Sierra Tucson, Inc. v. Bergin

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO
SIERRA TUCSON, INC., A CORPORATION; RAINIER J. DIAZ, M.D.;
SCOTT R. DAVIDSON; AND KELLEY ANDERSON,
Petitioners,
v.
THE HON. JEFFREY T. BERGIN, JUDGE OF THE SUPERIOR COURT OF THE
STATE OF ARIZONA, IN AND FOR THE COUNTY OF PIMA,
Respondent,
and
LINDSEY LECCE, INDIVIDUALLY AND ON BEHALF OF ALL SURVIVING
STATUTORY BENEFICIARIES; LINDSEY LECCE, AS PERSONAL
REPRESENTATIVE OF THE ESTATE OF RICHARD LECCE,
Real Party in Interest.
No. 2 CA-SA 2016-0017
Filed May 11, 2016
Special Action Proceeding
Pima County Cause No. C20155232
JURISDICTION ACCEPTED IN PART; RELIEF DENIED
COUNSEL
Renaud Cook Drury Mesaros, PA, Phoenix
By Michael D. Wolver and Charles S. Hover III
Counsel for Petitioners
SIERRA TUCSON, INC. v. BERGIN
Opinion of the Court
Law Office of Scott E. Boehm, P.C., Phoenix
By Scott E. Boehm
Kinerk, Schmidt & Sethi, P.L.L.C., Tucson
By Dev K. Sethi and Ted A. Schmidt
Co-Counsel for Real Party in Interest
OPINION
Presiding Judge Howard authored the opinion of the Court, in
which Judge Espinosa and Judge Staring concurred.
H O W A R D, Presiding Judge:
¶1 Sierra Tucson, Inc., Rainier Diaz, Scott Davidson, and
Kelley Anderson (collectively, “Sierra Tucson”) seek special action
review of the respondent judge’s order denying Sierra Tucson’s
motion seeking change of venue in a wrongful death action. Sierra
Tucson argues the respondent erred in finding inapplicable the
venue selection provision contained in a contract between Sierra
Tucson and the decedent, Richard Lecce, and in otherwise
concluding venue was proper in Pima County. As to the first issue,
we accept special action jurisdiction and deny relief. As to the
second, we decline jurisdiction.
Factual and Procedural Background
¶2 In January 2015, Richard arranged for treatment at
Sierra Tucson, a psychiatric hospital and behavioral health facility.
When he arrived at Sierra Tucson, and again when transferred from
the psychiatric hospital to a residential treatment facility, he signed
contracts that included a venue selection provision stating that “any
dispute” arising from Richard’s “participation at Sierra Tucson . . .
shall be heard exclusively in a State of Arizona Superior Court in
Pinal County.” While under Sierra Tucson’s care, Richard died,
allegedly committing suicide. Real-party-in-interest, Lindsey Lecce,
Richard’s widow, sued Sierra Tucson for wrongful death in Pima
County Superior Court “on her own behalf, and on behalf of their
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SIERRA TUCSON, INC. v. BERGIN
Opinion of the Court
two children, son Garret Lecce and daughter Morgan Lecce. She
also brings this action on behalf of the Estate of Richard Lecce.” The
complaint alleged, inter alia, claims of negligence and claims based
on the Consumer Fraud Act.
¶3 Sierra Tucson applied to transfer venue to Pinal County,
arguing the venue selection provision constituted “good and
sufficient cause” for a change of venue pursuant to A.R.S. § 12-
406(B)(3). Lecce objected, asserting venue was proper in Pima
County, the venue selection provision did not apply to the statutory
beneficiaries, and the provision was in any event unconscionable. In
response, Sierra Tucson contended the provision was binding and
enforceable, and additionally asserted for the first time that venue
transfer was appropriate under § 12-406(B)(2) based on “the
convenience of witnesses and the ends of justice.”1
¶4 The respondent judge denied Sierra Tucson’s request to
change venue to Pinal County. The respondent concluded that
Sierra Tucson had not shown transfer was appropriate pursuant to
§ 12-406(B)(2) and that the venue selection provision “is not binding
upon the surviving beneficiaries that bring this wrongful death
action,” citing Dueñas v. Life Care Centers of America, Inc., 236 Ariz.
130, 336 P.3d 763 (App. 2014). The respondent granted Sierra
Tucson’s request to stay the trial court proceedings, and this petition
for special action followed.
