John Munic Enterprises, Inc. v. Laos , 235 Ariz. 12 ( 2014 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO
JOHN MUNIC ENTERPRISES, INC.,
AN ARIZONA CORPORATION,
Plaintiff/Appellee,
v.
BETH ANNE LAOS AND ENRICO B. LAOS, WIFE AND HUSBAND,
Defendant/Appellant.
No. 2 CA-CV 2013-0108
Filed May 6, 2014
Appeal from the Superior Court in Pima County
No. C20099937
The Honorable Charles V. Harrington, Judge
AFFIRMED
COUNSEL
Altfeld & Battaile P.C., Tucson
By Robert A. Kerry
Counsel for Plaintiff/Appellee
Waterfall, Economidis, Caldwell, Hanshaw & Villamana, P.C., Tucson
By Corey B. Larson
Counsel for Defendant/Appellant
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
OPINION
Chief Judge Howard authored the opinion of the Court, in which
Judge Brammer and Judge Olson concurred.1
H O W A R D, Chief Judge:
¶1 Beth and Enrico Laos (“the Laoses”) appeal from the
trial court’s denial of their Rule 60(c)(5), Ariz. R. Civ. P., motion for
relief from judgment entered in favor of John Munic Enterprises, Inc.
(“Munic”), and its denial of their request for a fair market valuation
hearing pursuant to A.R.S. § 12-1566. On appeal, they argue that the
court was biased against them, that it erred in applying the Uniform
Contribution Among Tortfeasors Act (“UCATA”) to prevent a
settlement amount between Munic and its attorney from serving as a
credit against the judgment entered against them, and that
fundamental fairness and equity entitled them to a fair market
valuation hearing. For the following reasons, we affirm.
Factual and Procedural Background
¶2 The underlying facts are undisputed. In March 2009,
the Laoses sought a loan from Munic in order to avoid the non-
judicial foreclosure of a ranch they had purchased. Munic loaned
them $900,000 for this purpose. When the Laoses failed to repay any
amount of the loan, Munic discovered that Beth Laos had
misrepresented the value of assets that secured the loan. Munic
sued the Laoses for breach of contract and fraud and was granted
summary judgment on both claims and awarded contract damages
in the amount of $1,362,305.70, which covered the loan principal,
unpaid interest, and attorney fees. The trial court declined to enter
1 The Hon. J. William Brammer, Jr., a retired judge of this
court, and the Hon. Robert Carter Olson, a retired judge of the
Arizona Superior Court, are called back to active duty to serve on
this case pursuant to orders of this court and the supreme court.
2
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
any additional compensatory or punitive damages on the fraud
claim.
¶3 Over a year after the judgment was entered, the Laoses
discovered Munic had sued its attorney for legal malpractice in
connection with his work on the loan and had obtained a
confidential settlement amount from him. The Laoses moved for
relief from judgment pursuant to Rule 60(c)(5), arguing that Munic
should reveal the amount of the settlement so that it could be
credited against the judgment entered against them or, in the
alternative, that Munic should be required to enter a satisfaction of
judgment. They also requested a fair market valuation hearing for
the value of the ranch. The trial court denied the motion and the
request for a valuation hearing. We have jurisdiction over the
Laoses’ appeal pursuant to A.R.S. § 12-2101(A)(2).
Trial Court Prejudice
¶4 The Laoses first argue the trial court was biased or
prejudiced against them because it looked into other cases involving
the Laoses pending on the superior court’s docket. However, they
did not make this argument below in their motion for
reconsideration or through an affidavit requesting the judge’s
disqualification pursuant to A.R.S. § 12-409. Additionally, they
stipulated to the same trial judge entering an amended judgment to
confirm this court’s jurisdiction. “The right to apply for a change of
judge for cause is waived if not timely filed.” Fendler v. Phx.
Newspapers Inc., 130 Ariz. 475, 481, 636 P.2d 1257, 1263 (App. 1981).
Therefore, they have waived any error. See Trantor v. Fredrikson, 179
Ariz. 299, 300, 878 P.2d 657, 658 (1994) (errors not raised in trial court
cannot be asserted on appeal); Marsin v. Udall, 78 Ariz. 309, 313, 279
P.2d 721, 724 (1955) (untimely to move to disqualify judge when
judgment already rendered on pleadings).
