Opinion
2 CA-CV 2023-0138
06-13-2024
Gerald D. W. North, Plaintiff/Appellant/Cross-Appellee, v. Ubiquity, Inc., a Nevada corporation; fka Ubiquity Broadcasting Corporation, a Delaware corporation; fka Ubiquity Holdings, Inc., a Delaware corporation, Defendant/Appellee/Cross-Appellant.
Dennis L. Hall, Attorney PLLC, Scottsdale By Dennis L. Hall Counsel for Plaintiff/Appellant/Cross-Appellee Frazier Law PLLC, Scottsdale By Grant H. Frazier and Dustin D. Romney Counsel for Defendant/Appellee/Cross-Appellant
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Maricopa County No. CV2014093859 The Honorable Roger E. Brodman, Judge The Honorable Patricia A. Trebesch, Judge Pro Tempore
Dennis L. Hall, Attorney PLLC, Scottsdale By Dennis L. Hall Counsel for Plaintiff/Appellant/Cross-Appellee
Frazier Law PLLC, Scottsdale By Grant H. Frazier and Dustin D. Romney Counsel for Defendant/Appellee/Cross-Appellant
Judge Eckerstrom authored the decision of the Court, in which Presiding Judge Brearcliffe and Judge Kelly concurred.
MEMORANDUM DECISION
ECKERSTROM, Judge
¶1 Gerald North appeals from the superior court's May 2023 judgment dismissing with prejudice his complaint against Ubiquity, Inc. In particular, he challenges the court's denial of two motions for leave to amend his complaint and one motion to set aside a prior judgment entered by the court under Rule 54(b), Ariz. R. Civ. P., which this court affirmed.Ubiquity cross-appeals from the court's denial of its request for an award of attorney fees. For the reasons that follow, we affirm.
North's notice of appeal also referenced other rulings, including the superior court's grant of summary judgment on his promissory fraud claim in favor of Ubiquity. However, North has not presented argument regarding those rulings in his briefs before this court. Any such claims are thus waived. See Dawson v. Withycombe, 216 Ariz. 84, ¶ 91 (App. 2007).
Factual and Procedural Background
¶2 We view the facts and all reasonable inferences to be drawn therefrom in the light most favorable to upholding the superior court's rulings. See Tucson Ests. Prop. Owners Ass'n, Inc. v. McGovern, 239 Ariz. 52, ¶ 3 (App. 2016). In 2006, Ubiquity-an upstart telecommunications company based in California-was seeking to expand its business nationwide. It approached North, a retired antitrust and patent lawyer, for assistance connecting with strategic partners in the telecommunications industry. In December 2006, Ubiquity entered into a contract with North's law firm, with North agreeing to connect Ubiquity to some of his industry contacts. Ubiquity agreed to pay a "commencement fee" in the form of a warrant for shares in Ubiquity.
¶3 However, two months after the contract was signed and before any shares were transferred, Ubiquity notified North in writing that it was terminating the agreement. North responded by accusing Ubiquity of breaching the contract by failing to issue the warrant and of having had fraudulent intentions when the agreement was signed. The termination became effective on March 13, 2007, ten days after North received the termination notice. Three days later, Ubiquity sent North a letter offering to issue the warrant in exchange for North's execution of a mutual release, which was enclosed with the letter. North did not respond to the letter, execute the mutual release, offer to do so, or otherwise indicate that he was willing to do so. Ubiquity never issued the warrant.
¶4 Ubiquity continued to acknowledge its obligation to issue the warrant for at least two years. In Private Placement Memorandums (PPMs) issued in April 2007 and November 2009, Ubiquity disclosed to potential investors that it had an obligation to issue the stock warrant to North. Neither the PPMs nor Ubiquity's statements regarding North's entitlement to the warrant were provided or communicated to North at the time.
¶5 In October 2013, North learned that Ubiquity had become a public company and was trading its shares on the NASDAQ stock exchange. He contacted Ubiquity and its principal officer, Christopher Carmichael, to demand issuance of the stock warrant. In February 2014, Ubiquity refused, citing the statute of limitations and other defenses. North filed this lawsuit in June 2014, claiming breach of contract and promissory fraud.
