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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

ENTERPRISING SOLUTIONS INC, Plaintiff/Appellant,

v.

STACY ELLIS, et al., Defendants/Appellees.

No. 1 CA-CV 17-0282

Appeal from the Superior Court in Maricopa County

No. CV2013-050340

The Honorable Susan M. Brnovich, Judge

AFFIRMED

COUNSEL

Gallagher & Kennedy, PA, Phoenix

By John P. Flynn

Counsel for Plaintiff/Appellant

Raymond Greer & McCarthy, PC, Scottsdale

By Daniel W. McCarthy, Michael J. Raymond 

Counsel for Defendants/Appellees

FILED 4-10-2018
ENTERPRISING v. ELLIS, et al.

Decision of the Court

2

MEMORANDUM DECISION

Presiding Judge Jon W. Thompson delivered the decision of the Court, in 

which Judge Peter B. Swann and Judge James P. Beene joined.

T H O M P S O N, Judge:

¶1 Enterprising Solutions, Inc. (ESI) appeals the superior court’s 

grant of summary judgment in favor of Stacy and Hal Ellis and Sunwest 

Insurance Ltd. (collectively, Defendants). Because ESI failed to present any 

evidence of damages, an essential element of its claims for negligence and 

negligent misrepresentation, we affirm. 

FACTUAL AND PROCEDURAL BACKGROUND

¶2 ESI is a professional employer organization that provides 

employee-related administrative services to employers. In that role, ESI 

administered an employee health benefits program called Sunwest 

Employer Services Group Medical and Dental Plan (the Plan), which was 

funded by ESI’s clients and their employees. During 2008 and 2009, the 

contribution levels that ESI established were insufficient to cover the Plan’s 

medical claims and expenses. After receiving numerous complaints from

Plan participants and providers, ESI terminated the Plan.

¶3 ESI had purchased a Staff Services Liability Policy and a 

Commercial Umbrella Policy (collectively, the Policies) from National 

Union Fire Insurance Company of Pittsburgh, Pennsylvania (National 

Union) through its insurance agent, Stacy Ellis, and her agency, Sunwest

Insurance Ltd. Unable to pay its claims, ESI tendered them to National 

Union, seeking defense and indemnity under the Policies. After National 

Union informed ESI that provisions in the Policies precluded coverage, ESI 

filed a lawsuit against National Union in superior court seeking a 

declaratory judgment to establish coverage. National Union removed the 

case to federal court. The district court issued an opinion determining that 

the Policies did not provide coverage:

[P]laintiff’s failure to properly calculate the contributions 

necessary to fully fund the [Plan] was, indeed, the exercise of 

discretion relating to plan management and administration 
ENTERPRISING v. ELLIS, et al.

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and was, consequently, subject to [Employee Retirement 

Income Security Act] fiduciary standards. Consequently, 

plaintiff’s conduct was excluded from coverage under the 

[Policies] . . . .

Enterprising Sols., Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 2:10-CV-01430-

PHX, 2012 WL 3962702 at *7 (D. Ariz. Sept. 11, 2012) (mem. decision) 

(citation omitted). 

¶4 While the federal litigation was pending, National Union paid 

the aggregate amount of $439,415.65 to settle claims submitted by ESI under 

a reservation of rights. After the district court issued its opinion, National 

Union’s counsel sent a letter to ESI’s counsel indicating that National Union 

“will no longer be paying any claims . . . relating to the failure of the [Plan].”

The letter further stated that “National Union reserves the right to seek 

reimbursement from ESI for all sums it has paid to defend and settle the 

claims previously asserted against ESI and [the Plan].” The record lacks 

any evidence, however, to suggest that National Union ever sought 

reimbursement.

