Archive for June, 2009

Jun
11

Court denies County Supervisor Don Stapley’s Motion to Dismiss

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Don Stapley is facing over 100 charges in the Superior Court arising from allegations that he completed financial disclosure forms containing omissions and misstatements.  His attorneys attempted to get the charges dismissed on the grounds that the county attorney had previously provided legal advice related to the disclosure forms.  In denying Mr. Stapley’s motion the court held:

The evidence is undisputed that the Defendant as a member of the Board of Supervisors for Maricopa County consulted with Deputy Maricopa County Attorneys assigned to the County Attorney’s civil department/division on matters relating to his official duties and provided financial information. It is also undisputed that generally the subject of that disclosure is also the subject matter of certain counts in the indictment against the Defendant. There is no evidence that any of the information disclosed to the civil Deputy County Attorneys was used to obtain the indictment against Defendant.

It is the Defendant’s position that because confidential information was obtained by the Maricopa County Attorney’s office that was part of the indictment, a conflict of interest was created. This conflict disqualified the Maricopa County Attorney’s office from appearing before the Maricopa County Grand Jury as an authorized prosecutor to present evidence under Rule 12.5, AZ Rules of Criminal Procedure. Defendant further argues that the appearance of an unauthorized person before the Grand Jury denies him Due Process and irreparably taints the indictment. This taint in turn requires dismissal.

The State’s argument in response is that there was no conflict of interest disqualifying the Maricopa Country Attorney since there is no attorney-client relationship. The Attorney-Client relationship, according to the State, is one created by statute, A.R.S. § 11-532(A) (9), which provides that the County Attorney is the legal advisor to the Board of Supervisors. The State further argues that this relationship does not extend to individual members of the Board.
The State’s position is that giving advice to individual members on how to deal with conflict of interest issues and on the financial disclosure forms as well as presenting evidence here to the Grand Jury is not egregious misconduct requiring dismissal.

At the hearing on these motions, a former civil department Deputy County Attorney and a current civil department Deputy County Attorney (civil deputies) testified. The testimony established that prior to this indictment, the civil deputies did not explain to newly elected county officials, including members of the Board of Supervisors, the scope of the attorney-client relationship with the Maricopa County Attorney’s office. The current civil deputy testified she gave “general advice” on conflict of interest issues and financial disclosure forms, but not “specific advice” on how to fill out the forms. She testified she gave individual advice relating only to a member’s role as a Supervisor and would not give advice on what information to include on the financial disclosure forms.

The former civil deputy testified that he gave legal advice to individual members if it was in furtherance of his representation of the Board of Supervisors. He also gave advice in the past to members of the Board of Supervisors on financial disclosure forms as to what items to include on the forms and viewed this as part of his role as a civil deputy. He viewed this as part of the attorney-client relationship and as confidential information. He has given advice to the Defendant on disclosure forms but cannot recall any specifics. He also noted however that if an individual member disclosed something that would concern the entire Board, he would discuss the matter with other Board members.

There is no doubt that the better practice would have been for the Maricopa County Attorney to refer the entire investigation at its inception to another State prosecuting agency, such as the Attorney General or another county attorney, given the relationship with the Board of Supervisors as its legal advisor. This Court must however review all the evidence to determine if, under the specific circumstances here, the Maricopa County Attorney was disqualified because an attorney-client relationship was created with the Defendant. State ex rel. Romley v. Superior Court, 184 Ariz. 223, 227 ( App. 1995).

As the Arizona Supreme Court noted in In re Petrie, 154 Ariz. 295, 299-300 (Ariz. 1987), the relationship is determined by looking at the parties’ conduct. For example, is there evidence that “… the party sought and received advice and assistance from the attorney in matters pertinent to the legal profession….” and what was the expectation of the client.

Here there is no dispute that the Defendant received legal advice and assistance from civil deputies within the Maricopa County Attorney’s Office. The inquiry does not end here however. The test is a subjective one and requires this Court to look “…to the nature of the work performed and the circumstances under which the confidences were divulged….” In re Petrie, supra. A reasonable person in the Defendant’s position when soliciting legal advice and assistance from the civil deputies about business ventures that could be conflicts of interest and/or would be reportable on the elected official’s financial disclosure statements would have been aware that the Maricopa County Attorney is also a prosecuting agency in addition to acting as the legal advisor for the Board of Supervisors. This is not a situation where the Defendant first engaged a private attorney for legal assistance, divulged confidences and later was prosecuted by the same attorney on the same matters. It was not reasonable under the circumstances here for Defendant to expect that the Maricopa County Attorney was his attorney on all matters. The legal advice and assistance from the civil deputies related to Defendant’s role as a member of the Board of Supervisors. As Mr.Wolcott, the former civil deputy, pointed out, the individual legal assistance was only given to individual members as necessary to further the business of the Board of Supervisors, the County Attorney’s client.

