Opinion
2 CA-CV 2023-0164
07-31-2024
Foxpoint Media, LLC, a Missouri limited liability company, Plaintiff/Appellant, v. Peter Grover, in his individual capacity and on behalf of his marital community, Defendant/Appellee.
Denton Peterson Dunn PLLC, Mesa By Brad A. Dunn and Jay Parmelee Counsel for Plaintiff/Appellant. Warner Angle Hallam Jackson & Formanek PLC, Phoenix By Chris R. Baniszewski, and Yvonne S. Tindell Counsel for Defendant/Appellee.
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Maricopa County No. CV2021006663 The Honorable Timothy J. Ryan, Judge.
Denton Peterson Dunn PLLC, Mesa By Brad A. Dunn and Jay Parmelee Counsel for Plaintiff/Appellant.
Warner Angle Hallam Jackson & Formanek PLC, Phoenix By Chris R. Baniszewski, and Yvonne S. Tindell Counsel for Defendant/Appellee.
Judge Brearcliffe authored the decision of the Court, in which Presiding Judge Sklar and Vice Chief Judge Eppich concurred.
MEMORANDUM DECISION
BREARCLIFFE, JUDGE.
¶1 Foxpoint Media LLC ("Foxpoint") appeals from the trial court's orders declaring a mistrial with prejudice as a sanction, awarding attorney fees and costs to Grover, and denying Foxpoint's motion for reconsideration. Foxpoint contends that the factual findings underlying the court's sanction were clearly erroneous, that the sanction was an abuse of discretion, and that the court should have ordered a new trial or granted its motion for reconsideration. For the following reasons, we affirm.
Factual and Procedural Background
¶2 Foxpoint does business in outdoor advertising. Foxpoint hired Peter Grover in June 2020 as a senior vice president. In February 2021, Grover was fired. About two months later, Foxpoint filed a complaint against Grover, alleging breach of contract, tortious interference with an existing contract, tortious interference with prospective contractual relations, and a request for declaratory judgment. After a partial grant of summary judgment for Grover, the only claims that would proceed to trial involved Grover's alleged interference with two of Foxpoint's former clients-MetroCenter and Beth El Cemetery.
¶3 On the first day of trial, during voir dire, a prospective juror informed the trial court that he (or she) could not participate past Friday of that week because of a planned vacation. The court assured the juror that the trial was not scheduled to continue past Friday, and the juror was empaneled. On the second day of trial, Foxpoint called Grover as a witness. Following Grover's testimony, the court had a conversation with both parties' counsel to discuss the next day of trial. Foxpoint's counsel indicated that Foxpoint would only call two more witnesses on day three- James Neumann, its majority managing member, and Mike James, its corporate counsel-and then it would rest. Grover's counsel indicated that, after Foxpoint rested, Grover planned to move for a directed verdict under Rule 50, Ariz. R. Civ. P., on grounds as stated in "bench memos" he had filed. Foxpoint's counsel acknowledged having received by then at least one of Grover's bench memos.
¶4 In one bench memorandum, Grover argued that any claims related to Beth El Cemetery depended on inadmissible hearsay, specifically, Neumann's claim that Herbert Dreiseszun had told Neumann "that Grover told [him] how to get out of Beth El's lease with Foxpoint." Dreiseszun had not testified and was not among Foxpoint's two disclosed, remaining testifying witnesses. In the other memorandum, Grover argued that any claims related to MetroCenter must fail because Foxpoint never disclosed "a computation and measure of damages," "documents and testimony on which such computation and measure are based," and "any witnesses who will testify on damages at trial."
¶5 On August 10, the third day of trial, the trial court began the proceedings by declaring a mistrial. We do not have a record of the court being informed, or of any initial discussions that may have occurred, but Foxpoint's counsel had evidently informed the court off the record that Neumann could not appear at trial. Further, according to the court, a juror had not appeared for jury duty. On the record, in explaining the mistrial to the jury, the court first noted that a juror had "unilaterally excuse[d] herself from jury service." The court also explained that it had been told Neumann was in the "emergency room" and "was ordered not to return to court today." Finally, the court recalled that one of the jurors needed to "be done by Friday or else." Altogether, the court concluded "continuance wasn't really an option." The jury was excused, and the court held an informal conference with counsel in-chambers.
