NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE

.

IN THE 

## A RIZONA 

## C OURT OF 

## A PPEALS

D IVISION O NE

GREEN CROSS MEDICAL, INC., an Arizona non

- profit corporation
, Plaintiff/Appell ee ,

v.
CARYN MANGISI, Trustee of the John V. Gally Family Protective Trust,

dated January 11, 1993
, Defendant/Appell ant

.

No. 1 CA

- CV 23

- 0692

Appeal from the Superior Court in Navajo County

No. S0900CV201200208 The Honorable Joseph Samuel Clark
, Judge

AFFIRMED

COUNSEL
Aspey Watkins & Diesel, PLLC
, Flagstaff By Whitney Cunningham
, Caitlin Rynn Counsel for Plaintiff/Appell ee

Hunter , Humphrey & Yavitz, PLC
, Phoenix By Randall S. Yavitz, Isabel M. Humphrey C ounsel for Defendant/Appell ant FILED 10-08-2024GREEN CROSS v. MANGISI Decision of the Court

2 MEMORANDUM DECISION
Judge Cynthia J. Bailey delivered the decision of the Court, in which Presiding Judge Paul J. McMurdie and Judge Maria Elena Cruz joined.

B A I L E Y , Judge:

¶1 Caryn Mangisi, Trustee of the John V. Gally Family Protective Trust, dated January 11, 1993 ( “ the Trust”) , appeals the superior court’s judgment awarding $ 3,565,000 in damages , along with attorneys’ and expert witness fees and accruing interest, to Green Cross Medical, Inc. (“Green Cross”). W e affirm.

FACTS AND PROCEDURAL HISTORY 1

¶2 In April 2012, John Gally , in his capacity at the time as T rustee of the Trust, entered a lease agreement to allow Green Cross to cultivate and dispense medical marijuana on commercial property held by the Trust in Winslow, Arizona (“the Property”)

. The lease allow ed Green Cross to lease the P roperty until it obtained a dispensary operating license from the Arizona Department of Health Services (“ ADHS”)

. After issuance of the license, t he lease provided for a three

- year term and an additional three

year tenant’s renewal option

. ¶3 The Property was one of only two parcels within the Winslow Community Health Analysis Area (“CHAA”) appropriately zoned for a medical marijuana dispensary. Another entity seeking an operating license from ADHS, The Medicine Room (“TMR”), obtained permission from the owner of the other property. A few weeks after entering the lease agreement , Green Cross received a letter from Gally, through Gally’s attorney , Kathryne Ward
, s tating that Gally and the Trust were unilaterally revoking the lease. The Property’s locks were changed, and from then on
, Green Cross could not access the Property.

1 We take p ortions of the facts and procedural history from this court’s prior memorandum decision and opinion involving the parties. See Green Cross Med

. , Inc. v. Gally (“ Green Cross I ”), 1 CA

– CV 12

– 0610, 2013 WL 5435817 (Ariz. App. Sept. 26, 2013) (mem. decision) ; Green Cross Med., Inc. v. Gally (“ Green Cross I

I ”), 242 Ariz. 293 (App. 2017) (review denied Sept. 12, 2017)

.GREEN CROSS v. MANGISI Decision of the Court

3 ¶4 Green Cross filed a complaint against Gally, as Trustee of the Trust, for breach of contract and motion s for a temporary restraining order (“TRO”) and preliminary injunction. Gally argued he was required to revoke the lease because a prior month

- to

- month lessee

— a sister company to Compassionate Care Dispensary (“CCD ”), w hich also wanted to operate a medical marijuana dispensary on the Property

— allegedly had a superior interest in the form of an option to purchase the Property. 2 The superior court issued the TRO and later the preliminary injunction, barring Gally and the Trust from revoking the lease and taking possession of the Property pending final determination of the action

. Gally did not restore Green Cross’s possession of the Property , however, and i n July 2012, he appealed the preliminary injunction

. ¶5 Green Cross had applied with ADHS to be awarded the single Winslow dispensary license
, but g iven its limited funds and the uncertainty over the lease’s status , Green Cross instructed ADHS to assign its sole $150,000 “proof of deposit” to the Kingman dispensary lottery

— a lottery with more contestants and a significantly smaller chance of winning

— instead of the Winslow lottery.

¶6 In August 2012, the ADHS dispensary bingo

- ball lottery drawings took place

. TMR won the Winslow dispensary lottery over CCD

. Green Cross did not win the Kingman dispensary lottery.

