KIM V.MANSOORI ( 2007 )

FILED BY CLERK
IN THE COURT OF APPEALS MAR 23 2007
STATE OF ARIZONA COURT OF APPEALS
DIVISION TWO DIVISION TWO
JOON NAE KIM, a married man, and )
CHANG NAE KIM, a married man, )
) 2 CA-CV 2006-0069
Plaintiffs/Appellants, ) DEPARTMENT B
)
v. ) OPINION
)
HAIDER MANSOORI, a single man, )
)
Defendant/Appellee. )
)
APPEAL FROM THE SUPERIOR COURT OF PINAL COUNTY
Cause Nos. CV200401185 and CV200401234 (Consolidated)
Honorable Stephen F. McCarville, Judge
APPEAL DISMISSED
Hoopes & Adams, PLC
By John R. Hoopes Chandler
Attorneys for Plaintiffs/Appellants
Mack & Associates, P.C.
By Richard V. Mack, Scott M. Drucker,
and Corey I. Richter Phoenix
Attorneys for Defendant/Appellee
E C K E R S T R O M, Presiding Judge.
¶1 Appellants Joon Nae Kim and Chang Nae Kim appeal from the trial court’s
grant of summary judgment on their claim for attorney fees under A.R.S. § 12-341.01 against
appellee Haider Mansoori. On appeal, the Kims argue Mansoori’s motion for summary
judgment was premature and the trial court abused its discretion when it certified the
judgment as final under Rule 54(b), Ariz. R. Civ. P., 16 A.R.S., Pt. 2. We agree, and
because the trial court erred when it certified the judgment as final, we dismiss the appeal
for lack of jurisdiction.
¶2 The Kims entered into a contract to purchase approximately forty acres of
vacant land in Pinal County for $160,000 from Fahmy David Ghobrial. The Kims were
represented by their own real estate agent, and Mansoori represented Ghobrial. After
Ghobrial failed to convey the property as required by the contract, the Kims filed a
complaint against him, claiming breach of contract and seeking specific performance,
damages, and attorney fees. Mansoori maintained that Ghobrial had signed the agreement,
but Ghobrial denied doing so and asserted that the signatures on the contract were not his.1
The Kims amended their complaint to include Mansoori as a defendant, asserting claims of
fraud and consumer fraud against him and requesting attorney fees under § 12-341.01.
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About a month after the Kims entered into a contract with Ghobrial, Steven and
Rania Sayegh entered into a contract with Ghobrial to purchase the same property. When
Ghobrial failed to convey the land to the Sayeghs according to their agreement, they also
filed a complaint for breach of contract and sought specific performance. Not long after, the
trial court ordered the cases consolidated.
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¶3 Mansoori filed a motion for partial summary judgment against the Kims on the
claim for attorney fees, asserting the Kims could not be awarded attorney fees under § 12-
341.01 because the action did not “aris[e] out of a contract.” The Kims responded that the
motion was “premature and procedurally inappropriate” because Rule 54(g)(2), Ariz. R. Civ.
P., requires that attorney fees be decided after a decision on the merits of a case.
¶4 After a hearing, the court granted Mansoori’s motion, finding the Kims would
not be entitled to attorney fees under § 12-341.01 because “there is no[] contract between
Mansoori and Kim.” Soon thereafter, Mansoori filed a form of judgment, proposing that the
judgment be entered pursuant to Rule 54(b). The Kims filed an objection to the proposed
form of judgment, asserting that certification under Rule 54(b) would be inappropriate
because the request for attorney fees was not a separate claim. Nonetheless, the court
directed the entry of judgment pursuant to Rule 54(b), purportedly making the judgment
final and appealable. The Kims now challenge the propriety of the trial court’s Rule 54(b)
certification of the claim as a final judgment.
¶5 Although neither party asserts that this court lacks jurisdiction to consider the
appeal before us, we may examine our jurisdiction sua sponte. See Salerno v. Atlantic Mut.
Ins. Co., 198 Ariz. 54, ¶ 9, 6 P.3d 758, 761 (App. 2000). In fact, “[t]his court has the duty
to review its jurisdiction and, if jurisdiction is lacking, to dismiss the appeal.” Davis v.
Cessna Aircraft Corp., 168 Ariz. 301, 304, 812 P.2d 1119, 1122 (App. 1991); see also
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Musa v. Adrian, 130 Ariz. 311, 312, 636 P.2d 89, 90 (1981) (“Even though the parties do
not raise the issue, the appellate court must determine that it has jurisdiction.”).
