Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_09-cv-08161/USCOURTS-azd-3_09-cv-08161-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Citizenship

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

1

 Since the plaintiff has not raised any cogent argument related to joining

a necessary party pursuant to Fed.R.Civ.P. 19, the Court construes the motion as

only being one pursuant to Fed.R.Civ.P. 15.

 Although the plaintiff has requested oral argument, the Court concludes

that oral argument would not aid the decisional process.

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Betty Jane Foster,

 Plaintiff,

vs.

Zurich American Insurance Company,

et al.,

 Defendants.

)

)

)

)

)

)

)

)

)

)

)

No. CV-09-8161-PCT-PGR

 

 ORDER

Among the motions pending before the Court is the plaintiff’s Motion to

Amend (First) Amended Complaint and/or to Join a Necessary Party (doc. #12). 

Having considered the parties’ memoranda in light of the relevant record, the

Court finds that the motion should be granted pursuant to Fed.R.Civ.P. 15(a)(2).1

Background

This action arises out of personal injuries sustained by the plaintiff on

August 16, 2007 when she fell out of a golf cart in which she was a passenger

Case 3:09-cv-08161-PGR Document 37 Filed 05/04/10 Page 1 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

- 2 -

while on the premises of the Yavapai-Apache Nation’s Cliff Castle Casino, and

from the subsequent conduct of the casino’s insurer, Zurich American Insurance

Company (“Zurich”) and its adjuster, Jani Lehane, related to their handling of the

plaintiff’s insurance claim. 

The plaintiff’s Amended Civil Complaint, the current operative complaint,

which was filed on August 21, 2009 in the Yavapai County Superior Court,

alleged five state law claims against named defendants Zurich and Lehane, all

stemming from these defendants’ alleged misrepresentations to the plaintiff

concerning the statute of limitations applicable to her insurance claim, and one

state law negligence claim against fictitiously-named defendant John Doe Driver,

the driver of the golf cart. Zurich and Lehane removed the action to this Court

based on diversity of citizenship jurisdiction. 

The plaintiff filed a lawsuit in the Yavapai-Apache Nation Tribal Court

against the Cliff Castle Casino and the Yavapai-Apache Nation and various

fictitious defendants arising from the same accident. The tribal court entered an

order of dismissal on December 14, 2009, wherein it reasoned that the plaintiff’s

complaint was time-barred inasmuch as she neither timely complied with the

applicable tribal notice of claim requirement or the tribal statute of limitations.

Other motions pending before the Court, which are not being resolved at

this time, include Zurich and Lehane’s motion to dismiss the amended complaint,

and Kenneth Thurman’s motion to dismiss.

Discussion

In her pending motion to amend, the plaintiff seeks to file a second

amended complaint in part to specifically name Kenneth David Thurman as the

previously identified but fictitiously-named “John Doe Driver” as the person who

Case 3:09-cv-08161-PGR Document 37 Filed 05/04/10 Page 2 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

- 3 -

negligently drove the golf cart in which she was injured; she also seeks to amplify

and clarify some of the allegations against Zurich and Lehane. The plaintiff has

also filed a contemporaneous motion to remand this case to the Yavapai County

Superior Court, wherein she argues that a remand is required pursuant to 28

U.S.C. § 1441(e) should the Court grant the motion to join Thurman as a

defendant since his joinder would destroy diversity jurisdiction. Since the

proposed addition of Thurman affects the Court’s continuing jurisdiction over this

action, the Court will concentrate on the propriety of adding him as a defendant.

Rule 15(a)’s policy that leave to amend must be “freely given when justice

so requires” must not only be heeded by this Court, Foman v. Davis, 371 U.S.

178, 182, 83 S.Ct. 227, 230 (1962), it must be applied with “extreme liberality.”

Owens v. Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 712 (9th Cir.2001),

cert. denied, 516 U.S. 1051 (1996). The defendants’ arguments against allowing

the amendment to add Thurman are in effect limited to the Foman factor of futility. 

While it is clear that “[f]utility of amendment can, by itself, justify the denial of a

motion for leave to amend[,]” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir.1995),

a proposed amendment is futile for purposes of Rule 15(a) “only if no set of facts

can be proved under the amendment ... that would constitute a valid and

sufficient claim[.]” Sweaney v. Ada County, Idaho, 119 F.3d 1385, 1393 (9th

Cir.1997). In making this determination, the Court must resolve all inferences in

favor of granting the motion to amend. Griggs v. Pace American Group, Inc., 170

F.3d 877, 880 (9th Cir.1999).

Thurman argues that the plaintiff possesses no valid negligence claim

against him (1) because the Court lacks jurisdiction over him inasmuch as he is

protected by the Yavapai-Apache Nation’s sovereign immunity, (2) because the

Case 3:09-cv-08161-PGR Document 37 Filed 05/04/10 Page 3 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

2

 Thurman raised these arguments in his motion to dismiss (doc. #34). 

While the motion to dismiss is premature because the Court has not yet allowed

Thurman to be added as a named defendant, the Court has considered the

arguments raised therein to the extent that they are relevant to Rule 15(a)’s futility

issue.

