Helal v. Winski ( 2015 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
AZIZ HELAL and TERESA HELAL, husband and wife,
Plaintiffs/Appellees,
v.
BRIAN WINSKI and AMY WINSKI, husband and wife;
AMERICAPITAL MORTGAGE & INVESTMENTS, LLC, an Arizona
limited liability company; STAR 1 INVESTMENTS, LLC, an Arizona
limited liability company, Defendants/Appellants.
No. 1 CA-CV 14-0201
FILED 12-15-2015
Appeal from the Superior Court in Maricopa County
No. CV2011-052561
The Honorable Michael D. Gordon, Judge
AFFIRMED
COUNSEL
Aziz Helal, Teresa Helal, Mesa
Plaintiffs/Appellees
Udall Shumway PLC, Mesa
By Joel E. Sannes
Counsel for Defendants/Appellants
HELAL v. WINSKI et al.
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Randall M. Howe delivered the decision of the Court, in
which Judge Jon W. Thompson and Judge Lawrence F. Winthrop joined.
H O W E, Judge:
¶1 Brian and Amy Winski, Americapital Mortgage and
Investments, LLC, and Star 1 Investments, LLC, (collectively, the
“Winskis”)1 appeal the trial court’s judgment against them and its award of
$233,000 in compensatory damages and punitive damages to Aziz and
Teresa Helal. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 In March 2011, the Helals sued the Winskis and entities they
were associated with, suspecting that the Winskis had set up “all kinds of
fraudulent moves” to defraud them of their two condominiums. The Helals
alleged that Mr. Winski intentionally misrepresented to them that he would
look for investors for them to refinance the properties’ loans with M&I
Bank. They alleged that by doing so, Mr. Winski obtained personal and
private information and documents from them to further his and his wife’s
financial interest, including purchasing the properties’ promissory notes
and deeds of trust from M&I without notifying the Helals. They further
alleged that Mr. Winski’s action in turn prevented the Helals from
refinancing their loans and retaining their properties. Although the parties
presented conflicting evidence at trial, the trial court found that the Winskis
defrauded the Helals by intentionally leading them on while working
separately with M&I to buy the Helals’ properties’ promissory notes and
deeds of trust. The sequence of events between the Helals and Winskis
explain the trial court’s decision to rule in favor of the Helals.
1 WEE II Family Revocable Trust of January 21, 1999, which is not a
party in this case, is the Winskis’ family trust and of which they are the
beneficiaries. WEE II owns Star 1, of which the Winskis are trustees.
Mrs. Winski owned Americapital, which used Star 1 as its purchasing
agent, and the Winskis are Americapital’s employees.
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1. The Refinancing Process
¶3 In December 2009, the Helals applied to M&I for loan
modifications on two of their eight condominiums because they had
defaulted on the loans, which totaled $488,000. M&I rejected their
applications and recorded notices of trustee sale for the properties in April
2010. The bank later canceled the sale, however, and a representative
contacted the Helals in October to discuss settling the loans for $98,094, due
in two installments, one on November 29, 2010, and the other on December
22, 2010. The Helals agreed and signed an agreement.
¶4 The Helals then contacted Simone Lohse, a friend and partner
at Mesquite Investment Partners (“MIP”), to finance their payoff to M&I.
Mrs. Lohse responded that she would check with her partners to see
whether MIP could finance the Helals. On December 10, she had the Helals
fill out a “Uniform Residential Loan Application.” MIP could not finance
the Helals, but Mrs. Lohse said that she would “do [her] research to do
[them] a personal favor.”
¶5 On December 11, Mrs. Lohse told the Helals that a few people
had investors that were interested in financing them, but that the potential
investors wanted more information about the loans and properties. The
Helals emailed Mrs. Lohse the requested information. By the end of the day,
she told them that Mr. Winski, a mortgage broker with Americapital, was
interested in being their broker. But Mr. Winski wanted their loan
application and M&I settlement agreement and to show his potential
investor the properties.
¶6 Two days later, Mr. Helal emailed Mrs. Lohse pictures of the
properties, and she forwarded the information, including his loan
application, to Mr. Winski, noting that “the app need[ed] a little fine
tuning.” On December 15, Mr. Helal emailed Mrs. Lohse and Mr. Winski
the M&I settlement agreement and the two properties’ tenant leases. Two
days later, Mr. Helal showed Mr. Winski and his investor the properties.
