Opinion
No. 1 CA-CV 12-0067
02-12-2013
RICHARD WHISTON, Plaintiff/Appellant, v. JESS A. LORONA and JANE DOE LORONA, husband and wife; and HORNE, DUCAR, LORONA & SLATON, P.C., an Arizona professional corporation, Defendants/Appellees.
Law Office of Roger D. Smith By Roger D. Smith Attorney for Plaintiff/Appellant Ernest S. Bustamante & Associates P.L.L.C. By Ernest S. Bustamante Attorneys for Defendants/Appellees
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(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)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. CV2007-070072
The Honorable Eileen S. Willett, Judge
AFFIRMED
Law Office of Roger D. Smith
By Roger D. Smith
Attorney for Plaintiff/Appellant
Scottsdale Ernest S. Bustamante & Associates P.L.L.C.
By Ernest S. Bustamante
Attorneys for Defendants/Appellees
Phoenix DOWNIE, Judge ¶1 Richard Whiston appeals from a judgment entered against him after a jury trial in his legal malpractice action against Jess A. Lorona and Horne, Ducar, Lorona & Slaton, P.C. (collectively, "Attorneys") and from the denial of his motion for new trial. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
Our factual recitation is based on the record in this case as well as the memorandum decision issued by this Court in Comrisk Ins., Inc. v. Whiston, 1 CA-CV 04-0671 (Ariz. App. June 30, 2005) (mem. decision).
¶2 Comrisk Insurance, Inc. ("Comrisk") works with insurance brokers seeking to obtain stop-loss coverage for their clients. If a stop-loss policy is written based on Comrisk's interactions with a broker, both Comrisk and the broker receive a percentage of the premiums paid by the insured. ¶3 Comrisk hired Whiston in April 2000 to handle sales, deal with customers, brokers, and insurers, and develop business. Comrisk terminated Whiston's employment on October 1, 2001. A few days later, CGI, a competitor of Comrisk's, hired Whiston to market stop-loss coverage in Arizona -- a new territory for CGI. Because Whiston had not signed a non-compete agreement, he felt free to use "information that [he] gained about insureds, brokers, markets and cases" learned at Comrisk "to move the business away from Comrisk." ¶4 Comrisk sued Whiston for violating the Uniform Trade Secrets Act, Arizona Revised Statutes ("A.R.S.") sections 44-401 through -403; interference with contract and prospective business advantage; breach of fiduciary duty; and unfair competition ("the Comrisk litigation"). Whiston retained Attorneys to defend him in the Comrisk litigation. ¶5 In a joint pretrial statement filed in the Comrisk litigation, the parties agreed that certain facts were uncontested, including:
• Comrisk instructed Whiston not to discuss Comrisk's business with TRU Services ("TRU") -- an insurance underwriter with whom Whiston had business and personal contacts;¶6 A two-day bench trial ensued. Comrisk called Whiston as its first witness. It also presented two brokers, who testified that after Whiston left Comrisk, he told them that policy renewals would have "to come through him and not Comrisk" and that several accounts renewed through him instead of Comrisk. Whiston's counsel cross-examined the two brokers but rested the defense case without calling any witnesses. ¶7 The court ruled that Whiston had violated the Uniform Trade Secrets Act by willfully and maliciously expropriating Comrisk's trade secrets, engaged in unfair competition, and interfered with Comrisk's contracts and prospective business advantage. The court stated, in pertinent part:
• Whiston disregarded Comrisk's instructions and discussed "confidential business plans and other proprietary information" with TRU;
• Whiston used his employment with CGI and his TRU contacts "to solicit and take customers and business from Comrisk," and "Comrisk was damaged by this loss of business and loss of business goodwill."
2. Whiston's conduct in using Comrisk's confidential and proprietary business information and trade secrets to solicit and take customers and business from Comrisk constituted unlawful and unfair competition.Comrisk was awarded compensatory damages of $150,810, punitive damages of $117,000, and attorneys' fees of $73,000. Whiston appealed, but this Court affirmed the trial court's judgment in June 2005. ¶8 In March 2007, Whiston filed the instant legal malpractice action against Attorneys, alleging that they negligently defended him in the Comrisk litigation and that he would have prevailed in that suit but for their negligence. Attorneys disclosed Robert Comeau as an expert witness who would testify at trial about "industry standards regarding confidentiality of customer lists, conduct of employees (during employment and upon termination), and other similar issues." Whiston filed a motion in limine to preclude Comeau's testimony because Comeau had not testified or been listed as a witness in the Comrisk litigation. Attorneys opposed the motion, and the trial court denied it. ¶9 A 13-day jury trial ensued. The jury rendered a defense verdict. After Whiston's motion for new trial was denied, he timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101.