In 2016, after the superior court denied Ubiquity's motion to dismiss for lack of personal jurisdiction, North-apparently worried about potential reversal on appeal-filed an identical breach-of-contract claim in federal court in Illinois, where his law firm was based. In 2017, the district court dismissed the case for lack of personal jurisdiction, which the Seventh Circuit Court of Appeals affirmed in 2023. North v. Ubiquity, Inc., 72 F.4th 221, 223-24, 229 (7th Cir. 2023).
¶6 In 2017, North moved for summary judgment on his claim for breach of contract. Ubiquity responded and cross-moved for summary judgment. In 2018, the superior court denied North's motion for summary judgment and granted Ubiquity's as to the contract claim. It ruled that the claim had accrued on the date termination of the contract became effective- March 13, 2007-and that, when North filed his lawsuit "well over seven years" later in June 2014, the contract claim was already time-barred. However, the court denied Ubiquity's summary judgment motion as to North's promissory fraud claim. In early 2019, the court entered judgment under Rule 54(b), and North appealed. In early 2020, we affirmed the superior court's judgment, agreeing that North's contract claim was time-barred. North v. Ubiquity Inc., No. 1 CA-CV 19-0229, ¶¶ 1, 6, 14 (Ariz. App. Feb. 20, 2020) (mem. decision). North filed a petition for review, which our supreme denied in August 2020.
The superior court noted that the claim was barred regardless of whether Arizona or California law applied. Arizona's statute of limitations is six years for claims regarding written contracts, A.R.S. § 12-548, while California imposes an even less permissive four-year statute of limitations for such claims, Cal. Civ. P. Code § 337 (West 2019).
¶7 During the pendency of his first appeal, North learned that, in late 2017, Carmichael had received assets from Ubiquity to settle a $2,000,000 debt owed to him for unpaid compensation. In September 2019, North sought leave to amend his complaint to add claims regarding this transaction, which he characterized as a fraudulent transfer. The superior court denied North's motion for leave to amend in May 2021.
¶8 In July 2022, Ubiquity produced to North its settlement agreement with Carmichael. Then, in August 2022, Ubiquity moved for summary judgment as to North's remaining claim for promissory fraud. Ubiquity argued both that the statute of limitations had expired and that North had presented no evidence of fraud. In support of that motion, Ubiquity referenced and attached the 2007 and 2009 PPMs, which had not previously been produced or otherwise communicated to North.
¶9 In late October 2022, North filed a motion pursuant to Rule 60(d)(3), Ariz. R. Civ. P., to set aside the superior court's Rule 54(b) judgment from 2019 that had been affirmed on appeal in 2020. He argued that the late disclosure of the PPMs constituted a "fraud on the court."
¶10 In November 2022, North filed another motion for leave to amend his complaint. This proposed amended complaint contained the same additional claims regarding an alleged fraudulent transfer to Carmichael that North had unsuccessfully attempted to add in September 2019. The proposed complaint also contained purportedly new claims for breach of contract based on the theory that the PPMs had tolled the running of the statute of limitations.
¶11 Ubiquity emailed North to request that he withdraw the two motions or face a request for attorney fees and costs. The parties met and conferred, but North refused to withdraw the motions. Ubiquity then responded to the motions, urging the superior court to deny them. Ubiquity also sought the attorney fees incurred in having to respond and defend against what it characterized as North's "baseless and wasteful" motions.
¶12 In December 2022, North filed a reply in support of his motion to set aside the Rule 54(b) judgment. Therein, he argued for the first time that, with each merger of Ubiquity's predecessor entities in 2007 and 2013, he "was entitled to new stock and a new breach occurred" when the warrant was not issued, "starting a new limitations period." North attached additional evidence to his reply, including discovery responses and a declaration with accompanying emails. Ubiquity moved to strike the additional evidence and new argument as unresponsive and thus improperly filed under Rule 7.1, Ariz. R. Civ. P.
¶13 In early 2023, the superior court denied both North's motion for leave to amend the complaint and his motion to set aside the Rule 54(b) judgment. In so doing, the court concluded, inter alia, that the PPMs "would not have reset the statute of limitations" under Arizona or California law. The court did not expressly rule on Ubiquity's motion to strike North's new argument regarding recurring breaches by Ubiquity's successor entities or the related evidence. In both rulings, the court denied without prejudice Ubiquity's request for attorney fees and costs, holding the issue in abeyance until final resolution of the matter.
