Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_14-cv-08146/USCOURTS-azd-3_14-cv-08146-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

Aramark Sports & Entertainment Services 

Incorporated, 

Plaintiff, 

v. 

Twin Anchors Marine Limited, 

Defendant.

No. CV-14-08146-PCT-NVW

ORDER 

 Before the court is Defendant Twin Anchors’ Motion to Dismiss Plaintiff’s First 

Amended Complaint (Doc. 41). For the reasons that follow, the Motion will be denied. 

I. BACKGROUND 

 Pursuant to a Houseboat Purchase Agreement (“Agreement”) signed in December 

2005, Twin Anchors Marine, Ltd. (“Twin Anchors”) constructed and delivered to 

Aramark Sports and Entertainment Services, Inc. (“Aramark”) six seventy-five-foot 

houseboats. (Doc. 37-1 at 3, 20). In the “Warranties” section of the Agreement, Twin 

Anchors warranted, among other things, that 1) “the Work shall be performed in 

accordance with the terms and conditions of this Agreement,” 2) “the Houseboat shall be 

free from defects in design, workmanship and materials,” and 3) “all Work will meet all 

applicable American Boat and Yacht Council standards as regulated and inspected by the 

National Marine Manufacturers Association, and the United States Coast Guard 

specifications and requirements applicable to houseboats.” (Id. at 10-11.) The parties 

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agreed that the warranty for “defects in workmanship and materials” would “only extend 

for a period of one (1) year from the date of Final Delivery to ARAMARK.” (Id. at 10.) 

The Agreement also contained the following “Indemnity” provision: “[Twin Anchors] 

agrees to defend, indemnify and hold ARAMARK, and its officers, directors, 

shareholders and affiliates, harmless from and against any and all lawsuits, causes of 

action, claims, liabilities, damages, losses, costs and expenses (including reasonable 

attorneys’ fees and expenses), arising out of: (i) the negligent acts or omissions or the 

intentional misconduct of [Twin Anchors] in the performance of this Agreement ... and 

(iii) any breach of this Agreement by [Twin Anchors].” (Id. at 13.) 

 On June 21, 2008, Robert Howeth rented one of Aramark’s houseboats to use for a 

family vacation on Lake Powell. (Doc. 37 at 3.) While on board three days later, several 

members of Howeth’s party experienced nausea, headaches, vomiting, and loss of 

consciousness; Glenn Howeth, Robert Howeth’s brother, suffered a heart attack and died. 

(Id.) In July 2009, the other members of the Howeth party sued Aramark, Twin Anchors, 

and three other parties in federal district court in Utah, seeking damages for personal 

injury and wrongful death allegedly caused by a carbon monoxide leak aboard the 

houseboat. (Id. at 3-4.) 

 As part of that litigation, Twin Anchors filed an “Answer to Third Amended 

Complaint and Cross Claim and Notice of Allocation of Fault” (“Twin Anchors 

Answer”) in May 2011. The Twin Anchors Answer states twenty-three defenses and, 

“[p]ursuant to Utah Code Annotated §78B-5-818, and otherwise as applicable under Utah 

substantive law and Local Rule 9-1,” asserts “crossclaims for standing and any other 

purpose, as necessary to allocate fault” to the other four defendants. (Doc. 25-1 at 3-22.) 

Under the provision of Utah law cited by Twin Anchors, which is titled “Comparative 

negligence,” the “fact finder may, and when requested by a party shall, allocate the 

percentage or proportion of fault attributable to each person seeking recovery, to each 

defendant, to any person immune from suit, and to any other person identified under 

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Subsection 78B-5-821(4) for whom there is a factual and legal basis to allocate fault.” 

Utah Code Ann. § 78B-5-818(4)(a). 

The Twin Anchors Answer explains why, in Twin Anchors’ view, each of the 

other defendants should be held liable in lieu of Twin Anchors. For example, Twin 

Anchors argued that if “the death of Glenn Howeth and/or any injuries incurred by 

Plaintiffs . . . was caused, in whole or in part, by the leak of carbon monoxide from the 

[water separator] during the voyage or otherwise, the said leak was proximately caused 

by the failure of Aramark . . . to properly adjust the valve on the water discharge line.” 

(Doc. 25-1 at 23.) The Twin Anchors Answer also asserts that, “In the event that Twin 

Anchors is held liable to any person or entity for any claim or cause of action arising 

from the subject incident or any damages alleged by Plaintiffs, it is entitled to an 

allocation of fault as against Aramark in accordance with applicable law.” (Id. at 25.) 

