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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

LITMATH, LLC, Plaintiff/Appellant,

v.

UNITED STATES FIRE INSURANCE COMPANY, Defendant/Appellee.

No. 1 CA-CV 22-0223 

Appeal from the Superior Court in Maricopa County

No. CV2014-014302

The Honorable Katherine Cooper, Judge

AFFIRMED

COUNSEL

Ahwatukee Legal Office PC, Phoenix

By David L. Abney

Co-counsel for Plaintiff/Appellant

Poli Moon & Zane PLLC, Phoenix

By Michael N. Poli, Lawrence R. Moon

Co-counsel for Plaintiff/Appellant

Taylor Young Appeals PLLC, Phoenix

By Taylor C. Young

Co-counsel for Plaintiff/Appellant

FILED 6-1-2023
2

Christian Dichter & Sluga PC, Phoenix

By Jeffrey O. Hutchins, Stephen M. Dichter, Gena L. Sluga 

Counsel for Defendant/Appellee

MEMORANDUM DECISION

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

Presiding Judge Samuel A. Thumma and Judge Anni Hill Foster joined.

H O W E, Judge:

¶1 Litmath, LLC appeals the trial court’s order granting 

judgment as a matter of law (“JMOL”) to United States Fire Insurance 

Company (“USFIC”). For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Litmath, an Arizona limited liability company, is owned and 

managed by husband-and-wife Ivan and Lilian Vachovsky. In 2006, 

Litmath purchased a commercial property in Phoenix, Arizona,

(“Property”) and later purchased insurance for the Property through

USFIC. The Property had been leased as a data and call center until January 

2008 and remained vacant thereafter.

¶3 Litmath’s insurance policy with USFIC provided that, in the 

event of loss or damage, the insured would be entitled to the actual cash

value (“ACV”) of the property at the time of the loss or damage. The ACV 

is “the measure of the value of the item at the time of the damage, not at the 

time of its original installation or subsequent repair and replacement.” If

the insured used that amount to repair or replace the damaged property, 

the insured would be entitled to receive additional payment necessary to 

repair or replace the property, the replacement cost value (“RCV”).

¶4 To receive the RCV rather than merely the ACV, the insured 

must actually repair or replace the damaged property “as soon as 

reasonably possible after the loss or damage.” If the insured did so, the 

insurer would pay the least of the following three options: (1) the limit of 

insurance applicable to the property, (2) the cost to replace the damaged 

property with one of “comparable material and quality” that is “[u]sed for 

the same purpose,” or (3) “[t]he amount actually spent that is necessary to 

repair or replace the lost or damaged property.”
LITMATH v. US FIRE

Decision of the Court

3

¶5 In October 2010, a hailstorm damaged the vacant Property’s

roof, air conditioning, and ventilation equipment. Shortly after the 

hailstorm, Litmath submitted a claim on the Property but withdrew it,

stating that the damage was not substantial. At no point did Litmath repair 

the Property. Two years later, after a construction company contacted 

Litmath and informed it that the Property had indeed been damaged,

Litmath reopened its claim.

¶6 After reopening the claim, Litmath hired its own contractors, 

consultants, and public adjustors (“PA”), each of which provided various 

estimates of loss. USFIC hired an independent adjuster and consultants to 

evaluate the claim; its total estimate of loss was $1.25 million, while the

ACV estimate was about $922,000. The difference in estimates depended on 

the scope of repairs to the Property’s cooling towers or battery system. In 

February 2013, USFIC paid Litmath the $922,000 ACV value. After

receiving the funds, Litmath hired another PA, who produced various 

estimates of the loss, eventually settling on $2.1 million.

¶7 In December 2014, Litmath sued USFIC for breach of contract

and insurer bad faith. Litmath alleged that USFIC breached the implied 

covenant of good faith and fair dealing in “lowballing” the amount of 

Litmath’s loss and not adequately and timely investigating Litmath’s claim.

“Lowballing” in the insurance industry “refers to an insurance company 

paying less on a claim than it knows or it should know how much it 

owes . . . The policyholder is not getting the full benefit that’s owed under 

their policy.” Litmath sought compensatory and punitive damages as well 

as attorneys’ fees. In January 2015, the Vachovskys sold the Property for 

$1.33 million.

