ChartOne, Inc. v. Bernini

• Decision Date: 06 February 2004
• Docket Number: No. 2 CA-SA 2003-0108., No. 2 CA-SA 2003-0107
• Citation: 83 P.3d 1103,207 Ariz. 162
• Parties: CHARTONE, INC., Petitioner, v. The Honorable Deborah BERNINI, Judge of the Superior Court of the State of Arizona, in and for the County of Pima, Respondent, and Ronald D. Mercaldo, Ltd., a professional corporation; Louis C. Webb, P.C., a professional corporation; Durazzo & Eckel, P.C., a professional corporation; and Smart Professional Photocopy Corporation, a California corporation, Real Parties in Interest. Smart Professional Photocopy Corporation, a California corporation, Petitioner, v. The Honorable Deborah Bernini, Judge of the Superior Court of the State of Arizona, in and for the County of Pima, Respondent, and Ronald D. Mercaldo, Ltd., a professional corporation; Louis C. Webb, P.C., a professional corporation; Durazzo & Eckel, P.C., a professional corporation; and Chartone, Inc., Real Parties in Interest.
• Court: Arizona Court of Appeals

83 P.3d 1103

207 Ariz. 162

CHARTONE, INC., Petitioner, v. The Honorable Deborah BERNINI, Judge of the Superior Court of the State of Arizona, in and for the County of Pima, Respondent, and Ronald D. Mercaldo, Ltd., a professional corporation; Louis C. Webb, P.C., a professional corporation; Durazzo & Eckel, P.C., a professional corporation; and Smart Professional Photocopy Corporation, a California corporation, Real Parties in Interest.

Smart Professional Photocopy Corporation, a California corporation, Petitioner, v. The Honorable Deborah Bernini, Judge of the Superior Court of the State of Arizona, in and for the County of Pima, Respondent, and Ronald D. Mercaldo, Ltd., a professional corporation; Louis C. Webb, P.C., a professional corporation; Durazzo & Eckel, P.C., a professional corporation; and Chartone, Inc., Real Parties in Interest.

Nos. -0107, -0108.

Court of Appeals of Arizona, Division Two, Department B.

February 6, 2004.

Fennemore Craig By Andrew M. Federhar, Theresa Dwyer, and Lori A. Higuera, Phoenix, for Petitioner ChartOne.

Anson, Lammers & Barkley, P.C. By Stephen M. Barkley and Mark D. Lammers, Tucson, for Petitioner Smart Professional Photocopy Corporation.

Mesch, Clark & Rothschild, P.C. By Douglas H. Clark, Jr., Scott H. Gan, and Gary J. Cohen, Tucson, for Real Parties in Interest Ronald D. Mercaldo, Ltd.; Louis C. Webb, P.C.; and Durazzo & Eckel, P.C.

OPINION

ESPINOSA, Chief Judge.

¶ 1 In these consolidated special actions, petitioners ChartOne, Inc. and Smart Professional Photocopy Corporation (collectively, defendants) ask us to determine the scope of a trial court's authority under article VI, § 24 of the Arizona Constitution and Rule 53, Ariz. R. Civ. P., 16 A.R.S., Pt. 1, to appoint a special master. Specifically, the primary issue in this case is whether a trial court may, in the absence of an agreement by the parties, appoint a special master to calculate a plaintiff's damages after a jury has found the defendant liable on the plaintiff's claim for breach of an implied contract. Additionally, we are asked to decide whether the respondent judge abused her discretion and violated the defendants' rights to a jury trial by vacating, after the jury trial on liability, a prior order bifurcating the jury trial into liability and damage phases and appointing a special master to calculate the damages. For the reasons stated below, we accept jurisdiction of these special actions and grant relief.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 ChartOne and Smart Professional are contractors that provide medical records production services to medical practices, hospitals, and other medical groups. They retrieve patients' records after reviewing a request for their production, photocopy the records, and release them after reviewing the authorization for their release. Real parties in interest (collectively, plaintiffs) are personal injury attorneys who filed a class action lawsuit in 1996 against ChartOne, Smart, and another defendant, alleging numerous claims which, by the time of trial in February 2003, had been reduced to a claim for breach of implied contract. The claim was based on plaintiffs' allegation that defendants had violated A.R.S. § 12-2295¹ by charging unreasonable fees for their services.

¶ 3 In January 2003, about two weeks before trial, plaintiffs requested that the respondent judge bifurcate the impending jury trial into two phases: liability and damages. Defendants objected, arguing that the two issues were inextricably intertwined. In response, the judge bifurcated the trial but ordered that the same jury would hear both phases if liability were found. The liability portion began on February 12. At times during that phase, the parties were prevented from introducing evidence that related to damages, and the judge refused instructions and interrogatories on that topic. Toward the end of the liability trial, the parties and the judge began discussing the special verdict forms and interrogatories that were to be submitted to the jury. During these discussions, the judge at times acknowledged the difficulty of conducting a bifurcated proceeding. Illustrative of problems encountered was defendants' argument in support of their motion for judgment as a matter of law, pursuant to Rule 50, Ariz. R. Civ. P., 16 A.R.S., Pt. 1; they asserted plaintiffs had no evidence of damages and would be unable to sustain their burden of proving those damages in the damage phase of the trial. Defendants also argued that plaintiffs had failed to sustain their burden of proving in the liability phase an essential element of a claim for breach of contract: that damages had resulted from the alleged breach.

