Court Opinion

ID: 4080386
Source: CourtListenerOpinion
Date Created: 2016-10-06 17:02:58.450852+00
Date Added: 2024-06-11T14:32:48.852275
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        UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
           PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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

 PAUL S. STEFANOVICH and JANET S. STEFANOVICH, husband and
             wife, Plaintiffs/Counterdefendants/Appellants,

                                        v.

MIKEL STEWART ANDERSON and ROBIN KAY ANDERSON, husband
          and wife, Defendants/Counterclaimants/Appellees.

                             No. 1 CA-CV 15-0567
                               FILED 10-6-2016

           Appeal from the Superior Court in Maricopa County
                          No. CV2013-002535
               The Honorable John Christian Rea, Judge

                                  AFFIRMED

                                   COUNSEL

Bihn & McDaniel PLC, Phoenix
By Martin A. Bihn, Donna M. McDaniel
Counsel for Plaintiffs/Counterdefendants/Appellants

Combs Gottlieb & MacQueen PC, Phoenix
By Christopher A. Combs, Patrick R. MacQueen, Benjamin L. Gottlieb
Counsel for Defendants/Counterclaimants/Appellees
                     STEFANOVICH v. ANDERSON
                         Decision of the Court

                      MEMORANDUM DECISION

Judge Samuel A. Thumma delivered the decision of the Court, in which
Presiding Judge Patricia K. Norris and Judge Margaret H. Downie joined.

T H U M M A, Judge:

¶1           Plaintiffs Paul and Janet Stefanovich appeal from a judgment
entered on a jury verdict, claiming error in a jury instruction and in an
award of attorneys’ fees. Because they have shown no error, the judgment
is affirmed.

                 FACTS AND PROCEDURAL HISTORY

¶2            In December 2012, the Stefanoviches filed a justice court
action claiming defendants Mikel and Robin Anderson breached a one-year
agreement to lease a Chandler residence owned by the Stefanoviches. The
Andersons answered and counterclaimed, alleging breach of contract, tort
and unjust enrichment claims as well as violations of Arizona Revised
Statutes (A.R.S.) sections 33-1321 (2016) (failure to return security deposit
or provide accounting), 33-1324 (2016) (failure to maintain fit premises) and
33-1343 (2016) (abuse of access).1

¶3            The Andersons’ counterclaim sought more than $10,000 in
damages, meaning the action was removed to superior court and then
transferred to compulsory arbitration. After a hearing, the arbitrator found
in favor of (1) the Stefanoviches and awarded them $3,142.85 and (2) the
Andersons on their abuse of access counterclaim under A.R.S. § 33-1343 and
awarded them $2,700 (one month’s rent). The arbitrator awarded the
Stefanoviches $24,800 in attorneys’ fees and $1,359.59 in costs. The
Andersons appealed to superior court. See Ariz. R. Civ. P. 77(a).

¶4          After a three-day trial, the superior court instructed the jury
on the Stefanoviches’ breach of contract claim and the Andersons’

1Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated. A.R.S. § 33-1343 sets
forth a landlord’s right to access a dwelling unit. The parties used the terms
“abuse of access” and “unlawful entry” synonymously. For clarity, this
court will refer to “abuse of access” unless the context otherwise requires.

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                     STEFANOVICH v. ANDERSON
                         Decision of the Court

counterclaims for breach of contract, negligent misrepresentation,
fraudulent concealment and violations of A.R.S. §§ 33-1321 and 33-1343.
The jury found in favor of (1) the Stefanoviches and awarded them $3,632;
(2) the Andersons on their counterclaims for negligent misrepresentation
and violation of A.R.S. § 33-1343 and awarded them $5,480.90 and (3) the
Stefanoviches on the Andersons’ remaining counterclaims decided by the
jury.2 The superior court entered a final judgment on the jury verdict in
favor of the Andersons in the net amount of $1,848.90 and, pursuant to the
lease agreement and A.R.S. §§ 12-341.01 and 12-341, awarded the
Andersons $107,265.50 in attorneys’ fees, $1,271.75 in computerized
research costs and $3,583.77 in taxable costs. The Stefanoviches timely
appealed. This court has jurisdiction pursuant to A.R.S. § 12-2101(A)(1).3

                             DISCUSSION

¶5           The Stefanoviches argue the superior court erred in (1)
instructing the jury it must award at least one month’s rent to the
Andersons if it found an abuse of access and (2) finding the Andersons, not
the Stefanoviches, were entitled to an award of attorneys’ fees and costs.

