*1
James P.
Plaintiff-Appellee, DAWSON, man, single
John W.
Defendant-Appellant.
No. 1 CA-CV 89-543. Appeals Arizona,
Court of 1, Department
Division B.
Sept. 1992.
As Corrected Oct. 2 and Nov.
Byrnes, by Rosier & Himelrick Richard Himelrick, Scottsdale, Ulrich, G. Paul G. by Ulrich, Phoenix, P.C. Paul plain- G. for tiff-appellee. Hendricks, Victor,
Meyer, Osborn & Mal- edon, by Hurwitz, P.A. Andrew D. Ron Phoenix, Kilgard, defendant-appellant. for AMENDED OPINION LANKFORD, Judge.
Defendant appeals John W. Dawson judgment on jury verdict favor plaintiff James P. Rhue and from the trial court’s denying order the motion for judgment notwithstanding or, the verdict alternative, modify judgment or for a new trial. compensatory awarded dam
ages punitive damages to Rhue on arising joint claims out of a agree venture addition, ment. found that had violated Ariz.Rev.Stat. (A.R.S.) prohibits 13-2310 which fraud § result, ulent schemes and artifices.2 As a judge trebled the compensatory damages under civil racketeering Arizona’s statute3 and awarded a total judgment, 1. The various statutes herein refer to the version 3. The civil statute authorizes treble 13-2314(A) pursuant currently civil A.R.S. in effect. That version is § identical to states, as follows: the one in effect in unless otherwise stat- person injury person, A ed. who sustains property by racketeering business or as de- 13-2301, D, paragraph § fined subsection 13-2310(A) § 2. A.R.S. defines the crime of superior ... file an action in court artifices, fraudulent schemes as follows: recovery treble and the costs who, Any person pursuant to a scheme or suit, including attorney’s reasonable defraud, knowingly any artifice to obtains fees____ pre- of false or benefit means fraudulent 13-2301(D)(4) (1988) defines "racke- tenses, representations, promises or material teering” as: guilty felony. act, of a class 2 omissions including any preparatory or com- offense, pleted gain, committed financial costs, him for including of of funds to reimburse attorneys’ fees and $8,379,339 part- that amount plus capital interest on contributions at time paid. nership until Rhue was liquidated. assets were development equal fee three to receive a ap- raises five main issues redevelopment percent of the cost of peal: named the enti- project. Rhue and Dawson admitting Did the trial court err in Ari- “Shopping Enterprises of ty Center of Dawson’s alcoholism? evidence “SCEA”). (hereinafter referred to as zona” sufficient to sus- 2. Was evidence they had dis- damages for Rhue testified that after tain an lost award partnership in profits? cussed the terms of the their *4 December, 1986, meeting first in to 3. Was the evidence sufficient sus- Rhue, put his arm around and up, stood tain a verdict for: on, said, “Well, partner, going I’m to come wrongful part- the a. dissolution of you began your new office.” Rhue show nership; joint project either that working on the fiduciary duty; and b. breach of day. parties next The did day same or the racketeering? c. immediately formalize their business instructing trial court err in 4. Did the entering into a by association written jury regarding punitive damages? the although agreement, drafts were circulated including by the court err 5. Did trial parties’ for the review. compensatory both trebled shopping prop- Rhue located two center pu- the and under statute eventually by purchased erties which were judgment? in nitive Valley purchased first SCEA. SCEA I. Plaza million. For mil- Center for $3.2 $4 lion, purchased adjacent an site SCEA then The must viewed in facts this case which vacant store The on a was located. light sustaining most favorable to separated by in two sites were 75th Street resulting judgment. verdict and Ro Scottsdale, Arizona. Rhue and Dawson Lords, gus planned develop to into originally both sites shopping center to “Los a unified be called December, meeting early During a Crossing.” Arcos proposed they Rhue to Dawson financing, To facilitate Dawson con- bank purpose a of the partnership.4 form appraiser an recommended tacted partnership acquire develop to and lending appraisals institution to obtain shopping property. center Rhue was to be provided a properties. appraiser partner shopping develop with center simple appraisal “as mar- letter of the is” expertise day- ment and was to handle Valley of the alone ket value Plaza Center to-day fi details. Dawson was to be the $3,625,000. appraiser fur- at later contributing bulk of partner, nancial appraisal nished Dawson with a full valu- capital facilitating financing. and $15,625,000. ing properties agreed purchase, the combined at Rhue and Dawson ren ovate, appraisal properties to This assumed that shopping and sell a center and redeveloped equally. pursuant plans profits equity share the and Daw would be specifications preferred prepared by a