D'Amico v. Structural I

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE IRENE E. D AMICO, Plaintiff/Counterdefendant/ Appellee/Cross-Appellant, v. STRUCTURAL I COMPANY, Defendant/Counterclaimant/ Appellant/Cross-Appellee. _________________________________ IRENE E. D AMICO, Plaintiff/Appellant, v. STRUCTURAL I COMPANY, Defendant/Appellee. _________________________________ IRENE E. D AMICO, Plaintiff/Counterdefendant/ Appellee, v. STRUCTURAL I COMPANY, Defendant/Counterclaimant/ Appellant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) No. DIVISION ONE FILED: 04/03/2012 RUTH A. WILLINGHAM, CLERK BY: sls 1 CA-CV 09-0493 1 CA-CV 10-0569 1 CA-CV 10-0762 (Consolidated) DEPARTMENT B MEMORANDUM DECISION (Not for Publication Rule 111, Rules of the Arizona Supreme Court) Appeal from the Superior Court in Maricopa County Cause No. CV2006-009862 The Honorable Jeanne M. Garcia, Judge AFFIRMED IN PART, REVERSED IN PART, REMANDED Cavanagh Law Firm By David A. Selden Julie A. Pace Jodi R. Bohr Attorneys for Structural I Phoenix Cohen Law Firm By Larry J. Cohen Attorneys for Irene D Amico Phoenix J O H N S E N, Judge ¶1 Structural I Company appeals a jury verdict in favor its former chief executive officer, Irene D Amico, on her claim for breach of her employment agreement. D Amico cross-appeals the jury s verdict in favor of Structural I on its claim against her for breach of fiduciary duty. We have consolidated this appeal and cross-appeal with two other appeals arising out of the same proceeding. For the following reasons and those set forth in a companion opinion filed this date pursuant to Arizona Rule of Civil Appellate Procedure reverse in part and remand. 2 28(g), we affirm in part, FACTS AND PROCEDURAL HISTORY ¶2 Structural I is a family-owned framing company founded and operated by Mary Jo and Doug McLeod. 1 The McLeods son Brett was the company s director of operations in California, and Chad Trott, who was like a son to the McLeods, was director of operations in Arizona. ¶3 Toward the end of 2001, the McLeods wanted to begin transitioning toward retirement. While they wanted Brett and Chad eventually to take over Structural I, the McLeods did not think they were ready to do so then. The McLeods had been seeing a counselor, Sharon Cottor, about personal and business matters. Cottor suggested the McLeods hire a bridge CEO who could run Structural I while mentoring Brett and Chad to prepare them to take over the company. Asked if she knew of someone to fill the bridge CEO position, Cottor named D Amico. ¶4 Structural I initially hired D Amico as a consultant. Pleased with her work, the McLeods eventually asked her to work for Structural I full time. D Amico agreed, and the parties negotiated an employment agreement (the Agreement ) dated as of July 18, 2003. ¶5 CEO. Under the Agreement, D Amico would have the title of Her salary would be $200,000 per year, with a performance- 1 We view the evidence in the light most favorable to sustaining the jury s verdicts. See S Dev. Co. v. Pima Capital Mgmt. Co., 201 Ariz. 10, 18, ¶ 16, 31 P.3d 123, 131 (App. 2001). 3 based incentive ( PBI ) based on the company s net income, as defined by the Agreement. The Agreement was for a term of five years and provided that D Amico could be terminated only for cause. The Agreement defined cause as: (i) the conviction of any felony or any crime involving moral turpitude, dishonesty, or other act gross in participation of a misconduct fraud or act against of the Company; dishonesty against (ii) the Company which adversely affects the Company in a material way. The Agreement also included a future option of an ownership interest for D Amico, though it was silent as to timeframe and percentage. The starting date of the Agreement was September 1, 2003, and it continued through December 31, 2008. 2 ¶6 Troubles began in 2005. In September of that year, D Amico proposed a succession plan by which she, Brett and Chad each would take a one-third interest in Structural I. Brett and Chad believed D Amico misled them by falsely telling each of them that the other had agreed that D Amico could take a onethird ownership interest in the company. McLeods viewed D Amico s proposal as an For their part, the attempt to obtain a part-ownership for herself against their express wishes that she facilitate a succession plan for Brett and Chad to take over the company. 2 Because an appendix to the Agreement lists 2003 as year one and 2007 as year five, Structural I argued that it instead terminated on December 31, 2007. 