Bernal et al v. Daewoo Motor America, Inc. et al, No. 2:2009cv01502 - Document 30 (D. Ariz. 2009)

Court Description: ORDER granting in part and denying in part 19 Motion to Strike. Signed by Judge David G Campbell on 11/16/2009.(NVO)
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Bernal et al v. Daewoo Motor America, Inc. et al 1 Doc. 30 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 Manuel Bernal, husband, individually and on behalf of Kevin Bernal, their minor son, et al., Plaintiffs, 12 13 vs. 14 Daewoo Motor America, Inc., a Delaware corporation, et al., 15 Defendants. 16 ) ) ) ) ) ) ) ) ) ) ) ) ) No. CV09-1502 PHX-DGC ORDER 17 Plaintiffs Manuel, Paula, and Christopher Bernal (“the Bernals”), on behalf of 18 themselves and others, filed a claim against Defendants Daewoo Motor America, Inc., 19 Daewoo Motor Co., Ltd. (collectively “Daewoo”), and other Defendants. Dkt. #1. Daewoo 20 filed an answer (Dkt. #16) and the Bernals have moved to strike the affirmative defenses and 21 demands in Daewoo’s answer (Dkt. #19). The motion is fully briefed. For the reasons that 22 follow, the Court will grant in part and deny in part the Bernals’ motion. 23 I. Background. 24 The Bernals, who are Arizona residents, purchased a 2000 Daewoo Leganza in 25 Arizona. Dkt. #22 at 4.1 On July 28, 2007, while driving in Mexico, the Bernals were 26 27 28 1 Citations to pages in the parties’ filings will be to the page numbers applied by the Court’s electronic docket at the top of each page, not to the numbers at the bottom of each page of a document. 1 involved in a rollover accident. Dkt. #19 at 2; Dkt. #20 at 2. The Bernals allege that 2 “[d]uring the rollover, the [v]ehicle’s roof buckled,” causing substantial injuries to them and 3 fatal injuries to Manuel Bernal’s mother-in-law who was also in the vehicle. Dkt. #19 at 2. 4 On July 21, 2009, the Bernals filed the present case against Daewoo and others, asserting 5 claims for product liability, wrongful death, breach of warranty, failure to warn, and loss of 6 consortium, as well as claims under the Arizona survival statute. Dkt. #1. On September 1, 7 2009, Daewoo filed its answer, which included 17 affirmative defenses and a demand for 8 attorneys’ fees. Dkt. #16. The Bernals have moved to strike all affirmative defenses and the 9 demand. Dkt. #19. 10 II. Arizona law applies. 11 “In a diversity case, the district court must apply the choice-of-law rules of the state 12 in which it sits.” Abogados v. AT&T, Inc., 223 F.3d 932, 934 (9th Cir. 2000) (citing Klaxon 13 Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). Arizona has adopted the “most 14 significant relationship” test set forth in the Restatement (Second) of Conflict of Laws. See 15 Bates v. Super. Ct., 749 P.2d 1367, 1369 (Ariz. 1988); Garcia v. Gen. Motors Corp., 990 16 P.2d 1069, 1075-76 (Ariz. App. 1999). Under this test, the Court must apply the law of the 17 state that has the most significant relationship to the cause of action. Garcia, 990 P.2d at 18 1075-76. To determine which state has the most significant relationship, the Court must 19 consider (1) where the injury occurred, (2) where the conduct causing the injury occurred, 20 (3) the domicile and residence of the parties, and (4) where the relationship between the 21 parties is centered. Id. at 1076. “Arizona courts traditionally have accorded great weight in 22 the conflicts analysis to the domicile of the tort victim in a personal injury case.” Id. 23 The Bernals argue that the Court should apply Arizona law, while Daewoo argues that 24 “the law of forum where this accident occurred will govern.” Dkt. #20 at 3. The Court 25 agrees with the Bernals. Two important factors weigh in favor of applying Arizona law: 26 (1) the Bernals are domiciled in Arizona, and (2) they purchased their vehicle here. Dkt. #22 27 at 4. The only factor that favors Mexico is that the accident occurred there, and this factor 28 “loses significance if the place of injury is merely fortuitous” as it is here. Garcia, 990 P.2d -2- 1 at 1076. Several Arizona courts have chosen to apply Arizona law, and not the law of the 2 state where the accident occurred, in circumstances much like this. See, e.g., id.; Baroldy v. 3 Ortho Pharm. Corp., 760 P.2d 574, 578-79 (Ariz. App. 1988) (applying Arizona law even 4 when three of the four factors weighed against application of Arizona law); Moore v. 5 Montes, 529 P.2d 716, 720-21 (Ariz. App. 1974). 