Court Opinion

ID: 4710267
Source: CourtListenerOpinion
Date Created: 2021-08-10 16:04:02.810647+00
Date Added: 2024-06-11T08:07:02.290744
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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

     ASPEN BIOTECH CORPORATION, et al., Plaintiffs/Appellees,

                                       v.

              JASON K. WAKEFIELD, Defendant/Appellant.
               ______________________________________

           JASON K. WAKEFIELD, Counterclaimant/Appellant,

                                       v.

         JON NIKOLAI CARLSON, Counterdefendant/Appellee.
             ______________________________________

          VIKING RESOURCES, LLC, Cross-Claimant/Appellee,

                                       v.

           JASON K. WAKEFIELD, Cross-Defendant/Appellant.

                            No. 1 CA-CV 20-0384
                              FILED 8-10-2021

          Appeal from the Superior Court in Maricopa County
                         No. CV2015-013984
             The Honorable Christopher Whitten, Judge

                                 AFFIRMED
                                 COUNSEL

Sparks Law Group, PLLC, Scottsdale
By James D. Sparks (argued)
Counsel for Plaintiffs/Appellees

Law Office of Craig Stephan, Scottsdale
By Craig Stephan (argued)
Counsel for Defendant/Counterclaimant/Cross-Defendant/Appellant

Manning & Kass, Ellrod, Ramirez, Trester LLP, Phoenix
By Anthony S. Vitagliano (argued) & Robert B. Zelms
Counsel for Counterdefendants/Appellees Edward and Kysa Britt

Stoops Denious Wilson & Murray, PLC, Phoenix
By Michael T. Denious (argued)
Counsel for Cross-Claimants/Counterdefendant/Appellees Jon Nikolai Carlson
and Viking Resources, LLC

                      MEMORANDUM DECISION

Presiding Judge Paul J. McMurdie delivered the Court’s decision, in which
Judge Cynthia J. Bailey and Judge Lawrence F. Winthrop1 joined.

M c M U R D I E, Judge:

¶1            Jason Wakefield appeals from several judgments and
post-trial motions entered by the superior court following a jury trial. For

1      Judge Lawrence F. Winthrop was a sitting member of the court when
the matter was assigned to this panel. He retired effective June 30, 2021. In
accordance with the authority granted by Article 6, Section 3, of the Arizona
Constitution and A.R.S. § 12-145, the Chief Justice of the Arizona Supreme
Court designated Judge Winthrop as a judge pro tempore in the Court of
Appeals, Division One, for the purpose of participating in the resolution of
cases assigned to the panel during his term in office.

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the following reasons, we affirm the judgments and the superior court’s
orders.2

             FACTS3 AND PROCEDURAL BACKGROUND

¶2             At its core, this case centers on three men, Jason Wakefield,
Edward Britt, and Jon Nikolai Carlson, and the corporate reorganization of
two companies, Aspen Biotech Corporation (“Aspen”), a Delaware
corporation, and Applied Biologics, LLC (“Applied”), a New Mexico
limited liability company (collectively, the “Company”).4 Wakefield, Britt,
and Carlson met in 2005 and became friends. At the time, Wakefield
worked in the medical-sales industry selling spinal implants. In 2008, Britt,
a licensed Arizona attorney providing occasional legal advice and
representation to Wakefield, assisted him in founding a distributorship,
Ethos Medical. In time, Carlson joined Wakefield at Ethos Medical.

¶3           In 2010, Wakefield and Carlson became interested in selling
medical products containing amniotic fluid and made a deal with a
supplier. To facilitate this new business, Wakefield organized Applied.
Although Wakefield was officially the sole member-manager of Applied,
he and Carlson had an oral agreement for Carlson to acquire a fifty-percent
stake in Applied for $50 at his discretion.

¶4           Over the next three years, Wakefield and Carlson succeeded
in growing Applied’s business. During this period, Britt aided Applied by
providing legal services and entered an advisory board agreement with
Applied, where he was paid a retainer through his business, Martin
Castleberry Co., Inc. (“Martin Castleberry”). In late 2013, Britt entered a
second agreement with Applied for legal services. The contract
contemplated a retainer of $12,000 for a minimum period of six months,
beginning November 2013 and ending April 2014.

2       On the court’s motion, it is ordered amending the caption as
reflected above to correct a misspelling of Wakefield’s name and directing
that the above captions be used in all further documents filed in this appeal.

3      We view the evidence in the light most favorable to sustaining the
verdicts. Walter v. F.J. Simmons & Others, 169 Ariz. 229, 231 (App. 1991).

4       We refer to the Company, Carlson, Britt, and their related entities
collectively as the “Appellees.”

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¶5           At the same time, Wakefield, Britt, and Carlson began to
discuss reorganizing Applied. They planned to form a new corporation and
transfer ownership of Applied to it. They decided that Britt would become
the CEO of this new corporation. Before the reorganization took place,
Wakefield and Carlson drafted their agreement as a written contract, and
Carlson exercised his option to purchase a fifty-percent membership stake
in Applied.

¶6            On January 8, 2014, Britt filed articles of incorporation for
Aspen in Delaware. Two days later, Wakefield, Britt, and Carlson each
entered an agreement to reorganize Applied and other related companies
as wholly owned subsidiaries of Aspen BioTech, Inc., entitled the
“Reorganization & Buyback Agreement” (the “Reorganization
Agreement”). In this agreement, Wakefield, Britt, and Carlson agreed that
Applied would become a wholly owned subsidiary of Aspen, and each
would own equal shares of Aspen. The Reorganization Agreement itself
noted, however, that it was entered between Aspen BioTech, Inc., Applied
Biologics incorporated in New Mexico, Applied Biologics incorporated in
South Dakota, Metropole Biogenics, Wakefield, Martin Castleberry, and
Viking Resources, LLC (“Viking”), an entity associated with Carlson.

¶7             On January 21, 2014, Aspen received its incorporation
certificate from Delaware. The next day, Aspen and Wakefield entered two
interrelated agreements entitled the “Exchange Agreement” and the
“Assignment of Membership Interest” (collectively, the “Exchange
Agreement”). In the Exchange Agreement, Wakefield and Aspen agreed to
exchange “all interest” Wakefield owned in Applied for 1 million shares of
stock in Aspen. The agreement was signed by Wakefield and Britt, with
Britt signing on behalf of Aspen as the president and director.

¶8             Following the reorganization of Aspen and Applied and
Britt’s ascent within the Company, however, the relationship between
Wakefield, Britt, and Carlson deteriorated. Wakefield, who was displeased
about the reorganization, threatened to dismantle the Company by cutting
off its suppliers, distributors, and customers. Wakefield also separately
solicited Britt and Carlson to join him while ousting the other. In the
summer of 2014, Wakefield retained outside counsel to negotiate a buyout
of his interest in the Company. Eventually, Britt and Carlson terminated
Wakefield from the Company in October 2014.

¶9          After his termination, Wakefield’s threats regarding the
Company proved prophetic. In December and January 2015, Wakefield met
with Shannon McPherson, from Applied’s largest distributor, Mac Medical,

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and other medical-sales industry members involved with the Company.
During this time, Mac Medical was under contract with Applied and was
subject to non-compete provisions preventing it from selling competing
products. By a second meeting in January 2015, Wakefield worked as a
consultant for Spectrum Medical (“Spectrum”).

¶10            In February 2015, Mac Medical stopped placing orders with
Applied for a particular product. Instead, it began to buy the product from
a competing business, ReGen Biosolutions, Inc. (“ReGen”), violating its
still-active contract with Applied. ReGen and Spectrum shared the same
management, and Wakefield received between $10,000 and $20,000 per
month working as a consultant for Spectrum.

¶11            The ongoing buyout negotiations for Wakefield’s Applied
stock broke down. In October 2015, the Company issued a resolution stating
that Britt and Carlson’s original intent in forming the Company was to give
1 million shares of stock to them. The resolution did not mention
Wakefield’s interest in the Company.

¶12          The Company eventually filed suit against Wakefield and
several other parties, alleging, inter alia, that Wakefield: (1) breached the
terms of the Exchange Agreement; (2) breached the implied covenant of
good faith and fair dealing for the same contracts; (3) breached his fiduciary
duties as an employee of Applied; and (4) tortiously interfered with
Applied’s existing relationships and contracts with vendors, distributors,
and customers. The Company also sought a declaratory judgment that
Wakefield was not entitled to any shares of Aspen stock because he
breached the Exchange Agreement.

¶13            In response, Wakefield joined Carlson and Viking as parties
to the suit and filed an eleven-count counterclaim against the Appellees, all
arising from the reorganization of Aspen and Applied. He asserted the
following claims relevant to this appeal: (1) breach of contract for violating
the Reorganization Agreement by failing to issue him 1 million shares of
Aspen stock and allocate distributions to him; (2) breach of the implied
covenant of good faith and fair dealing, again arising from the
Reorganization Agreement; (3) breach of the fiduciary duties owed by Britt
to Wakefield as his attorney related to the reorganization; (4) constructive
fraud, for essentially the same claim; (5) common-law promissory fraud
against Britt and Carlson for promising to perform their obligations under
the Reorganization Agreement without intent to do so; and (6) fraudulent
concealment against Britt for concealing the fraudulent nature of the
reorganization of Aspen and Applied. Viking subsequently filed a

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                       ASPEN, et al. v. WAKEFIELD
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cross-claim against Wakefield, seeking recovery for an agreement to settle
a $20,000 debt between Carlson and Wakefield.

¶14           After nearly four years of litigation too labyrinthian to
summarize here, the court held a ten-day trial in October 2019. Before the
trial, Wakefield elected to pursue only his tort claims, and the parties
ultimately presented a total of eight claims, including counterclaims and
crossclaims. The jury returned the following verdicts: (1) in favor of the
Company and against Wakefield for $124,156 on its interference claim;
(2) in favor of Wakefield and against Britt for $562,000 on his
breach-of-fiduciary and constructive fraud claims; and (3) in favor of
Viking and against Wakefield for $20,000 on its breach-of-contract
crossclaim. The jury found no liability for the remaining claims. After
receiving briefing on the Company’s outstanding declaratory-judgment
claim and the parties’ respective applications for attorney’s fees and costs
under A.R.S. §§ 12-341 and -341.01, the court issued a detailed order finding
the declaratory judgment action moot and awarding attorney’s fees to
Appellees.

¶15           In May 2020, the court entered separate final judgments for
Carlson and Viking. After several amendments, the court issued a final
judgment in June 2020, offsetting Wakefield’s recovery on his claims
against the Company and Britt’s attorney’s fees and costs awards, resulting
in a final award in favor of the Company for $123,935. Wakefield appealed
from each judgment and several orders denying motions for judgment as a
matter of law and a new trial. We have jurisdiction under A.R.S.
§ 12-2101(A)(1) and -2101(A)(5).