There was an attorney-client relationship created but it was limited in scope. This hybrid or limited scope attorney-client relationship does not given the same protections one would expect from representation by private counsel. The confidences divulged to the civil deputies were not used to obtain an indictment against the Defendant. Unlike the situation before the Honorable Gary Donahoe in 462 GJ 350, the County Attorney here is not attempting to use privileged communications with its client, the Board of Supervisors, or investigating the client’s (the Board of Supervisors) activities upon which it gave legal advice.

This Court is not convinced that the type of attorney-client relationship created between Defendant and the Maricopa County Attorney would disqualify the County Attorney from appearing before the Grand Jury to present evidence of criminal activity by Defendant so long as no confidences were divulged. The Motion to Dismiss is denied.

Contact Phoenix DUI and Criminal Defense Attorney Joshua Davidson today if you are facing criminal charges in Maricopa County Superior Court.

Categories : Criminal Law, Politics
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Jun
11

Lawsuit brought by sheriff and county attorney dismissed

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A superior court judge granted a motion for summary judgment filed by the maricopa county board of supervisors and dismissed a well publicized lawsuit in which the sheriff and the county attorney sought $24 million in special funds the encumbered by the Board.  The Court issued a lengy writted decision which included the following discussion of the legal claims asserted by the Board of Supervisors:

Defendants disagree and challenge the Plaintiffs’ arguments on a number of fronts. First, they claim that each of the encumbered funds is a special revenue fund, not a custodial or fiduciary fund, and that the Legislature is free to alter their use by enacting any new law so long
as it is constitutional. In passing the Bill, the Legislature altered the use and purpose of the encumbered funds, thereby allowing the funds to be used by the County to meet its obligations to the State. Because the Bill provided that counties could transfer the specified amounts from “any source of county revenue designated by the county,” the Bill was a reconciliation Bill, not a general appropriations law, and the Board’s decision to encumber these statutory funds was legal. To that end, because these statutory funds are public funds, they are subject to the Legislature’s power to amend their appropriation.

Second, Defendants argue that both the Sheriff’s Dept. and County Attorney have previously taken positions in another matter concerning the transfer to the State of over $2 million from one of the encumbered funds (the County Sheriff’s Inmate Services Fund) that is wholly inconsistent with the position now being asserted on the same issue in this case. Specifically, the 2008 Legislature passed the HURF Act, which required the County to pay the State $4,681,991, computed based on the distribution of the Highway Revenue Formula (“HURF”). The HURF Act contained the same provision which allowed the Board to take monies from any source of county revenues designated by the county in order to satisfy the Act’s legislative mandate.  Before the Board had to make decisions on which sources of monies could be utilized to meet the requirements of the HURF Act, the Sheriff’s Office asked the Board to transfer over $2 million from the Inmate Services Fund, which is one of the statutory funds that Plaintiffs argue in our case can’t be used for any purpose other than the purpose authorized by the fund’s enabling statute. Moreover, Defendants argue that the County Attorney’s Office approved the legality of encumbering this money from the Inmate Services Fund as partial payment for the
County’s liability under the HURF Act. In other words, the Plaintiffs, just a few months before filing this lawsuit on grounds that such a transfer was illegal because it sought to spend money from these statutory funds in derogation of the specific and limited purpose for which these funds can be used, requested that the Board approve the payment mechanism they now challenge.

Third, Defendants argue that the County Attorney should be precluded from bringing the claims asserted as it essentially equates to a lawyer suing his own client for an act he approved. The County Attorney is the Board’s legal advisor. In this case, the County Attorney, without seeking or receiving a waiver to bring the action, has sued the Board (its client) for encumbering these statutory funds in order to fulfill the mandated contributions to the State despite having previously approved an identical transfer last August in another matter. Defendants contend that the Arizona Rules of Professional Conduct prohibit such a suit by an attorney against a client under these circumstances.

