Franzi v. Koedyker

• Decision Date: 13 December 1985
• Docket Number: CA-CIV,No. 2,2
• Citation: 758 P.2d 1303,157 Ariz. 401
• Parties: Emil FRANZI, a married man, Plaintiff/Appellant, v. Donald KOEDYKER and Jane Doe Koedyker, husband and wife; Koedyker Construction Company, Inc., an Arizona corporation; Andrew Kelly and Patricia Kelly, husband and wife; Kevin Oberg and Nancy Oberg, husband and wife; Cienega Ltd., an Arizona corporation; Cienega Properties, Inc., an Arizona corporation and Cienega Corporation Company, an Arizona corporation, Defendants/Appellees. 5374.
• Court: Arizona Court of Appeals

Page 1303

758 P.2d 1303

157 Ariz. 401

Emil FRANZI, a married man, Plaintiff/Appellant, v. Donald KOEDYKER and Jane Doe Koedyker, husband and wife; Koedyker Construction Company, Inc., an Arizona corporation; Andrew Kelly and Patricia Kelly, husband and wife; Kevin Oberg and Nancy Oberg, husband and wife; Cienega Ltd., an Arizona corporation; Cienega Properties, Inc., an Arizona corporation and Cienega Corporation Company, an Arizona corporation, Defendants/Appellees.

No. 2 CA-CIV 5374.

Court of Appeals of Arizona Division 2, Department A.

Dec. 13, 1985. ^*

[157 Ariz. 402] Law Offices of William J. Risner by Kenneth K. Graham, Tucson, for plaintiff/appellant.

Stompoly & Even, P.C. by Leslie J. Cohen and William G. Walker, Tucson, for defendants/appellees.

Waterfall, Economidis, Hanshaw & Villamana, P.C. by James W. Stuehringer and

[157 Ariz. 403] Sandra Tedlock, Tucson, for defendants/appellees Kelly, Oberg, and Cienega.

OPINION

BIRDSALL, Presiding Judge.

This appeal is from a dismissal of the plaintiff/appellant's complaint pursuant to Rule 12(b)(6), Rules of Civil Procedure, 16 A.R.S., for failure to state a claim upon which relief can be granted. The motion to dismiss was made by the defendants/appellees Kelly, Oberg, and Cienega, who alleged failure to state a claim as an affirmative defense in their answer to the complaint. The defendant/appellee Koedyker, who had not answered, joined in the motion to dismiss. Matters outside the pleadings, an affidavit, a deposition, investigative reports, and a transcript of one witness's grand jury testimony, were presented to the trial court and not excluded.

The plaintiff's complaint purported to state a claim for racketeering. A.R.S. § 13-2301(D)(4) as amended effective July 21, 1982, defines racketeering in part:

"4. 'Racketeering' means any act, including any preparatory or completed offense, committed for financial gain, which is chargeable or indictable under the laws of the state in which the act occurred and, if the act occurred in a state other than this state, would be chargeable or indictable under the laws of this state had the act occurred in this state and punishable by imprisonment for more than one year, regardless of whether such act is charged or indicted, involving:

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(n) Obstructing or hindering criminal investigations or prosecutions.

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(t) A scheme or artifice to defraud."

The racketeering statute also provides a civil remedy in A.R.S. § 13-2314(A):

"A person who sustains injury to his person, business or property by racketeering as defined by § 13-2301, subsection D, paragraph 4 or by a violation of § 13-2312 may file an action in superior court for the recovery of treble damages and the costs of the suit, including reasonable attorney's fees...."

The gist of plaintiff's complaint was that the individual defendants gave false testimony to a Pima County Grand Jury, resulting in an indictment against the plaintiff charging him with six counts of perjury and six counts of false swearing before the grand jury. The indictment was subsequently dismissed. The complaint does not actually allege a conspiracy. However, paragraph XXXV thereof alleges that A.R.S. § 13-1003, which defines criminal conspiracy, was a law in effect at all material times and sets forth the language of that statute. And in the appellant's written opposition to the motion to dismiss, he states that his "Complaint is additionally predicated upon an alleged scheme or conspiracy amongst the Defendants to not only commit perjury and give false statements, but also to obstruct or hinder justice." The appellees do not contest this statement, and the motion to dismiss was presented to the trial court on that theory, together with others. Division One of our court has recently observed that when a civil wrong occurs as the result of concerted action, the participants in the common plan are equally liable. The court further observed that the word "conspiracy" is generally used in connection with imposing vicarious liability for concerted action. McElhanon v. Hing, 151 Ariz. 386, 728 P.2d 256 (App.1985). We will treat the complaint as one alleging a conspiracy.

The thrust of the motion to dismiss was the long established rule of law giving witnesses in a judicial proceeding absolute immunity against any civil damage claim arising out of their immunized statements. An exception may be found in malicious prosecution and abuse of process claims. See Sierra Madre Development, Inc. v. Via Entrada Townhouses Association, 20 Ariz.App. 550, 514 P.2d 503 (1973). We are not concerned with any such claim here.

