State ex rel. Corbin v. Pickrell

• Decision Date: 21 July 1983
• Docket Number: No. 16375-SA,16375-SA
• Citation: 136 Ariz. 589,667 P.2d 1304
• Court: Arizona Supreme Court
• Parties: , Blue Sky L. Rep. P 71,838 STATE of Arizona, ex rel. Robert K. CORBIN, Attorney General, and the Arizona Corporation Commission, Petitioners, v. The Honorable Robert W. PICKRELL, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, and Cara E. Brock, aka Cara E. Thompson, a single person; Stephen H. Christian, aka Steven Cline, and Steve Clay and Steve Clay Cline, a single person; Barbara J. Schaer aka Barbara J. Miller, a single person; Russell B. Smith, III and Deborah Smith, husband and wife; Arizona Utah Colorado Development Corporation, an Arizona corporation; Double Eagle, Ltd., a British West Indies corporation; Ore Resources Development Enterprises, Ltd., an Oregon corporation; Llouvia Del Oro Mining Company; Llouvia Del Oro # 4 Mining Company, an Oregon corporation; Llouvia Del Oro Mining Company # 6; Llouvia Del Oro Mining Company # 14, a Utah corporation; Paramount Financial Consulting & Guarantee Co.; Financial Services & Guarantee Co.; Nquir Financials, Ltd.; Tax International Planning Systems Corporation, aka Tips, a Colorado corporation; and Limitax, real parties in interest, Respondents.

Page 1304

667 P.2d 1304

136 Ariz. 589, Blue Sky L. Rep. P 71,838

STATE of Arizona, ex rel. Robert K. CORBIN, Attorney General, and the Arizona Corporation Commission, Petitioners, v. The Honorable Robert W. PICKRELL, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, and Cara E. Brock, aka Cara E. Thompson, a single person; Stephen H. Christian, aka Steven Cline, and Steve Clay and Steve Clay Cline, a single person; Barbara J. Schaer aka Barbara J. Miller, a single person; Russell B. Smith, III and Deborah Smith, husband and wife; Arizona Utah Colorado Development Corporation, an Arizona corporation; Double Eagle, Ltd., a British West Indies corporation; Ore Resources Development Enterprises, Ltd., an Oregon corporation; Llouvia Del Oro Mining Company; Llouvia Del Oro # 4 Mining Company, an Oregon corporation; Llouvia Del Oro Mining Company # 6; Llouvia Del Oro Mining Company # 14, a Utah corporation; Paramount Financial Consulting & Guarantee Co.; Financial Services & Guarantee Co.; Nquir Financials, Ltd.; Tax International Planning Systems Corporation, aka Tips, a Colorado corporation; and Limitax, real parties in interest, Respondents.

No. 16375-SA.

Supreme Court of Arizona, In Banc.

July 21, 1983.

As Amended Oct. 26, 1983.

Robert K. Corbin, Atty. Gen. by Patrick M. Murphy, Michael W. Sillyman, Colleen M. Parker, Asst. Attys. Gen., Phoenix, for petitioners

Levy, Mason & Sherwood by Andrew R. Sherwood, Thomas L. Abram, Philip L. Latish, Phoenix, for respondent Schaer.

Harrison & Lerch by Stephen M. Dichter, Phoenix, and Kirby, Gillick, Schwartz & Tuohey by Mark H. Tuohey, III, Washington, D.C., for respondents Brock, Christian, Entities.

Lewis & Roca by Judith E. Sirkis, Walter Cheifetz, Phoenix, for respondent Smith.

A. Melvin McDonald, U.S. Atty., Phoenix, Stephen G. Udall, Apache County Atty., St. Johns, Beverly Jenney, Cochise County Atty., Bisbee, John Verkamp, Coconino County Atty., Flagstaff, Robert Duber, Gila County Atty., Globe, Jack Williams, Graham County Atty., Safford, William A. Coffeen, Greenlee County Atty., Clifton, Don Moon, La Paz County Atty., Parker, Thomas E. Collins, Maricopa County Atty., Phoenix, William J. Ekstrom, Jr., Mohave County Atty., Kingman, Jay V. Flake, Navajo County Atty., Holbrook, Stephen D. Neely, Pima County Atty., Tucson, Roy A. Mendoza, Pinal County Atty., Florence, Dennis T. Fenwick, Santa Cruz County Atty., Nogales, Charles R. Hastings, Yavapai County Atty., Prescott, David S. Ellsworth, Yuma County Atty., Yuma, amici curiae.

FELDMAN, Justice.

Petitioners bring this special action alleging that the trial judge abused his discretion in granting a motion to dismiss four counts of petitioners' complaint for failure to state a claim. Since there is no adequate remedy by appeal and the issues raised in this special action are of important public interest, Engle Brothers, Inc. v. Superior Court, 23 Ariz.App. 406, 407, 533 P.2d 714, 715 (1975), we accepted jurisdiction pursuant to Ariz. Const. art. 6, § 5(4).

