K. Morrill v. Scott Financial Corp.

873 F.3d 1136, 2017 WL 4766888, 2017 U.S. App. LEXIS 20812
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 23, 2017
Docket14-16922
StatusPublished
Cited by167 cases

This text of 873 F.3d 1136 (K. Morrill v. Scott Financial Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
K. Morrill v. Scott Financial Corp., 873 F.3d 1136, 2017 WL 4766888, 2017 U.S. App. LEXIS 20812 (9th Cir. 2017).

Opinions

Dissent by Judge Kleinfeld

OPINION

KRONSTADT, District Judge:

K. Layne Morrill (“Morrill”), an attorney who resides in Arizona, and the law firm where he practices, Morrill & Aron-son, P.L.C. (“Morrill & Aronson”), which is also located in Arizona (collectively “Plaintiffs”), brought claims in the District of Arizona for abuse of process and wrongful institution of civil proceedings. The complaint named five defendants. The District Court dismissed the action, concluding that there was no personal jurisdiction over any defendant. Plaintiffs appealed. We affirm.

I. BACKGROUND

In December 2008, Plaintiffs began representing Gary Tharaldson (a Nevada resident), Club Vista Financial Services, L.L.C. (a Nevada corporation whose principal place of business is in Nevada), and Tharaldson Motels, II, Inc. (a North Dakota corporation whose principal place of business is in Nevada) (collectively “Thar-aldsons”) in connection with a failed condominium construction project in Las Vegas, Nevada. In January 2009, the Tharaldsons filed a civil action in the Eighth District Court of Clark County, Nevada (“Tharald-son Litigation”), in which Plaintiffs were counsel. Through that action, the Tharald-sons sought to be relieved of obligations associated with their previous guaranty of a $100 million construction loan made in connection with the condominium project. Plaintiffs continued to represent the Thar-aldsons in that' litigation until June 2011.

The defendants in the Tharaldson Litigation were Scott Financial Corporation (“Scott Financial”) (a North Dakota Corporation with its principal place of business in. Nevada) and its sole shareholder and officer, Bradley J. Scott (a North Dakota resident) (collectively “Scott Parties”). J. Randall Jones (“Jones”), who is a resident of Nevada, represented the Scott Parties in the Tharaldson Litigation. During that representation, Jones practiced with Kemp, Jones & Coulthard, L.L.P., which is a law firm based in Nevada, and Harrison, Kemp & Jones, Chartered, which is a Nevada law firm and professional corporation. The Scott Parties, Jones and the two law firms are the defendants in this action (“Defendants”).

Plaintiffs claim that, during the Tharald-son Litigation, Defendants “engaged in a campaign to harm [Plaintiffs]” in retaliation for their role as counsel to the Thar-aldsons. The first step in this alleged campaign occurred in October 2010, which was five months before the scheduled trial date. At that time, the Scott Parties sought to depose Morrill and his partner, Martin Aronson. As part of that process, the Scott Parties commenced companion civil proceedings in an Arizona Superior Court seeking to obtain a separate deposition subpoena for each witness. At that time, these civil proceedings were required by Arizona Rule of Civil Procedure 30(h) when an out-of-state party sought to depose a person who resided in Arizona. Ariz. R. Civ. P. 30(h) (2010) (deleted August 30, 2012, effective January 1, 2013).1 Jones represented the Scott Parties in those proceedings.

An Arizona Superior Court issued the requested subpoenas, and Morrill and Ar-onson were served. Morrill and Aronson then brought a motion to quash the subpoenas in the Arizona Superior Court. They argued that the “true purpose in taking the depositions ... was to pry into what [Plaintiffs] had learned about the [Tharaldson] case and to obtain privileged information and to attempt to drive a wedge between [Plaintiffs] and their clients” in that litigation. Jones was admitted pro hac vice in Arizona so that he could participate in the proceedings with respect to the motion to quash. The Scott Parties filed an opposition to the motion, and Jones appeared at the hearing on the motion that was held in the Arizona Superior Court. At the conclusion of the hearing, the Superior Court judge granted the motion. However, that' order was without prejudice to having the issue reviewed and decided de novo by the Special Discovery Master in Nevada who was overseeing discovery disputes in the Tharaldson Litigation. As the Superior Court judge explained, “I want the minute entry to reflect that this Court does not intend in any way to suggest to Floyd A. Hale, Special Master, what he ought to rule with regard to the matters which will finally be briefed [for] him on December 3rd, 2010.”

The Scott Parties then provided Special Master Hale with Plaintiffs’ motion to quash and their response that had been filed in the Arizona Superior Court. Special Master Hale denied the motion to quash and ruled that the depositions of Morrill and Aronson could proceed. Plaintiffs appealed that order through the Nevada courts, including to the Nevada Supreme Court. The Nevada Supreme Court held that the depositions could proceed if the Scott Parties successfully demonstrated that “(1) no other means exist to obtain the information than to depose opposing counsel; (2) the information sought is relevant and non-privileged; and (3) the information is crucial to the preparation of the case.” Thereafter, the Scott Parties elected not to proceed further, and the depositions were not taken.

In April 2011, the Scott Parties brought a defamation action against Plaintiffs in a Nevada court. It was based on alleged statements made by Plaintiffs to a Nevada mortgage lender during the course of discovery in the Tharaldson Litigation. The Scott Parties effected service of the complaint on Plaintiffs'in Arizona. Plaintiffs argued that the action was without merit in light of the broad litigation privilege that applies under Nevada law to statements made during a pending judicial proceeding. After the Scott Parties declined to dismiss the action voluntarily, Plaintiffs moved for summary judgment. Their mor tion was granted. The Nevada Supreme Court affirmed that ruling.

In May 2011, Jones filed a grievance with the Nevada State Bar “alleging that Morrill acted unethically and unprofessionally.” The Screening Panel of the Nevada State Bar decided not to initiate disciplinary proceedings against Morrill, and dismissed the complaint without prejudice.

In June 2011, the Tharaldsons elected to retain new counsel to represent them in the Tharaldson Litigation. Plaintiffs contend that the aforementioned conduct of Defendants “was a factor that contributed to the ... decision to retain new trial counsel.”

Based on the foregoing alleged conduct, Plaintiffs brought the present action in the District of Arizona. As noted, it advances claims against Defendants for abuse of process and wrongful institution of civil proceedings. As also noted, Defendants moved to dismiss the complaint for lack of personal jurisdiction. The District Court granted the motion, concluding that there was no personal jurisdiction over any of the Defendants.

II. STANDARD OF REVIEW

We review dismissals for lack of personal jurisdiction de novo. Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 671 (9th Cir. 2012). When a defendant moves to dismiss for lack of personal jurisdiction, “the plaintiff bears the burden of demonstrating that jurisdiction is appropriate.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).

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873 F.3d 1136, 2017 WL 4766888, 2017 U.S. App. LEXIS 20812, Counsel Stack Legal Research, https://law.counselstack.com/opinion/k-morrill-v-scott-financial-corp-ca9-2017.