Zelkind v. Del Webb

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
GLEN ZELKIND; NORMA ACKMA; DAVID and DEBORAH
ALTHOUSE; EILEEN APPLETON-SHAPIRO; DEVON and
SUSAN ARCHIBALD; JAMES and RYOKO AUGUST; ALFRED
and PAULINE AVERY; ALEXANDER and JUDITH AZEMOVE;
JOHN and MOLLY and ELIZABETH BAKER; FRANCIS BAKER;
ROBERT and CHRISTINE BARBERI; ROBERT and DIANE
BARISH; WILLIAM and SANDRA BAYER; ALAN and KATHRYN
BEACH; PITZER and LYNN BECKLEY; RAY and ELLEN
BEDWELL; JUDY BENDER; WILLIAM and BARBARA BERNARD;
RICHARD BERNARDONI; SAMUEL BERNHARDT and
PATRICIA JONES; GEORGE and CHRISTINE BIGLEY; KELVIN
and CHERYL BLAIR; DWIGHT and TERESA BOBIER; GERALD
and NANCY BOESCHE; ARTHUR BORTZ and KAREN ANTON;
GERALD and MARY BOWERS; STEPHEN and GRACE
BRODSKY; RONALD BROOKS and GLORIA YOUNG; GARY and
LYDIA BROWNING; RONALD and BARBARA BRUE; JOSEPH
and MARY BRUNSKILL; JAMES and RUTH BUNSE; THOMAS
and LINDA BUTLER; ARTHUR and ELAINE CARLSON; WAYNE
and GAIL CASEMORE; DAVID and LINDA CASTAGNA; B.
NATALIE CASTILLO; JAMES and BARBARA CAVALIER;
DENNIS and JEAN CERENZIA; GEOFFREY and JANET
CHARLES; GEORGE and PATRICIA CIPPON; RICHARD and
BARB CLARK; GERALD and LINDA CLEMENT; TIMOTHY and
KATHRYN CLOONAN; RICHARD and DIANE COLLIER;
GEORGE and JACQUELINE CONN; PATRICK and JANICE
CONWAY; ROBERT and COLLEEN CORACE; JAMES and F.
JANE COTTRELL; DONALD and NANCY CRABTREE; WILLIAM
and JANICE CREE; DENNIE and SUSAN CROOKS; GARY and
JANET CROSS; DAVID and PATRICIA DALLAIRE; FRANK and
ROSALYN DANIEL; BUFORD and WILLA DAUGHERTY; DAVID
and LaVERNA DAVIDSON; BARBARA De BLASI; CHARLENE
De STEPHANIS; DONALD and KATHLEEN DEACH; CARL and
JO ANN DEINER; MARLYS DeKUBBER and RICHARD
DINNEEN; DELBERT and ELAINE DIENER; TAUN and
DEBORAH DIMATTEO; ROCHELLE DISHLER; WILLIAM and
BARBARA DOWLING; RICHARD and MADGE DUCE; ROBERT
and PEGGY DYE; THOMAS and DIANA EAVES; GERALD and
BONNIE EICHSTEDT; FRANK and MYRNA EISENZIMMER;
JOHN and JUDITH ELLIOTT; JD and ROXIE ERWIN; DONALD
EVANS and TONI KAYE; DENNIS and MARLENE FEKETE;
NORMAN and IRENE FIET; DAVID and JANICE FINATRI; JOHN
and KATHLEEN FITZGERALD; RICHARD and CATHERINE
FOLLESTAD; LEONARD and KATHLEEN FONTAINE; DAVID
and SARAH FORSYTH; JOSEPH and KATHLEEN GALIETTA;
ARNOLD and BEVERLY GIBB; L.F. and ROSE GERHART;
RAYMOND GILE and VIRGINIA INCE; DALE and NANCY
GILES; RONALD GINN; FRANCES GIRD-LIPSHAY; KERRY and
BETH GISTER; DANIEL and MARY GLEASON; JOHN GONNER;
