Horton v. Horton

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

STEPHEN MARK HORTON, Plaintiff/Appellant,

v.

JONATHAN HORTON, et al., Defendants/Appellees.

No. 1 CA-CV 25-0011
FILED 10-21-2025

Appeal from the Superior Court in Maricopa County
No. CV2023-017444
The Honorable John L. Blanchard, Judge

AFFIRMED

COUNSEL

J. Douglas McVay Attorney at Law, Phoenix
By J. Douglas McVay
Counsel for Plaintiff/Appellant

Moyes Sellers & Hendricks, Phoenix
By Joshua T. Greer, Natalya Ter-Grigoryan
Counsel for Defendants/Appellees
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MEMORANDUM DECISION

Judge Anni Hill Foster delivered the decision of the Court, in which
Presiding Judge James B. Morse Jr. and Judge Veronika Fabian joined.

F O S T E R, Judge:

¶1 Plaintiff Stephen Horton (“Stephen”) appeals the grant of
summary judgment for Defendant, Jonathan Horton (“Jonathan”).1 Stephen
argues that the trial court erred by determining that his claims began to
accrue, at the latest, in October 2020. For the reasons below, this Court
affirms.

FACTS AND PROCEDURAL HISTORY2

¶2 The following facts are undisputed. Stephen and Jonathan
founded, owned and jointly operated Hawaii Technical Environmental
Construction Company (“Hawaii Tech”). When Stephen became disabled
in approximately 2015, Jonathan took over operations of Hawaii Tech.

¶3 In 2020, as part of a divorce action, Stephen obtained financial
records of Hawaii Tech that revealed suspicious transactions between
Hawaii Tech’s accounts and unidentified persons or entities. Stephen’s
counsel suggested an investigation commence to determine if Jonathan was
mishandling funds and whether Hawaii Tech had sustained a loss from the
transactions. On August 26, 2020, Stephen’s estranged wife subpoenaed
Hawaii Tech’s financial records, as part of their divorce proceedings,
seeking information on benefits paid to Stephen and Jonathan. After
receiving the subpoena, Stephen and Jonathan met with Stephen’s counsel
on August 28, who informed the pair “that their interests with respect to
the subpoena may not align” and suggested that Jonathan and Hawaii Tech
should obtain separate counsel to respond to the subpoena. Separately, on

1 The Court respectfully refers to each party by their first name due to both

parties sharing the same surname.
2 When reviewing grants of summary judgment, this Court views “the

evidence and reasonable inferences in the light most favorable” to the non-
moving party. Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12 (2003).

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August 31, Stephen requested that Jonathan voluntarily produce financial
documents from Hawaii Tech.

¶4 Jonathan contested the subpoena and litigation ensued. On
September 17, counsel in the divorce case met and conferred regarding the
subpoena issued to Hawaii Tech. In a subsequent letter, counsel for
Stephen’s wife inquired about a lawsuit against Jonathan based on a
fiduciary duty and suggested that Stephen’s wife would pursue a lawsuit
against Jonathan. Stephen’s wife submitted a motion to compel Hawaii
Tech to respond to the subpoena on October 1, which the court granted,
requiring Hawaii Tech to respond by December 17. Having not received the
documents by February 2021, Stephen sent Jonathan a separate request for
the documents. Jonathan did not provide documents to Stephen until
March 2021.

¶5 Upon review of the documents, Stephen determined that he
suffered a loss “in excess of 1.5 million dollars.” He filed a complaint against
Jonathan on November 6, 2023, alleging four tort claims: (1) Pattern of
Unlawful Activity (A.R.S. § 13-2314.04); (2) Fraud; (3) Unjust Enrichment;
and (4) Constructive Trust and Lien. Jonathan moved for summary
judgment arguing that the statute of limitations for Stephen’s claims had
expired. Following briefing and oral argument, the superior court granted
summary judgment on all claims finding that Stephen’s claims were time-
barred. Jonathan lodged a form of order and Stephen did not oppose. The
court entered final judgment pursuant to Arizona Rule of Civil Procedure
54(c) and granted judgment in favor of Jonathan on all of Stephen’s claims.
Stephen then moved for a new trial, which the court denied after briefing.
Stephen appealed.