Evi- was to receive distribution and SCEA. son mony "partners” "partnership.” chargeable under the referred to and which is or indictable Therefore, partnership laws the state in which the act occurred ... we will utilize terms punishable imprisonment for more and referring parties to the when and business year, regardless of whether such act than one and association formed between Rhue Dawson. indicted, charged involving: or the business association considered Whether joint partnership dif- a ference, venture makes little (t) A scheme or artifice defraud. analysis. any, if in our See discussion joint relationship between venture eventually Although en- 4. infra III, venture, part forming n. agreement joint 8. tered into parties and trial testi- discussions between presented dence through staff, at indicated proceeded then lock Rhue and Dawson estimated the cost offices, Rhue out of the partnership claim- acquiring renovating property ing that Rhue had removed records and $11,849,580,5 projected profit for a files. $3,775,420. one-half share Rhue’s thereafter, Soon against Rhue filed suit projected $1,887,- profits would have been Dawson. The complaint second amended declaratory contained counts judgment, days Just seven after Dawson received in the fraud inducement/constructive presented appraisal, the full he enti- form fraud, of fiduciary duty, breach violation Agreement” tled “Joint Venture for Rhue’s statute, civil racketeering breach of the signature. According Rhue, Dawson implied good covenant of faith fair pressured sign Rhue to dealing, attempted wrongful dissolution period permit within a time too brief enrichment, rescission, partnership, unjust Rhue to it. specifically read When Rhue estoppel, and constructive trust. The changes asked Dawson whether certain favor, returned the verdict Rhue’s they previously agreed had discussed superior court post-trial denied Dawson’s upon agreement, were reflected motions, appealed. and Dawson *5 replied Dawson in the affirmative. Dawson, however, bring to failed to II. Rhue’s attention insertion of a unilater- alleges Dawson first that evidence of his “Option al to Purchase” clause. Previous alcoholism was irrelevant to the issues at drafts had been circulated between trial, therefore, and the trial court buyout Rhue and Dawson provi- lacked this erroneously admitted this evidence.6 Alter buy sion. The clause allowed Dawson to natively, argues Dawson that even if rele Rhue’s partnership merely interest in the vant, the unfairly prejudicial evidence was by returning any capital contribution Rhue and should have been Ari excluded under pri- made. Rhue had Because contributed zona of Rules Evidence Rule 403. marily expertise not capital but and would issue, When we first reviewed this we pro- to an equal be entitled share of the objection concluded that no upon dissolution, to evidence ject’s equity provision this preserved had been for appeal. highly was to Rhue. Dawson’s unfavorable Rhue motion for signed reconsideration directed us to reading without part of verifying transcript the trial provisions him- contract shows he objection. self. that made an con-We although preserved clude that Dawson approximately learned two months objection, objection least one his was insuf- the agreement signed later that he had preserve ficient to appeal. error for buyout contained a clause. Rhue immedi- ately stating delivered a to admissibility letter Dawson of evidence alco- agreed buyout that Rhue had never to the holism was first raised when Rhue a filed provision, that did clarify he not intend to motion in limine to to the extent agreement, bound the written and that which such evidence would be admissible at expected renegotiate to he Dawson motion trial. Rhue’s four reasons for .cited buyout provision according (1) admitting explain to their earlier why the evidence: to agreements. responded let- project Dawson with a failed after Rhue was ousted ter from attorney partnership; explain his a notice of intent from the to Daw- Dawson, provision. buyout swings to exercise the son’s mood and “confrontational $11,849,580 filed, figure suggested granted, 5. The in 6. Dawson considered and we relating only a motion for reconsideration Rhue’s trial memorandum and cited in Daw- portion opinion. reconsidering of this this opening suggests son’s brief. at trial Evidence prior opinion, por- our we have amended this $11,964,580; projected figure may have been opinion. Although tion of the same, the result is the the difference is immaterial. reasoning original differs from opinion. behavior; (3) explain abuse of dis- will not be disturbed absent belligerent” cretion). confiding in why was careless “ get planned then-girlfriend that he any ‘Relevant evidence’ means evidence Rhue; (4) to Dawson’s attack rid of any to make the existence having tendency credibility by