Green v. Lisa Frank, Inc.

§ flight required for unlawful under 28- P.3d 16 622.01. GREEN, A. James Cross- Claimant/Counterdefendant/Appellant, addition, requires § “a 11 In 28-622.01 pursuing official law enforcement vehicle being operated in the manner de [was] FRANK, INC., corporation, an Arizona LISA (C).” But scribed in subsection Defendant/Counter-cl Cross- statute, depending under that latter on the aimant/Appellee. circumstance, use of a siren or other audible may necessary pursuing signal not be when 2No. CA-CV 2008-0028. R., fleeing vehicle. See In re Joel motor Arizona, Appeals Court of ¶ 8, (upholding 29 P.3d at 289 2, Department Division A finding delinquency flight unlawful where siren not sounded because unneces Jan. 2009. circumstances). And, sary noted in under as 28-624(C) decision, § footnote two of this requirement

excepts police vehicles from the having displaying “light or a colored or in front the vehicle.”

lens visible from 28-624(C)

Thus, §in prescriptions do not

equate signal to the “visual or audible or required stop

instruction” for failure to un 28-1595(A).

§der sum, stop 12 In failure to is not a felony flight

lesser-included offense of be person 28-1595(A) by cause a can violate —

failing stop signaled or instructed an always police satisfy

on-foot officer—without great corresponding elements of the §in

er offense found 28-622.01. See In re K.,

Victoria 11 P.3d at Thus, occurred, no error fundamental otherwise, by the trial court’s failure to sponte jury

sua instruct on failure to ¶ 23, 115 Henderson,

stop. See (defendant prove

P.3d at 608 must first error

in order relief to obtain under fundamental review).

error

Disposition

¶ 13 Fiihr’s conviction and sentence are

affirmed. HOWARD,

CONCURRING: JOSEPH W.

Presiding Judge, and J. WILLIAM

BRAMMER, JR., Judge.

(Lisa Frank), who served as directors of Sep- LFI. Frank the action in Lisa initiated by filing against tember 2005 a lawsuit amended, LFI. and As later Lisa Frank’s alia, complaint sought, inter to remove Green director, president, operating chief and LFI; buy-sell officer to enforce a stock herself, Green, LFI; agreement among and against and to assert a claim Green for fiduciary breach of duties.1 Green filed a against counterclaim Lisa Frank and a cross- LFI, against seeking claim declaration that unenforceable, buy-sell agreement was asserting Lisa Frank had violated her fidu- LFI, ciary making duties to him and to airplane pur- additional claims related to an against chased LFI. LFI counterclaimed Green, seeking accounting alleging an he “expended corporate had and diverted funds Iurino, By Lewis and Roca LLP John N. personal expenditures, corpo- for removed Korn, Demarchi, Kimberly Sivan R. A. property rate from LFI’s offices and facili- Tucson, Attorneys for Cross-ClaimanVCoun- ties,” corporate property per- and used terdefendant/Appellant. sought damages sonal reasons. LFI also McNamara, Goldsmith, fiduciary duty, from Green for breach of Jackson & Mac- conversion, Donald, Jackson, computer By Tucson, fraud under 18 U.S.C. P.C. G. Todd Wiemelt, copyright and and Law violations. LFI addi- By Offices of Mark PC Knechtel, Illinois, tionally rеquested Robert L. that Green be removed Chicago, Attor- a director of LFI neys buy-sell agree- and that the Cross-Defendant/Counterclaim- ment be enforced. anf/Appellee. ¶ In3 October the trial court entered

OPINION order, stipulated provisions of which BRAMMER, Judge. temporarily enjoining included Green from “removing any property intellectual or other ¶ Appellant appeals James Green from April assets from” LFI. In LFI filed a striking the trial court’s sanctions order his asking motion the court to find Green reply against by to the counterclaim filed him impose of that order and sanctions. Prank, (LFI), appellee Lisa entering Inc. that, LFI asserted on at least two occasions LFI, default in dismissing favor of and with immediately following entry of the Octo- prejudice against his cross-claim LFI. Green order, ber moving Green had used a van argues the trial court properly could not property to remove premises, from LFI’s reply dismiss his cross-claim and because his including computers containing proprietary violations of court prejudice orders did not artwork, LFI data and and “items from a additionally LFI. He contends the trial court storage original company locked area for art- by entering judgment erred default on sever- advertising.” work and LFI also asserted part al of LFI’s claims. We affirm and that, prior order, to the October Green had part. vacate in employees directed LFI copies to create computer compact LFI art on files discs. Background Factual and Procedural appeal protracted This arises hearing from liti- 4 After a on LFI’s motion gation concerning the manage- May May control and the court on 23 ordered by ment LFI days Green and Lisa Frank specified Green Green to return within three against 1. Lisa Frank later her dismissed claims LFI. that, entered its day after the court had computers and

property, including several “alter, media; requiring him not to Green to return storage May ordered 2006 order remove, delete, any prohibiting copying or transfer information” him from items and those media; storage computers data, or other had compact from the discs of material any ten parties’ information computers ordered that copied and from one of the LFI been “segregate technology experts would then possession computer same Green’s —the any remove” of Green’s permanently and days after not returned until five Green had computers. returned personal files from the addition, do so. In the deadline to failure to com- The court warned Green that twenty-two computer files on that had found could result in “severe ply with the order printer,” attached “transferred to an been up including incarcera- consequences, to and forty graphics LFI files had been trans- over tion.” computer to one owned ferred from Green, LFI files had and nine additional Although Green returned several com- with order, in a manner consistent been “accessed compliance he did puters in court also noted containing LFI an email attachment.” The computer data not return one compact ten previ- In a had not returned the days five after the deadline. that Green until order, modify the Green had ous motion to discs. he was unable to return

informed the court “Green, The court found that he was unable computer on time because counsel, personally culpable for wilful [wa]s [personal] e[ould] to “insure that he access the Court’s Orders repeated violations of computer] photographs on that on a [stored including, limited to the removal ... but not computer.” new In June attached software, hardware, comput- retention of order, modify May another motion to proprietary programs, intellectual and er signed filеd a but undated declaration Green property, graphics artwork ‍​​‌​​‌‌​​‌‌​‌​‌​​​​‌‌‌​​​​​​​‌​​‌​‌‌​‌‌​​​‌‌​‌​​‍and delib- LFI listing he had returned to the court. items Orders.” Com- erate violation of the Court’s posses- that he not “in In it Green stated was array menting that it had “considered an media, any storage includ- sion or control of sanctions, including imposition of attor- [compact ing, limitation ... but without incarceration,” ney fees and even the court discs].” “have to im- concluded such sanctions failed ¶ LFI filed another motion for sanctions press past Green in the and do not Mr. August asserting had contin- damage prop- address the to the intellectual May by failing violate the order ued to erty that occurred and contin- [LFI] of has computer giving “pre- a laptop return a and contempt ues to occur as a result of Green’s LFI for the late return. re- text” reason judicial process, court orders and this for the July alleging in foren- newed its motion Court.” analysis computers returned had sic of the that, the court had entered its revealed after court entered a sanctions 9 The trial order, May copied LFI files Green had against dismissing Green’s cross-claim order computers in violation of the or- from those LFI, striking reply counterclaim his to LFI’s der. him, judgment against granting and LFI “ex- in cept finding pаragraph for the of fraud three-day hearing 7 After a on LFI’s The court the Fifth Claim for Relief.”2 November, the court motion for sanctions replevin that a writ of issue to also ordered ruling containing in December 2007 issued a computers digital storage deliver “all of law. findings of fact and conclusions possession or control to the media in Green’s presented found the evidence es- court custody the Court for forensic review and computers had removed tablished that Green artwork, data, of LFI or docu- containing proprietary LFI data in violation removal Additionally, the court terminated It further found ments.” the October 2005 order. ruling Because the court’s clear intent was to it had struck effect. dispose 2. The court’s stated Green, LFI and we reply 2006” coun- of the claims between Green's to LFI’s "March interpret ruling striking reply superseded by as Green's more this terclaim. But that had been entering judgment recently reply reply amended counterclaim. filed Green's to LFI's Thus, striking reply had favor of LFI on its amended counterclaim. the first would have no entry granting Green’s status as a director of LFI and court’s minute LFI’s motion costs, attorney authority awarded LFI its reasonable cited much of LFI and the same as fees, costs, expert expenses “and all witness ordered a result of Green’s “[a]s sanctions incurred in connection previous fees with this and wilful violation of the Court’s orders prior pertaining property efforts to secure enforcement of the to the turnover of LFI Orders,” attorney Although Court’s as well as fees and and evidence.” the court did not prevailing party authority § costs “as the on its Counter- cite it 12-864 as for the sanctions signed claim.” The then imposed expressly and entered a and did not Green in find judgment judgment contempt, explain infra, favor of LFI. The we below incorporated the sanctions order appears and de- it nonetheless the court sanctioned But, buy-sell agreement pursuant § clared the valid and en- Green whether 12-864. monetary correctly forceable but stated that “LFI’s the court’s order is characterized as recovery pursuant accounting sanction, discovery finding to its and dam- of civil con- age by 12-864, claims shall be tempt hybrid § determined subse- under or some of the quent proceedings.” two, appeal This ultimately jurisdic- followed. is to our irrelevant question tion. The we address is whether

