IN THE

ARIZONA COURT OF APPEALS

DIVISION TWO

TUCSON ESTATES PROPERTY OWNERS ASSOCIATION, INC., AN ARIZONA 

NONPROFIT CORPORATION,

Plaintiff/Appellee,

v.

HOLLY A. MCGOVERN, AN UNMARRIED WOMAN; AND

DONALD E. SINES, AN UNMARRIED MAN,

Defendants/Appellants.

No. 2 CA-CV 2015-0069

Filed January 15, 2016

Appeal from the Superior Court in Pima County

No. C20145514

The Honorable Richard S. Fields, Judge

AFFIRMED IN PART AND REVERSED IN PART

COUNSEL

Carpenter, Hazlewood, Delgado & Bolen, PLC, Tucson

By Jason Smith and Nicholas Nogami

Counsel for Plaintiff/Appellee

Stephen M. Weeks, Marana

Counsel for Defendants/Appellants
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

2

OPINION

Judge Miller authored the opinion of the Court, in which Presiding 

Judge Vásquez and Chief Judge Eckerstrom concurred.

M I L L E R, Judge:

¶1 We address whether A.R.S. § 12-341.01 requires an 

award of attorney fees to the prevailing party if the contract that 

authorizes such fees mandates an award to the other party but is 

silent as to the prevailing party. As a matter of statutory 

interpretation, we conclude that § 12-341.01(A) permits a fees award 

in this situation but does not mandate it.

¶2 Holly McGovern and Donald Sines (collectively, 

“Appellants”) appeal the trial court’s denial of their request for 

attorney fees and costs against Tucson Estates Property Owners 

Association (TEPOA) after its request for an injunction and breach of 

contract claims were decided in favor of Appellants. Appellants

argue they should have been awarded fees pursuant to A.R.S. 

§ 12-341.01 and costs pursuant to A.R.S. § 12-341 because they were 

the prevailing parties below; further, they should have been 

awarded fees pursuant to A.R.S. § 12-349 as a sanction. For the 

following reasons, we affirm the court’s ruling on attorney fees but

reverse its denial of costs.

Factual and Procedural Background

¶3 We view the facts in the light most favorable to 

upholding the trial court’s ruling. McMurray v. Dream Catcher USA, 

Inc., 220 Ariz. 71, ¶ 6, 202 P.3d 536, 539 (App. 2009). In 2012, 

Appellants purchased property in Tucson Estates, which included a 

shed that had been built more than thirty-five years earlier. They 

were informed in writing that if they moved or replaced the shed, 

any new structure would have to comply with the current 

covenants, conditions, and restrictions (CC&Rs).
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

3

¶4 Sines soon submitted a change request to replace the 

shed in a new location.1 The request form included this admonition:

“The Association has thirty (30) days to respond to this request. Do 

not start your project until you have received approval.” There were 

multiple handwritten notes on the form, including “Appears shed 

will fit,” and a check mark in a box indicating the plan was denied. 

Contrary to the suggestion in the document that his plan was 

rejected, Sines testified that the person who inspected the property

for TEPOA gave verbal approval to replace the shed. He also 

testified he never received a copy of his request with the “Plan 

Denial” box checked. The trial court accepted Sines’s testimony, 

finding that TEPOA did not send the rejection form to Appellants.

¶5 More than a year after Sines submitted the request, and 

after he had completed the shed, TEPOA sent Sines a letter stating 

he had violated the CC&Rs. Sines continued to correspond with 

TEPOA and eventually moved the shed to the cement pad where the 

previous shed had stood.

¶6 TEPOA sought injunctive relief to require appellants to 

remove the shed, as well as liquidated damages and attorney fees

based on breach of contract. The matter was tried to the court in a 

one-day hearing. The court found the homeowners relied on either 

actual or implicit approval in building their shed. Additionally, it 

denied injunctive relief based, in part, on TEPOA’s year-long delay 

in giving notice to Appellants of the alleged violations of the CC&Rs 

and its failure to approve the relocation of the shed. The court also 

vacated the fines imposed by TEPOA against the homeowners, 

effectively denying the breach of contract claims. The court 

concluded, “In light of the tenor of this case, each party is to bear 

their own fees and costs.” The court denied Appellants’ motion for 

reconsideration “[i]n light of the procedural history, the evidence 

presented, and the tenor of the case.” Appellants’ motion for a new 

trial on the attorney fees issue was denied without further comment. 

This timely appeal followed.

