Trabucco v. Cogan

• Decision Date: 07 April 2020
• Docket Number: No. 1 CA-CV 18-0526,1 CA-CV 18-0526
• Parties: ARNALDO TRABUCCO, Plaintiff/Appellee, v. JEFFREY COGAN, Defendant/Appellant.
• Court: Arizona Court of Appeals

ARNALDO TRABUCCO, Plaintiff/Appellee, v. JEFFREY COGAN, Defendant/Appellant.

No. 1 CA-CV 18-0526

ARIZONA COURT OF APPEALS DIVISION ONE

April 7, 2020

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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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 Mohave County

No. B8015CV201404030

The Honorable Lee Frank Jantzen, Judge

AFFIRMED IN PART; REVERSED IN PART; VACATED IN PART; REMANDED WITH DIRECTIONS

COUNSEL

Wilenchik & Bartness, P.C., Phoenix

By Dennis I. Wilenchik, John D. Wilenchik, Christopher A. Meyers

Counsel for Plaintiff/Appellee

Jeffrey A. Cogan, Las Vegas, Nevada

Defendant/Appellant

MEMORANDUM DECISION

Judge Lawrence F. Winthrop delivered the decision of the Court, in which Presiding Judge Jennifer B. Campbell and Judge Michael J. Brown joined.

WINTHROP, Judge:

¶1 Jeffrey A. Cogan, a bankruptcy attorney licensed in Nevada and California, appeals the superior court's judgment in favor of Dr. Arnaldo Trabucco ("Dr. Trabucco"). After cross-motions for partial summary judgment, the superior court found Cogan liable on claims of malicious prosecution¹ and abuse of process, then held a trial on damages. The jury returned a verdict assessing $8,000,000 in compensatory and punitive damages, plus costs, against Cogan, and Cogan appealed. For the following reasons, we affirm the finding of liability for malicious prosecution, reverse the finding of liability for abuse of process, vacate the judgment with regard to damages awarded against Cogan, affirm the judgment with regard to Helen Scharf, Karen Bright, and Randall Scharf (collectively, "the Scharfs"), and remand with directions for the superior court to enter judgment in favor of Cogan as to liability on the abuse of process claim only and for a new trial on the issue of damages based only on the finding of malicious prosecution.

FACTS AND PROCEDURAL HISTORY

¶2 In September 2012, Dr. Trabucco performed kidney surgery—a laparoscopic left radical nephrectomy—on Gerald Scharf. Three days later, Mr. Scharf died.

¶3 Dr. Trabucco had been embroiled in a series of unrelated and extremely contentious financial and legal disputes—including but not limited to post-divorce proceedings with his ex-wife, Pamela, and acomplaint filed against him by Dr. Richard Cardone, a Mohave County physician, who had sued Dr. Trabucco for defamation.² Dr. Trabucco had numerous creditors, and in November 2012, he filed for Chapter 7 bankruptcy protection.

¶4 Cogan represented Pamela Trabucco's interests as a creditor in the bankruptcy proceeding. At the first meeting of the creditors in 2012, Cogan met Dr. Cardone's wife, Joanne, and he soon began representing Dr. Cardone. Joanne Cardone later put Cogan in touch with Gerald Scharf's widow, Helen, and Cogan eventually represented six creditors/clients with respect to Dr. Trabucco's bankruptcy: the Scharfs; Pamela Trabucco; Pamela Houle; and Dr. Cardone.

¶5 Meanwhile, through separate counsel, the Scharfs on March 11, 2013, filed a medical malpractice lawsuit against Dr. Trabucco in Mohave County Superior Court ("the 2013 Mohave County case"). The Scharfs' attorney in that lawsuit subsequently died, and Cogan took over their representation.

¶6 Rather than continue to litigate the 2013 Mohave County case, however, Cogan let that case lie dormant and filed an adversary "Complaint to Determine Nondischargeability of Debts" against Dr. Trabucco in Nevada bankruptcy court in May 2013, alleging negligence. Then, on July 16, 2013, Cogan filed a First Amended Complaint to Determine Nondischargeability of Debts on behalf of the Scharfs in bankruptcy court, asserting the same wrongful death claims as alleged in the 2013 Mohave County case, but dropping the negligence claim against Dr. Trabucco, and instead alleging that Dr. Trabucco had "committed willful and malicious actions upon Mr. Scharf, eventually resulting in Mr. Scharf's death," and Dr. Trabucco's actions constituted "extreme and outrageous behavior." More specifically, the allegations included the following: (1) Dr. Trabucco knew he lacked sufficient experience andexpertise regarding laparoscopic nephrectomy, and that he did not have hospital privileges to perform such a procedure; (2) Dr. Trabucco intentionally misled the Scharfs regarding his experience and expertise regarding laparoscopic nephrectomy; (3) an interoperative complication/injury occurred due to an error by Dr. Trabucco; (4) Dr. Trabucco knew this error had occurred and yet continued the operation without addressing the interoperative complication/injury; (5) following the surgery, Dr. Trabucco hid the fact that an interoperative complication/injury had occurred; (6) although he knew Mr. Scharf was seriously injured and would probably die, Dr. Trabucco did not attempt to remedy the situation, and instead lied to the Scharf family and hospital staff; and (7) Dr. Trabucco interfered with and delayed the subsequent medical transfer of Mr. Scharf, again with the intention of hiding the interoperative complication/injury or other malicious intent. As Cogan later explained, his basis for making such allegations was that "[u]nder bankruptcy law, negligence is a dischargeable matter of law. We were required to show willful, malicious injury which necessarily involves intentional conduct and kind of extreme and outrageous intentional conduct, and thus, the amended complaint was fashioned as such."³

