Free Order on Motion in Limine - District Court of Arizona - Arizona

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

) ) ) ) Plaintiff, ) ) vs. ) ) PETER THIMMESCH, et al., ) ) Defendants. ) ___________________________________) O R D E R

BILTMORE ASSOCIATES, L.L.C., as Trustee for the Visitalk Creditors' Trust,

No. 2:02-cv-2405-HRH

Motion in Limine re: UCATA Defense Plaintiff moves to exclude any argument, testimony, or evidence by Snell & Wilmer relating to the application of the Uniform Contribution opposed.2 necessary. Background Arizona adopted UCATA in 1984. 962 P.2d 909, 914 (Ariz. 1998). See Piner v. Superior Court, Among Tortfeasors Act (UCATA).1 This motion is

Oral argument has not been requested and is not deemed

In 1987, the Arizona legislature

amended UCATA "to abolish joint and several liability in most circumstances." State Farm Ins. Co. v. Premier Mfg. Sys., Inc., 172

1

Docket No. 424. Docket No. 430. -1-

2

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 1 of 11

P.3d 410, 413 (Ariz 2007). "The 1987 amendment, codified at A.R.S. § 12-2506, establishes a system of comparative fault, making 'each tortfeasor responsible for paying his or her percentage of fault and no more.'" Id. (quoting Dietz v. Gen. Elec. Co., 821 P.2d 166, 171 Section 12-2506(A) reads, in pertinent part:

(Ariz. 1991)).

In an action for personal injury, property damage or wrongful death, the liability of each defendant for damages is several only and is not joint, except as otherwise provided in this section. Each defendant is liable only for the amount of damages allocated to that defendant in direct proportion to that defendant's percentage of fault, and a separate judgment shall be entered against the defendant for that amount. Fault may also be allocated to nonparties as set forth in A.R.S. § 12-2506(B): In assessing percentages of fault the trier of fact shall consider the fault of all persons who contributed to the alleged injury, death or damage to property, regardless of whether the person was, or could have been, named as a party to the suit. Negligence or fault of a nonparty may be considered if the plaintiff entered into a settlement agreement with the nonparty or if the defending party gives notice before trial, in accordance with requirements established by court rule, that a nonparty was wholly or partially at fault. Fault may also be attributed to the plaintiff in certain circumstances. A.R.S. § 12-2505(A) provides, in pertinent part: The defense of contributory negligence or of assumption of risk is in all cases a question of fact and shall at all times be left to the jury. If the jury applies either defense, the claimant's action is not barred, but the full damages shall be reduced in proportion to the -2-

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 2 of 11

relative degree of the claimant's fault which is a proximate cause of the injury or death, if any. UCATA further provides that "[t]he relative degree of fault of the claimant, and the relative degrees of fault of all defendants and nonparties, shall be determined and apportioned as a whole at one time by the trier of fact." A.R.S. § 12-2506(C).

In the parties' Joint Pretrial Statement,3 Snell & Wilmer lists UCATA as one of its "separate" issues to be decided at trial. UCATA may have application here because the claims to be tried include legal malpractice claims, which in Arizona are considered personal injury claims. 2002). Botma v. Huser, 39 P.3d 538, 541 (Ariz. Ct. App.

Snell & Wilmer contends that if Visitalk is determined to

have sustained any compensable damages, the court will have to apportion fault among Snell & Wilmer and some 22 other parties and nonparties.4 Plaintiff contends that because this is the first time Snell & Wilmer raised UCATA as a defense, Snell & Wilmer has waived

3

Docket No. 422.

Id. at 12. The parties and non-parties are Vistalk.com, Inc; Bryan Cave; Gibson, Dunn, & Crutcher; Lynn Stodghill; The Falk Law Firm; Dickstein Shapiro; Stephen Best, P.C.; Lyons & Lyons; Ernst & Young, LLC; Peter Thimmesch; Cynthia Thimmesch; Raymond Gaston; Allan Kaplan; Jeffrey Hirschberg; Richard Rothwell; Michael O'Donnell; Marcia O'Donnell; Robert Corry; Michael Cooney; Mark Cardwell; Giles Sommerville; and MP3.com, Inc. All of these individuals or entities were at one time a party in this case except for Bryan Cave; Gibson, Dunn & Crutcher; Lynn Stodghill; Dickstein Shapiro; Lyons & Lyons; and Richard Rothwell, although Snell & Wilmer appears to believe that Rothwell was a named defendant. -3-

4

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 3 of 11

this defense and should be prohibited from presenting evidence relating to this defense at trial. Discussion "Under the Federal Rules of Civil Procedure, a party, with limited exceptions, is required to raise every defense in its first responsive pleading, and defenses not so raised are deemed waived." Morrison v. Mahoney, 399 F.3d 1042, 1046 (9th Cir. 2005). Rule

8(c) lists nineteen specific affirmative defenses that must be raised in a party's first responsive pleading. Comparative fault

is not one of the affirmative defenses listed in Rule 8(c), although contributory negligence is a listed affirmative defense. However,

