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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

ARIZONA COURT OF APPEALS

DIVISION ONE

JOHNSON UTILITIES, LLC dba JOHNSON UTILITIES COMPANY, an 

Arizona limited liability company; THE CLUB AT OASIS, LLC, an 

Arizona limited liability company, Plaintiffs/Appellants/Cross-Appellees,

v.

SWING FIRST GOLF, LLC, an Arizona limited liability company, 

Defendant/Appellee/Cross-Appellant,

DAVID ASHTON, Defendant/Appellee.

No. 1 CA-CV 13-0625

Appeal from the Superior Court in Maricopa County

No. CV2008-000141

The Honorable John Christian Rea, Judge

AFFIRMED

COUNSEL

Sanders & Parks, PC, Phoenix

By Garrick L. Gallagher, Anoop Bhatheja

Margrave Celmins, PC, Scottsdale

By Lat J. Celmins, Michael L. Kitchen

Co-Counsel for Plaintiffs/Appellants/Cross-Appellees

Craig A. Marks, PLC, Phoenix

By Craig A. Marks

Counsel for Defendant/Appellee/Cross-Appellant Swing First Golf, LLC
JOHNSON v. SWING

Decision of the Court

2

MEMORANDUM DECISION

Judge Maurice Portley delivered the decision of the Court, in which 

Presiding Judge Andrew W. Gould and Judge Jon W. Thompson joined.

P O R T L E Y, Judge:

¶1 Johnson Utilities, LLC (“Utility”) and The Club at Oasis, LLC

(“Oasis”) (collectively “Utility/Oasis”) challenge the jury verdicts and 

resulting judgment in favor of Swing First Golf, LLC (“SFG”). The 

appellants argue: (1) the court, and jury, lacked jurisdiction to decide SFG’s 

breach of tariff contract claim; (2) the court erred in denying its motion for 

directed verdict at the close of both trials, and in denying Utility’s Arizona 

Rule of Civil Procedure (“Rule”) 50 motion at the conclusion of the second 

trial; (3) the court erred by submitting SFG’s quantum meruit claim to the 

jury; (4) the court erred in admitting impermissible and prejudicial 

evidence; and (5) the court abused its discretion in awarding attorneys’ fees 

and costs to SFG. And on its cross-appeal, SFG argues the court erred in 

granting summary judgment to Utility and dismissing SFG’s breach of the 

covenant of good faith and fair dealing claim. For the following reasons, 

we affirm the judgment.

FACTS1 AND PROCEDURAL HISTORY

¶2 Utility is a water utility company in the San Tan Valley. Oasis 

owns a golf course, and is owned by George Johnson, the president and 

majority owner of Utility. SFG purchased a golf course in 2004 from 

 

1 We review the evidence in the light most favorable to sustain the verdict 

and judgment. Hutcherson v. City of Phoenix, 192 Ariz. 51, 53, 961 P.2d 449, 

451 (1998) (citations omitted). 
JOHNSON v. SWING

Decision of the Court

3

Johnson Ranch Holdings2 and watered the course with water provided by 

Utility.3

¶3 Two years after SFG purchased the golf course, George 

Johnson and David Ashton, SFG’s manager, discussed a plan for SFG to 

manage the Oasis golf course and, in return for SFG’s management services, 

Johnson proposed to pay SFG with water credits provided by Utility.

Ashton drafted a letter of understanding (“Oasis Agreement”) outlining the 

scope of SFG’s management services and confirming that Utility would 

provide water credits to pay for those services.4 Ashton and Johnson shook 

hands in Johnson’s office to confirm the agreement. SFG then began to 

manage Oasis, and Utility provided the agreed-upon water credits. 

Specifically, Utility supplied SFG with irrigation water for its golf course 

each month and sent a monthly invoice. SFG did not pay the invoice, and 

the following month’s invoice did not show any balance due.

¶4 SFG managed Oasis for six months. SFG had not anticipated 

that Johnson would fire the Oasis staff as SFG began managing the golf 

course and that it would also be responsible for being the golf course’s 

caretaker. As a result, and after training a new on-site manager, SFG 

resigned in November 2006. The following month, after changing SFG’s 

accounts for the CAP water and effluent, Utility sent new invoices to SFG 

for the irrigation water that had been delivered and credited to SFG under 

the Oasis Agreement. The invoices reflected that Utility had raised SFG’s 

rates for effluent from $0.62 per thousand gallons, the rate approved by the 

 

2 Johnson Ranch Holdings (“JRH”) had a Utilities Services Agreement with 

Utility for water services. Although JRH did not, as part of the golf course 

sale, assign its rights under the agreement to SFG, SFG argued during the 

first trial that the parties adopted the agreement. However, the court found 

the Utilities Services Agreement was a discriminatory contract and held 

that it was “illegal and against public policy” because the agreement 

provided a benefit to one of Utility’s customers without providing that 

same benefit to its other customers.

3 Utility initially provided untreated water from the nearby Central Arizona 

Project canal (“CAP water”). The parties, however, understood and agreed 

that Utility would provide treated wastewater (“effluent”) to SFG for 

irrigation upon completion of the wastewater treatment plant, and Utility 

eventually delivered effluent water.

4 During the first trial, the court held the Oasis Agreement to be 

unenforceable, and granted Utility’s motion for summary judgment in part 

and dismissed SFG’s breach of contract (Oasis Agreement) claim.
JOHNSON v. SWING

Decision of the Court

4

Arizona Corporation Commission (“ACC”), to $0.83 per thousand gallons, 

and raised the CAP water rate from $0.82 per thousand gallons, the ACC 

tariff rate, to $3.75 per thousand gallons. SFG paid for the water received 

at the tariff rate.

