Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_15-cv-00300/USCOURTS-azd-4_15-cv-00300-0/pdf.json

Nature of Suit Code: 385
Nature of Suit: Property Damage - Product Liability
Cause of Action: 28:1441 Petition for Removal- Product Liability

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IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Rosalinda Cervantes, et. al.

 Plaintiffs, 

vs. 

Ford Motor Company, et. al., 

Defendants. __________________________________ 

American Family Mutual Insurance Co., 

Cross-Claimant, 

vs. 

Ford Motor Company; Texas Instruments 

Incorporated.; Sensata Technologies, Inc., 

Cross-Defendants

No. CV-15-300-TUC-RCC (BPV)

REPORT & RECOMMENDATION 

 

 Pending before the Court are: (1) Defendant Ford Motor Company’s Motion to 

Dismiss Cross-Claim of American Family Mutual Insurance Company (Doc. 16); and (2) 

“Defendants Texas Instruments Incorporated and Sensata Technologies, Inc.’s Motion to 

Dismiss Cross-Claim of American Family Mutual Insurance Company” (Doc. 17). For 

the following reasons the Magistrate Judge recommends that the District Court: (1) grant 

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Defendant Ford Motor Company’s Motion to Dismiss; and (2) deny Defendants Texas 

Instruments Incorporated and Sensata Technologies, Inc.’s Motion to Dismiss with leave 

to renew at summary judgment. 

I. BACKGROUND

 On May 15, 2015, Plaintiffs filed suit against Defendant and Cross-Claimant 

American Family Mutual Insurance Company (“American Family”) and Defendants and 

Cross-Defendants Ford Motor Company (“Ford”) and Texas Instruments Incorporated 

and Sensata Technologies, Inc. (collectively “Sensata”) with regard to a June 1, 2013 fire 

that occurred at the home of Plaintiffs Carlos and Aurora Sanchez. Plaintiffs allege that 

the fire was caused by a defect in the speed control system of Plaintiff Rosalinda 

Cervantes’ 1999 Ford F-150 (“Subject Vehicle”), which was parked in the garage at the 

Sanchez home. “The Subject house was heavily damaged from the fire and was 

uninhabitable...” and a significant amount of personal property was destroyed due to the 

fire. (Complaint (Doc. 1-3), &&10, 12). Additionally, the Subject Vehicle was damaged 

and unusable due to the fire. (Id. at &13). As to Ford and Sensata, Plaintiffs claim: strict 

liability (Count One); negligence, gross negligence and wanton disregard (Count Two); 

failure to warn (Count Three); and breach of warranties (Count Four). 

 Plaintiffs also allege that American Family insured the Subject Vehicle and “paid 

Rosalinda Cervantes for the property damage to the Subject Vehicle due to the fire. 

[American Family] also took possession, custody, and control of the Subject Vehicle and 

[American Family] pursued subrogation against Ford.” (Complaint, &18; see also

American Family’s Answer & Cross-Claim (Doc. 5), p.1, &2 (admitting the allegations 

set forth in paragraph 18 of the Complaint)). Plaintiffs allege that despite American 

Family’s assurances that the Subject Vehicle would be preserved; American Family 

destroyed the Subject Vehicle after the fire, thus limiting Plaintiffs’ ability to pursue 

damages against Ford and Sensata. (Complaint, &&17-23). As to American Family, 

Plaintiffs claim: breach of contract (Count Five); promissory estoppel (Count Six); 

negligent misrepresentation (Count Seven); breach of bailment (Count Eight); and 

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negligence/negligent spoliation of evidence (Count Nine). 

 Plaintiffs seek compensatory damages from all Defendants, as well as punitive 

damages from Ford and Sensata. (Complaint, p. 26). Plaintiffs’ request for 

compensatory damages includes “[a]ll losses resulting from the damage to property, both 

real and personal....” (Id.). 

