KB Home Tucson, Inc. v. Charter Oak Fire Insurance

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
KB HOME TUCSON, INC., an Arizona corporation, Appellant,
v.
THE CHARTER OAK FIRE INSURANCE COMPANY; TRAVELERS
PROPERTY CASUALTY INSURANCE COMPANY; DRACHMAN LEED
INSURANCE INC., an Arizona corporation; AMERICAN E&S
INSURANCE BROKERS OF CALIFORNIA, INC., a foreign corporation,
Appellees.
No. 1 CA-CV 12-0681
FILED 11-25-2014
Appeal from the Superior Court in Maricopa County
No. CV2007-007842 and CV2008-017049
(Consolidated)
The Honorable Mark H. Brain, Judge
AFFIRMED IN PART, REVERSED IN PART AND REMANDED
COUNSEL
Dioguardi Flynn, LLP, Scottsdale
By John P. Flynn and Peter J. Moolenaar
Counsel for Appellant
Morales Fierro & Reeves, Phoenix
By William C. Reeves
Counsel for Appellees Charter Oak and Travelers
The Hassett Law Firm, PLC, Phoenix
By Myles P. Hassett and Julie K. Moen
Counsel for Appellee Drachman Leed
Pak & Moring, PLC, Scottsdale
By S. Gregory Jones
Counsel for Appellee American E&S
DeCiancio Robbins, PLC, Tempe
By Christopher Robbins
Counsel for Amicus Curiae IIABAZ
Lorber Greenfield & Polito, LLP, Tempe
By Holly P. Davies
Counsel for Amicus Curiae Leading Builders of America
Newmeyer & Dillion, LLP, Newport Beach, CA
By Alan H. Packer, Bonnie T. Roadarmel, Clayton T. Tanaka
and Susannah M. Eichele
Co-Counsel for Amicus Curiae Leading Builders of America
OPINION
Judge Kent E. Cattani delivered the opinion of the Court, in which
Presiding Judge Maurice Portley and Judge John C. Gemmill joined.
C A T T A N I, Judge:
¶1 KB Home Tucson, Inc. (“KB”) appeals from the entry of
summary judgment in favor of The Charter Oak Fire Insurance Company
and Travelers Property Casual Insurance Company (collectively, “Charter
Oak”) on KB’s claims for declaratory relief, breach of contract, and breach
of the covenant of good faith and fair dealing. KB also appeals from the
entry of summary judgment in favor of Drachman Leed Insurance, Inc.
(“Drachman Leed”) and American E&S Insurance Brokers of California,
Inc. (“American E&S”) on KB’s claims for negligence, negligent
misrepresentation, and fraud. All of the claims relate to whether KB was
entitled to coverage as an “additional insured” under insurance policies
issued to a subcontractor hired by KB. For reasons that follow, we reverse
the entry of judgment in favor of Charter Oak, but affirm the entry of
judgment in favor of Drachman Leed and American E&S.
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
FACTS AND PROCEDURAL BACKGROUND
¶2 KB hired GRG Construction Co., Inc. (“GRG”) in May 1999 to
perform work at a residential subdivision in Tucson. The contractual
relationship continued for approximately four years. Charter Oak
provided liability coverage for GRG, including “additional insured”
coverage for any person or entity GRG was obligated to cover by virtue of
a written contract or agreement. Drachman Leed and American E&S were
GRG’s insurance agents/brokers who—at GRG’s direction—issued
Certificates of Insurance requested by KB relating to GRG’s policy with
Charter Oak and with another insurer, Evanston Insurance Company
(“Evanston”).
¶3 Charter Oak issued two annual general liability policies to
GRG during the relevant time periods. The policies included a blanket
additional insured endorsement, which provided as follows:
WHO IS AN INSURED – (Section II) is amended to include
any person or organization you are required to include as an
additional insured on this policy by a written contract or
written agreement in effect during this policy period and
executed prior to the occurrence of any loss.
¶4 GRG’s written contracts with KB provided, in pertinent part:
7. All work and materials must be acceptable to and
comply with all rules, regulations and requirements of [KB].
7.1 [GRG] shall protect and indemnify [KB] from any
claims, liability, or losses suffered by anyone wholly or
partially through the negligence of [GRG] or any of his agents
or employees. [KB] shall retain a reasonable portion of all
payments due [GRG] until such claims are settled or suitable
indemnity arrangements acceptable to [KB] are provided by
[GRG].