¶5 Additionally, SFG was not paid for its management services. 

Moreover, Utility began withholding effluent and, through the end of 2007, 

delivered almost exclusively the more expensive CAP water to SFG, and 

billed SFG at the rates above the ACC-approved rates. Utility also turned 

off SFG’s irrigation water in November 2007 claiming that SFG owed about

$215,000. SFG filed an informal complaint with the ACC and Utility 

restored SFG’s irrigation service. Then seeking to prevent further service 

disruption, SFG filed a formal complaint with the ACC. Utility then 

resumed sending SFG effluent; in fact, Utility once delivered so much 

effluent that the golf course lake flooded much of the 18th-hole fairway.

¶6 Utility sued SFG and Ashton in January 2008 for failure to pay 

its water bills and for defamation.

5 In response, SFG answered and filed a 

thirteen-count counterclaim, including multiple breach of contract claims, 

quantum meruit, specific performance, negligence and a number of tort 

claims.

6 After discovery, voluntary dismissals and pretrial motions,

including summary judgment for Utility on SFG’s bad faith claim, the only 

claims remaining for trial were the breach of contract claims, SFG’s claims 

for trespass and negligence related to the golf-course flooding, its quantum 

meruit claim, and defamation claim.

¶7 The dispute was tried in March 2012. The jury’s verdicts were

as follows: (1) SFG owed Utility $151,156 for breach of contract; (2) Utility 

owed SFG $1,000,000 for breach of contract; (3) Oasis owed SFG $54,600 on 

the quantum meruit claim related to the Oasis Agreement; (4) Ashton was 

awarded $10,000 for compensatory damages and $10,000 as punitive 

damages for defamation; and (5) Utility was negligent and committed 

 

5 Specifically, Utility alleged: (1) breach of contract (Utility Service 

Agreement); (2) breach of the covenant of good faith and fair dealing; (3) 

tortious interference; and (4) defamation (as to SFG and Ashton).

6 SFG’s counterclaims included: (1) breach of contract – Utility Service 

Agreement; (2) breach of contract – Oasis Agreement; (3) quantum meruit; 

(4) unjust enrichment; (5) breach of contract – tariff rate schedule; (6) breach 

of covenant of fair dealing; (7) specific performance; (8) negligence; (9) 

trespass to land; (10) interference with a business relationship; (11) 

defamation; (12) unlawful use of monopoly power; and (13) racketeering.
JOHNSON v. SWING

Decision of the Court

5

trespass by over-delivering effluent and flooding the golf course, but no 

damages were awarded.

7 Utility/Oasis filed a motion for a new trial and 

the court granted the motion, vacated the verdicts on the contract claims

and ordered a new trial on those claims.

¶8 The parties then tried the breach of contract issues. After

considering the evidence, argument and instructions, the jury only found 

for SFG on its breach of contract claim and awarded it $41,883.11. The court

considered SFG’s request for attorneys’ fees, and in the final judgment 

awarded SFG $300,737.25 in attorneys’ fees.

¶9 Utility/Oasis then appealed the quantum meruit verdict from 

the first trial, the breach of contract verdict from the second trial, and SFG’s

award of attorneys’ fees. SFG filed a cross-appeal. We have jurisdiction 

pursuant to Arizona Revised Statutes (“A.R.S.”) section 12-2101(A)(1)8 and 

Arizona Rule of Civil Appellate Procedure 8(a).

DISCUSSION

I. UTILITY/OASIS’S APPEAL

¶10 In challenging the verdicts in favor of SFG on its quantum 

meruit and breach of tariff contract claims, Utility/Oasis asks that we enter 

judgment in its favor, or alternatively, for a new trial to correct alleged 

evidentiary errors. Utility/Oasis also seeks a reduction in SFG’s attorneys’ 

fees.

A. Subject Matter Jurisdiction

¶11 Utility/Oasis argues that the trial court and, as a result, the 

jury, lacked jurisdiction to decide SFG’s breach of tariff contract claim 

because the ACC has exclusive jurisdiction over utility regulation.9 Subject 

matter jurisdiction is a question of law we review de novo. State v. Dixon, 

231 Ariz. 319, 320, ¶ 3, 294 P.2d 157, 158 (App. 2013) (citation omitted).

 

7 Utility/Oasis does not appeal the defamation verdict and SFG does not 

appeal the verdict on its negligence and trespass claims.

8 We cite the current version of the statute unless otherwise noted.

9 Utility/Oasis filed a petition for special action asking this court to review 

the superior court’s denial of its motion to dismiss based on lack of subject 

matter jurisdiction. We denied the request for stay and declined to take 

special action jurisdiction.
JOHNSON v. SWING

Decision of the Court

6

¶12 “Subject matter jurisdiction is the power to hear and 

determine cases of the general class to which the particular proceedings 

belong,” In re Marriage of Dorman, 198 Ariz. 298, 301, ¶ 7, 9 P.3d 329, 332 

(App. 2000) (quoting Estes v. Superior Court, 137 Ariz. 515, 517, 672 P.2d 180, 

182 (1983)) (internal quotation marks omitted), and is conferred by our 

constitution or statutes, State v. Maldonado, 223 Ariz. 309, 311, ¶ 14, 223 P.3d 

653, 655 (2010). Subject matter jurisdiction cannot be vested in a court solely 

by waiver or estoppel. Guminski v. Ariz. State Veterinary Med. Examining Bd.,

201 Ariz. 180, 184, ¶ 18, 33 P.3d 514, 518 (App. 2001). 

¶13 Disputes involving whether a contract is enforceable or 

breached, even when one party is a utility, is left to the exclusive jurisdiction 

