Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01737/USCOURTS-azd-2_08-cv-01737-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1331 Fed. Question

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Plaintiff has also filed two Motions for Leave to File Sur-Replies, arguing that

Defendants have made new arguments in their reply briefs. (Dkt. ## 92, 95.) The Court does

not find Plaintiff’s Sur-Replies helpful and therefore denies the motions.

WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

ROBERT A. MACKENZIE, trustee of the

bankruptcy estate of WAVO corporation,

Plaintiff, 

vs.

LEONARD, COLLINS AND

GILLESPIE, P.C., et al., 

Defendants. 

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No. CV-08-1737-PHX-GMS

ORDER

Pending before the Court is the Motion to Dismiss of Defendant Charleen M. Lucia

(Dkt. # 49) and the Motion to Dismiss of Defendants Lucia Stark Williamson LLP (“LSW”),

Curt and Julie Clausen, and Charleen M. Lucia (Dkt. # 50) which has been joined by all other

Defendants (Dkt. ## 52, 58, 68). For the following reasons, the Court denies both motions.1

BACKGROUND

In 2001, National Datacast, Inc. (“NDI”), a creditor of WAVO corporation, obtained

a judgment against WAVO. While trying to execute the judgment, NDI determined during

the course of discovery that the officers and directors of WAVO had engaged in fraud,

breach of fiduciary duty, mismanagement, and self-dealing. NDI and other creditors of

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WAVO filed an involuntary bankruptcy petition against WAVO to prevent the further

dissipation of WAVO’s assets and to recover transfers made from WAVO to third parties.

Patrick Abele was appointed as Trustee of the WAVO Bankruptcy Estate. As Trustee, Abele

retained Defendants Leonard, Collins, and Gillespie, P.C. (“LC&G”); Collins, May, Potenza,

Baran & Gillespie (“the Collins Firm”); Treon, Strick, Lucia, and Aguirre, P.A. (“TSL&A”);

and Treon, Whitten, and Berry, PLLC (“TW&B”) as counsel for various actions in

connection with the Bankruptcy Estate (collectively “The Law Firm Defendants”).

On October 3, 2003, TSL&A, TW&B, attorneys Anthony R. Lucia, Curt W. Clausen

and Christopher J. Berry, together with Thomas S. Moring, an associate of TW&B, filed a

complaint on behalf of Abele against the officers of WAVO, their respective wives, and

Plymouth DeWitt, L.L.C., a Nevada corporation owned by David Deeds, a former officer of

WAVO (“the Deeds Litigation”). In August 2004, Abele retained Defendants Lucia Stark

Williamson LLP (“the Lucia Firm”) and Whitten Berry, PLLC (“the Berry Firm”) as special

counsel to substitute for the firms of TSL&A and TW&B, respectively. However, the Deeds

Litigation apparently did not progress actively.

On May 24, 2005, Anthony R. Lucia passed away. Plaintiff alleges that without

Lucia, various Defendants were not competent to handle the Deeds Litigation. Plaintiff

alleges that for more than seven months following Lucia’s death, Defendants did nothing to

advance the estate’s claims or suggest alternate counsel. On January 26, 2006, the District

Court found, among other things, that the Law Firm Defendants and their attorneys failed to

prosecute the Deeds Litigation and the court dismissed the case with prejudice against Abele.

Following the dismissal of the Deeds Litigation, Abele resigned as Trustee and Plaintiff

Robert A. Mackenzie was appointed Substitute Trustee. On April 24, 2008, the Ninth Circuit

affirmed the dismissal by the District Court.

In September 2008, Plaintiff filed a complaint against the Law Firm Defendants,

Daniel P. Collins, Curt W. Clausen, Christopher J. Berry, and Charleen M. Lucia as personal

representative of Anthony R. Lucia (“the Attorney Defendants”), and Roseanne K. Collins,

Julie Clausen, Jean Ann Berry and Charleen M. Lucia in an individual capacity (“the Spouse

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Defendants”). Defendant Charleen M. Lucia and Defendants LSW, Curt W. Clausen, and

Lucia filed Motions to Dismiss (Dkt. ## 49, 50).

