¶ 1 The plaintiffs, Marquette Venture Partners II, L.P., and MVP II Affiliates Fund, L.P. (collectively "Marquette"), challenge Frank Leonesio's ("Leonesio")
FACTUAL AND PROCEDURAL HISTORY
¶ 2 Defendants and Marquette were owners of Q Fitness Clubs, Inc. ("Q Clubs"). In 1999, Q Clubs agreed to merge with Fitness Holdings, Inc. ("FHI"), which operated 24 Hour Fitness. Following the merger, FHI asserted $45.6 million in damages against Q Clubs' owners and sought to recover an additional $5 million that had been placed in an escrow account for indemnification. Marquette and Defendants entered into a contract to fund litigation arising out of FHI's claims. After nearly three years of litigation, the case settled on the eve of trial. Marquette disputed the distribution of the settlement proceeds and sued Defendants alleging: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) fraud in the inducement; (4) conversion; (5) fraudulent transfer; (6) constructive trust; (7) unjust enrichment; and (8) an equitable lien. Marquette specifically alleged the following claims against Frank Leonesio and Kevin DeAngelis: (1) declaratory judgment; (2) breach of agency agreement; and (3) breach of fiduciary duty. Marquette also sought punitive damages against Frank Leonesio.
¶ 3 Defendants filed unsuccessful motions for summary judgment, and the case proceeded to trial. During trial, Defendants filed unsuccessful Rule 50(a) motions for judgment as a matter of law. After the jury found in favor of Marquette on its breach of fiduciary duty claim against Leonesio, it awarded Marquette compensatory and punitive damages. The jury found in favor of Defendants on the remaining claims. Leonesio did not file a post-verdict Rule 50(b) motion for judgment as a matter of law.
¶ 4 Marquette appealed, and Leonesio filed a cross-appeal. He argued that: (1) Marquette's breach of fiduciary duty claim was barred by the statute of limitations; (2) he was entitled to attorneys' fees; and (3) the jury's punitive damage award was excessive.
¶ 5 Marquette filed a motion to partially dismiss Leonesio's cross-appeal pursuant to ARCAP 6 and argues that certain cross-appeal issues are outside the scope of our jurisdiction. Specifically, Marquette argues that § 12-2102(C) precludes us from exercising appellate jurisdiction to consider the
¶ 6 We independently review whether we have jurisdiction to address an appellate issue. Engel v. Landman, 221 Ariz. 504, 508, ¶ 10, 212 P.3d 842, 846 (App.2009). Appellate jurisdiction is limited by statute. Eaton v. Unified Sch. Dist. No. 1, 122 Ariz. 391, 392, 595 P.2d 183, 184 (App.1979). Section 12-2101 (2003) specifies when the court may take jurisdiction, and § 12-2102(A) includes the requirement that we "review any intermediate orders involving the merits of the action and necessarily affecting the judgment, and all orders and rulings assigned as error, whether a motion for a new trial was made or not."
¶ 7 Section 12-2102(C), however, provides "an exception" to the broad scope of review granted under § 12-2102(A). Lewis v. S. Pac. Co., 105 Ariz. 582, 583, 469 P.2d 67, 68 (1970); see Acuna v. Kroack, 212 Ariz. 104, 111 n. 9, ¶ 27, 128 P.3d 221, 228 n. 9 (App.2006); Gabriel v. Murphy, 4 Ariz.App. 440, 442, 421 P.2d 336, 338 (1966) ("[A] motion for new trial must be made before the scope of the appeal may be enlarged to include the sufficiency of the evidence to sustain the verdict or judgment."). Specifically, subsection C provides that we cannot consider the sufficiency of the evidence on appeal from a jury trial "unless a motion for a new trial was made." We can, however, consider questions of law and evidentiary rulings "regardless of whether they were presented to the lower court in a motion for a new trial." Hays v. Richardson, 95 Ariz. 263, 267, 389 P.2d 260, 263 (1964).