After the tour, Mr. Winski asked for the properties’ leases again and the
name of Mr. Helal’s contact person at M&I. On December 20, Mr. Helal
emailed to Mr. Winski his M&I representative’s contact information and the
M&I settlement agreement.
¶7 The next day, Mr. Winski contacted Mr. Helal with a loan
refinancing option, offering a one-year $120,000 loan with a $50,000
payment in interest. The agreement also required the Helals to make
improvements on the properties with the difference between what they
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owed and the amount to be loaned to them. Mr. Helal immediately rejected
the offer.
¶8 Mr. Helal then called Mrs. Lohse and told her about the offer,
but not its terms. She in turn called Mr. Winski, who told her the terms. She
responded that of her many years working with private loans, she had
never seen such an unreasonable offer; he replied that “many different
investors” were involved in the group and he might be able to find the
Helals a better offer. Mr. Winski also said that he would do more research
and get back to her. Mrs. Lohse asked why the offer was not in writing;
Mr. Winski explained that “the particular investor” wanted it that way.
¶9 Mrs. Lohse then called other people to find an investor
because the Helals’ deadline to M&I was fast approaching. Meanwhile, as
a precaution, the Helals and Mrs. Lohse contacted the Helals’ M&I
representative, asking for an extension on their December 22 payment
deadline because their first offer fell through. The representative orally
agreed to an extension.
¶10 After the winter holidays, Mrs. Lohse referred the Helals to a
new mortgage broker from Mortgage Quest. But on January 3, Mr. Winski
called Mrs. Lohse and explained that he had a different investor on hand.
He stated that he needed the properties’ remaining six lease agreements to
have a “full package,” however. Mrs. Lohse emailed Mr. Winski the
information that same day. She explained to Mr. Winski, however, that
because the Helals had not heard from him since December 21, they were
working with another mortgage broker.
¶11 Still without a loan, the Helals asked for another extension.
But this time the bank denied the extension and offered a second settlement
agreement, which provided a settlement amount of $100,000 due on
January 7, 2011. The Helals signed the agreement, but later asked for a
payoff extension. The bank representative again orally agreed.
¶12 Mortgage Quest’s mortgage broker contacted the Helals’ M&I
representative on January 5 and maintained contact with him to keep him
informed about the Helals’ loan application process. On January 5, the
mortgage broker emailed potential lenders the Helals’ “scenario,”
including their initial application, the properties’ lease agreements, and the
M&I agreement. Americapital was coincidentally one of the recipients, and
Mrs. Winski responded that she was “working on it.” Several days later, the
mortgage broker found the Helals a lender, American Life Financial, and
put them in contact with the lender’s representative.
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¶13 On January 7, American Life sent the Helals a pre-approval
letter for a five-year loan for $115,000 at 9.990%; the Helals’ mortgage
broker forward the letter to the M&I representative. The Helals signed the
letter on January 10. Because American Life needed a property appraisal
and inspection for all their loans, the Helals arranged for the services. Their
mortgage broker emailed the M&I representative two days later informing
him of the appraisal and inspection and also requesting confirmation of
January 21 as the closing date, per a previous conversation between the
M&I representative and the lender’s representative.
¶14 Unbeknownst to the Helals, Mrs. Lohse, and the Helals’
mortgage broker and lender’s representative, M&I had sold the Helals’
properties’ promissory notes and deeds of trust to Star 1 on January 12. The
notes’ “sale and assignment agreement” and “assignment of beneficial
interest under deed of trust” showed that Mr. Winski signed for Star 1. Two
days later, Star 1 “by B&AW Family LLC” and “WEE II Family Revocable
Trust of January 21, 1999,” had assigned the notes, secured by the deeds of
trust, to Cadillac Properties. Mrs. Winski signed the assignments as “Amy
Lynne Winski, Co-Trustee of the WEE II Family Revocable Trust of January
21, 1999, sole Member of B&AW Family, LLC, an Arizona limited liability
company, as sole Member of Star 1 Investments, LLC, an Arizona limited
liability company.” The assignment was recorded on January 19.