DISCUSSION

I. Motion to Dismiss Suit Against Charleen M. Lucia in her Capacity as Personal

Representative of the Estate of Anthony R. Lucia and as an Individual

Charleen M. Lucia argues: (1) that claims against her as the representative of the

Estate of Anthony Lucia are time-barred, and (2) that claims cannot be brought against her

as an individual and former spouse of Anthony Lucia because the marital community was

dissolved by death. (Dkt. # 49 at 3.)

A. Statute of Limitations

Defendant argues that all claims brought against her as the personal representative of

Mr. Lucia’s Estate are barred by the statute of limitations because they were not filed within

four months of April 24, 2008, the date the Ninth Circuit issued its decision affirming the

termination of the Deeds Litigation. Plaintiff responds by arguing that the statute of

limitations did not accrue until July 23, 2008, ninety days after the Ninth Circuit’s judgment

and the date the opportunity to petition for a writ of certiorari to the United States Supreme

Court expired. See Sup. Ct. R. 13. The parties agree that the relevant statute of limitations

is found in Arizona Revised Statutes section 14-3803. That section states that in these

circumstances, any claim against a decedent’s estate must be made within “four months after

[the claim] arises.” Ariz. Rev. Stat. § 14-3803(C)(2).

When a claim for legal malpractice arises during the course of litigation is governed

by the two Amfac cases. In Amfac Distribution Corp. v. Miller, 138 Ariz. 155, 673 P.2d 795

(Ct. App.1983) (Amfac I), the Arizona Court of Appeals held that “a cause of action for legal

malpractice occurring in the course of litigation accrues when the plaintiff knew or should

reasonably have known of the malpractice and when the plaintiff’s damages are certain and

not contingent upon the outcome of an appeal.” Id. at 156, 673 P.2d at 796. The Arizona

Supreme Court then affirmed and supplemented that holding, stating that “in legal

malpractice cases, the injury or damaging effect on the unsuccessful party is not ascertainable

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The Amfac II court uses the phrase “failure to appeal” in referring to the finality of

the appellate process. However, appeals made to the Supreme Court of the United States (the

highest-level court at issue here) are discretionary and require a petition for a writ of

certiorari. Thus, in this case a more accurate statement of the rule would be that “the injury

or damaging effect on the unsuccessful party is not ascertainable until the appellate process

is completed or is waived by a failure to petition for a writ of certiorari.”

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until the appellate process is completed or is waived by a failure to appeal.” Amfac

Distribution Corp. v. Miller, 138 Ariz. 152, 673 P.2d 792 (1983) (Amfac II).2

In this case, the last day on which a petition for writ of certiorari could have been filed

with the Supreme Court of the United States was July 23, 2008. See Sup. Ct. R. 13. That is

the date on which “the appellate process [was] completed or waived by a failure to appeal,”

id., and thus the date after which the claim accrued. Before that date, damages were still

“contingent on the outcome of the appeal,” Amfac I, 138 Ariz. at 156, 673 P.2d at 796,

because Defendants could have elected to file a petition for writ of certiorari with the

Supreme Court of the United States

In her reply brief, Defendant argues for the first time that Joel Erik Thompson, Ltd.

v. Holder, 192 Ariz. 348, 965 P.2d 82 (Ct. App. 1998), dictates that the appellate process was

completed not on April 24, 2008, the date of the court of appeals’ decision, but rather on May

20, 2008, the day the court issued its mandate. We need not consider this argument since it

was first raised in a reply brief. Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007).

Nevertheless, this case is distinguishable from Joel. In Joel, the Arizona Court of Appeals

held “that the mandate establishes the completion of the appellate process.” 142 Ariz. at 349,

965 P.2d at 83. However, the Joel court was specifically addressing the question: “when is

the appellate process completed in an appeal finally resolved by the court of appeals without

a petition for supreme court review?” Id. at 348-49, 965 P.2d at 82-83 (emphasis added).

