Potter v. Meza ( 2023 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
PHILLIP TERRY POTTER, Plaintiff/Appellant,
v.
ROBERT MEZA, et al., Defendants/Appellees.
No. 1 CA-CV 22-0441
FILED 10-17-2023
Appeal from the Superior Court in Maricopa County
No. CV2021-013210
The Honorable Jay R. Adleman, Judge
AFFIRMED
COUNSEL
Phillip Potter, Scottsdale
Plaintiff/Appellant
The Nelson Law Group, PLLC, Phoenix
By Timothy A. Nelson
Counsel for Defendant/Appellee Robert Meza
Maynard Cronin Erickson & Curran, PLC, Phoenix
By Daniel D. Maynard
Counsel for Defendant/Appellee Alison Rapping
Dickinson Wright PLLC, Phoenix
By P. Bruce Converse, Andrew J. Alvarado
Counsel for Defendant/Appellee L. Henderson et al.
POTTER v. MEZA, et al.
Decision of the Court
MEMORANDUM DECISION
Judge Brian Y. Furuya delivered the decision of the Court, in which Judge
Cynthia J. Bailey and Judge Michael J. Brown joined.
F U R U Y A, Judge:
¶1 Phillip Potter appeals the superior court’s dismissal of his
various claims against many defendants. For the following reasons, we
affirm.
FACTS AND PROCEDURAL HISTORY
¶2 This case originates with Potter’s relationship to his now-ex-
wife, Tasneem Doctor, which ended with their divorce in late 2021. In
January 2020, Doctor sought and obtained an order of protection (“Order”)
against Potter containing what Potter alleges were “fabricated domestic
violence allegations.” The Order was quashed in April 2020. Potter alleges
sometime in March 2020 Doctor sent a defamatory letter to Potter’s business
associates related to the quashed Order, among other things.
¶3 In April 2021, Potter filed a complaint in superior court (case
number CV2021-005501), alleging one count of wrongful institution of civil
proceedings against Doctor and her legal representatives and one count of
aiding and abetting the first count against several other defendants,
including Doctor’s family, friends, and several fictitious defendants. The
claims referred to the quashed Order and included over 116 pages of
background information relating to Doctor’s relationships with Potter,
Robert Meza (a member of the Arizona Legislature), and other individuals
and organizations.
¶4 In August 2021, Potter initiated this matter as a separately
filed civil case (case number CV2021-013210), accusing Doctor of
participating in a larger criminal enterprise with 24 other defendants,
including major healthcare organizations, public figures, and other private
individuals. His timely filed first amended complaint (“FAC”) alleged
thirteen counts against the various defendants, including one count each of
wrongful institution of civil proceedings, defamation per se, negligence per
se, conversion, unjust enrichment, tortious interference with business
relationships, six counts of civil conspiracy to commit each prior tort
alleged, and one count against all defendants under Arizona Revised
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Decision of the Court
Statute (“A.R.S.”) § 13-2314.04, Arizona’s Racketeer Influenced and Corrupt
Organizations (“RICO”) Act. The FAC alleged Doctor filed the quashed
Order, sent the defamatory letter, and committed other “harassing,
threatening, [and] intimidating” acts to conceal a broader criminal
conspiracy designed to financially benefit Meza. The FAC claimed the other
named defendants knowingly supported Doctor’s actions with intent to
prevent Potter from exposing the alleged criminal organization.
¶5 Potter moved to consolidate CV2021-005501 and CV2021-
013210. The court denied his motion finding the second case, CV2021-
013210, “extends far beyond the allegations in CV2021-005501 and does not
involve common questions of law or fact.”
¶6 After three defendants had filed motions to dismiss, Potter
moved to amend his FAC. His proposed Second Amended Complaint
recategorized some information as “exhibits” and removed large portions
of the FAC. The superior court found the proposed Second Amended
Complaint “still fails to address numerous issues,” including still-
insufficient legal and factual allegations supporting both the RICO and civil
conspiracy claims. It found leave to amend would be futile and denied
Potter’s motion.
¶7 Several other defendants, including the Appellees, filed
motions to dismiss, and the court granted each one. Potter timely appealed.
However, of the original 25 named defendants, only Blue Cross Blue Shield
of Arizona, Inc.; Jewish Family and Children’s Service, Inc.; Lorrie
Henderson; Mercy Care; Tad Gary; Robert Meza; Pinnacle West Capital
Corporation; Arizona Public Service; Jeff Guldner; Donald Brandt; PSA
Behavior Health Agency; Shawn Emmons; and Alison Rapping
(collectively “Appellees”) are parties to this appeal. We have jurisdiction
pursuant to A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).
