Free Response in Opposition to Motion - District Court of Arizona - Arizona


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Matthew D. Kleifield 011564 Chad C. Baker 023083 KUNZ PLITT HYLAND DEMLONG & KLEIFIELD 3838 North Central Avenue, Suite 1500 Phoenix, Arizona 85012-1902 Email:mdk@kunzlegal.com, ccb@kunzlegal.com Phone: (602) 331-4600 Attorneys for Defendants IN THE UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT COURT OF ARIZONA MARVIN SAPIRO SAPIRO, his wife, and GLORIA No. CIV03-1555 PHX SRB DEFENDANTS' RESPONSE IN OPPOSITION TO: PLAINTIFF'S MOTION TO EXTEND PRETRIAL DEADLINES AND TO AMEND COMPLAINT TO SEEK PUNITIVE DAMAGES

Plaintiffs, v. SUNSTONE HOTELS INVESTORS, L.L.C., SUNSTONE HOTEL INVESTORS, L.P. Defendant.

Defendants ("Sunstone") oppose Plaintiff's Motion To Extend Pretrial Deadlines And To Amend Complaint To Seek Punitive Damages and respectfully request this Court deny Plaintiff's motion. Plaintiffs fail to demonstrate good cause for modifying the pretrial schedule; the proposed amendment would be futile; and, the proposed amendment would require additional depositions of already deposed witnesses whose testimony was obtained without knowledge of, and thus lack of attention to, the proposed amendment. See Fed. R. Civ. P. 16(b). ... ... ... ...
Case 2:03-cv-01555-SRB Document 112 Filed 08/11/2005 Page 1 of 7

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I.

Plaintiffs motion to amend the complaint filed approximately fourteen months after the Pretrial Schedule deadline does not demonstrate diligence in complying with the Pretrial Schedule. On April 27, 2004, this Court entered a Rule 16 Scheduling Order. Docket 31. The

Order set a June 1, 2004 deadline on Motions to Amend the Complaint, as well as an April 30, 2005 deadline for all discovery. Id. Thus the court clearly imposed an obligation upon plaintiffs to discover and propose any amendments no less than 10 months before the first discovery deadline. Subsequently, due to the significant travel occasioned by depositions in this case, this Court has extended the discovery deadline to November 21, 2005; the deadline to Amend the Complaint remained unchanged and thus expired more than one year ago. Docket 108. In that year the parties have concluded a substantial number of depositions across the far reaches of the United States (from Florida to Alaska). Curiously, nowhere do plaintiffs contend that they were unable to obtain such discovery before the June 1, 2004 deadline on Motions to Amend the Complaint. Plaintiffs fail to demonstrate "good cause" for the modification of the pretrial schedule. A Pretrial Schedule "shall not be modified except upon a showing of good cause." Fed. R. Civ. P. 16(b) (2005). Recent discovery of information does not provide "good cause" for the

modification of a pretrial schedule. Good Cause refers to the moving party's effort to comply with pretrial schedule, and exists only when the deadline could not be met despite that party's diligence. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992). Although the moving party's reasons for seeking modification focus the inquiry, the opponent's prejudice provides additional reasons to deny the motion for modification. Id. Additionally, a finding of a lack of diligence ends the inquiry and precludes modification of the pretrial schedule. Id. Plaintiffs present no evidence demonstrating their diligence in complying with the pretrial schedule setting the amendment deadline on June 1, 2004. Plaintiffs limit their support -2Case 2:03-cv-01555-SRB Document 112 Filed 08/11/2005 Page 2 of 7

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for "good cause" to attempts to assail Sunstone's character with allegations of delay and bad faith.1 More specifically, Plaintiffs claim that a four month delay in working with defense counsel prevented timely discovery of facts purportedly relevant for a punitive damage claim. This supposed delay was not, as Plaintiffs suggest, born from an intentional tactic by Sunstone. Regardless of the cause of the delay, however, a four month delay does not account for the fourteen month delay in filing a Motion to amend the complaint. Indeed, had Plaintiffs deposed Mr. Hammermeister (without "delay") back in January or February of 2005, and subsequently filed a motion to amend the complaint, that motion would still be untimely. Plaintiffs' attempt to reduce this ten month deficit by suggesting this Court should have extended all deadlines to conform to the discovery deadline overlooks the "good cause" requirement of Rule 16(b). Plaintiffs' suggestion also mistakenly incorporates an algebraic relationship between the pretrial schedule's deadlines. While such deadlines are not arbitrary, they are likely not derived from mathematical relationships. Thus, the extension of discovery does not directly impact the deadline for amending the pleadings. The fact that the original discovery deadline succeeded the amendment deadline by approximately eleven months demonstrates the disjunction between these two deadlines. This Court further demonstrated this disjunction by extending the discovery deadline by approximately four months, yet ordering the majority of the remainder of deadlines to remain the same. Docket 108. More importantly, the refusal to change other deadlines confirms the requirement of a showing of good cause to modify the pretrial schedule. Because Plaintiffs cannot demonstrate "good cause", this Court should deny Plaintiff's motion. ...
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Sunstone objects to Plaintiff's allegations of bad faith and feels it a response to these baseless allegations is not warranted. At all times, Sunstone has conducted itself professionally, openly, and honestly. Any assertions to the contrary are completely without merit. -3Case 2:03-cv-01555-SRB Document 112 Filed 08/11/2005 Page 3 of 7

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II.

The alleged failure to follow an operating manual does not demonstrate the requisite evil mind necessary for the imposition of punitive damages. Although courts freely and liberally grant leave to amend complaints, there is no

automatic right to amend pleadings. Courts are within their discretion to deny motions to amend when the plaintiffs have expressed undue delay or bad faith, or when the opposing party would suffer prejudice, or the amendment is futile. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). An amendment is futile when the amendments cannot affect the outcome of the trial. Klamath-Lake Pharmaceutical Ass'n v. Klamath Medical Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983). Punitive damages are not appropriate for the mere commission of a tort; the Arizona Supreme Court reserves punitive damages for the most egregious cases. Linthicum v.

