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Isip v. World Financial Group

United States District Court, D. Arizona

August 8, 2019

Erlinda Isip and Faye Perez, Plaintiffs,
World Financial Group, Defendant.



         Pending before the Court is World Financial Group's Motion to Dismiss (Doc. 12, “Mot.”). World Financial Group (“WFG”) asks the Court to dismiss the Complaint (Doc. 1, “Complaint”) because Plaintiff Erlinda Isip's claims are barred by the statute of limitations and this Court lacks personal jurisdiction over WFG for Plaintiff Faye Perez's claims. Plainitff Erlinda Isip filed a response. (Doc. 20). Plaintiff Perez filed a response as well. (Doc. 27). WFG replied to both responses. (Docs. 24, 28).

         I. Background

         Plaintiffs allege WFG is liable for fraud done by Maria Bernadette Roxas-Smith. WFG describes itself as “a marketing company that offers a business platform to individuals who seek to run independent financial services businesses.” (Mot. at 2-3). Plaintiffs refer to Ms. Roxas-Smith as the “perpetrator” of the fraud and claim she acted as a “life insurance agent with WFG” before her termination in February 2017. (Complaint ¶ 8). In total, they allege Ms. Roxas-Smith fraudulently took $200, 000 from Plaintiff Isip and $331, 367 from Plaintiff Perez. (Id. ¶¶ 19, 41). Most of their allegations concern Ms. Roxas-Smith's behavior rather than acts of the actual defendant in this case WFG. Generally, they seem to be alleging that WFG enabled Ms. Roxas-Smith to conduct her fraudulent schemes by allowing her to continue working on behalf of WFG after Plaintiff Isip notified WFG executives of Ms. Roxas-Smith's behavior, failed to report Ms. Salas-Smith to the Nevada, California, and Arizona Departments of Insurance, and ignored Plaintiffs concerns. (Id. ¶¶ 21-24, 46-48).

         II. Legal Standard

         WFG moves for dismissal under Federal Rule of Civil Procedure 12(b)(6) and 12(b)(2). To survive a Rule 12(b)(6) motion for failure to state a claim, a complaint must meet the requirements of Rule 8(a)(2). Rule 8(a)(2) requires a “short and plain statement of the claim showing that the pleader is entitled to relief, ” so that the defendant has “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Dismissal under Rule 12(b)(6) “can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). A complaint that sets forth a cognizable legal theory will survive a motion to dismiss if it contains sufficient factual matter, which, if accepted as true, states a claim to relief that is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

         Prior to trial, a defendant may move to dismiss the complaint for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2); Data Disc, Inc. v. Systems Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). Plaintiffs bear the burden of establishing personal jurisdiction. Ziegler v. Indian River Cty., 64 F.3d 470, 473 (9th Cir. 1995). Where the motion is based on written materials rather than an evidentiary hearing, “the plaintiff need only make a prima facie showing of jurisdictional facts.” Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). In determining whether the plaintiff has met this burden, uncontroverted allegations in the plaintiff's complaint must be taken as true, and “conflicts between the facts contained in the parties' affidavits must be resolved in [the plaintiff's] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists.” AT & T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996).

         “When no federal statute governs personal jurisdiction, the district court applies the law of the forum state.” Freestream Aircraft (Bermuda) Ltd. v. Aero Law Grp., 905 F.3d 597, 602 (9th Cir. 2018). Arizona exerts personal jurisdiction to the “maximum extent permitted by the Arizona Constitution and the United States Constitution.” Ariz. R. Civ. P. 4.2(a); see also A. Uberti and C. v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995) (analyzing personal jurisdiction in Arizona under federal law). Therefore, the analyses of personal jurisdiction under Arizona law and federal due process are the same. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004).

         Because compliance with the applicable statute of limitations is not a pleading requirement under Federal Rule of Civil Procedure 8, see Wyatt v. Terhune, 315 F.3d 1108, 1117-18 (9th Cir.2003), dismissal on such grounds is not justified “unless it appears beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the claim, ” Hernandez v. City of El Monte, 138 F.3d 393, 402 (9th Cir.1998) (quotation omitted). “Dismissal on statute of limitations grounds can be granted pursuant to Fed.R.Civ.P. 12(b)(6) ‘only if the assertions of the complaint, read with the required liberality, would not permit the plaintiff to prove that the statute was tolled, '” TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999) (quoting Vaughan v. Grijalva, 927 F.2d 472, 478 (9th Cir. 1991)), or had otherwise not yet accrued.

         III. Analysis

         A. Statute of Limitations

         The Complaint is not clear as to what legal theory Plaintiffs are relying on for relief. Plaintiffs talk a lot about fraud, but it alleges fraud on the part of Ms. Roxas-Smith and not fraud committed by WFG. The Court agrees with WFG that Plaintiffs are asserting a negligent supervision claim. Negligent Supervision claims are subject to a two-year statute of limitation. A.R.S. §12-542; Moses v. Phelps Dodge Corp., 808 F.Supp. 1287, 1289 (D. Ariz. 1993). Plaintiff Isip does not dispute that there is a two-year statute of limitations.

         Plaintiff Isip's argument against application of the statute of limitations here is the doctrine of equitable tolling and that of equitable estoppel. Equitable tolling focuses on a plaintiff's “excusable ignorance” of the statute of limitations. Lehman v. United States, 154 F.3d 1010, 1016 (9th Cir. 1998). The doctrine is unavailable to those who are negligent in exercising due diligence to preserve their legal rights. Id. Its fact-intensive nature is more appropriate for resolution on summary judgment than at the pleading stage. See Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir.1995) (dismissal inappropriate “where the applicability of the equitable tolling doctrine depended upon factual questions not clearly resolved in the pleadings”). “Equitable estoppel focuses primarily on the actions taken by the defendant in preventing a plaintiff from filing suit” and “may be invoked if the defendant takes active steps to prevent the plaintiff from suing in time, such as by misrepresenting or concealing facts necessary to the discrimination claim.” Coppinger-Martin v. Solis, 627 F.3d 745, 751 (9th Cir. 2010) (internal quotation marks and citations omitted).

         In her Response, Plaintiff Isip relates a number of facts that are not contained in the Complaint to support her argument for equitable estoppel. Plaintiff requests to be allowed to amend her complaint to include those facts. However, the Court finds that is unnecessary as there are sufficient facts in the Complaint, when construed liberally, to support a finding of equitable tolling at this stage. In the Complaint she alleges ongoing activity in her investigation through November 27, 2017. At what point during that investigation did her claim accrue is a question ...

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