establishing a reason for consequence to the any fact that is of inability to recall conversations. Dawson’s more probable of the action determination it probable than be without less would response filed to the no written Ariz.R.Evid. 401. the evidence.” argued motion limine. motion was in question that the trial reporter. The threshold in As chambers without court considering the result, must decide when arguments exclud- Dawson’s court admissibility any evidence whether ing the recorded. evidence were not manner, evidence, aids the arguments on the motion were later An resolving trier of fact the case. summarized on the record follows: if is relevant it bears item evidence MR. SUSEMIHL [Dawson’s counsel]: relationship properly to a matter some case____ in the to the determi- provable record, ought on the we to brief- While The standard used nation the action. ly happened yesterday summarize what making this determination is one Mr. Himelrick chambers. [Rhue’s “any If probability. the evidence has explained to the court his desire counsel] tendency” “any to make existence of put in and make an issue in alcoholism “more consequence” probable fact ... of credibility of Mr. order to attack evi- probable” or less than without the ability Dawson and his remember dence, the evidence “relevant.” As said, *6 he and also show it affected what to such, definition, very is a this liberal successfully to Mr. Dawson’s abilities defining range possible of as wide a as shopping center. construct We ob- as “relevant.” evidence being all that jected to as irrelevant of McClennen, Evi- Crane Arizona Courtroom solely purposes prejudicing and for Manual, 401 at 401-1. dence indicated, I jury. And the court if concedes, trial court’s As Dawson correctly, probative it have state it did discretionary admission of evidence is value, relevant, it was our and over ob- only and reviewable for abuse discretion. you going to jection, and are allow that objection on record was limit- Dawson’s put agreed in. we evidence We would relevancy prejudicial ed effect and to preserve objec- that on the record to that credibility “the the evidence to show of Mr. tion. ability his to Dawson and remember what accurately THE That COURT: stat- said, he and to show affected [alcoholism] ed, I believe. successfully to Mr. Dawson's abilities con- added). (Emphasis shopping center.” struct original opinion, this In the version of we regard memory loss and With relevancy had his held that Dawson waived credibility, court its the trial acted within and, dictum, in that evi- objection stated admitting pro evidence as discretion not rele- of Dawson’s alcoholism was dence repeatedly testified that bative. Dawson tried in this case. vant to the issues events, he did certain his not remember statements, prior reconsideration, prior his we reexamined own own On testimony. Dawson’s version of some record. We conclude evidence of conversations, including his excessive alcohol alcoholism and events Dawson’s credibility get that he “will rid of Jim consumption could affect his and statement Therefore, present his he memory the trial court did Rhue” and statements when loss. signature, for admitting ed the to Rhue its discretion not abuse testimony of Stotts, significantly from the differed as relevant. See State evidence credibility His could be other witnesses. Ariz. 1120 evidence of his alcohol- (a with admitting decision evidence undermined trial court’s ism. The trial Any objection court did not abuse its dis- relevancy is therefore admitting cretion the evidence on this waived. ground. Where, 401. See Ariz.R.Evid. as Although it is not clear here, pur- evidence admissible for one issue, preserved the we also review a another, pose, but not evidence is court’s determination under Ariz.R.Evid. Hunter, 121 admissible. Gaston v. unduly prejudi- that evidence was not cial on abuse of discretion standard. evidence of Dawson’s alcoholism was ad- Neal, See State v. missible to his memory substantiate lack of prejudice of alco- credibility. However, apparent. holism evidence is however, indicates, The record that the requires just Rule 403 not evidence evidence of Dawson’s alcoholism admitted prejudicial, probative but that the value scope at trial exceeded the of the matters substantially the evidence is out- for which evidence was relevant. weighed prejudice. Ariz.R.Evid. unfair Much of the evidence at trial did not relate Here, 403. the evidence was relevant memory loss or to other stated explain memory Dawson’s loss and with purpose example, of the evidence. For regard to credibility. The trial court evidence included an alcohol-related auto- did not abuse allowing its discretion mobile accident which Dawson was in- purpose for this evidence substan- years twenty prior volved to the trial. This tially outweighed by prejudice unfair evidence clearly is so attenuated as to be Dawson. inadmissible, yet objection appears no The evidence of Dawson’s alcoholism the record. Ariz.R.Evid. See was relevant to the issues of credibility point At the the evidence exceeded memory. To the extent some evidence admissible, purpose it which was at trial purposes exceeded these admissible required object. Dawson was Well-set or marginally unfairly but relevant objection law tled dictates that the must be prejudicial, specific objec- Dawson made no specific portions those as to of the evidence pre- tion on the record thus failed to not,
