NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

COLLEEN LONDON and R. LAMAR WHITMER, 

Plaintiffs/Appellants,

v.

ESTHER SUE KARATZ, solely in her capacity as President 

of the named Defendant Entity, and not personally; 

HILTON CASITAS HOMEOWNERS ASSOCIATION, 

a non-profit corporation, Defendants/Appellees.

No. 1 CA-CV 15-0070

Appeal from the Superior Court in Maricopa County

No. CV2014-054346

The Honorable John R. Hannah, Judge

AFFIRMED

COUNSEL

Porter Law Firm, Phoenix

By Robert S. Porter

Counsel for Plaintiffs/Appellants

Hill, Hall & Deciancio, PLC, Phoenix

By R. Corey Hill, Ginette M. Hill, Christopher Robbins

Counsel for Defendants/Appellees
LONDON et al. v. KARATZ et al. 

Decision of the Court

2

MEMORANDUM DECISION

Judge Randall M. Howe delivered the decision of the Court, in which 

Presiding Judge Kenton D. Jones and Judge Donn Kessler joined.

H O W E, Judge:

¶1 Colleen London and R. Lamar Whitmer (collectively, 

“Homeowners”) appeal the trial court’s award of attorneys’ fees to Hilton 

Casitas Council of Homeowners (“Council of Homeowners”), arguing that 

the Council was not a party to the lawsuit. For the following reasons, we 

affirm. 

FACTS AND PROCEDURAL HISTORY

¶2 The Homeowners own one of twenty-nine casitas on a parcel 

of land subleased from a Hilton hotel. The Homeowners and the owners of 

the remaining casitas are members of their homeowners’ association, which 

was founded in May 1972 and governed by a board of directors. The 

association’s declaration, bylaws, and articles of incorporation refer to it as 

the “Council” and “Council of Co-Owners.” The declaration states that its 

membership comprises the owners of the casitas and exists for the 

operation and management of the declaration.

¶3 In August 1994, the presiding board of directors incorporated 

the association as a non-profit organization under the name “Hilton Casitas 

Council of Homeowners.” The articles of incorporation specifically 

incorporated the 1972 declaration, stated that its membership and purpose 

were the same as set forth in the declaration, and named the same board of 

directors. At a members’ meeting a few months later, the board informed 

the casita owners that it had incorporated “to cover individual liabilities,” 

after noting that “most associations of this kind have become 

incorporated.” Upon incorporating, the association kept its same federal tax 

information, including its employer identification number.

¶4 On August 1, 2014, the Homeowners sued the association. 

They named the “Council of Co-Owners, also known as Hilton Casitas 

Council of Co-Owners, also known as Scottsdale Hilton Casitas 

Homeowners Association, an unincorporated association” and its 

president, Esther Karatz, as the defendants. The Homeowners alleged that 
LONDON et al. v. KARATZ et al. 

Decision of the Court

3

the Council of Co-Owners failed to hold proper elections pursuant to its 

bylaws and enforce a 2000 management agreement that existed between 

itself and the hotel. They also alleged that Karatz failed to follow the 

approved association budget and wrongfully sought money from its 

reserve for expenses that were not the association’s responsibility. The 

Homeowners sought the appointment of a receiver to act in the 

association’s place.

¶5 The Hilton hotel moved to intervene, arguing that the 

Homeowners’ lawsuit raised questions of the hotel’s rights and obligations 

under its management agreement with the association. On August 15, 2016, 

the “Council of Homeowners” joined the hotel’s motion and moved to 

dismiss the case. In both motions, the Council of Homeowners altered the 

caption to reflect it as the proper defendant. In a footnote, the Council of 

Homeowners explained that the trial court in CV2012-051066, a separate 

contemporaneous litigation by other casita-owning plaintiffs against the 

same defendant, had ruled on August 6 that as a matter of law, the 

non-profit Council of Homeowners was the proper party. That ruling 

denied those plaintiffs’—represented by the same attorney as the 

Homeowners here—motion to substitute the defendant Council of 

Homeowners with the Council of Co-Owners as the real party in interest. 

The trial court in the 2012 case specifically stated that it found that “the 

corporate entity [Council of Homeowners] was the successor entity to the 

unincorporated association as a matter of law and is the proper party in this 

litigation.”