 

1Although both McGovern and Sines are owners of the lot, 

most of the communications with TEPOA involved only Sines.
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

4

Attorney Fees

Mandatory Attorney Fees Pursuant To § 12-341.01

¶7 Appellants contend the trial court was required to 

award attorney fees under § 12-341.01(A). We generally review the 

denial of attorney fees for an abuse of discretion, but whether

§ 12-341.01(A) requires an award of fees is a question of law we 

review de novo. See Bennett Blum, M.D., Inc. v. Cowan, 235 Ariz. 204, 

¶ 5, 330 P.3d 961, 962-63 (App. 2014).

¶8 Section 12-341.01(A) provides that in an action arising 

out of contract, the trial court “may award the successful party 

reasonable attorney fees.” (Emphasis added.) This section, 

however, cannot “be construed as altering, prohibiting or 

restricting” the contract terms. Id.

¶9 We first determine whether there was a contract 

between the parties and, if so, examine the particular fees provision. 

See Barmat v. John & Jane Doe Partners A-D, 155 Ariz. 519, 521, 747 

P.2d 1218, 1220 (1987) (analyzing first whether express or implied 

contract existed before determining whether § 12-341.01 applied). 

Here, the relevant fees clause is contained in the CC&Rs, which

constitute a contract between TEPOA’s property owners as a whole 

and individual lot owners. Ahwatukee Custom Estates Mgmt. Ass’n, 

Inc. v. Turner, 196 Ariz. 631, ¶ 5, 2 P.3d 1276, 1279 (App. 2000). The 

agreement included this attorney fees provision: “In the event 

[TEPOA] receives judgment against any person for a violation or 

threatened violation of any of the CC&R’s herein, [TEPOA] shall . . . 

be entitled to recover from such person reasonable legal fees and 

costs.” The CC&Rs contained no provisions regarding attorney fees

in the event judgment was rendered for the lot owner and against 

TEPOA.

¶10 Appellants argue they were entitled to mandatory 

attorney fees under § 12-341.01(A) as a matter of “equity [and] basic 

fairness” because TEPOA would have received mandatory fees 

under the unilateral contract provision if it had prevailed. They rely 

on Pioneer Roofing Co. v. Mardian Construction Co., 152 Ariz. 455, 733 
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

5

P.2d 652 (App. 1986), to support this argument.2 In that case, the 

trial court ordered Mardian to pay the attorney fees of two other 

parties. Id. at 470, 733 P.2d at 667. The contract contained a specific 

provision that allowed Mardian to recover attorney fees in disputes, 

but was silent as to the other parties. Id. Mardian argued on appeal 

that the contract provision preempted the applicability of 

§ 12-341.01, and because it was silent as to the other parties, it was 

error to award them fees. 152 Ariz. at 470, 733 P.2d at 667. In 

upholding the award of fees, we concluded that there was no 

“prohibition against the recovery of attorneys’ fees to one party 

under § 12-341.01 simply because a contract contains a unilateral 

attorneys’ fees provision favorable to another party.” Id. at 471, 733 

P.2d at 668; see also Geller v. Lesk, 230 Ariz. 624, ¶ 9, 285 P.3d 972, 975 

(App. 2012) (citing Pioneer Roofing for principle that court will apply 

contract to determine fee award for named party, but “may award 

fees for other party under A.R.S. § 12-341.01(A)”).

¶11 Appellants seek to expand Pioneer Roofing to mandate 

an award of fees when a unilateral fees provision requires an award

of fees to the other party had it prevailed. Although arguably 

reasonable as a matter of equity, the plain language of § 12-341.01(A)

states only that a court may award fees in an action arising out of 

contract, and that it will not alter applicable contracts. The purpose 

of the statute is to “mitigate the burden of the expense of litigation to 

establish a just claim or a just defense.” § 12-341.01(B); Chaurasia v. 

Gen. Motors Corp., 212 Ariz. 18, ¶ 43, 126 P.3d 165, 176 (App. 2006). 

It offers the possibility of mitigating the expense of bringing a valid 

 

2Appellants also rely on two unpublished cases dated before 

January 1, 2015, presumably because they wish to assist the court in 

deciding whether to issue a published opinion. See Ariz. R. Sup. 

Ct. 111(c) (allowing citation to memorandum decisions to establish 

claim preclusion, assist court in deciding whether to publish, or—if 

issued on or after January 1, 2015—for persuasive value). The two 

unpublished cases, however, do not illustrate any lack of guidance 

in published case law or expand the holding of Pioneer Roofing, 152 

Ariz. at 471-72, 733 P.2d at 668-69. Thus, we rely solely on the 

published cases.
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

6

claim, but does not, by its language and stated purpose, require 

equity. Further, Pioneer Roofing does not support such an expansion; 

the court held only that the trial court has the discretion to award 

attorney fees under § 12-341.01 despite the existence of a unilateral 

fee provision. 152 Ariz. at 471, 733 P.2d at 668. To the extent this 

mandatory-discretionary differentiation results in an asymmetrical 

treatment of parties to a contract,3 the authority to revise § 12-341.01 

is vested solely in the legislature.4 See In re Pinal Cty. Mental Health 

No. MH-201000029, 225 Ariz. 500, ¶ 20, 240 P.3d 1262, 1268 (App. 

