by Terri Jo Neff | Aug 8, 2021 | News
By Terri Jo Neff |
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.
by Corinne Murdock | Aug 8, 2021 | News
By Corinne Murdock |
Banner Health, one of the largest health care companies in the United States, is exempting pregnant nurses from their COVID-19 vaccine mandate. Banner Health hasn’t announced these exemptions publicly.
This exemption was outlined in an email from a Banner Health nursing director, obtained by AZ Free News. The email also noted that Banner Health’s human resources may extend that exemption to women who are breastfeeding, of childbearing age, and more. The email didn’t clarify why pregnancy was considered an exemption by the health care company, nor did it elaborate why it was considering exemptions for women who are breastfeeding or of childbearing age.
“I learned today that pregnancy will be an approved exemption,” wrote the official. “The HR team is also working other automatic exemptions (breast feeding, child bearing age, etc). I will keep you all posted as I learn more.”
The CDC still recommends that pregnant women, breastfeeding women, and women of childbearing age get the COVID-19 vaccine (the CDC calls breastfeeding women “lactating people”).
Banner Health announced last month that it would require all employees to be vaccinated by November 1. The mandate didn’t bode well with the company’s employees.
This past week, hundreds of nurses protested against the vaccine mandate. Nurses say they oppose the mandate because the safety and efficacy of the vaccine isn’t proven, and they would like a choice in their own health care decisions.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinnejournalist@gmail.com.
by Terri Jo Neff | Aug 7, 2021 | News
By Terri Jo Neff |
The arrest of Arizona Sen. Otoniel “Tony” Navarrete (D-LD30) on multiple charges of sexual misconduct with minors has led to demands for his resignation, and many of those making the statements are including information about hotlines for victims of abuse.
Navarrete was taken into custody Thursday on seven felonies involving sexual misconduct with two boys, ages 16 and 13. An initial court appearance was held by video feed in a Maricopa County courtroom Friday at which time a judge set Navarette’s bail at $50,000.
According to court records, the older boy reported multiple incidents of abuse to the Phoenix Police Department on Wednesday. The next day a detective recorded a confrontation call between the boy and Navarrete before making the arrest.
A confrontation call is a common practice used by detectives in sexual abuse cases, particularly with children who cannot confront a suspect in person. The victim is told by a detective what types of things to say and ask in an attempt to obtain incriminating evidence against a suspect to use at trial.
A number of pretrial release conditions were also ordered in Navarrete’s case, including a no-contact order with the two victims as well as all other minors. He must also consent to electronic monitoring if he posts bail.
If convicted of all charges, Navarrete faces a mandatory prison sentence of nearly 50 years.
After the hearing, several public officials called on Navarrete to resign.
“Sen. Navarrete should resign immediately,” Gov. Doug Ducey’s statement read. “These allegations are abhorrent. My prayers are with the young victims and their loved ones during this traumatic time”
The governor’s statement was followed by Senate President Karen Fann.
“These are serious and alarming charges that require Senator Navarrete to step down immediately,” Fann stated Friday afternoon.
Raquel Teran, a state lawmaker and chair of the Arizona Democratic Party also joined the calls for Navarrete’s resignation.
“Like many in our community, I am grieving as more details come out about the charges against my Senate seatmate,” Teran tweeted. “I am calling on Senator Otoniel ‘Tony’ Navarrete to resign immediately. We are elected to protect the most vulnerable, and that begins with our children.
Other Democrats who called for Navarrete to step down Friday are Arizona Secretary of State Katie Hobbs and Kathy Hoffman, Arizona’s Superintendent of Public Instruction.
Also garnering attention after Thursday’s arrest is a tweet Navarrete made Wednesday morning complimenting US. Senator Mark Kelly, who was critical of Brett Kavanaugh’s nomination for the U.S. Supreme Court in 2018. Kelly called Kavanaugh “a dangerous choice” for the bench.
Blake Masters, who hopes to be Kelly’s opponent in the 2022 General Election, called out the senator for his silence on Navarrete’s arrest.