DISCUSSION
¶8 On appeal, Potter asks us to “establish jurisdiction, to
recognize Appellant’s standing,1 to apply lawful methods for evaluating
complaint sufficiency, to reinstate the complaint, to allow leave to amend
1 Potter argues the superior court erred by finding he lacked standing.
But the superior court did not make that finding. Instead, it noted it had
“significant concerns” about standing yet dismissed the case under Rule
12(b)(6), not for lack of standing. We thus decline to address this argument.
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to cure any actual complaint deficiencies, and to move the case to discovery
in the interests of justice.”
¶9 We review the superior court’s grant of a motion to dismiss
de novo. Mirchandani v. BMO Harris Bank, N.A., 235 Ariz. 68, 70 ¶ 7 (App.
2014). To decide whether “a complaint states a claim on which relief can be
granted, courts must assume the truth of all well-pleaded factual
allegations and indulge all reasonable inferences from those facts, but mere
conclusory statements are insufficient.” Coleman v. City of Mesa, 230 Ariz.
352, 356 ¶ 9 (2012).
I. Potter Waived His Abatement Argument.
¶10 For the first time on appeal, Potter argues the claims in his
prior filing, CV2021-005501, abated the claims in this case, removing
jurisdiction from the superior court.2 He therefore has waived any theory
of abatement, so we decline to address it. See Barkhurst v. Kingsmen of Route
66, Inc., 234 Ariz. 470, 476 ¶ 22 (App. 2014) (“We generally do not consider
arguments and legal issues on appeal that have not been specifically
presented to the superior court.”).
II. The Superior Court Did Not Err in Denying Potter’s Motion to
Consolidate.
¶11 To the extent Potter argues the superior court’s denial of his
Arizona Rule of Civil Procedure (“Rule”) 42 motion for consolidation was
error, we disagree. Rule 42 permits the court to consolidate multiple actions
involving “a common question of law or fact.” Ariz. R. Civ. P. 42(a). “Cases
may be consolidated in the trial court’s discretion, and we will not disturb
such an order unless the court abused its discretion.” Hancock v. McCarroll,
188 Ariz. 492, 495 (App. 1996).
¶12 The record supports the court’s ruling. The complaint for
CV2021-005501 names only six defendants in addition to several fictitious
defendants and alleges just two claims. By contrast, CV2021-013210 names
25 defendants and alleges 13 claims. The cases share only six named
2 In a “Motion to Dismiss for Lack of Appellate Jurisdiction” from
August 2023, Potter argues the same grounds likewise deprive us of
appellate jurisdiction. Because Potter waived his abatement argument and
we find the superior court and this court have jurisdiction, we deny his
motion.
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Decision of the Court
defendants and one claim. Rule 42’s language is permissive, and the court
did not abuse its discretion in declining to consolidate the two actions.
III. The Superior Court Did Not Err in Dismissing Potter’s FAC
Pursuant to Rule 12(b)(6).
¶13 The court did not err in granting Appellees’ motions to
dismiss the FAC under Rule 12(b)(6). Potter’s FAC fails to demonstrate any
“distinct and palpable injury” sufficient to maintain any claims against the
Appellees. Those allegations within the FAC that do impute harm to Potter
by reason of Appellees’ conduct are conclusory, speculative, or both. Other
allegations state only generalized harm which would include harm suffered
by the public at large. But the FAC is silent as to how any of these
allegations involve Potter, much less caused him any damage. We address
the deficiencies of each claim in turn.
A. Civil Conspiracy
¶14 The FAC accuses Appellees of knowingly and actively
participating in a criminal conspiracy and alleges they “agreed” to commit
various crimes against Potter and others. “For a civil conspiracy to occur[,]
two or more people must agree to accomplish an unlawful purpose or to
accomplish a lawful object by unlawful means, causing damages.” Wells
Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons, 201 Ariz. 474, 498
¶ 99 (2002) (citations omitted). Further, caselaw instructs “[t]here is a
qualitative difference between proving an agreement to participate in a tort,
i.e., a civil conspiracy, and proving knowing action that substantially aids
another to commit a tort.” Id. at 499 ¶ 101. In other words, it is not enough
to allege knowing action contributing to commission of another’s tort. To
qualify as civil conspiracy, the necessary agreement among co-conspirators
must be actual and not inferred because “it is unreasonable to infer a
conspiratorial agreement.” Id. Additionally, a mere agreement to do wrong
is insufficient by itself to establish liability for civil conspiracy. Id. at 498
¶ 99. The claim also requires that the underlying tort which the alleged
conspirators agreed to commit is actually accomplished. Id.¶15 We agree with the court’s ruling that Potter’s FAC lacks any
well-pleaded factual allegations supporting his conspiracy claims against
Appellees. Instead, the FAC recites conclusory statements the parties,
among other permutations, “conspired,” “committed to support[],”
“coordinated, initiated, and executed” various alleged damages without
providing a single supportive factual claim showing the existence of an
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actual agreement between the Appellees to commit any tort which directly
caused any harm to Potter.
