National Broker Associates, Inc. v. Marlyn Nutraceuticals, Inc.

119 P.3d 477, 211 Ariz. 210, 460 Ariz. Adv. Rep. 5, 2005 Ariz. App. LEXIS 116
CourtCourt of Appeals of Arizona
DecidedSeptember 13, 2005
DocketNos. 1 CA-CV 03-0810, 1 CA-CV 04-0534
StatusPublished
Cited by23 cases

This text of 119 P.3d 477 (National Broker Associates, Inc. v. Marlyn Nutraceuticals, Inc.) 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
National Broker Associates, Inc. v. Marlyn Nutraceuticals, Inc., 119 P.3d 477, 211 Ariz. 210, 460 Ariz. Adv. Rep. 5, 2005 Ariz. App. LEXIS 116 (Ark. Ct. App. 2005).

Opinion

OPINION

IRVINE, Judge.

¶ 1 Appellant, National Broker Associates, Inc. (“NBA”), appeals from the trial court’s orders preventing it from presenting witness testimony at trial to support its damages claim, dismissing its case with prejudice, and awarding attorneys’ fees and costs in favor of appellee, Marlyn Nutraceuticals, Inc. (“Mar-lyn”). For the following reasons, we affirm all of the trial court’s rulings.

FACTS AND PROCEDURAL HISTORY

¶ 2 NBA is a Florida corporation with an office located in Scottsdale, Arizona. Marlyn is also an Arizona corporation with an office located in Scottsdale, Arizona. On March 20, 1998, Marlyn hired NBA to manage its sales for two Marlyn products: Wobenzym Formula “50” and 4 Hair. The parties also agreed that NBA might manage additional products in the future. Paragraph ten of the agreement states, in pertinent part, that “NBA [is] to receive as a management fee, $5,000.00 per month plus 3% of net invoice sales.”

¶ 3 NBA filed its complaint on March 15, 2000 alleging breach of contract. In support of its cause of action, NBA claimed that Marlyn did not provide it with product literature or samples for the purpose of marketing the products and that Marlyn stopped paying the management fee of $5,000.00 per month after October 1, 1998. It further alleged that, as a “result of [Marlyn’s] breach of its contract with [NBA], [NBA] suffered damage and loss including ... management fees totaling $85,000.00 and 3% of the net sales of [Marlyn’s] product in an amount to be proven at trial.” Marlyn answered the complaint and asserted a claim for attorneys’ fees and costs incurred.

¶4 In NBA’s June 2000 initial disclosure statement, NBA informed Marlyn that it in[212]*212tended to call NBA’s president, Mr. Harold Beatty (“Beatty”), as a witness to testify to, among other things, the damages that NBA incurred by Marlyn’s alleged breach. Beatty’s address was given as NBA’s counsel’s address in Arizona, even though Beatty’s residence was in Missouri. Beatty was deposed on October 31, 2000 in Phoenix, Arizona. Gaylord “Buck” Prestidge (“Prestidge”), another witness for NBA, was deposed on September 19, 2000 in Phoenix, Arizona.

¶ 5 On July 1, 2002, NBA filed a motion for leave to amend the complaint with a proposed First Amended Complaint. On July 26, the trial court issued an order stating that it “reluctantly grants [NBA’s] Motion to Amend its complaint ...,” and added that “if [Marlyn] require[s] additional time to do discovery it will be granted and the trial date and motion in limine date will be vacated.” Trial was subsequently set for October 6, 2003.

¶ 6 NBA’s damage expert, Donald R. Bays (“Bays”), submitted his Report on Damages (the “Bays Report”) on May 30, 2003 and was deposed on August 1, 2003. In his report, Bays relied on sales data provided by Beatty to calculate damages.

¶ 7 In June 2003, several discovery issues arose. Marlyn did not receive the Bays Report until June 6, 2003. Marlyn also had difficulty obtaining documents from NBA that were referred to in the Bays Report. NBA sought sanctions from the trial court based on its allegation that Marlyn had violated its discovery obligations and, specifically, altered or destroyed its sales records. Marlyn asserted that the accusations were speculative and the trial court ordered that the issue be set aside and argued at trial.