Jurisdiction appealable the court’s sanctions order is un- governing appellate juris- der the statute our ¶ 10 first We address fundamental is diction, § A.R.S. 12-2101. jurisdiction, sue of our as we must. See Stores, Inc., Osuna v. Wal-Mart concluding jurisdic 12 In we have n. (App.2007). 1270 n. 2 appeal, begin tion to address this we argues jurisdiction Green we have to address principles: two one found in 12-2101 and appeal, argues his while LFI we do not. the other contained within the rationale of Relying on A.R.S. LFI reasons we holding contempt the cases orders are jurisdiction lack because the trial court’s or appealable. principle guides The first sanctioning der an order of con appellate jurisdiction our must entertain —we tempt, request based on LFI’s that Green be appeals superior from court orders that final contempt disobeying held in the court’s ly determine the merits of a cause or are LFI Mulligan, orders. relies on State v. appealable by otherwise made statute. The (1980), principle jurisdiction second limits our —we defendant, which appealing besides his may not contempt review lower courts’ or conviction, sought criminal also appeal sev principles ders. do not find We these contempt eral criminal citations. Our su Rather, conflict here. we conclude we in preme coiu’t stated: find no “We authoriza jurisdiction over, deed have and must ad appeal tion of such an contempt from the merits, superiоr dress on the court order charges, either statute rules of this appeals. from which Green Findings court. non-appeal- are able orders.” Id. The court concluded its ¶ acknowledge 13 We first that we finding nonappealability of with the observa may ignore not and cannot alter or overrule Mulligan’s tion that remedy” “review of the supreme City our court. See Phoenix v. of contempt by special citations was action. Id. Leroy’s Inc., 375, 378, Liquors, 177 Ariz. 868 217, at 613 P.2d at 1273. 958, (“[WJe (App.1993) P.2d 961 by are bound sanctions, 11 In its motion for LFI Supreme asked decisions of the Arizona Court and the trial pursuant overrule, court to sanction Green authority no modify, have or 65(j)(l), P., them.”). Rules 37 and Ariz. R. disregard supreme Civ. but A review of our argued area, however, also the court “ha[d] the inherent court’s decisions in this re authority to sanction those who clearly abuse the veals that none of them has held judicial process pre- or mishandle unappealable an appealable order rendered evidence” — sumably request 12-2101, a that by § the court find Green even when the order rests in § in contempt civil under 12-864. The part finding contempt.3 whole or in on a of here, supreme repeatedly 3. Our court has ruled that the order none of the orders addressed But, contempt appealаble. wholly disposed orders are not unlike those cases aof counterclaim 146 272, Tucson, 270, 419 City Ariz.App. 4 the trial court’s

