United States District Court, D. Arizona
ORDER
DOMINIC W. LANZA, UNITED STATES DISTRICT JUDGE
INTRODUCTION
In
2015, the City of Glendale (the “City”) entered
into a six-figure contract with a staffing company operated
by Michelle and Jeffery Griffin to obtain temporary workers
for various municipal projects. What was the name of the
staffing company? That's the key disputed issue.
The
Griffins are actually affiliated with two different staffing
companies with very similar names. The first, JG Staffing,
Inc., is a Texas corporation that was formed in 2005, and the
second, JG Staffing Arizona, LLC, is an Arizona limited
liability company that was formed in 2012. Here, although the
original bid for the contract was submitted by Mr. Griffin,
who identified himself as the CEO of “JG Staffing,
Inc.”, and although the City responded by sending a
notice of intent to award the contract to “JG Staffing.
Inc.”, Ms. Griffin later informed the City that she
“would prefer everything be under JG AZ since this is
an Arizona account” and Mr. Griffin submitted a
“Best and Final Offer” on behalf of “JG
Staffing AZ.” Thus, the final contract identified the
City's counterparty as “JG Staffing Inc., a Arizona
Corporation” and the contract was signed by Ms. Griffin
as the vice president of “JG Staffing Inc., an Arizona
corporation.” There is, unfortunately, no such company
as “JG Staffing Inc., an Arizona
corporation”-this appears to be a jumble of the two
real companies' names. About a year later, Ms. Griffin
sent the City a letter stating that “JG Staffing Inc. .
. . was incorrectly used by our sales manager to bid on the
contract” and that “the correct entity” was
“JG Staffing AZ.”
How
does Plaintiff ARA Incorporated (“ARA”) fit into
all of this? In 2011, ARA entered into a factoring agreement
with JG Staffing, Inc. (the Texas corporation). In July 2016,
following a default under the factoring agreement, ARA sent a
letter to the City. This letter explained that ARA, as a
secured creditor of JG Staffing, Inc., was entitled to
receive all future payments owed to JG Staffing, Inc. under
the staffing contract. The City, however, failed to remit the
future payments to ARA-it kept sending them to a bank account
associated with JG Staffing Arizona, LLC. This lawsuit
ensued.
Now
pending before the Court are cross-motions for summary
judgment filed by ARA (Docs. 54 & 56) and the City (Doc.
67).[1]
In addition to quarreling over whether ARA actually had a
security interest in the staffing contract, whether ARA
properly notified the City of that interest, and whether this
lawsuit was filed within the statute of limitations, the
parties ask the Court to determine, as a matter of law, the
identity of the City's counterparty under the staffing
contract-ARA argues it had to be JG Staffing, Inc. and the
City argues it had to be JG Staffing Arizona, LLC.
As
explained below, the Court will deny both parties'
motions in significant part.[2]This case involves an array of
conflicting evidence concerning the identity of the
City's counterparty. Although ARA and the City have each
identified certain pieces of evidence that tend to support
their position, it should be a factfinder-not the Court at
summary judgment-that decides how to weigh those pieces of
evidence and resolve any conflicts.
BACKGROUND
I.
The JG Entities
JG
Staffing, Inc. is a Texas corporation that was incorporated
in 2005. (Doc. 68-3 [Griffin Decl.] at 2 ¶ 3.) It
provides temporary staffing services. (Id.) JG
Staffing Arizona, LLC is a limited liability company that was
organized and formed in Arizona in 2012. (Id. at 2-3
¶ 4.) It also provides temporary staffing services.
(Id.) Ms. Griffin was involved with the management
and operations of JG Staffing, Inc. and was a member of JG
Staffing Arizona, LLC. (Id. at 2 ¶ 2.) Her
husband, Mr. Griffin, is the President of JG Staffing, Inc.
(Id.)
II.
The Factoring Agreement
On or
about May 4, 2011, ARA and JG Staffing, Inc. entered into the
Factoring Agreement, under which ARA received “[a]s
security for the Obligations [under the Factoring Agreement],
” “a security interest in [JG Staffing,
Inc.'s] business assets, including, without limitation,
all accounts, contract rights and other rights to payment,
and all proceeds of the foregoing.” (Doc. 58-5 at 31,
33 § 8, 37.)
In
March 2015, ARA learned that JG Staffing, Inc. breached the
Factoring Agreement. The parties thereafter sued each other
in Minnesota state court. The jury found JG Staffing, Inc.
liable on multiple claims and found ARA was not liable on any
of JG Staffing, Inc.'s claims. (Doc. 57-2.)
III.
The Staffing Contract
In
November 2014, the City issued a request for proposal with
the solicitation number “RFP 15-17” and the
description “Temporary Workers for Recycling Facility,
Landfill and Public Works Department.” (Doc. 58-6 at
46-70.)
On
December 1, 2014, “JG Staffing Inc.” submitted a
proposal for RFP 15-17. (Doc. 58-6 at 74-114.) This proposal
was signed by “Jeffery Griffin” as
“CEO” of “JG Staffing Inc.” and
included the email address
“jgriffin@jgstaffinginc.com” and the federal
taxpayer ID number 20-1936759. (Id. at 76.) Every
page of this proposal also noted “JG Staffing
Inc.” in the footer. (Id.)