that are claimed to be If inadmissible. appeal. serve the issue for We therefore *7 Dawson cannot allege error. Killings affirm ruling admitting the trial court’s 356, Nottingham, Ariz.App. worth v. 18 this evidence. 358, 1197, (1972). 501 P.2d 1199 Counsel pointing the of bears burden to irrelevant III. evidence; portions proffered of the trial In appeal, his second issue on judge separate “sheep need not the goats” that the segregate contends evidence is insufficient to the and the admissible wrongfully show he parts. partn from the v. that dissolved the inadmissible Grant Ari Co., 434, ership.7 argues He the zona Public Service 133 Ariz. evidence 450, 507, (1982). proves only partnership 652 that the P.2d 523 Dawson was was one at obligated specifically object partnership to when will a may Rhue such be presented any which did not relate by express evidence dissolved8 at time the will memory. partner. lack of Dawson did not do so. either Millett, 4, 8-9, present purposes, 982, For 7. whether the business v. 71 Ariz. 222 P.2d 985 Ghiz joint partnership (1950), 161, a venture or association is rehearing, 71 Ariz. 224 aff'd after joint makes little difference. A venture venture). differs (joint P.2d 650 partnership usually, although from a because Partnership 8. dissolution differs from termi- necessarily, joint a venture is limited to a partnership. a nation of Dissolution occurs at single transaction. Rubi Transamerica Title among relationship the or Co., 403, 406, 891, time between Ariz. Ins. 131 894 partners changes any partner be or ceases to (App.1981). Principles governing fiduciary duties, partnership. associated with the A.R.S. 29- e.g., exercising good § the utmost faith and partnership is not recognizing obligation terminated disso- loyalty, fairness may operate honesty, apply lution but continue to partnerships joint until Dixon, winding up partnership complete. alike. See DeSantis v. 72 affairs ventures Ariz. 38, (1951) (partnership); P.2d 236 41 A.R.S. 29-230. §
227
29-
A.R.S.
met
a definite term.
first
See
§
Rhue and Dawson
When
they
term
231(A).
definite
partnership,
partnership
their
A
for a
formulated
terms of
partnership.9
undertaking may
particular
an oral
formed
or for a
deter
partnership agreement are
oral
violating
partnership
without
dissolved
indicated
parties’
intent as
mined
or
only at the
of the term
agreement
end
Myers v.
their conduct
statements.
undertaking. A.R.S.
completion of the
497,
227,
Rollette,
225,
P.2d
439
29-231(A)(l).
§
Ariz.
(1968),
13
appeal
remand
499
after
speci
Only partnership having
a
no
(1970);
72,
Tripp v.
for renewals incre- preserved arguments appeal. those ments. This sup- evidence sufficient to only objection Dawson’s to the profits lost a port jury finding that the intent of the instruction was as follows: parties partnership was a to create for a objections Just our to the instructions definite term. only go to the extent being given instructions are on theories partnership Whether of the case that we don’t think have been particular undertaking formed for a or for proven, out, have been should directed term, a definite sufficient evidence exists yesterday and I think we had discussion support jury finding a that Dawson and tendered the various instructions partnership only could dissolve the SCEA refused, which were and we will make in accordance agree with the terms part those of the record. We think some attorneys ment. Dawson’s delivered a let of those instructions were a better state- notifying buyout ter Rhue of and dis ment of the law.
solving partnership. Dawson locked That’s all I have. I have no other partnership out of the offices. Rhue These that, objections than other none to the effectively part actions ousted as a form or of the content verdict forms. partnership. ner dissolved the objection This to state “the distinctly failed supports finding jury evidence that Daw objects grounds matter to which he and the wrongfully son’s conduct dissolved the objection.” 51(a). for his A Ariz.R.Civ.P. parties’ contravention general objection is insufficient to consti agreement. generally See 29- tute a distinct statement of the matter 231(B) (enumerating the causes of dissolu which objection is made and supporting tion). grounds Corvo, Long therefor. (App. 1981).
