Travelars Cas. & Sur. Co. v. Telstar Const. Co.
| Decision Date | 05 March 2003 |
| Docket Number | No. CIV. 02-111 I-PHX-ROS.,CIV. 02-111 I-PHX-ROS. |
| Citation | 252 F.Supp.2d 917 |
| Parties | TRAVELERS CASUALTY AND SURTY COMPANY OF AMERICA, a Connecticut Corporation, Plaintiff, v. TELSTAR CONSTRUCTION COMPNY, INC., a New Mexico Corporation; Skycorp Electrical, Inc., an Arizona Corporation; Terryl D. Corlis and Pauline L. Corlis, husband and wife; And Tom Wayne Walstrom And Suzanne Walstrom, husband and wife, Defendants. |
| Court | U.S. District Court — District of Arizona |
Jay Max Mann, Gretchen B. Friedlander, Mann Berens & Wisner LLP, Phoenix, AZ, Jon Scott Musial, Law Office of Jon S. Musial, for Travelers Casualty and Surety Co. of America.
Jon Scott Musial, Law Office of Jon Musial, Scottsdale, AZ, Jennie Deden Behles Law Firm PC, Albuquerque, NM, Sidney J. Diamond, Sidney J. Diamond LLP, El Paso, TX, for Telstar Const., Skycorp Elec, Inc., Terryl D. Corlis, Pauline L. Corlis.
Sharon Brook Shively, Alan H. Susman, Sacks Tierney PA, Scottsdale, AZ, for Skycorp Elec, Inc, Tom Wayne Walstrom, Suzanne Walstrom.
Myles Patrick Hassett, Myles Patrick Hassett PC, Phoenix, AZ, for Summit Global Partners of New Mexico, Inc.
This action arose from Plaintiff Travelers' attempt to collect from Defendant Telstar and Defendants the Corlises,1 officers of Telstar, pursuant to an indemnification agreement For losses resulting from the execution and delivery of surety bonds. Plaintiff filed a Complaint against the Defendants alleging breach of contract. Defendants filed a Motion to Dismiss for (1) lack of personal jurisdiction; (2) lack of venue; and (3) improper process and service of process. Plaintiffs Response included various affidavits and exhibits not relied on in the Complaint. Defendants' Reply contained a Motion to Strike these documents Plaintiff, reacting to the Motion to Strike, filed a Request for Leave to File Supplemental Exhibits. For the reasons stated below, the Court will (1) grant Defendants' Motion to Dismiss; (2) partially grant and partially deny Defendants' Motion to Strike; and (3) grant Plaintiffs Request for Leave to File Supplemental Exhibits.
On June 14, 2002 Plaintiff filed a Complaint (Doc. # 1) alleging that Defendants Telstar Construction Company, Inc. ("Telstar") and Defendants Terryl D. Corlis and Pauline L. Corlis breached a contractual agreement to indemnify Plaintiff for losses sustained from transactions involving various surety bonds.
Plaintiff is a Connecticut corporation, authorized to do business in the states of Arizona and New Mexico. Defendant Telstar is a New Mexico corporation which does business in New Mexico and Arizona. Defendants Terryl D. Corlis and Pauline L. Corlis are (1) owners in various construction companies, including Defendant Telstar, and (2) New Mexico residents who own a residence in Maricopa County, Arizona.
The Defendants executed an agreement in New Mexico under New Mexico law on May 14,2001 with Plaintiff wherein Plaintiff agreed to execute and deliver surety bonds for Telstar and Skycorp Electrical, Inc. ("Skycorp"). As a consequence, Defendants promised to completely indemnify Plaintiff for any losses resulting from the agreement. In reliance on this agreement, Plaintiff issued surety bonds to Telstar and Skycorp. Under the bonds, Plaintiff incurred expenses exceeding $12 million.
After filing the Complaint, Plaintiff served (1) Defendant Telstar through its statutory agent in Arizona and (2) the Corlises at their homes in both New Mexico and Arizona.
On August 13,2002, Defendants filed a Motion to Dismiss Pursuant to Rule 12(b) on Behalf of Defendants Telstar Construction Company, Inc., Terryl D. Corlis and Pauline Corlis ("M.Dis.") (Doc. # 10) that alleges three grounds: (1) lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2); (2) improper venue under Fed.R.Civ.P. 12(b)(3); and (3) insufficient process and service of process under Fed.R.Civ.P. 12(b)(4) and 12(b)(5). In conjunction with the M. Dis., Defendants filed a Separate Statement of Facts ("SOF"). (Doc. # 11).
On September 16,2002, Plaintiff filed a Response to Motion to Dismiss ("Response to M. Dis."), (Doc. #27), alleging that personal jurisdiction exists for all of the Defendants, and that both venue in this Court and service of process are proper. With the Response to M. Dis., Plaintiff submitted a number of affidavits and exhibits.
