NOTICE: NOT FOR PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE

LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

DEEPWATER DIVERS, INC., a California corporation, Plaintiff/Appellee,

v.

WELLS FARGO INSURANCE SERVICES USA, INC. a North Carolina 

corporation, as successor in interest to WELLS FARGO INSURANCE 

SERVICES OF ARIZONA, INC., an Arizona corporation, 

Defendant/Appellant.

No. 1 CA-CV 13-0518

Appeal from the Superior Court in Maricopa County

No. CV2009-033792

The Honorable Emmet J. Ronan, Judge

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

COUNSEL

Burch & Cracchiolo, P.A., Phoenix

By Jake D. Curtis, Daryl Manhart, Melissa Iyer

Counsel for Plaintiff/Appellee

Kutak Rock LLP, Scottsdale

By Paul S. Gerding, Paul S. Gerding, Jr., Andrew J. Russell

Counsel for Defendant/Appellant
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

2

MEMORANDUM DECISION

Judge John C. Gemmill delivered the decision of the Court, in which 

Presiding Judge Patricia K. Norris and Judge Lawrence F. Winthrop joined.

G E M M I L L, Judge:

¶1 Defendant/Appellant Wells Fargo Insurance Services USA, 

Inc. (“Wells Fargo”) appeals a judgment entered upon a jury verdict in 

favor of Plaintiff/Appellee Deepwater Divers, Inc. (“Deepwater”). The jury 

found against Wells Fargo on claims of breach of contract and negligence. 

For the reasons that follow, we affirm in part, reverse in part, and remand 

for further proceedings consistent with this decision. 

BACKGROUND 

¶2 Deepwater is a California-based company that provided 

commercial diving services. In September 2006, Wells Fargo provided 

brokerage services to help Deepwater obtain necessary commercial liability 

insurance. Those policies terminated in September 2007, and Deepwater 

did not renew them. At the time of termination, Deepwater owed $7500 in 

unpaid premiums on an umbrella policy purchased through Wells Fargo in 

May 2007.

¶3 In February 2007, Deepwater signed a Master Services 

Agreement (“MSA”) with Badger Oil Corporation. The MSA allowed 

Deepwater to submit bid proposals for jobs with Badger Oil, and in October 

2007, Badger Oil accepted Deepwater’s bid on a large-scale diving project, 

worth $291,000 in gross revenue to Deepwater. In accordance with the 

MSA, Deepwater was required to maintain various insurance policies, 

including comprehensive general liability and umbrella liability coverages, 

and to have Badger Oil named as an additional insured on all policies.

¶4 In order to obtain the necessary insurance, Deepwater again 

engaged the brokerage services of Wells Fargo. On October 15, 2007, 

Deepwater emailed Wells Fargo representative Greg Golucci to inform him 

that the Badger Oil job was “going forward.” In that email, Deepwater 

attached the portion of the MSA that outlined the insurance requirements 

for the Badger Oil job. On October 24, Deepwater wired the $7500 needed 

to pay the premiums outstanding on its prior policy. In a telephone 
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

3

conversation on Friday, October 26, Deepwater Vice President Michael 

Fennesy informed Golucci that the certificates of insurance needed to be in 

place by noon on the next business day, October 29. Fennesy testified that 

Golucci assured him that the certificates would in fact be available at that 

time.

¶5 By October 29, Wells Fargo had not yet obtained a quote for 

the insurance Deepwater required. On October 31, Wells Fargo informed 

Deepwater that its application had been declined by a prospective provider. 

Deepwater responded with an email emphasizing the urgency of its need 

for proof of insurance coverage and outlining the financial expenditures it 

had made in preparation for the Badger Oil job. This email also expressed

Deepwater’s concerns that Badger Oil would soon take legal action if the 

insurance coverage was not in place. On the next day, November 1, Wells 

Fargo severed its relationship with Deepwater. As a result of Deepwater 

not having the necessary insurance, Badger Oil cancelled the contract and 

Deepwater lost the job.