Although posit one could of (1966). unappealable 400, be- sanctioning Green is 402 order P.2d on, with, or based an it is cause associated ap- judgment from which Green 15 The sanctioning contempt, disagree. we order against LFI peals his cross-claim dismissed Arizona, and 14 “In our statutes reply and his to LFI’s prejudice struck permit appeals appellate procedure rules of counterclaim, “grant[ing] judgment only judgments final or orders.” S. from except finding ... for the of favor [LFI’s] Co., Peabody W. 194 Co. v. Coal Cal. Edison buy-sell agreement fraud.” It declared (1999). 16, 769, 47, “In P.2d 774 Ariz. 977 enforceable, agree- valid and ordered context, right appeal is not the civil performed, enjoined Green from ment to be only by Id. but exists statute.” absolute artwork, distributing and using or LFI’s data appealable an order final and Whether as a director of terminated Green’s status depends on its form but on “‘its sub not LFI, ” Green to surrender LFI and ordered Enters., Props. Inv. Ltd. stance or effect.’ computers and other materials' —all as re- Inc., Relief, Ariz. Airborne 115 v. Found. for But, quested in counterclaim. because LFI’s 307, 52, 54, (App.1977), quoting P.2d 309 563 open question of judgment leaves Co., Connolly Ariz.App. Ins. 5 v. Great Basin judgment not final as con- damages, it is (1967). 117, 120, 732, ap An 423 P.2d 735 12-2101(B). judgment, templated 12-2101(B) judgment final under pealable “ however, findings contains the trial court’s disposes of the cause on its ‘decides and 54(b), P., merits, pursuant to Rule Ariz. R. Civ. open judicial leaving question for no Id., quoting remaining there are “no issues on the claims determination.’”4 Decker v. action, tempt imprisonment and fines for ac in a civil and none of the order of and defenses "obstructing justice ap suggests not be tions the administration cases such an order would 210, lessening dignity authority Mulligan, of the pealable. 216-17, v. 126 Ariz. See State 1266, (1980) (dismiss juvenile adjudication); Riley Superi Court" v. 1272-73 Court, 498, 498-99, 900, 124 Ariz. contempt appeal orders sen from criminal (contempt (App.1979) imprison 900-01 order of parte tencing jail); 944, Wright, defendant to Ex 36 against probation 8, 16, (1929) prosecutor ment and fine (holding Ariz. 281 P. 947 hearing appealable); Haggard violation not v. resulting nonappealable contempt civil order Court, 162, 162-63, Superior Ariz.App. 26 547 Dyke Superior imprisonment); fines or Van v. 14, (1976) (no 508, Court, (1922) appeal contempt P.2d 14-15 from 24 Ariz. 211 P. 588 fining attorney appear order for failure on every (noting "common-law rule that court of prosecution); behalf client in criminal United judge contempts is the exclusive com record and, Heggblade-Margu Nat’l Farm Workers Union v. against authority dignity, as a mitted leаs-Tenneco, Inc., 514, 514-15, Ariz.App. 21 520 appeal judgment corollary, from a that no lies (1974) (contempt P.2d 1191-92 order for proceedings, in such the absence of constitution violating judgment appealable); Van Baalen statutory authority conferring right”); al or Court, 512, 512-13, Brown, Superior Ariz.App. v. parte Ex 77 P. (1973) (civil 1892) contempt (Terr. P.2d 771-72 order (stating contempt appeal- order not fining attorney failing appear in criminal remanding prisoners into sheriffs cus able and that, appealable); Anonymous, action not In re although tody). We also note this rule has (1966) (same); court, App. repeated by oft been this none of those Reinhardt, 103, 104-05, Herzog Ariz.App. encompasses judgment final in a civil decisions (1965) (no See, appeal P.2d from con contempt e.g., action based on a order. order). Burton, enforcing custody tempt order child Dep’t State ex rel. Econ. Sec. (no ¶¶ (App.2003) appeal for failure to make from order phrase 4. The "on the merits” does not mean the Evans, support payments); child Danielson v. had to determined after trial. cause of action be " 401, ¶¶ 34-35, 37, 749, 201 Ariz. 36 P.3d 759 finally if A decision is 'on the it resolves mprits’ (no appellate jurisdiction (App.2001) over con precludes an in a manner that later reliti action property tempt make order related to failure to gation judgment of the claims involved. Such a action); payments in Elia settlement dissolution may result from an actual trial on the substantive 26, 30, 796, 74, ¶¶ Pifer, 977 P.2d 802 Northpoint 194 Ariz. LP issues but it need not do so." 4501 (no 98, 16, ¶ (App.1998) appeal contempt finding Maricopa County, from for v. 215, 212 Ariz. 128 P.3d Pace, (2006) (internal omitted). support payments); make Pace v. failure to 218 A citations 455, 456-57, 619, judgment 128 Ariz. 626 P.2d 620-21 decision on the merits includes a re (same); Maricopa (App.1981) County sulting stipulation, grant summary re Juv. In from a a 409, 410-11, JT-295003, judgment, prejudice. 126 Ariz. 616 a Action No. dismissal Id. (no (App.1980) appeal from con- 85-86 except between Green and LFI aside from the mon- action between and LFI is over etary recovery amount of LFI’s and that damages. ap- An for the determination of just delay there is no reason for on this peal only is the avenue available that assures judgment,” and it “directs the immediate en- judgment finally review of the that deter- Thus, try” judgment. judgment is liability disposed to LFI mined Green’s (G), appealable pursuant §to 12-2101 which against of his claims it. “[fjrom appeal interlocutory judg- allows an ¶ Although finding a of criminal con- rights ment which determines the of the statute, tempt specifically appealable by is parties accounting and it directs an or other 12-863(D), see A.R.S. § pro- there is no such proсeeding to determine the amount 12-864, § contempt vision in the civil statute. State, recovery.” See Bilke v. 206 Ariz. supreme previously And our court has found ¶ 28, (2003); Salerno v. Atl. contempt unappealable, noting civil orders Co., Mut. Ins. 198 Ariz. provides they governed § that that 12-864 be (App.2000). 761-62 by practice usage “the of the common In reciting none of the cases the rule parte Wright, law.” See Ex 36 Ariz. contempt unappealable are orders were (1929). Accordingly, 281 P. one judgments the orders at issue final —unlike only legislature could conclude not that the here, they the trial court’s order did not provide expressly appeal has failed to for an action, underlying decide the merits of the order, contempt from a civil but also that the they nor did fall within the definition of an contempt common law rule that orders are appealable interlocutory order. See n. 1 su unappealable controls. 12-2101(C) pra; see also (L); § Van through disagree proposition 19 We with this for Court, Dyke Superior First, appeal three reasons. an from a crim- (1922) (contempt “spe P. is not markedly contempt inal conviction is differ- proceeding! cial allowing appeal ]” under typical appeal. ent from A criminal crimi- governing appellate jurisdiction). statute initiated, contempt proceeding may nal be Accordingly, we do not find those cases dis- alia, “upon inter affidavit of some credible positive jurisdiction ques of our here. The 12-862(A). person.” § A.R.S. Our criminal party may appeal tion whether a contempt statute, § appeals permits A.R.S. is, effect, order that in substance and an appeal only “prosecution by from a indict- appealable § order under 12-2101 has not ment, complaint,” information or which previously been addressed in Arizona. We appear contempt would proceed- to exclude ignore any prior need not or alter Arizona 12-863(D) ings § by initiated affidavit. And jurisdiction. ease law find that we have that, provides during appeal an from a con- ¶ Moreover, the reason behind contempt, viction for criminal the execution disallowing appeals pure the rule from con stayed. govern- of sentence is The statutes tempt simply inapplicable orders is here. As appeals equivalent most criminal have no explained, Division One of this court has See AR.S. provision. §§ through parties The rationale [for rule] Thus, appears legislature 13-4042. it already given have been the chance to specific appeal rights included under 12- appeal from the order that forms the basis 863(D) rights because those are not con- contempt. Enforcement of such orders ferred elsewhere our statutes. The inclu- up by contempt cannot be held appeals; appellate rights contempt sion of for criminal contempt where review of a order is need necessarily suggest does not the failure to ed, speedier it must be route of provide appellate rights contempt for civil special petition. action legislature § 12-864 means the intended to ¶74, 30, Pifer, Elia v. order; preclude appeal from a civil Here, course, (App.1998). legislature there is no it is reasonable to conclude the in- previous, appealable judgment govern appeals order or tended 12-2101 to from Moreover, Id. In- “forming] contempt.” the basis for supreme such orders. our deed, 216-17, suggested Mulligan, there is no other order to enforce and in 126 Ariz. at 1272-73, nothing delayed by appeal; appeals to be an the that from 613 at con- 148 ¶ Appeals 22 Circuit Court of not because The Seventh

