THE 

ARIZONA COURT OF APPEALS

DIVISION ONE

MARY MARSH, individually; ACHEN CONTRACTORS, LLC, an 

Arizona Limited Liability Company; ACHEN-GARDNER 

ENGINEERING, LLC, an Arizona Limited Liability Company; ARENA I 

LIMITED PARTNERSHIP, an Arizona limited partnership; JOHN 

ARENA, as Trustee of the Farm Managers, Inc., PSP&T; SYLVIA ARENA, 

individually; MERLE R. ARLEN, as Trustee of the Merle and Norma 

Arlen Family Trust Dated January 6, 1997; MERLE R. ARLEN, 

individually and as the owner and beneficiary of the Merle R. 

Arlen IRA Rollover; THOMAS BERLINGER and CATHERINE 

BERLINGER, husband and wife; BRUCE DENNIS BUCKLEY and ALIVIA 

VIRGINIA BUCKLEY, as Trustees of The Bruce Dennis Buckley and 

Alivia Virginia Buckley Revocable Living Trust Dated 

June 4, 1985; BRUCE D. BUCKLEY, individually and as the owner and 

beneficiary of the Bruce Dennis Buckley IRA; THOMAS A. BUSH and 

JOANNE M. BUSH, husband and wife; C&D TRADING, INC., a 

Nevada corporation; KAREN RUDEL CLEEVES-ESTABROOK, as Trustee 

of the Karen Rudel Cleeves-Estabrook Revocable Trust dated 

May 23, 2002; MELVIN L. DUNSWORTH JR., as Trustee of The 

Revocable Living Trust of Melvin Dunsworth, Jr. Dated December 23, 

2003; ENERGETICS, INC., an Arizona Corporation; JOHN 

GREENBANK, as trustee for Energetics, Inc. Restated Profit 

Sharing Plan; VALENTINE EYTAN, individually; DOUGLAS and 

SHARLENE GARDNER, individually and as husband and wife; 

DOUGLAS GARDNER, individually and as the owner and beneficiary of 

the Douglas D. Gardner IRA; SHARLENE GARDNER, individually and 

as the owner and beneficiary of the Sharlene K. Gardner IRA; WENDELL 

J. GARDNER, individually and as the owner and beneficiary of the 

Wendell J. Gardner IRA; WENDELL J. GARDNER and PAULINE M. 

GARDNER, as Trustees of the WPG Revocable Trust dated May 23, 

2002; GARDNER CAPITAL PARTNERS, LP, an Arizona limited 

partnership; ADAM GILBURNE and RONDA GILBURNE, husband and 

wife; ADAM GILBURNE, as Trustee for The Adam and Rhonda Gilburne 

Family Trust U/T/A Dated June 20, 2006; RONDA GILBURNE, as 

Trustee for The Adam Gilburne Irrevocable Trust For The Benefit Of 

Jillian Gilburne; GOLDEN LENDING GROUP, LLC, an Arizona limited 
2

liability company, f/k/a PENNY HARDAWAY INVESTMENTS, LLC; 

BONNIE GREENBANK, individually and as the owner and beneficiary of 

the Bonnie Greenbank IRA; BONNIE GREENBANK, as Trustee for Bonnie 

L. Greenbank Family Trust; THELMA A. GROSS, SUSAN L. ARENSON 

and MARC AMDUR GROSS as co-trustees of the Thelma Gross Trust 

dated March 11, 2014; THELMA A. GROSS, SUSAN L. ARENSON, and 

MARC AMDUR GROSS as co-trustees of the T & J Gross Trust; THELMA 

GROSS, individually; DELERY GUILLORY and KATHY GUILLORY, 

husband and wife; DELERY GUILLORY, individually; KATHY 

GUILLORY, individually and as the owner and beneficiary of the Kathy 

Guillory IRA account for which the Colonial Trust Company is 

Custodian and the Kathy Guillory IRA for which the First Trust of 

Onaga is Custodian; INVESTOR CLOUT, an Arizona Partnership; 

JSM FAMILY VENTURES, LLLP, an Arizona Limited Liability Limited 

Partnership; ALI G. KHAN, as Custodian for J.S. Khan; LISA KHAN, as 

Custodian for A.E. Khan, under the Uniform Gift to Minors Act; LISA 

KHAN, as Custodian for A.N. Khan, under the Uniform Gift to Minors 

Act; LISA KHAN, as Custodian for T.M. Khan, under the Uniform Gift to 

Minors Act; ALI KHAN and LISA KHAN, husband and wife; EVALINA 

LAYNE, as Trustee of the Wesley R. and Evalina O. Layne Family Trust; 