¶14 In late February 2023, North sought reconsideration of portions of the court's rulings denying his motions. Three days later, he again sought leave to amend the complaint, this time "to allege Ubiquity's recurring breaches of contract within the limitations period."
¶15 In early March 2023, the superior court granted Ubiquity's motion for summary judgment as to North's promissory fraud claim, stating its understanding that this ruling would terminate the case. The court directed Ubiquity to submit a proposed form of final judgment, "leaving blanks for awards of costs and attorneys' fees," as well as a claim for such award within ten days, if applicable. The court warned, "A failure to timely submit a claim for costs and/or attorneys' fees will result in a waiver of the claim."
¶16 The next day, the superior court denied North's motion to reconsider. The court explained that such a motion "is not for the purpose of rearguing issues already lost." In addition to affirming its prior rulings, including that the PPMs did not reset the statute of limitations, the court stated it could further "add 'futility' for the reasons set forth" in its denial of North's motion to set aside the Rule 54(b) judgment.
¶17 Ubiquity then filed a proposed final judgment as ordered, as well as an application for fees and costs under Rule 11, Ariz. R. Civ. P. It requested only those fees and costs incurred in defending against North's October 2022 motion to set aside the Rule 54(b) judgment and his November 2022 motion to amend the complaint, totaling $18,567.
¶18 At the end of March 2023, North filed a motion seeking leave to withdraw his February 2023 motion to amend the complaint and resubmit it as a motion for reconsideration. In April 2023, the superior court granted North's motion to withdraw but summarily denied his renamed motion for reconsideration.
¶19 In May 2023, the superior court entered final judgment. Noting its prior grant of summary judgment in favor of Ubiquity on the promissory fraud claim, it dismissed with prejudice North's complaint and "all claims or causes of action asserted therein against Defendants." With regard to Ubiquity's request for fees, the court found that an award of fees under Rule 11 was not warranted and that Ubiquity had waived any other theory by failing to timely raise it. The court thus refused to award any fees or costs.
¶20 This appeal and cross-appeal followed. We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).
Claims on Appeal I. Ubiquity's Purported Acknowledgements
¶21 Much of North's appeal turns on his contention that the PPMs issued by Ubiquity in April 2007 and November 2009, which Ubiquity did not produce until August 2022, constitute "key evidence" requiring that he be allowed to relitigate his claim for breach of contract. On this basis, he contends that this court's prior decision-affirming the superior court's grant of summary judgment on the breach-of-contract claim-"is not law of the case." This argument also undergirds North's claim that the superior court abused its discretion both by denying him leave to amend his complaint "to allege the acknowledgements" and by denying his motion to set aside the Rule 54(b) judgment already affirmed by this court.
¶22 As noted above, the superior court concluded that the PPMs "would not have reset the statute of limitations." It based this conclusion on its findings that the PPMs were not signed by Ubiquity and were never communicated to North, who did not learn of their existence until August 2022. We agree.
¶23 Under longstanding Arizona law, in order for an acknowledgement of a debt to extend or reset the running of the statute of limitations on a related claim, the acknowledgement must, inter alia, (a) "be signed by the party to be charged," (b) "contain a promise, express or implied, to pay the indebtedness," and (c) "contain, directly or impliedly, an expression by the debtor of the 'justness' of the debt"-"the moral obligation which the debtor feels rests upon himself to repay the original obligation." Freeman v. Wilson, 107 Ariz. 271, 275-76 (1971). As our supreme court has explained, id. at 275, this law has been codified at A.R.S. § 12-508. That statute bars the admission into evidence of any purported acknowledgment for the purpose of taking a related action "out of the operation" of the statute of limitations "unless the acknowledgment is in writing and signed by the party to be charged thereby."
The language of § 12-508 does not support North's argument that it only applies to acknowledgements made after an action is already barred by the statute of limitations. By its plain terms, § 12-508 refers to any acknowledgment of the justness of a particular claim "made subsequent to the time [the related debt] became due." See also Steinfeld v. Marteny, 40 Ariz. 116, 123 (1932) (requirements established in identical precursor to § 12-508 apply to any acknowledgement of justness of particular claim "made subsequent to the accrual of the right of action, and either before or after the bar" (emphasis added)).
