The Butler Law Firm, PLC; Everett S. Butler; Matthew D. Williams, Petitioners,
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.
Action from the Superior Court in Navajo County The Honorable
Robert J. Higgins, Judge No. CV 2016-00034
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.
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:
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.
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.
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.
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.
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.
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.