Moldovan v. Long
Opinion text
NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
ARIZONA COURT OF APPEALS
DIVISION ONE
DANIEL D. MOLDOVAN, et al., Plaintiffs/Appellants,
v.
JO ANN LONG, et al., Defendants/Appellees.
No. 1 CA-CV 23-0470
FILED 05-30-2024
Appeal from the Superior Court in Maricopa County
No. CV2022-001806
The Honorable Susanna C. Pineda, Judge
AFFIRMED
COUNSEL
Ivan & Associates, P.C., Glendale
By Florin V. Ivan
Counsel for Plaintiffs/Appellants
Roberts & Carver, PLLC, Prescott
By Paul L. Roberts, Jerry Carver
Counsel for Defendant/Appellee Pioneer Title Agency, Inc.
MOLDOVAN, et al. v. LONG, et al.
Decision of the Court
MEMORANDUM DECISION
Judge Brian Y. Furuya delivered the decision of the Court, in which Presiding
Judge Anni Hill Foster and Vice Chief Judge Randall M. Howe joined.
F U R U Y A, Judge:
¶1 Elite Holdings, LLC (“Elite”) and its manager, Daniel D.
Moldovan, appeal from the superior court’s grant of summary judgment in
favor of Pioneer Title Agency, Inc.’s (“Pioneer”). For the following reasons,
we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 This litigation arose from Elite’s 2020 sale of a Paradise Valley
property (“Property”) and centers on Pioneer’s role as escrow agent in that
transaction, particularly as concerns its disclosure of a November 2007
deed. That deed (“Turquoise Deed”) reads, in relevant part:
For the consideration of Ten Dollars, and other valuable
considerations, I or we, JO ANN LONG, an unmarried
woman, do/does hereby convey to JO ANN LONG, an
unmarried woman as to and [sic] undivided 50% interest and
TURQUOISE 5, LLC, an Arizona limited liability company as
to an undivided 50% interest JO ANN LONG, an unmarried
woman as Grantor, and ,[sic] the following real property
situated in Maricopa, [sic] County, Arizona . . . .
(Emphasis added.)
¶3 In late December 2007, other recorded warranty deeds show
the Property transferred from Long to Moldovan and then from Moldovan
to Elite. Capital Title Agency, Inc. (“Capital”), the escrow agent for the 2007
conveyance to Moldovan, did not disclose the Turquoise Deed. Between
2008 and 2010, several deeds were recorded conveying the property
between Elite, Moldovan, Moldovan’s wife, and Long, ending with a
conveyance to Elite in 2010.
¶4 In 2020, Elite listed the Property for sale, received an offer,
and executed a purchase contract and escrow agreement with the buyer.
The purchase contract named Pioneer as the escrow company for the
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Decision of the Court
transaction; stated the contract “shall be used as escrow instructions”; and
directed Pioneer to “obtain and deliver . . . a Commitment for Title
Insurance together with [ ] documents that will remain as exceptions to
Buyer’s policy of Title Insurance . . . including but not limited to . . . deed
restrictions.” The escrow agreement cross-referenced the purchase contract
and instructed Pioneer to “close this transaction upon fulfillment of any
additional escrow/title requirements.” Elite and the buyer set the close of
escrow for August 17.
¶5 On July 30, Pioneer obtained a commitment for title insurance
which required recording a deed from Turquoise 5, LLC (“Turquoise”) to
Elite “to eliminate interest created in [the Turquoise Deed].” On August 3,
Pioneer emailed Moldovan, attached the title report, and wrote, “[l]ooks
like the property is also owned by Turquoise 5, LLC. We’ll need to have
them sign a deed coming off title….(we’ll need proof of the authorized
signer as well for Turquoise 5) and then have you both sign a deed to the
buyer.” (Ellipses in original.) Elite asserts this date was the first time it
learned of the Turquoise Deed. Four days later, Elite and the buyer agreed
to set the closing date for August 7.
¶6 Shortly after, Elite agreed to pay Turquoise $39,953 in return
for Turquoise recording a deed releasing its 50% interest in the property.
Elite, however, indicated it was paying under protest and intended to
litigate.