SYLVIA GOODMAN; LYLE and NANETTE GORDON; IDA
GOSZTOLA; JAMES and ANN GROOTEGOED; FORREST and
RUTH GROSVENOR; RONALD and CHERYL HABERKORN;
JOHN and KAREN HAMMEL; DONALD and SHARON
HANSEN; LOREN and ROSE HANSEN; JAMES HANSON;
RICHARD and JOANN HARDER; WILLIAM and GLORIA
HAREID; ROBERT HARRIS and CAROL HODGSON; ERIC and
JENNIFER HARVEY; DOUGLAS and KATHLEEN HAXTON;
RICHARD and SHARON HAYNES; BARRY and JUDITH
HEDDEN; RONALD and MONA HEGLIN; WALTER and
SHERYL HENRY; LYMAN and MARILYN HERB; TERRANCE
and CLEO HILTS; MALGORZATA HINADY; J. VAL and
BARBARA HOLLANDS; WILLIAM and LOUISA HUFFER;
THERLON and ANNA HUGHES; JACK HUMPHREY; RICHARD
HUSTON; RICHARD and PAULA ILLIAN; HAROLD and MELVA
JASTRAM; BOYD and JOLEEN JOHNSON; TORI JOHNSON-
KELSO; ROBERT and JoANN JURGENS; RONALD and
SUZANNE KALETA; GEORGE KARONIS and ERMELINDA
VALDE; CORINNE KEMP; JEAN KIERNAT; EUGENE KIESLING;
FRED and JUDY KOESEL; MICHAEL KOLSKY; STANLEY and
ANN KONDILES; JAMES and HERMINE KOPENEC; MARK and
MURIEL KROSCH; HENRY KRYSKI and NORMA JANIK;
MICHAEL and JOYCE KUNSTADT; DALE and MARION
LARSON; JACK and BILLIE LAUB; RAYMOND and JUDITH
MARIE LEEGE; ROBERT and BARBARA LESLIE; DENNIS and
ANN LEVINE; PETER and CATHERINE LEWIS; JAMES and
MARY LOU LEWTICH; PAUL and SHIRLEY LILLIS; MARTHA
2
LINN; ALLEN and VICKY LIPTON; DAVID and BETTY LOCK;
LARRY and ELSIE LOSEKE; ROBERT LUSSIER and CAROLYN M
RHEA; SHAFI MALEK; YVONNE MANNION; LAWRENCE and
SHEILA MARDEN; J. MICHAEL and HELEN MATERIE;
CHARLES and CAROL MATTHEEUSSEN; ROGER and CAROL
MAUGER; HORACE and GERALDINE McCAIN; JOHN and
EILEEN McCARTHY; JILLANN McGREGOR; JAMES and LUPE
McVEIGH; GENE R and KARLEEN A MERWIN; ELIZABETH
MEYERS; GALEN MILER; ROBERT and LINDALU MILLER;
JAMES MILLER; CLIFFORD and JEAN MOMMAERTS; GARY and
DONNI MONN; SAMUEL and THELMA MOONEY; NATALIE
MORRISON; ANTHONY MULLOZZI; R. MICHAEL MYERS;
MORIO and JOHANNA NAKAGAWA; ROGER and NANCY
NELSON; JAN NELSON; THOMAS and JOYCE NICCUM; DAN
and DIANE NIELSEN; CHARLES and GAIL NIELSON; DONALD
and JANICE NOTEBOOM; LARRY and VIRGINIA NYRE;
DENNIS and ELAINE ODETTE; JOHN and JEAN OWEN;
NELSON and ROSEMARY PALMER; ROBERT and DOROTHY
PARKES; LOIS PARLOW; EILEEN PATELLI; MICHAEL and
CAROL PATTERSON; RONALD PAUL; PAUL and NAOMI
PEARSON; OSCAR and CAROL PENCE; DONALD and JANET
PETERSON; CONSTANCE POPP; EMILY PRICE; SAMMY and
KATHLEEN PUTMAN; DEAN and ROCHELLE RAMOS; ROBERT
