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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

CRYSTAL DAWN, Plaintiff/Appellee

v.

YUMA’S SUNSET MOUNTAIN CONSTRUCTION, Defendant/Appellant.

No. 1 CA-CV 20-0645 

Appeal from the Superior Court in Yuma County

No. S1400CV201800769

The Honorable Lawrence C. Kenworthy, Judge

AFFIRMED

COUNSEL

William P. Katz, Yuma

Counsel for Defendant/Appellant

Murphy Schmitt Hathaway & Wilson PC, Prescott

By Robert E. Schmitt

Co-Counsel for Plaintiff/Appellee

Becke & Olson PLLC, Prescott

By Andrew J. Becke

Co-Counsel for Plaintiff/Appellee

FILED 11-18-2021
DAWN v. YUMA’S SUNSET MOUNTAIN

Decision of the Court

2

MEMORANDUM DECISION

Judge Michael J. Brown delivered the decision of the Court, in which 

Presiding Judge Randall M. Howe and Judge Brian Y. Furuya joined.

B R O W N, Judge:

¶1 Defendant Yuma’s Sunset Mountain Construction, L.L.C. 

(“YSMC”) appeals the superior court’s order denying its request for 

sanctions against plaintiff Crystal Dawn and her attorneys under Arizona 

Rule of Civil Procedure (“Rule”) 11 and A.R.S. § 12-349. YSMC also appeals 

the court’s denial of a portion of its request for taxable costs. Finding no 

abuse of discretion, we affirm.

BACKGROUND

¶2 In March 2017, Dawn was involved in a car accident with 

Carolyn Mathis. At the scene of the accident and in later interviews, Mathis 

stated she did not see Dawn’s motorcycle approaching until Mathis entered 

the intersection while taking a left-hand turn. Mathis did not mention any 

obstructions to her line of sight that may have contributed to the accident.

¶3 Upon further investigation, however, Mathis retained an 

accident reconstructionist to create a report of the scene in relation to a 

potential line-of-sight obstruction from a portable advertising sign in the 

right-of-way on the northeast corner of the intersection. Two days before 

the expiration of the statute of limitations, Mathis gave Dawn the names of 

entities that could be responsible for landscaping located near the same 

corner, based on the accident reconstructionist’s preliminary opinion that

the landscaping affected sight distance. As relevant here, Dawn filed a 

second amended complaint on March 20, 2019, adding claims of negligence 

and negligence per se against YSMC and two other entities allegedly 

responsible for installing or maintaining the landscaping.

¶4 A few weeks later, Mathis filed a notice of non-party at fault, 

alleging that various individuals or entities associated with the installation 

or maintenance of the landscaping were negligent because the shrubbery 

and trees “like[ly] caused or contributed to the subject motor vehicle 

accident by improperly creating a site distance obstruction to the left 

turning Mathis vehicle.” The accident reconstructionist later concluded in 
DAWN v. YUMA’S SUNSET MOUNTAIN

Decision of the Court

3

his report that the presence of the advertising sign and the landscaping 

would limit a motorist’s ability to “fully observe approaching traffic.” 

¶5 Beginning in September 2019, two of the defendants were

dismissed from the lawsuit after they provided affidavits to Dawn 

indicating they had no material involvement with the landscaping. At least 

one of those defendants agreed to bear its own costs and expenses. Dawn 

and YSMC discussed dismissing YSMC but disagreed regarding the terms.

Dawn offered to dismiss YSMC without prejudice, with each side bearing

their own attorneys’ fees and costs, if YSMC would provide an affidavit 

stating that it did not have any responsibility for the installation or 

maintenance of the landscaping near the intersection where the accident 

occurred. YSMC declined that offer, as well as other similar offers, 

asserting it would seek recovery of all its fees and costs incurred in 

defending the second amended complaint. YSMC then demanded that the 

claims against it be dismissed with prejudice, and that Dawn pay YSMC 

$12,032.21, which included $7,605 in attorneys’ fees and $4,100 in expert 

witness fees. 

¶6 After additional discussions, in a letter to Dawn dated May 

15, 2020, YSMC outlined various points explaining why it believed the 

claims against it were brought without substantial justification and without 

any independent investigation. According to YSMC, Dawn refused to 

consider a proposed stipulation that YSMC did not design, install, or 

maintain the landscaping. YSMC advised it would now pursue court 

intervention and relief “with the necessary motions.” On May 28, Dawn 

noted her “longstanding offer” to pay taxable costs and dismiss the claims 

against YSMC with prejudice. She indicated she would be filing a motion 

to dismiss within the next seven days, and the superior court could decide 

whether Dawn or her counsel were “guilty of some inappropriate and/or 

unprofessional conduct.” On June 7, YSMC moved for summary judgment

and requested an award of all of its costs, expenses, and attorneys’ fees, plus 

damages, under “various sources of legal authority,” including A.R.S. § 12-

341, common law bad faith, and A.R.S. § 12-349. 