¶24 North first contends the superior court erred in concluding that the PPMs were not signed. He concedes that neither PPM "bore a manual signature." But he points to assorted authorities regarding various means beyond manual signatures by which parties may now effectively sign documents, including through typed signatures, electronic signatures, and the inclusion of signature blocks on emails. North concludes that, by sending copies of the PPM to potential investors "with his name and title embossed on the subscription agreements (as the expected signer for Ubiquity) . . . Carmichael, Ubiquity's CEO, identified and authenticated the acknowledgement contained in the PPM" and therefore "'signed' it."
¶25 As an initial matter, this argument applies only to the PPM issued in 2009. No such signature page appears in the 2007 PPM or any of its attachments. Regardless, the unexecuted signature page of the proposed subscription agreement included as an exhibit to the 2009 PPM is, quite obviously, not signed. The authorities North cites are inapposite and do not require a contrary conclusion. See, e.g., Haywood Sec. v. Ehrlich, 214 Ariz. 114, ¶¶ 2, 21 (2007) (finding typed signatures in "/s/ Name" format compliant with requirement that judgments be "signed," so long as judge intends such signature to formalize and authenticate written judgment). North argues that the document "expressly contemplated that Ubiquity's CEO would manually sign the subscription agreements entered into by the investors to whom they were addressed and in which the PPM would be incorporated by reference." But there is no evidence that any investor actually accepted the proposed agreement or that Ubiquity's CEO ever had occasion to sign it, manually or otherwise.
¶26 North further contends the superior court erred by focusing on the undisputed fact that the acknowledgments contained in the PPMs were not contemporaneously communicated to North. He argues that this amounted to improperly "engrafting an additional requirement on A.R.S. § 12-508." But that statute is "merely a rule of evidence, applied to a right which it is assumed by the statute exists as a matter of common law." John W. Masury &Son v. Bisbee Lumber Co., 49 Ariz. 443, 460 (1937). And Arizona case law makes plain that, in order to extend or reset the running of the statute of limitations, "an acknowledgment or promise must be made either to the creditor or someone acting for him, or to some third person with the intent that it be communicated to the creditor." Bulmer v. Belcher, 22 Ariz.App. 394, 396 (1974) ("fatal flaw" in appellants' argument that statute of limitations had been extended by debtor's acknowledgement was that it was not made to them, their agent, or with any intent that it be communicated to them before running of statute of limitations). The court thus correctly concluded that a debtor's disclosure of a debt to an uninvolved third party, if never communicated to (much less relied upon by) the creditor, cannot reset the statute of limitations. Having admitted that neither he nor any agent working on his behalf was notified of Ubiquity's acknowledgements in the 2007 and 2009 PPMs, North has failed to sustain his "burden of proving an acknowledgement of the debt to the creditor in writing so as to remove the limitations bar." Id. at 396-97 (emphasis added).
North accuses Ubiquity of violating the rules of professional conduct by failing to cite Bulmer in the superior court, "divert[ing] attention from it, and continu[ing] to duck it on this appeal," requesting that we impose sanctions due to this purported "lack of candor." We decline to do so. The case at issue most obviously supports Ubiquity's arguments on appeal, not North's. For the first time in his reply brief, North contends Ubiquity communicated its acknowledgment "to some third person with the intent that it be communicated to the creditor," Bulmer, 22 Ariz.App. at 396, "each time Ubiquity acknowledged its debt to a successor corporate entity." Having failed to raise this argument in his opening brief, North has waived it. See Ritchie v. Krasner, 221 Ariz. 288, ¶ 62 (App. 2009). Regardless, North has not explained why acknowledgements made in documents Ubiquity issued to potential investors should now be treated as acknowledgements to its own successor entities.
North argues that Arizona law governs for determining the effectiveness of the acknowledgements in the PPMs. Ubiquity does not take a definitive position either way. We need not address this choice-of-law question, as the result would be the same under California law, for the reasons explained by the superior court. See Clunin v. 1st Fed. Tr. Co., 207 P. 1009, 1010 (Cal. 1922) (well established in California that acknowledgments never communicated to creditor insufficient to take case out of statute of limitations); Biddel v. Brizzolara, 30 P. 609, 610 (Cal. 1883) ("An admission to a stranger of the existence of the debt cannot be construed an acknowledgment to the creditor such as indicates an intention on the part of the person making the admission to hold himself bound to pay, nor is it expressive of his willingness to pay.").
