Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_07-cv-08027/USCOURTS-azd-3_07-cv-08027-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity-Contract Dispute

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Jean Reidhead, et al.,

Plaintiffs, 

vs.

Joseph P. Meyers, et al., 

Defendants. 

Carribean Financial Corp., 

Counter Claimant, 

vs

Jean Reidhead, et al., 

Counter Defendants.

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No. CV 07-8027-PHX-MHM

ORDER

Pending before the Court are Defendants’ Motion for Attorney’s Fees (Doc. 15) and

Defendants’ Motion to Dismiss Plaintiffs’ Amended Complaint (Doc. 21). Plaintiffs have

not responded to either Motion, despite the passing of the deadline for such a response. The

Court considers the Motions and issues the following Order. 

Case 3:07-cv-08027-GMS Document 22 Filed 04/23/08 Page 1 of 6
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I. BACKGROUND

On June 6, 2007, Defendants removed this action from Navajo County Superior Court.

The claims arose from the transfer of property and the sale of ore in Navajo County. After

seeking and being granted leave of the Court, Plaintiffs filed an Amended Complaint.

Plaintiffs’ Amended Complaint includes the following claims: (1) Rescission – Based on

Fraud; (2) Breach of Duty of Good Faith and Fair Dealing; (3) Quite Title; (4) Breach of

Contract; and (5) Punitive Damages. 

In the same Order in which the Court granted Plaintiffs’ motion for leave, the Court

denied without prejudice Defendants’ motion to dismiss for failure to plead fraud with

particularity. Defendants now have filed a Motion for Attorneys’ Fees incurred in

association with their first motion to dismiss. Defendants also have filed a Motion to Dismiss

Plaintiffs’ Amended Complaint arguing that all of Plaintiffs’ claims are time-barred by the

statutes of limitations. Defendants also request an award of attorneys’ fees incurred in

association with their second Motion to Dismiss. The Court will review each Motion in turn.

II. MOTION FOR ATTORNEYS’ FEES

Defendants have filed a Motion for Attorneys’ Fees incurred in association with their

first motion to dismiss. Defendants claim that a granting of attorneys’ fees is appropriate

because Plaintiffs did not properly plead fraud with particularity, despite the “nearly 10 years

that Plaintiffs had to contemplate their claims.” Motion for Attorneys’ Fees at 2:12-13.

In their response, Plaintiffs conceded that they had not plead fraud with particularity

in their original Complaint. Plaintiffs simultaneously moved for leave to amend their

complaint to cure the deficiency. The Court granted Plaintiffs motion for leave to amend

their complaint and Plaintiffs timely filed their amended complaint. The Court denied

without prejudice Defendants’ Motion to Dismiss.

Pursuant to A.R.S. § 12-349, in part, it is within a court’s discretion to assess

reasonable attorney fees, if an attorney or party does any of the following:

Case 3:07-cv-08027-GMS Document 22 Filed 04/23/08 Page 2 of 6
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1

 Leave to amend one’s complaint is liberally granted. Reddy v. Litton Indus., Inc.,

912 F.2d 291, 296 (9th Cir. 1990). This rule reflects an underlying policy that disputes should

be determined on their merits, and not on the technicalities of pleading rules. See Foman v.

Davis, 371 U.S. 178, 181-82, 83 S.Ct. 227 (1962). 

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1. Brings or defends a claim without substantial justification.

2. Brings or defends a claim solely or primarily for delay or harassment. 

3. Unreasonably expands or delays the proceedings . . . .

The Court has discretion as to whether to grant an award of attorneys’ fees.

Defendants have not shown that an award of attorneys’ fees is merited. Specifically,

Defendants have provided no evidence to show that Plaintiffs were not justified in pleading

fraud, that Plaintiffs brought their fraud claim to harass Defendants, or that Plaintiffs brought

their fraud claim to unreasonably expand or delay the proceedings. Moreover, the policy of

liberally granting leave to amend one’s complaint in an effort to determine disputes on the

merits,1

 dissuades the Court from granting an award of attorneys’ fees relating to Defendants’

first motion to dismiss. Accordingly, Defendants’ Motion for Attorneys’ Fees is denied. 

III. MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT

Defendants have moved to dismiss Plaintiffs’ Amended Complaint arguing that all

claims in Plaintiffs Amended Complaint are time barred by the applicable statute of

limitations. Defendants also request an award of reasonable attorneys’ fees incurred in filing

their second Motion to Dismiss. Plaintiffs have not filed a Response.