¶6 The Homeowners did not respond to the motion to dismiss, 

but did object to the Council of Homeowners’ joinder, arguing that because 

the Homeowners did not name the Council of Homeowners in their 

complaint, it had no standing to join in the hotel’s motion to intervene. After 

hearing argument, the trial court granted the hotel’s motion and permitted 

it to intervene. Believing that the hotel’s intervention would cause delay in 

the lawsuit and make the requested relief untimely, the Homeowners 

voluntarily dismissed their lawsuit pursuant to Arizona Rule of Civil 

Procedure 41(a)(1) on August 25, 2014.

¶7 The Council of Homeowners subsequently applied for 

attorneys’ fees and costs, to which the Homeowners objected. The 

Homeowners again argued that the Council of Co-Owners, which they 

named as the defendants, and the Council of Homeowners were distinct 

entities. They reasoned, among other things, that because it only had a 

contractual relationship with the unincorporated Council of Co-Owners 
LONDON et al. v. KARATZ et al. 

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and not the Council of Homeowners, the latter was not eligible for fees 

under A.R.S. § 12–341.01.

¶8 The Homeowners also moved for sanctions under Arizona 

Rule of Civil Procedure 11 against the defense attorneys, arguing that the 

attorneys impermissibly amended the caption on their own accord and that 

the attorneys were precluded from asserting that the Council of 

Homeowners was the correct defendant in the case. But the trial court 

denied the motion “in light of [the trial court’s] ruling dated August 6, 

2014” in the 2012 case. Accordingly, the trial court here advised that a 

response to the Rule 11 motion was unnecessary.

¶9 That same day, the trial court also issued its ruling granting 

the Council of Homeowners attorneys’ fees and costs. The trial court 

ordered that “[t]his award runs in favor of all defendants represented by 

[defense counsel] in this case, without regard to the identity or legal form 

of the proper party to the suit.” The court further ordered that judgment be 

entered in favor of Karatz, the Council of Homeowners, the Council of 

Co-Owners, and the Scottsdale Hilton Casitas Homeowners Association, 

jointly and severally.

¶10 The Homeowners then moved for a new trial pursuant to 

Arizona Rule of Civil Procedure 59(a)(8), arguing, as relevant here, that the 

trial court lacked the authority to grant fees to the “Defendant Association” 

because the association did not vote to authorize defense counsel to 

represent them pursuant to the 1972 declaration. The trial court denied the 

motion, finding that the Homeowners waived the arguments by failing to 

raise them in the response to the Council of Homeowners’ fee application. 

The Homeowners then timely appealed the judgment and the denial of 

their motion for new trial. 

¶11 As the case was pending appeal in this Court, the 

Homeowners, then proceeding pro se, moved to stay the appeal and re-vest 

jurisdiction in the trial court so that they could move to set aside or vacate 

the judgment under Rule 60(c). This Court granted that motion. The 

Homeowners alleged in their Rule 60(c) motion that newly discovered 

evidence showed that defense counsel engaged in “misconduct and fraud” 

in procuring the judgment awarding them attorneys’ fees by 

misrepresenting to the trial court that the Council of Homeowners replaced 

the Council of Co-Owners. The Homeowners also moved to compel defense 

counsel to produce several documents that they believed were necessary to 

prove that the Council of Co-Owners authorized the Council of 
LONDON et al. v. KARATZ et al. 

Decision of the Court

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Homeowners to merge, or to alternatively file an affidavit “confirming the 

nonexistence” of that information. The trial court denied the motions. 

¶12 The Council of Homeowners then applied for attorneys’ fees 

and moved for Rule 11 sanctions against the Homeowners relating to the 

litigation of the Rule 60(c) motion. After subsequent briefing and an 

opposing motion for sanctions, the trial court denied the requests for 

sanctions and awarded the Council of Homeowners an award of fees 

significantly lower than what it requested, stating that much of its 

arguments “reflected a personal feud on which this Court declines to spend 

more time.” The Homeowners timely appealed the trial court’s awards of 

fees and costs.

DISCUSSION

¶13 The Homeowners argue on appeal that the Council of 

Homeowners is not a party to the lawsuit and that the trial court therefore 

erred by awarding it attorneys’ fees as the successful party under A.R.S. 

§ 12–341.01. We review the trial court’s award of attorneys’ fees for an abuse 

of discretion. Bennet Blum, M.D., Inc. v. Cowan, 235 Ariz. 204, 205 ¶ 5, 330 

P.3d 961, 962 (App. 2014). We defer to the trial court regarding any factual 

findings and infer that the court found every fact necessary to sustain the 

judgment. John C. Lincoln Hosp. & Health Corp. v. Maricopa Cty., 208 Ariz. 

