Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Greyhound Lines Inc. v. Viad Corp.

United States District Court, D. Arizona

November 21, 2016

Greyhound Lines Incorporated, Plaintiff,
Viad Corporation, Defendant.


          David G. Campbell United States District Judge

         Plaintiff Greyhound Lines, Inc. filed a complaint against Defendant Viad Corp. Doc. 1. Greyhound seeks damages and declaratory relief for Viad's alleged failure to satisfy its statutory and contractual obligations to indemnify Greyhound for costs associated with environmental damages on certain specific properties, as well as for nuisance. Id., ¶ 25; Doc. 30. Viad responded to Greyhound's complaint and asserted its own counterclaims, seeking declaratory and monetary relief for an alleged breach of contract, as well as indemnification for environmental costs paid by Viad. Doc. 15, ¶¶ 30-53. Viad subsequently amended its counterclaims to include allegations of fraud and negligent misrepresentation. Doc. 31, ¶¶ 49-68.

         Greyhound and Viad have filed cross-motions for partial summary judgment. The motions are fully briefed, and the Court heard oral argument on November 10, 2016. For the reasons set forth below, the Court will grant Greyhound's motion for summary judgment as to the fraud and misrepresentation claims, and deny Greyhound's and Viad's motions for summary judgment on the contract claims.

         I. Background.

         Between 1986 and 1999, Greyhound and Viad entered into four contracts (collectively, “Agreements”), which are at the center of this litigation. First, on December 22, 1986, the parties entered into an Acquisition Agreement that provided for the sale of certain of Viad's assets - including real properties - to Greyhound. Doc. 66-10. As part of the Acquisition Agreement, Viad indemnified Greyhound for costs related to general liabilities and obligations. Id. at 50-51. Several amendments were made to the Acquisition Agreement, but only the Third Amendment, dated March 18, 1997, is relevant here. Article III of the Third Amendment laid out several detailed changes concerning Viad's liability to Greyhound for environmental matters. Doc. 66-11 at 7. Specifically, the Third Amendment created a particular scheme for remediation of contamination caused by underground storage tank (“UST”) leaks at the various properties. Id. at 8.

         On August 23, 1991, the parties entered into a Claims Treatment Agreement. Doc. 66-12. Section 14(a) addressed environmental indemnification between the parties, clarifying their respective responsibilities under the amended Acquisition Agreement and limiting Viad's liability for remediation to contamination identified prior to March 1, 1992. Id. at 11. Finally, in 1999, the parties entered into a Settlement Agreement which further clarified the responsibilities of the parties under the amended Acquisition Agreement and Claims Treatment Agreement by amending them to include newly defined terms. Doc. 66-13 at 3. The Court will discuss the provisions of the Agreements in more detail below.

         There are numerous factual disputes concerning the parties' performance under the Agreements, but it is undisputed that Greyhound has submitted reimbursement requests to Viad over the years and some have been paid. Viad has made no payment since 2009. Doc. 73 at 51; Doc. 90 at 51. Viad's Director of Environment and Energy from 1987 to 2001, Ken Ries, was responsible for coordinating and overseeing remediation efforts for Viad in connection with the properties covered by the Agreements. Doc. 66, ¶ 37; Doc. 89, ¶ 37. Since 2001, Ries has continued to work for Viad as an independent consultant in the same capacity. Id.

         On September 11, 2015, Greyhound brought a claim against Viad seeking declaratory and monetary relief for breach of contract and private nuisance. Doc. 1. Additionally, Greyhound seeks cost recovery under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”). Doc. 30. According to the complaint, Viad has “failed to meet its obligations under both its statutory obligations and the [Agreements] to pay for the environmental costs incurred by” Greyhound. Id., ¶ 25. Viad's counterclaim alleges breach of contract and also seeks declaratory and injunctive relief. Doc. 31. According to Viad, Greyhound “has improperly sought and obtained payment from Viad for costs associated with Environmental Obligations of which Viad was not notified before March 1, 1992[.]” Id., ¶ 22.

         The claims relate to six properties, located in Portland, Seattle, Memphis, Miami, Jacksonville, and Oakland. Doc. 64 at 6; Doc. 72 at 1. Greyhound sold the Seattle and Miami properties to third parties in 2008 and 2013, respectively. Doc. 73, ¶¶ 27, 36; Doc. 90, ¶¶ 27, 36. Greyhound seeks reimbursement from Viad for costs incurred in the sale of these properties relating to environmental conditions thereon.

