Opinion
No. 1 CA-CV 11-0107
03-13-2012
COMPASS BANK, Plaintiff/Appellee, v. AMBERWOOD DEVELOPMENT, INC.; REIDS RANCH DEVELOPMENT, LLC; AMBERWOOD HEIGHTS DEVELOPMENT, LLC; and BILL G. JOHNSON, Defendants/Appellants.
Quarles & Brady, LLP By Nicole France Stanton And John Craiger Lauren Elliott Stine Attorneys for Plaintiff/Appellee Dioguardi Flynn, LLP By John P. Flynn And Todd A. Williams Mark D. Dioguardi Attorneys for Defendants/Appellants
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)
Appeal from the Superior Court in Maricopa County
Cause No. CV2009-026657
The Honorable Gary E. Donahoe, Judge
AFFIRMED IN PART, VACATED IN PART, REMANDED
Quarles & Brady, LLP
By Nicole France Stanton
And John Craiger
Lauren Elliott Stine
Attorneys for Plaintiff/Appellee
Phoenix
Dioguardi Flynn, LLP
By John P. Flynn
And Todd A. Williams
Mark D. Dioguardi
Attorneys for Defendants/Appellants
Scottsdale GOULD, Judge
¶1 Amberwood Development, Inc. ("Amberwood"); Reid's Ranch Development, LLC ("Reid's Ranch"); Amberwood Heights Development, LLC ("Amberwood Heights"); Montecito at Mirabel Development, LLC ("Montecito"); Weston Ranch Development, LLC ("Weston Ranch"); and The Landings at Reid's Ranch Development, LLC ("Landings") appeal from the trial court's grant of summary judgment, the dismissal of their counterclaim, the admission of certain expert testimony, and the award of attorneys' fees. For the reasons that follow, we affirm on all issues except for a portion of the fee award, which we vacate. We remand for entry of a new judgment for an award of attorneys' fees and costs.
Facts and Procedural Background
¶2In 2004, Amberwood and its related entities ("Borrowers") borrowed approximately $20 million from Guaranty Bank, which later became Compass Bank ("Lender"). The loan agreement was secured by a promissory note and deeds of trust on three pieces of real property. The loan was guaranteed by Billy G. Johnson ("Guarantor"). Between February 11, 2005 and April 24, 2008, the Borrowers executed five amendments to the loan agreement that increased the principal amount of the loan to $40 million and required all amounts due and owing to be paid by the loan maturity date, as defined in the loan documents. The Guarantor also guaranteed payment for all amounts due and owing using an amended guaranty.
¶3 Borrowers failed to repay the amounts due under the loan. Lender filed a complaint for breach of contract and breach of guaranty and sought the appointment of a receiver over certain entities of the Borrowers. Borrowers and Guarantor asserted a counterclaim that Lender breached the implied covenant of good faith and fair dealing by failing to allow Borrowers "the opportunity to sell or transfer properties which would have paid debts or obligations against the claimed debt." The trial court dismissed this counterclaim.
¶4 Shortly afterwards, three of the defendants (including Landings) declared bankruptcy. Lender moved for summary judgment on its contract claims, which the trial court granted. After the trial court entered judgment in favor of Lender, Borrowers and Guarantor ("Appellants") filed a motion for new trial and a motion for leave to file an amended answer and counterclaim, both of which were denied by the trial court.
¶5 After judgment was entered, Lender took action to foreclose its security interests in the properties securing the underlying Loan. After Lender acquired title to these properties, Appellants requested a fair market value hearing pursuant to Arizona Revised Statutes ("A.R.S.") section 33-814. The trial court held a fair market value hearing on September 23 and 24, 2010. Prior to the hearing, Appellants moved to exclude the testimony of two of Lenders' experts. After both sides briefed the issue, the trial court denied this motion on September 22, 2010.