8. [GRG] shall purchase and pay for all employer’s
liability and workman’s compensation insurance required by
the State in which this work is performed and shall also
purchase and pay for public liability, property damage,
products liability, and product performance insurance [in
specified amounts]. Certificates of coverage or copies of such
1 The 1999 agreement contained two paragraphs numbered “7.”
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
policies shall be furnished to [KB] prior to the commencement
of work.
¶5 After the parties signed the contract, KB sent annual letters to
GRG describing its insurance requirements. These letters detailed the
minimum coverage mandated by KB and stated that KB “must be named
as an Additional Insured on the General Liability Policy.” In response,
GRG directed Drachman Leed to provide KB a copy of Charter Oak’s
above-described blanket additional insured endorsements, together with
certificates of liability insurance listing KB as an additional insured for
COMMERCIAL GENERAL LIABILITY and AUTOMOBILE insurance.
¶6 Evanston also issued two annual policies insuring GRG for
the relevant time periods. Drachman Leed provided KB with certificates of
liability insurance for GRG’s Evanston policies, obtained through
producer/broker American E&S. These informational certificates showed
KB as an additional insured “As per written contract,” and named KB as
“certificate holder,” stating, “Any and all jobs. Certificate Holder is an
Additional Insured as per written contract, General Liability Coverage, as
respect work performed by the named insured.”
¶7 The Evanston policies similarly contained blanket additional-
insured endorsements, which referenced the “Name of Person or
Organization: AS PER WRITTEN CONTRACT,” and provided:
WHO IS AN INSURED (Section II) is amended to include as
an insured the person or organization shown in the Schedule,
but only with respect to liability arising out of “your Work”
for that insured by or for you.
¶8 In May 2001, the City of Tucson asserted a claim against KB
alleging deficiencies in streets and sidewalks within KB’s residential
subdivision project. KB sued GRG and other subcontractors for
reimbursement for repair costs and attorney’s fees incurred in defending
against the City’s claims. In February 2005, several homeowners in the
project sued KB for damage to their homes allegedly resulting from
construction defects. KB tendered its defense to Charter Oak on all of the
claims and to Evanston on the homeowners’ claims.
¶9 Charter Oak disclaimed coverage, stating that KB did not
qualify as an additional insured under the blanket additional-insured
endorsement because there was no written contract or agreement requiring
that GRG add KB as an additional insured. Similarly, Evanston disclaimed
coverage for the homeowners’ suit because the underwriting file and
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
policies did not contain an additional-insured endorsement, and because
any such endorsement would not have conveyed additional-insured
coverage in the absence of a written contract requiring that KB Home be
made an additional insured.
¶10 KB filed a complaint against Evanston for declaratory relief,
breach of contract, and breach of the implied covenant of good faith and
fair dealing. KB subsequently amended its complaint to include claims
against Drachman Leed and American E&S for negligence, negligent
misrepresentation, and fraud.2 KB also filed a separate action against
Charter Oak for declaratory relief, breach of contract, and breach of the
implied covenant of good faith and fair dealing. In January 2010, KB settled
its claims against Evanston, and the superior court subsequently
consolidated the Charter Oak, Drachman Leed, and American E&S actions.
¶11 Charter Oak, Drachman Leed, and American E&S filed
separate motions for summary judgment on all of KB’s claims. Among
other arguments, Charter Oak asserted that KB did not qualify as an
additional insured under the policies issued to GRG. Drachman Leed
argued primarily that (1) the firm did not owe a duty of care to KB because
KB was not a client; and (2) the firm provided accurate insurance
information to KB and, therefore, did not misrepresent coverage or commit
fraud. American E&S argued that KB had not shown: (1) a
misrepresentation of coverage; (2) that American E&S was aware of the
falsity of any alleged misrepresentation; or (3) KB’s right to rely on the
alleged misrepresentations. American E&S also joined Drachman Leed’s
motion for summary judgment. After briefing and oral argument, the
superior court ruled in favor of Charter Oak, Drachman Leed, and
American E&S, and directed entry of final judgment in favor of all three
defendants.