IV. preserve Because did not sufficiency In addition to appeal his other of the relating in- issue to the claims, struction, Dawson asserts that evidence our review limited to determin- ing court had insufficient evidence to con whether sufficient evidence exists profits support lost the record sider as an element of award of lost Rhue’s profits, compensable damages11 assuming for breach correctness of trial court’s instructions. partnership agreement. Dawson argues he profits should not be liable for lost B. property the value when had de *9 point subsequent at clined some to the dis The trial instructed a jury court the argues He also that an solution. infant partner wrongfully who has been excluded appraisal and an inflated rendered business right, the has the as profits subject lost to against Rhue’s con partner wrongfully who exclud- speculation him, and and too jecture uncertain ed “to breach of agreement, including probable prof- to be recoverable. loss of following 11. Rhue claimed the appraisal elements of as the difference between the value his (1) damage development claim: fee he properties was for the combined SCEA as if redevel- (2) promised; equity share his one-half in the of oped according plans specifications pre- to and dissolution; properties as of the date of and pared by redevelopment. SCEA and the cost of profits. profits lost Rhue calculated his lost
229
guided
urges
jury
by
must be
some rational
though
its.” Even
Dawson
and that
profits
determining
Rhue’s lost
were uncertain
In
whether a
standard.
to
jury
not have
instructed
burden,
should
been
has met
courts have
plaintiff
which we
profits,
consider lost
the issue
profit history from a simi-
considered
was
will
is whether
evidence
address
operated
plaintiff
a
by the
at
lar business
Dawson
support
to
verdict.
sufficient
different location.
infancy
in its
asserts that the business was
586,
583,
Riley, 150 Ariz.
724 P.2d
v.
Short
Either
appraisal
inflated.
that the
was
1252,
(App.1986).
was a
1255
While SCEA
factor,
argues,
prof-
lost
rendered
Dawson
association,
pieces
the two
of
new business
conjecture
its too uncertain
based on
by
operated
had
property held
SCEA
been
speculation.
estate market for
in the commercial real
profits,
lost
must
prove
plaintiff
To
many years.
reasonably
a
certain factual
“establish[]
addition,
if
evidence establishes a
computation
profits.”
lost
basis for
reasonably certain
for com
factual basis
Pescado,
Inc.
Rancho
v. Northwestern
losses, recovery
puting probable
cannot be
Co.,
174, 184, 680
Mut.
Ins.
140 Ariz.
Life
denied,
in a
partnership.
even
new
150
1235,
(App.1984).
The standard
585,
ap
The
Ariz. at
P.2d at 1254.
cannot
profits
is “that the existence
is sufficient
for the
praisal
evidence
nebulous, although
some
there can be
profits.12
ap
Rhue’s
The
determine
lost
uncertainty
fixing
in
or extent
measure
praiser
property
estimated the value of the
ex
profits
certainly
would
those
property
Surety Corp.,
assumption
ist.”
on the
that the
v. National
based
Schuldes
543, 548
Ariz.App.
developed
557 P.2d
was to be
accordance with
Furthermore,
(1976).
amount of
plans and
The
specifications.
SCEA’s
date
profits
Rhue’s lost
could not be based
sufficiently
appraisal
close to
conjecture
speculation.
Earle M.
See
the date of dissolution to establish
mar
Co., 10 Ariz.
Jorgensen
Mfg.
v. Tesmer
Co.
The
project.
ap
ket value of-
finished
App.
trial, moreover,
praiser testified
that he
accuracy
was satisfied with the
of the valu
objects
Dawson first
to the lost
performed
years earlier.
ation he
two
profits as too uncertain because SCEA was
Dawson
evidence also revealed that
himself
operat
a
new business.
and Dawson
appraisal after
had utilized the same
year.
ed
for less than
This
SCEA
one
dissolution
various financial statements
appropriate
court has stated the
burden
lending
Valuation meth
to a
institution.
plaintiff
prove
profits
in a new
lost
by the
included
appraiser
ods utilized
com
business:
sales,
income,
net
parable
discounted cash
required
loss of
prove
The evidence
flows,
replacement
costs.
evi
profits depends
individual
future
on the
and,
support
although
of each
dence was sufficient
circumstances
case
certainty
profits.
required,
absolute
is not
award of lost
ongoing
relies on two
we do not
real estate transactions.
cases which
in an
series of
Ash,
first,
persuasive.
