Court Opinion

ID: 3066708
Source: CourtListenerOpinion
Date Created: 2015-10-15 16:02:53.766921+00
Date Added: 2024-06-11T10:37:46.655197
License: Public Domain

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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

                        STANLEY EICK, a single person,
              Plaintiff/Counterdefendant/Appellant/Cross-Appellee,

                                         v.

          DELTA MECHANICAL, INC., an Arizona Corporation
            Defendant/Counterclaimant/Appellee/Cross-Appellant,

    CHROME, INC.; KITCHUKOV TRUST DATED JULY 16, 2009 and
        TODOR KITCHUKOV and MARIANA KITCHUKOV,
               Defendants/Appellees/Cross-Appellants.

                              No. 1 CA-CV 14-0565
                                 FILED 10-15-15

            Appeal from the Superior Court in Maricopa County
                           No. CV 2011-019532
                The Honorable Randall H. Warner, Judge

                                   AFFIRMED

                                    COUNSEL

The Brebner Law Firm, PC, Phoenix
By Bartlet A. Brebner
Counsel for Plaintiff/Counter-Defendant/Appellant/Cross-Appellee
Cheifetz Iannitelli Marcolini, PC, Phoenix
By Claudio E. Iannitelli, Jacob A. Kubert
Counsel for Defendants/Counter-Claimant/Appellees/Cross-Appellants

                      MEMORANDUM DECISION

Presiding Judge Margaret H. Downie delivered the decision of the Court,
in which Judge Patricia A. Orozco and Judge Maurice Portley joined.

D O W N I E, Judge:

¶1            Stanley Eick appeals from: (1) an award of punitive damages
to Delta Mechanical, Inc. (“Delta”); (2) a determination that he was not the
successful party for purposes of taxable costs and jury fees; (3) the denial
of his request for attorneys’ fees; and (4) the denial of prejudgment
interest on certain sums. Delta, Todor Kitchukov, Mariana Kitchukov,
Chrome, Inc., and the Kitchukov Trust Dated July 16, 2009 (“the Trust”)
cross-appeal from the trial court’s award of prejudgment interest. For the
following reasons, we affirm.

                FACTS AND PROCEDRUAL HISTORY

¶2          Delta is owned by Todor Kitchukov, who is married to
Mariana Kitchukov. Chrome, Inc. is a company wholly owned by
Kitchukov. Kitchukov is a trustee and beneficiary of the Trust.1

¶3            In 2008, Delta retained Eick to perform project management
services. Delta gave Eick access to certain business credit cards. In
August 2011, Delta became suspicious about purchases Eick made with a
Home Depot gift card that was to be used for business-related purposes.
Delta initiated an investigation and did not pay Eick for services
performed after August 8, 2011. On October 28, 2011, Eick obtained a cash
advance in the sum of $5000 from Delta’s Wells Fargo credit card.

1     References to “Kitchukov” in the singular are to Todor Kitchukov.
We refer to the Kitchukovs, Chrome, and the Trust collectively as “the
Property Owners.”

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¶4            Eick sued Delta for breach of contract, unpaid wages,2 and
unjust enrichment. Although he initially asserted several counts against
the Property Owners, Eick ultimately proceeded against them only on his
quantum meruit claims.           Delta counterclaimed against Eick for
conversion, civil racketeering, and fraud.

¶5              A jury trial ensued. Before the case was submitted to the
jury, the trial court granted judgment as a matter of law to Eick on Delta’s
racketeering and fraud counterclaims. Delta’s conversion counterclaim
was submitted to the jury. The jury rendered the following verdicts and
special interrogatory answers:

          Eick was an independent contractor, not a Delta employee.

          Delta owes Eick compensation in the sum of $7250.

          After offsetting the $5000 Eick obtained from Delta’s credit card,
          Delta owes Eick $2250 in compensation.

          Eick is awarded $750 on his quantum meruit claim against the
          Trust.

          Eick is awarded $1000 on his quantum meruit claim against
          Chrome.