 On July 20, 2015, American Family filed a combined Answer to Plaintiffs’ 

Complaint and Cross-Claim1

 against Ford and Sensata. (Doc. 5). American Family 

alleges that at the time of the fire, it insured the Subject Vehicle and it “paid [Plaintiff] 

Rosalinda Cervantes for the damage to the subject vehicle and rental car expenses....As a 

result of these payments, American Family is subrogated to the claims of Rosalinda 

Cervantes against Ford and [Sensata] to the extent of American Family’s payments to 

Rosalinda Cervantes.” (Id. at pp. 4-5, &&7-9). As to the Ford and Sensata CrossDefendants, American Family claims: strict liability (Count One); negligence (Count 

Two); failure to warn (Count Three); and breach of warranties (Count Four), which are 

essentially the same claims that Plaintiffs have alleged against Ford and Sensata. 

II. Standard 

 Cross-Defendants Ford and Sensata have filed separate motions to dismiss 

American Family’s Cross-Claim, each arguing that American Family’s Cross-Claim is 

barred by the statute of limitations. 

“[P]laintiffs ordinarily need not ‘plead on the subject of an anticipated affirmative 

defense.’” Rivera v. Peri & Sons Farms, Inc., 735 F.3d 892, 902 (9th Cir. 2013) (quoting 

 

1

 Rule 13 of the Federal Rules of Civil Procedure provides: 

A pleading may state as a crossclaim any 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, or if the claim 

relates to any property that is the subject matter of the original action. The 

crossclaim may include a claim that the coparty is or may be liable to the 

cross-claimant for all or part of a claim asserted in the action against the 

cross-claimant. 

Fed.R.Civ.P. 13(g). 

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United States v. McGee, 993 F.2d 184, 187 (9th Cir. 1993)); see also Bohmfalk v. Vaughn, 

357 P.2d 617, 622, 89 Ariz. 33, 39-40 (1960) (“it is not incumbent upon the party filing a 

complaint to anticipate an affirmative defense which the answer may disclose.”) (statute 

of limitations). “When an affirmative defense is obvious on the face of a complaint, 

however, a defendant can raise that defense in a motion to dismiss.” Rivera, 735 F.3d at 

902 (citations omitted); see also Jablon v. Dean, Witter & Co., 614 F.2d 677, 682 (9th

Cir. 1980). In resolving a motion to dismiss based on a statute-of-limitations defense, 

“[a] court should not dismiss a complaint unless plaintiff cannot plausibly prove a set of 

facts demonstrating the timeliness of the claim.” Ranch Realty, Inc. v. DC Ranch Realty, 

LLC, 614 F.Supp. 2d 983, 987 (D. Ariz. 2007) (citing Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007)); see also Ashcroft v. Iqbal, 556 U.S. 662 (2009). Determining 

plausibility is a “context-specific task...” that requires the court to “draw on its judicial 

experience and common sense.” Iqbal 556 U.S. at 679 (a complaint cannot survive 

dismissal where the court can only infer that a claim is merely possible rather than 

plausible). At bottom, a motion to dismiss based on a statute-of-limitations defense 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, 614 F.2d at 

682; see also Ranch Realty Inc., 614 F.Supp.2d at 987. 

III. DISCUSSION 

A. THE PARTIES’ ATTACHMENTS TO THEIR BRIEFS

 As a preliminary matter, the Court must determine whether to consider the 

attachments to the parties’ briefs. Ordinarily, courts will not consider evidence or 

documents beyond the complaint in the context of a Rule12(b)(6) motion to dismiss. See 

Hal Roach Studios, Inc. v. Richard Feiner & co., 896 F.2d 1542, 1550 (9th Cir. 1990). 