Settlement Credit
¶5 The Laoses next argue the trial court erred by
concluding that UCATA prevented crediting the settlement Munic
obtained from its attorney against the judgment entered against
them and therefore denying their Rule 60(c)(5) motion. We review
3
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
the denial of a Rule 60(c)(5) motion for an abuse of discretion. Ezell
v. Quon, 224 Ariz. 532, ¶ 15, 233 P.3d 645, 649 (App. 2010). A court
abuses its discretion if it commits an error of law. City of Tucson v.
Clear Channel Outdoor, Inc., 218 Ariz. 172, ¶ 58, 181 P.3d 219, 236
(App. 2008). We review de novo issues of statutory interpretation.
First Credit Union v. Courtney, 233 Ariz. 105, ¶ 9, 309 P.3d 929, 931
(App. 2013). “When the statutory language ‘is clear and
unambiguous,’ we look no further and ‘assum[e] the legislature has
said what it means.’” Id., quoting Clear Channel Outdoor, 218 Ariz.
172, ¶ 6, 181 P.3d at 225.
¶6 Rule 60(c)(5) allows a trial court to relieve a party from
a judgment if “the judgment has been satisfied, released or
discharged.” The Laoses claim Munic’s settlement with its attorney
satisfied, or at least partially satisfied, the judgment against them.
But the trial court concluded that “UCATA does apply to this case”
because § 12-2501(G) “defines ‘property damage’ to include
‘economic loss[.]’” The court then found that because the liability of
Munic’s attorney and the Laoses was several, and not joint, the
settlement could not be used to offset their judgment under UCATA.
See § 12-2506(A); Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493, 507-08,
917 P.2d 222, 236-37 (1996).
¶7 Sections 12-2501 through 12-2509, A.R.S., establish
Arizona’s version of UCATA. By its plain language, the act applies
to persons who become “liable in tort.” § 12-2501(A). “The right to
contribution under §§ 12-2501 through 12-2504 applies to all
tortfeasors whose liability is based on negligence, strict liability in
tort or any product liability action, as defined in § 12-681, including
warranty.” A.R.S. § 12-2509(A). Section 12-2506(A) sets a default
rule that in “personal injury, property damage or wrongful death”
actions liability is several and “in direct proportion to that
defendant’s percentage of fault.”
¶8 UCATA’s purpose is to “abolish joint and several
liability in most circumstances” so that “‘each tortfeasor [is]
responsible for paying his or her percentage of fault and no more.’”
State Farm Ins. Cos. v. Premier Manufactured Sys., Inc., 217 Ariz. 222,
¶ 12, 172 P.3d 410, 413 (2007), quoting Dietz v. Gen. Elec. Co., 169 Ariz.
505, 510, 821 P.2d 166, 171 (1991) (first emphasis added; second
4
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
emphasis in Dietz). Although § 12-2506(F) defines “[f]ault” as
including the “breach of a legal duty,” we recently concluded that
“[i]n the context of the UCATA . . . breach of a contractual
undertaking is [not] included within the meaning of ‘breach of a
legal duty.’”2 Fidelity & Deposit Co. of Md. v. Bondwriter Sw., Inc., 228
Ariz. 84, ¶ 24, 263 P.3d 633, 638 (App. 2011). We also determined
that “[t]he fact that economic losses are included within the
definition of ‘property damage’ does not compel the conclusion that
the comparative fault provisions of UCATA apply to breach of
contract claims.” Id. ¶ 25.
¶9 Munic received a judgment in its favor on both its
contract and tort claims against the Laoses. The judgment did not
include compensatory or punitive damages for the fraud claim. In
granting judgment in Munic’s favor on the contract claim, however,
the trial court awarded damages and attorney fees pursuant to the
terms of the contract. Because the Laoses are liable in tort and
contract, we must review the substance of the damages at issue to
determine whether UCATA was intended to apply to this situation.
See Thomas v. Goudreault, 163 Ariz. 159, 163-64, 165, 786 P.2d 1010,
1014-15, 1016 (App. 1989) (courts look to substance not labels;
analyzing damages involved to determine relevant law).
