Phillips v. Garcia

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
ROBERT PHILLIPS, Plaintiff/Appellee,
v.
CRAIG E. GARCIA, Defendant/Appellant.
No. 1 CA-CV 14-0239
FILED 6-9-2015
Appeal from the Superior Court in Maricopa County
No. CV2012-090337
The Honorable David King Udall, Judge
SPECIAL ACTION JURISDICTION ACCEPTED, RELIEF GRANTED
COUNSEL
Stein and Stein, P.C., Mesa
By Henry M. Stein
Co-Counsel for Defendant/Appellant
Law Office of Dennis A. Sever, PLLC, Mesa
By Dennis A. Sever
Co-Counsel for Defendant/Appellant
Slack-Méndez Law Firm, Tempe
By Charles J. Slack-Méndez
Counsel for Plaintiff/Appellee
PHILLIPS v. GARCIA
Opinion of the Court
OPINION
Presiding Judge John C. Gemmill delivered the opinion of the Court, in
which Judge Kenton D. Jones and Judge Donn Kessler joined.
G E M M I L L, Judge:
¶1 In this opinion we address an aspect of the procedure
established by the Arizona Rules of Civil Procedure for entry of an award
and judgment after a superior court arbitration. Defendant Craig E. Garcia
appeals the superior court’s denial of his motion to dismiss the arbitrator’s
award. We conclude that we lack appellate jurisdiction, but in our
discretion we exercise special action jurisdiction and grant relief by
ordering dismissal of the action without prejudice.
PROCEDURAL BACKGROUND
¶2 In January 2012, Plaintiff Robert Phillips filed a complaint
against Garcia in Maricopa County Superior Court alleging breach of
contract, breach of the implied duty of good faith and fair dealing, and
fraud/misrepresentation. The superior court ordered that the case was
subject to compulsory arbitration and appointed an attorney as arbitrator.
The matter was arbitrated in December 2012 and the arbitrator issued a
ruling that was filed with the court on January 3, 2013. Phillips’s counsel
prepared and submitted to the arbitrator a document entitled “Judgment”
(hereinafter “the Judgment”). The arbitrator signed the Judgment on
January 29, 2013, and it was filed with the court the same day. The
Judgment was not signed by a judge or commissioner of the superior court.
The Judgment, in pertinent part, declared that
[t]his matter having come on for arbitration on December 18,
2012, and the parties having presented their evidence and
rested, and based on the Arbitrator’s ruling of January 3, 2013,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
1. Plaintiff Robert Phillips shall have and recover from
Defendant Craig E. Garcia the sum of $11,967.00, together
with interest thereon at the rate of 4.25% per annum until
paid.
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PHILLIPS v. GARCIA
Opinion of the Court
2. Plaintiff Robert Phillips shall have and recover from
Defendant Craig E. Garcia attorney’s fees and costs in the sum
of $8,687.00, together with interest thereon at the rate of 4.25%
per annum until paid.
¶3 Nothing further was filed with the court until November
2013, approximately 10 months later, when Phillips filed a petition
requesting that the court order Garcia to appear as a judgment debtor
pursuant to Arizona Revised Statute (“A.R.S.”) § 12-1632. The petition
further provided that “[a] Judgment has been entered against this Judgment
Debtor and docketed.” (Emphasis added).
¶4 Garcia moved to dismiss the arbitration award because no
application for entry of judgment was timely filed within 120 days after the
arbitrator’s decision, in accordance with Arizona Rule of Civil Procedure
(Rule) 76(d). After numerous pleadings by the parties, the court denied
Garcia’s motion in a signed order filed February 26, 2014. Garcia filed his
notice of appeal on March 7, 2014.
DISCUSSION
I. Jurisdiction
¶5 Garcia asserts this court has jurisdiction over this appeal
under A.R.S. §§ 12-2101(A)(2), -(A)(3), and –(A)(4).1 This court, however,
lacks appellate jurisdiction because a challenge to a trial court’s denial of a
motion to dismiss is a non-appealable interlocutory order. See Engle Bros.,
Inc. v. Superior Court, 23 Ariz. App. 406, 407, 533 P.2d 714, 715 (App. 1975);
see also N. Propane Gas Co. v. Kipps, 127 Ariz. 522, 525, 622 P.2d 469, 472
(1980). No final, appealable judgment has been entered.
