United States District Court, D. Arizona
HONORABLE G. MURRAY SNOW JUDGE
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.
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.
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.
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).
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).
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
Reopening the Record
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.
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
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.
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