tempt were unavailable orders Corp., F.2d 714 by legislature’s ref- in v. Marine 819 they precluded the Szabo U.S. were (7th Cir.1987), law, simi- has reached a conclusion §in 12-864 to the common but erence for Acknowl- they provided were not one we reach here. rather because lar to the ... edging general statutes or rules. See also rule that an order “[t]he elsewhere our (no 543, contempt appealable,” 24 Ariz. at 211 at 588 the court Dyke, Van P. of civil is against ap- contempt the absence blanket rule appeal “[a] from civil “in reasoned of statutory authority contempt civil would make pealing orders of constitutional confer- added). “may contempt order ring right") (emphasis Unlike no sense” because a Mulligan Noting the exis- contempt orders at issue ... be final.” Id. at 716. rule, however, statutory general Dyke, and Van there is of criticism of the tence some authority appeal for an from the order at the court concluded: issue here. fault ... lies the statement of The practice rather than the of the rule ¶ Second, the civil con 20 reason courts____ promote clarity to would [I]t typically unappealable is tempt orders are contempt ap- say that an order of civil law, on the common not on the failure based only if pealable if and it is either final for provide right appeal. § See of 12-864 to § purposes [appeal ] of under 28 U.S.C. 13, Wright, “[A] Ariz. at 281 P. at 946. 36 under allow- appealable 1291 or a statute statutory provision authorized the Consti interlocutory ing appeal orders.5 always supersedes the common law.” tution Id. Glenn, 22, Conway v. State ex rel. appel- 23 Because we conclude we have (1942). 363, Thus, 367 to the jurisdiction late to review the trial court’s may §§ extent 12-864 and 12-2101 be Green, against sanctions order we need not question, conflict on this we conclude parties’ entertain the alternative invitation legislature’s specific appel delineation of our appeal request special treat as a for § jurisdiction late under 12-2101 controls. action relief. Third, 21 find conflict we no §§ 12-864 and 12-2101. between Whenever Merits Discussion so, reasonably practical it is to do we must Limitations Statute of interpret they so are harmonious statutes argues with each other. See Yar 24 Green LFI’s motion for and consistent 1, ¶22, Montoya-Paez, pursuant to A.R.S. brough v. Ariz. sanctions was time-barred 12-865, (App.2006). provides proceed § “[stat “[n]o And which against be utes should be construed consistent with the shall instituted any person begun year unless within one common law.” United Bank v. Mesa N.O. Co., complained the act of.” from the date of Nelson (1979). way deciding, Assuming, harmonious without that a motion most during litigation “pro is a read these statutes is to conclude that con for sаnctions filed 12-865, meaning § tempt unappealable ceeding” are within the we orders unless question— request or effect of the conclude LFI’s was not barred. LFI substance order beyond April including “finding[] contempt,” filed its first motion for sanctions Mulligan, approximately 126 Ariz. at P.2d at six months after Green qualifies the order as one of those had violated the trial court’s October 2005 1272— files, computers, appealable pursuant by removing § made 12-2101. order and data U.S.C., generally federal law does not 5. Section is similar to A.R.S. 6 P.3d at 12-2101(B), provides appeal interlocutory that federal courts of an from an order de allow appeals jurisdiction "shall have from all final leaving open termining liability question but of the district courts.” Certain inter decisions locutory damages. Bakery & See Kaszuk Confection appealable are under 28 decisions Fund, ery F.2d Union & Indus. Int'l Pension however, Admittedly, Ari U.S.C. 1292. unlike Cir.1986); (7th Corp. 'l Controls ‍​​‌​​‌‌​​‌‌​‌​‌​​​​‌‌‌​​​​​​​‌​​‌​‌‌​‌‌​​​‌‌​‌​​‍Int Bilke, jurisprudence, zona's see Vesco, (2d Cir.1976). 535 F.2d ¶ 28, 275; Salerno, 80 P.3d at 198 Ariz. 54. 12. LFI, from one-year thus well within the Basis Sanctions for statute of limitations. ¶27 parties agree may a trial court ¶ 25 LFI filed its second sanctions motion claims, party’s pleadings, dismiss strike its August less than three months after judgment against and enter a default that May Green had violated the trial court’s 2006 party comply for failure to thе court’s resulting order from LFI’s first motion for reaching question orders. Before the wheth- sanctions. The court never ruled on the sanctioning appropriate, er Green was how- motion, second and LFI renewed it with ever, we must first determine on what au- allegations July additional 2007. The thority doing the trial court relied in so. As court found that LFI had not discovered ¶ above, supra, noted we see the answer to those allegations additional Green had —that question entirely that is not clear. copied computer files from an LFI he had “authority 28 The court referred to its past May retained the deadline set in enforcing discretion obedience of its 2006 order —until June City 2007. See orders, including authority the inherent Outdoor, Inc., Tucson Clear Channel judicial pro- sanction those who abuse 172, 10, Ariz. (App. 225-26 Although cess.” the court also cited Rule 2008) (“[The] accrual of a cause of action 37(b), P., Ariz. R. Civ. the orders Green or, ‘plaintiff occurs when the knows in the discovery falling violated were not orders diligence, exercise of reasonable should know within 65(j)(l), that rule. It also cited Rule cause.’”), underlying quoting facts P., allowing party Ariz. R. Civ. it to find a Gust, & Henderson v. Prudential Rosenfeld contempt failing comply in- with an Am., 586, 588, Ins. Co. junction. governing Section civil (1995). contempt, explicitly does not authorizе a trial asserts, however, 26 Green that action, provide court to dismiss an it but does LFI sufficiently diligent was not in complet contempt “may punished be in conformi- analysis its forensic computers he ty practice to the usage of the common had obtained in violation of the October 2005 law.” order and LFI computer kept he had

past imposed the deadline May in the 29 “It is well established that [a order. But legal authority sug we find no authority trial] court has the to dismiss or to gesting LFI duty had a to exercise judgment, depending reason enter default on which diligence able comput fault, have the returned party comply is at for failure ... forensically ers analyzed to ensure Green with its orders.”7 Flaksa v. Little River had not Co., further violated the court’s orders. Marine Constr. 389 F.2d suggest (5th Cir.1968) Nor does the record cases); the trial court's nn. 2-7 (citing see finding on this NASCO, Inc., matter was erroneous. See Chambers v. 501 U.S. 44- Hrudka, Hrudka v. (1991) 111 S.Ct. 115 L.Ed.2d 27 (“We (court (App.1995) will not may disturb a appropriate “fashion sanction for trial court’s factual findings clearly dismissal”); unless conduct” including “outright erroneous.”). Thus, for each of Shepherd Cos., Green’s vio v. Am. Broad. 62 F.3d orders, (trial lations of (D.C.Cir.1995) the court’s LFI filed its court has inherent motion seeking contempt authority sanctions well with sanction with dismiss one-year statute of limitations 12- als and judgments); default United States v. (4th 865.6 Co., Equip. 11 F.3d Shaffer argues 6. To the attempting extent Green the trial noncompliance court could to address Green’s properly previous consider his violations of preclude with its earlier orders does not it from addressing when orders LFI’s final motion for considering noncompliance in later con- sanctions, disagree. we The court stated in the tempt proceedings. May "[n]othing 2006 order that in [this order] prevent any party referring will from to the is- 41(b), authority 7. This is reflected in Rule renewing sues in the Motion [for sanctions] or P., permits R. Civ. which a trial court to dismiss any if Motion warranted in further court comply an action for failure to with its orders. proceeding.” That the court had entered orders 150 349-54, 370, sas, 322, 29 S.Ct. 53 Cir.1998) 212 U.S. (same); Newspa Phoenix see also Elliott, 257, (1909), Court, Hovey 167 Ariz. and v. 101 L.Ed. 530 Superior v.

