Court Opinion

ID: 4295877
Source: CourtListenerOpinion
Date Created: 2018-07-19 17:01:33.906442+00
Date Added: 2024-06-11T14:40:02.819205
License: Public Domain

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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

           WAYNE S. GOSHKARIAN, et al., Plaintiffs/Appellants,

                                         v.

           THOMAS P. MCGOVERN, et al., Defendants/Appellees.

                              No. 1 CA-CV 17-0357
                                FILED 7-19-2018

            Appeal from the Superior Court in Maricopa County
                           No. CV2013-016271
                    The Honorable Hugh Hegyi, Judge

                                   AFFIRMED

                                    COUNSEL

Barton Pyper P.L.L.C., Scottsdale
By Mark B. Pyper
Co-Counsel for Plaintiffs/Appellants

Owens Law P.L.C., Scottsdale
By Bradley T. Owens
Co-Counsel for Plaintiffs/Appellants

McGovern Law Offices, Phoenix
By Thomas P. McGovern
Co-Counsel for Defendants/Appellees
Grant Woods Law, Phoenix
By Grant Woods
Co-Counsel for Defendants/Appellees

Law Office of Scott E. Boehm, P.C., Phoenix
By Scott E. Boehm
Co-Counsel for Defendants/Appellees

Lloyd Law Group P.L.L.C., Payson
By Arthur E. Lloyd
Co-Counsel for Defendants/Appellees

                      MEMORANDUM DECISION

Presiding Judge Kenton D. Jones delivered the decision of the Court, in
which Judge Michael J. Brown and Judge Jon W. Thompson joined.

J O N E S, Judge:

¶1           Wayne and Melissa Goshkarian appeal from the trial court’s
final judgment granting summary judgment in favor of Appellees Thomas
and Carol McGovern and McGovern Law Office (collectively, MLO) in a
legal malpractice action. For the following reasons, we affirm.

                FACTS AND PROCEDURAL HISTORY

¶2            In 2003, the Goshkarians filed for Chapter 7 bankruptcy. In
2006, they signed 40% contingency fee agreements with six different law
firms (collectively, Contingency Attorneys) to pursue a claim for the
wrongful death of their infant son. The Goshkarians did not advise the
bankruptcy court of the wrongful death action or the contingency fee
agreements, and the bankruptcy closed in July 2006. In 2010, the
Goshkarians settled their wrongful death claim for $2.2 million. The
Goshkarians then petitioned to reopen the bankruptcy proceeding and
hired MLO to dispute the Contingency Attorneys’ claims to the settlement
proceeds.

¶3            Attorney Mark Harrison was hired as an expert on behalf of
the Goshkarians to opine as to the applicable disciplinary rules and “other
legal, ethical and equitable principles to the requests for an award of

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attorneys’ fees submitted by” the Contingency Attorneys. Harrison
prepared a preliminary report that was filed with the bankruptcy court in
April 2011. Harrison opined that the contingency fee agreements were
voidable because the Goshkarians had reported they did not know of the
fee-splitting arrangement among the Contingency Attorneys until they
received the settlement documents. Therefore, at most, the Contingency
Attorneys should be awarded a quantum meruit1 recovery of reasonable
attorneys’ fees. Harrison specifically reserved the right to modify the
opinions expressed in the preliminary report if additional information was
obtained.

¶4            After the preliminary report was filed, the Contingency
Attorneys filed a response and supplement containing affidavits from their
experts and additional documents. The experts opined the Contingency
Attorneys’ fee agreement complied with the Arizona Rules of Professional
Conduct and that the retention and association of the litigating lawyers was
disclosed and consented to by the Goshkarians. The experts’ opinions were
based in part upon a newly disclosed “fee split” acknowledgment signed
by both Goshkarians in October 2010, directly controverting statements
made in Harrison’s preliminary report.

¶5             At 12:16 p.m. on June 7, 2011, Thomas McGovern sent the
Goshkarians an e-mail confirming he had spoken with each of them about
pursuing a settlement rather than proceeding to a hearing on the fee
dispute. The email stated: “I write to confirm that I have authority from the
two of you to try and negotiate for reduced fees. . . . If they get to 100K
reduction, I am instructed to say yes.” Wayne Goshkarian responded at
12:26 p.m., writing: “I am in agreement to try to settle with these guys. Keep
both of us posted.” Melissa Goshkarian responded at 1:30 p.m., writing: “I
am still of the opinion that I am willing to settle.” Later that afternoon, the
Contingency Attorneys agreed to reduce their fees by $100,000, and the
matter settled with the parties bearing their own fees and costs.

¶6           After settlement, the Goshkarians filed a legal malpractice
suit against MLO, claiming it had made several false and misleading
statements to induce the settlement. MLO filed a motion for summary
judgment arguing all the statements identified in the Goshkarians’
complaint were true, and, regardless, could not have effected the

1       Quantum meruit literally means “as much as he deserves” and
contemplates recovery of a reasonable amount to avoid unjust enrichment.
Levine v. Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., 244 Ariz. 234, 236
n.2, ¶ 3 (App. 2018) (quotation omitted).

