VAZIRANI v. ADVISORS, et al.

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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 DIVISION ONE FILED: 6/13/2013 RUTH A. WILLINGHAM, CLERK BY: mjt IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE VAZIRANI AND ASSOCIATES FINANCIAL, LLC, an Arizona limited liability company, ) ) ) ) Plaintiff/Appellant, ) ) v. ) ) ADVISORS EXCEL, LLC, a Kansas ) limited liability company; ) CREATIVE MARKETING INTERNATIONAL ) CORPORATION, a Kansas ) corporation; ANNEXUS ) DISTRIBUTORS AZ, LLC (formerly ) known as Shurwest Product ) Connection, LLC); and RONALD L. ) SHURTS, an individual, ) ) Defendants/Appellees. ) __________________________________) No. 1 CA-CV 12-0449 DEPARTMENT D MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2011-002523 The Honorable Sally Schneider Duncan, Judge AFFIRMED Dickinson Wright/Mariscal Weeks By Timothy J. Thomason David G. Bray Attorneys for Plaintiff/Appellant Phoenix Jennings, Strouss & Salmon, PLC By John J. Egbert Garrett J. Olexa Callie N. Parkinson Attorneys for Defendant/Appellee Advisors Excel Phoenix Stinson Morrison Hecker, LLP By Michael L. Parrish Sarah K. Langenhuizen Attorneys for Defendant/Appellee Creative Marketing Phoenix Ryley Carlock & Applewhite, PA By Clarke H. Greger Rodolfo Parga, Jr. Andrea G. Lisenbee Attorneys for Defendants/Appellees Annexus and Ronald L. Shurts Phoenix D O W N I E, Judge ¶1 Vazirani & Associates appeals the superior Annexus Distributors, court s AZ, Financial, grant LLC, of LLC summary formerly known ( Plaintiff ) judgment as to Shurwest Product Connection, LLC; Ronald L. Shurts; Advisors Excel, LLC ( Advisors ); and Creative Marketing International Corporation ( CMIC ) (collectively, Defendants ). Because the superior court correctly determined that Plaintiff s claims were barred by the statute of limitations, we affirm. FACTS AND PROCEDURAL HISTORY ¶2 Plaintiff is an independent marketing organization ( IMO ) that contracts with insurance companies to market and distribute their president and CEO. products. Anil Vazirani is Plaintiff s In 2005, Plaintiff entered into a contract 2 with Aviva to market its insurance products. Plaintiff subsequently contracted with downline producers to sell Aviva products. producers By 2008, approximately 100 of Plaintiff s downline had contracted with Aviva, and roughly 40% of Plaintiff s commissions came from the sale of Aviva insurance products. ¶3 Defendants are also distributing Aviva products. involved in marketing and In 2008, Plaintiff communicated with one of Advisors downline producers who was interested in moving to Plaintiff s team. When Advisors learned of this, it reportedly became infuriated and convinced Aviva to revoke an incentive trip that Vazirani had earned. In the spring of 2008, Vazirani heard from several sources that Defendants had been encouraging Aviva to terminate its relationship with Plaintiff. Defendants purportedly told others in the industry, including Aviva personnel, unethical that business Plaintiff practices, was was engaged being in illegal investigated government regulators, and would be shut down. or by In October 2008, an industry colleague told Vazirani that Aviva executive Jordan Canfield had related that Aviva had made up its mind to take action against Plaintiff based on complaints from other IMOs about Plaintiff s business practices. ¶4 discuss Plaintiff a pending contacted transfer CMIC of a 3 on CMIC November advisor 3, to 2008, to Plaintiff s team. CMIC stated that the transfer had been rejected based on Vazirani s and Plaintiff s industry conduct and business practices. ¶5 On November 6, 2008, Canfield advised Vazirani during a telephone call that Aviva had made a final decision that was not up for discussion to terminate Plaintiff s contract, as well as those of its downline producers, effective January 30, 2009. 1 Canfield said Aviva would send Vazirani a formal letter of termination on January 1, 2009, but stated, the decision s been made. We re going to go a different direction. Vazirani responded that he needed more than 30 to 60 days to make the transition. ¶6 Counsel for Vazirani wrote to Aviva on November 17, 2008, requesting reconsideration of the termination decision and, alternatively, providing Vazirani s thirty-day notice of intent to arbitrate. ACLU, detailing certain Defendants against wrongful The an next alleged and Vazirani wrote to the and conspiracy between Aviva legal assistance to fight letter dated seeking termination day, by Aviva. By December 12, 2008, Aviva s attorney advised that the contract termination would be effective December 19, 2008. extended the date to December 1 26, Vazirani recorded the November 6 transcript of the call is in the record. 