¶5 Following the district court’s ruling in favor of National 

Union, ESI brought this action in superior court asserting claims for 

negligence and negligent misrepresentation, alleging that Defendants

failed to act with reasonable care in procuring the Policies and made false 

representations regarding coverage. After conducting discovery, 

Defendants moved for summary judgment arguing that “ESI cannot meet 

its burden of proof because it cannot establish that Stacy Ellis failed to 

exercise reasonable care or that it (ESI) sustained actual damages.”1

¶6 The superior court granted Defendants’ motion, and ESI 

timely appealed. We have jurisdiction pursuant to Arizona Revised 

Statutes (A.R.S.) section 12-2101(A)(1) (2018).

 

1 Defendants first moved for summary judgment arguing that ESI’s claims 

were time-barred. Although the superior court granted their motion, this 

court vacated the judgment concluding that “neither party has shown as a 

matter of law that ESI’s claims are, or are not, timely.” Enterprising Sols., 

Inc. v. Ellis, 1 CA-CV 14-0355, 2015 WL 4748020 at *7, ¶ 23 (Ariz. App. Aug. 

11, 2015) (mem. decision). In their second motion for summary judgment, 

Defendants again argued that ESI’s claims were time-barred. The superior 

court rejected their argument. 
ENTERPRISING v. ELLIS, et al.

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DISCUSSION

¶7 On appeal, ESI challenges the superior court’s determination

that “there was no triable issue of material fact as to whether ESI’s claims 

for professional negligence and negligent misrepresentation resulted in 

identified/disclosed damages.” We review de novo the court’s grant of 

summary judgment. See Sanders v. Alger, 242 Ariz. 246, 248, ¶ 2 (2017). In 

doing so, we view the evidence in the light most favorable to ESI, the nonmoving party. See id.

¶8 Summary judgment is appropriate when “there is no genuine 

dispute as to any material fact and the moving party is entitled to judgment 

as a matter of law.” Ariz. R. Civ. P. 56(a). The party moving for summary 

judgment must demonstrate the absence of a genuine issue of material fact

and “explain why summary judgment should be entered in its favor.” Orme 

School v. Reeves, 166 Ariz. 301, 310 (1990), as amended (Jan. 23, 2008) 

(citations omitted). If the moving party meets its initial burden by 

establishing that the non-moving party does not have enough evidence to 

carry its burden of proof at trial:

[T]he burden then shifts to the non-moving party to present 

sufficient evidence demonstrating the existence of a genuine 

factual dispute as to a material fact. . . . To defeat the motion, 

the non-moving party must call the court’s attention to 

evidence overlooked or ignored by the moving party or must 

explain why the motion should otherwise be denied. 

Id. at 119, ¶ 26 (citations omitted). Pursuant to Arizona Rule of Civil 

Procedure 56(e), a party opposing a motion for summary judgment “may 

not rely merely on allegations or denials of its own pleading,” but by 

affidavits or otherwise must “set forth specific facts showing a genuine 

issue for trial.” If the opposing party does not properly respond to the 

motion, then summary judgment “shall be entered against that party.” Id.

¶9 Here, Defendants moved for summary judgment arguing that 

“ESI’s failure to disclose evidence of the fact, cause, amount, and timing of 

its damages is fatal” to its claims for negligence and negligent 

misrepresentation. Specifically, Defendants argued that damages are an 

essential element of ESI’s claims, and that “ESI has disclosed no evidence 

with which it can establish its damages.” See Amfac Distrib. Corp. v. Miller, 

138 Ariz. 152, 153 (1983) (holding that a cause of action for negligence

requires that “actual injury or damages must be sustained”); KB Home 

Tucson, Inc. v. Charter Oak Fire Ins. Co., 236 Ariz. 326, 333 n.7, ¶ 30 (App. 
ENTERPRISING v. ELLIS, et al.

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2014) (explaining that a cause of action for negligent misrepresentation 

requires “resulting damage”).

¶10 In opposing Defendants’ motion, ESI addressed damages in 

one paragraph only, stating:

ESI has disclosed sufficient information to support its 

damages claim. Plaintiff’s Disclosure Statement, Response to 

Requests for Admission, Response to Separate Non-Uniform 

Interrogatories and Response to Request for Production of 

Documents fully support the claims and damages sought. 

