Amparano v. Asarco ( 2004 )

IN THE COURT OF APPEALS
STATE OF ARIZONA
DIVISION TWO
BETTY AMPARANO and RAYMOND ) 2 CA-CV 2003-0162
AMPARANO, a married couple, on ) DEPARTMENT A
behalf of themselves and all others )
similarly situated, ) OPINION
)
Plaintiffs/Appellants/Cross-Appellees, )
)
v. )
)
ASARCO, INC., a New Jersey )
corporation, )
)
Defendant/Appellee/Cross-Appellant. )
)
APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY
Cause No. C20023364
Honorable Michael Alfred, Judge
AFFIRMED
Siegel, Bellovin & Karnas, P.C.
By M. David Karnas Tucson
and
The Shanker Law Firm, P.L.C.
By Howard M. Shanker Tempe
and
Thomas A. Zlaket, P.L.L.C.
By Thomas A. Zlaket Tucson
Attorneys for Plaintiffs/Appellants/
Cross-Appellees
Squire, Sanders & Dempsey, L.L.P.
By Mitchel B. Axler and Brian M. McQuaid Phoenix
Attorneys for Defendant/Appellee/
Cross-Appellant
H O W A R D, Judge.
¶1 The trial court dismissed appellants Betty and Raymond Amparanos’1 putative
class action against defendant ASARCO, Inc.,2 after determining the action had been
brought in an improper venue and could not be transferred to a proper venue. Concluding
that venue is controlled by the mandatory venue provisions governing real property actions,
we affirm the dismissal. In a cross-appeal, ASARCO challenges the trial court’s denial of
its motion to disqualify counsel. Because we conclude the trial court had a reasonable
basis for denying ASARCO’s motion, we affirm that ruling also.
MOTION TO DISMISS FOR IMPROPER VENUE
1
The amended complaint includes many named plaintiffs, all of whom we refer to as
“the Amparanos.”
2
The complaint names as defendants ASARCO, Inc.; Americas Mining Group; Grupo
Mexico S.A. de C.V.; Joseph Wilhelm; and John Shaw. We refer to all defendants as
“ASARCO.”
2
¶2 The parties do not dispute the facts alleged in the complaint or asserted in the
motion concerning venue. In July 2002, the Amparanos sued ASARCO in Pima County,
alleging ASARCO’s mining and smelting operations had released significant amounts of
pollutants and heavy metals into the environment, resulting in personal injury and property
damage to the named plaintiffs who reside in Gila and Pinal Counties. ASARCO
subsequently filed a number of motions to dismiss, including a motion to dismiss the
complaint for improper venue pursuant to Rule 12(b)(3), Ariz. R. Civ. P., 16 A.R.S., Pt. 1.
Finding that Arizona’s venue statute required the lawsuit to be filed in the county where the
real property is located and that no such county exists, the trial court granted ASARCO’s
motion and dismissed the Amparanos’ complaint without prejudice. The Amparanos now
appeal the dismissal.
¶3 The Amparanos first argue that the trial court erred in determining their action
was brought in an improper venue and in dismissing their action. They contend that,
because their claims are based on tort law, their action falls within the trespass exception
to the venue statute. A.R.S. § 12-401(10). Interpretation of the venue statutes is a question
of law that we review de novo. See Republic Nat’l Bank of N.Y. v. Pima County, 200 Ariz.
199, ¶ 10, 25 P.3d 1, 4 (App. 2001).
¶4 As a rule, venue generally lies in the county where a defendant resides unless
the cause of action falls within one of the nineteen statutory exceptions listed in § 12-401.
3
Brown v. Superior Court, 2 Ariz. App. 434, 435, 409 P.2d 593, 594 (1966). In dispute in
this case are subsections 10 and 12 of § 12-401, which provide in pertinent part:
10. When the foundation of the action is a crime,
offense or trespass for which an action in damages may lie, the
action may be brought in the county in which the crime, offense
or trespass was committed or in the county in which the
defendant or any of the several defendants reside or may be
found . . . .
....
