State v. Mecham, 1
| Court | Court of Appeals of Arizona |
| Citation | 173 Ariz. 474,844 P.2d 641 |
| Docket Number | CA-CV,No. 1,1 |
| Parties | STATE of Arizona, Plaintiff-Appellee, v. Evan MECHAM and Florence Mecham, husband and wife, Defendants-Appellants. 90-423. |
| Decision Date | 29 September 1992 |
Page 641
v.
Evan MECHAM and Florence Mecham, husband and wife, Defendants-Appellants.
Division 1, Department A.
Review Denied Feb. 2, 1993. *
Page 643
[173 Ariz. 476] Guttilla & Murphy by Patrick Murphy, Phoenix, for plaintiff-appellee.
Crowe & Scott by Michael B. Scott, Phoenix, for defendants-appellants.
TOCI, Judge.
Following the 1986 general election, several of then-Governor Mecham's supporters formed an Inaugural Committee (the "Committee"). The Committee raised money and deposited it in the Mecham Inaugural Fund to finance Governor Mecham's private inaugural activities and to pay off his campaign debt. The Maricopa County Attorney (the "County Attorney") threatened to sue the Committee, claiming its activities violated newly-enacted campaign finance laws. The Committee compromised the dispute by transferring the Mecham Inaugural Fund to the office of the Governor. Once transferred to the Governor's office, the money was referred to as the "Protocol Fund."
After the Governor was impeached and removed from office, he claimed the Protocol Fund belonged to him and refused to turn over the money to his successor. This suit resulted. The trial court granted the State's motion for summary judgment and awarded to the State the money in the Protocol Fund, civil penalties, and attorney's fees.
The Mechams appeal only from the denial of their motion to vacate the judgment and for new trial ("motion to vacate"). We hold that the facts produced in support of Mechams' claim have so little probative value that reasonable people could not conclude either that the Committee acted without authority, or that the Protocol Fund held by the Governor in his official capacity was anything other than "public money." We, therefore, affirm the trial court's denial of the Mechams' motion to vacate.
I. FACTS AND PROCEDURAL HISTORY
The following facts are uncontroverted. In 1986, Arizona voters elected Evan Mecham Governor of Arizona. At the same general election, the voters enacted Proposition 200, which became effective on December 16, 1986. See Ariz.Rev.Stat.Ann. ("A.R.S.") § 16-905. Proposition 200 limits the amounts that individual contributors and committees can donate to a political candidate in an election campaign.
After Mecham won the general election, his supporters organized a committee to plan and finance an inaugural ball and reception. At Governor Mecham's request, William Long served as chairman and had authority to act for the Committee. The Committee, an unincorporated association, remained completely independent from and was not controlled by Governor Mecham or his administration.
In December 1986, the Committee began to sell inaugural ball tickets imprinted with the words: "Proceeds to defray Ball expenses and retire campaign obligations." The Committee did use part of the funds raised to pay the expenses of the inaugural ball and reception, and it intended to use the balance of the funds to retire Mecham's campaign debts.
At the request of the Attorney General's office, the County Attorney investigated the Committee's activities. He concluded that the Committee's fund-raising efforts violated the recently-enacted A.R.S. section 16-905. According to the County Attorney, the State was entitled to recover all the remaining inaugural ball funds held by the Committee.
After learning of the allegations that the Committee had violated the campaign finance laws, Long retained two lawyers, Warner Lee and John Mangum, to advise the Committee. The lawyers later concluded that the Committee might have unknowingly violated section 16-905 and other election laws by using corporate donations to pay inaugural expenses.
Page 644
[173 Ariz. 477] The Committee decided to compromise the dispute rather than incur the delay, expense, and political repercussions of seeking a declaratory judgment to decide the issue. It recognized that its members faced the risk of personal civil liability for treble damages or possibly even criminal charges. In addition, the Committee might forfeit the inaugural funds to the State general fund as a penalty if the State won.
To avoid a possible forfeiture of the funds, the Committee's attorneys proposed transferring the funds to the State so "the Governor's office could use [the funds] for a legitimate state purpose in the interest of the Governor...."
Under the terms of the compromise reached by the Committee and the County Attorney, the Committee agreed to transfer the funds ($90,524) to the Governor's office for use according to the terms of A.R.S. section 41-1105. In return, the County Attorney agreed to halt the threatened civil proceedings against the Committee. After transferring the funds to the Governor's office, Long confirmed the compromise agreement in a letter to County Attorney Tom Collins dated June 26, 1987.
