Brody v. Polsinelli

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

MARVIN BRODY, et al., Plaintiffs/Appellants,

v.

POLSINELLI, P.C., Defendant/Appellee.

No. 1 CA-CV 18-0325
FILED 3-26-2019

Appeal from the Superior Court in Maricopa County
No. CV2015-009296
The Honorable Karen A. Mullins, Judge

AFFIRMED

COUNSEL

Dow Law Office, Phoenix
By David W. Dow
Co-counsel for Plaintiffs/Appellants

Marvin Brody Attorney at Law, Woodbine, Maryland
By Marvin Brody
Co-counsel for Plaintiffs/Appellants

Lewis Roca Rothgerber Christie LLC, Phoenix
By Dale A. Danneman, Jon D. Weiss
Counsel for Defendant/Appellee
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MEMORANDUM DECISION

Judge Maria Elena Cruz delivered the decision of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Kenton D. Jones joined.

C R U Z, Judge:

¶1 Marvin and Nancy Brody appeal the denial of their Request
for Rule 56(d) Relief and the entry of two partial summary judgments
dismissing their legal malpractice claim against Polsinelli, P.C.
(“Polsinelli”). For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Brody filed this lawsuit alleging that Polsinelli, a law firm,
mishandled litigation in bankruptcy court relating to Brody’s Chapter 11
reorganization plan and mishandled litigation in superior court relating to
property owned by Brody Family Investments Limited Partnership.

I. Bankruptcy Matter

¶3 Marvin Brody retained Polsinelli to file a Chapter 11 petition
in the Bankruptcy Court for the District of Arizona. Brody filed for
bankruptcy to prevent the foreclosure of a multimillion-dollar mansion he
was renovating, funded by a loan from Geared Equity (“Geared”). During
the bankruptcy proceedings, Brody continued to market the mansion and
eventually found a buyer. Brody then asked the bankruptcy court to
approve his bankruptcy reorganization plan, which called for Brody to pay
Geared the contract interest, as opposed to the higher interest rate triggered
by the default. This reorganization plan was based on a Ninth Circuit
opinion, which held that cure of a default in a bankruptcy reorganization
plan relieved the debtor from paying default interest. In re Entz-White
Lumber & Supply, Inc., 850 F.2d 1338, 1341-42 (9th Cir. 1988). Application of
Entz-White and approval of the proposed plan would have reduced Brody’s
interest obligation by approximately $200,000.

¶4 The bankruptcy court rejected Brody’s reorganization plan
and Brody instructed Polsinelli to appeal. On appeal, the district court
found that Entz-White applied, reversed the bankruptcy court and held
Brody was not responsible for default interest. Both parties sought
attorneys’ fees in bankruptcy court. The parties settled soon thereafter;

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Brody paid Geared $150,000 for its attorneys’ fees, while $200,000 being
held in escrow for payment of default interest and the balance of all fee
deposits was released back to Brody.

II. Superior Court Matter

¶5 Brody had a business relationship with Scott Jung and his
business entities (collectively “Jung”); those entities jointly purchased,
renovated and sold luxury homes. In 2009, Jung purchased a property in
Scottsdale (the “Clinton Property”). Brody’s daughter, Heather Brody,
occupied the Clinton Property during this time. In 2013, as part of a
separate lawsuit filed on behalf of a Brody business entity against Jung, a
lis pendens was recorded on the Clinton Property; the lawsuit was
voluntarily dismissed.

¶6 In April 2014, Jung faced foreclosure of the Clinton Property
and initiated eviction proceedings against Heather Brody. In May 2014,
Polsinelli filed a lawsuit on behalf of Brody Family Investments Limited
Partnership (“BFILP”) against Jung, alleging BFILP held an equitable
interest in the Clinton Property. BFILP also sought and obtained a
temporary restraining order (“TRO”) enjoining Jung from selling the
Clinton Property without the superior court’s permission. Later that
month, the justice court handling eviction proceedings ordered Heather
Brody to vacate the Clinton Property by the end of the month and she
complied. On July 8, 2014, the lis pendens from the first lawsuit was
released. On July 16, 2014, Jung sold the Clinton Property without the
court’s permission, violating the TRO. Appellants alleged that at the time
they filed the lawsuit against Jung, Appellants asked Polsinelli to file a new
lis pendens; however, Polsinelli did not file a second lien before Jung sold
the Clinton Property.

