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Capitol Indemnity Corporation v. Fleming12/10/2002
AFFIRMED
Capitol Indemnity Corporation, the surety for Anita Heller, a client of attorney Robert B. Fleming and conservator of an estate, filed an action against Fleming, his spouse, and Fleming's law firm (collectively, Fleming) for damages arising out of Fleming's alleged negligence in failing to act when Heller illegally used estate funds to make gifts and loans to her own children. Fleming filed a motion to dismiss the complaint for failure to state a claim upon which relief could be granted, pursuant to Rule 12(b)(6), Ariz. R. Civ. P., 16 A.R. S., Pt. 1. After a hearing, the trial court gr anted Fleming's motion and this appeal followed. We affirm.
BACKGROUND
In reviewing the grant of a motion to dismiss a complaint, we assume the facts alleged in the complaint to be true and give plaintiffs the benefit of all inferences arising from those facts. Botma v. Huser, 202 Ariz. 14, 39 P.3d 538 (App. 2002). We will uphold a trial court's dismissal of a complaint "only if the plaintiff is not entitled to relief 'under any facts susceptible of proof under the claims stated. '" Linder v. Brown & Herrick, 189 Ar iz. 398, 402, 943 P. 2d 758, 762 (App. 1997), quoting Donnelly Constr. Co. v. Oberg/ Hunt/Gilleland, 139 Ariz. 184, 186, 677 P. 2d 1292, 1294 (1984).
In 1996, the Pima County Superior Court appointed Heller to serve as conservator of the estate of Pearl E. Bennett, an incapacitated person. The court required Heller to post a bond in the amount of $345,000. Capitol issued the bond under a suretyship agreement with Heller. In 1997, Heller retained F leming to advise her on the duties of a conservator and to help her prepare and file annual accountings. Between her appointment in 1996 and her removal and criminal indictment in 1998, Heller used $235,561. 03 of estate funds to make unauthorized gifts and loans to her children. Although Fleming documented these transactions in two annual accountings he filed with the court, he allegedly did not alert Heller or the court about their impropriety. When Heller's financial misconduct was discovered, the court removed her as conservator and ordered her to reimburse the estate the full amount she had misappropriated. Heller was only able to repay $45,561.03 of the usurped funds. As surety, Capitol was then required to pay the r emaining $190,000 owed.
Capitol alleged in its complaint that Fleming had owed a duty to it, as Heller's surety, as well as to Bennett, the estate's protected person. Capitol further alleged that Fleming had breached that duty when he failed to properly inform Heller that her actions were illegal and to notify the court of Heller's ongoing criminal misconduct. In its r esponse to the motion to dismiss, Capitol advanced two theories in support of its claim. First, Capitol contended that it was entitled to sue Fleming directly under the principles outlined in Fickett v. Superior Court, 27 Ariz. App. 793, 558 P.2d 988 (1976). Second, and alternatively, Capitol claimed that it was entitled to be equitably subrogated to Bennett's right to sue Fleming for malpractice pursuant to A. R. S. ยง 12-1643(A). The trial court found that Capitol had no claim under either theory and gr anted Fleming's motion to dismiss.
DISCUSSION
1. Direct Cause of Action
Capitol first contends it "has a direct cause of action against Fleming for legal malpractice under the principles announced by this Court in Fickett." In Fickett, the conser vator of an incompetent person's estate sued the attorney for the former guardian, alleging that the attorney had negligently failed to discover the guardian's scheme to misappropriate and convert estate assets for h
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