Navarrete, who is a member of the Arizona Legislature’s LGBT caucus, was elected to the State House of Representatives for LD30 in 2016. Then in 2018, he was elected to the State Senate, where he was assigned to the Senate’s appropriations, commerce, and health & human services committees during the last legislative session.
His official Senate biography lists his regular job as Deputy Director for Promise Arizona, a nonprofit community-based organization located in Phoenix. As Deputy Director, Navarrete worked to promote policies which “strengthen families and increase civic participation,” the biography reads.
by Corinne Murdock | Aug 7, 2021 | Education, News
By Corinne Murdock |
The Goldwater Institute announced Thursday that it will represent a mother sued by the National Education Association (NEA) for daring to look into her school’s curriculum. The NEA is the largest teachers unions in the nation, with over $300 million to spend.
The Rhode Island mother, Nicole Solas, was slapped with the lawsuit on Monday. The NEA requested that the court prohibit the release of the records Solas sought. They alleged in their lawsuit that those records would cause teachers to be targeted and harassed by conservatives. Solas sought records pertaining to the teaching of critical race theory and gender theory, among other controversial topics.
“It is anticipated that teacher records will be produced that will be of a personal nature and will contain the identities of the teachers engaged in the personal communication as well as other communications that relate to the personal issues, disciplinary issues, performance issues, medical issues and issues not related to the official business of the School Department,” wrote the NEA. “[T]eacher emails will be produced that may or will continue discussion about critical race theory curriculum or other issues of ‘interest’ to the requestors that will contain individual teachers’ names and personally identifying information. Given the circumstances of the requests, it is likely that any teachers who are identifiable and have engaged in discussion about things like critical race theory will then be the subject of teacher harassment by national conservative groups opposed to critical race theory.”
Further, the NEA argued that not all records kept by public bodies were public record. It added that redaction of those records wasn’t always sufficient to ensure privacy.
In a press release, Goldwater Institute National Litigation Director Jon Riches assessed that this lawsuit is contrary to Solas’s rights as a parent and citizen.
“This brazen and unprecedented act of intimidation by the NEA will not stand,” said Riches. “Nicole Solas is entitled to know what her daughter’s school is teaching in the classroom. She’s entitled to ask questions. And she does not deserve to face legal action just for asking questions any concerned parent would ask.”
The debacle began when Solas submitted open records requests to her district this spring about the curriculum exposed to her daughter, as well as teacher correspondence
Ultimately, the district said it would cost Solas $74,000 to obtain the records. District policy states that they may charge 15 cents per page, and/or $15 per hour after the first hour of records retrieval. If the district was charging by the hour alone, it would take them a little over 4,900 hours, or 548 days (estimated based on 9 hour work days).
The lawsuit noted that the district released 6,500 pages of documents. That would cost about $975.
Solas hasn’t been discouraged by the lawsuit. Rather, she said that this would only help to further her cause for transparency.
“The NEA is so determined to push its political agenda that they are willing to expose themselves in a court of law for who they really are: an association of bullies eager to challenge a stay-at-home mom who simply wanted to know what her daughter would be taught,” said Solas. “This lawsuit won’t deter me from asking questions, and I encourage all parents to do the same, so that they are empowered to make informed decisions regarding their children’s education.”
The local NEA chapters, the National Education Association of Rhode Island (NEARI) and the National Education Association South Kingstown (NEASK), filed the lawsuit.
NEARI Deputy Executive Director Jennifer Azevedo said that NEA supports open records but believes that the interests of privacy outweigh the public interest in this case.
“We are asking the Court to conduct a balancing test to determine whether our members’ privacy rights outweigh the public interest,” said Azevedo. “We believe they do, and those records should either not be disclosed or should be redacted accordingly.
The NEA also named the school committee of Solas’s district, South Kingstown School District, as a defendant in the lawsuit.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinnejournalist@gmail.com.
by Terri Jo Neff | Aug 7, 2021 | Education, News
By Terri Jo Neff |
In March, the Foundation for Rural Service (FRS) released a report on the pandemic’s impact across rural America, particularly after millions of people were forced to conduct most of their daily life, business, and education online.