EVALINA LAYNE, individually and as the owner and beneficiary of the 

Evalina Layne IRA; LEAH L. LEWIS, as Trustee of the Leah L. Lewis 

Trust Dated February 23, 2000; LEAH L. LEWIS, individually and 

as the owner and Beneficiary of the Leah L. Lewis IRA; WILLIAM 

C. LEWIS, as Trustee of the William C. Lewis Trust Dated August 1, 1989, 

as amended; BARBARA LUKAVSKY, individually; LYNTON R. LESLIE; 

as Trustee of the Lynton R. Leslie and Rae D. Leslie Revocable Trust; 

STEPHEN MAYNE and LINDA MAYNE, husband and wife; MAYNE 

AND COMPANY DEFINED BENEFIT PENSION PLAN; DONNA J. 

MCGREGOR, individually; CHUCK NIDAY, as Trustee of the Ross Verne 

Family Trust, a Revocable Living Trust, dated January 18, 2007, and any 

supplements thereto; JEROME NOSANCHUK, individually; JOSHUA 

NOSANCHUK and PATRICIA L. MURPHY, husband and wife; SARA 

NOSANCHUK, individually; RICHARD J. PRINZ and CATHERINE T. 

PRINZ, husband and wife; YVONNE QUINTAL, individually; LINDA 

REEVES, as Trustee for The Linda Reeves Trust; RMA RENTAL AND 

LEASING LLP, an Arizona limited liability partnership; ROBERT 

RODEN, as Trustee of the Robert G. Roden Living Trust; MARCELO 

ROMANO, individually and as the owner and beneficiary of the 

Marcelo A. Romano IRA; THE MARCELO ROMANO AND JEANETTE 

ROMANO FAMILY LIMITED LIABILITY PARTNERSHIP, NUMBER 

ONE, an Arizona limited liability partnership; DAVID ROSENTHAL, 

individually; MORTON M. SCULT, as Trustee of the Morton M. 
3

Scult, PC Money Purchase Pension Plan; SUMAR INVESTMENT 

COMPANY, an Arizona general partnership; ROBERT L. TAYLOR and 

BONNIE TAYLOR, as Trustees of The Taylor Loving Trust; ROBERT L.

TAYLOR, as Trustee of the Robert L. Taylor, DDS, PC Profit Sharing Plan 

& Trust; RICHARD K. UNDERWOOD, as Trustee of the 

Richard K. Underwood Revocable Trust Dated October 31, 1995, as 

Amended; JOHN VINSON and TAEKO VINSON, as Trustees for the John 

Charles Vinson Family Trust, dated December 3, 1984, as amended; 

DAVID WACKNOV, individually and as the owner and beneficiary of the 

David Wacknov IRA and the David Wacknov Roth IRA; CHRISTINE 

WACKNOV, individually and as the owner and beneficiary of the 

Christine Wacknov IRA and the Christine Wacknov Roth IRA; DON 

WATKINS and CHRISTINE WACKNOV, individually and as joint 

tenants with right of survivorship; LEANORE WIRTZ, as Trustee for The 

Leanore Wirtz Living Trust Dated February 3, 1993; WMS FIXED 

INCOME FUND I, LLC, an Arizona limited liability company; WPG 

FAMILY LIMITED PARTNERSHIP, a Colorado Limited Partnership; 

DIANA WYKES, individually; DAVID C. ZANECKI and JODY J. 

ZANECKI, husband and wife and as joint tenants with right of 

survivorship; DAVID C. ZANECKI, individually and as owner and 

beneficiary of the David C. Zanecki IRA; CLARA B. ZANIECKI, an 

individual, by and through her attorney-in-fact, David C. Zanecki,

Plaintiffs/Appellants, 

v.