The
“Best and Final Offer” (likely mistakenly dated
April 7, 2014) submitted in connection with this proposal was
signed by “Jeff Griffin” as “Sales
Manager” of “JG Staffing AZ.” (Doc. 58-6 at
196-203.)
On
April 30, 2015, the City wrote a letter to “Mr. Jeffery
Griffin, ” as “CEO” of “JG Staffing,
Inc., ” notifying him that the City was offering JG
Staffing, Inc. a “Notice of Intent to Award” a
contract under RFP 15-17, pending any bid protests.
(Id. at 115-16.)
On June
29, 2015, Ms. Griffin sent the City an email requesting to
change the Employer Identification Number for the submitting
party. The email stated: “The reason I want to change
the EIN is because our sales person used the 20-number and I
would prefer everything be under JG AZ since this is an
Arizona account.” (Doc. 68-3 at 73.)
On or
about August 25, 2015, there was a request for the City
Council “to authorize the Acting City Manager to enter
into an agreement with J.G. Staffing, Inc., to provide
temporary staffing services for the Public Works Department
in an amount not to exceed $875, 153 annually.” (Doc.
58-6 at 117.) The City's 30(b)(6) designee testified in
her deposition that this authorization was provided and that
“[t]he City Council approved the City Manager to enter
into a contract with JG Staffing, Inc.” (Id.
at 29:2-12, 43:5-6).
On
August 28, 2015, the City entered into a contract (the
“staffing contract”) with “JG Staffing
Inc., a Arizona Corporation, ” which incorporated RFP
15-17. (Id. at 119.) Ms. Griffin signed the contract
as “Vice President” of “JG Staffing Inc.,
an Arizona corporation.” (Id. at 128.)
On
September 16, 2015, Ms. Griffin submitted a form to the City
identifying JG Staffing Arizona, LLC's EIN and bank
account information, so that payments under the staffing
contract could be deposited into that account. (Doc. 68-3
[Griffin Decl.] at 4-5 ¶ 15; 76.)
On or
about July 1, 2016, the City stated that it wished to renew
the staffing contract for a second year. (Doc. 58-4.) On July
12, 2016, Mr. Griffin executed the one-year contract
extension on behalf of “J G Staffing, Inc.”
(Id.)
On July
16, 2016, ARA became aware of the staffing contract. (Doc.
58-5 [Reid Dep.] at 43:22-45:2, 58:9-14.) On July 19, 2016,
ARA sent the City a letter. (Doc. 58-6 at 204.) The letter
indicated in the first line that it was regarding the
“Agreement for Temporary Workers for Recycling
Facility, Landfill & Public Works.” (Id.)
The next paragraph stated: “ARA has a pre-existing
relationship with JG Staffing Inc. as a source of capital
funding. Related to this relationship, JG Staffing Inc. has
pledged a security interest in its business assets
(including, without limitation, rights to payment on JG
Staffing Inc. invoicing) to ARA.” (Id.) The
letter went on to state that “ARA has teamed with AGR
Funding Inc., a specialist in the staffing industry, to
manage payments related to JG Staffing Inc. Please make all
payments for JG Staffing Inc. to [AGR Funding Inc.]. . . .
The foregoing irrevocable payment instructions shall not be
modified without ARA's prior written consent.”
(Id.)
On July
21, 2016, the City sent ARA an email acknowledging receipt of
ARA's letter and notifying ARA that “[i]n order for
[the City] to accept this update into [the City's]
system, ” the City needed to “receive a completed
COG TIN to support this change, ” which was available
at the link provided in the email. (Id. at 205.) AGR
filled out the initial form, but the City asked for the form
to be corrected. (Doc. 68-1 at [Reid Dep.] 67:2-10.) In a
July 26, 2016 email, the City again asked ARA, in filling out
the COG TIN form, to “confirm that the tax liability of
the JG Staffing invoices will be the responsibility of
ARA.” (Id. at 82.) ARA returned a COG TIN form
dated July 26, 2016 with JG Staffing Inc.'s TIN listed,
but without a signature of anyone representing JG Staffing,
Inc. (Id. at 68:24-71:21, 80, 82.)
In a
July 29, 2016 email exchange, Mr. Griffin told a City
employee that the EIN the City should be using for the
staffing contract is the number for JG Staffing Arizona, LLC,
not JG Staffing, Inc. (Doc. 58-6 at 212.)
On
August 1, 2016, Ms. Griffin sent the City a letter stating
that “JG Staffing Inc. (20-1936759) was incorrectly
used by our sales manager to bid on the contract” and
that “[p]rior to the inception of the contract this was
formally changed to the correct entity JG Staffing AZ
(46-0807153).” (Doc. 58-2.) She further claimed that
“[t]he correct TIN number 46-0807153 has been used by
finance etc., since the inception of the contract” and
that “[i]t appears as if there may be a
miscommunication and it was not changed in another
area.” (Id.)
On
September 21, 2016, the City issued a second amendment to the
staffing contract. (Doc. 58-6 at 214-17.) This amendment
purported to formally change the contracting party from
“JG Stafing [sic] Inc., TIN 20-1936759” ...