12. Actions for the recovery of real property, for
damages thereto, for rents, profits, use and occupation thereof,
for partition thereof, to quiet title thereto, to remove a cloud or
incumbrance on the title thereto, to foreclose mortgages and
other liens thereon, to prevent or stay waste or injuries thereto,
and all other actions concerning real property, shall be brought
in the county in which the real property or a part thereof is
located.
The term “trespass” as used in § 12-401(10) encompasses any type of wrongful act that
causes damage to another and is generally construed as being equivalent to a “tort.”
Jackson v. Superior Court, 23 Ariz. App. 361, 362, 533 P.2d 572, 573 (1975). In
determining if an action falls within one of the exceptions, a court must determine the venue
of the action “from the character of the complaint and from the character of the judgment
which might be rendered upon a default thereto.” Santa Cruz Ranch v. Superior Court, 76
Ariz. 19, 24, 258 P.2d 413, 416 (1953).
¶5 In their amended complaint, the Amparanos assert eight counts against
ASARCO: 1) trespass, 2) private and public nuisance, 3) strict liability, 4) negligence and
4
negligence per se, 5) medical monitoring, 6) fraud and misrepresentation, 7) intentional
infliction of emotional distress, and 8) negligent infliction of emotional distress. Each one
of these eight claims is clearly based in tort. We therefore agree with the Amparanos that
their action falls under the trespass exception of § 12-401(10).
¶6 Nevertheless, ASARCO argues that the Amparanos’ tort claims also concern
real property, thus directly implicating the real property exception of § 12-401(12). In
response, the Amparanos contend that § 12-401(12) is limited to claims “involv[ing] an
attempted recovery against the real property interests of the defendant” and that their claims
do not involve such interests.
¶7 The language of the statute does not support Amparanos’ interpretation. By
including the words “damages thereto” and “to prevent or stay waste or injuries thereto, and
all other actions concerning real property,” the legislature intended to include in this venue
exception actions other than those directed at a question of title or possession of real
property. See Diefenbach v. Holmberg, 200 Ariz. 415, ¶ 8, 26 P.3d 1186, 1189 (App.
2001) (statute is to be given such effect that no clause, sentence or word is rendered
superfluous, void, contradictory, or insignificant).
¶8 The complaint here alleges that ASARCO trespassed on the Amparanos’ land,
damaged it by means of a public nuisance, was negligent in doing so, and is strictly liable
for the damage. The complaint also requests that two real property classes be established:
one for property damage and one for property remediation. The complaint further requests
5
an injunction prohibiting further damage to the land. Because the Amparanos’ action
requests damages for the alleged contamination of the real property, remediation and
monitoring of the property, and injunctive relief against future injuries to the real property,
these claims clearly lie within the real property venue exception.
¶9 Because subsections 10 and 12 of § 12-401 both apply to the amended
complaint under the facts of this case, the issue that we must resolve is which statutory
exception takes precedence. In Massengill v. Superior Court, 3 Ariz. App. 588, 416 P.2d
1009 (1966), this court discussed an analogous situation of competing venue exceptions.
In Massengill, a plaintiff was involved in an automobile accident in Yuma County. The
plaintiff sued all the defendants in Maricopa County, including Yuma County and the sheriff
and deputy sheriff of Yuma County. The Yuma County defendants moved for a change of
venue to Yuma County based on § 12-401(15) and (16), which provide that counties and
county officials “shall” be sued in their own county. But, because one of the individual
defendants was served in Maricopa County, the plaintiff argued that venue was proper in
Maricopa County under the trespass exception. The trial court granted the motion to change
venue to Yuma County, and this court affirmed, holding:
It is our opinion that where there are several alternative
counties under which the “may” exception [of the venue
statute] could be applicable, the plaintiff is in a position to
exercise his option as to the proper county. . . . It is further our
opinion that as between a “may” exception and a “shall”
exception, the latter has the preference notwithstanding the
broad language contained in Subsection 10.
6
Massengill, 3 Ariz. App. at 591, 416 P.2d at 1012; see also Campbell v. Deddens, 21 Ariz.
App. 295, 297, 518 P.2d 1012, 1014 (1974) (plaintiff cannot circumvent venue statute by
uniting in complaint a personal action with a local action).
