Cella Barr Associates, Inc. v. Cohen

• Decision Date: 27 January 1994
• Docket Number: CA-CV,No. 1,1
• Citation: Cella Barr Associates, Inc. v. Cohen, 868 P.2d 1063, 177 Ariz. 480 (Ariz. App. 1994)
• Parties: CELLA BARR ASSOCIATES, INC., an Arizona corporation, Plaintiff-Appellant, v. Robert B. COHEN and Cohen and Channin, Defendants-Appellees. 91-0332.
• Court: Arizona Court of Appeals

Page 1063

868 P.2d 1063

177 Ariz. 480

CELLA BARR ASSOCIATES, INC., an Arizona corporation, Plaintiff-Appellant, v.Robert B. COHEN and Cohen and Channin, Defendants-Appellees.

No. 1 CA-CV 91-0332.

Court of Appeals of Arizona Division 1, Department C.

Jan. 27, 1994.

[177 Ariz. 482] Mariscal, Weeks, McIntyre & Friedlander, P.A. by Richard A. Friedlander, Gary L. Birnbaum, Scott A. Holcomb, Phoenix, for plaintiff-appellant.

Jennings, Strouss & Salmon by John A. Micheaels, James M. Ackerman, Phoenix, for defendants-appellees.

OPINION

EHRLICH, Judge.

Cella Barr Associates, Inc.("Cella Barr") appeals from a judgment dismissing its claims for contribution and indemnity and from the denial of its motion for new trial.We affirm the judgment for the reasons which follow.

FACTS AND PROCEDURAL HISTORY

On June 25, 1986, Gerald and Edwina Glassman, Plainville Electro Plating Company, and Plainville West, Inc.("Glassmans") conditionally contracted with Miles and William Munzer and Technical Metal Finishing Corporation("Munzers") for the purchase of Marro Plating, an electroplating facility in Scottsdale, Arizona.On June 30, 1986, the Glassmans, through Robert B. Cohen, a Connecticut attorney with the firm of Cohen & Channin ("Cohen"), and the Munzers contracted with Cella Barr to conduct an environmental audit of the plating facility.On that same day, Cella Barr submitted an oral report of its environmental audit.The Glassmans and Munzers closed the transaction the next day.However, in January 1988, the United States Environmental Protection Agency("EPA") notified the Glassmans that Marro Plating was located in the Indian Bend Wash Superfund site and that the facility was the subject of an EPA investigation.

In May 1988, the Glassmans filed an action against the Munzers and Cella Barr in federal court.The only claim against Cella Barr alleged professional malpractice in performing the environmental audit; it was dismissed without prejudice.The court later granted the Munzers' motion for summary judgment on the federal claims and declined jurisdiction over the pendent state racketeering claim, thereby ending the Glassmans' federal litigation.

In February 1989, the Glassmans filed an action against Cella Barr in Maricopa County Superior Court for professional negligence and malpractice.Cella Barr in turn designated Cohen and the Munzers as "non-parties at fault."In January 1990, the Glassmans sued the Munzers in a separate Maricopa County Superior Court action for alleged racketeering violations and added a claim for breach of contractual warranties.On May 24, 1990, Cella Barr moved to consolidate the Glassmans' two state cases, and to file a third-party complaint, adding the Munzers and Cohen as third-party defendants in the professional malpractice action against it.The trial court denied both motions.The Glassmans' suit against the Munzers eventually was settled.

While the jury was deliberating in the Glassmans' action against Cella Barr, but before it reached its verdict, the parties settled the lawsuit.Cella Barr agreed to pay the Glassmans $1,250,000, for which the Glassmans released Cella Barr and Cohen from liability; there was no reference to the Munzers.The parties nonetheless allowed the jury to continue deliberations, although the settlement made moot any verdict.Three days later, the jury rendered its verdict; it found the Glassmans and Cella Barr each 18.5% liable, Cohen 37% at fault, and the Munzers 26% liable for total damages of $700,000.

After the trial court refused to allow Cella Barr to file a third-party complaint in the Glassmans' malpractice action, but before that case was settled, Cella Barr filed an action against Cohen and the Munzers, the subject of this appeal.In its complaint, Cella Barr claimed that, with regard to damages for which it was liable to the Glassmans in the malpractice action, it was entitled to contribution from the Munzers and Cohen, indemnification from Cohen, and indemnification and treble damages from the Munzers.Only Cohen was served.The trial court granted Cohen's motion to dismiss; it later denied Cella Barr's motions for reconsideration and new trial.Cella Barr timely appealed.

DISCUSSION

A.Standard of Review

In this appeal, we decide whether the trial court properly dismissed Cella Barr's claims against Cohen for contribution and indemnity, and whether it properly denied Cella Barr's subsequent motion for new trial.However, we first must resolve the parties' disagreement as to the appropriate standard of review.Cella Barr urges that we apply the standard used to review a trial court's dismissal.Cohen maintains that his motion to dismiss was converted to one for summary judgment because the trial court relied upon facts and documents outside the pleadings submitted by Cella Barr.