Although neither Ford nor Sensata attached exhibits to their respective motions, 

American Family attached exhibits to each of its responses, and Ford and Sensata 

attached an exhibit to their respective replies. Generally, “[i]f the defense [based on the 

statute of limitations] does not appear on the face of the complaint and the trial court is 

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willing to accept matters outside of the pleadings, the defense can still be raised by a 

motion to dismiss accompanied by affidavits[]” which, pursuant to Rule 12(d), will then 

be treated as a motion for summary judgment.2

 Jablon, 614 F.2d at 682. The parties do 

not address whether the motions to dismiss should be converted to motions for summary 

judgment in light of the exhibits submitted by the parties. 

 While there are some exceptions to the rule that a motion to dismiss must be 

converted to a motion for summary judgment if the Court considers matters outside the 

pleadings in resolving the motion, those exceptions do not appear to apply here. See e.g., 

United States v. Ritchie, 342 F.3d 903, 907-10 (9th Cir. 2003); see also Ranch Realty, 

Inc., 614 F.Supp.2d at 987-88. Conversion to a motion for summary judgment does not 

occur “until the district court acts to convert the motion by indicating, preferably by an 

explicit ruling, that it will not exclude those materials from its consideration.” Swedberg 

v. Marotzke, 339 F.3d 1139, 1146 (9th Cir. 2003); see also Keams v. Technical Institute, 

Inc., 110 F.3d 44, 46 (“a 12(b)(6) motion need not be converted into a motion for 

summary judgment when matters outside the pleading are introduced, provided that 

‘nothing in the record suggest[s] reliance’ on those extraneous materials”) (quoting North 

Star Int'l. v. Arizona Corp. Comm'n., 720 F.2d 578, 582 (9th Cir.1983)). Thus, if the 

Court exercises its discretion to consider the submitted exhibits, the pending motions to 

dismiss must be converted to motions for summary judgment. See Fed.R.Civ.P. 12(d); 

see also Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1207 (9th Cir. 

2007) (Rule 12 “specifically gives courts the discretion to accept and consider extrinsic 

materials offered in connection with...[a motion to dismiss], and to convert the motion to 

one for summary judgment when a party has notice that the district court may look 

 

2

 Under Rule 12(d): 

If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated 

as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion. 

Fed.RCiv.P. 12(d). 

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beyond the pleadings.”). 

 In response to Ford’s motion, American Family attaches an incident report from 

the Tucson Fire Department (Doc. 21, Exh. 1) and a July 3, 2013 report issued by 

American Family’s investigator who was retained to investigate the cause and origin of 

the fire (Doc. 21, Exh. 2)). Ford’s Reply included a copy of e-mail correspondence from 

November 2014 between counsel for Ford and American Family. (Docs. 23, Exh. A). 

 American Family neither cites nor otherwise relies upon the exhibits attached to its 

Response to support its legal argument in opposition to Ford’s Motion to Dismiss; 

instead, the exhibits are cited only in the context of the “[f]actual [b]ackground” of the 

case. (See Doc. 21). As discussed below, the parties’ arguments address solely the legal 

issue whether American Family’s cross-claims against Ford relates back to the date of the 

filing of Plaintiffs’ Complaint. Here, the exhibits submitted by both parties have no 

bearing on the legal question presented in Ford’s motion to dismiss. Therefore, the 

Magistrate Judge excludes the exhibits submitted by both American Family and Ford, 

and continues to consider Ford’s motion as a Rule 12(b)(6) motion to dismiss for failure 

to state a claim. 

 In responding to Sensata’s Motion to Dismiss, American Family argues, as it did 

with Ford, that its claims relate back to the filing of Plaintiffs’ Complaint. Additionally, 

American Family argues that its claims against Sensata did not accrue until “very 

recently” when it discovered, through reading Plaintiffs’ Complaint, that Sensata 

“designed, tested, manufactured, supplied, marketed, and sold electric components, 

including the speed control deactivation switch....” (Doc. 22, p. 4). American Family 

attached the following exhibits to its Response: (1) an incident report from the Tucson 

Fire Department (Doc. 22, Exh. 1); (2) a July 3, 2013 report issued by American Family’s 

investigator who was retained to investigate the cause and origin of the fire3

 (Doc. 22, 

 

3

 The investigator’s report reflects that he conducted “[e]xtensive research and 

review of the National Highway Traffic Safety Administration (NHTSA) databases” and attached copies of pertinent NHTSA reports to his report, (Doc. 22, Exh. 2, pp. 1-2)). 

