Arizona Biltmore v. Conlon ( 2022 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
ARIZONA BILTMORE HOTEL VILLAS CONDOMINIUMS
ASSOCIATION INC, Plaintiff/Appellee,
v.
THE CONLON GROUP ARIZONA, LLC, et al., Defendants/Appellants.
No. 1 CA-CV 21-0432
FILED 5-12-2022
Appeal from the Superior Court in Maricopa County
No. CV2015-013012
The Honorable Roger E. Brodman, Judge (Retired)
AFFIRMED
COUNSEL
Pettit Kohn Ingrassia Lutz & Dolin PC, Los Angeles, CA
By Grant D. Waterkotte, Tristan A. Mullis
Counsel for Plaintiff/Appellee
Finney Law Office LLC, Clayton, MO
By Daniel P. Finney
Counsel for Defendant/Appellant Conlon
Ahwatukee Legal Office PC, Phoenix
By David L. Abney
Counsel for Defendant/Appellant Finney
ARIZONA BILTMORE v. CONLON, et al.
Decision of the Court
MEMORANDUM DECISION
Judge Randall M. Howe delivered the decision of the court, in which
Presiding Judge Jennifer B. Campbell and Judge James B. Morse Jr. joined.
H O W E, Judge:
¶1 Mark Finney and The Conlon Group (“TCG”) appeal the trial
court’s judgment awarding $479,562 in damages to the Arizona Biltmore
Hotel Villas Condominiums Association. For the following reasons, we
affirm.
FACTS AND PROCEDURAL HISTORY
¶2 This is the second appeal resulting from the Association’s
lawsuit against Finney and TCG for various tort and contract claims—
including breach of fiduciary duty and negligent misrepresentation—
resulting from Finney’s and TCG’s actions in a 2013 lawsuit between the
Association and the Arizona Biltmore Hotel and Salt River Project (“SRP”).1
Between 2004 and 2015, Finney served as president of the Association’s
Board of Directors and independently owned and controlled TCG. As
president, Finney launched the Association’s 2013 litigation, alleging that
SRP had breached its contract and wrongfully terminated a joint use
agreement that ended the Association’s rights to 103 parking spaces
(“South Spaces”). Finney and the Association also requested declaratory
judgment that it, rather than the Hotel, had exclusive rights to 78 different
parking spaces (“North Spaces”). The Association accrued over a million
dollars in attorney fees during the 2013 litigation and received a $200,000
settlement from SRP, with the Hotel being dismissed at summary
judgment.
¶3 The Association sued Finney and TCG for, among other
things, the 2013 litigation’s attorney fees, claiming that Finney breached his
fiduciary duty as president of the Board and negligently misrepresented
1 The factual and procedural history for this case has been
largely recounted in this court’s opinion Arizona Biltmore Hotel Villas
Condominiums Ass’n v. Conlon Grp. Arizona, LLC, 249 Ariz. 326 (App. 2020),
which we abridge and supplement for purposes of this appeal.
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ARIZONA BILTMORE v. CONLON, et al.
Decision of the Court
facts to the Board during the 2013 lawsuit. After a bench trial, the trial court
found that Finney as an individual and jointly and severally with TCG
breached his fiduciary duty as the Board president for his conduct related
to the South Spaces litigation. It found, however, that Finney and TCG were
not liable for the North Spaces litigation. In calculating the damages award,
the trial court took the amount the Association sought in attorney fees in
the 2013 litigation, $1,049,562, and subtracted the SRP settlement, $200,000.
It also subtracted the amount the “Association was prepared to spend” for
both the “Northern and Southern Spaces” litigation if the facts were “as the
non-Finney Board members believed them to be,” $350,000, for a total
damage amount of $479,562.
¶4 Finney appealed. This court affirmed the trial court’s
judgment in all respects but vacated the $479,562 damages award, finding
the trial court had “never deducted the Association’s fees on [the North
Spaces] claim from its total damage award.” See Arizona Biltmore Hotel Villas
Condominiums Ass’n, 249 Ariz. at 333 ¶ 33. We remanded to the trial court
to “conduct such proceedings” necessary to deduct the attorney fees
incurred in the North Spaces litigation. Id.
