Aubuchon v. Brock
| Decision Date | 14 May 2015 |
| Docket Number | No. 1 CA-CV 13-0451,1 CA-CV 13-0451 |
| Court | Arizona Court of Appeals |
| Parties | LISA M. AUBUCHON and PETER R. PESTALOZZI, wife and husband; DAVID HENDERSHOTT and ANNA HENDERSHOTT, husband and wife, Plaintiffs/Appellants; EDWARD MORIARITY; MORIARITY, BADARUDDIN & BOOKE, LLC, Appellants, v. SUPERVISOR FULTON BROCK; SUPERVISOR ANDREW KUNASEK; SUPERVISOR DONALD STAPLEY; SUPERVISOR MARY ROSE WILCOX; SUPERVISOR MAX WILSON; COUNTY MANAGER DAVID SMITH; ASSISTANT COUNTY MANAGER SANDI WILSON; former MARICOPA COUNTY ATTORNEY RICHARD ROMLEY; COUNTY ATTORNEY WILLIAM MONTGOMERY; PAUL AHLER; MARK FAULL; MARICOPA COUNTY; EDWARD NOVAK; THOMAS IRVINE; POLSINELLI SHUGHART PC, Defendants/Appellees. |
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
Appeal from the Superior Court in Maricopa County
The Honorable Sally Schneider Duncan, Judge
AFFIRMED IN PART, REVERSED AND REMANDED IN PART, VACATED IN PART, VACATED AND REMANDED IN PART
Lisa M. Aubuchon, Tempe
Plaintiff/Appellant
Edward P. Moriarity, Missoula, MT
Appellant
Swenson Storer Andrews & Frazelle, P.C., Phoenix
By Michael J. Frazelle
Counsel for Defendants/Appellees Brock, Kunasek, Stapley, Wilcox, M. Wilson, Smith,
S. Wilson, Romley, Ahler
Dickinson Wright PLLC, Phoenix
Sacks Tierney P.A., Scottsdale
By James W. Armstrong, Jeffrey S. Leonard
Polsinelli PC, Phoenix
By Thomas K. Irvine, Andrew S. Jacob
Presiding Judge Peter B. Swann delivered the decision of the court, in which Judge Kenton D. Jones and Judge Michael J. Brown joined.
¶1 This lawsuit was filed in the aftermath of a series of disputes between the Maricopa County Board of Supervisors and the Maricopa County Attorney's Office. After plaintiff Lisa Aubuchon, a high-ranking Maricopa County prosecutor,1 was terminated from her employment, she and formerMaricopa County Sheriff's deputy David Hendershott brought a number of claims seeking damages against the county, various public officials and a law firm that the county had retained. The superior court dismissed the action, and awarded sanctions against the plaintiffs.
¶2 This appeal requires us to decide whether the superior court erred by determining that claims set forth in the plaintiffs' proposed second amended complaint were futile, and by imposing attorney's-fees awards against the plaintiffs as sanctions. We affirm the court's determination of futility with respect to the majority of the claims but conclude that the claims for breach of contract and breach of the covenant of good faith and fair dealing were sufficiently pled. We further hold that while the plaintiffs clearly engaged in sanctionable conduct, the final calculation of the amount of sanctions in favor of the county must await the conclusion of the case on remand. Finally, we hold that while the court properly awarded sanctions in favor of a self-represented law firm, the measure of those sanctions that the trial court employed conflicts with recent case law, and the sanctions must therefore be recomputed.
¶3 In August 2011, Aubuchon, Hendershott, and their spouses (collectively, "Plaintiffs") commenced an action against multiple defendants: Maricopa County ("the County"); the Maricopa County Board of Supervisors ("the MCBOS"); the Maricopa County Attorney's Office ("the MCAO"); County officials, employees, or contractors Fulton Brock, Andrew Kunasek, Donald Stapley, Mary Rose Wilcox, Max Wilson ("M. Wilson"), Richard Romley, William Montgomery, David Smith, Sandi Wilson ("S. Wilson"), Paul Ahler, Mark Faull, and Katherine Baker (collectively, "the County officials and employees"); the State of Arizona ("the State"); State officials Terry Goddard and Thomas Horne (collectively, "the State officials"); and the law firm of Polsinelli Shughart, P.C., and its members Edward Novak and Thomas Irvine (collectively, "the Polsinelli defendants"). Plaintiffs were represented in the action by the law firm of Moriarity, Badaruddin & Booke, LLC ("the Moriarity Firm"), and all of their pleadings and proposed pleadings were signed by Moriarty Firm attorney Edward P. Moriarity.
