Cheatham v. ADT Corporation et al

Filing 57

ORDER finding as moot 33 Motion to Strike; granting 40 Motion to Amend/Correct. Signed by Judge David G Campbell on 5/3/2016.(DGC, nvo)

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1 WO 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE DISTRICT OF ARIZONA 7 8 Janet Cheatham, No. CV-15-02137-PHX-DGC Plaintiff, 9 10 v. 11 ORDER ADT Corporation, et al., 12 Defendants. 13 14 On March 1, 2016, Defendant ADT LLC (“ADT”) filed its answer to Plaintiff’s 15 complaint. Doc. 31. On March 10, before the expiration of the 21-day period for 16 amending the answer as a matter of course, Plaintiff filed a motion to strike all of ADT’s 17 affirmative defenses. Doc. 33. ADT responded, acknowledging that its answer was 18 deficient and stating its intention to file a motion for leave to amend. Doc. 38. Plaintiff 19 replied. Doc. 39. On March 31, 2016, eight days after the deadline for amending as a 20 matter of course, ADT filed a motion for leave to amend, attaching the proposed 21 amendment to its motion. Docs. 40, 50, 53. Oral argument has not been requested on 22 either motion. ADT’s motion for leave to amend will be granted and Plaintiff’s motion to 23 strike will be denied as moot. 24 Because ADT filed its motion after the deadline for amending as a matter of 25 course, it may amend “only with the opposing party’s written consent or the court’s 26 leave.” Fed. R. Civ. P. 15(a)(2). Leave is given freely “when justice so requires.” Id. 27 Applying this standard, courts grant leave absent “undue delay, bad faith or dilatory 28 motive on the part of the movant, repeated failure to cure deficiencies by amendments 1 previously allowed, undue prejudice to the opposing party by virtue of allowance of the 2 amendment, [or] futility of amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962). 3 The decision whether to grant leave “is within the discretion of the District Court.” Id.1 4 Plaintiff does not contend that ADT’s motion is prejudicial or made in bad faith. 5 Plaintiff instead argues that the proposed amendment is futile. Doc. 50 at 5-9. A 6 proposed affirmative defense is properly pleaded, and thus is not futile, if it “gives 7 plaintiff fair notice of the defense.” Simmons v. Navajo Cty., Ariz., 609 F.3d 1011, 1023 8 (9th Cir. 2010). 9 The first affirmative defense ADT seeks to add alleges that “[t]he claims asserted 10 by Plaintiff and/or the proposed class are barred or limited in whole or in part by 11 contractual limitations of liability contained in their Alarm Services Contract with ADT,” 12 including the contract’s integration clause. Doc. 40-1, ¶¶ 10-12. The existence of a 13 contractual limitation of liability is not a valid affirmative defense to Plaintiff’s fraud 14 claim. See Lutfy v. R. D. Roper & Sons Motor Co., 115 P.2d 161, 166 (Ariz. 1941) (“any 15 provision in a contract making it possible for a party thereto to free himself from the 16 consequences of his own fraud in procuring its execution is invalid and necessarily 17 constitutes no defense”). But the existence of a fully integrated contract that specifically 18 governs the rights and obligations at issue in this case may be a valid defense to 19 Plaintiff’s unjust enrichment claim. See USLife Title Co. of Ariz. v. Gutkin, 732 P.2d 579, 20 585 (Ariz. Ct. App. 1986). Therefore, the amendment is not futile. 21 The second affirmative defense ADT seeks to add alleges that some members of 22 the putative plaintiff class (1) waived their claims by continuing to engage ADT’s 23 monitoring services after discovering the defects alleged in this case, or (2) ratified 24 ADT’s conduct, or (3) are estopped from complaining about it. Doc. 40-1, ¶¶ 13-17. The 25 third affirmative defense ADT seeks to add alleges that the statute of limitations has run 26 1 27 28 Because the proposed amendment comes after the deadline for amendments set forth in the Court’s case management order (Doc. 25, ¶ 2), ADT must also show “good cause” for modifying the order. Johnson v. Mammoth Recreations, 975 F.2d 604, 608 (9th Cir. 1992); see Fed. R. Civ. P. 16(b)(4). Good cause exists here because ADT is seeking to cure defects identified in Plaintiff’s motion to strike. -2- 1 against some members of the putative plaintiff class. Doc. 40-1, ¶¶ 19-21. Plaintiff 2 argues that these affirmative defenses are insufficient, and an amendment to add them 3 would be futile, because ADT fails to identify any members of the putative class to whom 4 the defenses apply. Doc. 50 at 7. ADT objects that it cannot be expected to identify 5 specific class members before a class has been certified, but that it is plausible that these 6 defenses may apply to some of the “tens of thousands” of class members who may 7 ultimately participate in this litigation. Doc. 53 at 7-8. The Court agrees. ADT has 8 given Plaintiff fair notice of the defenses it intends to assert if and when a class is 9 certified. That is sufficient to defeat an argument of futility. 10 11 12 IT IS ORDERED that ADT’s motion for leave to amend (Doc. 40) is granted and Plaintiff’s motion to strike (Doc. 33) is denied as moot. Dated this 3rd day of May, 2016. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3-

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