¶10 “To determine whether contract or tort law applies in a
specific case, the court must consider the facts of the case, ‘bearing in
mind the purposes of tort law recovery as contrasted with contract
law.’” Salt River Project Agric. Improvement & Power Dist. v.
Westinghouse Elec. Corp., 143 Ariz. 368, 376, 694 P.2d 198, 206 (1984),
quoting Arrow Leasing Corp. v. Cummins Ariz. Diesel, Inc., 136 Ariz.
444, 448, 666 P.2d 544, 548 (App. 1983), abrogated on other grounds by
Phelps v. Firebird Raceway, Inc., 210 Ariz. 403, 111 P.3d 1003 (2005).
“[C]ontract remedies are designed to redress loss of the benefit of
the bargain while tort remedies are designed to protect the
public . . . .” Arrow Leasing Corp., 136 Ariz. at 447, 666 P.2d at 547.
When a party is induced to enter a contract by fraudulent
misrepresentations and justifiably relies on the misrepresentation,
2Faultalso can include a breach of warranty action, but we are
not presented with that issue here.
5
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
the contract is voidable by that party, but is not automatically void.
See Restatement (Second) of Contracts § 164(1) (1981) (hereinafter
“Restatement (Contracts)”). But whether the party chooses to void
the contract or not, it also has an independent tort action for fraud.
Morris v. Achen Constr. Co., 155 Ariz. 512, 514, 747 P.2d 1211, 1213
(1987).
¶11 The summary judgment in Munic’s favor awarded
damages and attorney fees based on the terms of the contract, but
did not award additional damages as requested by Munic’s fraud
claim. Thus, although Munic could have sought to void the
contract, Restatement (Contracts) § 164(1), it instead sought to
enforce the contract by its terms and receive the benefit of its
bargain. The only recovery Munic received in this case thus fits
squarely within the type of remedy that contract law is designed to
provide. See Arrow Leasing Corp., 136 Ariz. at 447, 666 P.2d at 547;
Thomas, 163 Ariz. at 165, 786 P.2d at 1016.
¶12 Under these circumstances, we conclude the damages in
this case sound primarily in contract. Therefore UCATA was not
intended to apply to this situation in which the Laoses were not
primarily “liable in tort” pursuant to § 12-2501(A) or liable for a
breach of a legal duty causing personal injury, property damage or
wrongful death within the meaning of § 12-2506(A), (F). See Fidelity
& Deposit Co. of Md., 228 Ariz. 84, ¶ 25, 263 P.3d at 638. Accordingly,
the trial court erred in applying UCATA to this case.
¶13 Munic argues we nonetheless may apply the collateral
source rule in this contract case and uphold the trial court because
our prior case law on this subject was ill-reasoned and is against the
weight of authority in other jurisdictions. The Laoses counter that
the collateral source rule is strictly a tort doctrine and should not
apply to contractual damages. If the court has reached the correct
result for the wrong reasons, however, we are bound to affirm its
ruling. Phelps Dodge Corp. v. El Paso Corp., 213 Ariz. 400, n.7, 142
P.3d 708, 712 n.7 (App. 2006).
¶14 The collateral source rule is a doctrine, usually applied
in personal injury cases, which provides “that benefits received by
the plaintiff from a source collateral to the defendant may not be
6
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
used to reduce that defendant’s liability for damages.” Dan B.
Dobbs, Dobbs Law of Remedies § 3.8(1) (2d ed. 1993) (hereinafter
Remedies). The Restatement (Second) of Torts § 920A, states the rule
as follows:
(1) A payment made by a tortfeasor or by a
person acting for him to a person whom he
has injured is credited against his tort
liability, as are payments made by another
who is, or believes he is, subject to the same
tort liability.
(2) Payments made to or benefits conferred
on the injured party from other sources are
not credited against the tortfeasor’s
liability, although they cover all or a part of
the harm for which the tortfeasor is liable.3
Thus, the rule prevents a tortfeasor from avoiding liability for
damages when the injured party has been compensated by a third
party. Sw. Fiduciary Inc. v. Ariz. Healthcare Cost Containment Sys.
