Free Order on Motion for Summary Judgment - District Court of Arizona - Arizona

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Ronald C. FISH, a law corporation, Plaintiff, vs. Thomas G. WATKINS, III, et al., Defendants.

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No. CIV 03-0067-PHX-SMM MEMORANDUM ORDER OF DECISION &

Pending before the Court is a Motion for Summary Judgment filed by Defendants on 16 March 31, 2006. (Dkt. 122) Plaintiff filed a Response on April 27, 2006. (Dkt. 124) In turn, 17 Defendants filed a Reply on May 16, 2006. (Dkt. 132) After considering the arguments 18 raised by the parties in their briefs, the Court issues the following Memorandum of Decision 19 20 // 21 // 22 BACKGROUND 23 24 25 26 27 28
The parties have had the opportunity to submit evidence and briefing, and the Court would not find oral argument helpful in resolving this matter. Accordingly, the Court finds the pending motion for summary judgment suitable for decision without oral argument. See LRCiv 56.2; Local Rules of Civil Procedure ("LRCiv") of the United States District Court for the District of Arizona 7.2(f); Lake at Las Vegas Investors Group, Inc. v. Pacific Malibu Dev. Corp., 933 F.2d 724, 728-29 (9th Cir. 1991) ("When a party has an adequate opportunity to provide the trial court with evidence and a memorandum of law, there is no prejudice" when oral arguments are not held on motions for summary judgment.) Case 2:03-cv-00067-SMM Document 138 Filed 12/14/2006 Page 1 of 7
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and Order.1

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As a preliminary matter, the Court takes judicial notice of Skyline Mfg., Inc. v. SoLite, Inc. et al., CIV 01-00940 PHX-MHM (D. Ariz.).2 Plaintiff Ronald Craig Fish ("Plaintiff") is an attorney residing in California. Defendant Thomas G. Watkins ("Watkins") is an attorney residing in Arizona and Defendant Skyline Manufacturing, Inc., ("Skyline") is an Arizona corporation that manufactures plastic roofing products. So-Lite, a former client of Plaintiff, is a California corporation and is a competitor of Skyline in the plastic roofing products business. On April 9, 2002, Plaintiff filed a complaint in the United States District Court for the Northern District of California, San Jose Division, asserting claims against Watkins and Skyline (collectively "Defendants") for abuse of process and malicious prosecution. Plaintiff's claims arise out of the events surrounding an earlier action, Skyline Mfg., Inc. v. So-Lite, Inc. et al. (citation omitted). In that action, Skyline, who was represented by Watkins, alleged that Plaintiff and So-Lite had committed unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125(a), and intentional interference with contractual relations. In Skyline Mfg., Inc. v. So-Lite, Inc. et al., CIV 01-00940 PHX-MHM, the Honorable Mary H. Murguia issued a Memorandum of Decision and Order on March 25, 2002 that dismissed Skyline's declaratory judgment claim for lack of subject matter jurisdiction because the patent had not issued. Judge Murguia also dismissed the Lanham Act violation, holding that it was not unfair competition to send out letters notifying customers and potential customers as to the status of pending patents and the possibility of future litigation. In addition, Judge Murguia dismissed the remaining claims against Plaintiff for lack of personal jurisdiction. On November 5, 2002, this case was transferred from the Northern District of California to this Court by the Honorable Jeremy Fogel. Plaintiff's claim for abuse of process was dismissed by Order of this Court on December 18, 2003 (Dkt. 66) and Defendants have

Under Fed. R. Evid. 201, a court may take judicial notice of "matters of public record." Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986).

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moved for summary judgment on the remaining claim for malicious prosecution. Defendants' Motion for Summary Judgment is now fully briefed and ripe for disposition by this Court. STANDARD OF REVIEW A court must grant summary judgment if the pleadings and supporting documents, viewed in the light most favorable to the nonmoving party, "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Jesinger v. Nevada Federal Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law determines which facts are material. See Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986); see also Jesinger, 24 F.3d at 1130. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. The dispute must also be genuine, that is, the evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Id.; see Jesinger, 24 F.3d at 1130. A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex, 477 U.S. at 323-24. Summary judgment is appropriate against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322; see also Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir. 1994). The moving party need not disprove matters on which the opponent has the burden of proof at trial. See Celotex, 477 U.S. at 323-24. The party opposing summary judgment need not produce evidence "in a form that would be admissible at trial in order to avoid summary judgment." Id. at 324. However, the nonmovant "may not rest upon the mere allegations or denials of [the party's] pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial." FED. R. CIV. P. 56(e); see Matsushita Elec. Indus. Co., Ltd. v.Zenith Radio Corp., 475 U.S. 574, 585-88 (1986); Brinson v. Linda Rose Joint Venture, 53 F.3d 1044, 1049 (9th Cir. 1995). -3Case 2:03-cv-00067-SMM Document 138 Filed 12/14/2006 Page 3 of 7