¶7 I n September 2013, t his court affirmed the preliminary injunction in favor of Green Cross

. See G reen Cross I , 1 CA

– CV 12

– 0610, at *3, ¶¶ 13, 15

. ¶8 On remand, the superior court granted Ward’s motion to withdraw as counsel for Gally and the Trust
, and t he parties cross

- moved for summary judgment. Green Cross sought partial summary judgment on liability for possible damages for the lease revocation ; Gally and the Trust argued the lease was illegal and therefore unenforceable under the Arizona Medical Marijuana Act (“AMMA”), see Ariz

. Rev

. Stat

. (“A.R.S.”) §§ 36

– 2801 to

– 28 22
, and the federal Controlled Substances Act, see 21 U.S.C. §§ 801 to 904

. T he superior court denied Green Cross’s motion and granted Gally and the Trust’s motion , holding the lease violated both state and federal law and was therefore void for illegality.

2 Ward, t he attorney for Gally and the Trust , was stepmother of a principal /owner of CCD

.GREEN CROSS v. MANGISI Decision of the Court

4 ¶9 Green Cross appealed , and t his court held the lease was not void, either for being contrary to the AMMA or for being contrary to the Controlled Substances Act
, and “was enforceable at least for purposes of a damages action for its breach

. ” Green Cross II , 242 Ariz. at 29 8, 300

- 01, ¶ ¶ 15, 25, 29

. We reversed and remanded for consider ation of Green Cross’s damages claim. Id

. at 300

- 01
, ¶ ¶ 25 , 30

¶10 In May 2018, Gally and the Trust filed their answer, denying Ward ever acted as their agent and positing she had “used” them “as an unwitting tool” to further her family’s interests. T he y later moved for summary judgment, arguing Green Cross could not show damages from breach of the lease because Green Cross’s lottery ball would likely have replaced CCD’s losing lottery ball in the Winslow drawing. Green Cross responded that even had its application “ replaced ” CCD’s, the lottery ball assignment was not guaranteed to be identical because ADHS randomized their assignment to qualified dispensary applicants via a computer program before the lottery

. T hus
, it was not a foregone conclusion G reen Cross would have been assigned the same lottery ball as CCD. Green Cross also noted the Trust’s argument assumed CCD would not have been included in the Winslow lottery absent the breach, despite what it termed a

“ likelihood ” it would have been. Finally, Green Cross argued the Trust’s argument ignored the opinions of the parties’ expert s , both of whom had employed

— at least in part

— an ex

- ante framework in calculating or critiquing lost profit damages

. This approach considered only information known or knowable on the date of the breach and excluded s ubsequent
events , such as the lottery drawing
, from the calculation

. After oral argument, at which the Trust’s attorney “agreed that either Ball ‘A’ or Ball ‘B’ could have been assigned to [Green Cross],” the court den ied the motion

. ¶11 The superior court also denied the Trust’s subsequent motion to exclude Green Cross’s claimed lost profits damages as speculative. In 2021, Gally passed away
, and his daughter
, Mangisi , replaced him as T rustee.
¶12 I n February 2022, the superior court conducted a two

- day bench trial on the damages issue

. The court heard testimony from William Brothers
, Green Cross’s founder and principal owner ; Mangisi ; Dwight Duncan, CFA
, Green Cross’s expert witness on damages ; and Timothy Tribe , CPA/CFF, CFE, CICA
, the Trust’s expert witness on damages

. ¶13 I n July 2022, the superior court issued a rulin g supported by findings of fact and conclusions of law

— as requested by the Trust

—GREEN CROSS v. MANGISI Decision of the Court

5 awarding damages in favor of Green Cross and against the Trust for $3,565,000. The court later entered judgment under Rule 54(c), Ariz. R. Civ. P., in favor of Green Cross and against the Trust, awarding the above damages, $95,024.87 in attorneys’ fees, and $49,866.25 in expert witness fees, along with accruing interest. The court denied the Trust’s motion for

a partial new trial, 3 and w e have jurisdiction over t he Trust ’s timely appeal under A.R.S. § 12

- 2101(A)(1)

.
DISCUSSION

I. The Trust’s Opening Brief

¶14 Green Cross argues that portions of the Trust’s opening brief do not comply with Rule 13, ARCAP , because the Trust makes numerous “uncited, and incorrect factual assertions” and engages in “editorializing amounting to argument” in its introduction and statement of the case. See ARCAP 13(a)(3)

- ( 4). We agree with Green Cross’s characterization of the Trust’s brief but decline to reject the Trust’s appeal on this basis, see Clemens v. Clark , 101 Ariz. 413, 414 (1966); Lederman v. Phelps Dodge Corp. , 19 Ariz. App. 107, 108 (1973) , and w e rely on our record review for the necessary facts
, see Sholes v. Fernando , 228 Ariz. 455, 457, ¶ 2 n.2 (App. 2011); State Farm Mut. Auto. Ins. Co. v. Arrington , 192 Ariz. 255, 257 n.1 (App. 1998).

