Opinion
1 CA-CV 12-0043
04-16-2013
GREGORY BEST, a single man, Plaintiff/Appellant, v. ROBERT WARRICK, Defendant/Appellee.
Gregory Best, Plaintiff/Appellant In Propria Persona Phoenix Sundberg & Mousel By Gary M. Sundberg Attorneys for Defendant/Appellee Phoenix
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
(Not for Publication -
Rule 28, Arizona Rules of
Civil Appellate Procedure)
Appeal from the Superior Court in Maricopa County
Cause No. CV2006-090128
The Honorable Karen A. Potts, Judge
AFFIRMED
Gregory Best, Plaintiff/Appellant
In Propria Persona
Phoenix Sundberg & Mousel
By Gary M. Sundberg
Attorneys for Defendant/Appellee
Phoenix NORRIS, Judge ¶1 Plaintiff/Appellant Gregory Best appeals the superior court's judgment rejecting his statutory and common law fraud claims against Defendant/Appellee Robert Warrick. On appeal, Best argues the superior court made various procedural errors and ignored Warrick's "admitted fraud." We reject Best's arguments as they are without merit. We thus affirm the superior court's judgment in Warrick's favor and impose sanctions against Best for pursuing a frivolous appeal.
FACTS AND PROCEDURAL BACKGROUND
¶2 Warrick was the personal representative for Nathaniel Fanniel's estate, which included real property in Phoenix ("the Property"). On March 22, 2004, Best entered into an exclusive purchase option contract with Warrick, in his capacity as personal representative, which gave Best the right to purchase the Property for $85,000 by March 23, 2009. On November 8, 2004, the parties terminated that option and entered into a new exclusive purchase option contract, which allowed Best to purchase the Property for $100,000 by March 23, 2009. On November 29, 2004, Warrick sold the Property to Foresight Investment Group, LLC. ¶3 Subsequently, Best sued Warrick individually and as personal representative, asserting various claims, including the two fraud claims at issue here. Best also sued Foresight and a contractor, Walter Jackson, who may have provided certain services -- the record is less than clear -- to Foresight. ¶4 On February 28, 2011, Jackson filed a notice of filing for bankruptcy, and pursuant to the automatic stay provision of the Bankruptcy Code, 11 U.S.C.A. § 362 (West, Westlaw through P.L. 112-283), Best's claims against Jackson were stayed. On September 22, 2011, Best moved to stay the trial. The superior court denied Best's request because the trial was stayed only as to his claims against Jackson, not those against Warrick. ¶5 Following a three-day bench trial, the superior court entered a judgment in Warrick's favor and awarded him attorneys' fees and costs.
DISCUSSION
We consider Best's arguments notwithstanding his failure to consistently provide relevant factual statements supported by "appropriate references to the record." ARCAP 13(a)(4); Gravel Resources of Ariz. v. Hills, 217 Ariz. 33, 36, ¶ 8, 170 P.3d 282, 285 (App. 2007). We strike irrelevant minute entries attached to Best's opening brief. We also reject Best's argument that we strike Warrick's answering brief for exceeding the page limit by two pages in violation of ARCAP 14(b). This argument elevates form over substance, as multiple pages in Warrick's brief contain very few lines.