¶12 KB timely appealed. We have jurisdiction under Article 6,
Section 9, of the Arizona Constitution and Arizona Revised Statutes
(“A.R.S.”) sections 12-120.21(A)(1) and -2101(A)(1).3
2 The claims against Drachman Leed and American E&S related only
to the Evanston policies.
3 Absent material revisions after the relevant date, we cite a statute’s
current version.
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
DISCUSSION
¶13 KB challenges the grant of summary judgment in favor of
each named defendant.4 Summary judgment is appropriate only if there
are no genuine issues as to any material fact and the moving party is
entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(a); Orme Sch. v.
Reeves, 166 Ariz. 301, 305, 802 P.2d 1000, 1004 (1990).
¶14 We review de novo the superior court’s grant of summary
judgment, viewing the facts in the light most favorable to the party against
whom judgment is entered. United Bank of Arizona v. Allyn, 167 Ariz. 191,
193, 195, 805 P.2d 1012, 1014, 1016 (App. 1990). We will affirm summary
judgment if it is correct for any reason supported by the record, even if not
explicitly considered by the superior court. See Mutschler v. City of Phx., 212
Ariz. 160, 162, ¶ 8, 129 P.3d 71, 73 (App. 2006).
I. Charter Oak.
¶15 Charter Oak’s obligation to provide additional-insured
general liability coverage to KB turns on whether GRG was required under
a written contract or agreement to include KB as an additional insured. KB
argues the superior court erred by finding that there was no such contract
or agreement. KB asserts in particular that its written instructions to GRG
regarding additional-insured coverage, coupled with GRG’s conduct in
conformity with those instructions, is evidence from which a reasonable
fact-finder could find the existence of an “executed” “written agreement”
between KB and GRG. KB further asserts that a reasonable fact-finder could
conclude that GRG’s contract with GRG obligated GRG to comply with
KB’s “rules, regulations and requirements,” which, as evidenced by other
writings, included an agreed-upon requirement that KB be named as an
additional insured under GRG’s insurance policies. In contrast, Charter
Oak argues that coverage was not contemplated under GRG’s contract with
KB, and further asserts that during the life of the contract, KB “concocted a
plan of surreptitiously attempting to supplement its admittedly (and
strategically) deficient contract” in an effort to “unilaterally modify the
subcontract.”
¶16 We conclude that a reasonable fact-finder could find that KB
had an “executed” written agreement with GRG requiring GRG to provide
4 Independent Insurance Agents and Brokers of Arizona and Leading
Builders of America submitted amicus curiae briefs, which this court has
considered.
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
additional-insured coverage. Although there is not a specific document
signed by both parties, written documents prepared by or at the direction
of KB and GRG establish such an agreement. KB’s correspondence makes
clear the requirement that GRG add KB as an additional insured on its
general liability policies, and GRG carried out and completed the
agreement by directing its agents to provide certificates of insurance listing
KB as an additional insured. See Black’s Law Dictionary (9th ed. 2009)
(defining “execute” as “To perform or complete (a contract or duty)” or as
“To make (a legal document) valid by signing; to bring (a legal document)
into its final, legally enforceable form”).
¶17 Moreover, even assuming the above-described
correspondence did not establish the existence of a written agreement,
GRG’s signed contract with KB specifically required that GRG comply with
KB’s “rules and requirements.” In light of the subsequently executed
written documents evidencing an additional-insured requirement, we
conclude that there is evidence from which a reasonable juror could find
that the subsequently-discussed rules and requirements were incorporated
into the contract.
¶18 We note that under GRG’s insurance policies with Charter
Oak, GRG was not required to obtain Charter Oak’s permission before
obligating Charter Oak to provide additional-insured coverage to
contractors for which GRG was providing services. The policies instead
contemplated that Charter Oak would make an after-the-fact assessment
(through evidence of a written contract or agreement) of whether GRG was
obligated to provide additional-insured coverage to such contractors.
¶19 GRG has never disputed that it was required, per the written
subcontract and KB’s insurance requirements, to add KB as an additional
insured on GRG’s general liability insurance policies. A GRG
representative in fact testified that GRG understood that it needed to
comply with KB’s insurance requirements as a condition to payment under
its contract with KB and as a condition to continuing to work with KB. But
even without such testimony, the subcontract at issue mandated
compliance with KB’s rules and requirements. And the written
correspondence between KB and GRG, coupled with GRG’s conduct in
response to that correspondence, clearly evidenced an understanding and
agreement that one of those requirements was that KB be named as an
additional insured on GRG’s Charter Oak policies.