Jurisdiction
¶5 We have discretion to accept special action jurisdiction
to address venue rulings. See Sierra Tucson, Inc. v. Lee, 230 Ariz. 255,
¶ 6, 282 P.3d 1275, 1277 (App. 2012); see also Ariz. R. P. Spec. Actions
1(a). The enforcement of a forum selection provision is a legal issue.
Bennett v. Appaloosa Horse Club, 201 Ariz. 372, ¶ 11, 35 P.3d 426, 429
(App. 2001) (enforceability of forum selection clause is reviewed de
1 Despite its claim to the contrary in its petition for special
action, Sierra Tucson did not move to change venue based on A.R.S.
§ 12-404(A), allowing a change of venue if the action has not been
“brought in the proper county.”
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SIERRA TUCSON, INC. v. BERGIN
Opinion of the Court
novo); see also Estate of DeCamacho v. La Solana Care & Rehab, Inc., 234
Ariz. 18, ¶ 9, 316 P.3d 607, 609 (App. 2014) (validity and
enforceability of contractual arbitration provision reviewed de
novo). As such, it is particularly appropriate for special action
review. See Sierra Tucson, Inc., 230 Ariz. 255, ¶ 6, 282 P.3d at 1277.
And special action review is proper when, as in this case, the issue is
a question of first impression and of statewide importance.
See Chartone, Inc. v. Bernini, 207 Ariz. 162, ¶ 9, 83 P.3d 1103, 1107
(App. 2004). Accordingly, we accept special action jurisdiction to
address whether the respondent judge erred in concluding the
venue selection provision did not require venue be transferred to
Pinal County.
¶6 Whether venue should be changed pursuant to A.R.S.
§ 12-406, however, is left to a trial court’s discretion. Curtis v.
Richardson, 212 Ariz. 308, ¶ 8, 131 P.3d 480, 483 (App. 2006). And
that determination may require a court to resolve factual disputes
and weigh competing interests of the parties, see § 12-406(B)(1)–(3),
and thus is less appropriate for review pursuant to special action, see
State ex rel. Montgomery v. Rogers, 237 Ariz. 419, ¶ 6, 352 P.2d 451, 453
(App. 2015) (special action jurisdiction appropriate when issue
“does not turn on the resolution of disputed facts”). Thus, we
decline to accept special action jurisdiction of any issue unrelated to
the venue selection provision.
Discussion
¶7 Sierra Tucson argues that forum selection provisions are
presumptively enforceable and the respondent judge erred in
relying on Dueñas.2 In Dueñas, this court determined an arbitration
2A forum selection provision typically involves “consent to a
particular court’s exercise of personal jurisdiction.” Desarrollo
Immobiliario y Negocios Industriales de Alta Tecnología de Hermosillo,
S.A. de C.V. v. Kader Holdings Co., 229 Ariz. 367, ¶ 11, 276 P.3d 1, 5
(App. 2012). Consent to personal jurisdiction is not implicated in
this case because the superior court of Arizona is a “single unified
trial court of general jurisdiction.” Marvin Johnson, P.C. v. Myers,
184 Ariz. 98, 102, 907 P.2d 67, 71 (App. 1995). However, because the
choice of venue has less impact on the parties’ rights than consent to
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SIERRA TUCSON, INC. v. BERGIN
Opinion of the Court
agreement was not enforceable against statutory beneficiaries in a
wrongful death action who were not parties to the agreement.
236 Ariz. 130, ¶¶ 23-29, 336 P.3d at 771-72. We noted, first, that “‘a
party is bound to arbitrate only those disputes which it has
contractually agreed to arbitrate.’” Id. ¶ 26, quoting Smith v.
Pinnamaneni, 227 Ariz. 170, ¶ 22, 254 P.3d 409, 415 (App. 2011). This
conclusion is consistent with the longstanding general rule that only
parties to a contract are subject to or may enforce its terms. See Lofts
at Fillmore Condo. Ass’n v. Reliance Commercial Constr., Inc., 218 Ariz.
574, ¶ 5, 190 P.3d 733, 734 (2008), citing Treadway v. W. Cotton Oil &
Ginning Co., 40 Ariz. 125, 138, 10 P.2d 371, 375 (1932); cf. Carroll v.
Lee, 148 Ariz. 10, 13, 712 P.2d 923, 926 (1986) (“[m]utuality of
obligation” required for valid contract and exists only when both
parties bound).
