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Dejonghe v. Hutton9/24/1991
ue of plaintiffs' accounts would have been had they, with one exception, been left as they were in 1982, including appreciation in the stocks, dividends, and interest on cash, and deducting from those figures the money left after defendants had pursued the disastrous course undertaken. We see nothing inappropriately speculative about this. While one speculative stock was eliminated from Mrs. DeJonghe's portfolio, the jury could reasonably conclude that such deletion would have occurred given the conservative nature of the management of the account. The evidence supports the jury's finding that sums awarded were for actual out-of-pocket losses. Vairo v. Clayden, 153 Ariz. 13, 20, 734 P.2d 110, 117 (App.1987).
EMOTIONAL DISTRESS DAMAGES
Defendants next argue that the jury was improperly permitted to award damages for emotional distress suffered by the plaintiffs. Unlike its federal counterpart, 18 U.S.C. § 1964(c), A.R.S. § 13-2314(A) provides that a plaintiff in a civil RICO action is entitled to recover for all injury to person as well as property. We read this provision to provide a broader remedy and to include damages for emotional distress that is proximately caused by defendants' acts. Given the proof of loss of property, damages may also be awarded for attendant emotional distress. Thomas v. Goudreault, 163 Ariz. 159, 786 P.2d 1010 (App.1989); Farr v. Transamerica Occidental Life Ins. Co., 145 Ariz. 1, 699 P.2d 376 (App.1984). DeJonghe presented evidence supporting damages for emotional distress and the award of such damages was permissible.
WHETHER SCIENTER IS REQUIRED FOR TREBLING OF DAMAGES
Defendants next maintain that scienter is required before damages can be trebled in a civil RICO action. Plaintiffs' complaint alleged civil RICO, based upon violation of A.R.S. § 44-1991. A.R.S. § 13-2301(D)(4)(r) defines racketeering as "any act, including any preparatory or completed
offense, committed for financial gain," involving fraud in the purchase or sale of securities, which is a crime under the laws of the state in which the act occurred. A.R.S. § 13-2314(A) states that a person injured by racketeering may recover treble damages for injuries to person or property. A.R.S. § 44-1991 defines fraud in the purchase or sale of securities:
It is a fraudulent practice and unlawful for a person, in connection with a transaction or transactions within or from this state involving an offer to sell or buy securities, or a sale or purchase of securities, including securities exempted under § 44-1843 or 44-1843.01 and including transactions exempted under § 44-1844, directly or indirectly to do any of the following:
1. Employ any device, scheme or artifice to defraud.
2. Make any untrue statement of material fact, or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.
3. Engage in any transaction, practice or course of business which operates or would operate as a fraud or deceit.
The supreme court has expressly held that "as to civil cases, scienter is not an element of a violation of A.R.S. § 44-1991(2) . . ." State v. Gunnison, 127 Ariz. 110, 113, 618 P.2d 604, 608 (1980). See also Garvi
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