Wollner v. Spanish Hills ( 2020 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
ROBERT WOLLNER, Plaintiff/Appellant,
v.
SPANISH HILLS CONDOMINIUM ASSOCIATION, Defendant/Appellee.
No. 1 CA-CV 19-0341
FILED 3-3-2020
Appeal from the Superior Court in Maricopa County
No. CV2017-055584
The Honorable Theodore Campagnolo, Judge
AFFIRMED
COUNSEL
Robert Wollner, Phoenix
Plaintiff/Appellant
Maxwell & Morgan, P.C., Mesa
By Chad M. Gallacher
Counsel for Defendant/Appellee
MEMORANDUM DECISION
Presiding Judge Lawrence F. Winthrop delivered the decision of the Court,
in which Judge Maria Elena Cruz and Judge David B. Gass joined.
WOLLNER v. SPANISH HILLS
Decision of the Court
W I N T H R O P, Judge:
¶1 Robert Wollner (“Wollner”) appeals the superior court’s
grant of summary judgment in favor of the Spanish Hills Condominium
Association (“Spanish Hills”). Wollner claims he was legally elected to
Spanish Hills’ Board of Directors, but that Spanish Hills prevented him
from serving on the Board by holding a second—and in his view illegal—
election. Wollner also argues an arbitrator in the case acted improperly
when he conducted an arbitration without jurisdiction, and the superior
court acted improperly when it failed to penalize Spanish Hills for not
abiding by the community’s written bylaws. For the following reasons, we
affirm the grant of summary judgment in favor of Spanish Hills.
FACTS AND PROCEDURAL HISTORY
¶2 Article IV, section 2, of Spanish Hills’ bylaws states: “At each
annual meeting the Members shall elect three (3) directors for a term of one
(1) year.” Article V, section 1, of the bylaws makes clear that “[n]omination
for election to the Board of Directors shall be [made] by a Nominating
Committee” or “made from the floor at the annual meeting.”
¶3 In 2017, Spanish Hills gave written notice to all community
members that the community’s annual meeting was set for July 27, 2017.
The notice advised that the meeting would “include an election of Directors
to the Board of Directors” and that any member interested in serving on the
Board could return an enclosed form to have their name included on the
election ballot. The notice also made clear that members could vote for the
Board either “in person at the meeting or by absentee ballot.”
¶4 Wollner expressed an interest in serving on the Board, and his
name was included on the absentee ballots sent out to members before the
July 27 annual meeting. Wollner’s was one of three names included on the
ballot for the three open Board positions.
¶5 On July 24, 2017, Spanish Hills sent out a notice cancelling the
July 27 meeting after it realized the candidates included on the ballot had
not been nominated by a Nominating Committee, as required by Spanish
Hills’ bylaws. Thereafter, the annual meeting was reset to August 29, 2017,
and a Nominating Committee nominated four individuals for the Board,
whose names were placed on a new absentee ballot that was then mailed
out to members. Wollner was not one of the individuals selected by the
Nominating Committee; accordingly, his name was not included on the
new ballot.
2
WOLLNER v. SPANISH HILLS
Decision of the Court
¶6 At no point before the August 29 meeting did Wollner object
to cancellation of the July 27 meeting, to resetting the meeting to August 29,
to discarding the initial ballots that did not comply with the bylaws, or to
his name not being included on the new ballot. Wollner attended and
participated in the August 29 meeting. During the meeting, Wollner did
not voice any objection to either the inclusion or the subsequent election of
the three candidates listed on the new ballot, 1 nor did he seek to nominate
himself from the floor of the meeting as the bylaws allowed.
¶7 On September 18, 2017, Wollner filed a civil complaint with
the superior court alleging Spanish Hills ignored the proper Board election
results from the July election and improperly held what he characterizes as
a second, invalid election in August. Wollner requested the court nullify
the August election and its results, and find a valid election had occurred
in July once the absentee ballots were sent out. The relief he requested was
a declaration that he had been duly elected to the Board and an order
directing Spanish Hills to allow him to serve his duly elected position.
¶8 On that same day, Wollner also filed a certificate of
compulsory arbitration, certifying that the case was subject to mandatory
arbitration. Based on that certification, court staff followed an
administrative process that resulted in an attorney being appointed to serve
as the arbitrator in this matter. An arbitration hearing was properly
scheduled and held on June 6, 2018, attended by both parties. After
reviewing the evidence and submissions of both parties, the arbitrator ruled
that he lacked jurisdiction over the action under Arizona Rule of Civil
Procedure (“Rule”) 72(b)(1)(A) because Wollner was seeking affirmative
relief other than a money judgment. Accordingly, the arbitrator referred
the matter back to the superior court.