III. Malpractice Lawsuit

¶7 Brody brought a legal malpractice action against Polsinelli,
alleging Polsinelli was liable for negligence, breach of fiduciary duty, and
negligent supervision. Included in those allegations was the contention
that at the time they authorized Polsinelli to file the lawsuit against Jung
they also directed that Polsinelli file a new lis pendens against the subject
property, and that Polsinelli’s failure to do so was a departure from the
applicable standard of care, and harmful to Brody’s economic interests. In
that regard, Brody certified in the complaint that expert testimony was
necessary to prove the licensed professional’s standard of care or liability
for the claim. See Ariz. Rev. Stat. (“A.R.S.”) § 12-2602(A). In October of

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2015, Plaintiffs identified their expert witness, David Vandeventer, and
timely provided his Preliminary Expert Affidavit.

¶8 In September of 2017, after the close of discovery, Polsinelli
moved for partial summary judgment in the bankruptcy matter and partial
summary judgment in the superior court matter, arguing, in part, that
Brody could not prove his claims because there was, as a matter of law,
insufficient expert testimony regarding the element of causation. In
response, Brody filed the expert’s “Supplemental Affidavit.” After the
motions for summary judgment were fully briefed, Brody filed a “Request
for Rule 56(d) Relief” seeking leave to utilize the newly-filed expert’s
Supplemental Affidavit. The superior court denied the Arizona Rule of
Civil Procedure (“Rule”) 56(d) request as both untimely and lacking merit.

¶9 The superior court granted both motions for partial summary
judgment. After Brody’s motion for reconsideration was denied, the court
entered final judgment dismissing Brody’s claims with prejudice. Brody
timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).

DISCUSSION

¶10 Brody raises three issues on appeal. He argues that: (1) the
superior court abused its discretion by denying his Request for Rule 56(d)
Relief; (2) the superior court erred by granting summary judgment in the
bankruptcy matter; and (3) the superior court erred by granting summary
judgment in the superior court matter. For the following reasons, we
affirm.

I. Request for Rule 56(d) Relief

¶11 Brody argues the superior court abused its discretion by
denying his request for relief under Rule 56(d). We disagree.

¶12 We review the superior court’s orders regarding expert
testimony and its denial of relief pursuant to Rule 56(d) for an abuse of
discretion. St. George v. Plimpton, 241 Ariz. 163 (App. 2016) (citations
omitted); Miller v. Kelly, 212 Ariz. 283, 285, ¶ 4 (App. 2006) (“discovery
issues are left to the discretion of trial courts.”).

¶13 To obtain relief in this setting under Rule 56(d), the moving
party must present an affidavit informing the court of: (1) the subject
evidence was unavailable or otherwise beyond the party’s control; (2) the
location of the evidence; (3) what the party believes the evidence will reveal;
(4) the methods to be used to obtain it; and (5) an estimate of the amount of

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time the additional discovery will require. Lewis v. Oliver, 178 Ariz. 330, 338
(App. 1993).

¶14 Pursuant to Rule 56(d), a party may seek relief to stay or
supplement summary judgment proceedings to conduct additional
discovery or to permit untimely disclosed opinions. A court may defer
considering a summary judgment motion and “allow time to obtain
affidavits or to take discovery before a response to the motion is required.”
Ariz. R. Civ. P. 56(d)(5)(A). The major objective of the rule is to ensure that
a diligent party is given a reasonable opportunity to prepare his case.
Hunter Contracting Co. v. Superior Court, 190 Ariz. 318, 322 (App. 1997)
(citation and quotation omitted). Moreover, the rule enables the trial court
to assure that each party has had an opportunity to ascertain the true facts.
Bobo v. John W. Lattimore, Contractor, 12 Ariz. App. 137, 141 (1970). Brody’s
motion did not, however, meet Rule 56(d) requirements.

¶15 Brody’s Rule 56(d) request was untimely because it was filed
over a week after the motions for partial summary judgment were fully
briefed. Additionally, Brody’s request was not supported by a good faith
consultation certificate in compliance with Rule 56(d)(1)(B) and Rule 7.1(h).
The request was also not supported by an “affidavit establishing specific
and adequate grounds for the request.” Ariz. R. Civ. P. 56(d)(1)(A).

¶16 In the request, Brody argued Polsinelli challenged their
expert’s opinions for the first time in its motions for partial summary
judgment, and therefore Brody should be allowed to present new expert
opinions. However, Brody failed to show that the Supplemental Affidavit
constituted newly discovered material or that Brody could not have with
reasonable diligence timely discovered and disclosed these opinions. See
Phil W. Morris Co. v. Schwartz, 138 Ariz. 90, 94 (App. 1983). Moreover, Brody
did not seek additional discovery before responding to Polsinelli’s motions.
Consequently, because his request was untimely and did not on its face
comply with Rule 56, the superior court did not err by denying Brody’s
discovery motion.

