Opinion
2 CA-CV 2013-0052
10-25-2013
MOUNTAINSTAR GOLD INC., a Canadian corporation, Plaintiff/Appellant, v. THE LIVING TRUST OF MICHAEL J. FITZGERALD, MARIA FITZGERALD, aka MARISSA FITZGERALD, TRUSTEE, and HENRY RANSPOT, Defendants/Appellees.
Udall Law Firm, LLP By Thomas D. Laue Attorneys for Plaintiff/Appellant Slosser Struse Fickbohm Marvel & Fletcher, PLC By Ronna L. Fickbohm Attorneys for Defendant/Appellee Fitzgerald Kuhn Young Law Firm, PLLC By Cynthia T. Kuhn Attorneys for Defendant/Appellee Ranspot
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
Not for Publication
Rule 28, Rules of Civil
Appellate Procedure
APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY
Cause No. C20120206
Honorable Jan Kearney, Judge
AFFIRMED
Udall Law Firm, LLP
By Thomas D. Laue
Tucson
Attorneys for Plaintiff/Appellant
Slosser Struse Fickbohm Marvel & Fletcher, PLC
By Ronna L. Fickbohm
Tucson
Attorneys for Defendant/Appellee Fitzgerald
Kuhn Young Law Firm, PLLC
By Cynthia T. Kuhn
Tucson
Attorneys for Defendant/Appellee Ranspot
HOWARD, Chief Judge.
¶1 Appellant Mountainstar Gold Inc. ("Mountainstar") appeals from the trial court's dismissal of its claims against appellees The Living Trust of Michael J. Fitzgerald through its trustee Maria Fitzgerald ("the Trust") and Henry Ranspot. On appeal, Mountainstar argues the trial court erred in each of its alternative bases for dismissing its claims before proceeding to full discovery, in awarding attorney fees to the Trust and Ranspot, and in denying its request to file a second amended complaint. Because we find no error, we affirm.
Factual and Procedural Background
¶2 The record supports the following undisputed procedural history. In December 1971, Michael Fitzgerald formed a Canadian company that eventually became Mountainstar and served in various management capacities with the company before his retirement in 1995. Mountainstar alleges that during his tenure with the company, primarily in the 1970's and 1980's, he formed a secret partnership with Ranspot, the purpose of which was to discover and exploit mining claims that could ensure private revenue streams to the partnership. Mountainstar further alleges the partnership fraudulently concealed its activities and usurped Mountainstar's corporate opportunities.
¶3 In 1999, Mountainstar sued both Fitzgerald and Ranspot, among other defendants, in Canada, similarly alleging that the two had breached their fiduciary duties, usurped corporate opportunities, and defrauded the company. That action was dismissed as to Ranspot and Fitzgerald. In 2009, Fitzgerald died. In December 2010, Mountainstar again tried to pursue its claims by filing a claim against Fitzgerald's estate in Washington state probate court. That claim was dismissed as untimely.
¶4 In February 2012, Mountainstar sued the Trust and Ranspot in Arizona. Both the Trust and Ranspot filed motions to dismiss the complaint based on, among other theories, lack of personal and subject matter jurisdiction, res judicata, improper venue, statute of limitations, and failure to state a fraud claim for which relief could be granted. The trial court granted the motions on all the above grounds. We have jurisdiction over Mountainstar's appeal pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).
Res Judicata
Although the terms collateral estoppel and claim preclusion are more prevalent, we use the term used by the parties.
¶5 Although the trial court granted the motion to dismiss on several alternative grounds, we will analyze the res judicata ground first. Mountainstar argues the court erred in failing to treat the motions to dismiss on res judicata grounds as motions for summary judgment. It contends the motion should have been treated as one for summary judgment because the court relied on "documents from the file of Action No. C991486 filed by [Mountainstar] in 1999 against Defendants including Fitzgerald and Defendant Ranspot in the Supreme Court of British Columbia."
¶6 Rule 12(b), Ariz. R. Civ. P., requires that a motion to dismiss for failure to state a claim be treated as a motion for summary judgment pursuant to Rule 56, Ariz. R. Civ. P., when it refers to "matters outside the pleading." But referring to documents that are matters of public record or matters central to the complaint does not require treating the motion as one for summary judgment. Strategic Dev. & Constr., Inc. v. 7th & Roosevelt Partners, LLC, 224 Ariz. 60, ¶¶ 13-14, 226 P.3d 1046, 1050 (App. 2010). "Likewise, Rule 56 treatment is not required when the court does not rely on the proffered extraneous materials." Id. ¶ 8.