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Goshkarians’ decision to settle because they occurred after the Goshkarians
provided settlement authority. The trial court agreed the statements at
issue were either truthful statements of fact or opinions or estimates
supported by ample evidence, and also found the Goshkarians had failed
to prove any injury where the settlement netted them an additional
$100,000 and prevented the Goshkarians from incurring additional expert
witness fees or being assigned full responsibility for the Contingency
Attorneys’ legal fees. The Goshkarians timely appealed, and we have
jurisdiction pursuant to Arizona Revised Statutes §§ 12-120.21(A)(1)
and -2101(A)(1).

                               DISCUSSION

¶7             We review the trial court’s grant of summary judgment de
novo, viewing the facts and reasonable inferences in the light most favorable
to the party opposing the motion. Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12
(2003) (citing Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons
Local No. 395 Pension Tr. Fund, 201 Ariz. 474, 482, ¶ 13 (2002)). Summary
judgment is proper when no genuine issues of material fact exist and the
moving party is entitled to judgment as a matter of law. Orme Sch. v. Reeves,
166 Ariz. 301, 309 (1990); Ariz. R. Civ. P. 56(a). We will affirm the entry of
summary judgment if it is appropriate for any reason. See City of Tempe v.
Outdoor Sys., Inc., 201 Ariz. 106, 111, ¶ 14 (App. 2001) (citing Guo v. Maricopa
Cty. Med. Ctr., 196 Ariz. 11, 15, ¶ 16 (App. 1999)).

¶8            “As in any negligence action, a plaintiff in a legal malpractice
action must show the following basic elements: duty, breach of duty,
causation, and damages.” Phillips v. Clancy, 152 Ariz. 415, 418 (App. 1986)
(citation omitted). Accordingly, a plaintiff claiming legal malpractice must
establish:

       (1) the existence of an attorney-client relationship which
       imposes a duty on the attorney to exercise that degree of skill,
       care, and knowledge commonly exercised by members of the
       profession, (2) breach of that duty, (3) that such negligence
       was a proximate cause of resulting injury, and (4) the fact and
       extent of the injury.

Id.

¶9              “[O]pponents of a motion for summary judgment do not raise
a genuine issue of fact by merely stating in the record that such an issue
exists. Rather, they must show that competent evidence is available which
will justify a trial on the issue.” Flowers v. K-Mart Corp., 126 Ariz. 495, 499

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(App. 1980) (citing Cullison v. City of Peoria, 120 Ariz. 165, 168 (1978), and
Hensley v. A. J. Bayless Stores, Inc., 5 Ariz. App. 550, 552 (1967)). Affidavits
and testimony by plaintiffs, without supporting documentation, may be
found insufficient to overcome summary judgment. See Gilmore v. Cohen,
95 Ariz. 34, 36-37 (1963) (holding the plaintiffs’ testimony, without
supporting business and tax records, was insufficient to overcome
summary judgment); Desert Palm Surgical Grp., P.L.C. v. Petta, 236 Ariz. 568,
583, ¶ 42 (App. 2015) (concluding the plaintiff’s testimony and conclusory
statements regarding damages, “unsupported by any documentary
evidence,” were speculative). If a party fails to produce evidence to support
its claims, summary judgment is appropriate. See Ariz. R. Civ. P. 56(e).

¶10           The Goshkarians argue MLO committed legal malpractice by
making five false statements in e-mails that were intended to and did
induce the Goshkarians to settle the fee dispute. The statements identified
by the Goshkarians are that: (1) the Contingency Attorneys’ counsel was
seeking $50,000 in fees in connection with his services in the fee dispute;
(2) the bankruptcy court had recently “run off a string of rulings” adverse
to the Goshkarians’ position; (3) the bankruptcy court had granted the
Contingency Attorneys’ request to introduce three hundred exhibits at the
fee dispute hearing; (4) Harrison would charge an additional $50,000 to
prepare for and attend the fee dispute hearing; and (5) there were three
boxes of documents that had not yet been sent to Harrison to review.

I.     Post-Settlement Statements

¶11          As a matter of practicality, the Goshkarians could not have
been induced to settle by statements made after they had already given
MLO settlement authority. MLO presented evidence that the Goshkarians
provided settlement authority via telephone the morning of June 7, 2011.
At 12:16 p.m. that day, MLO e-mailed the Goshkarians, seeking
confirmation of its settlement authority; the Goshkarians responded and
confirmed at 12:26 and 1:30 p.m. MLO then sent another e-mail at 1:42 p.m.,
which contains statements (1) and (2) above. Additionally, statement (5)
was sent via email to the Goshkarians on June 8, 2011 — the day after the
settlement.