II. Causation

¶15 The Trust argues Green Cross ’ s exclusion from the Winslow lottery and its subsequent lost expectancy damages were not caused by its breach of the lease but by subsequent independent acts of others

— including Ward and her family’s business interests, including CCD
, and Green Cross itself

. In its opening brief, however, the Trust abandons any argument concerning anyone except Ward, who t he Trust characterize s as having a “blatant conflict of interest.” T he Trust concedes, as it must, that an agency relations hip existed between it and Ward but argues the court erred in fail ing to recognize she was not only the attorney for Gally and the Trust , but also the attorney for her family’s entities, including CCD.

3 The motion alleged Green Cross had improperly withheld disclosure regarding Mr. Duncan. In its reply, the Trust abandoned that argument and argued Green Cross’s expert witness testimony on damages was inadmissible. After finding the Trust had filed “no motions, either before or during trial, arguing [Green Cross’s] expert’s opinion on calculation of damages should be excluded

— except an argument it was speculative,” the court denied the motion.GREEN CROSS v. MANGISI Decision of the Court

6 ¶16 We review findings of fact for clear error and conclusions of law de novo

. DeLuna v. Petitto , 247 Ariz. 420, 423, ¶ 9 (App. 2019). A superior court’s findings of fact are binding on this court if supported by credible evidence, and our inquir y is whether the court had before it evidence reasonably supporting its action viewed in the light most favorable to sustaining the findings; we will not re weigh conflicting evidence on appeal. Imperial Litho/Graphics v. M.J. Enter s. , 152 Ariz. 68, 72 (App. 1986)

. ¶17 The Trust acknowledges that “ [g] enerally, whether agency exists is a question of fact ” but argues that “ when the material facts are not in dispute, the existence of such a relationship is a question of law for the
court to decide.” Escareno v. Kindred Nursing Ctrs. W., L.L.C. , 239 Ariz. 126, 129, ¶ 6 (App. 2016) ( citations omitted)

. Here, however, the argument is unavailing, as the Trust seeks to characterize factual disputes as legal ones,
to introduce numerous contested “additional facts developed at tr ial
, ” and
to make other factual assertions that in some cases are simply arguments couched as “facts” not accepted by the superior court.

¶18 The record contradicts the Trust’s attempt to paint itself as an innocent victim

. Gally was a n experienced landlord and his previously sworn testimony before the superior court was “intentionally very evasive

on cross

- examination” due to his economic interests. See Green Cross I
, 1 CA

– CV 12

– 0610, at * 2 , ¶ 11. T he record is clear that , after entering the lease with Green Cross, Gally revoked it without cause and did so through his attorney, Ward , who was acting in her capacity representing Gally and the T rust

. Then, o ne day before the TRO hearing, the Trust, through Gally, signed an affidavit

— later submitted to ADHS

— declaring the Trust was selling the Property to Ward’s company, Western Surety, and that the only entity with rights to the Property was CCD, the company owned by Ward’s stepson. The affidavit noted that permission for any other applicant

— Green Cross

— “has been withdrawn.”

¶19 On June 28, 2012, the sale of the Property to Western Surety closed. Purportedly, t he sale was for $225,000, of which $220,000 was carried as a loan from the Trust to Western Surety. Despite the sale being subject to the rights of Green Cross under the lease, Western Surety no tified ADHS on July 18 that Green Cross lacked “landlord permission” to operate a dispensary on the Property. That same day, ADHS notified Green Cross its Winslow application was in complete, partly because it did not have a Document ation of Property Ownership form signed by Western Surety.GREEN CROSS v. MANGISI Decision of the Court

7 ¶20 Although the Trust suggests its liability ended with the sale to Western Surety, 4 Gally knew G reen Cross and CCD intended to operate medical marijuana dispensaries on the Property and knew of Ward’s connection s to CCD

