Kurtz v. Goodyear Tire & Rubber Company ( 2019 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 David L Kurtz, et al., No. CV-19-00152-PHX-GMS 10 Plaintiffs, ORDER 11 v. 12 Goodyear Tire & Rubber Company, 13 Defendant. 14 15 16 Pending before the Court is Defendant Goodyear Tire & Rubber Company’s 17 (“Goodyear’s”) Motion to Dismiss for Failure to State a Claim (Doc. 15). The Court grants 18 the motion. 19 BACKGROUND 20 In 2005 Plaintiff David Kurtz (“Kurtz”) filed his first lawsuit against Goodyear on 21 behalf of his clients, the Haeger family, alleging product liability, design defect, and other 22 various claims. (Doc. 1-3 at 7) (“Haegar I”). That case settled on the eve of trial in 2010. 23 But subsequently, Mr. Kurtz discovered through a newspaper article that Goodyear 24 disclosed test results that he had never seen in discovery. 25 In November 2012, the Court in the Haegar I case issued an order encouraging the 26 plaintiffs in that action to file a separate lawsuit dealing with the alleged misconduct in 27 discovery from that case. In May 2013, Mr. Kurtz filed a second lawsuit on behalf of the 28 Haegars against Goodyear in Maricopa County Superior Court, alleging abuse of process 1 and fraud (“Haegar II”).1 The complaint in Haegar II alleged that Goodyear crafted a 2 national policy to conceal the truth regarding its G159 tires that stretched back before the 3 Haegar I case was filed, that the Goodyear attorneys in Haegar I had fraudulently 4 concealed documents in that case, and other various claims of discovery misconduct. (Doc. 5 15-1 at 14). The complaint requested damages that would make up the difference between 6 the settlement offer accepted in Haegar I and the true value of the claims with the newly 7 disclosed material. (Doc. 15-1 at 83). 8 Plaintiff David Kurtz brings several claims in this lawsuit on his own behalf. 9 Specifically, he brings two claims under the Racketeer Influenced and Corrupt 10 Organizations Act (“RICO”), three claims of fraud, and individual claims of abuse of 11 process, aiding and abetting, and intentional interference with business expectancy. 12 Crucially, the alleged misconduct underlying the Haegar II suit—that Goodyear concealed 13 information regarding its G159 tire—is the exact misconduct that underlies the current suit. 14 But the injury Mr. Kurtz is claiming here is slightly different. Instead of claiming the 15 difference between the settlement offer and the true value of the claims, Mr. Kurtz now 16 claims that he is entitled to compensation for cases he could have taken had Goodyear 17 disclosed the test results at an earlier date, as well as various other expenses. (See e.g., 18 Doc. 1-3, ¶¶ 172-173, 184-186, 195-197, 205-207) (claiming that Mr. Kurtz is entitled to 19 damages for injuries to his business in property, as well as damages for “incurring 20 thousands of hours of unnecessary expense, lost opportunities, emotional damage, and 21 debt.”). 22 Defendant Goodyear now moves to dismiss on several grounds, including that all 23 of Plaintiff’s claims are barred by the relevant statutes of limitations. 24 I. Legal Standard 25 “A Rule 12(b)(6) motion tests the legal sufficiency of a claim.” Navarro v. Block, 26 250 F.3d 729, 732 (9th Cir. 2001). To survive dismissal for failure to state a claim pursuant 27 to Rule 12(b)(6) a complaint must contain more than “labels and conclusions” or a 28 1 The Court will take judicial notice of this document as the parties do not contest its authenticity and the document is referenced in the complaint. 1 “formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 2 U.S. 544, 555 (2007). A plaintiff must allege sufficient facts to state a claim to relief that 3 is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“A claim has facial 4 plausibility when the plaintiff pleads factual content that allows the court to draw the 5 reasonable inference that the defendant is liable for the misconduct alleged. The plausibility 6 standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer 7 possibility that a defendant has acted unlawfully.”). In deciding a Rule 12(b)(6) motion, a 8 court must accept all factual allegations in the complaint as true, in addition to the 9 reasonable inferences that can be drawn from them. Id. 10 II. Analysis 11 A. All Claims Are Barred By the Statute of Limitations 12 While the claims in this lawsuit have different periods of limitation,2 the analysis 13 for when the statute of limitations begins running for each claim is the