Ezra v. Weitz & Luxenberg, P.C. et al

Filing 72

ORDER granting in part and denying in part ECF Nos. 11 , 45 Motions to Dismiss. Signed by Judge Richard F. Boulware, II on 10/10/2017. (Copies have been distributed pursuant to the NEF - KR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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BEVERLY J. EZRA,

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Plaintiff,

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v.

Case No. 2:16-cv-00486-RFB-PAL
ORDER
Defendants’ Motions to Dismiss
(ECF Nos. 11 and 45)

WEITZ & LUXENBERG, P.C., et al.

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Defendants.

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I.

INTRODUCTION

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This case is before the Court on a Motion to Dismiss by Defendant Bristol-Myers Squibb

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(“BMS”) (ECF No. 11) and a Motion to Dismiss by Defendant Medical Engineering Corporation

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(“MEC”) (ECF No. 45). Plaintiff Beverly J. Ezra (“Ezra” or “Plaintiff”) claims that Defendants,

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who were involved in litigation with Plaintiff in the Eastern District of New York from 1998-2000,

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breached a Tolling Agreement signed with Plaintiff during the course of that litigation. BMS and

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MEC have joined in one another’s motions, so the Court considers the motions together.

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For the reasons stated below, the motions are GRANTED with respect to Plaintiff’s fraud

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and IIED claims, and DENIED with respect to Plaintiff’s breach of contract and breach of covenant

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of good faith and fair dealing claims.

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II.

BACKGROUND

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A. Factual Background

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The following factual allegations are taken from Plaintiff’s complaint. (ECF No. 1).

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Plaintiff Beverly J. Ezra sustained severe injuries as a result of her exposure to toxic chemicals

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used in her breast implants, manufactured and distributed by BMS and MEC. On or about July 7,

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1997, Ezra retained Sybil Shainwald, Esq., to represent her in an action against the manufacturers.

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On January 9, 1998, by and through her attorney, Sybil Shainwald, Ezra filed a summons and

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complaint against BMS and MEC in the U.S. District Court, Eastern District of New York, under

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Case No. 1-98-cv-00118-JBW.

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Soon thereafter, the Law Office of Sybil Shainwald referred Ezra’s case to Defendant

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Weitz & Luxenberg, P.C., who assumed the role of Ezra’s legal representatives in the New York

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case. On or about January 21, 2000, Robert J. Gordon, a member of Weitz & Luxenberg, sent a

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letter to Ezra indicating that he had negotiated a Tolling Agreement with the attorneys for

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Defendants, BMS and MEC. It was explained to Ezra that the Tolling Agreement would allow her

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to withdraw her case without costs and without prejudice to refiling at a later time. The letter

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informed Ezra that it was in her best interests to sign the Tolling Agreement so that she could keep

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her existing local case intact and later litigate it, using additional medical information which was

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soon to be published.

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Ezra was assured by her lawyer that the statute of limitations would not run against her if

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she filed the Tolling Agreement. Ezra signed the Tolling Agreement on January 26, 2000. The

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Tolling Agreement further specified that if she did not refile her action within one year of the

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dismissal of the referenced case, that the named Defendants would agree to toll the applicable

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statute of limitations for those actions, from the date of the dismissal to a date two years after

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Ezra’s death.

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On August 31, 2000, without Ezra’s consent or knowledge, and in contradiction to the

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Tolling Agreement, her attorneys and the named Defendants entered into, and filed with the Court,

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a Stipulation dismissing Ezra’s case with prejudice.

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Ezra first became aware that her case had been dismissed with prejudice on October 26,

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2015, when her attorney in the instant case looked up the earlier case, and informed her of this

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fact. Ezra generally alleges that Defendants caused severe emotional distress to her.

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B. Procedural Background

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Plaintiff filed her Complaint on March 6, 2016. (ECF No. 1). Defendant BMS filed its

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Motion to Dismiss on April 19, 2016. (ECF No. 11). Plaintiff responded on May 3, 2016 (ECF

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No. 17), and Defendant Replied on May 13, 2016 (ECF No. 25). Defendant MEC filed its Motion

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to Dismiss on September 27, 2016. (ECF No. 45). Plaintiff responded on October 12, 2016 (ECF

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No. 47), and Defendant replied on October 24, 2016. (ECF No. 48). Defendants BMS and MEC

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joined in one another’s motions. Plaintiff brings claims for Breach of Contract; Breach of the

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Covenant of Good Faith and Fair Dealing; Misrepresentation, Fraud, and Deceit; and Intentional

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Infliction of Emotional Distress.