¶15 Also on January 19, the Helals, thinking that they had finally
secured the money needed to save their properties, signed their refinancing
loan’s closing settlement agreement. That same day, their mortgage broker
informed the M&I representative, and the lender’s representative emailed
the M&I representative the Helals’ preliminary commitment of title
insurance and told him that they were ready to close on January 21. But the
next day, the M&I representative emailed the mortgage broker and lender’s
representative that M&I had sold the promissory notes and they should
direct questions to Accurate Foreclosure & Documents Services, a company
owned and managed by Mrs. Winski.
¶16 On January 26, Accurate informed Mr. Helal that the new
notes holder, Cadillac, hired it to start the foreclosure process and collect
on the entire two original loans. Accurate then recorded notices of trustee’s
sale on the properties on January 28. It then sent the Helals foreclosure
payment statements, totaling $571,460.59. M&I then informed the Helals
that both their loans had been settled for $50,000 each and that they had no
further obligations to the bank. After the foreclosure sale where Cadillac
bought the notes for $250,000, Cadillac filed a deficiency judgment against
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the Helals for $233,600. That court awarded that amount to Cadillac along
with $8,910 in attorneys’ fees.
¶17 Mr. Helal reckoned that something was amiss, “got curious,”
and started investigating. He discovered that M&I had sold their notes and
assigned their deeds of trust to Star 1 on January 12, which assigned them
to Cadillac two days later. For the sale, Mr. Winski signed for Star 1, and
for the assignments, Mrs. Winski signed for Star 1. The Winskis recorded
all the assignments on January 19—the same day that the Helals were
signing their loan closing documents and a day before M&I told them that
their notes had been sold. Mr. Helal also found that Star 1, Accurate, and
Americapital were registered with the Secretary of State using the same
address and all owned by Mrs. Winski. Suspecting that the Winskis had
defrauded them, the Helals sued, as relevant here, the Winskis,
Americapital, and Star 1 for, among other things, breach of fiduciary duty
and tortious interference with contractual relations and of business
expectancy.
2. The Trial and Resulting Judgment
¶18 At the subsequent trial, the Helals—unable to afford
counsel—represented themselves and presented evidence, including
testimony from Mrs. Lohse and their mortgage broker and lender’s
representative, explaining how the Winskis took advantage of their
predicament to obtain their properties. The Winskis, however, told a
different story. Specifically, Mr. Winski testified that he was not the
Helals’ mortgage broker because Mrs. Lohse was their broker.
Mr. Winski explained that Mrs. Lohse merely gave him the Helals’ scenario
and asked whether he wanted to become involved. But Mr. Winski
explained later that “from day one, [he] was under the belief that [they]
were buying a discounted distressed note.” Mr. Winski also testified that
he did not offer the Helals a loan, but instead offered to buy their notes. He
admitted that he contacted M&I and insisted that during his conversation
with M&I, the bank representative asked him to buy the Helals’ notes.
Mr. Winski explained that this was the only viable option because, after
checking the properties’ titles, he found judgment liens against the Helals,
which followed the properties, and “[it] would’ve been impossible to fund
a new loan without paying off judgments against the Helals.”
¶19 Mr. Winski also testified that “M&I was begging [them] to
buy the note[s]”and “wanted out” and that around Christmas, M&I told
him that “[t]hat deal [wasn’t] happening.” Mr. Winski stated that the M&I
representative contacted him on January 10, saying that the Helals had
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defaulted on their January 5 settlement agreement and that the bank ceased
discussions with the Helals on January 5, and asking whether Americapital
was interested in buying the notes. Star 1 purchased the notes, thereby
taking M&I’s first priority position over the loans. Mr. Winski explained
that by doing so, Star 1 would not have to pay the Helals’ judgment
creditors.
¶20 Mr. Winski further testified that they would have found out
about the Helals’ distressed notes regardless whether Mrs. Lohse had
contacted him. He explained that “[a]bout every two weeks, [M&I] w[as]
sending out a list of loans that were in default that [it] would solicit offers
on.” For the Helals’ notes, however, Mr. Winski could not “remember
whether [they were] or [weren’t], and whether [they] would have been or
not been” on the lists. His “guess” was that they were “probably” on the
December 5 list, but he could not recall seeing the notes on any lists.