¶6 Although this court lacks appellate jurisdiction, we may
exercise our discretionary special action jurisdiction under appropriate
circumstances, even when the parties have not requested such relief. See
A.R.S. § 12-120.21(A)(4) (providing court of appeals has “[j]urisdiction to
hear and determine petitions for special actions brought pursuant to the
rules of procedure for special actions, without regard to its appellate
jurisdiction.”); Danielson v. Evans, 201 Ariz. 401, 411, ¶ 35, 36 P.3d 749, 759
1 Unless otherwise specified, we cite the current versions of statutes and
rules when no material revisions have been enacted since the events in
question.
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PHILLIPS v. GARCIA
Opinion of the Court
(App. 2001) (court sua sponte accepted special action jurisdiction after it
determined it lacked appellate jurisdiction); Arvizu v. Fernandez, 183 Ariz.
224, 227, 902 P.2d 830, 833 (App. 1995) (court treated appeal from the trial
court’s paternity testing order as a special action and exercised special
action jurisdiction). Special action jurisdiction is proper when a party has
no “equally plain, speedy, and adequate remedy by appeal,” Ariz. R.P.
Spec. Act. 1(a) or “in cases involving a matter of first impression, statewide
significance, or pure questions of law,” see Roman Catholic Diocese v. Superior
Court, 204 Ariz. 225, 227, ¶ 2, 62 P.3d 970, 972 (App. 2003) (internal
quotation omitted).
¶7 The issue Garcia raises on appeal is primarily a question of
law—requiring this court to interpret court rules and a statute. See Orme
Sch. v. Reeves, 166 Ariz. 301, 303, 802 P.2d 1000, 1002 (1990) (accepting
special action jurisdiction when the question is a pure issue of law that
requires neither factual review nor interpretation). Additionally, the
parties have briefed the issue and we have a complete record. We are
presented a legal issue of first impression, and judicial economy will be
served by a substantive ruling now. Therefore, in our discretion we accept
special action jurisdiction to consider whether the trial court erred by not
dismissing the case. See Ariz. R.P. Spec. Act. 1(a).
II. Merits
¶8 Garcia argues the trial court erred when it declined to dismiss
the arbitration award in accordance with Rule 76(d), which provides:
If no application for entry of judgment has been filed within
120 days from the date of the filing of the notice of decision,
and no appeal is pending, the case shall be dismissed.
According to Garcia, no true judgment was entered, no appeal filed, and
the 120 day period allowed by Rule 76(d) has expired; therefore, the action
must be dismissed. Phillips contends that the Judgment is a valid judgment
under Rule 76(a) and A.R.S. § 12-133(E), and Garcia did not appeal that
judgment. We first address whether a true judgment was entered.
A. A True Judgment Was Never Entered
¶9 This court reviews de novo the interpretation of rules and
statutes. M-11 Ltd. P’ship v. Gommard, 235 Ariz. 166, 168, ¶ 6, 330 P.3d 356,
358 (App. 2014). We look to the plain meaning of the language as the most
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PHILLIPS v. GARCIA
Opinion of the Court
reliable indicator of the construction and meaning. See State v. Hansen, 215
Ariz. 287, 289, ¶ 7, 160 P.3d 166, 168 (2007); New Sun Bus. Park, LLC v. Yuma
Cnty., 221 Ariz. 43, 46, ¶ 12, 209 P.3d 179, 182 (App. 2009). When the
language of a statute or rule is “clear and unequivocal, it is determinative
of the statute’s construction.” See Janson v. Christensen, 167 Ariz. 470, 471,
808 P.2d 1222, 1223 (1991).
¶10 Rule 76(a) provides:
Within ten days after completion of the hearing, the arbitrator
shall:
(1) render a decision;
(2) return the original superior court file by messenger
or certified mail to the Superior Court Clerk;
(3) notify the parties that their exhibits are available for
retrieval;
(4) notify the parties of the decision in writing (a letter
to the parties or their counsel shall suffice); and
(5) file the notice of decision with the court.