Twin Anchors sought similar allocations of fault against all codefendants. Nowhere does 

the Twin Anchors Answer plead causes of action against Aramark or any other 

defendant. 

 Aramark filed an “Amended Answer of Defendants Aramark Corporation and 

Aramark Sports and Entertainment Services, LLC’s to Plaintiffs’ Third Amended 

Complaint, Counterclaim Against Robert Howeth, and Cross-Claim for Apportionment 

of Fault” (“Aramark Answer”) on July 5, 2011. (Doc. 25-1 at 60.) In addition to 

asserting thirty-eight affirmative defenses, the Aramark Answer includes a counterclaim 

against Robert Howeth, seeking indemnification for any damages awarded against 

Aramark in the Utah litigation, pursuant to an indemnity clause in Howeth’s rental 

agreement with Aramark. (Id. at 54-58.) The Aramark Answer also contains a clause, 

similar to that in the Twin Anchors Answer, declaring, “In the event that ARAMARK is 

held liable to any person or entity for any claim or cause of action arising from the 

subject incident or any damages alleged by the Plaintiffs, it is entitled [to] an allocation of 

fault against [the other defendants, including Twin Anchors] in accordance with 

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applicable law.” (Id. at 60.) Like the Twin Anchors Answer, the Aramark Answer does 

not plead any causes of action against any co-defendants. 

 The Utah litigation settled in November 2011. (Id. at 72.) Under the settlement 

agreement, all defendants released any claims they might have against one another, with 

one exception: “Aramark and Twin Anchors specifically reserve all of their rights to 

assert an indemnification action pursuant to the [Agreement] between them, which rights 

are not being discharged by this [settlement agreement].” (Id. at 75.) Aramark then 

brought this action against Twin Anchors on August 18, 2014. (Doc. 1.) The First 

Amended Complaint (Doc. 37), filed January 7, 2015, seeks damages under the 

Agreement’s indemnity provision for sums Aramark paid out in the Utah litigation. 

Specifically, Aramark claims Twin Anchors is responsible for those payments because 

(1) “Twin Anchors breached its contractual obligations to Aramark and delivered the 

[houseboat] with defects in its design, workmanship and materials, which did not meet 

the applicable standards,” and (2) Twin Anchors “negligently designed, constructed, sold 

and failed to give warnings and/or instructions about the [houseboat], such that, unknown 

to Aramark, users and others, [carbon monoxide] was released under the houseboat, 

where it accumulated and then migrated into the living spaces.” (Doc. 37 at 4-5.) In 

essence, Aramark’s first cause of action seeks indemnification for Twin Anchors’ breach 

of the warranties in the Agreement; the second seeks indemnification for general 

negligence in design and construction of the houseboat. At oral argument, counsel for 

Aramark conceded that these causes of action merely apply different labels to the same 

underlying facts. 

 Twin Anchors’ Motion, filed February 4, 2015, urges dismissal of Aramark’s First 

Amended Complaint on the grounds that it fails to state a claim upon which relief can be 

granted, as required by Rule 12(b)(6) of the Federal Rules of Civil Procedure. 

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II. STANDARD OF REVIEW 

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. 1990). On a motion to 

dismiss under Rule 12(b)(6), all allegations of material fact are assumed to be true and 

construed in the light most favorable to the non-moving party. Cousins v. Lockyer, 568 

F.3d 1063, 1067 (9th Cir. 2009). The principle that a court accepts as true all of the 

allegations in a complaint, however, does not apply to legal conclusions or conclusory 

factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive, a claim 

must have “facial plausibility”—the plaintiff must plead “factual content that allows the 

court to draw the reasonable inference that the defendant is liable for the misconduct 

alleged.” Id. Finally, courts generally may not consider any material beyond the 

pleadings when ruling on a Rule 12(b)(6) motion. One exception, however, is that a 

court may take judicial notice of matters of public record under Federal Rule of Evidence 

201. Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Courts do not have 

to accept alleged facts as true when they contradict those matters subject to judicial 

notice. Sears, Roebuck & Co. v. Metro. Engraver, Ltd., 245 F.2d 67, 70 (9th Cir. 1956). 

Twin Anchors alleges several deficiencies in the First Amended Complaint, which 

the court will consider in turn. 