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III.

LEGAL STANDARD
A. Motion to Dismiss

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An initial pleading must contain “a short and plain statement of the claim showing that the

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pleader is entitled to relief.” Fed. R. Civ. P. 8(a). The court may dismiss a complaint for failing to

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state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). In ruling on a motion to

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dismiss, “[a]ll well-pleaded allegations of material fact in the complaint are accepted as true and

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are construed in the light most favorable to the non-moving party.” Faulkner v. ADT Sec. Servs.,

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Inc., 706 F.3d 1017, 1019 (9th Cir. 2013) (citations omitted).

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To survive a motion to dismiss, a complaint need not contain “detailed factual allegations,”

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but merely asserting “‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause

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of action’” is not sufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic

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Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, a claim will not be dismissed if it

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contains “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its

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face,” meaning that the court can reasonably infer “that the defendant is liable for the misconduct

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alleged.” Iqbal, 556 U.S. at 678 (citation and internal quotation marks omitted). In sum, at the

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motion to dismiss stage, “[t]he issue is not whether a plaintiff will ultimately prevail but whether

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[he] is entitled to offer evidence to support the claims.” Cervantes v. City of San Diego, 5 F.3d

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1273, 1274-75 (9th Cir. 1993) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)) (emphasis

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in original).

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“As a general rule, a district court may not consider any material beyond the pleadings in

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ruling on a Rule 12(b)(6) motion.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)

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(citation and internal quotation marks omitted). If the district court relies on materials outside the

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pleadings submitted by either party to the motion to dismiss, the motion must be treated as a Rule

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56 motion for summary judgment. Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir. 1996). Two

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exceptions to this rule exist. First, the court may consider extrinsic material “properly submitted

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as part of the complaint,” meaning documents either attached to the complaint or upon which the

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plaintiff’s complaint necessarily relies and for which authenticity is not in question. Lee, 250 F.3d

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at 688 (citation omitted). Second, the court “may take judicial notice of matters of public record.”

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Id. (citation and internal quotation marks omitted).

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IV.

DISCUSSION
A. Ripeness

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“A dispute is ripe in the constitutional sense if it presents concrete legal issues, presented

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in actual cases, not abstractions . . . . Ripeness and standing are closely related because they

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originate from the same Article III limitation . . . in many cases, ripeness coincides squarely with

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standing’s injury in fact prong.” Montana Envtl. Info. Ctr. v. Stone-Manning, 766 F.3d 1184, 1188-

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89 (9th Cir. 2014) (internal citations and quotation marks omitted).

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Defendants argue that Plaintiff’s claim is unripe in that her injury is effectively speculative

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– that she would be denied the opportunity to re-instate her product liability claim against BMS

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and MEC, despite never trying to re-instate those claims after the initial dismissal of her New York

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case.

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Plaintiff’s alleged injury, on which her request for damages is based, is that the dismissal

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with prejudice in her earlier case, in alleged contravention of Tolling Agreement she signed with

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Defendants, bars her from bringing her underlying product liability case. The Court finds that the

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alleged injury became ripe when the earlier court filed the order dismissing her initial case with

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prejudice. The Court does not find that the injury would only become ripe upon Plaintiff’s attempt

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to refile her product liability claims against BMS and MEC; where there is a Court order precluding

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her from doing so, the injury is already ripe.

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Therefore, the Court rejects this argument for dismissal.

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B. Statute of Limitations

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Breach of contract claims in Nevada must be brought within six years. NRS 11.190(1)(b).

