Ara Inc. v. City of Glendale
360 F. Supp. 3d 957
D. Ariz.2019Background
- The City of Glendale contracted in 2015 for temporary staffing under an RFP; the contract party name was rendered as the non‑existent "JG Staffing, Inc., a Arizona Corporation."
- The Griffins operated two similarly named entities: JG Staffing, Inc. (Texas corp., formed 2005) and JG Staffing Arizona, LLC (Arizona LLC, formed 2012); bid documents and subsequent communications alternately referenced both.
- ARA had a 2011 factoring/security agreement with JG Staffing, Inc. (Texas) granting ARA a security interest in JG Staffing, Inc.’s accounts and rights to payment; JG Staffing, Inc. later defaulted and ARA notified the City in July 2016 to remit payments to ARA (via AGR Funding).
- The City continued directing payments to accounts associated with JG Staffing Arizona, LLC and later issued an amendment apparently changing the contracting party to JG Staffing AZ; invoices, insurance certificates, and some performance indicia pointed to JG Staffing Arizona, LLC.
- ARA sued the City asserting statutory claims under A.R.S. §§ 47‑9406 and 47‑9607, breach of contract, and account stated; both parties moved for summary judgment on multiple issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Identity of City's counterparty under staffing contract | Contract and preaward documents show "JG Staffing, Inc." (Texas) was the contracting party | Performance, payments, insurance, invoices and later amendment show contract was with JG Staffing Arizona, LLC | Genuine dispute of material fact exists; summary judgment denied to both on breach claim |
| Sufficiency of ARA's notice / proof of assignment | July 2016 letter informed City payments should be made to ARA/AGR; constituted adequate notice and, with TIN form, sufficient proof | Notice lacked the word "assign" and ARA failed to seasonably furnish proof; City requested proof via tax form | Jury could find notice and proof adequate; Court denies City's summary judgment on this ground |
| Account stated claim | City repeatedly paid amounts for staffing, demonstrating assent to balances owing to JG Staffing, Inc./ARA | No agreement to settle or mutually strike a balance between City and JG Staffing, Inc./ARA | ARA produced no evidence of an agreement to settle; City’s summary judgment granted on Count IV (account stated) |
| Statute of limitations under A.R.S. § 12‑821 | ARA filed within statutory period because accrual depends on when it knew it was damaged, which is disputed | Cause of action accrued July 2016 when ARA learned of the contract and City’s payments; later payments beyond one year barred | City failed to meet initial summary judgment burden; genuine issue remains as to accrual; motion denied |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and movant's burden)
- Rookaird v. BNSF Ry. Co., 908 F.3d 451 ( Ninth Circuit on viewing evidence and inferences at summary judgment )
- Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148 (Ariz. 1993) (contract interpretation: give effect to parties' intent)
- Greyhound Lines Inc. v. Viad Corp., 260 F. Supp. 3d 1181 (D. Ariz. 2017) (parol evidence admissible when contract language is reasonably susceptible)
- Indep. Nat'l Bank v. Westmoor Elec., Inc., 164 Ariz. 567 (Ariz. Ct. App. 1990) (an account debtor who receives notice of assignment must pay assignee; notice effect)