¶17 Brody’s reliance on Rasor v. Northwest Hospital, LLC, 243 Ariz.
160 (2017) is misplaced. In Rasor, the court held that, under the facts of that
case, the plaintiff can file a Rule 56(d) request for additional time to secure
a new expert if their expert’s qualifications are challenged. Id. at 165, ¶ 25.
Here, Polsinelli’s summary judgment motions were based on Brody’s
failure to timely disclose expert opinions on causation; the subject motions
did not challenge the expert’s qualifications. Moreover, relying on Rasor
does not satisfy Brody’s burden to show compliance with the requirements

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of Rule 56(d). For these reasons, the superior court did not err in denying
the Rule 56(d) relief.

II. Summary Judgment

¶18 We review a ruling granting summary judgment de novo.
Parkway Bank & Trust Co. v. Zivkovic, 232 Ariz. 286, 289, ¶ 10 (App. 2013).
The motion should be granted “if the facts produced in support of the claim
or defense have so little probative value, given the quantum of evidence
required, that reasonable people could not agree with the conclusion
advanced by the proponent of the claim or defense.” Orme Sch. v. Reeves, 166 Ariz. 301, 309 (1990). We independently determine whether there are
any genuine issues of material fact and if the superior court properly
applied the law. Parkway, 232 Ariz. at 289, ¶ 10. Moreover, we can affirm
summary judgment on any basis in the record, even if not relied on by the
superior court. Mutschler v. City of Phoenix, 212 Ariz. 160, 162, ¶ 8 (App.
2006).

A. Bankruptcy Matter

¶19 Brody argues that the superior court erred in granting
Polsinelli’s motion for partial summary judgment in the bankruptcy matter.
We disagree. Because the superior court correctly denied Appellants’ Rule
56(d) request, we only consider the Preliminary Expert Affidavit.

¶20 Because the crux of Brody’s complaint is a claim for legal
malpractice, to prevail, he must prove (1) the existence of an attorney-client
relationship that imposes a duty on the attorney to exercise that degree of
skill, care, and knowledge commonly exercised by members of the
profession; (2) the breach of a duty; (3) the defendant’s negligence was the
actual and proximate cause of the injury; and (4) the nature and extent of
damages. See Glaze v. Larsen, 207 Ariz. 26, 29, ¶12 (2004) (citing Phillips v.
Clancy, 152 Ariz. 415, 418 (App. 1986)). Each of Brody’s claims of legal
malpractice, including negligence, breach of fiduciary duty and negligent
supervision, require admissible evidence of a breach of the standard of care
proximately resulting in damages. Glaze, 207 Ariz. at 29, ¶ 15.

1. Breach of Duty

¶21 Expert testimony is generally required “to establish the
standard of care by which the professional actions of an attorney are
measured and to determine whether the attorney deviated from the proper
standard.” Baird v. Pace, 156 Ariz. 418, 420 (App. 1987). Where, however,
the attorney’s negligence “is so grossly apparent that a lay person would

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have no difficulty recognizing it,” expert testimony is not required. Asphalt
Eng’rs, Inc. v. Galusha, 160 Ariz. 134, 135-36 (App. 1989).

¶22 Brody alleged numerous instances in which Polsinelli
purportedly failed to meet the standard of care in the bankruptcy court
matter, specifically by not making an “equitable argument” regarding the
application of Entz-White to the default interest issue, failing to disclose
risks of continued litigation, not advocating strongly enough against the
bankruptcy court’s order instructing Brody to put money in an escrow
account for possible subsequent attorneys’ fees, and allegedly providing
misleading fee estimates.

¶23 Polsinelli’s alleged negligence is not apparent in the context
of the underlying action. It would not be “grossly apparent” to a jury
without expert testimony how and why Polsinelli should have prepared
and argued certain motions, how precedent applied to bankruptcy issues,
and how Polsinelli should have communicated with Brody regarding risks
and calculations of adverse attorneys’ fees awards considered in the context
of an outstanding settlement offer. Asphalt Eng’rs, 160 Ariz. at 136. Expert
testimony was necessary to establish the standard of care and whether
Polsinelli failed to meet that standard. Further, the Preliminary Expert
Affidavit failed to identify the standard of care that Brody contends
Polsinelli breached.