¶ 8 Although Leonesio filed motions for summary judgment and Rule 50(a) motions before the verdict,
¶ 9 Our supreme court has stated that a Rule 50(b) motion satisfies § 12-2102(C)'s "motion for a new trial" requirement. S.H. Kress & Co. v. Evans, 70 Ariz. 175, 177, 218 P.2d 486, 487 (1950). We have not, however, considered whether a Rule 50(a) motion is also sufficient.
¶ 10 Rule 50(a)(2) allows a party to file for judgment as a matter of law prior to submitting the case to the jury. We have explained that Rule 50(a) "is based upon the premise that the claimed omission in proof might be cured by a reopening of plaintiff's case if the trial court finds merit to the motion." Chavez v. Tolleson Elementary Sch. Dist., 122 Ariz. 472, 476, 595 P.2d 1017, 1021 (App. 1979). In addition, Rule 50(a) "is conceived as a device to save the time and trouble involved in a lengthy jury determination when there is a clear insufficiency of evidence on one side of the case or the other." 9B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2521 (3d ed. 2010).
¶ 11 Because a Rule 50(a) motion is a prerequisite for a Rule 50(b) motion,
¶ 13 In the absence of a prior decision from our courts, we find the U.S. Supreme Court's holding in Unitherm persuasive because "uniformity in interpretation of our rules and the federal rules is highly desirable." Orme Sch. v. Reeves, 166 Ariz. 301, 304, 802 P.2d 1000, 1003 (1990). Rule 50(a) and Rule 50(b) are substantively different. Unlike Rule 50(b) motions which are made after the verdict and, therefore, analogous to a motion for a new trial, see Rule 59; Rule 50(a) motions are made before the verdict is granted. Moreover, it is difficult to consider Rule 50(a) "a motion for a new trial" under § 12-2102(C) when, by definition, the motion must be made prior to a jury verdict and does not allow the trial court to grant a new trial, while Rule 50(b) specifically allows the court to grant a new trial. Consequently, we hold that a Rule 50(a) motion is insufficient to satisfy the jurisdictional requirement of § 12-2102(C).
¶ 14 Leonesio, however, asserts that the Arizona Rules of Civil Procedure "shall be construed to secure the just, speedy, and inexpensive determination of every action," Rule 1, and our holding may create a trap for the unwary. Even if true, Justice Stevens has stated that "it may be unfair or even an abuse of discretion for a court of appeals to direct a verdict in favor of the party that lost below if that party failed to make a timely [Federal] Rule 50(b) motion." Unitherm, 546 U.S. at 409, 126 S.Ct. 980 (Stevens, J., dissenting).
¶ 15 Leonesio also claims that even if a Rule 50(b) motion is required to preserve a sufficiency of the evidence challenge on appeal, the trial court waived this requirement. We disagree.
¶ 16 After the jury verdict, Marquette requested that a $2 million constructive trust or equitable lien be entered, and the trial court stated that it was "going to go either way, prejudgment garnishment or judgment and post-judgment garnishment." Federal cases have recognized an exception to the requirement to file a Federal Rule 50(b) motion when the trial court indicates such a motion is unnecessary. See, e.g., Best Brands Beverage, Inc. v. Falstaff Brewing Corp., 842 F.2d 578, 587 (2d Cir.1987). We do not believe that the trial court's statement indicated that Rule 50(b) motions would be futile. In fact, the trial court eventually ruled in Leonesio's favor and did not impose a constructive trust or equitable lien. Consequently,
¶ 17 We now address the two specific jurisdictional challenges to Leonesio's cross-appeal. Does § 12-2102(C) prevent Leonesio from asserting that the evidence was insufficient to support: (1) the breach of fiduciary duty claim; and (2) the punitive damage award.
A. Breach of Fiduciary Duty
¶ 18 In his cross-appeal, Leonesio argues that he should be granted judgment as a matter of law on Marquette's breach of fiduciary duty claim because: (1) Marquette's claim was untimely because it should have been discovered in 2001 rather than 2004; (2) the breach of fiduciary duty claim was raised in an amended complaint and did not relate back to the original complaint; (3) Marquette's attorneys and Marquette ratified Leonesio's breach of fiduciary duty; and (4) the Stockholder and Warrantholder Consent barred Marquette's claim for breach of fiduciary duty.