ASHLEY COLES, individually and as Trustee of the Ashley Coles 

Family Trust; FRANCINE L. COLES, individually and as conservator of 

Z.A. Coles and S.B. Coles, minors; and HALEY BROOKE COLES; 

FRANCINE L. COLES, as Trustee of the Coles Children’s Irrevocable

Trust, U/T/A dated March 3, 2010, an Arizona Trust, for the benefit of 

Z.A. Coles; FRANCINE L. COLES, as Trustee of the Coles Children’s 

Irrevocable Trust, U/T/A dated March 3, 2010, an Arizona Trust, for the 

benefit of Haley B. Coles; FRANCINE L. COLES, as Trustee of the Coles 

Children’s Irrevocable Trust, U/T/A dated March 3, 2010, an Arizona 

Trust, for the benefit of Samuel B. Coles; FRANCINE L. COLES, as Trustee 

of the FLC Revocable Trust dated July 11, 2003, an Arizona Trust, as 

amended; FHZS FAMILY LLC, an Arizona limited liability company; DG 

RESORTS, LLC, an Arizona limited liability company; and NLV 

HOLDINGS, LLC, an Arizona limited liability company, 

Defendants/Appellees. 
4

No. 1 CA-CV 14-0407

Appeal from the Superior Court in Maricopa County 

No. CV2010-097769 

The Honorable Arthur T. Anderson, Judge 

AFFIRMED

COUNSEL 

Smith LC, Phoenix 

By Steven C. Smith, Richard R. Thomas, Stephen C. Biggs 

Co-Counsel for Plaintiffs/Appellants 

The Spence Law Firm, LLC, Jackson, Wyoming 

By G. Bryan Ulmer, III, Mel C. Orchard, III 

Co-Counsel (Pro Hac Vice) for Plaintiffs/Appellants 

Warner Angle Hallam Jackson & Formanek, PLC, Phoenix 

By Jerome K. Elwell, J. Brent Welker, Phillip B. Visnansky 

Counsel for Defendants/Appellees Francine L. Coles; Haley Brooke Coles; FHZS 

Family LLC; DG Resorts, LCC; and NLV Holdings, LLC 

Kercsmar & Feltus PLLC, Scottsdale 

By Todd Feltus, Julia A. Guinane 

Counsel for Defendant/Appellee Ashley Coles

OPINION 

Judge Patricia K. Norris delivered the opinion of the Court, in which 

Presiding Judge Donn Kessler and Judge Andrew W. Gould joined. 

N O R R I S, Judge: 

¶1 The issue in this appeal is whether investors may obtain a 

constructive trust on life insurance proceeds received by the policy 

beneficiaries after the death of the insured when the insured allegedly 

acquired the insurance policies with funds wrongfully obtained through an 
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

5

illegal enterprise and a pattern of unlawful activity under state racketeering 

statutes. We hold a provision in Arizona’s racketeering statute protecting 

innocent third parties bars the constructive trust requested by the investors. 

We therefore affirm the superior court’s judgment in favor of the 

beneficiaries. 

FACTS AND PROCEDURAL BACKGROUND1

¶2 From at least 2003 until his death in 2008, Scott Coles 

participated in an illegal enterprise that, through the unlawful sale of realestate backed securities and money laundering, wrongfully deprived the 

plaintiff/appellant investors (“Investors”) of more than $127 million. The 

Investors alleged Scott Coles’ “confederates” in this illegal enterprise 

included Greenberg Traurig, LLP, a law firm, and an attorney employed by 

the firm (“Lawyer Defendants”); Mayer Hoffman McCann, P.C., an 

accounting and financial auditing firm, and associated entities (“Auditor 

Defendants”); and Hirsch & Shah, LLC, an accounting firm. According to 

the Investors, Scott Coles and these “confederates” (collectively, unless 

specified by name, the “Other Defendants”) comprised “an association-infact, although not a legal entity.”

¶3 Scott Coles used proceeds from the illegal enterprise to 

acquire and maintain life insurance policies that, upon his death, paid out 

“more than $40 [million]” to his widow, Ashley Coles; his ex-wife, Francine 

Coles; one of his daughters; and a trust for the benefit of his children, the 

Coles Children’s Irrevocable Trust. Francine Coles formed three limited 

liability companies to acquire assets with the life insurance proceeds she 

received, and also transferred $2,520,000 of the proceeds received by the 

Children’s Irrevocable Trust to her personal trust, the FLC Revocable Trust. 

We refer to the beneficiaries of Scott Coles’ life insurance policies and 

Francine Coles’ limited liability companies and personal trust as the “Coles

Defendants,” and we refer to the life insurance proceeds received by the 

Coles Defendants and the assets the Coles Defendants acquired with them, 

collectively, as the “life insurance proceeds.”

