Mcdowell Mountain Ranch Ass'n v. Simons

• Court: Arizona Court of Appeals
• Writing for the Court: Hall
• Citation: Mcdowell Mountain Ranch Ass'n v. Simons, 165 P.3d 667, 216 Ariz. 266 (Ariz. App. 2007)
• Decision Date: 10 August 2007
• Docket Number: No. 1 CA-CV 05-0296.,1 CA-CV 05-0296.
• Parties: McDOWELL MOUNTAIN RANCH COMMUNITY ASSOCIATION, INC., an Arizona nonprofit corporation, Plaintiff/Appellant, v. James F. SIMONS, an unmarried man, Defendant/Appellee.

165 P.3d 667

216 Ariz. 266

McDOWELL MOUNTAIN RANCH COMMUNITY ASSOCIATION, INC., an Arizona nonprofit corporation, Plaintiff/Appellant, v. James F. SIMONS, an unmarried man, Defendant/Appellee.

No. 1 CA-CV 05-0296.

Court of Appeals of Arizona, Division 1, Department D.

August 10, 2007.

Carpenter Hazlewood, PLC By Scott B. Carpenter, Jeffrey B. Corben, J. Roger Wood, Tempe, Attorneys for Appellant.

James F. Simons, Scottsdale, In Propria Persona.

HALL, Judge.

¶ 1 McDowell Mountain Ranch Community Association, Inc. (the Association) appeals from the trial court's award of partial attorneys' fees in its favor. The question presented is whether the trial court abused its discretion when it awarded the Association only one-half of its requested fees despite a provision in the Association's Declaration of Covenants, Conditions, and Restrictions (CC & Rs) that entitled the Association to "all attorney's fees and costs incurred" in enforcing compliance with the CC & Rs. We conclude that the Association is entitled to receive all its attorneys' fees except those that are clearly excessive. Because the record does not support the trial court's fifty percent reduction in the Association's fee request, we vacate the trial court's award of partial attorneys' fees and remand for proceedings consistent with this Opinion.

FACTS AND PROCEDURAL HISTORY

¶ 2 The Association is an Arizona nonprofit corporation whose members are home owners within the McDowell Mountain Ranch community in Scottsdale, Arizona. The Association members are subject to the CC & Rs. James F. Simons (Simons) owns a home within the community and is therefore subject to the CC & Rs.

¶ 3 On January 20, 2004, the Association filed a Complaint against Simons for injunctive relief alleging that he commenced a construction project at the rear of his home without obtaining the requisite approval from the Association and requesting that the trial court issue an order to show cause returnable on February 5. The Association also requested attorneys' fees. Simons did not appear at the return hearing and the trial court scheduled a three-hour evidentiary hearing on the Association's application for a preliminary injunction for April 9, 2004. Three days before that hearing, the Association filed a motion to continue the evidentiary hearing stating that Simons had begun working toward completion of the construction in accordance with the CC & Rs and expressing the "hope[] that the construction will be completed and that the parties can resolve this dispute without further litigation before the continued hearing date." Accordingly, the trial court continued the hearing to June 11, 2004. At that hearing, at which Simons did not appear, the Association reported to the trial court that the property restoration had not been completed. Following a brief evidentiary hearing on the Association's motion for injunctive relief, the trial court issued a permanent injunction.

¶ 4 Because Simons did not answer the complaint, the Association filed an application for entry of default against him and, in connection therewith, filed an application for attorneys' fees and costs based on Article XV, Section 15.14 of the CC & Rs, which states:

[I]n the event the Association employs an attorney . . . to enforce compliance with or recover damages for any violation or noncompliance with the [CC & Rs], the offending Owner or other person or entity shall pay to the Association, upon demand, all attorney fees and court costs incurred by the Association, whether or not suit is filed[.]¹

(Emphasis added.) In support of its application, the Association attached a detailed affidavit based on its attorneys' billing records and requested an award for its accrued attorneys' fees in the amount of $5,683.50.

¶ 5 On September 1, 2004, the Association filed a Request for Sanctions and For Order to Show Cause asserting that Simons had failed to comply with the permanent injunction. The trial court ordered Simons to appear on September 29, 2004 and explain "why the Court should not hold [him] in contempt for failing to abide by" the permanent injunction and "impose appropriate sanctions," including an award of attorneys' fees and costs to the Association. Simons attended the September 29 hearing, at which the Association's attorney informed the trial court that "it appears that [Simons] is attempting to come into compliance and that the Board will need to approve the condition of the property . . . [and] the issue of attorneys' fees is also pending."

¶ 6 At a subsequent telephonic status conference regarding the contempt issue, in which Simons participated, the trial court scheduled the matter for a contempt hearing on March 4, 2005. On March 1, 2005, the Association filed a Request to Vacate Contempt Hearing and Notice of Lodging of Final Judgment because Simons "has made headway in resolving the remaining compliance issue" and therefore a hearing was no longer necessary.