4 ¶7 In October of 2005, the McLeods informed D Amico they did not agree with the way she had calculated her 2004 PBI and believed Structural I had overpaid her. The disagreement over PBI continued into early 2006, when PBI for 2005 was calculated. ¶8 There also were issues surrounding the preparation of Structural I s 2005 financial statements. end statements were calculated using Structural I s year- the completion ( ECC ) of ongoing projects. responsible for preparing the ECCs. estimated cost of Brett and Chad were In mid-February 2006, D Amico sent the final 2005 financial statements to the McLeods, Brett and Chad. She then sent them to Structural I s outside accountant and lender. At internal company meetings on February 22 and 23, it became clear there were major errors in the ECC for a California project that was under Brett s supervision. The errors required the 2005 financial statements to be revised downward. After the revision, D Amico re-sent the financial statements to the outside accountant and the lender. At trial, the McLeods testified they had told D Amico not to deliver the revised financials to the lender because they wanted to deliver them personally and explain the discrepancy. ¶9 At a meeting on April 5, 2006, the McLeods informed D Amico she was being terminated. When D Amico asked to know why, Mary Jo McLeod told her there were a lot of causes, but was not more specific. 5 ¶10 D Amico filed a complaint against Structural I for breach of contract, alleging her termination was without cause and the company disputed her wage claim in bad faith. Structural I counterclaimed, alleging breach of fiduciary duty, fraud, unjust enrichment, fraudulent concealment and replevin. ¶11 After a 13-day jury trial in October and November of 2008, the jury returned six special verdicts. The jury found that Structural I breached the Agreement by shorting D Amico a total of $29,792 in PBI for 2004 and 2005. The jury also found Structural terminating I breached the Agreement by D Amico without cause and failing to pay her 2006 PBI and her salary through the end of the Agreement. The jury awarded D Amico $547,000 for her salary for the duration of the Agreement, plus $177,054, which the parties stipulated would have been D Amico s 2006 PBI. Of the total wages assessed of $753,846, the jury found there was a good-faith dispute over $229,792. The jury also found for D Amico on Structural I s claims for fraudulent inducement, fraud and unjust enrichment. It concluded, however, that D Amico breached her fiduciary duty to Structural I and awarded Structural I $150,000 in damages. ¶12 Both parties superior court denied. filed post-trial motions, which the After calculating prejudgment interest, entering awards of attorney s fees and costs and setting off the 6 verdicts against each other, the court entered judgment in favor of D Amico for $910,616. ¶13 Structural I appealed, and D Amico cross-appealed. We suspended the appeal to allow the superior court to rule on motions for relief from judgment pursuant to Arizona Rule of Civil Procedure 60(c) filed by both parties. The superior court denied the motions, and the parties took separate appeals from that judgment. ¶14 We then ordered the three appeals consolidated. We have jurisdiction pursuant to Article 6, Section 9 of the Arizona Constitution, and pursuant to Arizona Revised Statutes ( A.R.S. ) sections 12-2101(A)(1) and (2) (2012). 3 DISCUSSION I. Appeal Trial. A. and Cross-Appeal from the Judgment Entered After D Amico s Appeal from the Verdict for Structural I on the Claim for Breach of Fiduciary Duty. ¶15 D Amico argues the superior court erred by denying her Motion for Judgment as a Matter of Law and Motion for a New Trial pursuant to Arizona Rules of Civil Procedure 50(b) and 59(a) on Structural I s claim for breach of fiduciary duty. review de novo the superior judgment as a matter of law. court s denial of a motion We for Sec. Title Agency, Inc. v. Pope, 219 Ariz. 480, 492, ¶ 51, 200 P.3d 977, 989 (App. 2008). 3 A Absent material revisions after the relevant date, we cite a statute s current Westlaw version. 