City Center Executive Plaza, LLC v. Jantzen
237 Ariz. 37
| Ariz. Ct. App. | 2015Background
- The Refuge Community Association sued City Center over redevelopment of an adjacent golf course; a jury awarded $1.00 in damages and recommended a permanent injunction limiting the course to golf-related use. The injunction was appealed.
- The trial court later awarded attorneys’ fees and costs to the Association, entering two money judgments totaling $2,390,296.87. City Center appealed those money judgments.
- City Center moved to stay execution pending appeal and requested a supersedeas bond of $1.00 under ARCAP 7 (which tracks A.R.S. § 12-2108), because the jury awarded $1.00 in damages.
- The Association argued the bond should equal the full money judgments and also alleged City Center dissipated assets. The trial court initially set the bond at the full judgment, then (on remand) set it at 25% of the judgment ($597,574.22) after a hearing.
- City Center petitioned for special action relief, arguing § 12-2108 and ARCAP 7 limit the bond to the total damages awarded (here $1.00) and that attorneys’ fees should not be treated as “damages.” The appellate court accepted jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorneys’ fees and costs count as "damages" for computing the presumptive supersedeas bond under A.R.S. § 12-2108 and ARCAP 7 | City Center: "Damages" means compensatory damages awarded by the jury; attorneys’ fees are not damages, so bond should be $1.00 | Association: "Damages" and "judgment" are synonymous; bond may be set as full monetary judgment including fees and costs | Held: Attorneys’ fees are not "damages." The court remanded with instruction to set the bond at $1.00 (the total damages awarded) |
| Proper statutory procedure for setting the bond under § 12-2108/ARCAP 7 | City Center: Court must compare (a)(1) total damages, (a)(2) 50% net worth, and (a)(3) $25M and select the least, then consider upward/downward deviations per (B)/(C) | Association: Trial court can consider judgment and potentially set bond higher absent statutory restrictions | Held: Court must follow the three-step process: select the lesser of the three presumptive amounts, permit upward deviation only if appellee proves dissipation by clear and convincing evidence, allow downward deviation if appellant proves likely substantial economic harm. Trial court misapplied statute by treating fees as damages |
| Whether appellee proved dissipation sufficient to require bond up to full judgment | Association: alleged intentional dissipation of assets so bond up to full judgment was justified | City Center: disputed the dissipation allegation; trial court found Association failed to prove dissipation by clear and convincing evidence | Held: Appellate court affirmed trial court’s factual finding that dissipation was not proved, and declined to disturb it |
| Award of attorneys’ fees on the special action | Both parties sought fees under A.R.S. § 12-341.01 | N/A | Held: Court denied both parties’ fee requests in its discretion |
Key Cases Cited
- Bruce Church, Inc. v. Superior Court, 160 Ariz. 514 (App. 1989) (prior standard for supersedeas bond considered amount remaining unsatisfied and allowed trial court discretion)
- Salt River Sand & Rock Co. v. Dunevant, 222 Ariz. 102 (App. 2009) (special action jurisdiction appropriate to challenge supersedeas bond setting)
- U.S. Fidelity & Guar. Co. v. Frohmiller, 71 Ariz. 377 (1951) (attorneys’ fees are not damages within the meaning of certain statutes)
- Desert Mountain Prop. Ltd. P’ship v. Liberty Mut. Fire Ins. Co., 225 Ariz. 194 (App. 2010) (circumstances where attorneys’ fees may be treated as legal consequences of a wrongful act and thereby considered damages)
- Mahar v. Acuna, 230 Ariz. 530 (App. 2012) (definition of "judgment" under Arizona law and Rule 54)