III. NATURE OF FIRST CAUSE OF ACTION 

Twin Anchors argues that Aramark’s first cause of action, though couched as one 

for breach of the parties’ indemnity provision, in reality alleges nothing more than breach 

of the underlying contractual warranties. The first cause of action, Twin Anchors 

contends, “is the same in substance as” breach-of-warranty claims that Aramark included 

in its original Complaint (Doc. 1) but has since dropped. (Doc. 43 at 8.) On Twin 

Anchors’ view, that claim is therefore barred by the Utah settlement agreement, which 

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preserved only claims relating to the parties’ “rights to assert an indemnification action 

pursuant to the [Agreement] between them.” (Doc. 25-1 at 75.) 

This argument misunderstands the nature of Aramark’s claim. The “Warranties” 

and “Indemnity” sections of the Agreement secured to Aramark two different sets of 

contractual rights. The first set ensures that the boat delivered by Twin Anchors satisfies 

certain standards of workmanship and design. The second set ensures that, if Aramark is 

forced to pay damages resulting from deficiencies in design or construction of the 

houseboat, Aramark can obtain indemnification for those expenses from Twin Anchors. 

While the right to indemnification certainly presupposes and relies for its existence on the 

right to delivery of a defect-free houseboat, the two rights are analytically distinct. In this 

case, the first cause of action aims to vindicate only the second set of rights, not the first. 

Aramark is not suing for loss of value to the boat arising from the boat’s failure to 

conform to the Agreement. Rather, Aramark is suing because defects in the houseboat’s 

construction have allegedly forced Aramark to pay out settlement amounts for which 

Twin Anchors promised to provide compensation. Such a claim is permitted by the plain 

language of both the parties’ Agreement and their settlement agreement. 

IV. STATUTE OF LIMITATIONS FOR FIRST CAUSE OF ACTION 

Even if not precluded by the settlement agreement, Twin Anchors contends that 

the first cause of action is untimely under Arizona law, which governs this diversity 

action. Additionally, the Agreement contains a choice-of-law provision in favor of 

Arizona law. (Doc. 37-1 at 17.) Twin Anchors points to Arizona’s statute of limitations 

for sales contract disputes in the Uniform Commercial Code, which provides, “An action 

for breach of any contract for sale must be commenced within four years after the cause 

of action has accrued.” A.R.S. § 47-2725(A). The statute further specifies that a “cause 

of action accrues when the breach occurs, regardless of the aggrieved party’s lack of 

knowledge of the breach. A breach of warranty occurs when tender of delivery is made, 

except that where a warranty explicitly extends to future performance of the goods and 

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discovery of the breach must await the time of such performance the cause of action 

accrues when the breach is or should have been discovered.” Id. § 47-2725(B). Because 

the first cause of action is merely a breach-of-warranty claim disguised as an indemnity 

claim, and because the boat was delivered to Aramark in 2006, Twin Anchors maintains 

that even the original Complaint, filed in August 2014, does not satisfy the relevant 

statute of limitations.1

For the reasons outlined above, this argument must fail. Aramark’s first cause of 

action requests damages for breach of the indemnity provision, not breach of the 

underlying warranties. The four-year limitations period in § 47-2725(A) therefore begins 

to run from the date when Aramark’s indemnification claim accrued, rather than the date 

on which Twin Anchors delivered the houseboat. Arizona law is clear that the “right to 

indemnity ‘exists when there is a legal obligation on the indemnitee to pay or a sum is 

paid by him for which the indemnitor should make reimbursement.’” Payless 

Shoesource, Inc. v. Pac. Emplr. Ins. Co., No. CV-08-2317-PHX-DGC, 2009 WL 

4439267, at *4, 2009 U.S. Dist. LEXIS 110309, at *12 (D. Ariz. Nov. 24, 2009) (quoting 

INA Ins. Co. of N. Am. v. Valley Forge Ins. Co., 150 Ariz. 248, 253, 722 P.2d 975, 980 

(Ct. App. 1986)). Such “‘an obligation or sum cannot be imposed solely by a thirdparty’s unproven allegations against the indemnity parties[.]’ An indemnity claim 

therefore accrues only when liability is established or when an indemnitee actually pays a 

sum to discharge potential liability.” Id. (alteration in original) (citing INA Ins. Co., 150 