¶27 Because the PPMs were never signed by Ubiquity, the superior court was prohibited under § 12-508 from admitting them into evidence for the purpose of bringing North's contract claim within the statute of limitations. Moreover, the PPMs were incapable of resetting the statute of limitations because they were neither communicated to North nor intended to be communicated to North. For this reason, they could not have evinced either a promise to issue the warrant or an expression by Ubiquity that it believed itself morally obligated to do so. See Freeman, 107 Ariz. at 275-76. Indeed, less than a month before it issued the April 2007 PPM, Ubiquity had advised North that it would only issue the warrant-in order to avoid litigation, not out of a sense of moral obligation-if he executed and returned the mutual release, which he never did.
¶28 For all these reasons, we reject North's contention that the belated production of the PPMs amounted to "a substantial change" in the evidence, facts, or issues, such that we should reopen the contract claim already definitively addressed by both the superior court and this court. Our resolution of this issue also impacts our assessment of North's challenges to the superior court's denial of his motions for leave to amend the complaint and his motion to set aside the Rule 54(b) judgment. We now turn to those claims.
II. Denials of North's Motions for Leave to Amend
¶29 North challenges the superior court's denial of his repeated requests for leave to amend his complaint "to allege the acknowledgements and the recurring breaches." We review a denial of a request to amend pleadings for an abuse of discretion. 1st-Citizens Bank &Tr. Co. v. Morari, 242 Ariz. 562, ¶ 12 (App. 2017). "A court does not abuse its discretion by denying a request to amend if the amendment would be futile." Id. A court may also be within its discretion to deny leave to amend if it finds, inter alia, undue delay or undue prejudice to the opposing party. Carranza v. Madrigal, 237 Ariz. 512, ¶ 13 (2015). "A finding of 'undue delay' requires more than a party merely seeking to amend late in the proceedings," id., and is not appropriate "where the amendment seeks no more than to add a new legal theory supported by factual issues already in the case," Owen v. Superior Court, 133 Ariz. 75, 80 (1982). Rather, such a finding should be reserved for "when the amendment comes late and raises new issues requiring preparation for factual discovery which would not otherwise have been necessitated nor expected, thus requiring delay in the decision of the case." Carranza, 237 Ariz. 512, ¶ 13 (quoting Owen, 133 Ariz. at 81). For its part, "prejudice" in this context means "the inconvenience and delay suffered when the amendment raises new issues or inserts new parties into the litigation." Id. (quoting Owen, 133 Ariz. at 79). Even where the superior court did not state the basis for its denial, we will uphold the ruling if it is correct for any reason. Tumacacori Mission Land Dev., Ltd. v. Union Pac. R.R. Co., 231 Ariz. 517, ¶ 4 (App. 2013).
Neither North's motion for reconsideration before the superior court nor his opening brief on appeal presented any argument challenging the denial of his repeated requests to amend the complaint to allege claims regarding a purported fraudulent transfer to Carmichael. Ubiquity briefly addressed the proposed fraudulent transfer claims in its answering brief but primarily to explain that they would have been futile or, even if meritorious, could have been brought in a separate action if North had prevailed on his fraud claim. North then argued in his reply brief that the denials of his motions to amend to add the fraudulent transfer claims were "highly prejudicial" to him and that amendment would not have been futile. In our discretion, we decline to address these previously unraised issues. See Dawson, 216 Ariz. 84, ¶ 91 ("We will not consider arguments made for the first time in a reply brief.").
¶30 With regard to his November 2022 motion, North argues that the superior court abused its discretion by denying him leave to amend to allege the two acknowledgements-the PPMs-because it provided "no valid reason" for doing so. We disagree.