I. Automatic Stay in Jackson's Bankruptcy
¶6 As we understand his opening brief, Best argues the automatic stay in Jackson's bankruptcy stayed his claims against "all [d]efendants," and by allowing his claims against Warrick to be tried, the superior court "lift[ed] the bankruptcy stay." We disagree. ¶7 The superior court could not and did not lift the bankruptcy stay as to Jackson. While the court allowed Jackson to testify at trial, it specifically limited his testimony to Best's claims against Warrick, and held none of the evidence could be used against Jackson. See In re Miller, 262 B.R. 499, 503-07 (B.A.P. 9th Cir. 2001) (automatic stay did not preclude debtor from appearing as deposition witness in a case where debtor was co-defendant, as long as discovery requests pertained only to creditors' claims against other, non-debtor defendant). Therefore, the superior court neither violated nor "lifted" Jackson's bankruptcy stay. ¶8 Further, Jackson's bankruptcy stay did not preclude the superior court from allowing Best's claims against Warrick to go to trial. As a general matter, the bankruptcy automatic stay is limited to debtors and does not encompass non-bankrupt co-defendants. Teachers Ins. & Annuity Ass'n v. Butler, 803 F.2d 61, 65 (2d Cir. 1986); Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1205 (3d Cir. 1991) (automatic stay does not extend to non-bankrupt co-defendants "even if they are in a similar legal or factual nexus with the debtor"). Although under limited circumstances an automatic stay may extend to non-debtor third parties, see, e.g., Queenie, Ltd. v. Nygard Int'l, 321 F.3d 282, 287 (2d Cir. 2003) (claim against non-debtor will have "immediate adverse economic consequence" for debtor), A.H. Robins Co., Inc. v. Piccinin, 788 F.2d 994, 999 (4th Cir. 1986) (non-bankrupt defendant and debtor are closely associated and share an identity of interests), Best did not present any evidence showing this limited exception applied here. Therefore, Best's argument that the superior court "lifted" the bankruptcy automatic stay is without merit and we reject it. II. Default Judgment Against Jackson ¶9 Best argues the superior court should have found Jackson in default because a default "was scheduled to occur when his bankruptcy caused the stay," and alternatively, Jackson did not appear at trial on the first day of trial. We disagree. ¶10 First, the automatic stay precluded the superior court from entering a default judgment against Jackson, as discussed supra ¶ 7. Second, nothing in the record supports Best's assertion of a "scheduled default" against Jackson. Third, even though Jackson was a named defendant, he was not obligated to attend a trial that did not involve claims against him, and Best did not subpoena him to appear on the first day of trial. Therefore, these arguments are without merit and we reject them.
III. Best's Fraud Claims
¶11 Best argues the superior court should have found in his favor on his fraud claims because Warrick "admitted fraud." Whether a party committed fraud presents a question of fact. Marcus v. Fox, 150 Ariz. 342, 344, 723 P.2d 691, 693 (App. 1985), vacated in part, 150 Ariz. 333, 723 P.2d 682 (1986) (fraud is a question of fact). In reviewing factual findings in a bench trial, we apply a deferential standard. Federoff v. Pioneer Title & Trust Co. of Ariz. , 166 Ariz. 383, 388, 803 P.2d 104, 109 (1990). Our inquiry is limited to "whether the trial court had before it evidence that might reasonably support its action when viewed in the light most favorable to sustaining the findings." Id. We accept the superior court's factual findings "unless they are clearly erroneous or unsupported by any credible evidence." Id. Here, as discussed below the record supported the superior court's finding that Best failed to meet his burden of proving his fraud claims. ¶12 Both statutory fraud and common law fraud require proof of proximate injury. Powers v. Guar. RV, Inc., 229 Ariz. 555, 560, ¶ 17, 278 P.3d 333, 338 (App. 2012) (consumer fraud); Peery v. Hansen, 120 Ariz. 266, 269, 585 P.2d 574, 577 (App. 1978) (common law fraud). The superior court excluded Best's damage evidence because he had failed to disclose his damages in any of his disclosure statements as required by Rule 26.1(a)(7) of the Arizona Rules of Civil Procedure, and also had failed to respond to interrogatories seeking damages and witness information, even after the court had ordered him to comply. Based on our review of the record, the superior court acted well within its discretion in imposing this sanction. SWC Baseline & Crismon Investors L.L.C. v. Augusta Ranch Ltd. P'ship, 228 Ariz. 271, 291-92, ¶¶ 83-91, 265 P.3d 1070, 1090-91 (App. 2011) (superior court did not abuse its discretion by barring all damages evidence because, although plaintiff had identified witnesses, plaintiff failed to provide substance of testimony and only generally described damages). ¶13 Further, the superior court found Best had failed to prove he had relied upon a false promise or misrepresentation. At trial, Warrick testified that, before executing the first option contract, Best told him the option would establish the Property's value, and Warrick could change the purchase price or have Best release the option at any time; Best, however, refused to release the option when Warrick wanted to sell the Property. Finding Warrick's testimony both undisputed and credible, the superior court concluded Best had not met his burden of proving he had relied upon Warrick's alleged "misrepresentations that [h]e could and would transfer the [P]roperty to [Best]." Based on our review of the record, credible evidence supported the superior court's findings, and we thus affirm its judgment in Warrick's favor on Best's fraud claims.
Best relies upon the following trial testimony to support Warrick's "admitted fraud":
Gregory Best: So the entering of the second contract . . .