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Actions based on fraud or mistake have a three-year statute of limitations period. NRS

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11.190(3)(d). Actions to recover damages for injuries to a person caused by the wrongful act or

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neglect of another, have a two-year limitations period. NRS 11.190(4)(e). Defendants argue that

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Plaintiff’s claims for breach of contract, breach of covenant of good faith and fair dealing, and

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fraud and misrepresentation, are precluded by these statutes of limitation. While Plaintiff’s claims

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were brought well outside of the statute of limitations if the date of the alleged breach is considered

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to be the point of accrual of those claims, Plaintiff’s Complaint states that she only became aware

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of the breach of the alleged earlier “Tolling Agreement” in October 2015, when her lawyer in the

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instant litigation brought it to her attention as she was attempting to renew her products liability

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action. Therefore, Plaintiff argues that her claims did not accrue until October 2015.

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Statutes of limitation may be “tolled until the injured party discovers or reasonably should

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have discovered facts supporting a cause of action.” Peterson v. Bruen, 106 Nev. 271, 274 (Nev.

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1990). Defendants argue that Plaintiff’s allegation that she did not learn of the dismissal until

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October 2015, in spite of the publicly filed record in her original federal court action, is insufficient

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to toll the statutes of limitation. Defendants argue that since a litigant is “considered to have notice

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of all facts known to their lawyer-agent,” and the lawyer should have known of the dismissal with

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prejudice, that knowledge should be imputed to Plaintiff. Ringgold Corp. v. Worral, 880 F.2d

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1138, 1141-42 (9th Cir. 1989). The Court finds that since Plaintiff has named her former counsel

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as a Defendant in this case and is alleging affirmative misrepresentations and fraud on their part

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as to the nature of the dismissal of her earlier case, Plaintiff’s representation that she was unaware

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of the earlier dismissal with prejudice is a credible representation. Therefore, the Court will allow

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tolling of the relevant statutes of limitation to October 2015.

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C. Failure to State a Claim
i. Breach of Contract

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Under Nevada law, to prevail on a breach of contract claim, a plaintiff must show “(1) the

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existence of a valid contract; (2) a breach by the defendant; and (3) damage as a result of the

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breach.” Rivera v. Peri & Sons Farms, Inc., 735 F.3d 892, 899 (9th Cir. 2013) (internal citation

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omitted).

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Plaintiff has alleged the existence of a Tolling Agreement which provided that Plaintiff

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would dismiss her case without prejudice. She has alleged that Defendants, BMS and MEC, in

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addition to Plaintiff’s counsel in that earlier case, stipulated to a dismissal with prejudice without

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her knowledge, and therefore breached the Tolling Agreement. She alleges that she has been

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damaged by her inability to renew her products liability action. Therefore, Plaintiff has stated a

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breach of contract cause of action.
ii. Breach of Covenant of Good Faith and Fair Dealing

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Under Nevada law, every contract imposes upon each party a duty of good faith and fair

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dealing in its performance and execution. See A.C. Shaw Constr. Inc. v. Washoe Cty., 105 Nev.

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913, 914 (Nev. 1989). To state a claim for breach of the covenant of good faith and fair dealing,

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plaintiff must allege facts showing: (1) plaintiff and defendant were parties to an agreement; (2)

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the defendant owed a duty of good faith to the plaintiff; (3) the defendant breached that duty by

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performing in a manner that was unfaithful to the purpose of the contract; and (4) the plaintiff’s

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justified expectations were denied. Perry v. Jordan, 111 Nev. 943, 947-48 (Nev. 1995).

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Plaintiff has alleged the existence of a Tolling Agreement; that the Defendants owed a duty

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of good faith to her pursuant to the agreement, to dismiss her case without prejudice; that in

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allegedly stipulating to the dismissal with prejudice, they performed in a manner unfaithful to the

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agreement; and that Plaintiff’s expectations of the outcome of the agreement were denied, in her

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case being dismissed with prejudice. Therefore, in the alternative to a breach of contract, Plaintiff

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has adequately pled a breach of the covenant of good faith and fair dealing.

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iii. Misrepresentation, Fraud, and Deceit

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When alleging fraud or mistake, a party must state with particularity the circumstances

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constituting fraud or mistake. Fed. R. Civ. P. 9(b). To satisfy this heightened pleading requirement,

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a party must plead with particularity “the time, place, and nature of misleading statements,

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misrepresentations, and specific acts of fraud.” Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir. 1994),

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overruled on other grounds by City of Dearborn Heights Act 345 Police & Fire Ret. Sys. v. Align

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Tech., Inc., 856 F.3d 605 (9th Cir. 2017) (internal citation omitted). Here, Defendants argue that

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Plaintiff has failed to plead those facts with particularity, and instead has generally alleged that a

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Tolling Agreement was signed, and that Defendants breached that agreement.

