Stratton v. Weaver ( 2014 )


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  •                           NOTICE: NOT FOR PUBLICATION.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.
    IN THE
    ARIZONA COURT OF APPEALS
    DIVISION ONE
    CHRISTIAN M. STRATTON and EMILY R. SOLOMON; SOLOMON-
    STRATTON ENTERPRISES, L.L.C., a Nevada corporation,
    Plaintiffs/Appellees,
    v.
    NOEL GENE WEAVER, Defendant/Appellant.
    No. 1 CA-CV 13-0204
    FILED 07-22-2014
    Appeal from the Superior Court in Maricopa County
    No. CV2009-036826
    The Honorable Mark H. Brain, Judge
    AFFIRMED
    COUNSEL
    Ryan Rapp & Underwood PLC, Phoenix
    By Christopher T. Rapp, Polly S. Rapp
    Counsel for Plaintiffs/Appellees
    Noel Gene Weaver, Phoenix
    Defendant/Appellant
    MEMORANDUM DECISION
    Judge John C. Gemmill delivered the decision of the Court, in which
    Presiding Judge Samuel A. Thumma and Judge Randall M. Howe joined.
    STRATTON v. WEAVER
    Decision of the Court
    G E M M I L L, Judge:
    ¶1           Defendant/Appellant Noel Gene Weaver appeals the
    superior court’s judgment for Plaintiffs/Appellees Christian M. Stratton,
    Emily R. Solomon, and Stratton-Solomon Enterprises, L.L.C. For the
    following reasons, we affirm.
    Factual and Procedural Background
    ¶2             The facts, viewed in the light most favorable to sustaining
    the trial court’s judgment, are as follows. Harris v. City of Bisbee, 
    219 Ariz. 36
    , 37, ¶ 3, 
    192 P.3d 162
    , 163 (App. 2008). Weaver, Stratton, and Solomon
    formed an oral partnership to purchase a house, repair and remodel it,
    and sell it for a profit. In November 2008, the partnership purchased a
    house with money borrowed from a lender who secured the loan by
    holding title of the property. The parties then invested money and labor
    to improve the property.
    ¶3            Solomon attempted to purchase the house from the
    partnership in February 2009, but the sale was not completed until
    November 2009. Solomon paid $73,500 for the property, and after
    deducting closing and financing costs, the partnership was entitled to
    $31,412.89 from the sale. A dispute arose between Stratton, Solomon, and
    Weaver regarding the amount of the parties’ investments in the property
    and the division of the profits. Weaver received the proceeds from the
    sale and refused to disburse any funds to Stratton or Solomon.
    ¶4            Stratton and Solomon filed this action against Weaver and
    others for breach of contract, breach of fiduciary duty, conversion, and
    unjust enrichment. 1 Weaver counterclaimed for breach of contract and
    breach of fiduciary duty.
    1 The complaint also named several limited liability companies associated
    with Weaver as defendants. After counsel for those defendants withdrew,
    the court struck the companies’ answer, resulting in entry of default and
    then entry of a default judgment against those defendants. Weaver’s wife,
    Emily Miles, was a named defendant but appeared pro se as relevant here;
    she did not sign the notice of appeal from the judgment, and is therefore
    not a party to this appeal. See State v. One Single Family Residence at 1810
    East Second Ave., Flagstaff, Ariz., 
    193 Ariz. 1
    , 2 n. 1, 
    969 P.2d 166
    , 167 n. 1
    2
    STRATTON v. WEAVER
    Decision of the Court
    ¶5           Given the amount in controversy, the case was referred to
    mandatory arbitration. See Ariz. R. Civ. P. 72(b). After a hearing, the
    arbitrator awarded Stratton and Solomon $19,330.88 on their claims and
    $14,000 for attorneys’ fees, plus interest on both amounts. Weaver
    appealed the arbitration award. See Ariz. R. Civ. P. 77(a).