Plaintiffs’ Amended Complaint includes claims for Rescission – Based on Fraud;

Breach of Duty of Good Faith and Fair Dealing; Quite Title; Breach of Contract; and

Punitive Damages. These are the same claims Plaintiffs set forth in their original Complaint,

filed September 25, 2006. 

A motion to dismiss under Rule 12(b)(6) cannot be granted unless “it appears beyond

doubt that the plaintiff can prove no set of facts in support of his claim which would entitle

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him to relief.” See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99 (1957). Dismissal can

be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged

under a cognizable legal theory. See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699

(9th Cir. 1988). A motion to dismiss based on a statute of limitations defense is proper under

Rule 12(b)(6). Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 96 (1990); Washington v.

Garrett, 10 F.3d 1421, 1437 (9th Cir. 1993).

Generally, a district court, in ruling on a Rule 12(b)(6) motion, may not consider any

material beyond the pleadings. See Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc.,

896 F.2d 1542, 1555 n.19 (9th Cir. 1989). Material that is properly submitted as part of the

complaint, however, may be considered. See id. In analyzing a motion to dismiss, the Court

must accept as true all material allegations in the complaint, and construe them in the light

most favorable to the nonmoving party. See NL Industries, Inc. v. Kaplan, 792 F.2d 896, 898

(9th Cir. 1986). 

Defendants claim that Plaintiffs Amended Complaint “fails to state or support a

‘cognizable legal theory’ because the actions that Plaintiffs allege in their Amended

Complaint all occurred so long ago that Plaintiffs’ claims are now time-barred by the

applicable statutes of limitations.” Mot. to Dismiss at 3:13-16. 

As set forth in Plaintiffs’ Amended Complaint, the facts upon which Plaintiffs’ claims

rest took place between 1994 and 1998. This means that the most recent events upon which

Plaintiffs’ claims rest took place nine years ago. In contrast, the longest statute of limitations

for any of the claims alleged is six years. Specifically, (1) rescission – based on fraud

(A.R.S. § 12-543) has a statute of limitations of three years; (2) breach of duty of good faith

and fair dealing (A.R.S. § 12-548) has a statute of limitations of six years; (3) quite title

(A.R.S. § 12-524) has a statute of limitations of five years; (4) breach of contract (A.R.S. §

12-548) has a statute of limitations of six years; and (5) punitive damages has a statute of

limitations resulting from each of the above claims. Furthermore, Plaintiffs allege in their

Amended Complaint that they had actual or constructive knowledge of the allegedly

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 Plaintiffs state in their Amended Complaint that they necessarily discovered

Defendants’ allegedly fraudulent scheme no later than 1998. Plaintiffs also state in their

Amended Complaint that the two property transfers at issue in this case were recorded with

the Navajo County recorder in July 1998. Pursuant to A.R.S. § 33-416, “the record of a

grant, deed or instrument . . . which has been duly acknowledged and recorded in the proper

county, shall be notice to all persons of the existence of that grant, deed or instrument . . .”

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fraudulent scheme no later than July 1998.2

 Therefore, it appears that the statute of

limitations for all of Plaintiffs’ claims have run. Accordingly, Plaintiffs’ claims are

dismissed with prejudice. Defendant Caribbean Financial Corporation’s counter claim

remains. 

Regarding Defendants’ request for attorney’s fees, the Court does not find it

appropriate to grant such an award. There is no evidence to show that Plaintiffs bought

claims without substantial justification, that Plaintiffs brought claims to harass Defendants,

or that Plaintiffs brought claims to unreasonably expand or delay the proceedings. See II

Supra. Accordingly, Defendants’ request for attorneys’ fees incurred in association with

their second Motion to Dismiss is denied. 

IV. CONCLUSION

For the foregoing reasons, 

IT IS ORDERED denying Defendants’ Motion for Attorneys’ Fees (Doc. 15)

incurred in association with their first motion to dismiss.

IT IS FURTHER ORDERED granting Defendants’ Motion to Dismiss (Doc. 21).

IT IS FURTHER ORDERED dismissing with prejudice Counts 1 - 5 of Plaintiffs’

Amended Complaint.

IT IS FURTHER ORDERED, denying Defendants’ request for attorneys’ fees

incurred in association with their second Motion to Dismiss. 

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IT IS FURTHER ORDERED, directing the remaining parties to file a notice

informing the Court of the status of the remaining claims within 10 days of the file date of

this Order. 

DATED this 21st day of April, 2008.

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