¶6 On November 23, 2010, the trial court entered an amended judgment in favor of Lender and against Appellants, jointly and severally, in the total amount of $7,241,178.05 (exclusive of interest, attorneys' fees, and costs). As part of the amended judgment, the trial court awarded Lender its attorneys' fees and costs, including fees incurred in connection with enforcing its rights and remedies under the loan documents in a related bankruptcy proceeding against former defendant/co-borrower Landings, for which sums all Borrowers and Guarantor were jointly and severally liable under the loan documents.
¶7 Appellants timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1), (A)(5)(a) (West 2012).
We cite to the current version of the statute when no revisions material to this decision have occurred.
Discussion
¶8 Appellants argue the trial court erred by (1) granting summary judgment to Lender, (2) dismissing their counterclaim for breach of the implied covenant of good faith and fair dealing and denying leave to amend, (3) failing to exclude Lender's expert opinions and testimony from the fair market value hearing, and (4) awarding Lender its attorneys' fees relating to bankruptcy matters and the fair market value hearings. We address each argument below.
I. The Summary Judgment Motion
A. Standard of Review
¶9 When reviewing summary judgment, our role "is to determine whether there is any genuine issue of material fact underlying the adjudication, and, if not, whether the substantive law was correctly applied." Long v. Buckley, 129 Ariz. 141, 142, 629 P.2d 557, 558 (App. 1981). We review the trial court's determination de novo. Kosman v. State, 199 Ariz. 184, 185, ¶ 5, 16 P.3d 211, 212 (App. 2000). We review the facts and all reasonable inferences in the light most favorable to Appellants as the parties opposing the motion. Id.
B. The Maturity Date
¶10 Appellants argue the trial court erred in granting summary judgment because Lender misstated the maturity date in its motion. Lender's motion for summary judgment stated that "all amounts due and owing under the Third Amended Note were due on the loan maturity date of April 22, 2009." Based on this alleged error, Appellants assert that Lender failed to present a prima facie case for breach of contract.
¶11 Appellants' assertion lacks merit. When evaluating how the maturity date affects the validity of the summary judgment motion, we may consider only what was before the trial court at the time summary judgment was granted. Phx. Baptist Hosp. & Med. Ctr., Inc. v. Aiken, 179 Ariz. 289, 292, 877 P.2d 1345, 1348 (App. 1994) (explaining that our review is limited to record before trial court at time it considered motion for summary judgment). In their response to Lender's motion for summary judgment, Appellants conceded that the April 22, 2009 maturity date was the correct maturity date. As a result, this fact was "uncontroverted" at the time the trial court decided the summary judgment motion. See Sato v. Van Denburgh, 123 Ariz. 225, 228, 599 P.2d 181, 184 (1979) (affirming that if a party fails to controvert the moving party's statement of facts in a motion for summary judgment, the moving party's facts may be considered true); Ariz. R. Civ. P. 56(c)(2) (explaining that "[a]ny party opposing a motion for summary judgment shall file a statement . . . specifying those paragraphs in the moving party's statement of facts which are disputed") (emphasis added).
Instead of contesting the maturity date, Appellants' strategy was to argue that Lender breached its duty of good faith and fair dealing.
¶12 Appellants argue that their failure to point out the wrong maturity date to the trial court is irrelevant because the adequacy of any motion for summary judgment must be determined on its face and not based on the procedural failings of the party opposing the motion. In support of this position, Appellants rely on United Bank of Arizona v. Allyn, 167 Ariz. 191, 805 P.2d 1012 (App. 1990).
¶13 In Allyn, a bank alleged that a contract had been breached and the interest rate was five percent, but attached a promissory note to its motion for summary judgment that indicated the interest rate was four percent. Id. at 193-94, 805 P.2d at 1014-15. The borrower failed to respond to the summary judgment motion and the trial court entered judgment with an interest rate of four percent. Id. at 194, 805 P.2d at 1015. After this error was pointed out, the trial court denied the motion for new trial and the appellant appealed from both the judgment and the order denying the new trial motion. Id. We explained that "[t]he trial court was obligated to . . . review the motion and accompanying evidence presented by the bank" to make sure that summary judgment was appropriate even if the other party did not oppose the motion. Id. at 198, 805 P.2d at 1019. Given that the discrepancy was "apparent from the moving party's papers," we reversed the part of the judgment relating to the interest rate. Id. at 196, 198, 805 P.2d at 1017, 1019. We declined, however, to reverse the entire judgment (including the liability portion), as the appellants desired. Id. at 198, 805 P.2d at 1019. Instead, we limited our reversal to the rate of interest, the only part of the judgment that was inconsistent with the moving party's papers. Id.