¶7 The next day Dawn filed her motion to dismiss YSMC. Before 

the superior court ruled on the two pending motions, and three months

after filing of the motion for summary judgment, YSMC filed a motion for

sanctions against Dawn and her counsel under Rule 11, seeking $23,220 in 

attorneys’ fees and $10,114.54 in other expenses and costs. YSMC argued

that Dawn failed to conduct an independent investigation into whether 

YSMC was responsible for the landscaping and failed to dismiss YSMC for

many months despite evidence that YSMC was not responsible.
DAWN v. YUMA’S SUNSET MOUNTAIN

Decision of the Court

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¶8 In its ruling, the superior court noted that Mathis informally 

disclosed that her accident reconstruction expert believed the vegetation 

was a cause of the automobile accident and that YSMC may have been 

responsible, which she followed by filing a notice of non-party at fault

naming YSMC as a defendant a short time later. The court further noted 

that Dawn offered to dismiss YSMC in October 2019, if YSMC would 

provide “an affidavit as to non involvement,” but YSMC declined to do so. 

The court concluded that Dawn did not violate Rule 11, finding that she 

and her counsel acted reasonably in suing YSMC and not moving to dismiss 

until June 2020. YSMC’s motion for summary judgment was denied as 

moot. 

¶9 The court later awarded YSMC costs in the amount of 

$1,656.73, but declined to award costs for deposition transcripts in the 

amount of $1,464.50 that were incurred after Dawn filed her motion to 

dismiss YSMC. After all other parties were dismissed from the case, the 

court entered final judgment and YSMC timely appealed. We have 

jurisdiction under A.R.S. §§ 12–120.21(A)(1) and 12–2101(A)(1).

DISCUSSION

A. Rule 11 Sanctions

¶10 YSMC argues the superior court abused its discretion in

denying the motion for Rule 11 sanctions against Dawn and her counsel. 

We review the court’s denial of Rule 11 sanctions for an abuse of 

discretion. In re $15,379 in U.S. Currency, 241 Ariz. 462, 469, ¶ 15 (App. 

2016).

¶11 All pleadings, written motions, and other documents filed 

with a court must be signed by an attorney of record or the party. Rule 

11(a)(1). As relevant here, Rule 11(b)(3) states as follows:

By signing a pleading, motion, or other document, the 

attorney or party certifies that to the best of the person’s 

knowledge, information, and belief formed after reasonable 

inquiry[,] . . . the factual contentions have evidentiary support 

or, if specifically so identified, will likely have evidentiary 

support after a reasonable opportunity for further 

investigation or discovery . . . .

¶12 An attorney is not required to prepare a prima facie case for 

trial before filing a complaint. Boone v. Superior Ct., 145 Ariz. 235, 241 (1985). 

Instead, the attorney must make reasonable efforts to determine that the 
DAWN v. YUMA’S SUNSET MOUNTAIN

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claim is not insubstantial or frivolous. Id. Reasonable efforts are 

determined by the circumstances that exist at the time of the filing, 

including the facts known to the plaintiff and the amount of time available

for investigation. Id. We evaluate the attorney’s conduct under an objective 

standard of reasonableness. James, Cooke & Hobson, Inc. v. Lake Havasu 

Plumbing & Fire Prot., 177 Ariz. 316, 319 (App. 1993). 

¶13 YSMC argues that Dawn’s counsel failed to conduct an 

independent investigation into whether YSMC was the entity responsible 

for the landscaping at issue, basing the decision to file the second amended 

complaint on information provided by the original defendant’s counsel 

through an email. The superior court, however, found that it was 

reasonable for Dawn to sue YSMC. Given the preliminary opinion that the 

landscaping may have contributed to obstructing the original defendant’s 

line of sight and that the statute of limitations was set to expire in two days, 

the court did not abuse its discretion in concluding that Dawn’s claim was 

based on a good faith belief and a reasonable inquiry.

¶14 YSMC further contends that Dawn’s decision to maintain the 

action against it for eight months after she became aware that it was not 

responsible for the landscaping violated Rule 11. Dawn, however, 

voluntarily dismissed one defendant six months after filing its second 

amended complaint when the defendant provided a relatively simple 

affidavit of non-involvement with the landscaping at issue. Dawn also 

offered to dismiss YSMC if it provided a similar affidavit, which YSMC 

refused to provide. Approximately two months later, Dawn stipulated to a 

second defendant’s dismissal after it provided an affidavit of noninvolvement.