                              DISCUSSION

A. The Superior Court Did Not Abuse Its Discretion by Precluding
   Wakefield’s Expert from Testifying About Wakefield’s Economic
   Damages.

¶16           Wakefield retained John White, a CPA with certifications and
accreditations in business valuations and appraisals, to render an expert
opinion on Wakefield’s economic-damages claim during the pre-trial
proceedings. White issued a report opining that Wakefield’s damages,
which represented a one-third equity interest in Aspen, exceeded $15
million. Appellees moved in limine to preclude White’s opinion under
Arizona Rule of Evidence 702 and Daubert v. Merrell Dow Pharm., Inc., 509
U.S. 579 (1993). Appellees argued that despite White’s characterization of
his report as for “economic damages only” and “not a valuation or

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                        ASPEN, et al. v. WAKEFIELD
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appraisal of an equity ownership interest in any entity,” he arrived at his
calculation of economic damages by valuing Aspen at over $45 million.

¶17           In August 2019, after an evidentiary hearing where White
testified concerning his analysis and methodology, the court granted the
Appellees’ motion. It precluded White from opining on the value of Aspen
to support Wakefield’s economic-damages claims. In its ruling, the court
found that White’s opinion was a “thinly veiled valuation opinion under
the cloak of a damages calculation” because by assessing Wakefield’s
damages-claim for the value of a one-third equity interest in Aspen, White
necessarily opined on Aspen’s value. The court concluded that White’s
opinion concerning Aspen’s value was unreliable because White conceded
that he had “not applied any method of accepted business valuation” in
valuing Aspen.

¶18            Wakefield contends the court’s preclusion ruling was
erroneous, arguing White’s calculation of Aspen’s value was reliable and
that any dispute concerning White’s methodology goes to the weight of his
opinion, not its admissibility under Rule 702 and Daubert. We review the
superior court’s decision to admit or preclude expert testimony for an abuse
of discretion. State ex rel. Montgomery v. Miller, 234 Ariz. 289, 297, ¶ 15 (App.
2014). “[Rule 702] provides that a trial judge serves as a ‘gatekeeper’ who
makes a preliminary assessment as to whether the proposed expert
testimony is relevant and reliable.” Id. at 298, ¶ 19. “[T]he party seeking to
admit expert testimony must prove, by a preponderance of the evidence,
that the testimony is both[.]” Id. Because Rule 702 is identical to Federal
Rule of Evidence 702, “the federal rule’s background and its application by
federal courts shed light on the meaning of Arizona’s Rule[.]” State v.
Salazar-Mercado, 234 Ariz. 590, 592, ¶ 7 (2014).

¶19           The superior court’s ruling turned upon the application of
Rule 702(c), which requires an expert’s testimony to be based on “reliable
principles and methods.” “Under this requirement, an expert must be able
to explain how his methods, reasoning and opinions are based on ‘an
accepted body of learning or experience.’” Miller, 234 Ariz. at 298, ¶ 23
(quoting Fed. R. Evid. 702 advisory committee’s notes to 2000
amendments.). Daubert provides five non-exclusive factors for courts to
consider when evaluating the reliability of expert testimony:

       (1) whether the expert’s theory or technique can be or has
       been tested; (2) whether the theory or technique has been
       subjected to peer review and publication; (3) whether the
       technique or theory is generally accepted within the relevant

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                       ASPEN, et al. v. WAKEFIELD
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       scientific community; (4) the known or potential rate of error
       of the technique or theory when applied; and (5) the existence
       and maintenance of standards controlling application of the
       technique.

Miller, 234 Ariz. at 299, ¶ 24 (citing Daubert, 509 U.S at 593–94). None of
these factors are dispositive on the question of the expert’s reliability, and
not all Daubert aspects apply to “all experts or in every case.” Kumho Tire
Co. v. Carmichael, 526 U.S. 137, 141–42 (1999).

¶20           Deviation from a standard methodology typically goes to the
weight of the expert’s opinion rather than its admissibility. See Maricopa
County v. Barkley, 168 Ariz. 234, 239 (App. 1990). “[C]ross-examination,
presentation of contrary evidence, and careful instruction on the burden of
proof are the traditional and appropriate means of attacking shaky but
admissible [expert] evidence.” Miller, 234 Ariz. at 298, ¶ 20 (quoting Heller
v. Shaw Indus., Inc., 167 F.3d 146, 152 (3rd Cir. 1999)). But Daubert requires
that the expert’s conclusions “[be] supported by good grounds for each step
in the analysis.” Thus, “any step that renders the analysis unreliable under
the Daubert factors renders the expert’s testimony inadmissible.” In re Paoli
R.R. Yard PCB Litig., 35 F.3d 717, 745 (3rd Cir. 1994) (emphasis omitted); see
also Amorgianos v. Nat. R.R. Passenger Corp., 303 F.3d 256, 266 (2nd Cir. 2002)
(“[W]hen an expert opinion is based on data, a methodology, or studies that
are simply inadequate to support the conclusions reached, Daubert and
[Federal] Rule 702 mandate the exclusion of that unreliable opinion
testimony.”). Nor is the court required to admit expert opinion evidence
“that is connected to existing data only by the ipse dixit of the expert.”
Amorgianos, 303 F.3d at 266 (quoting Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146
(1997).

¶21            Applying these principles here, we conclude that the superior
court correctly exercised its role as a gatekeeper by prohibiting White from
testifying about Wakefield’s economic damages. Because Wakefield
claimed he was entitled to the value of a one-third equity interest in Aspen
as economic damages, White’s opinion was necessarily predicated on
determining the value of Aspen. White did so by multiplying the per-share
value of Aspen outlined in a single stock transaction ($7) by the total
number of outstanding shares at the time of the transaction (6.5 million),
arriving at a market value for Aspen of over $45 million. He further opined
that this figure was reasonable by summarizing the Company’s balance and
income statements from 2012 to 2016. At the same time, however, White
specifically (1) denied that it was “valuation or appraisal of an equity
ownership interest in any entity”; (2) disclaimed any interpretation of its

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                       ASPEN, et al. v. WAKEFIELD
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analysis as “an opinion of value for any interest” or an “appraisal of the
market value of any equity interest in Aspen”; and (3) cited no relevant
authority to support his single-stock-transaction approach for calculating
Aspen’s value.

¶22           White then exacerbated the disconnect between his analysis
and disclaimers during the Daubert hearing, where he vacillated between
(1) admitting that he had conducted a form of valuation by relying on the
figures provided in the stock transaction and (2) insisting that he had not
performed a valuation of Aspen. White also explicitly conceded that he had
not utilized any of the three accepted approaches (income, asset, and
market) for valuing a business or followed the “voluminous” steps he
would consider necessary to perform a valuation or appraisal. See
Amorgianos, 303 at 266 (exclusion warranted when expert data and
methodology are “simply inadequate” to support the expert’s conclusions).
Although White eventually claimed that a valuation was unnecessary
because a stock-transaction among insiders was “a strong indicator of
value,” Wakefield was unable to buoy White’s assertion with reputable
outside authority because he had not previously disclosed materials related
to the matter. See Joiner, 522 U.S. at 146 (court not required to admit expert
opinion solely on expert’s assurance of reliability).

¶23            Given the record, the court was well within its discretion to
conclude that a fundamental step in White’s analysis was unreliable,
thereby rendering his opinion on Wakefield’s damages inadmissible. In re
Paoli, 35 F.3d at 745. Simply put, White’s conflicting statements and
testimony regarding his calculation of Aspen’s market value, coupled with
his admission that he had not followed a generally accepted approach to
valuation and inability to offer more than his assurance of his
methodology’s reliability, created substantial doubt that White employed
“the same level of intellectual rigor that characterizes the practice of an
expert in the relevant field.” Kumho Tire, 526 U.S. at 152; see also Miller, 234
Ariz. at 298, ¶ 23 (expert must explain how his or her “methods, reasoning,
and opinions” are based on an accepted body of learning or experience).
Thus, the court did not abuse its discretion under Rule 702 and Daubert by
precluding White’s opinion concerning Wakefield’s damages.

B. The Superior Court did not Err by Granting Aspen’s Motion in Limine
   to Preclude Aspen’s Financial Documents.

¶24          The Company moved in limine to preclude Wakefield “from
introducing any financial documents or discussing the contents of financial
documents” dated after January 14, 2014. This is the date the Company

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                       ASPEN, et al. v. WAKEFIELD
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asserted was the alleged breach of the agreement. As a result, the court held
a hearing on the motion in September 2019. During the hearing, the
discussion turned to how Wakefield intended to present Aspen’s financial
documents given the court’s decision precluding his economic-damages
expert. Wakefield argued that he was entitled to introduce and discuss
Aspen’s relevant financial records, including documents from August 2014
and December 2015, to demonstrate the value of Aspen’s stock during that
period. When prompted by the court to identify a witness capable of
engaging in this analysis, Wakefield asserted that he could “testify about
those financial documents and the changes, for example, in the cost of
goods sold and that sort of thing” because he “ran the company and knew
the financials.”

¶25            The court granted the motion in limine. In a detailed ruling,
the court concluded that Wakefield was entitled to give his opinion
concerning the value of Aspen and its stock under the well-settled principle
that a prospective owner of property can testify to its value. Citing this
court’s decision in City of Tucson v. Tanno, 245 Ariz. 488, 493 (App. 2018),
however, the court noted that the owner-opinion rule does not permit
testimony that is “purely speculative or not based upon reality.” It then
concluded that Wakefield could not introduce Aspen’s financial documents
to support his damages claim because “determining the value of a company
using its financial reporting is something that requires expert testimony.”

¶26           On appeal, Wakefield contends the court erred by granting
the motion in limine, arguing that he should have been permitted to discuss
Aspen’s financial documents, as “[he] is an expert when it comes to
understanding his own business, including his own financials.” Wakefield
again identifies the relevant period concerning Aspen’s financial
documents as including August 2014 through December 2015.

¶27           Arizona Rule of Evidence 701 governs the admissibility of lay
opinion testimony. Because the 2012 amendment to Rule 701 specifically
adopted Federal Rule of Evidence 701, we look to the federal rule and its
interpretation for guidance. See Salazar-Mercado, 234 Ariz. at 592–93, ¶ 7.
The decision to admit or exclude lay opinion testimony lies “within the
sound discretion of the trial court” and will be upheld absent a showing
that the ruling is “clearly erroneous or an abuse of discretion.” Groener v.
Briehl, 135 Ariz. 395, 398 (App. 1983).