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Exh. 2); and (3) a Declaration from American Family Claims Manager Kim Tolle who 

states that she “supervised the claim of Rosalinda Cervantes...” and “until the point 

litigation was filed by plaintiff, I had no information that either Texas Instruments or 

Sensata Technologies designed, tested, manufactured, supplied, marketed, and sold 

electric components, including the speed control deactivation switch (‘SCDS’) for the 

subject vehicle...”; instead, “[a]ll of our investigations demonstrated and indicated Ford 

Motor Company was responsible for the SCDS.” (Doc. 22, Exh. 3). 

 Sensata attached to its reply a report issued by NHTSA, apparently in 2006, which 

Sensata contends identifies Texas Instruments as the manufacturer of the SDCS in Ford 

vehicles. (Doc. 24, p. 2 & Doc. 24, Exh. A). 

 Summary judgment is appropriate only when the pleadings, the discovery and 

disclosure materials on file, and any affidavits “show that there is no genuine issue as to 

any material fact and that the moving party is entitled to judgment as a matter of law.” 

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). This action is at the beginning 

stages and little, if any, discovery has occurred. At this stage of the proceeding, it would 

be premature to convert the pending motion to dismiss to a motion for summary 

judgment. Instead, the matter is best addressed on summary judgment after sufficient 

discovery has occurred. The Magistrate Judge, therefore, declines to consider the 

exhibits submitted by the parties and will maintain Sensata’s motion as a motion to 

dismiss for failure to state a claim under Rule 12(b)(6). 

 B. RELATION BACK

 The parties do not dispute that actions involving “trespass for injury done to the 

estate or the property of another” must be “commenced and prosecuted within two years 

after the cause of action accrues....” A.R.S. '12-542(3). Nor do they dispute that, an 

insurer’s subrogation claim “accrues at the time of the injury-causing event rather than 

the date that the claim is paid.” (Doc. 16, p. 3 (citing Preferred Risk Mut. Ins. Co. v. 

Vargas, 157 Ariz. 17, 20, 754 P.2d 346, 349 (App. 1988); United Pacific Reliance Ins. 

Co. v. Kelley, 127 Ariz. 87, 618 P.2d 257 (App. 1980)). Although American Family’s 

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Cross-Claim was filed more than two years after the June 1, 2013 fire, American Family 

argues that its Cross-Claim is timely because it “relate[s] back” to the filing of Plaintiffs’ 

Complaint. (Doc. 21, pp. 3-6; Doc.22, pp. 4-7). 

 “Although most of the decisions concerning this relation back issue involve 

counterclaims, the rationale of those decisions is equally applicable to crossclaims.” 

Appelbaum v. Ceres Land Co., 546 F.Supp. 17, 20 (D. Minn. 1981) (citation omitted). 

“For the purposes of the relation back doctrine, courts have distinguished between 

counterclaims and crossclaims that seek to somehow reduce the amount a plaintiff can 

recover, such as by recoupment, contribution, or indemnity, and claims that seek 

affirmative relief through an independent action. Defensive claims generally relate back, 

while affirmative claims must satisfy the applicable statute of limitations.” Id. at 20-21 

(citations omitted). The rule in Arizona comports with the Appelbaum court’s 

observation: “[I]f a claim would be barred originally by a statute of limitation, it is 

barred as a counterclaim even if it arises from the same transaction except as it falls 

within the principles of recoupment.” Unispec Dev. Corp. v. Harwood K. Smith & 

Partners, 124 F.R.D. 211, 214 (D.Ariz. 1988) (citing W.J. Kroeber v. Travelers Indem. 

