NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
CARLOS GALLARDO, et al., Plaintiffs/Appellants,
v.
WEST SAND LLC, et al., Defendants/Appellees.
No. 1 CA-CV 18-0010
FILED 11-15-2018
Appeal from the Superior Court in Maricopa County
No. CV 2015-013189
The Honorable Kerstin G. LeMaire, Judge
AFFIRMED
COUNSEL
Ahwatukee Legal Office, PC, Phoenix
By David L. Abney
Co-Counsel for Plaintiffs/Appellants
Ortega Law Firm PC, Phoenix
By Daniel R. Ortega, Jr.
Co-Counsel for Plaintiffs/Appellant
Jones Skelton & Hochuli PLC, Phoenix
By Jonathan P. Barnes, Jr., J. Gary Linder, Kimberly K. Page
Counsel for Defendant/Appellee West Sand LLC
Resnick & Louis PC, Scottsdale
By Kenneth J. Peace, Dane A. Dodd
Counsel for Defendant/Appellee McFadden’s Glendale LLC
MEMORANDUM DECISION
Presiding Judge Jennifer B. Campbell delivered the decision of the Court,
in which Judge Paul J. McMurdie and Judge Kent E. Cattani joined.
C A M P B E L L, Judge:
¶1 Carlos and Rosa Gallardo appeal the superior court’s statute
of limitations-based dismissal of their dram-shop suit against West Sand,
LLC (“Sandbar Mexican Grill” or “Sandbar”) and McFadden’s Glendale,
LLC (“McFadden’s”). The Gallardos argue that their suit was timely
because the discovery rule tolled the statute of limitations, and the issue of
their diligence in uncovering the identities of the two defendant restaurants
is a question of fact for a jury. We disagree and affirm for the reasons that
follow.
BACKGROUND
¶2 On review from an order granting a motion to dismiss, “we
accept as true all facts asserted in the complaint.” Harris v. Cochise Health
Sys., 215 Ariz. 344, 346, ¶ 2 (App. 2007). In the early morning hours of
November 24, 2013, Frankie Mendoza drunkenly sped his BMW through a
red light at an intersection. His car slammed into a Honda driven by the
Gallardos’ then-20-year-old son, Jorge. The impact sent the Honda across
the intersection and into a metal traffic pole, killing Jorge. Mendoza was
arrested and he admitted he had been drinking just before the accident.
¶3 On November 23, 2015—one day before the expiration of the
two-year limitation period prescribed by Arizona Revised Statutes
(“A.R.S.”) § 12-542(2) for wrongful-death actions—the Gallardos filed a
complaint, not against Mendoza, but only against various John-Doe
defendants. In March 2016, the Gallardos moved for and obtained an order
extending the time for serving the still-unknown defendants to July 20,
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Decision of the Court
arguing Mendoza had not provided information about where he was
drinking and therefore they did not know who else may be responsible for
their son’s death. On July 19, they moved for and obtained a second order
further extending the time for service to September 21, this time arguing
that Mendoza had since admitted to drinking at Sandbar Mexican Grill on
the night of the accident and that they intended to serve Sandbar with an
amended complaint.
¶4 The Gallardos filed their first amended complaint naming
Sandbar as a defendant on September 14, alleging its employees had
continued to sell alcohol to the obviously drunk Mendoza on the night of
the crash. After an August 24 notice of placement on the superior court’s
dismissal calendar, giving the parties two months to file a joint report and
proposed scheduling order, the court dismissed the case on November 30.
The Gallardos filed a motion to reinstate in January 2017, which the court
granted. On May 10, the Gallardos filed a second amended complaint
adding McFadden’s as a defendant, again alleging its employees had
continued to serve alcohol to the clearly drunken Mendoza.
¶5 McFadden’s filed a motion to dismiss pursuant to Rules
12(b)(6) and (b)(7) of the Arizona Rules of Civil Procedure, which Sandbar
later joined, arguing in part that the Gallardos had not alleged they were
diligent in discovering their dram-shop claims and the claims were time-
barred by the statute of limitations. The superior court granted the motion
to dismiss, ruling the Gallardos had made no showing that they
meaningfully attempted to ascertain the identity of the defendants before
the statute of limitations expired in November 2015.