¶6 This Court has jurisdiction pursuant to A.R.S. § 12-
120.21(A)(1).

DISCUSSION

¶7 Stephen argues the court erred in determining his fraud
claims were time-barred because they did not accrue until March 2021. He
seeks remand and reinstatement of his complaint. In response, Jonathan
argues that the court correctly determined Stephen’s claims were time-
barred and that Stephen waived his appeal on all but the fraud claim.
Stephen concedes that his appeal is limited only to his claim for fraud.

¶8 Summary judgment is appropriate when “there is no genuine
dispute as to any material fact and that the moving party is entitled to
judgment as a matter of law.” Ariz. R. Civ. P. 56(a). This Court reviews a

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superior court’s grant of summary judgment de novo. Wells Fargo Bank, N.A.
v. Allen, 231 Ariz. 209, 213, ¶ 14 (App. 2012). Similarly, the expiration of a
statute of limitations is reviewed de novo. Satamian v. Great Divide Ins. Co.,
257 Ariz. 163, 169, ¶ 11 (2024).

I. Stephen’s evidence supports the expiration of the statute of
limitations.

¶9 Stephen argues the court erred in concluding the statute of
limitations began to run in October 2020. Stephen argues he did not
discover the facts constituting fraud until March 2021. He contends that
because the August 2020 documents could not tell him how much, if any,
corporate monies had been taken, he lacked knowledge sufficient to
identify that a wrong had occurred and caused injury.

¶10 When addressing a statute of limitations issue, a court must
determine (1) the date plaintiff filed his claim; (2) “the applicable statute of
limitations period”; (3) the date the “plaintiff’s cause of action accrue[d]”;
and (4) whether the statute of limitations period should be “suspended or
tolled for any reason.” Porter v. Spader, 225 Ariz. 424, 427, ¶ 8 (App. 2010).
If a defendant affirmatively establishes that the statute of limitations
applies, then the plaintiff bears the burden of proving the limitations period
was tolled. See Troutman v. Valley Nat’l Bank of Ariz., 170 Ariz. 513, 517 (App.
1992).

¶11 The statute of limitations for fraud is three years but does not
begin to accrue “until the discovery by the aggrieved party of the facts
constituting the fraud.” A.R.S. § 12-543(3). Discovery occurs “when the
defrauded party discovers or with reasonable diligence could have
discovered the fraud” (“discovery rule”). Mister Donut of Am., Inc. v. Harris, 150 Ariz. 321, 323 (1986). However, a plaintiff “need not know all the facts
underlying a cause of action to trigger accrual.” Satamian, 257 Ariz. at 170,
¶ 13 (quoting Walk v. Ring, 202 Ariz. 310, 316, ¶ 22 (2002)). Rather, “‘the core
question’ of when a claim accrued is not when the plaintiff was conclusively
aware” he had a claim, Cruz v. City of Tucson, 243 Ariz. 69, 72, ¶ 8 (App.
2017) (quotation omitted), but when the plaintiff knows or should have
known the ‘who’ and the ‘what’ elements of causation to the point “a
reasonable person would be on notice to investigate whether the injury
might result from fault.” Kopacz v. Banner Health, 245 Ariz. 97, 100, ¶ 9 (App.
2018); see also Lawhon v. L.B.J. Institutional Supply, Inc. 159 Ariz. 179, 183
(App. 1988) (“The cause of action does not accrue until the plaintiff knows
or should have known of both the what and who elements of causation.”).

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¶12 Here, Stephen claims the August 2020 documents suggested
fraudulent transactions, but he could not determine how much, if any,
corporate monies were missing. It is undisputed that these documents
satisfied Stephen’s knowledge of the ‘who’ element to trigger accrual.
Stephen argues his lack of knowledge as to how much money, if any, was
taken left the ‘what’ element unknown. This Court disagrees.

