Baker v. Ludeke

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

PETER BAKER and MARY LANE, Plaintiffs/Appellants,

v.

BRUCE LUDEKE, et al., Defendants/Appellees.

No. 1 CA-CV 18-0324
FILED 6-6-2019

Appeal from the Superior Court in Navajo County
No. S0900CV201500044
The Honorable Dale P. Nielson, Judge

AFFIRMED IN PART; REVERSED IN PART

COUNSEL

Law Office of Alan K. Wittig, P.C., Queen Creek
By Alan K. Wittig
Counsel for Plaintiffs/Appellants
The Rigg Law Firm, P.L.L.C., Pinetop
By Brett R. Rigg
Counsel for Defendants/Appellees Ludeke, Scalese, Lind, Lawrence, Mosier,
Farner, Dempsey and Ulibarri

Law Offices of Farley & Choate, Phoenix
By Kevin M. Arnold
Counsel for Defendants/Appellees Ron and Irene T. Saffer

Nicholas D. Patton, Attorney at Law, PLLC, Show Low
By Nicholas D. Patton
Counsel for Defendants/Appellees Fred and Maria Ochoa and Ann Justus

MEMORANDUM DECISION

Judge Maria Elena Cruz delivered the decision of the Court, in which
Presiding Judge Jennifer B. Campbell and Judge James B. Morse Jr. joined.

C R U Z, Judge:

¶1 Peter Baker and Mary Lane (“Appellants”) filed a civil action
against numerous individual and associational defendants (“Appellees”)
alleging breach of quiet enjoyment, discrimination, trespass, theft, and
fraud. Each of Appellants’ claims were resolved in favor of Appellees at
various pretrial stages. On appeal, we affirm the court’s dismissal of all but
the trespass and theft claims. We vacate the court’s orders of default
judgment, and remand for the court to enter a judgment that Appellants
lacked standing on those remaining claims of trespass and theft.

FACTS AND PROCEDURAL HISTORY

¶2 In 2014, the Pinetop Lakes Association and Country Club (the
“Association”) obtained injunctive relief to enter Appellants’ property after
months of failed efforts to have Appellants’ property brought into
compliance with the Association’s Covenant, Conditions and Restrictions.
In January 2015, Appellants sued the Association along with dozens of
named officials—many of whom were identified as Association members
(the “Association Defendants”), and many of whom were named in an
individual capacity as non-members (Appellees). In their complaint,
Appellants alleged three claims of discrimination and one claim each of
breach of quiet enjoyment, trespass, theft, and fraud.

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¶3 Attorney Sterling Solomon filed a motion to dismiss the
complaint in its entirety; he later appeared in court to defend the motion,
along with attorney Mark Saul. Solomon indicated to the court that he did
not represent every defendant, but had filed the motion to dismiss under
the belief that Appellants’ claims were completely baseless, that there
would be no need for proceedings beyond dismissal, and that many of the
defendants should not have been named at all. The court granted the
motion as to every claim except for trespass and theft.

¶4 Appellants, under the impression that Solomon’s appearance
constituted sufficient notice of the complaint to all defendants under
Arizona Rule of Civil Procedure (“Rule”) 4(f)(3), filed an application for
default judgment against Appellees, who had not filed timely answers.1
The clerk of the court entered default against Appellees. But at the
December 9, 2015 hearing, the court declined to enter default judgment
against Appellees because Appellants claimed over $12,000,000 in
damages. The court was unsure whether Solomon’s motion to dismiss
could be deemed acceptance or waiver of service by the large number of
Appellees when Solomon never identified as attorney for each of them by
name, and they may not have been aware of the case against them, or of
Solomon’s appearance on their behalf. Instead, the court enlarged the time
for all Appellees to file their answers.

¶5 On July 19, 2016, Solomon filed a “Notice of Non-
Representation” stating he represented no one in the superior court matter.
Appellants requested the court issue sanctions against Solomon for
unreasonably expanding or delaying the proceedings as a result of his
limited appearance and of his failure to identify his clients in a clear and
timely fashion. The request was denied.