¶6 Generally, appellate court jurisdiction is “limited to final judgments which
dispose of all claims and all parties.” Musa, 130 Ariz. at 312, 636 P.2d at 90; see also
A.R.S. § 12-2101(B). Rule 54(b) provides an exception when the trial court “direct[s] the
entry of final judgment as to one or more but fewer than all of the claims or parties . . . upon
an express determination that there is no just reason for delay and upon an express direction
for the entry of judgment.” We review a Rule 54(b) certification for an abuse of discretion,
Southern California Edison Co. v. Peabody Western Coal Co., 194 Ariz. 47, ¶ 19, 977
P.2d 769, 775 (1999), unless the issue is whether “the judgment in fact is not final, i.e., did
not dispose of at least one separate claim of a multi-claim action,” in which case, we review
the trial court’s determination de novo. Davis, 168 Ariz. at 304, 812 P.2d at 1122; see also
Lloyd v. State Farm Mut. Auto. Ins. Co., 189 Ariz. 369, 373, 943 P.2d 729, 733 (App.
1996).
¶7 The Kims argue the trial court erred when it certified as a final judgment the
summary judgment against them on their claim for attorney fees. Specifically, they contend
such a claim in this particular context is not a separate one under Rule 54(b) and is therefore
not eligible for certification as a final judgment. Because this is a case of first impression,
we must interpret the civil procedure rules by employing principles of statutory construction.
See Byers-Watts v. Parker, 199 Ariz. 466, ¶ 10, 18 P.3d 1265, 1268 (App. 2001). “Our
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construction must necessarily be governed by the overarching principle that when
interpreting a court rule or statute, we are seeking to ascertain the intent of the framer.”
State v. Baca, 187 Ariz. 61, 63, 926 P.2d 528, 530 (App. 1996). If the plain text of the rule
is unambiguous, then it “will be given its usual, ordinary meaning unless doing so creates an
absurd result.” State v. Aguilar, 209 Ariz. 40, ¶ 23, 97 P.3d 865, 872 (2004). But, if the
language is ambiguous, then “we may look at a variety of elements, including the rule’s
context, the language used, the subject matter, the historical background, the effects and
consequences, and its spirit and purpose.” State ex rel. Romley v. Superior Court, 168
Ariz. 167, 169, 812 P.2d 985, 987 (1991).
¶8 Mansoori contends Rule 54(b) clearly contemplates that, for purposes of the
rule, a claim for attorney fees may be considered a separate claim. Rule 54(b) states:
When more than one claim for relief is presented in an
action, whether as a claim, counterclaim, cross-claim, or third-
party claim, or when multiple parties are involved, the court may
direct the entry of final judgment as to one or more but fewer
than all of the claims or parties only upon an express
determination that there is no just reason for delay and upon an
express direction for the entry of judgment. In the absence of
such determination and direction, any order or other form of
decision, however designated, which adjudicates fewer than all
the claims or the rights and liabilities of fewer than all the parties
shall not terminate the action as to any of the claims or parties,
and the order or other form of decision is subject to revision at
any time before the entry of judgment adjudicating all the claims
and the rights and liabilities of all the parties. For purposes of
this subsection, a claim for attorneys’ fees may be considered a
separate claim from the related judgment regarding the merits of
a cause.
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Mansoori argues that, with the addition of the last sentence in 1999, the rule “specifically
provides that attorneys’ fees are a separate claim and, therefore, may be determined without
resolving any or all of the other claims in the case.”
¶9 But that sentence, read in its entirety and in the context of the committee note
and other provisions of Rule 54, provides a trial court discretion to treat a claim for attorney
fees as a separate claim, subject to Rule 54(b) certification, only in the context of a “related
judgment regarding the merits of a cause.” Id. Here, the trial court granted judgment on the
Kims’ claim for attorney fees without entering a related judgment on the merits of the cause.
The State Bar Committee Notes to the 1999 amendments explain the rationale for the
pertinent provision as follows:
[T]here may be good reasons to entertain an immediate
judgment on the merits of a cause, while leaving attorneys’ fees
issues to be addressed later. Rule 54(b) was amended in 1999
to permit that approach. Under the amended rule, the trial
judge may certify the “merits” judgment for immediate entry and
appeal before such judge renders a decision on the attorneys’
fees issues. The trial court will retain jurisdiction to address the
attorneys’ fee issue after the appeal of a Rule 54(b) certified
judgment on the merits.