¶7 In February 2022, Elite and Moldovan filed a complaint
against Pioneer, Long, Turquoise, Capital, and several others. As to Pioneer,
the complaint alleged “[a] very short time prior to closing . . . Pioneer
suddenly refused to close escrow unless Turquoise executed an instrument
conveying title in favor of [Elite]” and “Pioneer’s failure to proceed shortly
prior to closing without consent of Turquoise despite the deficiencies in [the
Turquoise Deed] was negligent or a breach of fiduciary duty.” The
complaint made no other claims against Pioneer.
¶8 Pioneer answered, moved for summary judgment, and
requested attorneys’ fees under the indemnification clause of the escrow
agreement and Arizona Revised Statute (“A.R.S.”) § 12-341.01. After
considering Elite’s and Moldovan’s joint response, Pioneer’s reply, and oral
argument, the court granted Pioneer’s motion for summary judgment and
awarded Pioneer attorneys’ fees and costs. The court found the complaint
did not allege Pioneer had breached any term of the purchase contract or
escrow agreement, but instead argued, without legal support, “that
Pioneer, as escrow agent, should have investigated the circumstances of the
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Decision of the Court
Turquoise deed, talked to Long and Capital Title, and evaluated
Moldovan’s claim of adverse possession, or requested the buyer [to] close
escrow despite the Turquoise deed.”
¶9 We have jurisdiction over Elite’s and Moldovan’s timely
appeal under Article 6, Section 9 of the Arizona Constitution and A.R.S. §§
12-2101(A)(1), -2101(A).
DISCUSSION
I. The Superior Court Did Not Err by Granting Summary Judgment
in Favor of Pioneer.
¶10 We review the superior court’s grant of summary judgment
de novo and view the evidence in the light most favorable to the nonmoving
party. ADP, LLC v. Ariz. Dep’t of Revenue, 254 Ariz. 417, 421 ¶ 5 (App. 2023).
Summary judgment is appropriate when “the moving party shows that
there is no genuine dispute as to any material fact and the moving party is
entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). Once the
moving party satisfies its initial burden to show no genuine issue of
material fact exists, the nonmoving party bears the burden to present
evidence establishing disputed material facts. Jones v. Respect the Will of the
People, 254 Ariz. 73, 82–83 ¶ 37 (App. 2022).
¶11 Negligence and breach of fiduciary duty claims require
plaintiffs to first prove the defendant owed a duty to conform to a certain
standard of care. See BNCCORP, Inc. v. HUB Int’l Ltd., 243 Ariz. 1, 8 ¶ 30
(App. 2017) (duty required for negligence claim); Maxfield v. Martin, 217
Ariz. 312, 314 ¶ 12 (App. 2007) (escrow agent owes fiduciary duty to parties
to the escrow agreement). The existence of a duty is a question of law that
we review de novo. Quiroz v. ALCOA Inc., 243 Ariz. 560, 564 ¶ 7 (2018).
¶12 An escrow agent’s duties to principals arise from the terms of
their agreements. Tucson Unified Sch. Dist. v. Chicago Title Ins. Co. of Cal., 167
Ariz. 114, 116 (App. 1991). In addition to any duties specified under terms
of their contracts, agents owe two implicit duties to principals by virtue of
the escrow relationship: (1) “to comply strictly with the terms of the escrow
agreement”; and (2) “to disclose facts that a reasonable escrow agent would
perceive as evidence of fraud being committed on a party to the escrow.”
Maxfield, 217 Ariz. at 314 ¶ 12. Escrow agents must conduct these duties
with “scrupulous honesty, skill, and diligence,” id. (quoting Berry v.
McLeod, 124 Ariz. 346, 351 (1979)), but need not investigate fraud, see Burkons
v. Ticor Title Ins. Co. of Cal., 168 Ariz. 345, 353 (1991)).
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Decision of the Court
A. Pioneer Strictly Complied with the Purchase Contract and
Escrow Agreement.