¶6 As a result of the court’s December 9, 2015 ruling, Appellants
served (or attempted to serve) each of the Appellees, and most Appellees
filed answers through their newly-retained attorney Brett Rigg. A hearing
was held in February 2017 “to determine the issue of damages as against
non-association defendants who were in default.” The court stated that it
found Appellant Lane’s testimony unconvincing and that Appellants failed
to provide adequate evidence of damages stemming from their claims of

1 The Association Defendants filed timely answers and were later
granted summary judgment as to the remaining claims. Appellants did not
appeal against Association Defendants, and they are no longer party to
these proceedings.

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theft and trespass.2 Appellees eventually filed a motion to dismiss/motion
for summary judgment. On June 27, 2017, the court signed two orders. In
one order it granted Appellees’ motion to dismiss and motion for summary
judgment. In the second order, it “dismisse[d] [Appellants’] claims against
all remaining defendants.” On December 19, 2017, the court declined to
order costs to Appellants because “no information regarding costs had been
submitted.” The court ultimately granted fees and costs to Appellees. On
August 4, 2017, the court, finding Appellants had been awarded no
damages and that “the claims of the [Appellants] were without merit and
that [Appellants] suffered no injury resulting in damages,” denied
Appellants’ motion for attorneys’ fees and costs. Appellants’ motion for
reconsideration was denied.

¶7 The court entered its appealable judgment in May 2018.
Appellants timely appealed. We have jurisdiction pursuant to Article 6,
Section 9, of the Arizona Constitution, and Arizona Revised Statutes
(“A.R.S.”) sections 12-120.21(A)(1) and -2101(A)(1).

DISCUSSION

¶8 In their opening brief, Appellants raise the following issues,
which we address in turn:

(1) Dismissal of the claims of breach of quiet enjoyment,
discrimination, trespass, and theft;

(2) Denial of the motion to amend their complaint to include
racketeering claims;

(3) Denial of the motion to levy sanctions against Solomon;
and

(4) Denial of the request for fees and costs.

I. The Doctrine of Quiet Enjoyment

¶9 Appellants argue the court erred by dismissing their claim for
breach of quiet enjoyment. We agree with Appellees that quiet enjoyment
is a right possessed by tenants and is only enforceable against their
landlord. See, e.g., Johansen v. Ariz. Hotel, 37 Ariz. 166, 173 (1930) (affirming

2 We note that actual damages are not a requisite for civil trespass
claims. SWC Baseline & Crimson Inv’rs, L.L.C. v. Augusta Ranch Ltd. P’ship,
228 Ariz. 271, 292, ¶ 95 (App. 2011).

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the law in Arizona “that there is an implied covenant in a lease for the quiet
enjoyment of the premises by the lessee free from any interference on the
part of the landlord”) (emphasis added) (citation omitted). In Thompson v.
Harris, this court noted the lack of any case in Arizona applying the right of
quiet enjoyment to the activities of other tenants, but cited ten other
jurisdictions that recognized that such a right “does not extend to acts of
other tenants or third parties unless such acts are performed on behalf of
the landlord or by one claiming paramount title.” 9 Ariz. App. 341, 345
(1969) (citations omitted). Appellants point to no case since Thompson that
deviates from that holding.

¶10 Appellants instead cite Article 2, § 8 of the Arizona
Constitution, which provides that “[n]o person shall be disturbed in his
private affairs, or his home invaded, without authority of law.” This—our
state’s constitutional equivalent of the Fourth Amendment to the United
States Constitution—applies only to state action and is thus inapplicable to
a civil action against one’s neighbors. See State v. Wilson, 237 Ariz. 296, 298,
¶ 7 (2015) (“Both the Fourth Amendment to the United States Constitution
and Article 2, Section 8 of the Arizona Constitution protect against unlawful
searches and seizures.”).

¶11 Appellants also point to Frisby v. Schultz, 487 U.S. 474 (1988),
but reliance on this authority is similarly misguided. Frisby addressed
whether a city ordinance that made it unlawful to picket outside a
residential dwelling violated the First Amendment. Id. at 474. Discussing
the city’s interest in preserving the peace in residential areas, the Court
noted that “[t]he devastating effect of targeted picketing on the quiet
enjoyment of the home is beyond doubt.” Id. at 486. The discussion of quiet
enjoyment began and ended there—the Court did not go on to bestow
homeowners with a breach-of-quiet-enjoyment action against the picketers.
Therefore, the case is wholly inapposite. The Appellants’ claim for breach
of quiet enjoyment is unsupported in Arizona law and in fact. The court
rightfully dismissed this claim.