Ariz. R. Civ. P. 54(b) bar committee note. Thus, the framers intended to permit a trial court
to characterize a claim for attorney fees as a separate claim so it would have the discretion
to enter an immediate, appealable judgment on the merits—notwithstanding lingering and
unresolved attorney fees issues. Nat’l Broker Assocs., Inc. v. Marlyn Nutraceuticals, Inc.,
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211 Ariz. 210, ¶ 33, 119 P.3d 477, 484 (App. 2005).2 The note provides no express support
for entering an appealable judgment on an attorney fee claim in the absence of judgment on
the merits. And, to the extent the Arizona Appellate Handbook may state otherwise, it is
not precedential authority. See 1 State Bar of Arizona, Arizona Appellate Handbook §
3.3.1.6.1 (4th ed. 2000).
¶10 We agree with the Kims that Rule 54(g)(2) more squarely addresses, and
resolves, the scenario here. That subsection states:
When attorneys’ fees are claimed, the determination as
to the claimed attorneys’ fees shall be made after a decision
on the merits of the cause. The motion for attorneys’ fees shall
be filed within 20 days from the clerk’s mailing of a decision on
the merits of the cause, unless extended by the trial court.
(Emphasis added.) In short, the rule governing the procedure for claiming and being
awarded attorney fees expressly precludes a determination on an attorney fee request prior
to a decision on the merits. Therefore, Rule 54(b) cannot be read, by silence or by
implication, to authorize certification of a type of final judgment—a judgment on an attorney
fee claim preceding a decision on the merits—that is expressly forbidden in Rule 54(g).
2
Our understanding of the purpose of this language is reinforced by the State Bar
Committee Notes for Rule 58(g), Ariz. R. Civ. P., 16 A.R.S., Pt. 2. Rule 58(g) requires that
judgment not be entered until claims for attorney fees have been addressed “[e]xcept as
provided in Rule 54(b).” In explaining the purpose of that exception, the notes observe: “In
the rare case in which a judgment on the merits of a cause would be appropriate prior to
resolution of attorneys’ fees, the trial court may certify the entry of a ‘merits’ judgment
under Rule 54(b).” Notably absent is any reference to certifying the entry of an attorney fee
judgment as a separate claim before entry of a merits judgment.
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¶11 Mansoori counters that, when all subsections of Rule 54(g) are read together,
the sequencing limitation to determining an attorney fee request does not apply to this
situation because “Rule 54(g) is intended to govern a court’s determination as to the amount
of attorneys’ fees[,] . . . not a determination as to entitlement thereto.” But no language in
any of the four subsections of Rule 54(g) suggests that the “determination as to the claimed
attorney’s fees” refers exclusively to the amount of fees as distinguished from the
determination of a party’s entitlement to them. To the contrary, subsection (1) uses the
phrase “claim for attorneys’ fees” when setting forth a procedural requirement at the
pleading stage—a stage at which the amount of fees would not even be a relevant issue
because the amounts would not yet be known.
¶12 We acknowledge that, under the exceptional circumstances of this case, the
trial court arguably possessed enough information to assess whether the Kims’ claims for
attorney fees could survive summary judgment. But, a party’s entitlement to attorney fees
cannot, in most cases, be determined until the court has first reached a decision “on the
merits of the cause.” For example, § 12-341.01, the provision under which the Kims seek
attorney fees, authorizes an award of such fees to a “successful party” in litigation arising out
of a contract or “upon clear and convincing evidence that the claim or defense constitutes
harassment, is groundless and is not made in good faith.” § 12-341.01(A) and (C). Both
potential bases of award generally presuppose a prior decision on the merits. Thus, in the
absence of any language in Rule 54(g)(2) limiting its scope to determinations of the amount
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of attorney fees, and given the obvious logic of awaiting a decision on the merits under most
circumstances to determine a threshold entitlement to fees, we find little ambiguity in the
rule’s requirement that all determinations on attorney fees await a decision on the merits.
¶13 For the foregoing reasons, we find the purpose of the 1999 amendment to Rule
54(b) was to allow a determination of attorney fees to be made after a judgment on the
merits and did not contemplate or address a determination of attorney fees before a judgment
on the merits. We therefore conclude Rule 54(b) cannot be read to authorize the
certification of a judgment expressly prohibited by Rule 54(g)(2). Accordingly, the trial
court erred when it certified as final a judgment on an attorney fee claim pursuant to Rule
54(b) in advance of a “related judgment regarding the merits of [the] cause.”
¶14 Because this court lacks jurisdiction over this appeal, it is dismissed.
____________________________________
PETER J. ECKERSTROM, Presiding Judge
CONCURRING:
____________________________________
J. WILLIAM BRAMMER, JR., Judge
____________________________________
PHILIP G. ESPINOSA, Judge
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