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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

DBT YUMA LLC, et al.

1

Plaintiffs/Appellants,

v.

YUMA COUNTY AIRPORT AUTHORITY,

Defendant/Appellee.

No. 1 CA-CV 17-0735 

Appeal from the Superior Court in Yuma County

No. S1400CV201001309

The Honorable John P. Plante, Judge

AFFIRMED

COUNSEL

Williams, Mestaz, LLP, Phoenix

By Daryl M. Williams

Counsel for Plaintiffs/Appellants

1 On the court's own motion, it is ordered amending the caption in this 

matter as reflected in this decision. The above-referenced caption shall be 

used on all further documents filed in this matter.

FILED 2-5-2019
2

Kutak Rock, LLP, Scottsdale

By Paul S. Gerding, Jr., Marc R. Lieberman, Michael W. Sillyman

Co-Counsel for Defendant/Appellee

Benesch & Davy, PC, Yuma 

By Wayne C. Benesch

Co-Counsel for Defendant/Appellee

MEMORANDUM DECISION

Presiding Judge Diane M. Johnsen delivered the decision of the Court, in 

which Judge Michael J. Brown and Judge Jennifer M. Perkins joined.

J O H N S E N, Judge:

¶1 DBT Yuma, LLC, et al. appeal the superior court's judgment

in favor of the Yuma County Airport Authority ("YCAA") following a 

bench trial on various contract claims and cross-claims. For the following

reasons, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 YCAA operates the Yuma County airport. Beginning in mid2008, YCAA entered into four leases with DBT Yuma, LLC, and other

companies collectively doing business as Lux Air. The leases authorized 

Lux Air to use space at the airport to run a fixed-base-operator business 

refueling airplanes.

¶3 Under the leases, Lux Air had to pay monthly rent and fuelflowage fees. Each lease also provided:

[YCAA] may cancel this Agreement, at any time, in the event 

[Lux Air] shall:

A). Be in arrears in the payment of the whole or any part of 

the rent, fees and/or charges due hereunder for a period of 

ten (10) days after [Lux Air's] receipt of written notice from 

[YCAA] of the failure.

¶4 On appeal, Lux Air concedes it was "never current [and] was 

late 86% of the time" on its payments under the leases. On September 4, 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

3

2009, Craig Williams, YCAA airport director, delivered a letter to Tim 

Berger, Lux Air's managing partner, that stated in relevant part:

I am very concerned because Lux Air is seriously delinquent 

in its obligations to [YCAA] under the terms of the [leases] . . 

. . I have enclosed an accounting of the delinquent balances 

to this letter.

My Board of Directors is also very concerned because under 

the [leases], [YCAA] is entitled to terminate the [leases], in the 

event [Lux Air] is in arrears in the payment of the whole or 

any part of the rent, fees and/or charges due under the 

[leases] for a period of ten (10) days after [Lux Air's] receipt 

of written notice from [YCAA] of the failure.

Accordingly, this letter is to formally give Lux Air notice of 

its failure to make payments as more particularly described 

[on an attachment listing delinquencies].

* * *

[YCAA] is prepared to extend the ten (10) day cure period 

until October 1, 2009, upon the following terms and 

conditions:

1. Payment of the sum of . . . ($20,001.21) to [YCAA] before 

the close of business on Friday, September 4, 2009.

2. The payment of the sum of . . . ($20,001.21) as additional 

rental on or before October 1, 2009, together with the payment 

of an additional sum of . . . ($10,000.00) as a reduction of the 

obligations set forth [on the attachment]. This additional 

payment to continue each month until all financial obligations 

are current.

3. Payment in full of all fuel flowage payments due at the time 

required in the above referenced four (4) leases.

* * *

5. In the event Lux Air fails to meet any of the terms or 

conditions set forth herein, [YCAA] may immediately 

proceed to exercise all of its remedies under the [leases], 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

4

without further notice to Lux Air, notice having been given 

by this letter.

