Ziemak v. Schnakenberg
| Citation | 111 P.3d 1042,210 Ariz. 442 |
| Decision Date | 31 May 2005 |
| Docket Number | No. 2 CA-CV 2004-0088.,2 CA-CV 2004-0088. |
| Parties | Susan ZIEMAK, a single woman, Plaintiff/Appellant, v. Larry SCHNAKENBERG, a single man, Defendant/Appellee. |
| Court | Court of Appeals of Arizona |
Schwanbeck & Present, P.L.L.C., By Victor R. Schwanbeck, Tucson, for Plaintiff/Appellant.
DeConcini McDonald Yetwin & Lacy, P.C., By Lisa Anne Smith, Tucson, for Defendant/Appellee.
¶ 1 Plaintiff/appellant Susan Ziemak appeals the trial court's award of attorney fees and costs in favor of defendant/appellee, Larry Schnakenberg. She maintains that the trial court erred when it denied her motion for additur and declined to include jury fees and prejudgment interest in her trial judgment which, as a result, fell short of exceeding her arbitration award by twenty-five percent pursuant to A.R.S. § 12-133(I) and Rule 76, Ariz. R. Civ. P., 16 A.R.S., Pt. 2. We hold that the trial court did not err when it declined to consider jury fees in that calculation, and we affirm the trial court's denial of Ziemak's motion for additur. However, we conclude that the trial court should have awarded Ziemak prejudgment interest and included that total in the judgment for the purposes of comparing the judgment to the arbitration award.
¶ 2 We construe the facts "in the light most favorable to upholding the jury's verdicts." Crackel v. Allstate Ins. Co., 208 Ariz. 252, ¶ 3, 92 P.3d 882, 885 (App.2004). Schnakenberg began providing Ziemak with financial services and advice in the mid-1980s. In so doing, he acted as her health insurance agent, acquiring her first policy in 1992 or 1993. Rising premium costs prompted Ziemak to change insurance carriers a number of times; each time, Schnakenberg acted as her agent.
¶ 3 In July 2001, Ziemak received a letter from Conseco, her health insurance carrier at the time, notifying her that her coverage would end in February 2002. The letter also stated:
¶ 4 Ziemak testified that she gave the letter to Schnakenberg, who told her that he would "contact Conseco and get back to [her]." A few days later, according to Ziemak, Schnakenberg informed her that Conseco would not cancel her coverage until she acquired another policy. Ziemak and Schnakenberg then discussed other health insurance options, and Schnakenberg helped Ziemak apply for coverage with another carrier. However, the new carrier informed Ziemak that she would not be eligible for coverage until April or May 2002. She continued to make monthly premium payments to Conseco through February 2002.
¶ 5 That month, Ziemak was thrown from a horse. When she sought coverage for her injuries from Conseco, she discovered that Conseco had canceled her policy before the incident. She underwent knee surgery and her medical costs totaled over twenty thousand dollars. Ziemak ultimately paid $14,752.54 after negotiating with her various health care providers.
¶ 6 In August 2002, Ziemak filed a complaint against Schnakenberg, alleging negligence, breach of contract, negligent misrepresentation, and fraud. Most of the claims were substantively based on Schnakenberg's alleged statements that, until Ziemak secured alternative health insurance coverage, Conseco would not cancel her policy. She sought damages for her medical expenses, attorney fees and costs, and interest on any amount recovered for medical expenses.
¶ 7 The parties submitted the case for compulsory arbitration. Based on the uncontested facts presented at the arbitration, the arbitrator determined Schnakenberg had been fifty-five percent at fault and awarded Ziemak $7,370 in damages and $559.55 in costs.
¶ 8 Ziemak appealed from the arbitration award. After a two-day trial, the jury found Ziemak's "full damages" totaled $13,150.50 and that Schnakenberg had been seventy percent at fault, resulting in a net verdict of $9,205.25 in Ziemak's favor. Ziemak submitted a form of judgment that did not include prejudgment interest. The court then entered an initial judgment awarding her $9,205.25 and $509.29 against Schnakenberg for jury fees. Thereafter, Schnakenberg requested $16,309.40 in attorney fees and $566.35 in costs pursuant to A.R.S. § 12-133 and Rule 76(f), Ariz. R. Civ. P., 16 A.R.S., Pt. 2, on the ground that the judgment, excluding jury fees, did not exceed the arbitration award by twenty-five percent.