profits
In the
find
Weiner
Rhue was able to
his lost
based
estimate
plaintiffs
(App.1988),
Hosp., 581 P.2d where the “market after the fluctuat[es] breached[, contract such fluctuations] Although development of property not in measuring are relevant contract accomplished projected was not prior as damages which are measured at time of trial, the date of several factors hin- which Prospero the breach.” Assoc. Redac project dered the were Dawson’s own Corp., tron (Colo.App.1 making. develop- He failed facilitate 983).13 by refusing ment and sale a cash settle- ment right-of-way dispute; offer settle a Dawson’s claim that he should ben by failing employ leasing agent efit the market decline also failed to opportunities lost resulted in to secure leas- damages consider the source of Rhue’s shops; es by failing to follow adopted law. Arizona has through negotiations with the main two (UPA). Partnership the Uniform Act necessary approv- tenants to obtain the site protects partner UPA an innocent in the al. of a wrongful event dissolution. Such a the property partner right
While sold has damages not to recover value, prior to to verify appraised against for breach of the each appraisal supplied partner nevertheless a suffi wrong who causes the dissolution cient damage Requir 29-238(B). basis for the award. fully. partner theAs ing property actually developed wrongfully be partnership, excluded from the permit and sold would Dawson to insulate Rhue’s caused breach significant liability. (1) himself from He could measured part his interest lease, merely suspend develop, nership efforts to as of the date the breach and sell property after he wrested profits control his share which would have from Rhue. during partner- been made the term of the holding plaintiffs damages 13. The our Fair narrow decision in for breach of a construction Builders, Co., way Inc. v. Towers Rental contract where inflation would have made the Malouf (App.1979) at the measure time breach exception contrary inadequate repair damage is an and is this rule caused to it. That decision allowed increase breach.
231
Rowley
in
juryA
that Dawson
Sive,
could have found
ship. II Reed
David
Row-
&
ley
Partnership
Rhue that
tentionally
48.30
failed to disclose to
§
buyout provi
agreement
contained a
dissolve a
one member assumes to
[I]f
term,
Rhue out of
sion and that Dawson locked
the end of the
partnership before
dam-
may bring
action for
A
could have
partnership
jury
the other
an
offices.
breach,
only
ages
and recover
his
thereby breached
found that Dawson
interest,
but also his share
his
by failing to exer
fiduciary duty to Rhue
made
profits,
might
which
have been
by
breach
good
cise the utmost
faith
until
during
term. He need not wait
loyalty, fairness and
ing
obligation
need not
expiration
period,
Dixon,
Ariz.
honesty.
72
See DeSantis
accounting, but
go
equity
into
for an
350,
38,
(1951)
345,
(partner
profits
probable
show the
at law
8-9,
Millett,
4,
ship);
Ghiz
deprived
he has been
of.
which
(1950),
rehearing
aff'd after
pp.
(quoting
239-240
Zimmerman v.
Id. at
(1950) (joint
ble at Dawson’s dissolution of the court has stated that relation wrongful. ship parties between the partnership could not then be affects whether punitive damages can be awarded. Rawl argument The difficulty with this is that 149, 163, ings Apodaca, v. 151 Ariz. 726 jury partner- if the even found the written 565, (1986). 579 Rhue and Dawson ship binding, document not it still had evi- partners. discharge were Dawson failed to dence from which it could find that duty fiduciary duty and his to exercise parties partnership entered into an oral good discharge the utmost faith agreement which was not terminable at obligation loyalty, honesty fairness and pursue will. Rhue was entitled to the rem- dealings in his with Rhue. edy damages partner- for breach of the Furthermore, evidence of evil motives or ship agreement whether oral or written. necessary support punitive
malice
dam
age
“may
implied
instruction
be
from the
VI.
complained
nature of the acts
of and the
argues
Dawson next
that his con
Magma Copper
circumstances.”
v.
Co.
sufficiently outrageous
jus
duct was not
Shuster,
350,
118 Ariz.
575 P.2d
punitive
tify
jury
either a
instruction on
(App.1977).