¶6 Thereafter, the trial court went back on the record to clarify why it had ordered a mistrial and what it would require of the parties going forward. First, the court stated that it was "advised that [Foxpoint]'s primary witness was ill in the emergency room . . . and was instructed not to return to court today for medical reasons." It was also advised that there was an issue about whether or not Dreiseszun would be available to testify. Foxpoint's counsel acknowledged that Foxpoint "didn't have any formal letter or email confirming [Dreiseszun]" would have been available to testify that day.
¶7 The parties disagreed on how to proceed: Foxpoint sought to reset a trial date, while Grover-who claimed the mistrial was obtained in bad-faith-requested sanctions and that the mistrial be with prejudice. In weighing any next steps, the trial judge described to counsel two mistrials that he had personally experienced. One, when the judge had been a practicing lawyer, occurred when his then-opposing counsel obtained a mistrial because of a medical emergency, but was then seen healthy the next day and "got another bite at the apple." Based on his experiences, the judge noted that a mistrial "can be innocent" or "it can be not[-]innocent," and, accordingly, he ordered Foxpoint to produce corroborating medical records in order to "verify" that the mistrial was appropriate.
¶8 The following week, Grover filed a motion for summary judgment and for mistrial with prejudice repeating the grounds stated in his bench memoranda, and for a mistrial with prejudice and sanctions due to Neumann's absence on the last day of trial. Grover asserted that, despite his "claimed infirmity," Neumann had not gone to the emergency room, "but instead went to the Fountain Hills Medical Center, [and] obtained a 'Work Release Form' that requested he be excused from court until August 17, 2022." Grover also alleged that Neumann "received a couple of prescriptions, and apparently went home." Grover explained that "the day after the Court declared a mistrial, Neumann was seen at a job site location where Foxpoint is building a new billboard," and "[d]espite [his] claimed infirmity that prevented him from showing up at trial, he was at the job site for at least an hour overseeing the installation of a new billboard and did not complain about and did not appear to have any health issues." In support of this claim, Grover provided a declaration by an employee of a billboard installation company that was working with Foxpoint who claimed to have seen Neumann at the job site for about an hour on August 11, the day after the mistrial was granted. The worker explained he had personally spoken to Neumann and had not observed any health issues. Altogether, Grover argued that "Neumann's failure to appear at trial was completely unreasonable," and constituted a "delay tactic."
¶9 Foxpoint opposed the motion for summary judgment, asserting there was "nothing to be gained" by a feigned illness. Foxpoint explained that its attorney had "made a misstatement insofar as he announced that plaintiff would rest after calling Neumann and Mike James," and it had "never intended to proceed without calling additional witnesses." Foxpoint argued that it had "provided proof that [Neumann] sought medical attention" and "was given a prescription." Further, Foxpoint explained that Neumann "had to cancel a prepaid airline reservation scheduled for Friday of that week, which would have been a day after the scheduled four-day trial ended." And, Foxpoint explained that Neumann "was concerned enough about his condition that he went for a COVID-19 test on August 10." As support, it provided a receipt sent to Neumann's email showing a covid test had been purchased on August 10 at about 2:00 pm. Finally, Foxpoint provided a declaration by Neumann, in which he stated that he was indeed sick, but had been called to the job site on August 11 due to a "critical, unforeseen issue" that "could not be resolved without [him]." He claimed to have been too sick to drive himself, so he was driven there by somebody else. And that it had not occurred to him to tell the worker he spoke to that he was sick. He also stated he had personally wanted a continuance of the trial and had not asked for a mistrial.
¶10 The trial court held an evidentiary hearing and oral argument on the motions. Foxpoint was represented by new counsel. The employee of the billboard installer who spoke with Neumann at a job site on August 11 testified. According to that employee, the installation company was assembling a billboard structure for Foxpoint. The billboard to be installed arrived in pieces, which the company had not anticipated. He spoke with Neumann on the phone about the problem, but did not think there was "any reason that he would need to come to the site." Nevertheless, Neumann did come to the job site for about thirty minutes to an hour. After speaking with Neumann for five or ten minutes, the worker saw Neumann walk around the job site and talk to various people. Neumann did not tell the employee that he was ill.