pers, Inc. (1966) (“[T]his 841, 594, 409, 42 L.Ed. 215 258, Court 17 S.Ct. P.2d 595 418 U.S. 589, power punish (1897). to for recognized that the Phoceene Wyle, has 709 F.2d at See courts.”); Phosmarine, Inc., in the contempt Sous-Marine, is inherent v. S.A. U.S. cf. Harrison, Components, Cir.1982). Inc. v. (9th 802, Hovey, Precision In F.2d 806 682 Dichter, P.C., Ariz. 179 Harper, & Christian process prevented the held due the Court (trial 1098, 1102 556, (App.1993) 552, suxnmax’ilystriking a defen court from trial authority mis to sanction court has inherent punishment for failure to answer as dant’s it). A attorneys appearing before conduct court’s oi’der that the coxnplywith the tx’ial “fail[s] if it to in of court party is the funds at issue party deposit into coux't order, writ, judg obey process, [or] a lawful 411-12, 413-14, 17 167 U.S. at the lawsuit. Thus, ap it 12-864. ment of the court.” substantially was modi S.Ct. 841. That rule Green’s cross- pears the trial court dismissed Hammond, the Court found no where fied reply LFI’s counter his to claim and struck striking plead process due violation authority inherent on the court’s claim based comply failed to ings party of a that had comply to with its ord a failure to sanction discovery Court reasoned that order. The ers.8 requested materi produce refusal an admission of the want als “was but and Merits Between Conduct Nexus 212 U.S. at in the assei’ted defense.” merit and Claims Defenses 370; 351, see also Societe Internati 29 S.Ct. that, when a 30 Green asserts Participations Et onale Pour Industrielles contempt by termi party court sanctions 197, Commerciales, Rogers, U.S. S.A. v. 357 action, process if nating due is violated (1958). 1087, 210, 2 L.Ed.2d 1255 78 S.Ct. between the misconduct “there is no nexus majority applying of cases claims and defenses.” 32 The and the terminated by Hovey process requirement such nexus exists here. described Green contends no due process, discovery of due when comply To with notions have addressed vio and Hammond authority lations, a court exercises its inherent where the rale described Hammond orders, its See, a claim for violations of e.g., dismiss adily applied. Val re can be party’s must be a nexus between Co., “[t]here Eng’rs Eng’g 158 F.3d ley Inc. v. Elec. and the merits of the (9th actionable conduct 1051, 1053, Cir.1998); Halaco, 843 1056 Costle, Eng’g 843 F.2d case.” Halaco Co. v. 378, 379-80; Fjelstad, 762 F.2d at F.2d at (9th Cir.1988); 376, Fjelstad v. see Am. 381 1336, 1338; Consultants, 'l Seminar Inc. Prof (9th 1334, Co., 762 F.2d 1338 Honda Motor Council, v. Sino Am. Tech. Exch. 727 F.2d (“Due Cir.1985) imposition process limits the (9th Cir.1984); 1470, Wyle, 709 F.2d 1473-74 of dismissal or default of the severe sanctions suggesting find no at 588-89. But we cases in which ‘the de to ‘extreme circumstances’ similaxiy process x’equii'edwhen due is not controversy’ ception the matters in relates to mexits-temxinating out imposing sanctions ‘merely imposition prevents their Indeed, discovery context. sever side of the that did not punishment of an infraction Hovey, appellate al courts have relied on rightful to interfere with the deci threaten Hammond, progeny review and their when case.’”), quoting Wyle v. R.J. sion of the meiits-tenninating sanctions based on Indus., Inc., Reynolds 709 F.2d See, solely discovery. related to conduct (9th Cir.1983). Stewart, 416, e.g., 428-29 Chen (Utah 2005) or, (suborning perjury); Estrada v. requirement, more ae 31 This nexus (9th Cohen, Speno 244 F.3d requirement, derived & cui’ately, process due (failure Cir.2001) appear depositions at Supreme States Court’s de from the United hearings); Sys., Inc. v. Packing Co. v. Arkan- and court TeleVideo cisioixsin Hammond (App.2007), long required identify 104 n. 3 as court was not trial recites, here, ruling, may up- did facts con- authority supporting we trial court as it "the Cohen, stituting contempt.” Ariz. ruling State v. "if it is correct for hold the trial court’s (1971). reason,” Likins, App. any n. Dube v. Heidenthal, (9th Cir.1987) Guinee, Compagnie F.2d des Bauxites de (lying depositions recanting before U.S. 102 S.Ct. 72 L.Ed.2d 492 “reap advantage”); trial a tactical (1982), Pho- based on a reasonable inference Sous-Marine, (ly- ceene 682 F.2d at 803-05 party’s posi drawn from the conduct that its support court in to of motion to continue (“Due process tion is meritless. See also id. trial). only if is violated the behavior of the defen support Packing dant will not the Hammond ¶ Basing argument his on the presumption.”). no limit We see reason to requirement, process due Green asserts mer involving constructive waiver to misconduct its-terminating sanctions are unavailable un material evidence when other misconduct can the in less conduct “resulted the absence of equally suggestive be of the relative merits (or relevant) potentially evidence, relevant party’s position essentially, par of a when a — obstructing opponent’s ability litigate the to ty with a meritorious case or defense should the case.”9 This pro articulation of the due engage activity. have no need to in such requirement cess is too narrow. For exam ple, merits-terminating comply sanctions that, therefore conclude if We process with due where the conduct for negative the sanctioned conduct invites a in sought which sanctions were was intended to party’s ference about the merits of the claims advantage, obtain a tactical if even an advan defenses, process requirement or the due tage actually never was realized. See TeleV met, Hovey and is Hammond and merits- Sys., Additionally, ideo 826 F.2d at 917. the terminating constitutionally ap sanctions are process requirement due is satisfied when a (“[A] Chen, propriate. See 123 P.3d at 429 party’s court terminates a case as a sanction authority court has the inherent to strike a Chen, planned for a fraud on the court. See party’s pleadings judg and enter a default at 428-29. The Hammond due party if engages ment in conduct de process requirement is met in these cases signed improperly to influence the court’s permits because the sanctioned conduct an case, decision on the merits of the such as inference that party’s position the sanctioned perjury justice, or obstruction of or if the -just lacked as when the misconduct merit— conduct itself tends to demonstrate bad faith withholding hiding entails or evidence. merit.”) added). (emphasis or a lack Ac ¶ 34 Nor do we read Hammond as cordingly, we now address whether Green’s requiring potential the sanctioned conduct to permits conduct in the trial court an infer would, ly interfere with evidence that or ence that his claims and defenses lack merit. could, presented during have been litiga ¶ Here, litigation Examples concerns the tion. of such conduct include re evidence, continuing nature of fusing Green’s interest and refusing to disclose to attend LFI, including in depositions, role his status suborning perjury. or as a share The in say company. Court Hammond did holder director of the Al its conclusion though directly applicable we find no materiality was based on the authori the undis evidence, that, ty, plain closed it may party but rather that a court seems when a violates presume materiality party’s from in refusal court orders order to control or harm the produce to it. litigation, See U.S. at assets at stake in S.Ct. such action Thus, permits Hammond reflects a party’s position “construc an inference that the process, Corp. tive waiver” of due Ins. Ir. party on the merits is weak.10 A with a assume, purposes argument, 9. For of this we will the heart of the over contest control of LFI. But deciding, process require- Supreme without that the due Court has never decided whether it ment as Green has Hovey articulated it was not met would now reach the same result it did in given here. holding its substantial modification of that Hovey in Hammond. The situation in is nonethe- recognize property party Hovey 10. We merely that the at issue less distinct. The main- Hovey money party was the same tained con- control of an asset violation of a court not, Green, tempt deposit had refused actively to with the court. 167 order. improperly It did as did U.S. at 17 S.Ct. 841. That situation seek to obtain an asset not in its arguably analogous possession to the one before us where even more indicative of the —conduct sought Green has to retain over control assets at weakness of Green’s claims and Addi- defenses. ” trial.’ conduct of no interfered with would have claim or defense meritorious Chambers, retain 111 S.Ct. gain orders to 501 U.S. at to violate court need controversy and Young the asset States ex rel. Vuit- quoting control over v. United permit- Fils, S.A., on the merits await a decision 107 S.Ct. could 481 U.S. ton ‍​​‌​​‌‌​​‌‌​‌​‌​​​​‌‌‌​​​​​​​‌​​‌​‌‌​‌‌​​​‌‌​‌​​‍et lawfully. parties (1987); here ting The it to do so see also L.Ed.2d 740 Gulf court entered agreed the orders the trial Homеs, Beron, to Inc. v. litigation. during the protect (1984) LFI’s assets (affirming discov- Green, however, one such order violated sanctions, prevent “parties to ery part, retain and another improperly obtain ... “feeding] free[ ] lawsuits” from other proprietary intel- property including LFI’s district discovery orders of other flout other — stated property that Green himself lectual courts”). position Green advocates company, without which “life” of the was the litigants to violate unscrupulous allow would Moreover, good.” an LFI be “[no] would dismissal, will, court and without fear of at possession of the employee LFI testified that seeldng protect party’s another to orders seeking to “re- give party a property would unrelated to if those interests were interests art- proprietary LFI’s engineer or re-create” adopt to evidence. decline discoverable We “big jump.” acquisition of a Green’s work approach. an such he was able to exercise property the means additionally argues dismissal Green proprie- measure of control over LFI’s some has imposed “where the misconduct sanctions and, therefore, tary the fate of the assets opponent’s ability litigate impact on the no company.11 “purely punitive” are and there the merits” Further, continued con Green’s argument logi prohibited. But this fore strongly suggests he would have been duct cally the misconduct has flawed. Whether way comply any meaningful in unwilling to litigation on the merits has no corre affected orders, including those future trial court imposed are lation to whether the sanctions litigation on the merits. See resulting from event, any In the sanc punitive or coercive. (dismissal Chen, appropriate at 429 purely punitive. here were not tions Cf. bad party’s conduct demonstrated when Strick, 471, 473-74, Korman v. faith). Indeed, . the trial court referred to (1982) (distinguishing crimi 546-47 stating had been “ca possibility, this contempt; criminal nal and civil process, “entire from the valier” about the “solely” punitive while civil con sanctions today.” beginning right through until The coercive).12 tempt sanctions The threat thought expressed concern that Green court promotes compliance with a court’s sanctions ultimately process” himself “above even if the sanctions threatened are orders would not ensure determined lesser sanctions failure to avoid the imposed. never Green’s Mindek v. compliance with its orders. See imposi here not render their sanctions does (3d Cir.1992) Rigatti, 964 F.2d improper merely compliance tion because (dismissal appropriate “where the district now, ample opportunity to avoid the after properly determined that no judge court has sanctions, would not reverse the sanctions’ adequately ensure fu other sanction would Otherwise, dismissal would never be effect. compliance”). A court’s inherent au ture contempt. sanction for civil appropriate an failing thority parties for to com to sanction clearly That is not the law. exists, prevent ply part, orders with its “ stated, under the For the reasons of the Judicia [of] ‘disobedience orders here, presented the trial ry, circumstances regardless of whether such disobedience using property, whether tionally, proprietary but at issue here are be successful the assets wrongful unique, placing possessor in a improper attempt a at to control assets his significant position harm to LFI's business to do litigation permits the inference that stake interests. claims and defenses are meritless. his against legal LFI would have remedies 11. That Korman, Despite we note this distinction its intellectual Green should he use or disclose permits "punishL]” court to a trial change analysis. property our does not contempt. civil ultimately question is not whеther Green would 37(b), entry dismissal of Green’s claims and under Rule Arizona courts have identi- court’s against complied him equally of default with due relevant fied several factors that are process. per Homes, Green’s contumacious conduct example, here. our su- For Gulf mitted the court to infer that his claims and preme upheld dismissal as a sanction defenses were meritless and thus find he had party “‘flagrant when a had acted bad ” constructively hearing waived a on their mer by refusing respond questions faith’ 706, 102 Corp. of Ir., its. See Ins. 456 U.S. at during deposition. 141 Ariz. at S.Ct. 2099. ques- P.2d at 637. The court noted that the tions asked “were material to the claims” and Pwpriety Dismissal party’s injected refusal to answer ¶ 40 That the dismissal here does delay and “exacerbated the costs inherent in process not violate due does not end our litigation.” assuming Id. Even Green’s that, inquiry. agree with Green We comply failure to with the trial court’s orders general proposition, sanctions failure to ability litigate here did not affect LFI’s obey a trial court’s orders should be limited claims, remaining supreme factors the Hays, to achieve their desired result. See present. court discussed in Homes are Gulf ¶99, 17, Moreover, 67 P.3d at 698. willfully The trial court found Green had a claim should not be dismissed absent ex repeatedly comply failed to with its orders treme circumstances. See Corp. Birds Int’l stating and had “filed a declaration” that he Co., v. Maint. Ariz. Ariz. 135 662 longer possession any was no in of LFI Flaksa, (App.1983); P.2d 1054 389 F.2d despite having materials failed to return ten prefer at 887. Arizona courts that claims be compact containing copied discs material adjudicated on their merits. Assoc’d Avi Moreover, computer. from an LFI Green’s Cf. Wood, ation Underwriters v. 209 Ariz. plainly delayed proceedings conduct the and ¶ 147, (App.2004). 98 P.3d 614 We re greatly expense litiga- increased the of the imposition the view of sanctions for an abuse parties tion: both filed voluminous motions in Gama, Hays of discretion. See 205 Ariz. sanctions, support opposition of and in and ¶99, 17, (2003); Flaksa, 698 389 lengthy evidentiary hearing the court held a F.2d at 887. Whether a trial court has the explore Green’s conduct. impose discretion to the sanction of dismissal Court, Superior 43 In Nesmith v. depends specific on whether the facts and 70, 71-72, (App. sufficiently circumstances of the are case ex 1990), Division One of this court reversed a treme to warrant such a sanction. See Birds imposed discovery dismissal sanction for vio 1054; Corp., Int’l 135 Ariz. at 662 P.2d at (1) lations because: the trial court erred as a Flaksa, 389 F.2d at by requiring matter of law the sanсtioned ¶ 41 There is little Arizona law outside the plaintiff original to turn over business rec discovery guidance context that affords on (2) ords; expressly the trial court did not what factors a trial court must consider be- plaintiff find personally, opposed “that the dismissing fore an action for the claimant’s plaintiffs attorney, to the obstructed discov See, comply failure to with its e.g., orders. (3) ery”; “thoroughly the trial court did not Hefter, Carman v. other, sanctions”; consider less severe and (1983) (dismissal proper un- (4) party the sanctioned did not violate a 41(b), P., party der Rule Ariz. R. Civ. where had, tardily, complied court order and albeit during mentioned insurance twice trial discovery with the rules before the defendant order); violation of court Goodman Cush- Here, compel discovery. filed a motion to man, 276, 278-79, 395 contrast, expressly the trial court found (1962) (Rule 41(b) improper dismissal where Green, attorney, responsible not his was party compliance” in “substantial with court’s Moreover, the violations. Green did not vio complaint order to correct to omit certain procedural discovery late rules or deadlines material). ignored preliminary injunction but instead ¶ However, in addressing pro subsequent the and seeking court orders to en priety discovery injunction of sаnctions for violations force that with which —orders (3d Cir.1984) Co., 747 F.2d fully complied. And Cas. still has never party, prejudice to (personal responsibility sanctions of expressly court found lesser

