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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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Janet Cheatham,

No. CV-15-02137-PHX-DGC
Plaintiff,

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v.

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ORDER

ADT Corporation, et al.,

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Defendants.

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On March 1, 2016, Defendant ADT LLC (“ADT”) filed its answer to Plaintiff’s

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complaint. Doc. 31. On March 10, before the expiration of the 21-day period for

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amending the answer as a matter of course, Plaintiff filed a motion to strike all of ADT’s

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affirmative defenses. Doc. 33. ADT responded, acknowledging that its answer was

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deficient and stating its intention to file a motion for leave to amend. Doc. 38. Plaintiff

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replied. Doc. 39. On March 31, 2016, eight days after the deadline for amending as a

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matter of course, ADT filed a motion for leave to amend, attaching the proposed

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amendment to its motion. Docs. 40, 50, 53. Oral argument has not been requested on

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either motion. ADT’s motion for leave to amend will be granted and Plaintiff’s motion to

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strike will be denied as moot.

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Because ADT filed its motion after the deadline for amending as a matter of

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course, it may amend “only with the opposing party’s written consent or the court’s

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leave.” Fed. R. Civ. P. 15(a)(2). Leave is given freely “when justice so requires.” Id.

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Applying this standard, courts grant leave absent “undue delay, bad faith or dilatory

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motive on the part of the movant, repeated failure to cure deficiencies by amendments

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previously allowed, undue prejudice to the opposing party by virtue of allowance of the

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amendment, [or] futility of amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962).

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The decision whether to grant leave “is within the discretion of the District Court.” Id.1

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Plaintiff does not contend that ADT’s motion is prejudicial or made in bad faith.

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Plaintiff instead argues that the proposed amendment is futile. Doc. 50 at 5-9. A

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proposed affirmative defense is properly pleaded, and thus is not futile, if it “gives

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plaintiff fair notice of the defense.” Simmons v. Navajo Cty., Ariz., 609 F.3d 1011, 1023

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(9th Cir. 2010).

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The first affirmative defense ADT seeks to add alleges that “[t]he claims asserted

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by Plaintiff and/or the proposed class are barred or limited in whole or in part by

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contractual limitations of liability contained in their Alarm Services Contract with ADT,”

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including the contract’s integration clause. Doc. 40-1, ¶¶ 10-12. The existence of a

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contractual limitation of liability is not a valid affirmative defense to Plaintiff’s fraud

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claim. See Lutfy v. R. D. Roper & Sons Motor Co., 115 P.2d 161, 166 (Ariz. 1941) (“any

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provision in a contract making it possible for a party thereto to free himself from the

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consequences of his own fraud in procuring its execution is invalid and necessarily

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constitutes no defense”). But the existence of a fully integrated contract that specifically

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governs the rights and obligations at issue in this case may be a valid defense to

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Plaintiff’s unjust enrichment claim. See USLife Title Co. of Ariz. v. Gutkin, 732 P.2d 579,

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585 (Ariz. Ct. App. 1986). Therefore, the amendment is not futile.

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The second affirmative defense ADT seeks to add alleges that some members of

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the putative plaintiff class (1) waived their claims by continuing to engage ADT’s

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monitoring services after discovering the defects alleged in this case, or (2) ratified

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ADT’s conduct, or (3) are estopped from complaining about it. Doc. 40-1, ¶¶ 13-17. The

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third affirmative defense ADT seeks to add alleges that the statute of limitations has run

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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.
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against some members of the putative plaintiff class. Doc. 40-1, ¶¶ 19-21. Plaintiff

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argues that these affirmative defenses are insufficient, and an amendment to add them

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would be futile, because ADT fails to identify any members of the putative class to whom

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the defenses apply. Doc. 50 at 7. ADT objects that it cannot be expected to identify

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specific class members before a class has been certified, but that it is plausible that these

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defenses may apply to some of the “tens of thousands” of class members who may

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ultimately participate in this litigation. Doc. 53 at 7-8. The Court agrees. ADT has

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given Plaintiff fair notice of the defenses it intends to assert if and when a class is

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certified. That is sufficient to defeat an argument of futility.

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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.

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