          Eick is awarded $500 on his quantum meruit claim against the
          Kitchukovs.

          Delta is awarded $5000 in damages on its counterclaim against
          Eick.

          Delta is awarded $2251 in punitive damages against Eick.

          The compensation Delta owes Eick ($7250) includes amounts for
          work included in the quantum meruit awards — specifically,
          $1000 as to Chrome, $500 as to the Kitchukovs, and $750 as to
          the Trust.

The net effect of the jury’s awards was a $1 verdict in favor of Delta.

2     Eick alleged entitlement to treble damages on his wage claim
pursuant to A.R.S. § 23-355(A).

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¶6            Delta filed a post-trial application for attorneys’ fees and
costs, contending it was the “net prevailing party” for purposes of
Arizona Revised Statutes (“A.R.S.”) sections 12-341 and 12-341.01. Eick
filed a motion for remittitur regarding the compensatory and punitive
damage awards to Delta and, in the alternative, requested a new trial.
Eick also sought an award of attorneys’ fees and costs, claiming he was
the successful party.

¶7           The trial court denied Eick’s motion. It deemed Delta the
successful party, “though barely.” The court ordered Eick to pay jury fees
and awarded Delta taxable costs under A.R.S. § 12-341.

¶8            After analyzing the factors enunciated in Associated
Indemnity Corp. v. Warner, 143 Ariz. 567, 570 (1985), the court determined
Eick was not entitled to a fee award under A.R.S. § 12-341.01(A). It also
declined to award him fees under A.R.S. § 12-349, notwithstanding its
dismissal of Delta’s fraud and racketeering counterclaims. The court did,
however, award Eick $3060 in fees related to his defense of the
racketeering counterclaim under A.R.S. § 13-2314.04(A), noting that the
racketeering claim, “though not frivolous, was very thin.” The trial court
awarded Delta prejudgment interest on the $5000 in conversion damages
and awarded Eick prejudgment interest on the $5000 wage claim. The
court did not award Eick prejudgment interest on his other awards.

¶9           Eick filed a motion for reconsideration, arguing he was the
net judgment winner by roughly $65 once prejudgment interest was taken
into account and was thus the successful party. Delta also sought
reconsideration, arguing the court should deny all prejudgment interest as
waived by both parties. The court denied both motions. Eick timely
appealed, and Appellees timely cross-appealed. We have jurisdiction
pursuant to A.R.S. § 12-2101(A)(1).

                               DISCUSSION

I.     Punitive Damages

¶10           Eick contends Delta was not entitled to punitive damages
because it failed to prove actual damages. Alternatively, he argues the
punitive damage award was constitutionally excessive. We review these
issues de novo. See Cooper Indus., Inc. v. Leatherman Tool Grp., Inc., 532 U.S.
424, 436 (2001); Hall v. Lalli, 194 Ariz. 54, 57, ¶ 5 (1999).

¶11        “[T]he right to an award of punitive damages must be
grounded upon a cause of action for actual damages.” Quiroga v. Allstate

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                           EICK v. DELTA, et al.
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Ins. Co., 151 Ariz. 127, 129 (App. 1986); see also Saucedo ex rel. Sinaloa v.
Salvation Army, 200 Ariz. 179, 185–86, ¶ 21 (App. 2001) (“[C]ommon law
mandates that a plaintiff suffer actual damages as a result of the
underlying tort before a claim of punitive damages can be entertained.”).
Failure to prove actual damages precludes an award of punitive damages.
Fousel v. Ted Walker Mobile Homes, Inc., 124 Ariz. 126, 129 (App. 1979).

¶12         The jury was instructed as follows regarding Delta’s
punitive damage claim:

      If you find Mr. Eick liable to Delta Mechanical for
      conversion, you may consider assessing additional damages
      to punish Stanley Eick or to deter him and others from
      similar misconduct in the future.