the conduct, history dilatory will- party, ineffective. other would be faith, sanctions, other merits fulness or bad guidance from feder- draw further We defense). of claim or trial inher- discussions of a court’s al courts’ for contuma- authority to dismiss cases ent cases, Synthesizing these we conclude example, Shaffer, For cious conduct. typical- have the most relevant factors courts 462-63, the Fourth Circuit Court of F.3d at (1) ly prejudice are: to the other considered stated; Appeals ability litigate party, both terms its exercising power the inherent [B]efore by the its claims and other harms caused case, the dismiss a a court must consider actions; (2) party’s whether the disobedient factors; (1) following degree the of the by by party were committed the or violations (2) wrongdoer’s culpability; the extent of (3) counsel; whether the conduct was willful wrong- client’s blameworthiness if the the faith and whether violations or bad the attorney, committed ful conduct is (4) continuous; repeated public the were recognizing that we seldom dismiss claims integrity judicial system the of the interest'in (3) clients; prejudice against blameless (5) orders; compliance preju- and judicial process and the administra- to the judicial system, including delays dice to the (4) justice; prejudice to the tion of (6) court; placed and the burden on trial (5) victim; availability other sanc- (7) sanctions; efficacy of lesser whether the rectify wrong by punishing tions party would be was warned that violations culpable persons, compensating harmed (8) sanctioned; public policy favoring persons, deterring similar conduct resolution of claims on their merits. This (6) future; public interest. course, list, A is not exclusive. trial court courts have enumerated similar fac Other may identify any and address other relevant See, City Albuquer e.g., Chavez v. tors. circumstances. of (10th Cir.2005) que, 402 1044 F.3d ¶ 46 Most of the factors described (prejudice party, to other interference with present Again, above are here. it was Green judicial process, litigant’s culpability, advance personally, attorney, not his continuous dismissal, who warning possibility efficacy of of of ly willfully sanctions); Amtrak, and violated the trial court’s or In re 136 lesser (collect (S.D.Ala.2001) misrepresentations ders and made to the F.Supp.2d 1267 court about those violations. Green’s trans listing prejudice factors: to cases and gressions significant delays resulted in and judiсial pro party, other interference with cess, merits, expensive, unnecessary litigation requiring relationship culpability to of vio conduct, filings evidentiary lating pai'ty, lengthy faith extensive and willful bad sanction, availability hearings expert testimony. that included warning of dismissal as sanctions, interest); public Anheu His conduct thus burdened the trial court of lesser ser-Busch, Beverage timely v. hindered Inc. Natural Dis and resolution of the merits (9th Cir.1995) tribs., (public of the claims.13 The orders Green violated 69 F.3d 348 litiga place protect. significant in to expeditious interest “in resolution of were LFI’s docket, tion,” manage property, physical court’s need to risk of interest both and this, sanctions, public prejudice party seeking to intellectual. Green contests none of merits, only favoring disposition arguing on the that dismissal sanctions are in policy sanctions, availability appropriate faith because his violations did not of lesser bad of relationship ability litigate interfere with LFI’s to violating party, between conduct case; merits); recognize prejudice v. State Farm Fire We that such is and Poulis & Monte, City El Ninth Circuit also stated in that exces- 13. Green cites v. 138 Hernandez Hernandez of " Cir.1998), (9th proposition delays consumption for the F.3d 399 sive 'of the court's litigation Id., additional cаused “Lt]he costs of quoting valuable time'" favored dismissal. prejudice party's are to Bonzelet, a support misconduct insufficient (9th Ferdik v. 963 F.2d make dismissal.” But that does not Cir.1992). analysis. delays costs and irrelevant to the The except may judgment one factor a ... for the [LFI’s] trial court consider before favor imposing prejudice and that to claim finding relating sanctions of fraud” to LFI’s ability litigate ap- pur- LFI’s to its claims is not be removed a director should parent Nonetheless, finding preju- from the A record. of suant 10-809. the trial to dice, however, required support not is to court terminated as director “Green’s status Co., Eng’g years.” dismissal. F.2d at period See Halaco of LFI ... for a of See two 10-809(B). (finding prejudice “purely optional”). § factor, assuming Even the absence of that entry 50 “An of default estab given the court did not abuse its discretion proven well-pleaded lishes as all facts.” presence favoring other of several factors Moran, Moran dismissal. not, however, (App.1996). It does argues 47 Green also the trial court party hold default “to have admitted failed to preju- consider whether LFI was Accordingly, of law.” “[i]f conclusions Id. a “[fjor and, alone, diced this reason trial complaint legally entitling fails to state facts Ruling court’s be should vacated.” But the plaintiff recovery, judgment a to default clearly court did consider the harm Green’s rendered thereon is void.” Price Sunmas LFI, conduct finding had caused had there ter, Ariz.App. been “damage to property.” [its] intellectual (1976). trial judgment court’s favor of Moreover, finding court that the made no of LFI claim on its to have Green removed as a prejudice ability litigate ac- LFI’s only proper director therefore if was LFI’s tion does require the conclusion court alleged counterclaim facts sufficient entitle wholly failed to It consider that factor. is 10-809(A). Price, LFI to relief under See equally possible the court it but considered Ariz.App. at 558 P.2d at dispositive. did not Additionally, find it 10-809(A) permits judi 51 Section whether dismissal appropriate sanctions are corporation cial removal the director if is a inquiry may fact-intensive involve (1) “engaged the court finds the director factors, many including consideration of some fraudulent conduct or intentional criminal we have not identified here. see no We (2) conduct” “[r]emoval best reason for a trial articulate its find- corporation.” interest of the In its counter ings every According- on conceivable factor. claim, LFI enumerated “a series actions” stated, ly, for the reasons we conclude the Green undertaken “in had furtherance of court did striking not abuse its discretion in interests,” personal alleged own [his] those cross-claim, reply, dismissing Green’s his and “fraudulent,” asserted, actions were and entering judgment in favor of LFI. actions, based on Green’s continued “his as LFI ... in [its] sociation with is not best Directorship Termination of interests.” ¶ argues 48 Green the trial court erred ¶ 52 Because the trial entered court de- terminating him director as of LFI because Green, against allegation fault LFI’s con- explicitly rejected it a “finding of and fraud” cerning its best interests is deemed admitted. failed to any findings permitting make other Moran, 146, See 188 933 P.2d Ariz. at at § his removal under A.R.S. 10-809. re We however, explain, 1214. we and as As the law, questions including view de novo of the found, implicitly LFI’s assertion that statutes, interpretation of but will not disturb Green’s actions were fraudulent was not a findings a trial they court’s factual are unless “well-pleaded” entry fact that of the Green’s Pouliot, clearly Spaulding erroneous. See v. default be deemed could to have established. ¶ 196, 8, 243, (App. 218 Ariz. 181 P.3d 246 See id. 2008). ¶ Green, 49 In against its counterclaim allegation 53 An fraud of must sought LFI pled particularity. Green’s removal as director of be R. with Ariz. Civ. P. 10-809(A). pursuant 9(b). striking § LFI “Although ‘magic language’ After there is no fraud,” reply Green’s required to LFI’s counterclaim and en- a claim a claim to state default, tering his the “granted trial court ant “plead must all the essential elements of 156 Green complaint. v. LFI’s counterclaim does assert fraud” Linder ... in his LFI, 398, 404-05, it Herrick, fiduciary duties he owed 189 Ariz. 943 breached