¶12          At summary judgment and again on appeal, the Goshkarians
argue they did not provide settlement authority before MLO’s email at 1:42
p.m. on June 7, 2011. The Goshkarians objected to MLO’s statement of facts
by stating:

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               GOSHKARIAN, et al. v. MCGOVERN, et al.
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      [Plaintiffs] dispute that [they] gave defendants any authority
      to settle the fee dispute as of June 7, 2011, as of 12:16 p.m.
      According to the emails contained in defendants’ Exhibit E, at
      12:26 p.m., plaintiff Wayne Goshkarian conveyed to
      defendants that he was “in agreement to try to settle” but had
      not authorized any specific settlement amount. Further,
      plaintiff Melissa Goshkarian sent defendants an email at 1:30
      p.m. stating that she still had a conflict with Wayne
      Goshkarian regarding the settlement proceeds. . . .

      Plaintiffs dispute that there was a “settlement decision” of
      any kind made prior to the false or misleading statements
      supporting plaintiffs’ complaint against defendants,
      including but not limited to the 1:42 p.m. email.

These statements were supported only by general declarations from Wayne
and Melissa Goshkarian stating they had read their response to MLO’s
statement of facts and “know that each statement of fact contained therein
[is] true.”

¶13           In reviewing the record de novo, even in the light most
favorable to the Goshkarians, we find that no jury could find the
Goshkarians had provided settlement authority any later than 1:30 p.m.2
MLO wrote to confirm the authority to settle for a $100,000 reduction, and
the Goshkarians responded affirmatively, in writing. The Goshkarians’
unsupported declarations are simply insufficient, in light of the
unambiguous language of these communications, to present a genuine
issue of material fact. See Flowers, 126 Ariz. at 499. Thus, none of the
allegedly false statements made after 1:30 could have induced the
Goshkarians to settle, and their claims of malpractice related to those
statements fail as a matter of law.

II.   True Statements

¶14          The Goshkarians allege that MLO’s statement that “[the
Contingency Attorneys] asked to ass [sic] 300 exhibits today. The
[Bankruptcy] Judge said yes and invited them to summarize,” was false and

2      Although the trial court, in its under-advisement ruling, stated “a
jury could conclude that all of the allegedly false statements were contained
in the 12:16 p.m. email from MLO to Plaintiffs, and that Plaintiffs did not
give settlement authorization to MLO until approximately 2:00 p.m.,” our
de novo review of the record reveals no support for the court’s conclusion.

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                GOSHKARIAN, et al. v. MCGOVERN, et al.
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misleading. The transcript from the June 7, 2011 bankruptcy court hearing
supports MLO’s statement. There, counsel for the Contingency Attorneys
stated: “we have over 300 exhibits that we’re listing,” and the bankruptcy
judge replied: “I would hope again that a lot of that could be covered by
summary.” Additionally, later that afternoon, counsel sent MLO an e-mail
with a list of 362 exhibits. Statement (3) is not false or misleading; therefore,
it cannot form the basis of a malpractice claim.

¶15            The Goshkarians also allege MLO falsely stated that Harrison
“would charge an additional $50,000 to prepare for and attend the June 13,
2011 hearing.” The Goshkarians did not identify where in the record this
statement can be found or otherwise explain when the statement was made.
Our independent review of the record reveals no such statement; however,
there are three e-mails that could possibly form the basis of statement (4).
First, in an email sent on June 7, 2011 at 12:16 p.m., MLO stated: “This week
alone will cost you a possible $80-100,000 worst case scenario: fees to
Carmel, McGroder, Shelley, McGovern and Harrison.” Within the same e-
mail MLO stated: “I will have to deliver boxes to Mark Harrison to get him
ready and his bill will grow considerably through Monday.” Second, at
6:32 p.m. the same day, MLO sent an e-mail confirming settlement and
added that “we avoided a $50,000 week ahead; a $50,000 claim by Mr.
Carmel.” Finally, the next day, MLO sent an email advising that “by
resolving the issue, we also avoided $50,000 over the next 6 days from your
fees and costs.”

¶16            The latter two emails are irrelevant because they occurred
after the settlement. See supra ¶ 11. The first e-mail indicates only that
Harrison’s bill would increase substantially if the case did not settle. The
record reflects that Harrison swore within a later affidavit that to properly
prepare to testify, he would need to “carefully review all of the exhibits [he]
had not seen, not summaries of those exhibits, and would then be required
to research any legal issues presented by [his] review of the exhibits.”
Harrison added that $50,000 was a reasonable estimate for his services were
he “required to review and evaluate voluminous exhibits and testify at the
scheduled hearing.”       Accordingly, we likewise find statement (4),
encompassing MLO’s representations regarding Harrison’s increased fees,
to be truthful.

¶17           An attorney does not breach his duty of care by making
truthful statements about factors that would be relevant to the decision to
settle. Accordingly, MLO is entitled to judgment as a matter of law, and we
find no error in the grant of summary judgment in MLO’s favor.

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             GOSHKARIAN, et al. v. MCGOVERN, et al.
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                           CONCLUSION

¶18          The order granting summary judgment is affirmed. As the
successful party, MLO is awarded its costs incurred on appeal upon
compliance with ARCAP 21(b).

                       AMY M. WOOD • Clerk of the Court
                       FILED: AA

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