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Hamilton v. Yavapai Community College District

United States District Court, D. Arizona

October 7, 2016

Daniel Hamilton, Plaintiff,
v.
Yavapai Community College District; Guidance Academy LLC; John L. Stonecipher; Amanda Alsobrook; John Morgan; April Morgan, Defendants. Guidance Academy LLC; Amanda Alsobrook; John L. Stonecipher, Counterclaimants,
v.
Daniel Hamilton, Counterdefendant.

          ORDER

          Honorable G. Murray Snow United States District Judge

         Pending before the Court is Plaintiff-Relator/Counter-Defendant Daniel Hamilton's Motion for Judgment on the Pleadings and Alternative Motion to Stay the Proceedings. (Doc. 216.) For the following reasons, the Court denies both motions.

         BACKGROUND

         Counter-Defendant Hamilton is a former employee of the Counterclaimants' business partner, Yavapai College (“Yavapai”). (Doc. 132 at 23.) Hamilton served as Director of Aviation Programs from September 2011 until May 2012. (Id.) Yavapai contracted with the Counterclaimants to provide pilot and helicopter training to flight students. (Id.) A portion of these students were funded through veteran education benefit funds administered through the Department of Veteran's Affairs (“VA”). (Id.)

         In 2013, Hamilton filed a qui tam suit under the False Claims Act alleging that the Counterclaimants and Yavapai filed claims for veteran education benefits despite knowing that their programs violated VA funding regulations. (Doc. 8.) In their answer to these claims, Guidance and Stonecipher filed claims for defamation and for intentional interference with contractual relations against Hamilton. Specifically, the counterclaims allege that Hamilton developed a “personal vendetta” against the Counterclaimants because they “refused to support his proposal to incorporate religious ministry into YC's and Counterclaimants aviation instruction programs.” (Doc. 132 at 23-24.)

         This vendetta allegedly led Hamilton to tell members of the community and media outlets, including the Prescott Daily Courier and the Los Angeles Times, that “Counterclaimants had conspired to defraud and defrauded the United States by violating VA regulations regarding educational benefits.” (Doc. 132 at 24.) In March of 2015, the VA suspended educational support for the veterans enrolled in the Counterclaimants' flight program. (Doc. 132 at 24.) This lack of funding left Yavapai unable to continue its contract with the Counterclaimants. (Id.)

         DISCUSSION

         I. Legal Standard

         A motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) “is properly granted when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law.” Fajardo v. Cnty. of L.A., 179 F.3d 698, 699 (9th Cir. 1999). To survive a Rule 12(c) motion, a plaintiff must allege sufficient facts to state a claim to relief that is plausible on its face. See, e.g., Fed. R. Civ. Pro. 8(a); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011) (finding Iqbal applies to Rule 12(c) motions because Rule 12(b)(6) and Rule 12(c) motions are “functionally identical”). To satisfy the plausibility standard, the plaintiff must plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. However, “conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998).

         Contrary to Hamilton's assertions, the Counterclaimants are not required to satisfy the heightened pleading standard of Rule 9(b).[1] (Doc. 216 at 3-4.) Defamation is not listed in the causes of action outlined in Rule 9(b), and “nearly all of the circuits have now disapproved any heightened pleading standard in cases other than those governed by Rule 9(b).” Galbraith v. Cty. of Santa Clara, 307 F.3d 1119, 1125 (9th Cir. 2002). Thus, the pleading requirement of Rule 8(a) applies to the counterclaims.

         II. Analysis

         A. The Motion for Judgment on the Pleadings is Denied.

         To establish a prima facie case for defamation, a plaintiff must establish the existence of “(1) a false defamatory statement, (2) publication to a third party, and (3) negligence on the part of the publisher.” Boswell v. Phoenix Newspapers, Inc., 152 Ariz. 1, 3, 730 P.2d 178, 180 (Ct. App. 1985). Hamilton asserts that dismissal is appropriate due to Counterclaimants' failure to plead their defamation claim with sufficient detail to make it plausible and their perceived failure to predict and preempt Hamilton's affirmative defenses. These arguments are rejected for the reasons set forth below.[2]

         1. The Complaint Sufficiently Alleges the Content as well as the Third Party ...


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