¶31 When ruling on the motion in January 2023, the superior court explained that, "[a]s a policy matter," it declined to "exercise its discretion to reconsider a ruling denying a motion to amend made by a prior judge 20 months ago." It noted that North's proposed amended complaint would add three new causes of action, including a claim for fraudulent transfer, as well as a new defendant. It explained that, under the scheduling order approved in May 2022-nearly a year after the court's ruling denying North's prior attempt to amend the complaint-discovery was complete, a motion for summary judgment had been filed and briefed, and a trial-setting conference was set for March 2023. It stated that "the parties should be preparing for trial, not adding new claims." For all these reasons, the court "decline[d] to reopen the case with new causes of action (and additional parties and discovery) at [that] late stage." These explanations amount to a fairly detailed finding that the proposed amendment would have caused undue delay, undue prejudice to Ubiquity, or both. See Carranza, 237 Ariz. 512, ¶ 13; Owen, 133 Ariz. at 79-81.
The superior court concluded by emphasizing that the fraudulent transfer claim "can be brought in a separate action and is wholly dependent on plaintiff receiving a judgment in the instant action." As noted above, North waived any challenge to this finding by failing to raise it in either his motion for reconsideration before the superior court or in his opening brief on appeal.
¶32 North argues that the superior court's rationale "ignored that the new motion contained a completely new request for leave to amend, based on the acknowledgements that first surfaced in [Ubiquity's] August 26, 2022 motion for summary judgment, nearly three years after the prior motion." He also contends the court's "later-articulated reasons for denying leave to amend to allege the acknowledgements" contained in the PPMs-that they were neither signed nor communicated to North or his agent-"were legal errors." But, as discussed above, the court properly rejected North's claims that the PPMs were "key evidence" for resetting the statute of limitations and concluded that amendment to allege those "acknowledgments" would be futile. See Morari, 242 Ariz. 562, ¶ 12. We therefore find that North has established no abuse of discretion in the court's denial of his November 2022 motion to amend his complaint or its refusal to reconsider that denial.
¶33 Much of North's argument on appeal relates to the superior court's denial of his February 2023 motion to amend the complaint to allege two "later, recurrent" breaches by entities in Ubiquity's corporate history, pursuant to the contract itself and California's continuous accrual doctrine, as well as the merger statutes of Delaware and Nevada. As noted above, he sought to argue that each time one of Ubiquity's predecessors breached the contractual duty to issue the warrant, "a new claim arose with a new limitations period"-in other words, that "each subsequent merger gave rise to a new breach."
¶34 The superior court denied this motion in April 2023, noting that it had "reviewed the chronology including prior Court rulings." North contends this ruling amounts to an abuse of discretion because the court gave "no reason at all" for denying the motion-that it was "ipso facto, an abuse of discretion" for the court to do so "without articulating any justification at all." He further contends there was no unarticulated basis for denial of his motion for leave to amend to allow him to make these allegations.
¶35 As an initial matter, a superior court's denial of a motion for leave to amend is not necessarily an abuse of discretion any time it declines to state its legal or factual basis. See Tumacacori Mission Land Dev., 231 Ariz. 517, ¶¶ 4, 13 (affirming otherwise correct denial of leave to amend complaint even where superior court "did not state the basis for its denial"). And the superior court's denial here was clearly correct, even if all the possible reasons for that denial were not expressly articulated. See id. ¶¶ 4, 12.
¶36 North concedes that he learned of the April 2007 and March 2013 mergers underlying his new claims in October 2013. He further concedes that the claim he sought to add "related to the very same contract that had been at issue throughout this case." Nevertheless, as explained above, North did not raise his "recurring breach" argument in the superior court until his December 2022 reply in support of the motion to set aside. The court implicitly rejected that belated addition as improper under Rule 7.1(a)(3). Only afterwards did North seek leave, in late February 2023, to amend to allege his merger-based theory of recurring breach. North argues that the motion to amend should have been granted because, at the time, "no trial date was set and a trial setting conference was not scheduled for three weeks," such that "[n]o delay in the trial was contemplated." This argument ignores that North's claim for breach of contract had already been definitively litigated-with him never having raised the recurring breach theory-leaving only the promissory fraud claim still before the superior court. See North, No. 1 CA-CV 19-0229, ¶ 6.
In response to Ubiquity's emphasis on this concession, North instead contends in his reply brief that he actually "knew nothing about the 2007 merger before the PPMs were disclosed, nor could he have," such that the first purported breach "was not discovered until mid-2022." Even were we to credit this belated argument, North continues to concede that he learned of the 2013 merger before he filed his complaint in June 2014.
