Haines v. Get Air LLC

          REPORT AND RECOMMENDATION

          ERIC J. MARKOVICH UNITED STATES MAGISTRATE JUDGE

         This personal injury action involves a dispute between the Plaintiff, Blake Haines, and Defendant Get Air, LLC (“GALLC”). Haines was injured while performing a flip at Get Air Tucson, an indoor trampoline park, and is now a quadriplegic. Haines alleges GALLC produced a defective Employee Handbook (“EH”) used by Get Air Tucson.

         Pending before the Court is GALLC's Motion for Summary Judgment. (Doc. 238). Pursuant to the Rules of Practice of this Court, this matter was referred to the undersigned for a Report and Recommendation. (Doc. 25). The motion has been fully briefed by the parties, and the Court heard oral arguments on July 16, 2018. For the reasons stated below, the Magistrate Judge recommends that the District Court enter an ordering granting GALLC's Motion for Summary Judgment as to Plaintiff's punitive damages claim only, and denying GALLC's motion as to the remainder of Plaintiff's claims.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         On September 8, 2013 Haines was at the Get Air Tucson indoor trampoline park and performed a move where he flipped multiple times off of a platform and into a foam pit. (Doc. 12 at 9). Haines “suffered catastrophic injuries from the maneuver, including fractured cervical vertebrae resulting in paralysis.” Id. Following this incident, Haines filed suit in Pima County Superior Court on September 5, 2014 against the following defendants: Get Air Tucson, Inc.; Get Air Tucson Trampolines, LLC; Get Air Management, Inc.; GALLC; Trampoline Parks, LLC; Patti Goodell; Jacob Goodell; Kiersten Goodell; Scott Goodell; Alan McEwan Jr.; Val Iverson, individually and as owner or operator of Trampoline Parks, LLC; Jane and/or John Does #s 1-20; ABC Corporations 1-10; XYZ Partnerships 1-10; and ABC Limited Liability Corporations (LLCs) 1-10. (Doc. 6 Ex. 1). Haines alleged claims for negligence, negligent design, negligence in safety standards, negligent supervision, negligent hiring and training of personnel, piercing the corporate veil, and punitive damages. Id.

         On January 5, 2015, Defendant Get Air Tucson Trampolines, LLC removed the case to this Court, alleging all parties were diverse and the amount in controversy exceeded $75, 000.00. (Doc. 1 at 1-2). Get Air Tucson Trampolines, LLC did not indicate whether any of the other defendants joined or consented to the removal.

         On January 13, 2015, Haines filed a Notice of Filing Amended Pleading Pursuant to LRCiv 15.1(b), averring that no defendant had filed an answer to his original Complaint. (Doc. 8). Haines' First Amended Complaint named Alicia Durfee and Scott Hansen as additional defendants, and alleged Durfee was a manager or supervisor at Get Air Tucson, and Hansen was an employee who was acting as a de facto manager at the time of Haines' injury. (Doc. 12 at 5-6).

         On January 23, 2015, Haines filed a Motion to Remand to State Court. (Doc. 17). Haines alleged two arguments in his motion: One, the federal court lacked subject matter jurisdiction because there was not complete diversity among the parties, and two, removal was procedurally improper because the removing party did not establish unanimity among all served defendants for removal. Id. at 1-2. Get Air Tucson Trampolines, LLC and the Goodell, Durfee, and Hansen defendants counter argued that Haines' addition of Hansen and Durfee as parties was a “thinly veiled attempt to avoid federal jurisdiction.” (Doc. 19 at 1).

         Following oral arguments on the Motion to Remand, the Court granted the Motion on April 15, 2015 and remanded this matter back to Pima County Superior Court. (Doc. 31). The Court concluded that the case was improperly removed to federal court because all properly served defendants had failed to join or consent to the removal, and because Haines properly added Hansen and Durfee as defendants in his FAC, which destroyed the Court's diversity jurisdiction.

         Following remand, the Plaintiff and several defendants entered into a settlement agreement. The Superior Court then dismissed the defendants who were parties to the settlement agreement, leaving two remaining defendants: GALLC and Quality Foam & Fiber Products, Inc. (Doc. 32 Ex. 3).

         On June 12, 2015 GALLC removed the case to this Court, alleging that all parties were diverse due to the Superior Court's dismissal of the non-diverse defendants, and that the amount in controversy exceeded $75, 000.00. (Doc. 32 at 1-2). Defendant Quality Foam & Fiber Products, Inc. filed a notice consenting to and joining in the notice of removal. (Doc. 35). On July 2, 2015, the Court issued an order directing the Clerk to reopen the case and to recognize Plaintiff's Second Amended Complaint (filed in Superior Court) as the operative complaint in this matter. (Doc. 39).

