UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
MEMORANDUM DECISION
Judge Margaret H. Downie delivered the decision of the Court, in which
Presiding Judge Andrew W. Gould and Judge John C. Gemmill joined.
D O W N I E, Judge:
1
Appellants (collectively, Del Webb) challenge the superior
courts award of attorneys fees, expert witness fees, and taxable costs to
Appellees following lengthy construction defect litigation. For the
following reasons, we affirm the final judgment in part, vacate it in part,
and remand for further proceedings regarding Del Webbs request for
sanctions under Arizona Rule of Civil Procedure 68.
FACTS AND PROCEDURAL HISTORY
2
On January 25, 2008, counsel for Appellees sent Del Webb a
letter captioned Notice of Construction Defects and Opportunity to
Inspect and Repair (the Notice) on behalf of hundreds of homeowners
in the Sun City Grand development (collectively, Plaintiffs). Plaintiffs
included both original homeowners who had purchased their homes from
Del Webb and subsequent homeowners who were not in contractual
privity with Del Webb. The Notice advised that it was being provided
pursuant to the Purchaser Dwelling Act (PDA) Arizona Revised
Statutes (A.R.S.) sections 12-1361 to -1366.1
3
By letter dated April 7, 2008, Del Webb responded to the
Notice. It objected to several terms the Notice imposed and noted that
Plaintiffs would not grant extensions of time for Del Webb to conduct
inspections under A.R.S. 12-1363(B). Del Webb stated:
The preceding clearly violates the provisions of A.R.S. 121361 et seq. No builder, including Pulte/Del Webb, could
perform repairs and/or provide monetary compensation on
A dwelling action is defined as any action involving a
construction defect brought by a purchaser against the seller of a dwelling
arising out of or related to the design, construction, condition or sale of the
dwelling. A.R.S. 12-1361(7).
1
Attorneys Fees
A.
PDA
8
Plaintiffs moved for a post-trial award of attorneys fees and
expert costs as the prevailing parties under the PDA specifically, A.R.S.
12-1364.4 Alternatively, Plaintiffs sought to recover attorneys fees
Del Webb does not separately address the expert fees, but we
understand its position to be that those fees were improper for the same
reasons it contends the attorneys fee award was improper. As such, we
also do not separately address the expert fees.
3
Although A.R.S. 12-1364 has since been repealed, at the time of the
superior courts ruling, it provided:
4
Original Homeowners
11
Del Webb also contends the original homeowners could not
recover fees under the PDA because their sales contracts limit such
awards to mediation and arbitration proceedings. We review de novo the
application of a fee statute to an attorneys fees award. See Burke v. Ariz.
State Ret. Sys., 206 Ariz. 269, 272, 6 (App. 2003). We also review
questions of contract interpretation de novo. Grubb & Ellis Mgmt. Servs.,
Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, 86, 12 (App. 2006).
12
The relevant provision in the sales agreements between the
original homeowners and Del Webb states:
In the event of any arbitration or mediation between Us and
You, before or after the Closing, the prevailing party shall be
entitled to an award of all attorneys fees and costs . . . in an
amount to be determined by the arbitrator or mediator
hearing the matter. Any court or arbitrator hearing any
matter on appeal may also award such fees to the prevailing
party in and for any prior mediation or arbitration.
13
We agree with Plaintiffs that this provision does not
preclude, or even address, attorneys fees incurred in superior court
litigation. By its clear and unambiguous terms, the clause only governs
10
Taxable Costs
16
Finally, Del Webb challenges the inclusion of $231,913 in
copying costs in the award of taxable costs. Whether a particular
expenditure qualifies as a taxable cost is a question of law that we review
de novo. Reyes v. Franks Serv. & Trucking, LLC, 235 Ariz. 605, 608, 6
(App. 2014).
17
Plaintiffs asked the court to award copy costs in service of
PDA notices, pleadings, discovery, correspondence to counsel, clients, and
experts, depositing documents into depository ordered by the Court,
preparing and forwarding documents to experts from lot files, job files
and defense experts, and in preparing trial exhibits where scanned copies
of paper documents were used. Plaintiffs cited A.R.S. 12-332(A)(6) as
authority for their request, which includes within the definition of taxable
costs disbursements made or incurred by agreement of the parties and
court-ordered disbursements. Over Del Webbs objection, the superior
court awarded the full amount of taxable costs requested.
Neither the original homeowners nor Del Webb sought to compel
alternative dispute resolution in lieu of litigation.
6
11
Rule 68 Sanctions
20
Del Webb made pretrial offers of judgment that only a few
Plaintiffs accepted. Del Webb contends that if it succeeds on appeal
even if only on the copying cost issue we must remand for the superior
court to redetermine its entitlement to Rule 68 sanctions. Because we have
vacated the $231,913 award for copying costs, some of the Plaintiffs
judgments may no longer qualify as more favorable than the offers of
judgment. See Ariz. R. Civ. P. 68(g) (party who rejects offer and does not
obtain a more favorable judgment must pay sanctions for subsequently
Moreover, it appears Plaintiffs reply in support of their fee/cost
motion may have led the court to believe that the document depository
had been ordered by the previous judge. Plaintiffs stated: As for copy
costs, this case involved a court ordered document depository. Our
review of the record reveals no court order regarding the document
depository.
8
Under A.R.S. 12-333: A copy of a paper not required by law to be
copied shall not be allowed and taxed as costs. If a party or attorney takes
out copies of any pleadings or papers in an action, it shall be at his own
expense, and a charge for the copies shall not be allowed as costs.
7
12
:RT
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