Admin., 226 Ariz. 404, ¶ 20, 249 P.3d 1104, 1109 (App. 2011).
¶15 This court, however, rejected the rule’s application to
“ordinary contract cases” in Grover v. Ratliff, 120 Ariz. 368, 370, 586
P.2d 213, 215 (App. 1978). In Grover, we stated that the “collateral
source rule is a concept of damages in tort cases and does not apply
to an ordinary breach of contract case” because the rule “‘is punitive;
contractual damages are compensatory. . . . [I]f applied to an action
based on breach of contract, [it] would violate the contractual
damage rule that no one shall profit more from the breach of an
obligation than from its full performance.’” Id., quoting Patent
Scaffolding Co. v. William Simpson Constr. Co., 64 Cal. Rptr. 187, 191
(Ct. App. 1967). Our more recent opinion in Norwest Bank (Minn.),
3The Laoses noted at oral argument that the comment to this
rule discusses four types of collateral sources not used to offset the
liability of the tortfeasor. But the rules as stated are not so limited.
See Restatement (Second) of Torts § 920A & cmt. c.
7
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
N.A. v. Symington simply quoted Grover for the proposition that the
rule did not apply in ordinary contract cases, again relying on the
reasoning of Patent Scaffolding. 197 Ariz. 181, ¶ 36, 3 P.3d 1101, 1109
(App. 2000). But that case left open the possibility that the trial court
could refuse to offset a settlement from the deficiency judgment if it
concluded the damages were not similar enough, and declined to
consider such refusal an application of the collateral source rule.
Id. ¶ 37.
¶16 In a case decided just three years after Patent Scaffolding,
however, the California Supreme Court explicitly overruled the
statement that the collateral source rule is “punitive.” Helfend v.
S. Cal. Rapid Transit Dist., 84 Cal. Rptr. 173, 181 (1970). It concluded
the rule was not punitive and, at least in the tort context, has
“several legitimate and fully justified compensatory functions”
including encouraging the purchase of insurance, aiding the jury in
the computation of damages, better approximating full
compensation to victims by allowing victims a larger pool of funds
from which to pay their attorneys, and in preventing the tortfeasor
from benefiting from a victim’s thrift. Id. at 178-81. Moreover, even
in Patent Scaffolding, the court had left open the possibility that the
rule could be applied in cases of tortious or willful breaches of
contract. 64 Cal. Rptr. at 191.
¶17 Additionally, in Fleming v. Pima County, 141 Ariz. 149,
155, 685 P.2d 1301, 1307 (1984), our supreme court refused to offset
unemployment compensation against an award of damages for
wrongful discharge, characterizing those forms of compensation as a
collateral source. The court was unable to deduce whether the
damages were awarded under a tort or breach of contract theory. Id.
at 154, 685 P.2d at 1306. But it reasoned that applying the collateral
source doctrine “‘encourag[ed] employers to provide more stable
employment’ and provid[ed] for ‘persons unemployed through no
fault of their own.’” Id. at 155, 685 P.2d at 1307, quoting A.R.S. § 23-
601. Thus, at least in the wrongful discharge context, our supreme
court concluded applying the collateral source rule supported state
public policy and did “not give plaintiff a ‘windfall.’” Id.
¶18 Although the cases from other jurisdictions are divided,
those applying the collateral source rule in contract or similar cases
8
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
illustrate that in many contexts application of the rule would serve
valid and valuable purposes that also are consistent with contract
law principles. Enforcing the expectation interests of the parties is
one of the principal goals of remedying a breach of contract. See
Restatement (Contracts) §§ 344(a); 347 cmt. a. Applying the
collateral source rule has been held to advance that goal. See State
Farm Mut. Auto. Ins. Co. v. Nalbone, 569 A.2d 71, 75 (Del. 1989)
(“[T]he extent to which the collateral source rule should be applied
to permit double recovery should depend upon the contractual
expectations that underlie the collateral source payment.”);
Sunnyland Farms v. Cent. N.M. Elec. Coop., Inc., 301 P.3d 387, ¶ 50
(N.M. 2013) (court should honor expectation of parties to collateral
source over breaching party); McConal Aviation, Inc. v. Comm.