¶10 Although Massengill was based on the policy underlying the county exception,
we similarly conclude that the mandatory real estate exception should control even if the
plaintiff also alleges separate causes of action that fall under the permissive trespass
exception. At common law, actions involving real property were “local” in nature and were
required to be filed in the county where the real property was located. See Cooper v.
Amerada Hess Corp., 13 P.3d 68, 72 (N.M. Ct. App. 2000). The legislature continued this
requirement by using very broad terms in this exception, including within it any claim
involving an interest in real estate, damages to real estate, or simply “concerning real
property.”
¶11 Although the reasoning behind the “local” rule is not clear, other courts have
concluded that mandating venue in the county where the real estate is located is more
convenient for witnesses and prevents more than one court from acting on title to real
property. See, e.g., Stauffer Chem. Co. v. Superior Court, 71 Cal. Rptr. 202, 204 (Ct.
App. 1968) (“Whatever its origin in history or custom, the venue rule governing actions for
injury to real property usually promotes the convenience of the court, litigants and
witnesses.”); Truck South, Inc. v. Patel, 528 S.E.2d 424, 428 (S.C. 2000) (“Strong public
policy supports a rule that requires an action for the specific performance of a land sales
7
contract to be litigated in the county where the land is located.”). The legislature apparently
adopted these or similar reasons in enacting § 12-401(12).
¶12 A common sense reading of the statute indicates that the mandatory real
property exception should take precedence over the permissive trespass exception. First,
the permissive trespass exceptions in § 12-401(10) are exceptions to the requirement that
the plaintiff sue the defendant in the county of the defendant’s residence. They are not
exceptions to the mandatory language of the real estate exception. Second, to allow a
permissive exception to overcome a mandatory provision would eviscerate § 12-401(12).
Many disputes involving real property also involve mortgages, deeds of trust, other written
liens, torts for encroachments on the land, or torts resulting in some physical damage to the
land. Little would be left of § 12-401(12) if the courts allowed claims arising from a
writing, § 12-401(5) and (6), or from a tort, § 12-401(10), to defeat its mandatory language.
We conclude, therefore, that, when causes of action that may be brought in different
counties under § 12-401(10) are combined with a cause of action “concerning real
property,” § 12-401(12), the proper venue is in the county where the real property is
located.
¶13 The Amparanos next argue that, even if venue in this case is controlled by
§ 12-401(12), the trial court erred in dismissing the case rather than transferring it to the
proper county under A.R.S. § 12-404. They claim that venue would have been proper in
either Pinal or Gila County where “a part” of the real property is located. See § 12-401(12)
8
(action “shall be brought in the county in which the real property or a part thereof is
located”). But, because the Amparanos did not raise this argument below, we will not
reverse the trial court based on it and express no opinion on its validity. See Hahn v. Pima
County, 200 Ariz. 167, ¶ 13, 24 P.3d 614, 619 (App. 2001) (failure to raise issue in trial
court constitutes waiver of issue).
¶14 The Amparanos next argue that, regardless of what statutory venue exception
applies, ASARCO waived its right to challenge venue. The Amparanos contend that,
because ASARCO did not first move to have the action transferred under § 12-404, it
waived its ability to seek dismissal for lack of proper venue under Rule 12(b), Ariz. R. Civ.
P. We review the interpretation of a rule or statute de novo. Wersch v.
Radnor/Landgrant–A Phoenix P’ship, 192 Ariz. 99, 100-01, 961 P.2d 1047, 1048-49 (App.
1997).
¶15 Rule 12(b)(3), Ariz. R. Civ. P., permits a party to move to dismiss a
complaint for improper venue. Rule 12(b) further states in pertinent part: “The [improper
venue] defense . . . may be made only if the action cannot be or could not have been
transferred to the proper county pursuant to A.R.S. § 12-404.” Section 12-404(A)
provides:
If an action is not brought in the proper county, the court
shall nevertheless have jurisdiction and may . . . determine the
action unless the defendant, before expiration of the time
allowed to answer, files with the clerk of the court . . . an
affidavit of the defendant . . . stating that the county in which
9
the action is brought is not the proper county and stating the
county of the defendant’s residence, and praying that the action
be transferred to the proper county.
