Court Opinion

ID: 4254009
Source: CourtListenerOpinion
Date Created: 2018-03-13 16:04:22.94052+00
Date Added: 2024-06-11T14:44:22.470422
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

            SONORAN TRUCK & DIESEL SALES LLC, et al.,
                  Third-Party Plaintiffs/Appellants,

                                        v.

                            BANK OF THE WEST,
                        Third-Party Defendant/Appellee.

                             No. 1 CA-CV 17-0209
                               FILED 3-13-2018

           Appeal from the Superior Court in Maricopa County
                          No. CV2014-051312
               The Honorable Aimee L. Anderson, Judge

                                  AFFIRMED

                                   COUNSEL

Manning & Kass, Ellrod, Ramirez, Trester, LLP, Phoenix
By Scott A. Alles
Counsel for Third-Party Plaintiffs/Appellants

Jennings, Haug & Cunningham, LLP, Phoenix
By John G. Sinodis, Joseph A. Brophy
Counsel for Third-Party Defendant/Appellee
                SONORAN, et al. v. BANK OF THE WEST
                      Decision of the Court

                      MEMORANDUM DECISION

Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge Kent E. Cattani and Judge Jennifer M. Perkins joined.

J O H N S E N, Judge:

¶1            Sonoran Truck & Diesel Sales, LLC appeals the superior
court's denial of its motions to amend and to extend discovery and the
court's award of attorney's fees in favor of Bank of the West. For the
following reasons, we affirm.

             FACTS AND PROCEDURAL BACKGROUND

¶2            In December 2011, the Bank sold a Winnebago recreational
vehicle at auction to Sonoran for $81,000. The sales contract stated that "the
odometer now reads 5636 DIG 6 miles (no tenths)." Later that month,
Sonoran resold the Winnebago for $100,000; at the time, the odometer
showed 6,711 miles. In November 2014, the buyers of the Winnebago sued
Sonoran, alleging that the Winnebago actually had been driven more than
61,000 miles before they bought it. In turn, Sonoran filed a third-party
complaint against the Bank, alleging a claim for "indemnity/breach of
contract/contribution." The Bank moved for summary judgment in May
2016. Sonoran did not file a substantive response to the motion but instead
moved to amend its third-party complaint to replace its indemnity claim
with a claim for negligent misrepresentation. Sonoran also moved to
extend the existing discovery and disclosure deadlines by 90-120 days. The
superior court denied Sonoran's motions. Thereafter, having settled the
underlying matter with the buyers, Sonoran moved to dismiss its third-
party complaint.

¶3            On November 17, 2016, the superior court granted the Bank's
motion for summary judgment, denied Sonoran's motion to dismiss as
moot, and awarded the Bank its attorney's fees pursuant to Arizona Revised
Statutes ("A.R.S.") section 12-341.01 (2018).1 On December 16, 2016, the
Bank filed an application requesting $36,532 in attorney's fees. Sonoran

1      Absent material change since the relevant date, we cite the current
version of statutes.

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                 SONORAN, et al. v. BANK OF THE WEST
                       Decision of the Court

objected to the fee application as untimely, citing Arizona Rule of Civil
Procedure ("Rule") 54(g)(2).2 In response, the Bank sought relief from the
20-day requirement of that rule. The court granted the Bank's request for
relief, citing a delay in the Bank's receiving the November 17 order and the
lack of resulting prejudice to Sonoran. The court entered a final judgment
in favor of the Bank for $36,532.08 in attorney's fees, and Sonoran timely
appealed. We have jurisdiction pursuant to Article 6, Section 9, of the
Arizona Constitution, and A.R.S. §§ 12-120.21(A)(1) (2018) and
-2101(A)(1) (2018).

                               DISCUSSION

A.     Motions to Amend and Extend Deadlines.

¶4             Sonoran first argues the superior court erred by denying it
leave to amend its third-party complaint. Although leave to amend should
be liberally allowed, it may be denied based on undue delay or undue
prejudice. MacCollum v. Perkinson, 185 Ariz. 179, 185 (App. 1996).
"Prejudice is the inconvenience and delay suffered when the amendment
raises new issues or inserts new parties into the litigation." Owen v. Super.
Ct., 133 Ariz. 75, 79 (1982) (quoting Spitz v. Bache & Co., 122 Ariz. 530, 531
(1979)). We review the denial of a motion to amend for an abuse of
discretion. Timmons v. Ross Dress For Less, Inc., 234 Ariz. 569, 572, ¶ 17 (App.
2014).