 

1Because the Investors appeal from a dismissal for failure to 

state a claim, see generally Ariz. R. Civ. P. 12(b)(6), we “describe the facts as 

alleged in the complaint and assume them to be true for purposes of our 

review.” Sullivan v. Pulte Home Corp., 232 Ariz. 344, 345, ¶ 2, 306 P.3d 1, 2 

(2013). 
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

6

¶4 The Investors sued the Other Defendants, alleging, inter alia, 

a civil racketeering (“RICO”) claim under Arizona Revised Statutes 

(“A.R.S.”) sections 13-2312 (illegal control of an enterprise), -2314.04

(providing private cause of action to recover damages arising from 

racketeering activity), and -2317 (money laundering) (2010 & Supp. 2014).2

The Investors did not allege any of the Coles Defendants knew of, or

participated in the alleged wrongful acts. Indeed, the Investors specifically 

alleged they did not “believe” any of the Coles Defendants “participated in 

the illegal enterprise.” But, because the life insurance proceeds were 

allegedly proceeds of the illegal enterprise, the Investors asked the superior 

court to impose a constructive trust on the life insurance proceeds pursuant 

to A.R.S. § 13-2314.04(D)(6) (2010). Under that subsection, “[a]fter a 

determination of liability” on the underlying RICO claim, “[a] person or 

enterprise that acquires any property through an offense included in the 

definition of racketeering” shall act as “an involuntary trustee” and “hold 

the property, its proceeds and its fruits in constructive trust for the benefit 

of persons entitled to remedies under” the other substantive provisions of 

A.R.S. § 13-2314.04. 

¶5 The Coles Defendants and the Other Defendants moved to 

dismiss the Investors’ complaint for failure to state a claim under Arizona 

Rule of Civil Procedure 12(b)(6). As relevant here, the Coles Defendants 

argued A.R.S. § 13-2314.04(L), a provision in the RICO statute that protects 

certain parties from being held “liable in damages or for other relief,”

barred the court from imposing a constructive trust on the life insurance 

proceeds.3 

¶6 Before the superior court ruled on the motions, the Lawyer 

Defendants settled with the Investors. Accordingly, the superior court 

entered a stipulated order dismissing all claims against the Lawyer 

 

2Although the Arizona Legislature has amended certain 

statutes cited in this decision after the events giving rise to this appeal, these 

revisions are immaterial to our resolution of this matter. Thus, we cite to 

the current version of these statutes. 

3The Coles Defendants also argued A.R.S. § 20-1131(A) (2010), 

a statute that protects “lawful beneficiar[ies]” of life insurance proceeds 

from claims asserted by a decedent’s creditors, barred a constructive trust. 

Because we resolve the case based on A.R.S. § 13-2314.04(L), we need not 

address A.R.S. § 20-1131(A). 
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

7

Defendants with prejudice and “irrevocably and unconditionally” 

releasing the Lawyer Defendants from “any and all [c]laims.”

¶7 The superior court subsequently dismissed the Investors’ 

RICO claims against Hirsch & Shah and the Auditor Defendants, but it 

denied their motions as to other claims raised by the Investors against them. 

The Investors then settled their remaining claims against Hirsch & Shah and 

the Auditor Defendants. 

¶8 “In light of the dismissal of” the RICO claims against Hirsch 

& Shah and the Auditor Defendants, the superior court granted the Coles 

Defendants’ motions to dismiss the Investors’ request for a constructive 

trust, apparently reasoning that without a viable RICO claim, the Investors 

had no basis for asking the superior court to impose a constructive trust on 

the life insurance proceeds pursuant to A.R.S. § 13-2314.04(D)(6). Thus, the 

superior court did not address the Coles Defendants’ argument A.R.S. § 13-

2314.04(L) barred the Investors’ request for a constructive trust on the life 

insurance proceeds. The superior court also awarded the Coles Defendants 

attorneys’ fees and costs under A.R.S. § 13-2314.04(A).

DISCUSSION 

¶9 The Investors argue that, notwithstanding the dismissal of 

their RICO claims against the Other Defendants, they could still pursue 

their request for a constructive trust on the life insurance proceeds received 

by the Coles Defendants. In response, the Coles Defendants argue that even 

if the Investors are correct, we should nevertheless affirm the judgment in 

their favor because, as they argued in the superior court, A.R.S. § 13-

2314.04(L) barred the Investors’ request for a constructive trust. Because 

the Coles Defendants’ argument presents issues of statutory interpretation, 

we exercise de novo review, and, as explained, we agree the statute barred 

the Investors’ request for a constructive trust.4 See Ariz. Citizens Clean 

Elections Comm’n v. Brain, 234 Ariz. 322, 325, ¶ 11, 322 P.3d 139, 142 (2014);

Republic Nat. Bank of N.Y. v. Pima Cty., 200 Ariz. 199, 204, ¶ 19, 25 P.3d 1, 6 

(App. 2001) (appellate court may affirm ruling on any issue raised below 

even if unaddressed by superior court). 