Co., 112 Ariz. 285, 287, 541 P.2d 385, 397 (1975)). “Recoupment is a reduction by the 

defendant of a part of plaintiff’s claim because of a right in the defendant arising out of 

the same transaction.” Id. (citing Morris v. Achen Const. Co. Inc., 155 Ariz. 507, 510, 

747 P.2d 1206, 1209 (App.1986), reversed in part, vacated in part on other grounds, 155 

Ariz. 512, 747 P.2d 1211 (1987)). 

 Plaintiffs allege that American Family “paid Rosalinda Cervantes for the property 

damage to the Subject Vehicle due to the fire.” (Complaint, &18). Plaintiffs do not 

specifically claim that they seek recovery for property damage sustained by the vehicle, 

although they conclude their Complaint with a request for damages for, inter alia, “[a]ll 

losses resulting from the damage to property, both real and personal....” (Id. at p. 26). 

American Family alleges that it “is subrogated to the claims of Rosalinda Cervantes 

against Ford and [Sensata]...to the extent of American Family’s payments to Rosalinda 

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Cervantes.” (Doc. 5, p. 5, &9). 

 “[G]enerally, when an insurer has paid a loss suffered by its insured, the insurer 

becomes subrogated to the insured's claim against the party primarily liable for the loss 

and may enforce that claim against that party....The insurer essentially stands in the 

shoes of the insured....” Monterey Homes Arizona, Inc. v. Federated Mut. Ins. Co., 221 

Ariz. 351, 355, 212 P.3d 43, 47 (App. 2009) (citations omitted). American Family argues 

that had Plaintiffs not sued American Family, “[American Family] would have had to 

intervene to protect its subrogation interests, and it could have done so even after the 

expiration of the statute of limitations.” (Doc. 21, p. 5 (citing Untied Pacific, 127 Ariz. at 

90-91, 618 P.2d at 260-61)). In United Pacific, the plaintiffs’ suit against the tortfeasor 

specifically sought damages related to the vehicle for which they had already received 

payment, less the deductible, from their insurer. See United Pacific, 127 Ariz. at 90, 618 

P.2d at 260 (“the stated object of the property damage allegation...was to recover the 

entire amount of damages sustained by the vehicle.”). Here, unlike United Pacific, the 

allegations in the Complaint do not plausibly support the conclusion that Plaintiffs are 

suing for damages sustained by the Subject Vehicle given that Plaintiffs have specifically 

recognized that American Family already “paid Rosalinda Cervantes for the property 

damage to the Subject Vehicle due to the fire.” (Complaint, &18). 

 American Family’s cross-claims are not directed at reducing any amount of 

damages at issue if Plaintiffs prevail on the claims alleged in their Complaint. See

Unispec Dev. Corp., 124 F.R.D. at 214. Instead, American Family alleges affirmative 

claims solely with regard to the destruction of the Subject Vehicle and expenses it 

incurred related to same. Under the instant circumstances, American Family’s 

affirmative cross-claims “may not be instituted after the applicable period of the statute 

of limitations has expired since such claims are regarded as an independent cause of 

action.” Id. (citation omitted). See also Appelbaum, 546 F.Supp. at 20 (“Defensive 

claims generally relate back, while affirmative claims must satisfy the applicable statute 

of limitations.”). Because American Family’s cross-claims do not relate back to the 

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filing of Plaintiffs’ Complaint, American Family’s cross-claim against Ford is barred by 

the statute of limitations. See e.g., Appelbaum, 546 F.Supp. at 21 (dismissing untimely 

cross-claim “even though [cross-claimant’s] affirmative claim is based on similar 

transactions and occurrences as [plaintiff’s], it is indeed an independent claim that would 

have been time-barred had [cross-claimant] filed a separate action.”). For these same 

reasons, American Family’s reliance on the relation back rule to defeat Sensata’s motion 

to dismiss is equally unavailing. 