In a minute entry under advisement ruling granting the motion, the trial court succinctly said, in part "More importantly, it is the Plaintiff's indictment based upon this conduct and immunized statements that is the basis for his alleged damages. But for this indictment the Plaintiff would not have been injured. The Plaintiff's complaint must therefore be dismissed. Under no set of facts urged by the Plaintiff would his RICO [racketeering] claims survive. Folk v. City of Phoenix, 27 Az.App. 146 (1976)."

We must decide five issues to resolve this appeal:

(1) Does the rule of witness immunity preclude this racketeering action alleging conspiracy to hinder or obstruct a criminal investigation or prosecution? We hold that it does not.

(2) Should we review the trial court judgment as a judgment on the pleadings or as a summary judgment? We believe it must be treated as a summary judgment.

(3) Is there sufficient evidence of a conspiracy to withstand a motion for summary judgment? We find there was.

(4) Can the dismissal be affirmed because of use and prosecutorial immunity given the appellees? We hold it cannot.

(5) Should the appellant's claim for damages to his name and reputation have been dismissed? We agree that it should. For these reasons we reverse the judgment except for the dismissal of the claim for injuries to name and reputation.

The following facts are not in dispute. We will discuss other facts as necessary in this opinion. In late 1982, the Pima County Grand Jury was investigating alleged irregularities concerning a contract for janitorial services for Pima County. The investigation soon broadened into an investigation of alleged unlawful financial contributions to the campaign of county supervisor Conrad Joyner. An entity called "Radecon" (apparently a secret code or anagrammatical name for "Conrad") had allegedly been set up to receive illegal contributions to Joyner's campaign. Joyner had run, unsuccessfully, for the Republican nomination for the United States House of Representatives. The appellant, Emil Franzi, was a county employee who was helping Joyner in the campaign. The Pima County attorney who was assisting the grand jury investigation learned that the appellees might have information concerning the campaign contributions. They were interviewed, and subsequently appellees Koedyker and Kelly testified before the grand jury. After Franzi was indicted the appellee Oberg was listed as a witness and deposed. At first Kelly refused to testify before the Grand Jury. He was then given use immunity, A.R.S. § 13-4064, ¹ and did testify.

ISSUE ONE: WITNESS IMMUNITY

The appellees contend, and the trial court agreed, that the well-established rule that witnesses in a judicial proceeding have absolute immunity from any action against them arising out of their testimony requires dismissal of appellant's complaint. Our supreme court has recently reaffirmed the doctrine of absolute witness immunity. In Green Acres Trust v. London, 141 Ariz 609, 688 P.2d 617 (1984), the court held that the existence of the immunity may be decided as a matter of law on a motion to dismiss. Although holding that attorneys who conducted a press conference concerning a class action suit they were about to file were not entitled to the defense for statements made on that occasion, the court emphasized both the importance and continuing vitality of the privilege.

"The socially important interests promoted by the absolute privilege in this area include the fearless prosecution and defense of claims which leads to complete exposure of pertinent information for a tribunal's disposition. The privilege protects ... witnesses.... The defense is absolute in that the speaker's motive, purpose or reasonableness in uttering a false statement do not affect the defense." Id. at 613, 688 P.2d at 621.

The appellant first contends that the doctrine applies only to actions for defamation. We disagree. The appellant has cited no authority which so holds. Admittedly, a majority of the cases seem to be complaints of defamation. In Arizona, for example, see Green Acres, supra; Bailey v. Superior Court, 130 Ariz. 366, 636 P.2d 144 (App.1981); Drummond v. Stahl, 127 Ariz. 122, 618 P.2d 616 (App.1980), cert. denied, 450 U.S. 967, 101 S.Ct. 1484, 67 L.Ed.2d 616 (1981); Sierra Madre Development, Inc. v. Via Entrada Townhouses Association, 20 Ariz.App. 550, 514 P.2d 503 (1973); Todd v. Cox, 20 Ariz.App. 347, 512 P.2d 1234 (1973); Stewart v. Fahey, 14 Ariz.App. 149, 481 P.2d 519 (1971). This is not surprising when the privilege is being asserted as a defense against claims arising out of the publication of false statements. However, no less authority than the United States Supreme Court has allowed the privilege as a defense in a civil rights action under 42 U.S.C. § 1983 (1976). In Briscoe v. LaHue, 460 U.S. 325, 103 S.Ct. 1108, 75 L.Ed.2d 96 (1983), the court held that a policeman could not be sued for perjury committed in the plaintiff's criminal trial.

On issue one the appellant next contends, again without direct authority, that the doctrine of absolute privilege is inapplicable to racketeering actions. We disagree. This very question was decided in Sellers v. General Motors Corporation, 590 F.Supp. 502 (E.D.Pa.1984). The court there said, referring to the federal statut...