Phonejockey v. Rinella
1 CA-CV 15-0051
| Ariz. Ct. App. | Oct 13, 2016Background
- Judson C. Ball managed several Wyoming LLCs (PJLP-1, PJI-4, AOS-6); Richard Rinella Jr. (not an investor) told investors and trustees the LLCs were mismanaged and Ball had misappropriated funds.
- Rinella told a trustee an audit could show misappropriation; trustees (Norton and Stevenson) took actions that Ball alleges disrupted business relationships.
- Ball and the LLCs sued Rinella for defamation, false light, and tortious interference; separately the Norton Trust arbitrated claims against Ball and the LLCs (Rinella was not a party to the arbitration).
- The arbitration panel found Ball had taken unauthorized finder’s fees and a development fee but concluded counterclaims for defamation and tortious interference were not proven and that any alleged damages were speculative.
- Rinella moved for summary judgment in the superior court, arguing issue preclusion based on the arbitration (truth of statements and lack of damages) and invoking a qualified common-interest privilege; the court granted summary judgment for Rinella.
- The court of appeals affirmed, holding the arbitration findings established substantial truth and lack of proximate damages, so plaintiffs’ claims failed as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitration findings preclude plaintiffs' claims (issue preclusion) | Plaintiffs: Arbitration did not involve Rinella or his statements, so preclusion improper | Rinella: Arbitration decided key issues (unauthorized fees and no damages); defendants may invoke issue preclusion defensively | Held: Issue preclusion applies; arbitration findings bind plaintiffs and bar their claims |
| Whether Rinella's statements were false (defamation/false light) | Ball: Statements that he mismanaged and misappropriated funds were false | Rinella: Arbitration established Ball took unauthorized fees, making statements substantially true | Held: Statements were substantially true; falsity element fails |
| Whether plaintiffs proved damages from Rinella's statements (tortious interference/defamation) | Plaintiffs: Rinella’s statements induced trustees’ harmful actions, causing damage | Rinella: Arbitration found trustees’ actions caused no quantifiable damages | Held: Arbitration’s finding that trustees caused no actual damages defeats plaintiffs’ claims |
| Whether a qualified common-interest privilege protects Rinella | Plaintiffs: Privilege not dispositive | Rinella: Communications protected by a common-interest privilege | Held: Court did not need to decide privilege because arbitration findings were dispositive (privilege unnecessary to resolve) |
Key Cases Cited
- Campbell v. SCZ Props., Ltd., 204 Ariz. 221 (issue preclusion elements and defensive use)
- Andrews v. Blake, 205 Ariz. 236 (summary judgment standard)
- Glaze v. Marcus, 151 Ariz. 538 (affirming on any correct ground)
- Dube v. Likins, 216 Ariz. 406 (elements of tortious interference)
- Turner v. Devlin, 174 Ariz. 201 (defamation elements)
- Godbehere v. Phoenix Newspapers, Inc., 162 Ariz. 335 (false light and publication requirements)
- Read v. Phoenix Newspapers, Inc., 169 Ariz. 353 (substantial truth defense to defamation)
- Reynolds v. Reynolds, 231 Ariz. 313 (false light requires major misrepresentation)
- Clark v. Bear Stearns & Co., Inc., 966 F.2d 1318 (9th Cir.) (limited discussion on proving implied findings from arbitration)