¶24 All of the expert’s opinions are contained in his Preliminary
Expert Affidavit. At the expert’s deposition, when asked to identify
Polsinelli’s purported representation errors, the expert testified that he
“wasn’t hired to . . . second-guess the tactical decisions.” Regarding
litigation strategy, the expert testified that while he would have taken a
different approach, “this is not saying that [the Poslinelli lawyer] violated
the standard by doing something else.” Rather than explain specifically the
“licensed professional’s acts, errors or omissions that the expert considers
to be a violation of the applicable standard of care,” A.R.S. § 12-2602(B)(3),
the expert testified, “I don’t know” what Polsinelli failed to do in order to
meet the standard of care. Brody has failed to offer any evidence regarding
the appropriate standard of care. Accordingly, reasonable people could not
agree with the conclusion that Polsinelli deviated from the applicable
standard of care. Therefore, there is no triable issue of material fact and the
superior court did not err in granting the motion for summary judgment.

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2. Causation

¶25 The expert’s causation opinion is also deficient pursuant to
A.R.S. § 12-2602. Brody was required to present some evidence
demonstrating that “but for the attorney’s negligence, he would have been
successful in the prosecution or defense of the original suit.” Glaze, 207
Ariz. at 29, ¶ 12 (internal quotation and citation omitted). This is commonly
called a “case within the case.” Frey v. Stoneman, 150 Ariz. 106, 111 (1986).
Absent specific evidence establishing causation, expert testimony is
required “to substantiate the link between the claimed breach and the
alleged injury.” Mann v. GTCR Golder Rauner, L.L.C., 351 B.R. 685, 703 (D.
Ariz. 2006) (citations omitted); see A.R.S. § 12-2602(B)(4). The rationale
behind this requirement “stems from the basic principle that a plaintiff has
the burden of proving his or her injuries were caused by defendant’s
conduct.” Benkendorf v. Adv. Cardiac Specialists Chartered, 228 Ariz. 528, 530,
¶ 9 (App. 2012) (discussing expert medical testimony establishing
causation). Although causation is generally a question of fact for the jury
to resolve, see Gipson v. Kasey, 214 Ariz. 141, 143, ¶ 9 (2007), the court may
resolve the issue if the evidence is insufficient to allow a jury to reasonably
infer that “the negligent conduct on the part of the defendant was a
proximate cause of plaintiff’s injuries.” Ritchie v. Krasner, 221 Ariz. 288, 298,
¶ 23 (App. 2009); see Markowitz v. Ariz. Parks Bd., 146 Ariz. 352, 358 (1985)
(“The question of proximate cause is usually for the jury and it is only when
reasonable persons could not differ that the court may direct a verdict on
the issue.”).

¶26 Here, Brody’s Preliminary Expert Affidavit contained no
opinions about how Polsinelli’s “acts, errors or omissions caused or
contributed” to Brody’s alleged damages. A.R.S. § 12-2602(B)(4).
Moreover, the expert stated at his deposition, “I have an opinion [about
causation], but . . . it’s not an educated opinion, so I’m going to keep it to
myself.” Further, the expert explained that he only “[s]ort of” testified
about causation, because ultimately he believed a judge “wouldn’t let an
expert opine” about causation.

¶27 Without “specific evidence establishing causation,” expert
testimony is necessary to prove causation in a legal malpractice action.
Mann, 351 B.R. at 705. The effect of Polsinelli’s acts on the subsequent
litigation, appeal to the district court or the award of attorneys’ fees is not
“grossly apparent” and thus not likely to be understood by a jury without
expert testimony. See Asphalt Eng’rs, 160 Ariz. at 136; see also In re 1996
Nissan Sentra, 201 Ariz. 114, 117, ¶ 6 (App. 2001) (unsworn assertions in a

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memorandum are not facts to be considered when deciding a motion for
summary judgment).

¶28 Brody relies on inadmissible evidence to show Polsinelli
caused his injuries; specifically, Brody cites email communications which
allegedly show that, had Polsinelli provided sufficient information, Brody
would have earlier settled the lawsuit with Geared. Polsinelli argues that
those emails are not in the record. Regardless, emails are hearsay and
therefore are not considered in deciding motions for summary judgment.
Cullison v. City of Peoria, 120 Ariz. 165, 168 (1978) (hearsay is not competent
evidence that creates a triable issue of fact to withstand summary
judgment). Because the expert provided no admissible opinions on
causation, the Preliminary Expert Affidavit is insufficient under A.R.S. § 12-
2602 as a matter of law and does not serve to raise a triable issue.
Accordingly, the superior court did not err.

