Flores v. Johnson

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

ROSA FLORES, et al., Plaintiffs/Appellants,

v.

EDWARD JOHNSON, et al., Defendants/Appellees.

No. 1 CA-CV 21-0490
FILED 8-4-2022

Appeal from the Superior Court in Maricopa County
No. CV2019-054729
The Honorable Sara J. Agne, Judge

AFFIRMED

COUNSEL

Ortega & Ortega, PLLC, Phoenix
By Alane M. Ortega
Counsel for Plaintiffs/Appellants

Jennings Strouss & Salmon, PLC, Phoenix
By J. Scott Rhodes, Jimmie W. Pursell, Jr., Kerry A. Hodges
Counsel for Defendants/Appellees Edward Johnson and Law Office of Ed Johnson, PLLC

Broening Oberg Woods & Wilson, PC, Phoenix
By Donald Wilson, Jr., Kelley M. Jancaitis
Counsel for Defendants/Appellees Justin Fernstrom and Law Office of Justin Fernstrom

Arizona Attorney General’s Office, Phoenix
By Deborah L. Garner
Counsel for Defendant/Appellee State of Arizona
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Decision of the Court

MEMORANDUM DECISION

Judge Angela K. Paton delivered the decision of the Court, in which
Presiding Judge Paul J. McMurdie and Chief Judge Kent E. Cattani joined.

P A T O N, Judge:

¶1 Rosa Flores, Gustavo Loya (collectively “Flores”), Ivanna
Lopez, and Francisco Lopez (collectively “Lopez”), (altogether
“Appellants”) appeal the superior court’s dismissal of their First Amended
Complaint under Arizona Rule of Civil Procedure 41(a)(1)(B) providing
that a second voluntary dismissal operates as an adjudication on the merits.
Because the claims are time-barred, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 We review a grant of a motion to dismiss de novo, viewing all
well-pled facts as true. Brittner v. Lanzilotta, 246 Ariz. 294, 295-96, ¶ 4 (App.
2019) (citation omitted). Appellants filed a complaint in 2018 (“First
Complaint”) alleging that Johnson and Fernstrom intentionally
undermined a prospective adoption by Ivanna Lopez, the children’s
maternal aunt, while the Department of Child Safety (“DCS”) was seeking
to terminate the parental rights of the children’s mother. They claimed that
Johnson, while representing Lopez and without her knowledge, asked the
court to dismiss her future adoption hearing by circumventing normal
court operating procedures and violating his duty of candor to the court.
Appellants specifically alleged that Johnson lied when telling the court that
DCS no longer consented to the proposed adoption and did not disclose
that his client was unaware of, and did not consent to, the dismissal. They
further alleged that Fernstrom, acting as counsel to the foster parents
seeking to adopt the children, bypassed ordinary court procedure by filing
a petition to adopt and asking the court to set an adoption hearing for the
following day.

¶3 As Appellants further allege, the superior court granted the
petition the next day at the adoption hearing. Appellants moved—and DCS
stipulated to—setting aside that adoption, and the court did so. But two
years later, the court allowed those same foster parents to adopt the
children. We affirmed the dismissal of Flores’s later petition to adopt on
appeal. Rosa F. v. Dep’t of Child Safety, 1 CA-JV 19-0392, 2020 WL 5803281
(Ariz. App. Sept. 29, 2020) (mem. decision).

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Decision of the Court

¶4 Meanwhile, on November 6, 2019, Appellants filed a second
complaint in the United States District Court of Arizona (“Second
Complaint”). It contained a summarized version of the allegations in the
First Complaint, including Johnson’s alleged malfeasance in asking the
juvenile court to dismiss the adoption proceedings, and Fernstrom’s alleged
untoward cooperation with DCS in assisting his clients’ adoption of the
children. In addition to negligence, breach of fiduciary duty, and civil
conspiracy, Appellants alleged that Johnson and Fernstrom deprived them
of their rights under the Arizona Constitution. But Appellants voluntarily
moved to dismiss the Second Complaint on November 27, 2019, and
subsequently moved to dismiss their First Complaint on June 25, 2020.