    ¶6           After a two-day bench trial, the superior court granted
    judgment for Stratton and Solomon in the amount of $20,081.45 and
    awarded them $28,564 in attorneys’ fees plus costs. The court later denied
    Weaver’s request for additional findings and his post-trial motions
    challenging the awards. Weaver timely appealed.
    ¶7            We have jurisdiction pursuant to Arizona Revised Statutes
    (“A.R.S.”) section 12-2101(A)(1).
    Discussion
    ¶8            On appeal, Weaver argues the superior court erroneously
    denied his pretrial discovery motion and improperly excluded his
    evidence at trial. He also contends the superior court’s judgment was
    contrary to law and not supported by the evidence, and he challenges the
    award of attorneys’ fees.
    I.    Discovery Issues
    ¶9            Weaver argues the superior court erred by denying his
    motion to compel discovery from Stratton and Solomon and by excluding
    his trial exhibits. 2 We review disclosure and discovery rulings and the
    admission or rejection of evidence for an abuse of discretion. Marquez v.
    Ortega, 
    231 Ariz. 437
    , 441, ¶ 14, 
    296 P.3d 100
    , 104 (App. 2013).
    (App. 1997) (notice of appeal invalid as to spouse who did not sign it
    when the signing spouse is not a licensed attorney). Accordingly, the
    claims against these other defendants are not part of this appeal.
    2 Although Weaver also states that Stratton and Solomon failed to comply
    with the arbitrator’s order directing them to respond to Weaver’s
    discovery requests, he makes no argument concerning that alleged failure
    and we will not consider that issue. ARCAP 13(a)(6); Schabel v. Deer Valley
    Unified Sch. Dist. No. 97, 
    186 Ariz. 161
    , 167, 
    920 P.2d 41
    , 47 (App. 1996)
    (“Issues not clearly raised and argued in a party’s appellate brief are
    deemed waived.”).
    3
    STRATTON v. WEAVER
    Decision of the Court
    A.     Denial of Weaver’s Motion to Compel
    ¶10           After Weaver appealed the arbitration decision, he
    propounded additional discovery requests and noticed depositions for
    Stratton and Solomon. When Stratton and Solomon refused to respond to
    the additional requests or appear for their depositions, Weaver moved the
    court to compel their compliance. Stratton and Solomon opposed the
    motion on the grounds that the discovery requests and deposition notices
    were untimely. 3 The court denied Weaver’s motion, “[f]or the reasons
    stated on the record.”
    ¶11          Arizona Rule of Civil Procedure 77(g)(3) requires the parties
    to complete discovery within 80 days after an appeal is taken from an
    arbitration award unless the court extends the time for good cause. No
    such extension was granted here, meaning Weaver’s attempts at discovery
    were not timely. He sought to depose Stratton and Solomon after the 80-
    day deadline expired on March 9, 2012 and he delayed serving the
    discovery requests such that the responses were not due until after that
    deadline. See Ariz. R. Civ. P. 36(a). For these reasons, the superior court
    did not abuse its discretion by denying Weaver’s motion to compel.
    B.     Exclusion of Weaver’s Trial Exhibits
    ¶12            Weaver next asserts the superior court erred by excluding
    his trial exhibits, resulting in a denial of due process.
    ¶13            Rule 77(g)(1) requires a party appealing an arbitration award
    to file with the notice of appeal a list of witnesses and exhibits that the
    party intends to use at trial. Weaver did not include a list of exhibits with
    his notice of appeal from the arbitration award and never requested leave
    to file a supplemental list. Further, he failed to have the court mark any
    exhibits before the first day of trial. Nevertheless, the court allowed him
    to offer exhibits at trial and determined one by one whether each
    proffered exhibit had been disclosed and was admissible. The court
    ultimately admitted four of Weaver’s exhibits.
    ¶14          Weaver argues the court denied him a fair trial by excluding
    his exhibits without notice. Weaver has not shown how the superior
    court’s holding him to the disclosure requirement is a denial of due
    process. See Ariz. R. Civ. P. 26.1(a)(8), 75(b), (c), 77(g). In addition,
    3 Weaver asserts Stratton and Solomon did not respond to the motion to
    compel, but the record contains their response.
