Court Opinion

ID: 4693368
Source: CourtListenerOpinion
Date Created: 2021-06-07 20:01:33.589041+00
Date Added: 2024-06-11T08:05:22.450977
License: Public Domain

NOT FOR PUBLICATION                           FILED
                      UNITED STATES COURT OF APPEALS                         JUN 7 2021
                                                                        MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS
                              FOR THE NINTH CIRCUIT

YAZMIN JUAREZ COYOY, on her own                    No.   19-17539
behalf and as a surviving parent of M.J.,
                                                   D.C. No.
                  Plaintiff-Appellant,             2:19-cv-01391-JJT-ESW

    v.
                                                   MEMORANDUM*
CITY OF ELOY,

                  Defendant-Appellee.

                      Appeal from the United States District Court
                               for the District of Arizona
                      John Joseph Tuchi, District Judge, Presiding

                         Argued and Submitted March 1, 2021
                                  Phoenix, Arizona

Before: HAWKINS, BEA, and BUMATAY, Circuit Judges.

         Juárez appeals from the district court’s grant of Appellee City of Eloy’s

motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil

Procedure 12(b)(6). The district court had diversity jurisdiction under 28 U.S.C.

§ 1332, and we have jurisdiction on appeal under 28 U.S.C. § 1291. We affirm.

         We review de novo a district court’s dismissal for failure to state a claim and

*
 This disposition is not appropriate for publication and is not precedent except as
provided by Ninth Circuit Rule 36-3.
accept as true all well-pleaded allegations of material fact, construing them in the

light most favorable to the plaintiff. Puri v. Khalsa, 844 F.3d 1152, 1157 (9th Cir.

2017). However, we may consider documents incorporated by reference in the

complaint and need not credit as true allegations in the complaint that are

contradicted by these documents. United States v. Ritchie, 342 F.3d 903, 908 (9th

Cir. 2003); Gonzalez v. Planned Parenthood of Los Angeles, 759 F.3d 1112, 1115

(9th Cir. 2014).

      Where the federal government is a party, the interpretation of a contract is

governed by federal law. Chickaloon-Moose Creek Native Ass’n, Inc. v. Norton,

360 F.3d 972, 980 (9th Cir. 2004). We apply Arizona law to the substantive legal

issues of contract law as we believe the Arizona Supreme Court would apply it.

Cf. Astaire v. Best Film & Video Corp., 116 F.3d 1297, 1300 (9th Cir. 1997).

      1.     Juárez did not plead facts sufficient plausibly to allege that Eloy owed

her or her daughter a duty of reasonable care under § 324A of the Restatement

(Second) of Torts. “Arizona has adopted . . . § 324A with respect to a negligent

undertaking (or assumed duty).” Dabush v. Seacret Direct LLC, 478 P.3d 695, 703

(Ariz. 2021). Section 324A states:

      One who undertakes, gratuitously or for consideration, to render
      services to another which he should recognize as necessary for the
      protection of a third person or his things, is subject to liability to the
      third person for physical harm resulting from his failure to exercise
      reasonable care to protect his undertaking . . . .

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A duty pursuant to § 324A “may be assumed expressly or by conduct,” but to find

an actor has assumed a duty “requires affirmative, deliberate conduct such that it is

apparent that the actor specifically undertook to perform the task that he is charged

with having performed negligently.” Dabush, 483 P.3d at 703 (quoting Yost v.

Wabash College, 3 N.E.3d 509, 517 (Ind. 2014)) (cleaned up).

        Interpretation of an unambiguous written contract is a question of law. Beck

Park Apartments v. U.S. Dep’t of Hous. & Urb. Dev., 695 F.2d 366, 369 (9th Cir.

1982). “Federal common law follows the traditional approach for the parol

evidence rule: A contract must be discerned within its four corners, extrinsic

evidence being relevant only to resolve ambiguity in the contract.” Arizona v.