¶6 Deepwater brought suit against Wells Fargo, alleging breach 

of contract and negligence claims related to the failed attempt to procure 

insurance coverage. Before trial, Wells Fargo filed a motion for summary 

judgment, arguing that there was no valid contract between the parties, 

Wells Fargo’s statements could not support a negligence claim, and 

Deepwater’s negligence claims were barred by the economic loss doctrine. 

The court denied the motion. At the close of Deepwater’s case, Wells Fargo 

reasserted these arguments in a motion for judgment as a matter of law. 

The court again denied the motion and sent the claims to the jury. 

¶7 The jury found in favor of Deepwater on its breach of contract 

and negligence claims and awarded $1,134,442 in damages. On the 

negligence claim, the jury assigned 95 percent of the fault to Wells Fargo 

and the remaining five percent of fault to Deepwater. In October 2013, the 

court entered judgment in favor of Deepwater and awarded it pre- and 

post-judgment interest, attorney fees, and costs. Wells Fargo filed a 

renewed motion for judgment as a matter of law under Arizona Rule of 

Civil Procedure 50 and a motion for new trial under Arizona Rule of Civil 

Procedure 59. Both motions were denied. Wells Fargo timely appeals. This 

court has jurisdiction under Arizona Revised Statutes (“A.R.S.”) sections 

12-120.21 and -2101. 
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

4

ANALYSIS 

I. Denial of Summary Judgment 

¶8 Wells Fargo argues that the trial court erred when it denied 

its motion for summary judgment. However, the denial of a motion for 

summary judgment is not a “final order” under A.R.S. § 12-2101 and 

therefore is generally not appealable or subject to review after judgment. 

Martin v. Schroeder, 209 Ariz. 531, 533, ¶ 5, 105 P.3d 577, 579 (App. 2005). 

Accordingly, we need not address directly whether summary judgment 

was properly denied. 

II. Denial of Motion for Judgment as a Matter of Law 

¶9 Wells Fargo also claims that the trial court erred in denying 

its motions for judgment as a matter of law (“JMOL”) and renewed JMOL. 

We review de novo a trial court’s denial of JMOL. Felder v. Physiotherapy 

Assoc., 215 Ariz. 154, 162, ¶ 36, 158 P.3d 877, 885 (App. 2007). A motion for 

JMOL may be granted when “there is no legally sufficient evidentiary basis 

for a reasonable jury to find for that party on that issue.” Ariz. R. Civ. P. 

50(a). Because “in considering a JMOL motion, a trial court should apply 

the same test for deciding whether to grant a motion for summary 

judgment,” we consider Wells Fargo’s legal arguments in support of its 

motion for summary judgment as relevant to its JMOL motion. See Crackel 

v. Allstate Ins. Co., 208 Ariz. 252, 259–60, ¶ 20, 92 P.3d 882, 889–90 (App. 

2004).

A. Breach of Contract Claim 

¶10 First, Wells Fargo claims that no contract existed between the 

parties, arguing Deepwater offered no evidence that the parties reached any 

agreement as to the carrier of insurance, duration of coverage, or amount of 

premium. In the absence of any specific terms, Wells Fargo asserts that any 

agreement between it and Deepwater was merely conditional and 

incapable of sustaining a breach of contract claim. Deepwater argues that 

it did not need to present any such evidence and alleges instead that the 

parties entered into a valid contract to procure insurance, not for insurance 

itself, and that Deepwater suffered damages when that contract was 

breached. The question before this court, then, is whether a reasonable jury 

could have found that Deepwater proved the existence of an agreement 

capable of sustaining a breach of contract claim. 
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

5

¶11 To determine whether a claim based on a breach of duty 

sounds in contract, this court looks to “whether the defendant would have 

a duty of care under the circumstances even in the absence of a contract.” 

Premium Cigars Intern., Ltd. v. Farmer-Butler-Leavitt Ins. Agency, 208 Ariz. 