 

4We express no opinion whether, under A.R.S. § 13-

2314.04(D)(6), the superior court may impose a constructive trust on 

property in the hands of an innocent third party in a private RICO action in 

the absence of any party who was involved in the alleged wrongdoing. 
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

8

I. A.R.S. § 13-2314.04(L) Barred a Constructive Trust on the Life 

Insurance Proceeds 

¶10 A.R.S. § 13-2314.04(L), in pertinent part, provides: 

A natural person shall not be held liable in 

damages or for other relief pursuant to [A.R.S. § 

13-2314.04] based on the conduct of another 

unless the fact finder finds by a preponderance 

of the evidence that the natural person 

authorized, requested, commanded, ratified or 

recklessly tolerated the unlawful conduct of the 

other. An enterprise shall not be held liable in 

damages or for other relief pursuant to [A.R.S. § 

13-2314.04] based on the conduct of an agent, 

unless the fact finder finds by a preponderance 

of the evidence that a director or high 

managerial agent performed, authorized, 

requested, commanded, ratified or recklessly 

tolerated the unlawful conduct of the agent. 

The plain language of this subsection barred the Investors’ constructive 

trust claim. See Indus. Comm’n of Ariz. v. Old Republic Ins. Co., 223 Ariz. 75, 

77, ¶ 7, 219 P.3d 285, 287 (App. 2009) (“Where [statutory] language is plain 

and unambiguous, courts generally must follow the text as written.”). As 

discussed at supra ¶ 3, the Coles Defendants include natural persons and 

enterprises. See A.R.S. § 13-2301(D)(2) (Supp. 2014) (“’Enterprise’ means 

any corporation, partnership, association, labor union or other legal entity 

. . . .”). As such, they may be held “liable . . . for other relief,” only if “the 

fact finder finds by a preponderance of the evidence” they or their agent 

“authorized, requested, commanded, ratified or recklessly tolerated the 

unlawful conduct” of the illegal enterprise that deprived the Investors of 

their monies. See A.R.S. § 13-2314.04(L). As the Investors alleged no such 

conduct, a finder of fact could never make this finding. 

¶11 The Investors argue, nevertheless, that A.R.S. § 13-2314.04(L) 

is inapplicable because imposing a constructive trust on the life insurance 

proceeds does not amount to holding the Coles Defendants personally 

“liable for . . . other relief.” The Investors reason that because the right to 

a constructive trust “does not depend on the commission of any wrongful 

act by the transferee” of property, and “is instead a recognition of the 

plaintiff’s superior beneficial interest in the property,” a constructive trust 

“may be enforced against the third-party transferee without holding the 
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

9

transferee liable for the conduct of the person or enterprise who wrongfully 

acquired the property.” See Tucson Estates Residents Ass’n v. Mobilife Corp., 

26 Ariz. App. 83, 84–85, 546 P.2d 352, 353–54 (App. 1976) (“A constructive 

trust will arise whenever circumstance[s] make it inequitable that the 

property should be retained by the one who holds legal title.”); see also

Simonds v. Simonds, 58 A.D. 2d 305, 310–11 (N.Y. App. Div. 1977) (right to 

constructive trust does not depend upon allegation of wrongdoing against 

putative constructive trustee).

¶12 While this legal point may be correct in general, it ignores the 

statutory language at issue here—“liable for . . . other relief.” A.R.S. § 13-

2314.04(L). The word “liable” is defined to include “[r]esponsible or 

answerable in law; legally obligated.” Black’s Law Dictionary (10th ed. 

2014); accord The American Heritage Dictionary 1008 (4th ed. 2006).5 By 

requesting a constructive trust, the Investors sought to hold the Coles 

Defendants personally “[r]esponsible or answerable in law” for the life 

insurance proceeds. Black’s Law Dictionary (10th ed. 2014). And as we 

have recognized, a constructive trust is a form of “other relief.” See Murphy 

Farrell Dev., LLLP v. Sourant, 229 Ariz. 124, 130, ¶ 23, 272 P.3d 355, 361 (App. 