Ariz. at 253, 722 P.2d at 980; MT Builders, L.L.C. v. Fisher Roofing, Inc., 219 Ariz. 297, 

303, 197 P.3d 758, 764 (Ct. App. 2008)). No liability was ever established in the Utah 

litigation, as the parties settled out of court. As a result, Aramark’s indemnity claim 

accrued no earlier than the date on which Aramark, by signing the settlement agreement, 

first incurred a “legal obligation . . . to pay” other parties to the Utah litigation. The 

 

1 Aramark contends this action is governed by A.R.S. § 12-548, Arizona’s six-year statute of limitations for breach of a written contract. The court need not resolve this, as 

any claim that satisfies the four-year statute of § 47-2725(A) must also satisfy § 12-548. 

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Complaint was filed less than four years after the Utah litigation settled and is therefore 

timely. 

Twin Anchors attempts to escape this result by arguing, once again, that 

Aramark’s first cause of action is one for breach of warranty instead of contractual 

indemnity. The principal support offered for Twin Anchors’ reading of A.R.S. § 47-

2725(A), (B) is the Utah Supreme Court’s opinion in Perry v. Pioneer Wholesale Supply 

Co., 681 P.2d 214 (Utah 1984). There the court acknowledged the “general rule” that “a 

cause of action for indemnity does not arise until the liability of the party seeking 

indemnity results in his damage, either through payment of a sum clearly owed or 

through the injured party’s obtaining an enforceable judgment.” 681 P.2d at 218. But 

based on its “absolute language,” the court construed Utah Ann. Code § 70A-2-725(1), 

(2)—which is identical to A.R.S. § 47-2725(A), (B)—as a “statute of repose” that “set[s] 

a designated event for the statutory period to start running and then provide[s] that at the 

expiration of the period any cause of action is barred regardless of usual reasons for 

‘tolling’ the statute.” Id. at 218-19 (alterations in original) (quoting Restatement 

(Second) of Torts § 899 cmt. g (1979)). The Utah Supreme Court concluded that “the 

language of § 70A-2-725 gives repose from all actions based on breach of warranty that 

are brought more than four years after the tender of delivery of the goods.” Id. at 219. 

Therefore, the court held, “A specific statutory limitation period that seeks ultimate 

repose of causes of action will control over a general statute of limitations, even to cut off 

an indemnity action that technically has not accrued.” Id. at 218. 

As an initial matter, Perry is distinguishable from the instant case because the 

parties in Perry do not appear to have specifically agreed to an indemnity provision as 

part of their written contract. See id. at 216 (“Even if this were an action on a written 

contract, which third-party defendants dispute, the trial court was correct in rejecting the 

application of this general statute of limitations.”). Instead, the third-party plaintiff’s 

claim was one for equitable indemnity. See id. at 218 (listing elements of which “courts 

universally require proof” in indemnity actions). Here, by contrast, the parties expressly 

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stipulated in their Agreement that Twin Anchors would indemnify Aramark for “losses 

. . . arising out of . . . any breach of this Agreement by [Twin Anchors].” (Doc. 37-1 at 

13.) The Agreement did not provide that the right to indemnification would be cut off as 

soon as the statute of limitations on the underlying contractual warranties lapsed. Such 

unambiguous contractual language cannot be defeated by vague reference to “a 

legislative intent that all actions based on breach of contract for the sale of goods be 

brought, if at all, within four years of the tender of delivery.” Perry, 681 P.2d at 219. 

Moreover, even in the context of an “implied indemnity claim,” some courts have held 

that if the Uniform Commercial Code’s four-year statute of limitations for “breach of any 

contract for sale” is applicable, it begins to run on the date an “indemnity action[] 

accrue[s]”—i.e., “when the party seeking indemnity pays or is legally adjudged obligated 

to pay damages to a third party.” Cent. Wash. Refrigeration, Inc. v. Barbee, 133 Wash. 

2d 509, 516-17, 946 P.2d 760, 764-65 (1997). The reason for this rule is simple: 

“Indemnity actions are distinct, separate causes of action from the underlying wrong and 

are governed by separate statutes of limitations.” Id. at 517, 946 P.2d at 764. 

Moreover, this court is not persuaded by the Perry rationale. The Utah Supreme 

Court appears to have made the same mistake as Twin Anchors, overlooking the 

conceptual difference between a right to defect-free goods and a right to be indemnified 

for losses arising out of defective goods. With respect to the Utah equivalent of A.R.S. 