Rule 8(c) also provides that, "[i]n responding to a pleading, a party must affirmatively state any ... affirmative defense", not just those defenses spelled out in the rule. Snell & Wilmer first argues that it asserted comparative fault as a defense in its original answer and all its subsequent answers and thus it cannot be considered to have waived this defense. In

its original answer and each amended answer, Snell & Wilmer raised an affirmative defense labeled "Comparative Fault", stating that "[p]laintiff's claims may be barred or the amount of recoverable damages reduced by Plaintiff's own comparative fault."5

See Docket No. 37 at 7, ¶ 42; Docket No. 107 at 19, ¶ 346; and Docket No. 290 at 19, ¶ 346. The plaintiff at the time of Snell & Wilmer's answers was Visitalk.com, Inc., not the current plaintiff, Biltmore Associates, L.L.C. Snell & Wilmer does not (continued...) -4-

5

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 4 of 11

The defense that Snell & Wilmer raised in its answer is the statutory successor to a contributory negligence defense. Although Arizona to some extent does not use the term "contributory

negligence" anymore and there is Arizona case law stating that UCATA "replaced contributory negligence with comparative fault", Piner, 962 P.2d at 914, the Arizona Supreme Court acknowledged early on that "Arizona's Uniform Contribution Among Tortfeasors Act is unusual because it combines comparative negligence and contribution provisions within the same Act." Hall v. A.N.R. Freight System, The court concludes that

Inc., 717 P.2d 434, 436 (Ariz. 1986).

Snell & Wilmer raised a "contributory negligence" or "comparative negligence" defense as between it and Visitalk. But, Snell &

Wilmer's answer did not raise or put plaintiff on notice of a comparative fault defense based on the allocation of fault to other defendants and nonparties. The question then becomes whether comparative fault is an affirmative defense that must be raised in a party's first

responsive pleading. As mentioned above, "comparative fault" is not a listed defense in Rule 8(c), but Rule 8(c) requires that "a party ... affirmatively state any ... affirmative defense", not just those listed in the rule. Snell & Wilmer contends that allocation of

fault in Arizona is "automatic" as to defendants and any persons who

(...continued) seek to allocate fault to the current plaintiff but rather to the original plaintiff, Visitalk.com, Inc. -5-

5

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 5 of 11

have settled with the plaintiff.

Although Snell & Wilmer does not

couch its argument in these terms, Snell & Wilmer seems to be arguing that a defendant does not have to raise comparative fault as to other defendants and settling parties as an affirmative defense. Section 12-2506(B) only requires that statutory notice be given to nonparties who have not settled with the plaintiff. Thus, Snell & Wilmer argues that it is abundantly clear that any

allocation of fault must include all other existing or settling defendants, regardless of whether Snell & Wilmer raised such a defense in its answer. A.R.S. § 12-2506(B) does not require notice be given as to other defendants and persons who settled with the plaintiff. Section 12-2506(B) only requires that notice be given if a party wants the trier of fact to consider the negligence or fault of a nonparty. But, that does not mean that Snell & Wilmer was not

required to raise the comparative fault/allocation issue in its answer. Comparative fault is considered an affirmative defense.

See Williams v. Baugh, 154 P.3d 373, 374 (Ariz. Ct. App. 2007) (referring to "comparative fault" as an affirmative defense that could be raised by defendant); 65A C.J.S. Negligence § 697 (2000) ("[c]omparative fault is an affirmative defense"). Rule 8(c)

requires a party to set forth any affirmative defense in order "to give the court and the other parties fair warning that a particular line of defense will be pursued." Williams v. Ashland Engineering

-6-

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 6 of 11

Co., 45 F.3d 588, 593 (1st Cir. 1995), abrogated on other grounds by Carpenters Local Union No. 26 v. U.S. Fidelity & Guar. Co., 215 F.3d 136 (1st Cir. 2000)). "The fair notice pleading requirement

is met if the defendant sufficiently articulated the defense so that the plaintiff was not a victim of unfair surprise." Woodfield v.

Bowman, 193 F.3d 354, 362 (5th Cir. 1999) (citation omitted). Snell & Wilmer's silence as to comparative fault as to defendants and/or nonparties risked misdirected, inefficient case development and settlement efforts and terribly disruptive surprise for the parties and the court at trial. The court concludes that comparative fault as to the other defendants and nonparties is an affirmative defense that Snell & Wilmer should have raised in its first responsive pleading. Generally, as noted above, a party's failure to raise an affirmative defense in its answer results in the waiver of that defense. However, the court may excuse a late disclosure of a See, e.g.,

defense as long as the plaintiff is not prejudiced.

