Scott v. Nussbaum
| Decision Date | 03 April 2018 |
| Docket Number | No. 1 CA-CV 16-0583,1 CA-CV 16-0583 |
| Parties | R. DALE SCOTT and MARY JANE SCOTT, husband and wife; SCOTT HOSPITALITY, LLC, an Arizona limited liability company, Plaintiffs/Appellants, v. RANDY NUSSBAUM and POLLY MORRIS husband and wife; GREGORY P. GILLIS and BETTY GILLIS, husband and wife; NUSSBAUM AND GILLIS P.C.; NUSSBAUM, GILLIS & DINNER, P.C.; JABURG & WILK, P.C., Arizona professional corporation, Defendants/Appellees. |
| Court | Arizona Court of Appeals |
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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
The Honorable Arthur T. Anderson, Judge
AFFIRMED
Treon & Aguirre, PLLC, Phoenix
By Richard T. Treon
Counsel for Plaintiffs/Appellants
Broening Oberg Woods & Wilson, PC, Phoenix
Counsel for Defendants/Appellees Randy Nussbaum, Polly Morris, Gregory Gillis, Betty Gillis, Nussbaum & Gillis P.C., and Nussbaum, Gillis & Dinner, P.C.
By Roger L. Cohen, David N. Farren
Counsel for Defendant/Appellee Jaburg & Wilk, P.C.
MEMORANDUM DECISIONJudge Kenton D. Jones delivered the decision of the Court, in which Presiding Judge Randall M. Howe and Judge James B. Morse Jr. joined.
¶1 Appellants (collectively, Scott) appeal the trial court's order granting summary judgment in favor of Appellees on Scott's claims for legal malpractice. For the following reasons, we affirm.
¶2 In August 2007, Scott sued Five Star Development, Inc., Five Star Development Resort Communities, L.L.C., and their principals (collectively, Five Star) to recover a real estate commission related to Scott's actions in assisting Five Star with the purchase and development of real property in Maricopa County in 2004. The trial court in Scott I granted summary judgment in favor of Five Star after finding Scott was not entitled to payment because he did not have a written agreement for brokerage services and did not have a valid real estate license during the relevant times. This Court affirmed that analysis on appeal in February 2011. See Scott v. Five Star Dev., Inc., 1 CA-CV 10-0139, 2011 WL 540292, at *7, ¶ 40 (Feb. 15, 2011) (mem. decision).
¶3 Thereafter, Scott filed a second action against Five Star. In Scott II, Scott sought tort damages for fraud, intentional interference with a prospective economic advantage, and intentional infliction of emotional distress, all on the theory that Five Star wrongfully employed Scott's services and prevented Scott from working with other developers without any intention to compensate him. In May 2014, the trial court in Scott IIgranted summary judgment in favor of Five Star on multiple grounds, finding that: (1) Scott was precluded from bringing tort claims that arose from the same transaction that formed the basis of Scott I, (2) Scott failed to bring his tort claims within the applicable statutes of limitations, and (3) Scott was unable to prove his damages resulted from Five Star's conduct, rather than his own failure to procure a written contract and maintain his real estate license. Scott did not appeal the Scott II judgment.
¶4 In May 2015, Scott brought the present action against Appellees, his legal counsel in Scott I and II, alleging they committed malpractice by failing to timely identify and plead the tort claims raised in Scott II.1 Appellees immediately moved for summary judgment, arguing, inter alia, that the Scott II judgment, concluding that Scott was unable to prove causation on his tort claims, proved that he was not damaged by attorney negligence. The trial court granted Appellees' motions and entered final judgment in their favor. Scott timely appealed, and we have jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) §§ 12-120.21(A)(1)2 and -2101(A)(1).
¶5 Scott argues the trial court erred in granting Appellees' motion for summary judgment. Summary judgment is appropriate when "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); Nat'l Bank of Ariz. v. Thruston, 218 Ariz. 112, 115, ¶ 14 (App. 2008). When reviewing a grant of summary judgment, we view the facts in the light most favorable to the non-moving party. Campbell v. SZL Props., Ltd., 204 Ariz. 221, 223, ¶ 8 (App. 2003) (quoting Hartford Accident & Indem. Co. v. Fed. Ins., 172 Ariz. 104, 107 (App. 1992)). We then determine de novo whether a genuine issue of material fact exists and whether the court correctly applied the substantive law. Id. (citing Gonzalez v. Satrustegui, 178 Ariz. 92, 97 (App. 1993)).