. It was foreseeable and predictable that Ward would seek to oust Green Cross from the Property and use it for CCD, and Gally helped achieve this result by selling the Property to a sister company of CCD and signing documentation declaring that only CCD had the right to use the Property as a dispensary. At no time before the lottery drawing did Gally or the Trust disavow Ward as their agent , advise Green Cross they had told her to “stand down,” or claim her interests were in any way at odds with theirs. Further, Ward continued to represent them until April 2014 , about twenty months after the lottery drawing and seven months after this court affirmed the superior court’s preliminary injunction

. A reasonable trier of fact could infer Gally and the Trust were not taken advantage of by Ward or CCD , as they claim , but were cooperating with them

. And t he superior court found
, “ I n the end, it was the specific actions of the Trust and of it[s] attorney while acting for the Trust . . . that resulted in ADHS’s rejection of [Green Cross’s] application in Winslow.” Gally and the Trust’s acts prevented Green Cross from participat ing in the August 2012 Winslow dispensary lottery and directly caused Green Cross ’s lost expectancy damages

.
III. Effect of the Actual Lottery Result

¶21 At trial, Green Cross a rgued that breach of the l ease caused both the improper inclusion of CCD in the Winslow lottery and its

e xclusion from the Winslow lottery. Couching its argument as a legal argument, t he Trust argues that, as a matter of law, Green Cross cannot recover “uncertain result” damages for a hypothetical two

- ball drawing involving Green Cross and TMR, because a two

- ball drawing involving CCD and TMR occurred, and the result is known

— TMR won

. The Trust maintains the only effect of the breach is “that CCD’s application number, rather th a n Green Cross’s application number, was associated on a spreadsheet with the ultimately losing ping

- pong ball.” 5

4 The Trust later retrieved the Property through foreclosure after Western Surety failed to pay the mortgage.

5 We disagree with Green Cross that the issue was not preserved for appeal. The issue was raised before trial in the Trust’s motion for summary judgment, in the Joint Pretrial Statement, and in the Trust’s post

- trial Proposed Findings of Fact and Conclusions of Law.GREEN CROSS v. MANGISI Decision of the Court

8 ¶22 Whether the superior court applied the correct measure of damages is a mixed question of fact and law , which we review de novo

. S DR Assocs. v. A RG Enters. , 170 Ariz. 1, 2 (App. 1991). Although a damages expert may explain the factors they relied on and the methodology they used as an adjunct to the factfinder, t he superior court should not determine

an applicable legal standard through expert testimony

. See generally Ryan v. Napier, 245 Ariz. 54, 66, ¶¶ 51

- 52 ( 2018). The Trust, however, fails to support its legal argument by citing any Arizona authority precluding the methodology used by Green Cross’s damages expert, Mr. Duncan, and adopted by the superior court, and we are aware of none.

¶23 “ [D] amages are measured as of the date of the breach.” SDR
, 170 Ariz. at 3 (citation omitted). “ I f a breach is of a promise conditioned on a fortuitous event and it is uncertain whether the event would have occurred had there been no breach, the injured party may recover damages based on the value of the conditional right at the time of breach.” Restatement (Second) of Contracts § 348(3) (1981)

. ¶24 Here, ADHS randomized not only the ultimate selection of lottery winners but also the assignment of the lottery balls to qualified dispensary applicants in each CHAA via a computer program before the lottery. Thus, the lottery was not guaranteed to be identical, and it was not a foregone conclusion that G reen Cross would have been assigned the same lottery ball as CCD. Accordingly, the superior court correctly found Green Cross could have been assigned the winning ball had it participated in the Winslow l ottery

. ¶25 Furthermore, the Trust’s “losing lottery ball” argument ignores the opinion reports and testimony of both parties ’ experts , who agreed on the appropriate damages methodology to be applied in a case such as this, which involves a lost opportunity. Mr. Duncan presented an
ex ante damages analysis as of the date of the breach based on what was known or knowable at the time. Under an ex ante analysis, as Mr. Duncan testified, the relevant information is “only what was known or knowable as of the date of the b ad act.” Thus, even a stolen losing lottery ticket i s still worth its expectation value

— the probability of winning at the time of the theft times the jackpot amount. T he Trust’s expert, Mr. Tribe
, agreed with Mr. Duncan that an ex ante approach is a “ commonly accepted ” methodology for determining damages that is “widely accepted in variousGREEN CROSS v. MANGISI Decision of the Court

9 courts” 6 and that a probability adjustment is an appropriate way to calculate damages in this case

. ¶26 The Trust’s “losing lottery ball ” argument is not supported by applicable law , is inconsistent with how the dispensary certificate lottery was conducted
, i s not supported by trial testimony, and contradicts its own expert ’s admissions

.
IV. “ Speculative ” Lost Profits

¶27 The Trust argues Green Cross did not demonstrate its claimed lost profits with “reasonable certainty.” We disagree.