§ 47-2725(A), (B), that court reasoned, “The action must be commenced within four 

years after the action accrues, and a cause of action for breach of warranty accrues when 

tender of delivery is made, ‘regardless of the aggrieved party’s lack of knowledge of the 

breach.’ By its terms, this provision appears to override the general rule regarding 

indemnity actions.” Perry, 681 P.2d at 218 (emphasis in original). “By its terms,” this 

provision does require “a cause of action for breach of warranty” to “be commenced 

within four years after the action accrues” (emphasis added). But nothing in the statute 

suggests an intent to remove indemnity actions from the blanket rule that an action must 

be brought no more than four years after that action itself accrues. As explained above, 

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Aramark’s first claim is not a cause of action for breach of warranty. It is a cause of 

action for breach of contractual indemnity—although, to be sure, the latter breach in 

these circumstances can exist only by virtue of the former. The gravamen of Aramark’s 

complaint is not that the houseboat in question does not work properly, thereby requiring 

repairs or causing loss of use. Aramark complains instead that Twin Anchors’ failure to 

deliver a proper boat compelled Aramark to settle with the Utah plaintiffs, and Twin 

Anchors has refused to reimburse that loss. Accordingly, the typical rule for accrual of 

indemnity claims should apply to this dispute.

The parties have not cited, and the court has not found, any Arizona case requiring 

a different result. Absent an indication that Arizona courts would permit Twin Anchors 

to avoid its contractual obligations by too-cleverly rebranding Aramark’s claims, the 

plain language of the Agreement must prevail. Moreover, Arizona courts “disfavor 

statute of limitations defenses, preferring instead to resolve litigation on the merits when 

possible.” City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, 178, 181 P.3d 

219, 225 (Ct. App. 2008). Nothing in this case makes resolution on the merits 

impossible. 

V. THERE IS NO COMPULSORY CROSSCLAIM, NOT IN GENERAL AND 

 CERTAINLY NOT HERE 

Twin Anchors next contends that Aramark’s claim for contractual indemnification 

is barred because that claim “was a mandatory cross-claim that should have been asserted 

during the wrongful death litigation.” (Doc. 41 at 12.) Utah statute permits the factfinder to apportion fault “to each person seeking recovery, to each defendant, to any 

person immune from suit, and to any other person identified under Subsection 78B-5-

821(4) for whom there is a factual and legal basis to allocate fault.” Utah Code Ann. 

§ 78B-5-818(4)(a). In their Answers, both Twin Anchors and Aramark sought such 

allocations of fault against each other. Twin Anchors labeled its Answer as a “Cross 

Claim and Notice of Allocation of Fault” and alleged it “hereby gives notice, and 

crossclaims for standing and any other proper purpose, as necessary to allocate fault to 

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each of the following parties . . . .” (Doc. 25-1 at 2, 22.) Aramark similarly labeled its 

Answer as a “Cross-Claim for Apportionment of Fault” and alleged “it is entitled [to] an 

allocation of fault against” codefendants, including Twin Anchors. (Doc. 25-1 at 29, 60.) 

Neither party pleaded any contractual indemnity rights or obligations. Twin Anchors 

contends Aramark’s failure to litigate its indemnity claim against Twin Anchors in the 

Utah case bars it from litigating that claim later in another court. That is wrong for many 

reasons. 

First, a counterclaim is compulsory only if the original action ends in adjudication. 

See Restatement (Second) of Judgments § 22 (1982) (“A defendant who may interpose a 

claim as a counterclaim in an action but fails to do so is precluded, after the rendition of 

judgment in that action, from maintaining an action on the claim if: (a) The counterclaim 

is required to be interposed by a compulsory counterclaim statute or rule of court[.]” 

(emphasis added)). The adjudication precludes later assertion of an omitted compulsory 

counterclaim. The Utah case did not end in adjudication; it was settled and dismissed. 

Twin Anchors’ strange view of compulsory counterclaims would bar an unasserted 

compulsory counterclaim in a dismissed action that plainly would not even bar the 

primary claim itself. This through-the-looking-glass world of preclusive effects from 

non-adjudication is the opposite of the legal world in which we live. 

Second, in their settlement of the Utah case, the parties expressly preserved “all of 

their rights to assert an indemnification action pursuant to” the Agreement. (Doc. 25-1 at 

75.) Even where general principles of preclusion would apply, the parties may expressly 

agree otherwise. They did exactly that here. 