¶21 After considering the evidence, the trial court rejected the
Winskis’ defense that the Helals’ sought-after financing was impossible
because of the existence of several unsecured judgment creditors. The court
noted that although the Winskis presented some evidence of such creditors’
existence, no credible evidence showed that those judgments were recorded
in the county recorder’s office—a necessary predicate to obtaining a lien on
real property. The court also rejected the Winskis’ other defenses, including
that the Helals had lied on their initial loan application and that they
adequately explained to the Helals their proposed transaction, because the
defenses “strained credulity” and were “difficult to believe.”
¶22 The trial court found that the Helals proved that the Winskis
had breached their fiduciary duties because the Helals and Mr. Winski had
entered into a broker-borrower relationship, that Mr. Winski acted for and
on behalf of the martial community, and that his actions were “egregious,
outrageous, and conducted with an evil mind.” The court also found that
Mr. Winski committed the torts of interference with a contractual
relationship and of business expectancy on behalf of and for the martial
community’s benefit and that his action was egregious, outrageous, and
conducted with an evil mind. The court awarded the Helals $233,000 in
compensatory damages, $150,000 in punitive damages, $5,000 in attorneys’
fees, and $413.75 in taxable costs. The Winskis timely appealed.
DISCUSSION
¶23 The Winskis argue that the trial court erred in finding that
(1) a fiduciary relationship existed between the Helals and Mr. Winski and
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(2) Mr. Winski tortiously interfered with the contractual relations and
business expectancy between the Helals and M&I. They also argue that the
court erred in awarding the Helals (3) $233,000 in compensatory damages
and (4) punitive damages and that (5) the court’s questioning during trial
resulted in “plain error.” On appeal, we view the evidence in the light most
favorable to sustaining the verdict. Desert Palms Surgical Group, P.L.C.
v. Petta, 236 Ariz. 568, 578 ¶ 25, 343 P.3d 438, 448 (App. 2015). When the
evidence conflicts, we resolve the conflict and draw every reasonable
inference in favor of the prevailing party. St. Joseph’s Hosp. & Med. Ctr.
v. Reserve Life Ins. Co., 154 Ariz. 307, 312, 742 P.2d 808, 813 (1987). If any
substantial evidence exists to reach the result, we will affirm the judgment.
Desert Palms, 236 Ariz. at 578 ¶ 25, 343 P.3d at 448. Here, the trial court did
not err because the record supports all its findings and awards and its
impartiality during trial.
1. The Fiduciary Relationship
¶24 The Winskis first argue that the trial court erred in finding
that a fiduciary relationship existed between the Helals and Mr. Winski.2
We review de novo the existence of a fiduciary duty. TM2008 Invs., Inc. v.
Procon Capital Corp., 234 Ariz. 421, 424 ¶ 12, 323 P.3d 704, 707 (App. 2014).
Because a fiduciary relationship existed between the Helals and
Mr. Winski, the trial court did not err.
¶25 “A fiduciary relationship exists between a broker and his
client, and the broker owes his client the utmost good faith” as a result of
that relationship. Underdown v. Reche, 122 Ariz. 439, 441, 595 P.2d 671, 674
(App. 1979). A fiduciary relationship is something resembling business
agency, professional relationship, or family tie, impelling or inducing the
trusting party to relax the care and vigilance he would normally exercise.
Taeger v. Catholic Family & Cmty. Servs., 196 Ariz. 285, 290 ¶ 11, 995 P.2d 721,
2 The Winskis included “breach of fiduciary duty” in their briefs’
headings, but because they presented no arguments that Mr. Winski did
not breach his fiduciary duty on appeal, they have waived the issue. See
Ariz. R. Civ. App. P. 13(a)(6) (providing that the opening brief “must set
forth” an argument, which “must contain . . . contentions concerning each
issue presented for review, with supporting reasons for each contention,
and with citations of legal authorities and appropriate references to the
portions of the record on which the appellant relies”); State v. Felkins, 156
Ariz. 37, 38 n.1, 749 P.2d 946, 947 n.l (App. 1988) (claim abandoned when
not supported by sufficient authority).