Nationwide Life Ins. Co., 723 P.2d 675, 680 (Ariz. 1986). A claim for punitive damages is appropriate only when plaintiffs can demonstrate that defendant's "conduct was motivated by spite, actual malice, or intent to defraud or the defendant's conscious and deliberate disregard for the interest and rights of others." Lange v. Penn Mut. Life Ins. Co., 843 P.2d 1175, 1182 (9th Cir. 1988) quoting Gurule v. Illinois Mut. Life & Cas. Co., 734 P.2d (Ariz. 1987). The Arizona Supreme Court requires clear and convincing evidence of the defendant's evil mind. It is only when the wrongdoer should be consciously aware of the evil of his actions, of the spitefulness of his motives or that his conduct is so outrageous, or intolerable in that it creates a substantial risk of tremendous harm to others that the evil mind required for the imposition of punitive damages may be found. Linthicum, 723 P.2d at 679-80 (Ariz. 1986). The proposed amendments by Plaintiff do not support a claim for punitive damages. Plaintiffs' allegations that Sunstone failed to follow its operations manual would not, even if true, demonstrate negligence, let alone an evil mind. The cases cited by Plaintiff demonstrate the need of prior notice of a specific dangerous condition to establish an evil mind. See -4Case 2:03-cv-01555-SRB Document 112 Filed 08/11/2005 Page 4 of 7

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Rodriguez v. American Cyanamid Co., 858 F. Supp. 127, 131 (D.Ariz. 1994) (allowing punitive damage claim to go to the jury because evidence demonstrated that defendant knew of prior incidents of fires and explosion involving their product, yet continued to distribute the product in disregard of this prior notice); Ranburger v. Southern Pacific Trans. Co., 760 P.2d 551, 55456 (Ariz. 1988) (reversing award for punitive damages where evidence did not show that defendants possessed knowledge of a specific dangerous condition at train automobile intersection, despite knowledge that traveling at high speeds decreases the ability of train to stop). Plaintiffs' proposed amendments do not suggest Sunstone had specific knowledge of prior Legionellosis outbreaks in its boilers. Nor do the proposed amendments demonstrate that Sunstone had specific knowledge of the susceptibility of Plaintiffs' to contracting Legionellosis. Without this specific knowledge, Sunstone's actions were not performed with the requisite evil mind to support a claim for punitive damages. Because the proposed amendments would not affect the final outcome, they are futile. Consequently, Sunstone respectfully requests this Court deny Plaintiffs' motion to amend the complaint. III. The proposed amendment would require additional depositions of already deposed witnesses whose testimony was solicited in the absence of the proposed amendment. The undisputable fact is that the parties have expended substantial sums and time in traveling for, and proceeding with, depositions of witnesses in Florida, Alaska and California. It is likely that some of the witnesses examined in these depositions would need to be further examined in light of these new allegations. This would unnecessarily increase the cost of litigation to all parties where such costs would not be necessary had the amendment been timely proposed. The burden of future discovery would be "manifestly unfair and unduly prejudicial." Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990) (denying a motion to amend pleadings because the additional discovery would impose, not only additional litigation costs associated with discovery, but also opportunity costs on the defendant when "its officers spend -5Case 2:03-cv-01555-SRB Document 112 Filed 08/11/2005 Page 5 of 7

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time in the discovery process rather than engaging in their normal duties); see also Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1161 (9th Cir. 1989)(denying a motion to amend because defendant already incurred substantial litigation costs and additional time and expense associated with additional discovery of new theory would cause undue prejudice). The need to retake depositions of current and past Sunstone employees would once again disrupt these employees from completing their employment obligations and responsibilities. This disruption not only prejudices Sunstone but also the current employers of Sunstone's former employees. Additionally, the costs associated with new discovery that Plaintiff most surely seeks to impose upon Sunstone would unduly prejudice and burden Sunstone and its current employees. To prevent undue prejudice from the nullification of prior discovery and the burden of future discovery, Sunstone respectfully requests this Court deny Plaintiffs' motion to amend the complaint. IV. Conclusion The deadline to timely file a motion to amend the complaint lapsed more than fourteen months ago. Plaintiffs have failed to demonstrate good cause to warrant a modification of the pretrial schedule or excuse their untimely filing of a motion to amend the complaint. Moreover, the proposed amendments do not support a claim for punitive damages and therefore are futile. Despite the futility of the proposed amendments, response to the proposed amendments would unduly prejudice Sunstone by requiring the expenditure of time, money, and resources to conduct the necessary future discovery and re-dispose past deponents. Consequently, Sunstone respectfully requests this Court deny Plaintiff's Motion To Extend Pretrial Deadlines And To Amend Complaint To Seek Punitive Damages. ... ... -6Case 2:03-cv-01555-SRB Document 112 Filed 08/11/2005 Page 6 of 7

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DATED this 11th day of August, 2005. KUNZ PLITT HYLAND DEMLONG & KLEIFIELD A Professional Corporation

By

s/Chad C. Baker Matthew D. Kleifield Chad C. Baker 3838 North Central Avenue, Suite 1500 Phoenix, Arizona 85012-1902 Attorneys for Defendants

COPY of the foregoing e-mailed/mailed this 11th day of August, 2005, to: Steven W. Davis, Esq. Boies, Schiller & Flexner, L.L.P. Bank of America Tower, Suite 2800 100 S.E. Second Street Miami, Florida 33131 Attorneys for Plaintiffs s/C. Waight

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