Within ten days of the notice of decision, either 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, an affidavit in support of attorneys’
fees if such fees are recoverable, and a verified statement of
costs. Within five days of receipt of the foregoing, the
opposing party may file objections. Within ten days of receipt
of the objections, the arbitrator shall pass upon the objections
and file one signed original award or other final disposition
with the Clerk of the Superior Court and on the same day
shall mail or deliver copies thereof to all parties or their
counsel.
(Emphasis added.) This rule grants the arbitrator the power to render a
decision, and the parties may then propose the form of award for the
arbitrator to sign. After the parties have been given an opportunity to voice
any objections, the arbitrator’s duty is to then “pass upon the objections and
file one signed original award or other final disposition” with the clerk of the
court. Ariz. R. Civ. P. 76(a) (emphasis added). Rule 76(b) directs that when
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PHILLIPS v. GARCIA
Opinion of the Court
no award is filed with the court, the notice of decision becomes the award
of the arbitrator.
¶11 This court has explained that the rules of arbitration “clearly
contemplate two separate filings” by the arbitrator: the “notice of decision”
and “the award.” See Bittner v. Superior Court (Galati), 182 Ariz. 434, 436,
897 P.2d 736, 738 (App. 1995).2 The arbitrator here filed a notice of decision
on January 3, 2013. Phillips’s counsel submitted the Judgment to the
arbitrator, and it was signed and filed on January 29. The Judgment, despite
its name, must be correctly understood to be the “award or other
disposition” under Rule 76(a), because it was signed by the arbitrator rather
than a superior court judge or commissioner. See Ariz. R. Civ. P. 58(a)
(generally, “judgments shall be in writing and signed by a judge or a court
commissioner duly authorized to do so”) (emphasis added).
¶12 Phillips also argues that, based on the “or other final
disposition” language in the rule, the mislabeling of the award should not
matter. In Bittner, the mislabeling of an award was analyzed in the context
of whether an appeal from an arbitrator’s award was untimely. Bittner, 182
Ariz. at 435, 897 P.2d at 737. An arbitrator first filed an “Arbitration
Award” with the court but the award failed to provide for costs to the
prevailing party. Id. at 436, 897 P.2d at 738. On the same day, the prevailing
party was instructed to submit an affidavit in support of attorney fees and
costs. Id. After the submittal, the arbitrator filed an “Amended Arbitration
Award,” which included costs. Id. The non-prevailing party appealed after
the “Amended Arbitration Award.” Id. The court held that the mislabeling
of the awards was not fatal to the appeal because the “Arbitration Award”
was not intended to be the final award from which a party could appeal
and given the absence of costs in that award, it would have been impossible
to treat it as final. Id. Based on Bittner, we agree that the mislabeling of an
arbitration award does not necessarily affect an award for purposes of an
appeal from the award. But the mislabeling of an award as a judgment does
not make it a true judgment under the rules.
¶13 Rule 76(c) confirms an additional step within the compulsory
arbitration procedure by providing that any party may, after the time for
2The rules analyzed in Bittner were the Uniform Rules of Procedure for
Arbitration. In 2001, the arbitration rules were transferred to their current
placement as Arizona Rules of Civil Procedure 72–77. See Sabori v. Kuhn,
199 Ariz. 330, 331, ¶ 6, 18 P.3d 124, 125 (App. 2001).
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PHILLIPS v. GARCIA
Opinion of the Court
appeal of the award has expired, “file to have judgment entered on the
award.” In other words, after an “award or other final disposition” is
signed and filed by the arbitrator, a separate judgment is to be entered by
the court. Ariz. R. Civ. P. 76; see also Ariz. R. Civ. P. 58(a). The rules
therefore contemplate three steps leading to a judgment: the arbitrator’s
notice of decision; the arbitrator’s award or other final disposition; and the
superior court’s entry of judgment.