¶5 At the evidentiary hearing, the trial court stated it should
have been clearer in, or should have clarified, its initial ruling because the
$350,000 deduction had accounted for all the North Spaces’ attorney fees.
Although the Association never presented either a contemporaneous or a
re-created itemized billing statement dividing fees between the North and
South Spaces, the trial court determined that the Association proved with
“absolute certainty that the North Spaces fees” did not exceed $350,000, or
one-third of the total fees.
¶6 To explain the amount, the trial court identified several items
in the record that supported its conclusion. After judgment had been
entered in the North Spaces litigation, Finney e-mailed another Board
member on October 16, 2014, stating that the $470,000 in attorney fees
incurred by that date had been for both the South and North Spaces
litigation. The trial court thus determined that all attorney fees from
October 2014 until the litigation’s end involved only the South Spaces
litigation minus $30,000 for the North Spaces appeal, a difference totaling
nearly $550,000.
¶7 Although the trial court said it did not know exactly how the
pre-October 16 attorney fees were allocated, it determined that “it [wa]s not
remotely possible” that the North Spaces fees were substantially greater
than the South Spaces fees because (1) the Hotel’s fees for the North Spaces
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ARIZONA BILTMORE v. CONLON, et al.
Decision of the Court
litigation were only $136,356 while SRP’s fees four months later were
$570,000; (2) the Association prepared a $13 million claim against SRP in
the South Spaces litigation with an expert charging more than $126,000; and
(3) the Association had litigated and prevailed on various motions to
dismiss, including four dispositive motions, and needed to litigate multiple
discovery motions by October 31, 2014. Indeed, the trial court found that
the South Spaces litigation had “spun out of control” because SRP
employed a “scorched earth” strategy to the litigation. Id.
¶8 Thus, it concluded that “well under half” of the $470,000 in
attorney fees were incurred on the North Spaces litigation. While it
recognized that finding that the Association had incurred $700,000 in the
South Spaces litigation was “favorable to defendants and probably
significantly underestimate[d] the Association’s damages,” it concluded
that $350,000 of the total fees for the 2013 litigation were for the North
Spaces. It signed a new final judgment awarding the Association $479,562
in damages. Finney and TCG timely appealed.
DISCUSSION
¶9 Finney and TCG argue that the trial court improperly
deviated from this court’s mandate and that insufficient evidence
supported the trial court’s conclusion that $350,000 was spent on the North
Spaces litigation. We review whether a trial court follows an appellate
court’s mandate de novo, In re Marriage of Molloy, 181 Ariz. 146, 149 (App.
1994), and review the trial court’s damages award for an abuse of discretion,
Arizona Biltmore Hotel Villas Condominiums Ass’n, 249 Ariz. at 333 ¶ 31.
I. The trial court did not improperly deviate from the mandate.
¶10 An appellate mandate, along with the decision it seeks to
implement, is binding on the trial court and enforceable according to its
“true intent and meaning[,]” Raimey v. Ditsworth, 227 Ariz. 552, 555 ¶ 6
(App. 2011), as the “law of the case[,]” Dancing Sunshines Lounge v. Indus.
Comm’n of Ariz., 149 Ariz. 480, 482 (1986). In construing a mandate’s true
intent and meaning, a trial court is limited to the “specific direction of the
mandate” as interpreted “in light of the opinion.” 5 Am. Jur. 2d App. Rev. §
685 (emphasis added). Although a trial court is generally required to adhere
to this court’s “direction,” it may deviate from that direction if doing so is
not “contrary to the spirit of the appellate court’s decision.” United States v.
Perez, 475 F.3d 1110, 1113 (9th Cir. 2007) (“[A]n order issued after remand
may deviate from the mandate if it is not counter to the spirit of the circuit
court’s decision.”).