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726 (App. 1999). Mere trust in another’s competence or integrity does not
suffice to create such a relationship; instead, peculiar reliance in another’s
trustworthiness is required. Standard Chartered PLC v. Price Waterhouse, 190
Ariz. 6, 24, 945 P.2d 317, 335 (App. 1996). The parties’ relationship must be
such that one is bound to act for the other’s benefit and may be
characterized by great intimacy, disclosure of secrets, or entrusting of
power. Cook, 227 Ariz. at 334 ¶ 14, 258 P.3d at 152. In such a relationship,
the fiduciary holds “superiority of position” over the beneficiary, and this
position may be demonstrated “in material aspects of the transaction at
issue by a substitution of the fiduciary’s will.” Standard Chartered, 190 Ariz.
at 24, 945 P.2d at 335 (internal quotation marks and citation omitted). An
alleged beneficiary’s reliance on the alleged fiduciary’s superior knowledge
creates a fiduciary relationship when “the knowledge is of a kind beyond
the fair and reasonable reach of the alleged beneficiary and inaccessible to
the alleged beneficiary through the exercise of reasonable diligence.” Id. at
25, 945 P.2d at 336.
¶26 Here, Mr. Winski was the Helals’ broker and a fiduciary
relationship existed between the Helals and him. The record shows that the
Helals trusted Mr. Winski and believed that he would act for their benefit.
Their interactions reasonably lead the Helals to place a great degree of trust
in Mr. Winski and his company. The Helals sent Mr. Winski their initial
loan application, consisting of private information regarding their finances
and their properties, along with their settlement agreement with M&I. After
he told them that he was interested in being their broker and requested
additional information, including pictures of their properties, leases with
their tenants, and their M&I representative’s contact information, they
obliged. When Mr. Winski wanted to show his “investor” the properties,
they obliged within a few days and gave the individuals a tour.
¶27 The record also demonstrates that Mr. Winski had superior
knowledge about potential investors and that the knowledge was beyond
the fair and reasonable reach of the Helals. When the Helals were working
with Mr. Winski, he was their sole source of information for potential
investors. Neither the Helals nor Mrs. Lohse had access to Mr. Winski’s
network of potential investors, even with exercise of reasonable diligence.
Indeed, the Helals and Mrs. Lohse were seeking a broker for the Helals
because they lacked the knowledge and access to potential investors that
Mr. Winski and others working as mortgage brokers had.
¶28 The Winskis counter that Mr. Winski was not the Helals’
broker because Mrs. Lohse was their broker. But Mrs. Lohse made clear
during trial that her role was merely to find a broker for the Helals. She
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testified that she told Mr. Winski during their first conversation that she did
not represent the Helals, because she was not a mortgage broker, and that
she was looking for a broker for the Helals as a personal favor. Further,
Mrs. Lohse’s involvement in the transaction shows her minimal role: she
merely connected the individuals and forwarded requested documents.
She did not attend the properties’ touring, and she was not the individual
Mr. Winski contacted to make the refinancing offer. She learned of the offer
when Mr. Helal contacted her after he immediately rejected it.
¶29 The Winskis also counter that they were acting for their
investor clients, not the Helals. But Mr. Winski voluntarily entered his
position as the Helals’ mortgage broker by accepting the responsibility of
finding potential investors for them and repeatedly asking them for
information regarding their properties. The record shows that during the
period the Helals were working with Mr. Winski, he was the sole source of
information about potential investors and led them to believe that he had
found them a potential investor, especially when he made an offer for a one-
year $120,000 loan with a $50,000 payment in interest. He further confirmed
his position as broker when, after Mr. Helal rejected the refinancing offer,
Mr. Winski told Mrs. Lohse that he would try to find another investor.
Moreover, only after Mr. Helal rejected Mr. Winski’s offer did Mr. Helal
work with another broker.