¶8 Second, we observed that the wrongful death claims did
not belong to the decedent but instead belong to the statutory
beneficiaries. 236 Ariz. 130, ¶ 27, 336 P.3d at 772. We acknowledged
that a statutory beneficiary cannot bring a claim that is barred—such
as by a previous settlement by the decedent—and that a defendant is
entitled to raise any defenses against the statutory beneficiary that
could have been raised against the decedent. Id. But, we concluded,
those principles address the viability of the claim on the merits and
not “the question of whether the forum for such a claim may be
restricted by the decedent.” Id.
¶9 Applying the same reasoning to the venue selection
clause and the parties here, the statutory beneficiaries did not sign
the agreement containing the venue selection clause and are not
parties to the contract. Furthermore, their wrongful death claims are
personal jurisdiction, based on the facts and issues presented in this
case, we see no reason the general principles governing enforcement
of a forum selection provision would not apply to a venue selection
provision. Thus, like a forum selection provision, a venue selection
provision “is enforceable as long as it is not the result of unfair
bargaining or so unreasonable that the plaintiff would be deprived
of his or her day in court.” Bennett, 201 Ariz. 372, ¶ 19, 35 P.3d at
431.
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SIERRA TUCSON, INC. v. BERGIN
Opinion of the Court
not derivative of Richard’s claims. See id. Thus, the statutory
beneficiaries are not bound by the venue selection provision.
¶10 Sierra Tucson, however, contends the reasoning in
Dueñas does not apply to venue selection provisions because
arbitration agreements “result in the waiver of a party’s Arizona
constitutional right to a jury trial” instead of “merely chang[ing] the
location of a case within the superior court system.” But, in Dueñas,
we did not address the right to a jury trial or whether it was
pertinent to whether an arbitration provision should be enforced.
¶11 And this distinction does not make our reasoning in
Dueñas inapplicable to venue selection provisions. The critical
factors in Dueñas are present: the lack of a contractual relationship
between the statutory beneficiaries of a wrongful death action and
the fact that the statutory beneficiaries’ right to recover is not
derivative of any claims the decedent could have brought. And it
implicates a plaintiff’s right to choose the venue, a choice that
should not lightly be disturbed. See Cal Fed Partners ex rel. Cal Fed
Syndications v. Heers, 156 Ariz. 245, 246, 751 P.2d 561, 562 (App.
1987).
¶12 Sierra Tucson also argues the respondent judge erred by
concluding the venue selection provision was not binding because
Richard’s estate “is a plaintiff to this action in regards to the
Consumer Fraud Act claim,” as well as the claims Lindsey brought
as personal representative of Richard’s estate. Sierra Tucson reasons
that the estate is bound by Richard’s agreement and, thus, that the
venue selection provision must be enforced. Sierra Tucson further
argues that provision must then be enforced against the other
statutory beneficiaries. But, because Sierra Tucson did not raise
these arguments below, we decline to address them on review.
Yarbrough v. Montoya-Paez, 214 Ariz. 1, n.6, 147 P.3d 755, 762 n.6
(App. 2006) (“Generally, issues not raised or urged below or on
review are deemed waived.”).
¶13 Sierra Tucson further suggests that claims based on the
Consumer Fraud Act (CFA), unlike the wrongful death claims, are
“wholly derivative” of claims Richard could have brought and, thus,
are governed by the venue selection provision. In support, Sierra
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SIERRA TUCSON, INC. v. BERGIN
Opinion of the Court
Tucson cites Estate of DeCamacho for the proposition that “claims that
are derivative of a decedent’s rights are subject to the arbitration
agreement signed by the decedent.” 234 Ariz. 18, ¶ 25, 316 P.3d at
614.
¶14 In that case, we addressed whether an action brought
by the decedent’s estate pursuant to the Adult Protective Services
Act (APSA) was subject to an arbitration provision agreed to by the
decedent. Id. ¶¶ 3, 5, 13, 19. The action was derivative of the
decedent’s rights because, unlike claims brought pursuant to the
wrongful death statute, the APSA expressly provided that claims
survived the decedent. Id. ¶¶ 21-23. We concluded, then, that
derivative claims were subject to the arbitration provision.
Id. ¶¶ 24-27.
