Cavan v. Maron

182 F. Supp. 3d 954, 2016 U.S. Dist. LEXIS 55451, 2016 WL 1644005
CourtDistrict Court, D. Arizona
DecidedApril 26, 2016
DocketNo. CV-15-02586-PHX-PGR
StatusPublished
Cited by2 cases

This text of 182 F. Supp. 3d 954 (Cavan v. Maron) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cavan v. Maron, 182 F. Supp. 3d 954, 2016 U.S. Dist. LEXIS 55451, 2016 WL 1644005 (D. Ariz. 2016).

Opinion

ORDER

Paul G. Rosenblatt, United States District Judge

The Court has before it Defendants’ Motion to Dismiss Counts I through VI of Plaintiffs Complaint for Failure to State a Claim Pursuant to Rule 12(b)(6) and 9(b) [958]*958(Doc. 15), Defendants’ Request for Judicial Notice (Doc. 16), and Defendants’ Motion for Authorization to File Exhibits to Mar-on Declaration Under Seal (Doc. 17). The Court will grant in part and deny in part the motion to dismiss, will grant the request for judicial notice, and will deny the motion to file under seal.1

Background

According to the Complaint,2 Plaintiff, David Cavan, and Defendants, Robert Marón and Robert Marón Incorporated (“RMI”), entered into an agreement in July 2007 (the “initial agreement”) under which Cavan agreed to purchase two rare watches from Defendants: a Patek Philippe Ref 3449 (“Patek 3449”) for $1,800,000; and a Patek Philippe Ref 2523 (“Patek 2523”) for $2,100,000; and Defendants agreed to accept eighteen watches owned by Cavan, for a value of $2,295,000, to be credited towards the purchase price of the two rare watches. (Doc. 1 at 2-3.) Defendants subsequently provided an additional discount of $150,000 towards the purchase price of the two watches and Cavan made an additional payment of $150,000. (Id. at 3.) This left the remaining balance due from Cavan towards the purchase of the two rare watches at $1,304,000 as of September 2010. (Id.)

Defendants did not deliver either the Patek 3449 or the Patek 2523 to Cavan and Cavan alleges that Defendants sold one or both of these watches to another purchaser, (Id.) In October 2011, Cavan requested Defendants return to him the eighteen watches and his $150,000 payment. (Id.)

In December 2011, Maron told Cavan that Defendants had a different rare watch, a Patek Philippe Ref 2449J 18K 1st Series (“Patek 2449J”) worth over $2,000,000. (Id. at 3-4.) Cavan and Defendants then entered into an agreement (the “modification agreement”) under which Cavan would receive the Patek 2449J, rather than the Patek 3449 and the Patek 2523, in consideration for the eighteen watches and $150,000 Cavan had previously delivered to Defendants. The modification agreement was evidenced by a writing signed by Cavan and Marón in December 2011, and provided that the Patek 2449J was to be delivered to Cavan on or before January 20, 2012; (Id. at 4; see Doc. 19-1.)3

On or before January 20, 2012, Defendants delivered to Cavan a Patek 2449J watch. More than three years later, in April 2015, Cavan first became aware that the Patek 2449J may not have the original dial, so he had the watch examined and evaluated by a watch expert. (Id.). In a written report dated June 26, 2015, the expert confirmed that the original dial on the Patek 2449J had been replaced with an inferior dial. The Patek 2449J with the replaced dial is worth significantly less than the Patek 2449J with the original dial that had been promised under the modification agreement. (Id.)

In September 2015, Cavan had a watch broker contact Defendants on Cavan’s be[959]*959half. The broker informed Defendants that the Patek 2449J did not have the original Patek 2449J dial. Marón told the broker that he (Marón) was not sure what had happened but that he (Marón) would “take care of it” and replace the dial on the delivered watch with the original Patek 2449J dial. (Id.) In November 2015, Marón admitted he had switched the dial and, again, acknowledged he and RMI were responsible for delivering the original Patek 2449J dial, to Cavan and promised to do so. (Id.) Defendants did not deliver the original Patek 2449J dial to Cavan and have not returned Cavan’s eighteen watches or returned any money to Cavan. (Id.)

. On December 21, 2015, Cavan filed this action against Defendants, bringing claims for breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, negligent misrepresentation, fraud, and unjust enrichment. (Doc. 1 at 5-8.) Defendants have moved to dismiss the Complaint. (Doc. 15.)

Discussion

A. Choice of Law4

The parties disagree on the law applicable to this case, with Defendants arguing that California law applies (Doc. 15 at 15-16), and Cavan arguing that Arizona law applies (Doc. 24 at 5-6). Because the case is in this court based on diversity jurisdiction, the Court must apply Arizona’s choice of law provisions to resolve this conflict. See Waggoner v. Snow, 991 F.2d 1501, 1506 (9th Cir.1993). In a contract action, Arizona courts follow the Restatement (Second) of Conflict of Laws (“Restatement”) to determine the applicable law. Swanson v. The Image Bank, Inc., 206 Ariz. 264, 77 P.3d 439, 441 (2003); Cardon v. Cotton Lane Holdings, Inc., 173 Ariz. 203, 841 P.2d 198, 202 (1992); see Bobbitt v. Milberg LLP, 801 F.3d 1066, 1070 (9th Cir.2015).

Under the Restatement, the Court is to apply the law “of the state having the most significant relationship to the parties and the transaction.” Cardon, 841 P.2d at 202 (citing Restatement § 188). To determine whether Arizona or California has the most significant contacts to the parties and transactions, the Court considers (1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the residence, nationality, place of incorporation, and place of business of the parties. See Restatement § 188. “These contacts are to be evaluated according to their relative importance with respect'to the particular issue.” Id. Further, if the place of negotiation and the place of performance are in the same state, the local law of that state will usually be applied (with exceptions inapplicable to the present case). See id.

In the present case, a fair reading of the Complaint demonstrates that the initial agreement was negotiated and executed in July 2007 in Phoenix, Arizona. (Doc. 1 at 2 (“On or around July 6, 2007, at a face to face meeting in Phoenix, Arizona, Cavan purchased two rare watches from Defendants”; and on that same date, “at a face to face meeting in Phoenix, Arizona, Defendants agreed to accept as trade eighteen watches from Plaintiff.”).) The modification agreement reached in 2011 was negotiated by Defendants and a third party negotiating on behalf of Cavan (see Doc. 24-1 at 2). It is not clear where these negotiations occurred. However, Cavan asserts that he executed the modification agreement in Arizona after it was faxed to [960]*960him at his office in Scottsdale. (Doc. 24-1 at 2.) Cavan’s assertion is consistent with the copy of the modification agreement provided by Defendants, which indicates it was faxed by Cavan from Arizona on December 20, 2011, most likely after Cavan signed the agreement and for the purpose of sending a signed copy to Marón. (See Doc. 19-1 (fax stamp indicating faxed on “12-20-2011” at “14:16:33” hours, from “Cavan” at the fax number “480-747-9424”).)

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182 F. Supp. 3d 954, 2016 U.S. Dist. LEXIS 55451, 2016 WL 1644005, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cavan-v-maron-azd-2016.