Opinion
No. 1 CA-CV 13-0408
06-10-2014
GREGORY BEST, Plaintiff/Appellant, v. HAROLD ELSTON, JENNIFER ELSTON Defendants/Appellees.
Gregory Best, Phoenix Plaintiff/Appellant in Pro Persona Law Office of James B. Rolle, Phoenix By James B. Rolle, III Counsel for Defendant/Appellee Elston
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Maricopa County
No. CV2012-004989
The Honorable Arthur T. Anderson, Judge
AFFIRMED
COUNSEL
Gregory Best, Phoenix
Plaintiff/Appellant in Pro Persona
Law Office of James B. Rolle, Phoenix
By James B. Rolle, III
Counsel for Defendant/Appellee Elston
MEMORANDUM DECISION
Judge Kent E. Cattani delivered the decision of the Court, in which Presiding Judge Patricia K. Norris and Judge Samuel A. Thumma joined. CATTANI, Judge:
¶1 Gregory Best appeals from the superior court's order dismissing his case against Harold and Jennifer Elston for failure to state a claim for which relief can be granted. For reasons that follow, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 A stipulated judgment entered in a civil case brought by the State of Arizona against Best (State v. Best, CV2006-016293 (Maricopa Cnty. Super. Ct.)) terminated seven of Best's "Exclusive Purchase Option Contracts." The judgment also provided, however, that "[t]he 'Exclusive Purchase Option Contract' signed with Harold Elston, regarding 4027 S. 14th Street, will not be terminated pursuant to this Order."
¶3 In 2012, Best filed the instant case against the Elstons and several other defendants. His complaint, captioned "Civil Torts and Breach of Contract," alleged generally that the named defendants either were parties to or interfered with Best's land contracts and coordinated their efforts to defraud him.
¶4 As to the Elstons specifically, Best's complaint alleged "Harold Elston is a property owner who had a contract with [Best]," and that at the other defendants' urging, Elston breached the contract and failed to protect or maintain the property. Best sought specific performance as well as damages and attorney's fees.
¶5 In addition to the contract claim, the complaint alleged abuse of process, fraud by concealment, and breach of the covenant of good faith and fair dealing during litigation. The allegations regarding these claims did not mention the Elstons individually, but rather referred to the defendants generally.
¶6 Other defendants moved to dismiss under Arizona Rule of Civil Procedure 12(b)(6) for failure to state a claim for which relief can be granted. The Elstons joined that motion, arguing Best's allegations were merely conclusory and were insufficient to provide notice and an opportunity to assert relevant defenses. The superior court granted the other defendants' motion to dismiss—but did not mention the Elstons' motion—finding that "in the context of the Complaint's stream of accusations, it is impossible to determine the legal theories alleged" and that "[t]his lack of clarity, coupled with the absence of pled supporting facts, fail to provide sufficient notice and fail to state a claim for relief." Several months later, after the Elstons requested a ruling, the court granted the Elstons' motion to dismiss with prejudice, expressly incorporating the ruling on the other defendants' motion.
¶7 Best requested leave to amend the complaint to include supplemental factual allegations and moved for reconsideration of the dismissal order in light of the proposed amendment. Best's proposed second amended complaint reiterated, with minor modification, the 97 allegations of the original complaint and appended over 200 additional allegations of "Background Facts." After full briefing, the superior court found the proposed amendment "fail[ed] to plead fraud with sufficient particularity" and failed to adequately allege the elements of consumer fraud. See Ariz. Rev. Stat. ("A.R.S.") § 44-1522. More generally, the court noted that the proposed complaint "is riddled with repeat[ed] legal conclusions and is void of cogent, meaningful factual averments that would give the Defendants notice of the conduct underlying a claim." The court therefore denied leave to amend as futile and, in light of that ruling, denied Best's motion for reconsideration.
After the court granted the other defendants' motion to dismiss, but before it had ruled on the Elstons' motion, Best sought leave to file a first amended complaint. The court denied leave to amend at that time.
Absent material revisions after the relevant date, we cite a statute's current version.
¶8 The court entered a formal order, certified as final pursuant to Arizona Rule of Civil Procedure 54(b), dismissing the case as to the Elstons. Best timely appealed from this judgment. We have jurisdiction under Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).
