Continental Townhouses East Unit One Ass'n v. Brockbank, 1

• Court: Arizona Court of Appeals
• Writing for the Court: CONTRERAS; GRANT
• Citation: Continental Townhouses East Unit One Ass'n v. Brockbank, 733 P.2d 1120, 152 Ariz. 537 (Ariz. App. 1986)
• Decision Date: 05 August 1986
• Docket Number: No. 1,CA-CIV,1
• Parties: , 73 A.L.R.4th 921 CONTINENTAL TOWNHOUSES EAST UNIT ONE ASSOCIATION, an Arizona corporation; Vincent Territo; Dorothea Waxman; and Jill Sampson, Plaintiffs-Appellees, Cross Appellants, v. Roy R. BROCKBANK and Rita Brockbank, husband and wife, d/b/a Roy Brockbank Enterprises, Defendants-Appellants, Cross Appellees. 8582.

Page 1120

733 P.2d 1120

152 Ariz. 537, 73 A.L.R.4th 921

CONTINENTAL TOWNHOUSES EAST UNIT ONE ASSOCIATION, an Arizona corporation; Vincent Territo; Dorothea Waxman; and Jill Sampson, Plaintiffs-Appellees, Cross Appellants, v. Roy R. BROCKBANK and Rita Brockbank, husband and wife, d/b/a Roy Brockbank Enterprises, Defendants-Appellants, Cross Appellees.

No. 1 CA-CIV 8582.

Court of Appeals of Arizona Division 1, Department C.

Aug. 5, 1986.

Reconsideration Denied Dec. 5, 1986.

Review Denied March 11, 1987.

Wade Church, P.C. by Wade Church, Phoenix, for defendants-appellants, cross appellees.

Beus, Gilbert, Wake & Morrill by Neil Vincent Wake, Joseph A. Schenk, Shawn K. Aiken, Phoenix, for plaintiffs-appellees, cross appellants.

OPINION

CONTRERAS, Presiding Judge.

This appeal and cross-appeal followed the trial court's remittitur of damages awarded by a jury for the defendant-appellant's breach of the implied warranty of workmanship and habitability in the construction of the plaintiffs-appellees' townhouse roofs. Among the issues we resolve on appeal is whether an award of attorneys' fees under A.R.S. § 12-341.01 may include the cost of legal services performed by legal assistants. We conclude that the cost of such services may be included.

I. BACKGROUND OF THE CASE

Continental Townhouses East Unit One Association (the "Association") filed a complaint on December 16, 1981, against Roy Brockbank, the builder and seller of approximately 40% of the units in the Continental Townhouses condominium development in Mesa, Arizona. The complaint alleged that Brockbank had breached the implied warranty of workmanlike construction in building the condominium roofs. The complaint also alleged that Brockbank had breached his agreement to construct and repair various amenities and facilities within the development's common areas.

Nearly two years later, the trial court ordered that the individual homeowners, rather than the Association, were the real parties in interest. The court's minute entry referred to the Association's Covenants, Conditions and Restrictions, which provided that the homeowners pay the Association an assessment for improvement and maintenance of the homes, and concluded that "though Plaintiff [Association] has a duty to maintain and repair the roofs of the homeowners, the expense of such maintenance and repair is actually born [sic] by the homeowners through the assessment." The court also noted that recovery by the Association might not protect Brockbank from further suits by individual homeowners, and that privity between the Association and Brockbank, required at the time under Arizona law, was lacking. ¹ Thus, the court dismissed the complaint "as to those items in controversy which are not part of the 'Common Area' under the management and control of the Plaintiff Association," but "without prejudice in that a new Complaint may be filed by the individual homeowners."

An amended complaint was filed the following month, and in August, 1984, plaintiffs' Motion for Class Certification was granted. The certified class was defined as "any past, present, or future members of the plaintiff association who have paid, who will pay, or who are obligated to pay for any repairs to roofs for which defendants are found liable...." The plaintiff representatives of the class were townhouse owners and Association members; one of the class representatives owned a Brockbank-built unit.

On January 23, 1985, after a six day trial, a jury awarded the plaintiff-class $312,454.91 on the roof damage claim and $17,047.91 to the Association on the common areas claim.

In March of 1985, the trial judge granted Brockbank's motion for remittitur on the roof claim, reducing the amount of the jury verdict to $128,853.00, plus interest from June 2, 1981. Attorneys' fees were awarded to the Association on the common areas claim and to the class in a reduced amount on the roof damage claim. The class elected to accept the remittitur. Appellant Brockbank has not appealed from the judgment on the common areas claim or the award of attorneys' fees in favor of the Association. This appeal, therefore, concerns only the roof damage claim brought by the class and its award of attorneys' fees.

The class cross-appeals from the trial court's grant of remittitur and denial of the full amount requested as attorneys' fees.

