Bennett Blum, M.D., Inc. v. Cowan Law Office of Rand Haddock

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO
BENNETT BLUM, M.D., INC., AN ARIZONA CORPORATION,
Plaintiff/Appellee,
v.
CONNIE COWAN, A SINGLE WOMAN; AND
LAW OFFICE OF RAND HADDOCK, PLC, AN ARIZONA
PROFESSIONAL LIMITED LIABILITY COMPANY,
Defendants/Appellants.
Nos. 2 CA-CV 2012-0166 and 2 CA-CV 2013-0090 (Consolidated)
Filed July 3, 2014
Appeal from the Superior Court in Pima County
No. C20115520
The Honorable Charles V. Harrington, Judge
VACATED AND REMANDED
COUNSEL
Snell & Wilmer L.L.P., Tucson
By William N. Poorten, III, Andrew M. Jacobs,
and Katherine V. Foss
Counsel for Plaintiff/Appellee
Mesch, Clark & Rothschild, P.C., Tucson
By Gary J. Cohen
Counsel for Defendants/Appellants
BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
OPINION
Judge Vásquez authored the opinion of the Court, in which Judge
Howard and Judge Olson1 concurred.
V Á S Q U E Z, Judge:
¶1 In this action arising out of a contract, appellants
Connie Cowan and the Law Office of Rand Haddock, PLC
(Haddock) appeal from the trial court’s post-judgment award of
attorney fees in favor of appellee Bennett Blum, M.D., Inc. (Blum). 2
For the reasons set forth below, we vacate the award and remand for
further proceedings.
Factual and Procedural Background
¶2 Haddock represented Cowan in a contested will
proceeding involving the sale of Cowan’s deceased father’s ranch
(will litigation). Haddock and Cowan signed a contract under
which Blum agreed to provide assistance as a medical expert on the
issue of undue influence in the will litigation. Blum served as a
medical expert at a settlement conference, but Cowan and Haddock
refused to pay the amount he billed.
¶3 In July 2011, Blum filed a complaint against Cowan and
Haddock, alleging breach of contract for nonpayment of fees. After
1The Hon. Robert Carter Olson, a retired judge of the Arizona
Superior Court, is called back to active duty to serve on this case
pursuant to orders of this court and the supreme court.
2 We address other issues on appeal from the trial court’s
underlying judgment in favor of Blum in a separate memorandum
decision. See Ariz. R. Civ. App. P. 28(g).
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BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
a bench trial in September 2012, the court found in favor of Blum.
The court entered a final judgment in October 2012, awarding Blum
$18,708.74 in damages, plus attorney fees and costs.
¶4 In November 2012, Blum initiated a separate
garnishment proceeding in the trial court. Appellants then filed a
motion for stay of execution of the judgment, seeking “time to obtain
a supersedeas bond,” and filed a notice of appeal from the October
2012 judgment.3 In a February 2013 under-advisement ruling, the
court denied appellants’ motion for a stay and granted Blum’s
applications for entry of judgment against the garnishees. Blum
then requested attorney fees and costs incurred in the garnishment
and other post-judgment proceedings against appellants. In May
2013, the court granted Blum’s request in a signed, under-
advisement ruling. Appellants timely appealed that ruling. We
have jurisdiction pursuant to A.R.S. §§ 12-120.21, 12-2101(A)(2).
Post-Judgment Attorney Fees
¶5 Appellants maintain the trial court erred by awarding
Blum attorney fees incurred post-judgment. We review a trial
court’s award of attorney fees for an abuse of discretion. Orfaly v.
Tucson Symphony Soc’y, 209 Ariz. 260, ¶ 18, 99 P.3d 1030, 1035 (App.
2004). However, we review questions of law, including the court’s
authority to award attorney fees and contract interpretation, de
novo. Geller v. Lesk, 230 Ariz. 624, ¶ 8, 285 P.3d 972, 975 (App. 2012).
And, we will affirm an award of attorney fees if it was appropriate
under any of the authorities relied upon by the proponent. See
Harris v. Reserve Life Ins. Co., 158 Ariz. 380, 384, 762 P.2d 1334, 1338
(App. 1988).
3Appellants also filed a motion to set aside the October 2012
judgment pursuant to Rule 60(c), Ariz. R. Civ. P. Because their
appeal from that judgment was pending, they asked this court to
“revest jurisdiction in the trial court to consider their Rule 60(c)
motion.” We granted the request, but appellants subsequently
withdrew their Rule 60(c) motion before the trial court. We then
reinstated the appeal.