¶28          Because Wakefield was not disclosed or qualified as an expert
witness, his proposed testimony concerning the value of Aspen from
August 2014 to December 2015 could only be admissible as relevant lay

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opinion testimony under Rule 701. In this context, the only basis for
Wakefield to offer opinion testimony of Aspen’s value was as a present or
prospective owner of Aspen. “In Arizona, a property owner may always
testify about the value of his or her property because ‘[a]n owner of
property has, by definition, knowledge of the components of value that are
useful in ascertaining value.’” Tanno, 245 Ariz. at 493, ¶ 18 (quoting Town of
Paradise Valley v. Laughlin, 174 Ariz. 484, 486 (App. 1992)). For business
owners, testimony concerning value is admissible “not because of
experience, training or specialized knowledge within the realm of an
expert, but because of the particularized knowledge that the witness has by
virtue of his or her position in the business.” Fed. R. Evid. 701 advisory
committee’s notes to 2000 amendments.

¶29            However, although the owner-opinion rule is broad, the
scope of permissible testimony under Rule 701 is still confined to matters
that fall within the business owner’s “particularized knowledge.” DIJO, Inc.
v. Hilton Hotels Corp., 351 F.3d 679, 685 (5th Cir. 2003); see also Ariz. R. Evid.
602; United Cal. Bank v. Prudential Ins. Co. of Am., 140 Ariz. 238, 455–56 (App.
1983) (recognizing personal knowledge requirement under Rules 602 and
701). “This foundational requirement helps to eliminate the risk that a party
will circumvent the reliability requirements set forth in [Federal Rule 702]
by adducing expert testimony in lay witnesses’ clothing.” DIJO, Inc., 351
F.3d at 685–86; see also United Cal. Bank, 140 Ariz. at 456 (“[W]here the owner
has no knowledge of the value about which he expresses an opinion, the
presumption arising from ownership is overcome and the opinion may be
inadmissible.”) (quoting M. Udall, Arizona Law of Evidence § 120 at 258
(1960)).

¶30            Here, even under the broad owner-opinion rule, Wakefield
could not show that he had the requisite first-hand knowledge of Aspen’s
financial affairs from August 2014 to December 2015 to opine on the value
of Aspen or interpret or comment on its financial documents from that
period. See Tanno, 245 Ariz. at 493, ¶ 20 (excluding owner’s opinion
concerning the value of the property based upon “hypothetical investment”
theory was appropriate where “theory was not rooted in her experience as
a land owner”); Cunningham v. Masterwear Corp., 569 F.3d 673, 675–76 (7th
Cir. 2009) (owner of the property could testify to the value of the property,
but could not “merely repeat another person’s valuation” or discuss
hearsay outside his knowledge); LifeWise Master Funding v. Telebank, 374
F.3d 917, 930, (10th Cir. 2004) (president of the company could not testify to
lost profits using a damages model outside his knowledge). It is
uncontested that Wakefield was not participating in the Company by the
end of August or September 2014, and he was terminated from employment

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by October 2014. To support his claims on appeal, Wakefield relies only on
the business expertise he developed by founding Applied and growing its
business and not on any personal knowledge of Aspen’s relevant financial
records. However, “substantial business experience” alone is insufficient to
pass muster under Rule 701. See DIJO, Inc., 351 F.3d at 686.

¶31            Importantly, we note the superior court’s ruling here did not
exclude Wakefield from testifying about the value of Aspen and,
consequently, the value of its stock. On the contrary, the court specifically
allowed Wakefield to express an opinion about the value of Aspen, and he
did so at the trial. Nor did its ruling prevent Wakefield from asserting that
his expertise in the medical-supply industry and his experience founding
and managing Applied formed the basis for his opinion. Instead, the court
merely prohibited Wakefield from attempting to buoy his lay opinion
through some quasi-forensic analysis of Aspen’s financial records for the
period following his departure from the Company. Indeed, the court
confirmed as much during the trial by stating several times that Wakefield
was not precluded from discussing relevant financial matters within the
scope of his knowledge. Thus, the court did not abuse its discretion by
finding that expert testimony was necessary to analyze Aspen’s financial
records during the period identified by Wakefield or that permitting
Wakefield to do so himself would exceed the boundaries of permissible
owner-opinion testimony under Rule 701.5

C. The Superior Court Correctly Granted Aspen’s Motion to Preclude the
   August 2014 Term Sheet Under Arizona Rule of Evidence 408.

¶32           Wakefield argues the court erred by granting the Company’s
motion in limine precluding the specific dollar figures contained in an
August 13, 2014, letter (“Term Sheet”) sent by Aspen’s then-counsel
detailing a proposed buyout of Wakefield’s Aspen stock. The Term Sheet
was attached to an email in which Aspen’s counsel described the
company’s position concerning Wakefield, Britt, and Carlson’s business
relationship and included terms valuing Aspen’s stock at five dollars per

5       For the first time in his reply brief, Wakefield appears to challenge a
separate ruling by the court precluding him from opining on the value of
Applied, rather than the value of Aspen and its stock. Because he failed to
raise this issue in his opening brief, it is waived. ADOR v. Ormand Builders,
Inc., 216 Ariz. 379, 385, n.7 (App. 2007) (issues raised for first time in reply
brief are waived).

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share. The Term Sheet also noted the offer was contingent upon Wakefield
signing several other agreements, including mutual releases.

¶33            In its motion, the Company argued that the court should
preclude the dollar figures under Rule 408 because the Term Sheet was a
settlement offer and Wakefield sought to introduce the figures as evidence
of the amount of a disputed claim. In his response, Wakefield argued that
the dollar figures were relevant to prove the value of his claim for
damages—namely, the value of Aspen’s stock. Wakefield further argued
that Rule 408 did not apply to the dollar figures because the Term Sheet was
part of negotiations concerning a business transaction between the parties,
not an offer to settle a disputed claim.

¶34           The court excluded the evidence. In its ruling, the court found
the circumstances existing in August 2014 and language of the Term
Sheet—including the provision discussing the execution of mutual
releases—indicated the Term Sheet was an offer attempting to avoid
litigation over the deteriorating relationship between Wakefield and
Aspen, Britt, and Carlson.

¶35             “Generally, we review challenges to the court’s admission or
exclusion of evidence for an abuse of discretion.” McMurtry v. Weatherford
Hotel, Inc., 231 Ariz. 244, 258, ¶ 44 (App. 2013). However, we review the
interpretation of court rules de novo. Phillips v. O’Neil, 243 Ariz. 299, 301, ¶ 8
(2017). Because Rule 408 is modeled after Federal Rule 408, we look to “its
interpretation by federal courts to aid our interpretation of the Arizona
rule.” Id. at 302, ¶ 14.

¶36           In pertinent part, Rule 408 provides:

       Evidence of the following is not admissible—on behalf of any
       party—either to prove or disprove the validity or amount of
       a disputed claim[:]

              (1) Furnishing, promising, or offering . . . a valuable
                  consideration in compromising or attempting to
                  compromise the claim[.]

Relying on the Tenth Circuit’s decision in Big O Tires Dealers, Inc. v. Goodyear
Tire & Rubber Co., Wakefield argues that no dispute had arisen concerning
his claims in August 2014 because there is no indication from the language
of the Term Sheet or the surrounding circumstances that the discussions
between Aspen and Wakefield had “crystallized to the point of threatened
litigation.” 561 F.2d 1365, 1373 (10th Cir. 1977). Thus, Wakefield concludes

                                       13
                        ASPEN, et al. v. WAKEFIELD
                           Decision of the Court

that Rule 408 could not apply to the Term Sheet, and the court erred by
excluding the evidence.

¶37            However, most federal courts to consider the question have
held that Rule 408 applies “where an actual dispute or a difference of
opinion exists, rather than when discussions crystallize to the point of
threatened litigation.” Affiliated Mfrs., Inc. v. Aluminum Co. of Am., 56 F.3d
521, 528 (3rd Cir. 1995); Macsherry v. Sparrows Point, LLC, 973 F.3d 212, 222
(4th Cir. 2020); Weems v. Tyson Foods, Inc., 665 F.3d 958 965 (8th Cir. 2011);
Lyondell Chem. Co. v. Occidental Chem. Corp., 608 F.3d 284, 295, n.38 (5th Cir.
2010); Dallis v. Aetna Life Ins., 768 F.2d 1303, 1307 (11th Cir. 1985). “Both the
timing of the offer and the existence of a disputed claim are relevant to the
determination.” Pierce v. F.R. Tripler & Co., 955 F.2d 820, 827 (2nd Cir. 1992).
But “when the issue is doubtful, the better practice is to exclude evidence
of compromises or compromise offers.” Bradbury v. Phillips Petroleum Co.,
815 F.2d 1356, 1364 (10th Cir. 1987). As aptly described by the Fourth Circuit
in Macsherry, the broader understanding of the term “dispute”

       not only best interprets [Federal] Rule 408(a)’s plain language,
       but also best promotes the “public policy favoring the
       compromise and settlement of disputes” underlying this
       exclusionary rule. After all, the value of promoting efforts to
       settle disputes that have entered the doors of a court applies
       all the more to disputes that haven’t yet done so.

973 F.3d at 222 (quoting Fed. R. Evid. 408 advisory committee’s notes to
1972 proposed rule); see also Phillips, 243 Ariz. at 302–03, ¶ 15 (applying
public policy underlying federal rule to Arizona rule).

¶38            Applying this meaning of “dispute,” we conclude there was
ample evidence for the court to find that the Term Sheet fell within the
ambit of Rule 408. During the hearing, Aspen introduced excerpts from
Wakefield’s deposition wherein he claimed that by June 2014, he had
retained outside counsel because Britt was no longer looking out for his best
interests. See Mundy v. Household Fin. Corp., 885 F.2d 542, 547 (9th Cir. 1989)
(release agreement barred under Federal Rule 408 where plaintiff “had
retained legal counsel at the time the offer was made”); Olin Corp. v. Ins. Co.
of N. Am., 603 F. Supp. 445, 450 (S.D.N.Y. 1985) (evidence that negotiations
were settlement discussions included the fact that parties had “retained
outside counsel”).

¶39           Moreover, the Term Sheet itself references a dispute over the
characterization of Britt, Carlson, and Wakefield’s status within Aspen and

                                       14
                        ASPEN, et al. v. WAKEFIELD
                           Decision of the Court

explicitly states that the offer would be subject to the execution of mutual
liability releases. See Pierce, 955 F.2d at 827 (job offer conditioned on release
of party’s claims “was an attempt to compromise a claim”). And a
September 2014 letter sent by Wakefield’s then-counsel expressly
threatening litigation should the buyout negotiation not conclude to
Wakefield’s satisfaction confirms the Term Sheet was not merely the terms
of a business transaction but an attempt to avoid litigation surrounding the
parties’ failing business relationship. See Olin Corp., 603 F. Supp. at 450
(finding that Federal Rule 408 applied to alleged “business
communications” occurring between November 1981 and December 1982
because one letter sent during that period expressly “conceded that
litigation was possible”).

