Southern Union Co. v. Southwest Gas Corp.

• Decision Date: 27 August 2003
• Docket Number: No. CV-99-1294-PHX-ROS.,CV-99-1294-PHX-ROS.
• Citation: 281 F.Supp.2d 1117
• Parties: SOUTHERN UNION COMPANY, a Delaware corporation, Plaintiff, v. SOUTHWEST GAS CORPORATION, a California corporation, et al., Defendants.
• Court: Arizona Supreme Court

281 F.Supp.2d 1117

SOUTHERN UNION COMPANY, a Delaware corporation, Plaintiff, v.SOUTHWEST GAS CORPORATION, a California corporation, et al., Defendants.

No. CV-99-1294-PHX-ROS.

United States District Court, D. Arizona.

August 27, 2003.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

N Warner Lee, Esq, William B. McManus, Esq, Ryley Carlock & Applewhite PA, Robert E. B. Allen, Esq, Charles Steven Price, Esq, Barry R. Sanders, Esq, Allen Price & Padden PLC, Phoenix, AZ, Eric D. Herschmann, Jessica Mann, Michael M. Fay, Kasowitz Benson Torres & Friedman LLP, New York, NY, Tom Q. Ferguson, Shelly L. Dalrymple, Sam P. Daniel, Jr., Doerner Saunders Daniel & Anderson, Tulsa, OK, Christina Carlson Dodds, Daniel W Bishop, II, Daniel W Bishop II PC, Austin, TX, Thomas Anton Mauet, Tucson, AZ, for Plaintiff.

Michael J O'Connor, Esq, Richard R Thomas, Esq, Douglas F Behm, Michael Scott McCoy, Esq, Michael J Farrell, Jennings Strouss & Salmon PLC, Phoenix, AZ, Seth Aronson, Esq, Marc F Feinstein, Patrick Lynch, Floy E Andrews, O'Melveny & Myers LLP, Angeles, CA, Michael R Klein, Steven F Cherry, Howard M Shapiro, David P Donovan, Wilmer Cutler & Pickering, Washington, DC, Michael J Bowe, Kasowitz Benson Torres & Friedman LLP, New York, NY, Thomas R Sheets, Southwest Gas Corporation, Las Vegas, NV, Paul J Cleary, Scott R Rowland, Boone Smith Davis Hurst & Dickman, Tulsa, OK, Steve Morris, Kristina Pickering, Morris Pickering & Sanner, Las Vegas, NV, Mark M Deatherage, Esq, Michael K Kennedy, Esq, Tom Henze, Esq, Gallagher & Kennedy PA, Phoenix, AZ, John J Swenson, Esq, Richard Joseph Doren, Esq, Thomas E Holliday, Gibson Dunn & Crutcher LLP, Los Angeles, CA, John Henry Rule, Oliver Sterling Howard, Thomas James Kirby, David E Keglovits, Amelia A Fogleman, Gable & Gotwals, Tulsa, OK, David J Damron, Esq, Shannon M Ivanyi, Victoria P Skinner, Sanders & Parks PC, Michael A Beale, Esq, Keith Thomas Slack, Esq, Beale Micheaels & Slack PC, Samuel Brett Benham, Phoenix, AZ, C Stanley Hunterton, Hunterton & Associates, Las Vegas, NV, Michael P Anthony, Esq, Carson Messinger Elliott, Laughlin & Ragan PLLC, Phoenix, AZ, Michael W Sillyman, Esq, Brian Jay Schulman, Kutak Rock LLP, Scottsdale, AZ, Edward Jeffrey Walsh, Esq, Greenberg Traurig LLP, Phoenix, AZ, Barry Richard, Greenberg Traurig PA, Tallahassee, FL, Louis A Stahl, Esq, Quarles & Brady Streich Lang LLP, Phoenix, AZ, Michael D Kimerer, Esq, Thomas V Rawles, Esq, Kimerer & Derrick PC, Phoenix, AZ, Michael L Piccarreta, Esq, Piccarreta & Davis PC, Tucson, AZ, Mark M Deatherage, Esq, Tom Henze, Esq, Phoenix, AZ, John Henry Rule, Oliver Sterling Howard, Thomas James Kirby, Gable & Gotwals, Tulsa, OK, David G Derickson, Esq, William Ridgeway Harrison, David G Derickson PC, Phoenix, AZ, for Defendants.

Opinion

SILVER, District Judge.

On December 18, 2002, the jury returned a verdict for PlaintiffSouthern Union Company("Southern Union" or "SUG") against DefendantJames Irvin("Irvin" or "Commissioner Irvin").This Order summarizes and explains a number of evidentiary rulings made during trial and the Court's decision to deny Irvin's Motion for Judgment Notwithstanding the Verdict.In particular, on December 10, 2002, the Court held a hearing and issued final rulings on the admissibility of certain evidence raised during the cross-examination of Commissioner Irvin.The Court allowed Plaintiff Southern Union to question Irvin on notes written by his wife, Carol Irvin, in October 2002, and on the Clean Elections Act Qualifying Contribution Form ("Qualifying Contribution Form" or "Contribution Form" or "Form") signed by Irvin in May 2002 under penalty of perjury.The Court promised a written opinion would follow.This is that opinion.