Tohono O’odham Nation, 818 F.3d 549, 560–61 (9th Cir. 2016) (cleaned up). We

have reviewed the Modified Inter-Governmental Services Agreement (“MIGSA”)

entered into by Eloy and Immigration and Customs Enforcement (“ICE”) as

incorporated by reference, as well as the related agreements between Eloy and

Corrections Corporation of America (“CCA”).1

        We hold Eloy did not undertake to render protective services or to supervise

those services at the South Texas Facility under the express or implied terms of the

MIGSA, or by conduct.

        First, the MIGSA never expressly assigns Eloy by name any duty to render

1
    CCA is now known as “CoreCivic.”

                                          3
or supervise the provision of protective services to South Texas Facility detainees,

including Juárez or her daughter. The terms of the MIGSA explicitly assign each

of the relevant care and oversight duties to the “Service Provider” or to ICE. The

MIGSA designates Eloy not as Service Provider but as “Contractor/Offeror.”

      Second, to the extent Arizona law recognizes the ability to assume an

implied duty of care under § 324A, see Dabush, 250 Ariz. at 703, nothing within

the four corners of the MISGA demonstrates that Eloy ever impliedly agreed to

perform services as the Service Provider. The text of the MIGSA is not ambiguous

as to whom the parties agreed would assume the duty of providing care to South

Texas Facility detainees. The construction of medical and dental facilities as well

as the provision of those facilities’ equipment, access for detainees, security

staffing, transportation, and quality control were all services that were expressly

assigned in the statement of work to the Service Provider. And the MIGSA

provides a clear definition as to who the “Service Provider” was: “The entity,

which provides the services described in this statement of work.”

      The MIGSA does not imply that Eloy was to take on the role of Service

Provider unless or until Eloy entered into an agreement assigning a different entity

the role of Service Provider. The MIGSA by its terms defers designation of the

Service Provider until the point at which the services were actually provided.

Given that definition, it is simply not reasonable to interpret the MIGSA as

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designating a Service Provider at the time the contract was signed. Nor is it

reasonable to conclude the Service Provider was by necessity a signatory to the

MIGSA. By placing obligations upon the Service Provider, the MIGSA chose not

to designate the “undersigned” or “Contractor/Offeror” or “City of Eloy” as the

provider of services, although it easily could have.

      This understanding is confirmed elsewhere in the text. The MIGSA’s

“Ramp Up Plan” provisions expressly condition the commencement of the contract

on CCA—not Eloy—being on site and under contract: “‘Start Date’ is defined as

the later of [inter alia] ICE and CCA signing an award document which

precipitates the [IGSA] amendment being sent to Eloy” and “the date which CCA

is allowed on site per NEPA clearance.” The MIGSA unambiguously assigns

protective services to the Service Provider and does not imply Eloy agreed to take

on that role.

      Finally, Eloy did not undertake any duty by conduct. The complaint does

not allege that Eloy actually performed any of the services of the Service Provider,

and the amended agreement between Eloy and CCA confirms that CCA was

contractually obligated to “provide services in compliance with the applicable

terms of the [MIGSA]” “for every federal resident accepted into custody at the

South Texas Facility.”

      Juárez seeks to introduce ambiguity into the MIGSA to suggest Eloy agreed

                                          5
to be the Service Provider before delegating those duties by subcontract to CCA.

But again, the MIGSA unambiguously states the Service Provider is whichever

entity that actually performs the described services—it does not anywhere

designate Eloy to be the Service Provider unless and until Eloy designates a

subcontractor. But even if we were to find an ambiguity in the MIGSA, the facts

of Juárez’s complaint and the incorporated documents (including a 2018

Department of Homeland Security Office of Inspector General (“DHS OIG”)

Report which analyzed the MIGSA and the circumstances that gave rise to it),

rather than plausibly allege that Eloy agreed to undertake any caretaking

responsibilities as the Service Provider, directly contradict that allegation.