¶9 Following referral back to the superior court, Wollner filed
multiple motions objecting to the arbitration process that had occurred.2
1 Wollner acknowledges his lack of objection at the August 29 meeting
but explains he purposefully remained silent because voicing an objection
“would have resulted in arguments and turmoil” and because he “[knew]
full well that he planned to file a lawsuit in the Maricopa County Superior
Court soon after the meeting.”
2 Wollner filed four motions related to the arbitration: (1) Motion to
Deny Payment to Arbitrator; (2) Motion to Vacate the Arbitrator’s Decision;
3
WOLLNER v. SPANISH HILLS
Decision of the Court
The court denied all motions, holding the arbitrator had “acted
professionally, properly, ethically, and in accordance with Rules 72-76.”
The court stated that Wollner should have known his complaint was clearly
not subject to compulsory arbitration and “should not have filed the
Certificate of Compulsory Arbitration.” The court also denied Spanish
Hills’ request for attorneys’ fees and costs from the arbitration proceedings,
noting that Spanish Hills “should have performed its due diligence to
realize that compulsory arbitration was not available.”
¶10 Wollner filed a motion for summary judgment on September
18, 2018, and Spanish Hills filed a response and cross-motion for summary
judgment on October 22, 2018. The superior court heard arguments from
both sides and took the matter under advisement. The court issued its
ruling on February 5, 2019, granting Spanish Hills’ motion for summary
judgment. The court ruled that no election was held on July 27, 2017, and
that the annual meeting, including the election, was properly rescheduled
to August 29, 2017, in accordance with the bylaws.3
¶11 Wollner timely appealed to this court, and we have
jurisdiction pursuant to Arizona Revised Statutes (“A.R.S.”) section 12-
2101(A)(1).
ANALYSIS
I. Standard of Review
¶12 Summary judgment is appropriate if “there is no genuine
dispute as to any material fact and the moving party is entitled to judgment
as a matter of law.” Rule 56(a). Summary judgment is granted when “the
facts produced in support of the claim or defense have so little probative
value, given the quantum of evidence required, that reasonable people
could not agree with the conclusion advanced by the proponent of the claim
or defense.” Orme Sch. v. Reeves, 166 Ariz. 301, 309 (1990).
(3) Motion for Sanctions against Arbitrator; and (4) Motion for
Compensation from Arbitrator.
3 The superior court also found that Wollner’s requested relief—to be
allowed to serve on the Board as elected—was “a factual and legal
impossibility” because “the one-year term for which [Wollner] sought to be
elected has expired” and “a new set of Board members was elected” at the
2018 annual meeting.
4
WOLLNER v. SPANISH HILLS
Decision of the Court
¶13 We review a superior court’s grant of summary judgment de
novo and view the facts in the light most favorable to the party against
whom summary judgment was entered. United Dairymen of Ariz. v. Schugg,
212 Ariz. 133, 140, ¶ 26 (App. 2006). We will affirm the grant of summary
judgment “if it is correct on any ground.” Delmastro & Eells v. Taco Bell
Corp., 228 Ariz. 134, 138, ¶ 8 (App. 2011).
¶14 We also review the interpretation of a contract de novo. Great
W. Bank v. LJC Dev., LLC, 238 Ariz. 470, 475, ¶ 9 (App. 2015).
II. Actions of the Arbitrator
¶15 On appeal, Wollner argues that the arbitrator conducted an
“illegal” arbitration.4 Wollner complains the arbitrator required the parties
to submit documents and evidence, and to participate in an arbitration
hearing, even though the arbitrator lacked jurisdiction over the action
because the relief sought was not monetary. See Rule 72(b)(1)(A). Wollner
seeks compensation for the time and money he wasted in the arbitration
process.