II. ISSUES RAISED ON APPEAL BY BROCKBANK

A. Class Certification.

Appellant argues that there was antagonism and a lack of common interest between the members of the class. Of the 221 class members, only 87 owned the allegedly defective Brockbank units, while the other 134 owned units with Continental roofs. According to appellant, those with Continental roofs resisted any increases in the homeowners' assessments to pay for repairs to the Brockbank units. In particular, appellant contends that Rule 23(a)(4), Arizona Rules of Civil Procedure, is not satisfied if Continental roof owners represent the class. Rule 23(a)(4) requires that "the representative parties will fairly and adequately protect the interests of the class."

We conclude that the Association's Covenants, Conditions and Restrictions require that all Association members be assessed for roof improvements; both Brockbank and Continental roof owners must contribute and both are financially damaged if assessments are used to pay for repairs of the Brockbank units. Thus, all members of the homeowner association had an interest in recovering the amount of damages from an "outside" party, namely Brockbank.

This court will not interfere with the decision of the trial court unless it abused its discretion in certifying this class and permitting the plaintiff homeowners to proceed as a class. See Godbey v. Roosevelt School Dist. No. 66, 131 Ariz. 13, 638 P.2d 235 (App.1981). Based on the responsibilities of the Association and the homeowners as specified in the Association's Covenants, Conditions and Restrictions, and as presented to the trial court, we perceive no abuse of discretion.

B. Pre-Judgment Interest.

The remittitur submitted for plaintiffs-appellees' acceptance included an award of pre-judgment interest from June 2, 1981, to the date of entry of judgment. ²

Both parties agree with the legal proposition that pre-judgment interest on a liquidated claim is a matter of right. See, e.g., Autonumerics, Inc. v. Bayer Industries, Inc., 144 Ariz. 181, 193, 696 P.2d 1330, 1342 (App.1984); Arizona Title Insurance and Trust Co. v. O'Malley Lumber Co., 14 Ariz.App. 486, 496, 484 P.2d 639, 649 (1971). If the claim is not liquidated, then an award of pre-judgment interest is not appropriate.

The parties dispute whether the damages in this case were of a liquidated or unliquidated nature. A claim is liquidated "where the evidence furnishes data, which, if believed, makes it possible to compute the amount with exactness, without reliance upon opinion or discretion." Custom Roofing Co., Inc. v. Alling, 146 Ariz. 388, 391, 706 P.2d 400, 403 (App.1985). After analyzing several leading Arizona cases which determined the liquidated or unliquidated nature of particular claims, we conclude that the appellees' claim in this case is unliquidated. ³ The amount of the homeowners' claim in this case was based on opinion testimony and discretionary judgments, and was affected by the homeowners' mitigating conduct. In short, the damage figure was in dispute at the commencement of the litigation and remains disputed at the present time. In fact, when the trial judge exercised his discretion to order a remittitur from the jury verdict, he returned the amount of the claim to an uncertain status pending appellees' acceptance of the remittitur order. Cf. Borrow v. El Dorado Lodge, 75 Ariz. 218, 254 P.2d 1027 (1953) (when the court denied a motion for a new trial, conditioned expressly upon a remitter of a substantial amount from the original verdict, the amount of the judgment remained unliquidated until the plaintiffs should exercise their option to make the remitter or subject themselves to a new trial).

We conclude that under the circumstances of this case, the award of pre-judgment interest in favor of appellees was improper.

C. Mitigation of Damages.

The appellant argues that the class could have, but failed to, set up a structured program of roof maintenance in order to minimize its damages. Appellant contends that the roofs were inspected only at the time of their construction and received a "clean bill of health," and that a structured roof maintenance program was essential but could not be implemented because of the conflicting interests of the Continental and Brockbank roof owners. Appellant implies that the deterioration of the roofs was wholly caused by the failure of the homeowners to properly maintain them.

The class responds that the jury received a proper instruction on the doctrine of avoidable consequences. The instruction explained that the "defendant [appellant Brockbank] must prove by the preponderance of the evidence that a portion of plaintiffs' losses, if any, have occurred as a result of their failure to take reasonable steps to avoid those losses." Since the jury permitted the class to recover, the class now argues that appellant simply failed to meet its burden of proof. Additionally, substantial evidence existed for the jury to find that the class had reasonably maintained the roofs and mitigated its damages to the best of its ability given the condition of the roofs as constructed. ⁴ In sum, because the jury instruction was proper and evidence existed from which the jury could conclude that the homeowners acted reasonably to minimize their damages, we affirm the jury on this issue.

D. Other Jury Instructions.

Appellant argues that he was entitled to a jury instruction stating that since his work passed the Mesa Minimum Workmanship Standards, it was good and workmanlike. Such an instruction was not, however, requested by appellant, and it would...