      First, and most obvious, Eloy was never involved in the drafting or

negotiating of the MIGSA. The complaint states “Eloy did not participate in any

of the negotiations related to the [South Texas] facility and had no input regarding

the proposed IGSA modification.” It also accuses Eloy of being nothing more than

a “contrived” “middleman,” and cites to the DHS OIG Report that concluded that

“Eloy’s sole function under the modification is to act as the middleman between

ICE and CCA.”

      Second, the terms of the MIGSA, in light of the facts presented in the DHS

OIG Report, indicate that CCA—and not Eloy—was at all times the contemplated

Service Provider. Under “Acculturation/Adaption,” the MIGSA required the

                                           6
Service Provider to provide a personal health and hygiene program for the South

Texas Facility detainees and required that this program be delivered “[a]s

described in the Service Provider’s response to the ICE RFI dated 8/7/2014.” Yet

the complaint maintains that Eloy never participated in negotiations with ICE and

the DHS OIG Report states that CCA was the only entity to respond to ICE’s July

2014 request for proposals. Another provision of the MIGSA references “the

Service Provider’s 8/1/2014 Response to IGSA and Statement of Work” and “the

Service Provider’s Site Layout diagram.” Again, the DHS OIG reported that “ICE

worked directly with CCA to develop the requirements for the facility; Eloy did

not participate in developing the requirements or any other aspect of the

negotiations with ICE,” and that prior to Eloy becoming involved, “ICE continued

negotiating exclusively with CCA” and that the two “establish[ed] the housing

layout and pricing schedule[] without input from Eloy.” That these August 2014

documents were dated prior to the MIGSA’s September 2014 execution date

provides significant evidence that CCA was the designated and agreed upon

Service Provider. Thus, the terms of the MIGSA, even reviewed in context with

the extrinsic evidence provided by allegations of the complaint and the documents

attached to and incorporated into the complaint, preclude the conclusion that Eloy

was ever the implied Service Provider.

      Juárez does not seriously dispute this conclusion. She herself alleges ICE

                                         7
and CCA schemed to pay Eloy to be a “middleman,” which would allow ICE to

contract with CCA to be the Service Provider without having to abide by time-

consuming federal contracting regulations. That this contrived contractual

apparatus may have been illegal does not require us to ignore the unambiguous

expressed intent of the parties and instead resolve that Eloy must be held to have

agreed to be the Service Provider prior to CCA’s designation. That is a non-

sequitur. Neither is it relevant that Eloy was a governmental entity and party to an

intergovernmental agreement authorized by 8 U.S.C. § 1103(a)(11)(A). This fact

again merely shows that Eloy was a middleman, it does not show Eloy was ever

contemplated to be the Service Provider. Although this arrangement may have

been illegal, it was understood by all parties that Eloy was never to provide

services and that understanding is readily apparent in the text of the MIGSA as

well as the accompanying incorporated documents. Finally, it is not true that ICE

had no recourse for a breach in services at the South Texas Facility. The MIGSA

sets forth penalties against the Service Provider for failure to perform and permits

ICE to withhold payment from the Service Provider for contract or regulatory

violations.

       2.     Neither did Eloy assume a duty of care by subcontracting with CCA.

Like the district court, we have found no authority that suggests the Arizona

Supreme Court would conclude Eloy’s passive act of subcontracting was an

                                          8
affirmative undertaking of protective services sufficient to impose on it a duty of

care under § 324A. To the extent Juárez now alleges Eloy had a duty based on

negligent hiring and retention of CCA, she did not make that claim in her complaint

or before the district court, and we will not consider it for the first time on appeal.

Crawford v. Lungren, 96 F.3d 380, 389 n.6 (9th Cir. 1996).

       3.     Because Eloy never assumed a duty of care, we need not address

whether the alleged duty is nondelegable.

       AFFIRMED.

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