7 motion for judgment as a matter of law should be granted only when the evidence presented has so little probative value that a reasonable juror could not find for the claimant. Id. (quoting Shoen v. Shoen, 191 Ariz. 64, 65, 952 P.2d 302, 303 (App. 1997)). We review a superior court s denial of a motion for a new trial on the grounds that the verdict is against the weight of the evidence for abuse of discretion. Dawson v. Withycombe, 216 Ariz. 84, 95, ¶ 25, 163 P.3d 1034, 1045 (App. 2007). When reviewing the denial of post-trial motions, we view the evidence in the light most favorable to upholding the jury verdict and will affirm if any substantial evidence exists permitting reasonable persons to reach such a result. Hutcherson v. City of Phoenix, 192 Ariz. 51, 53, ¶¶ 12-13, 961 P.2d 449, 451 (1998). ¶16 To prevail on its claim for breach of fiduciary duty, Structural I was required to show that D Amico owed the company a fiduciary duty, she breached the duty and damages resulted. John E. Shaffer Enters. v. City of Yuma, 183 Ariz. 428, 432, 904 P.2d 1252, 1256 (App. 1995). D Amico does not dispute that as CEO of Structural I, she owed the company a fiduciary duty. See McCallister Co. v. Kastella, 170 Ariz. 455, 457, 825 P.2d 980, 982 (App. (1958)). 1992) (citing Restatement (Second) of Agency § 2 Although D Amico argues on appeal she did not breach her fiduciary duty, we need not decide that issue because the 8 record contains no evidence that Structural I suffered damages as a result of any alleged breach. ¶17 To recover for a breach of fiduciary corporation must suffer actual pecuniary damages. duty, a AMERCO v. Shoen, 184 Ariz. 150, 155-56, 907 P.2d 536, 541-42 (App. 1995). Although Structural I argues it was damaged by D Amico s breach[ing] the trust, it points to no evidence at trial of pecuniary damages, and our review of the record reveals none. ¶18 We note that Structural I called an expert accounting witness, Gary Freed, who testified that, in theory, a revised financial statement lowering a company s income might adversely affect the banking relationship. This evidence, however, was not enough to establish that Structural I suffered any pecuniary damages as a result of D Amico s alleged breach. Generally, damages that are speculative, remote or uncertain may not form the basis of a judgment. Lewin v. Miller Wagner & Co., 151 Ariz. 29, 34, 725 P.2d 736, 741 (App. 1986); see Coury Bros. Ranches, Inc. v. Ellsworth, 103 Ariz. 515, 521, 446 P.2d 458, 464 (1968); see also Farr v. Transamerica Occidental Life Ins. Co. of Cal., 145 Ariz. 1, 6, 699 P.2d 376, 381 (App. 1984) (plaintiffs who allege injury to their credit must show actual, rather Freed s than speculative testimony or concerned uncertain, only damage hypothetical to credit). damage to a banking relationship that might result when a company downwardly 9 revises its yearly financial statements. Such speculations, guesses or estimates of witnesses may not form the basis of a damage award. ¶19 Coury, 103 Ariz. at 521, 446 P.2d at 464. 4 Accordingly, because Structural I failed to offer evidence that it was damaged by any breach of fiduciary duty by D Amico, she was entitled to judgment as a matter of law on that claim. B. Structural I s Appeal from the Verdict for D Amico on Her Claim for Breach of Contract. ¶20 As Agreement in Structural I noted, D Amico terminating argues the argued her, superior Structural I breached purportedly without court by erred the cause. denying its Motion for Judgment as a Matter of Law and Motion for a New Trial pursuant to Arizona Rules of Civil Procedure 50(b) and 59(a) on the jury s verdict in favor of D Amico on her claim for breach of contract. The motion was based on several grounds, which we address in turn. 1. ¶21 D Amico Inconsistent verdicts. Structural I first argues the jury s conclusion that breached her fiduciary 4 duty necessarily means that The parties dispute whether D Amico owed Structural I a fiduciary duty in negotiating the Agreement by which she became the company s CEO. We need not decide that issue, however, because although Structural I alleges D Amico breached by failing to disclose she had consulted an attorney in those negotiations, Structural I does not argue on appeal that it incurred any pecuniary damages as a result of the alleged breach. 10 Structural I had cause to terminate D Amico. But after the verdicts were announced, Structural I failed to move pursuant to Arizona Rule of Civil Procedure 49(c) for resubmission of the verdicts before the jury was excused. Having failed to move for resubmission, Structural I waived any complaint that the jury s verdicts were inconsistent. Trustmark Ins. Co. v. Bank One, Arizona, NA, 202 Ariz. 535, 543, ¶¶ 38-39, 48 P.3d 485, 493 (App. 2002); Gonzalez v. Gonzalez, 181 Ariz. 32, 35-36, 887 P.2d 562, 565-66 (App. 1994). The reason for the rule is obvious; the error is capable of correction if it is raised as soon as the verdict is returned. Id. at 35, 887 P.2d at 565. The superior court thus did not err in denying Structural I s Motion for Judgment as a Matter of Law and Motion for a New Trial on this basis. 