¶ 1 In this opinion, we address whether “judgment finally obtained,” as used in Arizona Revised Statutes (“A.R.S.”) section 12-341.01 (2003), is limited to the jury’s verdict or whether it includes attorneys’ fees ultimately awarded by the trial court. We also consider whether the remedy of rescission is available to a subsequent purchaser in connection with a claim for breach of the implied warranty of habitability. For the following reasons, we hold that for purposes of determining the successful party pursuant to § 12-341.0KA), “judgment finally obtained,” as construed and applied in this case, is inclusive of attorneys’ fees. We further conclude that under the circumstances presented here, rescission cannot be properly requested by a subsequent purchaser. 1
BACKGROUND
¶ 2 In 1999, Jane Hall and her now-deceased husband purchased a previously-owned house, originally constructed by Read Development, Inc. (“RDI”). Soon thereafter, Hall experienced various structural problems with the house. In 2004, Hall filed suit against RDI, alleging breach of the implied warranty of habitability and requesting “rescission of the purchase,” or alternatively, damages for the costs to repair. 2 RDI later moved for summary judgment on whether Hall was entitled to rescission, asserting that the remedy of rescission was unavailable because Hall, as a subsequent purchaser, was not in privity with RDI. The trial court granted RDI’s motion.
¶ 3 At trial, the court granted judgment as a matter of law against Hall on her claims for negligent infliction of emotional distress and punitive damages. The jury found in favor of Hall on her breach of implied warranty of habitability claim and awarded $30,000 in damages, but found in favor of RDI on Hall’s intentional infliction of emotional distress claim.
¶ 4 Both parties requested attorneys’ fees and costs pursuant to § 12-341.01(A). Under that statute, RDI asserted it was the successful party because its settlement offers exceeded the amount of the jury verdict. Hall countered that the offers did not exceed the “judgment finally obtained,” which necessarily consisted of the jury verdict,
plus
attorneys’ fees and costs. Hall’s fee request totaled $303,496.01, which included only those fees estimated to have been incurred in connection with the implied warranty of habitability claim. Finding that Hall was the successful party, the trial court awarded attorneys’ fees in the amount of $227,500. It then reduced this figure by $2,500, the amount awarded to RDI for successfully defending against Hall’s request for rescission. The court later issued a final judgment,
¶ 5 RDI moved for a new trial, asserting the court erred when it granted attorneys’ fees to Hall pursuant to § 12-341.01(A). Upon the retirement of the original trial judge, a different judge denied RDI’s motion. This appeal and cross-appeal followed.
DISCUSSION
I. Trial Court’s Decision Regarding Attorneys’ Fees
¶ 6 In construing a statute, our fundamental goal is to give effect to legislative intent.
Premiere RV & Mini Storage LLC v. Maricopa Cnty.,
A. Discretionary Nature of A.R.S. § 12-341.01
¶ 7 Recovery of attorneys’ fees in actions arising out of contract is governed by § 12-341.0KA):
In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees. If a written settlement offer is rejected and the judgment finally obtained is equal to or more favorable to the offeror than an offer made in writing to settle any contested action arising out of a contract, the offeror is deemed to be the successful party from the date of the offer and the court may award the successful party reasonable attorney fees.
(Emphasis added.) Based on the plain language of the statute, fees may be awarded only to “the successful party.” Under the first sentence of § 12-341.01(A), a trial court exercises its broad discretion to determine whether a party was successful in the litigation.
See, e.g., Sanborn v. Brooker & Wake Prop. Mgmt., Inc.,
¶ 8 Once the court determines the successful party, the court weighs various factors to decide the amount of fees, if any, to be awarded the successful party, an exercise that is also highly discretionary.
See, e.g., Associated Indem. Corp. v. Warner,
¶ 9 The second sentence of the statute, added in 1999, seemingly narrows the trial court’s discretion in handling fee determination issues in contract cases, obligating the court to compare a written settlement offer against the “judgment finally obtained.” A.R.S. § 12-341.0KA); S.B. 1159, 44th Leg., 1st Reg. Sess. (Ariz.1999). If the offer is more favorable than the judgment finally obtained, then the offeror is “deemed” to be the successful party “from the date of the offer.” Therefore, an offeror is the successful party, even if an offeree obtains a favorable judgment, if the offeror previously made a written offer for an amount equal to or greater than the final judgment. Under such circumstances, however, the offeror is the successful party in the litigation only
¶ 10 Moreover, nothing in the language of the statute indicates that these methods are necessarily mutually exclusive directives for determining the successful party. The first contemplates an overall assessment of whether the plaintiff prevailed on his or her contractual claim. The second presumes a comparison of a settlement offer against the final judgment, potentially altering the successful party designation from the date of the offer.