¶11 One of Neumann's friends, Bryan P., testified as well. Bryan P. lived in Neumann's house and took care of the property. He would "regularly" drive Neumann around. On August 11, according to Bryan P., Neumann said, "I feel like crap," and asked to be driven to the job site to solve a problem. Bryan P. testified that Neumann "maybe" had "a cough, or, you know, sniffles or just, you know, visually you could tell somebody's not themselves, you know, by looking at them, saying, oh boy." He drove Neumann to the job site, they stayed for half an hour, and returned home.
¶12 Finally, Neumann testified. Neumann recounted that he had gone to Fountain Hills Medical Center on the second day of trial, August 9. He went to "a[n] outpatient med emergency center," or a "doc-in-a-box," or an "emergent care center." He went because he had "started feeling . . . symptoms coming on," "felt awful," and was told by his attorney that he "should probably go get checked out." Neumann testified that the doctor had told him he had bronchitis, had given him a COVID test, and had told him to take another COVID test "a couple days later." Foxpoint offered into evidence an invoice for a COVID test, which Neumann testified was for the original COVID test he had taken at the medical center on August 9. On cross-examination, Grover's counsel asked why the date for the invoice was August 10, at 2:00 pm-Neumann did not know why it would say that. Foxpoint offered evidence that Neumann had cancelled a flight on August 12, because of his sickness. However the cancellation does not say when the flight was booked or when the flight was scheduled for.
¶13 Neumann testified that he had told the doctor about his court proceedings, and the doctor told him he "shouldn't go" and gave him a "court release." Neumann testified that on August 11, he had still been sick with "[t]he same symptoms that led the doctor to tell [him] to get multiple COVID tests." Nevertheless, he went to the job site because the billboard installation worker would be leaving, the materials needed to be protected from theft, and because the crates of materials would be taking up space in a restaurant's parking lot during peak dinner hours, angering the restaurant. Neumann did not recall talking to the installation employee on the phone, and claims he did not talk to him until he got to the job site. When he arrived, he spoke to the installation employee for about five minutes, and left after thirty minutes. Ultimately, he did not have COVID.
¶14 At the close of evidence, the trial court asked Grover's counsel whether he had obtained "emergency room records." Grover's counsel avowed that he had only obtained the same documents shown during the evidentiary hearing, such as the work release form and the two prescriptions.
¶15 Grover then re-urged his arguments stated in his bench memos-that the MetroCenter claims were unsupported by any disclosed damages evidence and that the Beth El Cemetery claims would be unsupported by any admissible testimony. Grover argued that Foxpoint did not have essential witnesses prepared for trial because Foxpoint knew that such testimony would "hurt" Foxpoint's case. Grover's counsel claimed that, during the second day of trial, he had personally asked Foxpoint's former counsel whether he would have any additional witnesses testify, to which Foxpoint's former counsel was "absolutely clear" that he would not.
¶16 Foxpoint conceded that "the MetroCenter damages were not in the disclosure statements," called it "an error or oversight," but argued that Neumann could testify to those damages. At that point, Foxpoint was interrupted by the trial court. The court asked Grover's counsel about discussions, post-mistrial, with the jury-Grover's counsel claimed he had asked the jury about Grover's testimony, which the jury found credible, and about whether certain witnesses' testimony, such as Dreiseszun's, would have mattered to them more than witnesses with an interest in the case, which the jury indicated it would. The court turned back to Foxpoint's counsel, who stated that "[his] understanding [was] that he was prepared to be at the trial," "with or without subpoena."
¶17 The trial court granted Grover's motion for mistrial with prejudice. It found that Grover had proved each fact asserted in the mistrial motion, and incorporated its statement of facts as the court's findings. The court additionally found that:
On August 9, 2022, after the jury was empaneled and trial had begun, [Grover] filed a Bench Memorandum outlining [Foxpoint]'s failure to articulate damages, and that A Motion for Judgment under Rule 50 of the Arizona Rules of Procedure in favor of defendant would be made at the next opportunity. Upon realization that such an oral motion was very likely to be granted, the feigned illness and deep need to cause a mistrial ensued.
