Red Moon v. Kreitzman

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

RED MOON DEVELOPMENT & CONSTRUCTION, INC.,
Plaintiff/Appellant,

v.

JEFFREY KREITZMAN, et al., Defendants/Appellees.

No. 1 CA-CV 25-0460
FILED 11-12-2025

Appeal from the Superior Court in Maricopa County
No. CV2025-005662
The Honorable John L. Blanchard, Judge

APPEAL DISMISSED

COUNSEL

Kahana Feld LLP, Phoenix
By Joshua C. Offenhartz, Christopher Bates, Michael Appel
Counsel for Plaintiff/Appellant

Snell & Wilmer LLP, Phoenix
By Jason Ebe, Patrick F. Welch, Amanda Z. Weaver
Counsel for Defendants/Appellees

MEMORANDUM DECISION

Presiding Judge Angela K. Paton, Judge Daniel J. Kiley, and Judge Brian Y.
Furuya delivered the decision of the court.
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PER CURIAM:

¶1 Appellant Red Moon Development & Construction, Inc.
(“Red Moon”) sought a declaratory judgment in superior court that, if
granted, would have overturned a private arbitration panel’s decision not
to dismiss counterclaims filed in arbitration by Appellees Jeffrey and
Griselda Kreitzman as trustees of the Kreitzman Family Trust (the
“Kreitzmans”). The superior court denied Red Moon’s application, Red
Moon appealed, and the Kreitzmans moved to dismiss the appeal for lack
of appellate jurisdiction. Having considered the motion, Red Moon’s
response, and the Kreitzmans’ reply, we grant the motion and dismiss this
appeal.

FACTS AND PROCEDURAL HISTORY

¶2 This custom residential construction dispute began in
arbitration before the American Arbitration Association (“AAA”). Red
Moon, the general contractor on the project, initiated arbitration under the
parties’ contract, alleging the Kreitzmans had refused to pay the remaining
contract balance. The Kreitzmans filed counterclaims in the arbitration
alleging construction defects, failure to supervise subcontract work, and
abandonment of the project.

¶3 Red Moon moved to dismiss the Kreitzmans’ counterclaims
under the Arizona Purchaser Dwelling Actions Act, A.R.S. §§ 12-1361
through -1366 (“PDAA”). As relevant to this appeal, the PDAA requires a
residential buyer to provide the seller written notice of construction defects
“in reasonable detail” and an opportunity to repair or compensate before
bringing a dwelling action. A.R.S. § 12-1363(A)-(E), (Q). If the buyer does
not meet these requirements “before bringing a dwelling action, the
dwelling action shall be dismissed.” A.R.S. § 12-1363(P). Red Moon argued
in the arbitration that subsection (P) makes compliance with these
provisions “a jurisdictional pre-requisite to bringing a dwelling action.”

¶4 On October 7, 2024, the AAA panel denied Red Moon’s
motion. The panel stated that “[a]ny issues concerning the adequacy of
disclosure of any claimed defects shall be addressed through the Parties’
discovery process.” The panel also directed the parties to meet and confer
to set deadlines for, among other things, final amendments of parties,
claims and counterclaims, and the exchange of initial disclosure statements.
The parties then litigated the dispute in arbitration for several months.

¶5 Several months later, while the arbitration remained pending,
Red Moon filed a declaratory judgment application in the superior court

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seeking a declaration that the AAA panel “lack[ed] jurisdiction over the
residential construction defect claims . . . in the [Kreitzmans’]
counterclaim.” Red Moon contended the AAA panel lacked jurisdiction
because the Kreitzmans “fail[ed] to satisfy jurisdictional conditions
precedent contained in the [PDAA] . . . before [they] filed their residential
construction defects counterclaim.”

¶6 Following briefing, the superior court denied Red Moon’s
application. The court stated that the AAA panel’s reference to ongoing
discovery “suggest[ed] . . . that the issue of whether [the Kreitzmans’] notice
was sufficient remains unresolved.” The court thus concluded the AAA
panel’s order was a “procedural order resolving (at least for now) whether
PDAA prerequisites for notice and other conditions precedent have been
met” and noted that Red Moon “may, of course, raise this issue as part of
any procedure to vacate or confirm a final arbitration award.”