    4
    STRATTON v. WEAVER
    Decision of the Court
    Weaver did not make an offer of proof regarding his proposed exhibits
    and they apparently were not retained for this appeal. We therefore
    decline to reverse on this basis. See Ariz. R. Evid. 103(a)(2) (“A party may
    claim error in a ruling to admit or exclude evidence only if the error
    affects a substantial right of the party and. . . . if the ruling excludes
    evidence, a party informs the court of its substance by an offer of proof,
    unless the substance was apparent from the context.”); State v.
    Gulbrandson, 
    184 Ariz. 46
    , 59, 
    906 P.2d 579
    , 592 (1995) (declining to
    consider an evidentiary issue on appeal because the defendant made no
    offer of proof in the trial court).
    II.    Sufficiency of the Evidence
    ¶15             Weaver argues the court’s decision was not supported by the
    evidence. We view the facts in the light most favorable to sustaining the
    trial court’s judgment and will affirm if the record contains evidence that
    might reasonably support the judgment. Federoff v. Pioneer Title & Trust
    Co. of Ariz., 
    166 Ariz. 383
    , 388, 
    803 P.2d 104
    , 109 (1990).
    ¶16           Stratton and Solomon alleged Weaver breached the
    partnership agreement and the fiduciary duties he owed to them by
    retaining possession of the funds derived from the sale of the property.
    Weaver counterclaimed for breach of contract and breach of fiduciary
    duty, alleging Stratton and Solomon failed to act in the best interests of the
    partnership while improving the property and did not timely perform
    their obligations to the partnership, resulting in a lower profit from the
    sale of the house.
    ¶17            The court found the partnership received $31,412.89 as
    proceeds for the sale of the property, Stratton and Solomon were entitled
    to reimbursement of $15,750.01 they properly spent to improve the
    property, and Weaver was entitled to $7,000 in remuneration for the labor
    he invested in the project. It ruled that the partnership agreement
    required the parties to divide the remaining proceeds ($8,662.88) equally
    and rejected Weaver’s claim that he was entitled to an offset for any delay
    in selling the property.
    ¶18          Stratton and Solomon offered ample trial evidence to
    support the court’s decision. They testified the partnership purchased the
    investment property with money borrowed from a lender who was to be
    5
    STRATTON v. WEAVER
    Decision of the Court
    repaid, with interest, when the partnership sold the house. 4 They further
    testified the parties agreed they would be reimbursed for the money they
    spent to repair and remodel the house and would equally share the sale
    proceeds after deducting those costs.
    ¶19           Stratton and Solomon offered evidence that they spent
    $15,750.01 to make necessary repairs and improvements to the property.
    They testified Weaver did not contemporaneously object to these expenses
    and only challenged them at the time of the property’s sale. In addition,
    they disputed Weaver’s claim that he invested $11,483.12 in the property
    through his labor and by hiring others to perform labor at the property.5
    To refute Weaver’s claim that Solomon did not timely purchase the
    property, Stratton and Solomon testified Solomon intended to purchase
    the house from the partnership in February 2009, but the sale was delayed
    because Miles had conveyed the property to the partnership’s lender.
    The lender required a 90-day waiting period before a subsequent sale and
    the sale was further delayed because Weaver was dissatisfied with the
    appraisal amount.
    ¶20           This evidence reasonably supports the court’s determination
    that Stratton and Solomon were entitled to reimbursement of the amounts
    they spent to improve the partnership’s property, plus their respective
    portion of the partnership’s profits.
    III.   Attorneys’ Fees
    ¶21          Weaver challenges the superior court’s award of attorneys’
    fees to Stratton and Solomon. He contends the court erred by (1)
    awarding Stratton and Solomon the fees they incurred in the arbitration
    4 Weaver maintained at trial that the partnership never had an ownership
    interest in the house. Stratton and Solomon contradicted that account,
    testifying that they provided the deposit money for the purchase and were
    obligated along with Weaver and Miles to repay the loan. They also
    testified that they had no advance knowledge that Miles allowed the
    lender to hold title to the property as security for the loan.