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BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
¶6 In his motion for post-judgment attorney fees and costs,
Blum argued he was entitled to attorney fees based upon the fee
provision in the contract; A.R.S. §§ 12-341, 12-341.01(A); and Rules
54(f) and 77(f), Ariz. R. Civ. P. In response, appellants argued the
amount of fees requested was “unreasonable as a matter of law,” the
fees relating to Blum’s responses to appellants’ post-judgment
motions were not authorized by § 12-341.01(A), and the court should
deny the fees arising from the garnishment proceeding pursuant to
A.R.S. § 12-1580(E). After hearing argument and receiving
supplemental briefing on the applicability of § 12-1580(E),4 the trial
court granted Blum’s motion, apparently relying on § 12-341.01(A)
as the basis for the award. The court explained § 12-1580(E) “adds
an additional basis for an award of attorneys’ fees in the specific
area of garnishment to . . . § 12-341.01, [and is] not an exclusive
basis.”
¶7 On appeal, appellants contend that § 12-341.01(A) does
not authorize an award of attorney fees “to object to a motion for
stay pending appeal; to attempt collection efforts; or to file motions
or responses to motions post-judgment.”5 They further argue that,
4 The transcript of the hearing is not part of our record on
appeal. See Baker v. Baker, 183 Ariz. 70, 73, 900 P.2d 764, 767 (App.
1995) (we assume missing transcript supports trial court’s ruling).
5 In their reply brief, appellants argue the trial court lacked
jurisdiction to enter the award because this court had jurisdiction
over the appeal from the October 2012 judgment at that time. This
argument is without merit. “The filing of a notice of appeal . . .
divests the trial court of jurisdiction to proceed other than to issue
orders in furtherance of the appeal and to address matters unrelated
to the appeal.” In re Marriage of Flores & Martinez, 231 Ariz. 18, ¶ 10,
289 P.3d 946, 949 (App. 2012). Here, the trial court retained
jurisdiction over the motion to stay because it was in furtherance of
the appeal, see Ariz. R. Civ. App. P. 7(a), and the garnishment
proceeding because it was unrelated to the appeal, see San Fernando
Motors, Inc. v. Fowler, 17 Ariz. App. 357, 360-61, 498 P.2d 169, 172-73
(1972) (“[A] garnishment proceeding is an independent action.”).
Although the Rule 60(c) motion related to the judgment being
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BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
even if § 12-341.01(A) applies, they are the successful parties entitled
to their attorney fees, not Blum.6 And, again relying on § 12-1580(E),
appellants argue “Blum was not entitled to recover any fees incurred
in connection with the garnishments.”
¶8 “[I]t is well-settled in Arizona that ‘[c]ontracts for
payment of attorneys’ fees are enforced in accordance with the terms
of the contract.’” McDowell Mountain Ranch Cmty. Ass’n v. Simons,
216 Ariz. 266, ¶ 14, 165 P.3d 667, 670 (App. 2007), quoting Heritage
Heights Home Owners Ass’n v. Esser, 115 Ariz. 330, 333, 565 P.2d 207,
210 (App. 1977) (second alteration in McDowell Mountain Ranch
Cmty. Ass’n). Accordingly, a court lacks discretion to refuse to
award attorney fees under a contractual provision. Mining Inv. Grp.,
LLC v. Roberts, 217 Ariz. 635, ¶ 26, 177 P.3d 1207, 1213 (App. 2008);
Chase Bank of Ariz. v. Acosta, 179 Ariz. 563, 575, 880 P.2d 1109, 1121
(App. 1994).
¶9 The contract in this case includes the following
provision for attorney fees:
appealed, because appellants withdrew their Rule 60(c) motion, the
award was unrelated to the appeal. See In re Estate of Killen, 188
Ariz. 569, 573, 937 P.2d 1375, 1379 (App. 1996) (attorney fees may be
awarded when not dependent upon outcome of appeal).
6 Although appellants argue they are the successful parties,
they have cited no authority to support their position. See Ariz. R.
Civ. App. P. 13(a)(6); Sholes v. Fernando, 228 Ariz. 455, n.1, 268 P.3d
1112, 1114 n.1 (App. 2011). Instead, they maintain they were
successful because Cowan offered to pay the entire judgment in
installment payments before Blum initiated the garnishment
proceedings, but Blum rejected that offer, and he is now “collecting
the judgment through a continuing lien on promissory note
payments, which are, in themselves, installment payments.” But,
“[t]he fact that a party did not recover the full measure of relief
requested does not mean that he is not the successful party.” Ocean
W. Contractors, Inc. v. Halec Constr. Co., 123 Ariz. 470, 473, 600 P.2d
1102, 1105 (1979).