¶16 Potter’s conclusory allegations do not meet the particularity
standard required for fraud claims. See Ariz. R. Civ. P. 9(b). Potter also
failed to connect any alleged injury to the Appellees. Instead, each injury
relates to his ex-wife’s purported actions, not to those of Appellees.
Accordingly, the court did not err in dismissing Potter’s civil conspiracy
claims.
B. RICO
¶17 Potter alleges he was injured by the conspiracy’s “ongoing
pattern of unlawful activity for financial gain.” Arizona’s RICO statute
permits a civil cause of action for “reasonably foreseeable injury” to a
claimant’s “person, business or property by a pattern of racketeering
activity.” A.R.S. § 13-2314.04(A). To establish a “pattern of racketeering
activity,” Potter must show the Appellees committed one or more
statutorily designated predicate offenses, resulting in injury. See A.R.S. § 13-
2301. In other words, Potter must prove (1) Appellees committed a
statutorily enumerated “predicate offense,” and (2) the offense directly
harmed him. See Hannosh v. Segal, 235 Ariz. 108, 111–12 ¶¶ 7–8 (App. 2014).
¶18 The FAC fails to sufficiently plead the elements of any
requisite predicate offense. Potter generally asserts the Appellees
collectively engaged in conspiracy in violation of A.R.S. § 13-1003, money
laundering in violation of § 13-2317, and fraudulent schemes and artifices
in violation of § 13-2310. To the extent the FAC alleges fraudulent activity,
it is insufficiently vague and conclusory as to the circumstances showing
the alleged offenses occurred. “If any pleading, motion or other paper
includes an averment of fraud or coercion, it shall state these circumstances
with particularity with respect to each defendant.” A.R.S. § 13-2314.04(R);
see also Ariz. R. Civ. P. 9. Potter does not offer a single allegation of specific
conduct by Appellees in support of these sweeping assertions.
¶19 Even assuming the existence of a predicate offense under
RICO, the FAC lacks any well-pleaded allegation that a predicate offense
proximately caused Potter direct injury. See Rosier v. First Fin. Cap. Corp.,
181 Ariz. 218, 222 (App. 1994) (explaining A.R.S. § 13-2314 requires “a
plaintiff demonstrate proximate causation before becoming eligible for
treble damages”). Potter failed to show any direct relation between the
Appellee’s alleged violations and his injuries. See Anza v. Ideal Steel Supply
Corp., 547 U.S. 451, 461 (2006) (explaining the central question in proximate
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causation analysis is “whether the alleged violation led directly to the
plaintiff’s injuries”).
¶20 The FAC alleges Appellees laundered money through
“fundraiser events” coordinated by Meza and through Meza’s performance
of certain consulting contracts. But the FAC is silent as to how these
fundraising events or consulting contracts involved Potter or caused him
damage. Potter argues Meza “defraud[ed] the public,” but such generalized
allegations of harm are insufficient to show damage under RICO. See id. at
458 (holding a plaintiff could not recover when the direct victim was the
State of New York, not the plaintiff). Because Potter only alleges non-
Appellee defendants personally harmed him, he has failed to adequately
plead a RICO claim against Appellees and the court did not err by
dismissing the same.
C. Defamation Per Se
¶21 Potter’s FAC fails to adequately allege a claim for defamation
per se. Potter alleges Doctor authored an anonymous defamatory letter
which, in unspecified “coordination” with Appellees, she sent to Potter’s
business associates, resulting in damage to his reputation. “Whether a
statement is capable of defamatory meaning is a question of law for the
court,” Dube v. Likins, 216 Ariz. 406, 418–19 ¶ 43 (App. 2007), and we review
questions of law de novo, see Carlson v. Ariz. State Pers. Bd., 214 Ariz. 426,
430 ¶ 13 (App. 2007).
¶22 We cannot assess the letter’s potentially defamatory nature
because, as the court noted, neither the letter, nor a direct quote of its
contents, has been produced. Additionally, the FAC makes only conclusory
statements as to the Appellees’ connection to the letter. Thus, Potter has not
sufficiently pled the elements of defamation and the court did not err in
dismissing the claim.
D. Negligence Per Se
¶23 Potter asserts a negligence per se claim against Appellees
based on alleged violations of A.R.S. § 13-1202(A)(1)–(3). A negligence per
se claim must allege, among other things, the defendant violated a safety
statute, and the plaintiff is among the “class of persons” the statute intends
to protect. Steinberger v. McVey ex rel. Cnty. of Maricopa, 234 Ariz. 125, 139
¶¶ 56–57 (App. 2014). “To provide the basis for a negligence per se claim, a
statute ‘must proscribe certain or specific acts[.] Therefore, if a statute
defines only a general standard of care[,] negligence per se is
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inappropriate.’” Ibarra v. Gastelum, 249 Ariz. 493, 495–96 ¶ 9 (App. 2020)
(citations omitted).