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ARIZONA BILTMORE v. CONLON, et al.
Decision of the Court
¶11 Contrary to Finney and TCG’s contention otherwise, the trial
court’s new judgment did not violate the “true intent and meaning” of this
court’s mandate and opinion. See Raimey, 227 Ariz. at 555 ¶ 6. The intent
and spirit of this court’s first opinion required a damages award free from
the North Spaces litigation’s attorney fees, expressed by its requirement
that the trial court deduct those fees from the damages award. See Arizona
Biltmore Hotel Villas Condominiums Ass’n, 249 Ariz. at 333 ¶¶ 33–36; see also
Harbel Oil Co. v. Superior Ct. of Maricopa Cnty., 86 Ariz. 303, 306 (1959)
(resolving whether trial court violated the mandate required analysis of the
appellate court’s decision); 5 Am. Jur. 2d App. Rev. § 684. But as the trial
court made clear in its judgment on remand, attorney fees for the North
Spaces litigation had not been included in the original $479,562 damages
award. Thus, any deviation from the mandate’s direction to deduct
additional fees for the North Spaces litigation was consistent with the
mandate’s intent and spirit, assuming evidence supports the trial court’s
judgment on remand. See Raimey, 227 Ariz. at 555 ¶ 6; Perez, 475 F.3d at
1113; see also Sibley v. Jeffreys, 81 Ariz. 272, 277 (1956) (noting that trial courts
may deviate from a remand if the previous ruling on appeal is “manifestly
or palpably erroneous”).
II. Sufficient evidence supports the trial court’s damages award.
¶12 Considering the trial court’s clarification and the reasoning on
remand, the trial court did not err because sufficient evidence supports the
trial court’s conclusion that the North Spaces attorney fees did not exceed
$350,000. Once the fact of damages has been established, the amount of the
damages may be established with less certainty than is needed to establish
the fact of damage. Earle M. Jorgensen Co. v. Tesmer Mfg. Co., 10 Ariz. App.
445, 450 (1969). The award cannot hinge on conjecture or speculation,
however, and must be supported by some reasonable basis for computing
the amount of damages with such precision as, “from the nature of his claim
and the available evidence, is possible.” Walter v. F.J. Simmons & Others, 169
Ariz. 229, 236 (App. 1991). This court views the facts “in the light most
favorable to upholding the [trial] court’s ruling[,]” Bennett v. Baxter Grp.,
Inc., 223 Ariz. 414, 417 ¶ 2 (App. 2010), and will affirm unless it finds clear
error, Elar Invs., Inc. v. Sw. Culvert Co., 139 Ariz. 25, 30 (App. 1983).
¶13 Neither party disputes that the 2013 litigation attorney fees
totaled $1,049,562. Neither party disputes that as of October 16, 2014, the
hotel had been dismissed from the litigation and $470,000 had been spent
on both the North and South Spaces litigation, with another $30,000 spent
on the North Spaces appeal. Thus, over half of the total 2013 litigation’s
attorney fees, or nearly $550,000, was spent on the South Spaces after the
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ARIZONA BILTMORE v. CONLON, et al.
Decision of the Court
Hotel had been dismissed from the litigation ($1,049,562-$470,000-
$30,000=$549,562). Although the record does not show an exact calculation
of how the $470,000 in attorney fees was itemized between the North and
South Spaces litigation, the Association provided proof to a reasonable
degree of certainty that no more than $350,000 was spent on the North
Spaces litigation, including the $30,000 appeal.