3. By: (1) using Comrisk's trade secrets for his benefit and to Comrisk's detriment, and (2) communicating to brokers that renewals of incumbent insurance policies must come through Whiston instead of Comrisk, which resulted in Comrisk losing insurance renewal business, Whiston interfered with Comrisk's contracts and prospective business advantage with brokers and their insureds.
. . . .
6. Whiston's conduct was improper and Comrisk was damaged as a result.
Stop-loss coverage is designed for self-insured companies to protect against catastrophic claims.
Whiston appealed the judgment against him in the Comrisk litigation. See Comrisk, 1 CA-CV 04-0671, at ¶ 6. Among other things, he argued that the trial court erred by relying on the "Uncontested Facts Deemed Material" set forth in the joint pretrial statement. Id. at ¶ 21. This Court held that the trial court did not err in accepting the stated facts as stipulations. Id. at ¶ 25.
DISCUSSION
¶10 Whiston raises one issue on appeal: whether the trial court erred by permitting Comeau to testify in the malpractice action. We generally review challenges to the admission of evidence for an abuse of discretion. Yauch v. S. Pac. Transp. Co., 198 Ariz. 394, 399, ¶ 10, 10 P.3d 1181, 1186 (App. 2000) (citations omitted). If, however, an evidentiary ruling is predicated on a question of law, we review it de novo. Id. (citations omitted). We review the denial of a motion for new trial for an abuse of discretion. See Hutcherson v. City of Phoenix, 192 Ariz. 51, 53, ¶ 12, 961 P.2d 449, 451 (1998) (citations omitted). ¶11 In what is sometimes called the "case within the case" doctrine, the plaintiff in a legal malpractice suit must "prove that but for the attorney's negligence, he would have been successful in the prosecution or defense of the original suit." Phillips v. Clancy, 152 Ariz. 415, 418, 733 P.2d 300, 303 (App. 1986); see also Glaze v. Larsen, 207 Ariz. 26, 29, ¶ 12, 83 P.3d 26, 29 (2004) (plaintiff must prove attorney's negligence "was the actual and proximate cause of injury," i.e., that plaintiff would have succeeded in the original suit but for the negligence). "[T]he trier in the malpractice suit views the first suit from the standpoint of what a reasonable judge or jury would have decided, but for the attorney's negligence." Phillips, 152 Ariz. at 418, 733 P.2d at 303. The parties in the case at bar were thus required to conduct a "trial-within-a-trial" so that the jury could decide whether Whiston would have prevailed in the Comrisk bench trial had Attorneys defended him differently. ¶12 To the extent Whiston contends that Attorneys could not introduce any "new" evidence at the malpractice trial (i.e., evidence not presented in the Comrisk litigation), we disagree. Whiston himself introduced evidence at the malpractice trial that was not presented at the Comrisk bench trial. He did so in an attempt to prove that, had Attorneys presented this "new" evidence, he would have prevailed in that lawsuit. To defend against Whiston's claim, Attorneys were entitled to introduce their own "new" evidence to persuade the jury that Whiston would have lost the Comrisk litigation anyway because Comrisk would have rebutted the evidence Whiston contends should have been presented or would have countered it through cross-examination and impeachment. ¶13 We have little difficulty concluding that Attorneys could call witnesses at the malpractice trial who were disclosed in the Comrisk litigation -- whether or not those witnesses actually testified at that trial -- so that the malpractice jury would have before it rebuttal evidence that Comrisk likely would have offered. The more interesting question is whether Comeau should have been allowed to testify when he had not been listed as a witness in the Comrisk litigation and did not otherwise participate in that matter. Ultimately, though, we need not resolve this issue. Instead, we assume, without deciding, that Comeau's testimony was erroneously admitted. That "fact," though, is only one facet of the appellate inquiry. ¶14 Appellate courts will not reverse a trial court's erroneous evidentiary ruling unless prejudice arises from that ruling. See Jimenez v. Wal-Mart Stores, Inc. , 206 Ariz. 424, 427, ¶ 10, 79 P.3d 673, 676 (App. 2003) (citation