¶24 Potter bases his negligence per se claim on A.R.S. § 13-1202,
which prohibits individuals from “threatening or intimidating . . . by word
or conduct” to cause injury to another person or damage another person’s
property to “promote, further or assist in the interests of . . . a criminal
syndicate or a racketeering enterprise.” A.R.S. § 13-1202(A)(1)–(3).
¶25 We concur with the court that A.R.S. § 13-1202 is not a “safety
statute” and cannot form the basis for a negligence per se claim because it
does not articulate more than a “general standard of care,” see Ibarra, 249
Ariz. at 495–96 ¶ 9, nor does it identify a particular class of persons to be
protected. Because the FAC fails to identify a violation of a qualifying safety
statute, we need not address its other failures as to this claim. The court did
not err in dismissing Potter’s negligence per se claim.
IV. The Superior Court Did Not Err in Denying Potter’s Motion for
Leave to Amend the FAC.
¶26 Potter argues the court erred in denying his motion for leave
to amend his FAC. Rule 15 permits a party to file a second amended
complaint only with leave of court or written consent of all opposing
parties. Ariz. R. Civ. P. 15(a)(1)–(2). We review denial of a motion for leave
to amend a pleading for an abuse of discretion. Matter of Torstenson’s Est.,
125 Ariz. 373, 376 (App. 1980) (“A motion for leave to amend a pleading is
addressed to the sound discretion of the trial court[.]”). “Although the
superior court has the discretion to deny a motion to amend, we review de
novo whether a request to amend is futile.” Ute Mountain Ute Tribe v. Ariz.
Dep’t of Revenue, 254 Ariz. 410, 416 ¶ 22 (App. 2023) (citation omitted). In
determining a proposed amendment’s futility, we take all well-pleaded
factual allegations as true. Id. However, leave to amend should not be
granted when the proposed amended pleading is legally insufficient on its
face. Matter of Torstenson’s Est., 125 Ariz. at 377 (citation omitted).
¶27 The court denied the motion for leave to amend based upon
the futility of amendment, finding the proposed Second Amended
Complaint “still fails to address numerous issues,” including still-
insufficient legal and factual allegations supporting both the RICO and civil
conspiracy claims. The court also found Potter’s standing rested “entirely
on conjecture and speculation” as to the “corporate entities and non-family
members.” We agree.
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¶28 Potter’s proposed Second Amended Complaint does not
substantively change the FAC’s contents, but merely recategorizes as
“Exhibits”—or removes entirely—large sections of the FAC itself. And it
continues to rely on the same legal conclusions and bald assertions fatal to
the FAC. The proposed amendment also does not remedy the lack of
distinct and palpable injury to Potter. Under these circumstances, the court
did not abuse its discretion in denying Potter’s motion for leave to amend.
V. The Superior Court Did Not Err in Awarding Appellees’
Reasonable Attorneys’ Fees.
¶29 Potter argues the court erred by awarding a portion of
Appellees’ attorney’s fees. The court granted Appellees’ requests for
attorneys’ fees based on A.R.S. § 13-2314.04 (authorizing an award of
attorneys’ fees following successful defense of a racketeering claim), § 12-
349 (permitting an award of attorneys’ fees against a party who brings a
claim “without substantial justification,” “solely or primarily for delay or
harassment,” or who “[u]nreasonably expands or delays the proceedings”),
and costs based on § 12-341 (prevailing parties to a civil action may recover
costs). We review the court’s decision to award attorneys’ fees for an abuse
of discretion. Hannosh, 235 Ariz. at 115 ¶ 22.
¶30 Despite concluding Potter’s “inexplicable expansion of a
family court dispute has caused the dismissed parties to incur significant
attorney’s fees and costs to defend an entirely frivolous action,” the court
declined to order the full amount requested by Appellees, instead limiting
the award to approximately $10,000 per party plus costs. As Appellees are
the prevailing party following their successful defense of Potter’s
racketeering claim, we affirm the court’s award under A.R.S. § 13-2314.04
alone, and therefore conclude there was no abuse of discretion. For the same
reason, we likewise award Appellees their reasonable attorneys’ fees
expended in this appeal, together with taxable costs, subject to compliance
with Arizona Rule of Civil Appellate Procedure 21.
CONCLUSION
¶31 We affirm.
AMY M. WOOD • Clerk of the Court
FILED: JT
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