II. Discrimination Claims

¶12 The court also granted Appellees’ motion to dismiss as to
Appellants’ three counts of discrimination. When evaluating a complaint
in light of a motion to dismiss, our state’s courts look to the complaint’s
“well-pled facts,” Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, 419, ¶ 7
(2008), and are not permitted “to speculate about hypothetical facts that
might entitle the plaintiff to relief,” id. at 420, ¶ 14. “[M]ere conclusory
statements are insufficient to state a claim upon which relief can be

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granted,” and when that is the case, the court may properly grant a motion
to dismiss. Id. at 419, ¶ 7. Finally, before granting a motion to dismiss under
Rule 12(b)(6), the court should give the non-moving party a chance to
amend the complaint if such amendment may cure the defect. Wigglesworth
v. Mauldin, 195 Ariz. 432, 439, ¶ 26 (App. 1999) (citation omitted).

¶13 Each of Appellants’ three causes of action alleges that
Appellees “engaged in discriminatory practices against [Appellants] . . . by
conspiring to trespass and facilitate trespass to [their] residence, conspir[ed]
and facilitat[ed] theft of property from [their] residence, fil[ed] false
documents with the Court and otherwise engaged in acts of intimidation
and harassment.” The Appellants distinguish among the three causes of
action by differentiating the bases of the discrimination, namely: (1) the
disability of Appellant Lane; (2) the race of Appellant Baker; and (3) the fact
that Appellants are an interracial couple. However, Appellants’ complaint
alleges no facts that would entitle them to relief under the Fair Housing acts
of either Arizona3 or the United States, nor do they raise any such facts in
their response to Appellees’ Rule 12(b)(6) motion. The complaint
essentially collects each of the non-discrimination causes of action under
new headers, alleges that those acts were carried out because of disability
or race, and supplies the court with no facts by which that conclusion may
be drawn. The record is also bare of any evidence that Appellants requested
leave of the court to amend their complaint, and to this day provide no
evidence that might cure the defective pleading. Wigglesworth, 195 Ariz. at
439, ¶ 26. Because the court may not “speculate about hypothetical facts,”
we hold that the court properly dismissed the discrimination causes of
action for insufficiency of the evidence. Cullen, 218 Ariz. at 420, ¶ 14.

III. Entry of Default and Standing Regarding the Theft and Trespass
Claims

¶14 In response to Appellants’ initial complaint, attorney
Solomon filed a motion to dismiss as to each count. The record supports
the court’s implicit finding that Solomon filed that motion and appeared in

3 Appellees also allege that the Fair Housing statutes of Arizona do
not permit a private right of action, pursuant to the instruction in A.R.S.
§ 41-1491.09 that the attorney general receive and act upon complaints
alleging Fair Housing violations. Contra 42 U.S.C. § 3613 (providing for
enforcement by private persons in instances of discriminatory housing
practices). Because we dispose of these causes of action on other procedural
grounds, we decline to address this issue.

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open court to defend it in a limited capacity. Solomon did not hold himself
out to represent the Appellees individually, stating that “the motion to
dismiss was filed on behalf of the entity because we don’t believe [the
claims] would survive either against the [Association] or the individuals.”
Solomon explains that he viewed the motion (and his representation and
defense of it) as “preliminary in nature,” that he believed that exactly whom
he represented was irrelevant at that point, and that “most of [the
Appellees] should never even have been named”—an argument that “can
be made by their own individual counselor they choose to hire before this
case does proceed any further.” There is no support for the proposition that
at the time Solomon argued his motion to dismiss all defendants had agreed
or consented to his appearance on their behalf.

¶15 Although the court accepted Solomon’s representation that
his appearance was limited to argument on the motion to dismiss, it
nevertheless stated in its later minute entry that “Solomon’s appearance in
the case through the filing of a motion to dismiss [was] sufficient notice of
representation.” But the court errantly failed to specify, in light of
Solomon’s statements regarding his limited capacity of representation at
that juncture, which of the dozens of named defendants Solomon’s
appearance applied to going forward.