557, 568, ¶ 33, 96 P.3d 555, 566 (App. 2004) (quoting Ramsey Air Meds, LLC 

v. Cutter Aviation, Inc., 198 Ariz. 10, 15, ¶ 27, 6 P.3d 315, 320 (App. 2000), 

abrogated on other grounds by Webb v. Glitten, 217 Ariz. 363, 174 P.3d 275 

(2008)). If the obligation of the party would have arisen even without a 

contract in place, then the obligation sounds in tort and will not support a 

breach of contract claim. Id.; see also Barmat v. John & Jane Doe Partners A–D, 

155 Ariz. 519, 523, 747 P.2d 1218, 1222 (1987) (explaining that “where the 

implied contract does no more than place the parties in a relationship in 

which the law then imposes certain duties recognized by public policy, the 

gravamen of the subsequent action for breach is in tort, not contract”). 

¶12 When an insurance broker undertakes to procure insurance 

coverage, it incurs “a duty to the insured to exercise reasonable care, skill, 

and diligence” in seeking out the policy. Premium Cigars, 208 Ariz. at 566, 

¶ 22, 96 P.3d at 564 (quoting Darner Motor Sales, Inc. v. Universal

Underwriters Ins. Co., 140 Ariz. 383, 397, 682 P.2d 388, 402 (1984)). This duty

is not a contractual duty, however, because it does not arise from a specific 

contractual relationship. Instead, it is implied as a matter of law. See id. 

Because the “special duties” professionals such as attorneys and 

accountants owe to their clients are implied in law, breaches of these duties 

“are generally recognized as torts.” Barmat, 155 Ariz. at 523, 747 P.2d 1222. 

¶13 In Barmat, our supreme court explained that claims for 

breaches of duties implied in law sound in tort, rather than in contract. 

Barmat, 155 Ariz. at 523, 747 P.2d at 1222. That case involved a client’s 

malpractice suit against a lawyer. The client claimed that the lawyer had 

breached his duty to render competent and ethical service. Id. at 521, 747 

P.2d at 1220. In order to stand under the relevant statute, the client’s claim 

had to arise out of an express or implied contract. Id. at 523, 747 P.2d at 

1222. The Arizona Supreme Court held that although a contract between 

an attorney and a client includes an implied covenant to provide competent 

service, that covenant is implied in law, not in fact. Id. at 521–22, 747 P.2d 

at 1220–21. Therefore, the claim did not arise out of a contract. Id. at 524, 

747 P.2d at 1223. Similarly, an insurance broker’s duty to exercise 

reasonable care in procuring an insurance policy arises as a matter of law. 

Claims alleging a breach of that duty therefore sound in tort and not in 

contract. 
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

6

¶14 A promise to procure insurance may, however, sound in 

contract if all requirements of contract formation are satisfied. Premium 

Cigars, 208 Ariz. at 568, ¶ 35, 96 P.3d at 566. The purported contract for 

insurance must be supported by “sufficient specification of terms so that 

the obligations involved can be ascertained.” Regal Homes, Inc. v. CNA Ins., 

217 Ariz. 159, 166, ¶ 29, 171 P.3d 610, 617 (App. 2007) (quoting Savoca 

Masonry Co. v. Homes & Son Const. Co., 112 Ariz. 392, 394, 542 P.2d 817, 819 

(1975)). A sufficiently specific contract for insurance must include all the 

essential terms of the policy, including the subject of insurance, the duration 

of coverage, and the policy premium. See Gulf Ins. Co. v. Grisham, 126 Ariz. 

123, 125, 613 P.2d 283, 285 (1980). 

¶15 We agree with the contention in Deepwater’s answering brief 

that the agreement in this case was an agreement to procure insurance: 

“The essential terms of the contract between the parties were that Golucci, 

on behalf of Wells Fargo, promised, by noon on October 29th, to obtain the 

insurance policy placement Deepwater needed to meet the Badger Oil 

requirements.” It was not an agreement on the terms of one or more specific 

insurance policies. Michael Fennesy testified that Golucci offered to 

procure insurance for Deepwater and that Deepwater accepted this offer. 