¶28 We will not set aside f indings of fact unless they are clearly erroneous, and we give d ue regard to the superior court’s opportunity to judge the credibility of witnesses. Ariz. R. Civ. P. 52(a)( 6)

. When it aids in understanding evidence or determining a fact in issue, a party may generally present testimony by a qualified expert witness. See Ariz. R. Evid. 702. If substantial evidence supports a finding of fact, that finding is not clearly erroneous, even if conflicting evidence exists. Castro v. Ballesteros

Suarez , 222 Ariz. 48, 51

- 52 , ¶ 11 (App. 2009). W e do not reweigh the evidence or substitute our evaluation of the facts , but review de novo the superior court ’ s legal conclusions

. S ee id. at 52, ¶ ¶ 11

- 12; Grubb & Ellis Mgmt. Servs., Inc. v. 407417 B.C., L.L.C. , 213 Ariz. 83, 86, ¶ 12 (App. 2006). The legal sufficiency of evidence is a question of law we re view de novo

. See McBride v. Kieckhefer Assocs. , 228 Ariz. 262, 265, ¶ 10 (App. 2011)

. ¶29 To recover damages for lost profits, Green Cross had to prove (1) “[t]hat it is reasonably probable that the profits would have been earned except for the breach,” (2) “[t]hat the loss of profits is the direct and natural consequence of the breach,” and (3) that “ [ t ] he amount of lost profits can be shown with reasonable certainty.” RAJI (Civil) 7th Contract 19. “ 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 co njecture or speculation.” Id. “ [D] oubts as to the extent of the injury should be resolved in favor of the innocent plaintiff and against the wrongdoer.” Gilmore v. Cohen , 95 Ariz. 34, 36 ( 1963)

. Moreover, “[o]nce the fact of lost profits is established

. . . our courts have not been as strict about the amount.” Felder v. Physiotherapy Assocs.
, 215 Ariz. 1 5 4, 164, ¶ 47 (App. 2007); see also Earle M. Jorgensen Co. v. Tesmer

6 See SDR , 170 Ariz. at 3; Shah v. Skillz Inc. , 320 Cal. Rptr. 3d 175, 196

- 97 (Cal. Ct. App. 2024); Duncan v. TheraTx, Inc. , 775 A.2d 1019, 1022 (Del. 2001).GREEN CROSS v. MANGISI Decision of the Court

10 Mfg. Co. , 10 Ariz. App. 445, 450 (1969) (citing cases). Thus, disputes over “the evidence used to establish the amount of damages will go to the

‘ weight of the evidence .’” Felder
, 215 Ariz. at 164, ¶ 47 (citation s omitted)

. ¶30 A new business is not p recluded from recovering an award for lost future profits. Rancho Pescado, Inc. v. Nw. Mut. Life Ins. Co. , 140 Ariz. 174, 183

- 84 (App. 1984). “The evidence required to prove loss of future profits depends on the individual circumstances of each case

. . . . ” I d

. at 184. But the proponent must establish a “ reasonable basis in the evidence for the trier of fact. ” I d.

¶31 O ur review confirms that substantial evidence supports the superior court’s lost profits damages award. The Trust’s assertions that Green Cross lacked plans, experience, and financing are contradicted by the record. The court’s findings of fact and conclusions of law discuss Green Cross’s business plans, the experience of its principals, and its access to cash, citing the record

. ¶32 As to the expert testimony, t he superior court found that “Mr. Duncan reviewed pleadings, interviewed [ Green Cross’s ] principal, Bill Brothers (placing his notes into his file), industry texts, scholarly articles, qualified patient information within CHAA designations, trends from mature markets in California and Colorado, medical marijuana published data including studi es of marijuana crop yields, and NAICS codes for industry risk, among other data sources.” The court also found
, “ R elying on his experienc e and research, Mr. Duncan evaluated service areas, observed distances customers drive in other markets, calculated qualified patients as percentage of population, deduced average spend by patients and product pricing, summarized operating expense ratios, and performed risk adjustments, including company specific risk adjustments.” The record supports the court’s findings

