Sipolt Marketing v. Non Profit Patient Center Inc

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

M. SIPOLT MARKETING LLC, et al.,
Plaintiffs/Appellees,

v.

NON PROFIT PATIENT CENTER INC., et al.,
Defendants/Appellants.

No. 1 CA-CV 20-0142
FILED 12-29-2020

Appeal from the Superior Court in Maricopa County
No. CV2019-005595
The Honorable Daniel G. Martin, Judge

DISMISSED

COUNSEL

Coppersmith Brockelman, PLC, Phoenix
By John E. DeWulf, Shelley Tolman
Counsel for Plaintiffs/Appellees M Sipolt Marketing, Next Step Advisors LLC,
Sabertooth Holding LLC

Snell & Wilmer, LLP, Phoenix
By Christopher H. Bayley, Benjamin W. Reeves, James G. Florentine
Counsel for Plaintiff/Appellee True Harvest LLC

Lane Hupp & Crowley, PLC, Phoenix
By Alex Heglund Lane
Counsel for Defendants/Appellants
 SIPOLT MARKETING, et al. v. NON PROFIT, et al.
Decision of the Court

MEMORANDUM DECISION

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

M O R S E, Judge:

¶1 Non-Profit Patient Center, Inc. and Alex Lane (collectively
"Non-Profit") appeal the superior court's order adopting a proposed
settlement agreement. Separately, Non-Profit asserts the superior court
erred in denying its motion to disburse funds, which Non-Profit alleges it
is owed under the settlement agreement at issue. True Harvest, LLC ("True
Harvest") contests Non-Profit's claims and further argues that this court
lacks appellate jurisdiction. We agree and dismiss the appeal.

FACTS AND PROCEDURAL BACKGROUND

¶2 True Harvest operates a medical marijuana dispensary and
previously leased Non-Profit's rights to a "medical marijuana dispensary
registration certificate" and an "approval to operate." Their legal dispute
arises out of conflicts stemming from this arrangement. But we need not
delve deeply into the dispute's underlying facts because the procedural
history of this case demonstrates that we lack jurisdiction.

¶3 M. Sipolt Marketing, LLC, Next Step Advisors, LLC, and
Sabertooth Holdings, LLC, collectively filed suit against True Harvest for
breach of notes, accounting, and the appointment of a receiver. Five days
later, those parties stipulated to the appointment of a receiver. Shortly
thereafter, True Harvest filed a third-party complaint against Non-Profit for
fraud, breach of contract, negligent misrepresentation, and tortious
interference with business expectancy.

¶4 The parties litigated numerous disputes regarding
enforcement of the receivership order but eventually agreed upon a
settlement. That settlement was read into the record pursuant to Arizona
Rule of Civil Procedure ("Rule") 80(a)(2). Among other things, the
settlement provided that True Harvest would pay a total of $250,000 and
that the parties would "draft broad mutual releases." At that time, it was
noted that the parties were "subject to [the court's] jurisdiction . . . until the
matter gets dismissed."

2
 SIPOLT MARKETING, et al. v. NON PROFIT, et al.
Decision of the Court

¶5 Things immediately went awry. True Harvest paid Non-
Profit $50,000 but did not pay the remaining $200,000 as originally
scheduled. Additionally, the parties litigated other issues regarding the
receivership order and the specific terms of the settlement. The "broad
mutual releases" were never agreed upon, and no written agreement
between the parties was signed. These disputes culminated in the superior
court ordering the parties to submit competing proposed settlement
agreements detailing all terms of the settlement. Ultimately, the court
selected True Harvest's proposed settlement agreement and entered it as an
order of the court ("Settlement Order").

¶6 Relevant here, the Settlement Order provides that after the
completion of certain portions of settlement, including payment of the
remaining $200,000 to Non-Profit, "True Harvest shall dismiss the Third
Party Complaint against [Non-Profit] and Alex Lane with prejudice." The
Settlement Order does not dismiss any claims. Nor does it contain any
express determination that it is intended to serve as a final judgment under
Rule 54(b) or (c).

¶7 Non-Profit appeals the Settlement Order and the superior
court's denial of its motion to disburse funds.

DISCUSSION

¶8 Non-Profit argues we have jurisdiction under A.R.S.
§ 12-2101(A)(1) and (3).

I. The Settlement Order is not a final judgment under A.R.S.
§ 12-2101(A)(1).

¶9 In relevant part, A.R.S. § 12-2101(A)(1) provides for
jurisdiction over appeals taken "[f]rom a final judgment entered in an action
. . . commenced in a superior court . . . ." "In Arizona, with certain
exceptions, jurisdiction of appeals is limited to final judgments which
dispose of all claims and all parties. Public policy is against deciding cases
piecemeal." Musa v. Adrian, 130 Ariz. 311, 312 (1981).