¶14 Rule 74 also supports our understanding of Rule 76. Under
Rule 74, the arbitrator does not have the power to dispose of the case.
Rather, the arbitrator has the power to determine the admissibility of
evidence, decide the law and facts of the case, and make legal rulings. See
Ariz. R. Civ. P. 74(a)–(c). And, once the arbitrator signs the award, he or
she is divested of further jurisdiction. See Diggs Realty & Ins. v. Pertile, 114
Ariz. 85, 86, 559 P.2d 205, 206 (App. 1977) (holding that after an arbitrator
filed an award he was divested of jurisdiction and the case file was returned
to the superior court).
¶15 Phillips nonetheless contends that A.R.S. § 12-133(E) supports
his position that the award should be given the effect of a judgment in this
case. Section 12-133(E) provides:
The arbitration award shall be in writing, signed by a majority
of the arbitrators and filed with the court. The court shall
enter the award in its record of judgments. The award has the
effect of a judgment on the parties unless reversed on appeal.
(Emphasis added.) Phillips relies primarily on the italicized sentence to
equate the award (the Judgment) with a formal, final judgment. Garcia
argues that subsection (E) only applies to cases submitted to arbitration by
an agreement of reference pursuant to A.R.S. § 12-133(D)3 because if the
3 Subsection (D) provides
[r]egardless of whether or not suit has been filed, any case
may be referred to arbitration by an agreement of reference
signed by the parties or their respective counsel for both sides
in the case. The agreement of reference shall define the issues
involved for determination in the arbitration proceeding and
may also contain stipulations with respect to agreed facts,
issues or defenses. In such cases, the agreement of reference
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PHILLIPS v. GARCIA
Opinion of the Court
statute was applied to compulsory arbitration cases, it would conflict with
Rule 76(c). We are not persuaded by either argument, and we must
interpret § 12-133(E) in harmony with the Rules of Civil Procedure if
possible. See Hansen, 215 Ariz. at 289, ¶ 7, 160 P.3d at 168 (“Rules and
statutes ‘should be harmonized wherever possible and read in conjunction
with each other.’”) (citation omitted); see also Evenstad v. State, 178 Ariz. 578,
582, 875 P.2d 811, 815 (App. 1993) (“[W]hen we are considering the
interpretation and application of statutes, we do not believe we can be
limited to the arguments made by the parties if that would cause us to reach
an incorrect result.”).
¶16 In order “[t]o harmonize a rule and a statute, a court should
consider the purpose each is meant to serve.” State ex rel. McDougall v.
Superior Court, 173 Ariz. 385, 387, 843 P.2d 1277, 1279 (App. 1992). Section
12-133 creates the system of compulsory non-binding arbitration and
“mandates the arbitration of certain cases filed in the superior court.” Graf
v. Whitaker, 192 Ariz. 403, 405, ¶ 6, 966 P.2d 1007, 1009 (App. 1998). The
statute relies on “judicial rulemaking to implement a workable arbitration
scheme.” Id. at 403, 406, ¶ 13, 966 P.2d at 1010. When a dispute is within
the jurisdictional dollar amount, it is subject to compulsory non-binding
arbitration. A.R.S. § 12-133(A). Rules 72 through 77 “govern the
procedure” for compulsory arbitrations, see Graf, 192 Ariz. at 405, ¶ 7, 966
P.2d at 1009, and thus supplement the statute. Cf. State ex rel. Collins v.
Seidel, 142 Ariz. 587, 591, 691 P.2d 678, 682 (1984) (explaining that the court
will “recognize ‘statutory arrangements which seem reasonable and
workable’ and which supplement the rules we have promulgated”)
(citation omitted). Harmonizing Rules 76 and 58(a) with A.R.S. § 12-133(E),
we conclude that entry of a true judgment requires an affirmative act by the
court. Here, there was no affirmative act by the court because no party
requested entry of a judgment.