¶14 The Association had brought a $13 million claim against SRP
in the South Spaces litigation. As a result, the South Spaces litigation was
highly contested during 2013 and 2014. By November 2014, the Association
had—over the first 15 months of litigation—defended and prevailed on
various motions to dismiss, including against dispositive motions claiming
that it had (1) had failed to include the United States as an indispensable
party (twice); (2) filed a defective Notice of Claim; (3) failed to comply with
the statute of limitations; and (4) failed to prove damages. The Association
had also litigated multiple discovery disputes. Indeed, by February 2015,
SRP had spent over $570,000 in the South Spaces litigation. On the other
hand, the Hotel had spent only $136,356 to defend the entire North Spaces
litigation. Through a comparison of the fees spent to defend each case,
evidence to a reasonable degree of certainty supports the trial court’s
conclusion that well under half of the $470,000 in fees incurred before
October 16, 2014, was for the North Spaces litigation and that the total spent
on the North Spaces litigation did not come close to exceeding $350,000. See
Gilmore v. Cohen, 95 Ariz. 34, 36 (1963) (requiring a plaintiff provide a
“reasonable basis” for computing damages with such precision as is
possible). Thus, the trial court did not abuse its discretion in finding that
the attorney fees incurred by the North Spaces litigation had already been
deducted from total damages.
¶15 Finney and TCG argue, however, that the trial court’s
methodology was inadequate. They claim that the Association needed to
provide an itemized list of attorney fees—contemporaneous or recreated—
and that without a list, the trial court lacked a factual basis to determine the
attorney fees attributable to the North Spaces. That requirement, however,
is for requested attorney fees under A.R.S. § 12–341 or another like statute.
See, e.g., Schweiger v. China Doll Rest. Inc., 138 Ariz. 183, 188 (1983). In those
instances, a plaintiff anticipates an award of attorney fees and can readily
track all fees and costs to submit to a court if successful. But as is the case
here, when attorney fees become damages in an independent cause of
action, the Association needed only to establish damages to a reasonable
level of certainty. See Gilmore, 95 Ariz. at 36; Earle M. Jorgensen Co., 10 Ariz.
App. at 450. Although itemized billing sheets would have been helpful,
they were unnecessary. Furthermore, to the extent that Finney controlled
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ARIZONA BILTMORE v. CONLON, et al.
Decision of the Court
the 2013 litigation before 2015, his failure to demand contemporaneous
itemized billing, even if inadvertent, does not prevent the Association from
gaining meaningful recovery. See Rancho Pescado, Inc. v. Nw. Mut. Life Ins.
Co., 140 Ariz. 174, 184 (App. 1984) (unfair to deny a plaintiff meaningful
recovery because defendant’s actions prevented a showing of damages).
¶16 Finney and TCG next contend that the trial court’s finding
that $350,000 was meant to account for all the fees of the North Spaces
litigation contradicts its original ruling. But the court found that Finney had
fraudulently induced the Association to incur the fees in the South Spaces
litigation. Thus, the $350,000 the Association was prepared to spend if the
facts were as they believed them to be could equal only the amount in the
North Spaces litigation. See Title Ins. Co. of Minn. v. Acumen Trading Co., 121
Ariz. 525, 526 (1979) (“A construction will be adopted that supports the
judgment, rather than one that destroys it[.]”). Alternatively, while the trial
court reasoned that it applied $350,000 to the North Spaces litigation
because the amount was one-third of the total attorney fees, it also
suggested that well under $235,000 was attributable to the North Spaces
litigation. Thus, the new judgment could also be construed as apportioning
some amount of the reduction to the South Spaces litigation, thereby
conforming with the original judgment. Either way, the judgment on
remand can be construed consistently with the original judgment. See id.The trial court therefore did not err in finding that no more than $350,000
was attributable to the North Spaces litigation.
CONCLUSION
¶17 For the foregoing reasons, we affirm. Finney and TCG request
their costs on appeal, which we deny because they did not prevail in the
appeal. The Association requests their attorney fees and costs on appeal.
But because the Association does not provide any basis for its request, we
decline to award the Association its attorney fees. See ARCAP 21(a)(2) (“A
claim for fees under this Rule must specifically state the statute, rule,
decisional law, contract, or other authority for an award of attorney[]
fees.”). As the prevailing party, however, the Association is entitled to its
costs incurred on appeal upon compliance with ARCAP 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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