At a time when state officials are pushing ways to improve Arizona’s tourism industry, the Pima County Board of Supervisors reneged on its nearly $40,000 commitment to the Arizona Bowl.
The Arizona Bowl is a NCAA-certified postseason college football game held since 2015 at the University of Arizona’s Arizona Stadium. It is presented with a title sponsor, which for the first five years was NOVA Home Loans. Then in 2020 the game was played as the Offerpad Arizona Bowl.
This year, the Barstool Sports Arizona Bowl is slated to be played on Dec. 31, and the event is expected to bring thousands of football fans to southern Arizona. It is a boost to local tourism that is sorely needed, supporters say.
But on Tuesday the Pima County BOS took a swipe at the new title sponsor and brought what tourism officials say was undue negative attention to the event.
In a 4 to 1 vote, the BOS went back on its commitment of $38,155 toward the game, citing “ethical concerns” with controversial comments and activities associated with Barstool Sports and its founder, David Portnoy. The vote came despite the fact many of the concerning comments date back nearly a decade and that the company in recent years has established a respected reputation.
Barstool Sports is seen by many as an American business success story – the digital media company produces original content focused on sports and pop-culture. Its 280 employees are also involved in producing an amateur boxing league, a radio show distributed by Westwood One, and a number of podcasts.
And then there is the Barstool Fund, which garnered national attention last year when Portnoy led an effort which raised more than $40 million from several sports figures to provide financial support for small businesses hard hit by the pandemic. Some of the recipients were Arizonans.
In July, Portnoy announced Barstool Sports as the new title sponsor of the Arizona Bowl and kicked off an aggressive marketing campaign that will feature the Tucson area as much as the game itself.
But despite the company’s various successes, four Pima County supervisors turned their backs on the fact that the 17-member executive board of the Arizona Bowl vetted the new title sponsor. Among those on the executive board are Brent Deraad of Visit Tucson, Ted Maxwell of the Southern Arizona Leadership Council, and Joe Snell of Sun Corridor.
Critics of the BOS vote call it “misguided” and point to the fact many of the criticisms deal with comments and activities involving Portnoy and other company personalities from more than a decade ago.
The BOS also turned its back on comments from Kym Adair, who is serving as executive director of the bowl game.
Adair did not make excuses for prior inappropriate comments some found offensive, admitting there were jokes “that have missed, comedies and content that didn’t land or stand the test of time.” She did, however, emphasize the company’s various successes, which include being the only sports media company with a female CEO.
Barstool Sports also has a recent connection to Arizona, Adair told the board in a written statement. Earlier this year the NCAA abruptly cancelled a major women’s golf regional event in Louisiana, leaving a dozen teams without an opportunity to try for the Championship.
A Barstool Sports official got the company involved with the NCAA and several teams across the country ended up at the “Let Them Play” tournament in Chandler in May.
Efforts to fill the vacancy created by Tuesday’s resignation of Sen. Otoniel “Tony” Navarrete (D-LD30) in the face of child molestation charges will take a bit longer than expected, after it was discovered there are not enough Democrat LD30 precinct committeemen to make the nomination.
At least 30 elected precinct committeemen are required, but there is only 29, according to information obtained from the Maricopa County Recorder’s Office. That means the Maricopa County Board of Supervisors will have to appoint a citizen’s panel which will be tasked with nominating three Democrat candidates.
The board of supervisors will then vote to appoint one of the three candidates as LD30’s senator. The process could take two weeks or more if a rift occurs among within the party and interested candidates.
Navarrete announced his resignation five days after his Aug. 5 arrest on seven felonies involving sexual misconduct with minors. He had his initial court appearance the next day and was released from jail Aug. 7 to await trial after posting a $50,000 secured bond.
Numerous public officials called on Navarrete to resign as soon as word of his arrest became public, including Gov. Doug Ducey, Senate President Karen Fann, and Rep. Raquel Teran, chair of the Arizona Democratic Party.