Aviation Ins. Co., 799 P.2d 133, ¶ 21 (N.M. 1990) (breaching party
should not reap benefit of negotiations to which it is not a party).
¶19 Thus, when a party has paid valuable consideration
before the breach to a collateral source to insure against a loss or
otherwise to protect its interest, there is no logical reason to deny
that party a benefit it has paid for and grant it to another party who
neither negotiated for it, paid for it, nor absorbed the opportunity
costs of securing it, but who has precipitated the loss. To do so
would subsume the expectations of the third-party contract into the
breached contract, devaluing or eliminating the separate benefit of
the third-party contract which was supported by separate
consideration, and place the breaching party in a better position than
if it had performed the contract. Such a result is illogical and
inconsistent with the Restatement, which “implements the policy in
favor of allowing individuals to order their own affairs by making
legally enforceable promises.” Restatement (Contracts) § 344 cmt. a.
That the breaching party in these cases is forced to pay damages in
line with the expectations of the parties actually serves the maxim
that a party should not profit more from breach of a contract than its
full performance. See Restatement (Contracts) § 347 cmt. e.
¶20 And collateral payments resulting from a third-party
contract ordinarily are not meant to cover the “judgment debtor’s
obligation” but, instead, to settle or satisfy the obligations of the
third party, whether those arose contractually or otherwise. See
9
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
Restatement (Second) of Judgments § 50(2). Thus, it makes little
sense, in the name of fulfilling the expectations of the contract, to
give the breaching party the benefit of a separate contract negotiated
before the breach by the non-breaching party with a third party.4
¶21 Furthermore, in the case of breaches of contract having
a willful or tortious character, as when the breaching party secures
the benefit of a contract by fraud, the collateral source rule prevents
any further unjust enrichment of the breaching party. See GNP
Commodities, Inc. v. Walsh Heffernan Co., 420 N.E.2d 659, 668 (Ill. App.
Ct. 1981) (where contract secured by misrepresentations of
breaching party, “no reason [exists] why the collateral source rule
should not apply to bar defendants from reducing damages by proof
that plaintiff has been compensated from a source to which they
have not contributed”). Even courts that generally will not apply
the rule in contract cases concede the rule ought to apply in these
situations. See, e.g., Patent Scaffolding, 64 Cal. Rptr. at 191; see also
Midland Mut. Life Ins. Co. v. Mercy Clinics, Inc., 579 N.W.2d 823, 830
(Iowa 1998) (leaving open application of rule in cases of tortious or
willful breach). Though the breaching party “may not be a
wrongdoer in the same sense as is a tortfeasor” it seems particularly
unobjectionable that in these cases “the injured plaintiff [should]
recover twice [rather] than that the breaching defendant escape
liability altogether.” Hall v. Miller, 465 A.2d 222, 226 (Vt. 1983); see
4 But in “ordinary contract cases,” refusing to apply the
collateral source rule makes sense where a benefit to the non-
breaching party accrues as a direct result of the breaching party’s
action or where the non-breaching party is able to mitigate its
damages after the breach by finding a substitute transaction, as these
are all acts within the ordinary contemplation of the contract. See
Remedies § 12.6(2); see also All Am. Sch. Supply Co. v. Slavens, 125 Ariz.
231, 233, 609 P.2d 46, 48 (1980) (“Arizona has long held that damages
for breach of contract are those damages which arise naturally from
the breach itself or which may reasonably be supposed to have been
within the contemplation of the parties at the time they entered the
contract.”). The Laoses conceded at oral argument that under the
facts presented here, this is not a mitigation case.