¶30 The Winskis further counter that no fiduciary relationship
existed because the parties never agreed to such a relationship and
“[g]enerally, commercial transactions do not create a fiduciary relationship
unless one party agrees to serve in a fiduciary capacity.” Cook, 227 Ariz. at
334 ¶ 14, 258 P.3d at 152. But a fiduciary relationship is not formed merely
by an express agreement as the Winskis propose: “The law . . . requires
peculiar intimacy or an express agreement [for one party] to serve as a
fiduciary.” Id. at ¶ 15 (emphasis added). The record here shows the
intimacy and entrusting of power necessary for the existence of a fiduciary
relationship. The Helals sent Mr. Winski personal and private information;
they worked exclusively with him for a period of time; and he had
specialized knowledge that was beyond their fair and reasonable reach.
Consequently, the record supports the trial court’s finding that Mr. Winski
was the Helals’ broker and a fiduciary relationship existed between the
Helals and Mr. Winski.
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2. Tortious Interference with Contractual Relations and
Business Expectancy
¶31 The Winskis next argue that the trial court erred in finding
that Mr. Winski tortiously interfered with the Helals’ contractual relations
and business expectancy. The elements for tortious interference with
contractual relations or business expectancy are (1) the existence of a valid
contractual relationship or business expectancy; (2) the interferer’s
knowledge of the relationship or expectancy; (3) the interferer’s intentional
interference inducing or causing a breach or termination of the expectancy;
and (4) resultant damage to the party whose relationship or expectancy has
been disrupted. Neonatology Assocs., Ltd. v. Phoenix Perinatal Assocs. Inc., 216
Ariz. 185, 187 ¶ 7, 164 P.3d 691, 693 (App. 2007). Further, “the interference
must be improper as to motive or means before liability will attach.” Id.
Although tortious interference with a business expectancy covers situations
that intentional interference with a contract does not, the former is only
available in situations where the plaintiff can identify the specific
relationship with which the defendant interfered. Dube v. Likins, 216 Ariz.
406, 414 ¶ 19, 167 P.3d 93, 101 (App. 2007).
¶32 Here, Mr. Winski tortiously interfered with the Helals’
contractual relations and business expectancy with M&I. First, the record
shows that a valid contractual relationship and business expectancy existed
between the Helals and M&I. Because the Helals defaulted on their loans,
M&I offered them settlement agreements, which the Helals signed and
accepted. In exchange for giving M&I the payoff amount, the Helals
expected to keep their properties. Second, Mr. Winski knew of the
relationship between the Helals and M&I because the Helals provided him
with their initial loan application and settlement agreement. Mr. Helal
further met Mr. Winski and his investor for a tour of the properties and
forwarded additional information to him. Although the Winskis claim that
Mr. Winski knew only of the first settlement agreement, which expired on
December 22, on January 3, Mr. Winski contacted Mrs. Lohse for more
information regarding the properties because he had another potential
investor for the Helals—this action indicated that he knew more than the
Winskis claim.
¶33 Third, Mr. Winski’s intentional interference led M&I to
breach its settlement agreement with the Helals. Because Star 1 bought the
notes from M&I, the Helals were unable to complete the negotiated payoff
with the bank. Finally, as a result of Star 1’s purchase of the notes, the Helals
lost properties they were working to save. Cadillac then had Accurate—a
trustee entity operated by Mrs. Winski—foreclose on the properties and
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brought a deficiency action against the Helals. Consequently, Mr. Winski’s
actions were improper as to motive and means. He knew the Helals’
situation and took full advantage of it to benefit himself and his company.
Because the record supports the trial court’s finding the Mr. Winski
tortiously interfered with the Helals’ contractual relations and business
expectancies with M&I, the trial court did not err.
3. Compensatory Damages
¶34 The Winskis next argue that the trial court erred in awarding
the Helals $233,000 in compensatory damages because the court provided
no explanation for the damage amount. We review an award of damages
for an abuse of discretion. Gonzalez v. Ariz. Pub. Serv. Co., 161 Ariz. 84, 90,
775 P.2d 1148, 1154 (App. 1989). “If the verdict is supported by adequate
evidence, it will not be disturbed, and the greatest possible discretion is in
the hands of the trial judge.” Roberts v. City of Phoenix, 225 Ariz. 112, 123
¶ 41, 235 P.3d 265, 276 (App. 2010). Here, the evidence supported the trial
court’s award. The record shows that because Star 1 bought the Helals’
notes, preventing the Helals from paying M&I their negotiated payoff, their
properties were ultimately foreclosed upon. Then, a deficiency judgment
was bought against them by Accurate, a trustee entity operated by
Mrs. Winski. The deficiency judgment was for $233,600—$600 more than
the amount the trial court awarded in this case. Consequently, because the
record supports the trial court’s award, the court did not err.