As we discussed, if you agree to the above stated terms and 

conditions, please sign below indicating the concurrence of 

Lux Air and the cure period will be considered extended until 

October 1, 2009. If you do not sign and return this letter 

indicating Lux Air's concurrence by the close of business on 

Friday, September 4, 2009, this shall be considered your ten 

(10) day notice under the terms of the [leases]. Tim, I hope 

this extra time will help you reach your goals and close the 

bond issue that your team has been working on so diligently. 

But beyond this I cannot go.

¶5 Berger returned the signed letter on September 8, the next 

business day after September 4. Lux Air made its next fuel flowage 

payment on time in compliance with condition three of the letter, but failed 

to pay rent on October 1 as required by condition two. On October 23, 

YCAA terminated the leases and evicted Lux Air from the airport.

¶6 Lux Air sued YCAA, alleging breach of the lease agreement

and breach of the covenant of good faith and fair dealing. YCAA filed a 

counterclaim alleging breach of contract and breach of the covenant of good 

faith and fair dealing. The superior court held a 27-day bench trial, after 

which it found Lux Air materially breached the leases, the September 4 

letter was effective as a notice of default and no further notice of default 

was required, YCAA did not waive any of Lux Air's breaches, and YCAA 

had the right to evict Lux Air due to Lux Air's material breach. The court 

awarded $998,516 in damages to YCAA, plus $701,040.61 in prejudgment 

interest, $2,580,689.77 in attorney's fees and $625,311.95 in costs, along with 

prejudgment interest.

¶7 The court entered judgment pursuant to Arizona Rule of Civil 

Procedure 54(c), and Lux Air timely appealed. We have jurisdiction 

pursuant to Article 6, Section 9, of the Arizona Constitution, and Arizona 

Revised Statutes ("A.R.S.") sections 12-120.21(A)(1) (2019) and -2101(A)(1) 

(2019).2

 

2 Absent material revision after the relevant date, we cite the current 

version of a statute or rule.
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

5

DISCUSSION

A. Standard of Review.

¶8 In reviewing a judgment entered after a bench trial, "[w]e will 

not set aside the . . . court's findings of fact unless clearly erroneous, giving 

due regard to the opportunity of the court to judge the credibility of 

witnesses." In re Estate of Zaritsky, 198 Ariz. 599, 601, ¶ 5 (App. 2000). "A 

finding of fact is not clearly erroneous if substantial evidence supports it, 

even if substantial conflicting evidence exists." Kocher v. Dep't of Revenue, 

206 Ariz. 480, 482, ¶ 9 (App. 2003). "We are not bound by the trial court's 

conclusions of law and are free to draw our own conclusions of law from 

the facts found by the trial court." Ariz. Bd. of Regents v. Phoenix Newspapers, 

Inc., 167 Ariz. 254, 257 (1991). We review the record "in the light most 

favorable to sustaining the trial court's ruling." Swichtenberg v. Brimer, 171 

Ariz. 77, 82 (App. 1991).

B. Extension of Cure Period.

¶9 As noted, each of the leases granted YCAA the power to 

cancel if Lux Air failed to cure a breach after ten days' written notice. The 

September 4 letter listed Lux Air's existing breaches and cited the 

cancellation provision but did not demand that Lux Air cure the breaches 

within ten days. Instead, YCAA stated that it was "prepared to extend the 

ten (10) day cure period until October 1, 2009," upon specified conditions. 

The letter continued, "if you agree to the above stated terms and conditions, 

please sign below indicating the concurrence of Lux Air and the cure period 

will be considered extended until October 1, 2009." Further, the letter stated 

that if Lux Air did not "sign and return" the letter by the close of business 

on September 4, "this shall be considered your ten (10) day notice under the 

terms of the" leases. The superior court found that Berger's signature bound 

Lux Air to the terms of the September 4 letter, under which Lux Air had 

until October 1 to cure or face cancellation.

¶10 Whether an agreement has been created is a question of fact. 