2010) (“[T]his court is not free to amend the unambiguous language 

of our statutes to conform to our own notions of public policy.”). 

The trial court was not required to award attorney fees pursuant to 

§ 12-341.01 and Pioneer Roofing.

 

3A party may avoid asymmetrical treatment under the terms 

of a contract by negotiation or simply refusing to enter such a 

contract. We recognize that some contracts may be contracts of 

adhesion for which there is no practical ability to alter the terms of 

an unfavorable contract. See generally Broemmer v. Abortion Servs. of 

Phx., Ltd., 173 Ariz. 148, 150-51, 840 P.2d 1013, 1015-16 (1992). 

Because this issue was not raised below, we express no opinion as to 

whether the CC&Rs constitute such a contract and, even if so 

construed, whether an adhesion contract would affect the statutory 

analysis.

4Appellants argue in their reply that reciprocal attorney fees 

were required under the familiar maxim “‘[o]ne who seeks equity 

must do equity.’” See, e.g., Turner, 196 Ariz. 631, ¶ 20, 2 P.3d at 1282, 

quoting Ariz. Coffee Shops, Inc. v. Phx. Downtown Parking Ass’n, 95 

Ariz. 98, 100, 387 P.2d 801, 802 (1963) (alteration in Turner). 

Typically we do not consider arguments raised for the first time in a 

reply brief. Fisher v. Edgerton, 236 Ariz. 71, n.2, 336 P.3d 167, 171 n.2 

(App. 2014). Even were we to consider the issue here, it is doubtful 

a general common-law canon supplants the plain language of § 12-

341.01. Cf. Flood Control Dist. of Maricopa Cty. v. Gaines, 202 Ariz. 248, 

¶ 9, 43 P.3d 196, 200 (App. 2002) (within constitutional limits, 

legislature may alter common law “when its intent to do so is 

‘clearly and plainly manifest[ed]’”), quoting Wyatt v. Wehmueller, 167 

Ariz. 281, 284, 806 P.2d 870, 873 (1991) (alteration in Gaines).
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

7

Whether Discretionary Attorney Fees Should Have Been Awarded

¶12 Appellants argue in the alternative that the trial court 

abused its discretion because the factors to be considered in 

awarding fees pursuant to § 12-341.01(A) weighed in their favor. 

We may uphold a decision on attorney fees under § 12-341.01 if it 

has any reasonable basis, even if the trial court gave no reasons for 

denying the request for fees. Uyleman v. D.S. Rentco, 194 Ariz. 300, 

¶ 27, 981 P.2d 1081, 1086 (App. 1999). The question on appeal “‘is 

not whether the judges of this court would have made an original 

like ruling, but whether a judicial mind, in view of the law and 

circumstances, could have made the ruling without exceeding the 

bounds of reason. We cannot substitute our discretion for that of the 

trial judge.’” Associated Indem. Corp. v. Warner, 143 Ariz. 567, 571, 

694 P.2d 1181, 1185 (1985), quoting Davis v. Davis, 78 Ariz. 174, 179, 

277 P.2d 261, 265 (1954) (Windes, J., specially concurring).

¶13 Our supreme court outlined the factors that may be 

considered to determine the amount of a fee award under 

§ 12-341.01. Id. at 570, 694 P.2d at 1184. Those potentially applicable 

here include the merits of the claim presented by TEPOA, whether 

the litigation could have been avoided or settled, whether fees 

would cause extreme hardship to the unsuccessful party, whether 

the successful party prevailed with respect to all relief sought, 

novelty of the legal questions, and whether awarding fees would 

discourage parties from prosecuting legitimate contract claims. Id.

¶14 Appellants contend all factors weighed in their favor, 

particularly because the trial court concluded the late issuance of the 

denial letter “encroache[d] on misconduct,” and because the 

homeowners repeatedly communicated with TEPOA to resolve the 

issue, ultimately moving the shed. Although the trial court did 

make note of TEPOA’s failures, it generally found that the merits of 

the case were “equally balanced,” and that the delay in issuing the 

denial later essentially tipped the scale against TEPOA. The other 

factors may weigh in favor of Appellants, but because a reasonable 

basis supports the ruling, we do not substitute our discretion for that 

of the trial court. Orfaly v. Tucson Symphony Soc’y, 209 Ariz. 260,

¶ 21, 99 P.3d 1030, 1036 (App. 2004). The court did not abuse its 

discretion by denying Appellants’ request for attorney fees.
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