¶8 After receiving the complaint, USFIC requested under the 

insurance policy that the parties first undergo an appraisal process because 

of their conflicting damage valuations. When Litmath declined, USFIC 

obtained an order staying the case until completion of the appraisal process 

to determine the claim’s value. The policy required that in the event of 

disagreement about the Property’s value or amount of loss, each party

would select an impartial appraiser, and the appraisers would select a 

neutral umpire. If the two appraisers’ valuations differed, the valuation 

would be submitted to the umpire.

¶9 Litmath and USFIC each chose an appraiser, who agreed on a 

neutral umpire. Litmath’s appraiser opined the RCV to be $2.07 million, 

and USFIC’s appraiser opined it to be $526,000. In December 2015, the 

umpire determined the RCV to be $1.755 million, and the ACV amount to 
LITMATH v. US FIRE

Decision of the Court

4

be $1.158 million. Within the next 30 days, USFIC paid Litmath $236,400, 

the difference between its ACV estimate and the umpire’s estimate. USFIC 

paid Litmath a total of $1.158 million.

¶10 A few years after the appraisal, Litmath moved for partial 

summary judgment on the issue of an insurer’s duty of good faith, arguing

that USFIC was vicariously liable for punitive damages its employees and 

agents had caused. The court denied the motion. USFIC itself moved for 

summary judgment, arguing that the breach of contract claim was moot 

because it had fully paid whatever Litmath was owed at the time and that 

evidence showed that it never acted in bad faith. The court denied USFIC’s

motion on bad faith and found the breach of contract claim moot.

¶11 USFIC moved in limine to exclude testimony that Litmath 

could not afford to make repairs to the Property before it was sold because 

such testimony would be “fraud on the Court.” At oral argument, USFIC 

also argued that it wanted to preclude testimony that the Vachovskys 

themselves could not afford to repair the Property. The court warned 

Litmath that “if the Court is going to permit anyone, on behalf of Litmath, 

to say Litmath couldn’t afford to fix the building . . . [t]hat will open the 

door to cross-examination on the financials of Litmath or the principals 

involved . . . if there can be a connection established between the two.”

¶12 The trial court held a jury trial on the bad faith claim. On the 

second day of trial and on direct examination, Mrs. Vachovsky testified that 

upon receiving the ACV payment, she and her husband, on behalf of 

Litmath, called contractors to make the repairs. The contractors, however, 

told them that the repairs would cost twice the ACV amount. The 

Vachovskys did not use the $922,000 ACV payment to repair the property 

because they thought the payment too low to do the repairs.

Mrs. Vachovsky also testified that USFIC undervalued Litmath’s claim 

because the ACV payment was not enough to repair the Property based on 

their PA’s $2.1 million estimate.

¶13 While still on direct examination, Litmath’s counsel asked 

Mrs. Vachovsky without objection:

Q. So the defendant wants to know why Litmath didn’t put 

its own money into this building and make the repairs on its 

own. Did Litmath have the financial wherewithal to do that?

A. . . . [T]he only asset Litmath owned was the building, and 

there was no income coming from that. 
LITMATH v. US FIRE

Decision of the Court

5

Q. Did you and your husband have the independent financial 

wherewithal to have loaned money to Litmath in order to 

make the repairs to the building?

A. Yes. 

Q. Would that have hurt your family at all financially if you 

would have loaned the money?

A. No.

¶14 Later, on cross-examination, USFIC’s counsel asked 

Mrs. Vachovsky:

Q. If it had cost a million dollars to repair the building out of 

your own pocket, could you have done that without 

imperiling any interest of your family? 

. . . 

A. We could have done it without impairing the interest of the 

family.

¶15 Throughout Mrs. Vachovsky’s cross-examination, Litmath 

objected to the questions and moved for mistrial. The court denied the 

motions and allowed the testimony because it was “within the proper scope 

of cross-examination of what was testified to on direct.” USFIC continued 

to ask Mrs. Vachovsky how much money she and her husband could have 

spent on the Property:

Q. $3 million, not a problem?

A. I don’t think, at the time, it would have been a problem.

. . . 

Q. [Y]ou could have spent three, $4 million on this without 

hurting any family interest; isn’t that right?

¶16 Litmath objected and a discussion ensued between counsel.

Eventually, USFIC’s counsel asked:

Q. [I]s the door open now? . . . You could have spent $4 million 

couldn’t you? . . .
LITMATH v. US FIRE

Decision of the Court

6

A. Keep in mind, I have already spent [$]4.6 million for this 

building . . . Both my husband and I loaned the money to 

Litmath, LLC to repay the mortgage because the mortgage 

was due. We were also paying and maintaining the building 

. . . So you’re asking me, could you spend another four 

million? I think that would have been very risky for the 

family.