¶37 In particular, as outlined above, North filed his complaint in June 2014 and moved for summary judgment on his breach-of-contract claim in August 2017. He did not raise his merger-based theory then. Nor did he raise it in response to Ubiquity's January 2018 cross-motion for summary judgment, which focused specifically on a statute-of-limitations defense. The superior court granted Ubiquity's motion with regard to the contract claim on statute-of-limitations grounds in May 2018. We affirmed that ruling in February 2020. Because he had not raised it, neither ruling made reference to North's merger-based theory of later, recurring breaches. Thus, far from "seek[ing] no more than to add a new legal theory supported by factual issues already in the case," Owen, 133 Ariz. at 80, as North contends, he instead sought to reopen and relitigate an already-settled legal claim based on a new legal theory.
¶38 As we have explained in another case involving a prior summary judgment ruling affirmed on appeal, the superior court's prior grant of summary judgment on the contract claim (which we affirmed) was res judicata as to all contract-related theories that North asserted or could have asserted in this action. See Tumacacori Mission Land Dev., 231 Ariz. 517, ¶¶ 2, 6. This doctrine, also called claim preclusion, "bars a claim 'when a former judgment on the merits was rendered by a court of competent jurisdiction and the matter now in issue between the same parties . . . was, or might have been, determined in the former action.'" Id. ¶ 6 (quoting Hall v. Lalli, 194 Ariz. 54, ¶ 7 (1999)). Because the superior court entered a final Rule 54(b) judgment resolving the contract claim, North is barred from attempting to relitigate that claim, "notwithstanding that some theories may not have been raised," id. ¶ 8, previously or relate to one or more "connected transactions," id. (quoting Heinig v. Hudman, 177 Ariz. 66, 71 (App. 1993)), here, Ubiquity's two mergers.
¶39 Because the superior court, and this court, had rendered judgment on North's original breach-of-contract claim, he was barred from seeking to amend his claim to establish such breach, even if he "was prepared to do so using an alternate theory." Id. ¶ 10. It would thus have been futile for the superior court to permit North to amend his complaint. Id. ¶ 12. This, together with North's undue delay in pursuing his merger-based breach-of-contract claim, compels the conclusion that the court did not abuse its discretion by denying his February 2023 motion to amend. See id.; Carranza, 237 Ariz. 512, ¶ 13; Morari, 242 Ariz. 562, ¶ 12.
III. Denial of North's Motion to Set Aside
¶40 Finally, North contends the superior court erred in denying his Rule 60 motion to set aside the Rule 54(b) judgment in favor of Ubiquity on North's claim for breach of contract. He argues that the judgment was solely based on a statute-of-limitations defense and that Ubiquity had intentionally "withheld express acknowledgements that could have reset the statute of limitations," namely, the PPMs.
¶41 Lower courts possess "broad discretion" in deciding whether to set aside judgments under Rule 60 for fraud, misrepresentation, or other misconduct by a party. Woodbridge Structured Funding, LLC v. Ariz. Lottery, 235 Ariz. 25, ¶ 21 (App. 2014). We will not reverse such a decision absent an abuse of that discretion. See id. North has not established such abuse here.
¶42 The superior court rejected North's Rule 60 motion on two independent grounds. First, it found that North had not made a sufficient showing of "fraud on the court." In particular, it found "no persuasive evidence," much less clear and convincing evidence, that Ubiquity's failure to disclose the PPMs was "an intentional act taken with the intent to deprive [North] of key information." It noted that Ubiquity had disclosed the documents later in the lawsuit, arguing they were helpful to its motion for summary judgment on the promissory fraud claim. The court further found that "[a]ny failure to disclose was on largely tangential issues and did not substantially undermine the judicial process."
¶43 This final finding is tied to the second independent ground articulated by the superior court: that "the PPMs are not material" because they would not have reset the statute of limitations, both because they were not signed and because they were not contemporaneously communicated to North. As discussed at length above, this conclusion is correct as a matter of law, whether Arizona or California law applies. We therefore find no abuse of discretion in the trial court's denial of either North's Rule 60 motion or his motion to reconsider that denial.