The one-sentence resignation letter to Fann and Senate Minority Leader Rebecca Rios was followed by a written statement in which Navarrete “adamantly” denied “all allegations that have been made.”
Navarrete’s resignation put the brakes on an effort by Sen, Kelly Townsend for an ethics investigation. Sen. Sine Kerr, chair of the Ethics Committee, previously confirmed receiving Townsend’s complaint about Navarrete, but on Tuesday she dismissed the complaint as moot.
Court records show two boys, ages 16 and 13, told detectives with the Phoenix Police Department of being sexually molested by Navarrete in the past. The older boy alleged multiple incidents of abuse over several years. Among the evidence described in a probable cause statement is a confrontation call between Navarrete and the younger boy during which the then-senator reportedly admitted to engaging in sexual misconduct.
Confrontation calls are utilized by investigators in hopes of getting an alleged perpetrator to provide a confession or other incriminating evidence.
Navarrete has been ordered to have no-contact with the two victims named in the charges. He is also required to comply with electronic monitoring. If convicted of all charges, Navarrete faces a mandatory prison sentence of nearly 50 years.
Farm Bureau Financial Service and one of its Arizona representatives is not liable for the fact a group of developers lost funding for a hotel – casino in Puerto Peñasco, a coastal town in Mexico commonly known as Rocky Point, the Arizona Court of Appeals has ruled.
Last week a three-judge appellate panel affirmed a Pima County Superior Court judge’s ruling last year which dismissed a 2016 lawsuit filed by Cholla Bay Hotel Group LLC; CBHG Management S.A. DE C.V.; Desert Springs Equestrian Center LLC, and Lorilei Peters, who was a principal of Desert Springs Equestrian.
The various plaintiffs -collectively referred to as the CBHG plaintiffs- sued for defamation as well as tortious interference in a business expectancy and contract due to Farm Bureau information Cully provided to private investigators.
Those investigators were hired by Grupo Financiero IMBURSA in 2013 to conduct a due diligence review of the CBHG plaintiffs related to a $15 million loan for construction of a hotel and casino in Rocky Point. The loan, according to the lawsuit, was to be funded by Grupo Financiero and guaranteed by the Mexican government.
CBHG also alleged a Mexican government agency had approved it for a gaming license within Mexico.
In their lawsuit, the CBHG plaintiffs alleged the development loan was denied due to negative information Farm Bureau provided to the investigators. That involved a 2010 insurance claim for theft made by Peters on behalf of Desert Springs Equestrian with a value of more than $250,000.
The lawsuit alleged the letter “recklessly made false allegations of criminal conduct on behalf of Ms. Peters in connection with an allegedly fraudulent theft claim.” It also alleged Farm Bureau and Cully improperly sent a referral to the Arizona Department of Insurance and the National Insurance Crime Bureau, which the CBHG plaintiffs asserted was defamation.
In response to the lawsuit, Farm Bureau asserted that CBHG failed to produce admissible evidence of the existence of the $15 million loan, the hotel franchise agreement in Rocky Point, or a Mexican gaming license. Farm Bureau also argued the documents which were produced by the CBHG plaintiffs could not be authenticated and some bore “several hallmarks of being a forgery.”
Without validated evidence, CBHG could not substantiate its claim of a business expectancy, a judge with the Pima County Superior Court ruled in dismissing the CBHG lawsuit. The dismissal order noted the plaintiffs’ business expectancy claims were “too attenuated, speculative.”
CBHG timely appealed, arguing the judge erred in rejecting admissible evidence and in not properly addressing the defamation claim. The appeal also challenged the lower court’s opinion that CBHG’s business-expectancy claim was too attenuated and speculative.
But according to the unanimous appellate decision, CBHG had to show the existence of a valid contractual relationship or business expectancy in order to prove intentional interference with business expectancy and contract.
