Opinion
1 CA-SA 13-0044
04-09-2013
ALAN M. LOBOCK, Petitioner, v. THE HONORABLE COLLEEN L. FRENCH, Judge Pro Tem of the SUPERIOR COURT OF THE STATE OF ARIZONA In and for the County of MARICOPA, Respondent Judge, D-D THE AQUARIUM SOLUTION, L.L.C., an Arizona Limited Liability Company Real Party in Interest.
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz.R.Sup.Ct. 111(c); ARCAP 28(c);
Ariz.R.Crim.P. 31.24
Maricopa County
Superior Court
No. FN2012-054727
DECISION ORDER
This special action arises from the trial court's denial of Lobock's invocation of the privilege against self-incrimination in response to discovery requests and Arizona Rule of Civil Procedure 56(f) application for additional time to respond to a motion for summary judgment.
On August 6, 2012, D-D The Aquarium Solution L.L.C., ("Aquarium") filed a complaint alleging that Lobock embezzled and converted company funds through his position as the company's accountant. Concurrent with filing the complaint, Aquarium submitted proposed discovery and a motion to expedite. The discovery request included requests for production and uniform and non-uniform interrogatories. The motion explained that it wanted expedited discovery because it feared that Lobock would continue to embezzle company funds and it needed to determine the location of the missing funds: "Each of D-D US's carefully-crafted discovery requests is aimed at uncovering the location and, if applicable, the allocation or use by Defendant, of the missing funds."
Aquarium sought a temporary restraining order prohibiting Lobock from transferring funds from any account containing company funds, and the trial court granted one on August 15. At the same time, the court ordered Lobock to respond to discovery no later than thirty days after it was served on him. On September 13, 2012, Lobock responded to the discovery request by asserting a blanket invocation of his right against self-incrimination under the Fifth Amendment to the United States Constitution.
On October 12, 2012, Aquarium moved for summary judgment. Aquarium stated that Lobock's failure to dispute or deny that he absconded with Aquarium's money made summary judgment appropriate. On October 17, 2012, Aquarium moved to compel Lobock's response to discovery and requested its attorneys' fees and costs in preparing that motion.
Lobock responded to the motion to compel, stating that he was entitled to Fifth Amendment protection in civil proceedings, and that these protections applied to any information that would furnish a link in the chain of evidence that could lead to prosecution, as well as to evidence that he reasonably believed could be used against him in a criminal prosecution. He argued that the request to respond to interrogatories and request to identify documents fell within the Fifth Amendment's protections.
On November 28, 2012, Lobock submitted an Application for Additional Time to Respond to the Motion for Summary Judgment under Rule 56(f). Lobock stated that he had not had an opportunity to conduct necessary discovery and to respond to the motion. Lobock's attorney attached his affidavit stating that he wanted to "conduct discovery and seek production" from the owner of Aquarium and other individuals involved who may have knowledge of the allegations. He stated that he had not had an opportunity to identify witnesses who might testify or what documents existed due to Aquarium's own lack of disclosure. He also stated that after discovery, the evidence would show "that the parties had a pattern and practice of paying Defendant in an agreed upon procedure that was authorized ... and that the agreement among the parties authorized the actions Mr. Saxby accuses Defendant of committing." He estimated that he would need nine months to conduct discovery and to respond to the motion for summary judgment, and identified individuals he wished to depose.
On January 17, 2013, the court reviewed Aquarium's motion for summary judgment and Lobock's application for additional time and gave him until January 28, 2013, to respond to Aquarium's motion for summary judgment. On January 24, 2013, after oral argument, the court granted Aquarium's motion to compel. The court stated that a claimant may invoke the privilege against self-incrimination only if he apprehends a real and appreciable risk of prosecution, and noted that although an e-mail from Aquarium's majority owner directed Aquarium's counsel to report the theft to the authorities, "it is not clear that any report to a prosecuting agency will even be made." It therefore found that Lobock was not entitled to invoke the Fifth Amendment right in response to discovery. The court also awarded Aquarium its attorneys' fees and costs incurred in prosecuting the motion to compel. Lobock moved for reconsideration, which was denied, and then sought a stay of the court's order granting the motion to compel. This was also denied.
Lobock then filed this special action seeking review of the court's order that he respond to Aquarium's discovery requests and review of the denial of his application for additional time to respond to the motion for summary judgment. This Court has stayed Lobock's compliance with the trial court's order granting Aquarium's motion to compel, and has stayed the hearing, consideration of, and the ruling on the pending motion for summary judgment while the matter was under advisement.