omitted); Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493, 506, 917 P.2d 222, 235 (1996) ("We will not disturb a trial court's rulings on the exclusion or admission of evidence unless a clear abuse of discretion appears and prejudice results."). "[W]here evidence is erroneously admitted, reversal is required only when it is reasonably probable that, absent the tainted evidence, the jury would have reached a different conclusion." State v. Curiel, 130 Ariz. 176, 182, 634 P.2d 988, 994 (App. 1981) (emphasis added); see also Brown v. U.S. Fid. & Guar. Co. , 194 Ariz. 85, 88, ¶ 7, 977 P.2d 807, 810 (App. 1998) ("The improper admission of evidence is not reversible error if the jury would have reached the same verdict without the evidence."). ¶15 Whiston has not included a transcript of the malpractice trial in the record on appeal. It is the duty of the appealing party to insure that the appellate court receives a complete record. Rancho Pescado, Inc. v. Nw. Mut. Life Ins. Co. , 140 Ariz. 174, 189, 680 P.2d 1235, 1250 (App. 1984) (citation omitted). Where the record is incomplete, we presume that the missing portions would support the trial court's rulings. Bee-Gee, Inc. v. Ariz. Dep't of Econ. Sec., 142 Ariz. 410, 414, 690 P.2d 129, 133 (App. 1984) (citation omitted); see also Brousseau v. Fitzgerald, 138 Ariz. 453, 457, 675 P.2d 713, 717 (1984) (citation omitted) (without a trial transcript, appellate court cannot consider questions pertaining to evidence or findings of fact). ¶16 Without a transcript, we cannot determine whether Comeau's testimony was cumulative of other evidence presented at the 13-day trial and was, thus, non-prejudicial; whether damaging admissions by Whiston that were before the jury could support the verdict independent of Comeau's testimony; or whether, excluding Comeau's testimony, the malpractice trial evidence taken as a whole was sufficient to support the verdict. Indeed, without a transcript, we have no idea how any witness actually testified, preventing any meaningful assessment of prejudice. ¶17 The malpractice jury had before it Judge Galati's detailed conclusions of law from the bench trial in the Comrisk litigation, which appear in significant respects to overlap the Comeau testimony that has been described by the parties in their appellate briefs. Moreover, minute entries from the malpractice trial reveal that Attorneys read portions of the Comrisk bench trial testimony to the malpractice jury, and the transcript of that trial was introduced as a trial exhibit. The jury thus had before it significant admissions by Whiston that he: (1) used information learned from working at Comrisk to move business from Comrisk; (2) took contact information from Comrisk; (3) understood the confidential nature of information about insureds with whom Comrisk worked; (4) solicited brokers to renew through CGI for policies he knew from working at Comrisk were approaching renewal; and (5) had no "remorse" for using contacts and information gained at Comrisk to "take business away from Comrisk." ¶18 Under these circumstances, Whiston has failed to carry his burden of establishing that, without the allegedly improper testimony by Comeau, it is reasonably probable that the malpractice jury would have reached a different conclusion. Curiel, 130 Ariz. at 182, 634 P.2d at 994.
CONCLUSION
Whiston does not make any independent arguments regarding the denial of his motion for new trial, and we therefore do not address that ruling separately, except to note that the trial court ruled that substantial evidence supported the verdict. Without a trial transcript, we must assume that the record supports this determination. See State ex rel. Baumert v. Superior Court (Abodeely), 118 Ariz. 259, 260-61, 576 P.2d 118, 119-20 (1978) (citation omitted).
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¶19 For the reasons stated, we affirm the judgment of the superior court. Whiston is not the successful party, and we therefore deny his requests for attorneys' fees and costs. Attorneys are entitled to recover their appellate costs upon compliance with ARCAP 21.
______________________
MARGARET H. DOWNIE,
Presiding Judge
CONCURRING: ______________________
MAURICE PORTLEY, Judge
______________________
PHILIP HALL, Judge