¶40          Given the evidence presented, the court did not abuse its
discretion by finding the dollar figures contained in the Term Sheet
inadmissible under Rule 408.6

D. The Superior Court Committed No Error by Denying Wakefield’s
   Motion for Judgment as a Matter of Law and a New Trial Concerning
   the Company’s Intentional Interference with Contract Claim.

¶41            At the close of evidence in Aspen’s case, Wakefield moved for
judgment as a matter of law concerning the Company’s claim for
intentional interference with contract, which alleged that Wakefield had
tortiously induced the Company’s largest supplier, Mac Medical, to breach
its agreement with Applied in February 2015. Wakefield argued that Aspen
had failed to introduce evidence that he had acted improperly, a necessary
element of an intentional-inference claim. See Safeway Ins. v. Guerrero, 210
Ariz. 5, 10, ¶ 14 (2005). The court denied the motion.

¶42           Following the jury’s verdict, Wakefield renewed his motion
for judgment as a matter of law and moved alternatively for a new trial,
arguing that (1) Aspen failed to prove he acted improperly; (2) the jury’s
verdicts finding in his favor on Aspen’s breach-of-fiduciary-duty claim and

6       For the first time in his reply brief, Wakefield contends that even if
the Term Sheet constituted a settlement offer within the meaning of Rule
408, it should have been admissible against Britt individually because he
was not a party to the offer. Because Wakefield did not raise this argument
either in his opening brief or before the superior court, it is waived. Ormond
Builders, Inc., 216 Ariz. at 385, n.7; Canyon Ambulatory Surgery Ctr. v. SCF
Ariz., 225 Ariz. 414, 418, ¶ 10, n.11 (App. 2010).

                                       15
                        ASPEN, et al. v. WAKEFIELD
                           Decision of the Court

against him on its intentional-interference claim were inconsistent; and
(3) Aspen’s closing argument addressing the intentional-interference claim
exceeded the boundaries of permissible argument. The court denied the
motions.

¶43            Wakefield repeats the arguments on appeal. We review de
novo the denial of a motion for judgment as a matter of law. ABCDW LLC v.
Banning, 241 Ariz. 427, 433, ¶ 16 (App. 2016). A motion for judgment as a
matter of law should be granted “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.” Desert Palm
Surgical Grp., P.L.C. v. Petta, 236 Ariz. 568, 578, ¶ 25 (App. 2015). We view
the evidence in the light most favorable to upholding the jury’s verdict and
will affirm if substantial evidence exists that would allow a reasonable
person to reach that result. Id. We do not weigh the witnesses’ credibility or
resolve conflicting evidence. Dupray v. JAI Dining Servs. (Phoenix), Inc., 245
Ariz. 578, 582, ¶ 11 (App. 2018). Instead, we give complete deference to the
jury’s right to resolve the matters. Id.

¶44           We review for an abuse of discretion the court’s denial of a
motion for a new trial on the ground that the verdict was against the weight
of the evidence. Spring v. Bradford, 243 Ariz. 167, 170, ¶ 11 (2017). “[W]e give
great deference to the jury’s factual findings.” Larsen v. Decker, 196 Ariz. 239,
244, ¶ 27 (App. 2000). We do the same in reviewing the verdict itself. See S.
Dev. Co. v. Pima Cap. Mgmt. Co., 201 Ariz. 10, 13, ¶ 3 (App. 2001).

¶45             At the outset, we reject Wakefield’s argument concerning the
allegedly inconsistent verdicts for breach of fiduciary duty and intentional
interference for two reasons. First, if Wakefield believed the jury verdicts
concerning these claims were inconsistent, he was required to move for
resubmission of the case to the jury under Arizona Rule of Civil Procedure
49(f)(1) after the verdicts were rendered but before the jurors were released.
Trustmark Ins. v. Bank One, Ariz., NA, 202 Ariz. 535, 543–44, ¶¶ 38–42 (App.
2002) (failure to object to inconsistent verdict until after the jury is excused
waives the argument); Gonzalez v. Gonzalez, 181 Ariz. 32, 35–36 (App. 1994).
By not doing so, Wakefield has waived any argument related to the alleged
inconsistency. See Gonzalez, 181 Ariz. at 36 (noting that allowing litigants to
object to inconsistent verdicts in post-trial motions would endorse
impermissible jury-shopping).

¶46         Second, even assuming Wakefield did not waive the
argument, the verdicts are not inconsistent. The jury instruction given for

                                       16
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

the Company’s breach-of-fiduciary-duty claim against Wakefield
specifically stated that the claim concerning Wakefield’s fiduciary duties
applied “during the time of his employment.” The instruction did not
reference duties after Wakefield’s employment termination. And, as
described below, there was substantial evidence that Wakefield engaged in
improper behavior concerning Applied’s contract with Mac Medical
following his employment termination in October 2014.

       1.     Reasonable Evidence Supported the Jury’s finding that
              Wakefield Improperly Interfered with Applied’s Contract.

¶47           Wakefield contends that the evidence presented at the trial
was insufficient to demonstrate he acted improperly. Instead, Wakefield
argues that during the relevant time, he legally competed with the
Company and “[t]here is no evidence that [he] acted illegally or inequitably,
or committed fraud, duress, or abuse of economic power.”

¶48            “[A] cause of action in tort is available to a party to any
contract, at-will or otherwise, when a third party improperly and
intentionally interferes with the performance of that contract.” Wagenseller
v. Scottsdale Mem’l Hosp., 147 Ariz. 370, 387 (1985), superseded by statute on
other grounds as stated in Powell v. Washburn, 211 Ariz. 553, 560, ¶ 29 (2006).
Ordinarily, there is no liability for interference with contracts or business
relationships “absent a showing that [the] defendant’s actions were
improper as to motive or means.” Id. at 388. We evaluate whether a
defendant’s actions were improper by examining seven factors:

       (a) the nature of the actor’s conduct,

       (b) the actor’s motive,

       (c) the interests of the other with which the actor’s conduct
       interferes,

       (d) the interests sought to be advanced by the actor,

       (e) the social interests in protecting the freedom of action of
       the actor and the contractual interests of the other,

       (f) the proximity or remoteness of the actor’s conduct to the
       interference and

       (g) the relations between the parties.

                                      17
                        ASPEN, et al. v. WAKEFIELD
                           Decision of the Court

Id. at 387; see also Neonatology Assocs., Ltd. v. Phoenix Perinatal Assocs. Inc.,
216 Ariz. 185, 188 (App. 2007); Restatement (Second) of Torts § 767 (1979).

¶49            The improper element of tortious interference “generally is
determined by weighing the social importance of the interest the defendant
seeks to advance against the interest invaded.” Snow v. W. Sav. & Loan Ass’n,
152 Ariz. 27, 34 (1986). In Arizona, we give the most weight to the first two
factors of the seven-factor analysis. Guerrero, 210 Ariz. at 12, ¶ 22. Because
our supreme court explicitly adopted the Restatement’s factors for
determining whether conduct is improper, we rely on its guidance in our
analysis of the evidence presented in this case. Wagenseller, 147 Ariz. at 388.

¶50              We turn first to the nature of Wakefield’s conduct. Based on
the trial record, the jury reasonably concluded that Wakefield knowingly
misrepresented the Company’s prospects and violated industry customs to
induce Mac Medical to abandon its contract with Applied. See Restatement
§ 767 cmt. c (fraudulent misrepresentations and violations of industry
customs may be evidence of improper conduct, even when the “fraudulent
representation is not of such a character as to subject [the defendant] to
liability for . . . other torts”).

¶51            Through two witnesses—Shannon McPhearson and a
sub-distributor of Mac Medical, Amber Crowder—the Company presented
evidence that Mac Medical breached its contract with Applied, in part,
because Wakefield made misrepresentations to McPhearson and others
during several meetings in December 2014 and January 2015. McPhearson
and Crowder both acknowledged that the decision to breach was based on
some combination of statements by Wakefield that Applied (1) was losing
its supplier; (2) would have no inventory to provide to Mac Medical; and
(3) was going out of business. Based on the evidence presented concerning
the state of the Company when Wakefield departed, the jury could
reasonably conclude that Wakefield knew these statements were false and
misleading when made and that he intended to persuade Mac Medical to
breach its contract with Applied.

¶52           The Company also presented evidence that Mac Medical
breached its contract with Applied because Wakefield offered to pay Mac
Medical higher commission rates than Applied’s. Information concerning
the commission rates paid to distributors is considered confidential within
the medical supply and sales industry. Britt and Wakefield acknowledged
that Applied and Wakefield’s current employer considered such
information confidential. Thus, the jury could reasonably conclude that
Wakefield induced Mac Medical to breach its contract with Applied by

                                       18
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

taking advantage of the confidential information regarding the commission
rates paid by Applied to Mac Medical in violation of industry customs.

¶53           Turning next to Wakefield’s motive, a jury could reasonably
find Wakefield was primarily motivated by a desire to interfere with the
Company’s contractual relations rather than a general desire to compete.
See Restatement § 767 cmt. d (if “desire to interfere” is the primary motive
for actor’s conduct, “it may carry substantial weight in the balancing
process”). Both Britt and Carlson testified that shortly before Wakefield’s
acrimonious exit from the Company, Wakefield warned them that he
controlled Applied’s suppliers and distributors and could cut the Company
off. These conversations culminated in threats to “burn” the company to the
ground. In addition, Amber Crowder testified that after Wakefield left the
Company, he was “extremely upset” about the matter and indicated that
he would “take Applied’s business.” Given the timing between Wakefield’s
statements, his departure from the Company, the meetings between
Wakefield and McPhearson, and Mac Medical’s decision to breach its
contract with Applied, there was ample basis for the jury to conclude
Wakefield induced Mac Medical to breach its agreement to carry out his
threats against the Company. See Restatement § 768 cmt. d (noting interplay
“between the factor of motive and that of the proximity of the actor’s
conduct to the actual interference”).

¶54           Finally, the Company also showed that Wakefield sought to
cloak his efforts to induce Mac Medical to breach its contract by concealing
his involvement with ReGen, which took Mac Medical’s business from
Applied. Although Wakefield claimed to be a consultant for a separate
entity when he met with McPhearson and others, the Company introduced
evidence that Wakefield was a “blind partner” with ReGen and that ReGen
and the entity Wakefield consulted for were owned by the same
individuals. Therefore, a jury could reasonably find that Wakefield’s
interference was not the result of open, honest, and innocent competition
but a directed effort to damage the Company.

¶55           Accordingly, although “hatred or a desire for revenge is not
alone sufficient to make [Wakefield’s] interference improper,” the evidence
surrounding Wakefield’s motives for interfering with Applied’s contract
with Mac Medical adds significant weight in favor of finding that Wakefield
acted improperly. Restatement § 768 cmt. g; see also Bar J Bar Cattle Co., Inc.
v. Pace, 158 Ariz. 481, 485 (App. 1988) (“One who interferes with the
contractual rights of another for a legitimate competitive reason does not
become a tort-feasor simply because he may also bear ill will toward his
competitor.”).