Third, the compulsory counterclaim obligation in Rule 13(a)(1) of the Federal 

Rules of Civil Procedure does not apply to crossclaims under Rule 13(g). Rule 13(a)(1) 

provides in part that a “pleading must state as a counterclaim any claim that—at the time 

of its service—the pleader has against an opposing party if the claim: (A) arises out of the 

transaction or occurrence that is the subject matter of the opposing party’s claim.” But 

the crossclaim rule is explicitly permissive: “A pleading may state as a crossclaim any 

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claim by one party against a coparty if the claim arises out of the transaction or 

occurrence that is the subject matter of the original action or of a counterclaim.” Fed. R. 

Civ. P. 13(g) (emphasis added). 

The Ninth Circuit has never held that one coparty’s Rule 13(g) crossclaim 

converts another coparty into an “opposing party” under Rule 13(a), requiring a 

compulsory crossclaim back against the original crossclaimant. Twin Anchors relies on a 

dictum in Mitchell v. CB Richard Ellis Long Term Disability Plan, 611 F.3d 1192 (9th 

Cir. 2010). In that case, one of two codefendant insurers, UNUM, filed a crossclaim 

against the other, MetLife, seeking indemnification from MetLife if UNUM was found 

liable to the plaintiff. 611 F.3d at 1198. MetLife did not file a parallel crossclaim for 

indemnity against UNUM. Id. The district court entered judgment in favor of the 

plaintiff against MetLife, not UNUM, and dismissed UNUM’s crossclaim for indemnity 

as moot. Id. For the first time on appeal, MetLife argued the district court should have 

adjudicated MetLife’s unpled right to indemnification from UNUM. See id. at 1201. 

The Ninth Circuit demurred, holding, “Because MetLife failed to assert a cross-claim 

against UNUM for indemnification, the district court did not err by failing to address 

such a claim.” Id. MetLife “cannot now complain that the district court failed to resolve 

a claim that was not even before it. MetLife, moreover, failed to even appeal the district 

court’s grant of declaratory judgment in favor of UNUM, so neither claim is properly 

before us on appeal.” Id. That disposed of the issue. 

But the Ninth Circuit then added in summary dictum, “Any claim by MetLife for 

indemnification against UNUM would have been compulsory under Federal Rule of Civil 

Procedure 13(a)” because “UNUM’s cross-complaint requesting declaratory relief and 

indemnification arose out of the same transaction as Mitchell’s amended complaint 

against MetLife and UNUM.” Id. That dictum is neither binding nor persuasive. See 

City of Colton v. Am. Promotional Events, 2010 WL 4569038, at *7 n.4, 2010 U.S. Dist. 

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LEXIS 123744, at *19 n.4 (C.D. Cal. Nov. 2, 2010) (interpreting Mitchell analysis of 

Rule 13 as “dicta that had little, if not no, relevance to the Ninth Circuit’s decision”).2

 

This court is not persuaded there can ever be a compulsory crossclaim. Reading 

bright-line rules according to their plain language allows litigants to reduce the 

uncertainty inherent in complex litigation. Rule 13(g) plainly makes crossclaims 

permissive, not compulsory. Litigants should be able to rely on that clear language. A 

coparty who wants an adjudication on any issue permissible under Rule 13(g) can plead it 

himself and insist it be decided. It is neither necessary nor fair to trap a coparty into 

forfeiture of an unripe indemnity claim that the first coparty did not care to plead. 

Fourth, even the circumstances that some courts have found to trigger compulsory 

crossclaims are not present here. Some courts have held or assumed that “co-parties 

become opposing parties within the meaning of Rule 13(a) after one party pleads a 

crossclaim against the other” if “the initial cross-claim includes a substantive claim (as 

opposed to merely a claim for contribution and indemnity).” Rainbow Mgmt. Grp. v. 

Atlantis Submarines Haw., L.P., 158 F.R.D. 656, 659-60 (D. Haw. 1994). See also City 

of Colton, 2010 WL 4569038, at *6, 2010 U.S. Dist. LEXIS 123744, at *18 (“[A] party 

to a cross-claim does not become an ‘opposing party’ within the meaning of Rule 13(a)—

thereby requiring the compulsory assertion of a counterclaim—unless the claim asserted 

is ‘substantive.’”); accord Paramount Aviation Corp. v. Agusta, 178 F.3d 132, 146 n.11 

(3d Cir. 1999) (“[W]e suspect that a compulsory cross-claim rule would be limited to 

situations in which the initial cross-claim included a substantive claim, as opposed to 

claims for contribution and indemnity, in order to avoid needless complication of 

litigation.”). 