¶7 The superior court certified its order as a Rule 54(c) judgment.
This appeal and the Kreitzmans’ motion to dismiss followed.

DISCUSSION

¶8 The Kreitzmans contend we lack jurisdiction over Red
Moon’s appeal because (1) the judgment does not fall within A.R.S. § 12-
2101.01(A) and (2) the judgment is not otherwise appealable because it
“addresses interlocutory issues reserved to arbitration.”

I. The judgment is not appealable under A.R.S. § 12-2101.01 or § 12-
2101(A)(1).

¶9 The following categories of orders are appealable under
A.R.S. § 12-2101.01(A):

1. An order denying an application to compel arbitration
made under section 12-1502 or 12-3007.

2. An order granting an application to stay arbitration made
under section 12-1502 or 12-3007.

3. An order denying confirmation of an award.

4. An order modifying or correcting an award.

5. An order vacating an award without directing a rehearing.

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6. A judgment or decree entered pursuant to chapter 9 or 21
of this title.

The superior court’s judgment does not fall within any of these categories,
and Red Moon does not contend otherwise.

¶10 Instead, Red Moon contends we have jurisdiction under § 12-
2101(A)(1) because the judgment “fully resolved” the declaratory relief
action and the arbitration is a “separate proceeding.” We disagree for two
reasons.

¶11 First, a Rule 54(c) certification, standing alone, does not confer
appellate jurisdiction. Powers Reinforcing Fabricators, L.L.C. v. Contes, 249
Ariz. 585, 589, ¶ 12 (App. 2020). Red Moon relies on Ruesga v. Kindred
Nursing Ctrs., 215 Ariz. 589, 594, ¶ 14 (App. 2008) for the opposite
proposition; that “an order ‘entered under Rule 54(c)’ that resolves all
claims is final and appealable.” The current Rule 54(c) was not effective
until January 1, 2014, several years after Ruesga. Madrid v. Avalon Care Ctr.-
Chandler, L.L.C., 236 Ariz. 221, 223, ¶ 4 (App. 2014). And while we stated in
Ruesga that “an order that compels arbitration, dismisses the arbitrable
claims and includes a Rule 54(b) . . . certification of finality is appealable,”
we determined we lacked appellate jurisdiction over an uncertified order
that compelled arbitration but did not dismiss any claims. Ruesga, 215 Ariz.
at 594, ¶¶ 15-16 (emphasis in original). Here, the superior court certified its
order, but did not dismiss any of the parties’ claims or counterclaims arising
out of the project. The superior court instead determined that Red Moon
improperly sought declaratory relief based on its disagreement “with the
panel’s order and its procedure for resolving the identification of the
alleged [construction] defects.” Ruesga thus does not support Red Moon’s
position.

¶12 Second, the parties’ claims and counterclaims arising out of
the project remain unresolved. In Madrid, the appellant challenged a Rule
54(c) judgment that compelled arbitration as to some claims and granted
summary judgment on the remaining claims. 236 Ariz. at 223, ¶ 2. We
concluded the certification did not confer appellate jurisdiction because the
claims referred to arbitration remained unresolved. Id. at 224, ¶ 6. The
procedural history of this case differs from Madrid in several respects, but
either Red Moon or the Kreitzmans can return to the superior court when
arbitration is complete to have the award confirmed or vacated, and make
any potential merits arguments there. See A.R.S. §§ 12-3022, -3023.

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II. The PDAA does not create a statutory jurisdictional bar.

¶13 Red Moon also contends the Kreitzmans’ alleged PDAA
noncompliance “is a statutory jurisdictional bar determining whether the
controversy is subject to arbitration under [§ 12-3006](B).” Red Moon again
relies on A.R.S. § 12-1363(P).