¶7 The documents attached to the motion to dismiss related directly to the Canadian litigation to which the complaint referred in recounting Mountainstar's claims, and consisted primarily of public records from that litigation. The trial court considered only the public records, stating it had "review[ed] the Statement of Claim and other documents from that case." Because the court considered only the public records that were central to the complaint, it was not required to treat the motions to dismiss as motions for summary judgment. Roosevelt Partners, 224 Ariz. 60, ¶¶ 8, 13, 226 P.3d at 1049, 1050.
¶8 Mountainstar, however, further argues that because the motions should have been treated as ones for summary judgment, it was entitled to additional discovery pursuant to Rule 56(f). That rule gives the trial court discretion to allow a party opposing summary judgment additional time to obtain affidavits or undertake discovery. Alberta Sec. Comm'n v. Ryckman, 200 Ariz. 540, ¶ 11, 30 P.3d 121, 124 (App. 2001) (court has discretion to grant continuance to allow additional discovery). But because the court was not required to treat the motions as motions for summary judgment, the rules related to summary judgment were inapplicable.
¶9 Furthermore, the affidavit Mountainstar submitted in connection with its response to the motions to dismiss did not explain why it needed additional time to obtain an affidavit from its Canadian attorney and investigator, why it did not know the legal effect of the dismissal of a lawsuit it had initiated, or how any of the other discovery previously requested and denied would relate to the res judicata claim. See Simon v. Safeway, Inc., 217 Ariz. 330, ¶ 6, 173 P.3d 1031, 1034 (App. 2007) (motion pursuant to Rule 56(f) requires sworn affidavit describing "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 the discovery"); Ariz. R. Civ. P. 56(h) cmt. ("Section (f) affidavits must continue to satisfy the specificity requirements set forth in existing Arizona case law."). Thus, even were Rule 56(f) applicable, Mountainstar's motion was insufficient to warrant relief under the rule. The trial court did not abuse its discretion by implicitly refusing to grant Mountainstar additional time to conduct discovery. See Ryckman, 200 Ariz. 540, ¶ 11, 30 P.3d at 124.
¶10 Mountainstar also argues the trial court erred in dismissing its complaint based on res judicata grounds. But Mountainstar's response to the motion to dismiss did not argue substantively that res judicata should not bar its claim. It merely asked for additional time to respond, vaguely suggesting the dismissal of the Canadian lawsuit was on procedural grounds. And, although it attempted to argue the merits of res judicata in its motion for reconsideration, arguments raised for the first time in a motion for reconsideration are not preserved for appeal. Ramsey v. Yavapai Family Advocacy Ctr., 225 Ariz. 132, ¶ 18, 235 P.3d 285, 290 (App. 2010). Mountainstar therefore has forfeited the opportunity to make this argument on appeal. See City of Tempe v. Fleming, 168 Ariz. 454, 456, 815 P.2d 1, 3 (App. 1991) ("arguments not made at the trial court cannot be asserted on appeal"); see also Trantor v. Fredrikson, 179 Ariz. 299, 300, 878 P.2d 657, 658 (1994) (trial court ordinarily must be "afforded the opportunity to correct any asserted defects before error may be raised on appeal"). Because it has forfeited the opportunity to challenge the court's ruling on this basis, we may, and do, affirm the dismissal of the complaint for this reason alone. See Fleming, 168 Ariz. at 456, 815 P.2d at 3.
Mountainstar's citations to the contrary are misleading. In McComb v. Superior Court, we concluded that an argument raised in a motion for reconsideration also had been raised before the substantive ruling, and therefore the issue had been preserved. 189 Ariz. 518, 523, 943 P.2d 878, 883 (App. 1997). Furthermore, that argument concerned the constitutionality of a statute, an issue of statewide importance. Id. Although in Pugh v. Cook, 153 Ariz. 246, 247-48, 735 P.2d 856, 857-58 (App. 1987), we did consider an argument that had not been raised until a motion to reconsider, an exercise of this court's discretion in so doing does not alter the ordinary rule that such arguments are not preserved. See Evans Withycombe, Inc. v. W. Innovations, Inc., 215 Ariz. 237, n.5, 159 P.3d 547, 551 n.5 (App. 2006) (court has discretion to consider matters raised for first time in motions for reconsideration). Mountainstar did not ask us to exercise such discretion here until it filed its reply brief, and we decline to do so. See Dawson v. Withycombe, 216 Ariz. 84, ¶ 91, 163 P.3d 1034, 1061 (App. 2007) (court does not consider arguments raised for first time in reply brief).