Evidence of fraudulent
damages
damages by
or an award of such
support
and dishonest conduct will
a find
jury.
reviewing
punitive
In
dam
ing that
the “defendant’s conduct was
award,
ages
this court must affirm “[a] guided by
Rawlings Apo
evil motives.”
v.
jury’s
punitive damages
decision to award
daca,
163,
guage, Legislature specifically declared persuasive. sion not The federal are civil remedy punitive that the in nature. not statute, racketeering as in 18 13-2314(N) contained now A.R.S. reads as follows: § 1964(c), provi- U.S.C. does not contain a § A civil action authorized this section 13-2314(N). parallel sion to A.R.S. ..., § punitive is remedial and not statutory specify federal scheme does by any does not limit and is not limited punitive whether it is remedial or or wheth- previous subsequent other or civil or provided supplemental er the remedies are action under criminal this title or mutually only exclusive. It states that a provision other of law. Civil remedies litigant successful “shall recover threefold provided supplemen- under this title are damages he sustains and the cost of mutually tal and not exclusive. suit, including attorney’s a reasonable added.) (Emphasis court, This while con- fee.” split The federal courts are on the issue, sidering recognized an unrelated has punitive damages may issue of whether damages non-punitive that treble have ob- imposed simultaneously with treble dam- jectives: ages. view the federal racke- Some courts admitting damages While that actual teering punitive, statute as others as reme- showing can be recovered without a dial. Jed S. Rakoff & Howard W. Gold- scienter, defendants claim treble dam- RICO: Civil stein, Criminal Law and ages they “punitive cannot because are Strategy 4.03[4], at 4-28 § damages ap- in nature.” ... are [S]uch only that, propriate where there is an intent to We therefore hold as a matter of injure express statutory language, or a conscious course of conduct Arizona civil knowledge signifi- racketeering provided with that it creates a actions for in A.R.S. others____ 13-2314(A) nature, of harm cant risk A.R.S. are remedial § 13-2314(N) damages characterizes the civil rem- awarded treble under statute § punitive.” supplemental edy as “remedial and not We are to other and not remedy mutually Healey view this as akin to antitrust exclusive. But cf. 349, 356-357, damages, Coury, treble which is intended not (civil only compensate (App.1989) for losses and to 802-803 redesignated Legislature 14. The added this subsection to this subsection was 3; Laws, Ch. subsection N. § 13-2314 remedial; however, damage provision are not hold- as an intimation from ing prospective limited to the nature of the the court to restrict the amount of dam- statute). sum, The statute is intended to ages. agree allow we with the Court litigants successful Appeals to receive both treble for the Tenth Circuit that racketeering damages punitive informing dam- would serve no useful ages. The trial court in properly probable consequences this case function and its awarded both. impermissible would be harmful—an low- ering of damages. the amount of *14 complains Dawson also that the tri Second, jury it is not for the to deter- al jury court should have informed the judgment. mine the amount of a Its prior fixing punitive damages to its that compute function is to the amount of consequence imposing quasi- the of the damages. Congress’s in authorization racketeering criminal sanction would be triple 15 U.S.C.A. 15 to the award of damages. treble the compensatory The damages applied is a matter of law to be jury compensa determines the amounts of by the district court without interference tory damages punitive damages jury. from the party charged also determines whether the added) (footnote (first any predicate emphasis committed act under the Id. omit- ted). racketeering trebling statute. The is auto judge matic and is entered into the When in viewed isolation
judgment.15 jury is not informed of award, damage rest of the the award of trebling finding effect of its that a case, not, punitive damages per in this is party racketeering violated the statute. se, outrageously excessive and does not Riley, Inc. v. Brewing Pollock & Pearl Cf. suggest passion prejudice. punitive A Co., 1240, (5th Cir.1974), 498 F.2d 1242-43 excessive, damages may award howev cert. denied sub nom. Oil Co. Gulf er, light trebling in of actual dam 992, Wood, 1427, 420 U.S. 95 S.Ct. 43 ages. (1975) (an case). L.Ed.2d 673 antitrust punitive damages The amount of should Thus, jury is not allowed to consider in part be based on the defendant’s wealth trebling calculating appropriate appropriate in order to achieve the level of punitive damages. Informing amount of punitive effect. Maxwell v. Aetna Life jury trebling might pur- of thwart the Co., 205, 218-219, Ins. 143 Ariz. 693 P.2d pose by inducing jury of the statute 348, (App.1984). 