¶5            Sonoran denies it unduly delayed, arguing it did not know
the Bank's "role in the chain of sale" until the Bank "admitted" in its
summary judgment motion that it – not the auction house – sold the
Winnebago to Sonoran and represented "the odometer now reads 5636 DIG
6 miles (no tenths)." But the record belies this contention. The sales contract
clearly identified the "seller" as the Bank and attributed the odometer
reading to the Bank. As a matter of law, a competent person is held to know

2      The Rules were revised effective January 1, 2017, to reflect
comprehensive stylistic and substantive changes. Prior to this change, Rule
54(g)(2) stated:

       When attorneys' fees are claimed, the determination as to the
       claimed attorneys' fees shall be made after a decision on the
       merits of the cause. The motion for attorneys' fees shall be
       filed within 20 days from the clerk's mailing of a decision on
       the merits of the cause, unless extended by the trial court.

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                SONORAN, et al. v. BANK OF THE WEST
                      Decision of the Court

the contents of an agreement he or she signs. In re Henry's Estate, 6 Ariz.
App. 183, 186 (1967). And in its answer to the third-party complaint, the
Bank acknowledged that it sold the Winnebago to Sonoran at auction and
the mileage on the sales contract was based on the vehicle's digital
odometer.

¶6            Sonoran offers no other reason why it could not have brought
its negligent misrepresentation claim much earlier. Cf. Gust, Rosenfeld &
Henderson v. Prudential Ins. Co. of Am., 182 Ariz. 586, 588 (1995) (cause of
action accrues when the plaintiff knows, or in the exercise of reasonable
diligence should know, the facts underlying the claim). Finally, Sonoran's
assertion that the Bank would not have been prejudiced by the amendment
is unavailing. Sonoran's amendment sought to add a new theory of liability
after the parties participated in two mediations, discovery was soon to
close, and the Bank had filed a dispositive motion. The superior court was
well within its discretion to deny leave to amend under these
circumstances. See Owen, 133 Ariz. at 80; cf. Carranza v. Madrigal, 237 Ariz.
512, 515, ¶ 14 (2015).

¶7             In arguing the court erred by denying its corresponding
motion to extend discovery, Sonoran asserts that because trial was still
more than a year away, the Bank would have had plenty of time to complete
any necessary discovery on the new claim. But the court did not abuse its
discretion in denying both of Sonoran's motions, based on the length of time
the third-party claim had been pending and the ample discovery schedule
set at the outset of the case. More generally, because the superior court did
not abuse its discretion in denying Sonoran's motion to amend, it did not
err in denying the motion to extend deadlines. See Owen, 133 Ariz. at 80-81.

B.     Attorney's Fees.

¶8             The superior court may award attorney's fees to the successful
party in a contested action arising out of a contract. A.R.S. § 12-341.01(A);
see Assoc. Indem. Corp. v. Warner, 143 Ariz. 567, 570 (1985). We review an
award of fees for abuse of discretion. In re Guardianship of Sleeth, 226 Ariz.
171, 174, ¶ 12 (App. 2010). We will uphold the court's award if any
reasonable basis supports it. Fulton Homes Corp. v. BBP Concrete, 214 Ariz.
566, 569, ¶ 9 (App. 2007).

       1.     Timeliness.

¶9            Sonoran first argues the superior court erred by considering
the Bank's fee application because the Bank did not file it until nine days
past the presumptive 20-day deadline. Rule 54(g)(2) allows the superior

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                 SONORAN, et al. v. BANK OF THE WEST
                       Decision of the Court

court "to extend the time for requesting attorneys' fees, and the party
seeking the fees need not request an extension prior to untimely filing its
claim." Aztar Corp. v. U.S. Fire Ins. Co., 223 Ariz. 463, 479, ¶ 60 (App. 2010)
(citing Nat'l Broker Assoc., Inc. v. Marlyn Nutraceuticals, Inc., 211 Ariz. 210,
218, ¶ 38 (App. 2005)). Sonoran cites Star Studio Prof'l Photography, Inc. v.
Ariz. Escrow & Fin. Corp., 1 CA-CV 09-0625, 2017 WL 3723205, at *3, ¶ 14
(Ariz. App. Aug. 29, 2017) (mem. decision), for the proposition that a timely
fee application is jurisdictional under Rule 54(g)(2). In view of Aztar and
Marlyn, however, our memorandum decision in Star Studio, which cited no
authority in support of the proposition that the fees deadline is
jurisdictional, is not persuasive. Moreover, unlike the fees applicant in that
case, the Bank asked for leave to file its application past the deadline.
Further, Sonoran does not contend it was prejudiced by the delay.