I.Background

On December 18, 2002, after a jury trial of nearly two months, the jury returned a verdict for PlaintiffSouthern Union Company("Southern Union") against James Irvin, the only remaining Defendant at the conclusion of trial.¹Plaintiff prevailed on both causes of action, intentional interference with business expectancy and intentional interference with contractual relations, caused by Irvin's improper and wrongful activities in early 1999 to bring about the merger between Southwest Gas Corporation(SWG) and ONEOK, Inc. instead of SWG and Plaintiff.The evidence of wrongful conduct established that Irvin, a Corporation Commissioner at the time of the activities relating to the merger, was instrumental in ensuring that ONEOK rather than the Plaintiff was the chosen merger partner by the SWG Board of Directors.

During cross-examination of Defendant Irvin, Plaintiff was allowed to pursue questioning on two issues.²First was the notes of a purported conversation Carol Irvin, the wife of Commissioner Irvin, had with Jack Rose in July 1999 and her statement of an alleged event she witnessed in 1999, that was memorialized in the statement.The two separate documents ("the Carol Irvin notes") were initially brought to the Court's and to counsels' attention by Irvin's counsel on October 24, 2002 and proffered as new and material evidence.After Southern Union informed counsel and the Court that a forensic examiner would be proffered to testify to his opinion regarding when the notes were prepared, the following afternoon counsel for Irvin withdrew the notes as possible evidence.The second issue was evidence that Irvin had been untruthful in signing a Qualifying Contribution Form from a supposed contributor, Ken Dickson, who swore that he never contributed money to Irvin despite the express statement on the form to the contrary.Plaintiff sought to introduce Irvin's false statements on the Contribution Form as impeachment evidence.

II.The Carol Irvin Notes

On October 24, 2002, the week before trial began, Irvin's counsel informed the Court in the late evening that new evidence had been discovered and would be offered at trial.This evidence included two pages of notes written by Carol Irvin dated "7-31-99."The notes described a telephone conversation between Carol Irvin and DefendantJack Rose, an assistant to Irvin at the time of the failed merger, occurring on July 31, 1999, and the notes were represented as made "contemporaneously" with the 1999 conversation.The notes unambiguously expressed that Rose allegedly informed Ms. Irvin of his sentiment and opinion, that he was principally involved in working on the merger while "Jim [Irvin was] not involved."The notes continued, in part, to exculpate Irvin with Rose's alleged remarks that "Jim [Irvin] did nothing wrong—Jack working with others to bring Oneok to AZ. Jim not involved—trusted Jack to do research....Jack did a lot without Jim knowing cuz Jim busy at Commiss.Jack working in AZ Best interest.When will Jim be home—Jack needs to tell Jim s-o-o much he doesn't know! .... Call me anytime!I'm there for you!Don't worry—we did nothing wrong."

Further, the notes were written on the back of unrelated documents dated March 30, 1998 and April 8, 1998, which gave credence to the statement of Irvin's counsel that the notes were made in 1999, contemporaneously with the phone call.Concomitantly, the written statement of an event occurring in 1999, which was represented as drafted by Carol Irvin two weeks prior to the October 24 hearing, was written on blank paper.This feature further supported the proposition that the notes, in contrast, were made contemporaneously during the Rose conversation.Also, the notes are not complete sentences but are unconnected words or phrases appearing as if Carol Irvin was listening to Rose speak and hurriedly taking down the meaning of the statements.In comparison, however, the memorandum of the event in 1999 was written with complete sentences and appropriate paragraphs as if written in thoughtful recollection of that event.

After Irvin's counsel presented the notes to the Court and opposing counsel, the Court ordered Irvin's counsel to produce the documents for inspection by Plaintiff's and Rose's counsel.On October 31, 2002, Plaintiff's counsel requested an opportunity to conduct a forensic examination of the notes, and the Court granted the request.In the morning of November 1, 2002, counsel for Irvin phoned the Court and requested an emergency hearing that day, which was held the same afternoon.At the telephonic hearing, Irvin's counsel began with the assertion that "there was considerable confusion on the communication on those notes."Transcript ("Tr.")at 1286.He then retracted his earlier statement that the notes of the 1999 conversation between Rose and Carol Irvin had been made "contemporaneously" at the time of the phone call.He elaborated, stating that the notes had actually been prepared by Carol Irvin sometime the week before October 24, at the same time she prepared the statement memorializing the event she witnessed in 1999, and apologized for his misunderstanding of Carol Irvin's description of the notes.Id. at 1289.Essentially, he explained that when she used the word "original" in describing the notes she did not mean that they were contemporaneously written during the conversation with Rose.

The testimony of Carol Irvin was given at a hearing convened to determine if Commissioner Irvin and Carol Irvin fabricated evidence with the intent that his lawyers use it in his defense, and concomitantly whether it would be admitted at trial.The Court learned for the first time that Carol Irvin claimed that she did take notes contemporaneously during the conversation with Rose in 1999, but that on October 23, 2002she recopied them on another piece of paper, and then destroyed the original.She gave no credible explanation for, on the eve of trial, recopying the original notes three years after they were written, and then destroying the originals.She gave no credible reason for the Court to dismiss the obvious indicia supporting the first proposition of Irvin's lawyers, that she clearly told Irvin's counsel that...