361-362 While “ver damage reduce or even eliminate awards: punish dict must be sufficient to deter primary policy supporting our deci- circumstances,” others similar the dam prohibit informing jury sion that [to ages imposed “must not kill the defen damages awarded will be verdict However, significant dant.” Id. treble underpinning tripling trebled] damage award reduces the defendant’s provision purpose itself. The of treble might any punitive wealth and render damages is to deter violations and en- award excessive. See Al-Kazemi v. Gen courage private enforcement of the anti- Acceptance Corp., F.Supp. eral & Inv. justifiable trust laws. The anti- fear of (D.D.C.1986). 543-544 juries plaintiffs trust is that will punitive damage adjust damage award downward or award this liability, thwarting arguably light case is excessive in no find therefore purpose, trebling racketeering Congress’s because some no- effect of statute. plaintiff. compensatory damages of a windfall to the were tions One Actual $2,081,710, $6,245,130 suggested jury equalled has even when court $2,000,- might damages take revelation of the treble trebled. Punitive were statute, Arts, damages. Daggett judge 15. Under the a trial must award hold such v. Jackie Fine 559, 568-569, damages plaintiff prevails Inc., if a treble a com- 733 P.2d plaint alleging a civil violation. 1150-1151 judge The trial court has no discretion to with- Af- $134,209, punitive damages should be awarded. attorneys’ fees were verdict, $8,379,339. the trial damages jury ter the returns its total trebling jury instruct court could an award of The trial court review mandatory, fol- damages the actual may reduce a verdict punitive fix the amount lowed an instruction to Moreno, it finds excessive. Braun damages. punitive (1970). Ariz.App. exercising its has discretion in A trial court juries ensure that procedure This would Spur Feeding Co. v. power of remittitur. compensatory improperly reduce would Fernandez, informed they had been because fixing the trebling prior to mandatory proce- damages. of those Yet the amount not interfere with Appellate courts will relevant arm the with all dure would damages unless the verdict on on the evidence, prior information to its decision supported by verdict is not Co., proper damages. punitive amount of Filasky v. Risk Mut. Ins. Preferred *15 (1987), or outrageously it is “so excessive unless VIII. blush, passion preju suggest, at first case, in judgment is affirmed this Shuster, Copper Magma Co. dice.” exception of the amount of the with (App. punitive damages. We remand to the 1977). punitive court for its review of the award short, the award of no bar exists to par- opinion. in with this Each accordance damages punitive damages. treble both ty attorneys’ is to fees on bear own time, permit- the same the trial court is At appeal. compensato- amount of ted to consider the damages, ry damages, including treble J., KLEINSCHMIDT, concurs. exercising discretionary power to review its GERBER, punitive Judge, concurring. awards for excessiveness. specially unclear as to whether the Prior law was Although majority insightful its effect of the trial court could consider the exegesis, herculean effort statutory its assessing propriety award in trebled damage the Rico statutes make sense of Therefore, we remand punitive mind, award. which, my is an leads to result court to reconsider Dawson’s for the trial absurdity, anomaly namely if not an that a The court part. motion for new trial simultaneously both jury may civil award punitive the amount of dam- review punitive treble compensatory ages light trebled damages by conduct. Treble same are not damages to ensure that the former very punitive; they their nature are seek above, As noted the trial excessive. we deter, punish, example, precise- to set scrutiny in the has broader discretion court ly punitive damages. Admittedly the as do re- than we exercise. Our of the award seeking clarify latest amendment part our mand intimates no view on 13-2313(N) damages for states that civil excessive in damages are or are not punitive” are are “not nor this case. sup- language This does they “exclusive.” However, reasoning. port majority’s approach to avoid ex- possible Another in the given prosecution’s involvement damage in treble punitive awards cessive repeated amendment of this enactment and cases, judges relieves trial and one which labyrinth, palatable read- statutory a more weighing the effect of of their burden is not that it authorizes ing of that statute damages, is to bifurcate treble punitive damages but seeks treble and both compensatory damages determination and all criminal only to assure could damages. punitive and of despite any kind remain viable proceedings compensatory damages as to be instructed damage I concur rather verdict. findings a racke- of civil make whether and told to language precise dissent because has occurred and whether than teering violation support majority’s statute does position, recalling again statutory lan-
guage statutory rather than wisdom is our
domain—except eighth amendment con-
cerns, which are not raised here.
STATE of MOORE, Appellant.
Mark Chester
1No. 91-150. CA-CR Arizona, Appeals
Court of 1, Department
Division A.
Nov. *16 Woods, Atty.
Grant Gen. Paul J. McMurdie, Counsel, Appeals Chief Crim. Section, Phoenix, appellee. Nelson, Yuma, appellant. Garth OPINION TOCI, Judge. appeal
This is an from the sentence im- posed judgment on a of conviction that (“defendant”) Mark Moore commit- Chester