and LINDA RANZINGER; WILLIAM RAPLEY JR. and MARY
RAPLEY; JOSEPH RAYO; GERALD REDNER; TIMOTHY and
LAURA REED; LEE and CHERYL RETELSDORF; JAMES and
KATHLEEN REVALEE; CHARLES and HARRIET REYNOLDS;
CAROL RICHTER; EUGENE ROBERTSON; MARSHALL and
JOANNE ROCKOFF; PAUL ROCKWELL; ANGELO ROMAY;
STANLEY and MARLENE ROSENBLATT; ROBERT ROWLAND;
THOMAS and CAROL ANN RUFRANO; DANIEL and KAYE
RYAN; SUSAN RYAN; ROBERT and AMELIA SABLOFF; JAMES
and SANDRA SABO; ROBERT and BARBARA SANDERS; BRUCE
and ROSEMARY SANTELMAN; DONALD and DIANE
SASNETT; BETTIE SASSCER; DAVID and JANET SCHAUM;
GARY SCHMIT; HERBERT and MARY SCHMITT; RODNEY
SCHNEIDER; JOHN and THERESA SCHUETTE; CHARLES and
NADINE SCHULWOLF; GERALD and BARBARA SCHWARTZ;
GEORGE and ELAINE SCHWARTZ; THOMAS and JULIE
SCOTT; WAYNE and CHRISTINE SEMINARI; ROBERT and
GERTRUDE SHAW; SERGEI and ELENA SIKORSKY; ROBERT
and CYNTHIA SIMON; MARLENE SIMPSON; CHARLES and
MARY SLIVINSKY; ARLENE SMALLEY; DONALD and GILDA
3
SMALLEY; CATHERINE SMITH; GARY and MARGARET
SONTAG; EDWIN and JANET KAY SORENSEN; RICHARD and
CONSTANCE SPLITT; JOHN and CONNIE STAFFORD; JOAN
STAHULAK; JOHN and DONNA STENSLOKKEN; FRED and
KATHLEEN STENZEL; WALTER and CONNIE STEPNITZ;
MURIEL STONE-JOHNSON; WILLIAM and CAROL SUMMERS;
ALBERT and CONSTANCE SWANSON; RONALD and SHARON
SWANSON; RICHARD and FRANCINE SWARTZ; SUSAN
SYQUIA; JOHN TASTET; ROBERT and CAROLYN TAYLOR;
BARTHOLOMEW and ANGELA TESORIERO; MARK and
JUDITH THIBAUDEAU; MELVIN TODD; JUDITH TRENCH;
ELGIN TYUS; RICHARD and HELEN VAN DEWERKER; LARRY
and MARY VERING; JOHN and SHARON VRBOVSKY; JOHN and
MARYANN VYSZWANY; PAUL and JOYCE WALA; ROBERT and
MONIKA WALKER; HERMIS and SHIRLEY WALLER; JOHN
WAPPEL; BARBARA WATSON; JAMES and KATHLEEN WEHR;
GERALD and SHIRLEY WENDRYCH; ELMER and BETTY
WEREB; LEONARD and MURIEL WHITE; ROBERT and JANICE
WHITMORE; JOHN and JUDITH WILKES; DAVID and IRMA
WILLIAMS; RICHARD WILLIAMS; JIMMY and LINDA WILLIS;
WAYNE and DESPINA WOJDA; FREDERICK WRESH; GERALD
and BARBARA YASUTAKE; LEONARD and MARJORIE
ZACHRISON; EDWARD and MARILY ZEITZ,
Plaintiffs/Appellees,
v.
DEL WEBB COMMUNITIES, INC., an Arizona corporation; DEL
WEBB HOME CONSTRUCTION, INC., an Arizona corporation;
DEL WEBB CORPORATION, an Arizona corporation; PULTE
HOME CORPORATION, a Michigan corporation; PULTE
DEVELOPMENT CORP., a Michigan corporation,
Defendants/Appellants.
TRUSEAL TECHNOLOGIES, INC.,
Third Party Defendant/Appellee.
