Court Opinion

ID: 2677253
Source: CourtListenerOpinion
Date Created: 2014-06-05 16:01:37.944397+00
Date Added: 2024-06-11T08:46:11.380726
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NOTICE: NOT FOR PUBLICATION.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

      CITY CENTER EXECUTIVE PLAZA, L.L.C.; INFORMATION
     SOLUTIONS, INC.; JERRY and CINDY ALDRIDGE, Petitioners,

                                        v.

 THE HONORABLE LEE F. JANTZEN, Judge of the SUPERIOR COURT
  OF THE STATE OF ARIZONA, in and for the County of MOHAVE,
                      Respondent Judge,

  BRIAN THIENES, an individual; JOHN BALL and MONICA BALL,
    husband and wife; THE THOMPSON FAMILY TRUST; JUAN
BRACAMONTE and JACQUELINE BRACAMONTE, husband and wife;
        THE REFUGE COMMUNITY ASSOCIATION, INC.,
                       Real Parties in Interest.

                             No. 1 CA-SA 14-0090
                              FILED 06-05-2014

  Petition for Special Action from the Superior Court in Mohave County
                          No. S8015CV2011001563
                    The Honorable Lee F. Jantzen, Judge

      JURISDICTION ACCEPTED; RELIEF GRANTED IN PART

                                   COUNSEL

Perkins Coie LLP, Phoenix
By Daniel C. Barr, John H. Gray, Joshua M. Crum, Alexander W. Samuels
Counsel for Petitioners
Beus Gilbert PLLC, Phoenix
By Franklyn D. Jeans, Cory L. Broadbent, Lyn Anne Bailey
Counsel for Real Parties in Interest Thienes, Ball, Thompson Family Trust and
Bracamonte

Ekmark & Ekmark, L.L.C., Scottsdale
By Penny L. Koepke, Nicole A. Miller, Solomon S. Krotzer
Counsel for Real Party in Interest The Refuge Community Association, Inc.

                            DECISION ORDER

Judge Michael J. Brown delivered the decision of the Court, in which
Presiding Judge Randall M. Howe and Judge Jon W. Thompson joined.

B R O W N, Judge:

¶1             This special action involves a challenge to the superior
court’s determination of the amount of a supersedeas bond. The
underlying litigation arises out of a dispute relating to redevelopment of a
golf course, which involved in part the reduction of the size of the golf
course to accommodate an RV park. A homeowner’s association and
several neighboring property owners who opposed the redevelopment
(“Plaintiffs”) filed a lawsuit against the golf course owners (“City Center”)
seeking injunctive relief and damages.

¶2            A jury awarded $1.00 in damages to Plaintiffs and
recommended granting injunctive relief. In December 2013, the superior
court entered judgment permanently enjoining City Center from using the
golf course for anything other than golf activities, which does not include
an RV park. The judgment did not resolve the parties’ requests for
attorneys’ fees and costs. City Center filed an appeal from the injunction
order. See 1 CA-CV 14-0077 (“Injunction Appeal”). 1

1      In the superior court, City Center filed a motion to stay
enforcement of the injunction pending the outcome of the Injunction
Appeal as well as a subsequent motion for a hearing to set a supersedeas
bond of $1.00. The superior court denied the motion to stay, as did this
court and the supreme court. However, it is unclear if any issues remain

                                       2
              CITY CENTER v. HON. JANTZEN/THIENES
                       Decision of the Court

¶3            In March 2014, the superior court awarded attorneys’ fees
and costs to Plaintiffs and entered two separate judgments that totaled
$2,390,296.87. City Center appealed from those judgments. See 1 CA-CV
14-0264 (“Fees Appeal”).

¶4            City Center moved to stay the judgments pending the
outcome of their Fees Appeal and asked the superior court to set the
supersedeas bond at $1.00, the amount of damages City Center alleged
were awarded to Plaintiffs under Arizona Rule of Civil Appellate
Procedure (“ARCAP”) 7. Plaintiffs countered that the bond amount be set
at the full amount of the judgment ($2,390,296.87), asserting that the term
“damages” under ARCAP 7 is synonymous with “judgment.” Plaintiffs
also argued the full judgment amount was justified because under
ARCAP 7(A)(2) City Center had intentionally dissipated assets outside the
ordinary course of business to avoid payment of the judgment. In
support, Plaintiffs attached documentation indicating that City Center
executed several deeds of trust against the golf course and other
properties after the jury verdict had been entered.

¶5            The superior court summarily set the supersedeas bond at
the full amount of attorney’s fees and costs ($2,390,296.87). The court did
not specifically address City Center’s argument that the only “damages”
Plaintiffs obtained was $1 nor did the court address Plaintiffs’ argument
that City Center had dissipated assets.

¶6           City Center then filed this special action, arguing the
superior court erred by including attorneys’ fees in the calculation of the
supersedeas bond because the court’s ruling conflicts with Arizona
Revised Statutes (“A.R.S.”) section 12-2108 and ARCAP 7. City Center
also requested a stay pending the outcome of this special action, which
was granted following a telephonic hearing.

¶7           Special action jurisdiction is proper when a party has no
“equally plain, speedy, and adequate remedy by appeal.” Ariz. R.P. Spec.
Act. 1(a). A party challenging the setting of a supersedeas bond does not
have such a remedy on appeal and therefore special action jurisdiction
may be appropriate. See Salt River Sand & Rock Co. v. Dunevant, 222 Ariz.

as to whether the injunction may be suspended in the Injunction Appeal,
as the record before us does not indicate that the superior court has issued
a ruling on City Center’s motion to set a supersedeas bond.

