SC34 v. Desert Mountain Master Ass'n
| Decision Date | 21 March 2013 |
| Docket Number | No. 1 CA-CV 11-0240,1 CA-CV 11-0240 |
| Parties | SC34, Plaintiff/Appellee, v. THE DESERT MOUNTAIN MASTER ASSOCIATION, an Arizona non-profit corporation, Defendant/Appellant. |
| Court | Arizona Court of Appeals |
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Not for Publication
of Civil Appellate Procedure
Appeal from the Superior Court in Maricopa County
Cause No. CV2007-052952 & CV2008-000971 (Consolidated)
The Honorable Robert A. Budoff, Judge
AFFIRMED
Lake & Cobb, P.L.C.
By Joel E. Sannes
Joseph J. Glenn
Attorneys for Plaintiff/Appellee
Tempe
Schneider & Onofry, P.C.
By Jon D. Schneider
Charles D. Onofry
Luane Rosen
Jason M. Kelly
Attorneys for Defendant/Appellant
Phoenix
¶1 The Desert Mountain Master Association ("DMMA") raisesseveral issues on appeal in this breach of Covenants, Conditions, and Restrictions ("CC&Rs") action. For the following reasons, we affirm the judgment in favor of SC34.
¶2 We view the facts and evidence in the light most favorable to sustaining the jury's verdict. See Inch v. McPherson, 176 Ariz. 132, 136, 859 P.2d 755, 759 (App. 1992).
¶3 Richard and Susan Pallan ("Pallan" for Richard Pallan unless context requires otherwise) created SC34 to purchase Lot 34 and build a home in the community of Sunset Canyon at Desert Mountain in Scottsdale. The Pallans were the only members of the L.L.C. SC34 made the necessary arrangements to build the home, but a few weeks prior to breaking ground on July 31, 2007 a severe storm flooded Lot 34. The home of SC34's neighbors and co-plaintiffs, Herb and Marsha Anderson ("Anderson" for Herb Anderson unless context requires otherwise), was also flooded due to the storm.1 In December of 2007, following another storm, the drainage system overflowed again but caused no damage to the Andersons' home or Lot 34.
¶4 SC34 and the Andersons ("Plaintiffs") requested that DMMA repair the drainage system to avoid further flooding.
Plaintiffs grew increasingly frustrated by DMMA's lack of communication and lack of action. The Andersons hired experts to determine the cause of the flood after repeated requests for a response from DMMA. The Andersons and Pallans filed separate lawsuits (in October 2007 and January 2008, respectively).
¶5 DMMA hired engineer David Deatherage in October or November of 2007 to evaluate the drainage system for Lot 34 and to make recommendations to the Homeowners' Association ("HOA") on how to proceed. At Deatherage's suggestion, DMMA implemented temporary measures building soil berms around the perimeter of the drainage inlet and removing a metal grate covering the drainage culvert. In February 2008, Deatherage also created and stamped2 a revised engineering plan which included recommendations to add a spillway, geotextile fabric to prevent erosion of the soil berms, and creation of a "riprap" channel.3 DMMA accomplished these interim repairs in March 2008. Deatherage testified that this plan would withstand the 100-yearstorm standard.4 Deatherage, in March 2008, made further recommendations to improve the drainage system, but DMMA did not adopt them by the time these issues went to trial.
¶6 In contrast, SC34's expert, Hal Marron, testified that the interim repairs were inadequate to withstand another 100-year storm event. SC34's hydrology expert, Jonathan Fuller, also testified that the interim repairs were incapable of supporting a 100-year storm event.
¶7 In January 2008, the Pallans, individually and on behalf of SC34, filed an amended complaint against DMMA alleging breach of contract and a request for injunctive relief. SC34's breach of contract action was based on DMMA's alleged violations of the Master Association's CC&Rs, specifically sections 8.1 (), 8.1(a) (), and 9.2 of Sunset Canyon's CC&Rs (common areas are the responsibility of the Master Association).
¶8 On DMMA's motion, the trial court dismissed the Pallans as individuals from the action. After a jury trial, SC34 was awarded $777,000 in damages. The trial court also granted SC34 injunctive relief and awarded attorneys' fees andcosts to SC34 in its final judgment.