As a result, Wells Fargo undertook, as a matter of law, a duty to exercise 

reasonable care in procuring an insurance policy. But in the absence of any 

sufficiently specific agreement regarding the insurance company, the extent 

and duration of coverage, and the policy premium, Wells Fargo had no 

greater contractual obligation as a result of Golucci’s alleged promise. It 

had the usual duty to exercise reasonable care, which it assumed as a matter 

of law. Any claim Deepwater may have as a result of the breach of this duty 

is therefore a tort claim, not a contract claim. See Barmat, 155 Ariz. at 523, 

747 P.2d at 1222; see also Travelers Ins. Co. v. Breese, 138 Ariz. 508, 511, 675 

P.2d 1327, 1330 (App. 1983) (“A promise lacks consideration if the promisee 

is under a preexisting duty to counter-perform.”). 

¶16 Deepwater, by failing to prove the existence of the elements 

necessary to form a contract for insurance, did not present evidence 

sufficient to support a breach of contract claim. Any claim Deepwater may 

possess from Wells Fargo’s failure to procure insurance sounds in tort, not 

contract. Accordingly, the trial court erred in denying Wells Fargo’s motion 

for JMOL on Deepwater’s breach of contract claim. 
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

7

B. Negligence Claim and the Economic Loss Doctrine

¶17 Wells Fargo also argues that, because any alleged damage is 

purely pecuniary, Deepwater’s negligence claim is barred by the economic 

loss doctrine. The economic loss doctrine, however, applies only when the 

parties have entered into a contract defining their relationship. See Sullivan 

v. Pulte Home Corp., 232 Ariz. 344, 346, ¶ 9, 306 P.3d 1, 3 (2013); Flagstaff 

Affordable Housing Ltd. P’ship v. Design Alliance, Inc., 223 Ariz. 320, 323, ¶ 11, 

223 P.3d 664, 667 (2010). Because no contractual agreement existed between 

the parties in this case, the economic loss doctrine does not apply and the 

court correctly denied Wells Fargo’s motion for JMOL on this issue. 

III. Proposed Jury Instructions 

¶18 At trial, Wells Fargo presented separate proposed jury 

instructions regarding Deepwater’s contract and tort claims. Wells Fargo 

requested the court instruct the jury on whether Deepwater had proven a 

claim for negligent misrepresentation. Wells Fargo argues that the court

erred when it did not include these proposed instructions in its final 

instructions. We conclude the court did not err in declining to include Wells 

Fargo’s negligent misrepresentation instructions in the final jury 

instructions because the specific claims addressed therein were not at issue 

in the case. 

¶19 To determine whether proposed instructions were 

improperly omitted from the final jury instructions, this court considers the 

evidence presented in the light most favorable to support the theory of the 

party proposing the instruction. Miller v. Arnal Corp., 129 Ariz. 484, 489, 632 

P.2d 987, 992 (App. 1981). In general, a party who requests instructions is 

entitled to have them given to the jury if they are legally proper, supported 

by the evidence, and pertinent to an important issue. DeMontiney v. Desert 

Manor Convalescent Ctr. Inc., 144 Ariz. 6, 10, 695 P.2d 255, 259 (1985). But 

requested jury instructions must appropriately address the legal issues 

presented.

¶20 Wells Fargo’s proposed instructions on negligent 

misrepresentation were properly rejected by the trial court because 

negligent misrepresentation was not alleged in the case. Wells Fargo claims 

that Deepwater’s negligence claim is more properly construed as a claim 

for negligent misrepresentation. Contrary to Wells Fargo’s assertions, 

however, the gravamen of the tort allegations was not negligent 
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

8

misrepresentation but common-law negligence on the part of an insurance 

broker. 

¶21 Liability for negligent misrepresentation is described by the 

Restatement (Second) of Torts § 552, as follows:

One who, in the course of his business, profession or 

employment, or in any other transaction in which he has a 

pecuniary interest, supplies false information for the 

guidance of others in their business transactions, is subject to 

liability for pecuniary loss caused to them by their justifiable 

reliance upon the information, if he fails to exercise 

reasonable care or competence in obtaining or 

communicating the information.

Neither in its complaint nor its argument does Deepwater allege that it 

relied on Wells Fargo’s promise to provide insurance brokerage services as 

guidance when it decided to enter into the contract with Badger Oil. Rather, 

it alleged and argued that Wells Fargo assumed a duty when it contracted 

with Deepwater for insurance services, that it breached that duty, and that 

the breach caused damage to Deepwater. The court did not err when it 

rejected Wells Fargo’s proposed jury instructions on negligent 

misrepresentation.