Best's notice of appeal also purports to appeal from an unsigned minute entry order granting another defendant's motion to dismiss. By separate order entered August 28, 2013, this court determined we lack jurisdiction over the appeal from the unsigned minute entry order and dismissed that portion of the appeal. Our review is therefore limited to Best's arguments regarding the judgment dismissing his claims against the Elstons.
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DISCUSSION
¶9 Best argues the superior court erred by dismissing his claims against the Elstons for failure to state a claim for which relief can be granted. We review dismissal for failure to state a claim de novo. Coleman v. City of Mesa, 230 Ariz. 352, 355, ¶ 7, 284 P.3d 863, 866 (2012).
¶10 Arizona's notice pleading standard requires that a complaint set forth "[a] short and plain statement of the claim showing that the pleader is entitled to relief." Ariz. R. Civ. P. 8(a)(2); see also Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, 419, ¶ 6, 189 P.3d 344, 346 (2008). This standard ensures that the defendant receives "fair notice of the nature and basis of the claim." Cullen, 218 Ariz. at 419, ¶ 6, 189 P.3d at 346 (citation omitted).
¶11 Dismissal under Rule 12(b)(6) for failure to state a claim is appropriate "only if 'as a matter of law [] plaintiffs would not be entitled to relief under any interpretation of the facts susceptible of proof.'" Coleman, 230 Ariz. at 356, ¶ 8, 284 P.3d at 867 (citation omitted and alteration in original). In evaluating a complaint's sufficiency, we "assume the truth of all well-pleaded factual allegations and indulge all reasonable inferences from those facts, but mere conclusory statements are insufficient." Id. at ¶ 9. Because this assessment is based on the complaint's well-pleaded facts, "a complaint that states only legal conclusions, without any supporting factual allegations, does not satisfy Arizona's notice pleading standard under Rule 8." Cullen, 218 Ariz. at 419, ¶ 7, 189 P.3d at 346.
¶12 Best's complaint failed to set forth factual allegations sufficient to give the Elstons fair notice of the basis of his claims against them. The breach of contract claim—the only claim mentioning the Elstons by name—alleged the legal conclusion that Elston "refused to honor," "unilaterally rescinded," "breached," and "anticipatorily repudiated" a contract, apparently for property, but did not set forth any facts to establish the parameters of the alleged contract or how Elston breached its terms. The complaint was silent, for example, as to what property the contract concerned, the price and performance contemplated, or how Elston failed to perform as required. See Thomas v. Montelucia Villas, LLC, 232 Ariz. 92, 96, ¶ 16, 302 P.3d 617, 621 (2013) (stating that breach of contract claim requires proof of the existence of a contract, breach, and resulting damages). Similarly, the complaint did not detail facts underlying Best's allegation that Elston violated the implied covenant of good faith and fair dealing. See Bike Fashion Corp. v. Kramer, 202 Ariz. 420, 424, ¶ 14, 46 P.3d 431, 435 (App. 2002) (noting that breach of implied covenant of good faith and fair dealing claim may be established by showing that a party has undermined the other party's reasonable expectations of contract).
¶13 The other claims in the complaint provided even less factual basis generally, and no factual allegations at all specific to the Elstons. Best's abuse of process (and bad faith during litigation) claim mentioned the State v. Best litigation generally. But it provided only unsubstantiated legal conclusions, such as, "Defendants conspired with state officials and encouraged the State of Arizona to bring false claims against [Best]," allegedly in an effort "to improperly bias judges to hold up the cases [Best] had brought against the Defendants." See Crackel v. Allstate Ins. Co., 208 Ariz. 252, 257, ¶ 11, 92 P.3d 882, 887 (App. 2004) (defining abuse of process as a willful act in using judicial process for an improper, ulterior purpose).
¶14 Although Best made general allegations that the defendants "commit[ed] perjury" and "provide[d] false statements, false affidavits, and . . . conceal[ed] material information," Best did not indicate what false information was provided or by whom, or how this related to a lawsuit brought by the State and not by any of the named defendants. Nor did the complaint set forth any facts underlying its allegation that the defendants "intentionally misused a settlement conference." Moreover, the complaint was entirely silent as to any relevant actions by the Elstons, as opposed to by the other defendants who were in fact engaged in separate litigation against Best during State v. Best.
