Sabatina v. Cook
1 CA-CV 15-0156
| Ariz. Ct. App. | Dec 27, 2016Background
- Cook (an attorney) loaned her husband, Carlton Rebeske, $80,000 and prepared a promissory note and deed of trust naming herself trustee/beneficiary; those documents were recorded.
- At Decedent's request Cook executed and recorded a “Release of Lien,” then after his death re-recorded the deed of trust (June 2009) and later recorded a lis pendens (August 2009).
- The Estate (successor PR Nicole Sabatina) sued Cook for breach of fiduciary duty and false recording under A.R.S. § 33-420; summary judgment (unopposed by Cook) found liability but left damages for trial.
- The Estate also added a conversion claim over a joint IRS refund check (~$4,713) mailed to Cook; the Estate claimed it never received its share.
- At trial the court excluded evidence of damages tied solely to the August 2009 lis pendens (not pleaded), found no actual damages from the June 2009 re-recording, awarded statutory damages ($5,000) under § 33-420, $2,356.55 for conversion, denied punitive damages, and awarded $3,500 in attorney’s fees to the Estate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preclusion of evidence about August 2009 lis pendens | The lis pendens was a continuation of Cook’s false filings and its damages should be considered | Lis pendens was not pleaded as part of the § 33-420 claim; evidence should be limited to the pleaded June 2009 deed | Court properly excluded lis pendens-based damages; any related evidence admitted was insufficient to show damages |
| Damages for breach of fiduciary duty | Estate: Cook’s recordings and conduct deprived Estate of the ability to sell/rent and caused value loss | Cook: Estate did not attempt to sell; rented successfully; little or no interference from lien | Trial factfinding supported: insufficient proof of actual damages from June 2009 recording; findings not clearly erroneous |
| Punitive damages | Estate: Cook’s conduct (re-recording, alleged tax guidance, removal of caption sheet) showed malicious intent | Cook: acted without evil mind, sought independent counsel, traumatized, lacked intent or understanding | Court did not abuse discretion in denying punitive damages; evidence failed to prove “evil mind” by clear and convincing evidence |
| Conversion of tax refund check | Estate: joint refund check received at Decedent’s home; Estate never reimbursed — conversion | Cook: may have lost it or believed it was her separate refund; no intent to convert | Court found sufficient evidence of intent to exercise dominion inconsistent with Estate’s rights and awarded conversion damages |
| Attorney’s fees award | Estate sought ~$210,000 under § 12-341.01 | Cook contested reasonableness and claim allocation | Court reasonably awarded $3,500 for the § 33-420 claim given lack of proven damages and undifferentiated fee entries |
Key Cases Cited
- Preston v. Amadei, 238 Ariz. 124 (discretionary review of motion in limine)
- Ogden v. J.M. Steel Erecting, Inc., 201 Ariz. 32 (reversal requires prejudice from discretionary error)
- In re U.S. Currency in Amount of $26,980.00, 199 Ariz. 291 (standard for reviewing findings of fact)
- Chambers v. United Farm Workers Org. Comm., AFL-CIO, 25 Ariz. App. 104 (punitive damages reviewed for abuse of discretion)
- Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326 (punitive damages require clear and convincing proof of defendant’s evil mind)
- Hawkins v. Allstate Ins. Co., 152 Ariz. 490 (punitive damages may not rest on speculation)
- Gurule v. Illinois Mut. Life & Cas. Co., 152 Ariz. 600 (punitive damages require proof defendant acted with evil mind)
- Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411 (defendant’s motives are determinative for punitive damages)
- Miller v. Hehlen, 209 Ariz. 462 (conversion requires intent to exercise dominion inconsistent with plaintiff’s rights)
- Lee v. ING Inv. Mgmt., LLC, 240 Ariz. 158 (appellate standard for review of attorney-fee awards)