The court concluded that it was "[m]ost telling" that Neumann did not produce records of his doctor visit, but instead had "another health care provider at a different facility write a vague uninformative note." The court explained it had "telegraphed to [Foxpoint] exactly what level of corroboration would be needed to make a credible claim of medical emergency requiring mistrial," and Foxpoint "fell woefully short." Therefore, it ruled:
The Court finds that [Foxpoint]'s former counsel violated his ethical duties of Candor to the Court, a duty of fairness to the opposing party and counsel, an obligation to present meritorious claims and contentions, and a duty to expedite litigation and avoid dilatory practices. These violations all occurred in conjunction with Mr. Neumann feigning illness and creating an opportunity for [Foxpoint]'s counsel to insist on a mistrial when none should have occurred. This purposeful misconduct caused a jury panel to have their time and effort wasted, ate up several days of this Division's trial availability for other cases, caused [Grover] to incur substantial expense, and cost the
taxpayers considerable expense in jury fees, administrative costs, and the expense of court staff having their time expended on such a frivolous matter. To allow another trial under these facts would be judicial malfeasance.
¶18 Because it granted a mistrial with prejudice on this basis, the trial court deemed the motion for summary judgment moot, and awarded fees and costs to Grover. In its fee award, the court determined that Neumann "shall be jointly and severally liable for any award of Attorney Fees and Costs." Foxpoint moved for reconsideration, arguing that the court made erroneous factual findings and that its order violated Arizona law. The court denied the motion, and entered final judgment certified under Rule 54(c), Ariz. R. Civ. P. Foxpoint appealed. We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).
Contempt orders and civil sanctions under A.R.S. § 12-864 are generally not appealable, Stoddard v. Donahoe, 224 Ariz. 152, ¶ 7 (App. 2010), but because the court's ruling here resulted in a final order of dismissal, it is, Green v. Lisa Frank, Inc., 221 Ariz. 138, ¶¶ 14-17, 21 (App. 2009).
Discussion
¶19 Here, the trial court's declaration of a "mistrial with prejudice" was, essentially, a dismissal of the case as a sanction. See Green v. Lisa Frank, Inc., 221 Ariz. 138, ¶¶ 28-29 (App. 2009) (a trial court possesses inherent authority to sanction party with dismissal). Generally, we review the imposition of such a sanction for abuse of discretion. Id. ¶ 40.
I. Trial Court's Factual Findings
¶20 Foxpoint argues that the trial court's factual findings supporting its dismissal were clearly erroneous. We will defer to a court's findings of fact unless they are clearly erroneous. Ariz. Bd. of Regents v. Phx. Newspapers, Inc., 167 Ariz. 254, 257 (1991); see also In re Gen. Adjudication of All Rts. to Use Water in Gila River Sys. &Source, 198 Ariz. 330, ¶ 25 (2000) (reviewing court defers to trial court's resolution of conflicting facts and inferences derived from evidence). Factual findings are not clearly erroneous if they are supported by substantial evidence, even if conflicting evidence exists. In re $26,980 U.S. Currency, 199 Ariz. 291, ¶ 9 (App. 2000); see also Valdez v. Delgado, 254 Ariz. 495, ¶ 14 (App. 2019) ("A factual finding is clearly erroneous only when, considering the totality of the evidence, the reviewing court 'is left with the definite and firm conviction that a mistake has been committed.'" (quoting State v. Burr, 126 Ariz. 338, 339 (1980))). We will not reweigh that conflicting evidence-we will only review the record to determine if substantial evidence exists that would support the court's ruling. In re Est. of Pouser, 193 Ariz. 574, ¶ 13 (1999). "Substantial evidence is evidence which would permit a reasonable person to reach the trial court's result." Id.
¶21 Foxpoint contends that there is insufficient evidence that: (1) Neumann feigned his illness; (2) that Foxpoint or Neumann "took any steps to obtain a mistrial due to reading a bench memorandum following the second day of trial"; or (3) that Foxpoint, through Neumann, provided insufficient medical records to substantiate the medical necessity for the mistrial. Foxpoint asserts that the trial court originally ordered the mistrial in part because logistical complications with the jury made a continuance impossible.
