Arunski v. Pet Pool
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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 THEODORE J. ARUNSKI, Plaintiff/Appellant, v. PET POOL PRODUCTS, INC., an Arizona corporation; EDWARD TARTAGLIO; DINA TARTAGLIO; PETER WAKEFIELD; ROSIE WAKEFIELD, Defendants/Appellees. ) ) ) ) ) ) ) ) ) ) ) ) ) ) DIVISION ONE FILED: 03-18-2010 PHILIP G. URRY,CLERK BY: DN 1 CA-CV 08-0629 DEPARTMENT A MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2005-005185 The Honorable Peter B. Swann, Judge AFFIRMED Theodore J. Arunski, Plaintiff/Appellant In Propria Persona Mesa Gregg Clarke Gibbons, P.C. by Gregg Clarke Gibbons Attorneys for Defendants/Appellees Scottsdale P O R T L E Y, Judge ¶1 Theodore J. Arunski ( Appellant ) appeals the trial court s grant of summary judgment to PET Pool Products, Inc., Edward Tartaglio, Dina Tartaglio, Peter Wakefield, and Rosie Wakefield (collectively Appellees ). For the following reasons, we affirm. FACTS AND PROCEDURAL HISTORY 1 ¶2 Tartaglio, During the and summer Peter of 2003, Wakefield chlorinator line for pools. Appellant, discussed Edward developing a Based on those discussions, in September 2003, the parties formed PET Pools, Inc. 2 The three men each received a thirty-three and a third percent share in PET Pools, and were all appointed officers and directors of the company. ¶3 At a shareholders meeting on March 8, 2005, Wakefield and Tartaglio voted to remove Appellant as president and from his director position with PET Pools. Appellant injunctive and his relief wife and filed economic termination of Appellant. a Seventeen days later, civil damages complaint arising out seeking of the He filed an amended complaint on November 20, 2006, which contained six counts. Count I alleged Tartaglio and Wakefield breached a contract with Appellant when they removed him as president; Count II requested a preliminary injunction relating to the contract breach in Count I; Count III 1 We view the facts in the light most favorable to the party opposing the motion for summary judgment. Ariz. Prop. & Cas. Ins. Guar. Fund v. Martin, 210 Ariz. 478, 478-79, ¶ 2, 113 P.3d 701, 701-02 (App. 2005). 2 PET is formed from the first initials of the three principals. 2 alleged Appellees breached an employment contract when they failed to pay wages to Appellant that were due and owing; Count IV alleged Appellees breached their duty of good faith and fair dealing in performing the two aforementioned contracts; Count V was a derivative suit that alleged Appellees breached their fiduciary duty to PET Pools; and Count VI alleged Appellees tortiously interfered with Appellant s business expectancies and destroyed existing and prospective business opportunities. ¶4 Appellees moved for summary judgment on the complaint. 3 The superior court granted summary judgment on Counts I through V on December 20, 2007. 4 Appellees then successfully moved for summary judgment on Count VI. ¶5 Appellant reconsideration, pursuant to and Arizona filed then an unsuccessful appealed. 5 Revised Statutes We have ( A.R.S. ) motion for jurisdiction sections 12- 120.21 (2003) and -2101(B) (2003). DISCUSSION ¶6 granting Appellant summary argues that judgment on 3 the trial his court amended erred in complaint. Appellees also moved for summary judgment on their counterclaim and third party claim, but the motion was denied. 4 Count II was dismissed because counsel had previously represented that the request was withdrawn. 5 Appellant s wife did not sign the notice of appeal. Appellant appealed the court s unsigned minute entry. Because the court filed a signed judgment on October 29, 2008, we have jurisdiction. Although the appeal was stayed because Appellant filed bankruptcy, the stay was lifted on June 25, 2009. 3 Specifically, he argues that the court erred because: (1) the court did not read the entire record; 6 (2) the Arizona Superior Court [should not] be allowed to overrule Arizona Statutes and allow grand theft by not following business law and allowing assets to be sold for a[] gross undervalue and not dispersing the money to the shareholders as the law provides ; (3) the court . . . err[ed] when using the Business Judgment Rule as its decision for summary judgment while being biased towards the defendants ; and (4) the court err[ed] in allowing the defendants to breach their fiduciary duty, allow Tortuous [sic] Interference to lose Prospective Economic Advantage, and cause shareholders, as well as employees to lose money without reviewing all the evidence provided[.] ¶7 We review a grant of summary judgment de novo and view the facts in the light most favorable to the non-moving party. Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12, 69 P.3d 7, 11 (2003). A court may grant summary judgment if the pleadings, deposition, answers to interrogatories, and admissions on file, 6 Appellant characterizes the issue more broadly. His argument headnote reads: Did the Court error in issuing a summary judgment where there were no facts presented to support this legally with so many outstanding issues yet to be determined? The only argument he provides to support his claim, however, is that it is wrong for the court to assume evidence and documents presented not to be a integral part of this case and not be read as was in the footnotes on IR # 95 when it states it would unreasonable for the court to review 700 pages of abstract accounting records. 4 together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. 56(c)(1). The determination of whether a Ariz. R. Civ. P. genuine issue of material fact exists is based on the record made in the trial court. Phoenix Baptist Hosp. & Med. Ctr., Inc. v. Aiken, 179 Ariz. 289, 292, 877 P.2d 1345, 1348 (App. 1994). I. ¶8 Appellant inappropriate contends because it is that wrong summary for the judgment court to was assume evidence and documents presented not to be a integral part of this case and not be read. in the minute entry The argument is based on a footnote granting summary judgment on Counts I through V, which states that: [t]he court notes that the statement of facts submitted by plaintiffs is over 1,000 pages in length with its exhibits, and the vast majority of those pages are of no relevance. Absent a specific citation for a specific purpose, it is patently unreasonable to expect the court to review over 700 pages of abstract accounting records. ¶9 The court granting summary is required judgment to pursuant review to the Arizona record Rule of before Civil Procedure 56(c)(1). Here, the court specifically stated that it had parties reviewed exhibits. record It because the is the also briefing, evident court found 5 that that [and] the the the court voluminous reviewed evidence the possibly revealed an agreement between the shareholders loans taken could be recharacterized as wages. 7 that certain Consequently, it is clear that the court considered the evidence presented. ¶10 Moreover, provided in the opposition voluminous to accounting Appellees records unsuccessful were motion for summary judgment on their counterclaim and third party claim. Accordingly, there is evidence that the court reviewed those records and the entire record. We find no error. II. ¶11 Appellant argues that Appellees breached their fiduciary duties because they violated A.R.S. §§ 10-705, -1303, and -1202(A) (2004). 8 The court, however, found that Appellant lacked standing to bring a derivative claim, see Ariz. R. Civ. P. 23.1, because notice is statutorily required and the notice requirements were not satisfied. ¶12 Before a shareholder can bring a derivative claim, the shareholder must be able to demonstrate that both: 1. A written demand has been made on the corporation to take suitable action. 2. Ninety days have expired from the date the demand was made unless the shareholder has earlier been notified that the demand has been rejected by the 7 The court dismissed Appellant s claim that alleged Appellees breached his employment contract because he provided no evidence of a prospective agreement that PET Pool would provide him with a salary. 8 Appellant lists other statutes in his opening brief and his appendix. Because he does not argue the applicability of those statutes, we do not list them. 6 corporation or unless the statute of limitations will expire within the ninety days or unless irreparable injury to the corporation would result by waiting for the expiration of the ninety day period. A.R.S. § 10-742 (2004). ¶13 742. Appellant did not demonstrate compliance with § 10Moreover, he did not appeal the finding that he did not demonstrate an exception to the notice requirement. As a result, we need not address his argument that the Appellees breached their statutory fiduciary duties because Appellant does not have standing to pursue his derivative claim. Thus, the court did not err by dismissing Appellant s breach of fiduciary duty claim. III. ¶14 Appellant contends that application of the business judgment rule was improper, 9 and the two remaining directors and corporate attorney made improper and horribly wrong decisions that would have benefitted shareholders and allow the company to 9 Appellant repeatedly alleges in his opening brief that the court was biased against him because he was self-represented. We note, however, that Appellant was represented a majority of the time by different lawyers. Moreover, pro se litigants are held to the same familiarity with required procedures and the same notice of statutes and local rules as would be attributed to a qualified member of the bar. Copper State Bank v. Saggio, 139 Ariz. 438, 441, 679 P.2d 84, 87 (App. 1983). Finally, our review of the record demonstrates no bias towards Appellant. A trial judge is presumed to be free of bias. State v. Ramsey, 211 Ariz. 529, 541, ¶ 38, 124 P.3d 756, 768 (App. 2005). A party must show by a preponderance of the evidence that the judge was, in fact, biased. Id. Appellant has not done so. 7 be profitable for years. Specifically, Appellant argues that the business