Orozco v. Alvarez-Corrales
1 CA-CV 16-0113
| Ariz. Ct. App. | Dec 22, 2016Background
- Orozco sued Alvarez-Corrales for negligence; Alvarez-Corrales served a Rule 68 offer of judgment for $7,001 which Orozco did not accept.
- Case proceeded to compulsory arbitration; the arbitrator issued a decision awarding Orozco $2,552.56 and allowed $825 in taxable costs.
- After the Rule 77(a) period to seek relief from the award expired, Alvarez-Corrales asked the superior court to enter judgment on the arbitration award.
- Alvarez-Corrales also sought a mandatory Rule 68(g) sanction (reasonable expert fees and double taxable costs) because Orozco failed to obtain a more favorable judgment than the offer.
- The superior court entered judgment on the arbitration award and imposed the requested Rule 68(g) sanction against Orozco over his objection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 68(g) sanctions are available after arbitration concludes | Rule 68(g) sanction became unavailable after arbitration and arbitrator’s award was the operative disposition | Rule 68(g) sanctions may be sought from the court after the arbitration award becomes a court-entered judgment | Court held sanctions properly sought post-arbitration; sanction assessed against Orozco after court entered judgment on the award |
| Whether Rules 76(a) and 74(c)(1)(F) conflict over arbitrator authority to award Rule 68 sanctions | Plaintiff relied on Rule 76(a) language suggesting arbitrator may consider costs/awards arising from offers of judgment | Defendant elected to seek sanction from the court; Rule 74(c)(1)(F) reserves Rule 68 sanctions to the court | Court recognized a conflict in the rules but found Defendant was not required to seek sanctions from the arbitrator and properly sought them post-judgment |
Key Cases Cited
- Bradshaw v. Jasso-Barajas, 231 Ariz. 197 (App. 2013) (de novo review of civil-procedure rules; plain-language interpretation)
- Arellano v. Primerica Life Ins. Co., 235 Ariz. 371 (App. 2014) (Rule 68 sanctions are mandatory to encourage settlement)
- Warner v. Sw. Desert Images, LLC, 218 Ariz. 121 (App. 2008) (purpose of Rule 68 sanctions)
- Metzler v. BCI Coca-Cola Bottling Co. of Los Angeles, 230 Ariz. 26 (App. 2012) (sanction question hinges on comparison with the judgment)
- Sw. Barricades, L.L.C. v. Traffic Mgmt., Inc., 240 Ariz. 139 (App. 2016) (arbitrator’s award is not a judgment; court must enter judgment to finalize award)
- Phillips v. Garcia, 237 Ariz. 407 (App. 2015) (same principle: arbitrator lacks authority to dispose of the case)