¶4 All of the defendants moved to dismiss Plaintiffs' first amended complaint, arguing that it violated the basic pleading standards of Rule 8 and was subject to dismissal under Rule 12(b)(6) for failure to state claims. Some of the defendants argued that the complaint also violated the pleading standard prescribed by Rule 10(b). The MCBOS and the MCAO further argued that they were immune from suit as non-jural entities, and the Polsinelli defendants argued that dismissal was warranted under A.R.S. § 12-752. The Polsinellidefendants also stated that they intended to seek sanctions under Rule 11 and A.R.S. §§ 12-349 and -752.
¶5 Plaintiffs disputed that the first amended complaint was deficient, but posited that they would be able to cure any defects if granted leave to amend. At oral argument on the motions to dismiss, Plaintiffs' counsel did not argue the merits of the motions. Instead, he simply stated:
I'm wondering if I could make a suggestion that could cut this thing way short. I've gone through in detail and looked at all of the arguments and matters as set forth by the Defendants, and if the Court were to deem these say ten or 15 days to file an amended complaint, I think that we can resolve probably almost everything that they are complaining about.
¶6 In response to this statement, the court explained that it agreed with the defendants that the first amended complaint violated Rules 8 and 10, and that it was concerned that dismissal might be warranted under Rule 12(b)(6). Specifically, the court indicated that it was skeptical about claims of legal malpractice in the absence of allegations of an attorney-client relationship, as well as about claims of defamation arising out of privileged complaints filed with the State Bar of Arizona. The court allowed Plaintiffs to file a motion seeking leave to amend, but warned that the motion and proposed second amended complaint would need to comply with the rules of civil procedure. The court further stated that it was "not ready to make th[e] decision" regarding whether sanctions were warranted, explaining that "depending on what happens there may or may not be sanctions that are appropriate" and that "[i]f there is a violation of Rule 11, and I have given due process warning as far as I'm concerned, sanctions can attach to any further action." The court granted the MCBOS and the MCAO's request for dismissal based on their non-jural status but otherwise denied the defendants' motions to dismiss, without prejudice.
¶7 In February 2012, Plaintiffs filed their motion for leave to file a second amended complaint. The proposed second amended complaint attached to the motion eliminated several of the remaining defendants from the caption, namely: Faull, Baker, the State, the State officials, and the Polsinelli defendants. The defendants who remained in the proposed second amended complaint objected to the motion for leave to amend, arguing that the motion did not comply with Rule 7.1, that the proposed amendments did not comply with the applicable pleading standards, and that the proposed amendments were futile. The Polsinelli defendants filed a renewed motion to dismiss the first amended complaint (alternatively styled a motion for judgment on the pleadings) and requested sanctions under Rule 11 and A.R.S. § 12-349.
¶8 In May 2012, after holding oral argument, the court denied Plaintiffs' motion for leave to amend. The court found that Plaintiffs' motion did not comply with Rule 7.1 and that "even if filed in compliance with the Arizona Rules of Civil Procedure, [a]mendment would be futile because the claims are not legally viable." The court specifically found that "Montgomery was not in office at the time the claims arose and/or the claims are futile," and that there was "no legal basis" for the defamation and intentional infliction of emotional distress ("IIED") claims related to Kunasek even assuming the truth of the allegations. The court also granted the Polsinelli defendants' motion for dismissal and sanctions, ordering dismissal with prejudice and directing the defendants to file an application for attorney's fees. The court found that such sanctions were appropriate because "[n]o legal or factual basis ever existed to file a Complaint against these defendants" and "the Complaint was filed for vexatious purposes."
¶9 The County and the County officials and employees (with the exception of Faull and Baker) subsequently requested attorney's fees as sanctions. The court granted these requests, ordered the dismissal with prejudice of "ALL named Defendants," and awarded the Polsinelli defendants the full amount of fees and costs they requested.
¶10 Before the court entered any appealable orders, Plaintiffs filed a motion for reconsideration regarding the court's award of fees and costs to the Polsinelli defendants, arguing that these defendants were not entitled to recover fees because they had represented themselves in the action. The court promptly set oral argument on the motion, but before the date set for argument, Plaintiffs filed a notice of appeal. This court dismissed the appeal as premature. Plaintiffs then filed an unsuccessful motion in the superior court for a change of judge for cause.
¶11 In May 2013, the court ultimately entered final, appealable Rule 54(b) judgments awarding approximately $185,000 in attorney's fees and costs to the Polsinelli defendants; approximately $35,000 in fees to the County; approximately $18,000 in fees to Montgomery; and approximately $17,000 in fees to Brock, Kunasek, Stapley, Wilcox, M. Wilson,...
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