¶13           Contrary to Eick’s suggestion, the requirement for actual
damages does not require that the party claiming punitive damages be the
net winner after setoffs. It simply means that the “requisite intent and
outrageous and egregious conduct must occur in tandem with the conduct
giving rise to the injury in order to recover punitive damages.” Saucedo,
200 Ariz. at 182, ¶ 13. As the trial court ruled, even if Appellees owed
Eick more than $5000, “the jury properly found that it was conversion for
[Eick] to pay himself $5,000 using gift or credit cards. [Eick] could not
take that money to satisfy the debt any more than he could steal a truck
from [Delta] to satisfy the debt.”

¶14           As noted supra, the jury was instructed that if it found Eick
liable for conversion, it could consider assessing punitive damages. The
jury found Eick liable for conversion and awarded Delta $5000 in actual
damages on that claim, thereby establishing the necessary predicate for an
award of punitive damages. The subsequent setoffs do not negate the
propriety of the punitive damage award.

¶15           Turning to Eick’s constitutional claim, we agree that due
process principles limit the size of punitive damage awards. Nardelli v.
Metro. Grp. Prop. & Cas. Ins. Co., 230 Ariz. 592, 609, ¶ 83 (App. 2012).

      The United States Supreme Court has instructed courts to
      consider three guideposts when reviewing punitive
      damages awards: “(1) the degree of reprehensibility of the
      defendant's misconduct; (2) the disparity between the actual
      or potential harm suffered by the plaintiff and the punitive
      damages award; and (3) the difference between the punitive

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                           EICK v. DELTA, et al.
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      damages awarded by the jury and the civil penalties
      authorized or imposed in comparable cases.”

Security Title Agency, Inc. v. Pope, 219 Ariz. 480, 501, ¶ 94 (App. 2008)
(quoting State Farm Mut. Auto. Ins. v. Campbell, 538 U.S. 408, 418 (2003)).

¶16           However, Eick has not provided a trial transcript, which
prevents any assessment of the reprehensibility of his conduct. When
matters are not included in the record on appeal, we presume that the
missing portions of the record would support the trial court’s judgment.
State v. Zuck, 134 Ariz. 509, 513 (1982); State v. Rivera, 168 Ariz. 102, 103
(App. 1990). Moreover, there is no acceptable bright-line ratio between
compensatory and punitive damages because an appropriate punitive
damage award is a fact-sensitive inquiry. See Nardelli, 230 Ariz. at 611,
¶ 95. However, “single-digit multipliers are more likely to comport with
due process, [and] a factor more than four comes ‘close to the line’ of
constitutional impropriety.” Hudgins v. Sw. Airlines Co., 221 Ariz. 472, 491,
¶ 57 (App. 2009). The multiplier in this case is just under one-half
($2251/$5000 = 0.4502), which is well within the constitutionally
permissible range. The record before us establishes no due process
violation.

¶17           Finally, to the extent Eick argues on appeal that the jury was
improperly instructed or that the court’s handling of the verdicts and
special interrogatories was deficient in some respect, the lack of a trial
transcript prevents review of whether such issues were properly
preserved and whether the trial court responded appropriately. See
Rivera, 168 Ariz. at 103 (“In the absence of a record to the contrary, we
must presume that the trial court acted properly.”).

II.   Taxable Costs

¶18           Eick next contends the trial court should have deemed him
the successful party and awarded him taxable costs under A.R.S. § 12-341.
Eick maintains he was the net judgment winner against Delta after
prejudgment interest is considered and was wholly successful against the
Property Owners.

¶19           The language of A.R.S. § 12-341 is mandatory, and the trial
court has no discretion to deny costs to the successful party. Roddy v. Cty.
of Maricopa, 184 Ariz. 625, 627 (App. 1996). The court does, however, have
discretion in determining the successful party. Democratic Party of Pima

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                          EICK v. DELTA, et al.
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Cty. v. Ford, 228 Ariz. 545, 549, ¶ 15 (App. 2012). We review a
determination of the successful party for an abuse of discretion. Id.