4 2008, Counsel later and telephone expressed call. A willingness to discuss a termination date that comports with what Mr. Verizani [sic] alleges Jordan Canfield told him. Aviva later extended the effective date of the termination to January 30, 2009. On January 30, 2009, Aviva s attorney faxed Plaintiff a letter terminating the contract effective that day. ¶7 agent In February 2009, Vazirani reviewed the online Aviva portal and saw that his contracts and downline agents were still listed as active. those of his He emailed Aviva, stating: plz advise status of VAZIRANI & ASSOC.....AND ITS DOWNLINE WITH AVIVA....none of us have rec[ei]ved any WRITTEN COMMUNICATION in the mail from AVIVA.....my advisors have been processing biz....I ALSO HAVE NOT REC[EI]VED ANY RESPONSE FROM YOU in regards to my concerns that i have e-mailed you in the recent past. A letter from Canfield dated February 9, 2009, advised Plaintiff that all agreements with downline agents Plaintiff s Aviva would received terminate similar April 1. correspondence. The contracts in fact terminated on April 1, 2009. ¶8 On January 27, 2011, Plaintiff sued Defendants for tortious interference with contract and business expectancies. The complaint alleged that Defendants wrongfully interfered with Plaintiff s relationship with Aviva, causing Aviva to terminate Plaintiff s contract. Advisors moved for summary judgment, arguing the complaint was barred by the statute of limitations. 5 The other Defendants joined the motion, which the superior court granted. 2 Plaintiff timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes ( A.R.S. ) section 12-2101. DISCUSSION ¶9 We consider the facts in the light most favorable to Plaintiff, against whom summary judgment was entered. See Angus Med. Co. v. Digital Equip. Corp., 173 Ariz. 159, 162, 840 P.2d 1024, 1027 (App. 1992) (citation omitted). We review de novo any questions of law relating to the statute of limitations defense. Logerquist v. Danforth, 188 Ariz. 16, 18, 932 P.2d 281, 283 (App. 1996). on expiration of [A]lthough dismissal of an action based the statute of limitations is generally disfavored, . . . claims that are clearly brought outside the relevant limitations period are conclusively barred. Montano v. Browning, 202 Ariz. 544, 546, ¶ 4, 48 P.3d 494, 496 (App. 2002). ¶10 The limitations parties applies. agree See that Clark v. a two-year Airesearch statute Mfg. Co., of 138 Ariz. 240, 243-44, 673 P.2d 984, 987-88 (App. 1983) (actions for tortious interference with contract and business expectancies are governed by two-year statute of limitations set forth in 2 The superior court rejected Defendants claim that the action was barred under an issue preclusion theory because similar claims had been dismissed in Kansas. Defendants have not challenged that decision on appeal. 6 A.R.S. § 12-542). Plaintiff s claims are therefore time-barred if they accrued before January 27, 2009. ¶11 According to Plaintiff, its causes of action accrued as of March 1, 2009, when Aviva stopped accepting new policy applications, terminated. or April 1, 2009, when the contracts actually Defendants, on the other hand, contend Plaintiff s claims accrued in November 2008, when Aviva communicated its final decision to terminate the contracts. We agree with Defendants. ¶12 We begin by considering the elements of Plaintiff s claims. See Glaze v. Larsen, 207 Ariz. 26, 29, ¶ 10, 83 P.3d 26, 29 (2004) ( The determination of when a cause of action accrues requires presented. ). an analysis of the elements of the claim As a general matter, a cause of action accrues, and the statute of limitations commences, when one party is able to sue another. Gust, Rosenfeld & Henderson v. Prudential Ins. Co., 182 Ariz. 586, 588, 898 P.2d 964, 966 (1995). ¶13 elements The Arizona Supreme Court has identified the following of an intentional interference with expectancies claim: (1) The existence of valid contractual relationship or business expectancy; (2) knowledge of the relationship expectancy on the part of the interferor; 7 or business (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the relationship or expectancy disrupted. party has whose been Antwerp Diamond Exch. of Am. v. Better Bus. Bureau of Maricopa County, 130 Ariz. 523, 529-30, 637 P.2d 733, 739-40 (1981). A claim for tortious interference with contract requires proof