United States District Court, D. Arizona
ORDER
G.
MURRAY SNOW, CHIEF UNITED STATES DISTRICT JUDGE
Pending
before the Court is Defendant Goodyear Tire & Rubber
Company's (“Goodyear's”) Motion to
Dismiss for Failure to State a Claim (Doc. 15). The Court
grants the motion.
BACKGROUND
In 2005
Plaintiff David Kurtz (“Kurtz”) filed his first
lawsuit against Goodyear on behalf of his clients, the Haeger
family, alleging product liability, design defect, and other
various claims. (Doc. 1-3 at 7) (“Haegar
I”). That case settled on the eve of trial in
2010. But subsequently, Mr. Kurtz discovered through a
newspaper article that Goodyear disclosed test results that
he had never seen in discovery.
In
November 2012, the Court in the Haegar I case issued
an order encouraging the plaintiffs in that action to file a
separate lawsuit dealing with the alleged misconduct in
discovery from that case. In May 2013, Mr. Kurtz filed a
second lawsuit on behalf of the Haegars against Goodyear in
Maricopa County Superior Court, alleging abuse of process and
fraud (“Haegar II”).[1] The complaint in
Haegar II alleged that Goodyear crafted a national
policy to conceal the truth regarding its G159 tires that
stretched back before the Haegar I case was filed,
that the Goodyear attorneys in Haegar I had
fraudulently concealed documents in that case, and other
various claims of discovery misconduct. (Doc. 15-1 at 14).
The complaint requested damages that would make up the
difference between the settlement offer accepted in
Haegar I and the true value of the claims with the
newly disclosed material. (Doc. 15-1 at 83).
Plaintiff
David Kurtz brings several claims in this lawsuit on his own
behalf. Specifically, he brings two claims under the
Racketeer Influenced and Corrupt Organizations Act
(“RICO”), three claims of fraud, and individual
claims of abuse of process, aiding and abetting, and
intentional interference with business expectancy. Crucially,
the alleged misconduct underlying the Haegar II
suit-that Goodyear concealed information regarding its G159
tire-is the exact misconduct that underlies the current suit.
But the injury Mr. Kurtz is claiming here is slightly
different. Instead of claiming the difference between the
settlement offer and the true value of the claims, Mr. Kurtz
now claims that he is entitled to compensation for cases he
could have taken had Goodyear disclosed the test results at
an earlier date, as well as various other expenses. (See
e.g., Doc. 1-3, ¶¶ 172-173, 184-186, 195-197,
205-207) (claiming that Mr. Kurtz is entitled to damages for
injuries to his business in property, as well as damages for
“incurring thousands of hours of unnecessary expense,
lost opportunities, emotional damage, and debt.”).
Defendant
Goodyear now moves to dismiss on several grounds, including
that all of Plaintiff's claims are barred by the relevant
statutes of limitations.
I.
Legal Standard
“A
Rule 12(b)(6) motion tests the legal sufficiency of a
claim.” Navarro v. Block, 250 F.3d 729, 732
(9th Cir. 2001). To survive dismissal for failure to state a
claim pursuant to Rule 12(b)(6) a complaint must contain more
than “labels and conclusions” or a
“formulaic recitation of the elements of a cause of
action.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007). A plaintiff must allege sufficient facts to
state a claim to relief that is plausible on its face.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged. The plausibility standard is not akin to
a ‘probability requirement,' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.”). In deciding a Rule 12(b)(6) motion, a
court must accept all factual allegations in the complaint as
true, in addition to the reasonable inferences that can be
drawn from them. Id.
II.
Analysis
A.
All Claims Are Barred By the Statute of Limitations
While
the claims in this lawsuit have different periods of
limitation, [2] the analysis for when the statute of
limitations begins running for each claim is the same. Claims
accrue for both the RICO and various state law claims when,
by reasonable diligence the plaintiff knows or should know of
the wrongful conduct, and the plaintiff was harmed or injured
as the result. Keonjian v. Olcott, 216 Ariz. 563,
566169 P.3d 927, 930 (Ct. App. 2007) (explaining that the
“controlling issue” is “when [the
plaintiff] became aware or should have been aware of the
cause of their harm.”); Rotella v. Wood, 528
U.S. 549, 555 (2000) (“Discovery of the injury . . . is
what starts the clock.”); Coronado Dev. Corp. v.
Superior Ct., 139 Ariz. 350, 352, 678 P.2d 535, 537
(1984); Beneficial Standard Life Inso Co. v.
Madariaga, 851 F.2d 271, 275 (9th Cir. 1988) (holding
that civil RICO claim accrues “when [the plaintiff has]
actual or constructive knowledge of the fraud”);
see also Hexcel Corp. v. Ineos Polymers Inc., 681
F.3d 1055, 1060 (9th Cir. 2012) (“The plaintiff is
deemed to have had constructive knowledge if it had enough
information to warrant an investigation which, if reasonably
diligent, would have led to the discovery of the
fraud.”).
Mr.
Kurtz alleges several facts in his complaint to support his
claims of fraud against Goodyear. The Haegar II
complaint demonstrates that Mr. Kurtz had actual knowledge of
the alleged wrongful conduct at least in 2013. It is also
apparent that Mr. Kurtz knew of the non-speculative injuries
at that time. For example, Mr. Kurtz claims as damage in this
case that he was required to hire an additional law firm to
help with representation in Haegar II. But that
counsel appeared in that case in March 2012-nearly seven
years before Mr. Kurtz filed this lawsuit. And Mr. Kurtz
would have known at the time he filed the second lawsuit that
he would be expending additional resources litigating
Haegar II that may have precluded him from taking
other cases. Because Mr. Kurtz had actual knowledge of both
the alleged misconduct and his resulting injury as early as
2013, his claims are barred by the statute of limitations.
In
response, Plaintiff argues that he did not sustain actual
injury or damages until January 2017, when Haegar II
settled. Specifically, Plaintiff argues that only after
crediting the fee recovery against the damage alleged did
Plaintiff know his total damage, or in his words, his
“injury.” This argument lacks merit. If adopted,
this view would toll the statute of limitations for all
claims to any date where a separate offset against damages is
calculated. It also conflates the distinction between a
plaintiff's knowledge of an injury (here, his loss of
revenue and additional legal expenses in hiring another
firm), and his knowledge of the specific extent of resulting
damage (that damage minus his fee award in 2017). Plaintiff
does not cite to any authority, and the Court is unaware of
any, where a court tolled the applicable statute of
limitations period until an offset against the damage was
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