¶16 The Amparanos argue that ASARCO failed to file the requisite affidavit to
transfer the action to the proper county as required by § 12-404(A) and, thus, that the trial
court improperly dismissed the complaint under Rule 12, Ariz. R. Civ. P. But the statute
and rule pertain to different situations and are mutually exclusive. Section 12-404 applies
if the action is filed in a county in which venue is not proper, but venue would be proper
in a different county. In contrast, Rule 12(b) is limited to those rare situations in which “the
action cannot be or could not have been transferred to the proper county,” i.e., where no
county would be the proper venue for the action as constituted. Accordingly, if an action
is brought in a county without proper venue and cannot be transferred to the county which
would be the proper venue pursuant to § 12-404, the trial court is required to dismiss the
action under Rule 12(b).
¶17 In conclusion, § 12-401(12) provides that venue is proper only in the county
where the real property is located. Because the named plaintiffs’ real property is located
in more than one county, there is no correct venue under § 12-401(12) for the Amparanos’
action. Accordingly, as the case was argued below, ASARCO could not have complied
with § 12-404 by requesting “that the action be transferred to the proper county.” The trial
court did not err in dismissing the complaint.
10
¶18 At oral argument, the Amparanos argued that this result would allow venue
to trump jurisdiction. The superior courts retain jurisdiction; but, as in other actions
concerning improper venue, the defendant can require the action to be brought in the county
with proper venue. See Massengill, 3 Ariz. App. at 591, 416 P.2d at 1012. The
Amparanos also contended that our supreme court premised the Arizona Rules of Civil
Procedure on the Federal Rules of Civil Procedure, and the federal version of Rule 12(b)(3)
was specifically designed to allow the federal district courts of limited jurisdiction to
dismiss a case brought in an improper venue. Because Arizona’s superior courts are courts
of general jurisdiction, see Hayes v. Continental Insurance Co., 178 Ariz. 264, 273, 872
P.2d 668, 677 (1994), the Amparanos argue that Rule 12(b)(3), Ariz. R. Civ. P., is a
“vestige” of the federal rules and has never been applied in any reported case. They also
argue that the legislature has circumvented this rule by providing statutory mechanisms to
resolve other venue conflicts. See, e.g, A.R.S. § 12-401(7) (when multiple defendants
reside in different counties, action may be brought in any of those counties); A.R.S. § 12-
401(15) (actions against multiple counties may be brought in any one of the named
counties). The Amparanos ask us to imply such a resolution here, arguing that, to do
otherwise, would impair the ability to bring class actions and would contravene
jurisprudential policies such as promoting judicial economy. Although we understand these
concerns, we cannot disregard the supreme court’s rule or the legislature’s clear venue
11
mandate. Nor can we tell the superior court it erred in applying both to the present action.
Any remedy must therefore come from either our supreme court or the legislature.
MOTION TO DISQUALIFY COUNSEL
¶19 On cross-appeal, ASARCO challenges the trial court’s denial of its motion
to disqualify the Amparanos’ counsel because of the lead counsel’s previous attorney-client
relationship with ASARCO.3 We review a trial court’s ruling on a motion to disqualify
counsel for an abuse of discretion. Smart Indus. Corp., Mfg. v. Superior Court, 179 Ariz.
141, 145, 876 P.2d 1176, 1180 (App. 1994). We will not find an abuse of discretion if a
reasonable basis exists for the trial court’s ruling. See In re Shano, 177 Ariz. 550, 557, 869
P.2d 1203, 1210 (App. 1993).
¶20 The general facts as presented by ASARCO’s affidavits and supporting
memoranda are undisputed. In 1993, Howard Shanker became employed as an associate
attorney at the law firm of Fennemore Craig, P.C. During his time there, Shanker worked
in the firm’s environmental and natural resources practice group and completed research
projects for various partners within that group. Shanker left Fennemore Craig in 1995 and,
three years later, began representing clients in this action against ASARCO. The action
progressed and, in 2002, Tucson attorney David Karnas and his firm became co-counsel for
3
Although we are affirming dismissal of the complaint, if ASARCO’s claim has
merit, it is entitled to an order barring Shanker from any further adverse representation.