I.    The Issue Of Whether The Jury Was Properly Instructed On Abuse
      of Access Was Not Preserved For Appeal.

¶6             The superior court instructed jurors that, if they found the
Stefanoviches entered the property unlawfully, “then you must determine
the amount of actual damages to award the Andersons, which at a
minimum must be at least one month’s rent.” The Stefanoviches urge that
this instruction is contrary to the relevant statute, which provides:

             If the landlord makes an unlawful entry or a
             lawful entry in an unreasonable manner or
             makes repeated demands for entry otherwise
             lawful but which have the effect of
             unreasonably harassing the tenant, the tenant

2The superior court granted the Stefanoviches’ motion for judgment as a
matter of law on the Andersons’ claim for punitive damages, Ariz. R. Civ.
P. 50, and the Andersons either abandoned or waived their other
counterclaims.

3The current version of the applicable statute is cited when no revisions
material to this decision have since occurred.

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                      STEFANOVICH v. ANDERSON
                          Decision of the Court

              may obtain injunctive relief to prevent the
              recurrence of the conduct or terminate the rental
              agreement. In either case, the tenant may recover
              actual damages not less than an amount equal
              to one month’s rent.

A.R.S. § 33-1376(B) (emphasis added).

¶7             A party may not “assign as error the giving or the failure to
give an instruction unless that party objects thereto before the jury retires
to consider its verdict, stating distinctly the matter objected to and the
grounds of the objection.” Ariz. R. Civ. P. 51(a). Failure to object with
particularity to a jury instruction generally results in waiver of the objection
on appeal. See Duran v. Safeway Stores, Inc., 151 Ariz. 233, 234 (App. 1986);
see also Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 419-20 (1988)
(deeming waived appellant’s argument that jury instruction was error
because appellant failed to object to the final instructions at trial).

¶8             The Stefanoviches do not cite to the record where they
objected to the abuse of access instruction on the basis it misstated the law.
Nor does this court’s review show such a timely objection in the record
presented. In a motion for summary judgment filed more than a year before
trial, the Stefanoviches argued the Andersons neither sought injunctive
relief nor terminated the lease, meaning they were not entitled relief under
A.R.S. § 13-1376. The Andersons’ response, however, was that they “did
terminate the lease” and the superior court denied the motion for summary
judgment without explanation. This motion for summary judgment did not
set forth “distinctly” or “with particularity” any objection to what jury
instructions would be appropriate at the close of the evidence at trial. Ariz.
R. Civ. P. 51(a).

¶9             The Stefanoviches moved for judgment as a matter of law
before the jury deliberated, see Ariz. R. Civ. P. 50, but did so on grounds
unrelated to the abuse of access instruction. Further, the Stefanoviches
failed to provide this court with transcripts from the superior court
proceedings, notwithstanding their burden to ensure “the record on appeal
contains all transcripts or other documents necessary for us to consider the
issues raised on appeal.” Baker v. Baker, 183 Ariz. 70, 73 (App. 1995); see Ariz.
R. Civ. App. P. 11(b), (c). Accordingly, because the record does not show
the Stefanoviches objected to the instruction, they have waived the issue on
appeal.

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                      STEFANOVICH v. ANDERSON
                          Decision of the Court

II.    Attorneys’ Fees.

       A.     The Superior Court Did Not Err In Determining The
              Parties’ Claims Arose Out Of Contract.

¶10            The Stefanoviches argue the superior court erred in awarding
attorneys’ fees to the Andersons because the claims on which they prevailed
did not arise out of contract under A.R.S. § 12-341.01. The issues of contract
interpretation and the interpretation and application of a fee statute are
reviewed de novo. Great W. Bank v. LJC Dev., LLC, 238 Ariz. 470, 475 ¶ 9
(App. 2015); Arizona Tile, L.L.C. v. Berger, 223 Ariz. 491, 498 ¶ 35 (App. 2010).
This court may affirm the superior court on any basis supported by the
record, Leflet v. Redwood Fire & Cas. Ins. Co., 226 Ariz. 297, 300 ¶ 12 (App.
2011), even one not relied upon by that court, Parkinson v. Guadalupe Pub.
Safety Ret. Local Bd., 214 Ariz. 274, 277 ¶ 12 (App. 2007).