¶22 Substantial evidence supports the trial court's conclusion on each of these points. A reasonable person could conclude from the evidence set-forth above that Neumann feigned an illness, did so to delay the proceedings, and failed to provide sufficient documentation that would substantiate the medical necessity for a mistrial. Amparano v. ASARCO, Inc., 208 Ariz. 370, ¶ 19 (App. 2004) ("We will not find an abuse of discretion if a reasonable basis exists for the trial court's ruling."). Foxpoint's argument of other causes for the mistrial ignores the fact that if Neumann had attended trial, the court would not have been put in the position of deciding between a continuance or a mistrial in the first place; the trial would have concluded as scheduled.
¶23 Foxpoint also argues that the trial court's ruling reflects "confusion on the part of the Court whether or not the 'outpatient med emergency center' Fountain Hills Medical Center is an emergency room as stated on the record." In its ruling, as explained above, the court determined that Neumann had claimed to have seen a doctor, failed to obtain records of this visit, and instead had "another health care provider at a different facility write a vague uninformative note." Foxpoint contends on appeal that there is no indication that Neumann saw any other doctor than the one at Fountain Hills. Regardless, the court had "telegraphed to [Foxpoint] exactly what level of corroboration would be needed to make a credible claim of medical emergency requiring a mistrial," and determined that Foxpoint fell "woefully short." Foxpoint fails to demonstrate that the court's ultimate conclusion on this point-that the medical emergency Foxpoint represented had occurred was not in fact an emergency justifying a mistrial-was unsupported by substantial evidence. See In re Est. of Pouser, 193 Ariz. 574, ¶ 13.
II. Sanctions
¶24 Foxpoint similarly argues that the trial court's decision to grant a mistrial with prejudice as a sanction was an abuse of discretion. Foxpoint's argument relies, in part, on its fundamental assertion that no evidence supports the court's conclusion that Foxpoint's counsel or Neumann engaged in "culpable behavior." But, as stated above, substantial evidence supports the court's conclusion that Neumann did in fact engage in culpable behavior. See id.
¶25 Foxpoint also baldly asserts that the trial court was influenced by bias when it ordered a mistrial with prejudice. Specifically, Foxpoint argues that the court's "distaste for opposing counsel in his practice days bled over to this case, such that [the judge] imputed bad motive and behavior to Foxpoint and Neumann without factual basis." This claim is based on nothing more than the story the trial judge told about a negative experience in private practice when opposing counsel had obtained a mistrial because of a medical emergency, but was then seen healthy the next day and "got another bite at the apple." Although this experience may have motivated the court's demand that Foxpoint provide sufficient verification of Neumann's medical emergency, without more we cannot say that the court's approach to the ultimate determination was colored by personal bias.
¶26 Next, Foxpoint argues that the case citation the trial court provided in its ruling, Rivers v. Solley, 217 Ariz. 528 (App. 2008), is inapposite. In Rivers, the court had dismissed a case for discovery violations, as authorized by Rule 37(d), Ariz. R. Civ. P. Id. ¶¶ 11, 13. Under Rule 37(d), "[i]f a party or attorney knowingly fails to make a timely disclosure of damaging or unfavorable information required under Rule 26.1, [Ariz. R. Civ. P.,] the court may in its discretion impose any sanctions the court deems appropriate in the circumstances." These sanctions include "dismissal of the action in whole or in part." Id. As explained in Rivers, in the context of discovery violations, dismissal is an "extreme sanction" requiring an evidentiary hearing and requires express findings that a party-not just counsel-has obstructed discovery. Id. ¶ 13. Further, the court must make an express finding that it "has considered and rejected lesser sanctions as a penalty." Id. (quoting Wayne Cook Enters., Inc. v. Fain Props. Ltd. P'ship, 196 Ariz. 146, ¶ 12 (App. 1999)).