¶13 Here, the purchase contract and escrow agreement directed
Pioneer to: (1) close escrow by a specified date “upon fulfillment of any
additional escrow/title requirements”; and (2) “obtain and deliver to Buyer
and Seller directly, . . . a Commitment for Title Insurance.” The commitment
for title insurance required Elite to record a deed from Turquoise to
eliminate any purported interest created by the Turquoise Deed. Pioneer
complied with these duties by obtaining an offer for title insurance and
notifying Elite of the necessary actions to secure insurance and close on
time. See Tucson Unified Sch. Dist., 167 Ariz. at 116 (escrow agents’ duties
are confined to the terms of their agreements).
B. Pioneer Fulfilled any Disclosure Duty by Notifying Elite of
the Turquoise Deed.
¶14 Elite argues that because the Turquoise Deed was “highly
questionable, vague, and indefinite,” Pioneer should have recognized
Elite’s sole ownership through adverse possession and also should have
reached out to Long to investigate the validity of the deed. Elite contends
the Turquoise Deed is “highly questionable, vague, and indefinite” because
of: (1) the use of “and” instead of “an”; and (2) a repeated and misplaced
phrase: “JO ANN LONG, an unmarried woman as Grantor, and ,”. See supra
¶ 2. Thus, Elite asserts Pioneer breached its duty because it assumed the
Turquoise Deed was valid and required Elite to address it by obtaining a
release of interest from Turquoise. Not so.
¶15 Even if an escrow agent suspects fraud, its only duty is to
disclose the facts underlying that suspicion; it need not investigate or
determine the validity of the fraud. See Maxfield, 217 Ariz. at 314 ¶ 12;
Burkons, 168 Ariz. at 353. Thus, regardless of whether such typos are
sufficient indicia of fraud to invoke legal duties on the part of a reasonable
escrow agent, that agent’s only duty would be to disclose the deed. Pioneer
did just that. Therefore, Elite failed to show any evidence of a disputed
material fact regarding its breach of fiduciary duties claim.
C. Pioneer Breached No Other Duties.
¶16 Elite further asserts Pioneer is liable for negligent
misrepresentation, a particular type of negligence that requires proof that,
in the course of business, the defendant provided false information to the
plaintiff and failed to exercise reasonable care in communicating that
information. See Kuehn v. Stanley, 208 Ariz. 124, 127 ¶ 9 (App. 2004).
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Decision of the Court
¶17 Elite and Moldovan contend Pioneer falsely told Moldovan:
“Looks like the property is also owned by Turquoise 5, LLC.” Based on that
statement, they argue “Pioneer took the position that Turquoise 5 also
owned the Property.” But whether Pioneer’s statement assumed
Turquoise’s ownership is irrelevant to the purpose of that communication,
which was to communicate the Turquoise Deed’s existence. Valid or not,
the Turquoise Deed’s recordation clouded the Property’s title. Further,
Pioneer’s statement was that it “looked like” Turquoise also owned the
Property. In other words, Turquoise appeared to have an ownership interest.
Given the reality of the Turquoise Deed’s existence in the Property’s chain
of title, this statement is not false information. Thus, Elite and Moldovan
failed to show any evidence of disputed material facts related to negligent
misrepresentation.
¶18 Finally, Elite argues Pioneer “block[ed] the transaction” and
“declare[d] the exclusive remedy.” It did neither. After receiving Pioneer’s
email about the Turquoise Deed, Elite had nearly two weeks before the
original closing date to investigate the deed, pursue its adverse possession
claim, and/or renegotiate with the buyer. See, e.g., A.R.S. § 33-420(B) (“The
owner or beneficial title holder of the real property may bring an action . . .
to clear title to the real property as provided for in the rules of procedure
for special actions.”). But none of these actions were Pioneer’s to pursue
and neither the purchase contract nor the escrow agreement imposed any
such duties on it. Moreover, nothing in Pioneer’s statements prevented Elite
or Moldovan from taking any of these actions—its directions related only
to the actions needed to obtain title insurance by the specified closing date
and ensure a timely closing. Rather than pursue any other avenues, Elite
chose to pay Turquoise and agreed to close escrow ten days before the
original closing date.
¶19 On this record, the court did not err by granting Pioneer’s
motion for summary judgment.
II. The Superior Court Did Not Abuse Its Discretion by Certifying Its
Judgment under Arizona Rule of Civil Procedure 54(b).
