Free Response to Motion - District Court of Arizona - Arizona

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Russell A. Kolsrud, #004578 Brad M. Thies, #021354 N ORLING, K OLSRUD, S IFFERMAN & D AVIS, P.L.C. 16427 N. Scottsdale Road, Suite 210 Scottsdale, Arizona 85254 (480) 505-0015 Attorneys for Defendant ValueOptions, Inc. IN THE UNITED STATES DISTRICT COURT

7 DISTRICT OF ARIZONA 8 SHANNON MICHAEL CLARK, 9 Plaintiff, 10 v. 11 VALUEOPTIONS, INC., 12 Defendant. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 By: /s/ Brad M. Thies Russell A. Kolsrud Brad M. Thies Attorneys for Defendant ValueOptions, Inc. Defendant ValueOptions, Inc. ("ValueOptions"), through its counsel, hereby files its response to plaintiff's motion for leave of court to file amended complaint. This court should deny plaintiff's motion based on plaintiff's previous amendments which failed to rectify his errors, his undue delay and futility of his proposed amendments. This response is supported by the following memorandum of points and authorities and the pleadings on file. RESPECTFULLY SUBMITTED this 19 th day of September, 2005. NORLING, KOLSRUD, SIFFERMAN & DAVIS, P.L.C. RESPONSE TO PLAINTIFF'S MOTION FOR LEAVE OF COURT TO FILE AMENDED COMPLAINT Case No. CIV 03-1344-PHX-EHC (MS)

Case 2:03-cv-01344-EHC-HCE

Document 144

Filed 09/19/2005

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MEMORANDUM OF POINTS AND AUTHORITIES Factual and Procedural Posture Plaintiff filed his original complaint on July 15, 2003. [DKT. #1]. On August 28, 2003, plaintiff filed his first amended complaint. [DKT. #11]. ValueOptions filed its answer to the first amended complaint on May 20, 2004. [DKT. #36]. On August 30, 2004, plaintiff filed motion for leave to file a second amended complaint and lodged the same. [DKT. #48]. On October 12, 2004, ValueOptions filed its answer to plaintiff's second amended complaint. [DKT. #56]. On October 13, 2004, ValueOptions filed a motion for summary judgment regarding plaintiff's claims. [DKT. #57]. In its August 2, 2005 order, the court denied ValueOptions' motion for summary judgment and plaintiff's cross-motion for summary judgment inviting ValueOptions to file a subsequent motion for summary judgment based on the court's order. [DKT. #121] On September 2, 2005, ValueOptions filed its second motion for summary judgment pursuant to the court's invitation. [DKT. #135]. On September 6, 2005, plaintiff filed a motion to amend the complaint for a third time. [DKT. #143]. II. Standard Rule 15 of the Federal Rules of Civil Procedure provides that leave to amend the pleadings "shall be freely given when justice requires." Rule 15(a), Fed.R.Civ.P. However, the Supreme Court of the United States recognized that the right to amend is never absolute. Foman v. Davis, 371 U.S. 178, 182 (1962). The Ninth Circuit has recognized five factors frequently used to assess the propriety of a motion for leave to amend which include: (1) bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of amendment; and (5) whether plaintiff has previously amended his complaint. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). The court's discretion to deny leave to amend is particularly broad where plaintiff has previously amended the complaint. Id. Consistent with the court's broad discretion, it need not find all five factors present to justify denial of motion for leave to amend where the plaintiff has previously amended the complaint Id.

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III.

Argument A. Plaintiff's Previous Amendments Support Denial of His Motion for Leave to Amend a Third Time.