    5  The trial court noted that it awarded Weaver only $7,000 and not the
    additional amounts he claimed because it found his testimony was not
    credible.
    6
    STRATTON v. WEAVER
    Decision of the Court
    proceeding, and (2) failing to provide findings of fact and conclusions of
    law in support of its award.
    A.     A.R.S. § 12-1510 Did Not Prohibit the Award
    ¶22          Weaver argues that because the partnership agreement did
    not provide for an award of attorneys’ fees incurred in an arbitration
    proceeding, A.R.S. § 12-1510 6 prohibited the court from awarding Stratton
    and Solomon those fees.
    ¶23          Section 12-1510 however, does not apply here because the
    case was not arbitrated pursuant to the parties’ agreement, but under the
    rules for compulsory arbitration proceedings. Arizona Rule of Civil
    Procedure 76(a) allows the arbitrator in a compulsory arbitration
    proceeding to award attorneys’ fees when they are recoverable under the
    law.
    B.     The Fee Award Was Proper Under A.R.S. § 12-341.01(A)
    ¶24           Stratton and Solomon requested fees pursuant to A.R.S. § 12-
    341.01(A), which provides for a discretionary award of attorneys’ fees to
    the successful party in an action arising out of contract. We review the
    superior court’s award of attorneys’ fees for an abuse of discretion and
    affirm if the award has any reasonable basis. Associated Indem. Corp. v.
    Warner, 
    143 Ariz. 567
    , 570-71, 
    694 P.2d 1181
    , 1184-85 (1985).
    ¶25           We reject Weaver’s argument that the superior court was
    required to make findings of fact or conclusions of law to support its fee
    award. The statutes Weaver cites, A.R.S. § 12-341.01(C)(1999) 7 and -349
    (2014), concern a discretionary award of fees as a sanction, which requires
    6  Although Weaver’s briefs cite A.R.S. § 12-1501 (2014), that section
    addresses the validity of a written arbitration agreement and, accordingly,
    we assume the briefs intended to reference A.R.S. § 12-1510, which
    concerns the fees and expenses of arbitration.
    7 Weaver cites A.R.S. § 12-341.01(D) (1999), which states that the court and
    not a jury shall make an award of fees in a contested action arising out of
    contract. It appears he was attempting to reference A.R.S. § 12-341.01(C)
    (1999), which allowed a court to enter an award of reasonable attorneys’
    fees as a sanction. That subsection was in effect at the time the court
    entered the judgment in this case, but was removed effective January 1,
    2013. 2012 Ariz. Legis. Serv. Ch. 305 (H.B. 2544).
    7
    STRATTON v. WEAVER
    Decision of the Court
    the trial court to specify reasons for an award. A.R.S. § 12-350 (2014);
    Bennett v. Baxter Grp., Inc., 
    223 Ariz. 414
    , 421, ¶¶ 27-28, 
    224 P.3d 230
    , 237
    (App. 2010). In contrast, the court is not required to set forth such a basis
    for a fee award under A.R.S. § 12-341.01(A), and we will uphold an award
    as long as the record reflects a reasonable basis for it. Orfaly v. Tucson
    Symphony Soc'y, 
    209 Ariz. 260
    , 267, ¶ 25, 
    99 P.3d 1030
    , 1037 (App. 2004).
    ¶26            This dispute arises from a contract between the parties and
    the record reasonably supports the superior court’s award of fees to
    Stratton and Solomon. Stratton and Solomon were the prevailing parties
    in the litigation and nothing in the record shows that the court abused its
    discretion by granting them reasonable attorneys’ fees.
    Conclusion
    ¶27          For the foregoing reasons, we affirm. Stratton and Solomon
    request an award of attorneys’ fees incurred on appeal pursuant to A.R.S.
    § 12-341.01(A). In our discretion, we grant the request and we will award
    an amount of reasonable attorneys’ fees and taxable costs contingent upon
    their compliance with Arizona Rule of Civil Appellate Procedure 21.
    :gsh
    8