Opinion
No. CV-05-02046-PHX-GMS
03-26-2021
Leroy Haeger, et al., Plaintiffs, v. Goodyear Tire & Rubber Company, et al., Defendants.
ORDER
Pending before the Court is Plaintiffs Leroy and Donna Haeger, Barry and Suzanne Haeger, and Farmers Insurance Company of Arizona's (collectively, "Haegers") Motion to Establish the Remaining Amount of the Contingent Sanction. (Doc. 1229.) Also before the Court is Defendant Goodyear Tire & Rubber Company's ("Goodyear") Motion for Leave to File Sur-Reply Instanter or Alternatively for Oral Argument. (Doc. 1232.) For the following reasons, the Haegers' Motion is granted in part and denied in part and Goodyear's Motion is denied as moot.
As the Court did not require Goodyear's Sur-Reply to make its determination, Goodyear's Motion is denied as moot. Additionally, Goodyear's request for oral argument is denied because the parties have had an adequate opportunity to discuss the law and evidence and oral argument will not aid the Court's decision. See Lake at Las Vegas Invs. Grp., Inc. v. Pac. Malibu Dev., 933 F.2d 724, 729 (9th Cir. 1991).
BACKGROUND
The Haegers filed a product liability suit against Goodyear in 2005. Goodyear was represented by Graeme Hancock of Fennemore Craig, P.C. and Basil Musnuff of Roetzel & Andress. On November 8, 2012, the Court awarded sanctions against Mr. Hancock, Mr. Musnuff, and Goodyear for discovery-related misconduct in the suit. (Doc. 1073.) The Court found that Mr. Hancock, Mr. Musnuff, and Goodyear all engaged in sanctionable behavior. Id. at 56. The Court concluded that Mr. Hancock was responsible for twenty percent of Plaintiffs' fees and costs and that Mr. Musnuff and Goodyear would be "held jointly responsible for eighty percent of the fees." Id. at 64. The Court explained that it made this allocation "based on its belief that Mr. Hancock is less culpable but Mr. Musnuff and Goodyear are equally culpable." Id.
On August 26, 2013, the Court entered a sanctions judgment against Mr. Hancock in the amount of $548,240.23 and against Mr. Musnuff and Goodyear in the amount of $2,192,960.93, totaling $2,741,201.16 in attorneys' fees and costs. (Doc. 1125.) In the same order, the Court also entered a contingent award of $2,018,794.64 in case "a direct linkage between the misconduct and harm is required." Id. at 7, 11. Goodyear appealed the sanctions award to the Ninth Circuit, (Doc. 1127), which was affirmed, Haeger v. Goodyear Tire & Rubber Co., 813 F.3d 1233 (9th Cir. 2016). Goodyear then sought further review from the United States Supreme Court.
During this time, the Haegers also pursued a lawsuit against Goodyear, Mr. Musnuff, Roetzel & Andress, Mr. Hancock, and Fennemore Craig in Maricopa County Superior Court for damages caused by the misconduct in the federal proceedings. In 2016, prior to the United States Supreme Court's ruling, Mr. Musnuff and Roetzel & Andress settled the state lawsuit with the Haegers. As part of the settlement, Mr. Musnuff and Roetzel & Andress agreed to pay $1.1 million "in full satisfaction of their share" of the sanctions awarded by the Court in the federal proceeding. (Doc. 1229, Ex. 1.)
In 2017, the Supreme Court reversed and remanded the Court's sanctions award, finding that "[a] sanctioning court must determine which fees were incurred because of, and solely because of, the misconduct at issue." Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178, 1189 (2017). The Supreme Court, however, deferred on whether to accept the contingent award and instructed the Court to consider whether Goodyear waived its ability to challenge it on remand. Id. at 1190. On March 7, 2018, the Court found that Goodyear waived its objections to the contingent award. (Doc. 1186 at 10.) The Court also determined that Goodyear is vicariously liable for the conduct of its attorneys. Id. at 7.
As of this Order, Goodyear has yet to pay any portion of the contingent award. (Doc. 1229 at 2.) The Haegers now move for the Court to determine how much of the contingent award Goodyear must pay.
DISCUSSION
The Court found that both Mr. Musnuff and Goodyear engaged in sanctionable conduct and that they are "jointly responsible." Mr. Musnuff and Goodyear are thus jointly liable for 80% of the $2,018,794.64 contingent award. Joint liability is defined as "[l]iability shared by two or more parties." Joint Liability, Black's Law Dictionary (11th ed. 2019). "[A] payment made by a joint tortfeasor diminishes the claim against the remaining tortfeasors." Seymour v. Summa Vista Cinema, Inc., 809 F.2d 1385, 1389 (9th Cir. 1987). Because Goodyear is a joint tortfeasor, its liability is offset by Mr. Musnuff's settlement for $1.1 million. Factoring in the offset from the settlement, the amount remaining for Goodyear to pay is $515,035.71 plus post-judgment interest. Although Goodyear reaches the same conclusion pursuant to Arizona law, federal law applies.
Contrary to the Haegers' assertion, that Goodyear is vicariously liable for the actions of its attorneys does not change that Goodyear is jointly liable for its own sanctionable conduct. --------
Regarding post-judgment interest, 28 U.S.C. § 1961 applies. The statute provides that interest on a sanctions judgment is "calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield." 28 U.S.C. § 1961(a). Interest is computed daily to the date of payment and is compounded annually. § 1961(b). Judgment was entered on August 26, 2013, (Doc. 1126), and the parties agree that the interest is calculated at .14% per year. Therefore, the Haegers are entitled to $5,484.90 in post-judgment interest.
Accordingly,
IT IS THEREFORE ORDERED that Plaintiffs' Motion to Establish the Remaining Amount of the Contingent Sanction Award Against Goodyear, per Docket 1186 (Doc. 1229) is GRANTED in part and DENIED in part. The Haegers are entitled to $515,035.71 plus $5,484.90 in post-judgment interest pursuant to 28 U.S.C. § 1961.
IT IS FURTHER ORDERED that Goodyear Tire & Rubber Company's Motion for Leave to File Sur-Reply Instanter or Alternatively for Oral Argument (Doc. 1232) is DENIED as moot.
Dated this 26th day of March, 2021.
/s/_________
G. Murray Snow
Chief United States District Judge