¶15 A claim based on the CFA, however, may be brought by
the statutory beneficiaries in a wrongful death action, as this case
was. 3 See Maurer v. Cerkvenik-Anderson Travel, Inc., 181 Ariz. 294,
295, 297-98, 890 P.2d 69, 70, 72-73 (App. 1994) (CFA claim brought as
wrongful death action permits recovery when “damage resulting
from the alleged violation is death”); see also A.R.S. §§ 12-611
through 12-613. That action permits recovery by the statutory
beneficiaries “[w]hen death of a person is caused by wrongful act,
neglect or default, and the act, neglect or default is such as would, if
death had not ensued, have entitled the party injured to maintain an
action to recover damages.” § 12-611; see also § 12-612(A) (identifying
statutory beneficiaries). And, a claim of wrongful death by the
statutory beneficiaries is independent of any claim Richard could
have brought while alive; therefore, they are not bound by a venue
selection provision to which he agreed. Dueñas, 236 Ariz. 130, ¶ 27,
336 P.3d at 772; Estate of DeCamacho, 234 Ariz. 18, ¶ 27, 316 P.3d at
614.
¶16 Finally, Sierra Tucson urges us to adopt the reasoning
of “several other courts” purportedly finding forum selection
3To the extent the complaint could be read to allege a CFA
claim not based on wrongful death, the real party in interest has
avowed “[t]he entire case is a wrongful death action.”
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SIERRA TUCSON, INC. v. BERGIN
Opinion of the Court
clauses “can apply to non-signatories . . . if the claims are closely
related to the agreement.” Only two of the cases Sierra Tucson cites
discuss forum selection provisions in the context of a wrongful
death action. None convince us we should abandon the general rule
that only parties to a contract are bound by its terms. See Treadway,
40 Ariz. at 138, 10 P.2d at 375.
¶17 In the first case cited by Sierra Tucson, the New York
Supreme Court, Appellate Division, applied a forum selection
provision in a wrongful death action against the non-signatory
plaintiff. Couvertier v. Concourse Rehab. & Nursing, Inc., 117 N.Y.S.2d
772, 772-73 (N.Y. App. Div. 2014). But the court’s decision contains
no reasoning, citing three cases and summarily concluding that
“[t]his Court has upheld nonnegotiated forum selection clauses.” Id.
at 773. Of those cited cases, the sole case addressing a forum
selection provision involving a non-signatory determined only that
the provision could be enforced by a non-signatory with a sufficiently
close relationship with a signatory—there, a doctor retained by the
defendant to treat the injured individual. Bernstein v. Wysoki,
77 N.Y.S.2d 241, 250-51 (N.Y. App. Div. 2010). The other case cited
by Sierra Tucson that involves a wrongful death action does not
meaningfully analyze the issue, much less suggest that we should
evaluate that question based on the closeness of relationship
between the decedent and the plaintiffs. See Brenner v. Nat’l Outdoor
Leadership Sch., 20 F. Supp. 3d 709, 716 (D. Minn. 2014).
¶18 Two other cases cited by Sierra Tucson evaluate the
relationships of the non-signatory to a contracting party in
determining whether a forum selection provision can be enforced.
In Manetti-Farrow, Inc. v. Gucci Am., Inc., the Ninth Circuit Court of
Appeals determined a forum selection provision would apply to
non-signatories because the “alleged conduct of the non-parties is so
closely related to the contractual relationship.” 858 F.2d 509, 514 n.5
(9th Cir. 1988). But the court did not consider whether statutory
beneficiaries were bound by the forum selection provision. Rather,
the non-parties to the forum selection provision were co-defendants
in contractual relationships with the signatory defendant, had been
involved in the conduct leading to the litigation, and in one instance
had consented to and ratified the contract containing the forum
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Opinion of the Court
selection provision. See id. at 510-12. Similarly, in Net2Phone, Inc. v.
Superior Court, the California Court of Appeals enforced a forum
selection provision against a non-signatory because the non-
signatory was “‘closely related to the contractual relationship,’”
there, a statutory representative under California’s unfair
competition law “challenging certain contractual terms.”
135 Cal. Rptr. 2d 149, 150, 152-53 (Ct. App. 2003).
¶19 In this case, the statutory beneficiaries were not
involved in the relevant events and have no contractual relationship
with Richard, much less one that relates to the issues raised in this
litigation. Nor is the contract between Richard and Sierra Tucson
the core of the dispute. Thus, even if we agreed with Sierra Tucson
that Arizona should adopt a rule similar to that applied in the cited
cases, it plainly would not apply here.
Disposition
¶20 The respondent judge correctly determined that the
venue selection provision did not require that venue be moved to
Pinal County. We accept jurisdiction of that issue and deny relief.
We otherwise decline jurisdiction.
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