12
the Amparanos. In addition, two Texas-based attorneys, Newton Schwartz and Seth
Cortigene, also became co-counsel.
¶21 On April 1, 2003, counsel for ASARCO wrote to all of the Amparanos’
counsel, requesting they withdraw because of Shanker’s previous attorney-client
relationship with ASARCO. The Amparanos’ counsel refused this request, and ASARCO
subsequently filed under seal a motion to disqualify the Amparanos’ counsel for violating
ERs 1.9 and 1.10, Ariz. R. Prof’l Conduct, Ariz. R. Sup. Ct. 42, 17A A.R.S. This motion
contained several supporting documents, including Shanker’s billing statements and
affidavits from ASARCO’s general counsel and the chairman of Fennemore Craig’s
environmental and natural resources practice group. The trial court denied the motion
without explanation.
¶22 We begin our analysis by discussing the scope of the Rules of Professional
Conduct as adopted by our supreme court in 1983 and recently amended in 2003.
According to its present Preamble, the Rules of Professional Conduct are designed, in part,
to provide a structure for regulating attorney conduct through disciplinary agencies, and
“[f]ailure to comply with an obligation or prohibition imposed by a Rule is a basis for
invoking the disciplinary process.” Pmbl. ¶¶ 19-20, Ariz. R. Prof’l Conduct. But the
Preamble also states that a violation of an ethical rule “does not necessarily warrant any
other nondisciplinary remedy, such as disqualification of a lawyer in pending litigation,” and
warns that “the purpose of the Rules can be subverted when they are invoked by opposing
13
parties as procedural weapons.” Pmbl. ¶ 20, Ariz. R. Prof’l Conduct. Thus, the rules of
professional responsibility are for ethical enforcement and are not designed to be used as
a means to disqualify counsel. The courts have, of course, looked to the ethical rules for
guidance on disqualification issues. See Towne Dev. of Chandler, Inc. v. Superior Court,
173 Ariz. 364, 368-69, 842 P.2d 1377, 1381-82 (App. 1992). Within this context, we
review ASARCO’s challenge to the trial court’s refusal to disqualify Amparano’s counsel
pursuant to ERs 1.9 and 1.10, Ariz. R. Prof’l Conduct.
¶23 ASARCO first argues that the court abused its discretion by not disqualifying
Shanker pursuant to ER 1.9. This rule, as it read when the trial court decided this issue,4
provides in relevant part:
A lawyer who has formerly represented a client in a matter
shall not thereafter:
(a) represent another person in the same or a
substantially related matter in which that person’s interests are
materially adverse to the interests of the former client unless
the former client consents after consultation; or
(b) use information relating to the representation to the
disadvantage of the former client except as ER 1.6 would
permit with respect to a client or when information has become
generally known.
ER 9, Ariz. R. Prof’l Conduct (1983).
4
The trial court issued its decision prior to the December 2003 amendments to the
Arizona Rules of Professional Conduct.
14
¶24 ASARCO argues that the Amparano case is substantially related to Shanker’s
former work. Although ASARCO argues that the court may presume a conflict exists, the
burden is on the party moving to disqualify opposing counsel to show “sufficient reason”
why the attorney should be disqualified. Alexander v. Superior Court, 141 Ariz. 157, 161,
685 P.2d 1309, 1313 (1984). And, in the absence of any express findings and conclusions
by the trial court, we will imply the necessary findings and conclusions, if supported by the
record, to affirm the order. Shano, 177 Ariz. at 557-58, 869 P.2d at 1210-11.
¶25 ASARCO contends that Shanker “represented ASARCO in a wide range of
matters related to the environmental effects of ASARCO’s operations” during his tenure at
Fennemore Craig. As evidence of this representation, ASARCO submitted affidavits from
partners who had worked with Shanker at Fennemore Craig, attesting that he had worked on
numerous projects relating to permitting, lobbying, and enforcement issues for ASARCO.