¶20            After acknowledging its discretion in determining the
identity of the successful party, the trial court stated:

      The monetary difference between what each party obtained
      is small: one dollar before calculation of prejudgment
      interest and $65.25 including it. But the jury clearly intended
      that Defendants would be considered prevailing. Although
      the court is not bound by that determination, it is persuaded
      by it. It is also persuaded by the fact that Plaintiff obtained
      substantially less in monetary damages than he sought.

¶21            Looking at net judgment amounts is one method of
determining the successful party, see Trollope v. Koerner, 21 Ariz. App. 43,
47 (1973) (a party who obtains judgment in excess of setoff or
counterclaim is “successful”), particularly in cases involving “competing
claims, counterclaims and setoffs all tried together.” Ayala v. Olaiz, 161
Ariz. 129, 131 (App. 1989). But the “net judgment rule” is not the only
acceptable way of determining the successful party. See, e.g., McEvoy v.
Aerotek, Inc., 201 Ariz. 300, 303, ¶¶ 12–13 (App. 2001) (successful party
determination may be based on “success upon the merits, not upon
damages”); Pioneer Roofing Co. v. Mardian Constr. Co., 152 Ariz. 455, 467
(App. 1986) (“percentage of success” evaluation proper); Nataros v. Fine
Arts Gallery of Scottsdale, Inc., 126 Ariz. 44, 49 (App. 1980) (approving
“totality of the litigation presented to the trial court” assessment of
successful party). Indeed, a contrary holding would gut the trial court’s
well-established discretion, reducing the successful party determination to
a mechanical, mathematical exercise.

¶22           The trial court found that the jury “clearly intended” that
Appellees “be considered prevailing.” It characterized this factor as
persuasive, and, coupled with the fact that Eick “obtained substantially
less in monetary damages than he sought,” determined Delta was the
successful party, even if just barely. We find no abuse of discretion. The
trial judge who made that determination had presided over the case for
over two years and was far better equipped than this Court to make the
discretionary decision regarding the successful party.

¶23          As to the Property Owners, Eick argues they “cannot be
successful parties for purposes of A.R.S. § 12-341 because Eick obtained
100% of the relief he sought against them, and they obtained no relief

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                           EICK v. DELTA, et al.
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against Eick.” Although a “party does not enjoy derivative success simply
because he is lined up on the same side as a prevailing party,” Bishop v.
Pecanic, 193 Ariz. 524, 531, ¶ 27 (App. 1998), we are not dealing here with
simple positional alignment. The jury included the quantum meruit
damage amounts in its award against Delta. The final judgment makes
Delta jointly and severally liable for the awards against the Property
Owners. And the trial court factored in those awards in evaluating the net
effect of the monetary awards. Cf. Welch v. McClure, 123 Ariz. 161, 165
(1979) (“The general rule is that total costs are taxed against defendants
who are jointly and severally liable on the judgment.”). Given the unique
circumstances of this case, and based on the record before us, we discern
no error in treating Delta and the Property Owners as a collective unit in
assessing taxable costs and fees.

¶24            Finally, jury fees are included in costs, and the unsuccessful
party at trial is liable for them. See A.R.S. § 12-332(B); Roddy, 184 Ariz. at
627. Because Eick was not the successful party, the court did not err by
ordering him to pay the jury fees.

III.   Attorneys’ Fees

¶25           “In any contested action arising out of a contract, express or
implied, the court may award the successful party reasonable attorney
fees.” A.R.S. § 12-341.01(A). There is, however, no presumption that fees
will be awarded in contract actions. Associated Indem. Corp., 143 Ariz. at
568–69. “An award of attorney’s fees under A.R.S. § 12-341.01 is
discretionary with the trial court, and if there is any reasonable basis for
the exercise of such discretion, its judgment will not be disturbed.”
Schwartz v. Farmers Ins. Co. of Ariz., 166 Ariz. 33, 38 (App. 1990).

