Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-00880/USCOURTS-azd-2_05-cv-00880-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1332 Diversity-Personal Injury

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 These parties are the current Plaintiffs but were Defendants in the prior action. 

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

KATHLEEN C. CAMPBELL et al., 

Plaintiffs, 

v. 

JUDY FERNANDO-SHOLES et al., 

Defendants. _________________________________

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No. CV-05-0880-PHX-SMM

MEMORANDUM OF DECISION AND

ORDER

Pending before the Court is a Motion to Dismiss and Request for Attorney's Fees and

Costs filed by Defendants [Doc. No. 13]. After considering the arguments raised in the parties'

briefs, the Court issues the following Memorandum of Decision and Order.

BACKGROUND

Defendants originally brought an action in the underlying dispute against Kathleen C.

Campbell ("Plaintiff") in Arizona State Court for fraudulently raising the price of property

purchased by Defendants at a bankruptcy-court auction. That case was then removed to the

United District Court for the District of Arizona, Phoenix Division in December 2002. On

March 26, 2003, Judge Murguia granted Kathleen Campbell's and Capitol Equity's1

 Motion to

Dismiss, or in the Alternative Motion for Summary Judgment [Doc. No. 20 in CV 02-0686].

On January 9, 2004, Plaintiffs brought a malicious prosecution action against Defendants

in Sacramento, California, County Superior Court ("Superior Court"). The Superior Court

granted Defendants' motion to quash summons for lack of California personal jurisdiction on

Case 2:05-cv-00880-SMM Document 20 Filed 03/14/06 Page 1 of 5
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March 24, 2004. On March 23, 2005, Plaintiffs then filed a Complaint [Doc. No. 1] in this

Court, in which she alleges that the statute of limitations on the malicious prosecution action

should be equitably tolled because the California action remains pending. On August 29, 2005,

Defendants filed a Motion to Dismiss and Request for Attorney's Fees and Costs [Doc. No. 13].

STANDARD OF REVIEW

A motion to dismiss based on a statute of limitations defense is properly brought

pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Irwin v. Dep't of Veterans

Affairs, 498 U.S. 89, 96 (1990); Washington v. Garrett, 10 F.3d 1421, 1437 (9th Cir. 1993). 

A motion to dismiss based on the running of the applicable limitations period, however,

may be granted only "if the assertions of the complaint, read with the required liberality, would

not permit the plaintiff to prove that the statute was tolled." Jablon v. Dean Witter & Co., 614

F.2d 677, 682 (9th Cir. 1980). "On a motion to dismiss . . . the court must construe the

complaint in the light most favorable to the plaintiff, taking all her allegations as true and

drawing all reasonable inferences from the complaint in her favor." Doe v. US, 419 F.3d 1058,

1061 (9th Cir. 2005). Furthermore, a court should not dismiss a complaint unless it is beyond

doubt that the plaintiff can prove no set of facts that would demonstrate the timeliness of the

claim. Jablon v. Dean Witter & Co., 614 F.2d at 682 (citing Conley v. Gibson, 355 U.S. 41, 78

(1957)). 

DISCUSSION

I. Timely Service

Defendants contend that Plaintiffs failed to serve Defendants within 120 days of the

filing of the Complaint. Specifically, Defendants contend that because the Complaint was

filed on March 27, 2005, Plaintiffs' attempt to serve the Complaint upon the Corporation

Commission on August 4, 2005 was untimely.

Defendants, however, fail to recognize that on July 22, 2005, this Court issued an

order granting Plaintiffs until September 19, 2005 to serve Defendants. [Doc. No. 12]. 

Thus, the Court finds that Plaintiffs have complied with the Court's Order as to Defendant

Wild Horse Ranch LLC.

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2

 Section § 12-504(A) provides: If an action is commenced within the time limited for the action, and

the action is terminated in any manner other than by abatement, voluntary dismissal, dismissal for lack of

prosecution or a final judgment on the merits, the plaintiff . . . may commence a new action for the same cause

after the expiration of the time so limited and within six months after such termination. Ariz. Rev. Stat. Ann.

§ 12-504(A) (2006).

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Defendants also state that Plaintiffs have failed to timely serve the remaining

Defendants. Federal Rule of Civil Procedure 4(m) states that, "[i]f service of the summons

and complaint is not made upon a defendant within 120 days after the filing of the

complaint, the court, upon motion or on its own initiative after notice to the plaintiff, shall

dismiss the action without prejudice as to that defendant . . .." Fed. R. Civ. P. 4(m). 

On September 22, 2005, the Court issued an Order [Doc. No. 19] extending the time

for Plaintiffs to serve Defendants Judy Fernando-Sholes, Bruce A. Sholes, and John C.