IV. Motion in Limine to Exclude Master Services Agreement

¶22 Wells Fargo next argues that the court erred in denying its 

motion in limine to preclude any mention of the MSA Deepwater entered 

with Badger Oil. We review a trial court’s evidentiary rulings for an abuse 

of discretion. See Warner v. Southwest Desert Images, LLC, 218 Ariz. 121, 133, 

¶ 33, 180 P.3d 986, 998 (App. 2008) (reviewing motion seeking to prohibit 

presentation of worker’s compensation benefits at trial). 

¶23 Before Deepwater was able to bid on a specific job with 

Badger Oil, it was required to negotiate and sign an MSA with Badger Oil. 

Deepwater representative Fennesy clarified the purpose of the MSA during 

his deposition, explaining that the agreement was not a contract for any 

particular job, but a preliminary outline of Badger Oil’s requirements for all 

jobs: “Typically, you need [the MSA] in hand before you’re even allowed 

to bid.” The MSA included, inter alia, detailed requirements regarding the

necessary insurance coverage.
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

9

¶24 In his email to Golucci on October 15, 2007, Fennesy attached 

an excerpt of the MSA consisting of the three pages outlining the insurance 

requirements. But Deepwater did not provide Wells Fargo with the entire 

MSA itself. Because a full copy of the MSA had not yet been disclosed, on 

December 23, 2011, Wells Fargo filed a motion in limine to prohibit any 

reference to the MSA at trial. On January 13, 2012, Deepwater produced an 

unsigned copy of a generic Badger Oil MSA. On January 18, 2012, it filed a 

supplemental response to Well Fargo’s motion and included an alternative 

motion for relief under Arizona Rule of Civil Procedure 37(c). Deepwater

finally disclosed a copy of the original, signed MSA on January 19, 2012.

¶25 Assuming that the MSA was not produced in a timely 

manner, Wells Fargo cannot successfully claim prejudice by any untimely

disclosure. Wells Fargo asserts that the late disclosure was prejudicial 

because it prevented Wells Fargo from learning about an already-existing 

“material[ ] default” of the MSA: that Deepwater had allowed its insurance 

coverage to expire in September 2007. Wells Fargo contends that if it had 

received the entire MSA in its possession more promptly, it could have 

conducted further discovery and investigation into this “potentially 

dispositive information.” This is not persuasive, however, because the 

terms outlining the material default Wells Fargo identifies are found in the 

section on requirements for insurance—the same section included in the 

three-page excerpt sent to Golucci in October 2007. As such, Wells Fargo 

had the pertinent information in its possession at all times relevant to these 

proceedings. 

¶26 In addition, Wells Fargo admitted that it purposefully 

delayed raising the issue of non-disclosure as a part of its procedural 

strategy. When asked why the issue was not raised earlier in the litigation, 

Wells Fargo responded: 

Because we opted not to raise it in that fashion I guess is the 

way to put it. We—you know, we’ve asked for it. They’ve 

provided their response. You know, okay. I mean, we—I 

think that’s our choice from a procedural standpoint that we 

want to proceed with a motion to compel, which we decided 

not to. And instead to raise it in a limine fashion to limine it 

out because we don’t have the full document. 

¶27 For these reasons, Wells Fargo cannot demonstrate that it was 

prejudiced by the late disclosure of the Badger Oil MSA. We conclude the 
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

10

trial court did not abuse its discretion when it denied Wells Fargo’s motion 

in limine. 

V. Rule 59 Motion for New Trial 

¶28 Next, Wells Fargo argues that the jury returned an excessive 

verdict, necessitating a new trial under Rule 59. The jury’s final verdict 

awarded Deepwater $1,134,442 in damages on its breach of contract and 

negligence claims. Specifically, Wells Fargo argues that this verdict 

necessarily included the jury’s speculation regarding Deepwater’s lost 

future profits, contrary to Arizona law.