of Arizona courts. See Ariz. Const. art. 6, § 1; General Cable Corp. v. Citizens 

Utilities Co., 27 Ariz. App. 381, 386, 555 P.2d 350, 355 (1976) (“We agree with 

the trial court that the construction and interpretation to be given to legal 

rights under a contract reside solely with the courts . . . .”); see, e.g., Nelson 

v. Rice, 198 Ariz. 563, 567, ¶ 13, 12 P.3d 238, 242 (App. 2000) (noting that the 

trial court has to determine whether a contract is unconscionable as a matter 

of law). In fact, more than fifty years ago our supreme court stated that: 

“No judicial power is vested in or can be exercised by the corporation 

commission unless that power is expressly granted by the constitution.” 

Trico Elec. Coop. v. Ralston, 67 Ariz. 358, 363, 196 P.2d 470, 473 (1948). And 

although the ACC has broad jurisdiction over “public service corporations” 

pursuant to Article 15 of the Arizona Constitution, the provision does not 

give the ACC jurisdiction to entertain and resolve contract claims. See Trico, 

67 Ariz. at 362-65, 196 P.2d at 472-74 (comparing Arizona Constitution 

Article 15 to Article 6, and concluding that the Constitution vested no 

jurisdiction in the ACC to construe contracts and determine their validity); 

see, e.g., Ariz. Corp. Comm’n v. Tucson Gas, Elec. Light & Power Co., 67 Ariz. 

12, 189 P.2d 907 (1948).

¶14 Utility/Oasis, however, contends that the ACC has exclusive 

jurisdiction in this case because SFG’s contract claim is not based on an 

enforceable contract. We disagree. This is not a case about setting water 

rates. Instead, Utility elected to sue SFG in the Maricopa County Superior 

Court for breach of contract and related legal theories for failing to pay its

water bill, including the water that SFG received while it provided 

management services at the Oasis golf course. The fact that Utility/Oasis 

was unsuccessful given the totality of the evidence, does not wrest subject 

matter jurisdiction from the court.

¶15 Moreover, even though one of SFG’s claims against Utility

involved whether Utility had billed SFG, its customer, above the rates 
JOHNSON v. SWING

Decision of the Court

7

approved by the ACC, the court had subject matter jurisdiction to resolve 

the contract dispute. See Sommer v. Mountain States Tel. & Tel. Co., 21 Ariz. 

App. 385, 387-88, 519 P.2d 874, 876-77 (1974). Therefore, the superior court 

had subject matter jurisdiction to resolve the dispute between Utility and 

its customer. See Trico, 67 Ariz. at 365, 196 P.2d at 474; see also General Cable, 

27 Ariz. App. at 386, 555 P.2d at 355 (concluding that the ACC cannot 

construe and interpret the parties’ rights under a contract, even if that 

contract had been specifically approved by the ACC).

¶16 Utility/Oasis also contends the jury had to decide water 

utility policy, even though the ACC has sole and exclusive jurisdiction. We 

disagree with the argument.

¶17 Neither jury in either trial was asked to decide water utility 

regulation policy. Instead, the jury in the second trial had to decide whether 

SFG or Utility breached any contracts and, if so, to decide damages. 

Because the jury was not asked to resolve water utility regulation policy or 

rates, and did not, the superior court was not divested of subject matter 

jurisdiction over this lawsuit.

B. Breach of Tariff Contract Claim

¶18 Utility/Oasis next asserts that the superior court erred in 

denying its motion for directed verdict10 at the close of both trials, and in 

denying its Rule 50(b) post-judgment motion for judgment as a matter of 

law after the second trial. Utility/Oasis asserts that SFG failed to present 

any evidence to support its breach of tariff contract claim.

¶19 We review the court’s ruling on a motion for directed verdict 

and a motion for judgment as a matter of law de novo. Felder v. 

Physiotherapy Assocs., 215 Ariz. 154, 162, ¶ 36, 158 P.3d 877, 885 (App. 2007); 

Warne Invs., Ltd. v. Higgins, 219 Ariz. 186, 194, ¶ 33, 195 P.3d 645, 653 (App. 

2008). We will affirm the ruling unless, like a motion for summary 

judgment, “the facts produced in support of the claim or defense have so

little probative value, given the quantum of evidence required, that 

reasonable people could not agree with the conclusion advanced by the 

 

10 Utility/Oasis did not provide the transcript from the first trial. As a 

result, we presume that the record would support the court’s ruling. Baker 

v. Baker, 183 Ariz. 70, 73, 900 P.2d 764, 767 (App. 1995). Consequently, the 

superior court did not err by denying the motion for directed verdict in the 

first trial. See id.
JOHNSON v. SWING

Decision of the Court

8

proponent of the claim or defense.” Orme Sch. v. Reeves, 166 Ariz. 301, 309, 

802 P.2d 1000, 1008 (1990); see Ariz. R. Civ. P. 50(a).

¶20 To prevail on its breach of contract claim, SFG was required 

to prove it had a contract with Utility, Utility breached the contract, and 

SFG suffered resulting damages. See Goodman v. Physical Res. Eng’g, Inc., 

229 Ariz. 25, 28, ¶ 7, 270 P.3d 852, 855 (App. 2011). Utility does not dispute 

the existence of a contract – it provided irrigation water to SFG for a fee. 