¶15 In November 2019, Dawn offered to dismiss YSMC without 

prejudice if each party agreed to pay its own attorneys’ fees and taxable 

costs. YSMC refused this offer. The following month, Dawn tried to reach 

an agreement by offering to dismiss YSMC with prejudice and pay its 

taxable costs. But YSMC refused the offer again and insisted that (1) Dawn

pay its costs, expenses, and attorneys’ fees of more than $12,000, and (2) 

dismiss the case with prejudice to restore YSMC to its status before Dawn 

wrongfully filed the suit. YSMC also noted that it would have to ask its 

expert to continue his work due to an upcoming disclosure deadline, and 

that other defense costs “will continue to accrue.”

¶16 In its Rule 11 motion, YSMC argues that “the only way out”

offered by Dawn and its counsel required it to stipulate to bear its own 

attorneys’ fees and all other non-taxable costs. But YSMC could have 
DAWN v. YUMA’S SUNSET MOUNTAIN

Decision of the Court

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signed an affidavit confirming its lack of involvement with the landscaping, 

and Dawn eventually offered to pay YSMC’s taxable costs. In any event,

YSMC offers no explanation why it failed to ask for attorneys’ fees as a 

sanction in its answer, failed to seek dismissal of the complaint much earlier 

in the litigation, or continued to actively litigate the case for such an 

extended period if it knew it had no involvement with the landscaping at 

issue. YSMC waited a significant amount of time before it began to provide 

specific information why its client could not be found negligent. And the 

first formal request for sanctions was summarily mentioned at the end of 

the summary judgment motion, filed a little over 14 months after the second 

amended complaint was filed. Then three months later YSMC filed its 

request for Rule 11 sanctions. Given all the circumstances involved in this 

litigation, we cannot say the court abused its discretion when it denied 

YSMC’s request for Rule 11 sanctions.

B. Sanctions Under A.R.S. § 12-349

¶17 YSMC argues the superior court was required to impose 

sanctions against Dawn under A.R.S. § 12-349 as condition of obtaining a 

dismissal of her complaint because it took Dawn an unreasonable length of 

time to file the motion. We review a court’s application of § 12-349 de novo,

but we view the evidence in a manner most favorable to sustaining the 

decision and we will affirm unless the court’s finding is clearly erroneous. 

Phoenix Newspapers, Inc. v. Dep’t of Corr., 188 Ariz. 237, 243–44 (App. 1997).

¶18 Under A.R.S. § 12-349(A), a court “shall” assess reasonable 

attorneys’ fees against an attorney or party who, among other things, brings 

a claim without substantial justification. As defined within the statute, a 

claim lacks substantial justification when it is both “groundless” and “not 

made in good faith.” A.R.S. § 12-349(F). While groundlessness is 

determined objectively, bad faith is a subjective determination. Rogone v. 

Correia, 236 Ariz. 43, 50, ¶ 22 (App. 2014). A claim is groundless if the 

proponent is unable to present any rational argument, based on the law or 

the evidence , supporting the claim. Id.

¶19 YSMC argues that Dawn filed the action against it without 

substantial justification and that Dawn unreasonably delayed the 

proceedings. But as discussed above, the court did not abuse its discretion 

when it concluded Dawn acted in good faith in filing the complaint. 

Accordingly, the court did not err by denying sanctions under A.R.S. § 12-

349. 
DAWN v. YUMA’S SUNSET MOUNTAIN

Decision of the Court

7

C. Taxable Costs

¶20 YSMC contends the superior court erred in denying the cost 

of deposition transcripts as taxable costs under A.R.S. § 12-332. Costs for 

preparing transcripts are incidental to taking a deposition and therefore 

recoverable as costs. Visco v. Nat’l Bank of Ariz., 3 Ariz. App. 504, 508 (1966). 

Trial courts, however, “must determine whether challenged expenditures, 

notwithstanding their status as taxable costs, were necessarily incurred and 

whether they are reasonable in amount.” Reyes v. Frank’s Serv. & Trucking, 

LLC, 235 Ariz. 605, 611, ¶ 20 (App. 2014). We will affirm the court’s cost 

award if there is any reasonable basis to support it. Owner-Operator Indep. 

Drivers Ass’n v. Pac. Fin. Ass’n, Inc., 241 Ariz. 406, 416, ¶ 38 (App. 2017).

¶21 YSMC argues the court applied an incorrect standard to 

determine taxable costs. After the court granted Dawn’s motion to dismiss 

and awarded YSMC its costs, YSMC filed a statement of taxable costs.

Dawn objected to the transcript costs for depositions taken after she filed 

her motion to dismiss and YSMC sought summary judgment because those 

costs were unnecessarily incurred. The court declined to award the 

deposition costs, reasoning that they were incurred in relation to the issue 

of sanctions and not to secure a dismissal. On this record, YSMC has failed 

to establish that the court lacked any reasonable basis for denying the 

requested deposition costs.

CONCLUSION

¶22 We affirm the superior court’s judgment. As the successful 

party on appeal, Dawn is entitled to an award of taxable costs upon 

compliance with ARCAP 21.