¶17 On the third day of trial, Litmath’s insurance expert testified

that the USFIC policy covered Litmath for the full RCV value through 

standard RCV language. He testified that under the policy, however, the 

insured must have first repaired or replaced the property to receive the

claim’s full RCV payment. He added that general contractors commonly

used the ACV payment to begin repairs and then completed the project 

with the remaining RCV payment received later. An insured could use the 

ACV payment to repay a debt, but the insured would not be entitled to the 

full RCV payment. On the fourth day of trial, Litmath’s PA also testified 

that Litmath had to spend the ACV money to receive the remainder of the 

full RCV amount. The same day, Litmath’s real estate expert testified that,

had the Property been repaired, it would have been worth more than $4 

million.

¶18 After Litmath’s case in chief, USFIC moved for JMOL. USFIC 

argued that no reasonable jury could find that USFIC acted unreasonably

because Litmath’s various repair estimations showed that its claim was 

“fairly debatable,” that USFIC was not part of Litmath’s decision to sell the 

property “as is” without making repairs, and that its actions did not cause 

diminution in the Property’s value or loss of proceeds from its sale. USFIC 

argued last that Litmath could have easily repaired the building with 

money that USFIC paid or advanced by Litmath’s members. Until Litmath

used the ACV amount to repair the damage, it was not entitled to the RCV

payment under the policy. The court heard oral argument and took the 

matter under advisement. Trial proceeded, and on the sixth day of trial the

court granted the motion in part on the RCV payment issue. After USFIC

presented its defense case, it renewed its JMOL motion on the issue of 

Litmath’s lost proceeds at the sale.

¶19 The court then granted the motion in its entirety and 

dismissed the jury. The court found that the policy required Litmath to use 

the ACV amount to repair the Property before receiving the full RCV

payment. If Litmath had made the repairs, it would have been entitled to 

the remaining portion of the claim, about $600,000 according to the court’s 

calculation. But the court found that Litmath had the right not to repair the 
LITMATH v. US FIRE

Decision of the Court

7

Property and did not do so, and USFIC did not relieve Litmath from its 

obligations under the policy. USFIC’s actions, therefore, were reasonable, 

and it was not obligated to pay Litmath more than the ACV amount under 

the circumstances. The court also found that USFIC’s actions did not cause 

Litmath not to repair the Property. Rather, Litmath decided on its own not 

to repair the Property, use the ACV proceeds for other purposes, and to sell

the Property “as is,” which resulted in the diminished value. The court 

noted that even if the amount was insufficient to Litmath, the Vachovskys

could have paid for additional repairs to the Property. Any loss from the 

sale resulted from Litmath’s conduct. Litmath timely appealed. 

DISCUSSION

¶20 Litmath argues that the trial court erred (1) in disregarding 

the LLC framework and admitting evidence of the Vachovskys’ personal 

finances because the evidence is irrelevant and (2) in granting USFIC’s

motion for JMOL because the evidence shows that USFIC committed the 

tort of bad faith against Litmath.

I. Admission of Evidence of the Vachovskys’ Personal Finances

¶21 We will not disturb the trial court’s ruling on the admissibility 

of evidence absent a clear abuse of discretion and resulting prejudice. 

Lohmeier v. Hammer, 214 Ariz. 57, 60 ¶ 7 (App. 2006). Although Litmath is 

correct that the evidence was initially inadmissible and irrelevant, Litmath

opened the door to the evidence during Mrs. Vachovsky’s direct 

examination. Under the “open door” doctrine “where one party injects 

improper or irrelevant evidence or argument, the ‘door is open,’ and the 

other party may have a right to retaliate by responding with comments or 

evidence on the same subject.” Pool v. Superior Court, 139 Ariz. 98, 103 

(1984). “The rule is most often applied to situations where evidence 

adduced or comments made by one party make otherwise irrelevant 

evidence highly relevant or require some response or rebuttal.” Id. The 

party that opens the door typically is precluded from raising the error on 

appeal after first inviting the error. State v. Lucero, 223 Ariz. 129, 135 ¶ 17 

(App. 2009) (“[I]nvited error precludes a party who causes or initiates an 

error from profiting from the error on appeal . . .[and] the offending party 

has no recourse on appeal.”).