         On July 30, 2015 GALLC filed a Motion to Dismiss for lack of personal jurisdiction and failure to state a cause of action pursuant to Fed.R.Civ.P. 8 and Rule 12(b). (Doc. 43). On August 25, 2015 Plaintiff filed a Motion for Leave to Amend Complaint to add and clarify allegations specific to GALLC, and to add Pacific Urethanes, LLC as a products liability defendant. (Doc. 45). On February 8, 2016 the District Court entered an Order adopting the undersigned's Report and Recommendation, granting Plaintiff's Motion to Amend and denying GALLC's Motion to Dismiss as moot. (Doc. 83).

         On February 8, 2016 Plaintiff filed his Third Amended Complaint (“TAC”), which named Pacific Urethanes, LLC as an additional products liability defendant. (Doc. 84). The TAC also alleged that GALLC developed defective safety rules and supplied them to Get Air Tucson.

         On March 1, 2016 GALLC filed a Motion to Dismiss for lack of personal jurisdiction, arguing that it had not engaged in any business in Arizona and that there were no facts supporting general or specific personal jurisdiction over it. (Doc. 97). On March 31, 2017 the District Court entered an Order adopting the undersigned's Report and Recommendation and denying GALLC's Motion to Dismiss. (Doc. 172).

         On April 15, 2016 Defendant Pacific Urethanes, LLC filed a Motion to Dismiss for lack of personal jurisdiction. (Doc. 103). On March 21, 2017 the District Court entered an Order adopting the undersigned's Report and Recommendation and granting Pacific Urethane's Motion to Dismiss. (Doc. 167).

         On September 19, 2017 the Court held a Status Conference with Plaintiff and GALLC to resolve a dispute regarding the procedural posture of the case. At that time, Plaintiff believed the case was ready for trial, and GALLC still had not filed its initial disclosure statement and believed a discovery schedule needed to be set. Following the status conference, the undersigned issued a Revised Scheduling Order. (Doc. 191).

         On September 27, 2017 the District Court entered an Order dismissing Pacific Urethanes with prejudice, and on October 11, 2017 the Court entered an Order dismissing Quality Foam & Fiber with prejudice. (Docs. 193 & 195).

         On November 3, 2017 Mid-Continent Excess & Surplus Insurance Company filed a Motion to Intervene. (Doc. 199). On December 8, 2017 Mid-Continent filed a Motion for Leave to File Complaint in Intervention and Proposed Complaint. (Docs. 210 & 211). Mid-Continent's motion is currently stayed. (Docs. 213 & 219).

         On April 16, 2018 GALLC filed its first Motion for Summary Judgment. (Doc. 238).

         II.STANDARD OF REVIEW

         Summary judgment is appropriate when the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). A material fact is one that might affect the outcome of the case under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In addition, a “genuine” issue means that a reasonable jury could find in favor of the non-moving party. Id. Thus, “there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Id. at 249.

         “Initially, a party moving for summary judgment has the burden of showing there are no genuine issues of material fact and it is entitled to summary judgment as a matter of law.” National Bank of Arizona v. Thruston, 218 Ariz. 112, 114-15 (App. 2008). “Only if the moving party satisfies this burden will the party opposing the motion be required to come forward with evidence establishing the existence of a genuine issue of material fact that must be resolved at trial.” Id. at 115. The non-moving party “may not rest upon mere allegations or denials of [the moving party's] pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e)).

         “The burden of persuasion on the summary judgment motion is heavy. Where the evidence or inferences would permit a jury to resolve a material issue in favor of either party, summary judgment is improper.” National Bank of Arizona, 218 Ariz. at 116 (internal quotations and citation omitted). In evaluating a motion for summary judgment, the Court must make all inferences in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255. Finally, “at the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S at 249; see also Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990) (court may not make credibility determinations or weigh conflicting evidence).

         III.GALLC'S MOTION TO DISMISS

         GALLC contends that it is not liable to Plaintiff because:

1) assuming, for purposes of this motion and for purposes of this motion only, that GALLC owed a duty, and that plaintiff's expert's opinion is admissible, his opinion, that the rule that he alleges should have been in the employee handbook (EH) is, in fact, in the EH on the page the rules appear; 2) GALLC owed plaintiff no duty; 3) the GALLC employee involved with the creation of the EH has been dismissed with prejudice and under Arizona law, GALLC no longer has any potential legal liability; 4) there is no causal connection ...