Duhammel v. Star, 1

• Decision Date: 30 March 1982
• Docket Number: No. 1,CA-CIV,1
• Citation: 133 Ariz. 558,653 P.2d 15
• Parties: Dallas DUHAMMEL, Sr., a single man, for himself and as next friend of his daughter, Debra Duhammel, a minor; Dallas Duhammel, Jr., a single man, Plaintiffs-Counter-defendants-Appellees, v. Thomas STAR, in his official capacity and individually, and Joan Star, his wife, Defendants-Counter-claimants-Appellants. 5347.
• Court: Arizona Court of Appeals

Page 15

653 P.2d 15

133 Ariz. 558

Dallas DUHAMMEL, Sr., a single man, for himself and as next friend of his daughter, Debra Duhammel, a minor; Dallas Duhammel, Jr., a single man, Plaintiffs-Counter-defendants-Appellees, v. Thomas STAR, in his official capacity and individually, and Joan Star, his wife, Defendants-Counter-claimants-Appellants.

No. 1 CA-CIV 5347.

Court of Appeals of Arizona Division 1, Department A.

March 30, 1982.

Rehearing Denied April 29, 1982.

Review Denied Oct. 27, 1982.

William F. Hyder, P.C. by William F. Hyder, Sid A. Horwitz, Phoenix, for appellees

McGroder and Tryon by G. Michael Tryon, David M. Heller, Phoenix, for appellants.

OPINION

CORCORAN, Judge.

The question raised in this appeal is whether the filing of a complaint tolls the statute of limitations regarding a counterclaim that is brought after the applicable time period has expired. A brief factual and procedural history of this appeal is as follows:

On July 18, 1978, appellees were having a birthday party at their residence in Scottsdale, Arizona. Sometime that day appellant Thomas Star, a Scottsdale police officer, came to appellees' residence apparently in response to a noise complaint. Exactly what occurred at that time is in dispute, but appellees Dallas Duhammel, Sr., and his son were subsequently arrested.

On July 18, 1979, exactly one year later, appellees filed a complaint against appellants and others. The complaint alleged, among other things, false arrest, assault and battery, and civil rights violations, all stemming from the incident at appellees' residence. A first amended complaint was filed on August 2, 1979, which was substantially similar to the original complaint.

On August 23, 1979, appellants filed an answer and a counterclaim against appellees. The counterclaim alleged counts of libel, slander, intentional infliction of emotional distress, and invasion of privacy. According to the counterclaim, the basis for these allegations was that appellees made false statements of police brutality against appellant Thomas Star by leading a card-carrying demonstration around the Scottsdale City Council building on July 25, 1978, and by appearing before the Council on that date and verbalizing such accusations. The counterclaim also alleges further false accusations made against appellant Thomas Star by appellee Dallas Duhammel, Sr., to local newspapers on July 25 and 26, 1978.

In response to the counterclaim, appellees filed a motion for judgment on the pleadings pursuant to rule 12(c), Rules of Civil Procedure, arguing that because the counterclaim was filed more than one year after the allegations occurred, the counterclaim was barred by the statute of limitations. ¹ The lower court granted appellees' motion and this appeal followed. We affirm the decision of the lower court.

Appellants first argue that where commencement of an action is within the statute of limitations, the filing of a compulsory counterclaim pursuant to rule 13(a) is not barred by the running of the statutory time thereafter, and cases are cited which uphold that general proposition. Although there is a split of authority regarding this question, the law in Arizona does not appear to support appellants' position. In W.J. Kroeger Co. v. Travelers Indemnity Co., 112 Ariz. 285, 541 P.2d 385 (1975), our Supreme Court stated:

If a claim would be barred originally by a statute of limitation, it is barred as a counterclaim even if it arises from the same transaction except as it falls within the principles of recoupment.

112 Ariz. at 287, 541 P.2d at 387.

Similarly, Division 2 of the Court of Appeals has held that "[a] party is not entitled to a set-off or counterclaim unless he is entitled to relief in a direct action." Ness v. Greater Arizona Realty, Inc., 117 Ariz. 357, 360, 572 P.2d 1195, 1198 (App.1977). The court then reiterated the principles regarding recoupment expressed in W.J. Kroeger.

This court has followed both W.J. Kroeger and Ness in Aetna Finance Co. v. Pasquali, 128 Ariz. 471, 626 P.2d 1103 (App.1981). Aetna Finance held:

Under both federal and Arizona law, a statute of limitations is not a bar to a recoupment defense.... A recoupment defense survives as long as plaintiff's claim can be asserted, even though defendant's claim would be barred by the statute of limitations if brought as an affirmative action.

128 Ariz. at 473, 626 P.2d at 1105.

W.J. Kroeger, Ness and Aetna Finance leave little doubt that where a counterclaim is filed beyond the applicable statute of limitations it will be barred unless the counterclaim is in the nature of a recoupment, even if the counterclaim is a compulsory counterclaim.

However, appellants argue that an earlier case, Tom Reed Gold Mines Co. v. Brady, 55 Ariz. 133, 99 P.2d 97, 127 A.L.R. 905 (1940), supports their position that the filing of a complaint suspends the operation of the statute of limitations with regard to a counterclaim, and that since Tom Reed has not been overruled in subsequent cases it is the controlling authority. We do not agree. Although the court in that case did make a statement that, standing alone, might be interpreted to support appellants' position, ² other language in the decision indicates a position consistent with the later cases. For example, the court stated that:

Of course defendant could not, after the statute had run, maintain an independent action against plaintiff for these wrongs. These same causes of action, however, it could use as defensive instruments when it was sued by plaintiff....

55 Ariz. at 139, 99 P.2d at 100 (emphasis added).

The court in Tom Reed also referred to defendant's claim as an "existing debt," and it appears quite clearly from a review of the facts of the case that the court was simply applying the recoupment principle. We do not find any conflict among these authorities.

Appellants, however, argue further and alternatively request us to treat the counterclaim as if it were a recoupment. Recoupment has been defined as "an equitable doctrine which can be used to reduce or eliminate a judgment, but not for affirmative relief." Ness, supra, 117 Ariz. at 360, 572 P.2d at 1198. The term describes a species of defense that oftentimes arises in an action in contract because of the violation of some duty. Nogales Service Center v. Atlantic Richfield Co. 119 Ariz. 552, 582 P.2d 642 (App.1978) ("[r]ecoupment is confined to the contract on which plaintiff sues, ..." 119 Ariz. at 554, 582 P.2d at 644.) 20 Am.Jur.2d. Counterclaim, Recoupment, and Set-Off § 1 at 228 (1965); 36A Words and Phrases, Recoupment (1962).

Clearly, recoupment is available only in a defensive as opposed to an offensive manner. In their counterclaim, appellants request affirmative relief, not merely a reduction of appellees' damages. The counterclaim contained four separate tort counts which do not fall within the principles of recoupment.

Counts I and II of the counterclaim deal with libel and slander which are governed by a one-year statute of limitations. A.R.S. § 12-541. With the exception of that portion of Count II that alleges a libel on December 14, 1978, Counts I and II were filed more than one year after the cause of action accrued, and the lower court was correct when it dismissed those counts.

Count III is an allegation of intentional infliction of emotional distress, which both parties concede is governed by a two year statute of limitation. A.R.S. § 12- 542. Appe...