¶14 Appellants' reliance on Allyn is misplaced. Unlike Allyn, Appellants not only filed a response to Lender's motion for summary judgment, but they agreed with Lender's recitation of the maturity date. Allyn does not require a court to search the record to determine whether the parties have correctly agreed to or conceded certain factual issues in their moving papers. While we are cognizant that the trial court has an independent duty to ensure that summary judgment is appropriate even when the other party does not respond to the motion, our supreme court has explained that "neither we, the trial court, nor the court of appeals should be required to perform counsel's work by searching the record to attempt to discover facts which establish or defeat the [summary judgment] motion. These are tasks which must be left to counsel." Mast v. Standard Oil Co. of Cal. , 140 Ariz. 1, 2, 680 P.2d 137, 138 (1984); see also White v. Lewis, 167 Ariz. 76, 80, 804 P.2d 805, 809 (App. 1990) ("In light of the volume and complexity of modern litigation, we consider the cases requiring a trial court or an appellate court to search the entire record in connection with a motion for summary judgment to be contrary to modern authority. It is the attorney's responsibility to search the record . . . .").
Although there are some cases to the contrary, see Chanay v. Chittenden, 115 Ariz. 32, 37, 563 P.2d 287, 292 (1977) (holding "[t]he entire record must be examined" by the trial court before granting summary judgment), we recently explained the proper balance between the two approaches as follows: "From our perspective, whether such a search is required, either by the trial court or on appeal, depends on 'the volume and complexity' of the specific litigation in which the motion for summary judgment is filed." Tilley v. Delci, 220 Ariz. 233, 237 n.4, ¶ 10, 204 P.3d 1082, 1086 n.4 (App. 2009) (quoting White, 167 Ariz. at 80, 804 P.2d at 809).
¶15 Even if Lender's motion for summary judgment listed the wrong maturity date, Appellants are not entitled to relief because they never asserted in their response that there was an issue of fact regarding whether the contract had been breached. In a breach of contract action, "the plaintiff has the burden of proving the existence of a contract, breach of the contract, and resulting damages." Chartone, Inc. v. Bernini, 207 Ariz. 162, 170, ¶ 30, 83 P.3d 1103, 1111 (App. 2004); see Provident Nat. Assurance Co. v. Sbrocca, 180 Ariz. 464, 885 P.2d 152 (App. 1994). A plaintiff is not, however, required to prove the exact date on which a breach occurred. Thus, even if the maturity date was in fact wrong in Lender's summary judgment motion, given the fact that Appellants conceded there was a breach, this factual dispute is not material to the resolution of summary judgment. See Long, 129 Ariz. at 142, 629 P.2d at 558 (stating that our role "is to determine whether there is any genuine issue of material fact") (emphasis added).
Although the date of breach may be relevant to establishing that breach occurred in cases where breach is controverted, the date of breach is not relevant in cases where breach is conceded, except insofar as it affects the damages calculation.
¶16 Appellants also contend that because the April 22, 2009 maturity date relied upon by Lender is wrong, Lender failed to present any evidence that the loans were due and payable; as a result, there was no proof of breach. We disagree. Apart from the April 22, 2009 maturity date listed in the loan documents, Lender also presented evidence that three advances on the loan "were due and payable on the following dates: one on April 12, 2009; one on April 18, 2009, and one on May 1, 2009." Lender further explained that "[u]nder the Loan Documents, a failure to pay any amount due as of any Maturity Date constituted an event of default and triggered Defendants/Appellants' obligation to pay the entire balance of the Loan." Thus, any one of these dates could, under the terms of the loan documents, serve as a maturity date that formed the basis for Lender's breach of contract claim.