2. ¶22 Burden of proof for cause for termination. Structural I next argues a jury instruction improperly shifted the burden of proving cause for termination from D Amico to Structural I. The following instructions were given to the jury: Irene D Amico claims that Structural I owes her additional amounts under the Employment Agreement after it terminated her employment. Structural I claims that it does not owe her the amounts because it terminated her employment for cause under the Employment Agreement . . . Structural I must prove its claim by the More Probably True burden of proof. 11 * * * The parties do not dispute that Structural I and Irene D Amico were parties to the Employment Agreement. They also do not dispute that the Employment Agreement provides for payment to Irene D Amico if Structural I terminates her for other than cause as that term is defined in the Employment Agreement. * * * Structural I has the burden of proof on showing it terminated Irene D Amico for cause . . . by the More Probably True Burden of Proof. ¶23 A discharged employee who sues for breach of an employment contract has the initial burden of proving breach. Palicka v. Ruth Fisher Sch. Dist. No. 90 of Maricopa County, 13 Ariz. App. 5, 9, 473 P.2d 807, 811 (1970). Once the employee offers proof of the contract and the fact of dismissal, however, the burden of establishing good cause as a defense rests with the employer. Id. Discharge for cause is an affirmative defense; accordingly, under Arizona law, [t]he burden is on the employer to prove justification for the discharge. Chapin v. Klein, 128 Ariz. 94, 94, 623 P.2d 1250, 1250 (App. 1981). ¶24 Structural I argues Palicka does not apply because it involved a statutory claim. But the court s discussion in that case of the employer s burden to come forth with evidence came in its analysis of the employee s breach of contract claim. 12 Palicka, 13 Ariz. App. at 9, 473 P.2d at 811. Structural I further urges us to reject Chapin and rely instead on Guo v. Maricopa County Medical Center, 196 Ariz. 11, 992 P.2d 11 (App. 1999). Guo, however, was a summary judgment case and did not address the burden of proof. As noted, at trial in this case, neither party disputed the existence of the Agreement or the fact that D Amico had been terminated. As a result, the burden fell affirmative to Structural I to prove its defense of termination for cause. 3. ¶25 Testimony of Sharon Cottor. Structural I next argues it is entitled to a new trial on D Amico s claim for breach of contract because the superior court improperly admitted testimony by Sharon Cottor. In our separate opinion, we hold Structural I lacks standing to argue that Cottor s testimony should have been precluded on privilege grounds. Structural I also argues, however, that the superior court erred in permitting Cottor to testify about Brett McLeod s drug and alcohol use because the prejudice of that evidence outweighed its probative value. ¶26 may Under Arizona Rule of Evidence 403, relevant evidence be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury . . . . We will affirm the superior court s evidentiary ruling absent abuse of discretion. 13 Readenour v. Marion Power Shovel, Inc., 149 Ariz. 442, 450, 719 P.2d 1058, 1066 (1986). Because probative value and the danger of unfair prejudice are not easily quantifiable factors, we accord substantial discretion to the trial court in the Rule 403 weighing process. Hudgins v. Southwest Airlines, Co., 221 Ariz. 472, 481, ¶ 13, 212 P.3d 810, 819 (App. 2009). ¶27 Structural I argues that Cottor s testimony about Brett s drug use was highly prejudicial and had no probative value because D Amico offered it in support of her unclean hands defense, which the court ultimately barred on disclosure grounds. But in overruling Structural I s objection to Cottor s testimony, the superior court specifically stated it was not relying on D Amico s unclean hands defense. And D Amico argues the testimony about Brett s drug use was highly probative to show why Brett, not D Amico, was responsible for the problems with the company s financial performance. ¶28 Given D Amico was that to Structural blame for I the contended company s at poor trial that financial performance, and bearing in mind the substantial discretion we accord the superior court, we cannot say the court abused its discretion in concluding the danger of unfair prejudice this testimony presented did not substantially probative value. 