Brown & 758, may any support (App.1997). allege Fraud be does facts that would P.2d 764-65 rely Brazee v. on actual or constructive. See induced LFI to finding either a that Green 475, Morris, 224, 84, Dawson, 68 Ariz. 204 P.2d Ariz. him 216 to its detriment. (1949). showing 72, A of actual fraud LFI failed at 1057. Because 163 P.3d requires: constituting plead “the circumstances (2) (3)

(1) required particularity” fraud ... as representation, falsity, its its a (4) 9(b), materiality, knowledge properly Rule trial court declined speaker’s of the (5) truth, entry falsity its established ignorance or find that default its speaker’s allegation proven. the information LFI’s See Flor intent fraud an, by the upon should be hearer and 933 at 1214. acted 188 Ariz. at P.2d (6) contemplated, reasonably a manner Notwithstanding failure to 55 LFI’s ignorance of the information’s fal- hearer’s correct properly plead the trial court’s —and (7) truth, sity, reliance on the hearer’s its fraud, court, ex without refusal to find— (8) thereon, right rely and the hearer’s favor, planation, judgment in LFI’s entered (9) consequent proximate and the hearer’s removing pursuant as director Green injury. frаud, § In absence of 10- 10-809.14 Servs., Taeger Family Cmty. v. & Catholic permits only if he or a director’s removal (App. Ariz. P.2d activity. engaged in intentional criminal she 1999); Beauty see Built also Echols plead any alleging that But LFI did not facts Homes, Inc., engaged in criminal Green had intentional (1982). fraud, contrast, Constructive allege LFI facts conduct. Because failed to “ equitable legal duty ‘a or breach of § 10— entitle it to relief under sufficient to which, guilt regard to moral intent without or by removing as a the court erred person charged, of the law declares LFI, we va director of must therefore fraudulent the breach to de because tends Price, portion judgment. cate that others, public private or ceive violates confi Ariz.App. 969. at at ” dences, injures public Daw interests.’ ¶ 72, Withycombe, son Computers Against Fraud Claim 1034, 1057(App.2007),quoting Lasley v. Helms, 56 Green contends the trial court’s 1994). (App. though A constructive rejection pre allegation of LFI’s fraud also require showing fraud “does not of intent against claim judgment cludes him on LFI’s dishonesty purpose, to deceive or it does pursuant That to 18 U.S.C. statute require fiduciary or confidential relation liability governs criminal for “fraud civil and duty by person ship,” a “breach of in the activity in connection with com related fiduciary relаtionship,” confidential or § puters.” U.S.C. None of its sub 18 person justifi the “induee[d] that breach however, sections, require finding actual a of by reliance to his able the other detriment.” apparently fraud. to subsection Green refers ¶

