A-Plan v. Quarles & Brady

CourtCourt of Appeals of Arizona
DecidedFebruary 27, 2014
Docket1 CA-CV 13-0054
StatusUnpublished

This text of A-Plan v. Quarles & Brady (A-Plan v. Quarles & Brady) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A-Plan v. Quarles & Brady, (Ark. Ct. App. 2014).

Opinion

NOTICE: NOT FOR PUBLICATION. UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

IN THE ARIZONA COURT OF APPEALS DIVISION ONE

A-PLAN DEFENSE FUND, INC., a non-profit entity; ALLEN ADAMS, II; EUGENE H. FRANK; JOHN LUMLEY; PETER W. MCCUE, III; ARTHUR MELNICK; GERALD N. PILOT; and RICHARD P. BARTHELEMY, appearing as individuals and as class representatives, Plaintiffs/Appellants,

v.

QUARLES & BRADY, LLP, Defendant/Appellee.

No. 1 CA-CV 13-0054 FILED 2-27-2014

Appeal from the Superior Court in Maricopa County No. CV2008-023215 The Honorable Katherine Cooper, Judge

AFFIRMED

COUNSEL

Law Office of Ethan Steele, P.C., Tucson By Ethan Steele

Counsel for Plaintiffs/Appellants

Osborn Maledon, P.A., Phoenix By Geoffrey M.T. Sturr, Thomas L. Hudson, Sharad H. Desai

Counsel for Defendant/Appellee A-PLAN, et al. v. QUARLES & BRADY Decision of the Court

MEMORANDUM DECISION

Judge Lawrence F. Winthrop delivered the decision of the Court, in which Presiding Judge Patricia A. Orozco and Judge Kenton D. Jones joined.

W I N T H R O P, Judge:

¶1 Plaintiffs, A-Plan Defense Fund, Inc. (“APDF”); Allen Adams, II; Eugene H. Frank; John Lumley; Peter W. McCue, II; Arthur Melnick; Gerald N. Pilot; and Richard P. Barthelemy (collectively, “Appellants”) appeal the superior court’s summary judgment in favor of Defendant, Quarles & Brady, L.L.P. (“Quarles & Brady”) on the basis that Appellants’ legal malpractice lawsuit is precluded by the statute of limitations. Appellants argue that (1) they filed their lawsuit before the statutory limitations period had expired, and (2) even if their lawsuit was not filed within the statutory period, Quarles & Brady is equitably estopped from asserting a statute of limitations defense. For the following reasons, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND 1

¶2 The individual Appellants in this case are retired and active pilots for Trans World Airlines (“TWA”). This legal malpractice case arises from Appellants’ efforts to save their TWA pension plan (“the A- Plan”).

¶3 In 1992, TWA filed for bankruptcy, and the Pension Benefit Guaranty Corporation (“PBGC”) - a corporation wholly owned by the federal government that operates a mandatory government insurance program which protects pension benefits covered by the Employee Retirement Income Security Act of 1974 (“ERISA”) - issued a notice that

1 Quarles & Brady notes that Appellants have failed to fully support factual assertions contained in their opening brief with specific citations to the record. We decline Quarles & Brady’s invitation to sanction Appellants, however, and instead rely on our review of the record in deciding this appeal on the merits. See Clemens v. Clark, 101 Ariz. 413, 414, 420 P.2d 284, 285 (1966); Lederman v. Phelps Dodge Corp., 19 Ariz. App. 107, 108, 505 P.2d 275, 276 (1973).

2 A-PLAN, et al. v. QUARLES & BRADY Decision of the Court

TWA’s pension plans, including the A-Plan, were significantly underfunded. PBGC expressed its intention to terminate the pension plans and pursue TWA and its chairman, Carl Icahn, for the $1.124 billion in underfunded liability. To resolve disputes that prevented TWA from moving forward with reorganization, PBGC, TWA, Icahn, and the respective unions, including the Air Line Pilots Association, International (“ALPA”), entered a Comprehensive Settlement Agreement (“CSA”). In part, the CSA provided that PBGC would not terminate the pension plans unless a “Significant Event,” as defined in the CSA, occurred. In December 2000, Pichin Corporation (“Pichin”), an Icahn subsidiary authorized to oversee the pension plan, notified PBGC that such a significant event had occurred, and requested that PBGC terminate the pension plans. PBGC agreed to terminate the plans pursuant to the CSA. In an effort to stop PBGC, restore the A-Plan, and obtain monetary damages resulting from the A-Plan’s termination, ALPA filed a lawsuit (the “ALPA” action) in the United States District Court for the District of Columbia on December 29, 2000. ALPA argued that both the CSA and termination of the A-Plan violated ERISA.

¶4 In November 2001, while summary judgment motions in the ALPA action were pending, APDF retained Quarles & Brady to analyze any potential claims and possibly file a motion to intervene. Before Quarles & Brady could file a motion to intervene on Appellants’ behalf, however, the district court (the Honorable Ricardo M. Urbina, now- retired) granted a defense motion for summary judgment on March 29, 2002. See Air Line Pilots Ass’n, Int’l v. Pension Benefit Guar. Corp., 193 F. Supp. 2d 209 (D.D.C. 2002). Judge Urbina determined the challenged portion of the CSA did not violate ERISA, PBGC made an appropriate cause determination pursuant to ERISA in 1992 before entering the CSA, and PBGC’s actions in terminating the A-Plan in 2001 were neither arbitrary nor capricious. Id. at 217-21.

¶5 On May 15, 2002, Quarles & Brady filed, on behalf of Appellants, a separate class action (the “Adams“ action) in the United States District Court for the District of Columbia against entities involved in the ALPA action, including PBGC, Pichin, and ALPA. Appellants sought an order setting aside termination of the A-Plan and monetary damages for lost benefits. On July 22, 2002, the district court (the Honorable Royce C. Lamberth) stayed Adams pending disposition of the ALPA appeal. On July 11, 2003, the United States Court of Appeals for the District of Columbia Circuit affirmed Judge Urbina’s ruling in ALPA. See Allied Pilots Ass’n v. Pension Benefit Guar. Corp., 334 F.3d 93, 98-99 (D.C. Cir. 2003) (holding in part that PBGC had statutory authority under ERISA

3 A-PLAN, et al. v. QUARLES & BRADY Decision of the Court

section 4067, see 29 U.S.C. § 1367, to postpone termination pending occurrence of a defined event). The stay in Adams was then lifted.

¶6 In August 2003, Appellants discharged Quarles & Brady and retained new counsel in the Adams action. In September 2003, Appellants filed an amended complaint, in which they dropped claims against ALPA, and they filed a separate petition for writ of mandamus to compel PBGC to recover from Pichin the A-Plan’s unfunded pension liability. The Adams complaint and petition for writ of mandamus argued that PBGC did not have statutory authority to enter the CSA.

¶7 On October 15, 2003, Appellants sent a letter to Quarles & Brady in response to an inquiry asking when their unpaid bills would be paid. In the letter, Appellants stated they had been injured by Quarles & Brady’s failure to file a motion to intervene in the ALPA action. Appellants claimed that, as a result of Quarles & Brady’s conduct, they had incurred excessive and additional legal fees and lost the opportunity to participate in the ALPA action.

¶8 On August 25, 2004, the federal district court (Judge Lamberth) granted the defendants’ motion to dismiss in Adams. See Adams v. Pension Benefit Guar. Corp., 332 F. Supp. 2d 231 (2004). On January 27, 2006, the United States Court of Appeals for the District of Columbia Circuit affirmed Judge Lamberth’s decision, and the United States Supreme Court denied certiorari on October 10, 2006. See Adams v.

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