Kubasch until November 18, 2005. As of March, 1, 2006, however, Plaintiffs have failed to

serve these Defendants and have failed to address or provide justification for this failure in

their response to Defendants' motion or subsequent filing with the Court. Accordingly, the

Court finds the Plaintiffs have failed to timely serve these Defendants. Thus, the action

against Defendants Judy Fernando-Sholes, Bruce A. Sholes and John C. Kubasch is

dismissed without prejudice.

II. Statute of Limitations

Defendants assert that this case should also be dismissed because the statute of

limitations has run. 

The Ninth Circuit has stated that since the Court cannot consider materials outside

the pleadings for Rule 12(b)(6) purposes, and since the applicability of the equitable tolling

doctrine often involves factual inquiries, whether a claim is time-barred is "not generally

amenable to resolution on a Rule 12(b)(6) motion." Cervantes v. City of San Diego, 5 F.3d

1273, 1276 (9th Cir. 1993). While the court in Cervantes was addressing the application of

a California equitable tolling statute, Arizona also has a saving statute.2 Additionally, this

Court notes that the Arizona Court of Appeals has held that this savings statute applies

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3

 The substantive law of the forum state applies to actions brought in federal district court under

diversity jurisdiction. Stanford Ranch, Inc. v. Md. Cas. Co., 89 F.3d 618, 624 (9th Cir. 1996) (quoting St. Paul

Fire and Marine Ins. Co. v. Weiner, 606 F.2d 864, 867 (9th Cir. 1979)) (citations omitted). 

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equally to cases where the prior suit was brought in another state and dismissed for lack of

personal jurisdiction. Templer v. Zale, 803 P.2d 111, 112 (Ariz. Ct. App. 1990).3

In their Complaint, Plaintiffs allege that the malicious prosecution action filed in

California remains pending (Pls.' Compl. at 3, ¶ 26). The court must assume this allegation

is true. See Doe, 419 F.3d at 1061 ("On a motion to dismiss . . . the court must construe the

complaint in the light most favorable to the plaintiff, taking all her allegations as true and

drawing all reasonable inferences from the complaint in her favor.") Thus, the Court finds

that the Complaint contains allegations that, when read in the light most favorable to

Plaintiffs, raise an issue of fact and preclude the granting Defendants' Motion to Dismiss. 

III. Proper Parties

Defendants also claim that Plaintiffs are not proper parties to this lawsuit. 

Significantly, Defendants cite no legal authority in support of this position and even fail to

indicate whether this a motion brought under Rule 12(b)(6). In In Re Morrissey, 349 F.3d

1187 (9th Cir. 2003), the Ninth Circuit clearly recognized that it is not the duty of the court

to develop a parties arguments for them or to find legal authority to support such arguments. 

Id. at 1189. Despite Defendants' failure to cite to any legal authority, the Court, in the

interest of thoroughness, will attempt to decipher and address Defendants' assertions. 

The Court reads Defendants' motion to contend that Plaintiff Kathleen Campbell

cannot bring this action on behalf of a corporation. The Arizona Supreme Court, however,

has found that, "the president of a corporation, acting alone, may institute suit on behalf of

the corporation." Gemstar Ltd. v. Earnst & Young, 917 P.2d 222, 230 (Ariz. 1996). The

Court also finds that Plaintiffs' Complaint contains allegations that (a) she is currently the

president and sole owner of Capitol Enquiry Inc., and that (b) Defendant harassed the

corporation unnecessarily during the prior action filed in the District Court for the District of

Arizona. (Pls.' Compl. ¶6, ¶¶33-45). 

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Accordingly, the Court finds that Defendants' assertion that Plaintiffs are not proper

parties fails at this stage, especially in light of Defendants' failure to cite any legal authority

in support of this position. 

IV. Attorney's Fees

The Court having denied Defendant's motion to dismiss also finds that Defendant's

Motion for Attorney's Fees and Costs is premature. Accordingly, Defendants' motion for

Attorney's Fees and Costs is denied.

CONCLUSION

Accordingly,

IT IS HEREBY ORDERED that this action is dismissed without prejudice as to

Defendants Judy Fernando-Sholes, Bruce A. Sholes, and John C. Kubasch.

IT IS FURTHER ORDERED that Defendant's Motion to Dismiss for expiration of the

statute of limitations as to Defendant Wild Horse Ranch LLC, is hereby DENIED.

IT IS FURTHER ORDERED that Defendant's Motion for Attorney's Fees and Costs

is hereby DENIED.

DATED this 14th day of March, 2006.

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