The burden of proof was on the CBHG plaintiffs to provide a showing of “a business relationship evidenced by an actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered.” Judge Sean Brearcliffe wrote in the appellate decision.
“Simply stating that the documents have a government stamp on the first of sixty-five pages and having a third party with no personal knowledge of either the characteristics of the stamp or the ministry’s receipt of the documents testify, is not sufficient,” Brearcliffe wrote. “CBHG was unable to produce admissible evidence below to create a genuine issue of material fact as to the existence of a valid contractual relationship or business expectancy.”
As to the defamation claim, the court of appeals ruled insurance companies such as Farm Bureau have a statutory duty to refer claims they believe to be fraudulent to the Insurance Fraud Unit of the Arizona Department of Insurance.
The CBHG plaintiffs, jointly or individually, have until Sept. 6 to file a petition for review to the Arizona Supreme Court.
The owners and operators of the several critical pipelines which crisscross Arizona have been directed by the Department of Homeland Security’s Transportation Security Administration (TSA) to make cybersecurity a priority, the second such mandate this year.
A Security Directive issued in late July requires owners and operators of TSA-designated critical pipelines which transport hazardous liquids such as gasoline, diesel, and jet fuels, as well as natural gas (also known as methane) to implement a number of “urgently needed” protections against cyber intrusions.
The mandate also applies to dedicated high vaper pressure (HVP) pipelines used for the transport of liquefied petroleum gases (LPGs) such as propane, normal butane, and isobutane.
According to the Arizona Corporation Commission, Arizona is served by several interstate pipeline transmission systems including Cross Country Energy Corp’s Transwestern Pipeline, Dominion Energy’s Southern Trails Pipeline, Energy Transfer Partners’ Transwestern Pipeline, Kinder Morgan’s El Paso Natural Gas, Mohave Pipeline, Questar’s Southern Trails Pipeline, Southwest Gas, and TransCanada’s North Baja Pipeline.
There are then several intrastate distribution and transmission pipelines, including Abbott Nutrition, Alliant Gas Arizona, Applied LNG Technologies, Arizona Public Service, Calpine Pipeline, Desert Gas Services, Duncan Rural Services, Gila River Power, Mineral Park Mine, Nucor Steel Kingman, Pimalco Aerospace Aluminum, Plains LPG Services, Swissport Fueling, UniSource Energy, and Zapco / Biogas Energy Tactics.
The recent Security Directive requires those operating critical pipelines to put into place mitigation measures to protect against ransomware cyberattacks and other threats to information technology and operational technology systems. They must also develop and implement a cybersecurity contingency and a recovery plan, and conduct a cybersecurity architecture design review.
“Through this Security Directive, DHS can better ensure the pipeline sector takes the steps necessary to safeguard their operations from rising cyber threats, and better protect our national and economic security,” according to Alejandro Mayorkas, Secretary of Homeland Security. “Public-private partnerships are critical to the security of every community across our country and DHS will continue working closely with our private sector partners to support their operations and increase their cybersecurity resilience.”
DHS and TSA issued an initial Security Directive in May following a ransomware on Colonial Pipeline, which moves gasoline, diesel, and jet fuel from Texas to the eastern United States. Colonial Pipeline paid a $4.4 million ransom to hackers who accessed the company’s billing software, triggering a pipeline shutdown until it was certain the cyberattack had not targeted the company’s operational software.
The May directive mandated the reporting of all confirmed and potential cybersecurity incidents to DHS’s Cybersecurity and Infrastructure Security Agency (CISA). Each pipeline owner or operator was also required to immediately designate a Cybersecurity Coordinator who would be available 24 / 7 to federal officials.
There was also a requirement for an internal review of all current cybersecurity practices by the end of June, as was a report to TSA and CISA of all gaps in remediation measures.
TSA’s heightened attention on pipeline cybersecurity issues follows the agency’s efforts over the last two decades to enhance the physical security preparedness of hazardous liquid and natural gas pipeline systems across the country.