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BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
In the event either Party hereto shall
commence legal proceedings against the
other to enforce the terms hereof, or to
declare rights hereunder, as the result of
the breach of any covenants or condition of
this Agreement, the prevailing Party in any
such proceeding shall be entitled to recover
from the losing Party its costs of suit,
including reasonable attorneys’ fees.
A. Post-Judgment Motions
¶10 The attorney fees stemming from appellants’ Rule 60(c)
motion and motion to stay fall squarely within the broad language
of this contractual provision. 7 There is no dispute that the
underlying action arose from the parties’ contract and that Blum was
the prevailing party on his breach-of-contract claim in that action. In
their Rule 60(c) motion, appellants sought relief from the underlying
judgment, and, in their motion to stay, appellants sought to delay
execution of that judgment. See Ariz. R. Civ. App. P. 7(a). Thus,
both the Rule 60(c) motion and the motion to stay necessarily were
related to the underlying action on the contract. The trial court
denied appellants’ motion for stay, and appellants withdrew their
Rule 60(c) motion.
¶11 The trial court therefore had no discretion to refuse to
award Blum attorney fees for appellants’ Rule 60(c) motion and
7 The day of oral argument in this court, appellants filed a
supplemental citation of legal authority, see Ariz. R. Civ. App. P. 17,
directing us to Midyett v. Rennant Properties, Inc., 171 Ariz. 492, 493-
94, 831 P.2d 868, 869-70 (App. 1992), for the proposition that “upon
entry of judgment, both [the] breach of contract action and the
contract upon which that action is based merge into the judgment,
extinguishing both the contract and breach of contract action, and
the judgment defines the subsequent rights of the plaintiff and
defendant.” We, however, find that case distinguishable as it
involved a purchaser at a sheriff’s sale who was trying to enforce an
earlier contract to which it was not a party. See id.6
BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
motion to stay under the contract. See McDowell Mountain Ranch
Cmty. Ass’n, 216 Ariz. 266, ¶ 14, 165 P.3d at 670. Because the
contract controls, we need not address the applicability of § 12-
341.01(A). See Harris, 158 Ariz. at 384, 762 P.2d at 1338; see also Lisa v.
Strom, 183 Ariz. 415, 418 n.2, 904 P.2d 1239, 1242 n.2 (App. 1995)
(contract’s attorney fees provision controls to exclusion of statute).
¶12 Moreover, we disagree with appellants that Blum’s
request for attorney fees was untimely because “Blum did not
generally make a fee request post-judgment, much less a request
that stated the legal basis for a request.” In support of this
argument, appellants rely on Ezell v. Quon, 224 Ariz. 532, ¶ 31, 233
P.3d 645, 652 (App. 2010). But that case is inapplicable here because
it involved a request for attorney fees on appeal based solely on
Rule 21, Ariz. R. Civ. App. P. See Ezell, 224 Ariz. 532, ¶¶ 28, 31, 233
P.3d at 652. And, in any event, Blum requested attorney fees in the
underlying action in his complaint and then again within a week
after the trial court had issued its February 2013 ruling. See Ariz. R.
Civ. P. 54(g)(1), (2) (claim for attorney fees shall be made in
pleading; motion for attorney fees shall be filed within twenty days
of decision on merits). In both the complaint and the motion, Blum
specified the contract as a basis for the award.
B. Garnishment Proceeding
¶13 However, we conclude the trial court erred in awarding
attorney fees relating to the garnishment proceeding pursuant to
§ 12-341.01(A). Garnishment proceedings are “purely statutory,”
Patrick v. Associated Drygoods Corp., 20 Ariz. App. 6, 8, 509 P.2d 1043,
1045 (1973), and are “treated in all respects . . . as an original
independent action” from the underlying lawsuit, Davis v. Chilson,
48 Ariz. 366, 371, 62 P.2d 127, 130 (1936).8 And, § 12-341.01(A) does
8 Because a garnishment proceeding is an “independent
action,” Davis, 48 Ariz. at 371, 62 P.2d at 130, we agree with
appellants that Rule 77(f) does not authorize an award of attorney
fees relating to the garnishment. Rule 77(f) permits an award of
attorney fees “for services necessitated by the appeal” of an
arbitration award and requires a comparison of the arbitration
award to the judgment entered at trial. See Bradshaw v. Jasso-Barajas,
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BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
not apply to “‘purely statutory causes of action.’” Keystone Floor &
More, LLC v. Ariz. Registrar of Contractors, 223 Ariz. 27, ¶ 11, 219 P.3d
237, 240 (App. 2009), quoting Hanley v. Pearson, 204 Ariz. 147, ¶ 17, 61
P.3d 29, 33 (App. 2003); Kennedy v. Linda Brock Auto. Plaza, Inc., 175
Ariz. 323, 325-26, 856 P.2d 1201, 1203-04 (App. 1993). We therefore
turn to the garnishment statutes to determine whether the award
was proper.