Moreover, the mandate in Joel was issued after the deadline for appeal to the Arizona

Supreme Court had passed. Id. at 350, 965 P.2d at 84. The mandate was the final judgment

in the case and it brought the “appeal to a formal, final end.” Id. at 349, 965 P.2d at 83.

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In this case, by contrast, the Ninth Circuit’s mandate was issued before Plaintiff’s

opportunity to petition for a writ of certiorari to the Supreme Court expired. Had Plaintiff

filed the writ of certiorari with the Supreme Court, and had the case been accepted, damages

would have remained “contingent on the outcome of the appeal.” Amfac I, 138 Ariz. at 156,

673 P.2d at 796. Thus, the appellate process was not “completed or . . . waived by a failure

to appeal” until Plaintiff’s opportunity to file a writ of certiorari with the Supreme Court

expired on July 23, 2008. See Amfac II, 138 Ariz. at 154, 673 P.2d at 794. Plaintiff’s

Complaint against Defendant as representative of Anthony R. Lucia’s estate therefore was

timely filed under Arizona law.

B. Community Property

Defendant next argues that all claims brought against her individually as Anthony R.

Lucia’s former spouse must be dismissed because the Supreme Court of Arizona has held

that “a community is dissolved by death.” Tway v. Payne, 55 Ariz. 343, 344, 101 P.2d 455,

456 (1940). Plaintiff responds by arguing that even though the marital community was

dissolved upon Mr. Lucia’s death, Defendant still can be liable for damages because the legal

malpractice for which Mr. Lucia was allegedly responsible occurred during his life while he

was engaged in the practice of law for the benefit of the marital community.

In Arizona, a spouse can be liable for a debt incurred by a decedent spouse while

furthering a community purpose. See Samaritan Health Sys. v. Caldwell, 191 Ariz. 479, 957

P.2d 1373 (Ct. App. 1998). In Samaritan, the Arizona Court of Appeals held that a creditor

could proceed against the spouse of a decedent for an obligation incurred by the community

of which the spouse was a partner. Id. at 484, 957 P.2d at 1378. The court stated that “even

though the community no longer exists . . . its obligations become the subjects of joint

liability of the former spouses.” Id. at 483, 957 P.2d at 1377. It is clear from Samaritan that

Defendant can be liable for damages even after the community was dissolved by Lucia’s

death.

In her reply brief, Defendant argues that the Arizona community property statutes

distinguish between debts contracted by a spouse and tort liability incurred by a spouse prior

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to death. (Dkt. # 83 at 3.) In support of that argument, Defendant cites Arizona Revised

Statutes sections 25-214 and 25-215. However, these statutes do not suggest that contract

debts survive the death of a member of the community while obligations otherwise incurred

by a community member do not. Section 25-215(D), in fact, specifies that the community

is responsible not only for debts but for obligations that arise from one spouse “otherwise

act[ing] for the benefit of the community.” Ariz. Rev. Stat. § 25-215(D).

The only case on which Defendant relies is Peagler v. Phoenix Newspapers, Inc., 26

Ariz. App. 274, 547 P.2d 1074 (Ct. App. 1976), reversed on other grounds by 114 Ariz. 309,

560 P.2d 1216 (1977). In Peagler, the Arizona Court of Appeals held that a surviving spouse

could not be sued for the community liability of a tortfeasor who committed libel. Id. at 283-

85, 547 P.2d at 1083-85. However, the court so held because the Arizona statutes exclude

libel as a surviving tort. See id. (citing Ariz. Rev. Stat. § 14-3110 (“Every cause of action,

except a cause of action for . . . libel [among others] . . . shall survive the death of the person

entitled thereto or liable therefor . . . .”)). In this case, the relevant tort is not libel, but legal

malpractice, which is not excluded as a surviving tort. See Ariz. Rev. Stat. § 14-3110.

