Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-01537/USCOURTS-azd-2_06-cv-01537-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Best Western International, Inc., a nonprofit corporation, 

Plaintiff, 

vs.

John Doe, an Internet website

administrator; James Furber, an Internet

website administrator; James Dial, an

Internet website blogger and Member of

Best Western International, Inc.; Jane

Does 1-X, Internet website bloggers and

Members of Best Western International,

Inc.; and John Does 1-X, Internet website

bloggers and Governors of Best Western

International, Inc.,

Defendants.

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No. CV-06-1537-PHX-DGC

ORDER

Plaintiff has filed a motion for leave to amend the complaint pursuant to Rule 15 of

the Federal Rules of Civil Procedure. Dkt. #133. A response and reply have been filed.

Dkt. ##138, 141. The Court will grant the motion.

I. Background.

Plaintiff filed this action against various Doe Defendants. Dkt. #1. Plaintiff claims

that Defendants have posted anonymous messages on an Internet website that, among other

things, defame Plaintiff, breach contracts with Plaintiff, reveal confidential information, and

constitute unfair competition. Plaintiff named James Furber and James Dial as Defendants

in an earlier amended complaint. Dkt. #53.

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II. Legal Standard.

Rule 15(a) declares that leave to amend a complaint “shall be freely given when

justice so requires.” The Supreme Court has instructed that “this mandate is to be heeded.”

Foman v. Davis, 371 U.S. 178, 182 (1962). In deciding this motion, the Court “‘must be

guided by the underlying purpose of Rule 15 – to facilitate decision on the merits rather than

on the pleadings or technicalities.’” Eldridge v. Block, 832 F.2d 1132, 1135 (9th Cir. 1987)

(citation omitted). “Thus, ‘Rule 15’s policy of favoring amendments to pleadings should be

applied with extreme liberality.’” Id. This liberality “is not dependent on whether the

amendment will add causes of action or parties.” DCD Programs, LTD. v. Leighton,

833 F.2d 183, 186 (9th Cir. 1987).

The Court may deny a motion to amend if there is a showing of undue delay or bad

faith on the part of the moving party, undue prejudice to the opposing party, or futility of the

proposed amendment. See Foman, 371 U.S. at 182. Generally, however, “this determination

should be performed with all inferences in favor of granting the motion.” Griggs v. Pace Am.

Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999).

III. Analysis.

Plaintiff seeks to add as defendants Loren Unruh and his spouse, Gayle Unruh, and

Teresa Furber and Nidrah Dial, the spouses of the named Defendants. Plaintiff asserts that

adding the spouse defendants is necessary for complete relief – to obtain a judgment against

both the separate and community property of Defendants James Furber, James Dial, and

Loren Unruh. Dkt. ##133, 141.

Defendants contend that naming their spouses is futile because the Furbers and Dials

live in Indiana and the Unruhs live in Kansas, none of which is a community property state.

Defendants claim that the filing of this action did not convert their separate property into

community property. Dkt. #138. 

The parties agree that “the property rights of a husband and wife are governed by the

law of the couple’s matrimonial domicile at the time of the acquisition of the property.”

Lorenz-Auxier Fin. Group, Inc. v. Bidewell, 772 P.2d 41, 43 (Ariz. Ct. App. 1989) (emphasis

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Plaintiff notes, for example, that Furber previously lived in Texas, a community

property state. Dkt. #141 at 5 n.2.

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added); see Stephen v. Stephen, 284 P.2d 158, 159 (Ariz. 1930) (“When the parties acquire

property, it is to be presumed they do it in view of the law as it exists at the time and place,

and its character as community or separate estate is determined with its first acquisition.”).

The Court cannot determine at this stage of the litigation whether Defendants have acquired

community property while residing in other states.1

 Nor can the Court determine from the

parties’ briefs whether, under Indiana or Kansas law, any such community property would

be subject to a judgment against Defendants. See Lorenz-Auxier, 772 P.2d at 43 (stating that

“the question of funds available to creditors to satisfy the debts of a marital community or

to satisfy the separate debts of either spouse” is “resolved according to the laws of the

matrimonial domiciliary state”).

Defendants’ reliance on Lorenz-Auxier is misplaced. In Lorenz-Auxier, an Oregon

couple was sued for breaching a lease that the husband had entered into in Arizona. The trial

court applied Arizona community property law and granted summary judgment against the

defendants. The Arizona court of appeals reversed the judgment against the wife because

Oregon law protects a wife’s separate property from being subject to the separate debt of the

husband. The court declined to address the relevant question here – whether any community

property existed and, if so, whether it was subject to a judgment against the husband. 772

P.2d at 45.

Defendants further contend the Court lacks personal jurisdiction over Mrs. Furber and

Mrs. Unruh. Dkt. #138 at 8-12. Defendants do not at this point dispute the Court’s personal

jurisdiction over Mr. Furber and Mr. Unruh, and Plaintiff argues that the Court has

jurisdiction over their spouses because Messrs. Furber and Unruh are alleged to have acted

on behalf of their respective marital communities. Dkt. #141 at 5-7 (citing Essex Eng’g Co.

v. Credit Vending, Inc., 732 F. Supp. 311, 313 (D. Conn. 1990) (asserting jurisdiction over

non-resident spouse where the marital community had minimum contacts with the forum

state); C & J Travel, Inc. v. Shumway, 775 P.2d 1097, 1100 (Ariz. Ct. App. 1989) (stating

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Plaintiff should note that the Court’s local rules do not authorize the filing of briefs

with reduced-size type in footnotes. All type in Plaintiff’s future briefs, including footnotes,

shall comply with LRCiv1(b)(1).

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that to take advantage of Arizona’s community property laws a creditor must join both

spouses thereby giving the court “personal jurisdiction over the community”)). Defendants

say this argument lacks merit because the Furbers and the Unruhs reside in non-community

property states (Dkt. #138 at 11), but they cite no authority in support of this assertion. See

id. If the evidence ultimately shows that Defendants acquired community property at some

time in their marriages, there would appear to be a marital community on behalf of which

Defendants could act, potentially giving rise to jurisdiction over their spouses.

“[A] proposed amendment is futile only if no set of facts can be proved under the

amendment to the pleadings that would constitute a valid and sufficient claim or defense.”

DCD Programs, 833 F.2d at 187; see Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th

Cir. 1988). At this point, Defendants have not shown that no set of facts could be proven

to establish the existence of community property and personal jurisdiction over the spouse

defendants. Therefore, consistent with the liberal amendment policy of Rule 15, the Court

will grant the motion to amend.2

IT IS ORDERED:

1. Plaintiff’s motion for leave to amend the complaint (Dkt. #133) is granted.

2. The Clerk shall file the lodged proposed amended complaint (Dkt. #134-2).

DATED this 21st day of August, 2007.

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