4
No. 1 CA-CV 14-0816
FILED 03-24-2016
Appeal from the Superior Court in Maricopa County
Nos. CV 2008-008310
CV 2008-003089
CV 2008-020853
CV 2009-029434
(Consolidated)
The Honorable Robert H. Oberbillig, Judge
AFFIRMED IN PART, VACATED IN PART, AND REMANDED
COUNSEL
Koeller Nebeker Carlson & Haluck, LLP, Phoenix
By William A. Nebeker, Troy G. Allen
Counsel for Defendants/Appellants
Bush Seyferth & Paige, PLLC, Troy, MI
By Stephanie A. Douglas
Pro Hac Vice for Defendants/Appellants
Osborn Maledon, PA, Phoenix
By Thomas L. Hudson, Eric M. Fraser
Co-Counsel for Plaintiffs/Appellees
Kasdan Lippsmith Weber Turner, LLP, Phoenix
By Stephen L. Weber, Scott A. Booth, Kenneth S. Kasdan, Robert R. Brina
Co-Counsel for Plaintiffs/Appellees
5
ZELKIND, et al. v. DEL WEBB, et al.
Decision of the Court
MEMORANDUM DECISION
Judge Margaret H. Downie delivered the decision of the Court, in which
Presiding Judge Andrew W. Gould and Judge John C. Gemmill joined.
D O W N I E, Judge:
¶1 Appellants (collectively, “Del Webb”) challenge the superior
court’s award of attorneys’ fees, expert witness fees, and taxable costs to
Appellees following lengthy construction defect litigation. For the
following reasons, we affirm the final judgment in part, vacate it in part,
and remand for further proceedings regarding Del Webb’s request for
sanctions under Arizona Rule of Civil Procedure 68.
FACTS AND PROCEDURAL HISTORY
¶2 On January 25, 2008, counsel for Appellees sent Del Webb a
letter captioned “Notice of Construction Defects and Opportunity to
Inspect and Repair” (the “Notice”) on behalf of hundreds of homeowners
in the Sun City Grand development (collectively, “Plaintiffs”). Plaintiffs
included both original homeowners who had purchased their homes from
Del Webb and subsequent homeowners who were not in contractual
privity with Del Webb. The Notice advised that it was being provided
pursuant to the Purchaser Dwelling Act (“PDA”) — Arizona Revised
Statutes (“A.R.S.”) sections 12-1361 to -1366.1
¶3 By letter dated April 7, 2008, Del Webb responded to the
Notice. It objected to several “terms” the Notice imposed and noted that
Plaintiffs would not grant extensions of time for Del Webb to conduct
inspections under A.R.S. § 12-1363(B). Del Webb stated:
The preceding clearly violates the provisions of A.R.S. § 12-
1361 et seq. No builder, including Pulte/Del Webb, could
perform repairs and/or provide monetary compensation on
1 A “dwelling action” is defined as “any action involving a
construction defect brought by a purchaser against the seller of a dwelling
arising out of or related to the design, construction, condition or sale of the
dwelling.” A.R.S. § 12-1361(7).
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ZELKIND, et al. v. DEL WEBB, et al.
Decision of the Court
over 400 homes under the “terms” of your offers. In
addition, repairs on 400 homes could not be completed in 30
days.
Given Pulte’s/Del Webb’s belief that your clients’ PDA
notices contain unconscionable terms and do not adhere to
the spirit and intent of the PDA, Pulte/Del Webb will not be
making any offers under these circumstances.
Del Webb did not object on the basis that the Notice lacked information
required by the PDA.
¶4 Plaintiffs filed suit in superior court on April 14, 2008. Del
Webb answered the complaint and identified numerous affirmative
defenses, including an assertion that Plaintiffs had failed to comply with
the PDA. Del Webb did not allege anything specific in this regard, instead
“reserv[ing] its right, as information is learned, to allege non-compliance
with the PDA, in whole or part.”