of the same elements. See Miller v. Hehlen, 209 Ariz. 462, 471, ¶ 32, 104 P.3d 193, 202 (App. 2005) (citation omitted). cause of action plaintiff knew intentional expectancy, for or tortious interference reasonably interference resulting in with its should accrues have when known the plaintiff s termination; and [A] the of the business the realized he or she was damaged by that termination. plaintiff Dube v. Likins, 216 Ariz. 406, 411, ¶ 8, 167 P.3d 93, 98 (App. 2007). ¶14 The record is clear that Plaintiff knew of Defendants allegedly tortious conduct in 2008. Vazirani s November 2008 memorandum to the ACLU recited in great detail the conduct that was later alleged Plaintiff s claims. full measure of in the 2011 complaint as the basis for The fact that Plaintiff did not know its damages at that time is irrelevant. Commencement of the statute of limitations will not be put off until one learns the full extent of his damages. Commercial Union Ins. Co. v. Lewis & Roca, 183 Ariz. 250, 255, 902 P.2d 8 1354, 1359 (App. 1995). Rather, the statute commences to run when the plaintiff incurs some injury or damaging effect . . . . Id. The November 2008 communication to the ACLU reveals Plaintiff s belief it had already suffered damage to its reputation in the insurance industry, as well as a deprivation of rights, based on Defendants conduct and Aviva s termination decision. ¶15 The interference question thus resulted in becomes the when breach Defendants or Plaintiff s contract/business expectancies. 3 alleged termination of Antwerp, 130 Ariz. at 529-30, 637 P.2d at 739-40; Miller, 209 Ariz. at 471, ¶ 32, 104 P.3d at 202. Whether Aviva complied with contractual notification provisions is not the proper focus - especially where Aviva is not a party to this litigation. The relevant inquiry is when Plaintiff knew or reasonably should have known that Defendants alleged conduct had caused Aviva to terminate its business relationships with Plaintiff. ¶16 As Plaintiff itself has unequivocally alleged, it knew on November 6, 2008, that Aviva had made a final decision, not up for discussion to sever ties with Plaintiff and its downline agents. Plaintiff requested an extended wind-up period 3 Neither side has discussed whether a breach is something less than a termination, see Antwerp, 130 Ariz. at 529-30, 637 P.2d at 739-40, so we do not address that issue. 9 and made an arbitration demand that same month. 4 Also in November 2008, Vazirani sought legal assistance from the ACLU to fight against wrongful termination by Aviva, stating he was being deprived of his rights and suffering reputational damage. ¶17 Given these facts, the superior court correctly ruled that Plaintiff s causes of action accrued in 2008, making the January that 2011 Aviva complaint would not untimely. follow Vazirani s through with subjective its hope termination decision is insufficient to defeat summary judgment in light of the complaint s express acknowledgement that Aviva s decision was final and not up for discussion and the absence of any evidence that the termination decision effective date) was being reconsidered. Ricks, 449 U.S. 250, 258, 261 (as opposed to its Cf. Del. State Coll. v. (1980) (limitations period triggered when plaintiff learned of decision to deny tenure, not when termination later became effective, despite 4 college s The Arbitration clause of the contract between Plaintiff and Aviva reads: You and we agree that any disputes arising out of or relating to this Contract will be arbitrated in accordance with the Rules of the American Arbitration Association and the Federal Arbitration Act. Arbitration may not be initiated unless the party requesting arbitration has given the other party at least 30 days prior written notice of its intent to initiate arbitration and a detailed description of the basis of the dispute. 10 expressed willingness to change its prior decision if pending grievance was successful); Weber v. Moses, 938 S.W.2d 387, 392 (Tenn. 1996) ( An employee s hope for rehire, transfer, promotion, or a continuing employment relationship cannot toll the statute of limitations absent some employer conduct likely to mislead an employee into sleeping on his rights. ). CONCLUSION ¶18 The superior court properly ruled that claims were barred by the statute of limitations. Plaintiff s We therefore affirm the grant of summary judgment to Defendants. /s/ MARGARET H. DOWNIE, Judge CONCURRING: /s/ ANDREW W. GOULD, Presiding Judge /s/ PATRICIA A. OROZCO, Judge 11

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