¶7 Cogan admittedly didn't "know medical terms, medical procedures and the like," so he hired Joanne Cardone, who is a nurse, as his paralegal. Unknown to Cogan, Joanne Cardone had filed complaints against Dr. Trabucco with various agencies, including the Department of Health and Human Resources, the Nevada State Board of Medical Examiners, and the Arizona Medical Licensing Board, and sent letters to Dr. Trabucco's relatives, friends, business associates, referral sources, and judges handling Dr. Trabucco's divorce, all in an effort to discredit Dr. Trabucco. After learning of Joanne Cardone's continuing activities in this regard, Cogan terminated her employment.

¶8 Realizing Cogan was not experienced in medical malpractice litigation, Dr. Trabucco's medical malpractice defense attorney, Scott Holden, took Cogan aside after the first hearing following filing of the First Amended Complaint and explained to Cogan that (1) "if you accuse someone [of] intentionally causing the death of a patient, you better have evidence to back that up," (2) Cogan's "essential medical theory made no sense," and (3) the allegations in the First Amended Complaint couldadversely affect any existing liability insurance coverage because, "[i]f you accuse a doctor of intentional conduct, the [malpractice] insurance [coverage] goes away." Thereafter, Holden repeatedly demanded that Cogan produce evidence to support his claims that Dr. Trabucco had intentionally and maliciously caused the death of Gerald Scharf, and he threatened to seek sanctions against Cogan pursuant to Arizona Rule of Civil Procedure ("Rule") 11.

¶9 Cogan acknowledged it was "unfair to Dr. Trabucco to make these allegations," but explained that, in his opinion, "these are the only allegations that I can make, ie. (sic) intentional tort and they would survive a Rule 11 claim" because the surgery had continued well beyond the anticipated two hours and because Dr. Trabucco had "consent to open the [surgical] field and did not," indicating Dr. Trabucco made a conscious decision not to convert the laparoscopic procedure to an open procedure for which he had pre-operative consent and instead, according to Cogan, prematurely terminated the surgery.

¶10 In February 2014, the parties stipulated to dismiss the First Amended Complaint in bankruptcy court with prejudice. The stipulation allowed the Scharfs to institute a medical negligence action against Dr. Trabucco if they obtained bankruptcy court approval to pursue claims against him personally, but the dismissal was final and binding as to any allegations of malicious or intentional conduct by Dr. Trabucco.

¶11 On February 28, 2014, Dr. Trabucco filed the complaint in this case against Cogan and the Scharfs, alleging malicious prosecution, abuse of process, and intentional infliction of emotional distress.⁴ Cogan initially represented only himself in this case but, after being admitted pro hac vice and notwithstanding the apparent conflict of interest, also represented the Scharfs.

¶12 Meanwhile, Dr. Trabucco moved to dismiss the 2013 Mohave County case for failure to prosecute, and in June 2014, that case was dismissed with prejudice by stipulation of the parties. Also, in July 2014,the bankruptcy court entered an order discharging Dr. Trabucco from all pre-petition debts.

¶13 In September 2014, Cogan filed an answer and counterclaims in this case, alleging a "survival claim" and wrongful death claim on behalf of the Scharfs. Cogan also filed a new complaint on behalf of the Scharfs in federal district court, alleging medical negligence and wrongful death claims against Dr. Trabucco.

¶14 In January 2015, the superior court granted Dr. Trabucco's motion for summary judgment on the counterclaims in this case.⁵ Dr. Trabucco then filed a First Amended Complaint, adding a claim for negligent hiring, supervision, and retention against Cogan regarding the hiring of his paralegal, Joanne Cardone. In March 2015, Dr. Trabucco filed a Second Amended Complaint in this case, extending the claims of negligent hiring, supervision, and retention to Cogan's business entity.

¶15 In January 2016, Dr. Trabucco moved for partial summary judgment as to liability in this case. Cogan and the Scharfs cross-moved for partial summary judgment. After further briefing and oral argument in April 2016, the court took the matter under advisement.

¶16 Meanwhile, on October 6, 2017, the jury in the federal district court medical negligence case found unanimously in favor of Dr. Trabucco. Dr. Trabucco then filed...