same. Claims accrue 14 for both the RICO and various state law claims when, by reasonable diligence the plaintiff 15 knows or should know of the wrongful conduct, and the plaintiff was harmed or injured as 16 the result. Keonjian v. Olcott, 216 Ariz. 563, 566 169 P.3d 927, 930 (Ct. App. 2007) 17 (explaining that the “controlling issue” is “when [the plaintiff] became aware or should 18 have been aware of the cause of their harm.”); Rotella v. Wood, 528 U.S. 549, 555 (2000) 19 (“Discovery of the injury . . . is what starts the clock.”); Coronado Dev. Corp. v. Superior 20 Ct., 139 Ariz. 350, 352, 678 P.2d 535, 537 (1984); Beneficial Standard Life Inso Co. v. 21 Madariaga, 851 F.2d 271, 275 (9th Cir. 1988) (holding that civil RICO claim accrues 22 “when [the plaintiff has] actual or constructive knowledge of the fraud”); see also Hexcel 23 Corp. v. Ineos Polymers Inc., 681 F.3d 1055, 1060 (9th Cir. 2012) (“The plaintiff is deemed 24 to have had constructive knowledge if it had enough information to warrant an 25 2 There are three separate limitations periods for Mr. Kurtz’s claims. For his RICO claims, the statute of limitations period is four years. Agency Holding Corp. v. Malley-Duff & 26 Associates, Inc., 483 U.S. 143, 156 (1987). For his fraud and aiding and abetting fraud claims, the statute of limitations is three years. Ariz. Rev. Stat. § 12-543; Serrano v. 27 Serrano, 2012 WL 75639 at *3 (Az. Ct. App. 2012). And for his abuse of process and tortious interference claims, the statute of limitations period is two years. Ariz. Rev. Stat. 28 § 12-542; Clark v. Airesearch Mfg. Co. of Ariz. Inc., 138 Ariz. 240, 243 (Az. Ct. App. 1983). 1 investigation which, if reasonably diligent, would have led to the discovery of the fraud.”). 2 Mr. Kurtz alleges several facts in his complaint to support his claims of fraud against 3 Goodyear. The Haegar II complaint demonstrates that Mr. Kurtz had actual knowledge of 4 the alleged wrongful conduct at least in 2013. It is also apparent that Mr. Kurtz knew of 5 the non-speculative injuries at that time. For example, Mr. Kurtz claims as damage in this 6 case that he was required to hire an additional law firm to help with representation in 7 Haegar II. But that counsel appeared in that case in March 2012—nearly seven years 8 before Mr. Kurtz filed this lawsuit. And Mr. Kurtz would have known at the time he filed 9 the second lawsuit that he would be expending additional resources litigating Haegar II 10 that may have precluded him from taking other cases. Because Mr. Kurtz had actual 11 knowledge of both the alleged misconduct and his resulting injury as early as 2013, his 12 claims are barred by the statute of limitations. 13 In response, Plaintiff argues that he did not sustain actual injury or damages until 14 January 2017, when Haegar II settled. Specifically, Plaintiff argues that only after 15 crediting the fee recovery against the damage alleged did Plaintiff know his total damage, 16 or in his words, his “injury.” This argument lacks merit. If adopted, this view would toll 17 the statute of limitations for all claims to any date where a separate offset against damages 18 is calculated. It also conflates the distinction between a plaintiff’s knowledge of an injury 19 (here, his loss of revenue and additional legal expenses in hiring another firm), and his 20 knowledge of the specific extent of resulting damage (that damage minus his fee award in 21 2017). Plaintiff does not cite to any authority, and the Court is unaware of any, where a 22 court tolled the applicable statute of limitations period until an offset against the damage 23 was determined. Rather, courts have held that offsets do not toll the limitations period. See 24 e.g. Keonjian, 169 P.3d at 929 (explaining that the resolution of a separate claim that would 25 have provided an offset did not toll statute of limitations). 26 Because Mr. Kurtz had knowledge of the underlying fraud and resulting injury at 27 least six years before he filed this lawsuit, his claims are barred by the various statutes of 28 limitation. 1 CONCLUSION 2 All of Mr. Kurtz’s claims against Goodyear are time-barred. The Court will therefore dismiss the lawsuit. 4 IT IS THEREFORE ORDERED that Goodyear’s Motion to Dismiss (Doc. 15) is GRANTED. 6 IT IS FURTHER ORDERED directing the Clerk of Court to terminate this action and enter judgment accordingly. 8 Dated this 8th day of July, 2019. Wars ) 10 i Waray Sete! 11 Chief United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 _5-