¶20 Generally, we review the court’s certification under Arizona
Rule of Civil Procedure (“Rule”) 54(b) for an abuse of discretion. Kim v.
Mansoori, 214 Ariz. 457, 459 ¶ 6 (App. 2007). The court abuses its discretion
when its use of that discretion is “manifestly unreasonable, or exercised on
untenable grounds, or for untenable reasons.” Englert v. Carondelet Health
Network, 199 Ariz. 21, 27 ¶ 14 (App. 2000) (quoting Torres v. N. Am. Van
Lines, Inc., 135 Ariz. 35, 40 (App. 1982)).
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¶21 “[T]he court may direct entry of a final judgment as to one or
more, but fewer than all, claims or parties only if the court expressly
determines there is no just reason for delay and recites that judgment is
entered under Rule 54(b).” Ariz. R. Civ. P. 54(b). A separable claim need not
be “entirely distinct from all the other claims in the action” or “arise from a
different occurrence or transaction.” See Cont’l Cas. v. Superior Court, 130
Ariz. 189, 191 (1981). Rather, a claim is separable from the other
undetermined claims when “no appellate court would have to decide the
same issues more than once even if there are subsequent appeals.”
Dabrowski v. Bartlett, 246 Ariz. 504, 512 ¶ 14 (App. 2019) (quoting id.).
¶22 Elite argues allowing final judgment for Pioneer while Capital
continues through litigation could result in “inconsistent and unjust
outcomes” and Pioneer faces no hardship or injustice by remaining in the
litigation. According to Elite, Capital wrongfully did not disclose the
Turquoise Deed whereas Pioneer correctly disclosed the deed but went
beyond its duties to cause harm. Elite contends because the escrow
companies’ actions were “diametrically opposite,” judgment in favor of
Pioneer “also means by necessary implication” that Capital is liable.
¶23 But the judgment in Pioneer’s favor does not preclude Elite
from pursuing its claims against any other defendants, including Capital.
The superior court’s grant of Pioneer’s motion for summary judgment
applies only to Pioneer’s actions under its agreements with Elite. Even
assuming arguendo that Pioneer and Capital took opposite actions and
positions, such a fact does not determine whether either company’s actions
were proper or improper under their respective and distinct agreements.
An appeal on claims against Capital would not require us to revisit the
same issues presented in this appeal. As discussed above, an escrow
company’s duties stem directly from its contract with buyers and sellers.
See Maxfield, 217 Ariz. at 314 ¶ 12.
¶24 We express no opinion about the virtue of Elite’s claims
against Capital but conclude nothing in that case, if appealed, would
require us to reconsider Pioneer’s actions or the contracts between Pioneer
and Elite. Therefore, the court did not abuse its discretion in certifying its
judgment with 54(b) language.
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Decision of the Court
III. The Superior Court Did Not Abuse its Discretion by Awarding
Pioneer its Attorneys’ Fees and Costs.
A. Elite’s and Moldovan’s Claims Arise out of Contract for the
Purposes for A.R.S. § 12-341.01.
¶25 “In any contested action arising out of a contract, express or
implied, the court may award the successful party reasonable attorney
fees.” A.R.S. § 12-341.01(A). We review the application of A.R.S. § 12-341.01
de novo. Ray & Lindsay – 11, LLC v. Town of Gilbert, 252 Ariz. 147, 151 ¶ 22
(App. 2021).
¶26 Whether a duty arises out of contract for purposes of A.R.S.
§ 12-341.01 depends on whether the duty would exist without the contract.
Caruthers v. Underhill, 230 Ariz. 513, 526 ¶ 57 (App. 2012). Recently, we
considered whether negligence and breach of fiduciary duty claims against
an escrow company arise out of contract. See Mago v. Ariz. Escrow & Fin.
Corp., 1 CA-CV 22-0270, 2023 WL 2704099, *3 ¶¶ 20–23 (Ariz. App. Mar. 30,
2023) (mem. decision). There, we reasoned—and reaffirm now—that A.R.S.