Therein, Plaintiff disclosed 89 documents, while providing 

responses confirming a minimum of $439,000 in claims 

damages as National Union has retained a contractual/policy 

entitled to seek recovery of those funds paid out under a 

reservation of rights, subsequently withdrawn once [the 

district court] finally ruled that no coverage existed.

(Citation omitted.) In ESI’s controverting statement of facts, it stated 

simply: “Plaintiff’s disclosure and discovery responses identify the 

damages.”

¶11 Therefore, we turn our review to Section VII of ESI’s 

disclosure statement, which addressed damages by stating:

Given that this matter is in its infancy, Plaintiff has not fully 

calculated its damages. However, at a minimum, Plaintiff is 

entitled to recover its compensatory damages in excess of the 

minimum jurisdictional limits of this Court and according to 

proof. Plaintiff reserves the right to supplement this 

disclosure as discovery in this matter progresses.

Although the disclosure statement lists eighty-nine relevant documents, 

our review of the list provides no explanation of ESI’s claimed damages, 

and the documents themselves are not a part of the record. Moreover, in 

responding to Defendants’ motion for summary judgment, ESI failed to (1) 

identify which of the documents are relevant to damages and (2) place the 

relevant documents into the record. 

¶12 We next turn to ESI’s discovery responses. Defendants served 

ESI with an interrogatory expressly asking: “What are your damages?” ESI 

responded: “ESI incorporates Section VII of its Disclosure Statement and 

any supplements thereto.” On appeal, ESI again asserts that its discovery 

responses confirm a “minimum of $439,000 in claims damages” that 
ENTERPRISING v. ELLIS, et al.

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National Union “paid out under a reservation of rights.” The record, 

however, contains nothing to reflect that National Union has sought 

reimbursement.2

¶13 This fact was confirmed at oral argument on Defendants’ 

motion, when the superior court and ESI’s counsel had the following 

exchange:

THE COURT: . . . I agree with the defense that you never 

really responded to their claim that you haven’t produced any 

evidence of damages.

MR. FLYNN: $439,000 in documented damages with a claw 

back, a hang out from the insurer and the Department of 

Labor claim as it relates to the unpaid claims. That’s been 

identified in the course of litigation.

. . . 

If there’s some additional supplementation that counsel 

believes we need to provide, we certainly would be glad to. 

But there’s documentation evidencing the damages that were 

inflicted.

THE COURT: What is it? I still don’t understand. . . . I looked 

at your statement of facts and I didn’t see anything. So are you 

saying that National Union has come after your client for that 

$439,000?

MR. FLYNN: They have not yet. The Department of Labor is 

continuing to push and process. National Union has not filed 

any action. They have indicated that they are reserving their 

rights to do so. But they have not taken any action. There’s 

been no lawsuit filed.

 

2 On appeal, ESI also argues that the “Department of Labor continues to 

knock on ESI’s door,” but does not provide any citation to evidence in 

support of its argument. See ARCAP 13(a)(7)(A) (explaining that a brief 

must set forth arguments with “appropriate references to the portions of 

the record on which the appellant relies”). 
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¶14 In order to defeat Defendants’ motion for summary 

judgment, ESI had to call the superior court’s attention to “evidence 

overlooked or ignored” by Defendants regarding damages, which was an 

essential element of their claims. Doe v. Roe, 191 Ariz. 313, 323, ¶ 33 (1998). 

ESI could not “rely merely on allegations or denials of its own pleading,” 

but had to “set forth specific facts showing a genuine issue for trial.” Ariz. 

R. Civ. P. 56(e). “The opposing party must show that evidence is available 

which justifies going to trial.” Portonova v. Wilkinson, 128 Ariz. 501, 502 

(1981). 

¶15 In opposing Defendants’ motion, ESI failed to present any

evidence demonstrating damages. Accordingly, the court properly granted 

summary judgment in favor of Defendants under Rule 56(e). See id.

CONCLUSION

¶16 For the foregoing reasons, we affirm the entry of summary 

judgment. We award costs to Defendants upon compliance with Arizona 

Rule of Civil Appellate Procedure 21.