       2.     Successful party.

¶10             Sonoran argues the Bank was not the successful party in the
third-party claim because it did not "win" a dispositive motion; to the
contrary, Sonoran explains, the Bank's summary judgment motion "became
moot" when Sonoran voluntarily dismissed the third-party complaint. But,
as stated, Sonoran did not object to the Bank's motion for summary
judgment on its merits; it responded to the motion by moving to amend the
complaint. The court effectively disposed of the case when it denied
Sonoran's motion to amend on August 26, 2016, even though Sonoran did
not move to dismiss its claim until two months later. Under these
circumstances, the Bank was the "successful party" under § 12-341.01. See
Britt v. Steffen, 220 Ariz. 265, 267, ¶ 9 (App. 2008) (defendant against whom
a contract action is dismissed without prejudice is "successful party"); cf.
Vicari v. Lake Havasu City, 222 Ariz. 218, 224-25, ¶¶ 25-27 (App. 2009)
(affirming fee award to defendant following voluntary dismissal pursuant
to Rule 41(a)).

       3.     Amount of award.

¶11          Finally, Sonoran argues that the superior court erred because
a fees award was not warranted under Warner, 143 Ariz. at 570. Our
supreme court held in that case that among the factors to be considered in
awarding attorney's fees are:

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

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                SONORAN, et al. v. BANK OF THE WEST
                      Decision of the Court

       2. The litigation could have been avoided or settled and the
       successful party's efforts were completely superfluous in
       achieving the result.

       3. Assessing fees against the unsuccessful party would cause
       an extreme hardship.

       4. The successful party did not prevail with respect to all of
       the relief sought.

Id.

¶12            We will not substitute "our own item-by-item analysis" of the
Warner factors for that of the superior court. Sanborn v. Brooker & Wake Prop.
Mgmt., Inc., 178 Ariz. 425, 430 (App. 1994). As noted above, the Bank was
the successful party, and Sonoran acknowledges on appeal that the Bank
offered to settle the claim early in the litigation. Although Sonoran argues
the fee award caused it undue financial hardship, it points to no evidence
in the record to support that proposition. And, contrary to its assertion, the
record does not support the proposition that the Bank "has only itself to
blame for the fees it incurred." See Orfaly v. Tucson Symphony Soc'y, 209
Ariz. 260, 266, ¶ 21 (App. 2004).

¶13            Finally, the Bank's fee application disclosed the type and date
of legal services provided, the attorney involved, and the time spent
thereon, and was sufficiently detailed so the superior court could assess the
reasonableness of the time incurred. See Schweiger v. China Doll Rest., Inc.,
138 Ariz. 183, 187-88 (App. 1983). Sonoran's comparison of the award to
the amount of its own fees does not demonstrate the unreasonableness of
the award. See In re Indenture of Trust Dated January 13, 1964, 235 Ariz. 40,
52-53, ¶ 47 (App. 2014); Assyia v. State Farm Mut. Auto. Ins. Co., 229 Ariz.
216, 223, ¶ 29 (App. 2012). Regarding Sonoran's seven asserted "Instances
of Excessiveness," the court need not reduce a fee request based on a
contention that the tasks should have been performed faster. See First
Interstate Bank of Ariz., N.A. v. Simon, 159 Ariz. 91, 92 (App. 1988).

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               SONORAN, et al. v. BANK OF THE WEST
                     Decision of the Court

                             CONCLUSION

¶14          For the foregoing reasons, we affirm. We award the Bank its
costs and, pursuant to A.R.S. § 12-341.01, its reasonable attorney's fees,
upon compliance with Arizona Rule of Civil Appellate Procedure 21.

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

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