¶5 In January of 2013, Del Webb filed a motion for partial
summary judgment, seeking a determination “that Plaintiffs failed to
comply with the PDA, and that consequently, the attorneys’ fees and costs
provisions of the PDA do not apply to this dispute.” Del Webb argued the
Notice failed to provide “a reasonably detailed description of the alleged
defects in a fair and representative sample of the affected residential
units,” as required by A.R.S. § 12-1363.2 It also contended the repair
2 At the time, A.R.S. § 12-1363(A) provided:
At least ninety days before filing a dwelling action, the
purchaser shall give written notice by certified mail, return
receipt requested, to the seller specifying in reasonable detail
the basis of the dwelling action. The notice in a multiunit
dwelling action involving alleged defects that are
substantially similar in multiple residential units may
comply with this section by providing a reasonably detailed
description of the alleged defects in a fair and representative
sample of the affected residential units. For the purposes of
this subsection, “reasonable detail” includes a detailed and
itemized list that describes each alleged defect and the
location that each alleged defect has been observed by the
purchaser in each dwelling that is the subject of the notice.
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ZELKIND, et al. v. DEL WEBB, et al.
Decision of the Court
protocol set forth in the Notice was inconsistent with the PDA. The
superior court denied Del Webb’s motion, concluding it had litigated the
action for more than four years “without asserting its rights under the
PDA” and had therefore “waived the issue of Plaintiffs’ compliance with
the PDA.”
¶6 After a lengthy trial, the jury returned 279 individual
verdicts in April 2014 that cumulatively awarded Plaintiffs damages of
roughly $4.1 million. Both Del Webb and Plaintiffs subsequently
requested awards of fees and costs. On November 3, 2014, the superior
court entered a final judgment awarding Plaintiffs attorneys’ fees, expert
fees, and taxable costs. Del Webb timely appealed. We have jurisdiction
pursuant to A.R.S. § 12-2101(A)(1).
DISCUSSION
¶7 Del Webb has paid the damages awarded by the jury. On
appeal, it “takes issue solely with the trial court’s award of over $6 million
in attorneys’ fees, expert fees, and costs.”3
I. Attorneys’ Fees
A. PDA
¶8 Plaintiffs moved for a post-trial award of attorneys’ fees and
expert costs as the prevailing parties under the PDA — specifically, A.R.S.
§ 12-1364.4 Alternatively, Plaintiffs sought to recover attorneys’ fees
3 Del Webb does not separately address the expert fees, but we
understand its position to be that those fees were improper for the same
reasons it contends the attorneys’ fee award was improper. As such, we
also do not separately address the expert fees.
4 Although A.R.S. § 12-1364 has since been repealed, at the time of the
superior court’s ruling, it provided:
In any contested dwelling action, the court shall award the
successful party reasonable attorney fees, reasonable expert
witness fees and taxable costs. If the seller’s offer, including
any best and final offer, is rejected and the judgment finally
obtained is less than or less favorable to the purchaser than
the offer or best and final offer, the seller is deemed to be the
successful party from the date of the offer or best and final
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ZELKIND, et al. v. DEL WEBB, et al.
Decision of the Court
pursuant to A.R.S. § 12-341.01. Del Webb opposed Plaintiffs’ requests. It
objected to an award under the PDA because: (1) Plaintiffs failed to
analyze “successful party” status on a plaintiff-by-plaintiff basis; and (2)
the requested sums were unreasonable.5 Del Webb further argued the
original homeowners could not recover fees based on language contained
in their sales contracts. Del Webb did not object to Plaintiffs’ requests
based on alleged non-compliance with the PDA.
¶9 The superior court awarded Plaintiffs attorneys’ fees and
expert costs under the PDA, concluding:
The Plaintiffs are entitled to an award of reasonable
attorneys fees, reasonable expert witness fees, and taxable
costs per A.R.S. § 12-1364. The Court finds that the “Del
Webb” defendants failed to make a legally valid offer to
settle on a timely basis as required by A.R.S. § 12-1363(E) in
order for that offer to be considered per § 12-1364. There
being no valid offer, “the judgment finally obtained” is more
favorable to the Plaintiffs and the Plaintiffs are the
“successful party.”
The court denied Plaintiffs’ request for fees under A.R.S. § 12-341.01 and
rejected Del Webb’s contention that the original homeowners were
precluded from recovering fees. The court also denied Del Webb’s
request for fees and costs.