Robert Warrick: Was just to get you to sign, just to get you to sign the release on the first contract.
Gregory Best: So your intent, by entering the second contract, was actually to deceive me so that you would get a release. Is that what you're saying?
Robert Warrick: That's exactly what I'm saying.
Gregory Best: Yeah, did you do anything that would make it more difficult for me?
Robert Warrick: Oh, I used the release, yes, to sell the property.
Gregory Best: Okay. So not only did you deceive in getting the release, but you actually intended it, your actions to hinder my use of this contract later. Is that correct? By selling it to somebody else?
Robert Warrick: You could say that.
IV. Attorneys' Fees at Trial
¶14 Best also challenges the superior court's award of attorneys' fees to Warrick, arguing he was not entitled to fees because "[t]he underlying case was a [tortious] interference case." Best, however, did not raise this objection in the superior court and has thus waived it on appeal. Van Loan v. Van Loan, 116 Ariz. 272, 274, 569 P.2d 214, 216 (1977) (arguments raised for first time on appeal are untimely and deemed waived).
V. Rule 25 Sanctions on Appeal
¶15 Warrick asks this court to preclude Best from filing any further lawsuit without first seeking leave of the superior court, and also requests sanctions under Rule 25 of the Arizona Rules of Civil Appellate Procedure. While this court lacks authority to bar the superior court from accepting Best's filings, we may impose sanctions when "the appeal is frivolous," and the sanction may include an assessment of attorneys' fees or other "reasonable penalties or damages . . . as the circumstances of the case and the discouragement of like conduct in the future may require." ARCAP 25. ¶16 Best's arguments on appeal were frivolous for the reasons stated above. Matter of Levine, 174 Ariz. 146, 152-53, 847 P.2d 1093, 1099-1100 (1993) (finding an appeal frivolous because it was unsupported by a reasonable legal theory and presented no colorable argument). Moreover, Best misrepresented the record in his briefing on appeal. Best repeatedly stated the superior court had lifted the bankruptcy stay when it had not, and mischaracterized Warrick's testimony, see supra footnote 2, as "admitted fraud." Further, in his opening brief, Best stated:
[Warrick] admitted he deceived [Best] into the second contract so he could defraud him of the right to purchase the subject property. He went on to admit he knew [Best] believed the false claim that he was simply using the termination to convert the title to his name when he made the false claim. [Warrick] admitted he knew [Best's] rights to the property he had a contract on would be impeded by his deceitful actions and intentional misrepresentations.¶17 These statements are misleading and taken out of context. The superior court found Best had misrepresented the purpose of the option contracts to Warrick from the beginning -- a finding amply supported by the trial evidence:
[Warrick] testified that prior to executing these documents, [Best] told [Warrick] that the documents were solely for the purpose of establishing a value for the underlying real property thus enabling [Warrick] to obtain at least that price for the property if the City of Phoenix attempted to purchase the property in the future for a public purpose. This testimony by [Warrick] was both undisputed and credible. [Best] himself offered no testimony regarding what was or was not said prior to the execution of the documents and did not testify that he relied on the content of the documents.(Emphasis in original.) Further, multiple witnesses corroborated Warrick's testimony that Best had told them the option contracts would maintain their properties' value "in case the City came in," and Best did not present any evidence to the contrary. ¶18 Best's frivolous arguments, combined with his efforts to mislead this court, warrant sanctions. Therefore, pursuant to ARCAP 25, we order Best to compensate Warrick's counsel for the time he expended in responding to and defending against Best's appeal -- at the hourly rate of $200 he charged in the superior court, contingent upon Warrick's submission of a statement itemizing his counsel's hours and an affidavit in compliance with ARCAP 21(c)(2). We also deny Best's requests for attorneys' fees and costs.
CONCLUSION
¶19 For the foregoing reasons, we affirm the superior court's judgment in Warrick's favor, and impose sanctions against Best for filing a frivolous appeal. As the successful party on appeal, we also award Warrick his costs on appeal, contingent upon his compliance with ARCAP 21(a). Ariz. Rev. Stat. ("A.R.S.") § 12-341 (2003).
________________________
PATRICIA K. NORRIS, Presiding Judge
CONCURRING: ________________________
ANDREW W. GOULD, Judge
________________________
RANDALL M. HOWE, Judge
As discussed infra ¶¶ 13, 16-17, Best has quoted Warrick's testimony out of context.