Court Opinion

ID: 2670405
Source: CourtListenerOpinion
Date Created: 2014-04-18 00:02:56.102913+00
Date Added: 2024-06-11T13:07:32.315428
License: Public Domain

NOTICE: NOT FOR PUBLICATION.
   UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
          LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

                                    IN THE
               ARIZONA COURT OF APPEALS
                                 DIVISION ONE

 JOHNNY JOHNSON and ANNA JOHNSON, husband and wife; RUDY
      JOHNSON and DIANA JOHNSON, husband and wife,
                    Plaintiffs/Appellants,

                                        v.

 SHERRY CAMERON, in her capacity as the Personal Representative of
           the Estate of WALTER DON CAMERON
                       Defendant/Appellee.

                             No. 1 CA-CV 13-0398
                              FILED 4-17-2014

           Appeal from the Superior Court in Maricopa County
                          No. CV2012-015219
                The Honorable Lisa Daniel Flores, Judge

                                  REVERSED

                                   COUNSEL

Daniel D. Maynard, Phoenix
By Maynard Cronin Erickson Curran & Reiter, P.L.C.
Counsel for Plaintiffs/Appellants

Joyce N. Van Cott, Ryan J. Talamante, Justin N. Redman, Phoenix
By Van Cott & Talamante, PLLC
Counsel for Defendant/Appellee
                         JOHNSON v. CAMERON
                           Decision of the Court

                      MEMORANDUM DECISION

Judge Kenton D. Jones delivered the decision of the Court, in which
Presiding Judge Patricia A. Orozco and Judge Lawrence F. Winthrop
joined.

JONES, Judge:

¶1             Daniel D. Maynard (Maynard) appeals the trial court’s grant
of attorneys’ fees and costs as sanctions for his failure to respond to Walter
Don Cameron’s (Cameron) motion to dismiss. 1 For the reasons stated
below, we reverse the decision of the trial court.

                 FACTS AND PROCEDURAL HISTORY

I.     The Complaint

¶2            In October 2012, Maynard filed a complaint in Maricopa
County Superior Court on behalf of plaintiffs Johnny and Anna Johnson,
and Rudy and Diana Johnson, as shareholders in Bill Johnson’s
Restaurant, Inc. The complaint named various defendants, alleging their
complicity in negligence, breach of fiduciary duty, and common law fraud
pertaining to the termination of the Defined Benefit Plan of Bill Johnson’s
Restaurant, Inc. Among the defendants, Maynard named “Harrell
Cameron and John Doe Cameron, wife and husband.” Cameron was
named as a defendant in the action solely as husband to Herrell (Dena)
Cameron. The complaint asserted Dena made a false filing with the
Pension Benefit Guaranty Corporation (PBGC), a provider of ERISA Title
IV plan termination insurance, stating the pension plan sought to
terminate and had sufficient assets to do so. The complaint was devoid of
any allegation of wrongdoing on the part of Cameron.

1 Walter Don Cameron died on December 25, 2013. On March 13, 2014,
this Court granted an order to substitute Sherry Cameron, daughter and
personal representative of Walter Don Cameron, as the real party in
interest pursuant to Arizona Rule of Civil Appellate Procedure 17(a).

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                        JOHNSON v. CAMERON
                          Decision of the Court

II.   The Motion to Dismiss

      A.     The Demand Letter

¶3            On December 7, 2012, Cameron sent Maynard a letter via
email demanding plaintiffs voluntarily dismiss him from the lawsuit as
the complaint did not allege a wrongful act by him, and he was named
only in his capacity as Dena’s spouse. The letter also informed Maynard
that Dena and Cameron had been legally separated for more than twelve
years and all property in the possession of each of them was held by each
as their separate property. Cameron included, within the letter, a
redacted copy of the Consent Decree for Legal Separation (Separation
Decree) entered by the Maricopa County Superior Court which
established Cameron and Dena legally separated and divided their
community property acquired up to the time they executed the division of
property agreement on May 11, 2000. In addition, the property division
agreement, which was incorporated into the Separation Decree, provided
that any property acquired subsequent to the legal separation would be
separate property. Based upon the provided documents and
A.R.S. § 25-211, 2 Cameron reasserted he was not an appropriate party to
the lawsuit. Cameron concluded by informing Maynard he intended to
file a motion to dismiss and an application for attorneys’ fees and costs if
Cameron did not receive a notice of dismissal by December 13, 2012.

      B.     Motion to Dismiss and Application for Award of Attorneys’
             Fees under A.R.S. §§ 12-349 and -350

¶4            Maynard did not respond to Cameron’s letter, later
admitting, “I should have responded to the letter but I was busy getting
ready for the holidays and did not.” On December 17, 2012, Cameron
filed a motion to dismiss pursuant to Arizona Rule of Civil Procedure
12(b)(6) for Johnson’s failure to state a claim upon which relief may be
granted, and included a claim for attorneys’ fees and costs against

2 Arizona Revised Statute (A.R.S.) section 25-211(A)(2) (2014) states: “All
property acquired by either husband or wife during the marriage is
community property . . . except for property that is . . . [a]cquired after
service of a petition for dissolution of marriage, legal separation or
annulment if the petition results in a decree of dissolution of marriage,
legal separation, or annulment.”

