Maguire v. Coltrell et al

Filing 48

ORDER granting 34 Motion to Dismiss Counts/Claims; denying 40 Motion to Amend/Correct. Signed by Judge David G Campbell on 2/4/2015.(DGC, nvo)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Robert D. Maguire,

No. CV-14-01255-PHX-DGC
Plaintiff,

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v.

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ORDER

Cathleen A. Coltrell, et al.,

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Defendants.

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Defendants Cathleen Coltrell and John Carmichael have filed a counterclaim for

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civil extortion against Plaintiff Robert Maguire, alleging violations of A.R.S. § 13-

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1804(6).

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Rule 12(b)(6), asserting that it is barred by the statute of limitations. Doc. 34. The

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motion is fully briefed and no party seeks oral argument. The Court will grant the motion.

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I.

Doc. 38 at 10.

Plaintiff moves to dismiss the counterclaim pursuant to

Background.

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Defendants assert the following facts in their answer to Plaintiff’s amended

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complaint. Doc. 38. In January 2006, Plaintiff and Coltrell began living together at a

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house Coltrell owned (the “Justine House”). Id. at 1. Plaintiff immediately began to pay

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Coltrell $1,500 per month, which Coltrell used in part to retire the mortgage that

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encumbered the house. Id. Plaintiff and Coltrell agreed to a “reasonable cost-sharing

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aspect to the arrangement when [Plaintiff] moved into the Justine House.” Id. at 2.

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In 2008, Plaintiff suffered the failure of a business, and certain personal property

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was recorded in Coltrell’s name. Id. In 2009, Coltrell purchased another property (the

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“Milton House”) where both Plaintiff and Coltrell “took an active part” of negotiations

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and renovation oversight. Id. While attempting to obtain financing to purchase the

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Milton House, a third party’s legal action against Plaintiff’s ex-wife damaged Plaintiff’s

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credit score and Coltrell agreed to purchase the Milton House solely in her name. Id.

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Plaintiff contributed financially to the purchase of the Milton House. Id. at 3. Plaintiff

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claims he provided $104,000 toward the $160,000 down payment. Id. In July of 2009,

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Plaintiff and Coltrell moved into the Milton House following its renovation. Id.

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In February of 2013, while Plaintiff was out of the country, Coltrell notified him

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by telephone that she had met another man, Defendant John Carmichael, and that she

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intended to pursue a relationship with him. Id. Following Plaintiff’s return to Arizona,

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Coltrell asked Plaintiff to move out of the Milton House. Id. Shortly after Plaintiff

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moved out, Coltrell and Carmichael were married. Id.

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On March 10, 2013, Coltrell received an email from Plaintiff in which she claims

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he accepted her settlement offer of $25,000 to resolve all of his claims and right to

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payment. Id. at 7, 17. Coltrell paid Plaintiff the $25,000. Id. at 7.

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On April 11, 2013, Coltrell received another email from Plaintiff (the “April 2013

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email”) demanding further payment of $50,987.86. Id. at 10, 19. The April 2013 email

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threatened to distribute personal and private information about Coltrell unless she paid

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the demand by April 29, 2013. Id. In response, Coltrell’s attorney sent Plaintiff a letter

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informing him that Coltrell was represented by counsel and instructing him not to contact

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her directly again. Doc. 40 at 24.

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Coltrell sold the Justine House for $412,000 in June of 2013, and the Milton

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House for $800,000 in September of 2013. Doc. 38 at 4-5. In December of 2013,

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Plaintiff hired attorney David Carmichael on the recommendation of another attorney.

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Doc. 41-1 at 2. On April 1, 2014, Plaintiff’s attorney sent a demand letter directly to

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Coltrell. Doc. 40 at 4. The letter requested an accounting of assets and expressed hope

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that the matter could be settled without litigation. Id. at 18.

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On May 7, 2014, Plaintiff brought this action against Defendants in Maricopa

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County Superior Court. Doc. 1. Defendants removed the action to this Court and filed

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their answer and counterclaims. Id.; Doc. 4. Plaintiff has amended his complaint once.

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Doc. 33. Defendants have amended their answers and counterclaims twice. Docs. 7, 38.

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II.

Legal Standard.

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“[T]he statute of limitations defense . . . may be raised by a motion to dismiss . . .

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[i]f the running of the statute is apparent on the face of the complaint.” Jablon v. Dean

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Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980) (citing Graham v. Taubman, 610 F.2d

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821 (9th Cir. 1979)). The “‘complaint cannot be dismissed unless it appears beyond

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

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claim.’” Hernandez v. City of El Monte, 138 F.3d 393, 402 (9th Cir. 1998) (quoting

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Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1206 (9th Cir. 1995)).

