Kresock v. Depaoli

• Decision Date: 30 November 2017
• Docket Number: No. 1 CA-CV 15-0622,1 CA-CV 15-0622
• Parties: FRANK D. KRESOCK, JR.; RICHARD W. HUNDLEY and LAW FIRM OF BERENS, KOZUB, KLOBERDANZ & BLONSTEIN, PLC, Plaintiffs/Appellants, v. ROSEMARY T. DEPAOLI; GREGORY MEELL; ABRAM, MEELL & CANDIOTO, P.A., an Arizona professional corporation, Defendants/Appellees.
• Court: Arizona Court of Appeals

FRANK D. KRESOCK, JR.; RICHARD W. HUNDLEY and LAW FIRM

OF BERENS, KOZUB, KLOBERDANZ & BLONSTEIN, PLC, Plaintiffs/Appellants, v. ROSEMARY T. DEPAOLI; GREGORY MEELL; ABRAM, MEELL

& CANDIOTO, P.A., an Arizona professional corporation, Defendants/Appellees.

No. 1 CA-CV 15-0622

ARIZONA COURT OF APPEALS DIVISION ONE

November 30, 2017

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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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

No. CV2013-055126

The Honorable Michael D. Gordon, Judge

AFFIRMED

COUNSEL

The Kozub Law Group, Scottsdale

By Richard W. Hundley

Counsel for Plaintiffs/Appellants

Joshua Carden Law Firm, PC, Scottsdale

By Joshua W. Carden

Counsel for Defendant/Appellee Rosemary T. DePaoli Burch & Cracchiolo PA, Phoenix

By Melissa Iyer Julian

Counsel for Defendants/Appellees Gregory Meell and Abram, Meell & Candioto, P.A.

MEMORANDUM DECISION

Presiding Judge Kenton D. Jones delivered the decision of the Court, in which Judge Jon W. Thompson and Chief Judge Samuel A. Thumma joined.

JONES, Judge:

¶1 Frank Kresock, Jr. appeals the trial court's orders: (1) dismissing his complaint, and (2) awarding attorneys' fees and costs in favor of Appellees.¹ In addition, attorney Richard Hundley and the law firm of Berens, Kozub, Kloberdanz & Blonstein, PLC (collectively, Hundley) appeal the award of fees and costs against them. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Kresock and Rosemary DePaoli married in 1983, had three children, and divorced in 2002. As relevant here, the decree of dissolution, entered in December 2002, authorized DePaoli to sell the community property and distribute the proceeds equally. Kresock estimated that, at the time of the divorce, the parties had more than $5.2 million in personal assets and $3.2 million in business assets as well as substantial debt.

¶3 Following entry of the decree, the parties engaged in protracted family court litigation.² In September 2003, Kresock requestedthe family court order "an independent audit and proper accounting of the entire marital estate from January 01, 2000 to present." He also requested the "immediate release[] of his share of [the] marital funds," which he calculated to be $432,519.86; he attached to this request an August 2003 trust account record provided by Meell. The family court denied both requests.

¶4 In March 2004, Meell wrote a letter to Kresock's then-attorney addressing, in part, "the updated accounting of Dr. Kresock's share of the property proceeds" and advising him a check for his share of the property proceeds (the 2004 check) had been prepared. This letter was attached as an exhibit to a reply DePaoli filed in the family court in April 2006. Meell's letter continued:

On February 6, 2004, we forwarded to [a different attorney representing Kresock] . . . an updated summary accounting describing Dr. Kresock's net share of the community proceeds as equaling $279,554.82 at that time. On February 18, 2004, we forwarded to your office a further updated accounting and a related supporting spreadsheet determining Dr. Kresock's net share of the community proceeds as equaling $263,279.20. Another courtesy copy of both accompanies this letter.

. . .

This morning your paralegal requested arrangements to retrieve a check for Dr. Kresock's share of the property proceeds. Pursuant to that request a check has been prepared made payable to Dr. Kresock in the amount of $263,279.20 and is ready for retrieval by your courier.

¶5 Nearly a decade later, in April 2013, Kresock again requested the family court order an accounting, explaining that, despite "multiple attempts by various counsels," he had been unable to obtain an accounting from DePaoli or confirm she had complied with the decree. In response, DePaoli summarized "the long history of duplicative accountings" she had provided and/or made available to Kresock "and his eight (8) former attorneys." In October 2013, the family court denied the request as untimely.