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Plaintiff filed his original complaint on July 15, 2003. [DKT. #1]. Plaintiff filed an amended complaint on August 28, 2003. [DKT. #11]. ValueOptions answered the amended complaint on May 20, 2004. [DKT. #36]. On August 30, 2004, plaintiff filed a motion for leave to file second amended complaint and lodged the same with the court. [DKT. #48]. Through its report and recommendation filed on September 24, 2004, this court dismissed Count IV of the second amended complaint as frivolous and considered plaintiff's second amended complaint filed on the same day. [DKT. #52 and 53] On October 12, 2004, ValueOptions filed its answer to the second amended complaint. [DKT. #56]. Plaintiff now files a motion to amend the Complaint for the third time. Plaintiff's third amended complaint attempts to add additional allegations relating to existing defendants, add additional defendants and include additional theories of recovery. It is appropriate for the court to deny plaintiff's motion for leave to amend where the factual basis of the claims were known to plaintiff long before the proposed amendment. Allen, supra, 911 F.2d at 373. Plaintiff was aware of the factual basis of the proposed changes long before filing for leave to amend the complaint a third time. It also presents no new facts to support the proposed changes. In such circumstances, the court does not abuse its discretion in denying leave to amend when movant presents no new facts, but only new theories and has provided no satisfactory explanation for his failure to fully develop his contentions originally. Id. (Citations omitted). Plaintiff's flawed previous amendments and failure to correct errors when he was aware of the basis for the proposed changes support denial of leave to amend. B. Plaintiff's Undue Delay Supports Denial of Leave to Amend.

Over two years after filing the original complaint and after two subsequent amendments, plaintiff now requests leave to file a third amended complaint. In addition, plaintiff's motion for leave to amend was filed subsequent to ValueOptions' second motion 3 Case 2:03-cv-01344-EHC-HCE Document 144 Filed 09/19/2005 Page 3 of 9

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for summary judgment. [DKT. #135]. Plaintiff can advance no justifiable reason for the delay in the proposed additions. Additionally, the Ninth Circuit has clearly recognized that a motion for leave to amend is not a vehicle to circumvent summary judgment. SchlacterJones v. General Telephone of California, 936 F.2d 435, 443 (1991)(overruled on other grounds). In Schlacter, the Ninth Circuit held that the district court did not abuse its discretion in denying plaintiff's motion for leave to amend more than a year after the filing of the complaint and the request occurring subsequent to a pending motion for summary judgment. Id. Similar to the ruling in Schlacter, plaintiff's delay of over two years ­ and filing after ValueOptions' second motion for summary judgment ­ justify denial of plaintiff's motion for leave to amend. Courts have further recognized that sudden amendments appearing when a party is prepared to litigate remaining issues by summary judgment evidences the moving party's failure to act with due diligence. Owens Corning v. National Union Fire Insurance Co. of Pittsburgh, Pennsylvania, 257 F.3d 484, 496-497 (10 th Cir. 2001). ValueOptions' pending motion for summary judgment could eliminate it as a defendant in this matter and Plaintiff's failure to adequately amend the complaint on previous attempts evidences undue delay. It is within this court's discretion ­ and appropriate under the circumstances ­ to deny leave to amend due to plaintiff's undue delay and filing for leave to amend subsequent to ValueOptions second motion for summary judgment. C. The Futility of Plaintiff's Proposed Amendment Supports Denial of Leave to Amend.

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It is within the court's discretion to deny leave to amend if the proposed amendment would be futile. Foman, supra. An amendment to the complaint is futile if the complaint, as amended, would be subject to dismissal for any reason, including if the amendment would not survive a motion for summary judgment. Jurgevich v. McGary, 63 Fed. Appx. 448, 452 (10 th Cir. 2003). A proposed amendment is also futile if it attempts to advance actions that are time barred. Funtanilla v. Rubles, 2003 WL 21309491 N.D. (Cal. 2003). Both reasons justify denial in the present matter. 4 Case 2:03-cv-01344-EHC-HCE Document 144 Filed 09/19/2005 Page 4 of 9