¶10 We review the grant of Plaintiffs’ motion for fees and costs
based on arguments that the parties advanced in the superior court
regarding that motion. See, e.g., Trantor v. Fredrikson, 179 Ariz. 299, 300
(1994) (“[A]bsent extraordinary circumstances, errors not raised in the trial
offer. If the judgment finally obtained is more favorable to
the purchaser than the seller’s offer or best and final offer,
the purchaser is deemed to be the successful party from the
date of the offer or best and final offer. This section shall not
be construed as altering, prohibiting or restricting present or
future contracts or statutes that may provide for attorney
fees.
5 Del Webb also contended Plaintiffs could not recover fees because
their counsel had a conflict of interest. That argument has not been re-
urged on appeal.
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ZELKIND, et al. v. DEL WEBB, et al.
Decision of the Court
court cannot be raised on appeal.”); Winters v. Ariz. Bd. of Educ., 207 Ariz.
173, 177, ¶ 13 (App. 2004) (generally, we will not consider a challenge on
appeal if it was not raised with specificity and addressed in the trial
court). As Plaintiffs observe, although Del Webb devotes significant
appellate briefing to Plaintiffs’ alleged non-compliance with the PDA, it
did not oppose Plaintiffs’ motion on that basis. Nor did Del Webb appeal
(or brief in substantive fashion) the denial of its Motion for Partial
Summary Judgment Regarding Purchaser Dwelling Act Compliance. See,
e.g., John C. Lincoln Hosp. & Health Corp. v. Maricopa Cty., 208 Ariz. 532, 539,
¶ 19 (App. 2004) (“[I]n cases that have gone to trial, a party who wants to
preserve a summary-judgment issue for appeal, with a possible exception
for a purely legal issue, must do so by reasserting it in a Rule 50 motion . .
. or other post-trial motion.”). Under these circumstances, we deem Del
Webb’s appellate arguments about Plaintiffs’ alleged non-compliance with
the PDA waived. And with the exception of one contention about original
homeowners that we discuss next, Del Webb has articulated no other basis
for reversing the superior court’s awards of attorneys’ fees and expert
costs.
B. Original Homeowners
¶11 Del Webb also contends the original homeowners could not
recover fees under the PDA because their sales contracts limit such
awards to mediation and arbitration proceedings. We review de novo the
application of a fee statute to an attorneys’ fees award. See Burke v. Ariz.
State Ret. Sys., 206 Ariz. 269, 272, ¶ 6 (App. 2003). We also review
questions of contract interpretation de novo. Grubb & Ellis Mgmt. Servs.,
Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, 86, ¶ 12 (App. 2006).
¶12 The relevant provision in the sales agreements between the
original homeowners and Del Webb states:
In the event of any arbitration or mediation between Us and
You, before or after the Closing, the prevailing party shall be
entitled to an award of all attorneys fees and costs . . . in an
amount to be determined by the arbitrator or mediator
hearing the matter. Any court or arbitrator hearing any
matter on appeal may also award such fees to the prevailing
party in and for any prior mediation or arbitration.
¶13 We agree with Plaintiffs that this provision does not
preclude, or even address, attorneys’ fees incurred in superior court
litigation. By its clear and unambiguous terms, the clause only governs
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ZELKIND, et al. v. DEL WEBB, et al.
Decision of the Court
fee awards in arbitration or mediation proceedings — neither of which is
at issue here.6 The sales agreement provision simply does not trigger the
then-existing A.R.S. § 12-1364 caveat that “[t]his section shall not be
construed as altering, prohibiting or restricting present or future contracts
. . . that may provide for attorney fees.” Cf. Jordan v. Burgbacher, 180 Ariz.
221, 229 (App. 1994) (recovery of attorneys’ fees on other legal bases, such
as A.R.S. § 12-341.01, is not inconsistent with contractual provision
contemplating fee award under certain circumstances).
¶14 Del Webb contends for the first time on appeal that A.R.S. §
12-1366 precluded a fee award to the original homeowners because “when
sales contracts provide homeowners with access to arbitration,” the PDA
does not apply. See A.R.S. § 12-1366(A)(1) (West 2008) (PDA inapplicable
“[i]f a contract for the sale of a dwelling . . . contain[s] commercially
reasonable alternative dispute resolution procedures.”). Del Webb did not
preserve this argument in the superior court, and we therefore deem it
waived. See Winters, 207 Ariz. at 177, ¶ 13.