¶15 Best's allegations related to the defendants' "campaign to defraud" him were similarly deficient. The complaint mentioned "false statements," "falsification of facts surrounding the Contracts" and "surrounding events prior to . . . and after the contracts," and concealing "secret lawless activity by Defendant Gary Sundberg." Best again gave no indication, however, of what false statements or facts were provided, by whom, or to whom. See Lerner v. DMB Realty, LLC, 234 Ariz. 397, 402, ¶ 12, 322 P.3d 909, 914 (App. 2014) (as modified) (defining fraud claim as requiring "proof that the defendant made 'a false and material representation, with knowledge of its falsity or ignorance of its truth, with intent that the hearer would act upon the representation in a reasonably contemplated manner,' and that the plaintiff, 'ignorant of the falsity of the representation, rightfully relied upon the representation and was thereby damaged'") (citation omitted). Moreover, Best again failed to include allegations as to actions or false statements by the Elstons specifically. Even setting aside the requirement that "the circumstances constituting fraud . . . shall be stated with particularity," Ariz. R. Civ. P. 9(b), the complaint lacked factual allegations sufficient to meet the notice pleading standard of Rule 8.
¶16 Best suggests that "[m]any other causes can be gleaned from the averments." But Rule 8 requires "[a] short and plain statement of the claim" sufficient to provide the defendant fair notice of the claim and the conduct from which it arises. Ariz. R. Civ. P. 8(a)(2); Cullen, 218 Ariz. at 419, ¶ 6, 189 P.3d at 346. Because Best's complaint was devoid of well-pleaded factual allegations supporting its litany of conclusory statements, the superior court did not err by determining Best had failed to state a claim for which relief could be granted. See Cullen, 218 Ariz. at 419, ¶ 7, 189 P.3d at 346.
¶17 Best nevertheless argues the superior court erred as a matter of law because the stipulated judgment in State v. Best expressly allowed him to proceed with litigation to enforce his land contract with Elston. As the superior court noted, however, the stipulated judgment simply declined to order that the Best-Elston land contract be terminated (as it did regarding certain other option contracts) and declined to prohibit litigation to enforce the contract. The judgment did not acknowledge or establish that Best had any meritorious claims against the Elstons. Thus, dismissal of Best's claims against the Elstons for failure to state a claim for which relief can be granted was not inconsistent with the stipulated judgment in State v. Best.
¶18 Best also argues the superior court erred by denying his request for leave to amend the complaint. We review denial of leave to amend for an abuse of discretion. Tumacacori Mission Land Dev., Ltd. v. Union Pac. R.R. Co., 231 Ariz. 517, 519, ¶ 4, 297 P.3d 923, 925 (App. 2013). Generally, leave to amend the complaint should be granted liberally. Ariz. R. Civ. P. 15(a)(1) ("Leave to amend shall be freely given when justice requires."). The court nevertheless has discretion to deny leave to amend if, for example, amendment would not cure the pleading defect or would otherwise be futile. Tumacacori Mission, 231 Ariz. at 519, ¶ 4, 297 P.3d at 925; see also Dube v. Likins, 216 Ariz. 406, 415, ¶ 25, 167 P.3d 93, 102 (App. 2007).
¶19 Best's proposed second amended complaint failed to cure the lack of factual allegations that was fatal to his original complaint against the Elstons. Although the proposed amendment added over 200 allegations, only a handful provided any additional factual background tied to the Elstons. The amendment failed to define the contract between Best and Elston or what actions by Elston constituted a breach. Nor did it illuminate the Elston's role in the alleged abuse of process or fraudulent conduct, mentioning only that Elston was named as a witness in suits between Best and some of the other named defendants. Although the proposed amendment stated that another named defendant "was coaching the witnesses to lie," it provided no context or factual background to substantiate this conclusory statement. Because allowing the proposed amendment would have been futile, the superior court did not err by denying leave to amend. See Tumacacori Mission, 231 Ariz. at 519, ¶ 4, 297 P.3d at 925.
¶20 The Elstons seek an award of attorney's fees on appeal pursuant to A.R.S. § 12-341.01. In an exercise of our discretion and in light of Best's asserted contract claim, we award the Elstons as the prevailing parties their reasonable attorney's fees upon compliance with ARCAP 21. As the prevailing parties, the Elstons are entitled to their costs on appeal upon compliance with ARCAP 21.
CONCLUSION
¶21 For the foregoing reasons, we affirm.