¶22 Here, the court did not err in admitting evidence of the 

Vachovskys’ personal finances. Litmath opened the door to this evidence 

during Mrs. Vachovsky’s direct examination. Without objection, Litmath’s 

counsel asked her whether she and her husband had “the independent 
LITMATH v. US FIRE

Decision of the Court

8

financial wherewithal to have loaned money to Litmath in order to make 

the repairs.” Without objection, she answered, “Yes.” Counsel also asked 

her whether lending Litmath the money would have “hurt [her] family at 

all financially.” Again, without objection, she replied, “No.” She also

testified that she and her husband had lent Litmath money before to pay 

the mortgage, and that Litmath did not repair the Property because USFIC 

undervalued its claim in paying about $922,000. All this was during her 

direct examination by Litmath’s attorney.

¶23 By opening the door to the Vachovskys’ finances, Litmath 

made the evidence relevant and admissible on the causation issue. The 

evidence was relevant to refute Litmath’s claim that USFIC’s conduct led

Litmath to do a forced sale of the Property at a lower value and, as a result,

caused Litmath’s loss in proceeds. Showing that the Vachovskys had the 

money to repair the Property demonstrated that Litmath could have gained 

access to funds to repair the Property before selling it but chose not to do 

so. Thus, the evidence is relevant to demonstrate that USFIC did not act 

unreasonably or cause Litmath’s alleged losses upon selling the Property.

¶24 Litmath argues that the evidence was unfairly prejudicial 

because USFIC did not assert an alter ego theory or present facts to pierce 

the LLC’s veil. Litmath also argues that the elicited testimony led the jury 

to blame the Vachovskys as “greedy manipulators,” even though Litmath 

relied on receiving the full RCV payment in good faith to commence 

repairs. Litmath has not shown unfair prejudice, however. The 

admissibility of evidence of the Vachovskys’ personal wealth is not 

predicated on USFIC first piercing the corporate veil. The point of piercing 

the LLC’s veil under an alter ego theory is to hold persons such as an LLC’s 

members liable for the LLC’s debts and obligations. See Keg Restaurants 

Ariz., Inc. v. Jones, 240 Ariz. 64, 73 ¶ 31 (App. 2016) (“[W]hen a subsidiary 

corporation is merely the parent corporation’s alter ego and when 

observing the corporate form would work an injustice, a court may 

properly ‘pierce the corporate veil’ and hold the parent corporation liable 

for the acts of its subsidiary.”). Admitting evidence of the Vachovskys’ 

personal wealth was not to hold them liable for Litmath’s debts or 

obligations, but to show that USFIC did not cause a diminution in the 

Property’s value. See infra ¶¶ 29–30.

¶25 Further, while the Vachovskys were not obliged to lend

Litmath money, see A.R.S. § 29–3304(A) (stating that an LLC’s members are 

“not personally liable, directly or indirectly, by way of contribution or 

otherwise,” for an LLC’s liability solely because they are members), asking 

about their financial resources on direct examination—while precluding 
LITMATH v. US FIRE

Decision of the Court

9

cross-examination on the topic—could have produced misleading

testimony on causation, that USFIC “lowballed” its payment and Litmath 

was indeed forced to sell the Property. This would have left a one-sided 

presentation for the jury’s consideration. Cf. E.E.O.C. v. Gen. Telephone Co. 

of N.W., Inc., 885 F.2d 575, 578 (9th Cir. 1989) (“[F]acilitating one-sided 

presentation of a defense prevents the factfinder from getting ‘the full 

picture’ of a defendant’s conduct by precluding the plaintiff from enjoying 

a fair opportunity to challenge the evidence and the defendant’s theory in 

offering it.”). Thus, once Litmath’s counsel opened the door to the 

Vachovskys’ personal finances, USFIC was entitled to a “fair opportunity 

to challenge the evidence.” Id. Even though the court dismissed the jury 

before they were asked to deliberate on the case, Litmath had opened the 

door, and the evidence added to the record. The trial court had authority to 

consider the “entire record” before it in rendering its decision. See Schwab 

v. Ames Const., 207 Ariz. 56, 59 ¶ 15 (App. 2004). Litmath did not show, 

based on the record, how the admitted evidence unfairly prejudiced 

Litmath. See Walsh v. Walsh, 230 Ariz. 486, 494 ¶ 24 (App. 2012) (stating not 

all errors warrant reversal; this court will reverse only if a party suffers 

prejudice from the error, and the prejudice “appear[s] affirmatively from 

the record”). Therefore, Litmath has shown no reversible error.