Cf Drozda v. McComas,
¶ 11 Here, after extensive briefing and oral argument, the trial court first determined that by “presenting her complaint to a jury and attaining a verdict awarding damages,” Hall was the successful party for “purposes of both A.R.S. § 12-341 and § 12-341.01.” 4 Recognizing that RDI “might become the successful party ‘from the date of the offer’ under § 12-341.01(A),” the court then addressed RDI’s claim that it prevailed under the settlement comparison test:
[RDI] contends it is the successful party because of offers to settle made January 25, 2007, the most favorable of which was for the sum of $40,000, made with the understanding that if [Hall] accepted, each party would be responsible for respective costs and attorney fees incurred. [RDI] urges that the analysis of this offer under [A.R.S.] § 12-341.01(A) is simple: $40,000 is more tha[n] the $30,000 jury award, ergo [RDI] is the successful party from January 25, 2007.
The language of the statute does not compare the offer to the jury verdict, but rather ‘the judgment finally obtained,’ 5 which in this ease will, at a minimum, include the jury award and the award of costs, which total is less favorable to the offeror [RDI], than the January 25, 2007 offer. [RDI] is thus not the successful party from January 25, 2007.
[RDI] next points to an offer of judgment made March 2, 2009 in the amount of $126,000[.j In order for the judgment finally obtained in this case, which will include the jury award, the award of costs, and an award for recovery of attorneys^] fees, to be more favorable to offeror [RDI] than the $126,000 settlement offer, [Hall’s]recovery of attorneys^] fees would have to be less than $85,242.21.
[Hall] seeks recovery of $303,496.01 in attorneys!’] fees, a figure the court would have to discount by nearly 72% to limit [Hall’s] judgment finally obtained to less than the $126,000 offer. [RDI] provides no basis for reducing [Hall’s] attorneys^] fees claim so significantly!.]
The court therefore rejected RDI’s argument that it was the successful party under the settlement comparison test of § 12-341.01(A), and applied the
Warner
factors in awarding Hall a portion of her requested attorneys’ fees.
See Warner,
B. Judgment Finally Obtained
¶ 12 RDI contends the trial court erred when it applied the settlement comparison test of § 12-341.01(A) by incorporating attorneys’ fees and costs in the final judgment and comparing this sum with the various settlement offers RDI made to Hall during the litigation. RDI asserts that the statute requires a comparison between the settlement offer and the jury verdict, and that a trial court cannot simply “add a plaintiffs attorney’s fees to the verdict before comparing the sum to the defendant’s offer.” We disagree.
¶ 13 The plain language of the second sentence of § 12-341.01(A) requires a comparison of the amount of the settlement offer versus the amount of the “judgment finally obtained,” not just the jury’s verdict.
See Berry v. 352 E. Virginia, L.L.C.,
¶ 14 Similar to our reasoning in
Berry,
we conclude that the legislature’s decision to use the phrase “judgment finally obtained,” must be given legal effect. That phrase means the sum ultimately obtained in a particular case, which in the present judgment includes attorneys’ fees.
See id.
at ¶ 29;
see also Vega v. Sullivan,
C. Legislative Purposes and Rule 68
¶ 15 RDI contends nonetheless that a comparison of the final judgment as inclusive of attorneys’ fees requires the trial court to determine attorneys’ fees
before
determining the identity of the successful party. RDI
¶ 16 We acknowledge that the second sentence of § 12-341.01(A) requires a court to “prejudge” components of the final judgment that have not yet been completely resolved, such as taxable costs, prejudgment interest, and attorneys’ fees, and then decide what amounts will carry forward to the final judgment. Calculating non-discretionary items such as costs and prejudgment interest should be relatively straightforward for purposes of comparing the offer and judgment. But decisions regarding attorneys’ fees require the exercise of substantial discretion, the application of which is undoubtedly more complex as a result of the legislature’s addition of the settlement comparison test. As occurred here, trial courts will have no choice but to exercise their discretion to determine the amount of reasonable attorneys’ fees incurred up to the date of the offer (and would thus be included in the final judgment) when comparing a settlement offer to the judgment finally obtained. Otherwise a court cannot comply with the directive of the statute. However, this methodology reflects a legislative choice and is consistent with the broad discretion granted to trial courts under the first sentence of § 12-341.01. 8 We therefore reject RDI’s suggestion that interpreting “judgment finally obtained” as inclusive of attorneys’ fees and costs “would almost always result in a plaintiff exceeding the offer” and “allow for a plaintiff to run up attorneys’ fees to the point where the case cannot be settled.” We presume that trial courts will appropriately exercise their discretion in evaluating relevant factors and will award only those fees, if any, “reasonably” incurred by the successful party.