AROK Const. Co. v. Indian Const. Servs., 174 Ariz. 291, 295 (App. 1993). 

Although an acceptance must comply with the requirements of the offer, 

"inconsequential variations [in the acceptance] . . . may be within the scope 

of the offer." See Restatement (Second) of Contracts § 58, cmt. a (1981). 

Generally, we favor enforcing agreements "when it is clear that the parties 

intended themselves to be bound." AROK, 174 Ariz. at 297. Under 

Arizona's "realist view" of contracts, "[i]f the parties have concluded a 

transaction in which it appears that they intend to make a contract, the court 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

6

should not frustrate their intention if it is possible to reach a fair and just

result." Id. (quotation omitted).

¶11 Lux Air argues it failed to strictly comply with the September 

4 deadline to sign and return the letter and also did not strictly comply with 

the letter's requirement that it pay $20,001.21 in rent by close of business on 

September 4. Instead, Lux Air returned the signed letter the next business 

day after September 4 and the payment it made was short of the stated 

amount by $580.74. Lux Air argues that signing and returning the letter no 

later than September 4 and making a rent payment of $20,001.21 were 

conditions of its acceptance, and when it failed to sign and return the letter 

on time and failed to pay the precise amount demanded, it did not satisfy 

those conditions.

¶12 The superior court did not err by finding that Lux Air 

accepted YCAA's offer to extend the deadline to October 1. Although 

Berger did not return the letter on September 4 as the letter required, Lux 

Air's conduct – Berger signed and returned the letter the next business day,

along with a payment that was barely short of the required amount – shows

it intended to be bound by the terms of the letter. From YCAA's 

perspective, Lux Air's variation in acceptance was inconsequential because, 

as Williams testified, the amount Lux Air paid was "good enough" and a 

"good faith effort on their part to meet that requirement, so . . . I accepted 

that amount at that time and . . . extended the cure period to October the 

1st." Both parties' subsequent conduct further supports the superior court's 

finding: Lux Air made its next fuel flowage payment on time, as the letter 

required, and YCAA did not declare a default until after Lux Air missed the

payments due under the letter agreement on October 1. Although Lux Air 

points out that the court found that Berger failed to appreciate the 

significance of the letter, that does not undermine his assent on behalf of 

Lux Air to the letter's terms. See Hill-Shafer P'ship v. Chilson Family Tr., 165 

Ariz. 469, 474 (1990) ("[M]utual assent is based on objective evidence, not 

on the hidden intent of the parties.").

C. Materiality of the Breach.

¶13 Lux Air next challenges the superior court's finding that it

materially breached by failing to make the October 1 rent payment on time.

¶14 When it comes to commercial leases, a "landlord's right to 

terminate is not unlimited," and a "court's decision to permit termination 

must be tempered by notions of equity and common sense." Foundation 

Dev. Corp. v. Loehmann's, Inc., 163 Ariz. 438, 446 (1990). A landlord may 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

7

terminate a lease only for a material, non-trivial breach. Id. at 445-46. The 

Loemann's court held that in determining whether such a breach has 

occurred, the factfinder must consider the following five factors:

(a) the extent to which the injured party will be deprived of 

the benefit which [it] reasonably expected;

(b) the extent to which the injured party can be adequately 

compensated [by damages] for the part of that benefit of 

which [it] will be deprived;

(c) the extent to which the party failing to perform or to offer 

to perform will suffer forfeiture;

(d) the likelihood that the party failing to perform or to offer 

to perform will cure [its] failure, taking account of all the 

circumstances including any reasonable assurances; [and]

(e) the extent to which the behavior of the party failing to 

perform or to offer to perform comports with standards of

good faith and fair dealing.

Id. at 446-47 (quoting Restatement (Second) of Contracts § 241 (1981)).

