CBHG Mgmt. v. Farm Bureau Fin. Servs.
| Decision Date | 06 August 2021 |
| Docket Number | 2 CA-CV 2020-0111 |
| Parties | CBHG Management, S.A. de C.V., a foreign corporation; Cholla Bay Hotel Group, an Arizona corporation; Desert Springs Equestrian Center, LLC, an Arizona limited liability company; and Lorilei Peters, in her individual capacity, Plaintiffs/Appellants, v. Farm Bureau Financial Services, a foreign corporation, and Paul Cully, Defendants/Appellees. |
| Court | Arizona Court of Appeals |
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Pima County No. C20161278 The Honorable Brenden J. Griffin, Judge
By William G. Walker
and
Law Offices of Scott MacMillan Baker P.C., Tucson
By Scott MacMillan Baker
Counsel for Plaintiffs/Appellants
Lewis Brisbois Bisgaard & Smith LLP, Phoenix
By Matthew D. Kleifield and Robert C. Ashley
Judge Brearcliffe authored the decision of the Court, in which Presiding Judge Eppich and Chief Judge Vasquez concurred.
¶1 Appellants Cholla Bay Hotel Group LLC; CBHG Management S.A. DE C.V.; Desert Springs Equestrian Center LLC ("DSEC"); and Lorilei Peters (collectively "CBHG") appeal from the trial court's grant of summary judgment in favor of appellees, Farm Bureau Financial Services, its "affiliate," Western Agricultural Insurance Company, and Paul Cully (collectively "Farm Bureau"), and the ultimate dismissal of its claims. We affirm.
¶2 On review of the grant of summary judgment, "[w]e view the facts and all reasonable inferences therefrom in the light most favorable to the party opposing summary judgment." Martin v. Schroeder, 209 Ariz. 531, ¶ 2 (App. 2005). CBHG sued Farm Bureau and Cully for tortious interference in business expectancy and contract, and defamation.
¶3 In its complaint, CBHG alleged that a Mexican government agency had approved it to hold and use a gaming license within Mexico. It further alleged that it had received approval for a fifteen-million-dollar loan to construct a hotel and casino in Puerto Penasco, a coastal town in the state of Sonora. That development loan was, according to the complaint, guaranteed by the Mexican government and funded by a group of commercial banks, Grupo Financiero IMBURSA ("GFI"), each of which had hired private investigators to conduct background investigations of CBHG.
¶4 CBHG claimed that the investigators contacted Farm Bureau and its agent Cully regarding an insurance claim made by DSEC, through its principal, Peters, who was also a principal of CBHG. CBHG's complaint asserted that once contacted, Farm Bureau and Cully provided a letter to the investigators that "recklessly made false allegations of criminal conduct on behalf of Ms. Peters in connection with an allegedly fraudulent theft claim" made on behalf of DSEC. CBHG alleged that Farm Bureau and Cully filed a criminal referral with the National Insurance Crime Bureau ("NICB") and the Arizona Department of Insurance ("DOI"), allegedly "making false criminal allegations against Lorilei Peters and DSEC among others" amounting to defamation. CBHG claimed the development loan was denied due to negative information provided by Farm Bureau. At the close of discovery, Farm Bureau filed a motion for summary judgment seeking dismissal of CBHG's claims.
¶5 Regarding the tortious interference claim, Farm Bureau asserted that CBHG had failed to produce admissible evidence supporting the existence of the loan, hotel franchise, or gaming license, and that the documents that were produced could not be authenticated and some bore "several hallmarks of being a forgery." This, it claimed, defeated CBHG's claim of a business expectancy. It also asserted that, in light of the forged documents, summary judgment was appropriate as a sanction.
¶6 As to the defamation claim, Farm Bureau asserted that Cully had not published the purportedly defamatory documents as required for such a claim, and that the criminal referral of DSEC's insurance claim to the DOI was privileged. It also asserted that CBHG's defamation claims were time-barred and the allegations that the criminal referral was in bad faith were precluded by res judicata.
¶7 The trial court's grant of summary judgment was "[f]or all the reasons that [Farm Bureau's] Motion for Summary Judgment states." It further stated that CBHG's "business-expectancy claims are too attenuated, speculative." The court entered final judgment in favor of Farm Bureau as to all claims, pursuant to Rule 54(c), Ariz. R. Civ. P. CBHG then appealed. We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1), 12-2101(A)(1).