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As to ValueOptions, this court previously denied ValueOptions' motion for summary judgment but still recognized the deficiencies in plaintiff's claims against ValueOptions. The court invited ValueOptions to file a subsequent motion for summary judgment, which it did, advancing arguments consistent with the court's order of August 2, 2005. [DKT. #121]. ValueOptions' second motion for summary judgment establishes the lack of merit to plaintiff's claims as recognized in the court's order dated August 2, 2005. [DKT. #121]. Though plaintiff's third amended complaint attempts to remedy these deficiencies, it is appropriate for this court to deny leave to amend since the proposed amendments rely on non-specific and conclusory allegations insufficient to state a claim on which relief can be granted. Jurgevich, supra, 63 Fed. Appx. at 451; citing Hall v. Bellmon, 935 F.2d 1106, 1110 (10 th Cir. 1991). Plaintiff's claims are futile as alleged against ValueOptions and, as further explained in ValueOptions' second motion for summary judgment, require denial of leave to amend. Plaintiff's proposed complaint further attempts to add additional defendants including the Arizona Department of Health Services ("ADHS") and 17 employees of ValueOptions in their individual and official capacities ("Employees"). However, claims against these additional defendants are futile since plaintiff cannot meet the prima facia requirements of a § 1983 claim and the claims are barred by the statute of limitations. Similar to the claims against ValueOptions, plaintiff has not, and cannot, produce evidence to support his allegations of any constitutional violation against ADHS or the Employees. Deliberate indifference is a stringent standard of fault, requiring proof that a municipal actor disregarded a known or obvious consequence of his action. Board of County Commissioners v. Brown, 520 U.S. 397, 410 (1997). This requires proof that the municipality or actor was aware of prior unconstitutional actions by its employees and failed to take corrective measures. Stemler v. City of Florence, 126 F.3d 856, 865 (6 th Cir. 1987). Additionally, a § 1983 plaintiff must prove that the municipal policies and practices directly caused the constitutional violation. Gray ex rel Estate of Gray v. City of Detroit, 399 F.3d 612, 617 (6 th Cir. 2005). For the reasons set forth in ValueOptions' second motion 5 Case 2:03-cv-01344-EHC-HCE Document 144 Filed 09/19/2005 Page 5 of 9

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for summary judgment, ADHS cannot be liable to plaintiff for alleged constitutional violations. Similarly, plaintiff's proposed amendments fail as to the Employees since plaintiff failed to allege, and can offer no proof beyond conclusory allegations, that they participated either directly or indirectly in the constitutional violations. Turner v. City of Taylor, 412 F.3d 629, 649 (6 th Cir. 2005). Plaintiff's only theory of recovery against the Employees appears to be one of respondent superior, which is not viable in a § 1983 action. Id. Plaintiff simply cannot establish a prima facia case against ADHS or the Employees. Leave to amend should be denied. Plaintiff's claims against ADHS and the Employees are futile since they are barred by the statute of limitations. The State's personal injury statute of limitations provides the applicable time limit for filing a § 1983 claim. Wilson v. Garcia, 471 U.S. 261, 280 (1985). The relation back provisions of State law also govern a § 1983 cause of action. Cabrales v. County of Los Angeles, 864 F.2d 1454, 1463-64 (9 th Cir. 1988). Arizona has adopted a two year statute of limitations for personal injury under A.R.S. § 12-542. Arizona follows the discovery rule for determining the accrual for the statute of limitations. Logerquist v. Danforth, M.D., 188 Ariz. 16, 19, 932 P.2d 281, 285 (App. 1997). A cause of action under the discovery rule accrues when the plaintiff knew or by the exercise of reasonable diligence should have known of the defendant's conduct. Id. A claim is barred two years from when plaintiff knew or should have known the facts giving rise to the claim. Id. Plaintiff has alleged in the various versions of the complaint that the adult intake assessment performed by Karen Marshall on August 22, 2002 and the SMI determination of Thomas Nathan Crumbly on August 30, 2002 were inadequate in violation of his constitutional rights. As such, plaintiff's claims accrued no later than August 30, 2002. Plaintiff knew or should have known of the facts giving rise to his claims at the time it was determined he was not eligible for SMI services. Despite the accrual of plaintiff's claims on August 30, 2002, plaintiff now attempts to add ADHS and the Employees over three

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years after the accrual of his claims. The two year statute of limitations in A.R.S. § 12-542 bars Plaintiff's claims against ADHS and the Employees.1 It is anticipated that plaintiff will argue that these claims relate back to the original complaint, or alternatively, that the statute of limitations was tolled. Despite plaintiff's anticipated arguments, sufficient proof to justify relation back or tolling of the statute of limitations simply does not exist. Arizona's relation back doctrine is governed by Rule 15(c) Ariz.R.Civ.P.2 The relation back doctrine under Rule 15(c) balances the Plaintiff's right to a hearing on the merits of the claim with a defendant's right to be protected from stale claims and the attendant uncertainty they cause. Pagman v. Vickers, 208 Ariz. 573, 578, 96 P.3d 571, 576 (App. 2004). In the context of adding or changing a party, the doctrine protects to-be-added defendants by barring addition unless the plaintiff proves notice, knowledge and timeliness. Id. (emphasis added). Before the relation back doctrine can apply, the plaintiff must affirmatively show that: (1) the party to be added received notice of the institution, that is, filing of the action so that it will not be prejudiced in maintaining a defense on the merits; (2) that the defendant knew or should have known that the plaintiff would have sued it but for a mistake; and (3) that the to-be-added defendant received required notice and