¶15 The record shows the superior court applied both equity and 

common sense, as instructed by Loehmann's, in concluding that Lux Air's 

breach was material. Lux Air does not argue the superior court's findings 

of fact on this issue are unsupported by substantial evidence. Instead, it 

argues we should review de novo the court's finding that Lux Air committed 

a material breach. Without meaning to imply that we would come to a 

different outcome than the superior court on de novo review, we note that, 

on a record such as this, whether a breach is material is a question of fact,

and we will affirm the superior court's finding if it is supported by 

substantial evidence. See Maleki v. Desert Palms Prof'l Props., L.L.C., 222 Ariz. 

327, 333, ¶ 27 (App. 2009) ("the record contains substantial evidence that 

[appellee] did not materially breach the lease").

¶16 Substantial evidence supports the superior court's finding 

that Lux Air materially breached the leases, thereby permitting YCAA to 

cancel after October 1. The September 4 letter listed Lux Air's arrearages –

unpaid lease deposits from January 2009, unpaid rent from August and 

September 2009, unpaid fuel flowage fees from August and other charges –

all of which totaled $55,935.32. Condition two of the letter required that, by 

October 1, Lux Air pay $20,001.21 for that month's rent and $10,000 toward 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

8

reducing the outstanding arrearages. There is no dispute that Lux Air failed 

to pay these amounts (totaling $30,001.21) by October 1. This breach by Lux 

Air gave YCAA the right to terminate the leases "without further notice" as 

provided by the September 4 letter.

¶17 The record also shows that Lux Air failed to provide 

reasonable assurances to YCAA that, having materially breached the leases,

it would cure its breaches: Williams testified that, as referenced in the 

September 4 letter, Lux Air had told him it needed to obtain bond financing 

to allow it to continue to pay its monthly obligations. Based on Berger's 

assurances in a September 9 email, Williams believed that Lux Air was 

"very close to finalizing all the details on [its] bond financing." But on

October 19, Berger admitted to Williams that Lux Air did not have "a deal 

in hand on the financing." The record therefore supports the superior 

court's finding that "[t]he excuses given convinced YCAA that Lux Air 

probably lacked the ability to go forward as a going concern."

¶18 Lux Air argues the superior court erred in weighing the 

equities by ruling that Lux Air was required to tender performance after 

YCAA canceled the leases. Tender "is an offer to perform a contract, or to 

pay money, coupled with a present ability to do the act." Somerton State 

Bank v. Maxey, 22 Ariz. 365, 369 (1921) (quotation omitted). According to 

Lux Air, tender was unnecessary as a matter of law because YCAA's 

cancelation of the leases was irrevocable.

¶19 Contrary to Lux Air's contention, the superior court did not 

rule that Lux Air should have tendered performance. It only found that 

Lux Air "knew or should have known" that it could have cured the default 

by tendering payment, but failed to do so. It further found that if Lux Air 

had properly tendered payment on or before October 26, 2009, YCAA 

"would have been bound by equity to accept" it. In any event, when tender 

otherwise may be required, it is excused only "where it is clear that the other 

party will not accept it." Kammert Bros. Enters., Inc. v. Tanque Verde Plaza Co., 

102 Ariz. 301, 306 (1967) (tender excused when seller "positively refused 

[buyer's] offer to perform its duties under the contract"). Lux Air points to 

no such evidence in the record here. See also Ceizyk v. Goar Serv. & Supply, 

Inc., 21 Ariz. App. 119, 122 (1973) (tender not excused because sellers of land 

never indicated to the buyer a positive refusal to perform).

¶20 Lux Air argues that some of the Loehmann's factors weigh in 

its favor: As the superior court found, Lux Air had the ability to pay, the 

termination was a "crushing blow" to the company that left it "with no 

sources of income and much debt," and the "termination prevented Lux Air 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

9

from realizing large profits." At the same time, however, as the superior 

court found, Lux Air was at fault because Lux Air deliberately gave YCAA 

the "mistaken impression" that it needed to complete the bond deal to allow 

it to continue to perform its obligations under the leases.