¶14 Section 12-1580(E) provides that, in a garnishment
proceeding, “[t]he prevailing party may be awarded costs and
attorney fees in a reasonable amount determined by the court.”
However, “[t]he award shall not be assessed against nor is it
chargeable to the judgment debtor, unless the judgment debtor is
found to have objected to the writ solely for the purpose of delay or
to harass the judgment creditor.” A.R.S. § 12-1580(E). Here, the trial
court assessed attorney fees against appellants, the judgment
debtors. However, because it relied improperly on § 12-341.01(A) as
the basis for the award, the court did not make the requisite findings
under § 12-1580(E). And, in the absence of such findings, the court
erred by awarding fees against appellants in the garnishment
proceedings.
¶15 Blum nevertheless argues “§ 12-1580(E) does not apply”
and “[t]his Court should reject [a]ppellants’ argument that . . . § 12-
1580(E) somehow trumps contractual provisions . . . that
unambiguously provide for an award of attorneys’ fees or costs to
the prevailing party.” He thus suggests the parties contractually
waived the applicability of § 12-1580(E). Waiver is the intentional
relinquishment of a known right. Jones v. Cochise Cnty., 218 Ariz.
372, ¶ 22, 187 P.3d 97, 104 (App. 2008). “It is well settled that most
rights may be waived.” McClellan Mortg. Co. v. Storey, 146 Ariz. 185,
188, 704 P.2d 826, 829 (App. 1985). Even statutes “enacted to protect
individuals may nonetheless be waived by those individuals.” State
ex rel. Horne v. Campos, 226 Ariz. 424, ¶ 21, 250 P.3d 201, 206-07 (App.
2011), citing Herstam v. Deloitte & Touche, LLP, 186 Ariz. 110, 116, 919
231 Ariz. 197, ¶ 7, 291 P.3d 991, 993 (App. 2013). Because the
garnishment proceeding does not involve an appeal from an
arbitration award, Rule 77(f) does not apply.
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BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
P.2d 1381, 1387 (App. 1996). However, “a statutory right may not be
waived where waiver is expressly or impliedly prohibited by the
plain language of the statute.” Verma v. Stuhr, 223 Ariz. 144, ¶ 68,
221 P.3d 23, 36 (App. 2009).
¶16 Although it does not expressly say so, we conclude § 12-
1580(E) impliedly prohibits parties from waiving its requirements.
“[G]arnishment was unknown to the common law.” Andrew Brown
Co. v. Painters Warehouse, Inc., 11 Ariz. App. 571, 572, 466 P.2d 790,
791 (1970). It exists only by virtue of the statutes contained in Article
4 of Title 12, most recently enacted and amended in 1976, 1984, and
1986. See 1976 Ariz. Sess. Laws, ch. 170, § 14; 1984 Ariz. Sess. Laws,
ch. 258, § 12; 1986 Ariz. Sess. Laws, ch. 4, § 3; see also Andrew Brown
Co., 11 Ariz. App. at 573, 466 P.2d at 792 (discussing history of
Arizona garnishment statutes beginning in 1877). “‘Since
garnishment is a creature of statute, garnishment proceedings are
necessarily governed by the terms of those statutes. . . . Thus, courts
may not allow garnishment proceedings to follow any course other
than that charted by the legislature.’” Patrick, 20 Ariz. App. at 9, 509
P.2d at 1046, quoting Andrew Brown Co., 11 Ariz. App. at 572, 466
P.2d at 791.