¶8 We review the trial court's grant of summary judgment de novo, Martin, 209 Ariz. 531, ¶ 6, and summary judgment may be granted "if the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law," Ariz. R. Civ. P. 56(a). However, we "deferentially review[] the evidentiary rulings of the trial court and affirm[] unless [we] find clear abuse of discretion or legal error, and prejudice." Mohave Elec. Coop., Inc. v. Byers, 189 Ariz. 292, 301 (App. 1997). On appeal, CBHG claims that the trial court erred in rejecting admissible evidence and finding that CBHG's business-expectancy claim was too attenuated and speculative. CBHG further claims that the court erred in not addressing its defamation claim.
¶9 To prove the tort of intentional interference with business expectancy and contract, CBHG principally must show "the existence of a valid contractual relationship or business expectancy." See Wallace v. Casa Grande Union High Sch. Dist. No. 82 Bd. of Governors, 184 Ariz. 419, 427 (App. 1995). "[A]n action for . . . interference with a business relationship requires a business relationship evidenced by an actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered." Dube v. Likins, 216 Ariz. 406, ¶ 19 (App. 2007) (quoting Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.2d 812, 815 (Fla. 1994)).
¶10 CBHG argues that the trial court abused its discretion in determining that the documents on which it relied for its interference claims were inadmissible for lack of authentication. The court specifically addressed, and the parties discussed, four specific exhibits identified by the parties as the Mexico Documents, the Villa Letter, [1] the License Transfer Agreement, and the FNS Loan Letter.
Authenticity standard
¶11 CBHG argues that the trial court applied an incorrect legal standard in determining the admissibility of documents when it stated that CBHG "must prove that the item is what the party claims it is." CBHG asserts that Rule 901, Ariz. R. Evid., does not require a party to prove that an item is what it contends it is. It asserts that, instead, it must only produce "some evidence" from which the trier of fact could reasonably conclude that the document is authentic.
¶12 In its ruling, the trial court stated, as quoted above, that the documents CBHG relied on "lack[ed] authenticity and foundation to be admitted into evidence so as to allow a reasonable jury to rely on them to decide in Plaintiffs' favor on their defamation and business-expectancy claims." It also stated that, even if the documents were "verbal acts"-that is, non-testimonial exhibits not offered for their truth-authentication and foundation were still required.
¶13 Under Rule 901(a) "[t]o satisfy the requirement of authenticating or identifying an item of evidence, the proponent must produce evidence sufficient to support a finding that the item is what the proponent claims it is." Such authentication and identification are conditions precedent to admissibility. See Cavallo v. Phoenix Health Plans, Inc., 250 Ariz. 525, ¶ 36 (App. 2021). The trial judge must determine whether the record contains sufficient evidence to support a jury finding that the offered evidence is what the proponent claims it is. See Taeger v. Catholic Family &Comty. Servs., 196 Ariz. 285, ¶ 40 (App. 1999). In doing so, "[t]he judge does not determine whether the evidence is authentic, but only whether evidence exists from which the jury could reasonably conclude that it is authentic." State v. Lavers, 168 Ariz. 376, 386 (1991). When considering whether evidence has been properly authenticated, the court may "consider the unique facts and circumstances in each case-and the purpose for which the evidence is being offered." State v. King, 226 Ariz. 253, ¶ 9 (App. 2011) (quoting State v. Haight-Gyuro, 218 Ariz. 356, ¶ 14 (App. 2008)).
¶14 The trial court, by examining whether sufficient evidence of the authenticity of multiple key documents had been brought forward such as to allow a reasonable jury to rely on those documents, applied the correct standard. As discussed more fully below as to the discrete documents in question, it simply determined that CBHG, as the proponent of the authenticity of the material, had failed to bring forward sufficient evidence.
¶15 In 2010, DSEC claimed a theft of over $250, 000 in personal property, which Farm Bureau denied. During that litigation, a sixty-five-page packet of documents, which included Farm Bureau's denial of DSEC's claim, was produced (the "Mexico Documents"). In the current litigation CBHG claims that Cully provided this sixty-five-page packet to the Mexican government investigators. The defamatory document within this packet, CBHG claims, caused its expected loan to be denied.
¶16 In its motion for summary judgment, Farm Bureau asserted that CBHG had...
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