¶21 A landlord that has given proper notice is entitled to demand 

that a tenant pay rent in a timely fashion, and the record shows that after 

Lux Air failed to make the payments due on October 1, it did not try to 

show YCAA that it could come up with the money it owed. As the superior 

court found, Lux Air "recklessly failed" to pay, when it should have known 

that payment was required to avoid termination. In reviewing findings of 

fact, "we do not substitute our judgment" for that of the superior court if 

substantial evidence supports the court's decision. Great W. Bank v. LJC 

Dev., LLC, 238 Ariz. 470, 478, ¶ 22 (App. 2015). This is so even when, as 

here, the record also contains substantial conflicting evidence. See Kocher, 

206 Ariz. at 482, ¶ 9. 

D. Purported Waiver of Power to Evict.

¶22 Lux Air also argues YCAA waived the right to cancel the 

leases by taking actions that were "inconsistent with the intention of 

enforcing a forfeiture."

¶23 In Chadwick v. Winn, 101 Ariz. 533 (1966), the supreme court 

acknowledged that, by its conduct, a landlord may waive the right to 

declare a forfeiture. In that case, a tenant who had been persistently late in 

paying rent testified he told the landlord he would pay "in a couple of 

days," and the landlord consented. Id. at 535. Several days went by, and 

after the tenant still had not paid, the landlord terminated the lease. Id. The 

tenant sued and prevailed. Id. The supreme court affirmed, reasoning that 

any

act of the lessor done with the knowledge of a cause of 

forfeiture by the lessee affirming the existence of the lease and 

recognizing the lessee as his tenant is a waiver of such 

forfeiture. And inasmuch as forfeitures are not favored, slight 

acts will be construed as a waiver of the forfeiture.

Id. at 536. The court reasoned that because the landlord had granted the 

tenant an extension, he temporarily waived his right to declare a forfeiture

by putting the tenant "off guard"; before canceling the lease, the landlord

needed to make a demand and give the tenant a reasonable opportunity to 

pay. Id. See also Kammert Bros., 102 Ariz. at 305 ("Once strict performance 

of the contract has been waived as to timely payment, a clear and definite 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

10

notice to buyer followed by allowance of a reasonable time to bring 

payments up to date would be necessary in order to reinstate the forfeiture 

clause of the contract.").

¶24 Relying on Kammert Bros. and on the "slight acts" language of 

Chadwick, Lux Air argues YCAA waived its right to cancel the leases by, 

among other actions, accepting payments, approving a sewer abandonment 

project and communicating with Lux Air employees without informing 

them that YCAA had decided to evict Lux Air after it failed to pay the rent 

on October 1. The superior court fully considered this argument, but found

that "YCAA's acceptance from Lux Air of the rent payment and later the 

fuel flowage payment after the September 4, 2009 letter was sent did not 

constitute a waiver." Furthermore, the court found that "[u]pon missing the 

October 1, 2009 payment, proper notice having been given, YCAA had the 

right to terminate the lease" and that "[n]o actions of YCAA could 

reasonably have led Lux Air officials to believe an extension of the 

requirement to pay the sums required under the September 4, 2009 letter 

was granted."

¶25 Substantial evidence supports the superior court's finding 

that YCAA did not waive its right to terminate the leases upon Lux Air's 

failure to comply with the terms of the September 4 letter. See Chaney Bldg. 

Co., Inc. v. Sunnyside School Dist. No. 12, 147 Ariz. 270, 273 (App. 1985) 

(whether party waived contractual notice requirement is a question for trier 

of fact). Kammert Bros. and Chadwick teach that a party must put the other 

on plain notice that it will declare a forfeiture upon the other's breach. Here, 

and unlike in those cases, YCAA's September 4 letter did just that, formally 

alerting Lux Air that "[i]n the event Lux Air fails to meet any of the terms 

or conditions set forth herein, [YCAA] may immediately proceed to exercise 

all of its remedies [including termination] under the [leases] without further 

notice to Lux Air, notice having been given by this letter." See Kammert

Bros., 102 Ariz. at 305; Chadwick, 101 Ariz. at 536.