8

Whether Attorney Fees Should Have Been Awarded As a Sanction

¶15 Appellants contend attorney fees were mandatory 

under A.R.S. § 12-349(A)(1) for bringing a claim without substantial 

justification. We could consider TEPOA’s failure to respond to this 

argument to be a confession of error, see In re 1996 Nissan Sentra, 201 

Ariz. 114, ¶ 7, 32 P.3d 39, 42 (App. 2001), but in our discretion we do 

not do so, see Savord v. Morton, 235 Ariz. 256, ¶ 9, 330 P.3d 1013 

(App. 2014). To mandate attorney fees, TEPOA’s claim must have 

been groundless and not made in good faith. See § 12-349(F). As the 

trial court found, there was conflicting evidence regarding

Appellants’ assertion they had no notice of the plan denial. This 

conflict in the testimony and the absence of evidence showing the 

claim lacked good faith demonstrates that the trial court did not err 

in its decision not to award § 12-349 attorney fees.5

Costs

¶16 Appellants argue the trial court erred by denying their 

request for costs. We review the court’s decision for an abuse of 

discretion. Democratic Party of Pima Cty. v. Ford, 228 Ariz. 545, ¶ 15, 

269 P.3d 721, 725 (App. 2012).

¶17 A.R.S. § 12-341 states, “The successful party to a civil 

action shall recover from his adversary all costs expended or 

incurred therein unless otherwise provided by law.” Although the 

award of costs is mandatory, the trial court has discretion to 

determine which party was successful. Ford, 228 Ariz. 545, ¶ 15, 269 

P.3d at 725. Arizona courts apply the same principles to determine 

the successful party in both the attorney fees and costs contexts. See

Henry v. Cook, 189 Ariz. 42, 44, 938 P.2d 91, 93 (App. 1996).

¶18 TEPOA does not directly respond to the § 12-341

argument, but generally contends that Appellants were not 

successful parties below. It reasons that because injunctive relief is 

 

5Appellants also argue the trial court erred by failing to make 

findings of fact as required by A.R.S. § 12-350, but this was never 

raised below, and is therefore waived. See Trantor v. Fredrikson, 179 

Ariz. 299, 300-01, 878 P.2d 657, 658-59 (1994).
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

9

an equitable remedy and denial of such does not require finding a 

prevailing party, the trial court could have correctly determined that 

neither party prevailed. TEPOA relies on Turner, 196 Ariz. 631, ¶ 4, 

2 P.3d at 1278, in which a special master denied retroactive 

injunctive relief to the plaintiffs for previous violations of the 

CC&Rs, but enjoined the homeowners from making future 

alterations without board approval. The court upheld the finding 

that there was no prevailing party. Id. ¶ 22. Turner is inapposite. 

TEPOA prevailed on none of the claims against Appellants, while 

each party in Turner prevailed in part. Id. ¶ 4. Moreover, 

Appellants prevailed against the breach of contract claims for 

monetary damages. In view of its ruling on the merits that denied 

all of TEPOA’s requested relief and the mandatory requirement of 

A.R.S. § 12-341, the court erred in failing to award Appellants their 

costs. See Michaelson v. Garr, 234 Ariz. 542, ¶ 5, 323 P.3d 1193, 1195 

(App. 2014) (court abuses discretion when record devoid of 

competent evidence supporting decision).

Request for Judicial Notice of Subsequent Case

¶19 Appellants requested that this court take judicial notice 

of a second lawsuit filed against them by TEPOA after they filed 

their notice of appeal. They argue the second lawsuit is relevant 

because it illustrates that an attorney fee award is necessary to 

discourage “another meritless lawsuit.” TEPOA objects to the 

request and seeks attorney fees as a sanction for a frivolous motion. 

See Ariz. R. Civ. App. P. 25.

¶20 We decline the request to take judicial notice because

the case file was not forwarded along with the request. Ariz. Dep’t of 

Revenue v. Questar S. Trails Pipeline Co., 215 Ariz. 577, n.7, 161 P.3d

620, 625 n.7 (App. 2007). Further, the case was not available to the 

trial court at the time it ruled and its relevance is minimal, at least 

while it is pending in the superior court. Although we decline to 

take judicial notice of the subsequent case, in our discretion we deny

TEPOA’s request for fees.
TUCSON ESTATES POA v. MCGOVERN; SINES

Opinion of the Court

10

Disposition

¶21 For the foregoing reasons, we affirm the trial court’s 

ruling as to attorney fees, but reverse as to costs. Appellants also 

request an award of attorney fees on appeal. In our discretion, we 

deny the request.