Claim on Cross-Appeal
¶44 Ubiquity contends the superior court erred in denying it the attorney fees incurred in having to defend against North's October 2022 motion to set aside the Rule 54(b) judgment and his November 2022 motion to amend his complaint. Ubiquity characterizes these motions as "obviously-baseless," "frivolous," and "dilatory." It argues that, because the motions "were not warranted by existing law and lacked any evidentiary support," it was "unjust" for Ubiquity to incur fees and costs responding.
¶45 We review a trial court's determination of a motion for sanctions under Rule 11 for abuse of discretion. Cal X-Tra v. W.V.S.V. Holdings, L.L.C., 229 Ariz. 377, ¶ 113 (App. 2012). Ubiquity has failed to establish such abuse here.
¶46 In its earlier rulings, the superior court never concluded that Ubiquity would be entitled to an award of the attorney fees and costs incurred in defending against North's two motions. Indeed, as noted above, in both of its rulings in early 2023 denying them, the court expressly denied Ubiquity's motion for fees and costs without prejudice, holding the issue in abeyance until final resolution of the case. And, when granting Ubiquity's motion for summary judgment on the promissory fraud claim in March 2023, the court indicated only that it would consider the issue of fees and costs. It did so by ordering Ubiquity to leave blanks for such an award in its proposed form of final judgment and to "make a claim for costs and attorneys' fees, if applicable."
¶47 Ubiquity is correct that, in ultimately denying its request for fees and costs in May 2023, the superior court provided limited explanation for doing so. It said only that an award under Rule 11 was "not warranted" because the highly contentious case had been "robustly litigated," with "[b]oth sides . . . at times, the subject of accusations by the other because of the intensity of the proceedings." And it explained that, because Ubiquity had provided no other theory to undergird its request, an award of fees was precluded under the court's February 2023 ruling.
¶48 Ubiquity contends that this amounted to a failure by the superior court to consider the evidence. It argues that the judge who issued the ruling, who had not been "privy to the oral arguments" held on North's motions in January 2023, should have "listened to the recordings of the oral argument," rather than relying only on her "review of the court docket." But Ubiquity has failed to provide a transcript of that hearing for our review. Indeed, it expressly declined to do so in support of its cross-appeal, despite later asserting the relevance of that transcript in its briefing.
¶49 Ubiquity was "responsible for making certain the record on appeal contains all transcripts . . . necessary for us to consider the issues raised" in its cross-appeal. Baker v. Baker, 183 Ariz. 70, 73 (App. 1995); see also Ariz. R. Civ. App. P. 11(c)(1)(B) ("If the appellant will contend on appeal that a judgment, finding or conclusion, is unsupported by the evidence or is contrary to the evidence, the appellant must include in the record transcripts of all proceedings containing evidence relevant to that judgment, finding or conclusion."). We assume the missing transcript "would support the court's findings and conclusions." Baker, 183 Ariz. at 73. This is particularly so given Ubiquity's apparently considered decision to refrain from providing it. Given that presumption, we cannot say the superior court abused its discretion by concluding that an award of fees and costs was not warranted under Rule 11 in this case. See id.
Attorney Fees and Costs on Appeal
¶50 Ubiquity also requests an award of the attorney fees it has incurred on appeal to "defend against North's frivolous legal arguments." In support of this request, Ubiquity cites Rule 21, Ariz. R. Civ. App. P., and "the reasons stated above" on the merits. But it cites no statutory basis for our award of attorney fees. We therefore deny Ubiquity's request. See Grubb v. Do It Best Corp., 230 Ariz. 1, ¶ 17 (App. 2012) (denying fee request made pursuant to Rule 21 where party failed to separately articulate appropriate statutory basis for same); see also Bed Mart, Inc. v. Kelley, 202 Ariz. 370, ¶ 24 (App. 2002) (Rule 21 only sets forth procedure for requesting fees and "does not provide a substantive basis for a fee award").
¶51 Section 12-341, A.R.S., establishes, "The successful party to a civil action shall recover from his adversary all costs expended or incurred therein unless otherwise provided by law." Ubiquity has prevailed on appeal, and North has prevailed on cross-appeal. Both parties are thus entitled to recover any costs incurred solely in defending against the appeal or cross-appeal brought by the other party, upon their compliance with Rule 21(b).
Disposition
¶52 For the foregoing reasons, we affirm the judgment of the superior court.