Haeger v. Goodyear Tire & Rubber Co.

          ORDER

          HONORABLE G. MURRAY SNOW JUDGE

         Pending before the Court are Spartan Motor's brief regarding its procedural status, (Doc. 1194), Plaintiffs' motion to expand the record, (Doc. 1197), and Defendant Goodyear's motion to seal, (Doc. 1214). The Court denies Spartan Motor's request in its brief, denies Plaintiffs' motion, and grants Defendant's motion.

         BACKGROUND

         Plaintiffs Leroy, Donna, Barry, and Suzanne Haeger sued Goodyear Tire, Spartan Motors, and other defendants when their family's motorhome swerved off the road and flipped over due to a failure of a Goodyear G159 tire. The parties in this case regularly refer to this lawsuit as “Haeger I.” After several years of litigation, the parties settled the lawsuit in 2010.

         Nearly a year after settling this suit, the Haegers filed a motion for sanctions against Goodyear due to extensive bad faith discovery fraud. (Doc. 938). Defendant Spartan Motors joined the Haegers' request, arguing that Goodyear's discovery fraud also harmed Spartan. (Docs. 966, 1048). On November 8, 2012, Judge Silver granted the Haegers' motion and sanctioned Goodyear, but she rejected Spartan's request for sanctions because Spartan did not serve discovery and did not point to specific evidence showing that it relied on Goodyear's representations. (Doc. 1073 at 65-66). Eighteen days after this order, Spartan requested an extension of time to present evidence that it was harmed by Goodyear's fraud. (Doc. 1074). Judge Silver granted the motion, and Spartan filed supplemental affidavits on December 13, 2012. (Doc. 1083). Goodyear sought clarification that the supplemental affidavits would be treated as a motion for reconsideration under Local Rule 7.2(g). (Doc. 1088). While Spartan prepared its supplemental affidavits, Goodyear and its lawyers appealed Judge Silver's decision to award sanctions. (Docs. 1078-1080). The Ninth Circuit denied this initial request for lack of jurisdiction until a specific monetary award was granted as part of the sanctions. (Doc. 1120). Thereafter, Judge Silver agreed to treat Spartan's supplement as a motion for reconsideration, but she hesitated to rule on it due to Goodyear's appeal of the decision to award sanctions, even though the Ninth Circuit had already temporarily denied review of Goodyear's appeal. (Doc. 1121). Judge Silver subsequently entered judgment and ordered Goodyear and its attorneys to pay a certain amount of sanctions. (Doc. 1125). Goodyear appealed these sanctions to the Ninth Circuit and Supreme Court, but Spartan did not take any further action.

         Separately in the 2012 sanctions proceedings, the Haegers and Spartan alleged that Goodyear fraudulently induced the settlement of Haeger I. Because Haeger I “ha[d] long been closed and it would be inappropriate to allow Plaintiffs to litigate their fraud claims here[, ]” the Court did not consider the issue and instead stated that the Plaintiffs “may wish to . . . pursue an independent cause of action for fraud . . . .” (Doc. 1073 at 52). The Court also stated that “Spartan likely would have a viable case of fraud against Goodyear based on Goodyear's misrepresentations, but that claim should be litigated in as [sic] separate action where Spartan can introduce evidence regarding all the G159 litigation it was involved in over the years.” (Doc. 1073 at 66).

         Plaintiffs pursued this independent cause of action for fraudulent inducement in Arizona state court. The parties typically refer to this separate suit as Haeger II. During discovery in Haeger II, Plaintiffs acquired additional evidence of potential discovery abuse in the Haeger I proceedings. In April 2017, the parties entered a settlement agreement to resolve Haeger II. (Doc. 1198, Exh. 48). In the agreement, Plaintiffs promised to completely release Defendants from any and all claims, including any alleged failure to disclose during Haeger I, “excluding only the attorney fee claims currently pending before the U.S. Supreme Court.” (Doc. 1198, Exh. 48).