         II. Legal Standard.

         A party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, shows “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Summary judgment is also appropriate against a party who “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322. Only disputes over facts that might affect the outcome of the suit will preclude the entry of summary judgment, and the disputed evidence must be “such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The parties' arguments focus on Arizona law, and no choice-of-law issues have been raised. The Court therefore will look to Arizona law for the relevant statutes of limitations, principles of contract interpretation, accord and satisfaction, and the economic loss doctrine.

         III. Greyhound's Motion for Summary Judgment. A. Statute of Limitations.

         Greyhound argues that Viad's counterclaims are time-barred. The Court finds that disputed facts prevent summary judgment on this issue.

         1. Arizona Law.

         Arizona law applies the discovery rule to cases under both contract and tort law. Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of Am., 898 P.2d 964, 967-68 (Ariz. 1995). “Under the discovery rule, a plaintiff's cause of action does not accrue until the plaintiff knows or, in the exercise of reasonable diligence, should know the facts underlying the cause.” Id. at 966. The discovery rule is motivated by the equitable concern that “it is unjust to deprive a plaintiff of a cause of action before the plaintiff has a reasonable basis for believing that a claim exists.” Id. at 967. Courts have recognized that statutes of limitations are intended to protect defendants from stale claims where plaintiffs have slept on their rights, but “[a] blamelessly uninformed plaintiff cannot be said to have slept on his rights.” Walk v. Ring, 44 P.3d 990, 995-96 (Ariz. 2002).

         The key “inquiry in applying the discovery rule is whether the plaintiff's injury or the conduct causing the injury is difficult for plaintiff to detect.” Gust, 898 P.2d at 968. Importantly, the discovery rule “does not permit a party to hide behind its ignorance when reasonable investigation would have alerted it to the claim.” ELM Ret. Ctr., LP v. Callaway, 246 P.3d 938, 941 (Ariz.Ct.App. 2010). In a breach of contract case, this means that a party must still “exercise[] reasonable diligence in monitoring the performance of another under the contract.” Gust, 898 P.2d at 969. Where the “wrong constituting the cause of action is concealed, limitation will not begin to run until such concealment is discovered, or reasonably should have been discovered.” Walk, 44 P.3d at 995 (citing Acton v. Morrison, 155 P.2d 782, 784 (Ariz. 1945)). Accordingly, “the core question is whether a reasonable person would have been on notice to investigate.” Id. at 996. “[S]ummary judgment is warranted only if the failure to go forward and investigate is not reasonably justified.” Id.

         The Arizona Supreme Court has made clear that “[w]hen discovery occurs and a cause of action accrues are usually and necessarily questions of fact for the jury.” Doe v. Roe, 955 P.2d 951, 961 (Ariz. 1998); Walk, 44 P.3d at 996. “The jury must determine at what point Plaintiff's knowledge, understanding, and acceptance in the aggregate provided sufficient facts to constitute a cause of action.” Doe, 955 P.2d at 962. “A plaintiff need not know all the facts underlying a cause of action to trigger accrual. But the plaintiff must at least possess a minimum requisite of knowledge sufficient to identify that a wrong occurred and caused injury.” Id. at 961 (emphasis in original; internal citation omitted).

         Additionally, Arizona law permits the tolling of the statute of limitations “when a party wrongfully conceals facts giving rise to the cause of action so as to prevent a potential plaintiff from reasonably discovering the claim's existence during the limitation period.” Walk, 44 P.3d at 999 (emphasis in original). “In general, to toll the statute of limitations the fraud must prevent inquiry, elude investigation or mislead the party who claims the cause of action. The concealment must come after the injury, and there must be some affirmative act of the defendant calculated to obscure the existence of a cause of action.” Anson v. Am. Motors Corp., 747 P.2d 581, 588 (Ariz.Ct.App. 1987) (internal quotation marks and citations omitted); Cooney v. Phoenix Newspapers, Inc., 770 P.2d 1185, 1187 (Ariz.Ct.App. 1989); Tovrea Land & Cattle Co. v. Linsenmeyer, 412 P.2d 47, 63 (Ariz. 1966) (“Mere silence by the person allegedly committing the fraud will not avoid the running of the statute. There must be positive acts of concealment done to prevent detection. There must be some trick or contrivance intended to exclude suspicion and prevent inquiry.”).

         “The defense of statute of limitations is never favored by the courts, and if there is doubt as to which of two limitations periods should apply, courts generally apply the longer.” Gust, 898 P.2d at 968. Because the statute of limitations is an affirmative defense, the burden of proof lies with the defendant. Estate of Page v. Litzenburg, 865 P.2d 128, 135 (Ariz.Ct.App. 1993). The burden of proving the statute was tolled, however, rests with the claimant. Engle Bros. v. Superior Court In & For Pima Cty., 533 P.2d 714, 716 (Ariz.Ct.App. 1975). Similarly, “[t]he burden of establishing that the discovery rule applies to delay the statute of limitations rest[s] on plaintiff.” Logerquist v. Danforth, 932 P.2d 281, 284 (Ariz.Ct.App. 1996).