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             CITY CENTER v. HON. JANTZEN/THIENES
                      Decision of the Court

102, 105–06, ¶ 7, 213 P.3d 251, 254–55 (App. 2009). In the exercise of our
discretion, we accept jurisdiction over this special action.

¶8            Section 12-2108 was adopted by the legislature in 2011, and
similar language was added to ARCAP 7, effective January 1, 2012. Prior
to those changes, establishment of a bond amount was determined by
court rules and the common law.

¶9            Current ARCAP 7 (and § 12-2108) sets forth a three-part
analysis to determine the amount of a supersedeas bond:

      The amount of the bond shall be set as the lesser of the
      following:

      (A) The total amount of damages awarded, excluding
      punitive damages;

      (B) Fifty per cent of the appellant’s net worth;

      (C) Twenty-five million dollars.

However, both ARCAP 7 and § 12-2108 permit the court to deviate from
the presumed amounts if either of the following circumstances are
present:

      Notwithstanding the foregoing, the court may require an
      appellant to post a bond in an amount up to the full amount
      of the judgment if an appellee proves by clear and
      convincing evidence that the appellant is intentionally
      dissipating assets outside the ordinary course of business to
      avoid payment of a judgment.

      The trial court may also lower the bond amount to an
      amount that will not cause an appellant substantial
      economic harm if the appellant proves by clear and
      convincing evidence that the appellant is likely to suffer
      substantial economic harm if required to post a bond in the
      amount set pursuant to the provisions of (A), (B), or (C)
      above. In determining the amount of the bond, the court
      may consider whether there is other security for the
      judgment, or whether there is property in controversy which
      is in the custody of the sheriff or the court.

                                     4
              CITY CENTER v. HON. JANTZEN/THIENES
                       Decision of the Court

ARCAP 7; see also A.R.S. § 12-2108 (B), (C). As they did in the superior
court, Plaintiffs argue there has been a dissipation of assets by City Center.
Conversely, City Center claims it will be financially harmed if it is
required to post the full amount of the current bond.

¶10            Under the new statute and rule, a court must consider, first,
the “total amount of damages awarded,” in accordance with § 12-
2108(A)(1) and Rule 7(a)(2)(A), and then determine whether a upward or
downward deviation from that amount is appropriate. On this sparse
record, we find that these matters must be addressed by the superior court
in the first instance. See ARCAP 7(c) (holding that “[t]he provisions of
Rule 7 do not limit any power of the appellate court or of a judge or justice
thereof to stay proceedings during the pendency of an appeal, or to
suspend, modify, restore, or grant an injunction during the pendency of
an appeal, or to make any order appropriate to preserve the status quo or
the effectiveness of the decision subsequently to be entered.”); see also
ARCAP 9.1 (“The appellate court may, upon its own initiative or upon
stipulation or motion for good cause shown, suspend the appeal and
revest jurisdiction in the superior court for the purpose of allowing it to
consider and determine specified matters.”). As such, we note that the
superior court failed to conduct a hearing as originally required under
Rule 7. See ARCAP 7(a)(1) (stating that a hearing on a motion to stay to
determine that amount of the bond “shall be held forthwith”) (emphasis
added). We recognize that nothing in this special action record indicates
that any of the parties requested a hearing in the superior court.
However, because we are unable to determine whether the superior court
applied the appropriate legal analysis under § 12-2108 and Rule 7(a)(2),
and given the factual allegations raised regarding dissipation of assets, a
hearing is necessary to resolve these issues.

¶11             Additionally, nothing in the record explains the superior
court’s justification for its decision to set the bond amount equal to the full
amount of the judgment. Although City Center requests that we interpret
§ 12-2108 and decide whether “damages” is synonymous with
“judgment,” consistent with ARCAP 7(c), we decline to do so, particularly
when none of the parties cited the statute in their arguments below and
thus did not provide any of the statutory construction analysis to the
superior court that has been asserted in this special action.

¶12            IT IS ORDERED accepting jurisdiction of City Center’s
petition for special action.

                                      5
             CITY CENTER v. HON. JANTZEN/THIENES
                      Decision of the Court

¶13          IT IS FURTHER ORDERED vacating the superior court’s
April 17 order setting a supersedeas bond in the amount of $2,390,296.87.

¶14          IT IS FURTHER ORDERED directing the superior court to
conduct a hearing to determine an appropriate amount of the supersedeas
bond consistent with A.R.S. § 12-2108(A)(1) and ARCAP 7. 2

¶15         IT IS FURTHER ORDERED that the superior court shall
make findings supporting its determination of the bond amount(s).

¶16          IT IS FURTHER ORDERED vacating as moot the stay
previously entered by this court on May 14, 2014.

¶17           IT IS FURTHER ORDERED denying all requests for
attorneys’ fees and costs relating to this special action.

                                :gsh

2      To the extent that City Center’s request for a bond amount for the
Injunction Appeal remains unresolved, if that request involves
overlapping issues with the supersedeas bond at issue here, we urge the
court to simultaneously consider the amount of the bond required to
suspend the injunction pending appeal under Arizona Rule of Civil
Procedure 62(c), A.R.S. § 12-2108(A)(1), and ARCAP 7.

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