14 outweigh its 4. ¶29 Testimony of Gary Freed. Structural I next argues the superior court erred in barring expert witness Gary Freed from testifying about issues it asserts were relevant to its defense of D Amico s breach of contract claim. ¶30 sound The admissibility of expert testimony is within the discretion of the superior court, and we will overturn its ruling absent an abuse of that discretion. not Webb v. Omni Block, Inc., 216 Ariz. 349, 352, ¶ 6, 166 P.3d 140, 143 (App. 2007). scientific, assist the determine a Under Arizona technical, or Rule other trier of fact to fact in issue, of Evidence specialized understand an expert the 702, [i]f knowledge evidence witness thereto in the form of an opinion or otherwise. 5 may will or to testify While expert testimony may embrace an ultimate issue to be determined by the trier of fact, it will be rejected if it fails to assist the trier of fact in understanding the evidence or determining a fact at issue. Webb, 216 Ariz. at 353, ¶ 12, 166 P.3d at 144 (citing Ariz. R. Evid. 704). Witnesses are not permitted as experts on how juries should decide cases. 5 Ariz. R. Evid. 704, Arizona Rule of Evidence 702 recently was revised. See Order Amending the Arizona Rules of Evidence and Rule 17.4(f), Arizona Rules of Criminal Procedure, Ariz. Sup. Ct. No. R-100035, at 64 (Sept. 7, 2011). We refer to the rule in effect at the time of trial. 15 cmt.; see also Pincock v. Dupnik, 146 Ariz. 91, 96, 703 P.2d 1240, 1245 (App. 1985) (expert could not testify to ultimate issue when testimony was within the knowledge of the average juror ). ¶31 Here, the superior court excluded Freed s opinion that D Amico s actions constituted indicia of fraud and his opinion of how a certified public accountant such as D Amico would have interpreted the Agreement s language concerning the term of the Agreement. 6 The court permitted Freed to testify about CPA rules and regulations, but did not allow him to offer an opinion as to whether D Amico breached those rules. ¶32 Structural I argues Freed should have been permitted to testify that D Amico acted dishonestly in breaching certain standards applicable to CPAs, thereby demonstrating indicia of fraudulent activity. We disagree. Structural I did not allege D Amico breached the standard of care owed by a CPA and does not argue the jury required Freed s assistance in assessing whether D Amico acted argument, it negligently. sought to As use we understand Freed s Structural testimony to I s establish D Amico s knowledge and intent in its claims against her for fraud and fraudulent inducement. abuse its discretion when it The superior court did not precluded 6 Freed s testimony on Structural I argued it had cause to terminate D Amico because, inter alia, she had committed fraudulent and/or dishonest acts. 16 those issues while allowing Freed to testify about CPA rules and regulations. Knowledge and intent are matters jurors are well qualified to assess without the assistance of an expert. ¶33 Nor testifying did about the court how a err CPA in precluding likely would Freed interpret Agreement s language as to the term of the contract. from the To the extent that parol evidence was admissible on the question of the length of the contract, the relevant issue was the parties intent, not the intent of the typical CPA. 5. ¶34 by Alleged ER 4.4 violation. Structural I finally argues the superior court erred failing to grant a new trial violations by D Amico s counsel. based on alleged ethical It argues her counsel violated Arizona Rule of Professional Conduct 4.4(a) by engaging in ex parte communication with Sharon Cottor. ¶35 Rule 4.4(a) provides that a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden any other person, or use methods of obtaining evidence that violate the legal rights of such a person. Likewise, our supreme court has made clear that an attorney may not engage in ex parte communications with an opposing party s treating physician without the party s consent. Duquette v. Superior Court, 161 Ariz. 269, 277, 778 P.2d 634, 642 (App. 1989). 