Instead, Utility argues that SFG claimed that it had a right to effluent for its 

irrigation water, but failed to prove a contractual right to effluent instead 

of CAP water. The record belies the focus of the argument. 

¶21 SFG presented evidence to the jury that Utility breached its 

tariff contract by: (1) overcharging SFG for deliveries of both CAP water 

and effluent; (2) withholding effluent; (3) improperly charging for 

minimum bills; (4) over-delivering irrigation water resulting in flooding of 

the golf course; (5) manufacturing bills; (6) using a manufactured account 

balance as a pretext to discontinue service; (7) failing to follow Arizona 

Administrative code regulations; and (8) not providing appropriate credits 

for overcharges. And citing to A.R.S. § 47-2306(B), SFG also claimed that 

Utility breached its contracts by failing to use its best efforts to deliver 

effluent to SFG.

¶22 Because the water rates that Utility can charge its customers 

for CAP water and effluent are set by the ACC, the approved tariffs 

constitute an enforceable contract between Utility and its customer, SFG. 

See Sommer, 21 Ariz. App. at 387-88, 519 P.2d at 876-77. SFG presented 

evidence that Utility breached the contract. SFG also presented evidence 

that it was damaged as a result of Utility’s breach and the amount of those 

damages, including the amount SFG overpaid between November 2006 and 

December 2007.

¶23 The jury heard the testimony. The jury had to determine the 

credibility of the witnesses, evaluate the exhibits and determine the facts in 

reaching its verdict. See Logerquist v. McVey, 196 Ariz. 470, 488, ¶ 52, 1 P.3d 

113, 131 (2000). The jury fulfilled its role, found that Utility had breached 

the tariff rates, and awarded SFG $41,883.11 in damages. Because 

substantial evidence supported the jury’s breach of tariff contract verdict, 

we find no error.
JOHNSON v. SWING

Decision of the Court

9

C. Quantum Meruit Claim

¶24 Utility/Oasis argues that the superior court erred in the first 

trial by submitting SFG’s quantum meruit claim to the jury because the 

claim was based on an illegal contract. We disagree. 

¶25 “Quantum meruit” is the measure of damages imposed when 

a party prevails on the equitable claim of unjust enrichment. W. Corr. Grp., 

Inc. v. Tierney, 208 Ariz. 583, 590, ¶ 27, 96 P.3d 1070, 1077 (App. 2004) (citing 

Landi v. Arkules, 172 Ariz. 126, 135, 835 P.2d 458, 467 (App. 1992)). To 

recover quantum meruit damages, a plaintiff must prove “the defendant 

received a benefit, that by receipt of that benefit the defendant was unjustly 

enriched at the plaintiff’s expense, and that the circumstances were such 

that in good conscience the defendant should provide compensation.” 

Freeman v. Sorchych, 226 Ariz. 242, 251, ¶ 27, 245 P.3d 927, 936 (App. 2011).

¶26 Utility/Oasis contends, however, that SFG cannot recover 

damages under its quantum meruit theory because the court found the 

Oasis Agreement to be unenforceable and against public policy. Although 

the agreement was unenforceable, quantum meruit damages can be 

awarded when one party has performed in return for a promise that turns 

out to be unenforceable on public policy grounds. See Blue Ridge Sewer 

Improvement Dist. v. Lowry and Assocs., Inc., 149 Ariz. 373, 375, 718 P.2d 1026, 

1028 (App. 1986) (noting that a plaintiff may recover under quantum meruit 

despite the possible illegality of the underlying contract); Pelletier v. Johnson, 

188 Ariz. 478, 937 P.2d 668 (App. 1996) (allowing a seller to recover on a 

quantum meruit claim against the buyer even though the contract was 

illegal under Arizona law); see also Restatement (Second) of Contracts § 198 

cmt. b (1981) (claimant entitled to restitution for performance under a 

contract determined to be against public policy where “the public policy is 

intended to protect persons of the class to which he belongs and, as a 

member of that protected class, he is regarded as less culpable.”); see also 

Restatement (Third) of Restitution and Unjust Enrichment § 32 (2011).

¶27 Here, SFG provided golf course management services for six 

months to Oasis pursuant to an agreement made between SFG and Johnson, 

the owner of Oasis and Utility. Johnson, on behalf of Utility, agreed that 

Utility would provide water credits to SFG in exchange for SFG’s 

management services. The superior court found the Oasis Agreement 

unenforceable and against public policy because “[a] public utility must 

treat all customers without discrimination.” The court, as a result, 

dismissed SFG’s breach of Oasis Agreement claim, but allowed the jury to 

decide whether SFG was entitled to damages under its quantum meruit 
JOHNSON v. SWING

Decision of the Court

10

claim. Because there were facts supporting the equitable quantum meruit 

claim and damages, the court did not err by allowing the jury to decide 

whether SFG was entitled to quantum meruit damages despite the illegality 

of the Oasis Agreement.

¶28 Utility/Oasis also claims the superior court erred in denying 

its request in the first trial for a non-uniform quantum meruit jury 

instruction. We review de novo whether jury instructions correctly state 

the law. State v. Torres, 233 Ariz. 479, 481, 314 P.3d 825, 827 (App. 2013). 

We review jury instructions as a whole to determine whether the jury was 

properly guided in its deliberations. See Terry v. Gaslight Square Assocs., 182 

Ariz. 365, 368, 897 P.2d 667, 670 (App. 1994). 