Magana v. Commonwealth of Northern Mariana Islands, 107 F.3d 1436, 1446 (9th Cir. 1997); Camarillo v. McCarthy, 998 F.2d 638, 639 (9th Cir. 1993). Although Snell & Wilmer failed to raise a comparative

fault defense as to other defendants and nonparties in its answer, plaintiff had notice that Snell & Wilmer intended to raise such a defense as to other defendants as of November 20, 2003. On November

-7-

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 7 of 11

20, 2003, Snell & Wilmer filed a "Joinder in Notice of Non-parties at Fault" which stated: Defendant Snell & Wilmer, LLP hereby joins in the designation of the non-parties at fault submitted by any other party hereto and further designates [as] a non-party at fault any person ever named as a defendant herein and dismissed prior to trial.[6] This filing put plaintiff on notice that Snell & Wilmer intended to request that fault be allocated between all persons who had ever been named as a defendant in this action. Thus, plaintiff cannot

claim surprise based on a lack of notice and Snell & Wilmer may be entitled to have fault allocated as between Visitalk and all of the defendants in this case. The court is mindful that plaintiff contends that Snell & Wilmer's "notice" was untimely and must be stricken. Plaintiff's

request to strike Snell & Wilmer's notice is based on Arizona Rule of Civil Procedure 26(b)(5) which provides: Any party who alleges ... that a person or entity not a party to the action was wholly or partially at fault in causing any personal injury, property damage or wrongful death for which damages are sought in the action shall provide the identity, location and facts

Docket No. 160. Prior to this November 2003 joinder, defendants Michael Cardwell and Margaret Mahoney had filed a Notice of Non-Parties at fault that listed Jeffrey Hirschberg and Alan Kaplan as nonparties at fault. See Docket No. 153. Cardwell and Mahoney filed a second notice at Docket No. 167 but this was filed after Snell & Wilmer had filed its joinder. MP3.com also filed a Notice of Non-Parties at fault at Docket No. 165, but this too was filed after Snell & Wilmer filed its joinder. -8-

6

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 8 of 11

supporting the claimed liability of such nonparty ... within one hundred fifty (150) days after the filing of that party's answer.... Pursuant to Arizona Rule 26(b)(5), plaintiff argues that Snell & Wilmer's notice was due 150 days after it filed its answer on March 10, 2003, or in other words, by August 7, 2003. Because Snell &

Wilmer did not file its notice until November 20, 2003, plaintiff argues that it was untimely. Plaintiff contends that Arizona Rule

26(b)(5) applies to state law claims in Arizona federal court actions and cites to Wester v. Crown Controls Corp., 974 F. Supp. 1284 (D. Ariz. 1996), for support. Wester involved a motion to The

strike a defendant's designation of non-parties at fault.

plaintiff argued that the designation should be stricken because the defendant failed to comply with Arizona Rule 26(b)(5). The

defendant argued that the 150-day notice requirement did not apply because it was a state procedural rule. The court analyzed the

issue under Erie and determined that "Erie considerations strongly support the application of Ariz. R. Civ. P. 26(b)(5) in this diversity case." Id. at 1288. The court concluded that "[t]he 150day notice rule is inextricably intertwined with UCATA's substantive rules governing the allocation of liability among named and un-named parties." Id. The court found that a failure to apply the state

rule would encourage forum shopping, result in discrimination against resident plaintiffs, and affect the amount of damages to be awarded at trial. Id. The reasoning of the Wester court is sound -9-

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 9 of 11

and there is no reason why this court should reach a different result. But, plaintiff's attempt to strike Snell & Wilmer's notice itself comes way too late. See Fed. R. Civ. P. 12(f)(2) (20 day While the court has the

deadline for filing a motion to strike).

discretion to accept an untimely motion to strike, this one comes over four years too late. Snell & Wilmer may have failed to comply

with the time requirements for filing a notice as to allocation of fault, but it filed its notice in sufficient time to prevent significant misdirection or inefficiency in case development or settlement efforts, or unfair surprise to plaintiff. Plaintiff knew by late 2003 that Snell & Wilmer was seeking to allocate fault as between the defendants in this case. The nonparties to whom Snell & Wilmer wants to allocate fault are a different matter. Snell & Wilmer did not put plaintiff on

notice that it would seek allocation of fault of nonparties until it did so in the Joint Pretrial Statement. Snell & Wilmer

acknowledges that A.R.S. § 12-2506(B) provides that the defendant must give notice if fault is to be apportioned to a nonparty who did not settle with the plaintiff. But, Snell & Wilmer contends that

there is no federal rule of procedure that imposes a deadline or time limit for a designation of a nonparty at fault. As stated above, the court has concluded that Arizona Rule 26(b)(5) applies here and thus Snell & Wilmer's notice as to nonparties was too late. Snell & Wilmer is not entitled to have the

-10-

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 10 of 11

fact finder allocate fault to any person or entity who was not ever a party to this action because Snell & Wilmer did not timely put plaintiff on notice that it intended to seek such allocation. Conclusion Plaintiff's motion7 in limine is granted in part and denied in part. Snell & Wilmer is entitled to present evidence that would

allow the trier of fact to allocate fault as between Visitalk and and any person or entity that was ever a defendant in this action. But, Snell & Wilmer is not entitled to present evidence relating to the allocation of fault to nonparties. DATED at Anchorage, Alaska, this 2008. 7th day of February,

/s/ H. Russel Holland United States District Judge

7

Docket No. 424. -11-

Case 2:02-cv-02405-HRH

Document 450

Filed 02/07/2008

Page 11 of 11