¶26 Lux Air's contention that YCAA waived its right to cancel by 

accepting the interim payments required by the September 4 letter and 

approving the sewer project is misplaced. In the September 4 letter, the 

parties agreed that Lux Air would make certain interim payments due 

before October 1 and would pay rent due on October 1. When Lux Air 

began to perform its obligations under that agreement by making the 

interim payments, YCAA was entitled to accept that performance in

accordance with the September 4 letter. Further, the superior court 

thoroughly reviewed YCAA's actions after October 1 and its interactions 

with Lux Air and found that nothing "could reasonably have led Lux Air 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

11

officials to believe" that YCAA had agreed to extend the October 1 deadline. 

"[G]iving due regard to the opportunity of the [superior] court to judge the 

credibility of witnesses," we conclude that substantial evidence supports 

the superior court's findings. See Zaritsky, 198 Ariz. at 601, ¶ 5.

E. Purported Breach of Covenant of Good Faith and Fair Dealing.

¶27 Lux Air further contends the superior court erred when it 

ruled that YCAA did not breach the covenant of good faith and fair dealing.

Lux Air argues YCAA acted in bad faith when it "secretly" planned "behind 

the back of its tenant to forfeit the tenant because it ha[d] changed its mind 

about its revenue plan and want[ed] millions of dollars out of the FAA it 

could not otherwise get."

¶28 Arizona law implies in every contract a covenant of good faith 

and fair dealing that "prohibits a party from doing anything to prevent 

other parties to the contract from receiving the benefits and entitlements of 

the agreement." Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement 

Masons Local No. 395 Pension Tr. Fund, 201 Ariz. 474, 490, ¶ 59 (2002).

¶29 The superior court thoroughly reviewed evidence of YCAA's 

actions before finding that YCAA did not breach the covenant of good faith 

and fair dealing. Although Lux Air asserts we should review the alleged 

breach de novo, "[w]hether a party has breached the covenant of good faith 

and fair dealing is a question of fact." Maleki, 222 Ariz. at 333, ¶ 28.

¶30 Substantial evidence supports the court's finding. Lux Air's 

long history of delinquent payments justified YCAA's decision to develop 

a contingency plan in case Lux Air shut down or otherwise failed to 

perform on the September 4 letter agreement. As the superior court 

correctly concluded, YCAA "had a right to take steps to ensure that the 

airport could carry on fueling and other essential functions of the airport 

once the leases were actually terminated." In fact, the law imposes a "duty 

upon the [party] injured to exercise reasonable care to mitigate the injury, 

according to the opportunities that may fairly be or appear to be within [its] 

reach." S. A. Gerrard Co. v. Fricker, 42 Ariz. 503, 508 (1933). Based on weeks 

of testimony, the superior court did not err in concluding that "Lux Air 

failed to prove that any actions by Craig Williams or Gerald Hinkle Jr.

[YCAA's chief financial officer] were deceptive or unfair." Moreover, 

although Lux Air objects to YCAA's delay in terminating the lease after the 

October 1 breach, it failed to prove it suffered any prejudice as a result of 

YCAA's delay.
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

12

¶31 As noted, YCAA also provided Lux Air with notice and a 

reasonable opportunity to cure in compliance with Chadwick and Kammert 

Bros. before evicting Lux Air for its material breach as permitted under the 

leases. Such "[a]cts in accord with the terms of one's contract cannot without 

more be equated with bad faith." Wells Fargo, 201 Ariz. at 492, ¶ 65. Lux Air 

contends that YCAA's so-called bad faith conduct continued after the 

eviction and during this litigation. But any actions occurring after the 

eviction cannot constitute actionable bad faith because a material breach by 

one party relieves the other party from performance and discharges it from 

the contract. Murphy Farrell Dev., LLLP v. Sourant, 229 Ariz. 124, 133, ¶ 33 

(App. 2012).