¶ 7 On the same day, the Association filed a supplement to its application for attorneys' fees and costs, which alleged a total of $8,000.00 in attorneys' fees and $538.80 in costs. The Affidavit Regarding Attorneys' Fees contained the following avowal:

[Attorney for McDowell] avows to this Court that the fees charged to the [Association] in this case comply with the applicable ethical standards for attorneys' fees, constitute a fair and reasonable fee given the substance of the pleadings and the services rendered in this case, and have been paid or agreed to be paid by the client.²

The Association based its claim for attorneys' fees on Article XV, Section 15.14 of the CC & Rs.

¶ 8 On March 3, 2005, the Association filed a Judgment for an Award of Attorneys' Fees and Costs, requesting attorneys' fees in the amount of $8,000.00 and costs in the amount of $538.80. The trial court issued an order setting March 23, 2005 as the deadline for Simons to object to the proposed form of judgment and the application for attorneys' fees.

¶ 9 On March 24, 2005, the trial court received a letter from Simons objecting to the Association's request for attorneys' fees and costs. In the letter, Simons claimed that he did not appear for the evidentiary hearing because the Association's attorney informed him that the Association would "dismiss[] the hearing" based on his efforts to bring his home into compliance. Simons further claimed that the Association's attorneys' fees would have been substantially less if the Association did not "drag[] out" the proceedings. Accordingly, Simons requested the opportunity "to show the court in a hearing or trial the communications between myself and the [Association] to illustrate their failure to operate in good faith with me in resolving their complaint."

¶ 10 On March 28, 2005 the Association filed a Motion for Summary Disposition, requesting that the trial court grant its request for attorneys' fees and Costs.³ In the reply, the Association denied Simons' allegation regarding verbal communications between the parties and argued that the terms of the CC & Rs mandate that the Association be awarded its full attorneys' fees. The Association also increased its request for attorneys' fees to $8,380.80. However, the Association did not supplement its application for attorneys' fees or its affidavit to identify the source of the additional fees. Additionally, the Association did not amend the Judgment for an Award of Attorneys' Fees and Costs to reflect the increased amount it requested.

¶ 11 The trial court did not schedule a hearing as Simons requested. Instead, the trial court granted the Association's request for attorneys' fees, but crossed out the "8" and handwrote the number "4," awarding McDowell $4,000.00 rather than $8,000.00 in attorneys' fees.

¶ 12 The Association timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) section 12-2101(B), (F) (2003).

DISCUSSION

¶ 13 As its sole issue on appeal, the Association contends that the trial court erred by not awarding it the entire amount of its requested attorneys' fees pursuant to Article XV, Section 15.14 of the CC & Rs. Simons has not filed a responsive brief. In cases when the appellant has raised a debatable issue, we may, in our discretion, treat the failure to file an answering brief as a confession of error. Nydam v. Crawford, 181 Ariz. 101, 101, 887 P.2d 631, 631 (App.1994). However, in order to clarify a rule of law, we do not do so here. Id.

¶ 14 "CC & Rs constitute a contract between the subdivision's property owners as a whole and individual lot owners." Ahwatukee Custom Estates Mgmt. Ass'n, Inc. v. Turner, 196 Ariz. 631, 634, 2 P.3d 1276, 1279 (App.2000). "Unlike fees awarded under A.R.S. § 12-341.01(A), the court lacks discretion to refuse to award fees under [a] contractual provision." Chase Bank of Ariz. v. Acosta, 179 Ariz. 563, 575, 880 P.2d 1109, 1121 (App.1994). Indeed, it is well-settled in Arizona that "[c]ontracts for payment of attorneys' fees are enforced in accordance with the terms of the contract." Heritage Heights Home Owners Ass'n v. Esser, 115 Ariz. 330, 333, 565 P.2d 207, 210 (App.1977) (quoting 25 C.J.S. Damages § 50(c)); see also A.R.S. § 12-341.01(A) (2003) ("This section shall in no manner be construed as altering, prohibiting or restricting present or future contracts or statutes that may provide for attorney fees."); Sweis v. Chatwin, 120 Ariz. 249, 252, 585 P.2d 269, 272 (App.1978) ("[I]t is our opinion that [A.R.S. § 12-341.01] is inapplicable to the litigation here involved, inasmuch as the parties have provided in their contract the conditions under which attorney's fees may be recovered.").

¶ 15 In Heritage Heights, the association filed a complaint against a home owner to enforce a restriction in the subdivision deed. Id. at 332, 565 P.2d at 209. The trial court denied the association's request for injunctive relief and its request for attorneys' fees. Id. The...