¶17 The statement in Patrick is consistent with the more
general principle that “‘[w]hen a statute creates a right and also
creates a remedy for the right created, the remedy thereby given is
exclusive.’” Hull v. DaimlerChrysler Corp., 209 Ariz. 256, ¶ 8, 99 P.3d
1026, 1027 (App. 2004), quoting Register v. Coleman, 130 Ariz. 9, 14,
633 P.2d 418, 423 (1981); see also Blankenbaker v. Jonovich, 205 Ariz.
383, ¶ 18, 71 P.3d 910, 914 (2003) (“When, as here, a statute ‘creates a
right and also provides a complete and valid remedy for the right
created, the remedy thereby given is exclusive.’”), quoting Valley
Drive-In Theatre Corp. v. Superior Court, 79 Ariz. 396, 400, 291 P.2d
213, 215 (1955); Grady v. Barth, 233 Ariz. 318, ¶¶ 17, 20-21, 312 P.3d
117, 121-22 (App. 2013) (forcible detainer statute determines whether
a party in possession is entitled to a stay pending appeal); In re
Jaramillo, 229 Ariz. 581, ¶ 11, 278 P.3d 1284, 1287 (App. 2012) (court
cannot “graft a remedy onto a statute when its plain language
contains no such remedy”).
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BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
¶18 Applying those principles here, although either party as
the “prevailing party” in the garnishment proceeding may agree to
waive the right to attorney fees, appellants cannot waive the
statutorily mandated limitation on the trial court’s authority to
award attorney fees against a judgment debtor. We therefore
disagree with Blum’s argument that the attorney fees provision of
the contract governs an award of attorney fees in the garnishment
proceeding and that § 12-1580(E) does not apply. To the contrary,
§ 12-1580(E) controls an award of attorney fees against the judgment
debtor in a non-earnings garnishment proceeding. As we have
noted, that section authorizes attorney fees against a judgment
debtor only when “the judgment debtor is found to have objected to
the writ solely for the purpose of delay or to harass the judgment
creditor.”
¶19 The plain language of § 12-1580(E) is clear and requires
no interpretation. “When the meaning is plain from the statutory
language, we look no further and assume the legislature meant what
it said.” First Credit Union v. Courtney, 233 Ariz. 105, ¶ 23, 309 P.3d
929, 935 (App. 2013). Furthermore, “we presume the legislature
expressed its meaning in as clear a manner as possible.” Callender v.
Transpacific Hotel Corp., 179 Ariz. 557, 561, 880 P.2d 1103, 1107 (App.
1993).
¶20 In sum, because garnishment is a statutory cause of
action, the language of the statute is clear, and the legislature has
explicitly determined when attorney fees may be awarded against
the judgment debtor, a trial court must follow the manner in which
the legislature has chosen for making that determination. See
Patrick, 20 Ariz. App. at 9, 509 P.2d at 1046. That remedy is
exclusive, Hull, 209 Ariz. 256, ¶ 8, 99 P.3d at 1027, and neither the
parties nor the court were permitted to graft another remedy onto it,
Jaramillo, 229 Ariz. 581, ¶ 11, 278 P.3d at 1287. See, e.g., Parkway Bank
& Trust Co. v. Zivkovic, 232 Ariz. 286, ¶¶ 15-17, 304 P.3d 1109, 1113
(App. 2013) (mortgage anti-deficiency protections “‘would be
largely illusory if a prospective creditor could compel a prospective
debtor to waive them at the time the mortgage is executed’”), quoting
Brunsoman v. Scarlett, 465 N.W.2d 162, 167 (N.D. 1991); CSA 13-101
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BENNETT BLUM, M.D., INC. v. COWAN
Opinion of the Court
Loop, LLC v. Loop 101, LLC, 233 Ariz. 355, ¶ 16, 312 P.3d 1121, 1126
(App. 2013).
¶21 Accordingly, we vacate the trial court’s award of
attorney fees in the garnishment proceeding. And, because we are
unable to discern from Blum’s motion for and affidavit in support of
attorney fees exactly what portion of the total award is attributable
to the post-judgment motions, we remand to the trial court for a
redetermination of the proper amount relating to the Rule 60(c)
motion and the motion to stay.9
Disposition
¶22 For the reasons stated above, we vacate the award of
attorney fees and remand for further proceedings consistent with
this opinion. Both parties have requested their attorney fees and
costs on appeal. Because both parties prevailed in part, we deny
both requests as to this part of the appeal.
9The amount of attorney fees in this case appears to be high in
relation to the underlying damages. However, appellants have not
challenged the reasonableness of the award below or on appeal. See
A.R.S. § 12-341.01(A) (allowing for an award of “reasonable attorney
fees”). We therefore do not address this issue further.
11