¶17 As the court held in Graf, we conclude Rule 76 “does not
frustrate but rather advances the intent behind the statute.” Graf, 192 Ariz.
at 407, ¶ 14, 966 P.2d at 1011. We have considered the purpose each is meant
to serve and have avoided an interpretation that would render portions of
the statute or rules meaningless or of no effect. See id.; see also State v. Clifton
Lodge No. 1174, Benevolent & Protective Order of Elks, 20 Ariz. App. 512, 513,
514 P.2d 265, 266 (App. 1973) (“Courts must avoid construction of statutes
which would render them meaningless or of no effect.”) (citation omitted).
shall take the place of the pleadings in the case and shall be
filed of record.
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PHILLIPS v. GARCIA
Opinion of the Court
To require a party in a compulsory arbitration proceeding to request entry
of judgment by the court does not render any portion of § 12-133(E)
meaningless. Rules 76 and 58(a) supplement the statute by clarifying that
the court must enter judgment and any party may request the court to do
so.
¶18 There is an additional reason we reject Phillips’s argument
that A.R.S. § 12-133(E) creates a self-executing conversion of an arbitrator’s
award into a true judgment. Prior to a 2007 change in the rules, the
following provision was included in the rules:
Legal Effect of Award or Other Final Disposition. Upon
expiration of the time for appeal and if no appeal has been
taken, the arbitrator’s award or other final disposition shall
become binding as a judgment of the Superior Court and shall
be entered in the judgment docket.
See Ariz. R. Civ. P. 75(c) (West 2007). This provision was removed from the
rules in 2007 and the provision in current Rule 76(c) requiring a party to
apply for entry of judgment was created. See Ariz. R. Civ. P. 76(c) (West
2008). This rulemaking history confirms that the Arizona Supreme Court
intended by these rules to require an affirmative act by the court to enter
the formal judgment. No such affirmative act occurred here and no true
judgment was entered.
B. Dismissal of the Action is Required Under Rule 76(d)
¶19 Garcia argues that because a judgment was never entered, the
superior court should have dismissed the case in accordance with Rule
76(d), which provides that “[i]f no application for entry of judgment has
been filed within 120 days from the date of the filing of the notice of
decision, and no appeal is pending, the case shall be dismissed.” This
language is plain and unambiguous, and should be enforced. See State ex
rel. Romley v. Superior Court (Stewart), 168 Ariz. 167, 169, 812 P.2d 985, 987
(1991) (noting that when the language of a rule “is not subject to different
interpretations, we need look no further than that language to determine
the drafters’ intent”).
¶20 The parties had until May 3, 2013, within which to request
entry of judgment (120 days after the notice of decision was filed on January
3, 2013). Because no application for entry of judgment was filed and
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PHILLIPS v. GARCIA
Opinion of the Court
because no appeal from the arbitrator’s award was pending, the trial court
should have dismissed the action.
ATTORNEY FEES AND COSTS
¶21 Both parties request attorney fees based on A.R.S. § 12-341.01.
Garcia has prevailed in this court but neither party has prevailed overall
and, in our discretion, we decline to make an award of attorney fees to
Garcia. Because Phillips was unsuccessful, we also deny his request for
attorney fees. Garcia is entitled to an award of statutory, taxable costs upon
compliance with Arizona Rule of Civil Appellate Procedure 21.
CONCLUSION
¶22 We lack appellate jurisdiction over this attempted appeal
from the denial of a motion to dismiss. But, in our discretion, we exercise
special action jurisdiction to reach the merits of the issues presented. We
determine that the Judgment signed by the arbitrator constituted the award
under Rule 76, and no true judgment as described in Rules 58(a) and 76 was
entered. In accordance with Rule 76(d), therefore, the action should have
been dismissed. At oral argument before this court, both parties conceded
that—if we determined dismissal was required—a dismissal without
prejudice would be the appropriate disposition of this action. We therefore
vacate the trial court’s denial of Garcia’s motion to dismiss and also the
judgment entered in favor of Phillips, and we direct the entry of a judgment
of dismissal without prejudice.
:ama
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