¶ 8 After receiving the Bays Report, Mar-lyn gave notice on July 3, 2003 to redepose Beatty and Prestidge at the office of Mar-lyn’s counsel in Phoenix. Marlyn sent the notice to Beatty in Scottsdale, care of NBA’s counsel. NBA’s counsel refused to agree to the deposition, requesting that Marlyn’s counsel “[s]top ignoring the rules and aggravating me at the same time” and stating that Marlyn had to seek permission from the court before deposing a witness for the second time.

¶ 9 On August 1, 2003, Marlyn filed its Motion to Compel, seeking to compel the depositions of Beatty and possibly Prestidge regarding the sales data used by Bays to create the Bays Report. In its motion, Mar-lyn requested that Bays be precluded from testifying as an expert witness if Beatty’s deposition was not permitted. On August 6, 2003, Marlyn sent a letter to NBA’s counsel stating: “Please advise the status of the deposition for Harold Beatty. It is imperative that the deposition proceed as soon as possible.” On August 8, 2003, NBA filed its Response to the Motion to Compel, arguing that deposing Beatty was inappropriate and further stating “[i]t takes time because presently Mr. Beatty is in Orland [sic], Florida, but it is forthcoming.” NBA’s response did not dispute that the deposition was to take place in Arizona.

¶ 10 At the August 13, 2003 hearing on the Motion to Compel, the trial court granted Marlyn’s Motion to Compel and ordered that Beatty be redeposed only on the sales data provided to Bays. The trial court subsequently awarded attorneys’ fees to Marlyn for its Motion to Compel in the amount of $2,336.00. In a follow-up letter to NBA’s counsel sent on August 13, 2003, Marlyn’s counsel wrote, “I will work with you in scheduling Mr. Beatty’s deposition. However, I will not agree to take his deposition by telephone. Please immediately contact me as soon as you know Mr. Beatty’s availability.”

¶ 11 Counsel discussed the Beatty deposition again at an August 22, 2003 hearing regarding production of documents. NBA’s counsel advised the trial court that Beatty lived in Missouri and was presently out of town. NBA’s counsel further requested a telephonic deposition and stated that NBA was not requiring that Beatty be deposed in Missouri. Marlyn’s counsel asked the court for an in-person deposition and further requested “an order that Mr. Beatty appear for deposition within the next ten days____” The trial court ordered that Beatty’s deposition be taken in person in Arizona and that Mar-lyn “give him 10 days notice.”. Marlyn’s counsel then discussed with the trial court “what 10 days is from today. It strikes me [213]*213as probably a week from Monday or Tuesday.” August 22, 2003 was a Friday. NBA’s counsel made no comment.

¶ 12 On August 22, 2003, Marlyn gave notice to NBA’s counsel and Beatty at the Scottsdale address that the deposition was scheduled for September 3, 2003 at the office of Marlyn’s counsel in Arizona. On August 27, 2003, NBA’s counsel stated that Beatty would not appear for the September 3, 2003 deposition because Beatty was presently out of town and would continue to be out of town until September 8, 2003. NBA’s counsel also informed Marlyn’s counsel of his intent to seek a reversal of the trial court’s August 22, 2003 decision. In addition, NBA’s counsel stated that the October 6, 2003 trial date would be vacated because it fell on a religious holiday and asked Marlyn’s counsel to contact him to reschedule. Marlyn’s counsel wrote to NBA’s counsel on August 29, 2003, stating:

I am in receipt of your August 27, 2003 letters. Since receipt of these letters, I have left four messages on your voice mail and have not received a return phone call.
With respect to Mr. Beatty’s deposition, unless you contact me by 1:00 p.m. today and we agree to reschedule Mr. Beatty’s deposition, I expect him to appear on September 3, 2003 at 10:00 a.m. The Court ordered Mr. Beatty’s deposition and I noticed his deposition consistent with the Court’s ruling. I will do everything I can to cooperate, but your failure to communicate with me regarding Mr.

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119 P.3d 477, 211 Ariz. 210, 460 Ariz. Adv. Rep. 5, 2005 Ariz. App. LEXIS 116, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-broker-associates-inc-v-marlyn-nutraceuticals-inc-arizctapp-2005.