If two companies create a third, independent company which later runs out of money, it can be possible for creditors to sue the parent companies, but those creditors need to act fast, according to the Arizona Supreme Court.
On Thursday, the justices affirmed a Maricopa County judge’s order which dismissed a 2015 lawsuit filed against Meritage Homes of Arizona by a subcontractor of a residential real estate development. The lawsuit stemmed from Meritage’s ownership interest in Maricopa Lakes, LLC.
The Supreme Court ruled the subcontractor, Specialty Companies Group LLC, was barred by the statute of limitations from initiating the legal action which sought to collect more than $234,000 as payment on a 2011 default judgment against Maricopa Lakes.
Court records show the controversy dates back to 2004 when Meritage Homes and Hacienda Builders, Inc., joined forces to create Maricopa Lakes to develop a real estate project. Maricopa Lakes then hired G&K South Forty Development to serve as project manager.
In August 2007, G&K hired Specialty Companies Group, LLC, to provide grouted riprap for the development. Grouted riprap refers to rocks which are cemented or wired into place along inclined shorelines, spillways, and ditches to prevent erosion.
By the end of 2007, Hacienda Builders was no longer able to meet its financial obligations to the Maricopa Lakes partnership due to the burgeoning real estate crash. In April 2009, Specialty Companies sued G&K for more than $150,000 in unpaid work, and G&K then sought indemnification from Maricopa Lakes.
G&K and its subcontractor ran into a problem, however, as Maricopa Lakes had already been administratively dissolved by the Arizona Corporation Commission.
In November 2011, G&K was awarded a default judgment for nearly $235,000 which it later assigned to Specialty Companies. Then in January 2015, Specialty Companies sued Meritage Homes and Hacienda Builders under the legal theory of alter ego, also known as piercing Maricopa Lakes’ corporate veil.
According to Mark N. Goodman of Goodman Law in Prescott, the protections normally afforded to those with an interest in a limited liability corporation (LLC) in Arizona can be removed in some situations. In the case of Maricopa Lakes, responsibility for the company’s debts could have fallen onto Hacienda Builders and Meritage Homes.
“The alter ego status is said to exist when there is such unity of interest and ownership that the separate personalities of the corporation and owners cease to exist,” Goodman explains, adding that piercing the corporate veil based on alter ego status is only available to third parties, such as creditors, and not to shareholders.
But a Maricopa County judge dismissed Specialty Companies’ 2015 alter ego lawsuit against Meritage and Hacienda, ruling the claim was untimely based on a six-year statute of limitation for disputes involving a written contract. The subcontractor appealed, but only as to Meritage Homes’ alter ego liability.
The Arizona Court of Appeals came to a much different decision, ruling last year that Specialty Companies had simply took action in 2015 to enforce the 2011 judgment which had its own five-year statute of limitations.
The Arizona Supreme Court did not agree. Its unanimous opinion released Aug. 5 states an attempt to pierce the corporate veil to enforce a judgment is not its own cause of action. Instead, a plaintiff “is bound by the limitation period applicable to the cause of action to which the alter-ego claim is tied,” Justice Clint Bolick wrote in the opinion.
And the initial cause of action involving Hacienda Builders, Meritage Homes, and Maricopa Lakes is a breach of contract.
“A claim for breach of contract accrues when the plaintiff knew or should have known the facts giving rise to the claim,” Bolick wrote, adding the Maricopa County judge heard evidence that the necessary facts about Maricopa Lakes’ ownership was known in late 2007 or early 2008.
Therefore, the six-year statute of limitations expired before Specialty Companies sued Meritage Homes in 2015, the opinion states. Bolick noted the statute of limitations dismissal meant the justices did not take up whether Maricopa Lakes was in fact Meritage Homes’ alter ego.
And even though Meritage Homes was the prevailing party on review, the justices chose to “exercise our discretion” in denying the company’s request for attorney fees.