F. Costs Award.

¶32 The superior court awarded YCAA costs of $625,311.95. In its 

opening brief on appeal, Lux Air argues that $575,150.60 of the award 

represented costs not allowed under A.R.S. § 12-332(A) (2019). In its reply, 

Lux Air also argues that YCAA did not provide evidentiary support for the 

costs.

¶33 The court must award taxable costs to the successful party in 

a civil action. A.R.S. § 12-341 (2019). "Whether a particular expenditure 

qualifies as a taxable cost is a question of law that we review de novo." Reyes 

v. Frank's Serv. & Trucking, LLC, 235 Ariz. 605, 608, ¶ 6 (App. 2014). Taxable 

costs are defined in § 12-332(A). In arguing that the bulk of the costs the 

court awarded to YCAA were not taxable, Lux Air overlooks that § 12-

332(A)(6) allows the court to order reimbursement of other expenses "that 

are made or incurred pursuant to . . . agreement of the parties."

¶34 As allowed by § 12-332(A)(6), the leases at issue here 

expressly permitted the prevailing party in a litigation to recover "court 

costs, costs of investigation, and other related expenses." Lux Air does not 

identify any particular expense that it argues is not taxable under that 

contract provision. In the absence of argument or citations to the record, 

we will not parse the long list of expenses for which YCAA sought and 

obtained an award. See ARCAP 13(a)(7). As for the adequacy of evidence 

supporting the costs, Lux Air does not argue how the court erred by 

accepting the affidavit YCAA provided in support of the costs.

G. Attorney's Fees.

¶35 Lux Air also argues the superior court erred by awarding 

YCAA attorney's fees incurred by Kutak Rock, a law firm hired by YCAA's 

insurer to defend YCAA. Lux Air argues YCAA and Kutak Rock did not 
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Decision of the Court

13

have an attorney-client relationship and YCAA's insurer paid the law firm's 

fees, not YCAA. We review an award of attorney's fees for abuse of 

discretion. Orfaly v. Tucson Symphony Soc'y, 209 Ariz. 260, 265, ¶ 18 (App. 

2004).

¶36 The superior court did not abuse its discretion in awarding 

the fees. There is no dispute that Kutak Rock appeared on behalf of YCAA 

in the litigation, and Lux Air does not challenge the reasonableness of the 

fees incurred. Under these circumstances, we long have held that the court 

may award fees incurred by a law firm hired and paid by an insurer on 

behalf of its insured. Orfaly, 209 Ariz. at 267, ¶ 27; Catalina Foothills Ass'n, 

Inc. v. White, 132 Ariz. 427, 428 (App. 1982) (contrary rule would "misdirect 

the benefit derived through the foresight of the cautious individual who 

procured insurance" and "would also discriminate against the insurance 

company").

¶37 Lux Air argues that caselaw teaches otherwise, citing Moedt v. 

Gen. Motors Corp., 204 Ariz. 100 (App. 2002). But Moedt, and the case on 

which it relied, Lisa v. Strom, 183 Ariz. 415 (App. 1995), are not relevant to 

the issue presented here. In Lisa, an attorney and his law firm had 

represented the attorney and his wife in the litigation; we held fees could 

not be awarded because the attorney and his wife were not obligated to 

reimburse the firm for the work performed on their behalf. 183 Ariz. at 419. 

In Moedt, we upheld a fees award to a plaintiff who had sued for breach of 

a car warranty under statutes authorizing fees awards to prevailing parties. 

204 Ariz. at 102, 104, ¶¶ 2-4, 14. Citing Lisa, the defendant argued that 

because the plaintiff's lawyer was representing her on a contingent fee, a 

fees award was improper because the plaintiff was not personally obligated 

to pay the lawyer. Moedt, 204 Ariz. at 103, ¶ 10. We rejected that argument, 

holding that the client's fee agreement was sufficient because it "created a 

financial obligation" between herself and the law firm. Id. at 104, ¶ 12. 