¶16 Because of this error, some of the Appellees did not file timely
answers after the court disposed of the initial motion to dismiss. On the
other hand, Appellants—relying on the court’s indication that Solomon
represented all defendants pursuant to Rule 4(f)(3)—filed an affidavit of
default as to Appellees. The clerk of the court, finding no answers for
Appellees on the record, automatically entered the default.

¶17 On review of the transcript of the hearing on the motion to
dismiss, we believe it was clear that Solomon did not appear as counsel for
each individual Appellee, and therefore service on Appellees could not
have been waived by Solomon’s filing of the motion to dismiss, nor by his
appearance in court. Ariz. R. Civ. P. 4(f)(3). Appellants points to nothing
in the record showing that Appellees were otherwise served, or even put
on notice of the claims against them. The default against Appellees was
therefore ineffective—we vacate all orders relating to the default.4

4 Appellants also appeal the court’s denial of their motion to amend
their complaint to include allegations of racketeering under A.R.S. § 13-
2314.04. Because we hold Appellants had no standing to pursue their

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¶18 We now reach the question of whether, with their default
judgment vacated, Appellants had any authority to pursue their trespass
and theft claims beyond the year 2015. The power of attorney authorizing
Appellants to sue for the alleged theft and trespass on behalf of the prior
property owner, Mr. Butters, expired on December 31, 2015. We can find
no support for the proposition that a power of attorney continues to convey
authority to its named holder beyond its expiration, even if proceedings
based upon that authority are mid-stroke; other jurisdictions have held in
other types of proceedings, however, that “[w]hen the power of attorney
expires, the legal authority . . . terminates.” Cf. In re Martin, 237 Mich. App.
253, 257 (Mich. Ct. App. 1999) (discussing an expired power of attorney to
exercise parental authority over minor children).

¶19 We hold today that if a power of attorney providing its named
holder authority to pursue a claim on behalf of another expires before a final
entry of judgment disposing of that claim, then the holder of that power of
attorney is precluded from continuing to pursue that claim. See Henry v.
Lane, 128 F. 243, 255-56 (5th Cir. 1904) (“Of course, after the power of
attorney expired by limitation, the appellant was not in any way [] bound
by any declarations of his agents . . . or by concessions made by the
appellee.”). In light of this holding, Appellants were barred from
continuing to seek damages for trespass and theft after their power of
attorney expired on December 31, 2015. We vacate the court’s orders
relating to default against Appellees and order the superior court to enter
judgment against Appellants for lack of standing.

IV. Sanctions Against Solomon Were Appropriately Denied

¶20 Appellants contend that the court erred when it denied their
motion for sanctions against Solomon under A.R.S. § 12-349(A)(3). At issue
is whether Solomon’s behavior delayed or expanded the proceedings.
A.R.S. § 12-349(A)(3). “We review application of a statute de novo.”
Solimeno v. Yonan, 224 Ariz. 74, 81, ¶ 30 (App. 2010) (citation omitted).

¶21 In its order denying Appellants’ motion, the court laid out the
somewhat confusing nature of Solomon’s role in the proceedings, and
noted that “the case has had some setbacks as a result of” his failure to state
whom he represented until seven months after ordered to do so. But the
court concluded that because of the immense nature of the case—
Appellants began serving over forty defendants after Solomon filed his

claims of trespass and theft, they cannot rely on the facts underlying those
claims to pursue this additional claim.

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motion to dismiss—“it will of necessity take a considerable amount of time
to resolve,” and Solomon’s behavior did “not contribute[] to either
expanding or delaying the proceedings.” On review of the record, we
believe the court correctly applied § 12-349(A)(3), and decline to overturn
its denial of Appellants’ motion for sanctions against Solomon.

V. Fees and Costs

¶22 Because we vacate any judgment below in favor of
Appellants, they have no claim to fees and costs below. Appellees request
their fees and costs on appeal. In our discretion, we deny their request for
fees. However, as the prevailing party on appeal, Appellees are entitled to
their costs upon compliance with Arizona Rule of Civil Appellate
Procedure 21.

CONCLUSION

¶23 We affirm dismissal of all but the trespass and theft claims.
We vacate the court’s orders regarding default judgment, and remand for
the court to enter a judgment that Appellants lacked standing to continue
to maintain the lawsuit against Appellees for the claims of trespass and
theft.

AMY M. WOOD • Clerk of the Court
FILED: JT
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