¶5 Before moving to dismiss their first two complaints, however,
Appellants filed the instant action in superior court on October 22, 2019
(“Instant Complaint”). The Instant Complaint contained essentially
identical allegations to the first two complaints: that Johnson asked the
superior court to dismiss Flores’s petition to adopt the children without his
client’s knowledge or consent and that Fernstrom improperly colluded
with DCS to ensure that his clients could adopt the children. In addition to
claims for breach of fiduciary duty, negligence, and civil conspiracy,
Appellants claimed that Johnson and Fernstrom violated their state
constitutional rights.

¶6 Appellants then filed two identical documents titled “First
Amended Complaint” on November 26 and December 3, 2019, in superior
court. These documents included largely the same allegations and causes
of action in the Instant Complaint but added substantial detail concerning:
the fiduciary duties owed to Appellants by Fernstrom and Johnson,
statements of law, allegations of specific knowledge, and allegations that
Johnson and Fernstrom were sanctioned by the State Bar of Arizona.
Although the First Amended Complaint did not include the claim for civil
conspiracy, it added claims against Johnson and Fernstrom for intentional
infliction of emotional distress (“IIED”), abuse of process, and aiding and
abetting a tort.

¶7 Fernstrom filed a motion to dismiss the Instant Complaint, as
amended, arguing that the two voluntary dismissals operated as an
adjudication on the merits under Rule 41(a)(1)(B) and that claim preclusion
barred the Instant Complaint. Johnson filed an additional motion to
dismiss, which Fernstrom joined, also arguing that: (1) Rule 41 barred a
third complaint against him, (2) the statute of limitations time-barred
Appellant’s claims, and (3) the complaint otherwise failed to state a claim
for relief.

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Decision of the Court

¶8 The superior court granted the motion to dismiss Johnson and
Fernstrom. See Ariz. R. Civ. P. 41(a)(1)(B). The court agreed that Appellants
were precluded from filing a third complaint after voluntarily dismissing
their two prior actions involving essentially the same parties, operative
facts, and claims for relief. Although the court declined to resolve the
motion on the basis of the applicable statute of limitations, it found that
Appellants “possessed a minimum requisite of knowledge sufficient to
identify that a wrong occurred and caused injury as early as May 23, 2017,
and no later than October 9, 2017.” The court noted Appellants admitted
that their state constitutional claims did not apply to Johnson and
Fernstrom. The court entered a judgment under Rule 54(b) in favor of
Johnson and Fernstrom.

¶9 Appellants timely appealed. We have jurisdiction pursuant
to Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12-
120.21(A)(1), and -2101(A)(1).

DISCUSSION

I. The statute of limitations bars Appellants’ Instant Complaint.

¶10 We will uphold the superior court’s disposition for any
legally correct reason in the record. Logerquist v. Danforth, 188 Ariz. 16, 18
(App. 1996). We review the grant of a motion to dismiss de novo. Romero
v. Hasan, 241 Ariz. 385, 386, ¶ 6 (App. 2017). The superior court declined to
address Johnson and Fernstrom’s arguments that Appellants’ claims were
time-barred under the applicable statute of limitations in its order
dismissing Appellants’ complaint. But the court found that Appellants’
knowledge of the facts was sufficient to support a cause of action no later
than October 9, 2017. We review the interpretation of a statute of limitations
de novo. Webster Bank NA v. Mutka, 250 Ariz. 498, 499, ¶ 6 (App. 2021).

¶11 Once a plaintiff “knows or, in the exercise of reasonable
diligence, should know the facts underlying the cause [of action,]” the
statute of limitations begins running. Gust, Rosenfeld & Henderson v.
Prudential Ins. Co. of Am., 182 Ariz. 586, 588 (1995) (citing 2 Calvin W.
Corman, Limitations of Actions § 11.1.1 (1991)). In other words, the statute
of limitations begins to operate “after an injury occurs and is (or reasonably
should have been) discovered.” State v. Ariz. Bd. of Regents, 253 Ariz. 6, 13,
¶ 26 (2022) (citation omitted).