¶26           As discussed supra, the trial court did not err in determining
that Eick was not the successful party. Additionally, the court expressly
analyzed the relevant factors in concluding that a fee award under A.R.S.
§ 12-341.01 was inappropriate. We find no abuse of the court’s
considerable discretion in denying Eick’s fee request. See Associated Indem.
Corp., 143 Ariz. at 571 (“The question is not whether the judges of this
court would have made an original like ruling, but whether a judicial
mind, in view of the law and circumstances, could have made the ruling
without exceeding the bounds of reason. We cannot substitute our
discretion for that of the trial judge.”).

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                           EICK v. DELTA, et al.
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IV.   Prejudgment Interest

¶27          Eick’s final contention is that he should have been awarded
prejudgment interest on the full $7250 for which Delta was held jointly
and severally liable, not merely the $5000 for which it was solely liable.
Entitlement to prejudgment interest is a matter of law that we review de
novo. John C. Lincoln Hosp. & Health Corp. v. Maricopa Cty., 208 Ariz. 532,
544, ¶ 39 (App. 2004).

¶28            Prejudgment interest on a liquidated claim is a matter of
right. Fleming v. Pima Cty., 141 Ariz. 149, 155 (1984). “A claim is
liquidated if the evidence furnishes data which, if believed, makes it
possible to compute the amount with exactness, without reliance upon
opinion or discretion.” Ariz. Title Ins. & Trust Co. v. O'Malley Lumber Co.,
14 Ariz. App. 486, 496 (1971); see also Peterson Constr., Inc. v. Ariz. State
Carpenters Health & Welfare Trust Fund, 179 Ariz. 474, 485 (App. 1994)
([P]laintiff must “provide a basis for a precise calculation that would make
the amount of damages readily ascertainable by reference to an agreement
between the parties or through simple computation.”).

¶29           As Appellees note, our record includes no evidence which, if
believed by the trier of fact, made it possible to compute with exactness
the amount Eick was owed for work he performed at the properties
owned by the Kitchukovs, Chrome, and the Trust or the accrual date for
those claims. The joint pretrial statement concedes Eick performed some
work at those locations, but we have no evidence establishing when
compensable work (i.e., work subject to the jury awards) was performed
or how Eick was to be compensated for those services.3 See, e.g., John C.
Lincoln, 208 Ariz. at 544–45, ¶¶ 39, 44 (noting that claims for services “to
be paid for at an agreed rate” may be liquidated and observing that
plaintiffs “provided a specific method of calculation and the requisite
data” to allow ascertainment of exact amount owed); Fairway Builders, Inc.
v. Malouf Towers Rental Co., 124 Ariz. 242, 264 (App. 1979) (evaluating trial
testimony to determine propriety of prejudgment interest and concluding
it provided “a basis for precisely calculating the amounts claimed for extra

3     Contrary to Eick’s suggestion, allegations in pleadings are not
evidence. See Bank of Yuma v. Arrow Constr. Co., 106 Ariz. 582, 585 (1971).

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                          EICK v. DELTA, et al.
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work”). We therefore find no error in the trial court’s prejudgment
interest awards.4

                             CONCLUSION

¶30           We affirm the judgment of the superior court. We deny
Eick’s request for an award of attorneys’ fees on appeal pursuant to A.R.S.
§ 12-341.01 because he is not the successful party. We further deny Eick’s
request for a fee award as a sanction for a frivolous cross-appeal.
Appellees request a fee award under A.R.S. §§ 12-341.01 and 12-349.
Although we disagree with the substantive merits of Eick’s appeal, we
cannot say that it was pursued in violation of A.R.S. § 12-349. In the
exercise of our discretion, we deny Appellees’ fee request premised on
A.R.S. § 12-341.01. However, Appellees are entitled to recover their
taxable costs on appeal upon compliance with ARCAP 21.

                                  :jt

4      Although the cross-appeal challenges the prejudgment interest
awards, Delta indicates we need not reach the cross-appeal if we affirm
the successful party determination — something we have done.

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