¶16 We disagree with Wollner’s characterization of the
arbitration. The explicit provisions of Rule 72 control here. First, we
emphasize that it was Wollner himself who submitted a certificate of
compulsory arbitration to the superior court, which, after no objection from
Spanish Hills, resulted in the case being automatically referred to
arbitration. Wollner’s argument that he should be compensated for the
“illegal” arbitration holds little weight considering he is the one who
initiated the compulsory arbitration process and acknowledged in his
certification that he knew the case was therefore subject to a set of uniform
rules of procedure for arbitration. As the superior court explained in
response to Wollner’s motions regarding the arbitration proceedings, the
arbitrator was “properly appointed, and had no choice but to proceed” in
light of Wollner’s certification of compulsory arbitration. Further, based on
the clear provisions of Rule 72(e)—including the explicit responsibilities
4 Spanish Hills argues all of Wollner’s claims should be waived on
appeal because Wollner “did not provide a Table of Citations,” “failed to
identify any statutory authority or case law to support his position,” and
“failed entirely to develop his arguments on appeal or to support them with
reference to the record.” See Ariz. R. Civ. App. P. (“ARCAP”) 13. In our
discretion, we only hold as waived those claims which are completely
without supporting argument or citations to any legal authority.
5
WOLLNER v. SPANISH HILLS
Decision of the Court
assigned to the parties to certify and/or contest whether the case was
subject to compulsory arbitration—the arbitrator had no reason to believe
that arbitrability was an issue that he needed to analyze and determine
upon assignment of the case. In retrospect, we agree it might have been
more efficient if the arbitrator had conducted a preliminary review of the
pleadings to determine whether Wollner was seeking relief that the
arbitrator could not legally provide, but we will not second-guess the
arbitrator’s decision to first consider that issue after hearing from the
parties at an already-scheduled hearing before properly arriving at such
legal conclusion. Further, there is nothing in the record to suggest the
arbitrator acted improperly by referring the matter back to the superior
court once it was clear the relief Wollner was seeking could not be ordered
by an arbitrator and that, pursuant to Rule 72(e), his complaint was not
subject to compulsory arbitration.
¶17 Finally, Wollner cites no legal authority that would allow him
to recover his costs associated with the arbitration proceeding, nor any
authority allowing this court to order compensation to him for the time
“wasted” in arbitration. Because there is neither valid reason nor legal
authority to do so, we will not grant Wollner compensation for the time or
money he may have spent in connection with the arbitration proceedings
he himself initiated.
III. Validity of August Board Election
¶18 Wollner argues the superior court erred in holding the
August 29 election was valid. He maintains the July election was valid and
properly took place when absentee ballots were sent out to the community
members.
¶19 In response, Spanish Hills argues it properly rescheduled the
annual meeting and election in order to be compliant with the bylaws’
requirement that candidates for election to the Board be selected by a
Nominating Committee.
¶20 The heart of this dispute arises out of the procedural
requirements for the Board election as detailed in Spanish Hills’ bylaws.
The bylaws constitute a contract between Spanish Hills and the community
members. See Rowland v. Union Hills Country Club, 157 Ariz. 301, 304 (App.
1988) (“The rights of members of a private organization are governed by
the articles of incorporation and by-laws, which constitute a contract
between the members and the organization.”). “A general principle of
contract law is that when parties bind themselves by a lawful contract the
6
WOLLNER v. SPANISH HILLS
Decision of the Court
terms of which are clear and unambiguous, a court must give effect to the
contract as written.” Grubb & Ellis Mgmt. Servs., Inc. v. 407417 B.C., L.L.C.,
213 Ariz. 83, 86, ¶ 12 (App. 2006).
¶21 Here, Spanish Hills’ bylaws plainly state, “At each annual
meeting the Members shall elect three (3) directors for a term of one (1)
year.” Thus, under the clear language of the bylaws, the election occurs at
the annual meeting. Accordingly, there was no election in July, even if
absentee ballots had already been sent out, because there was no annual
meeting held. This procedure also conforms to applicable statutory
requirements, which state that directors shall be elected “at each annual
meeting after the first annual meeting, unless . . . [t]he articles of
incorporation or bylaws provide some other time or method of election.”
A.R.S. § 10-3804(A)(2).
¶22 Further, “[t]he bylaws of a corporation may contain any
provision for regulating and managing the affairs of the corporation that is
not inconsistent with law or the articles of incorporation.” A.R.S. § 10-
3206(B). Spanish Hills’ bylaws require that “[n]omination for election to the
Board of Directors shall be [made] by a Nominating Committee” or “made
from the floor at the annual meeting.” This procedural requirement for the
Board election is not inconsistent with Spanish Hills’ other governing
documents nor with applicable law. Had Spanish Hills held the election in
July without using a nominating committee, it would have been in violation
of the bylaws and potentially liable for a breach of contract.