                                      19
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

¶56           In arguing the Company failed to show he acted improperly
before this court, Wakefield relies on the conflicting evidence surrounding
Mac Medical’s decision to breach its contract with Applied and his freedom
to compete legally with the Company following his termination. But it is
the “function of the jury to weigh conflicting evidence and inferences and
to determine the credibility of witnesses.” Correa v. Pecos Valley Dev. Corp.,
126 Ariz. 601, 607 (App. 1980). We will not disturb the jury’s decision to
resolve the conflicting evidence against Wakefield.

¶57            Moreover, contrary to Wakefield’s assertions, balancing
social interests here tips heavily towards the Company because Wakefield
directly interfered with the contractual relations between Applied and Mac
Medical. See Restatement § 768 cmt. h (inducement to commit a breach of
legal duty cannot be justified by “the mere fact of competition”); see also id.
§ 767 cmt. f (“If the interest of the other has been already consolidated into
the binding legal obligation of a contract, . . . that interest will normally
outweigh the actor’s own interest in taking that established right from
him.”). Under these facts, the “social interest in the security of transactions
and the greater definiteness of [Applied’s] expectancy outweigh the
interests in [Wakefield’s] freedom of action,” and his general right to
compete with the Company, therefore, carries little weight. Id.

¶58          The court did not err by denying Wakefield’s motion for
judgment as a matter of law and a new trial.

       2.     Aspen did not Exceed the Bounds of Permissible Argument.

¶59           During closing arguments, Aspen’s counsel argued that
Wakefield secretly became an owner of a competing business while still a
shareholder at Aspen. On five occasions while describing Wakefield’s
conduct, Aspen’s counsel stated something akin to “this is what fraud looks
like.” Wakefield moved for a mistrial after Aspen ended its argument,
asserting the use of the term “fraud” was improper because that allegation
was outside the evidence and “[Aspen doesn’t] have a fraud claim.” The
court denied the motion. Wakefield renewed the argument in his motion
for a new trial, which the court again denied. On appeal, Wakefield asserts
the court abused its discretion by denying his motion for a new trial on this
ground, arguing that Aspen’s counsel’s references to fraud were outside the
evidence and improper.

¶60          The superior court has broad discretion in determining
whether the alleged improper conduct of an attorney justifies granting a
new trial. Waid v. Bergschneider, 94 Ariz. 21, 24 (1963). When considering a

                                      20
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

motion for a new trial on the grounds of misconduct, the trial court
exercises its discretion to decide whether the misconduct occurred and
materially affected the aggrieved party’s rights. Leavy v. Parsell, 188 Ariz.
69, 72 (1997). Concerning closing arguments, “[t]he rule is that wide latitude
is allowed in the discussion of facts supplied by the evidence and the
inferences to be drawn therefrom.” Beliak v. Plants, 93 Ariz. 266, 269 (1963).
“The granting of a new trial because of the misconduct of counsel in closing
argument is only sparingly granted. It should never be granted for a
disciplinary measure, but only to prevent a miscarriage of justice.” Anderson
Aviation Sales Co. v. Perez, 19 Ariz. App. 422, 429 (1973).

¶61              Given the wide latitude afforded counsel in closing
arguments, and our deference to the superior court’s ruling, we cannot say
that Aspen’s comparisons of Wakefield’s conduct to fraud were outside the
evidence or an unreasonably drawn inference. The impropriety element of
an intentional-interference claim may be satisfied by proof that the
defendant committed fraud. This is true “even when [the defendant’s]
fraudulent representation is not of such a character as to subject him to
liability for . . . other torts.” Restatement § 767 cmt. c. Leaving aside the
strength of the evidence referenced by Aspen, it was entitled to attempt to
persuade the jury that Wakefield committed fraud to support its
interference claim.

¶62           Moreover, even if we agreed that Aspen’s statements came
close to an appeal to passion or prejudice rather than a reasonable inference
drawn from the evidence, we do not believe it is appropriate to reverse a
lengthy trial for isolated statements within an equally protracted closing
argument, especially “where the trial judge did not feel a mistrial was
warranted.” Rancho Pescado, Inc. v. Nw. Mut. Life Ins., 140 Ariz. 174, 188
(App. 1984). Again, the decision to grant a mistrial due to misconduct by
counsel lies within the trial court’s discretion, and “[t]hat court has the
whole picture and is better equipped to make such a judgment than an
appell[ate] court.” McFarlin v. Hall, 127 Ariz. 220, 226 (1980). Thus, the
superior court did not abuse its discretion by denying Wakefield’s motion
for a new trial on this argument.

E. Wakefield    Waived     the     Arguments             Concerning       the
   Measure-of-Damages Instruction.

¶63        During the trial, a dispute arose over the proper measure of
damages the jury was to apply to Wakefield’s tort claims. Specifically,
although Wakefield agreed that the appropriate measure of damages was

                                     21
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

the value of 1 million shares of Aspen stock, he asserted that the value of
the stock should be measured at the time of the trial.

¶64           However, the court found that because Wakefield’s tort
actions were fundamentally founded on deceit, Wakefield’s damages are
measured at the time of the alleged misrepresentations and omissions that
gave rise to Wakefield’s claims—January 2014. The court cited specific
caselaw to explain its rationale. Thereafter, Appellees proposed the
following instruction concerning the measure of damages:

              If you find for [Wakefield] on his claims of Breach of
       Fiduciary Duty, Constructive Fraud, Fraud and/or
       Fraudulent Concealment, you must determine his damages
       by determining the value of one million shares of [Aspen] as
       of January 2014.

The court so instructed the jury over Wakefield’s objection. The jury found
Britt liable for breach of fiduciary duty and constructive fraud and awarded
Wakefield $562,000 in damages as the value of the Aspen stock.

¶65            On appeal, Wakefield argues the court erred by giving the
instruction, asserting once again that the value of Aspen’s stock should
have been measured at the time of trial, not at the time of the alleged
tortious conduct. Because determining the correct measure of damages
involves a mixed question of fact and law, we review jury instructions
involving the measure of damages de novo. SDR Assocs. v. ARG Enters., Inc.,
170 Ariz. 1, 2 (App. 1991). The superior court must give a jury instruction if
(1) “the evidence presented supports the instruction,” (2) the instruction
correctly states the law, and (3) the instruction pertains to an important
issue that is not dealt with by other instructions. Czarnecki v. Volkswagen of
Am., 172 Ariz. 408, 411 (App. 1991). “We review a court’s decision to give a
jury instruction for abuse of discretion,” but review de novo “whether the
given instruction correctly states the law.” State v. Solis, 236 Ariz. 285, 286,
¶ 6 (App. 2014). We also consider the “jury instructions as a whole to
determine whether the jury was properly guided in its deliberations.”
Powers v. Taser Int’l, Inc., 217 Ariz. 398, 400, ¶ 12 (App. 2007). To determine
whether prejudicial error occurred, “we may consider the jury instructions
as given, the evidence at trial, the parties’ theories, and the parties’
arguments to the jury.” State v. Felix, 237 Ariz. 280, 285, ¶ 16 (App. 2015).

¶66          “An instruction will only warrant reversal if it was both
harmful to the complaining party and directly contrary to the rule of law.”
Powers, 217 Ariz. at 400, ¶ 12. “We will not overturn a jury verdict on the

                                      22
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

basis of an improper instruction ‘unless there is substantial doubt whether
the jury was properly guided in its deliberations.’” Id. (quoting Barnes v.
Outlaw, 188 Ariz. 401, 405 (App. 1996), aff’d in part and rev’d in part on other
grounds, 192 Ariz. 283 (1998)). “Prejudice ‘will not be presumed but must
affirmatively appear from the record.’” Skydive Ariz., Inc. v. Hogue, 238 Ariz.
357, 367, ¶ 37 (App. 2015) (quoting Walters v. First Fed. Sav. & Loan Ass’n of
Phoenix, 131 Ariz. 321, 326 (1982)).

¶67               As an initial matter, we find that Wakefield waived his
challenge to the measure-of-damages instruction by failing to develop it
meaningfully on appeal. In the sections of his opening and reply briefs
concerning the issue, Wakefield cites only cases supporting the general
notion that tort damages include all damages legally caused by the tort. See
Thomas v. Better-Bilt Aluminum Products Co., 171 Ariz. 550, 554 (1992).
Although axiomatic to all torts, this principle says nothing about the proper
measure of damages applicable to the tort claims raised and evidence
presented in Wakefield’s case. Even a cursory search of relevant authority
reveals that questions surrounding an appropriate jury instruction on the
measure of damages are intimately tied to the nature of the tort alleged, the
plaintiff’s theory of liability and damages, and the evidence presented at
trial. See, e.g., Cole v. Gerhart, 5 Ariz. App. 24, 26–27 (App. 1967) (reversing
measure-of-damages instruction for fraud because consequential damages
were available as a matter of law and evidence was sufficiently presented
for the plaintiffs to recover those damages); 89 C.J.S. Trial § 687, Westlaw
(database updated June 2021) (jury instructions on the measure of damages
must not be framed “to allow the jury to assess damages without regard to
the evidence in the case, or to assess damages on evidence that was not
admitted for the purpose of showing the damages sustained”); 22 Am. Jur.
2d Damages § 800, Westlaw (database updated May 2021) (instructions must
not “invade the province of the jury and should be confined to matters of
damages in issue by virtue of the pleadings and evidence”).

¶68            Moreover, the portions of Wakefield’s briefs addressing the
measure-of-damages instruction provide only the citations to the record
necessary to support that he preserved the issue for appellate review. To
prevail on this issue, Wakefield must explain how the instruction was
contrary to the evidence presented or his theories of liability and damages.
His failure to do so is telling. And Wakefield’s failure to discuss any specific
legal authority addressing the issue is particularly egregious here because
both the superior court and the Appellees’ answering briefs addressed the
rationale and caselaw underlying the measure-of-damages instruction.

                                      23
                        ASPEN, et al. v. WAKEFIELD
                           Decision of the Court

¶69           We have previously outlined the potential consequence of an
appellant’s failure to address the dispositive reasons for a court’s ruling—
when clearly outlined by the superior court and the appellate answering
brief—in the context of an appellant’s failure to file a reply brief:

       [W]here, as here, appellant’s opening brief failed to address
       itself to substantial and determinative issues clearly
       developed and defined in the trial court, and these issues are
       again brought forth in the appellees’ answering brief filed in
       this Court, a failure by the appellant to file a reply brief leaves
       this Court without any assistance in analyzing and deciding
       the difficult issues upon which the trial court’s decision could
       have been based and upon which appellant’s hopes for
       reversal must depend. . . . [I]n our opinion, the foregoing
       would constitute a sufficient basis for summary affirmance of
       the trial court’s judgment[.]