According to the affidavits, Shanker had full access to the area where all of ASARCO’s
files are located, and Shanker used some of these files to conduct legal research and write
memoranda on issues directly relating to ASARCO. In furtherance of its argument,
ASARCO submitted billing statements for approximately 112 hours of Shanker’s legal work
that was apparently billed to ASARCO. ASARCO noted that a portion of these hours dealt
with water quality issues, which ASARCO claims is the basis for part of the Amparanos’
complaint.
15
¶26 Despite its allegation that Shanker was considerably involved in ASARCO’s
representation, ASARCO did not submit any of the actual work product on which it based
this claim. And, although the court allowed the parties to submit evidence under seal,
ASARCO has not provided any of the “information relating to the representation” that
Shanker allegedly received or explained how he would use that information “to the
disadvantage of the former client.” ER 1.9(b), Ariz. R. Prof’l Conduct (1983). The only
evidence ASARCO presented is in the form of vague billing statements supported by very
generalized affidavits, stating that Shanker researched and wrote memoranda and that, at one
point, one of these memoranda was incorporated into an opinion letter. The record thus
fails to support ASARCO’s claim that Shanker, a first-year associate, was “environmental
counsel for ASARCO” or that he would have been aware of litigation strategy ASARCO’s
counsel might use.
¶27 Furthermore, the Amparanos’ complaint is based in state tort law and focuses
on toxicology and causation of damages to the Amparanos and their property and increased
risk of illness from an alleged exposure to unchecked toxic air emissions. In contrast,
Shanker’s work at Fennmore Craig appears to have centered primarily on federal permitting
and compliance matters, focusing on water-related issues such as wastewater disposal under
the Clean Water Act and solid waste regulation pursuant to the Resource Conservation and
Recovery Act. And, although ASARCO correctly notes that the Amparanos’ complaint
refers to water pollution by stating “copper tailings . . . dumped adjacent to the [Gila River]
16
result[ed] in tailings being washed down the river,” ASARCO failed to demonstrate how
this one reference in a 138-paragraph complaint would show this action was substantially
related to Shanker’s activities when he worked on ASARCO’s matters.
¶28 Even though the trial court gave no explanation for denying ASARCO’s
motion, the court could have properly found that the matters on which Shanker had worked
while at Fennemore Craig and the matters raised in the Amparano complaint were not
“substantially related.” See ER 1.9(a), Ariz. R. Prof’l Conduct (1983); see also Ariz. State
Bar Comm. on Rules of Prof’l Conduct Ethics Op. 94-06 (1994) (“[S]ome factual nexus
must exist between the two matters; i.e., the matters themselves must be substantially
interrelated.”). Furthermore, the trial court could have found that Shanker’s potential access
to ASARCO’s files was too speculative to constitute a substantial risk that confidential
information would be reviewed. Accordingly, the trial court could have properly concluded
that ASARCO had failed to carry its burden of substantiating its claim that some ASARCO
matter on which Shanker worked at Fennemore Craig while he was an associate was
substantially related to this present action.
¶29 ASARCO also argues that Shanker’s current representation of the Amparanos
creates an appearance of impropriety, relying on Canon 9 of the Model Code of
Professional Responsibility. Although the appearance of impropriety is no longer a
standard in the Arizona Rules of Professional Conduct, it remains “a part of conflict of
interest” analysis for purposes of disqualifying an attorney. Gomez v. Superior Court, 149
17
Ariz. 223, 225-26, 717 P.2d 902, 904-05 (1986). However, the appearance of impropriety
does not necessarily require disqualification in every case; rather, “[w]here the conflict is
so remote that there is insufficient appearance of wrongdoing, disqualification is not
required.” Id. at 225, 717 P.2d at 904; see also Sellers v. Superior Court, 154 Ariz. 281,
289, 742 P.2d 292, 300 (App. 1987) (appearance of impropriety is “too slender a reed”
upon which to rest disqualification of counsel). Accordingly, we conclude that any conflict
in this case is too remote to raise an “appearance of impropriety” that would require
Shanker’s disqualification.