6 In addition, the Court must consider “(1) the needs of the interstate and international 7 systems, (2) the relevant policies and interests of the competing forums, (3) the protection 8 of justified expectations, (4) the basic policies underlying the field of law, (5) the certainty, 9 predictability, and uniformity of result, and (6) the ease of determining and applying the law 10 of the particular forum.” Garcia, 990 P.2d at 1077. Daewoo has not asserted that the law 11 of Mexico should be applied based on these factors. Given that Mexico’s only contact with 12 this litigation is that the accident occurred there, the Court does not find that the needs of 13 Mexico or its policies demand that Mexican law be applied. See Moore, 529 P.2d at 720-21. 14 The Bernals are not Mexican residents, Daewoo is not a Mexican corporation, and the 15 litigation does not concern Mexico’s traffic laws or tort policies. Arizona is clearly more 16 central to this litigation. The Bernals are Arizona residents, Daewoo does business here, and 17 the Bernals purchased their vehicle here. Arizona certainly has an interest in protecting its 18 citizens under its laws and policy rationales. As a result, this Court finds that Arizona law 19 should be applied in this case. 20 III. Daewoo’s affirmative defenses. 21 The Bernals ask the Court to strike all of Daewoo’s affirmative defenses. Dkt. #19. 22 While the Court may strike insufficient defenses pursuant to Rule 12(f), “[m]otions to strike 23 are viewed negatively because of the limited import of the pleadings under the Federal 24 Rules.” Netflix, Inc. v. Blockbuster, Inc., 2006 WL 2458717, at *8 (N.D. Cal. 2006). 25 Motions to strike “‘should not be granted unless it is clear that the matter to be stricken could 26 have no possible bearing on the subject matter of the litigation.’” Id. (citation omitted). 27 Although motions to strike are generally disfavored, they “are proper when a defense is 28 insufficient as a matter of law.” Torres v. Goddard, 2008 WL 1817994, *1 (D. Ariz. 2008) -3- 1 (citing Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 2 1057 (5th Cir. 1982)). 3 The Bernals argue that all Daewoo’s affirmative defenses are insufficient because 4 they do not contain factual support as required by Federal Rule of Civil Procedure 8(b). 5 Dkt. #19 at 3-4. Rule 8(b), however, does not apply to affirmative defenses. Rule 8(c) 6 applies and requires a party to “affirmatively state any avoidance or affirmative defense.” 7 It does not contain the language from Rules 8(a) or 8(b) requiring a “short and plain 8 statement” or “short and plain terms.” The Court will not strike Daewoo’s affirmative 9 defenses on the ground that they do not comply with Rule 8(b). 10 The Bernals also argue that six of Daewoo’s 17 affirmative defenses – statute of 11 limitations, statute of repose, assumption of the risk, notice of claim, collateral source, and 12 statutory cap – are insufficient as a matter of Arizona law and should be stricken with 13 prejudice under Rule 12(f). The Court will consider these six affirmative defenses in turn. 14 A. 15 Daewoo has asserted as an affirmative defense that “Plaintiffs’ claims are barred by 16 the applicable statute of limitations.” Dkt. #16 at 7. The Bernals, however, assert that they 17 complied with all applicable statutes of limitation. Under Arizona law, product liability 18 claims, failure to warn claims, and wrongful death claims must be brought within two years 19 of the accrual of the claim. A.R.S. §§ 12-542, 12-551. Survival actions and loss of 20 consortium claims also have a two year limitation, as they also arise from injuries to person. 21 A.R.S. § 12-542. The Bernals assert that they complied with the two year limitation because 22 the claim accrued on July 28, 2007 – the date of the accident – and the Bernals filed the 23 present case on July 21, 2009, less than two years later. Dkt. #19 at 4-5. Daewoo does not 24 dispute these dates. Statute of limitations. 25 The Bernals also claim that they complied with the statute of limitations for their 26 breach of warranty claim, which they assert could be either two years or four years 27 depending on whether the claim sounds in contract or tort. See A.R.S. §§ 12-542, 47-2725 28 (indicating that there is a two year period for breach of warranty claims arising out of -4- 1 personal injury and a four year period for contract disputes). Under A.R.S § 47-2725, 2 however, a breach of warranty action based on contract must be brought within four years 3 of accrual of the cause of action, which generally occurs “when tender of delivery is made.” 4 The Bernals did not inform the Court when they received their vehicle from Daewoo, so the 5 Court cannot determine whether four years passed between “tender of delivery” and the date 6 the Bernals brought suit. A.R.S § 47-2725. As a result, the Court cannot conclude that no 7 applicable statute of limitations could bar the Bernals’ claims. The Court will not strike the 8 defense. 