¶23 Because the bylaws clearly state that the election occurs at the
annual meeting, and because Wollner acknowledges that no annual
meeting occurred in July, his argument that the July election was valid has
no merit. Wollner does not allege any procedural defects in the August
election as supported by the bylaws or the record.5 Summary judgment
was properly granted in favor of Spanish Hills.
5 Wollner does not dispute that a Nominating Committee was
properly used for the names on the August ballot. Wollner’s main
complaint regarding the August election is that Spanish Hills’ “Governing
Documents do not support a second election” after a valid election occurred
in July. However, because no valid election occurred in July, this argument
fails. Further, Wollner acknowledges that Spanish Hills had the authority
to cancel the annual meeting but claims it did not have authority to cancel
the election. The plain language of the bylaws does not support such a
7
WOLLNER v. SPANISH HILLS
Decision of the Court
¶24 We note that the parties argue at length about whether the
superior court properly applied the holding in Zajac v. City of Casa Grande,
209 Ariz. 357 (2004). Zajac arose out of a dispute regarding a rezoning
ordinance passed by the City of Casa Grande. Neither party here makes
any argument for why this court should apply principles of public election
law to a dispute over contractually-agreed-upon management procedures
detailed in the bylaws of a private, nonprofit corporation. Zajac is
inapplicable to our resolution of this case and we do not address either
side’s arguments related to it.
IV. Sanctions against Spanish Hills
¶25 Finally, Wollner argues the superior court erred in not
penalizing Spanish Hills after it violated its bylaws by failing to use a
Nominating Committee in the July 2017 election process. We find this
argument has been waived because Wollner does not cite any legal
authority in support of it.
¶26 This court will hold an argument waived if it is “wholly
without supporting argument or citation to authority.” Bennett v. Baxter
Grp., Inc., 223 Ariz. 414, 418, ¶ 11 (App. 2010) (quoting Brown v. U.S. Fid. &
Guar. Co., 194 Ariz. 85, 93, ¶ 50 (App. 1998)); see also ARCAP 13(a)(7) (stating
an argument section must contain “supporting reasons for each
contention,” “citations of legal authorities,” and “appropriate references to
the portions of the record on which the appellant relies”).
¶27 Here, Wollner claims “the Courts generally penalize such
Associations whose Board of Directors are in violation” of community
bylaws and argues that penalizing the Board is “traditional, conforming to
established practice or standards.” But Wollner does not cite any legal
authority for these broad statements.6 Accordingly, this argument is
waived.
distinction between the annual meeting and the election. And, of course,
Spanish Hills did not “cancel” the election; it was in fact held in August,
following compliance with the bylaws as to involvement of a Nominating
Committee and appropriate notice to the members.
6 Wollner acknowledged in superior court filings that he “believes
that there are no laws that require the Court to punish the Board of
Directors.”
8
WOLLNER v. SPANISH HILLS
Decision of the Court
¶28 Even were this argument not waived, Wollner argues in his
opening brief that the superior court should have “punished” or
“penalize[d]” Spanish Hills, but he does not articulate what sort of
punishment or remedy would be appropriate. In earlier filings with the
superior court, Wollner argued that “[w]hat is considered to be the
punishment for violating the governing documents is the Association loses
the lawsuit and a judgment is given to the plaintiff for his costs.” Wollner
was not entitled to a judgment in his favor, as detailed supra. Moreover, the
superior court appropriately awarded Spanish Hills its taxable costs under
A.R.S. §§ 12-341 and 12-332 because Spanish Hills was the successful party
below. There is no basis to award Wollner his costs.
V. Attorneys’ Fees and Costs
¶29 Spanish Hills requests an award of attorneys’ fees and costs
incurred on appeal pursuant to A.R.S. § 12-341.01 and to Article XII, Section
15, of Spanish Hills’ CC&Rs, which provides that in an action to enforce
compliance with or recover damages for any violation of Spanish Hills’
governing documents or bylaws, the prevailing party is entitled to recover
their reasonable attorneys’ fees. We award Spanish Hills, as the prevailing
party, its reasonable attorneys’ fees and costs incurred on appeal upon
compliance with ARCAP 21(b). See Chase Bank of Ariz. v. Acosta, 179 Ariz.
563, 575 (App. 1994) (“A contractual provision for attorneys’ fees will be
enforced according to its terms.”).
CONCLUSION
¶30 For the foregoing reasons, we affirm the grant of summary
judgment in favor of Spanish Hills.
AMY M. WOOD • Clerk of the Court
FILED: AA
9