DISCUSSION
¶6 Pursuant to A.R.S. § 12-542(2), a two-year statute of
limitations applies to actions for “injuries done to the person of another
when death ensues from such injuries,” including dram-shop actions. See
Andrews ex rel. Woodard v. Eddie’s Place, Inc., 199 Ariz. 240 (App. 2000). The
Gallardos argue the superior court erroneously dismissed their suit because
the discovery rule tolled the running of the limitation statute long enough
for them to identify both of the defendant restaurants, and the issue of their
reasonable diligence in discovering the restaurants’ identities is a question
of fact for a jury. McFadden’s and Sandbar, however, contend the
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GALLARDO, et al. v. WEST SAND, et al.
Decision of the Court
Gallardos’ second amended complaint1 failed to create a factual issue
concerning whether the limitation statute had been tolled because it alleged
no facts demonstrating their reasonable diligence in discovery. Therefore,
the defendant restaurants argue, the Gallardos’ suit was time-barred and
correctly dismissed by the superior court.
¶7 We review de novo both the superior court’s grant of a motion
to dismiss, Romero v. Hasan, 241 Ariz. 385, 386, ¶ 6 (App. 2017), as well as
questions of law regarding statute of limitations defenses, City of Tucson v.
Clear Channel Outdoor, Inc., 218 Ariz. 172, 178, ¶ 5 (App. 2008). When
deciding a Rule 12(b)(6) motion, “courts look only to the pleading itself and
consider the well-pled factual allegations contained therein.” Young v. Rose,
230 Ariz. 433, 438, ¶ 25 (App. 2012). We will affirm the dismissal “if we are
satisfied as a matter of law that plaintiffs would not be entitled to relief
under any interpretation of the facts susceptible of proof.” Chalpin v. Snyder,
220 Ariz. 413, 418, ¶ 18 (App. 2008) (internal quotation marks omitted).
¶8 “The affirmative defense of a statute of limitations may be
raised in a motion to dismiss if it appears on the face of the complaint that
the claim is barred.” Republic Nat’l Bank of New York v. Pima Cty., 200 Ariz.
199, 204, ¶ 20 (App. 2001). Then, the plaintiff must show the statute has not
expired. Id.; see also Engle Bros., Inc. v. Superior Court ex rel. Pima Cty., 23 Ariz.
App. 406, 408 (App. 1975) (“[W]hen the face of the complaint reflect[s] that
the claim [is] barred by the statute of limitations, the burden of proving the
statute was tolled devolve[s] upon the respondent real parties in interest.”).
¶9 The general purpose of any statute of limitation is to protect
both defendants and courts from the litigation of stale claims for which
evidence may be lost or witnesses’ memories faded; however, “courts
disfavor statute of limitations defenses, preferring instead to resolve
litigation on the merits when possible.” City of Tucson v. Clear Channel
Outdoor, 218 Ariz. 172, 178, ¶ 5 (App. 2008). “[K]nowledge of the identity of
the defendant is a critical element in determining when a cause of action
accrues.” Lawhon v. L.B.J. Inst. Supply, Inc., 159 Ariz. 179, 181 (App. 1988).
Therefore, pursuant to the discovery rule, accrual begins when plaintiffs
discover or by the exercise of reasonable diligence should have discovered
that they have been “injured by a particular defendant’s negligent conduct.”
Lawhon, 159 Ariz. at 183. When a cause of action begins to accrue is usually
and necessarily a question of fact for a jury. Doe v. Roe, 191 Ariz. 313, 323,
1 “Once an amended complaint is filed, . . . it supersedes the original
complaint, which becomes functus officio, that is, of no further effect or
authority.” Francini v. Phx. Newspapers, Inc., 188 Ariz. 576, 586 (App. 1996).
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¶ 32 (1998). However, “[a] common thread seems to run through all the
types of actions where courts have applied the discovery rule. The injury or
the act causing the injury, or both, have been difficult for the plaintiff to
detect.” Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of America, 182
Ariz. 586, 589 (1995). Even when plaintiffs may not be aware of every
necessary fact, they are charged with a duty to diligently investigate to
discover these facts. Doe, 191 Ariz. at 324, ¶ 37.