¶29 In its briefing, Wells Fargo asserts that Deepwater provided a 

reasonable basis for, at most, $521,769.48 in damages.1 Wells Fargo argues 

that the $1,134,442 verdict is unsupported by the evidence and must 

necessarily be based in substantial part on Deepwater’s speculative claim 

for lost future profits.2 Wells Fargo further alleges that because Deepwater 

did not provide a reasonable basis for an award of lost future profits, the 

court erred in denying its motion for a new trial.

¶30 The grant or denial of a motion for new trial is within the 

“sound discretion of the trial court,” and absent a clear abuse of discretion, 

we will not overturn its ruling. Adroit Supply Co. v. Elec. Mut. Liab. Ins. Co., 

112 Ariz. 385, 389, 542 P.2d 810, 814 (1975). A motion for new trial may be 

 

1 This figure represents the actual expenditures made in preparation for the 

cancelled Badger Oil contract ($177,269.48), lost profit on that contract 

($130,950), lost profit from the second Badger Oil contract for which 

Deepwater’s bid was denied ($53,550), and loss of business goodwill 

($160,000). 

2 As a preliminary matter, Deepwater argues that Wells Fargo waived any 

argument that the evidence presented was insufficient to provide for an 

award of lost future profits when it allowed the jury to be instructed 

according to Contract 19 of the Revised Arizona Jury Instructions: “If 

future lost profits are reasonably certain, any reasonable basis for 

determining the amount of the probable profits lost is acceptable. 

However, the amount of lost profits cannot be based on conjecture or 

speculation.” We reject this waiver argument of Deepwater, however, 

because Wells Fargo’s argument is that the verdict was based purely on 

speculation, rather than on reasonably certain proof regarding lost future 

profits.
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

11

granted when the jury’s verdict is “excessive,” the “result of passion or 

prejudice,” or “not justified by the evidence or contrary to law.” Hutcherson 

v. City of Phoenix, 192 Ariz. 51, 55, ¶ 22, 961 P.2d 449, 453 (1998); Ariz. R. Civ. 

P. 59(a)(5), (7), (8). 

¶31 The strength of evidence necessary to prove lost future profit 

damages is dependent upon the circumstances of each individual case. 

Short v. Riley, 150 Ariz. 583, 586, 724 P.2d 1252, 1255 (App. 1986). In order 

to recover for lost future profits, a party must provide a “reasonably certain 

factual basis for computation” of those losses. Rancho Pescado, Inc. v. 

Northwestern Mut. Life. Ins. Co., 140 Ariz. 174, 184, 680 P.2d 1235, 1245 (App. 

1984). Calculation of lost future profit cannot be based on speculation, but 

requires a “reasonable basis in the evidence for the trier of fact to fix 

compensation when a dollar loss is claimed.” Nelson v. Cail, 120 Ariz. 64, 

67, 583 P.2d 1384, 1387 (App. 1978). 

¶32 Deepwater claims that the reasonable basis for a lost profits 

award comes from the testimony of Tom Fennesy, Deepwater’s CEO. The 

testimony to which Deepwater points, however, is Fennesy’s testimony 

regarding his goodwill valuation, not lost future profits.3 Furthermore, any

such testimony was speculative, based upon the projected capital 

expenditures of clients with whom Deepwater had a pre-existing MSA. The 

numbers estimated by Fennesy were also disproportionately high in 

comparison to Deepwater’s past performance. See Desert Palm Surgical Grp., 

PLC v. Petta, 236 Ariz. 568, 584, ¶ 45, 343 P.3d 438, 454 (App. 2015) (setting 

aside a nearly $11 million verdict because it was unsupported by the 

evidence and shocking to the court’s conscience); Rancho Pescado, Inc., 140 

Ariz. at 185, 680 P.2d at 1246 (rejecting a claim for lost future profits when 

projected production levels for the business in question were “inordinately 

high”). The Badger Oil contract, worth just under $300,000, was the largest 

job Deepwater had procured to date, yet Fennesy projected nearly $3.4 

million in revenue for the year to follow.

¶33 We conclude that the jury’s verdict was excessive and not 

justified by the evidence in the record. Deepwater failed to present 

evidence sufficient to support a reasonable calculation of lost future profits. 