¶15 We affirm the superior court’s award of attorneys’ fees and
expert costs to Plaintiffs.
II. Taxable Costs
¶16 Finally, Del Webb challenges the inclusion of $231,913 in
copying costs in the award of taxable costs. “Whether a particular
expenditure qualifies as a taxable cost is a question of law that we review
de novo.” Reyes v. Frank’s Serv. & Trucking, LLC, 235 Ariz. 605, 608, ¶ 6
(App. 2014).
¶17 Plaintiffs asked the court to award “copy costs in service of
PDA notices, pleadings, discovery, correspondence to counsel, clients, and
experts, depositing documents into depository ordered by the Court,
preparing and forwarding documents to experts from lot files, job files
and defense experts, and in preparing trial exhibits where scanned copies
of paper documents were used.” Plaintiffs cited A.R.S. § 12-332(A)(6) as
authority for their request, which includes within the definition of taxable
costs disbursements made or incurred by agreement of the parties and
court-ordered disbursements. Over Del Webb’s objection, the superior
court awarded the full amount of taxable costs requested.
6 Neither the original homeowners nor Del Webb sought to compel
alternative dispute resolution in lieu of litigation.
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ZELKIND, et al. v. DEL WEBB, et al.
Decision of the Court
¶18 The record reflects that the parties agreed to use a specified
entity “as the document depository and site for case-related events,
including depositions, mediation sessions, and in-person meet and confer
purposes.” The issue before us, though, is not document depository fees.
And an agreement to use a document depository is not synonymous with
an agreement to incur copying costs. Indeed, the purpose of a document
depository is to eliminate or significantly reduce the need to reproduce
records. At oral argument, Del Webb explained that the parties agreed to
use the depository “because that way we don’t have to make copies for
everybody” and noted it was designed to be “a cost savings, not an
expense.” Moreover, many of the copying cost categories Plaintiffs
identified in their motion had nothing to do with the document
depository and, in fact, pre-dated its existence.
¶19 Our de novo review does not support the inclusion of
copying costs based on an agreement of the parties or a court order.7 We
therefore vacate the award of copying costs to Plaintiffs in the sum of
$231,913. Our resolution of this issue obviates the need to address Del
Webb’s contention that A.R.S. § 12-333 prohibits an award of copying
costs.8
III. Rule 68 Sanctions
¶20 Del Webb made pretrial offers of judgment that only a few
Plaintiffs accepted. Del Webb contends that if it succeeds on appeal —
even if only on the copying cost issue — we must remand for the superior
court to redetermine its entitlement to Rule 68 sanctions. Because we have
vacated the $231,913 award for copying costs, some of the Plaintiffs’
judgments may no longer qualify as more favorable than the offers of
judgment. See Ariz. R. Civ. P. 68(g) (party who rejects offer and does not
obtain a more favorable judgment must pay sanctions for subsequently
7 Moreover, it appears Plaintiffs’ reply in support of their fee/cost
motion may have led the court to believe that the document depository
had been ordered by the previous judge. Plaintiffs stated: “As for copy
costs, this case involved a court ordered document depository.” Our
review of the record reveals no court order regarding the document
depository.
8 Under A.R.S. § 12-333: “A copy of a paper not required by law to be
copied shall not be allowed and taxed as costs. If a party or attorney takes
out copies of any pleadings or papers in an action, it shall be at his own
expense, and a charge for the copies shall not be allowed as costs.”
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ZELKIND, et al. v. DEL WEBB, et al.
Decision of the Court
incurred expert fees and costs). We therefore remand to the superior
court for reconsideration of Del Webb’s entitlement to Rule 68 sanctions.
CONCLUSION
¶21 For the foregoing reasons, we affirm the judgment of the
superior court with the exception of its award of $231,913 in copying costs,
which we vacate. We remand for issuance of a revised judgment that does
not include the copying costs and for further proceedings relating to Del
Webb’s request for Rule 68 sanctions. Because each side has partially
prevailed on appeal, we decline to award fees or taxable costs to either
side.
:RT
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