would have been successful if they had . . . sign[ed] the Pool Salt trademark and . . . also [not] shut down the business one month before the season kicked off and sales would have been flowing. ¶15 In Arizona, [t]he business judgment rule precludes judicial inquiry into actions taken by a director in good faith and in the exercise of honest judgment in the legitimate and lawful furtherance of a corporate purpose. Albers v. Edelson Tech. Partners L.P., 201 Ariz. 47, 54, ¶ 29, 31 P.3d 821, 828 (App. 2001) (quoting Shoen v. Shoen, 167 Ariz. 58, 65, 804 P.2d 787, 794 (App. 1990)). There is a presumption that a director acts in accordance with the business judgment rule, and the party challenging a director s action has to presumption with clear and convincing evidence. rebut the See A.R.S. § 10-830(D) (2004). ¶16 Appellant argued in Count III that Tartaglio and Wakefield individually breached a contract with Appellant when they terminated him as president of PET Pool. found that, under the business judgment The trial court rule, there was no evidence that Appellees could be liable as corporate officers 8 for their termination of Appellant. 10 Appellant to evidence. rebut the The burden was then on presumption. He proffered no such Accordingly, and after reviewing the record, we find no error. IV. ¶17 Appellant provides words the last issue argument for his tortious broadly, but interference only claim. Specifically, he argues that there was sufficient evidence in the record to prove tortious interference with prospective economic advantage and that the court erred when it granted summary judgment. ¶18 To Appellant establish had to a show: viable tortious (1) valid a interference contract or claim, business expectancy existed; (2) the interferer had knowledge of such business contracts interference expectancy; or causing and (4) expectancy; a breach resultant of (3) the damages. there was contract intentional or business Neonatology Assocs., LTD. v. Phoenix Perinatal Assocs., Inc., 216 Ariz. 185, 187, ¶ 7, 164 P.3d 691, 693 (App. 2007) (quoting Wallace v. Casa Grande Union High Sch. Dist. No. 82 Bd. of Governors, 184 Ariz. 419, 427, 909 P.2d 486, 494 (App. 1995)). 10 Moreover, the interference Once Counts I and III, the breach of contract claims, were dismissed, there was no evidence that Appellees breached the covenant of good faith and fair dealing. Consequently, Count IV was dismissed. 9 must be intentional and improper as to motive or means. Neonatology, 216 Ariz. at 188, ¶ 8, 164 P.3d at 694 (quoting Safeway Ins. Co. v. Guerrero, 210 Ariz. 5, 11, ¶ 20, 106 P.3d 1020, 1026 (2005)). ¶19 Summary judgment was granted after found no evidence of an improper motive. the trial court Generally, the issue of motive or the propriety of an action is one of fact and not law, but [the court] may resolve the issue as a matter of law when there is no reasonable inference to the contrary in the record. Neonatology, 216 Ariz. at 188, ¶ 9, 164 P.3d at 694 (citing Woerth v. City of Flagstaff, 167 Ariz. 412, 419, 808 P.2d 297, 304 (App. 1990)). The court found the evidence demonstrated only that Appellees stopped funding the parties business to conserve their own resources. ¶20 The evidence demonstrated that the business was not financially successful and the parties had contributed funds in excess of their original agreements and Furthermore, because the parties were obligated provide more capital, their to not understanding. contractually decision to stop funding the business to save their resources was not improper. Cf. Neonatology, 216 Ariz. at 189, ¶ 15, 164 P.3d at 695 (stating that a business competitor does not act improperly if its purpose at least in part is to advance its own economic interests ) (quoting Miller v. Hehlen, 209 Ariz. 462, 471, ¶ 10 32, 104 P.3d 193, 202 (App. 2005)). Because [a] question of fact as to a specific motive is only material if one of the possible motives supported by the record may be considered improper, and because Appellant has not provided evidence of an improper motive, we affirm the grant of summary judgment. See Neonatology, 216 Ariz. at 189, ¶ 15, 164 P.3d at 695. ¶21 Because Both parties have requested attorneys fees on appeal. Appellant was representing himself, and has not prevailed, he is not entitled to an award of attorneys fees. Appellees request 341.01(A) (2003). fees and Because costs pursuant Appellees have to A.R.S. prevailed § 12- on the issues raised, in the exercise of our discretion, we grant their request for reasonable attorneys fees on appeal and applicable costs subject to their compliance with Arizona Rule of Civil Appellate Procedure 21. CONCLUSION ¶22 For the foregoing reasons, we affirm the grant summary judgment dismissing Counts I through VI. /s/_____________________________ MAURICE PORTLEY, Presiding Judge CONCURRING: /s/_________________________ LAWRENCE F. WINTHROP, Judge /s/_________________________ MARGARET H. DOWNIE, Judge 11 of
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