¶20 KB did not “unilaterally modify” its contract with GRG by
clarifying the additional-insured requirement. The contract specifically
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
noted a duty to comply with other “rules and requirements,” and nothing
about GRG’s response to KB’s correspondence detailing the additional-
insured requirement suggests that GRG was surprised in any way or
believed that an additional-insured requirement was beyond the scope of
their contractual agreement. Moreover, GRG’s contract with Charter Oak
specifically contemplated that additional-insured coverage would be
provided in connection with GRG’s work for any number of contractors.
Thus, the additional-insured requirement did not unilaterally change the
responsibilities of KB or GRG or otherwise modify their subcontract.
¶21 Nor did KB’s exercise of the “rules, regulations, and
requirements” provision of the contract alter the nature of Charter Oak’s
relationship with and responsibilities to GRG. As noted previously,
Charter Oak did not require pre-approval to add additional insureds to its
policy with GRG. Charter Oak thus understood that GRG would be adding
as additional insureds individuals or entities that hired GRG to perform
work on their behalf. And the additional-insured language specified that
Charter Oak was only providing coverage “as respect work performed by
the named insured [GRG].” Thus, the “requirements” referenced in GRG’s
contract with KB and spelled out in KB’s correspondence with GRG did not
unfairly deprive Charter Oak of any anticipated right under its insurance
policies with GRG or expand its obligations to provide coverage based on
GRG’s alleged negligence.
¶22 Charter Oak nevertheless asserts that the superior court
correctly applied Lennar Corp. v. Auto-Owners Ins. Co., 214 Ariz. 255, 151
P.3d 538 (App. 2007), in finding that KB was not entitled to coverage. In
Lennar, this court held that “the requirement that [a contractor] indemnify
[a developer] is not an agreement that [the contractor] obtain insurance that
could provide a defense for [the developer].” Id. at 267, ¶ 45, 151 P.3d at
550. But the contract at issue in Lennar did not contain a provision
specifying additional obligations; nor were there writings and conduct
evidencing an agreement to add the contracting developer as an additional
insured on the contractor’s insurance policies. Thus, Lennar’s holding is not
controlling here.5
5 In Lennar, this court noted that this type of dispute can be avoided if
a contract between a contractor and subcontractor includes more specific
language delineating additional-insured status. 214 Ariz. at 268 n.15, 151
P.3d at 551 n.15. But the KB–GRG contract predated the Lennar decision by
several years.
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
¶23 Although Arizona appellate courts have not addressed the
issue before us, case law from other jurisdictions supports the conclusion
that KB was entitled to coverage in this case. For example, in Mid-Am
Builders, Inc. v. Federated Mutual Ins. Co., a subcontractor’s insurance
company conditioned additional-insured endorsements to the
subcontractor’s policy on the existence of a “written contract” requiring the
subcontractor to name the other party as an additional insured. 194 F.
Supp. 2d 822, 824 (C.D. Ill. 2002). The contract between the subcontractor
and the contractor did not contain such a requirement, but a
contemporaneous transmittal letter asked the subcontractor to issue a
certificate of insurance naming the general contractor as an additional
insured. Id. at 823–24. The subcontractor thereafter called its insurance
agent to request that the general contractor be added as an additional
insured, and the subcontractor provided the general contractor with the
requested certificate of insurance. Id. at 824. The district court found that
notwithstanding the “written contract” requirement in the endorsement,
the general contractor was entitled on summary judgment to additional-
insured status because the transmittal letter, together with the subcontract,
provided sufficient evidence of mutual assent to allow for additional-
insured status. See id. at 827 (noting that under Illinois law, when
instruments are executed together as part of one transaction or agreement,
they are to be construed as a single instrument).