Plaintiff's claims for medical malpractice and medical negligence against ADHS and the Employees are similarly barred by A.R.S. § 12-542, the applicable two year statute of limitations. "Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the parties against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against the party to be brought in by amendment, plus the period provided by Rule 4(i) for service of the Summons and Complaint, the party to be brought in by amendment, (1) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party . . ." 7 Case 2:03-cv-01344-EHC-HCE Document 144 Filed 09/19/2005 Page 7 of 9
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knowledge within the original limitation, plus the time allowed for service of process. Id. Plaintiff did not meet his affirmative duty to establish any of the necessary elements to justify application of the relation back doctrine to the newly added defendants. Appropriately, plaintiff's motion for leave to amend should be denied. It is further anticipated plaintiff will attempt to resurrect his time barred claims by arguing he is entitled to tolling of statute of limitations. Arizona courts have recognized that the statute of limitations serves an important purpose of protecting defendants and the courts from litigation of stale claims in which plaintiffs have slept on their rights and evidence may have been lost or witnesses' memories faded. Nolde v. Frankie, 192 Ariz. 276, 279, 964 P.2d 477, 480 (1998). The policy underlying the statute of limitations "is sound and necessary for the orderly administration of justice." Id. (citations omitted). Justification for tolling the statute of limitations is specifically prescribed by A.R.S. § 12502. A.R.S. § 12-502 only allows tolling if "at the time the cause of action accrues" the party was either (1) the age of minority or (2) of unsound mind. It is undisputed that Plaintiff was not a minor at the time of accrual of his causes of action. It is plaintiff's burden to establish that the unsound mind exception applies, a burden plaintiff cannot meet. In Arizona, a person of unsound mind is generally considered to be "unable to manage his affairs or to understand his legal rights or liabilities." Allen v. Powell's International, Inc., 21 Ariz. App. at 269, 518 P.2d 588 (1974). To justify tolling, the courts require "hard evidence that a person is simply incapable of carrying on the day-to-day affairs of human existence." Nolde, supra 964 P.2d at 482. Simply attaching a posttraumatic stress disorder label to a person is insufficient to satisfy the definition of unsound mind. Id. 964 P.2d at 483. Plaintiff's motion for leave to amend has not offered, and plaintiff cannot produce sufficient evidence, to justify tolling of the statute of limitations for unsound mind. Though it is anticipated that Plaintiff will advance such an argument, reality simply will not support it. ValueOptions believes the accrual of Plaintiff's actions would have accrued on or before August 30, 2002, well outside the two-year statue.

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Plaintiff's amendment attempting to add additional defendants also comes more than two years after the filing of his original Complaint on July 15, 2003. Filing the complaint unquestionably evidences plaintiff's ability to understand his legal rights demonstrating he was of sound mind at the time he filed the complaint. Plaintiff has also failed to meet his burden of establishing his entitlement to tolling. Plaintiff's proposed amendment is futile since claims against the ADHS and the Employees are barred by the statute of limitations. Plaintiff's motion for leave should be denied. III. Conclusion Plaintiff's previous amendments failing to rectify errors in the complaint, coupled with the undue delay and the futility of Plaintiff's proposed amendment, justify denial of plaintiff's motion to amend. ValueOptions requests this court enter an order denying plaintiff's motion. RESPECTFULLY SUBMITTED this 19 th day of September, 2005. NORLING, KOLSRUD, SIFFERMAN & DAVIS, P.L.C.

By: /s/ Brad M. Thies Russell A. Kolsrud Brad M. Thies Attorneys for Defendant ValueOptions, Inc. Original electronically filed with the Court this 19 th day of September, 2005, with a copy mailed to: Shannon M. Clark #113372 ASPC-Tucson-Santa Rita P.O. Box 24406 Tucson, Arizona 85734-4406 Plaintiff pro per /s/ Brad M. Thies

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