¶ 17 We readily acknowledge that the second sentence of § 12-341.01 (A) fails to provide any specificity as to what fees and costs in the judgment should be utilized in the comparison to the settlement offer: those incurred up to the date of the offer, or those incurred through the date of the judgment. But we resolve this lack of detail by adhering to the overall legislative intent and harmonizing the statute with Rule 68.
¶ 18 The purposes of § 12-341.01(A) include: (1) mitigating “the burden of the expense of litigation to establish a just claim or a just defense;” (2) encouraging “more careful analysis prior to filing suit” by imposing the risk of paying the opposing party’s attorneys’ fees where legitimate settlement offers are rejected; and (3) promoting settlements and thus reducing caseloads involving contractual matters.
See
A.R.S. § 12-341.01(B);
Chaurasia v. Gen. Motors Corp.,
¶ 19 Consistent with the statutory goals, the purpose of Rule 68, which governs offers
¶ 20 We conclude that comparing the “judgment finally obtained” under § 12-341.01(A) to a settlement offer should involve only those reasonable fees and costs incurred as of the date the offer was made. This approach fulfills the purposes of the statute and provides an accurate comparison of the settlement offer with the final judgment, ensuring the final judgment includes only those attorneys’ fees and costs that were incurred at the time of the settlement offer and included in the final settlement figure.
Cf. Hales v. Humana of Arizona, Inc.,
D. Evaluation of Settlement Offers
¶21 We now consider whether the trial court erred in performing the comparison contemplated by § 12-341.01(A) and analyze each settlement offer made by RDI in turn. As noted, the court expressly found that Hall was the successful party because she prevailed on her contractual claim. As a secondary question, the court considered but rejected RDI’s assertion that it offered Hall more than she ultimately obtained in the litigation. Although the court’s analysis was not necessarily correct in its entirety, the court reached the correct result.
¶ 22 RDI initially offered Hall $15,000 as “full and final settlement.” However, because the jury’s verdict alone totaled $30,000, RDI did not obtain an award at trial “more favorable to the offeror” than the settlement offer.
¶ 23 In January 2007, RDI made three alternative offers. It first offered “to buy back [Hall’s] home for her purchase price ($96,000) plus an additional $20,000, for a total of $116,000.” Under this offer, although RDI was willing to expend $116,000,
¶ 24 RDI’s second alternative offer stated, “[RDI] offers to make the repairs ... (costing approximately $20,000) and also offers to pay [Hall] an additional $20,000.” Similarly, the third offer stated, “[RDI] offers to pay [Hall] $40,000, allowing [Hall] to hire her own replacement contractor to perform and warrant the repairs and keep the additional $20,000.” At the time of these two offers, Hall had incurred $69,396.50 in attorneys’ fees, not including taxable costs of several thousand dollars. RDI did not contend the fee amount stated by Hall was unreasonable or request an evidentiary hearing as to reasonableness. Even if the trial court reduced the requested fees by 75%, RDI would not have achieved a more favorable result.
¶ 25 About one month before trial, RDI later made its final offer for $126,000. As indicated in Hall’s objection to RDI’s statement of taxable costs, Hall had incurred $206,692.81 in attorneys’ fees — an amount that was unchallenged by RDI and far exceeds RDI’s offer.
¶ 26 The record before us supports the trial court’s conclusion that RDI did not ultimately obtain a more favorable judgment than any of its offers. Accordingly, the court did not abuse its discretion in rejecting RDI’s assertion that it was the successful party pursuant to the settlement comparison test of § 12-341.01(A).
10
See Hale v. Amphitheater Sch. Dist. No. 10 of Pima Cnty.,
II. Rescission
¶ 27 On cross-appeal, Hall asserts that the trial court improperly granted summary judgment to RDI on her request for rescission. She contends that because a party need not be in privity to maintain an action for breach of the implied warranty of habitability in Arizona, by implication, privity is also not required for the remedy of rescission. We disagree.