¶24 Here, additional-insured status was conditioned on the
existence of a written contract or a written agreement, which as detailed
above could be established without a specific document signed by both
parties. Moreover, although KB’s correspondence regarding rules and
requirements was not contemporaneous with the contract, the contract
referenced such rules and requirements. Thus, even assuming the written
documents do not establish the existence of a separate written agreement,
under Mid-Am Builders, the subsequent correspondence would be relevant
to establish that the “rules and requirements” provision in KB’s contract
with GRG included an additional-insured requirement. See also Mt. Hawley
Ins. Co. v. Robinette Demolition, Inc., 994 N.E.2d 973, 983, ¶ 50 (Ill. App. Ct.
2013) (stating that certificates of insurance provide additional support for
finding a written agreement that the parties intended to name other entities
as additional insureds).6
6 Other courts have rejected claims to additional-insured status under
arguably similar circumstances. See, e.g., Certain Underwriters at Lloyd’s of
London v. Am. Safety Ins. Servs., Inc., 702 F. Supp. 2d 1169 (C.D. Cal. 2010).
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
¶25 In sum, because there was written evidence from which a fact-
finder could conclude either that (1) there was a written agreement between
KB and GRG requiring GRG to include KB as an additional insured on
GRG’s general liability policies with Charter Oak, or (2) the “rules and
requirements” provision in GRG’s written contract with KB contemplated
the type of requirement subsequently evidenced by written correspondence
and completed conduct of the parties. Accordingly, we reverse the
summary judgment granted in favor of Charter Oak.
II. Drachman Leed and American E&S.
¶26 KB argues that the superior court erred by granting summary
judgment on KB’s negligence, negligent misrepresentation, and fraud
claims against Drachman Leed and American E&S. For reasons that follow,
we affirm the superior court’s rulings on those claims.
A. Negligence.
¶27 To establish negligence, a plaintiff must prove four elements:
(1) the defendant owed a duty of care to the plaintiff; (2) the defendant
breached that duty; (3) the breach proximately caused the plaintiff’s injury;
and (4) resulting damages. Gipson v. Kasey, 214 Ariz. 141, 143, ¶ 9, 150 P.3d
228, 230 (2007). An action for negligence cannot be maintained in absence
of a duty owed by a defendant to a plaintiff. Id. at ¶ 11.
¶28 Here, KB could not establish a claim for negligence against
Drachman Leed and American E&S because they did not owe a duty of care
to KB. Absent special circumstances in which a foreseeable and specific
third party is injured, insurance producers/agents owe no duty of care to
third-party non-clients. Napier v. Bertram, 191 Ariz. 238, 242, ¶ 15, 954 P.2d
1389, 1393 (1998). Although such special circumstances may include an
enhanced relationship between the insurance producer/agent and the non-
client, the record here does not reflect such a relationship. Instead,
Drachman Leed simply provided insurance information regarding GRG’s
policies in a normal business transaction through certificates and
additional-insured endorsements to KB. See Ferguson v. Cash, Sullivan &
Cross Ins. Agency, Inc., 171 Ariz. 381, 385, 831 P.2d 380, 384 (App. 1991). See
But those cases, like Lennar, do not involve the type of contractual provision
at issue here referencing additional rules and requirements, and they do not
address correspondence from or at the direction of both parties evidencing
an agreement to add a contractor as an additional insured on the
subcontractor’s insurance policy.
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
also Gipson, 214 Ariz. at 145, ¶ 19, 150 P.3d at 232; Ferguson, 171 Ariz. at 385,
831 P.2d at 384 (noting that the mere existence or discussion of third parties
with the insured does not create a special relationship with the agent).
¶29 Moreover, even assuming Drachman Leed and/or American
E&S owed some type of duty to KB as a third-party non-client, KB has not
established a breach of duty, because Drachman Leed and American E&S
simply provided certificates of insurance requested by their insured, but
with the following proviso:
THIS CERTIFICATE IS ISSUED AS A MATTER OF
INFORMATION ONLY AND CONFERS NO RIGHTS UPON
THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES
NOT AMEND, EXTEND OR ALTER THE COVERAGE
AFFORDED BY THE POLICIES BELOW.
KB was provided a copy of the relevant insurance policies, and KB has not
established that the defendants provided inaccurate information. Thus, the
superior court properly granted summary judgment in favor of Drachman
Leed and American E&S on KB’s negligence claim.