Turf Irrigation and Waterworks Supply v. Mountain States Tel. & Tel. Co., 24
Ariz. App. 537, 541 (App. 1975). We believe our rationale in Turf Irrigation
applies equally to a situation where an appellant, despite receiving notice
from both the superior court and appellees of the determinative basis
underlying the challenged decision, nevertheless fails to raise any
substantive argument addressing it. Finding waiver here also comports
with the long-standing principle that an appellant must do more than
merely claim that the superior court’s decision is contrary to the law to
justify appellate relief. See Grubb v. Do it Best Corp., 230 Ariz. 1, 5, ¶¶ 15–16
(App. 2012); Polanco v. Indus. Comm’n, 214 Ariz. 489, 491, ¶ 6, n.2 (App.
2007); ARCAP 13(a)(7).

¶70             Substantively, we find Wakefield’s limited argument
concerning the measure-of-damages instruction unpersuasive. As we
understand Wakefield’s case, Wakefield sought to recover the value of one
million shares of Aspen stock for each of his tort claims—breach of
fiduciary duty, constructive fraud, common-law promissory fraud, and
fraudulent concealment—under a “benefit of the bargain” theory of
damages. In Arizona, actions founded in deceit permit the plaintiff to
recover the “benefit of the bargain,” or the difference between the
property’s actual value and its value if the representations were true. Lufty
v. R.D. Roper & Sons Motor Co., 57 Ariz. 495, 502–03 (1941); Curry v. Windsor,
22 Ariz. 108, 111 (1921); Bechtel v. Liberty Nat. Bank, 534 F.2d 1335, 1341 (9th
Cir. 1976); see also Grand v. Nacchio, 214 Ariz. 9, 28–29, ¶¶ 66–73 (App. 2006)
(analyzing breach of a fiduciary duty claim based on misrepresentations
under the law governing actions for deceit). These damages are measured

                                       24
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

at the time of the transaction. Lufty, 57 Ariz. at 498–503 (when the car model
year was misrepresented, the measure of damages was the value of the
difference between model years on the date of the sale); Packard Pheonix
Motor Co. v. McRuer, 41 Ariz. 450, 456 (1933); Ulan v. Richtars, 8 Ariz. App.
351, 358, n.5 (1968); 37 Am. Jur. 2d Fraud and Deceit § 376, Westlaw,
(database updated May 2021) (“The damages under the benefit of the
bargain rule in a fraudulent misrepresentation case are measured at the
time of the transaction.”).

¶71             Arizona law also provides that a plaintiff pursuing a
benefit-of-the-bargain theory of damages is entitled to “consequential
damage beyond loss of bargain,” such as out-of-pocket expenses or lost
profits incurred because of the defendant’s conduct. Ashley v. Kramer, 8
Ariz. App. 27, 31 (1968) (consequential damages are “a proper measure of
damages in a fraud action”); Bechtel, 534 F.2d at 1341 (in addition to the
benefit of the bargain, “the buyer may recover any consequential damages
that may have proximately resulted from the fraudulent conduct of the
seller”); see also Standard Chartered PLC v. Price Waterhouse, 190 Ariz. 6, 36
(App. 1996) (“Consequential damages are losses ‘not inherent in the nature
of the transaction.’”) (quoting Restatement § 549 cmt. a). But such damages
must be shown to be legally and factually caused by the defendant’s
tortious conduct and must be “reasonably certain and not based on
speculation.” 22 Am. Jur. 2d Damages § 340, Westlaw (database updated
May 2021); see also 22 Am. Jur. 2d Damages § 334 (“[D]amages usually may
not include compensation for injuries that are remote from the wrongful act
or are of an uncertain or speculative nature.”); 2 Am. Law of Torts § 8:35,
Westlaw (database updated March 2021).

¶72             Here, to recover consequential damages beyond the benefit of
his bargain—the value of a million shares of Aspen stock as of January
2014—Wakefield would need to prove that any alleged loss of the increased
value of Aspen’s stock in the years following the events giving rise to his
tort claims (1) was proximately caused by the alleged tortious conduct and
(2) could be established with “reasonable certainty and [was] not too
speculative or remote to afford reliable basis for computation.” 26 Am. Jur.
Proof of Facts 3d 119, § 9, Westlaw (database updated June 2021). Wakefield
points to no evidence concerning any recoverable category of consequential
damages other than his expert’s opinion, which was not introduced at trial.
Our review of the voluminous record has not revealed that Wakefield
identified or distinguished between any claims for direct and consequential
losses. Indeed, before the trial, Wakefield disclaimed that he was seeking

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                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

consequential damages.7 Based on this record, we can only conclude
Wakefield erroneously believed that prevailing on any of his tort claims
would entitle him to damages equal to the value of Aspen’s stock at the
time of the trial as a matter of course.

¶73           Given the authorities cited above and Wakefield’s failure to
identify any evidence or authority (1) supporting his entitlement to
additional compensable damages in this case or (2) requiring a different
measure of damages, we cannot say that he has raised “substantial doubt
regarding whether the jury was properly guided in its deliberations.” State
Farm Fire & Cas. In. Co. v. Grabowski, 214 Ariz. 188, 192, ¶ 13 (App. 2007) (as
amended). Thus, we conclude the court did not err by instructing the jury
that Wakefield’s recovery was limited to the benefit of his bargain—the
value of 1 million shares of Aspen stock as of January 2014.

F. The Superior Court’s Ruling on Attorney’s Fees Was Not Erroneous.

¶74             Wakefield raises three arguments concerning the court’s
award of attorney’s fees and costs to Appellees under A.R.S. § 12-341.01.
Wakefield contends the court erred by (1) finding the Company’s
declaratory-judgment claim moot and refusing to consider it in its
attorney’s fees ruling; (2) concluding that Wakefield’s common-law
promissory fraud claim and fraudulent concealment claims arose out of
contract; and (3) determining that the Appellees were the successful parties
in the litigation. We address each argument in turn.

       1.     The Court Did Not Commit Reversible Error by Refusing to
              Consider the Company’s Declaratory Judgment Action in
              Awarding Attorney’s Fees.

¶75           Wakefield first argues that the court erred in its determination
of attorney’s fees and costs by finding the Company’s
declaratory-judgment action against Wakefield was rendered moot by
Wakefield’s decision to pursue tort remedies for the value of his stock. In
the declaratory-judgment action, the Company sought a declaration that

7      With respect to his tort claims, Wakefield stated that “it’s not like a
negligence claim where you’ve got an injury, and [you can] add to it stuff
beyond the economic loss. We’re not asking for anything but the economic
loss, but they’re a different cause of action to get to the same point, and
those tort claims all basically are valued the same.”

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                        ASPEN, et al. v. WAKEFIELD
                           Decision of the Court

due to Wakefield’s alleged breaches of the Exchange Agreement, he was
not entitled to the issuance of Aspen stock.

¶76           After briefing on the issue by the parties, the court found that
no justiciable controversy existed for the issuance of Aspen stock because
“by the time the case went to the jury, no party claimed that [Wakefield]
was entitled to stock in Aspen Biotech.” Thus, the court concluded that the
Company’s declaratory-judgment action had been rendered moot by
Wakefield’s decision to pursue “the value of the stock . . . as opposed to the
issuance of the actual stock.”

¶77            Under the declaratory judgments act, a justiciable controversy
exists if there is “‘an assertion of a right, status, or legal relation in which
the plaintiff has a definite interest and a denial of it by the opposing party.’”
Keggi v. Northbrook Prop. & Cas. Ins., 199 Ariz. 43, 45, ¶ 10 (App. 2000)
(quoting Samaritan Health Servs. v. City of Glendale, 148 Ariz. 394, 395 (App.
1986)). “The declaratory judgments act is interpreted liberally.” Id.
However, “[c]ourts will not hear cases that seek declaratory judgments that
are advisory or answer moot or abstract questions,” and declaratory relief
should turn on the “existing state of facts.” Thomas v. City of Phoenix, 171
Ariz. 69, 74 (App. 1991).

¶78            We agree with the superior court that Wakefield’s election of
remedies rendered the Company’s declaratory-judgment action moot. In
his complaint, Wakefield alleged several causes of action premised on his
contractual right to the stock. By the time of the trial, however, Wakefield
chose to pursue only tort remedies under the theory that he was
fraudulently misled into believing he had a legal right to Aspen’s stock by
the Appellees’ misrepresentations and omissions. Because Wakefield’s
ability to recover the value of 1 million shares of Aspen stock under this
theory was not dependent on any contractual entitlement to the issuance of
shares but rather on the tortious deprivation of that entitlement, the court
correctly concluded that no justiciable controversy for the declaratory
judgment existed.

¶79          Moreover, there could be no further dispute on the matter
once the jury returned a verdict awarding Wakefield compensatory
damages equal to the value of the Aspen stock. At that point, Wakefield had
acquired his remedy, and even he acknowledged before the court that he
could not recover both the value of the Aspen stock and the stock itself.
Therefore, a declaratory judgment addressing Wakefield’s entitlement to
the stock was unnecessary. Accordingly, the court appropriately
determined that the Company’s declaratory-judgment action was moot and

                                       27
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

was well within its discretion to refuse to consider it in deciding which
party was entitled to attorney’s fees.

       2.     Wakefield’s Common-law Promissory Fraud and
              Fraudulent Concealment Claims Are Inextricably
              Intertwined with his Breach of Contract Claims.

¶80            Wakefield argues the court erred by concluding that his
claims for common-law promissory fraud and fraudulent concealment
“[arose] out of contract” under A.R.S. § 12-341.01. The parties devote
substantial discussion in their briefs to whether Wakefield’s common-law
promissory fraud and fraudulent concealment claims arose out of a
contract. But we need not address this often elusive and challenging
question because we conclude Wakefield’s fraud-related claims were
inextricably interwoven with his explicit contract-based claims. See Modular
Mining Sys., Inc. v. Jigsaw Techs., Inc., 221 Ariz. 515, 522, ¶ 23 (noting
difficulties in arising-out-of-contract analysis); Ramsey Air Meds, L.L.C. v.
Cutter Aviation, Inc., 198 Ariz. 10, 13, ¶ 19 (App. 2000) (same).

¶81            Under A.R.S. § 12-341.01, in “any contested action arising out
of a contract, express or implied, the court may award the successful party
reasonable attorney fees.” Whether a claim arises out of contract under
A.R.S. § 12-341.01 presents a question of law that we review de novo. Zeagler
v. Buckley, 223 Ariz. 37, 38, ¶ 5 (App. 2009). “It is well-established that a
successful party on a contract claim may recover not only attorneys’ fees
expended on the contract claim, but also fees expended in litigating an
‘interwoven’ tort claim.” Ramsey, 198 Ariz. at 13, ¶ 17. “Claims are
interwoven when they are based on the same set of facts and involve
common allegations, which require the same factual and legal
development.” Hogue, 238 Ariz. at 369, ¶ 52. When “claims are so
interrelated that identical or substantially overlapping discovery would
occur, there is no sound reason to deny recovery of such legal fees.” Zeagler,
233 Ariz. at 39, ¶ 9.

