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The Butler Law Firm, PLC v. Higgins

Supreme Court of Arizona

February 22, 2018

The Butler Law Firm, PLC; Everett S. Butler; Matthew D. Williams, Petitioners,
v.
The Honorable Robert J. Higgins, Judge of the Superior Court of the State of Arizona, in and for The County of Navajo, Respondent Judge, Winslow Memorial Hospital, Inc., d/b/a Little Colorado Medical Center, Real Party in Interest.

         Special Action from the Superior Court in Navajo County The Honorable Robert J. Higgins, Judge No. CV 2016-00034

         Order of the Court of Appeals, Division One No. 1-CA-SA 17-0073 Filed Mar 23, 2017

          Anthony S. Vitagliano (argued), Robert B. Zelms, Manning & Kass, Ellrod, Ramirez, Trester LLP, Phoenix, Attorneys for The Butler Law Firm, PLC, Everett S. Butler, Matthew D. Williams

          Randall Yavitz, Isabel M. Humphrey, Hunter, Humphrey & Yavitz, PLC, Phoenix; and James E. Ledbetter (argued), Jared R. Owens, The Ledbetter Law Firm, P.L.C., Cottonwood, Attorneys for Winslow Memorial Hospital, Inc. d/b/a Little Colorado Medical Center

          JUSTICE BRUTINEL authored the opinion of the Court, in which CHIEF JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, and JUSTICES TIMMER, BOLICK, GOULD, and LOPEZ joined. Butler Law, et al. v. Hon. Higgins (Winslow Memorial) Opinion of the Court JUSTICE BRUTINEL, opinion of the Court:

          BRUTINEL JUSTICE

         ¶1Winslow Memorial Hospital ("Hospital") filed this legal- malpractice action in the Superior Court of Navajo County against Butler Law Firm, PLC ("BLF"), a professional limited liability company ("PLLC") organized in Maricopa County, and against attorneys Everett S. Butler and Matthew D. Williams, both Maricopa County residents (collectively, "Defendants"). The trial court denied Defendants' motion for change of venue. We reverse and hold that venue does not properly lie in Navajo County as to any of the Defendants.

         I. BACKGROUND

         ¶2 In March 2013, BLF entered into a legal-services agreement (the "Representation Agreement" or "Agreement") with the Hospital to draft an employment contract for the Hospital's CEO. The Hospital is in Navajo County. The Representation Agreement stated that BLF would provide "legal services" to the Hospital and that Everett S. Butler, BLF's sole member, would have "primary responsibility" for representing the Hospital. In addition to an hourly fee, the Hospital agreed to reimburse BLF for costs incurred on its behalf, including "travel, parking, computerized legal research, long distance calls, photocopying, court costs and filing fees, court transcripts, messenger services, etc." The Representation Agreement was written on BLF's letterhead and displayed BLF's Phoenix address, but it was silent as to where BLF was to perform its services under the Agreement.

         ¶3 The relationship between the parties soured. In January 2016, the Hospital sued BLF, Butler, and Williams, a non-member attorney employed by BLF. The complaint alleged legal malpractice, breach of fiduciary duty, and breach of the covenant of good faith and fair dealing.

         ¶4 Defendants moved to transfer venue to Maricopa County pursuant to A.R.S. § 12-404(A). They argued that because all Defendants resided in Maricopa County, venue in Navajo County was improper unless a statutory exception applied under A.R.S. § 12-401.

         ¶5 The trial court denied the motion. Relying on Morgensen v. Superior Court, 127 Ariz. 55, 56 (App. 1980), it found that venue in Navajo Butler Law, et al. v. Hon. Higgins (Winslow Memorial) Opinion of the Court County was proper under § 12-401(5) because "the plaintiff exclusively contracted business in Navajo County." The court also found venue proper under § 12-401(18), reasoning that because the liability limitations of both limited liability companies ("LLCs") and corporations are susceptible to "veil-piercing, " LLCs should be considered corporations for venue purposes. The court did not address any other exception. The court of appeals declined special-action review.

         ¶6 We granted review to consider (1) whether BLF "contracted in writing to perform an obligation" in Navajo County, and (2) whether an LLC is an "other corporation" contemplated by the venue statute. We have jurisdiction pursuant to article 6, section 5(3), of the Arizona Constitution and A.R.S. § 12-120.24.

         II. ...


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