Petitioners, the State of Arizona and Arizona Corporation Commission, brought an action against several individuals and business enterprises (respondents) based on illegal sales of securities. Petitioners' complaint alleged three claims for relief under the Arizona Securities Act based on the offer and sale of unregistered securities, § 44-1841; the offer and sale of securities Respondents moved to dismiss the consumer fraud and RICO counts of the complaint. Respondents' motion to dismiss asserted that securities violations could not be the basis of consumer fraud violations. Respondents also argued that petitioners failed to state a claim under RICO since they did not allege a special "racketeering injury" distinct from the injury caused by the securities violation. The trial judge granted respondents' motion to dismiss and the State then filed this special action, alleging that the trial judge abused his discretion and exceeded his legal authority.

by unregistered dealers or salesmen, § 44-1842; and fraud in connection with the offer and sale of securities, § 44-1991. The securities sales also served as the basis for two counts alleging violations of the Arizona Consumer Fraud Act, §§ 44-1522 and 44-1531. The complaint also contained three counts based on violations of the Arizona Racketeering Act (RICO) alleging the use of fraudulent schemes and artifices to defraud, § 13-2310; control of an enterprise through racketeering, § 13-2312(A) and conducting an enterprise through racketeering, § 13-2312(B). Additionally, petitioners' complaint sought the involuntary dissolution of one corporation pursuant to § 10-094.

THE CONSUMER FRAUD COUNTS

Respondents contend that the trial judge acted properly in dismissing the consumer fraud counts and argue that the dismissal was mandated by the opinion of the court of appeals in People ex rel. Babbitt v. Green Acres Trust, 127 Ariz. 160, 618 P.2d 1086 (App.1980). In Green Acres Trust, the court held that violations of the securities act could not be alleged as the basis for a cause of action under the consumer fraud act. The court based its holding on its determination that the legislature did not intend the consumer fraud act to provide cumulative remedies. The court noted that the securities act was a comprehensive regulatory scheme which already provided relief in the form of a "self-contained consumer fraud act in the specialized field of securities." Id. at 165, 618 P.2d at 1091. The court stated that it could not accept the proposition that the legislature "by enactment of the Consumer Fraud Act, intended to provide an additional avenue of relief" to those aggrieved by securities act violations. Id. We note, however, that soon after the opinion in Green Acres Trust, the legislature amended the consumer fraud act to provide: "The provisions of this article are in addition to all other causes of action, remedies and penalties available to this state." A.R.S. § 44-1533(A) (Supp.1982-1983) (amended 1981 Ariz.Sess.Laws, Ch. 295, § 5). Thus, the holding in Green Acres Trust was stripped of its foundation and cannot be considered a correct interpretation of the amended consumer fraud act.

Respondents argue, however, that there is no legislative history indicating that the amendment was intended to overturn the Green Acres Trust decision. We note, though, that there is no legislative history to the contrary and that the timing of the amendment justifies an inference that the amendment was intended to reverse the effect of the decision in Green Acres Trust. Further, it is a basic tenet of statutory construction that where the statutory language is unambiguous, that language must ordinarily be regarded as conclusive, absent a clearly expressed legislative intent to the contrary. United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981); Smith v. Pima County Law Enforcement Council, 113 Ariz. 154, 157, 548 P.2d 1151, 1154 (1976); Arizona State Board of Directors for Junior Colleges v. Phoenix Union High School District of Maricopa County, 102 Ariz. 69, 71, 424 P.2d 819, 821 (1967).

We believe that the clear language of the amendment mandates the conclusion that the legislature intended the consumer fraud act to provide an additional avenue of relief to those aggrieved by securities act violations.

Respondents contend, however, that the amendment is unconstitutional because the bill amending the section did not satisfy Every act shall embrace but one subject and matters properly connected therewith, which subject shall be expressed in the title, but if any subject shall be embraced in an Act which shall not be expressed in the title, such Act shall be void only as to so much thereof as shall not be embraced in the title.

the requirements of Ariz. Const. art. 4, pt. 2, § 13, which provides as follows:

This provision has been interpreted to require that the title of a bill give notice of what is contained in the body of the act. State v. Sutton, 115 Ariz. 417, 419, 565 P.2d 1278, 1280 (1977). The test generally applied is that any provision having a natural connection with the title of the act is properly embraced in the act. White v. Kaibab Road Improvement District, 113 Ariz. 209, 211, 550 P.2d 80, 82 (1976). Where, however, "the title particularizes some of the changes to be made by amendment, the legislation is limited to the matters specified and anything beyond them is void, however germane it may be to the subject of the original act." State v. Sutton, 115 Ariz. at 419-20, 565 P.2d at 1280-81.

The bill amending § 44-1533 was titled:

An Act relating to trade and commerce; prescribing consumer fraud investigatory authority of the attorney general; prescribing methods of service of demand or subpoena; providing for certain in camera hearings; prescribing applicability of certain remedies and penalties; prescribing uses of revolving fund; exempting certain monies in the fund from lapsing, and amending sections 44-1524, 44-1526, 44-1527, 44-1531.01 and 44-1533, Arizona Revised Statutes.

1981 Ariz.Sess.Laws, Ch. 295, at 990 (emphasis supplied).

Respondents argue that the amendment establishes a new cause of action under the consumer fraud act--one based on the violation of the securities laws--and that the title does not give notice of this fact. We reject respondents' argument. The act was not amended to create a new cause of action, but, rather, to make the remedies available under the act cumulative to other legal remedies. The portion of the act proscribing unlawful practices was not changed. See A.R.S. § 44-1522. Although, as we held earlier, securities violations may now serve as the basis for consumer fraud claims, this is only an effect of the amendment providing for cumulative remedies. The title of the bill adequately specifies that it is the remedies portion of the act which is being amended in the language "prescribing the...