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Workman v. Verde Wellness Center, Inc.

Court of Appeals of Arizona, Second Division

October 18, 2016

Melinda S. Workman, Plaintiff/Appellant,
Verde Wellness Center, Inc., an Arizona nonprofit corporation, dba The Downtown Dispensary, Defendant/Appellee.

         Appeal from the Superior Court in Pima County No. C20153597 The Honorable Leslie Miller, Judge

          Sanders & Parks, P.C., Phoenix By G. Gregory Eagleburger, Anoop Bhatheja, and Amanda M. Breemes Counsel for Plaintiff/Appellant

          Loose, Brown, Hobkirk & Callahan, P.C., Tucson By Donald A. Loose and Jesse R. Callahan Counsel for Defendant/Appellee

          Presiding Judge Vásquez authored the opinion of the Court, in which Chief Judge Eckerstrom and Judge Espinosa concurred.


          VÁSQUEZ, Presiding Judge.

         ¶1 In this action for judicial dissolution of a nonprofit corporation, Melinda Workman appeals from the trial court's order granting appellee Verde Wellness Center, Inc.'s motion to dismiss. She argues the court erred by considering matters outside the pleadings and by finding Workman had lost her standing to maintain this action when Verde removed her from its board of directors. She also argues the court erred when it denied her motion to amend the complaint and awarded fees to Verde as a sanction. For the following reasons, we reverse the court's dismissal order, vacate its denial of the motion to amend and award of fees, and remand for further proceedings.

         Factual and Procedural Background[1]

         ¶2 Verde, a marijuana dispensary authorized under the Arizona Medical Marijuana Act, was incorporated in May 2012. Workman joined the board of directors in May 2013. On June 17, 2015, Workman filed this action requesting a receiver and judicial dissolution of Verde because "[t]he directors . . . have acted, are acting or will act in a manner that is illegal, oppressive or fraudulent" and "corporate assets [were] being wasted, misapplied or diverted for non-corporate purposes."

         ¶3 Verde filed a motion to dismiss pursuant to Rule 12(b)(6), Ariz. R. Civ. P., arguing Workman lacked standing because, within hours after she had filed her complaint, the board held a special meeting and removed her as a director. In her response, Workman noted that the exhibits attached to Verde's motion did not show the board had voted to remove her during the special meeting. Instead, the board purported to adopt resolutions and amend bylaws after "dispens[ing] with the formality of a Special Meeting." Workman also argued she had standing to bring the lawsuit "despite [the] illegal and ineffective removal" because her "standing to bring a judicial dissolution action is expressly granted by statute" and "[n]o [c]ourt would ever sustain the notion that a wrongdoer could eliminate a claim by engaging in yet more oppressive conduct to eliminate the suit." Apparently in response to Workman's arguments, another special meeting was held in August 2015, and the board again voted to remove Workman as a director.

         ¶4 At a hearing on the motion in September 2015, Workman acknowledged the board had voted in August to remove her as a director. However, she asserted that "the motion to dismiss should be denied [because] the defendants [were] attempting to . . . deprive [her] of standing to hide their misdeeds." Workman also filed a motion to amend her complaint on the day of the hearing, raising claims for breach of contract, breach of good faith and fair dealing, breach of fiduciary duty, civil conspiracy, and alter ego.

         ¶5 At the conclusion of the hearing, the trial court denied Workman's request for a receiver. And on September 3, 2015, the court entered an order granting Verde's motion to dismiss and ruling the motion to amend was "moot." Approximately three months later, the court granted Verde's request for attorney fees, finding Workman "interposed claims lacking legal or factual basis in violation of Rule 11, Ariz. R. Civ. P." Workman filed a notice of appeal from this order. Because the order did not include language pursuant to Rule 54(c), Ariz. R. Civ. P., this court revested jurisdiction in the trial court "for an appropriate final judgment, " and Workman filed a supplemental notice of appeal.


         ¶6 Verde argues this court lacks jurisdiction to consider Workman's appeal because she did not directly appeal from the trial court's original order granting the motion to dismiss. Because our jurisdiction is defined by statute, we have an obligation to examine whether we have jurisdiction over an appeal and, if lacking, to dismiss. See Grand v. Nacchio, 214 Ariz. 9, ¶ 12, 147 P.3d 763, 769 (App. 2006); Davis v. Cessna Aircraft Corp., 168 Ariz. 301, 304, 812 P.2d 1119, 1122 (App. 1991).

         ¶7 "Generally, this court's jurisdiction is limited to appeals from final judgments which dispose of all claims and parties." Baker v. Bradley,231 Ariz. 475, ¶ 9, 296 P.3d 1011, 1015 (App. 2013). A final judgment dismissing an action with prejudice is appealable pursuant to A.R.S. § 12-2101(A)(1). See Thiele v. City of Phoenix,232 Ariz. 40, ¶¶ 8-9, 301 P.3d 206, 208 (App. 2013). In contrast, an order dismissing without prejudice is not a final judgment because the plaintiff can refile the action and therefore "ha[s] nothing to appeal." Osuna v. Wal-Mart Stores, Inc., 214 Ariz. 286, ¶ 9, 151 P.3d 1267, 1270 (App. 2007), ...

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