Marquette Venture Partners II, L.P. v. Leonesio – 5/3/2011

May 4, 2011

Arizona Court of Appeals Division One Holds That A.R.S. § 12-2102(C) Requires a Party to File a Post-Verdict Rule 50(b) Motion for Judgment as a Matter of Law in Order to Challenge on Appeal the Sufficiency of the Evidence to Support a Jury Verdict.

Plaintiff Marquette asserted claims against multiple defendants, including a breach of fiduciary duty claim against Defendant Frank Leonesio for which it sought punitive damages.  During trial, Leonesio filed several unsuccessful Rule 50(a) motions for judgment as a matter of law.  A jury found in Marquette’s favor on the breach of fiduciary duty claim and awarded compensatory and punitive damages.  Leonesio did not file any post-verdict Rule 50(b) motions for judgment as a matter of law, nor did he argue below that the punitive damages award violated the due process clause.  Marquette appealed and Leonesio cross-appealed.  Marquette partially moved to dismiss Leonesio’s cross-appeal, arguing that the Court of Appeals lacked jurisdiction over several issues that challenged the sufficiency of the evidence to support the jury verdict and the punitive damages award.

The ArizonaAppeals Court granted the partial motion to dismiss in a published opinion and affirmed the remaining issues on appeal in an unpublished memorandum decision.  The Court began by noting that its appellate jurisdiction is limited by statute.  A.R.S. § 12-2102(C) prevents the Court from considering the sufficiency of the evidence on appeal from a jury verdict “unless a motion for new trial was made.”  Although Rule 50(b) motions satisfy A.R.S. § 12-2102(C)’s “motion for new trial” requirement, the Court held that pre-verdict Rule 50(a) motions do not satisfy this requirement.  Citing Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc., 546 U.S. 294 (2006) – a case interpreting the federal counterpart to Rule 50 – the Court explained that Rule 50(a) motions are unlike Rule 50(b) motions because they do not allow the trial court to order a new trial, and they are permissive – the trial court is not required to grant them.

In this case, several of Leonesio’s issues on appeal argued that the evidence was insufficient to support the jury’s verdict on the breach of fiduciary duty claim and its punitive damages award.  Because Leonesio failed to file a Rule 50(b) motion raising those issues, the Court held that it lacked jurisdiction to consider them.  The Court rejected Leonesio’s argument that the trial court waived the requirement of a Rule 50(b) motion, explaining that the trial court never indicated that such a motion would have been futile. 

The Court, however, explained that A.R.S. § 12-2102(C) did not prohibit it from considering Leonesio’s due process challenge to the amount of the punitive damages award because the Court may consider constitutional arguments raised for the first time on appeal.  Nonetheless, the Court declined to exercise jurisdiction over the issue because Leonesio had failed to raise it with the trial court, which was in a better position to assess whether punitive damages were appropriate after hearing the evidence. 

Presiding Judge Portley authored the opinion; Judges Orozco and Irvine concurred.