2012) (citing cases; “constructive trust is an equitable remedy”); see infra ¶ 

30. To agree with the Investors that A.R.S. § 13-2314.04(L) does not apply 

to their request for a constructive trust would require us to ignore the 

statute’s plain language, which provides, subject to exceptions inapplicable 

here, that an innocent natural person or enterprise “shall not be held liable 

in damages or for other relief” for the acts of another. (Emphasis added).

¶13 The Investors also argue we cannot construe A.R.S. § 13-

2314.04(L) to bar their request for a constructive trust on the life insurance 

proceeds because such a construction renders A.R.S. § 13-2314.04(D)(6)’s 

exception for a bona fide purchaser for value superfluous. In other words, 

according to the Investors, this construction of A.R.S. § 13-2314.04(L) would 

“swallow up” the narrower protections afforded by A.R.S. § 13-

2314.04(D)(6).6 See TDB Tucson Grp., L.L.C. v. City of Tucson, 228 Ariz. 120, 

 

5See Stout v. Taylor, 233 Ariz. 275, 278, ¶ 12, 311 P.3d 1088, 1091 

(App. 2013) (“To determine the ordinary meaning of a word, we may refer 

to established and widely used dictionaries.”). 

6In connection with this argument, the Investors contend that 

A.R.S. § 13-2314.04(D)(6) and (L) were enacted at the same time. Although 

the Investors are technically correct, their reading of the legislative history 

is too limited. As discussed below, see infra ¶¶ 17–18, the language of (D)(6) 
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

10

123, ¶ 9, 263 P.3d 669, 672 (App. 2011) (appellate court will not interpret a 

statute in a manner that renders any part “superfluous, void, insignificant, 

redundant or contradictory” (internal quotation marks omitted) (citation 

omitted)). Under A.R.S. § 13-2314.04(D)(6), a bona fide purchaser for value 

who is “reasonably without notice of the unlawful conduct and who is not 

knowingly taking part in an illegal transaction” cannot be required to serve 

as an involuntary trustee even if it possesses proceeds acquired through 

racketeering activity. Because a bona fide purchaser, by definition, does not 

have knowledge of the unlawful origins of the property it purchases, see 

generally First Am. Title Ins. Co. v. Action Acquisitions, LLC, 218 Ariz. 394, 398, 

¶ 12, 187 P.3d 1107, 1111 (2008) (“The term ‘bona fide purchaser’ is often 

used to refer to one who purchases property for value and without 

notice.”), a bona fide purchaser could never have “authorized, requested, 

commanded, ratified or recklessly tolerated the unlawful conduct” of the 

wrongdoer; and, thus, a bona fide purchaser would always fall within the 

protection granted in A.R.S. § 13-2314.04(L) as well. 

¶14 We agree with the Investors that both A.R.S. § 13-2314.04(L) 

and (D)(6) protect a bona fide purchaser. An interpretation of a statute is 

not improper, though, merely because it acknowledges two subsections 

may sometimes overlap in their effect. See Conn. Nat. Bank v. Germain, 503 

U.S. 249, 253, 112 S. Ct. 1146, 1149, 117 L. Ed. 2d 391 (1992) (“Redundancies 

across statutes are not unusual events in drafting, and so long as there is no 

‘positive repugnancy’ between two laws, . . . a court must give effect to 

both.”); In re Estate of Nash, 220 S.W.3d 914, 917–18 (Tex. 2007) (“[T]here are 

times when redundancies are precisely what the Legislature intended[.]”). 

While both subsections protect a bona fide purchaser, their core functions 

and purposes are distinct. See Wyatt v. Wehmueller, 167 Ariz. 281, 284, 806 

P.2d 870, 873 (1991) (“historical background” and “spirit and purpose” of 

legislation may be considered in determining legislative intent). 

¶15 The Legislature enacted Arizona’s RICO statutes in 1978. 

1978 Ariz. Sess. Laws, ch. 204, § 2 (2d Reg. Sess.). As originally enacted, 

A.R.S. § 13-2314 governed both state and private civil RICO actions. Id. In 

1985, the Legislature enacted the language found in A.R.S. § 13-

2314.04(D)(6), then codified in A.R.S. § 13-2314(E), as part of its efforts to 

expand RICO remedies to allow recovery of the proceeds of unlawful 

 

first appeared in 1985 while subsection (L) did not appear until 1993, when 

the Legislature created a separate statute governing private RICO actions. 
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

11

activity. 1985 Ariz. Sess. Laws, ch. 329, § 3 (1st Reg. Sess.); Senate Fact Sheet, 

S.B. 1255, 37th Leg., 1st Reg. Sess. (Feb. 18, 1985).7 

¶16 In reaction to abuses by private plaintiffs seeking significant 

RICO remedies against defendants who had only oblique relationships to 

the underlying wrongdoing, in 1993 the Legislature enacted a separate 

statute to govern private RICO claims, A.R.S. § 13-2314.04. 1993 Ariz. Sess. 