On October 4,2002, Defendants filed a reply styled, "Reply in Support of Motion to Dismiss, Including Evidentiary Objections to Affidavits and Documents Submitted by Plaintiff and Motion to Strike Same" ("M.Strike"). (Doc. # 32). In the M. Strike, Defendants object on various grounds, including hearsay, lack of foundation, speculation, lack of authentication and lack of personal knowledge. Defendants allege that their M. Dis. must be treated as a Motion for Summary Judgment under Fed.R.Civ.P. 56 because matters outside the pleadings were submitted with the motion.
On October 23,2002, Plaintiff filed a response styled "Response to Motion to Strike Affidavits and Documents Submitted by Plaintiff with its Response to Motion to Dismiss" ("Response to M. Strike") (Doc. # 36). Plaintiff claims that Defendants' M. Dis. is not subject to Fed. R.Civ.P. 56, and even if it were, the materials submitted by Plaintiff should be considered by the Court.
On October 8, 2002, Plaintiff filed a pleading styled "Request for Leave to File Supplemental Exhibits in Support of Response to Motion to Dismiss and Supplemental Response to Motion to Dismiss" ("Request for Leave to File") (Doc. # 33). On October 28, 2002, Defendants filed a Response to Plaintiffs Request for Leave to File. (Doc. # 35). Four days later Plaintiff filed a Reply to its Request for Leave to File (Doc. #38). Three days later, Defendants filed a pleading styled "Reply in Support of Evidentiary Objections to Affidavits and Documents Submitted by Plaintiff and Motion to Strike Same" that addresses both issues raised in their M. Strike and Plaintiffs Request for Leave to File. (Doc. # 39).
Pending before the Court are (1) Defendants' Motion to Dismiss; (2) Defendants' Motion to Strike; and (3) Plaintiffs Motion for Leave to Supplement. Before turning to these Motions, the Court must determine if subject matter jurisdiction exists.
In their Reply to the M. Dis., Defendants raised for the first time the issue of subject matter jurisdiction. (Reply M. Dis. at 8) (Doc. #32). On December 2,2002, the Court ordered supplemental briefing on this issue. (Doc. # 40). After careful review of the supplemental briefing, the Court issued a December 24,2002 Order finding diversity jurisdiction pursuant to 28 U.S.C. § 1332.
On October 8,2002, Plaintiff filed its Motion for Leave to Supplement without seeking agreement from Defendants. Plaintiff requests supplementation in two ways. First, Plaintiff desires to include additional affidavits and exhibits that concern contacts by Defendants with Arizona. Second, Plaintiff desires to include evidence of the Corlises being served while at their residence in Arizona.
In a Response, Defendants remark that Plaintiff neglected to request a stipulation from them before filing its Motion. "Had such a request been made, Defendants would have stipulated to such." (Response M. Supp. at 2) (Doc. # 35). Defendants then incorporate by reference their prior objections to Plaintiffs affidavits and exhibits. Id.
Because Defendants have consented to the granting of Plaintiff s Motion for Leave to Supplement, it will be granted and the Court will consider Plaintiffs supplemental material, as well as Defendants' objections to the admissibility of that material.
In their Reply in Support of Motion to Dismiss, Defendants include a Motion to Strike various documents submitted by Plaintiff ("M.Strike"). Defendants contend, without citing to any legal authority, that their Motion to Dismiss should be considered by the Court as a Motion for Summary Judgment. (Defs.' M. Strike at 4 n. 2). Defendants claim their Rule 12 M. Dis. should be converted to a Rule 56 Motion for Summary Judgment merely because they submitted an affidavit with their separate SOF. Defendants further contend that the evidence offered by the Plaintiff must be admissible.
a. The Submission by Plaintiff of Various Documents in Response to the M. Dis. does not Convert it into a Summary Judgment Motion.
Federal Rule of Civil Procedure 12(b) states:
If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56 [of the Federal Rules of Civil Procedure], and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
Fed.R.Civ.P. 12(b) (emphasis added). Defendants' M. Dis., however, is not based upon Fed.R.Civ.P. 12(b)(6) because Defendants only sets forth three arguments: (1) lack of personal jurisdiction under Fed. R.Civ.P. 12(b)(2); (2) improper venue under Fed.R.Civ.P. 12(b)(3); and (3) insufficient process and service of process under Fed.R.Civ.P. 12(b)(4) and 12(b)(5). Therefore, Defendants' M. Dis. is not subject to transformation to a Motion for Summary Judgment.
[1] Because Defendants' M. Dis. is based on Rules 12(b)(2)-(5) of the Federal Rules of Civil Procedure, the Court may consider written materials in connection with the Motion without transforming it into a Motion for Summary Judgment. It is well established that the Court may consider affidavits and...
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