         Eventually, the United States Supreme Court considered the District Court's and Ninth Circuit's legal standard in calculating the Haeger I sanctions against Goodyear. In its review, the Supreme Court ruled in favor of Goodyear and remanded for additional proceedings. Because the Plaintiffs argued that Goodyear waived any challenge to the calculation of a predetermined contingency award, in its remand, the Supreme Court said “[t]he possibility of waiver should therefore be the initial order of business below. If a waiver is found, that is the end of this case.” Goodyear Tire & Rubber Co. v. Haeger, 137 S.Ct. 1178, 1190 (2017). The Court then held a status conference with the parties and directed them to first brief whether Goodyear waived objections to Judge Silver's calculation of the contingent award, and second, whether the Court should reopen the record. The Court considered the first issue and found that Goodyear waived any challenge to the calculation of the contingent award. (Doc. 1186). Presently, the Court considers whether it is appropriate to reopen the record to consider additional evidence of Goodyear's discovery abuse, and separately, whether Spartan Motor's failure to appeal has foreclosed any present opportunity to seek sanctions against Goodyear in this suit.

         DISCUSSION

         I. Reopening the Record

         Defendant Goodyear argues that the settlement agreement in Haeger II precludes the Haegers from asking this Court to reopen the record in pursuit of additional sanctions. Under Arizona law, settlement agreements are ordinary contracts. Employers Mut. Casualty Co. v. McKeon, 170 Ariz. 75, 79 (App. 1991). Courts give effect to the contract as it is written, and clear and unambiguous terms are conclusive. Shattuck v. Precision Toyota, Inc., 115 Ariz. 586, 588 (1977) (quoting Goodman v. Newzona Investment Co., 101 Ariz. 470, 472, 421 P.2d 318, 320 (1966). “The intent of the parties, as ascertained by the language used, must control the interpretation of the contract.” Id.

         The settlement agreement is clear. In the recitals and definitions, the agreement defines “Haeger Sanctions Proceedings” as the “post-settlement proceedings” of the Haeger accident dispute “which remain pending in the Supreme Court of the United States.” (Doc. 1198, Exh. 48 at 1). The settlement agreement intended to cover “all claims brought by or which could be brought by Plaintiffs against Defendants” except it “does not encompass any claims pending in the Haeger Sanctions Proceedings that are currently pending before the Supreme Court of the United States.” (Doc. 1198, Exh. 48 at 1-2). The next section describes that the Plaintiffs promise to “completely release and forever discharge Defendants . . . from any and all past, present or future claims” including “alleged acts or omissions, disclosures or failure to disclose of Defendants and/or their representatives during Haeger I and/or the Haeger Sanction Proceedings, excluding only the attorney fee claims currently pending before the U.S. Supreme Court.” (Doc. 1198, Exh. 48 at 2-3). The next section additionally precludes Plaintiffs from participating in “a suit, demand or claim, or executing on any judgment or order, except for the attorney fee claims of the Haeger I Sanctions Proceedings currently pending before the U.S. Supreme Court, against the Defendants.” (Doc. 1198, Exh. 48 at 3). The settlement agreement settled all claims, including the deceptions surrounding Haeger I which was the underlying focus of Haeger II, and carved out as an exception only the attorney fee claims pending at that time before the Supreme Court.

         At the time of the settlement agreement, the U.S. Supreme Court was considering the $2.7 million award and the issue of causation in the calculation of civil sanctions. Goodyear Tire & Rubber Co. v. Haeger, 137 S.Ct. 1178 (2017). The Supreme Court did not consider the additional fraud uncovered in the Haeger II lawsuit which Plaintiffs request the Court to now consider in expanding the sanctions award. Neither the additional fraud nor an expansion of the sanctions award was ever pending before the Supreme Court.

         Additionally, Arizona law gives effect to every word in a contract and interprets contracts in such a way to give meaning to all of its terms. Hamberlin v. Townsend, 76 Ariz. 191, 196 (1953); Gfeller v. Scottsdale Vista N. Townhomes Ass'n, 193 Ariz. 52, 54 (App. 1998). When the settlement agreement preserves only “claims . . . that are currently pending before the Supreme Court of the United States” (Doc. 1198, Exh. 48 at 2), the Court cannot give ...