Peagler did distinguish between contractual and tort liability for community debts,

but only in the context of discussing the pleading and proof required to assert community

liability. See 26 Ariz. App. at 284-85, 547 P.2d at 1084-85. The Court explained that when

suing for debts or contractual obligations, the plaintiff need not plead the facts and

circumstances showing the liability of the community property, but that when liability is

asserted based upon a tort committed by one of the spouses, there is no presumption of

community liability and such liability must be pleaded and proved. Id. As Peagler itself

points out, the court was not holding that all community liability for one spouse’s torts fails

to survive the death of that spouse. Id. at 283, 547 P.2d at 1083 (“[C]ommunity tort liability

may survive the death of the culpable member of that community . . . .”). The Arizona

Supreme Court has long-recognized that it can. See Mortensen v. Knight, 81 Ariz. 325, 305

P.2d 463 (1956) (permitting recovery from the community property of a surviving husband

for the negligence of his spouse in operating a community automobile).

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Here, Plaintiff has pleaded community liability for attorney Lucia’s legal malpractice.

Plaintiff alleges that Anthony R. Lucia committed legal malpractice while practicing law and

earning income for the benefit of the community. (Dkt. # 5 at 16.) Thus, Plaintiff has done

all that he needs to do to survive a motion to dismiss under Peagler. Lucia’s motion to

dismiss is therefore denied in this respect.

II. Motion to Dismiss for Legal Malpractice and Breach of Fiduciary Duty for

Failing to Sue Various Third Parties

Defendants argue that all claims against them for failing to bring claims against

“various other third parties” are barred by the applicable statute of limitations and must be

dismissed. (Dkt. # 50 at 3-4.) Plaintiff argues that the Complaint was timely filed because

Arizona has adopted, in all but name, the “continuous representation” rule. (Dkt. # 71 at 6-

8.) The Court rejects that argument. The “continuous representation” rule, as adopted by

New York and other states, “provides that the statute of limitations does not run during the

duration of the attorney-client relationship.” Amfac I, 138 Ariz. at 158 n.5, 673 P.2d at 798

n.5 (citing Siegel v. Kranis, 288 N.Y.S.2d 831 (N.Y. App. Div. 1968)). In Amfac I, the

Arizona Court of Appeals was directly presented with an opportunity to adopt the

“continuous representation” rule. While the court stated that “the logic of the New York

cases gives direct support to our holding,” it did not adopt the “continuous representation”

rule. See Amfac I, 138 Ariz. at 158, 673 P.2d at 798 (“Although New York has adopted the

‘continuous representation’ rule, the logic of the New York cases gives direct support to our

holding.”) (emphasis added and footnote omitted). Instead, Amfac I held that the cause of

action “accrues when the plaintiff knew or should reasonably have known of the

malpractice.” Id. at 156, 673 P.2d at 796.

Even in the absence of Arizona’s adoption of the continuous representation rule,

however, dismissal of these claims nonetheless remains inappropriate. In the instant case,

Defendants failed to file claims against various third parties before November 29, 2003, two

years after the Order of Relief was entered by the Bankruptcy Court. (Dkt. # 5 at 6.) See

Ariz. Rev. Stat § 12-542 (stating that actions for injuries caused to another person shall be

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“commenced and prosecuted within two years after the cause of action accrues.”). Plaintiff

also failed to file any legal malpractice claims against Defendants before November 29,

2005, two years after that date. Regardless, what Abele “knew or reasonably should have

known” regarding potential claims against third parties is a question of fact that is not

appropriately decided on a motion to dismiss. It is plausible that the Estate had third party

claims of which Abele was unaware that might have prevented the Trustee’s claim for legal

malpractice against the Defendants from accruing. Therefore, Defendants’ motion to dismiss

is denied.

CONCLUSION

For the following reasons:

IT IS HEREBY ORDERED that the Motion to Dismiss of Charleen M. Lucia (Dkt.

# 49) is DENIED.

IT IS FURTHER ORDERED that the Motion to Dismiss of LSW, the Clausen

Defendants, and Charleen M. Lucia (Dkt. # 50) is DENIED.

IT IS FURTHER ORDERED that the Motions for Leave to File Sur-Replies (Dkt.

## 92, 95) are DENIED.

DATED this 31st day of July, 2009.

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