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                        JOHNSON v. CAMERON
                          Decision of the Court

plaintiffs and their counsel, Maynard, jointly and severally, as sanctions
pursuant to A.R.S. §§ 12-349 (2014) 3 and 12-350 (2014). Asserting the
December 7, letter was an attempt to avoid the time and expense of filing
the motion to dismiss, Cameron requested an amount at least equal to the
cost of the motion’s filing or, at the court’s discretion, double damages not
to exceed $5,000. Basing his claim for double damages upon A.R.S. § 12-
349(A)(1), Cameron asserted Maynard named him within the complaint
“without substantial justification” as the claim was groundless and not
made in good faith. Maynard filed a response to neither the 12(b)(6)
motion nor the request for attorneys’ fees. Cameron subsequently
petitioned the trial court to enter an order granting the motion.

       C.    Granting of the Motion to Dismiss and Award of Attorneys’
             Fees

¶5           The trial court granted Cameron’s unopposed 12(b)(6)
motion, finding the complaint named Cameron as a defendant due only to
his marriage to Dena and the complaint did not assert any allegation of
wrongdoing against him. In addition, the trial court found the Separation
Decree established Dena and Cameron did not share community property
from which a judgment against Dena could be satisfied, and all property
acquired and owned by Dena and Cameron since the separation was their
separate property.

¶6           As regarded the request for attorneys’ fees, the trial court
awarded Cameron reasonable attorneys’ fees and costs related to the filing
of the motion to dismiss, finding Cameron sent the December 7th letter
requesting dismissal on the ground of the legal separation and Maynard
could have, but did not, voluntarily dismiss the complaint or contest the
motion. In order to determine whether to award double damages or to
assess the award against plaintiffs, Maynard or both, the trial court
requested such pertinent information be included in the fee application.

III.   Contesting the Award and Amount of Attorneys’ Fees

¶7           Cameron filed an application for an award of attorneys’ fees,
costs, and double damages. Maynard filed an untimely response
requesting the motion for attorneys’ fees be directed at him alone;
recognizing he should have filed a timely response to the motion to

3Absent material revisions after the relevant dates, we cite to the current
version of the statutes and rules unless otherwise indicated.

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                        JOHNSON v. CAMERON
                          Decision of the Court

dismiss but failed to do so. However, Maynard denied his failure to
respond satisfied the requirements for sanctions under A.R.S. § 12-349,
asserting his decision to forego a response was based upon the Separation
Decree which, by Maynard’s reading, provided no provision for the
division of real property, stocks, bonds and other investments that had
been Dena and Cameron’s community property before their separation.

¶8            In addition, Maynard explained he did not respond to the
motion to dismiss filed on December 17, 2012, because he was out of the
office from December 20 through December 27, and though he should
have requested an extension from the court Maynard conceded he
decided not to file a response as he could recover the damages he was
seeking from numerous other defendants should plaintiffs win the case. In
contesting the application for double damages as sanctions under A.R.S. §
12-349(F), Maynard asserted he had “substantial justification” not only to
name Cameron as a defendant pursuant to Arizona community property
laws, but also to maintain the action as the Separation Decree did not
address how the community property specified above was divided.
Finally, Maynard argued the amount of attorneys’ fees sought by
Cameron was unreasonable as the motion to dismiss consisted of five
pages, contained “boilerplate” language, and could not have taken more
than three to four hours to complete given Cameron’s counsel were
experienced litigators.

¶9            In reply, Cameron asserted the amount of fees requested met
the standard for reasonable fees articulated in Schweiger v. China Doll
Restaurant Incorporated, 138 Ariz. 183, 673 P.2d 927 (App. 1983). Cameron
also addressed Maynard’s burden to show Cameron’s application did not
satisfy the China Doll standards.

IV.   The Award of Attorneys’ Fees

¶10           The trial court denied Cameron’s application for double
damages as sanctions, but granted his request for attorneys’ fees and costs
in the amount of $6,172.89 against Maynard and the law firm in which he
was a partner, jointly and severally. Maynard timely appealed. We have
jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) (2014) and -2101(A)(1)
(2014).

                          ISSUES ON APPEAL

¶11           Maynard appeals the trial court’s award of attorneys’ fees
and costs as well as the amount of the award.

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                         JOHNSON v. CAMERON
                           Decision of the Court

                               DISCUSSION

¶12            “The applicability of an attorneys’ fees statute is a question
of statutory interpretation that we review de novo. However, we review
the court’s decision to grant or deny a party’s requested attorneys’ fees for
an abuse of discretion.” Vicari v. Lake Havasu City, 222 Ariz. 218, 224, ¶ 23,
213 P.3d 367, 373 (App. 2009) (citations omitted) (internal quotations
omitted). “[W]e view the evidence in the light most favorable to
upholding the court’s decision.” Id. (citing Rowland v. Great States Ins. Co.,
199 Ariz. 577, 587, ¶ 31, 20 P.3d 1158, 1168 (App. 2001)).