¶13 The record and Stephen’s briefing concede that his fraud
claim accrued in August 2020. Stephen admits that “[i]t is undisputed that
there were . . . suspicious transactions which could give a reasonable
indication whether a fraud occurred at all.” That reasonable indication put
Stephen on notice to do “what he was expected to do – an investigation.”
Stephen also admits that he had an obligation and did in fact begin a legally
adequate investigation of his claims against Jonathan starting in late August
2020. Stephen’s counsel described a discussion in an August 2020 meeting
between him, his client and Jonathan. While recounting the meeting,
Stephen’s counsel said: “I did not tell Jonathan Horton that Plaintiff
Stephen Horton was aware that money was missing from the Hawaii Tech
accounts.” Counsel’s declaration admits that Stephen knew money was
missing (“what”) during his initial meeting with Jonathan in August of
2020. Stephen’s pleading also acknowledged Jonathan (“who”) was
responsible for Hawaii Tech’s corporate account.

¶14 Stephen’s arguments and the record of repeated requests for
Hawaii Tech’s financial records show that Stephen pursued an
investigation into the alleged fraud by Jonathan as early as August 2020. As
a matter of law, based on Stephen’s admissions, the date of accrual for the
fraud claim was at the end of August 2020.

II. The statute of limitations for the fraud claim is not tolled.

¶15 Stephen also argues that the statute of limitations should be
tolled based on Jonathan’s efforts to mislead and delay Stephen’s
investigation. Specifically, Stephen’s counsel alleged that Jonathan’s
counsel made assurances to Stephen that there was no wrongdoing.

¶16 Positive acts of concealment to avoid detection can toll the
statute of limitations. Tovrea Land & Cattle Co. v. Linsenmeyer, 100 Ariz. 107,
130 (1966). To establish fraudulent concealment, one must show a
defendant’s intentional acts tended to conceal the cause of action. Id. But
Jonathan’s refusal to produce the financial records voluntarily cannot be
said to be a “trick or contrivance intended to exclude suspicion and prevent
inquiry.” Id. Rather, the evidence shows that Stephen and his counsel

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continued to distrust and investigate Jonathan, even after he denied
wrongdoing. Stephen admitted that in a December 2020 meeting,
Jonathan’s counsel assured him there was no wrongdoing. Nevertheless,
Stephen and Counsel continued to investigate into February of 2021 by
asking Jonathan’s counsel again for requested financial documents.
Stephen’s counsel confirmed Stephen’s distrust by writing, “[f]rom my
client’s perspective, Jonathan’s refusal to produce those records for
evaluation by my client’s accountant when my client has an absolute right
to see them raises a reasonable presumption that something untoward
occurred.”

¶17 Stephen’s continued reliance on Jonathan’s failure to produce
Hawaii Tech’s documents does not toll the statute of limitations. Based on
the facts in the record, Stephen has not met his burden of proving the statute
was tolled. See Coronado Dev. Corp. v. Superior Court (Gesky), 139 Ariz. 350,
352 (1984) (a plaintiff that continues to distrust a defendant despite
defendant’s representations but does nothing to investigate further or file a
lawsuit, will not toll the statute of limitations).

III. Attorneys’ Fees.

¶18 Jonathan argues that the court should grant attorneys’ fees
and costs pursuant to A.R.S. § 12-349(A). Section 12-349 permits the court
to assess reasonable attorneys’ fees if the attorney or party (1) “[b]rings or
defends a claim without substantial justification”; (2) “[b]rings or defends
a claim solely or primarily for delay or harassment”; (3) “[u]nreasonably
expands or delays the proceeding[s]”; or (4) “[e]ngages in abuse of
discovery.” Section 12-349 “requires a showing of both groundlessness and
the absence of good faith.” Ariz. Republican Party v. Richer, 257 Ariz. 237,
243, ¶ 14 (2024). Stephen brought a colorable claim supported by rational
arguments with adequate case law to support his position. He pursued the
appeal in good faith and it was not groundless. The request for attorneys’
fees is denied.

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CONCLUSION

¶19 For the foregoing reasons, this Court affirms the superior
court’s ruling. Jonathan’s request for attorneys’ fees is denied. A.R.S. § 12-
349(A)(1). But as the successful party to this appeal, this Court awards costs
to Jonathan upon compliance with Arizona Rule of Civil Appellate
Procedure 21. Ariz. R. Civ. App. P. 21; A.R.S. § 12-341.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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