¶6 Appellees urge us to affirm the trial court's application of collateral estoppel to bar Scott's negligence claim against them. We hesitate to do so where the estoppel traces back to a judgment against Scott purportedly occasioned by Appellees' misconduct. To adopt Appellees' position would sanction, as a general rule of law, the ability of an attorney to malpractice himself out of a malpractice case. We need not decide the issue, however, because we may affirm summary judgment on any ground argued by the parties and supported by the record. KB Home Tucson, Inc. v. Charter Oak Fire Ins., 236 Ariz. 326, 329, ¶ 14 (App. 2014) (citing Mutschler v. City of Phx., 212 Ariz. 160, 162, ¶ 8 (App. 2006)). Here, even accepting Scott's facts as true, his malpractice claim fails as a matter of law.
¶7 To prevail on a claim for legal malpractice, a plaintiff must prove duty, breach, causation, and damages. See Glaze v. Larsen, 207 Ariz. 26, 29, ¶ 12 (2004) (citing Phillips v. Clancy, 152 Ariz. 415, 418 (App. 1986)). A plaintiff is entitled to relief only if he can prove that "but for the attorney's negligence, he would have been successful in the prosecution or defense of the original suit." Phillips, 152 Ariz. at 418; see also Amfac Distrib. Corp. v. Miller, 138 Ariz. 152, 154 (1983) (). Thus, the plaintiff must prove "a " Phillips, 152 Ariz. at 418 (quoting Frey v. Stoneman, 150 Ariz. 106, 111 (1986)).
¶8 Within his complaint, Scott alleges Appellees were negligent in failing to timely file claims of fraud and intentional interference with prospective economic advantage against Five Star, depriving him of his opportunity to recover the resulting losses.3 To prevail on this attorney malpractice claim, Scott must prove he would have been successful on those claims had they been timely filed. See id. Scott cannot do so here.
¶9 Fraud requires proof of nine elements:
(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by and in the manner reasonably contemplated; (6) the hearer's ignoranceof its falsity; (7) his reliance on the truth; (8) his right to rely thereon; and (9) his consequent and proximate injury.
Lininger v. Sonenblick, 23 Ariz. App. 266, 267 (1975) (citations omitted). But a party has no right to rely upon oral representations that are unenforeceable because they are required to be memorialized in writing. Id. at 268-69.
¶10 For example, in Lininger, the plaintiff-buyer brought a fraud claim against the defendant-seller, alleging the seller had agreed to a stock sale but later refused to reduce the understanding to writing. Id. at 267. This Court found the sale was governed by the statute of frauds, see A.R.S. § 44-101, and unenforceable if not memorialized in writing. Id. at 268. Thus, "the alleged agreement was no agreement at all until it was placed in written form," and the buyer "had no right to rely on representations made by [the seller] as to the terms of the agreement until there was, in fact, an agreement." Id. The Court concluded that, "without the right to rely, [the buyers] were unable to maintain an action for fraud." Id. at 269. The Court acknowledged that its holding potentially benefited the deceitful defendant, who "at the time of the making of the oral contract may have had no intention of performing it" but determined the solution was nonetheless "best calculated to uphold the theory upon which the statute of frauds is founded." Id. (quoting Canell v. Arcola Hous. Corp., 65 So. 2d 849, 851 (Fla. 1953)); see also McMurran v. Duncan, 17 Ariz. 552, 555-56 (1916) ().
¶11 The same reasoning applies here. Scott alleges Five Star fraudulently induced him to maintain the relationship by its false promise to pay. But "an agreement authorizing or employing an agent or broker to purchase or sell real property, or mines, for compensation or a commission" is unenforceable if not memorialized "in writing and signed by the party to be charged." A.R.S. § 44-101(7); see also Butterfield v. MacKenzie, 37 Ariz. 227, 229 (1930) (). Scott admits he did not have a written contract with Five Star. In the absence of a written agreement authorizing Scott to work on Five Star's behalf, Scott had no right to rely upon representations made by Five Star as to the agreement's supposed terms. Accordingly, Scott's fraud claim fails as a matter of law, and therefore, he cannot win the as required by Phillips.
¶12 A person is liable for intentional interference with a prospective contractual relationship if he ...
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