Dawson, 84, 72, 216 Ariz. 163 P.3d at 1057 (a)(4), requires finding person that a which (citation omitted). “intent protected computer accessed a

¶ Despite to of “the in 54 its enumeration of Green’s defraud” and furtherance activities, allegedly Asuming, arguendo, to fraudulent LFI failed tended fraud.” any allegation allege rejection in its the of LFI’s fraud counterclaim facts constitut court’s rejected any in ing implicitly of actual fraud. Tae also assertion of elements See ¶ 28, defraud, however, 285, ger, 196 995 tent subsections Ariz. P.2d at 730. other fraud, require finding. § Regarding ‍​​‌​​‌‌​​‌‌​‌​‌​​​​‌‌‌​​​​​​​‌​​‌​‌‌​‌‌​​​‌‌​‌​​‍although of 18 U.S.C. 1030 no such constructive directors, suggests corporate find nor 14. LFI trial court al of and we neither terminated cited, any authority suggesting directorship has LFI a trial Green's sanction for his non- and, therefore, statutory prerequisites compliance may circumvent the with court orders court requirements by characterizing ruling by as a court was of for removal its not bound judicial governs § § 10-809. But remov- sanction.

157 (a)(5)(C) prohibits for lack of example, right infringement For subsection claim as void jurisdiction. “eaus[ing] subject intentional unauthorized access matter event, damage any In LFI and loss.” did explicitly allege portion

not fraud this of Disposition complaint, asserting instead Green had its ¶ above, va- 59 For the reasons stated we by “absconding damaged it with and retain- ruling portions cate those of the trial court’s ing belonging Pending information to LFI.” granting judgment copy- LFI on its claim of proof damages, LFI’s of this conduct falls right infringement terminating Green’s 1030(a)(5)(C), § within 18 U.S.C. and the directorship. LFI affirm the remainder We properly entered default on that claim. judgment.15 of the Copyright Infringement Claim PELANDER, CONCURRING: JOHN

¶ Last, Judge. Chief 57 Green contends the subject jurisdiction trial court lacked matter HOWARD, Judge, dissenting. judgment to enter in favor of LFI on its copyright infringement brought pursu claim ¶ respectfully I from the 60 must dissent ant 17 to Title of the United States Code. He majority only legislature because can judgment regard further asserts the court’s change only supreme court a statute and ing that claim must therefore be vacated. As change interpretation a statute. can notes, subject jurisdiction matter can law, Under the current state of the this court may any not be waived and be raised at jurisdiction appeal does have over this stage proceeding. Swichtenberg of a See v. contempt order from the trial court’s civil Brimer, 82, 77, 1218, Ariz. 171 828 P.2d 1223 § undеr A.R.S. 12-864.16 issued (App.1991). judgment may “A be attacked “ right appeal only by ‘[T]he 61 exists as void” if court that entered it lacked ” force of statute.’ Osuna v. Wal-Mart subject jurisdiction. Adoption matter In re Stores, Inc., 286, 9, 151 1267, 214 Ariz. P.3d Hadtrath, 606, 608, 121 Ariz. 592 P.2d (App.2007), quoting City 1270 Cordova (1979). 1262, judgment 1264 Whether a Tucson, 469, 470, Ariz.App. 15 489 question void is a of law we review de novo. Osuna). (1971) (alteration in In 728 Ex Escandon, In re Estate de 215 Ariz. parte Wright, Ariz. P. ¶ 7, (App.2007). (1929), supreme our court said: “Cases fall 1338(a), 58 Pursuant 28 U.S.C. fed within section 4474 A.R.S. 12- [now juris by eral “original governed ‘practice district courts alone have ... must be 864] any arising any usage According diction of civil action under of the common law.’ Congress relating copyrights.” practice usage Act of to ... such the contemnor is not claims, jurisdiction jury appeal This includes over like entitled to a trial nor to an LFI’s, Court, out of Title Dyke Superior arise U.S.C. See bail.” See also Van 508, 537, 544, 576, 585-86, suggest pro id. LFI does not otherwise or P. (1922). any response Additionally, Mulligan,

vide to Green’s assertion. See in State v. Sentra, (1980), In re 1996 Nissan (failure (App.2001) to address the court stated: find no authorization “We answering appeal appeal brief issues raised on for such an from the error”). “can be charges, considered a confession of either statute or rules of this Accordingly, portion Findings contempt non-appeal- we vacate the of the court. of are judgment relating copy- trial court’s to LFI’s able orders.” ¶ entry Supra,

15. Because we affirm the trial court's of sanction. 11. But Green himself ar- buy-sell agreement, default as to the we do gues appeal contempt not a on that the order was argument Moreover, reach LFI’s that the issue is moot. governed by § 12-864. the order discusses, majority later the orders that Green majority points ambiguity 16. The out some in the discovery Supra, violated were not orders. record as to whether the trial court's order was a ¶¶ 27-29. contempt § discovery order under 12-864 or a Newspapers, 188 Ariz. authority ignore no or ments. See Phoenix have We guess at P.2d at 805. Nor can we supreme pronouncements. court Phoe alter Corrs., might that court resolve an issue the Newspapers, Dep’t Inc. v. 188 how nix ¶ 3, Keith, (App.1997). v. 934 P.2d future. See State (App.2005). the same lan 12-864 still contains Section gov requiring contempt cases be guage appeal I 65 would dismiss Green’s usage of the “practice the erned therefore, and, jurisdiction I lack of dissent. contempt And the statutes common law.” provide appeal for an explicitly still do not contempt, although they provide do

from civil contempt. appeal

for an from criminal See Therefore, 12-861, §§

A.R.S. 12-863. ac Wright,

cording binding precedent to the overruled, legisla never been the which has 211 P.3d 36 appeal specifically provided that no ture has Arizona, Appellee, The STATE contempt will lie from a civil order. party’s here a 63 The order determines Rydell NORRIS, Appellant. 54(b), Anson liability, and it has Rule Ariz. R. Civ. P., language making proeedurally it a final 2No. CA-CR 2006-0347. substantively final are order. Most orders Arizona, 12-2101(B), pursuant Appeals § Court of appealable to A.R.S. interlocutory determining par- Department orders Division B. § ty’s rights may appealable under 12- be Feb. 2101(G). specific But a statute controls over general statute. See La Canada Hills Ltd. Kite, P’ship (App.2007). By requiring civil con-

tempts “punished conformity to be the law,”

practice usage of the common 12-864, legislature specifically has di- contempt

rected that such orders are sub-

stantively appealable. Wright, See Accordingly,

Ariz. at P. at 946.

general appeal statute cannot confer substan- appealability legis-

tive on an order that the specifically

lature has determined is not sub-

ject appeal.

¶ Moreover, statute, general appeal present existed form when supreme Mulligan. court issued that,

supreme say contempt did not if a case-dispositive, exempt

order was it was “[fjindings language

from the broad

contempt non-appealable orders” and are governed by general appeal

was instead Mulligan, 126 Ariz. at

statute.

at 1272. And I do not see how the nature of imposed by nonappealable ‍​​‌​​‌‌​​‌‌​‌​‌​​​​‌‌‌​​​​​​​‌​​‌​‌‌​‌‌​​​‌‌​‌​​‍sanction can order invest this court with

jurisdiction legislature has withheld. Ad- above,

ditionally, power have no as stated we ignore supreme pronounce- or alter

Case Details

Case Name: Green v. Lisa Frank, Inc.

Court Name: Court of Appeals of Arizona

Date Published: Jan 20, 2009

Citation: 211 P.3d 16

Docket Number: 2 CA-CV 2008-0028

Court Abbreviation: Ariz. Ct. App.