The additional maturity dates are based on Lender's May 8, 2009 demand letter. Appellants claim on appeal that this letter is inadmissible evidence, and should not be considered by this court. However, Appellants waived any objection to the admissibility of the demand letter by failing to object to its admissibility in their response to Lender's motion for summary judgment; in fact, Appellants included the letter in their own statement of facts. See Ball Corp. v. George, 27 Ariz. App. 540, 544, 556 P.2d 1143, 1147 (App. 1976) ("In the absence of objection to the testimony when it was presented or a motion to strike such testimony thereafter, [defendant] cannot claim the trial court committed error in admitting it.").
C. The Motion for a New Trial
¶17 In their reply brief, Appellants add the argument that the trial court's related denial of their amended motion for a new trial was "in error." Normally, when an appellant fails to raise an argument until its reply brief, we deem this argument waived because it would be unfair to consider such arguments without giving the opposing party opportunity to respond. See Nelson v. Rice, 198 Ariz. 563, 567 n.3, ¶ 11, 12 P.3d 238, 242 n.3 (App. 2000) (stating that party waives argument by failing to raise it in the opening brief).
¶18 However, even if we were to consider this issue, it would not change the result. The "denial of a motion for a new trial is within the sound discretion of the trial court and we will not upset its ruling absent a clear showing of an abuse of discretion." Wendling v. Sw. Sav. & Loan Ass'n, 143 Ariz. 599, 602, 694 P.2d 1213, 1216 (App. 1984). Under an abuse of discretion standard, we defer to the trial court's decisions and reverse only if, as one court colorfully put it, "they 'strike us as wrong with the force of a five-week old, unrefrigerated dead fish.'" Rodriguez v. Anderson, 973 F.2d 550 (7th Cir. 1992) (internal citations omitted).
¶19 After switching attorneys, Appellants caught the maturity date error and filed a motion for a new trial pursuant to Arizona Rule of Civil Procedure 59. In the motion, Appellants argued that the trial court's independent duty to verify the record even in an uncontested motion for summary judgment under Allyn entitled Appellants to set aside the judgment and have a new trial notwithstanding their other concessions and their failure to raise this issue in the earlier briefing.
¶20 The trial court did not abuse its discretion in denying this motion. Separate and apart from the April 22, 2009 maturity date, Lender presented evidence that Appellants defaulted on three loan advances that were due and payable on April 12, 2009, April 18, 2009, and May 1, 2009. In addition, even if the maturity date was wrong, Appellants' concession that they breached the loan documents in the summary judgment briefing made this error immaterial to Lender's prima facie case for breach. Appellants should have, and could have, raised their argument regarding the maturity date during the summary judgment briefing; the trial court did not err in refusing to let them take advantage of their own tardiness by forcing a trial on liability that they had already essentially conceded.
II. Dismissal of Counterclaim and Denial of Motion to Amend
A. Dismissal of Counterclaim
¶21 "We review a trial court's grant of a motion to dismiss for abuse of discretion, but we review issues of statutory interpretation de novo." T.P. Racing, L.L.P. v. Ariz. Dep't of Racing, 223 Ariz. 257, 259, ¶ 8, 222 P.3d 280, 282 (App. 2009).
¶22 Appellants asserted a counterclaim for breach of the implied covenant of good faith and fair dealing in their answer. The trial court dismissed this counterclaim upon Lender's motion on November 18, 2009. Eight months later, and one month after the trial court had granted Lender's motion for summary judgment, Appellants sought leave to file an amended counterclaim, which the trial court denied. Appellants argue that both decisions were in error.