“Never before has reliable access to high-speed internet been as important as it has been during the COVID-19 pandemic,” said FRS Executive Director Pam Becker. “Broadband connects us to our work, education, health care, government programs and—most importantly—one another.
In rural Arizona, the pandemic made it apparent that Internet “is quickly becoming the fourth utility and a necessity right along with gas, electricity, and water,” according to Heather Floyd, spokesperson for Valley TeleCom Group (VTC). “The pandemic only increased the speed that society moved to depending on Internet to facilitate our day to day lives.”
VTC started as a telephone cooperative serving southeast Arizona and southwest New Mexico in the 1960s. Over the years, its service area has expanded to provide phone and Internet service to more than 20 rural communities spread over thousands of square miles, many of which are in mountainous areas.
For the past five years, the company proactively installed fiber Internet technology to all the schools in its service area. When COVID-19 and its various lockdowns hit last year, the disparity between Internet service in Arizona’s rural and metropolitan areas became more glaring, particularly for kids forced into remote learning, said Floyd.
VTC officials stepped up and implemented a number of activities in response to COVID-19, including providing free Internet service for 40 homes from April to June 2020, installing 8 WiFi Hotspots throughout its territory, and offering discounted service for 37 households.
Then in May of this year, VTC got on board with the FCC’s Emergency Broadband Benefit Program (EBBP) which provided $10,000 each to 10 school district in the company’s service territory for the purchase of laptops and tablets for students doing in-home learning.
But VTC isn’t resting on its laurels, according to Floyd.
This school year, company officials continue to facilitate opportunities for students in VTC’s service communities, including providing 17 schools and 7 libraries with fiber internet, considered the best level of service. Also being continued is VTC’s involvement with the FCC’s EBBP which will provide a discount of up to $50 a month for households struggling to pay for Internet.
Schools within VTC’s service area also have a new tool -the FCC’s Emergency Connectivity Fund (ECF)- for providing in-home Internet access for students and teachers. ECF reimburses schools for equipment and internet access for those who need Internet connections placed in their homes.
And another option became available Aug. 1 for students unable to sign up for ECF, Floyd said. The option, Discounted Access for Student Homework (DASH), provides Internet service for students at only $29.95 per month. DASH, which is designed for educational use, is filtered to comply with the Children’s Internet Protection Act (CIPA), so many entertainment websites are blocked.
More information about VTC’s programs can be found at https://www.vtc.net
by Corinne Murdock | Aug 5, 2021 | News
By Corinne Murdock |
The private school Brophy College Preparatory (Brophy) announced Wednesday that it would mandate the experimental COVID-19 vaccine. Their take on the mandate mirrored President Joe Biden’s vaccine mandate for federal employees and contractors – if an individual isn’t fully vaccinated, they must adhere to masking restrictions, social distancing measures, and frequent testing.
In a letter to parents, Brophy Principal Bob Ryan explained that there wouldn’t be a hybrid learning option for students. Therefore, students needed to adjust accordingly to create a safe learning environment. According to Ryan, Brophy students and faculty may choose to not be vaccinated; however, they would have to be tested regularly and be prohibited from overnight retreats and school travels outside of the metro area.
“Over the last six months, it has become increasingly clear that the most effective way to contain the spread of the virus is to have a vaccinated community,” wrote Ryan. “Therefore, effective September 13, every student, teacher, and staff member will need to have proof of vaccination on file with the school or get tested for COVID regularly. Additionally, effective Monday, August 9, and for the foreseeable future, any student who wishes to participate in overnight retreats or any school-related travel outside of the Phoenix metro area will be required to have proof of vaccine on file.”
Brophy will resume classes next Thursday.
Earlier this summer, Governor Doug Ducey signed the bill prohibiting K-12 mask and vaccine mandates into law. Both of Ducey’s sons are Brophy graduates.
It is unclear whether private schools like Brophy are exempt from the law. The COVID-19 vaccine is still under emergency use authorization (EUA) only from the FDA.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinnejournalist@gmail.com