Fourth, Defendants argue that Plaintiffs lack standing as they cannot establish a distinct and palpable injury, only a speculative fear of some injury that could possibly happen in the future. Further, Defendants argue that no harm has occurred because the Board of Supervisors simply followed the law set forth by the Legislature and, in doing so, at all times acted legally.

Fifth, Defendants assert that neither Plaintiff has the power to bring this suit under the law. The Sheriff is not a jural entity and lacks statutory authority to file such an action. The County Attorney also lacks standing to bring such an action in his own name, under the Declaratory Judgments Act, or under A.R.S. §11-641(B). A.R..S. §11-641(B) only applies to cases where a board of supervisors acts without legal authority, which Defendants contend is not the case here. Otherwise, it is the Board of Supervisors, not the County Attorney, that is vested with the power to direct and control the prosecution and defense of suits to which the County is a
party. Further, 11-641(B) creates power to seek injunction or refund of an illegal payment of money, and Defendants contend there is no “payment” of public funds in the legislation at issue.

Additionally, Defendants assert that nothing in the Declaratory Judgments Act, A.R.S. §12-1831, et seq., confers upon either Plaintiff the ability to sue in their official capacities, especially where neither Plaintiff can establish concrete real interests at stake. The statutes creating these funds make no mention of the Plaintiffs’ right to exclusively manage or spend money in the funds or establishes for Plaintiffs’ benefit any irrevocable entitlement to those funds. Moreover, The Board of Supervisors voted to transfer monies in accounts other than the six the Plaintiffs complain of. Since Plaintiffs are not authorized to use or control funds from those other accounts, they have no “right” in such funds and cannot seek declaratory relief concerning the propriety of transferring them. The State also argues that in no event can it be sued by Plaintiffs for declaratory relief since Count Two only alleges that the Board’s acts were illegal and seeks a declaratory judgment only against the Board.

Sixth, Defendants argue that Plaintiffs’ claims are barred by laches as Defendants have waited until late in the fiscal year, with resulting great prejudice to Defendants, to change their position regarding the Board’s encumbrance of a statutory fund to fulfill the mandated legislative contribution. In essence, by waiting until 75% of the budget year had been completed before suit was filed, Defendants contend that Plaintiffs have placed the County in the virtually impossible position of having to look to alternative funding sources at the very last minute for the full $24 million assessment.

Seventh, Defendants believe that this lawsuit is barred by A.R.S. §12-1802, the anti-injunction statute, which provides that an injunction shall not be granted to prevent the exercise of a public office in a lawful manner by the person in possession. The effect of the statute is to prevent courts from interfering by injunction with the exercise of a public official’s duties, if those duties were exercised in a lawful manner and within statutory authority.  Here, Defendants argue that because the Board acted lawfully in encumbering the statutory funds, the Court cannot interfere with the Board’s duties by granting injunctive relief. Otherwise, Plaintiffs would be able to effectively veto, through litigation, decisions by the Board that amount to a lawful exercise of their authority.
Eighth, Defendants argue that the Legislature has the power to change the statutes that established these special funds. This means the Legislature can, by its actions, repeal or modify the language of the statutes that limits use of the funds to a specific purpose. Thus, when the Bill authorized the County to encumber any source of County revenue to comply with the new statute, the Legislature for fiscal year 2008-2009 removed all previous limitations on the funds.
Otherwise, the language of the Act is unavoidably inconsistent with the enabling statutes establishing these funds. In that event, case law suggests that the more recent statute governs and the inconsistent language in the older statute is repealed.

Lastly, Defendants contend that the Bill did not violate Article 9, Section 22, which requires any act that imposes a new tax, fee, or assessment providing for a net increase in state revenue to be passed by a two-thirds supermajority of both houses of the Legislature. According to Defendants, the transfers being made in this matter did not create an increase in state revenue because all of the monies that the Board encumbered were previously lawfully obtained and deposited in these funds pursuant to Arizona statute and authority delegated to Maricopa County. 

Thus, the transfer of these monies operates merely as a reallocation of monies already within the possession of the State through Maricopa County and does not result in an increase in State revenues.

In ruling against the sheriff and county attorney, the court held:

The Court agrees with a number of Defendants’ arguments as to why summary judgment should be entered in their favor.  It is not necessary for purposes of this decision to discuss every argument raised by Defendants, but the Court will address those that in the Court’s view are case
dispositive and clearly entitle Defendants to judgment as a matter of law.

Categories : Politics
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