¶13           A.R.S. § 12-349(A) provides in pertinent part:

       [T]he court shall assess reasonable attorney fees, expenses
       and, at the court’s discretion, double damages of not to
       exceed five thousand dollars against an attorney or party . . .
       if the attorney or party does any of the following:

       1. Brings or defends a claim without substantial justification.

       2. Brings or defends a claim solely or primarily for delay or
       harassment.

       3. Unreasonably expands or delays the proceeding.

Section 12-349(F) defines “without substantial justification” as “the claim
or defense is groundless and is not made in good faith.”

¶14           In awarding attorneys’ fees under A.R.S. 12-349, the trial
court is required to make “findings of fact and conclusions of law” for the
elements of § 12-349(F). Bennett v. Baxter Group, Inc., 223 Ariz. 414, 421, ¶
28, 224 P.3d 230, 237 (App. 2010). The trial court must also “set forth the
specific reasons for an award [under § 12-349].” Id.; A.R.S. § 12-350. The
purpose of the requisite findings is to assist the party in the appellate
process. Trantor v. Fredrikson, 179 Ariz. 299, 300, 878 P.2d 657, 658 (1994)
(“[A] party is entitled to findings and conclusions to aid in appellate
review”).

¶15          On appeal, Maynard cites Johnson v. Mohave County, 206
Ariz. 330, 78 P.3d 1051 (App. 2003) for the proposition that this Court
must independently review the record to determine whether sufficient
evidence exists to support an award. In Johnson, a case dealing with the
application of A.R.S. §§ 12-349 and -350, the trial court had specifically
concluded in a final judgment it had “previously found that the Plaintiff’s

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                         JOHNSON v. CAMERON
                           Decision of the Court

Complaint was without substantial justification, that is, it was not filed in
good faith and was groundless.” Id. at 334, ¶ 18, 78 P.3d at 1055. By doing
so, the trial court simply parroted § 12-349(A)(1) and (F) pertaining to
groundless claims not made in good faith. Noting the trial court “did not
make the requisite specific findings,” the Johnson Court independently
reviewed the record to determine if sufficient evidence existed to support
the general finding of a frivolous claim. Id. The Court then ultimately
found Johnson’s claim raised nonfrivolous issues, not “without substantial
justification.” Id. at ¶ 19, 78 P.3d at 1055.

¶16           Unlike the findings in Johnson, the trial court’s minute entry,
found only: 1) Cameron sent a letter on December 7, 2012, asking
Maynard to dismiss him from the complaint based upon the Separation
Decree; 2) Cameron sent a copy of the Separation Decree to Maynard; 3)
Maynard “could have, but did not, voluntarily dismiss the complaint; 4)
Cameron filed the motion to dismiss; and 5) Cameron incurred attorneys’
fees and costs to file the motion to dismiss. The trial court also noted
Cameron’s request for attorneys’ fees and double damages and Maynard’s
failure to respond to that request. In fact, as best can be established
through recourse to the record, the closest the trial court came to making a
finding of fact in support of its award was its recitation of Cameron’s
argument for double damages wherein Cameron, rather than the court,
asserted Maynard lacked substantial basis for bringing a claim against
him.

¶17          These statements do not provide sufficient support for a
determination that any of the four subsections of A.R.S. § 12-349
authorized the trial court to make its award.             Simply restating
A.R.S. § 12-349(A)(1) is insufficient as a “specific reason for the award,”
and summarizing Cameron’s position leaves us without the ability to
determine from the balance of the record on review whether the trial court
was adopting Cameron’s argument or simply restating it. The trial court
did not render a conclusion of law either in its final judgment or in a
previous finding authorizing an award of attorneys’ fees. Consequently,
this Court does not have findings of the trial court to independently
review.

¶18            Maynard also appeals the $6,172.89 in attorneys’ fees and
costs awarded by the trial court, asserting the award was unreasonable
given the “boilerplate” language of the 12(b)(6) motion. However, we are
unable to test Maynard’s assertion as absent from the record are findings
of fact setting forth the basis of the award. Bennett, 223 Ariz. at 421, ¶ 28,
224 P.3d at 237 (“[T]he findings need only be specific enough to allow an

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                        JOHNSON v. CAMERON
                          Decision of the Court

appellate court to test the validity of the judgment.”) (citation omitted)
(internal quotations omitted).

¶19         Given the absence of conclusions of law and findings of fact,
on review we are without sufficient support in the record to address the
reasonableness of the trial court’s award.

                            CONCLUSION

¶20          For the above reasons, the decision of the trial court is
reversed. While Cameron has requested the award of their attorneys’ fees
on appeal such are denied as they are not the successful party. Appellant
has not made a request of their fees on appeal and none are, therefore,
awarded.

                                 :MJT

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