¶9 DMMA timely appeals and we have jurisdiction pursuant to A.R.S. § 12-2101(A)(1) (Supp. 2012).5
¶10 On appeal DMMA challenges the trial court's decisions to: a) deny a motion to offset pretrial settlement damages; b) deny a directed verdict on the damage claims and to allow the calculation of the loss of use damages, c) deny a special verdict; d) deny certain jury instructions and exclude related evidence; and e) deny a motion to continue the trial.
¶11 SC34 settled with the following co-defendants prior to trial for an amount totaling $215,000: the property developer, Desert Mountain Properties ("DMP"); DMP's engineer, Rick Engineering; and DMP's contractor, Blucor. DMMA contends that it is entitled to a $215,000 credit or offset against the jury award given to SC34.
¶12 We review issues applying settlement offsets to damages awards de novo because they are questions of law. See Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493, 507, 917 P.2d 222, 236 (1996).
¶13 Both parties cite Am. Home Assur. Co. v. Vaughn, 21Ariz. App. 190, 192, 517 P.2d 1083, 1085 (1974), for the proposition that a settlement offset against a damage award is required if the plaintiff is seeking recovery from multiple defendants based on the "same incident or transaction." DMMA claims SC34's damages all arise from the same event - SC34's inability to build on Lot 34 because of inadequate flood protection.
¶14 In reaching our decision on this issue, we have considered the facts and the law and the jury instructions given by the court. Two of these jury instructions, which were requested by DMMA, are pertinent and significant. First, the trial court included a "No Liability for Original Design or Construction" instruction that directed the jury as follows:
(Emphasis added.)
¶15 Second, the court instructed the jury that DMMA was not liable to SC34 "for any action or inaction by DMMA that resulted in damages that were incurred" before the initial flood:
The Desert Mountain Master Association's obligations under the CC&Rs were not potentially implicated until after the July 31, 2007 storm. If you find that theDefendant [DMMA] breached the applicable CC&Rs on or after August 1, 2007, then you must determine whether the breach caused any damage to [SC34]. A breach of the CC&Rs causes the injury if the alleged injury would not have happened without the breach. The Desert Mountain Master Association is not liable to SC34, LLC for any action or inaction by DMMA that resulted in damages that were incurred before August 1, 2007.
(Emphasis added.)
¶16 Our supreme court has noted that we must presume that jurors follow the trial court's instructions, in the absence of some reason to conclude otherwise. See State v. Newell, 212 Ariz. 389, 403, ¶ 68, 132 P.3d 833, 847 (2006); State v. Ramirez, 178 Ariz. 116, 127, 871 P.2d 237, 248 (1994) (). Accordingly, the jury was directed by the trial court that DMMA was not liable to SC34 for any damages arising out of the original construction or design or for any action or inaction that may have caused damages prior to August 1, 2007. In other words, the jury was essentially instructed that DMMA was not liable for the actions of the settling defendants in designing and constructing the drainage and flood control system. Because the damages awarded by the jury did not include damages for the deficient design and construction, DMMA is not entitled to a credit or offset for its payments to the settling defendants.
¶17 Additionally, DMMA's liability was not triggered until mother nature revealed that the drainage system was improperly designed and built by the defendants who settled prior to trial. DMMA was obligated, based on the terms of the CC&Rs, to maintain the common areas and repair the drainage system if something went awry, in accordance with a "reasonable standard of care." DMMA did not do so in a reasonable or timely manner, according to the jury. Thus, SC34 was allowed to recover its alleged damages because DMMA did not reasonably repair and maintain the drainage system.
¶18 We agree with the trial court that SC34's claim for damages against DMMA was different and separate from the claims against DMP and its agents.
¶19 DMMA challenges several trial and post-trial rulings made by the trial court regarding damages. We analyze DMMA's arguments concerning the trial court's rulings on damages at trial and post-trial together when appropriate.
¶20 During trial, DMMA moved for an initial Judgment as a Matter of Law ("JMOL") on SC34's claimed damages in accordance with Rule 50 of the Arizona Rules of Civil Procedure. The trial court denied the motion pertaining to SC34's damages claims. Subsequently, DMMA moved for a new trial in January of 2011, essentially renewing its JMOL claims concerning damages. Cf.Ariz. R. Civ. P. 50(b); Ariz. Rule Civ. P. 59. The trial court denied DMMA's motion for a new trial.
¶21 Our review for denial of JMOL is de novo. See Felder v. Physiotherapy Assocs., 215 Ariz. 154, 162, ¶ 36, 158 P.3d 877, 885 (App. 2007). And we view the "evidence in the light most favorable to the nonmoving party."...
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