¶30 ASARCO next argues the trial court erred by not disqualifying Shanker’s
co-counsel pursuant to ER 1.10, Ariz. R. Prof’l Conduct. The 1983 version of this rule
provides in relevant part: “While lawyers are associated in a firm, none of them shall
knowingly represent a client when any one of them practicing alone would be prohibited
from doing so by ER 1.7, 1.8(c), or 2.2.” ER 1.10(a), Ariz. R. Prof’l Conduct (1983). We
will assume for the purpose of this opinion that this rule could apply to co-counsel. See
Funds of Funds, Ltd., v. Arthur Andersen & Co., 567 F.2d 225, 234-36 (2d Cir. 1977).
¶31 In applying the rule of imputed disqualification, the first inquiry is to
determine whether the representation of the present client is substantially related to the
representation of the former client; if it is, any confidences and secrets known by the former
client’s lawyer are imputed to the firm, and the firm is then vicariously disqualified.
18
Rodriguez v. State, 129 Ariz. 67, 72, 628 P.2d 950, 955 (1981). However, we have already
determined that the court did not err in denying ASARCO’s motion to disqualify Shanker.
Thus, logic dictates that, if Shanker is not disqualified, there can be no imputed
disqualification of the associated firm. State ex rel. Romley v. Superior Court, 184 Ariz.
223, 228, 908 P.2d 37, 42 (App. 1995). Accordingly, we need not continue our inquiry into
this matter.
¶32 Finally, ASARCO preemptively counters the Amparanos’ argument that it
waived the right to object to the ethical conflicts presented by Shanker and his co-counsel.
ASARCO contends that it made the request for counsel to withdraw only four months after
the first amended complaint was filed in January 2003. But the record shows ASARCO
was aware of Shanker’s association with the Amparanos several years before the amended
complaint was filed. As early as 1998, ASARCO’s local counsel, whom Shanker had met
when he was at Fennemore Craig, contacted Shanker to discuss matters relating to
ASARCO. That same year, Shanker met with ASARCO’s local and national counsel to
negotiate a tolling agreement to allow the Amparanos time to develop their claims in
furtherance of settlement. And Shanker presented a settlement package to ASARCO in
May 2000. Further, even if we accept ASARCO’s general counsel’s avowal that he did not
know Shanker was representing the Amparanos until “some time following . . . February
2001,” ASARCO has not explained why it waited until 2003 to first raise the
disqualification issue.
19
¶33 By demonstrating these initial contacts, the Amparanos raised at least a prima
facie case of waiver, and the burden of going forward with evidence shifted to ASARCO
to show why it had not waived any conflict. See Babe Invs. v. Ariz. Corp. Comm’n, 189
Ariz. 147, 152, 939 P.2d 425, 430 (App. 1997); Kiley v. Jennings, Strouss & Salmon, 187
Ariz. 136, 139, 927 P.2d 796, 799 (App. 1996). It failed to do so. And, considering that
Shanker had worked with and for these plaintiffs for five years before ASARCO first raised
the issue of disqualification, the trial court could have readily concluded that ASARCO had
waived any conflict or that disqualification would be an excessive penalty. See Hrudka v.
Hrudka, 186 Ariz. 84, 90, 919 P.2d 179, 185 (App. 1995) (finding that disqualification
would be excessive penalty after parties had actively litigated case for year and half before
issue of disqualification was raised); see also Foulke v. Knuck, 162 Ariz. 517, 523, 784
P.2d 723, 729 (App. 1989) (disqualification may be avoided if hardship to new client far
outweighs injustice to former client who requests disqualification).
CONCLUSION
¶34 We hold that the mandatory real estate venue exception of A.R.S. § 12-
401(12) has precedence over the permissive trespass exception of § 12-401(10), requiring
dismissal of the Amparanos’ action as constituted. And, because a reasonable basis exists
for the trial court to have found that ASARCO had not met its burden of showing sufficient
reason why Amparanos’ counsel should be disqualified, the trial court did not abuse its
20
discretion in denying ASARCO’s motion to disqualify counsel pursuant to ERs 1.9 and
1.10, Ariz. R. Prof’l Conduct (1983). We affirm.
JOSEPH W. HOWARD, Judge
CONCURRING:
J. WILLIAM BRAMMER, JR., Presiding Judge
M. JAN FLÓREZ, Judge
21