¶29 During the first trial, Utility/Oasis requested the following 

non-uniform jury instructions: 

A party may not recover on an unjust enrichment claim where 

the claimed amount is simply the amount allegedly due on a 

contract.

Where a contract is alleged, a party has no claim for unjust 

enrichment.

An innocent party to an illegal contract may only seek 

restitution under the contract if a public interest is not 

threatened.

The court rejected the requested instruction, and gave the following: 

Quantum Meruit11

Swing First is entitled to recover the reasonable value of the 

services rendered to Oasis unless you find that either one of 

two things was true in this case:

First, Swing First is not entitled to recover for his services if it 

was understood by Swing First and Oasis that the services 

were being rendered free of charge. It is Oasis’ burden to 

show that the parties had such an understanding.

 

11 This is the Revised Arizona Jury Instruction for Quantum Meruit. See 

Rev. Ariz. Jury Instr. (Civil) Contract 24 (5th ed. 2013).
JOHNSON v. SWING

Decision of the Court

11

Second, Swing First may not recover for his services if you 

find that, under all the circumstances, it was not unfair for 

Oasis to receive the benefit of Swing First’s services without 

paying for them.

Unless you find that Swing First and Oasis understood that 

the services were being rendered free of charge, or that under 

all the circumstances it was not unfair for Oasis to receive the 

benefit of those services without paying for them, you should 

award Swing First the reasonable value of the services. In 

determining what the reasonable value of Swing First’s 

services was, you may consider the nature of the services 

provided and the customary rate of pay for such services.

The instruction the court gave was not a misstatement of the law but 

reflected the current state of the law. And viewing the instruction with the 

other instructions in this case, the jury was not misled by the instruction 

and, as a result, we find no error. See Blue Ridge, 149 Ariz. at 375, 718 P.2d 

at 1028.

¶30 Utility/Oasis’s last challenge to the quantum meruit verdict 

is based on In re Estate of Newman, and Utility/Oasis contends that the claim 

should have been decided by the judge rather than the jury because it is 

purely an equitable claim. 219 Ariz. 260, 274, ¶ 55, 196 P.2d 863, 877 (App. 

2008). In Newman, a probate matter, we stated that there is no constitutional 

right to a jury trial for equitable claims, including breach of fiduciary duty 

relating to a trustee’s duties in probate proceedings. Id. at 273-74, ¶¶ 53, 57, 

196 P.3d at 876-77; see Henry v. Mayer, 6 Ariz. 103, 114, 53 P. 590, 593 (Ariz. 

Terr. 1898) (“[T]he cause being one of equitable jurisdiction, the court below 

was not bound to submit any issue of fact to a jury[.]”). This case, however, 

is not a probate action. Instead, it was a contract and tort dispute that was 

whittled down to just the equitable claim against Oasis after the verdicts in 

the first trial and the court’s grant of the motion for new trial. Moreover, 

Arizona Rule of Civil Procedure 39(m) provides:

In all actions not triable of right by a jury the court upon 

motion or of its own initiative may try any issue with an 

advisory jury or, the court, with the consent of both parties, 

may order a trial with a jury whose verdict has the same effect 

as if trial by jury had been a matter of right.

And “even in equity cases, where a jury has been demanded, the court may 

not withdraw the case from the jury’s consideration if there are 
JOHNSON v. SWING

Decision of the Court

12

controverted issues of fact.” Jones v. CPR Div., Upjohn Co., 120 Ariz. 147, 

150, 584 P.2d 611, 614 (App. 1978) (internal citation and quotation marks 

omitted). Although the quantum meruit claim is an equitable claim, the 

jury had to resolve diverse factual questions to determine if SFG was 

entitled to any damages under the theory. See id. Consequently, the court 

properly allowed the jury to decide the issue after properly instructing the 

jury; we find no error.

D. Evidentiary Rulings 

¶31 Utility/Oasis asserts that the court’s erroneous evidentiary 

rulings in both trials prejudiced Utility/Oasis and precluded a fair trial. We 

will not disturb the trial court’s rulings regarding the exclusion or 

admission of evidence unless there is a clear abuse of discretion and 

prejudice results. Larsen v. Decker, 196 Ariz. 239, 241, ¶ 6, 995 P.2d 281, 283 

(App. 2000) (citations omitted). 

¶32 First, Utility/Oasis argues that the court erred in admitting 

the unsigned Oasis Agreement in the first trial because it was an illegal 

contract. As discussed in ¶ 26, supra, Arizona law allows the remedy of 

quantum meruit for an innocent party who has provided benefits under an 

illegal contract. See Restatement (Third) of Restitution and Unjust 

Enrichment § 32 (1981); Blue Ridge, 149 Ariz. at 375, 718 P.2d at 1028. The 

court did not abuse its discretion by admitting the Oasis Agreement. The 

agreement was relevant to show the meeting of the minds, the parties’ 

understanding of the scope of work, and the expected cost for SFG’s 

management services.

¶33 Utility/Oasis next contends that the admission of evidence 

relating to the management of the Oasis golf course in the second trial was 

prejudicial and precluded a fair trial. Although the Oasis Agreement was 

not directly relevant to the contract claims being litigated in the second trial, 

Utility asked Ashton questions about SFG’s payment history. On redirect, 

the court allowed Ashton to testify to a limited extent and explain why SFG 

did not make payments on its water accounts during the time it provided

management services to Oasis. See Elia v. Pifer, 194 Ariz. 74, 79, 977 P.2d 

796, 801 (App. 1998) (“[A] party will not be allowed to complain of the 

introduction of irrelevant evidence where he has asserted a position that 

makes such evidence relevant.”) (citing Morris K. Udall et. al, Law of 

Evidence § 11, at 11 (3d ed. 1991)).

