Court Opinion

ID: 4441915
Source: CourtListenerOpinion
Date Created: 2019-09-26 17:02:13.364531+00
Date Added: 2024-06-11T14:46:31.591913
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

              THE ISLANDS COMMUNITY ASSOCIATION,
                          Plaintiff/Appellee,

                                        v.

                 TIMOTHY DANIELS, Defendant/Appellant.

                             No. 1 CA-CV 18-0618
                               FILED 9-26-2019

           Appeal from the Superior Court in Maricopa County
                          No. CV2017-093032
                 The Honorable David J. Palmer, Judge

                                  AFFIRMED

                                   COUNSEL

Timothy Daniels, Mesa
Defendant/Appellant

Maxwell & Morgan P.C., Mesa
By Chad M. Gallacher
Counsel for Plaintiff/Appellee
                       THE ISLANDS v. DANIELS
                         Decision of the Court

                      MEMORANDUM DECISION

Presiding Judge Samuel A. Thumma delivered the decision of the Court, in
which Judge Jennifer M. Perkins and Judge Paul J. McMurdie joined.

T H U M M A, Judge:

¶1            Plaintiff The Islands Community Association, a homeowners’
association, brought this action against defendant Timothy Daniels to
foreclose on his housing unit based on a failure to pay assessments. Daniels
appeals from an order denying his motion for new trial and from the final
judgment entered against him following the grant of summary judgment in
favor of The Islands. Because Daniels has shown no reversible error, the
order and final judgment are affirmed.

                FACTS AND PROCEDURAL HISTORY

¶2            In 1994, Daniels purchased a unit in The Islands. The unit is
governed by Covenants, Conditions, Restrictions & Easements (CC&Rs),
which bind unit owners like Daniels. The CC&Rs required Daniels to pay
certain assessments, and he did so for many years. In 2012, however,
Daniels stopped paying assessments. In 2014, The Islands sued Daniels to
recover the delinquent assessments, and in 2015, The Islands obtained a
$5,978.30 judgment against Daniels.

¶3           Daniels failed to satisfy the 2015 judgment or pay additional
assessments as they came due. Given Daniels failure to make these
payments, in May 2017, The Islands filed this lien foreclosure action.
Following discovery, the court granted The Islands’ motion for summary
judgment and, in May 2018, entered a final judgment on foreclosure.

¶4            Daniels unsuccessfully moved for a new trial. He timely
appealed from the denial of that motion and the final judgment. This court
has jurisdiction over this appeal pursuant to Article 6, Section 9, of the
Arizona Constitution and Arizona Revised Statutes (A.R.S.) sections 12-
120.21(A)(1) and § 12-2101(A)(5)(a) (2019).1

1Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated.

                                     2
                         THE ISLANDS v. DANIELS
                           Decision of the Court

                                DISCUSSION

¶5             The denial of a motion for new trial is reviewed for an abuse
of discretion. Matos v. City of Phoenix, 176 Ariz. 125, 130 (App. 1993); State v.
Spears, 184 Ariz. 277, 287 (1996). The entry of summary judgment is
reviewed de novo, “viewing the evidence and reasonable inferences in the
light most favorable to the party opposing the motion,” Andrews v. Blake,
205 Ariz. 236, 240 ¶ 12 (2003), to determine “whether any genuine issues of
material fact exist and whether the [superior] court properly applied the
law,” Brookover v. Roberts Enters., Inc., 215 Ariz. 52, 55 ¶ 8 (App. 2007). This
court will affirm the grant of summary judgment if it is correct for any
reason, Hawkins v. State, 183 Ariz. 100, 103 (App. 1995).

¶6           Daniels argues the superior court erred in: (1) denying his
motion for new trial because the minute entry and the final judgment did
not grant the same relief; (2) granting The Islands’ motion for summary
judgment because factual issues were present regarding the amount owed
and applying A.R.S. § 33-1807 (the lien statute) to the facts of this case; and
(3) awarding The Islands attorneys’ fees. This court addresses his
arguments in turn.

