380 P.3d 672
Ariz. Ct. App.2016Background
- AOR loaned Buteo $400,000 under a promissory note with contractual attorneys’ fees and interest provisions; guaranty signed by Scott Miller.
- AOR obtained a prejudgment writ of attachment in the 2013 action and Buteo posted a $200,000 provisional-remedy bond as security for any judgment.
- The trial court ultimately entered judgment for AOR in the 2013 case: $400,000 principal + $214,687.07 interest = $614,687.07 in damages; plus attorneys’ fees and costs (total judgment larger). The court ordered the $200,000 provisional bond released to AOR and applied to its awards.
- In separate 2014 litigation, the court later awarded Buteo attorneys’ fees, costs, and a sanction totaling $123,021.29, and AOR posted a $1.00 bond to stay that (no damages).
- On appeal in the 2013 case, the trial court set the supersedeas bond at $291,666.78 (full damages of $614,687.07 minus the $200,000 provisional bond and minus the $123,021.29 awarded to Buteo in the 2014 case). AOR sought special action relief.
Issues
| Issue | Plaintiff's Argument (AOR) | Defendant's Argument (Buteo) | Held |
|---|---|---|---|
| Proper amount of supersedeas bond under A.R.S. § 12-2108 / Ariz. R. Civ. App. P. 7 | Bond must be set at total damages for the 2013 judgment ($614,687.07); attorneys’ fees and costs excluded from "damages" calculation | Court properly reduced bond by the $200,000 provisional bond and by Buteo’s 2014 fees because AOR retained cash from the 2014 judgment | Court held bond must be set at $614,687.07 (smallest statutory presumed amount) and vacated reduction |
| Whether the $200,000 provisional-remedy bond may offset the supersedeas bond | The $200,000 was applied to AOR’s attorneys’ fees per the parties’ agreement and judgment, so it is not an "other security" to reduce the statutory damages amount | The provisional bond constituted cash in AOR’s possession and thus reduced security needed to preserve status quo | Court held trial court erred to reduce the supersedeas bond by the provisional bond because record shows it was not treated as "other security" under Rule 7 and AOR applied it to fees |
| Whether attorneys’ fees awarded in a separate 2014 judgment can offset the supersedeas bond in the 2013 case | Attorneys’ fees are not "damages" and a separate judgment cannot offset the statutory calculation for this judgment | The 2014 award gave Buteo possession of cash, so the trial court could consider that in setting bond to preserve status quo | Court held trial court erred: fees are not damages and §12‑2108/Rule 7 limit calculation to the judgment at issue; separate-judgment fees cannot reduce the statutory presumed amount |
Key Cases Cited
- City Ctr. Exec. Plaza, LLC v. Jantzen, 237 Ariz. 37, 344 P.3d 339 (App. 2015) (defining "damages" for bond calculation and outlining statutory procedure)
- Bobrow v. Herrod, 239 Ariz. 180, 367 P.3d 84 (App. 2016) (standard of review for statutory interpretation)
- Kresock v. Gordon, 239 Ariz. 251, 370 P.3d 120 (App. 2016) (attorneys’ fees are not "damages" for purposes of bond amount)
- Wells Fargo Bank N.A. v. Rogers, 239 Ariz. 106, 366 P.3d 583 (App. 2016) (distinguishing protective/status-quo orders from the statutory Rule 7 bond-setting procedure)