¶ 9 Ziemak filed a motion for additur, claiming that the jury's verdict had not adequately compensated her for medical expenses based on the evidence presented and that the court should award her an additional $1,600. Ziemak also argued that she was entitled to prejudgment interest on her liquidated damages and that as the prevailing party, she, rather than Schnakenberg, was entitled to recover her court costs. Finally, Ziemak challenged Schnakenberg's claim for attorney fees on the ground that, properly calculated, her judgment exceeded the arbitration award by twenty-five percent.
¶ 10 The trial court declined to consider Ziemak's argument that she was entitled to prejudgment interest on the ground that she had raised it for the first time in her reply on the motion for additur. The court also rejected Ziemak's motion for additur but modified the award to Ziemak by including $611.55 in costs not reflected in the initial judgment to Ziemak. It then concluded that Ziemak still had not exceeded the arbitration award by twenty-five percent and entered a final judgment, which required Ziemak to pay Schnakenberg $16,309.40 in attorney fees and $566.35 in costs pursuant to § 12-133. After subtracting the amount of Ziemak's trial verdict from Schnakenberg's attorney fees and costs, the court entered a final judgment in the net amount of $7,670.50 in favor of Schnakenberg. Ziemak filed this timely appeal.
¶ 11 Section 12-133(I) provides that if, on appeal from arbitration, "the judgment on trial de novo is not at least twenty-five percent more favorable than the monetary relief. . . granted by the arbitration award," the appellant must pay the appellee's "costs taxable in any civil action and reasonable attorney fees." See Ariz. R. Civ. P. 76(f) (same). Here, the trial court correctly concluded that Ziemak's judgment would have to exceed $9,911.94—twenty-five percent more than the arbitration award (including the damage award and costs)—in order for her to avoid paying Schnakenberg's attorney fees. The portion of the final judgment in favor of Ziemak, which included the jury's award of $9,205.25 and $611.55 in costs, but neither jury fees nor prejudgment interest, fell $95 short of the twenty-five percent threshold.
¶ 12 On appeal, Ziemak argues that the total amount of a judgment for purposes of § 12-133 includes jury fees and prejudgment interest on her liquidated damages. She contends if either of those amounts had been included in the judgment, the final sum would have been twenty-five percent more favorable than the arbitration award and, therefore, she should not have been obligated to pay Schnakenberg's attorney fees and taxable costs.
¶ 13 We first consider whether a judgment entered after a trial de novo includes jury fees for purposes of § 12-133 and Rule 76(f), Ariz. R. Civ. P. Because this issue requires us to interpret and apply both a statute and a court rule, our review is de novo. See North Valley Emergency Specialists, L.L.C. v. Santana, 208 Ariz. 301, ¶ 8, 93 P.3d 501, 503 (2004) (statute); Perguson v. Tamis, 188 Ariz. 425, 427, 937 P.2d 347, 349 (App.1996) (rule).1
¶ 14 The primary objective of statutory interpretation is to give effect to the legislature's intent. Martineau v. Maricopa County, 207 Ariz. 332, ¶ 9, 86 P.3d 912, 914 (App.2004). "We begin our analysis with the plain language of the pertinent statute because a statute's plain language provides the best evidence of intent." Id. (citation omitted). Only if a statute is ambiguous will this court "consider `the statute's context, subject matter, historical background, effects and consequences, and spirit and purpose"' to determine the legislative intent. Aros v. Beneficial Ariz., Inc., 194 Ariz. 62, 66, 977 P.2d 784, 788 (1999), quoting Zamora v. Reinstein, 185 Ariz. 272, 275, 915 P.2d 1227, 1230 (1996).
¶ 15 Preliminarily, we must determine whether the legislature intended the phrase, "judgment on trial de novo," as used in § 12-133(I), to include jury fees. As Ziemak emphasizes, the legislature has specifically indicated in another provision that jury fees must be included in the judgment. See A.R.S. § 12-332(B) (). But the language of § 12-133(I) requires more than a rote mathematical comparison between the components of the judgment and the arbitration award. Rather, the party appealing an arbitration award escapes sanction only by acquiring a judgment "twenty-five per cent more favorable" than the award. Id. (Emphasis added). And, when interpreting a statute, " `we must read the statute as a whole and give meaningful operation to each of its provisions.'" Herman v. City of Tucson, 197 Ariz. 430, ¶ 14, 4 P.3d 973, 977 (App.1999), quoting Ruiz v. Hull, 191 Ariz. 441, ¶ 35, 957 P.2d 984, 993 (1998). Because jury fees are not awarded to the prevailing party but rather must be paid to the court by the nonprevailing litigant, see § 12-332(B), those fees do not render the judgment "more favorable" to the prevailing party. Accordingly, although the trial judgment here including jury fees was mathematically greater than the arbitration award by twenty-five percent,...
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