Whether we designate the motion as one to dismiss or one for summary judgment is of little consequence to the resolution of this appeal.SeeBrosie v. Stockton, 105 Ariz. 574, 576, 468 P.2d 933, 935(1970).However, in granting Cohen's motion to dismiss the contribution and indemnity claims pursuant to Arizona Rule of Civil Procedure 12(b)(6), the trial court considered evidence extrinsic to the pleadings.Thus we consider Cohen's motion as one for summary judgment.E.g., Frey v. Stoneman, 150 Ariz. 106, 109, 722 P.2d 274, 277(1986).The motion was properly granted if, viewing the evidence in the light most favorable to Cella Barr, "factually, 'reasonable people could not agree with the conclusion advanced by the proponent of the claim.' "Riley, Hoggatt & Suagee, P.C. v. English, 177 Ariz. 10, 12, 864 P.2d 1042, 1044(1993), quotingOrme School v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008(1990);seeAriz.R.Civ.P. 56(c).

B.Contribution Claim

Cella Barr challenges the trial court's dismissal of its claim for contribution against Cohen.The court granted Cohen's motion to dismiss because Cella Barr failed to comply with the requirements of Arizona Revised Statutes Annotated("A.R.S.")section 12-2503(D) by not discharging all parties potentially liable to the Glassmans, specifically the Munzers.The court then denied Cella Barr's motion for reconsideration and later denied its motion for new trial, stating similarly that, because Cella Barr had not obtained a release of the Munzers, it had not discharged the "common liability" and therefore was not entitled to contribution from Cohen.

In 1984, the Arizona legislature adopted a version of the Uniform Contribution Among Tortfeasors Act, A.R.S. § 12-2501 et seq., which retained a comparative negligence scheme and recognized a right of contribution for a joint tortfeasor who paid more than his pro rata share of the common liability for the same injury.City of Tucson v. Superior Court, 165 Ariz. 236, 240, 798 P.2d 374, 378(1990);Neil v. Kavena, 176 Ariz. 93, 95, 859 P.2d 203, 205(App.1993), citingDietz v. General Electric Company, 169 Ariz. 505, 510, 821 P.2d 166, 171(1991).In 1987, however, the legislature repealed the then-existing version of section 12-2506 and enacted a new statute which abolished joint liability and provided that a defendant in a personal-injury action "is liable only for the amount of damages allocated to that defendant in direct proportion to that defendant's percentage of fault."A.R.S. § 12-2506, added by Laws 1987, ch. 1, § 2, eff. Jan. 1, 1988.Thus, for lawsuits filed after January 1, 1988, a defendant's liability is several only, unless a statutory exception applies.Dietz, 169 Ariz. at 506-08, 821 P.2d at 167-69;City of Tucson, 165 Ariz. at 240 n. 2, 789 P.2d at 378 n. 2;cf.A.R.S. § 12-2506(D)(specifying circumstances in which joint and several liability remain).

Cella Barr maintains on appeal that, even as a severally-liable tortfeasor, it is entitled to seek contribution from Cohen if it shows that Cohen is also liable to the Glassmans for the same injury and that Cella Barr has paid more than its pro rata share of the common liability.Section 12-2501 provides:

A.Except as otherwise provided in this article, if two or more persons become jointly or severally liable in tort for the same injury to person or property or for the same wrongful death, there is a right of contribution among them even though judgment has not been recovered against all or any of them.[Emphasis added.]

B.The right of contribution exists only in favor of a tortfeasor who has paid more than his pro rata share of the common liability, and his total recovery is limited to the amount paid by him in excess of his pro rata share.

* * * * * *

D.A tortfeasor who enters into a settlement with a claimant is not entitled to recover contribution from another tortfeasor whose liability for the injury or wrongful death is not extinguished by the settlement nor in respect to any amount paid in a settlement which is in excess of what was reasonable.

Cella Barr asserts that, because subsection A of this statute uses the disjunctive phrase "jointly or severally liable" rather than the conjunctive phrase "jointly and severally liable," contribution is available to merely severally-liable tortfeasors "even though judgment has not been entered against all or any of them."It further maintains that, according to subsection B, this right exists when the tortfeasor has paid more than his pro rata share of the common liability and that subsection D permits a settling tortfeasor's contribution action against those tortfeasors whose liability has been extinguished by the settlement.Cella Barr also asserts that it satisfied the procedural requirements of A.R.S. § 12-2503 for enforcing its right.

Recently, however, Arizona courts have recognized that, in cases such as this when several liability applies, contribution among joint tortfeasors virtually is nonexistent.E.g., Dietz, 169 Ariz. at 510, 821 P.2d at 171;City of Tucson, 165 Ariz. at 240 n. 2, 798 P.2d at 378 n. 2;Neil, 176 Ariz. at 95, ...