4. Punitive Damages
¶35 The Winskis next contend that the trial court erred in
awarding the Helals punitive damages because Mr. Winski did not intend
to injure, defraud, or consciously disregard the probability of some injury
to the Helals.3 Whether punitive damages are properly awarded is a legal
question we review de novo. See Medasys Acquisition Corp. v. SDMS, P.C.,
203 Ariz. 420, 422 ¶ 8, 55 P.3d 763, 765 (2002); Hall v. Lalli, 194 Ariz. 54, 57
¶ 5, 977 P.2d 776, 779 (1999). For a punitive damages award, “a plaintiff
must prove by clear and convincing evidence that the defendant engaged
in reprehensible conduct combined with an evil mind over and above that
required for commission of a tort.” Petta, 236 Ariz. at 584 ¶ 48, 343 P.3d at
454. A defendant acts with the requisite evil mind when he intends to injure
3 Because the Winskis do not challenge the amount of the punitive
damages award, we need not examine its reasonableness. See State Farm
Mut. Auto. Inc. Co. v. Campbell, 538 U.S. 408, 418 (2003).
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or defraud, is motivated by spite or ill will, or deliberately interferes with
the rights of others, “consciously disregarding a substantial risk that his
conduct might significantly harm others.” Sec. Title Agency, Inc. v. Pope, 219
Ariz. 480, 498 ¶ 81, 200 P.3d 977, 995 (App. 2008); see also Bradshaw v. State
Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 422, 758 P.2d 1313, 1324 (1988).
¶36 The plaintiff can present either direct evidence or evidence
that the defendant’s conduct was so oppressive, outrageous, or intolerable
such that an evil mind can be inferred. Gurule v. Ill. Mut. Life & Cas. Co., 152
Ariz. 600, 602, 734 P.2d 85, 87 (1987). When the wrongdoer is conscious of
the harm posed by his tortious conduct, but continues to act in the same
manner in deliberate contravention to the victim’s rights, punitive damages
are appropriate to punish the wrongdoer and deter others from acting in
the same manner. Newman v. Select Specialty Hosp.-Ariz., Inc., 238 Ariz. 59,
63, ¶ 11, 356 P.3d 345, 349 (App. 2015). We will affirm the award if any
reasonable view of the evidence would satisfy the clear and convincing
standard. Hyattt Regency Phoenix Hotel Co. v. Winston & Strawn, 184 Ariz.
120, 132, 907 P.2d 506, 518 (App. 1995).
¶37 Here, Mr. Winski committed outrageous conduct with the
requisite evil mind that supports the punitive damages award. The record
shows that Mr. Winski consciously disregarded the Helals’ rights under the
settlement agreement with M&I. Instead of looking for potential investors
for the Helals to help them refinance their loans, Mr. Winski was working
with M&I to purchase the notes directly from the bank for his own benefit.
Although the Winskis claim that the Helals came to Mr. Winski to find an
investor to buy their notes and deeds of trust from M&I, the evidence shows
that the Helals’ purpose for reaching out to potential investors—since
October 2010 when the M&I representative contacted them to resolve their
default—was to finance their loans and keep their properties. No evidence
in the record show that the Helals were looking to sell their properties. Even
though Mr. Winski knew that his action was contrary to the Helals’
interests, he continued to act in the same manner in deliberate
contravention to the Helals’ rights.
¶38 Moreover, the record shows that Mr. Winski had a motive to
defraud the Helals to secure benefits for him and his company. Mrs. Lohse
contacted Mr. Winski specifically as a personal favor to the Helals to find
them a mortgage broker for financing purposes. Mr. Winski repeatedly
asked the Helals for information—personal information regarding
themselves and their properties—under the guise that potential investors
wanted that information. The Helals obliged and went so far as allowing
Mr. Winski and his “investor” to see the properties. Although Mr. Winski
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HELAL v. WINSKI et al.