I.     The Final Judgment Properly Reflects The Relief Granted.

¶7            Daniels argues the final judgment “does not come close to
what relief the court granted in its minute entry. Indeed, it purposely
misstates the minute entry. . . . The May 29 formal judgment includes the
relief of foreclosure. That is nowhere in the May 7 order.” The final
judgment does include relief not reflected in the minute entry granting
summary judgment. That minute entry, however, contemplated additional
matters to be resolved before a final judgment would be entered, including
attorneys’ fees, which were then awarded in the final judgment without
timely objection by Daniels. See Ariz. R. Civ. P. 58(a)(2). All claims and
issues must be resolved before a final judgment may issue. See Ariz. R. Civ.
P. 54(c). Daniels thus has shown no error based on the additional relief
granted in the final judgment.

                                       3
                        THE ISLANDS v. DANIELS
                          Decision of the Court

II.    The Court Properly Granted Summary Judgment To The Islands.

¶8             Daniels argues the court erred in granting the motion for
summary judgment because there was a genuine issue of material fact as to
the amount due. “When a summary judgment motion is made and
supported . . . , an opposing party may not rely merely on allegations or
denials of its own pleading.” Ariz. R. Civ. P. 56(e). Instead, the opposing
party must, through admissible evidence, “set forth specific facts showing
a genuine issue for trial. If the opposing party does not so respond,
summary judgment, if appropriate, shall be granted against that party.” Id.
When uncontroverted, “facts alleged by affidavits attached to a motion for
summary judgment may be considered true.” Portonova v. Wilkinson, 128
Ariz. 501, 502 (1981).

¶9             The Islands supported its motion for summary judgment with
certified business ledgers validating its accounting of the assessment
charges, fees and costs due. Daniels’ response stated that the balance was
“arbitrary” and the ledgers were “hodge podge bookkeeping,” but Daniels
did not provide controverting evidence or genuinely dispute The Islands’
factual showing. Daniels did provide copies of checks he sent to The
Islands, but those checks either were from before entry of the 2015 judgment
(which the ledgers show were properly applied) or after this litigation was
filed (a time period not relevant to the allegations in the complaint). As a
result, in opposing the motion for summary judgment, Daniels failed to
rebut The Islands’ evidentiary showing. Accordingly, Daniels has not
shown a genuine issue of material fact preventing entry of summary
judgment against him.

¶10            The minute entry granting summary judgment did so
“concerning unpaid assessments, late fees and collection costs owed in the
amount of $1,242.75.” Daniels then paid $1,242.75 and argues foreclosure is
therefore not appropriate. In the final judgment, the court granted
foreclosure and awarded The Islands the principal amount of $4,017.34
($1,242.75 plus additional amounts that had accrued, attorneys’ fees and
late charges); $1,089.36 in costs; additional attorneys’ fees of $5,000; and
interest. Accordingly, Daniels’ payment of $1,242.75 to satisfy a portion of
these obligations did not satisfy the final judgment in its entirety or obviate
entry of the final judgment. Thus, Daniels’ payment of the amount listed in
the minute entry did not bar The Islands’ foreclosure rights.

                                      4
                        THE ISLANDS v. DANIELS
                          Decision of the Court

III.   The Superior Court Properly Applied A.R.S. § 33-1807.

¶11           Section 33-1807(A) addresses enforcing a lien for unpaid
assessments. For the statute to apply, an owner must be delinquent in
paying assessment fees “for a period of one year or in the amount of $1,200,
or more, whichever occurs first.” A.R.S. § 33-1807(A). “A lien for unpaid
assessment is extinguished unless proceedings to enforce the lien are
instituted within three years after the full amount of the assessment comes
due.” A.R.S. § 33-1807(F).2

¶12           Daniels argues the court failed to properly apply the statute
in three ways. First, he contends the court improperly considered the
aggregate amount he owed rather than just the assessments. Second, he
argues there was no finding that he was delinquent for more than one year.
Third, he claims the limitations period in subsection F means The Islands
can only seek foreclosure based on three years’ worth of quarterly
assessments, “or the total sum of $660.”