The June 26, 1987 letter assured the County Attorney's office "all funds remaining in the Ticket Sales Account ... have been turned over to the office of the Governor...." The County Attorney's office relied upon the letter and stopped its investigation of the Committee.
As a member of the Committee, Joyce Downey delivered the passbook for the Mecham Inaugural Fund account to the Governor's office. Afterward, the Committee's lawyers met with Jim Colter, the Chief of Staff, and other representatives of the Governor's office. The Committee's lawyers explained the compromise agreement and the restrictions placed upon the Protocol Fund. Governor Mecham attended part of the meeting. Colter introduced members of the Committee to Governor Mecham "as people who had been working on the problem with the Mecham Inaugural Committee Fund."
Following Governor Mecham's impeachment conviction and removal from office, the Attorney General demanded that Governor Mecham turn the funds over to his successor. Instead, Mecham transferred the Protocol Fund to a new account on which he was the signatory. He refused to relinquish the funds, claiming that they were private funds that had been given to him individually. He claimed that Long only had authority to use the funds to retire Governor Mecham's campaign debt. Governor Mecham then tried to disburse the funds to individual ticket purchasers.
The State sued the Mechams to recover the Protocol Fund, for civil penalties, and for attorney's fees. After the court granted defendant Valley National Bank's motion to interplead the funds, the clerk of the superior court held the Protocol Fund balance of $79,782.41. The parties then filed cross motions for summary judgment.
On February 27, 1990, the trial court granted the State's motion for summary judgment. It awarded the Protocol Fund held by the clerk of the court to the State and assessed a statutory civil penalty and attorney's fees. The clerk of the court delivered the balance of $86,970.75 in the Protocol Fund to the Governor of Arizona. The Mechams filed a motion to vacate judgment and requested a new trial. See Ariz.R.Civ.P. 59(a). On May 22, 1990, the court denied the Mechams' motion.
On June 5, 1990, the Mechams timely appealed from the order denying the motion to vacate judgment. This court has jurisdiction pursuant to A.R.S. section 12-120.21.
II. DISCUSSION
A. STANDARD OF REVIEW
The Mechams did not appeal from the summary judgment entered for the State. However, a motion for new trial may appropriately challenge a grant of summary judgment. United Bank of Arizona v. Allyn, 167 Ariz. 191, 197, 805 P.2d 1012, 1018 (App.1991). The Mechams' motion to vacate thus requires us to examine the propriety of the trial court's grant of summary judgment for the State.
Page 645
[173 Ariz. 478] The standard adopted in Orme School v. Reeves, 166 Ariz. 301, 802 P.2d 1000 (1990), for adjudicating motions for summary judgment directs the trial court to grant the motion "if the facts produced in support of the claim or defense have so little probative value ... that reasonable people could not agree with the conclusion advanced by the proponent of the claim or defense." Id. at 309, 802 P.2d at 1008. Here, we must determine whether the Mechams presented evidence from which reasonable people could conclude either that: (1) the Committee lacked authority to compromise the dispute and transfer the funds to the Governor's office, or (2) the inaugural funds transferred to the office of the Governor under A.R.S. section 41-1105 were not held as public money.
B. THE COMPROMISE AGREEMENT TO TRANSFER THE INAUGURAL BALL TICKET PROCEEDS TO THE OFFICE OF THE GOVERNOR
1. The Authority of William Long to Act for the Committee
We conclude that the State established a prima facie case entitling it to summary judgment on the issue of Long's authority to act for the Committee. We also conclude that the Mechams did not produce competent evidence to justify a trial on that issue.
Summary judgment is appropriate when the record shows no real dispute exists as to any material facts and the moving party is entitled to judgment as a matter of law. Ariz.R.Civ.P. 56(c); United Bank, 167 Ariz. at 194-95, 805 P.2d at 1015-16. The party seeking summary judgment has the burden of satisfying this standard and demonstrating both the absence of any factual conflict and the right to judgment as a matter of law. Id., 167 Ariz. at 195, 805 P.2d at 1016.
The State argues that the Mechams had the burden of showing that summary judgment was not appropriate. It says that the Mechams' failure to assert disputed material facts precluding summary judgment in their response to the State's motion rendered summary judgment appropriate. We disagree.
The Mechams' motion to vacate judgment and for new trial did raise the issue of whether the court properly granted summary judgment. This motion "gave the superior court an opportunity to correct any error and ... preserved as an issue for...
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