Neither case addressed the situation in Orfaly or Catalina Foothills, where we 

upheld fees awards to compensate insurers that were financially obligated 

to pay the lawyers they had retained to represent their insureds.

H. Prejudgment Interest.

¶38 In their pretrial statement, YCAA and Lux Air agreed to an 

amount of damages to be awarded to YCAA if it prevailed. The parties also 

stipulated in their pretrial statement that the prevailing party would be 

entitled to interest, and, after ruling in favor of YCAA, the superior court 

awarded YCAA prejudgment interest of $701,040.61 on damages of 

$998,516. On appeal, Lux Air argues prejudgment interest was not proper 
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

14

because the damages were not liquidated, given that the stipulation in the 

pretrial statement was "contingent upon the outcome of the case."

¶39 A litigant has a right to prejudgment interest on a liquidated 

claim. Scottsdale Ins. Co. v. Cendejas, 220 Ariz. 281, 288, ¶ 32 (App. 2009). A 

claim is liquidated if the litigant "provides a basis for precisely calculating 

the amounts owed" so that, accepting the evidence, one can "calculate 

exactly the amount of damages without relying on the opinion or discretion 

of a judge or jury." Id. at 288, ¶ 33. We review de novo a superior court's 

award of prejudgment interest. Id. at 288, ¶ 32.

¶40 Contrary to Lux Air's contention, any damage award is 

"contingent upon the outcome of the case." The issue is whether the 

damages were liquidated, which turns on whether, assuming a claimant 

prevails on the merits, the amount of damages is ascertainable without 

resort to opinion or discretion. See Cendejas, 220 Ariz. at 288, ¶ 33.

¶41 More generally, Lux Air argues that because the total 

damages were stipulated, "there was no evidentiary basis to parse the 

stipulated sum into components for purposes of assessing prejudgment 

interest." Because the parties had stipulated to the total amount of damages 

to which YCAA might be entitled, the superior court did not permit YCAA 

to offer evidence in support of any of its damages. In its proposed findings 

of fact and conclusions of law, however, YCAA itemized its various 

damages, including unpaid rent and fuel flowage fees due under the leases, 

storage fees YCAA incurred for the items Lux Air left behind after the

eviction, and the costs YCAA incurred in completing Lux Air's 

unperformed lease obligations, including the construction of a new 

terminal and removal of underground fuel storage tanks. Lux Air neither 

contested YCAA's proposed findings and conclusions, nor did it file its own 

proposed findings and conclusions.

¶42 With its post-trial application for fees and costs, YCAA sought 

prejudgment interest and attached a table that specified the date on which 

interest should begin to run for each category of damages. Lux Air did not 

lodge any objection to YCAA's proposed prejudgment interest amounts, 

nor did it argue that any of the categories of damages were unliquidated. 

Further, on appeal, Lux Air does not identify any particular item of 

damages that it contends was unliquidated. In any event, having failed in 

the superior court to object that the damages were not liquidated, Lux Air 

may not press the matter here. See Brown v. U.S. Fidelity & Guar. Co., 194 

Ariz. 85, 88, ¶ 9 (App. 1998).
DBT YUMA LLC, et al. v. YCAA

Decision of the Court

15

¶43 Additionally, although Lux Air argues the court's calculation 

of prejudgment interest has no support in the record, the detailed 

calculations that YCAA provided to the superior court, to which Lux Air 

did not object, amply support the court's award of prejudgment interest.

CONCLUSION

¶44 For the reasons set forth above, we affirm the superior court's 

judgment in favor of YCAA. YCAA is entitled to its costs on appeal and, in 

the exercise of our discretion, we award YCAA its reasonable attorney's fees

pursuant to A.R.S. § 12-341.01(A) (2019), contingent upon compliance with 

Arizona Rule of Civil Appellate Procedure 21.