Orozco v. Alvarez-Corrales ( 2016 )


Menu:
  •                      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    UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
    JAVIER OROZCO, Plaintiff/Appellant,
    v.
    RAMIRO ALVAREZ-CORRALES, Defendant/Appellee.
    No. 1 CA-CV 16-0113
    FILED 12-22-2016
    Appeal from the Superior Court in Maricopa County
    No. CV2015-001932
    The Honorable Randall H. Warner, Judge
    AFFIRMED
    COUNSEL
    The Brill Law Firm PLLC, Scottsdale
    By Daniel S. Brill
    Counsel for Plaintiff/Appellant
    Jennings Haug & Cunningham LLP, Phoenix
    By Laurence R. Sharlot, Robert John Lamb
    Counsel for Defendant/Appellee
    OROZCO v. ALVAREZ-CORRALES
    Decision of the Court
    MEMORANDUM DECISION
    Judge Peter B. Swann delivered the decision of the court, in which Presiding
    Judge Andrew W. Gould and Judge Patricia A. Orozco joined.
    S W A N N, Judge:
    ¶1             This is an appeal from a judgment concurrently adopting an
    arbitration award in favor of the plaintiff and imposing a sanction against
    the plaintiff under Ariz. R. Civ. P. (“Rule”) 68(g). The plaintiff contends
    that the sanction became unavailable after the arbitration proceedings
    concluded. We disagree. Under the applicable rules of civil procedure, the
    defendant properly sought the sanction after the arbitration award became
    final and was entered as a judgment. We therefore affirm.
    FACTS AND PROCEDURAL HISTORY
    ¶2            Javier Orozco (“Plaintiff”) filed a negligence action against
    Ramiro Alvarez-Corrales (“Defendant”). Defendant answered and served
    an offer of judgment for $7,001 under Rule 68. Plaintiff did not accept the
    offer, and the matter proceeded to compulsory arbitration under A.R.S.
    § 12-133 and Rule 72.
    ¶3            The arbitrator issued a notice of decision finding in favor of
    Plaintiff in the amount of $2,552.56. Plaintiff thereafter submitted a
    statement of costs totaling $825, to which Defendant did not object. The
    arbitrator then filed an award in Plaintiff’s favor consistent with the notice
    of decision and the statement of costs.
    ¶4            After the time for “appeal” under Rule 77(a) expired,
    Defendant applied to the superior court for entry of judgment on the award
    and asked the court to assess $1,449.68 (double Defendant’s taxable costs)
    against Plaintiff as a sanction for Plaintiff’s failure to accept the offer of
    judgment. Over Plaintiff’s objection, the court entered judgment on the
    arbitration award but awarded Defendant the requested sanction. Plaintiff
    appeals.
    DISCUSSION
    ¶5            We review de novo the superior court’s interpretation and
    application of the civil procedure rules. Bradshaw v. Jasso-Barajas, 
    231 Ariz. 2
                        OROZCO v. ALVAREZ-CORRALES
    Decision of the Court
    197, 199, ¶ 5 (App. 2013). We follow the rules’ plain language if it is
    unambiguous. 
    Id. ¶6 Rule
    74(g) expressly permits Rule 68 offers of judgment in
    compulsory arbitration cases. Under Rule 68(g), if the offeree does not
    accept an offer of judgment and fails to later obtain a “more favorable
    judgment,” he or she must pay a sanction equivalent to the reasonable
    expert witness fees and double the taxable costs incurred by the offeror after
    making the offer. The sanction, which serves the purpose of encouraging
    settlement and eliminating needless litigation, is mandatory. Arellano v.
    Primerica Life Ins. Co., 
    235 Ariz. 371
    , 381, ¶ 48 (App. 2014); Warner v. Sw.
    Desert Images, LLC, 
    218 Ariz. 121
    , 138, ¶ 57 (App. 2008). In arbitration cases,
    “[t]he determination whether a sanction should be imposed . . . shall be
    made by reference to the judgment ultimately entered.” 
    Bradshaw, 231 Ariz. at 199
    –200, ¶ 8; see also Rule 68(g)(3).
    ¶7             Based on the plain language of Rule 68(g), the question
    whether a sanction shall be imposed hinges upon comparison of the offer
    of judgment with the “judgment.” See Metzler v. BCI Coca-Cola Bottling Co.
    of Los Angeles, 
    230 Ariz. 26
    , 28, ¶¶ 6-7 (App. 2012). An arbitrator’s award is
    not a judgment — the arbitrator lacks authority to dispose of the case. Sw.
    Barricades, L.L.C. v. Traffic Mgmt., Inc., 
    240 Ariz. 139
    , 142, ¶ 13 (App. 2016);
    Phillips v. Garcia, 
    237 Ariz. 407
    , 411, ¶ 13 (App. 2015). The arbitrator’s award
    may become a judgment only if, after the time to seek relief from the award
    has expired under Rule 77(a), a party asks the court to enter judgment on
    the award and the court affirmatively does so. See Ariz. R. Civ. P. 76(c); Sw.
    
    Barricades, 240 Ariz. at 142
    , ¶ 13.
    ¶8            Consistent with these rules requiring a court-entered
    judgment before Rule 68 sanctions may be assessed, Rule 74(c)(1)(F)
    provides that “the arbitrator shall make all legal rulings, including rulings
    on motions, except . . . motions for sanctions under Rule 68 of these Rules.”
    (Emphases added.) But as Plaintiff observes, the applicable version of Rule
    76(a) nonetheless provides that the arbitrator may consider a request for
    sanctions in connection with issuing the award:
    [E]ither party may submit to the arbitrator a proposed form
    of award or other final disposition, including any form of award
    for attorneys’ fees and costs whether arising out of an offer of
    judgment, sanctions or otherwise, . . . . [T]he opposing party
    may file objections[, and] . . . the arbitrator shall pass upon the
    objections and file one signed original award or other final
    disposition.
    3
    OROZCO v. ALVAREZ-CORRALES
    Decision of the Court
    (Emphases added.)
    ¶9             Rule 76(a) plainly conflicts with Rule 74(c)(1)(F).1 In view of
    the conflict, we would not penalize Defendant had he sought and obtained
    a Rule 68(g) sanction from the arbitrator. But he did not do so, and under
    the permissive language of Rule 76(a), he was not required to do so. On
    this record, the conflict created by Rule 76(a) was not implicated.
    ¶10           Defendant’s election to seek the sanction post-judgment was
    proper. We reject Plaintiff’s contention that allowing Defendant to seek the
    sanction from the court promoted unfair “gamesmanship” or “lying in
    wait.” Plaintiff knew of the offer of judgment and elected not to accept it.
    Rule 68(g) placed Plaintiff on clear notice that if he chose not to seek relief
    from an arbitration award worth less than the amount of the offer, he risked
    entry of judgment on that award and the imposition of a mandatory
    sanction.
    CONCLUSION
    ¶11           We affirm for the reasons set forth above.
    AMY M. WOOD • Clerk of the Court
    FILED: AA
    1      Effective January 1, 2017, Rule 76(a) will no longer create a conflict.
    See 2016 Arizona Court Order 0019 (enacting amended version of Rule 76(a)
    that does not specifically authorize application for costs arising out of an
    offer of judgment).
    4
    

Document Info

Docket Number: 1 CA-CV 16-0113

Filed Date: 12/22/2016

Precedential Status: Non-Precedential

Modified Date: 4/17/2021