Laws, ch. 257, §§ 2–3 (1st Reg. Sess.); see Minutes, Senate Committee on 

Commerce and Economic Development, S.B. 1197, February 3, 1993 

(statements of Senators Greene and Wright);8 Senate Fact Sheet, S.B. 1197, 

41st Leg., 1st Reg. Sess. (Feb. 1, 1993);9 Jennifer B. Wuamett, RICO Litigation; 

Damages, 26 Ariz. St. L.J. 293, 294–95 (1994). As enacted, A.R.S. § 13-2314.04

restricted both the scope of defendants potentially liable in a private RICO 

action, and the remedies available to the private RICO plaintiff. Senate Fact 

Sheet, S.B. 1197, 41st Leg., 1st Reg. Sess. (Feb. 1, 1993); Wuamett, supra, 26 

Ariz. St. L.J. at 296–97. While the Legislature retained the constructive trust 

remedy in both the new private RICO statute and the amended statute 

governing RICO actions by the State, compare A.R.S. § 13-2314(F) (2010) with 

A.R.S. § 13-2314.04(D)(6), it only included the language of A.R.S. § 13-

2314.04(L) in the private RICO statute—a step in accord with its intent to 

narrow the remedies available to private RICO plaintiffs. 1993 Ariz. Sess. 

Laws, ch. 257, §§ 2–3 (1st Reg. Sess.); Senate Fact Sheet, S.B. 1197, 41st Leg., 

1st Reg. Sess. (Feb. 1, 1993); Wuamett, supra, 26 Ariz. St. L.J. at 306. 

¶17 Consistent with this legislative history, A.R.S. § 13-

2314.04(D)(6) and (L) serve distinct purposes and protect distinct classes of 

persons. Section 13-2314.04(D)(6) allows RICO plaintiffs to recover the 

proceeds of unlawful activity unless the proceeds are in the hands of a bona 

 

7See State v. Payne, 223 Ariz. 555, 563 n.5, ¶ 25, 225 P.3d 1131, 

1139 n.5 (App. 2009) (“Senate fact sheets” are “relevant legislative history . 

. . reflective, though not dispositive, of legislative intent.” (citing State ex rel. 

Ariz. Dep't of Revenue v. Capitol Castings, Inc., 207 Ariz. 445, 449, ¶ 19, 88 P.3d 

159, 163 (2004))). 

8Hernandez-Gomez v. Leonardo, 185 Ariz. 509, 513, 917 P.2d 238, 

242 (1996) (“[W]hen the sponsors of a bill and the very committees 

considering that bill tell Congress and the public what they intended to 

accomplish with a specific provision of that bill, such expressed intentions 

can be useful to clarify any ambiguity in the meaning of the enacted 

legislation.”). 

9See Payne, 223 Ariz. at 563 n.5, ¶ 25, 225 P.3d at 1139 n.5.
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

12

fide purchaser for value without notice of the unlawful activity, whereas 

A.R.S. § 13-2314.04(L) protects individuals who did not “authorize[], 

request[], command[], ratif[y] or recklessly tolerate[] the unlawful conduct” 

of another from the reach of private RICO plaintiffs. Cf. Sonitrol of Maricopa 

Cty. v. City of Phoenix, 181 Ariz. 413, 420, 891 P.2d 880, 887 (App. 1994) (two 

subsections of city code that both had the effect of exempting charges for 

out-of-state transmissions from taxable income were not “merely 

duplicative” because they served distinct functions). Section 13-2314.04(L) 

is substantially broader than the bona fide purchaser exception in A.R.S. § 

13-2314.04(D)(6); A.R.S § 2314.04(L) protects even those with some 

knowledge of the unlawful activity of another, whereas A.R.S. § 13-

2314.04(D)(6) protects only bona fide purchasers who are completely 

ignorant of the unlawful activity. Sections 13-2314.04(D)(6) and (L) are 

neither repugnant nor merely redundant; both can be applied to accomplish 

their distinct purposes without creating contradiction or disharmony. See 

Midtown Med. Grp., Inc. v. State Farm Mut. Auto. Ins. Co., 220 Ariz. 341, 347, 

¶ 22, 206 P.3d 790, 796 (App. 2008) (“When construing statutes, we seek to 

harmonize them.”). 