¶34 Moreover, the court instructed the jury before the final jury 

instructions to disregard any testimony about the alleged Oasis Agreement 
JOHNSON v. SWING

Decision of the Court

13

involving SFG and the management of another golf course because it had 

no bearing on the issues in the case. Therefore, even if Utility had not

opened the door to allow Ashton’s redirect testimony, the court’s limiting 

instruction cured any potential error. See Jimenez v. Starkey, 85 Ariz. 194, 

196, 335 P.2d 83, 84 (1959) (when superior court properly instructs jury, an 

appellate court “must presume that the jury obeyed such instructions”); 

Hyatt Regency Phoenix Hotel Co. v. Winston & Strawn, 184 Ariz. 120, 140, 907 

P.2d 506, 526 (App. 1995) (“We must assume on review that the jury 

followed the instructions of the trial court.”).

¶35 Utility also contends the court erred in allowing the jury to 

hear testimony about the Utility Services Agreement. During Ashton’s 

testimony in the second trial, a juror submitted the following question: 

Was there ever anything in writing, such as a contract, that 

says you were only to get effluent from Johnson Utilities?

Utility objected to be question because the Utility Services Agreement had 

been determined to be an illegal contract in the first trial and any affirmative 

answer would “completely open[] up the door to lots of issues that have 

been thrown out already in this case.” The objection was overruled, and 

Ashton answered “Yes, there was.” Utility/Oasis argues that Ashton’s 

answer caused it substantial prejudice and affected the jury’s verdict. We 

disagree. Both parties were given the opportunity to ask Ashton any 

follow-up questions to clarify his answer to the question. Moreover, the 

court, as noted in ¶ 34, supra, gave a limiting instruction telling the jury to 

“disregard any testimony regarding any other golf course in reaching your 

decision in this case.” Finally, neither party mentioned the Utility Services 

Agreement in closing arguments. Consequently, given the answer to the 

one question and the limiting instruction, the court did not err by allowing 

Ashton to answer the juror’s question. 

¶36 Finally, Utility/Oasis argues that the court abused its 

discretion by refusing to admit additional attachments to a letter Brian 

Tompsett, Utility’s Executive Vice President, sent to Ashton (Exhibit 8).

Utility/Oasis, however, does not cite to any legal authority supporting its 

argument. 

¶37 During the first trial, Utility offered Exhibit 22 that had the 

Tompsett letter as well as additional attachments, and it was admitted. In 

the second trial, SFG offered Exhibit 8, which included the Tompsett letter, 

but omitted 83 pages of the attached invoices from Exhibit 22. Utility 

argued that Exhibit 8 was incomplete and moved to admit the 83 pages of
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additional attachments to the Tompsett letter.

12 SFG objected because the 

83-page document had not been disclosed nor provided before trial, and 

the court sustained the objection. Because the trial court is the gate-keeper 

to ensure that exhibits have been disclosed, see Arizona Rule of Civil 

Procedure 26.1, see, e.g., Lohmeier v. Hammer, 214 Ariz. 57, 66, ¶ 32, 148 P.3d 

101, 110 (App. 2006) (noting a trial court must serve as an evidentiary 

gatekeeper), the court did not abuse its discretion by admitting Exhibit 8 

and precluding Utility’s undisclosed additional attachments.

E. Prejudgment Interest

¶38 Utility/Oasis claims that the court erred by awarding SFG 

prejudgment interest on its quantum meruit claim. Whether a party is 

entitled to prejudgment interest is a question of law we review de novo. 

Berry v. 352 E. Virginia, L.L.C., 228 Ariz. 9, 13, ¶ 18, 261 P.3d 784, 788 (App. 

2011); Alta Vista Plaza, Ltd. v. Insulation Specialists Co., 186 Ariz. 81, 82, 919 

P.2d 176, 177 (App. 1995).

¶39 Oasis asserts that SFG was not entitled to prejudgment 

interest on its quantum meruit claim because the claim was not liquidated. 

Prejudgment interest is awarded as a matter of right on a liquidated claim.

Alta Vista, 186 Ariz. at 82-83, 919 P.2d at 177-78. A claim is liquidated if 

there is credible data from which a precise amount of damages can be 

calculated without reliance on opinion or discretion. Id.; see also John C. 

Lincoln Hosp. & Health Corp. v. Maricopa Cnty., 208 Ariz. 532, 544, ¶ 39, 96 

P.3d 530, 542 (App. 2004) (“A claim is liquidated if the plaintiff provides a 

basis for precisely calculating the amounts owed.”).

¶40 Here, the court awarded prejudgment interest on SFG’s 

quantum meruit damages from November 1, 2006, the date SFG resigned 

from managing Oasis, to the date of the judgment. The record establishes 

that the reasonable value of the management services SFG provided to 

Oasis was ascertainable by accepted standards of valuation and the jury 

determined the value of those services. SFG managed the Oasis golf course 

for six months according to the terms of the Oasis Agreement. And the 

agreement provided that Utility would provide to SFG as payment for its 

services water credits to 150 million gallons of irrigation per year. Although 

that agreement was unenforceable, it was some evidence of the value SFG

was to receive for its management services. Given the agreement, the value 

of the management services were ascertainable by reasonable calculation 

 

12 The additional attachments were marked as Exhibit 42. The exhibit is not 

contained in the record on appeal.
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after SFG resigned, and as the jury determined after reviewing the 

agreement and relevant exhibits. Accordingly, the court did not err by 

awarding SFG prejudgment interest on the value of its management 

services from the date it resigned. See Alta Vista, 186 Ariz. at 82-83, 919 P.2d 

at 177-78.