¶ 4 From time to time, the judge questioned her decision to bifurcate the trial. She also expressed concern about compelling the jury to review the many boxes of invoices and other documents that purportedly would establish plaintiffs' damages and stated she was inclined to appoint a special master to review the information and calculate the damages if liability were found. While the jury was deliberating on the issue of liability, the judge vacated her prior order bifurcating the trial and stated that, if the jury found defendants liable, she would appoint a special master to calculate the damages. Defendants objected and asked the judge to reconsider, arguing they had been prejudiced in conducting their defense by defending only on the question of liability and not damages. They further argued that the judge essentially had relieved plaintiffs of their burden of proving damages, an essential element of a breach of contract action. Finally, defendants argued that appointing a special master in this situation would violate Rule 53(b), Ariz. R. Civ. P.

¶ 5 The jury returned a verdict in favor of plaintiffs, finding unreasonable the fees defendants had charged during the period alleged in plaintiffs' complaint. The jury specified what it deemed were reasonable fees. Two days later, plaintiffs filed an application to appoint a special master, proposing that the judge select one of three nominees and that she order the defendants to pay the fees of the person appointed. Again, defendants objected. After it became clear the judge did not intend to reverse her decision to appoint a special master, defendants agreed to one of the candidates, but the judge ultimately ruled that plaintiffs could select one of the three and that defendants would be required to pay for his services as part of their taxable costs. Plaintiffs selected one of the two candidates that defendants had rejected. Thereafter, defendants not only objected to the special master plaintiffs had selected but reiterated their objections to the appointment of a special master in general. The judge refused to reconsider her orders but agreed to stay all further proceedings while defendants filed separate special actions challenging her rulings, stating, at one point, that she looked forward to clarification by this court. Pursuant to the request of all parties, we have consolidated the special actions in order to do so.

SPECIAL ACTION JURISDICTION

¶ 6 Defendants challenge the respondent judge's decisions to vacate her order bifurcating the trial after she had allowed the case to proceed through the liability phase; to appoint a special master to calculate plaintiffs' damages; and to permit plaintiffs to select the special master of their choice, rather than the candidate the parties had agreed could be appointed. All parties urge this court to accept special action jurisdiction in order to address these issues. We find it appropriate for us to do so for several reasons.

¶ 7 First, defendants have no equally plain, speedy, or adequate remedy by appeal. See Ariz. R.P. Special Actions 1, 17B A.R.S. As defendant ChartOne points out, there is authority for the proposition that an order appointing a special master is not an appealable order and that special action review of such an order is appropriate. See Bolon v. Pennington, 3 Ariz.App. 433, 415 P.2d 148 (1966); see also La Buy v. Howes Leather Co., 352 U.S. 249, 77 S.Ct. 309, 1 L.Ed.2d 290 (1957); United States v. Microsoft Corp., 147 F.3d 935 (D.C.Cir.1998); Prudential Ins. Co. of Am. v. U.S. Gypsum Co., 991 F.2d 1080 (3d Cir.1993); Burlington N. R.R. Co. v. Dep't of Revenue, 934 F.2d 1064 (9th Cir.1991).

¶ 8 Second, the propriety of the judge's order with respect to the application of article VI, § 24 of the Arizona Constitution and Rule 53, Ariz. R. Civ. P., raises questions of law, which are particularly appropriate for special action review. State ex rel. Romley v. Fields, 201 Ariz. 321, 35 P.3d 82 (App.2001) (when question presented in special action is one of law, acceptance of special action may be appropriate); see also Greenwald v. Ford Motor Co., 196 Ariz. 123, 993 P.2d 1087 (App.1999) (interpretation of supreme court rule is question of law). So, too, is the question whether the judge's orders resulted in a violation of defendants' constitutional right to a jury trial. See Mendez v. Robertson, 202 Ariz. 128, 42 P.3d 14 (App.2002).

¶ 9 Third, acceptance of special action jurisdiction may be appropriate when the questions raised are of statewide importance and of first impression. Inzunza-Ortega v. Superior Court, 192 Ariz. 558, 560, 968 P.2d 631, 633 (App.1998) (court of appeals "will accept special action jurisdiction in a case that raises a constitutional issue of first impression and statewide importance"); see also State ex rel. Pennartz v. Olcavage, 200 Ariz. 582, ¶ 8, 30 P.3d 649, ¶ 8 (App.2001) (acceptance of special action jurisdiction appropriate "in cases involving a matter of first impression, statewide significance, or pure questions of law"). The parties maintain that the issues in this case may be so characterized, further justifying our acceptance of special action jurisdiction.

¶ 10 Finally, as all the parties note, even assuming there is a remedy by...