¶14 “The court shall decide whether an agreement to arbitrate
exists or a controversy is subject to an agreement to arbitrate.” A.R.S. § 12-
3006(B). The parties’ agreement refers to arbitration “[a]ny controversy
arising out of the construction of the Project or regarding the interpretation
of the Agreement.” Whether the Kreitzmans complied with the PDAA is
an issue that plainly “aris[es] out of the construction of the Project;” it
therefore falls within this broad scope and was properly before the AAA
panel. See The Spaulding LLC v. Miller, 250 Ariz. 383, 386-87, ¶ 13 (App. 2020)
(“Defendants signed the Operating Agreement, which contained an
arbitration clause in which they agreed to arbitrate a broad spectrum of
disputes. This dispute falls under the broad sweep of the arbitration
agreement, granting the arbitrator the power to adjudicate the matter.”).

¶15 Red Moon’s conduct in the arbitration also shows there is no
“statutory jurisdictional bar,” as Red Moon raised the Kreitzmans’ alleged
failure to comply with the PDAA in arbitration and the parties litigated the
issue. That Red Moon disagrees with the AAA panel’s ruling does not
make the ruling immediately reviewable in court. See Atreus Cmtys. Grp. of
Ariz. v. Stardust Dev., Inc., 229 Ariz. 503, 506, ¶ 13 (App. 2012) (“In cases
arbitrated subject to the parties’ agreement and subject to the arbitrator not
exceeding his or her powers, the arbitrator’s decisions are final and binding
as to both issues of fact and law, regardless of the correctness of the decision.”)
(emphasis added).

III. We decline to exercise special action jurisdiction.

¶16 Red Moon alternatively asks us to accept special action
jurisdiction under State v. Perez, 172 Ariz. 290, 292-93 (App. 1992). Perez
largely mirrors Rule of Procedure for Special Actions (“RPSA”) 2(b)(2),
which states that special action jurisdiction “may be accepted only if the
remedy by appeal is not equally plain, speedy, and adequate.”

¶17 Red Moon does not identify any specific factors that would
support accepting special action jurisdiction. See RPSA 12(b). It instead
contends that forcing it to complete arbitration before seeking judicial
review “would nullify the PDAA’s pre-litigation protections.” Red Moon
does not show the PDAA creates any “pre-litigation protections.” Rather,

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parties who dispute whether a buyer met the PDAA’s pre-suit
requirements litigate those issues, and if the seller prevails, dismissal
results under § 12-1363(P). Indeed, as discussed above, Red Moon sought
that exact relief in arbitration, and the issue remains open in that forum.
We therefore decline to exercise special action jurisdiction.

IV. Attorneys’ Fees and Costs

¶18 The Kreitzmans request reasonable attorneys’ fees and costs
under A.R.S. §§ 12-341, 12-341.01, and 12-1840, the last of which permits
“such award of costs as may seem equitable and just” in declaratory relief
actions.

¶19 We deny the Kreitzmans’ attorneys’ fee request because the
parties’ claims and counterclaims remain unresolved in arbitration. See
Silverman v. Ariz. Dep’t of Econ. Sec., 257 Ariz. 384, 393, ¶ 33 (2024) (denying
a fee request under § 12-1840 “[b]ecause no party has yet prevailed in this
case”); cf. City of Cottonwood v. James L. Fann Contracting, Inc., 179 Ariz. 185,
194 (App. 1994) (“With arbitration proceedings yet to commence, a
‘successful party’ on the merits under A.R.S. section 12–341.01 had yet to be
determined.”). The Kreitzmans may, however, recover taxable costs
incurred in this appeal upon compliance with Arizona Rule of Civil
Appellate Procedure 21. See Robinson v. Kay, 225 Ariz. 191, 193, ¶ 8 (App.
2010) (dismissing appeal on jurisdictional grounds but awarding taxable
costs to the prevailing party).

CONCLUSION

¶20 “When parties have agreed to submit their claims to
arbitration, ‘the parties, having chosen a different tribunal, may not
reinstate judicial tribunals to resolve the controversy.’” Hamblen v. Hatch, 242 Ariz. 483, 491, ¶ 34 (2017) (quoting Canon Sch. Dist. No. 50 v. W.E.S.
Constr. Co., Inc., 180 Ariz. 148, 152 (1994)). Red Moon tried to do just that,
seeking declaratory relief in superior court because it believed the AAA
panel “wrongly denied [its] Motion to Dismiss.” We therefore dismiss this
appeal.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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