Senior Advisory Grp. of America, Inc. v. McDowell
| Decision Date | 08 December 2011 |
| Docket Number | No. 1 CA-CV 11-0080,1 CA-CV 11-0080 |
| Parties | SENIOR ADVISORY GROUP OF AMERICA, INC., an Arizona corporation, Plaintiff/Counterdefendant/ Appellant, v. CHRIS MCDOWELL and ELIZABETH LANGFORD, husband and wife, Defendants/Counterclaimants/ Appellees. |
| Court | Court of Appeals of Arizona |
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)
The Honorable John Christian Rea, Judge
AFFIRMED
Jackson White P.C.
By Roger R. Foote
John N. Skiba
Attorneys for Plaintiff/Counterdefendant/Appellant
Mesa
Vescio Law Firm P.C.
By Theresa L. Seifert
Lynda R. Vescio
Attorneys for Defendants/Counterclaimants/Appellees
Glendale
¶1 Senior Advisory Group of America, Inc. ("SAG") appeals from the judgment entered in favor of Chris McDowell after a jury trial. For the following reasons, we affirm.
¶2 SAG, a wholesaler of insurance products, was founded by Steve Stern. It is one of 13 independent marketing organizations that sell a fixed annuity called BalancePlus Annuity and belongs to the Annexus Group. SAG and other members of the Annexus Group employ marketers who search for agents to sell their products.
¶3 In September 2008, Steve Stern asked McDowell if he would be interested in working for SAG. McDowell declined an employee position, but agreed to work as an independent contractor through at least the end of the year. He began work in October 2008 at a flat rate of $8500 per month. Shortly thereafter, SAG asked McDowell to help create a new database. McDowell was reportedly responsible for the migration of information from SAG's old database to its new one. The database contained detailed information about each of SAG's agents. The data ranged from an agent's contact information tohow often an agent sold products. To assist in the process, Brad Stern, SAG's vice president, gave McDowell a copy of SAG's old database.
¶4 When McDowell and SAG were negotiating his contract, McDowell told the Sterns that he was currently working with and would continue to work for other clients. On December 17, 2008, while working for SAG, McDowell acquired a 15% interest in Ignite Financial Group ("Ignite"), an insurance wholesaler. Dennis Rackers owned the remaining 85%. McDowell informed SAG of his ownership interest in Ignite on January 2, 2009. Ignite was never a member of the Annexus Group, and it ceased doing business in March 2009 because it was unsuccessful.
¶5 On January 10, 2009, McDowell terminated his contract with SAG after it accused him of not doing his job and threatened to take legal action. McDowell still possessed the copy of SAG's database that Brad Stern had given him. Six days later, SAG filed a lawsuit in the superior court, accusing McDowell of breach of contract, misappropriation of trade secrets, conspiracy, unjust enrichment, and misrepresentation.2 McDowell counterclaimed, alleging defamation and interference with prospective business advantage.
¶6 A five-day jury trial ensued. After SAG presented its case-in-chief, McDowell moved for judgment as a matter of law ("JMOL") on all of SAG's claims. The court granted the motion as to the unjust enrichment and conspiracy claims, as well as the breach of contract claim stemming from an alleged violation of a non-disclosure provision. The court denied McDowell's motion as to SAG's misappropriation of trade secrets and negligent misrepresentation claims. After McDowell presented his case, SAG moved for JMOL on the counterclaims. The court granted the motion as to the claims for interference with prospective business advantage and punitive damages, but denied the motion as to the defamation counterclaim. The jury returned a unanimous verdict in favor McDowell on all of SAG's remaining claims. It also found in favor of McDowell on the defamation claim and awarded him $153,000 in damages.
¶7 SAG renewed its motion for JMOL and filed a motion for new trial. McDowell moved for an award of attorneys' fees and costs. The court denied SAG's renewed JMOL motion and its motion for new trial. It awarded McDowell $87,437.54 in attorneys' fees and costs.
¶8 The court entered final judgment on December 10, 2010, and SAG filed a timely appeal. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") sections 12-2101(A)(1) and (A)(5)(a).
¶9 SAG contends the defamation counterclaim should not have been submitted to the jury because there was no proof it made defamatory statements about McDowell. We will affirm the jury's verdict if there is substantial evidence to support it. See Gonzales v. City of Phoenix, 203 Ariz. 152, 153, ¶ 2, 52 P.3d 184, 185 (2002). "Substantial evidence is any relevant evidence from which a reasonable person might draw a conclusion." Mealey v. Arndt, 206 Ariz. 218, 221, ¶ 12, 76 P.3d 892, 895 (App. 2003) (internal quotation marks and citation omitted).
¶10 McDowell's defamation counterclaim alleged: (1) Brad and/or Steve Stern "published by way of written and/or spoken words, false and defamatory communications regarding McDowell to third parties[;]" (2) SAG knew "the statements it made about McDowell to third parties were false and defamed McDowell, or SAG acted in reckless disregard of the truth of the matters it published, or acted negligently in failing to obtain the truth of the matters it published to third parties[;]" and (3) SAG's false and defamatory statements brought McDowell "into contempt, disrepute, ridicule, and/or impeached his honesty, integrity, virtue or reputation." At the conclusion of trial, the court instructed the jury on the defamation claim as follows:
Defendant Chris McDowell has alleged that Plaintiff Senior Advisory Group has defamed him. To prove a claim for defamation, Defendant, as a private person must prove that SAG made a statement to a third party about McDowell and: a) knew that the statement was false and that it defamed McDowell; b) acted in reckless disregard of the truth of the statement; or c) acted negligently in failing to ascertain the truth of the statements.
¶11 SAG does not challenge this jury instruction. A statement is defamatory when it is false and brings the defamed person into disrepute, contempt, or ridicule, or impeaches his honesty, integrity, virtue, or reputation. Turner v. Devlin, 174 Ariz. 201, 203-04, 848 P.2d 286, 288-89 (1993) (citation omitted).
¶12 According to SAG, there was no evidence that it or its agents made defamatory statements about McDowell. After considering the trial evidence and the reasonable inferences therefrom in the light most favorable to sustaining the verdict, we conclude otherwise. We concur with the trial court's determination that there was "sufficient circumstantial evidence for the jury to infer the existence of the elements of defamation."
¶13 Direct and circumstantial evidence have equal probative value, and a verdict may be supported entirely by circumstantial evidence. See Lohse v. Faultner, 176 Ariz. 253, 259, 860 P.3d 1306, 1312 (App. 1992). Considered together, thetrial testimony of Mike Rossi, Dennis Rackers, Ron Shurts, and Chris McDowell could lead reasonable jurors to find that SAG, through the Sterns, falsely told third parties that McDowell had misappropriated SAG's proprietary information specifically, its database.3 Rackers, for example, testified that Shurts questioned him after Steve Stern told Shurts that Rackers was using SAG's database. On January 24, 2009, Shurts sent an email to several members of the Annexus Group that read:
¶14 Shurts testified that he sent this e-mail after speaking with Rackers about SAG's database, and thus, after speaking with Steve Stern. Shurts further testified:
¶15 When asked whether anyone told him that McDowell stole the database from SAG, Rossi testified that he did not believe the word "stole" was used, though there were "inference[s]" that McDowell had unauthorized access to SAG's database.
¶16 In reviewing the trial evidence, it is not an appellate court's role to reweigh the evidence to determinewhether we would reach the same verdict as the jury. State v. Guerra, 161 Ariz. 289, 293, 778 P.2d 1185, 1189 (1989). The appellate court must not ...
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