¶82           Here, it is undisputed that Wakefield’s promissory fraud and
fraudulent concealment claims arose out of the same factual transaction as
his breach-of-contract claims: the reorganization of the Company and the
associated agreements entered by the parties. Therefore, Wakefield’s fraud
and contract claims relied on many of the same facts, as conceded by
Wakefield before the trial.

¶83         In both the superior court proceedings and on appeal,
Wakefield asserted that his tort and contract claims were alternative

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                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

theories of liability to arrive at the same award of “economic damages”—
the value of 1 million shares of Aspen stock. Wakefield’s tort and contract
claims were so intertwined that the parties spent significant time discussing
the potential election-of-remedies issues before the trial. Wakefield
ultimately elected to proceed at the trial only on his tort claims. Thus, we
conclude Wakefield’s fraud and contract claims were so interrelated that
identical or substantially overlapping discovery and development of the
case necessarily occurred in litigating these claims, and there is “no sound
reason” to deny Britt and Carlson fees for defending against the fraud
claims. Zeagler, 223 Ariz. at 39, ¶ 9.

      3.     The Court did not Abuse Its Discretion by Finding the
             Appellees’ Were the Successful Parties.

¶84          Finally, Wakefield challenges the superior court’s
determination that the Company, Britt, Carlson, and Viking, were each a
“successful party” under A.R.S. § 12-341.01.

¶85           In addressing which of the parties was the “successful party”
in the litigation, the court first held that Carlson and Viking were
undisputedly the successful parties as to all claims raised against or by
them because they had prevailed in prosecuting and defending all claims
in which they were involved. Concerning the remaining parties, the court
noted that “courts often employ a ‘totality of the litigation’ test” to
determine the successful party in complex, multi-party, multi-claim suits.
But the court then found the test unhelpful because the parties had “each
successfully defended all fee eligible claims made by the other.”
Consequently, the court decided to resolve the issue by examining the
seven-factor test articulated by our supreme court in Associated Indemnity
Corp. v. Warner, 143 Ariz. 567 (1985) and the language of A.R.S.
§ 12-341.01(A)’s second sentence. Applying this criterion, the court
concluded that the Company and Britt were also successful parties because
Wakefield had rejected two settlement offers made by the Company in
2014—one for $5 million and another for a post-tax payment of $750,000—
that would have allowed him to avoid litigation and achieve a more
favorable result. Therefore, the court also granted the Company and Britt’s
application for attorney’s fees.

¶86           Wakefield raises two initial arguments concerning the court’s
successful-party ruling. First, Wakefield contends that the superior court
failed to apply the “net judgment rule” to determine the successful party.
Under that test, Wakefield concludes that he should have been designated
the successful party because he recovered a more significant money

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                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

judgment than the other parties. Second, Wakefield argues the court erred
by considering “prelitigation settlement offers made in 2014” in its
successful-party determination based on the second sentence of A.R.S.
§ 12-341.01(A), which provides that a party who makes an offer “in writing
to settle any contested action arising out of a contract” will be deemed the
successful party from the date of the offer if the final judgment is less
favorable or equal to the proposal. Because the phrase “settle any contested
action arising out of a contract” implies an offer made during a legal
proceeding rather than before a lawsuit is filed, Wakefield asserts the court
committed error by considering prelitigation settlement offers.

¶87          “The decision as to who is the successful party for purposes
of awarding attorneys’ fees is within the sole discretion of the trial court,
and will not be disturbed on appeal if any reasonable basis exists for it.”
Maleki v. Desert Palms Prof’l Props., L.L.C., 222 Ariz. 327, 334, ¶ 35 (App.
2009). “The superior court, in its discretion, role, and experience, may
determine the prevailing party from all the circumstances[.]” See Bobrow v.
Bobrow, 241 Ariz. 592, 598, ¶ 25 (App. 2017).

¶88           As an initial matter, we reject Wakefield’s arguments to the
extent he challenges the court’s finding that Carlson and Viking were
successful parties for all claims related to them. Carlson and Viking
prevailed on every counterclaim raised by Wakefield against them—
including Wakefield’s interwoven common-law promissory fraud claim—
and Viking successfully recovered the entire amount sought on its
contract-based crossclaim against Wakefield. Accordingly, the court did not
abuse its discretion by finding Carlson and Viking were entitled to
attorney’s fees as a successful party.

¶89             We now consider whether the court abused its discretion by
finding the Company and Britt were also successful parties over Wakefield.
This court has long held that the superior court is not bound to the net
judgment rule in a multi-party, multi-claim case in the exercise of its
discretion. Instead, it may use other tests to determine the parties’ relative
success concerning the various claims. Schwartz v. Farmers Ins. Co. of Ariz.,
166 Ariz. 33, 38 (App. 1990). Consequently, the court’s refusal to apply the
net judgment rule was not an abuse of discretion error. Nevertheless, we
cannot endorse the court’s use of the Warner factors to break the deadlock
in its “totality of the litigation” analysis.

¶90           In Warner, the Arizona Supreme Court outlined a
non-exhaustive, seven-factor test to aid courts in evaluating whether to
grant a discretionary award of attorney’s fees after the successful party had

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                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

been determined. 143 Ariz. at 570 (interpreting the phrase “may award” in
“authorizing the trial judge to award a successful contract litigant
reasonable attorney’s fees”). These factors include:

       (1) The merits of the claim or defense presented by the
           unsuccessful party.

       (2) Whether the litigation could have been avoided or settled and the
           successful party’s efforts were completely superfluous in
           achieving the result.

       (3) Whether assessing Fees against the unsuccessful party would
           cause an extreme hardship.

       (4) Whether the successful party prevailed with respect to all the
           relief sought.

Id. Because the Warner test was not crafted to assist the court with deciding
who is the successful party, we must conclude the court erred by applying
it.

¶91            However, the court’s decision to apply Warner is not fatal to
its successful-party determination in this case. The only Warner factor the
court found relevant and dispositive—that Wakefield could have avoided
litigation and achieved a better result by accepting one of several settlement
offers made by the Company before any party filed a lawsuit—is an entirely
appropriate factor to consider under the “totality of the litigation”
approach. The purposes of A.R.S. § 12-341.01 include (1) “encouraging
more careful analysis prior to filing suit by imposing the risk of paying the
opposing party’s attorneys’ fees where legitimate settlement offers are
rejected” and (2) “promoting settlement and thus reducing caseloads
involving contractual matters.” Am. Power Prods., Inc. v. CSK Auto, Inc., 242
Ariz. 364, 369, ¶ 20 (2017) (quotations omitted)). Thus, relying on the fact
that one party could have obtained a more favorable result by accepting a
legitimate settlement offer and avoiding litigation to determine the
successful party is consistent with the statute’s purposes. Cf. Macsherry, 973
F.3d at 222 (“[T]he value of promoting efforts to settle disputes that have
entered the doors of a court applies all the more to disputes that haven’t yet
done so.”).

¶92          Moreover, the settlement comparison provision in A.R.S.
§ 12-341.01(A)’s second sentence does not foreclose a superior court from
considering pre-suit settlement offers. The challenged sentence provides:

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                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

       If a written settlement offer is rejected and the judgment
       finally obtained is equal to or more favorable to the offeror
       than an offer made in writing to settle any contested action
       arising out of a contract, the offeror is deemed to be the
       successful party from the date of the offer and the court may
       award the successful party reasonable attorney fees.

A.R.S. § 12-341.01(A). While the portion of the sentence making the
successful party designation automatic may be limited to settlement offers
made during a legal proceeding, the provision is designed to reinforce, not
deemphasize, the necessity of considering each side’s settlement efforts
when determining the successful party. And holding otherwise would
undermine the purposes of A.R.S. § 12-341.01(A). Thus, the court’s
consideration of pre-action settlement offers was appropriate, and its
consideration of the Warner factors was, at most, harmless error.

¶93           The only question remaining is whether the court abused its
discretion in assessing the pre-suit settlement offers. In this regard,
Wakefield contends the settlement offer for a post-tax payment of $750,000
was wholly inadequate to compensate him for his claims and that the court
incorrectly found that it was an offer “without conditions.” But the $750,000
post-tax settlement offer would have left Wakefield with $200,000 more
than the amount Wakefield recovered after four years of litigation. And the
court did not find that the post-tax settlement offer had no conditions; it
found it did not have the same restrictive conditions as a previous
settlement offer for $5 million. Given our deferential standard of review and
the superior court’s intimate understanding of the trial proceedings, we will
not substitute our judgment for the superior court concerning the weight it
gave to these pre-suit settlement offers, including its assessment of the
conditions contained within each proposal. See Warner, 143 Ariz. at 571.8

8      At oral argument, Wakefield argued, for the first time, that there
were distinctions between A.R.S. § 12-341.01 and the costs statute, A.R.S.
§ 12-341. Because he did not raise any argument concerning any alleged
differences between the statutes in his briefs, the arguement is waived.
Schabel v. Deer Valley Unified Sch. Dist. No. 97, 186 Ariz. 161, 167 (App. 1996)
(“Issues not clearly raised and argued in a party’s appellate brief are
waived.”).

                                      32
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

G. Wakefield’s Recovery for the Value of His Aspen Stock Has Rendered
   Any Arguments Concerning the Summary Judgment Granted on
   Wakefield’s Contract Counterclaims Moot.

¶94           In September 2018, the Company and Britt moved for partial
summary judgment on several of Wakefield’s counterclaims, including his
claims against Britt for breach of contract and the implied covenant of good
faith and fair dealing arising out of the Reorganization Agreement (the
“Contract Claims”). In its motion, the Company and Britt argued that Britt
could not be held liable for any claims related to the Reorganization
Agreement because it had been superseded and extinguished by Wakefield
and Aspen’s execution of the Exchange Agreement. In response, Wakefield
argued that the Reorganization Agreement was not superseded because it
contained additional terms not addressed in the Exchange Agreement.

¶95            The superior court granted summary judgment in favor of
Britt, finding the Exchange Agreement superseded the Reorganization
Agreement in “all ways relevant” to Wakefield’s claims. In response to a
later court ruling that appeared contrary to its summary-judgment ruling,
the Appellees moved for the court to clarify what issues regarding the
enforceability of the Reorganization Agreement remained at issue under
Arizona Rule of Civil Procedure 56(g). The court agreed with the Appellees
that it had issued conflicting decisions regarding the Reorganization
Agreement, reaffirmed its finding that the Reorganization Agreement had
been superseded and extinguished by the Exchange Agreement, and
concluded that no party could be found liable for the Contract Claims.
Consequently, the court extended its summary judgment to Carlson and all
entities related to Britt and Carlson.