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DISCUSSION This motion for summary judgment raises a pure question of law: whether a prior action was "favorably terminated" for purposes of a malicious prosecution claim? A plaintiff presenting a claim for malicious prosecution must establish the following elements: (1) that a prior prosecution terminated in favor of the plaintiff; (2) that the defendant was the prosecutor; (3) that it was actuated by malice; (4) that there was no probable cause; and, (5) that damages were sustained. Frey v. Stoneman, 150 Ariz. 106, 110, 722 P.2d 278 (1986); Carroll v. Kalar, 112 Ariz. 595, 596, 545 P.2d 411, 412 (1976). Defendants claim that the original action, Skyline Manufacturing Inc. v. So-Lite Innovative Roofing Products,(citation omitted), did not terminate in Plaintiff's favor because Judge Murguia dismissed the claims against him for lack of personal jurisdiction. Because a dismissal for lack of personal jurisdiction is not considered a favorable termination, Defendants argue, Plaintiff's claim for malicious prosecution must fail as a matter of law. The Court agrees. While a judgment on the merits after a trial is always a favorable termination, the law is less clear for determinations on less than the merits. Where there has been no adjudication on the merits, the existence of a favorable determination of the prior proceeding is generally found in the substance rather than the form of prior events. Frey, 150 Ariz. at 111. However, a prior proceeding terminated on procedural or technical grounds is not a favorable termination. Id. at 110 (quoting Jaffe v. Stone, 18 Cal.2d 146,150, 114 P.2d 335, 338 (1941)). A dismissal for lack of jurisdiction "not only is not on the merits, it is unreflective of the merits; neither the judgment of the court nor that of the prosecuting party on the merits is implicated in the dismissal." Lackner v. La Croix, 25 Cal.3d 747, 750, 159 Cal.Rptr. 693, 694 (1980) (quoting Minasian v. Sapse, 80 Cal. App 3d 823, 827(1978)).3

The Arizona Supreme Court has historically relied upon California's case law analyzing claims malicious prosecution because it has "a well-developed jurisprudence in this area." Frey, 150 Ariz. at 110.

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Plaintiff opposes Defendants' motion on a variety of grounds. First, Plaintiff argues that even though Defendants' motion is styled as one for summary judgment, it is actually a motion for reconsideration because it repeats arguments that were raised in his motion to dismiss (Dkt. 124 - 125). The Court rejects this argument. A defendant is not precluded from raising an argument in a motion for summary judgment that was previously raised in a motion to dismiss. The legal standards and procedural requirements governing motions for summary judgment differ from those governing motions to dismiss. Compare e.g. Celotex, 477 U.S. 317 with e.g Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). An argument that fails in a motion to dismiss may nonetheless be a winning argument in a motion for summary judgment where the court is able to look beyond the pleadings. Next, Plaintiff argues that he did in fact receive a favorable termination in the prior proceeding because Judge Murguia dismissed Defendant's unfair competition claim for failure to state a claim before she dismissed the remaining claims against him for lack of personal jurisdiction. (Dkt. 124-125) (emphasis added). Plaintiff correctly points out that a dismissal for failure to state a claim is, as this Court has previously stated, a decision based on the merits. (Dkt. 66) However, contrary to Plaintiff's argument and this Court's prior statement in a Memorandum of Decision and Order ruling on the motion to dismiss (Id.), a dismissal for failure to state a claim that accompanies a dismissal for lack of personal jurisdiction is not a decision on the merits. The reason a dismissal for failure to state a claim accompanying a dismissal for lack of personal jurisdiction is not a decision on the merits is because a court has no authority to address the merits of a claim against a particular party if it lacks personal jurisdiction over that party. Based upon Plaintiff's reasoning, if Judge Murguia resolved the personal jurisdiction issue first, before addressing the merits of unfair competition claim, then he would not have received a favorable termination in the earlier action. However, because Judge Murguia decided to address the personal jurisdiction issue last, after dismissing the unfair competition claim, Plaintiff received a favorable termination. Essentially, Plaintiff

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asks the Court to focus solely upon the sequence of Judge Murguia's Order, rather than the substance of her decision. Plaintiff's argument overlooks the significance of Judge Murguia's determination that the court lacked personal jurisdiction over him. Courts may not assume "hypothetical jurisdiction" to resolve a case on the merits. Steel Co. v Citizens for a Better Env't, 523 U.S. 83, 101, 118 S. Ct. 1003 (1998). Rather, an actual determination must be made whether authority over the category of claim in suit (subject matter jurisdiction) and authority over the parties (personal jurisdiction) exists before turning to the merits of a case. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577, 119 S. Ct. 1563 (1999). "For a court to pronounce upon the meaning or the constitutionality of a state or federal law when it has no jurisdiction to do so is, by very definition, for a court to act ultra vires." Steel Co., 523 U.S. at 101-02. By finding that the court lacked personal jurisdiction over Plaintiff, Judge Murguia determined that, as a matter of procedure, the court was precluded from addressing the merits of any claims against him. Thus, as soon as Judge Murguia determined that the court lacked personal jurisdiction over Plaintiff, her jurisdiction over the unfair competition claim became hypothetical as to him. And because the claims against Plaintiff in the earlier action were dismissed based on lack of personal jurisdiction, he did not receive a favorable determination. Therefore, Plaintiff cannot establish an essential element of his malicious prosecution claim and the Court will grant Defendants' Motion for Summary Judgment. Finally, the Court finds it unnecessary to address Plaintiff's argument that Defendants' motion did not fully comply with Local Rule 56.1. Plaintiff argues that Defendant neglected to mention or mischaracterized certain facts relied upon in support of their motion for summary judgment. In determining that Plaintiff cannot establish an essential element to his claim for malicious prosecution, the Court relied solely upon the Judge Murguia's Order in Skyline Mfg., Inc. v. So-Lite, Inc. et al., (citation omitted) and the relevant statutory and case law. Accordingly, the Court finds no reason to determine whether Defendants

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CONCLUSION Therefore, for the reasons provided above, IT IS HEREBY ORDERED that Motion for Summary Judgment filed by Defendants (Dkt. 122) is GRANTED and this case shall be DISMISSED WITH PREJUDICE. IT IS FURTHER ORDERED that the Clerk of Court shall enter judgment accordingly. DATED this 14th day of December, 2006.

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