¶ 19 The applicability of the statute of limitations is usually a question of fact for the jury. See Walk v. Ring, 202 Ariz. 310, 315, ¶ 17, 44 P.3d 990, 995 (2002) ("[I]t is often the rule that in such cases the question of accrual is for the jury."); Logerquist v. Danforth, 188 Ariz. 16, 22, 932 P.2d 281, 287 (App.1996) ("[D]etermination of a claim's accrual date usually is a question of fact. . . ."); Long v. Buckley, 129 Ariz. 141, 144, 629 P.2d 557, 560 (App.1981) ("[T]he discovery issue itself involves questions of reasonableness and knowledge, matters which this court is particularly wary of deciding as a matter of law.").
¶ 20 Leonesio requested a statute of limitations jury instruction, but the instruction was not given to the jury. He did not object. Moreover, the issue was not raised after the verdict. Because he generally challenges the sufficiency of the evidence, he has failed to preserve the statute of limitations issue for appeal. Additionally, he waived the issue by failing to object to the court's refusal to give his requested jury instruction or raising it after the verdict. Rule 51(a); see Spillios v. Green, 137 Ariz. 443, 446, 671 P.2d 421, 424 (App.1983) ("If lawyers want to preserve the record for appellate review, they must make sure that their arguments to the trial judge are being transcribed by the court reporter and that any ruling is in the record.").
¶ 21 Second, Leonesio argues that either Marquette or Marquette's attorneys approved and ratified the breach of fiduciary duty. The claim challenges the sufficiency of the evidence. Moreover, he did not present the argument to the trial court. Because the argument was not raised below, it was waived.
¶ 22 Leonesio also challenges whether the evidence sufficiently demonstrated that the waiver provisions in the Stockholder and Warrantholder Consent were satisfied. The Stockholder and Warrantholder Consent provided that Leonesio was only liable for fraudulent or willful actions taken while representing the shareholders. The jury was instructed on the liability waiver. He raised the issue in a Rule 50(a) motion, but not in a post-trial motion. Because the issue was not raised in a Rule 50(b) motion and his appeal challenges the sufficiency of the evidence, the issue is waived, and we will not consider it pursuant to § 12-2102(C).
B. Punitive Damages
¶ 23 Leonesio also appealed the punitive damage award because: (1) the evidence
¶ 24 Our jurisdiction to review whether the evidence was sufficient to support an award of punitive damages is limited by § 12-2102(C). We are not, however, prohibited from considering constitutional arguments raised for the first time on appeal. Hawkins v. Allstate Ins. Co., 152 Ariz. 490, 503, 733 P.2d 1073, 1086 (1987). In Hawkins, the defendant challenged, in a post-judgment motion for judgment as a matter of law, whether the evidence was sufficient to support the jury's punitive damage award. Id. at 494, 733 P.2d at 1077. The defendant, however, never asserted that the award violated due process at any time prior to its appeal to the supreme court. Id. at 502, 733 P.2d at 1085. Our supreme court found that the evidence was sufficient to support an award of punitive damages and then turned to the defendant's due process challenge. Id. at 500-02, 733 P.2d at 1083-85. In holding that the ability to consider a constitutional issue raised for the first time on appeal was discretionary, the court noted that "[t]his is not a case involving denial of a fundamental constitutional right in a criminal trial nor contentions which affect the jurisdiction of the court, and we do not feel compelled to exercise our discretion." Id. at 503, 733 P.2d at 1086.
¶ 25 Here, we will not exercise our discretion and address the constitutional claim on appeal. The jury was instructed on punitive damages, and the trial court was in a better position to assess whether the punitive damages were appropriate after hearing the evidence.
¶ 26 Based on the foregoing reasons, we grant Marquette's partial motion to dismiss Leonesio's cross-appeal.
CONCURRING: PATRICIA A. OROZCO, and PATRICK IRVINE, Judges.