 

2

 Twin Anchors also cites Polimaster Ltd. v. RAE Systems, 623 F.3d 832 (9th Cir. 

2010), where the Ninth Circuit, in a parenthetical included in a string citation, quotes an Eastern District of Pennsylvania court for the proposition that “Any party asserting a claim, whether an original claim, counterclaim, cross-claim or third-party claim, becomes an opposing party to the party sued.” 623 F.3d at 839. Polimaster did not involve 

crossclaims at all, and the quoted sentence is as obviously dictum as the discussion of Rule 13 in Mitchell. 

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Even if the court agreed that crossclaims can sometimes be compulsory, that rule 

could not apply here because Twin Anchors did not file a “substantive” crossclaim 

against Aramark. Alleging that another party is exclusively liable for any damage does 

not assert a claim against that party. The Utah law pursuant to which Twin Anchors 

brought its “crossclaim” requires only a notice; no pleading is necessary. Even assuming 

that notice—which a defendant may include in its answer alone—can be transformed into 

a crossclaim by calling it one, it still does not plead a “substantive” claim, or any claim, 

against Aramark. Indeed, Twin Anchors argues here for preclusion by omission of the 

very type of claim—indemity—that Rainbow Management Group and other cases say 

would not be precluded by the rule they advance. 

Fifth, Twin Anchors did not file a permissible crossclaim at all. Although they 

dressed up their filings with the Utah federal court as “crossclaims,” neither party pled 

any claims for any kind of relief against the other—damages, an injunction, or even a 

declaratory judgment. Mislabeling a non-claim as a crossclaim does not make it so, not 

for compulsory counterclaim purposes or any other purpose.

Sixth, a rule of compulsory crossclaims could not apply to contractual indemnity 

that has not yet been paid or adjudged. Rule 13(a)(1), the compulsory counterclaim rule 

that Twin Anchors would read into rule 13(g), requires a party to plead only those claims 

“that—at the time of its service—the pleader has against an opposing party.” Fed. R. 

Civ. P. 13(a)(1) (emphasis added). As explained above, a claim for contractual 

indemnity “accrues only when liability is established or when an indemnitee actually 

pays a sum to discharge potential liability.” Payless Shoesource, 2009 WL 4439267, at 

*4, 2009 U.S. Dist. LEXIS 110309, at *12. Aramark’s claim for contractual indemnity 

had not accrued when it served its pleading and did not accrue until execution of the 

parties’ settlement agreement in November 2011. It could not be a compulsory 

crossclaim on any view. 

Aramark’s failure to assert contractual indemnification in the Utah litigation does 

not prohibit raising that claim here. More could be said, but six reasons are enough. 

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VI. STATUTE OF LIMITATIONS FOR SECOND CAUSE OF ACTION 

Finally, Twin Anchors requests dismissal of Aramark’s second cause of action on 

the grounds that it is untimely under Arizona’s four-year statute of limitations for 

contract claims. A.R.S. § 47-2725(A). The court has previously explained that under 

Arizona law, a cause of action for indemnity “accrues only when liability is established 

or when an indemnitee actually pays a sum to discharge potential liability.” Payless 

Shoesource, 2009 WL 4439267, at *4, 2009 U.S. Dist. LEXIS 110309, at *12. Because 

Aramark discharged its liability to the Utah plaintiffs no earlier than November 2011, the 

original August 18, 2014 Complaint was timely. 

Twin Anchors attempts to circumvent this clear rule by noting that “Aramark 

threatened to seek damages for the Howeth suit from Twin Anchors in 2008.” (Doc. 43 

at 13.) Twin Anchors cites no authority for the proposition that a cause of action accrues 

as soon as a party communicates its intention to assert that cause of action in the future. 

Aramark’s second cause of action is not barred by the four-year limit of A.R.S. § 47-

2725(A). 

IT IS THEREFORE ORDERED that Defendant Twin Anchors’ Motion to 

Dismiss Plaintiff’s First Amended Complaint (Doc. 41) is denied. 

Dated this 20th day of April, 2015. 

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