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Plaintiff’s Complaint only states that Defendants “without the consent or knowledge of

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Ezra, and in direct contradiction to the agreed upon Tolling Agreement,” entered into a stipulation

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of dismissal with prejudice. Plaintiff has alleged no misleading statements or specific acts of fraud.

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Therefore, Plaintiff has failed to adequately plead her fraud claim.
iv. Intentional Infliction of Emotional Distress (“IIED”)

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To establish a claim for IIED, a plaintiff must prove: “(1) extreme and outrageous conduct

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with either the intention of, or reckless disregard for, causing emotional distress; (2) the plaintiff’s

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having suffered severe or extreme emotional distress; and (3) actual or proximate causation.” Star

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v. Rabello, 97 Nev. 124, 125 (Nev. 1981) (internal citation omitted). Liability for emotional

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distress is reserved for acts that “shock the conscience.” Id.

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Plaintiff alleged that Defendant’s actions were “utterly intolerable,” but these bare

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allegations are insufficient to make the alleged conduct rise to the level of “outrageous.”

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Furthermore, she has alleged no specific emotional or physical injury as a consequence. Therefore,

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Plaintiff has failed to adequately plead her IIED claim.

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D. Collateral Estoppel

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Defendants assert that Plaintiff has already prosecuted her systemic injuries claim arising

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out of her silicone breast implants, in a separate case in the Eastern District of Michigan, against a

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different Defendant, Dow Corning. 1 In that proceeding, Defendants assert that Plaintiff actually

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litigated, and the court decided, the merits of whether there is adequate scientific evidence to show

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causation between her silicone implants and the injuries she claims. They argue that in order to

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In re Dow Corning, Corp. v. DCC Litig. Facility, 541 B.R. 643, 646-47 (E.D. Mich. 2015);
Defendants attach a copy of the order in this case to their Motion to Dismiss (ECF No. 19-3), and argue
that they are in privity with Dow Corning.

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prevail on her current claims, regarding a breach of the Tolling Agreement, she must show that

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she would have prevailed on her product liability claims if she had been permitted to relitigate

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them against BMS and MEC.

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In the earlier case, the Eastern District of Michigan granted Dow Corning’s motions to

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exclude Plaintiff’s expert opinions. Issue preclusion, the doctrine Defendants attempt to invoke,

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applies when: “(1) the issue necessarily decided at the previous proceeding is identical to the one

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which is sought to be relitigated; (2) the first proceeding ended with a final judgment on the merits;

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and (3) the party against whom [issue preclusion] is asserted was a party or in privity with a party

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at the first proceeding.” Paulo v. Holder, 669 F.3d 911, 917 (9th Cir. 2011) (alteration in original)

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(internal citation omitted). Defendant has not proven the elements of issue preclusion. The issue

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decided in the earlier litigation, as to the experts proffered in that litigation, is not necessarily

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identical to the issue which would be litigated as to the damages in the instant case. Plaintiff can

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assert damages related to the legal fees and preparation she made to refile her case, and may also

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be able to prove her ability to relitigate her case through the use of a different expert or different

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evidence. At the hearing on this motion, Plaintiff argued that the on the face of the dismissal order

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in the Michigan case, there is no identity of issues between the Michigan case and the instant case.

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The Court does not find that the Eastern District of Michigan opinion meets all of the

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elements of issue preclusion, in that the issue necessarily decided at the previous proceeding is not

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identical to the one being litigated in the instant case, nor would it necessarily preclude damages

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in the instant case. Therefore, the Court rejects this argument for dismissal.

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V.

CONCLUSION

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Accordingly,

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IT IS HEREBY ORDERED that Motions to Dismiss [ECF No. 11] and [ECF No. 45] are

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GRANTED with respect to Plaintiff’s fraud and IIED claims, and DENIED with respect to

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Plaintiff’s breach of contract and breach of covenant of good faith and fair dealing claims.

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DATED: ______________.
October 10, 2017

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__________________________________
RICHARD F. BOULWARE, II
UNITED STATES DISTRICT JUDGE

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