17 ¶36 Structural I argues D Amico s counsel had improper ex parte communications occasions. with Cottor on several unspecified Because Cottor provided the McLeods with personal counseling, Structural I argues these ex parte communications violate[d] the legal rights of the McLeods. ¶37 We need not decide, however, whether D Amico s counsel acted improperly, and if so, whether his conduct could be the basis for a new trial, because Structural I has not demonstrated and the record does not reflect actually influenced the verdict. Co., 143 Ariz. (misconduct 205, grounds 215, for new how the alleged misconduct See Maxwell v. Aetna Life Ins. 693 P.2d trial 348, only 358 (App. where it 1984) appears probable the misconduct actually influenced the verdict ). We therefore hold the superior court did not abuse its discretion in denying Structural I s motion for new trial on this ground. II. D Amico s Appeal from the Denial of Her Motion for Relief from Judgment. ¶38 D Amico Motion for Relief appeals from the superior Judgment Based court s upon denial Newly of her Discovered Evidence pursuant to Arizona Rules of Civil Procedure 60(c)(2) and (3). These provisions permit the court to relieve a party from a final judgment for (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(d) 18 or (3) fraud . . . , misrepresentation or other misconduct Ariz. R. Civ. P. 60(c)(2)-(3). of an adverse party. We review the superior court s denial of a Rule 60(c) motion for abuse of discretion. Norwest Bank (Minn.), N.A. v. Symington, 197 Ariz. 181, 184, ¶ 11, 3 P.3d 1101, 1104 (App. 2000). ¶39 D Amico s motion was based on facts she contends she discovered while Structural I trying following to recover trial. on She her judgment alleged she against discovered Structural I had been sold to Brett and Chad for $20,000 and Structural I, with the assistance of its attorneys, engaged in a scheme to rid itself of assets in order to avoid paying her judgment. Her motion argued that the superior court should vacate Structural I s judgment on the breach of fiduciary duty claim and treble the damages awarded to her on her breach of contract claim. ¶40 As an initial matter, D Amico s request for relief from the $150,000 judgment for breach of fiduciary duty is now irrelevant because we have reversed that judgment. As to D Amico s request for treble damages, she offers no authority for the proposition that facts occurring after an employee s termination bear on whether the superior court should exercise its discretion to award treble damages pursuant to A.R.S. § 23355(A). We therefore affirm the D Amico s Rule 60(c) motion. 19 superior court s denial of III. Structural I s Appeal from the Denial of Its Motion for Relief from Judgment. ¶41 its Structural I appeals the superior court s denial of Rule 60(c)(6) Motion for Relief from Judgment. Before trial, the McLeods filed a complaint against Cottor with the Arizona Board of Behavioral Health Examiners. As a result of the Cottor Board s investigation into the complaint, entered into a consent agreement with the Board for the surrender of her license on January 11, 2010, more than a year after the trial. Under the agreement s terms, Cottor agreed to relinquish her license, while neither admitting nor denying findings of fact and conclusions of law. the Board s Structural I s motion for relief from judgment argued the Board s findings entitled it to a new trial on D Amico s claim for breach of contract. ¶42 Rule relieve a 60(c)(1)-(5) party . enumerated reasons. 179, 181, 731 . . permits from a the final superior judgment court for to several See Gorman v. City of Phoenix, 152 Ariz. P.2d 74, 76 (1987). Rule 60(c)(6) is an equitable catch-all that permits the superior court to set aside a judgment for any other reason justifying relief. Panzino v. City of Phoenix, 196 Ariz. 442, 446, 999 P.2d 198, 202 (2000). To obtain relief under Rule 60(c)(6), a party must show a reason for setting aside the judgment other than one of the reasons set forth in the preceding five clauses of rule 20 60(c) and extraordinary circumstances of hardship or injustice justifying relief. Hilgeman v. Am. Mortg. Sec s, Inc., 196 Ariz. 215, 220, ¶ 15, 994 P.2d 1030, 1035 (App. 2000). ¶43 So far as we can understand, Structural I argues the consent agreement demonstrates that Cottor testified at trial in this case about privileged matters, discussed the litigation in sessions, and based these on that Cottor non-privileged and business conversations, both D Amico coaching testified falsely, and that Cottor falsified the notes she relied on in her deposition in this case. ¶44 A.R.S. The § consent agreement 32-3251(12)(t) (2012) recites by that Cottor disclosing confidence or privileged communication. a violated professional While it is clear from the agreement that this conclusion of law refers in some fashion to Cottor s relationship with the McLeods, the agreement does not specify the confidential or privileged communication that Cottor disclosed. Item 56 of the agreement s findings states that in her deposition in this case, Cottor verbally disclosed sensitive McLeods. information With regard of to a personal Cottor s nature actual regarding trial the testimony, however, the consent agreement simply states that Cottor was allowed to testify about sessions Business Consultation Sessions. 