¶11            The lease agreement provided that “[t]he prevailing party in
any dispute or claim between Tenant and Landlord arising out of or relating to
this Agreement shall be awarded all their reasonable attorney[s’] fees and
costs.” (Emphasis added.) “A contractual provision for attorneys’ fees will
be enforced according to its terms.” Chase Bank of Ariz. v. Acosta, 179 Ariz.
563, 575 (App. 1994); see also Grubb & Ellis Mgmt. Servs., Inc. v. 407417 B.C.,
L.L.C., 213 Ariz. 83, 90 ¶ 26 (App. 2006) (noting that contractual attorneys’
fees provision controls to the exclusion of a statute).

¶12           This litigation constituted, at the core, a dispute between the
parties that related to the lease agreement. Indeed, the Stefanoviches’
pretrial statement conceded as much, noting “[t]his is a landlord-tenant
dispute arising out of the rental of a furnished home.” On this record, and
given this concession, the superior court did not err in determining the
parties’ claims arose out of contract.

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                      STEFANOVICH v. ANDERSON
                          Decision of the Court

       B.     The Superior Court Did Not Abuse Its Discretion In
              Determining The Andersons Were The Prevailing Parties.

¶13           The Stefanoviches argue that the superior court should have
considered “percentage of success” or “totality of litigation” in determining
the prevailing party, rather than the “net verdict rule.”4 The superior court
has discretion to determine who the successful party is for the purpose of
awarding attorneys’ fees, and this court will not disturb that decision on
appeal if there is any reasonable basis for it. Sanborn v. Brooker & Wake Prop.
Mgmt., Inc., 178 Ariz. 425, 430 (App. 1994); see also Berry v. 352 E. Virginia,
L.L.C., 228 Ariz. 9, 13 ¶ 21 (App. 2011). This court views the record in the
light most favorable to upholding the superior court. Berry, 228 Ariz. at 13
¶ 21.

¶14             Looking at the net judgment is one method of determining the
successful party, see Trollope v. Koerner, 21 Ariz. App. 43, 47 (1973) (a party
who obtains judgment in excess of setoff or counterclaim is “successful”),
particularly in cases involving “competing claims, counterclaims and
setoffs all tried together,” Ayala v. Olaiz, 161 Ariz. 129, 131 (App. 1989).

              For cases involving claims and counterclaims in
              which both sides receive a favorable judgment
              in part, our supreme court has applied the ‘net
              judgment’ approach, by which the ‘prevailing
              party’ for attorneys’ fees purposes is the party
              that, when both sides are awarded judgments,
              is awarded a greater amount than the other
              party.

Vortex Corp. v. Denkewicz, 235 Ariz. 551, 562 ¶ 40 (App. 2014) (citing Ocean
West Contractors, Inc. v. Halec Constr. Co., 123 Ariz. 470, 473 (1979)).

¶15           Relying on Ocean West, the Stefanoviches urge the “net verdict
rule” is inapplicable because this was not one action involving a claim and
counterclaim on a contract, but rather two separate actions tried together.
See Ocean West, 123 Ariz. at 473-74. Not only do the Stefanoviches parse
Ocean West too finely, see generally Vortex, 235 Ariz. at 554 ¶ 5, 562 ¶ 40, the
record does not support their premise. Among other things, without
apparent objection by the Stefanoviches, the jury was instructed at the

4The parties do not suggest that “prevailing party” as used in the lease
agreement should be construed differently than “successful party” under
A.R.S. § 12-341.01.

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                      STEFANOVICH v. ANDERSON
                          Decision of the Court

beginning of trial that “[t]his case is a landlord-tenant dispute arising out
of the lease of a furnished home. . . .” and that “[t]he Stefanoviches filed this
lawsuit alleging damages for unpaid rent, late fees, and property damage.”
The superior court had a reasonable basis to find the Andersons were the
prevailing party. Accordingly, the court did not abuse its discretion in
determining the Andersons were entitled to an award of attorneys’ fees and
costs pursuant to the lease agreement.

                                CONCLUSION

¶16          The judgment is affirmed. The Stefanoviches’ request for an
award of attorneys’ fees on appeal is denied. The Andersons are awarded
their reasonable attorneys’ fees and costs on appeal pursuant to the lease
agreement, upon their compliance with Arizona Rule of Civil Appellate
Procedure 21.

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

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