Santa Cruz County notched a series of significant legal wins in its ongoing lawsuit against the Arizona Auditor General and the State of Arizona, following a Dec. 8 ruling by the Maricopa County Superior Court.
In an under-advisement decision, Judge Dewain D. Fox granted the county’s motions to dismiss the auditor general’s counterclaim and to strike and dismiss a set of third-party pleadings, including a supplemental third-party complaint, filed by the auditor general in the case stemming from a years-long embezzlement scheme carried out by the County’s former treasurer.
The court sided with Santa Cruz County in finding that the auditor general’s counterclaim, which alleged negligence and related theories, did not constitute a legitimate, standalone cause of action. The ruling characterized the filing as “tantamount to an affirmative defense of comparative fault masquerading as a counterclaim.”
While the court allowed the auditor general until Jan. 9 to revise the counterclaim, it underscored that the state agency may not simply repackage its original defenses into a damages claim.
Judge Fox also dismissed both the initial and supplemental third-party complaints filed by the Auditor General, ruling them procedurally improper.
The Court barred the state from amending the dismissed pleadings, concluding that any amendment would be futile. Additionally, the supplemental third-party complaint was deemed improperly filed because it was submitted without the Court’s permission and did not qualify as a legitimate supplemental pleading.
The lawsuit accuses the auditor general of failing to detect a multi-year theft of public funds by the County’s former treasurer despite conducting annual audits. The case remains active in Maricopa County Superior Court as the parties prepare for the next stage of litigation.