§ 12-341.01 applies because an escrow company would have had no duty to
act toward a buyer with “scrupulous honesty, skill, and diligence” but for
an escrow agreement. Id. at *3 ¶¶ 22–23. We therefore hold that Elite’s and
Moldovan’s claims arise out of contract for the purposes of A.R.S. § 12-
341.01.
¶27 Moldovan, however, claims A.R.S. § 12-341.01 is inapplicable
because, unlike Elite, he does not have a contractual relationship with
Pioneer. But the applicability of A.R.S. § 12-341.01 depends on the
characteristics of the claims, not the relationship of the parties. See Rudinsky
v. Harris, 231 Ariz. 95, 101–02 ¶¶ 27–30 (App. 2012) (applying A.R.S. § 12-
341.01 in contract claims asserted by a non-party to the contract). It is
irrelevant that Moldovan was not a party to the contract because his claims,
like Elite’s, would not exist but for the purchase contract and escrow
agreement governing Pioneer’s escrow duties. Therefore, the court did not
err in holding Moldovan liable for Pioneer’s fees.
¶28 Pioneer also requested its fees under the indemnification
clause of the escrow agreement. Unlike fees awarded under A.R.S. § 12-
341.01, the court has no discretion to refuse to award fees under a
contractual provision awarding attorneys’ fees and must enforce it
according to its terms. Premier Consulting & Mgmt. Sols., LLC v. Peace Releaf
Ctr. I, ___ Ariz. ___, ___ ¶ 70, ___ P.3d ___, ___, 2024 WL 413467, at *12 ¶ 70
(App. 2024). But because we find the court properly awarded fees under
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Decision of the Court
A.R.S. § 12-341.01, we need not address whether it was also obligated to do
so under the indemnification clause. See Freeport McMoRan Corp. v. Langley
Eden Farms, LLC, 228 Ariz. 474, 478 ¶ 15 (App. 2011) (“[W]e do not issue
advisory opinions or decide unnecessary issues.”).
B. The Court Did Not Abuse its Discretion in Determining the
Amount of Attorneys’ Fees Awarded.
¶29 We review the amount of attorneys’ fees awarded for an
abuse of discretion. Tucson Ests. Prop. Owners Ass’n v. Jenkins, 247 Ariz. 475,
478 ¶ 8 (App. 2019). The court abuses its discretion if no evidence supports
its conclusions or the reasons it provides are “clearly untenable, legally
incorrect, or amount to a denial of justice.” Id. (quoting Charles I. Friedman,
P.C. v. Microsoft Corp., 213 Ariz. 344, 350 ¶ 17 (App. 2006)). The court cannot
award unreasonable fees under a contractual provision, id., and has broad
discretion in determining the amount of fees awarded under A.R.S. § 12-
341.01(A), Vortex Corp. v. Denkewicz, 235 Ariz. 551, 562 ¶ 39 (App. 2014).
¶30 The fee application must indicate the date, attorney, and time
spent for each legal service provided. Cooke v. Grebe, 245 Ariz. 367, 370 ¶ 11
(App. 2018). The description of the service provided need only “contain
sufficient detail so as to enable the court to assess the reasonableness of the
time incurred.” Orfaly v. Tucson Symphony Soc’y, 209 Ariz. 260, 266 ¶ 23
(App. 2004). For fee-paying clients, “the rate charged by the lawyer to the
client is the best indication of what is reasonable under the circumstances
of the particular case.” Schweiger v. China Doll Rest., Inc., 138 Ariz. 183, 187–
88 (1983).
¶31 After the requesting party submits an affidavit detailing its
fees, the opposing party bears the burden to show the fees are improper or
unreasonable. In re Indenture of Tr. Dated January 13, 1964, 235 Ariz. 40, 52–
53 ¶ 47 (App. 2014). But the opposing party “does not meet his burden
merely by asserting broad challenges to the application” and must do more
than “simply state . . . that the hours claimed are excessive and the rates
submitted too high.” Id. (quoting State ex rel. Corbin v. Tocco, 173 Ariz. 587,
594 (App. 1992) (citation omitted)).