¶10 Non-Profit claims the Settlement Order is a "formal signed
Judgment/Order by the Superior Court purporting to resolve all remaining
claims in the action below." The Settlement Order's plain language refutes
Non-Profit's claim. The Settlement Order did not dismiss True Harvest's
third-party complaint, which remains pending before the superior court.
Instead, the Settlement Order expressly contemplates that the complaint
will be dismissed at some later date. Because it does not dispose of all

3
 SIPOLT MARKETING, et al. v. NON PROFIT, et al.
Decision of the Court

claims and all parties, the Settlement Order is not a final judgment under
Rule 54(c). Moreover, the Settlement Order does not include the express
Rule 54(b) language required for a final judgment resolving less than all
claims. See Madrid v. Avalon Care Ctr.-Chandler, LLC, 236 Ariz. 221, 224, ¶ 9
(App. 2014) (noting that the lack of an express Rule 54(b) determination
defeats finality). Therefore, the Settlement Order is not a final judgment,
and A.R.S. § 12-2101(A)(1) does not provide jurisdiction over Non-Profit's
appeal.

II. A.R.S. § 12-2101(A)(3) does not grant us jurisdiction to review the
Settlement Order.

¶11 In the alternative, Non-Profit cites A.R.S. § 12-2101(A)(3) as
authority for this court's jurisdiction over the Settlement Order. That
statute provides that this Court has jurisdiction over "any order affecting a
substantial right made in any action when the order in effect determines the
action and prevents judgment from which an appeal might be taken."
A.R.S. § 12-2101(A)(3). This provision does not provide jurisdiction for an
appeal from the Settlement Order.

¶12 Assuming the Settlement Order affects a substantial right and
effectively determines the action, Non-Profit does not demonstrate that the
Settlement Order prevents a final judgment from being entered. In fact, the
Settlement Order expressly contemplates the future finality of pending
claims. This renders it dissimilar from other circumstances where A.R.S.
§ 12-2101(A)(3) confers jurisdiction.

¶13 Our courts have held A.R.S. § 12-2101(A)(3) provides
appellate jurisdiction over dismissals without prejudice in cases where the
statute of limitations has passed and no savings statute applies. See Garza
v. Swift Transp. Co., 222 Ariz. 281, 284, ¶ 15 (2009); McMurray v. Dream
Catcher USA, Inc., 220 Ariz. 71, 74, ¶ 4 (App. 2009).1 Similarly, courts have
held that the provision provides appellate jurisdiction over dismissals
without prejudice based on a forum-selection clause. See Dunn v. FastMed
Urgent Care PC, 245 Ariz. 35, 38, ¶ 9 (App. 2018). In both circumstances, the
superior court's non-final dismissal of the claims ends the case without the
possibility of a final judgment. That is not what we have here. Nothing

1 These cases discuss A.R.S. § 12-2101(D), but that section was later
renumbered as § 12-2101(A)(3) without any substantive change. See 2011
Ariz. Sess. Laws, ch. 304, § 1.

4
 SIPOLT MARKETING, et al. v. NON PROFIT, et al.
Decision of the Court

about the Settlement Order prevents a final judgment from being entered
in this case, and Non-Profit does not argue otherwise.

¶14 In sum, neither statute cited by Non-Profit grants us
jurisdiction to review the Settlement Order.2

III. We decline to sua sponte exercise special-action jurisdiction.

¶15 Although we do not have appellate jurisdiction, we could, as
a matter of discretion, treat this appeal as a petition for special action and
exercise special-action jurisdiction. See Dunn, 245 Ariz. at 38, ¶ 9 n.1; A.R.S.
§ 12-120.21(A)(4). But Non-Profit has not requested that we accept
special-action jurisdiction nor shown that it lacks an adequate remedy by
way of direct appeal from a final judgment. See Dunn, 245 Ariz. at 38,
¶ 9 n.1; A.R.S. § 12-120.21(A)(4). We are disinclined to take such action sua
sponte.

IV. Attorneys' fees and costs.

¶16 Both parties request attorneys' fees under A.R.S. § 12-341.01.
True Harvest also requests fees under A.R.S. §§ 12-349 and -350. Non-Profit
is not the prevailing party on appeal, and therefore is not entitled to fees.
In our discretion, we decline to award True Harvest its attorneys' fees.

¶17 True Harvest also requests its costs under A.R.S. § 12-341. As
the prevailing party on appeal, True Harvest is entitled to recover its costs
upon compliance with ARCAP 21.

2 Non-Profit also challenges the superior court's denial of its motion
to disburse funds. However, Non-Profit's sole jurisdictional argument over
the denial of the motion is premised on its argument that the Settlement
Order is an appealable order. Because neither A.R.S. § 12-2101(A)(1) nor (3)
provide a basis for jurisdiction, we have no jurisdiction to consider
Non-Profit's challenge to the motion to disburse funds.

5
 SIPOLT MARKETING, et al. v. NON PROFIT, et al.
Decision of the Court

CONCLUSION

¶18 For the reasons above, we dismiss the appeal for lack of
jurisdiction.

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

6