¶10 Here, it appeared from the face of the Gallardos’ second
amended complaint that their dram-shop suit was time-barred: Mendoza
drunkenly drove into Jorge’s Honda, killing him, on November 24, 2013,
but the complaint identifying both Sandbar Mexican Grill and McFadden’s
as defendants was not filed until May 10, 2017. The intervening three-and-
a-half years far surpassed the two-year limitation period following the
death of the injured party prescribed by A.R.S. § 12-542(2), yet the
complaint asserted no facts demonstrating why it was difficult for the
Gallardos to detect the identities of McFadden’s and Sandbar or why it took
three-and-a-half years to investigate and discover their identities.
¶11 The second amended complaint alleges that, just after his
arrest, Mendoza admitted he had been drinking right before the accident.
However, both the second amended complaint and the Gallardos’ response
to the motion to dismiss are devoid of any averments concerning any
significant attempts by the Gallardos to pursue discovery from Mendoza
prior to the running of the statute of limitations or describing how they
were deceived, thwarted, or denied in their efforts to do so.
¶12 Nor do the Gallardos allege any facts indicating diligence in
their various motions and earlier complaints, which they urge us to
consider in addition to the second amended complaint. Specifically, the
Gallardos point to their allegation—first raised in their original complaint—
that Mendoza provided no information about where he was drinking on
the night he killed their son, pursuant to his Fifth Amendment right against
self-incrimination, preventing them from discovering the defendant
restaurants’ identities. The superior court stated in its ruling that it had
“reviewed the legal file in this matter” and addressed the Gallardos’
argument concerning Mendoza’s silence, and we agree with its ruling that
the Gallardos made no showing that they meaningfully attempted to
ascertain the defendant restaurants’ identities. Nowhere have the Gallardos
indicated that they did anything other than wait for the drunk driver to
break his silence until near the conclusion of his criminal prosecution—a
discovery strategy that does not comport with the purpose of the statute of
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Decision of the Court
limitations and that raises no question of fact concerning their diligent
investigation.
¶13 For example, neither the second amended complaint nor any
other item in the record contains any averment explaining that the
Gallardos made any attempt to uncover the identity of potential dram
shops by requesting subpoenas of Mendoza’s bank, credit card, cell phone,
or vehicle navigation records, or by interviewing any potential witnesses to
Mendoza’s behavior that night. The Gallardos did not move to further
amend their second amended complaint to add any such averments that
would create a triable issue of fact regarding their diligence, nor did they
refer to any matters outside the pleadings in their response to the motion to
dismiss to trigger its conversion to a motion for summary judgment
pursuant to Rule 12(d) of the Arizona Rules of Civil Procedure. See Belen
Loan Inv’rs, LLC v. Bradley, 231 Ariz. 448, 451, ¶ 5 (App. 2012) (“[I]f
extraneous matters neither add to nor subtract from the deficiency of the
pleading,” the motion to dismiss need not be converted into a motion for
summary judgment).
¶14 Because it appeared from the face of the Gallardos’ second
amended complaint that the two-year statute of limitations had already
expired by the time they identified the defendant restaurants, McFadden’s
and Sandbar properly asserted the affirmative defense of the statute of
limitations. “The discovery rule . . . does not permit a party to hide behind
its ignorance when reasonable investigation would have alerted it to the
claim,” ELM Ret. Ctr., LP v. Callaway, 226 Ariz. 287, 290, ¶ 12 (App. 2010),
and the Gallardos alleged no facts from which the court could discern an
issue relating to their reasonable diligence in investigating the identity of
the defendants. The superior court therefore did not err by finding the
Gallardos had “made no showing that they meaningfully attempted to
ascertain the identity of [McFadden’s and Sandbar] before the statute of
limitations expired in 2015,” and we affirm the dismissal.2
2 Because we affirm the superior court’s dismissal based on the failure to
state a claim under Rule 12(b)(6), we need not address the parties’
arguments concerning the failure to join a party under Rule 12(b)(7). See Sw.
Non-Profit Hous. Corp. v. Nowak, 234 Ariz. 387, 391, ¶ 10 (App. 2014) (we may
affirm if a dismissal is correct for any reason).
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Decision of the Court
CONCLUSION
¶15 For the foregoing reasons, we affirm. We award McFadden’s
and Sandbar Mexican grill their costs on appeal upon their compliance with
Rule 21 of the Arizona Rules of Civil Appellate Procedure.
AMY M. WOOD • Clerk of the Court
FILED: AA
7