¶13           The limitation Daniels identifies in subsection A is phrased in
the disjunctive, meaning foreclosure is available for either more than $1200
delinquent or more than a year of delinquency. Daniels stopped paying
assessments in 2012. He does not dispute that he stopped making those
payments and does not offer any evidence to show that he was current in
paying his assessments when The Islands first sued Daniels in 2014 in the
action leading to the 2015 judgment. Accordingly, his first argument
regarding application of the statute fails.

¶14           Next, Daniels argues the three-year limitations period in
subsection F had expired on The Islands’ claim. The lien on Daniels’ unit
arose when he first stopped paying assessments in 2012. The Islands first
sought to enforce the lien in the 2014 action, which resulted in the 2015
judgment. The Islands filed this action in 2017, alleging Daniels’ failure to
satisfy the 2015 judgment and continued failure to pay assessments since
that time. At no point following Daniels’ 2012 initial breach was there a
lapse of three years during which proceedings to enforce the lien were not
ongoing. Accordingly, even if the three-year limitation period applies (as
opposed to the six-year limitation period applicable to the CC&Rs
contained in A.R.S. § 12-548), Daniels has not shown The Islands’ claim is
time-barred.

2 Effective after the facts at issue here, the limitations period was extended
to six years. 2019 Ariz. Leg. Serv. Ch. 200 (S.B. 1531) § 2 (May 8, 2019).

                                      5
                       THE ISLANDS v. DANIELS
                         Decision of the Court

¶15           Finally, Daniels argues The Islands is attempting to apply
A.R.S. § 33-1807 retroactively because he purchased his unit in 1994 while
the statute was enacted in 1996. The CC&Rs, which Daniels concedes are
binding, state that The Islands may either “[b]ring an action at law and
recover judgment against the Member” for nonpayment or “[f]oreclose the
Assessment Lien . . . in accordance with then prevailing Arizona law.” This
language allows The Islands to apply the law in place at the time of non-
payment and foreclosure, not the law at the time the property was
purchased as Daniels argues. Because A.R.S. § 33-1807 was in place at the
time Daniels stopped paying in 2012, The Islands is not seeking to apply the
statute retroactively.3

IV.   The Superior Court Did Not Abuse Its Discretion In Awarding
      Attorneys’ Fees.

¶16           The minute entry granting summary judgment declined to
award attorneys’ fees but allowed The Islands to submit an application for
fees. Daniels argues the court erred in later granting The Islands $2,500 in
pre-litigation attorneys’ fees and $5,000 in attorneys’ fees related to this
action. Daniels does not provide any evidence or statements about what the
appropriate fees should be; he only states that “the fee requests submitted
by plaintiff are simply outrageous.” Daniels also argues that because the
minute entry declined to award fees, the subsequent fee application
requesting a larger amount in fees is “the ultimate in bad faith.”

¶17           An award of attorneys’ fees is reviewed for an abuse of
discretion. Vortex Corp. v. Denkewicz, 235 Ariz. 551, 562 ¶ 39 (App. 2014).
The Islands provided a procedurally proper, factually supported
application for attorneys’ fees. Section 7.8 of the CC&Rs states that the
“Member shall be liable for all costs, including attorneys’ fees, which may
be incurred by the Association” in collecting costs and interest on
delinquent assessments. The court did not err by awarding fees according
to the contractual agreement.

3Nor has Daniels shown how cases describing foreclosure proceedings as
equitable meant the superior court erred in granting summary judgment
against him for failing to pay amounts owed to The Islands, including
amounts reflected in the 2015 judgment.

                                     6
                       THE ISLANDS v. DANIELS
                         Decision of the Court

                              CONCLUSION

¶18           The final judgment and denial of Daniels’ motion for new trial
are affirmed. The Islands is awarded taxable costs incurred on appeal, and
reasonable attorneys’ fees incurred on appeal pursuant to Section 7.8 of the
CC&Rs, contingent upon its compliance with Arizona Rules of Civil
Appeals Procedure 21.

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

                                        7