Attorney Fees Below
¶11 Mountainstar next argues the trial court erred by awarding the Trust and Ranspot attorney fees pursuant to A.R.S. § 13-2314.04(N). However, it has forfeited any argument against an award of attorney fees under this section by not presenting it to the trial court until it filed its motion for reconsideration. See Ramsey, 225 Ariz. 132, ¶ 18, 235 P.3d at 290 (arguments not made until motion for reconsideration insufficient to preserve issue for appeal because opposing party deprived of fair opportunity to respond). Accordingly, we do not consider it.
Second Amended Complaint
¶12 Mountainstar last argues the trial court erred by denying it leave to file a second amended complaint after the court had granted the Trust's and Ranspot's motions to dismiss. "A motion for leave to amend the pleadings is within the sound discretion of the trial court, and we will not overturn that decision absent a clear abuse of discretion." Hall v. Romero, 141 Ariz. 120, 124, 685 P.2d 757, 761 (App. 1984).
¶13 Rule 15(a), Ariz. R. Civ. P., allows one amendment to the pleading as a matter of course, but otherwise requires leave of the court or the written consent of the adverse party. Rule 15(a) also directs that "[l]eave to amend shall be freely given when justice requires." But this generally liberal policy concerning amendments is not absolute, and "the trial court does not abuse its discretion in refusing to allow an amendment which would not affect the outcome of the litigation and which would add nothing to the status of the law suit." Lewis v. Swenson, 126 Ariz. 561, 567, 617 P.2d 69, 75 (App. 1980). In Lewis, we concluded the court did not abuse its discretion in denying a request for leave to amend the complaint after an order granting a motion to dismiss already had been entered and the amended pleading would have added nothing new. Id. at 566-67, 617 P.2d at 74-75.
¶14 Here, Mountainstar's motion for leave to file a second amended complaint—filed after its motion for reconsideration of the dismissal—essentially restated the same arguments and facts articulated in Mountainstar's first amended complaint and its response to the motions to dismiss, and it provided little guidance to the trial court on the differences between the two complaints. An examination of the second amended complaint lodged with the court reveals some substantial rewording of a few pages, but the proposed complaint offers virtually no additional factual allegations, and new exhibits attached to it consist entirely of unauthenticated printouts from unidentified websites. At oral argument on its request, Mountainstar conceded "res judicata may apply to some of the claims here," but offered little, if anything, to explain which claims those were (it had asserted only two in its complaint). It also conceded that it "might need to dismiss" its claim based on Arizona law. On the record before us, we cannot say the court abused its discretion in denying Mountainstar's request for leave to amend its complaint after an order of dismissal already had been entered. See Lewis, 126 Ariz. at 567, 617 P.2d at 75.
Attorney Fees on Appeal
¶15 Both the Trust and Ranspot request their attorney fees and costs pursuant to A.R.S. §§ 12-341, 13-2314.04(N), and Rule 21(c), Ariz. R. Civ. App. P. The record supports the trial court's finding that this lawsuit was brought "vexatiously and in bad faith." Many of the issues presented by Mountainstar either had not been preserved for appeal adequately or lack merit. Mountainstar's decision to press a nine-issue appeal when most of those issues plainly had been waived further supports the conclusion that this litigation was brought "vexatiously and in bad faith." And its opening brief cited multiple unpublished decisions as authority, in violation of Rule 111(c), Ariz. R. Sup. Ct. We conclude this appeal is a further extension of vexatious litigation and, in our discretion, we award both the Trust and Ranspot their reasonable attorney fees and costs upon their compliance with Rule 21.
Conclusion
¶16 For the foregoing reasons, we affirm the judgment of the trial court.
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JOSEPH W. HOWARD, Chief Judge
CONCURRING: _______________
GARYE L. VASQUEZ, Presiding Judge
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J. WILLIAM BRAMMER, JR., Judge
A retired judge of the Arizona Court of Appeals authorized and assigned to sit as a judge on the Court of Appeals, Division Two, pursuant to Arizona Supreme Court Administrative Order No. 2012-101 filed December 12, 2012.
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