¶23 We first examine the elements of a successful claim for breach of the implied covenant: "Arizona law recognizes that a party can breach the implied covenant of good faith and fair dealing both by [1] exercising express discretion in a way inconsistent with a party's reasonable expectations and [2] by acting in ways not expressly excluded by the contract's terms but which nevertheless bear adversely on the party's reasonably expected benefits of the bargain." Bike Fashion Corp. v. Kramer, 202 Ariz. 420, 424, ¶ 14, 46 P.3d 431, 435 (App. 2002). In Arizona, the implied covenant of good faith and fair dealing cannot be read to directly contradict an express term of the contract. Id. at 423-24, ¶ 14, 46 P.3d at 434-35.
¶24 Applying these principles to the counterclaim as it was originally pleaded, we decide the trial court did not abuse its discretion by dismissing this counterclaim. As originally pleaded, the counterclaim stated the following:
Defendant Bank, in violation of its duty of good faith and fair dealing, has failed to allow Claimants the opportunity to sell or transfer properties which would have paid debts or obligations against the claimed debt and therefore Claimants have been damaged. . . .(Emphasis added.)
¶25 This cursory assertion is insufficient to state a claim for breach of the covenant of good faith and fair dealing. The loan documents do not impose any obligation on Lender to grant Appellants time past the maturity dates to cure any breach. Any such requirement would obviously defeat the purpose of securing the loan. Given that the implied covenant of good faith and fair dealing cannot preclude Lender from requiring Appellants to comply with the express terms of the loan documents, this counterclaim, as originally pleaded, is defective as a matter of law. See id.
Even Appellants acknowledge the "somewhat inartful original pleading" of the counterclaim.
¶26 Most of Appellants' arguments challenging the dismissal of the counterclaim relate to their attempt to file an amended counterclaim approximately one month after the court entered judgment. They argue that their amended counterclaim adequately stated a claim. However, even assuming it did, this is not a sufficient reason to find that the trial court abused its discretion by dismissing the counterclaim before the motion to amend.
B. Denial of Motion to Amend
¶27 A trial court's decision on a motion to amend pleadings is "left to the trial court's sound discretion." Bishop v. State Dep't of Corr., 172 Ariz. 472, 474, 837 P.2d 1207, 1209 (App. 1992). A trial court does not abuse its discretion by denying a motion to amend if the denial is based on "undue delay in the request, bad faith or a dilatory motive on the part of the movant, undue prejudice to the opposing party as a result of the amendment, or futility in the amendment." Id. at 474-75, 837 P.2d at 1209-10.
¶28 Here, the request was untimely. Appellants attempted to amend their counterclaim eight months after the court granted Lender's motion to dismiss, and one month after the court signed a judgment dismissing the original counterclaim. We need not resolve whether there is an absolute rule barring such amendment after judgment as Lender urges; however, absent compelling circumstances, an answer may be amended only "at any time before trial." Romo v. Reyes, 26 Ariz. App. 374, 376, 548 P.2d 1186, 1188 (App. 1976).
¶29 While delay alone is generally insufficient to deny a motion to amend, there is a major difference between allowing amendment when discovery is ongoing and allowing amendment after the case has reached judgment. Given the huge variation in how long any given case may take for resolution (depending on the length of discovery, the type and number of motions that are filed, the legal and factual complexity of the case, etc.), it is impossible to arbitrarily assign a number of months after which a request to amend becomes "untimely." A request to amend that is two years into litigation could conceivably be timely if discovery is still ongoing. See Owen v. Superior Court (Moroney), 133 Ariz. 75, 77-80, 649 P.2d 280-83 (1982) (reversing denial of leave to amend where request to amend had been delayed twenty-seven months but still occurred six weeks prior to trial and did not require any additional discovery).
¶30 However, as the case progresses towards resolution (e.g., discovery ends, motions for summary judgment are filed, such motions are resolved, the case proceeds to trial, judgment is entered), it becomes increasingly difficult to argue that any given delay is still timely. In Owen, the twenty-seven month delay was apparently due to difficulties locating and deposing a key witness and obtaining discovery. Id. at 77, 649 P.2d at 280. Given that trial was still six weeks away at that point, and no further discovery would be required, our supreme court found that the trial court abused its discretion in denying leave to amend based solely on delay. Id. at 81, 649 P.2d at 284.