532, 540 ¶ 23, 96 P.3d 530, 538 (App. 2004). We will not reverse the trial court 

unless its findings are clearly erroneous. City of Tucson v. Clear Channel 

Outdoor, Inc., 218 Ariz. 172, 182 ¶ 27, 181 P.3d 219, 229 (App. 2008). We 

review any questions of law, however, including the trial court’s authority 

to award fees, de novo. Bennet Blum, 235 Ariz. at 206 ¶ 5, 330 P.3d at 962. 

Because the trial court’s finding that the Council of Homeowners succeeded 

the unincorporated association was not clearly erroneous, it did not err in 

awarding the Council of Homeowners attorneys’ fees as the successful 

party under A.R.S. § 12–341.01.

¶14 For contested actions arising out of a contract, A.R.S. 

§ 12–341.01(A) permits a trial court to “award the successful party 

reasonable attorney fees.” A “party” is one who has a right to appeal and 

contest any litigated issue in court. Chalpin v. Mobile Gardens, Inc., 18 Ariz. 

App. 231, 234, 501 P.2d 407, 410 (1972), superseded by statute on other grounds 

as stated in Switzer v. Superior Court, 176 Ariz. 285, 288, 860 P.2d 1338, 1341 

(App. 1993). This includes someone who is directly interested in the subject 

matter of the suit or some part thereof and who has a right to make 

defenses, control proceedings, and examine witnesses. Helge v. Druke, 136 

Ariz. 434, 437, 666 P.2d 534, 537 (App. 1983). 
LONDON et al. v. KARATZ et al. 

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¶15 The trial court’s finding that the Council of Homeowners was 

a party to the lawsuit and thus eligible for fees was not clearly erroneous 

because the Council of Homeowners had the right to contest the litigation

and was directly interested in the subject matter of the suit. The 

Homeowners’ complaint alleged a failure to comply with the bylaws’ 

election procedures and to enforce a management agreement between it 

and its lessor, the hotel. Similarly, the Homeowners sued Karatz in her 

capacity as president of the association. If the Homeowners continued and 

succeeded on their claim and received the sought-after relief, the Council 

of Homeowners would have to relinquish some of its authority to an 

appointed receiver. This potential loss of management authority reflects a 

direct interest in the suit and creates a right to litigate the alleged 

wrongdoings. 

¶16 This finding was also supported by the record. Although the 

association has had and still has several names, the record shows that the 

original association, which was known as the Council of Co-Owners and 

the Scottsdale Hilton Casitas Homeowners Association, incorporated in 

1994 under the Council of Homeowners name. This action was approved 

and executed by the then-board of directors, which informed the 

association members about the change at a subsequent meeting. The 

Council of Homeowners’ incorporation paperwork specifically adopted the 

1972 declaration, membership, purpose, and same board of directors. After 

its incorporation, the association continued to use the same information on 

its tax returns, including its unique employer identification number. 

¶17 Moreover, the question of the correct defendant’s status was 

fully briefed and decided by the trial court in the 2012 case. Although the 

lawsuits involved different plaintiffs, the substantive issue was the same in 

both cases’ motions. Cf. Reidy v. O’Malley Lumber Co., 92 Ariz. 130, 132–33, 

374 P.2d 882, 884 (1962) (stating that a court may take judicial notice of the 

record in another action in the same court, and concluding that the trial 

court in a specific performance action properly took into consideration a 

prior disposition in another case when the cases dealt with identical 

questions of entitlement to proceeds and the same property). The trial court 

thus did not err in adopting the other court’s ruling in the 2012 case that the 

Council of Homeowners was the successor entity of the previously 

unincorporated Council of Co-Owners. Because the Council of 

Homeowners is the successor to the Council of Co-Owners, it is a “party” 

to this lawsuit. Accordingly, the trial court did not err by awarding it fees 

under A.R.S. § 12–341.01(A). 
LONDON et al. v. KARATZ et al. 

Decision of the Court

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¶18 The Council of Homeowners requests attorneys’ fees incurred 

on appeal pursuant to A.R.S. § 12–341.01(A). We grant its request and will 

award reasonable fees upon timely compliance with Arizona Rule of Civil 

Appellate Procedure 21. 

CONCLUSION

¶19 For the foregoing reasons, we affirm.