10
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
also El Escorial Owners’ Ass’n v. DLC Plastering, Inc., 65 Cal. Rptr. 3d
524, 542 (Ct. App. 2007) (where conduct underlying breach of
contract involves tort, collateral source rule applies); McConal
Aviation, 799 P.2d 133, ¶ 35 (“‘If there must be a windfall certainly it
is more just that the injured person shall profit therefrom, rather
than the wrongdoer shall be relieved of his full responsibility for his
wrongdoing.’”) (Montgomery, J., specially concurring), quoting
Grayson v. Williams, 256 F.2d 61, 65 (10th Cir. 1958). Moreover, this
approach brings symmetry with the bankruptcy code, which has
long refused to discharge contractual debts incurred by fraud. See
11 U.S.C. § 523(a)(2)(A).
¶22 Additionally, the supposed “double recovery” often
will prove to be more hypothetical than actual. In many contract
cases the plaintiff has assigned its claims to the collateral source or a
subrogation has occurred. No double recovery occurs then because
the breaching party bears the full burden of its breach; the collateral
source can pursue the claim against the breaching party or the
breaching party can fully repay the collateral source. Sunnyland
Farms, 301 P.3d 387, ¶ 49.
¶23 Persuasive scholarship also supports application of the
collateral source rule to at least some contract cases. Professor
Dobbs concludes that the division of the courts on this issue “at all is
probably best seen as a reflection of the fact that different contract
cases may demand different answers.” Remedies § 12.6(4). Thus, he
reasons, courts ought to consider the rule’s application using “a case
by case analysis,” taking into account the “performance called for by
the contract, the nature of the breach, the nature of the parties’ non-
contractual relationship, . . . the nature of the benefits in issue, and
the subrogation rights of the collateral source” in determining
whether to apply the rule. Id. Other scholars have agreed the rule
should apply in contract cases, noting that, particularly where the
non-breaching party has paid separate consideration to receive the
benefit or the plaintiff has subrogated its rights to the collateral
source, the rule ought to apply, and that the type of breach involved
is an important consideration. See Joseph M. Perillo, The Collateral
Source Rule in Contract Cases, 46 San Diego L. Rev. 705, 708-12, 719-21
11
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
(2009); John G. Fleming, The Collateral Source Rule and Contract
Damages, 71 Calif. L. Rev. 56, 63-73, 77-86 (1983).
¶24 Conducting a case by case analysis, we conclude this is
not an “ordinary contract case” as in Grover and Symington. Rather,
it is more like Fleming in which the analysis of the policies behind
the collateral source rule dictates it should apply. Beth Laos was
able to secure the contract through her misrepresentations. Munic
recovered judgment on both contract and tort theories, but the trial
court declined to award “additional damages” for the fraud claim.
It did find, however, that the underlying conduct was based on a
tort, stating “Beth Anne Laos intentionally misrepresented the
amount and status of her assets offered as collateral to [Munic] for
the purpose of obtaining a loan from [Munic].” Thus, the eventual
breach had a “willful or tortious” character that justifies applying
the collateral source rule in this case.
¶25 Moreover, fulfilling the expectations of the parties also
dictates that we apply the rule. Munic had paid specific
consideration to its attorney before the breach with the anticipation
that its attorney would protect its interests. Nothing in the record
suggests that the Laoses were parties to Munic’s agreement with its
attorney. When Munic’s attorney failed to protect its interests,
Munic was able to resort to the law of professional negligence in
order to seek a recovery for its losses—a right it had purchased by
choosing to hire an attorney in the first place. And, as the Laoses
conceded at oral argument, Munic’s action against its attorney was
not brought to mitigate its contract damages. Allowing the Laoses
to benefit from the extra protection Munic had purchased for itself
would give them the benefit of a bargain to which they were not a
party and for which they had paid no consideration. And it would,
at the same time, deprive Munic of a benefit for which it had paid.5
5At oral argument, the Laoses argued they had paid Munic’s
attorney fees related to this transaction. But they were unable to
direct the court to any evidence in the record of that fact. If a fact is
not in the record, we may not consider it. See Schaefer v. Murphey,
131 Ariz. 295, 299, 640 P.2d 857, 861 (1982). The Laoses also failed to
cite any authority that payment of Munic’s attorney fees as closing
12
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
¶26 Additionally, Munic’s attorney waived any right it had
to an assignment or subrogation of Munic’s rights against the
Laoses. So, although Munic may have some level of double
recovery, that result may be associated with its attorney’s
determination not to pursue the Laoses rather than any double
payment from the Laoses. If that decision turns out to be favorable
for Munic, that is a benefit it should reap for advancing Arizona
policy by settling its claim; the Laoses should not “reap the benefit
of a settlement to which [they were] not a party.” McConal Aviation,
799 P.2d 133, ¶ 21; Yollin v. City of Glendale, 219 Ariz. 24, ¶ 15, 191
P.3d 1040, 1046 (App. 2008) (“‘It has always been the policy of
[Arizona] law to favor compromise and settlement; and it is
especially important to sustain that principle in this age of
voluminous litigation.’”), quoting Dansby v. Buck, 92 Ariz. 1, 11, 373
P.2d 1, 8 (1962).