¶12 On appeal, Appellants argue that “[a]ll of the Tort Claims
arise out of the Appellees’ manipulation of the relevant court procedures

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and fraud committed on the Superior Court to ensure the failure of the
Flores and Lopez petitions.” We agree that the manipulation allegation is
the basis for Appellants’ claims, and thus examine when Appellants
became aware of these injuries to determine when the statute of limitations
began to run. On de novo review, we agree with the superior court that
Appellants knew or should have known of their cause of action on May 23,
2017, and in any event, no later than October 9, 2017.

¶13 In the underlying adoption proceedings, Appellants filed a
motion to set aside the Foster Placement’s Adoption Order on May 23, 2017.
See generally ELM Ret. Ctr., LP v. Callaway, 226 Ariz. 287, 289, ¶ 7 (App. 2010)
(documents not attached to complaint may be considered if they are central
to a claim, without converting a motion to dismiss into one for summary
judgment). In moving to set aside the first adoption of the children,
Appellants necessarily knew about the allegedly wrongful or fraudulent
adoption of the children. This motion included a request that the order be
set aside on grounds of fraud. It noted that Flores was taken by surprise by
the adoption and challenged the adoption on statutory grounds. This
motion demonstrated knowledge of the underlying facts giving rise to the
claim: that the children were wrongfully adopted while the action by Flores
remained pending.

¶14 Moreover, counsel for Appellants filed a motion to compel the
testimony of Johnson on October 9, 2017. The motion recited the alleged
wrongdoing, including that Johnson while representing the foster family:
had scheduled the adoption on short notice, dismissed Lopez’s petition
without her knowledge or consent, and sought and obtained an expedited
hearing for adoption by the foster family. Appellants argued that Johnson
and Fernstrom were the only witnesses who could testify as to their
knowledge of the respective adoption petitions and “circumvent[ion of] the
Clerk of Court and Juvenile Adoptions Unit Processing to achieve an
adoption less than one day after filing the Petition to Adopt.” The contents
of the motion indicated that on the day it was filed Appellants were aware
of their injury by Johnson and Fernstrom, even if Appellants did not “know
all the facts underlying [the] cause of action.” Doe v. Roe, 191 Ariz. 313, 323,
¶ 32 (1998). Thus, the statute of limitations, at the latest, began running on
October 9, 2017.

¶15 Each of the remaining tort claims against Johnson and
Fernstrom have a two-year statute of limitations. A.R.S. § 12-542; see also
Hatch v. Reliance Ins. Co., 758 F.2d 409, 414-15 (9th Cir. 1985) (abuse of
process); Coulter v. Grant Thornton, LLP, 241 Ariz. 440, 444, ¶ 9 (App. 2017)
(breach of fiduciary duty); Rowland v. Kellogg Brown & Root, Inc., 210 Ariz.

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530, 532, ¶ 6 (App. 2005) (negligence); Hansen v. Stoll, 130 Ariz. 454, 460
(App. 1981) (IIED). The statute of limitations expired no later than October
9, 2019. The Instant Complaint was filed on October 22, 2019. Accordingly,
we find that the action is time-barred.

ATTORNEYS’ FEES AND COSTS ON APPEAL

¶16 Johnson and Fernstrom request their costs on appeal
pursuant to A.R.S. § 12-341 and Arizona Rule of Civil Appellate Procedure
(“ARCAP”) 21. As the prevailing party, we award them their taxable costs
upon compliance with ARCAP 21.

¶17 In their answering brief, Johnson and Fernstrom “reserve the
right to pursue” attorneys’ fees as a sanction against Appellants for filing a
frivolous appeal. We note that this language does not follow best practices
concerning a fee request, as parties seeking fees should ask for fees to be
awarded rather than reserving the right to pursue them. See ARCAP 21(a).
In any event, we exercise our discretion and decline to award fees in this
matter, including fees requested in motion practice before this court.

CONCLUSION

¶18 We affirm.

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

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