¶31 Here, in contrast, the case had reached judgment before
Appellants moved to amend. At a minimum, allowing the amendment would have required a reopening of the case, additional time and expense to resolve the new counterclaim, and a substantial delay in Lender's efforts to collect the judgment it had obtained. These prejudicial effects would not be implicated if Appellants had timely moved to amend. As such, we find no abuse of discretion in the trial court's denial of the motion to amend.
III. Expert Opinions and Testimony
¶32 We review the trial court's ruling on a motion in limine under an abuse of discretion standard. See Warner v. Sw. Desert Images, LLC, 218 Ariz. 121, 133, ¶ 33, 180 P.3d 986, 998 (App. 2008). Appellants argue that the trial court erred in denying their motion in limine to exclude expert testimony because Lender's experts relied on the wrong definition of "fair market value" and the testimony was not timely disclosed.
¶33 Lender's experts cited to the definition of fair market value contained in 12 C.F.R. § 323.2(g) (the "FDIC definition") rather than the definition in A.R.S. § 33-814(A) (the "Arizona definition"). The two definitions share several common elements; both require, for example, that value be determined as of a specific date, that value be the most probable price that a property can receive, that conditions to a fair sale exist, that buyer and seller are acting prudently and knowledgeably, that each is acting in his or her own best interest, and that there is an absence of duress (in the Arizona definition) or undue stimulus (in the FDIC definition). A.R.S. § 33-814(A), 12 C.F.R. § 323.2(g).
¶34 According to Appellants, the definitions are different in that (1) "the FDIC 'market value' definition does not preclude the element of 'duress' or compulsion affecting the sale," and (2) the FDIC definition allows properties to be valued "on dates other than the date of the trustee's sales."
¶35 Appellants never respond to Lender's challenge to explain the "metaphysical distinction" between "duress" and "undue stimulus" in the briefs other than to argue generally that the purposes behind the two statutes were not the same. Even if Appellants are correct that the purposes of the two statutes are different, they fail to demonstrate how this difference goes to admissibility of the testimony rather than its weight, as the trial court correctly pointed out when it denied their motion.
¶36 Similarly, Appellants' argument that the FDIC definition allows valuation on a day other than the date of sale goes to weight rather than admissibility, given that both experts testified that using the Arizona definition would not produce a different determination of value for the subject properties. The difference between the two dates was minor (29 days for the Landings property and 20 days for the Montecito property). A trial court has "considerable discretion in determining the relevancy and admissibility of evidence," and we find no abuse of discretion in admitting this testimony. Wait v. City of Scottsdale, 127 Ariz. 107, 109, 618 P.2d 601, 603 (1980).
¶37 Appellants' arguments about the timing of disclosure are likewise flawed; the trial court required disclosure of expert opinions by September 3, 2010. On this date, Lender disclosed the identity of its experts, stated that they would testify consistent with their previously disclosed appraisals of the properties, and that they would testify as to the "fair market value" of the properties and the factors that led to the determination of those fair market values. We agree with the trial court that this disclosure was sufficient.
IV. Attorneys' Fees
A. Standard of Review
¶38 We review a trial court's award of attorneys' fees for an abuse of discretion. Cohen v. Frey, 215 Ariz. 62, 68, ¶ 18, 157 P.3d 482, 488 (App. 2007). Appellants challenge the trial court's award of $128,433.00 in attorneys' fees and $18,644.57 in expenses that Lender had requested in its supplemental fee application filed October 18, 2010.
The total requested, $147,077.57, was awarded by the trial court in its amended judgment without further comment. The trial court had already awarded $296,768.90 in fees and $751.00 in costs to Lender in the initial judgment.
B. Fees Relating to the Bankruptcy Proceeding
¶39 Landings, an entity that Lender asserts is related to Appellants, filed a motion in bankruptcy court to stay trustee's sales on the eve of the trustee's sale proceedings in this case. The bankruptcy court ruled against Landings and in favor of Lender and allowed the trustee's sale to proceed.