II. Insurance Bad Faith

¶26 Initially, USFIC argues that Litmath waived the argument

that the court erred in granting USFIC JMOL because it failed to develop it 

or cite portions of the record under Arizona Rule of Civil Appellate 

Procedure (“Rule”) 13(a). Although some arguments on this issue are not 

fully developed, the brief is not so deficient as to warrant waiver. See Ramos 

v. Nichols, 252 Ariz. 519, 523 ¶ 10 (App. 2022) (stating that courts prefer to 

decide cases on their merits). We thus address Litmath’s arguments.

¶27 We review a ruling on a JMOL motion de novo but view the 

evidence in the light most favorable to the nonmoving party. Torres v. Jai 

Dining Servs. (Phx.) Inc., 252 Ariz. 28, 30 ¶ 9 (2021); Spooner v. City of Phoenix, 

246 Ariz. 119, 123 ¶ 7 (App. 2018). The trial court considers “the entire 

record” in determining a JMOL motion. See Schwab, 207 Ariz. at 59 ¶ 15; see 

also Glazer v. State, 237 Ariz. 160, 167 ¶ 29 (2015) (“The standards for 

granting or denying a motion for JMOL and a motion for summary 

judgment are the same.”). A court may properly grant JMOL against a party 

only when a “reasonable jury would not have a legally sufficient 

evidentiary basis to find for the party” on an issue that is necessary to the

party’s claim or defense. Ariz. R. Civ. P. 50(a); Dupray v. JAI Dining Servs. 

(Phx.), Inc., 245 Ariz. 578, 582 ¶ 11 (App. 2018). We will uphold a grant of 
LITMATH v. US FIRE

Decision of the Court

10

JMOL if “the facts produced in support of the claim or defense have so little 

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

people could not agree with the conclusion advanced by the proponent of 

the claim or defense.” Jones, 240 Ariz. at 72 ¶ 28 (quoting Felder v. 

Physiotherapy Assocs., 215 Ariz. 154, 162 ¶ 36 (App. 2007)). 

¶28 Bad faith insurance claims derive from the duty of good faith 

and fair dealing. Clearwater v. State Farm Mut. Auto. Ins. Co., 164 Ariz. 256, 

259 (1990). An insurance company breaches that duty, and “the tort of bad 

faith arises[,] when the insurance company intentionally denies, fails to 

process or pay a claim without a reasonable basis for such action.” Cavallo 

v. Phx. Health Plans, Inc., 254 Ariz. 99, 104 ¶ 19 (2022) (quoting Noble v. Nat’l 

Am. Life Ins. Co., 128 Ariz. 188, 190 (1981)). The insured has the burden to 

prove that its insurer “unreasonably investigate[d], evaluate[d], or 

processe[d] a claim (an ‘objective’ test), and either [knew] it [was] acting 

unreasonably or act[ed] with such reckless disregard that such knowledge 

may be imputed to it (a ‘subjective’ test).” Nardelli v. Metro. Grp. Prop. & Cas. 

Ins. Co., 230 Ariz. 592, 597–98 ¶ 19 (App. 2012); Tritschler v. Allstate Ins. Co., 

213 Ariz. 505, 516 ¶ 32 (App. 2006). 

¶29 Here, Litmath did not demonstrate that USFIC acted 

unreasonably or intended to do so. The record shows that USFIC timely 

investigated, evaluated, and processed Litmath’s claim. After Litmath 

reopened its claim in 2012, two years after the hailstorm, USFIC hired an 

independent adjuster and consultants to evaluate the claim. They produced 

an estimate shortly thereafter and paid Litmath about $922,000 for the ACV 

amount. Meanwhile, Litmath hired different adjusters, contractors, and 

consultants who produced varying estimates before presenting its final 

estimate in January 2014. Because of the difference in loss valuation, USFIC 

requested the parties seek an appraisal by a neutral umpire pursuant to the 

policy. The umpire estimated the RCV amount to be $1.755 million, and the 

ACV amount to be $1.158 million. Within 30 days of the umpire’s estimate, 

USFIC paid Litmath the $236,400 difference in the ACV amount to match

the umpire’s ACV estimate. Even if USFIC had retained biased adjusters to 

provide a low-balled estimate, USFIC reasonably and promptly complied 

with the umpire’s estimate.