21 she identified as Family ¶45 On appeal, Structural I does not point to any particular testimony by Cottor, but argues only generally that she improperly testified about confidential personal counseling sessions with them. matters from her Upon our close reading of Cottor s trial testimony, the only testimony that might be at issue concerned Brett s substance abuse. If we construe Structural I s argument to pertain to that testimony, its Rule 60(c) motion could succeed only if the superior court was obligated to conclude that Cottor s testimony caused an unjust result. ¶46 We cannot conclude, however, that even if Cottor had not testified about Brett s substance abuse, that information would not have come before the jury. D Amico was aware of Brett s substance abuse issues because she participated in an intervention and testified about it at trial. that D Amico problems, was those unaware problems of the would severity have been of To the extent Brett s disclosed trial even absent Cottor s deposition testimony. drug prior to In defending against Structural I s claim that she mismanaged the company, D Amico argued that problems with the California project under Brett s supervision led to the downward company s 2005 financial statements. was experiencing a substance abuse revision of the To the extent that Brett problem at the time, Structural I would have been obligated to disclose that fact in 22 response to interrogatories and the McLeods would have subject to examination about it in their depositions. been And, of course, the McLeods and Brett himself would have been subject to cross-examination on the issue at trial. Accordingly, we cannot conclude that Cottor s deposition and trial testimony about the substance abuse necessarily rendered unjust the jury s verdict in favor of D Amico on her claim for breach of contract. See Hilgeman, 196 Ariz. at 220, ¶ 15, 994 P.2d at 1035. ¶47 Structural I s argument that D Amico and Cottor met in non-privileged subsequently agreement. sessions lied to about it discuss finds the no litigation support in the and consent Finally, Structural I argues Cottor falsified the notes she relied on in her deposition regarding her business counseling sessions with the McLeods. The Board found that sometime before her deposition, Cottor prepared summary notes of her sessions, and represented them as her contemporaneous notes. Again, it is difficult Structural I, testimony that contemporaneous because it to Cottor was notes see her during how this conduct during practice her to sessions her trial take clarified prejudiced very brief and summarize them later. ¶48 In denying Structural I s motion for relief from judgment, the superior court found that the circumstances are not extraordinary and [] there 23 is no severe injustice that requires correction and that Structural I failed to establish that the outcome of the trial would have been any different had the jury been permitted to hear the relevant findings in the consent agreement. Because we agree, we conclude the superior court did not abuse its discretion in denying Structural I s Rule 60(c)(6) motion. CONCUSION ¶49 We reverse the judgment in favor of Structural I on its claim for breach of fiduciary duty against D Amico. For the reasons stated above and in our companion opinion, we vacate and remand for further proceedings consistent with this decision the superior court s denial of D Amico s request for treble damages. Otherwise, we affirm the judgment and the superior court s denial of both parties post-trial motions. ¶50 Both parties have requested costs and attorney s fees on appeal pursuant to A.R.S. § 12-341.01 (2012). D Amico also asks for attorney s fees pursuant to A.R.S. § 12-349 (2012) in Structural I s appeal from the denial of its motion for relief from judgment, on the ground that the appeal is frivolous. In our discretion, we decline both parties requests for attorney s fees. Because D Amico prevailed more substantially than Structural I on the appeal and cross appeal from the judgment entered after trial, D Amico is entitled to her costs of that appeal, upon compliance with Arizona Rule of Civil Appellate 24 Procedure 21. Each side shall bear its own costs in the separate appeals from the denials of the respective motions for relief from judgment. /s/ DIANE M. JOHNSEN, Presiding Judge CONCURRING: /s/ MARGARET H. DOWNIE, Judge /s/ LAWRENCE F. WINTHROP, Chief Judge 25

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