¶27 Notwithstanding the trial court's citation to Rivers, the court's sanction was not, it seems, based on discovery violations or Rule 37. Grover, for his part, argues that the court's order was justified under Rule 41(b), Ariz. R. Civ. P. Under Rule 41(b), a court may dismiss a case for a failure to prosecute a case or to comply with the rules or court orders. Arguably, by creating circumstances under which the trial in this matter could not be completed as scheduled, Foxpoint improperly delayed this matter and, through subterfuge, obviated the trial scheduling order. "[I]nvoluntary dismissal of an action pursuant to Rule 41(b) is a matter directed to the sound discretion of the trial court and . . . where a party has been accurately notified of the time and place of the hearing, his failure to appear is proper grounds for dismissal." Troxler v. Holohan, 9 Ariz.App. 304, 306 (App. 1969).
¶28 Although the trial court cited to a case discussing Rule 37, which does not appear to apply, and did not expressly found its order on Rule 41(b), we cannot say the court's sanction is fundamentally flawed. In imposing a sanction, the court was "not required to identify authority supporting its ruling, and we may uphold the trial court's ruling 'if it is correct for any reason.'" Id. n.8 (quoting Dube v. Likins, 216 Ariz. 406, n.3 (App. 2007)). Our courts have the inherent power "to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." Hmielewski v. Maricopa Cty., 192 Ariz. 1, ¶ 14 (App. 1997). This includes the inherent power to punish misconduct before them "independent of" specific rules that may govern the conduct. Id.; Precision Components, Inc. v. Harrison, Harper, Christian &Dichter, P.C., 179 Ariz. 552, 555 (App. 1993); Long v. Ariz. Portland Cement Co., 2 Ariz.App. 332, 335 (1965) (affirming dismissal of case where plaintiff failed to appear).
¶29 In any such order dismissing a case, however, a trial court must recite facts supporting its sanction. See Green, 221 Ariz. 138, n.8. We have articulated that a court should consider factors such as "prejudice to the other party," "whether the violations were committed by the party or by counsel," "prejudice to the judicial system, including delays and the burden placed on the trial court," "efficacy of lesser sanctions," and any other relevant factors. Id. ¶ 45. As outlined above, the court found the unjustified mistrial caused prejudice to Grover; was committed by Foxpoint itself, through Neumann, and in conjunction with Foxpoint's counsel; was done purposefully; and prejudiced the judicial system with delays and burdens. These findings are sufficient to justify the court's sanction, and we cannot say that the court abused its discretion or its inherent authority.
¶30 Foxpoint argues that the trial court failed to consider lesser sanctions. The court's ruling shows that it considered "allow[ing] another trial," but determined that to do so "would be judicial malfeasance." While the court could have been more explicit in its consideration of lesser sanctions, this portion of the court's ruling reflects that the court considered an alternative to dismissal and rejected that alternative. Although less severe alternatives the court could have considered were limited in light of its having declared a mistrial and dismissed the jury, the mistrial itself may be deemed a natural consequence of the delay caused by Foxpoint. We cannot say the court abused its discretion in refusing to grant a new trial and opting for a more severe sanction.
¶31 Finally, because the trial court did not abuse its discretion in granting the mistrial with prejudice as a sanction, we conclude it did not err in awarding attorney fees and costs to Grover below, or in denying Foxpoint's motion for reconsideration.
III. Attorney Fees
¶32 Both parties request attorney fees, pursuant to Rule 21, Ariz. R. Civ. App. P., under A.R.S. §§ 12-341, 12-341.01, and as provided by the parties' employment contract. This court "lacks discretion to refuse to award fees under [a] contractual provision." McDowell Mountain Ranch Cmty. Ass'n v. Simons, 216 Ariz. 266, ¶ 14 (App. 2007) ("Indeed, it is well-settled in Arizona that contracts for payment of attorneys' fees are enforced in accordance with the terms of the contract."). The employment contract states, "The prevailing party in any legal action instituted by either party against the other" for breach of the contract "shall be entitled to recover from the non-prevailing party all costs and expenses incurred in connection therewith." Foxpoint is not the prevailing party on appeal, so we reject its request for fees and costs. Grover, as the prevailing party, is entitled to his attorney fees and costs upon his compliance with Rule 21.
Disposition
¶33 We affirm the trial court's dismissal of Foxpoint's case with prejudice, its award of attorney fees and costs to Grover, as well as its denial of Foxpoint's motion for reconsideration.