I. Discovery Orders
The trial court erred in ordering Lobock to respond to the discovery requested because a person is not required to wait for a possible report of criminal activity before invoking the right against self-incrimination. The privilege may be invoked when "the claimant has reasonable cause to apprehend danger of incrimination." Thoresen v. Superior Court In and For Maricopa Cnty., 11 Ariz. App. 62, 66, 461 P.2d 706, 710 (App. 1969). The privilege may be invoked in a civil proceeding, see State v. Ott, 167 Ariz. 420, 808 P.2d 305 (App. 1990), and a claimant need not be the subject of a pending prosecution to invoke the privilege, see Zonver v. Superior Court of Los Angeles Cnty. , 270 Cal. App. 2d 613 (1969) (A witness does not have to demonstrate conclusively that the answers will make him subject to prosecution; the court only need to come to that conclusion with "reasonable judicial imagination."). Courts are to liberally interpret the privilege and only deny it if it is "perfectly clear from a careful consideration of all the circumstances in the case, that the witness is mistaken and that the answer cannot possibly have such a tendency to incriminate." Flagler v. Derickson, 134 Ariz. 229, 232, 655 P.2d 349, 352 (1982) citing Malloy v. Hogan, 378 U.S. 1, 12 (1964).
Here, the discovery in question requests production of tax returns, the general ledger of the company, records of expenses, and the company's bank statements. The non-uniform interrogatories ask where company funds are located and for an explanation of certain expenses on the company's account and identification of a bank account. The uniform interrogatories ask questions regarding Lobock's employment contract. With little judicial imagination, an examination of the complaint clearly shows that Lobock's responses to this discovery could incriminate him. Because courts are to interpret the privilege liberally, the court should not have denied Lobock his right to use it. The court appears to have denied Lobock the right to use the privilege only because no criminal investigation or prosecution was pending. Because that is not a requirement for its use, the trial court erred in granting Aquarium's motion to compel discovery, and Lobock may assert his right against self-incrimination and refuse to answer the requests for production and interrogatories.
We decline to address the propriety of Lobock's blanket assertion of his right against self-incrimination. Although Aquarium argues in its response to the petition for special action that a blanket assertion is improper, it did not raise this issue before the trial court, and arguments not raised in the trial court are generally waived. See Odom v. Farmers Ins. Co. of Ariz., 216 Ariz. 530, 535, ¶ 18, 169 P.32d 120, 125 (App. 2007). Moreover, given Aquarium's claim that "[e]ach of D-D US's carefully-crafted discovery requests is aimed at uncovering the location and, if applicable, the allocation or use by Defendant,of the missing funds[,]" a blanket assertion may have been appropriate. See Ott , 167 Ariz. at 427, 808 P.2d at 312 ("When all the questions clearly seek incriminating testimony, . . . a party may be excused from separately answering each question.")
II. Request for Additional Time to Respond under Rule 56(f)
At the time Lobock filed his motion under Rule 56(f), the rule provided:
Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such order that is just.Ariz. R. Civ. P. 56(f).
This statute was amended January 1, 2013.
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The decision whether to grant a pre-summary judgment continuance to allow additional discovery is within the trial court's discretion. Alberta Secs. Com'n v. Ryckman, 200 Ariz. 540, 543, ¶ 11, 30 P.3d 121, 124 (App. 2001). This decision will not be reversed absent an abuse of that discretion. Id. "A Rule 56(f) motion 'requires a party to submit a sworn statement specifically describing the reasons justifying delay,' which includes the evidence outside the party's control, its location, what the party believes the evidence will show, the discovery method the party wishes to use, and an estimate of the time required to complete discovery." Simon v. Safeway, Inc., 217 Ariz. 330, 333, ¶ 6, 173 P.3d 1031, 1034 (App. 2007). The objective of Rule 56(f) is "to insure that a diligent party is given a reasonable opportunity to prepare his case." Id.
Here, the trial court had reason to deny the Rule 56(f) motion because Lobock's compliance with the rule's requirements was arguably inadequate. The affidavit of Lobock's attorney notes four people he would like to depose but does not state why discovery has been delayed or identify the evidence that he seeks to discover. The objective of the rule, to ensure that a diligent party has time to prepare his case, would not be met by granting a continuance because Lobock has not noticed any depositions to Aquarium or propounded any discovery in the six months since the complaint was filed.
Although we would otherwise find that the trial court did not abuse its discretion in denying the Rule 56(f) motion for lack of compliance with Rule 56(f), the record is unclear whether its erroneous ruling on the motion to compel influenced its ruling on the Rule 56(f) motion. We therefore remand this matter to the superior court to reevaluate Lobock's Rule 56(f) motion in light of our determination that he was entitled to invoke his Fifth Amendment right against self-incrimination in responding to Aquarium's discovery requests.
III. Attorneys' Fees and Costs
Because we find that the court erred in ordering Lobock to respond to the discovery requests, the court improperly awarded Aquarium its attorneys' fees and costs in pursuing their motion to compel.
CONCLUSION
Accordingly, the court, by Presiding Judge Patricia K. Norris and Judges Andrew W. Gould and Randall M. Howe, accepts special action jurisdiction and grants relief in part.
IT IS ORDERED lifting the previous stay order.
IT IS FURTHER ORDERED reversing the trial court's order that Lobock respond to discovery and granting Lobock's request to invoke the Fifth Amendment privilege against self-incrimination.
IT IS FURTHER ORDERED remanding to the trial court to reconsider Lobock's 56(f) request in accordance with this Court's instructions.
IT IS FURTHER ORDERED reversing the court's order granting Aquarium its attorneys' fees and costs incurred in pursuing its motion to compel.
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RANDALL M. HOWE, Judge