NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
MEMORANDUM DECISION
THUMMA, Judge.
¶ 1 Plaintiff Roy Hill challenges the superior court's denial of his motion for change of judge for cause and entry of judgment on the pleadings against him. Affirming the denial of his motion for change of judge for cause, because Hill's operative pleading does not show as a matter of law that his remaining claim is a derivative claim, that portion of the judgment is vacated and this matter is remanded.
FACTS1 AND PROCEDURAL HISTORY
¶ 2 Hill claims defendants The Mountain Club (TMC) and TMC director and president Gene Kirkman (Defendants) are operating as a "de facto" homeowners association (HOA) for residents "in that area commonly known and designated as [TMC] near Prescott" and have been "shutting off water" to such residents. The Second Amended Complaint (SAC), Hill's operative pro se pleading,2 alleges Hill is a past director and officer of TMC and suggests Hill owns property in and/or is a resident of TMC. The SAC alleges TMC membership "is voluntary and that not all residents are members;" that by-law amendments purport to authorize TMC "to turn off the water for failure to pay dues, fees and assessments;" that the by-laws state that dues are used in part to maintain "`water lines owned by' TMC;" that Defendants "have from time to time, shut off the water supply to residents who live within the boundaries of" TMC and that residents "are being advised that water utilities will be resumed upon payment of dues, fees and assessments." Based on these factual allegations, as relevant here, Hill asserted a breach of fiduciary duty claim, alleging Defendants "held positions of trust in direct relationship to the performance of their duties to" Hill and other members; that "Defendants by their conduct of shutting off water, and misrepresenting themselves to the public and Members, mismanaged the money and assets of [Hill] . . . and Members" and that such conduct has proximately caused economic harm to Hill and members.3
¶ 3 Defendants successfully moved for judgment on the pleadings, arguing Hill's claim "is derivative in nature." Hill then filed a motion for change of judge for cause, which the associate presiding judge denied after finding Hill failed to show bias.4 This court has jurisdiction over Hill's timely appeal from the resulting Arizona Rule of Civil Procedure 54(b) partial judgment pursuant to Arizona Revised Statute (A.R.S.) sections 12-120.21(A)(1) and 2101(A)(1) (2014).5
DISCUSSION
I. Motion For Change Of Judge For Cause.
¶ 4 Hill claims the associate presiding judge erred in denying his motion for change of judge for cause. See Ariz. R. Civ. P. 42(f)(2). A judge is presumed to be "free of bias and prejudice." Simon v. Maricopa Med. Ctr., 225 Ariz. 55, 63 ¶ 29, 234 P.3d 623, 631 (App. 2010) (citation omitted). A party challenging the impartiality of a judge must present a specific basis for an assertion of bias and prove bias by a preponderance of the evidence. Id. The bias must arise from an extrajudicial source and not from the judge's participation in the case; a judge's rulings do not themselves demonstrate bias. Id. Hill relies on several purported instances of bias, all of which can be addressed summarily and none of which show the associate presiding judge erred in denying his motion for change of judge for cause.
¶ 5 Denying a motion to compel based on a failure to personally consult with an opposing party in good faith (as required by Arizona Rule of Civil Procedure 37(a)(2)(C)) does not, as Hill argues, prove bias. Denying a motion addressing trial scheduling without oral argument is within the superior court's discretion and does not, as Hill argues, prove bias. Ariz. R. Civ. P. 7.1(c)(2). Hill next argues the superior court prematurely granted the motion for judgment on the pleadings, because such motions may only be made "[a]fter the pleadings are closed." Ariz. R. Civ. P. 12(c). This argument, however, fails to distinguish between "motions," Ariz. R. Civ. P. 7.1, and "pleadings," Ariz. R. Civ. P. 7(a). Although there were motions pending, the pleadings allowed by Rule 7(a) had been filed long before the superior court granted the motion for judgment on the pleadings. Nor does Hill show bias by stating that the court "allowed this matter to proceed for 4 years time." Finally, Hill has failed to show that he was held to "a higher standard" than Defendants' attorneys in a way that demonstrates bias. Given this lack of proof, the associate presiding judge did not err in denying Hill's motion for change of judge for cause. See Simon, 225 Ariz. at 63, 234 P.3d at 631.
II. Judgment On The Pleadings.
¶ 6 A motion for judgment on the pleadings tests the sufficiency of the relevant pleading, and judgment should be entered for the defendant if the complaint fails to state a claim upon which relief may be granted. Giles v. Hill Lewis Marce, 195 Ariz. 358, 359 ¶ 2, 988 P.2d 143, 144 (App. 1999); see also Ariz. R. Civ. P. 12(c). This court reviews the superior court's legal conclusions de novo. See Shaw v. CTVT Motors, Inc., 232 Ariz. 30, 31 ¶ 8, 300 P.3d 907, 908 (App. 2013).
¶ 7 Hill argues the superior court erred in concluding his claims were derivative and therefore failed for lack of standing. An action by a shareholder against a corporation
is derivative rather than direct "if the gravamen of the complaint is injury to the corporation, or to the whole body of its stock or property without any severance or distribution among individual holders, or if it seeks to recover assets for the corporation or to prevent the dissipation of its assets." [Funk v. Spalding, 74 Ariz. 219, 223, 246 P.2d 184, 186 (1952)].
A shareholder may maintain a direct action under certain circumstances, however, such as when (1) the relationship between the shareholders and a wrongdoer is separate from the shareholders' status as shareholders or their ownership interest in the corporation, (2) the wrongdoer owes a duty to the shareholders for some reason other than their status as shareholders, or (3) the injuries or damages were sustained by individual shareholders rather than by the corporation.
Albers v. Edelson Tech. Partners L.P., 201 Ariz. 47, 52 ¶¶ 17, 18, 31 P.3d 821, 826 (App. 2001) (citations omitted).
¶ 8 As applied, Hill's breach of fiduciary duty claim does not exclusively rely on his status as a shareholder and alleges Defendants held "positions of trust" in which they owe him fiduciary obligations. The SAC alleges Defendants breached these obligations by shutting off water, making misrepresentations and mismanaging Hill's "money and assets." The SAC claims these breaches "proximately caused economic harm to . . . [Hill] and Members," not TMC. Accordingly, in addressing Defendants' argument that Hill is pressing a derivative claim, it cannot be said that the SAC fails to state a claim upon which relief may be granted. Giles, 195 Ariz. at 359 ¶ 2, 988 P.2d at 144; see also Funk, 74 Ariz. at 224, 246 P.2d at 187 (stating claim was not derivative when "there exists a fiduciary relationship between the parties which requires the wrongdoer to protect the interest of the stockholder and that duty has been violated and full relief to the stockholder cannot be had through a recovery by the corporation") (citation omitted). Therefore, the order granting Defendants' motion for judgment on the pleadings is vacated.6
CONCLUSION
¶ 9 That portion of the superior court's Rule 54(b) judgment dismissing Hill's fiduciary duty claim is vacated and this matter is remanded for further proceedings. This court affirms the remainder of that judgment including the dismissal of the other claims in the Second Amended Complaint.