         2. Viad's Claims.

         Greyhound argues that Viad's breach of contract claims are subject to a six-year statute of limitations under A.R.S. § 12-548, and that Viad's claims for fraud and negligent misrepresentation are subject to at least a three-year statute of limitations under A.R.S. §§ 12-542.[1] Doc. 64 at 14-15. Viad does not dispute these limitation periods, but argues that it did not learn the facts underlying its claims until after Greyhound filed this lawsuit. Doc. 78 at 14. Viad also contends that Greyhound intentionally concealed information that would have put Viad on notice that it was being wrongfully billed for remediation for which it was not contractually liable. Id. at 11-14. Because Viad seeks to recover for alleged overpayments it made to Greyhound, and Viad last made a payment to Greyhound on March 25, 2009, the only issues are when the respective limitations periods commenced, and whether the periods were subject to tolling. As discussed above, Viad has the burden of proof on both of these issues.[2]

         The Court concludes that a genuine factual dispute precludes summary judgment. Greyhound contends that Viad had an in-house expert, Ken Ries, monitoring environmental work at the properties, reviewing invoices sent by Greyhound, reviewing explanatory information provided by Greyhound, and tracking the work and payments for each site on his own internal spreadsheets. Greyhound alleges that Ries had access to all of the information he requested, that he visited Greyhound and the properties in question, and that he spoke directly with consultants performing the work. Greyhound notes that Ries had been responsible for these sites for more than 30 years, and thus was intimately familiar with their contamination and the required remediation. As a result, Greyhound asserts, Viad knew or should have known precisely what work was being done at the properties and the scope of work covered by Greyhound's bills to Viad - the very facts on which Viad now bases its breach of contract and tort claims.

         Viad paints a different picture. It asserts that Greyhound knew it was investigating and remediating contamination for which Viad was not responsible under the Agreements, and yet billed Viad for that work on a regular basis. Viad asserts that Greyhound never informed Ries of this fact, and withheld key information that would have revealed that improper payments were being sought. Viad contends that Ries relied not only on the incomplete information provided by Greyhound, but also that Greyhound undertook an obligation in the Agreements to bill only for work for which Viad was responsible. Viad provides specific examples of contamination for which Greyhound allegedly was solely responsible at each of the sites, and yet which was included in the work for which Viad was billed. Additionally, Viad contends that Greyhound actively concealed information regarding new sources of contamination at the relevant properties and failed to provide information that Ries requested when reviewing reimbursement requests. Doc. 78 at 14-15; Doc. 89, ¶¶ 130-133.

         This sharp factual disagreement precludes summary judgment. As Arizona courts have noted, application of the discovery rule and related tolling doctrines often present factual issues that must be resolved at trial. Doe, 955 P.2d at 961; Walk, 44 P.3d at 996. This is such a case.[3]

         B. Collateral Estoppel.

         “Under collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation.” Montana v. United States, 440 U.S. 147, 153 (1979). “To foreclose relitigation of an issue under collateral estoppel: (1) the issue at stake must be identical to the one alleged in the prior litigation; (2) the issue must have been actually litigated in the prior litigation; and (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in the earlier action.” Clark v. Bear Stearns & Co., Inc., 966 F.2d 1318, 1320 (9th Cir. 1992). When analyzing a party's attempt to assert collateral estoppel, “[t]he party asserting preclusion bears the burden of showing with clarity and certainty what was determined by the prior judgment.” Id. at 1321. “Since the doctrine of collateral estoppel applies only to matters actually litigated, it is imperative that the party claiming estoppel adequately show the controlling facts of the prior litigation.” United States v. Lasky, 600 F.2d 765, 769 (9th Cir. 1979).[4]

         Greyhound argues that:

Viad is precluded from arguing (i) that it did not have notice of the Environmental Obligations if the evidence shows that Viad was informed (either by [Greyhound], a regulator, or by the fact that Viad itself was performing the work) of subsurface contamination prior to March 1, 1992; and (ii) that releases to the subsurface, regardless of whether a specific tank or constituent can be identified, are Environmental Obligations for which it owes indemnification.

Doc. 64 at 14. According to Greyhound, these issues are identical to issues decided in a 2002 case between Greyhound and Viad before the United States District Court for the Southern District of California (“San Diego case”). Id. Viad argues that the issues in the San Diego case are irrelevant to its claims here. Doc. 78 at 8. The Court has reviewed the decision in the San Diego case, and the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.