B. Negligent Misrepresentation.
¶30 “A claim for relief for negligent misrepresentation is one
governed by the principles of the law of negligence. Thus, there must be ‘a
duty owed and a breach of that duty before one may be charged with the
negligent violation of that duty.’” Van Buren v. Pima Cmty. Coll. Dist. Bd.,
113 Ariz. 85, 87, 546 P.2d 821, 823 (1976) (citation omitted).7 Here, as
described above, neither Drachman Leed nor American E&S owed a duty
to KB, a third-party non-client, and KB did not establish a
misrepresentation. See supra ¶¶ 24–27. Under these circumstances, the
superior court appropriately granted summary judgment against KB on
this claim.
7 The elements of negligent misrepresentation are: (1) the defendant
provided false information in a business transaction; (2) the defendant
intended for the plaintiff to rely on the incorrect information or knew that
it reasonably would rely; (3) the defendant failed to exercise reasonable care
in obtaining or communicating the information; (4) the plaintiff justifiably
relied on the incorrect information; and (5) resulting damage. Mur-Ray
Mgmt. Corp. v. Founders Title Co., 169 Ariz. 417, 422–24, 819 P.2d 1003, 1008–
09 (App. 1991).
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KB HOME v. CHARTER OAK, et al.
Opinion of the Court
C. Fraud.
¶31 To prove fraud, a plaintiff must establish: “(1) [a]
representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge
of its falsity or ignorance of its truth; (5) [the speaker’s] intent that it should
be acted upon by the person and in the manner reasonably contemplated;
(6) the hearer’s ignorance of its falsity; (7) [the hearer’s] reliance on its truth;
(8) [the hearer’s] right to rely thereon; and (9) [the hearer’s] consequent and
proximate injury.” Nielson v. Flashberg, 101 Ariz. 335, 338–39, 419 P.2d 514,
517–18 (1966).
¶32 We agree with the superior court that the certificates and
endorsements delivered by Drachman Leed and American E&S truthfully
indicated that KB was an additional insured if it had a written contract as
required by the relevant insurance policies. Thus, KB’s fraud claim fails for
lack of a false statement.
¶33 KB argues that it established the requisite false statement
because the certificate issued by Drachman Leed that referenced the
additional-insured endorsement was not authorized by Evanston and was
not in Evanston’s underwriting file. But Evanston’s denial of coverage was
not based on those facts. Evanston’s denial letter stated that the
endorsement could not have conveyed additional-insured coverage
because the KB–GRG subcontract “does not set forth any requirement that
KB Home be made an additional insured, or be named as an additional
insured, under the liability policy GRG was to procure.” Accordingly, the
superior court correctly entered summary judgment in Drachman Leed’s
favor on the fraud claim. Because the judgment was correct on this basis,
we do not address KB’s arguments regarding reliance and damages.
¶34 As to the judgment in favor of American E&S, KB
acknowledged being unaware of any involvement by American E&S in
GRG’s policies with Evanston. As such, KB cannot now successfully claim
that American E&S made any representations to KB, much less false
representations on which KB relied. See St. Joseph’s Hosp. & Med. Ctr., 154
Ariz. 307, 312, 742 P.2d 808, 813. Thus, the superior court did not err by
granting summary judgment in favor of American E&S.
III. Attorney’s Fees & Costs.
¶35 KB has requested its attorney’s fees on appeal pursuant to
A.R.S. § 12-341.01(A) and ARCAP 21(c). In our discretion, we award KB its
reasonable attorney’s fees relating to its arguments against Charter Oak
upon compliance with ARCAP 21. American E&S also requests attorney’s
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fees on appeal pursuant to A.R.S. § 12-341.01(A). Because KB’s tort claims
against American E&S did not arise out of contract, we deny American
E&S’s fee request. See Barmat v. John & Jane Doe Partners A-D, 155 Ariz. 519,
524, 747 P.2d 1218, 1223 (1987). As the successful parties on appeal, KB is
entitled to its costs relating to its claims against Charter Oak, and Drachman
Leed and American E&S are entitled to their costs upon compliance with
ARCAP 21.
CONCLUSION
¶36 For the foregoing reasons, we reverse the superior court’s
grant of summary judgment in favor of Charter Oak; vacate the court’s
award of costs, fees, and Rule 68 sanctions to Charter Oak; and remand for
further proceedings consistent with this decision. We affirm the court’s
grant of summary judgment in favor of Drachman Leed and American E&S.
:gsh
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