C. DISCOVERY RULE

 In responding to Sensata’s Motion, American Family asserts that its claim is 

timely under the discovery rule because American Family did not discover Sensata’s 

involvement until “very recently” upon reading Plaintiffs’ Complaint. (Doc. 22, p.4). 

Both American Family and Sensata rely on matters outside the pleadings to support their 

positions on whether the discovery rule applies in this case.4

 “Under the ‘discovery rule,’ a cause of action does not accrue until the plaintiff 

knows or with reasonable diligence should know the facts underlying the cause.” Ranch 

Realty, Inc., 614 F.Supp.2d at 988-89 (citing Doe v. Roe, 191 Ariz. 313, 955 P.2d 951, 

960 (1998)). “In Arizona, determination of a claim's accrual date is usually a question of 

fact, with the inquiry centering on the plaintiff's knowledge of the subject event and 

resultant injuries, whom the plaintiff believed was responsible, and plaintiff's diligence in 

pursuing the claim. Application of the discovery rule often depends on resolution of such 

factual issues....” Doe v. Garcia, 5 F.Supp.2d 767, 774 (D. Ariz. 1998) (citing 

Logerquist v. Danforth, M.D., 188 Ariz. 16, 932 P.2d 281, 287 (App.1996)); see also 

Ranch Realty, Inc., 614 F.Supp.2d at 989 (“When discovery occurs and a cause of action 

accrues are ordinarily questions of fact for the jury.”) (citation omitted). 

 Resolution of questions concerning when American Family learned, or with 

 

4

 While the Magistrate Judge acknowledges that the parties attached exhibits outside the pleadings to their briefs, the Magistrate Judge does not consider those reports in resolving the instant motion. See supra.

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reasonable diligence, should have learned about Sensata’s alleged involvement requires 

consideration of facts beyond the allegations of the pleadings as is evidenced by the 

attachments submitted with the parties’ briefing on this issue. At this point in the 

litigation, “[i]t would be improper to dismiss [American Family’s]...Cross-Claim...on 

statute of limitations grounds before discovery has been completed and the Court has had 

the opportunity to review evidence that has been compiled to determine the existence of a 

genuine issue of material fact.” Lowes HIW, Inc. v. Thomas James Civil Design Group,

2010 WL 2721903, *3 (D.Ariz. July 7, 2010) (denying motion to dismiss where crossclaimant raised the discovery rule in its response to motion to dismiss and attached 

exhibits in support of that argument to its response). Consequently, the matter is not one 

that can be resolved by a Rule 12(b)(6) motion to dismiss. Sensata’s Motion to Dismiss 

should be denied with leave to renew the argument at summary judgment after sufficient 

time for discovery has occurred. See id.

IV. RECOMMENDATION

 For the foregoing reasons, the Magistrate Judge recommends that the District 

Court, after its independent review, enter an order: 

 (1) granting Ford Motor Company’s Motion to Dismiss Cross-Claim of 

American Family Mutual Insurance Company (Doc. 16); and 

 (2) denying Defendants Texas Instruments Incorporated and Sensata 

Technologies, Inc.’s Motion to Dismiss Cross-Claim of American Family Mutual 

Insurance Company (Doc. 17) with leave to renew the argument at summary judgment 

after sufficient time for discovery has occurred. 

 Pursuant to 28 U.S.C. §636(b) and Rule 72(b)(2) of the Federal Rules of Civil 

Procedure and LRCiv 7.2(e), Rules of Practice of the U.S. District Court for the District 

of Arizona, any party may serve and file written objections within FOURTEEN (14)

DAYS after being served with a copy of this Report and Recommendation. A party may 

respond to another party’s objections within FOURTEEN (14) DAYS after being served 

 

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with a copy. Fed.R.Civ.P. 72(b)(2). No replies to objections shall be filed unless leave is 

granted from the District Court to do so. 

 Failure to file timely objections to any factual or legal determination of the 

Magistrate Judge may be deemed a waiver of the party’s right to review. 

 Dated this 9th day of November, 2015. 

 

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