F. Attorneys’ Fees

¶41 Utility/Oasis contends that the court erred by awarding SFG 

its attorneys’ fees. We review the award, including the amount, for an 

abuse of discretion. Assyia v. State Farm Mut. Auto. Ins. Co., 229 Ariz. 216, 

222, ¶ 25, 273 P.3d 668, 674 (App. 2012). We consider whether “a judicial 

mind, in view of the law and circumstances, could have made the ruling 

without exceeding the bounds of reason.” Associated Indem. Corp. v. Warner,

143 Ariz. 567, 571, 694 P.2d 1181, 1185 (1985) (citation omitted). But, the 

application of A.R.S. § 12-341.01(A) is a question of law we review de novo. 

Nolan v. Starlight Pines Homeowners Ass’n, 216 Ariz. 482, 490, 167 P.3d 1277, 

1285 (App. 2007). 

¶42 After two trials, Utility did not prevail on its lawsuit, but SFG 

was awarded damages against Utility/Oasis for quantum meruit and 

breach of the tariff contract; the total exceeding $95,000. In ruling on 

competing requests for attorneys’ fees, the court denied Utility’s request, 

found that SFG was the prevailing party and, after deducting the fees 

associated with the non-contract claims and unsuccessful claims, awarded 

SFG $300,737.25 in attorneys’ fees.

¶43 Utility/Oasis asserts that the court erred by awarding SFG 

fees for the breach of tariff contract and quantum meruit because those 

claims were not “actions arising under contract.” See A.R.S. § 12-341.01(A)

(“In any contested action arising out of a contract, express or implied, the 

court may award the successful party reasonable attorney fees.”). We 

disagree. As discussed above in ¶ 15, supra, SFG’s breach of tariff contract 

counterclaim arose because it was a customer of Utility and Utility 

unlawfully billed it above the rates set by the ACC for CAP water and 

effluent. See Sommer, 21 Ariz. App. at 387-88, 519 P.2d at 876-77. Moreover, 

a party prevailing on a quantum meruit claim may recover attorneys’ fees 

under A.R.S. § 12-341.01(A). See Pelletier, 188 Ariz. at 482-83, 937 P.2d at 

672-73. Therefore, the court did not abuse its discretion by awarding SFG 

its attorneys’ fees associated with the two claims under A.R.S. § 12-

341.01(A).
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¶44 Utility also challenges the court’s decision that SFG was the 

“successful party,” and therefore eligible for an award of fees pursuant to 

A.R.S. § 12-341.01. Determining the “successful” party for the purposes of 

attorneys’ fees is within the trial court’s discretion and “will not be 

disturbed on appeal if any reasonable basis exists for it.” Vortex Corp. v. 

Denkewicz, 235 Ariz. 551, 562, ¶ 39, 334 P.3d 734, 745 (App. 2014) (internal 

citation and quotation marks omitted); see also Assyia, 229 Ariz. at 223, 273 

P.3d at 675 (“[T]he trial court has substantial discretion to determine who 

is a ‘successful party.’”) (internal citation omitted). Here, SFG was the 

“successful party” because it prevailed and received a monetary judgment

and Utility/Oasis did not. See Berry, 228 Ariz. at 14, ¶ 24, 261 P.3d at 789 

(finding that buyer was the successful party because it received a monetary 

judgment); see also Ocean W. Contractors, Inc. v. Halec Constr. Co., 123 Ariz. 

470, 473, 600 P.2d 1102, 1105 (1979) (monetary award not dispositive but 

“an important item to consider when deciding who, in fact, did prevail”). 

Although it did not prevail on all of its counterclaims or claims that were 

tried, SFG prevailed more than Utility/Oasis and the court did not abuse 

its discretion by finding that SFG was the successful party.

¶45 Finally, Utility/Oasis argues that the court abused its 

discretion by awarding SFG attorneys’ fees because (1) SFG did not provide 

sufficient detail to determine the reasonableness of the fees sought, and (2) 

the fees were excessive. SFG’s fee affidavit, as required, disclosed “the type 

of legal services provided, the date the service was provided, the attorney 

providing the service . . . and the time spent in providing the service.” See 

Schweiger v. China Doll Rest., Inc., 138 Ariz. 183, 188, 673 P.2d 927, 932 (App.

1983). The fee affidavit also provided “sufficient detail to enable the court 

to assess the reasonableness of the time incurred.” See id.