¶ 28 Summary judgment may be granted when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(c). We review a trial court’s grant of summary judgment de novo.
Chalpin v. Snyder,
¶29 Generally, “only the parties and privies to a contract may enforce it.”
Lofts at Fillmore Condo. Ass’n v. Reliance Commercial Constr., Inc.,
¶ 30 The contractual remedy of rescission “abrogate[s the contract] and undo[es] it from the beginning; that is, not merely to release the parties from further obligation to each other in respect to the subject of the contract, but to annul the contract and restore the parties to the relative positions which they would have occupied if no such contract had ever been made.”
Reed v. McLaws,
¶ 31
Richards
did not address the situation before us — whether a subsequent purchaser may seek to rescind a contract to which he was not a party. Nor is there any suggestion in
Richards
that our supreme court contemplated that a claim based on the implied warranty of habitability would include the right to nullify the original transaction. Instead, the court simply removed the obstacle of privity, in the context of an implied warranty of habitability claim, to ensure that homebuilders were held accountable and that deserving subsequent purchasers had the opportunity to obtain a recovery for damages.
Richards,
¶ 32 Moreover, providing subsequent purchasers with the ability to rescind a contract negotiated and entered into between other parties is not a viable solution. We cannot return RDI and Hall to the status quo because they never contracted with each other; instead, RDI sold the house to the original purchaser. Hall’s only contract was with the original purchaser of the house. We therefore decline to require a builder to return funds to a subsequent purchaser who paid no funds to the builder.
Cf. Standard Chartered PLC v. Price Waterhouse,
CONCLUSION
¶ 33 For the foregoing reasons, and those set forth in our memorandum decision, we affirm the judgment of the trial court.
Notes
. Pursuant to Arizona Rule of Civil Appellate Procedure 28(g), we address other issues raised on appeal by RDI and Hall's cross-appeal by separate memorandum decision filed herewith.
. In May 2008, Hall filed an amended complaint, adding claims for negligent infliction of emotional distress, intentional infliction of emotional distress, and punitive damages.
. Whether there can be a “hybrid” determination of "successful party” is not squarely before us; however, it is relevant in construing the legislative intent of the statute. At oral argument before this court, counsel for both parties acknowledged that the second sentence of §12-341.01(A) may change the successful party status as of the date of an offer and the offeree could still be the prevailing party prior to that point.
. Other than asserting it should be deemed the successful party "from the date" of its settlement offers, RDI does not challenge this finding.
. Additionally, at oral argument, the trial court explained: "[W]hether artfully expressed or not, the legislature anticipated an analysis that included more than a simple comparison of the offer made [to] the jury verdict rendered.”
. A judgment does not always include taxable costs because a successful party may file and serve a statement of costs "within ten days after judgment.” Ariz. R. Civ. P. 54(f)(1). However, we do not address this possibility because the judgment here included taxable costs.
. "Effective December 1, 2000, the Uniform Rules of Procedure for Arbitration were abrogated!.]" Veg
a,
. The trial court’s role under § 12 — 341.01 (A) in "pre-judging” the attorneys’ fee award involves an inquiry similar to the one required in assessing whether a party is entitled to sanctions under Rule 68 when attorneys' fees are claimed. In that instance, before the court decides whether the threshold has been satisfied, the court must determine the amount of "reasonable” fees incurred prior to the date of the offer. See Ariz. R. Civ. P. 68(g) ("If the judgment includes an award of taxable costs or attorneys’ fees, only those taxable costs and attorneys’ fees determined by the court as having been reasonably incurred as of the date of the offer was made shall be considered in determining if the judgment is more favorable than the offer.”); see also Ariz. R. Civ. P. 68, State Bar Committee Note 2007 Amendments (stating that a court may require a hearing to assess reasonableness of fees incurred as of the date the offer was made).
. We construe the settlement comparison test of § 12-341.01(A) in this fashion based on the wording selected by the legislature. If the legislature intended a different methodology for courts to follow when implementing the test, we presume it will make appropriate adjustments to the statutory language.
See Helvetica Servicing, Inc. v. Pasquan,
. Although the trial court considered the full amount of attorneys' fees and costs requested by Hall in applying the settlement comparison test, instead of the fees and costs incurred up until date of the offers, documentation provided by Hall in support of her fee request supports the trial court’s ultimate conclusion.
See Gen. Electric Capital Corp. v. Osterkamp,