¶6 In November 2013, Kresock, now represented by Hundley,³ filed this civil action, alleging that "[a]t no time" had he received either a "full accounting" of, or "any proceeds" resulting from, the sale of the community property identified in the decree. As amended and as relevant here, he brought claims for: (1) breach of fiduciary duty (Count One) and declaratory relief/accounting (Count Six) against DePaoli and Meell, and (2) conversion (Count Three) and unjust enrichment (Count Five) against DePaoli, both based upon his continuing assertion he did not receive the 2004 check. Kresock later sought to amend his complaint to: (1) narrow the scope of Counts One, Five, and Six to address community property that was not identified within the decree, and (2) add a claim for partition (Count Seven).⁴

¶7 After filing an answer to the complaint, Appellees moved to dismiss, based upon the statute of limitations and claim preclusion. After full briefing and oral argument, the trial court granted the motion to dismiss and denied as futile the motion to amend. The court also granted Appellees' request for attorneys' fees and costs as a sanction against both Kresock and Hundley. See Ariz. Rev. Stat. (A.R.S.) § 12-349;⁵ Ariz. R. Civ. P. 11. The final judgment dismissed the complaint with prejudice and awarded $20,248.50 in fees and costs to DePaoli and $32,500 in fees to Meell. See Ariz. R. Civ. P. 54(c). Kresock and Hundley timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).

DISCUSSION

I. Motion to Dismiss

A. Conversion Rule

¶8 The parties dispute whether the trial court improperly considered exhibits attached to DePaoli's motion to dismiss. A motion to dismiss shall be treated as a motion for summary judgment when "mattersoutside the pleading are presented to and not excluded by the court." Ariz. R. Civ. P. 12(b) (2014).⁶

¶9 Although the trial court did not affirmatively state it considered DePaoli's exhibits when it granted the motion in one sentence, we can infer from the record it did so. See Workman v. Verde Wellness Ctr., Inc., 240 Ariz. 597, 601, ¶ 11 (App. 2016) (finding the trial court "necessarily considered matters outside the pleadings" when exhibits were attached to the motion and arguments at a hearing were based on the exhibits) (citing Coleman v. City of Mesa, 230 Ariz. 352, 356, ¶ 9 (2012)); Canyon del Rio Inv'rs, L.L.C. v. City of Flagstaff, 227 Ariz. 336, 340, ¶ 15 (App. 2011) (converting motion because exhibits were not stricken) (citing Yollin v. City of Glendale, 219 Ariz. 24, 27, ¶ 6 (App. 2008); and Jones v. Cochise Cty., 218 Ariz. 372, 375, ¶ 7 (App. 2008)). Kresock never objected to the court's consideration of DePaoli's attachments within the framework of a motion to dismiss. Kresock did not ask the court to strike DePaoli's attachments or argue that the motion should be converted to a motion for summary judgment, even when the trial court raised the issue at a hearing.

¶10 Nor did Kresock argue to the trial court that he had inadequate opportunity to refute the contents of the exhibits or request additional discovery. Although Kresock now argues, for the first time on appeal, the trial court should have allowed him to pursue discovery once it considered evidence outside the pleadings, "[t]he 'reasonable opportunity' requirement inherent in Rule 12(b) is satisfied when a party had the opportunity to file a written response or reply." Workman, 240 Ariz. at 602, ¶ 15 (quoting Belen Loan Inv'rs, L.L.C. v. Bradley, 231 Ariz. 448, 453 n.7, ¶ 7 (App. 2012)). Indeed, Kresock addressed the documents' contents in bothhis written and oral argument and continually asserted he was nonetheless entitled to a ruling in his favor.

¶11 On this record, Kresock failed to make a timely objection to the trial court's consideration of the materials presented by DePaoli. "A failure to make timely objection is a waiver of error." City of Prescott v. Sumid, 30 Ariz. 347, 355-56 (1926) (citations omitted). Accordingly, we consider whether the court properly granted summary judgment in Appellees' favor.

B. Statute of Limitations

¶12 We review a trial court's grant of summary judgment de novo, "viewing the evidence in the light most favorable to the non-prevailing party." Salib v. City of Mesa, 212 Ariz. 446, 450, ¶ 4 (App. 2006) (citing Romley v. Arpaio, 202 Ariz. 47, 51, ¶ 12 (App. 2002)). Summary judgment is proper if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(a); Orme Sch. v. Reeves, 166 Ariz. 301, 305 (1990). Summary judgment is also proper when the facts supporting a claim "have so little probative value, given the quantum of evidence required," that no reasonable person could find for its proponent. Orme Sch., 166 Ariz. at 309. We also review de novo the application of the statute of limitations, including the question of accrual. Cook v. Town of Pinetop-Lakeside, 232 Ariz. 173, 175, ¶ 10 (App. 2013) (quoting Montano v. Browning, 202 Ariz. 544, 546, ¶ 4 (App. 2002)).

¶13 The parties disagree regarding the applicable limitations period, but, even assuming the longest, four-year period applies, see A.R.S. § 12-550 (setting the general limitations period at "four years after the cause of action accrues, and not afterward"), all of Kresock's claims are time-barred.

¶14 All of Kresock's claims arise out of purported mishandling and misreporting of assets contained in the marital estate, which was dissolved in accordance with the December 2002 decree. Kresock did not file his civil complaint until November 2013, and all claims accruing before November 2009 are time-barred. Kresock argues his claims were timely because he did not discover the facts giving rise to these claims until 2013. When a cause of action accrues and when it is discovered are generally questions of fact, but they may be determined as a matter of law when the plaintiff was ...