¶27 Furthermore, the settlement resolved potential
professional negligence liability, which was a separate legal wrong
susceptible to damages beyond the scope of the contract. See
McConal Aviation, 799 P.2d 133, ¶ 13 (settled negligence claim
“would not have represented double recovery” on separate breach
of contract claim). This is consistent with the trial court’s conclusion
that the liability of the Laoses and Munic’s attorney was several, not
joint.
¶28 Thus, to the extent the Laoses rely on Pasco Industries,
Inc. v. Talco Recycling, Inc., 195 Ariz. 50, ¶¶ 72-74, 985 P.2d 535, 550
(App. 1998), and American Home Assurance Co. v. Vaughn, 21
Ariz. App. 190, 192, 517 P.2d 1083, 1085 (1974), for the proposition
that a plaintiff cannot recover twice for the same wrong, those cases
are inapposite because Munic has recovered for different wrongs.
The Laoses also rely on Hyatt Regency Phoenix Hotel Co. v. Winston &
Strawn, 184 Ariz. 120, 907 P.2d 506 (App. 1995). But in that case this
court allowed a settlement with a joint tortfeasor to reduce a
costs would make them parties to or beneficiaries of the contract.
See Ness v. W. Sec. Life Ins. Co., 174 Ariz. 497, 503, 851 P.2d 122, 128
(App. 1992) (argument waived if made without supporting
authority).
13
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
judgment against another joint tortfeasor. Id. at 138-40, 907 P.2d at
524-26. Munic’s attorney was not a joint tortfeasor with the Laoses
and thus Hyatt Regency is inapposite. Accordingly, the trial court
did not err in refusing to offset Munic’s settlement with its attorney
against the judgment entered against the Laoses.
Fair Market Valuation Hearing
¶29 The Laoses finally argue that the trial court erred in
denying their request for a fair market valuation hearing pursuant to
A.R.S. § 12-1566 to determine the value of their foreclosed home.
They maintain “fairness dictates they be informed if the Judgment
had been satisfied or extinguished before such obligation to request
a valuation hearing should arise.” “Because this issue involves
statutory interpretation and application, it is a question of law that
we review de novo.” Wells Fargo Credit Corp. v. Tolliver, 183 Ariz. 343,
345, 903 P.2d 1101, 1103 (App. 1995).
¶30 Section 12-1566(C) requires that a judgment debtor
request a fair market valuation hearing within thirty days of the sale
of real property and does not authorize the court to extend the time.
The Laoses did not make a timely request. And they have not
provided any authority for their position that the trial court should
have extended this deadline in fairness, or had the authority to do
so. “Arguments unsupported by any authority will not be
considered on appeal.” Ness v. W. Sec. Life Ins. Co., 174 Ariz. 497,
503, 851 P.2d 122, 128 (App. 1992). Moreover, they concede that
failing to request the hearing timely “may have been the fault of
their then existing counsel.” Their request, therefore, has no
connection to their discovery of Munic’s settlement with its attorney.
Accordingly, we reject this argument.
Attorney Fees
¶31 The Laoses request their attorney fees on appeal
pursuant to A.R.S. § 12-341.01 and Rule 21, Ariz. R. Civ. App. P.
Because the Laoses were not successful in this appeal, we deny their
request. Munic also requests its fees and costs pursuant to § 12-
341.01, Rule 21, and the contract. We award Munic its fees and costs
14
JOHN MUNIC ENTERS., INC. V. LAOS
Opinion of the Court
pursuant to the terms of the contract upon its compliance with Rule
21.
Disposition
¶32 For the foregoing reasons, we affirm the judgment of
the trial court.
15