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Wichansky v. Zowine

United States District Court, D. Arizona

May 18, 2016

Marc A. Wichansky, Plaintiff,
v.
David T. Zowine, et al., Defendants.

          ORDER

          David G. Campbell United States District Judge

         Plaintiff Wichansky has provided a proposed form of judgment (Doc. 507), Defendants have objected and proposed their own form (Doc. 517), and Plaintiff has responded (Doc. 519). A few issues require further briefing.

         I. Joint and Several Liability.

         The jury found $11, 000, 000 in compensatory damages for breach of fiduciary duty, and allocated fault among some Defendants. Doc. 500. Plaintiff’s form of judgment would appear to permit him to recover $11, 000, 000 from Defendant Zowine, $1, 100 from the Ilardo Defendants, $550, 000 from Defendant Johnson, $110, 000 from Defendant Leon, and $27, 500 from the Shanahan Defendants. Doc. 507-1. In his response, Plaintiff acknowledges that he can recover no more than $11, 000, 000. Doc. 519. Without citing any authority, Arizona or otherwise, Plaintiff argues that he may recover all of the $11, 000, 000 from Defendant Zowine, or may recover amounts in accordance with the jury’s allocation of fault, or may recover something in between. Id. at 2-3. But this is possible only if Defendants are jointly and severally liable for the $11, 000, 000 in total damages. Plaintiff fails to address the fact that Arizona has abolished joint and several liability in most cases:

In an action for personal injury, property damage or wrongful death, the liability of each defendant for damages is several only and is not joint, except as otherwise provided in this section. Each defendant is liable only for the amount of damages allocated to that defendant in direct proportion to that defendant’s percentage of fault, and a separate judgment shall be entered against the defendant for that amount. To determine the amount of judgment to be entered against each defendant, the trier of fact shall multiply the total amount of damages recoverable by the plaintiff by the percentage of each defendant’s fault, and that amount is the maximum recoverable against the defendant.

A.R.S. § 12-2506(A). As the Arizona Supreme Court has explained, “The 1987 amendment, codified at A.R.S. § 12-2506, establishes a system of comparative fault, making ‘each tortfeasor responsible for paying his or her percentage of fault and no more.’ Dietz v. Gen. Elec. Co., 169 Ariz. 505, 510, 821 P.2d 166, 171 (1991). Under this system of several-only liability, plaintiffs, not defendants, bear the risk of insolvent joint tortfeasors.” State Farm Ins. Cos. v. Premier Manufactured Sys., Inc., 172 P.3d 410, 413 (Ariz. 2007) (emphasis in Deitz).

         The statute recognizes three exceptions to this rule, two of which are potentially applicable to this case: where Zowine and the other Defendants were “acting in concert, ” and where the other Defendants were acting as “an agent or servant” of Zowine. A.R.S. § 12-2506(D)(1) & (2). The phrase “acting in concert” is specifically defined in the statute. See § 12-2506(F)(1). The parties do not address whether either of these exceptions applies.

         Finally, even if one or both of these sections could apply, the jury was not asked to decide whether Defendants were acting in concert of were agents of one another within the meaning of A.R.S. § 12-2506. The parties do not address this fact.

         II. Punitive Damages.

         Defendants argue that the jury awarded a total of $14, 375, 000 in punitive damages, and that this amount must be allocated among the Defendants found at fault. Doc. 517 at 2. The Court does not agree. The verdict form was clear. The $14, 375, 000 constituted the amount of “punitive damages . . . assessed against Defendant Zowine.” Doc. 500 at 2. The punitive damages assigned to Defendants Johnson, Leon, and Shanahan were “the amount of punitive damages that should be assessed against that Defendant.” Id. at 5.

         III. Judgments of Acquittal.

         Plaintiff concedes that judgments of acquittal should be entered against Defendants Costello, Knowlton, Mayo, and Narducci, whom the jury found not liable, but fails to acknowledge that the Court granted judgment in favor of Defendants Grant, Gonzales, and Sarah Shanahan for their allegedly tortious conduct. Doc. 478. All of these Defendants will be included in the final judgment.

         IV. Prejudgment Interest.

         Plaintiff does not dispute “the rule in Arizona that prejudgment interest may not be awarded unless the claim for payment is liquidated prior to judgment.” Fairway Builders, Inc. v. Malouf Towers Rental Co., 603 P.2d 513, 535 (Ariz.Ct.App. 1979). Relying on Fairway Builders, Plaintiff argues that the amount at issue in this case was liquidated. The Court does not agree. Fairway Builders found the amount to be liquidated because the contract at issue called for “compensation at cost plus ten percent.” Id. No similar formula existed here. Plaintiff asked the jury to compensate him for damages caused by Defendant Zowine’s breach of fiduciary duty, which were not subject to precise calculation. See Pueblo Santa Fe Townhomes Owners’ Ass’n v. Transcon. Ins. Co., 178 P.3d 485, 496 (Ariz.Ct.App. 2008) (‚ÄúDamages are liquidated if the evidence of damages furnishes data which, if believed, makes it possible to compute the amount of damages with exactness, without relying upon opinion or discretion. Thus, prejudgment interest ...


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