¶96         On appeal, Wakefield claims that the Exchange Agreement
was not intended to supersede and extinguish the Reorganization
Agreement because the latter agreement contains additional terms not
contemplated by the former. However, we need not address the merits of
Wakefield’s argument because we conclude our disposition of the
remaining issues in this appeal renders any problem concerning the
summary-judgment ruling moot.

¶97            “[A] case becomes moot when an event occurs, pending an
appeal, which renders the relief sought either impossible or without
practical effect on the parties to the action.” Sandblom v. Corbin, 125 Ariz.
178, 183 (App. 1980). In this case, even assuming we granted the relief
Wakefield seeks and reverse the summary-judgment ruling, he could not
recover damages under his claims for breach of contract or breach of the

                                     33
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

implied covenant of good faith and fair dealing because doing so would
result in an impermissible double recovery.

¶98            “A plaintiff may not receive a double recovery for the same
injuries or losses arising from the same conduct or wrong.” 22 Am. Jur. 2d
Damages § 32, Westlaw (database updated May 2021); Ball Corp. v. George,
27 Ariz. App. 540, 545 (1976) (“There can be no double recovery.”); Snowden
v. D.C. Transit Sys., Inc., 454 F.2d 1047, 1048 (D.C. Cir. 1971) (“A cardinal
principle of law is that in the absence of punitive damages a plaintiff can
recover no more than the loss actually suffered.”). “[A] person is not
entitled to recover twice for the same elements of damage growing out of
the same occurrence or event.” 25 C.J.S. Damages § 11, Westlaw (database
updated June 2021). Notably, the doctrine has been explicitly applied to bar
subsequent actions on tort theories if the plaintiff has already recovered on
a contract theory and vice versa. See, e.g., Simon v. Royal Bus. Funds Corp., 34
A.D.2d 758, 758–59 (N.Y. App. 1970) (because the plaintiff could not have
double recovery, action for fraudulent inducement against one party
raising same damages as the previous breach of contract action against
another was barred); Simon v. Noma Elec. Corp., 56 N.E.2d 537, 539–40 (N.Y.
App.      1944)     (plaintiff    could      not    prove      damages       for
interference-with-contract claim because plaintiff had already successfully
obtained a judgment against another in a breach-of-contract action for the
same damages ).

¶99           Here, if we were to reverse the court’s summary-judgment
ruling, the prohibition against double recovery would apply with full force
to bar any further recovery by Wakefield against Britt for the Contract
Claims. As his complaint, disclosures, and opening brief make clear,
Wakefield’s counterclaims were alternative theories for recovering the
same damages resulting from the same indivisible injury—the failure to
provide him with 1 million shares of Aspen stock. Moreover, Wakefield
provided an almost identical computation of damages for each
counterclaim and asserted to the court that the damages and evidence for
his tort and contract claims were the same.

¶100            Thus, Wakefield’s recovery for the value of a million shares
of Aspen stock against Britt under the breach-of-fiduciary-duty and
constructive fraud theories, which we affirm in this decision, bar any
further award of damages against him arising from Wakefield’s loss of
Aspen stock, including damages arising from the Contract Claims.
Wakefield’s dissatisfaction with the amount of damages is immaterial, as is
the fact that he could assert alternative legal theories under which to hold
Britt liable. See Saichek v. Lupa, 787 N.E.2d 827, 835 (Ill. 2003) (“Having once

                                      34
                       ASPEN, et al. v. WAKEFIELD
                          Decision of the Court

been awarded damages for the injuries by the court, she cannot seek
compensation for those injuries again. That is so ‘regardless of whether or
not the plaintiff has recovered all that he or she might have recovered’ in
the initial proceeding.”) (quoting Dillion v. Evanston Hosp., 771 N.E.2d 357,
369 (Ill. 2002)); Elyousef v. O’Reilly & Ferrario, LLC, 245 P.3d 547, 549 (Nev.
2010).

¶101           Concluding that Wakefield cannot recover twice against Britt
does not end our inquiry because the Contract Claims were also brought
against Carlson. “If two or more tortfeasors produce a single injury, the
plaintiff may sue each one for the full amount of the damage and hold the
defendants severally liable[.]” 47 Am. Jur. 2d Judgments § 770, Westlaw
(database updated May 2021). But we need not engage in an extended
analysis of this issue to conclude that, assuming we reversed the summary
judgment ruling, Wakefield would be barred from recovering against
Carlson as well. A necessary corollary to the general doctrine of double
recovery is the “one satisfaction” rule, which provides that where “one joint
tortfeasor satisfies a judgment obtained by the plaintiff, all other tortfeasors
are discharged from liability, and the plaintiff has no further cause of
action.” Bridgestone/Firestone N. Am. Tire, L.L.C., v. Naranjo, 206 Ariz. 447,
449, ¶ 8 (App. 2003); see also Restatement (Third) of Torts: Apportionment
Liab. § 25(a) (2000).

¶102          Wakefield’s recovery has been fully satisfied by operation of
the setoff imposed in the final judgment between Wakefield, Britt, and the
Company, and as stated above, we have found no infirmity in that
judgment. See 47 Am. Jur. 2d Judgments § 806, Westlaw (database updated
May 2021) (“[T]he purpose of setoff is to speedily and effectively satisfy
judgments[.]”). As a result, Wakefield would be foreclosed from using the
Contract Claims to try and recover against Carlson for an injury that has
already been satisfied. Elyousef, 245 P.3d at 549 (holding that satisfaction of
prior judgment through a settlement agreement precluded the plaintiff
from asserting new claims against a new party for the same injury).

¶103         Similarly, review of the summary-judgment ruling is also
moot because our affirmance of the jury’s verdict and damages award
would be fatal to the Contract Claims under the “law of the case” doctrine.
As set forth by our supreme court in Dancing Sunshines Lounge v. Indus.
Comm’n:

       The term “law of the case” refers to a legal doctrine providing
       that the decision of a court in a case is the law of that case on
       the issues decided throughout all subsequent proceedings in

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                        ASPEN, et al. v. WAKEFIELD
                           Decision of the Court

       both the trial and appellate courts, provided the facts, issues
       and evidence are substantially the same as those upon which
       the first decision rested.

149 Ariz. 480, 482 (1986). Because the superior court would be bound by the
issues decided in this appeal, including the validity of the jury’s damages
award and the judgment, Wakefield would not be entitled to a further
award of damages from Britt or Carlson for loss of the Aspen stock. As a
result, an essential element of the Contract Claims—damages—would be
missing, and the court would be required to dismiss the claims based on
Wakefield’s inability to make a prima facie case for either claim. See First Am.
Title Ins. v. Johnson Bank, 239 Ariz. 348, 353, ¶ 22 (2016) (elements of contract
claim include “resulting damages”) United Dairymen of Ariz. v. Schugg, 212
Ariz. 133, 139, ¶ 21 (App. 2006) (reversed jury’s award for breach of the
implied covenant of good faith and fair dealing based on lack of proof of
damages); see also Elyousef, 245 P.3d at 549–50 (applying the related doctrine
of issue preclusion to damage issue litigated in a prior suit for the same
injury); Bodam v. City of Chicago, 609 N.E.2d 802, 804–05 (Ill. App. 1993)
(same).

¶104          Finally, we note an important but ultimately not dispositive
caveat to our holding. As we read Wakefield’s complaint, his claim for
breach of contract against Britt and Carlson originally included an
allegation of damages for a seemingly different injury—the loss of after-tax
distributions under a provision of the Reorganization Agreement.
Wakefield’s disclosed computation of damages confirms this, as it alleges
an additional $750,000 in damages related to this injury. If Wakefield could
proceed with the breach-of-contract claim solely for this injury on remand,
we would be compelled to find that Wakefield’s arguments concerning the
summary-judgment ruling were not moot. However, we conclude
Wakefield waived and abandoned this claim by knowingly failing to take
any action once he became aware of the possibility that the court did not
intend its summary judgment ruling on the Contract Claims to decide the
issue.

¶105         During a hearing before the trial, Wakefield requested
guidance from the court regarding his ability to mention specific provisions
of the Reorganization Agreement, including the distribution provision. The
court told Wakefield that it had intended its summary-judgment ruling to
cover overlapping provisions of the Reorganization Agreement and
Exchange Agreement, not potentially independent provisions. As the
discussion continued, the court agreed that any remaining ambiguities
surrounding the ruling would be problematic and expressly invited

                                       36
                        ASPEN, et al. v. WAKEFIELD
                           Decision of the Court

Wakefield to make an argument concerning the issue. Wakefield made no
further argument. Following the hearing, Wakefield did not file a motion
addressing the issue and ultimately elected to pursue only his tort theories
at trial.

¶106           “Waiver is either the express, voluntary, intentional
relinquishment of a known right or such conduct as warrants an inference
of such an intentional relinquishment.” Am. Cont. Life Ins. v. Ranier Constr.
Co., 125 Ariz. 53, 55 (1980). A party may waive any contract provision made
for that party’s benefit, Concannon v. Yewell, 16 Ariz. App. 320, 321 (1972),
and “litigation-related activity” may be considered to establish waiver,
Russo v. Berger, 239 Ariz. 100, 103–05, ¶¶ 12–21 (App. 2016). Because we
view Wakefield’s inaction here as conclusive evidence of a knowing waiver
of any further pursuit of his claim for after-tax distributions, we do not
consider it in our mootness analysis. Our refusal to consider this alleged
element of damages also aligns with long-standing principles of appellate
waiver. Cf. S. Ariz. Freight Lines v. Jackson, 48 Ariz. 509, 518 (1936) (“Parties
may not sit by and allow error which is not fundamental to be committed,
without protesting and asking the trial court to correct the error at the time,
and then later, when the judgment goes against them, ask for a new trial on
that ground.”).

¶107          Ultimately, because our exhaustive review of the issues raised
on appeal has revealed no error requiring reversal of the jury’s verdict and
damages awarded in this case, Wakefield’s recovery stands and permitting
him to litigate the Contract Claims against Britt and Carlson could only
result in an impermissible double recovery. Therefore, any arguments
concerning the summary-judgment ruling on the Contract Claims are moot,
and we do not address the issues further.

                     ATTORNEY’S FEES AND COSTS

¶108           All parties request an attorney’s fees and costs award under
A.R.S. §§ 12-341 and -341.01. Per our discretion, we deny the requests for
attorney’s fees. However, as the successful parties on appeal, Appellees are
entitled to their costs upon compliance with Arizona Rule of Civil Appellate
Procedure 21.

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               ASPEN, et al. v. WAKEFIELD
                  Decision of the Court

                      CONCLUSION

¶109   We affirm the superior court’s judgments.

                   AMY M. WOOD • Clerk of the Court
                   FILED: AA

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