Decision of the Court
claimed that he did not know about the second settlement agreement and
knew only that the first settlement agreement expired on December 22, on
January 3, he proceeded to ask the Helals for more information—once again
under the guise that he had a potential investor for them.
¶39 The Winskis present several counterarguments, but the
record does not support them. The Winskis argue that the Helals would not
have gotten financing because of the existence of judgment creditors on
their properties and therefore the Helals’ had the limited option of selling
their notes and deeds of trust. But contrary to the Winskis’ position, the
Helals’ subsequent Mortgage Quest broker found them a lender within a
few days. For the Winskis’ other arguments, including that the Helals
presented false information in their initial loan application and that they
adequately explained the note purchase transaction to the Helals, the record
shows that the initial application was merely that, an initial application that
required “fine tuning” and was merely meant to be a basis for the
subsequent application. The record also shows that everyone involved—
including the Helals, their lender’s representative and Mortgage Quest
broker, Mrs. Lohse, and Mr. Winski—understood that the Helals were
seeking to refinance their loans. In fact, only at trial did the Winskis assert
that the Helals were looking for investors to buy their notes from M&I.
Consequently, because the record supports the trial court’s finding that
Mr. Winski’s actions were outrageous and conducted with an evil mind, the
court did not err in awarding the Helals punitive damages.
5. Trial Court Impartiality
¶40 The Winskis argue finally that the trial court committed
“plain error” by taking on an advocate’s role during trial and questioning
witnesses extensively. But the Winskis cite no authority that the court’s
action would constitute error, let alone be a basis for reversal. That “the trial
judge is not a mere moderator, but has active duties to perform without
partiality to see that the truth is developed, and in his discretion he may ask
questions to elicit the material evidence” is well settled. State v. Mendez,
2 Ariz. App. 77, 79–80, 406 P.2d 427, 429–30 (1965); see also Ariz. R. Evid.
614(b) (“The court may examine a witness regardless of who calls the
witness.”); State v. Schackart, 190 Ariz. 238, 256, 947 P.2d 315, 333 (1997) (“A
court . . . may interrogate witnesses as part of its duty to see that the truth
is developed.”). Here, the record makes clear that the trial court
appropriately asked questions to see that the truth was developed. The
judge explained to counsel on numerous occasions that as the fact finder,
he felt it necessary to gather additional information to assist him in
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HELAL v. WINSKI et al.
Decision of the Court
understanding the case and that counsel was more than welcome to object
to any of his questions.
¶41 To the extent that the Winskis imply that the court was biased
against them, they have not overcome the presumption that trial judges are
free of bias and prejudice. State v. Medina, 193 Ariz. 504, 510 ¶ 11, 975 P.2d
94, 100 (1999). The Winskis have not proved that the judge had “a hostile
feeling or spirit of ill-will, or undue friendship or favoritism, towards one
of the litigants.” State v. Cropper, 205 Ariz. 181, 185 ¶ 22, 68 P.3d 407, 411
(2003). “Opinions formed by the judge on the basis of facts introduced or
events occurring in the course of the current proceedings, or of prior
proceedings, do not constitute a basis for a bias or partiality motion unless
they display a deep-seated favoritism or antagonism that would make fair
judgment impossible.” State v. Henry, 189 Ariz. 542, 546, 944 P.2d 57, 61
(1997) (internal quotation marks and citation omitted). Here, the record
does not reflect impropriety in the substance or tone of the court’s
questioning. Instead, it shows that the court extensively and impartially
considered the parties’ positions and entered orders based on the evidence.
Consequently, the Winskis have failed to demonstrate bias or prejudice
displaying a deep-seated favoritism or antagonism.
6. Attorneys’ Fees on Appeal
¶42 The Winskis request attorneys’ fees and taxable costs on
appeal pursuant to A.R.S. §§ 12–341 and 12–341.01 and upon compliance
with Arizona Rule of Civil Appellate Procedure 21. Because the Winskis are
not the successful parties, we deny their request. Because the Helals are the
successful party, however, we award them their taxable costs, subject to
compliance with Rule 21.
CONCLUSION
¶43 For the foregoing reasons, we affirm.
:ama
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