¶30 Moreover, Litmath did not show that USFIC’s actions caused 

the Property to be sold for $1.33 million or caused a forced sale of the 

Property. The record shows that USFIC followed the policy in not

providing the remaining portion of the RCV amount unless Litmath 

commenced repairs to the Property. The insurance policy and testimony 

from Litmath’s experts are clear that had Litmath used the ACV amount to 
LITMATH v. US FIRE

Decision of the Court

11

repair the Property, USFIC would have paid it the remaining RCV amount. 

This is a common provision in insurance contracts. See, e.g., Tritschler, 213 

Ariz. at 510 ¶ 9. Also, Litmath’s real estate expert testified that, had Litmath 

repaired the Property, it would have sold for more than $4 million. But 

Litmath chose not to make the repairs and instead sold the Property for a 

lower value before the appraisal ended at the beginning of litigation.

Litmath then chose to use the money to pay off the Vachovskys for loans 

they had made to Litmath, which it was entitled to do. As the evidence 

revealed, however, Litmath did not then have money for the repairs. Yet 

the Vachovskys were financially capable of supplying Litmath with the 

funds to do the repairs. Litmath’s choices caused its losses. USFIC’s actions 

were reasonable, and where an insurer acts reasonably, it has not 

committed bad faith. Trus Joist Corp. v. Safeco Ins. Co. of Am., 153 Ariz. 95, 

104 (App. 1986). The court considered the entire record in rendering its 

decision, and Litmath did not show that USFIC committed bad faith 

practices.

¶31 Litmath nevertheless argues that USFIC’s breach of the duty 

of good faith and fair dealing absolved it from repairing the Property and 

that the Vachovskys did not use the ACV payment for repairs because

USFIC “lowballed” the ACV amount. But Litmath never had a duty to 

repair the Property, as its insurance expert testified, nor did USFIC have a 

duty under the policy to pay Litmath the RCV amount before it started the

repairs. See Rawlings v. Apodaca, 151 Ariz. 149, 155 (1986) (The insured is not 

entitled “to payment of claims that are excluded by the policy, nor to 

protection in excess of that which is provided for in the contract, nor to 

anything inconsistent with the limitations contained in the contract.”). 

Litmath could have used the ACV payment to start repairs and then 

subsequently receive the full RCV payment to complete them. Litmath’s 

insurance expert testified that general contractors typically work on 

projects this way. And although Litmath may not have had the funds to 

repair the Property because the Vachovskys used USFIC’s ACV payment 

for another purpose, evidence shows that the Vachovskys themselves had 

the financial capability to lend Litmath up to $3 million if the ACV payment 

did not suffice to cover the repairs. Then they would have received the RCV 

payment. 

¶32 Even if evidence of their personal finances had not been 

admissible, Litmath did not suffer prejudice. See Ariz. R. Civ. P. 61 (“Unless 

justice requires otherwise, an error in admitting or excluding evidence . . . 

is not grounds for granting a new trial, for setting aside a verdict, or for 

vacating, modifying, or otherwise disturbing a judgment or order.”); see also 

supra ¶¶ 24–25. The record provides sufficient evidence—even without that
LITMATH v. US FIRE

Decision of the Court

12

of the Vachovskys’ personal finances—that USFIC did not act in bad faith

and did not preclude Litmath from repairing the Property. USFIC timely 

and reasonably followed the insurance policy by paying Litmath the ACV 

value that the neutral umpire estimated. Litmath’s own conduct in failing 

to repair the Property with the full ACV amount precluded a profitable sale.

USFIC was entitled to judgment regardless of the admissibility of the 

Vachovskys’ financial ability to fund the repairs. Therefore, the court did 

not err in granting USFIC’s JMOL motion.

CONCLUSION

¶33 For the foregoing reasons, we affirm. Both parties request 

attorneys’ fees and costs under Rule 21, A.R.S. § 12–341, and A.R.S. § 12–

341.01, which authorizes a discretionary fee award to the successful party 

in an action arising out of a contract. Litmath also requests costs under 

A.R.S. § 12–331 and A.R.S. § 12–342. USFIC is the successful party on appeal 

and may recover reasonable attorneys’ fees and taxable costs incurred in 

this court upon compliance with Rule 21.