9 B. Statute of repose. 10 Arizona recognizes a statute of repose in actions based in contract, but not in 11 negligence claims. A.R.S. § 12-552; see Flagstaff Affordable Housing Ltd. P’Ship v. Design 12 Alliance, Inc., 212 P.3d 125, 132 (Ariz. App. 2009); Fry’s Food Stores of Ariz., Inc. v. 13 Mather & Assoc., Inc., 900 P.2d 1225, 1227 (Ariz. App. 1995). Given that the Bernals assert 14 a breach of warranty claim based upon “certain express and implied warranties” including 15 the warranty of merchantability and the warranty of fitness for a particular purpose, the Court 16 cannot hold that the Bernals’ action is based entirely in tort and not in contract. Dkt. #1, 17 ¶ 51; see A.R.S. § 47-2314 (indicating that the warranty of merchantability and the warranty 18 of fitness for a particular purpose arise from contract); Am. L. Prod. Liab. 3d § 18:34 (stating 19 that breach of warranty actions sound in contract). The Court cannot strike the defense on 20 this ground. 21 C. 22 To “invoke the doctrine of assumed or incurred risk there must be either a risk or 23 danger which the plaintiff knows of or appreciates, or the danger must be so obvious that the 24 plaintiff will be presumed to have known and comprehended it.” Miller v. George F. Cook 25 Constr. Co., 370 P.2d 53, 54 (Ariz. 1962). Whether the Bernals assumed the risk generally 26 is a question of fact for the jury. See A Tumbling-T Ranches v. Flood Control Dist. of 27 Maricopa County, --- P.3d ---, 2009 WL 3245447, *19 (Ariz. App. 2009). As a result, the 28 Court cannot strike this defense on the ground that it is insufficient as a matter of law. Assumption of the risk. -5- 1 D. 2 Plaintiffs argue that there is no notice of claim requirement under Arizona law unless 3 the defendant is the state or federal government. See A.R.S. § 12-821.01. Daewoo does not 4 dispute this contention. As a result, the Court finds the notice of claim defense insufficient 5 as a matter of law and will strike it with prejudice. Notice of claim. 6 E. 7 In Arizona, this defense applies in contract actions but not in tort actions. See 8 Norwest Bank (Minn.), N.A. v. Symington, 3 P.3d 1101, 1109 (Ariz. App. 2000); Grover v. 9 Ratliff, 586 P.2d 213, 215 (Ariz. App. 1978); Silverson v. U.S., 710 F.2d 557, 559 (9th Cir. 10 1983). Because the Bernals’ breach of warranty action may sound in contract, the Court 11 cannot now hold this affirmative defense legally insufficient. The Court will not strike this 12 affirmative defense with prejudice. Collateral source. 13 F. 14 The Bernals assert that there are no constitutional or statutory limitations on the 15 amount of recovery in the present action, and Daewoo has not pointed to any. The defense 16 will be stricken with prejudice. Statutory cap. 17 G. 18 At this early stage of the litigation, the Court can conclude that only two of Daewoo’s 19 affirmative defenses are insufficient as a matter of law – notice of claim and statutory cap. 20 The Court will strike these defenses with prejudice, but otherwise will deny the Bernals’ 21 motion to strike. 22 IV. Summary. Daewoo’s claim for attorneys’ fees. 23 Arizona law generally does not permit the recovery of attorneys’ fees unless provided 24 by statute or agreement of the parties. See U.S. Fid. Guar. Co. v. Frohmiller, 227 P.2d 1007, 25 1008 (Ariz. 1951). Arizona statutes provide for attorneys’ fees when the claim “aris[es] out 26 of a contract,” or when the “claim or defense constitutes harassment” or “is not made in good 27 faith.” A.R.S. § 12-341.01. The Bernals argue that Daewoo cannot recover attorneys’ fees 28 because none of the claims sound in contract. As discussed above, however, the Bernals’ -6- 1 breach of warranty claim may sound in contract. Chaurasia v. Gen. Motors Corp., 126 P.3d 2 165, 174 (Ariz. App. 2006) (“Time after time, Arizona courts have held that a claim for 3 breach of warranty does arise out of contract for purposes of A.R.S. § 12-341.01(A).”). 4 Moreover, Daewoo could be entitled to attorneys’ fees for other reasons under A.R.S. § 12- 5 341.01. Given these facts, the Court will not strike Daewoo’s claim for attorneys’ fees. 6 7 8 IT IS ORDERED that Plaintiffs’ motion to strike (Dkt. #19) is granted in part and denied in part as set forth above. DATED this 16th day of November, 2009. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7-