¶46 Once a party establishes entitlement to fees and meets the 

minimum requirements in an application and affidavit, as SFG did here, the 

burden shifts to the party opposing the fee award to demonstrate the 

impropriety or unreasonableness of the requested fees. Assyia, 229 Ariz. at

223, ¶ 29, 273 P.3d at 675. The argument that $400 was an unreasonable 

hourly rate because SFG’s counsel, Craig Marks, lacked sufficient litigation 

experience is not persuasive. See State ex rel. Corbin v. Tocco, 173 Ariz. 587, 

594, 845 P.2d 513, 520 (App. 1992) (citing State v. Maricopa Cnty. Med. Soc’y,

578 F. Supp. 1262, 1264 (D. Ariz. 1984)) (opposing party cannot simply claim 

that the rates submitted are “too high”). SFG supported its fee request with 

an affidavit from counsel that documented Mr. Marks’ experience and 

credentials, including more than 30 years’ experience in utility law. SFG 

was entitled to retain competent, experienced counsel to represent it, and a 

commensurate hourly rate was not unreasonable. See Assyia, 229 Ariz. at 
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223, ¶ 30, 273 P.3d at 675. Therefore, finding no error, we affirm the court’s 

award of SFG’s attorneys’ fees.

II. SFG’S CROSS-APPEAL

¶47 In its cross-appeal, SFG argues that the trial court erred in 

granting Utility’s motion for summary judgment and dismissing SFG’s 

claim that Utility tortiously breached the covenant of good faith and fair 

dealing. SFG seeks to reverse the court’s ruling, and remand the claim for 

a jury trial. For the following reasons, we affirm.

¶48 SFG, as part of its claims against Utility, asserted a claim for 

breach of good faith and fair dealing as it related to Utility’s alleged breach 

of contract. Specifically, SFG argued that Utility breached its duty of good 

faith by failing to make payment under the Oasis Agreement and by failing 

to abide by the ACC-mandated tariffs in providing water service. Utility 

moved for summary judgment, which included SFG’s bad faith claim, the 

court granted the motion in part and dismissed the claim.13 SFG filed a 

motion for reconsideration, which the court denied.

¶49 We review the grant of summary judgment de novo to 

determine “whether there are any genuine issues of material fact” and to 

determine whether the movant is entitled to judgment as a matter of law. 

Unique Equip. Co. v. TRW Vehicle Safety Sys., Inc., 197 Ariz. 50, 52, ¶ 5, 3 P.3d 

970, 972 (App. 1999). If “the evidence or inferences would permit a jury to 

resolve a material issue in favor of either party, summary judgment is 

improper.” Comerica Bank v. Mahmoodi, 224 Ariz. 289, 292, ¶ 19, 229 P.3d 

1031, 1034 (App. 2010) (internal citation and quotation marks omitted). We 

view the facts and reasonable inferences in the light most favorable to the 

 

13 SFG argues that Utility’s motion for summary judgment only requested 

that the court dismiss SFG’s bad faith claim as to the Utility Services 

Agreement and the Oasis Agreement, but not as to the tariff contract. SFG 

contends, “the Court granted a motion that was not made and to which 

[SFG] did not respond.” In its summary judgment motion, Utility claimed 

it was entitled to summary judgment on Count Six of SFG’s First Amended 

Counterclaim, which alleged that Utility breached the covenant of good 

faith and fair dealing by breaching the terms of the Utility Service 

Agreement, the Oasis Agreement, and tariffs. The record, as a result, 

supports the court’s ruling that the motion encompassed SFG’s bad faith 

claim in its entirety.
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party against whom judgment was entered. Unique Equip. Co., 197 Ariz. at 

52, ¶ 5, 3 P.3d at 972.

¶50 Tort damages for breach of the covenant of good faith and fair 

dealing are available only when there exists a “special relationship” 

between the parties, which is characterized by “‘elements of public interest, 

adhesion, and fiduciary responsibility.’” Rawlings v. Apodaca, 151 Ariz. 149, 

158, 726 P.2d 565, 574 (1986) (quoting Seaman’s Direct Buying Serv., Inc. v. 

Standard Oil Co. of Cal., 686 P.2d 1158, 1166 (Cal. 1984)) (emphasis added). 

Examples of the “special relationship” include the relationship between 

common carrier and passenger, innkeeper and guest, physician and patient, 

and attorney and client. Rawlings, 151 Ariz. at 159, 726 P.2d at 575. And as 

the superior court noted in its ruling, Arizona case law does not permit tort 

damages “based on the adhesive nature of the contract alone – the Supreme 

Court used ‘and,’ not ‘or,’ in listing the elements.” See id. at 158, 726 P.2d at 

574.

¶51 Here, SFG alleged the special relationship between the parties 

was based solely on the adhesive nature of the contract, and it did not allege 

any additional elements of public interest or fiduciary responsibility in its 

amended counterclaim. In its cross-appeal, SFG now argues that Utility’s 

relationship with its customers is subject to the public interest and involved 

fiduciary elements. SFG did not raise the argument in response to the 

summary judgment motion, but only in its motion for reconsideration. The 

superior court did not reconsider its ruling, and we generally do not 

consider arguments raised for the first time in a motion for reconsideration. 

See Evans Withycombe, Inc. v. W. Innovations, Inc., 215 Ariz. 237, 240, ¶ 15, 159 

P.3d 547, 550 (App. 2006). Because we find no reason to consider an 

argument the court did not address, SFG failed to preserve its argument for 

appellate review.

III. ATTORNEYS’ FEES AND COSTS ON APPEAL

¶52 Both parties have requested an award of attorneys’ fees and 

costs upon appeal pursuant to A.R.S. § 12-341.01. Because Utility/Oasis has 

not prevailed, we deny the request. In the exercise of our discretion, we 

award SFG its reasonable attorneys’ fees on appeal in an amount to be 

determined pursuant to A.R.S. § 12-341.01, as well as its costs on appeal 

upon compliance with Arizona Rule of Civil Appellate Procedure 21.
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CONCLUSION

¶53 For the foregoing reasons, we affirm the court’s judgment.