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III.

Analysis.

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Plaintiff asserts that Defendants’ civil extortion counterclaim was filed beyond the

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one-year statute of limitations in A.R.S. § 12-541(5). Doc. 34. Defendants do not

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dispute that a one-year limitation period applies. See Doc. 40. The April email, which

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serves as the basis of Defendants’ civil extortion claim, was sent on April 11, 2013.

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Doc. 38 at 10. Defendants first filed their counterclaim for civil extortion more than 14

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months later on June 23, 2014. Doc. 4.

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Defendants oppose Plaintiff’s motion for two reasons: (1) Plaintiff’s violation of

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A.R.S. § 13-1804 was a continuing violation that should toll the statute of limitations, and

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(2) the Court must treat Defendants’ extortion claim as a recoupment defense that is not

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subject to the statute of limitations. See Doc. 40. These arguments are not persuasive.

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First, Plaintiff’s actions do not support a continuing violation. The theory of

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continuing violations is an equitable doctrine that “prevent[s] a defendant from using its

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earlier conduct to avoid liability for later illegal conduct of the same sort.” O'Loghlin v.

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Cnty. of Orange, 229 F.3d 871, 875 (9th Cir. 2000). To establish a continuing violation,

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the asserting party must show a series of related acts, one or more of which falls within

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the limitations period. Green v. L.A. Cnty. Superintendent of Sch., 883 F.2d 1472, 1480

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(9th Cir. 1989). A “continuing violation” is occasioned by continual unlawful acts, not

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by continual ill effects from an original violation. Ward v. Caulk, 650 F.2d 1144, 1147

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(9th Cir. 1981). Defendants’ claim falls short of this standard.

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Defendants assert that Plaintiff’s continuing acts of extortion are demonstrated by

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the following facts: (1) Plaintiff hired David Carmichael, a cousin of John Carmichael, as

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his attorney; (2) David Carmichael sent a demand letter to Coltrell on her anniversary;

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(3) David Carmichael showed a private photograph to Coltrell at her deposition in order

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to demonstrate Plaintiff’s knowledge of, and access to, her personal life; and (4) David

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Carmichael sent a letter directly to Coltrell when she was represented by counsel, and the

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letter made reference to the “intrusive nature of litigation.” Doc. 40 at 3-4. These

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litigation-related events do not allege unlawful behavior by Plaintiff, much less continual

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unlawful behavior. The Court concludes that the limitations period for the extortion

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counterclaim was not tolled by these activities. The claim is therefore barred by the one-

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year statute of limitations.

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Although not raised by Plaintiff, the Court also seriously doubts that the criminal

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statute relied on by Defendants, A.R.S. § 13-1804(6), gives rise to a civil cause of action.

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Under Arizona law, “no private cause of action should be inferred based on a criminal

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statute where there is no indication whatsoever that the legislature intended to protect any

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special group by creating a private cause of action by a member of that group.” Phoenix

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Baptist Hosp. & Med. Ctr., Inc. v. Aiken, 877 P.2d 1345, 1350 (Ariz. App. 1994).

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Section 13-1804(6) contains no indication that the legislature had such intent.

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Nor does Defendants’ civil extortion claim constitute a recoupment defense. A

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recoupment defense must arise from the existence of “some feature of the transaction

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upon which the plaintiff’s action is grounded.” Aetna Finance Co. v. Pasquali, 626 P.2d

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1103, 1105 (Ariz. App. 1981). Where a lawsuit, like this one, is based on claims such as

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breach of contract, the recoupment defense must “arise out of mutual obligations or

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covenants of the . . . transaction upon which [the] suit [is] founded.” Id. Defendants’

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civil extortion claim does not arise out of the dealings between Plaintiff and Coltrell

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before their relationship ended, “but is an affirmative action which exacts a penalty for an

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independent wrong.” Id. It therefore is not a recoupment defense. Id.

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Defendants ask the Court to permit them to amend their counterclaim to allege that

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“Plaintiff continued his campaign of extortion by continuing to threaten Cathleen

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Carmichael in 2014.” Doc. 40 at 6. For reasons explained above, this amendment would

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not save the counterclaim. The motion to amend will therefore be denied.

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IT IS ORDERED

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Plaintiff’s motion to dismiss (Doc. 34) is granted.

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2.

Defendant’s motion to amend (Doc. 40) is denied.

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Dated this 4th day of February, 2015.

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