B. Superior Court Matter

¶29 Brody argues that the superior court further erred in granting
Polsinelli’s motion for partial summary judgment in the superior court
matter. We disagree.

¶30 On May 9, 2014, Polsinelli filed a lawsuit in superior court
against Jung on behalf of BFILP and contemporaneously filed a TRO
application to enjoin Jung from selling the Clinton Property. Brody alleges
that Polsinelli is liable for legal malpractice because Polsinelli did not timely
record a lis pendens, which Brody further contends would have prevented
Jung from selling the Clinton Property in violation of the TRO.

1. Standing

¶31 Polsinelli argues that Brody does not have standing to bring
this action because BFILP claimed ownership interest in the Clinton
Property, not Brody. To have standing, a plaintiff must have suffered “an
injury in fact, economic or otherwise, caused by the complained-of conduct,
and resulting in a distinct and palpable injury giving the plaintiff a personal
stake in the controversy’s outcome.” Karbal v. Ariz. Dep’t of Revenue, 215
Ariz. 114, 116, ¶ 7 (App. 2007) (citation omitted). Rule 17 requires that “[a]n
action must be prosecuted in the name of the real party in interest.”

¶32 Brody is not the real party in interest and thus has no standing
to appeal. Polsinelli filed a lawsuit against Jung on behalf of BFILP, not
Brody. Moreover, it is undisputed that Appellants, in their individual
capacities, never owned the Clinton Property. The record reflects Brody

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conceded below that Appellants never claimed any personal ownership
interest in the Clinton Property. Brody further conceded below that Brody
“never claimed that he or his wife was personally injured by the sale of the
Clinton Property and that the sole claimed injury was to Brody Family
Investments, LP.”

¶33 Appellants contend that Brody signed a fee agreement with
Polsinelli on May 13, 2014 and therefore, “BFI is the Plaintiff in the lawsuit
against Jung and his various entities, . . . but it is not the client.” The fee
agreement is not in the record. See GM Dev. Corp. v. Cmty. Am. Mortg. Corp.,
165 Ariz. 1, 4 (App. 1990) (on appeal, materials not in the record before the
superior court will not be considered). Brody cites his deposition
testimony, in which he affirms that the complaint was filed at his
“direct[ion] . . . as the general partner” of the partnership. Even if Brody
signed the client agreement as a BFILP partner, that alone does not make
him the real party in interest. Section 29-1013 states, “[p]roperty acquired
by a partnership is property of the partnership and not of the partners
individually.” Any injury that resulted from the sale of the Clinton
Property in violation of the TRO was suffered by BFILP. Accordingly,
Brody’s argument is not supported by specific facts sufficient to raise a
triable issue, and therefore the superior court did not err.

2. Preliminary Expert Affidavit

¶34 The Preliminary Expert Affidavit also provides insufficient
expert testimony on the standard of care in the superior court matter. In a
legal malpractice action, unless the attorney’s negligence is “so grossly
apparent that a lay person would have no difficulty recognizing it,” expert
testimony is required. Asphalt Eng’rs, 160 Ariz. at 135-36. Expert testimony
is required “to establish the standard of care by which the professional
actions of an attorney are measured and to determine whether the attorney
deviated from the proper standard.” Baird, 156 Ariz. at 420. Here, while
the expert’s disclosed opinion was that it was below the standard of care
for Polsinelli “not to follow Plaintiffs instructions,” such disclosed opinion
does not inform the trier of fact as to what a reasonably prudent lawyer
would have done under the circumstances. Brody’s expert testimony is
insufficient. Accordingly, the superior court did not err in granting the
motion for partial summary judgment in the superior court matter.

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CONCLUSION

¶35 For the foregoing reasons, we affirm.1

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

1 Mr. Brody filed a Notice of Appearance the day before oral argument
and argued before the court. Mr. Brody is a retired member of the Arizona
State Bar. Pursuant to Rule 32(c)(5) of the Arizona Rules of the Supreme
Court, a lawyer on retired status cannot practice law in any jurisdiction,
except to provide volunteer pro bono services under the supervision of a
qualified legal services organization. Accordingly, although Mr. Brody
may enter an appearance on his own behalf, Mr. Brody may not appear as
counsel on behalf of Mrs. Brody or any other party. Therefore, to the extent
Mr. Brody argued on behalf of Mrs. Brody or any others, Mr. Brody’s Notice
was improper and his argument possibly violated Arizona Rules of the
Supreme Court 31 and 32.

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