. ¶33 Additionally, Mr. Tribe endorsed Mr. Duncan’s principles and methods and testified about the information and data that would produce reliable expert testimony in determining Green Cross’s damages. These included publications of technical, financial and industry data; interviews with management; the expert’s own experience specific to the business and the industry; and examination of mature markets like California and Colorado, including consumption or usage data and pricing data

— the very things Mr. Duncan r elied on in forming his opinions

. ¶34 Also, i n performing his work, Mr. Duncan determined a discount rate he applied to his damages calculation

— a rate meant to factorGREEN CROSS v. MANGISI Decision of the Court

11 in various risks, including industry risks and company

- specific risks. Mr. Tribe made no change s to Mr. Duncan’s proposed discount rate
, while indicat ing he thought it was unnecessary. W ithin the damages framework accepted by both parties, Green Cross presented substantial evidence, mostly without any rebuttal from Mr. Tribe or the Trust. On this record, Green Cross presented substantial evidence to prove its claimed lost profits with “reasonable certainty.” 7

V. F ailure to S ubtract M anagement F ees F rom “P rofits ”

¶35 The Trust argues the superior court erred in awarding lost profits damages to Green Cross because Mr. Duncan admitted “essentially all” profits would have been paid as management expenses and thus

“ agreed ” that such expenses should not be awarded as damages. We discern no error

. ¶36 The AMMA require s registered medical marijuana dispensarie s to be non

- profit entities. See AOW Mgmt. LLC v. Scythian Sols. LLC , 1 CA

- CV 20

- 0699, 2022 WL 2813523, at * 3, ¶ 16 ( Ariz. App. July 19, 2022 ) (mem. decision) (citing A.R.S. § 36

- 280 6). ADHS required certificate applicants to submit proposed bylaws ( including, inter alia
, provisions for operating the dispensary on a non

- profit basis) and a proposed business plan reflecting revenue s not exceeding expenditures.

¶37 That said, a non

- profit medical marijuana dispensary can be a lucrative enterprise, but as a non

- profit, it is distinguished from a for

profit business corporation “primarily by the absence of stock or other indicia of ownership that give their owners a simultaneous share in both profits and control.” Id. at ¶ 14 (citation omitted). R eceipts or profits greater than operating expenses and applicable costs must be reinvested back into the non

- profit or donated to other charitable causes. Id. at ¶ 17.

¶38 The Trust’s argument appears to be based on conjecture about how Green Cross would use and distribute its excess receipts or “ profits. ” The Trust asserts Mr. Duncan “admitted” that profits for a non

- profit

7 I n denying the Trust’s pretrial motion to exclude Green Cross’s claimed lost profits damages as speculative, the superior court advised, “If, after [Green Cross] has been fully heard on the issue of lost profit damages, the evidence is such that a reasonable jury could not have a legally sufficient evidentiary basis to find lost profit damages, then [the Trust] can make a Rule 50 motion for judgment as a matter of law. ” T he record does not indicate the Trust made such a motion.GREEN CROSS v. MANGISI Decision of the Court

12 Arizona medical marijuana dispensary are normally paid out as management expenses to a management company

— and thus can not be counted as profit. However, although Mr. Duncan testified that he was aware of business models in which non

- profits paid “essentially all the profits” to a separate management compan y, he also made clear he was not necessarily speaking about Green Cross
, and he was aware of other business models

. Mr. Tribe, the Trust’s expert, testified that a profits calculation for a non

- profit would be “functionally” the same as for any other entity. And Mr. Duncan’s damages calculation factored in expected

revenue s and deducted both the cost of goods sold a nd operating expenses. The remainder count ed as “ profit, ” which the court awarded in this case. The Trust ’s argument does not challeng e Mr. Duncan ’s methodology or Mr. Tribe’s testimony

. ¶39 Further, a lthough the Trust concedes non

- profit entities can prove lost profits, its argument suggests any profits should not inure to Green Cross
, a non

- profit corporation. But when asked about this at trial, counsel for the Trust conceded it was not “fair game to breach non

- profit contracts” and disputed any claim that Green Cross should be denied lost profits damages because it is a non

- profit corporation. Although n on

profits are limited as to how they may pay a separate management company or allocate distributions
, they may still create “profits.”

VI. Attorneys’ Fees and Costs on Appeal

¶40 Both sides request costs and attorneys’ fees on appeal under A.R.S. § 12

- 341.01 . The Trust is not the successful party, and we deny its request. Green Cross is the successful party, and we grant its request for taxable costs and attorneys’ fees in an amount to be determined upon compliance with ARCAP 21.

CONCLUSION

¶41 The superior court’s judgment is affirmed.