- 4 -

plaintiff’s claims against him are barred by res judicata given the ruling of the

Yavapai-Apache Tribal Court dismissing the plaintiff’s claims against the YavapaiApache Nation and the Cliff Castle Casino, and (3) because the plaintiff failed to

timely comply with the Yavapai-Apache Nation’s notice of claim requirement.2

Based on the limited record before it, the Court cannot conclude at this time that

the plaintiff’s negligence claim against Thurman is futile for purposes of Rule

15(a).

First, all of Thurman’s sovereign immunity and notice of claim-related

arguments, as is Zurich and Lehane’s subject matter-related futility argument, are

based on the contention that he was at the time of the accident an employee of

Cliff Castle Casino, and thus an employee of the Yavapai-Apache Nation, acting

in his official capacity within the scope of his employment. While that may very

well turn out to be the case, there is no evidence in the record before the Court at

this time that conclusively establishes such employment as a matter of fact or

law. While the Court understands that the plaintiff has alleged “on information

and belief” in his various pleadings that Thurman was an employee of Cliff Castle

Casino acting within the scope of his employment at the time of the accident,

Thurman’s employment status is still merely an allegation, and thus speculative,

at this time for purposes of the futility doctrine. 

Second, the Court cannot determine at this time whether Thurman is

entitled to the benefits of res judicata with regard to the tribal court order because 

Case 3:09-cv-08161-PGR Document 37 Filed 05/04/10 Page 4 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

3

 The Court is not now making any ruling concerning the merits of Zurich

and Lehane’s pending motion to dismiss, which is technically directed at the

existing amended complaint.

4

 The proposed second amended complaint alleges that each individual

party is a “resident” of somewhere notwithstanding that it is black letter law that

allegations of residency do not suffice for purposes of 28 U.S.C. § 1332. See

Steigleder v. McQuesten, 198 U.S. 141, 143, 25 S.Ct. 616, 617 (1905) ("It has

long been settled that residence and citizenship [are] wholly different things within

the meaning of the Constitution and the laws defining and regulating the

jurisdiction of the ... courts of the United States; and that a mere averment of

residence in a particular state is not an averment of citizenship in that state for

- 5 -

he was not an actual party to the tribal court action and his privity to the named

defendants depends on his employment relationship with the Yavapai-Apache

Nation which has not yet been established, and because there is nothing in the

Court’s record that conclusively establishes that any final judgment in the tribal

court action has in fact been entered. 

While Zurich and Lehane have also opposed the proposed amendment as

it relates to the various state law claims raised against them on the ground of

futility, the Court, viewing the inferences raised in the current record in favor of

the plaintiff, is not willing to conclude through the mechanism of the motion to

amend that none of claims have any substantive merit.3

While the Court will permit the plaintiff to file a second amended complaint,

the Court cannot conclude at this time that 28 U.S.C. § 1441(e) mandates the

remand of this action. While the plaintiff argues that the joinder of Thurman will

destroy diversity of citizenship jurisdiction, the Court cannot make that

determination based on the plaintiff’s proposed Verified Second Amended Civil

Complaint as the jurisdictional allegations therein are insufficient as a matter of

law to establish the existence of diversity jurisdiction.4

 The Court will therefore

Case 3:09-cv-08161-PGR Document 37 Filed 05/04/10 Page 5 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

the purpose of jurisdiction."); accord, Kanter v. Warner-Lambert Co., 265 F.3d

853, 857-58 (9th Cir. 2001) (Plaintiffs' complaint ... state[s] that Plaintiffs were

'residents' of California. But the diversity jurisdiction statute, 28 U.S.C. § 1332,

speaks of citizenship, not of residency. ... [The] failure to specify Plaintiffs' state of

citizenship was fatal to [the] assertion of diversity jurisdiction.") 

The proposed second amended complaint also alleges that the corporate

party is a “foreign corporation,” which is insufficient since a proper allegation of

corporate citizenship for purposes of § 1332 requires an affirmative allegation of

both the state of corporation and the state in which it has its principal place of

business. See Montrose Chemical Corp, of California v. American Motorists Ins.

Co., 117 F.3d 1128, 1134 (9th Cir.1997).

The plaintiffs are also advised that the total capitalization of the parties’

names in the caption of a complaint violates LRCiv 7.1(a)(3).

- 6 -

require the plaintiff to file a second amended complaint that properly states a

jurisdictional basis, and upon the receipt of that complaint the Court will resolve

the plaintiff’s pending motion to remand. Therefore,

IT IS ORDERED that the plaintiff’s Motion to Amend (First) Amended

Complaint and/or Join a Necessary Party (doc. #12), construed solely as a

motion pursuant to Fed.R.Civ.P. 15(a), is granted.

IT IS FURTHER ORDERED that the Clerk of the Court shall not file the

plaintiff’s Verified Second Amended Civil Complaint lodged on October 19, 2009

(doc. #13-1).

IT IS FURTHER ORDERED that the plaintiff shall file a second amended

complaint that properly states a jurisdictional basis no later than May 14, 2010.

DATED this 4th day of May, 2010.

Case 3:09-cv-08161-PGR Document 37 Filed 05/04/10 Page 6 of 6