¶32 Appellants argue the $320-hourly rates for Pioneer’s
attorneys are too high because they exceed the average rates for contract
issues and civil litigation in this jurisdiction: according to Elite, $243 and
$298 respectively. Pioneer’s attorneys submitted a fee application
explaining that the lead attorney has practiced real-estate and business law
in Arizona since 1988, and that the supporting attorney had “extensive
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Decision of the Court
experience” in the relevant areas for the case and has practiced law in
Arizona since 1980. They assert that they are knowledgeable concerning fee
rates normally charged in this jurisdiction and that their own rates are
comparable. That Appellants dispute this assertion by invoking their fee
software’s metrics reduces to an invitation to reweigh this evidence, which
we will not do. See Lehn v. Al-Thanayyan, 246 Ariz. 277, 286 ¶ 31 (App. 2019).
Instead, we presume that the court fully considered the relevant evidence
in awarding fees, even if the order does not detail the relevant evidence
considered. Fuentes v. Fuentes, 209 Ariz. 51, 55 ¶ 18 (App. 2004). On this
record, we see no error in the court’s decision to not reduce the hourly rate.
¶33 Next, Appellants contend the number of hours worked was
unreasonable because two partner-level attorneys, instead of a partner and
associate, worked on the case, doing “overlapping work.” But the fee
application shows one attorney worked 72.1 hours while the other worked
7.6 hours—all of which he spent conferencing with the lead attorney or
revising drafts. Appellants point to no specific entry showing duplicative
work between the two attorneys, and we find none. On this record,
Appellants have not shown an abuse of discretion.
¶34 Lastly, Appellants argue three sets of entries do not support
the fee amount because they include insufficient descriptions, unrelated
services, or are vague and ambiguous. As to the first set, Appellants
contend some entries fail to differentiate the time spent pertaining to which
claim and which plaintiff. But Elite and Moldovan jointly sued Pioneer,
made the same claims, and were jointly and severally ordered to pay fees
and costs—so it is reasonable that Pioneer’s attorneys would not have
differentiated time between the two. Without identifying any specific entry,
Appellants claim “block-billing . . . appears in many entries.” But though
block-billing often is not the best of practices, it is not, per se, unreasonable
and Appellants do not specify and explain how any particular entry is
unreasonable here. See RS Indus., Inc. v. Candrian, 240 Ariz. 132, 138 ¶ 21
(App. 2016) (“Although the better practice may be to avoid block-billing
when it can be done reasonably, . . . no Arizona authority holds that a court
abuses its discretion by awarding fees that have been block-billed.”).
¶35 Appellants assert the second set of entries are “inapplicable
or unrelated to defending the claims against Pioneer,” primarily because
some of them pertain to co-defendants’ filings. Yet, as Pioneer points out, it
would be helpful for Pioneer to understand all of Elite’s claims and the
other defendants’ defenses to respond to the claims against it. Some of the
entries highlighted by Elite relate to preparing a joint report and proposed
scheduling order, which would necessarily require Pioneer’s attorneys
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communicate and understand the other defendants’ positions. Thus,
without more, we cannot say the superior court abused its discretion in
awarding time spent reviewing all the filings in the case.
¶36 Finally, Appellants argue the third set of entries are “vague or
ambiguous” because, for example, some entries reference individuals
whose relation to the matter is unknown and attorney conferences do not
include details. But Elite fails to identify even one individual whose relation
to the matter is unknown and provides no other explanation why the
attorney conferences were unreasonable. Without more, Appellants have
not shown the superior court—which is in the best position to evaluate the
reasonableness of the work required for the case—abused its discretion by
granting Pioneer’s fee request. See Parker v. McNeill, 214 Ariz. 495, 499 ¶ 24
(App. 2007).
CONCLUSION
¶37 We affirm.
¶38 Pioneer requests attorneys’ fees and costs under the
indemnification clause of the terms and conditions of escrow and A.R.S. §
12-341.01(A). We award Pioneer its reasonable attorneys’ fees and costs
against Elite under the indemnification clause, and in our discretion,
against Moldovan under A.R.S. § 12-341.01, contingent upon timely
compliance with Arizona Rule of Civil Appellate Procedure 21.
AMY M. WOOD • Clerk of the Court
FILED: TM
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