¶40 The trial court awarded Lender its fees relating to this proceeding. In its fee motion, Lender argued that the motion had been filed in bankruptcy court to prevent the trustee's sale from going forward.
¶41 On appeal, Appellants argue that this award was unfair because Landings was technically a different entity who was not a judgment debtor in the case before the trial court.
¶42 Lender concedes that Landings is not a judgment debtor; however, Lender argues that this fact does not matter because Landings was expressly included in the definition of "Borrower" in the loan documents. According to the loan documents, "Borrowers" agreed that "if th[e] Note is not paid when due, whether at maturity or by acceleration, or if it is collected through a bankruptcy, probate or other court, whether before or after maturity, the undersigned agrees to pay any and all costs of administration, enforcement, work-out or settlement negotiations, appraisal, third party consultants and costs, collections. . . ."
¶43 Lenders never adequately address Appellants' argument that "there is no legal or factual basis for imposing attorneys' fees [that] occurred in entirely separate litigation against legally distinct entities that were not parties to the separate litigation." Given that Landings had declared bankruptcy and was no longer a party before the court, Landings' actions in another forum could not form the basis of the trial court's fee award against the other defendants. See Zeagler v. Buckley, 223 Ariz. 37, 39, ¶ 7, 219 P.3d 247, 249 (App. 2009) (limiting an award of fees incurred in related bankruptcy proceedings to those that are "substantially intertwined" with the case before the trial court). To obtain such a judgment, Lender would have needed to persuade the trial court that the entities were so related that Appellants should be held liable for Landings' acts because Landings was controlled by Appellants.
¶44 No such finding was made by the trial court, and Lender does not argue that the record would support such a finding. Accordingly, we vacate the portion of fees awarded as a result of Lender's involvement in the bankruptcy proceedings related to Landings and remand to the trial court for a recalculation of attorneys' fees awarded to Lender in light of our decision.
C. Fees Relating to the Fair Market Value Hearing
¶45 Appellants also contest the portion of fees that related to the fair market value hearing. They argue that awarding fees in connection with such hearings would deter debtors from exercising their rights to hold such a hearing. However, nothing in the statute itself forbids such an award. A.R.S. § 33-814. The loan documents clearly authorize such an award; they provide that "Lender shall also be entitled to its attorneys' fees, costs and expenses incurred in any post-judgment actions (judicial or non-judicial) or proceedings to collect and enforce the judgment." As Lender correctly points out, this provision says nothing about parsing each hearing or motion to determine which party technically prevailed on that specific hearing or motion. Instead, they simply authorize Lender to collect fees associated with collecting and enforcing the judgment.
D. Fees on Appeal
¶46 Both parties seek attorneys' fees incurred in connection with this appeal pursuant to Arizona Rule of Civil Appellate Procedure 21(c) and A.R.S. § 12-341.01(A). Section 12-341.01(A) authorizes a court to award attorneys' fees to the successful party in a contested action arising out of contract. Given that Lender is the prevailing party in this appeal for all but one issue, we award Lender its reasonable attorneys' fees incurred in presenting all arguments except those related to the supplemental attorney fee application pursuant to A.R.S. § 12-341.01(A) upon compliance with ARCAP 21.
Lender also seeks fees pursuant to the loan documents.
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Conclusion
¶47 For the foregoing reasons, we affirm the entry of summary judgment, the dismissal of the counterclaim, the denial of the motion to amend the counterclaim, and the award of fees and expenses relating to Lender's prosecution of this lawsuit and the fair market value hearings. We vacate the fee award to the extent it awards fees in connection with Landings' bankruptcy proceedings and remand with instructions for the trial court to enter a new award excluding those fees.
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ANDREW W. GOULD, Judge
CONCURRING:
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MAURICE PORTLEY, Presiding Judge
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ANN A. SCOTT TIMMER, Judge