To the extent that the verdict may have represented damages for lost future 

profits, the damages award was necessarily based on speculation rather 

than a reasonably certain factual basis. The trial court erred, therefore,

 

3 Using the data presented, Fennesy concluded that the total goodwill of 

the business was “roughly $160,000.”
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

12

when it failed to grant Wells Fargo’s motion for a new trial on damages. 

For these reasons, we vacate the denial of that motion and remand for a 

new trial on damages only. We do not perceive the liability and damages 

evidence to be inextricably interwoven nor do we conclude that the 

negligence verdict was the result of passion or prejudice. As a result, the 

negligence verdict and the allocation of fault (95 percent and five percent) 

are affirmed. 

VI. Prejudgment Interest 

¶34 Next, Wells Fargo argues that the trial court erred in 

awarding prejudgment interest at bifurcated rates. Because we vacate the 

judgment and remand to the trial court for a new trial on damages, we 

conclude it is premature for this court to analyze the availability of 

prejudgment interest or the applicable interest rate. Such issues are best 

addressed by the trial court upon remand. In our discretion, therefore, we 

decline to address Wells Fargo’s argument on this issue.

VII. Attorney Fees in Superior Court

¶35 Finally, Wells Fargo argues that the trial court erred in 

denying attorney fees under A.R.S. § 12-341.01. Under this statute, a trial 

court has “broad discretion” to award attorney fees to the successful party, 

and we will not disturb its decision absent an abuse of that discretion. 

Vortex Corp. v. Denkewicz, 235 Ariz. 551, 562, ¶ 39, 334 P.3d 734, 745 (App. 

2014). Additionally, a party who prevails by successfully defending against 

a contract claim, on the basis that no contract existed, is eligible for a 

discretionary award of fees under § 12-341.01. See Rudinsky v. Harris, 231 

Ariz. 95, 101, ¶ 27, 290 P.3d 1218, 1224 (App. 2014). 

¶36 Wells Fargo argues the court erred in denying attorney fees in 

favor of the individual broker, Greg Golucci. Golucci was dismissed from 

the case before the close of trial, and the jury was instructed that Golucci’s 

individual actions were undertaken in the course and scope of his 

employment with Wells Fargo. The trial court determined that such a 

dismissal did not make Golucci a “prevailing” party entitled to attorney 

fees. Accordingly, it declined to award attorney fees to Wells Fargo on his 

behalf. 

¶37 We discern no abuse of discretion in the trial court’s denial of 

attorney fees. The court considered the totality of the circumstances and 

determined that Deepwater was “clearly” the prevailing party. Wells Fargo 
DEEPWATER DIVERS, INC. v. WELLS FARGO

Decision of the Court

13

claims that because Deepwater abandoned its claims against Golucci, the 

court should have awarded attorney fees on his behalf. See, e.g., Fulton 

Homes Corp. v. BBP Concrete, 214 Ariz. 566, 155 P.3d 1090 (App. 2007) 

(determining that third party defendant prevailed in suit when original 

plaintiff abandoned the claims against him). The claims against Golucci 

were not abandoned as a practical matter, however. Instead, Wells Fargo 

agreed to assume liability for his actions. The court’s refusal to award 

attorney fees to Wells Fargo for defending Golucci was not an abuse of 

discretion. 

VIII. Attorney Fees and Costs on Appeal

¶38 Finally, both parties have requested awards of attorney fees

on appeal under A.R.S. § 12-341.01. Both parties have prevailed on appeal 

on certain issues and been unsuccessful on certain issues. In our discretion, 

we decline to award attorney fees to either party. We conclude, however, 

that Wells Fargo is entitled to an award of statutory, taxable costs upon its 

compliance with Arizona Rule of Civil Procedure 21. 

CONCLUSION

¶39 For these reasons, we vacate the judgment of liability in favor 

of Deepwater on its breach of contract claim. We affirm the finding of 

liability and the allocations of fault on Deepwater’s negligence claim. We 

vacate the damages awarded as unsupported by the evidence and remand

to the trial court for a new trial on the issue of damages. We also vacate the 

court’s award of prejudgment interest. We affirm the court’s denial of 

attorney fees to Wells Fargo for defending Greg Golucci.