¶18 Moreover, as discussed, A.R.S. § 13-2314.04(L) is clear on its 

face, and we cannot abandon its plain meaning to comply with an 

interpretative canon of statutory construction. See Sonitrol, 181 Ariz. at 420, 

891 P.2d at 887 (“general principle that statutes should be construed to 

avoid rendering any portion meaningless or superfluous” not applicable 

when language of statute is clear on its face); Bank Midwest, Minn., Iowa, 

N.A. v. Lipetzky, 674 N.W.2d 176, 181 (Minn. 2004) (applying plain meaning 

of statute although acknowledging to do so resulted in redundancy). 

¶19 For all of these reasons, we agree with the Coles Defendants—

A.R.S. § 13-2314.04(L) barred the Investors’ request for a constructive trust 

on the life insurance proceeds.

II. Attorneys’ Fees

¶20 The Investors argue the superior court should not have 

awarded the Coles Defendants attorneys’ fees and costs pursuant to A.R.S. 

§ 13-2314.04(A) because they did not bring a “racketeering claim” against 

them. According to the Investors, a “racketeering claim” only encompasses 

those claims against defendants alleged to have actually participated in an 

act of racketeering. Reviewing this question of law de novo, see supra ¶ 9,

we disagree. 
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

13

¶21 Section 13-2314.04(A) authorizes the superior court to award 

costs and reasonable attorneys’ fees to “the person against whom a 

racketeering claim has been asserted,” provided the person prevails. 

Section 13-2301(D)(4) (Supp. 2014) defines “[r]acketeering” as “any act . . . 

that is chargeable or indictable under the laws of the state or country in 

which the act occurred . . . that would be punishable by imprisonment for 

more than one year under the law of this state . . . and the act involves” any 

of the various enumerated offenses. A “claim” is defined as including 

“[t]he assertion of an existing right; any right to payment or to an equitable 

remedy, even if contingent or provisional.” Black’s Law Dictionary (10th 

ed. 2014). Thus, to be entitled to attorneys’ fees and costs under A.R.S. § 13-

2314.04(A), a party must be “the person against whom” the plaintiff has 

asserted a right to payment or to an equitable remedy related to an act that 

meets the statutory definition of “racketeering.” 

¶22 The Investors’ request for a constructive trust on the life 

insurance proceeds was a racketeering claim. A constructive trust “is a 

remedial device, used ‘to compel one who unfairly holds a property interest 

to convey that interest to another to whom it justly belongs.’” Cal X-Tra v. 

W.V.S.V. Holdings, L.L.C., 229 Ariz. 377, 409, ¶ 107, 276 P.3d 11, 43 (App. 

2012) (quoting Harmon v. Harmon, 126 Ariz. 242, 244, 613 P.2d 1298, 1300 

(App. 1980)). Thus, by asserting a right to a constructive trust on the life 

insurance proceeds, the Investors sought an equitable remedy against the 

Coles Defendants. Because their putative right to this remedy arose from 

racketeering activity, the Investors asserted a “racketeering claim” against 

the Coles Defendants. 

¶23 Moreover, adopting the Investors’ proposed construction 

would lead to the anomalous result of allowing prevailing defendants 

alleged to have actually participated in racketeering to recover their fees 

and costs while forcing prevailing defendants who were not involved in the 

alleged wrongdoing to bear their own fees and costs. See Summers Grp., Inc. 

v. Tempe Mech., LLC, 231 Ariz. 571, 574, ¶ 14, 299 P.3d 743, 746 (App. 2013) 

(“Statutes must be given a sensible construction that accomplishes the 

legislative intent and which avoids absurd results.”).
MARSH, et al. v. MAYER, et al. 

Opinion of the Court 

14

CONCLUSION 

¶24 For the foregoing reasons, we affirm the superior court’s 

judgment in favor of the Coles Defendants. Pursuant to A.R.S. § 13-

2314.04(A), we also award the Coles Defendants their taxable costs and 

reasonable attorneys’ fees on appeal, contingent upon their compliance 

with Arizona Rule of Civil Appellate Procedure 21.