Rodriguez v. Wise

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

JESUS R. FRANCO RODRIGUEZ, Plaintiff/Appellee,

v.

NELS A. WISE, et al., Defendants/Appellants.

No. 1 CA-CV 16-0331
FILED 11-9-2017

Appeal from the Superior Court in Maricopa County
No. CV2013-016284
The Honorable Lori Horn Bustamante, Judge

AFFIRMED IN PART, REVERSED IN PART AND REMANDED

COUNSEL

Miller Pitt Feldman & McAnally PC, Phoenix
By Nathan J. Fidel, Jose de Jesus Rivera, Nathan B. Webb,
Stanley G. Feldman
Counsel for Plaintiff/Appellee
Hill Hall & DeCiancio PLC, Phoenix
By Joel DeCiancio, Christopher Robbins
Counsel for Defendant/Appellant

Levenbaum Trachtenberg PLC, Phoenix
By Geoffrey M. Trachtenberg

Law Offices of Raymond J. Slomski, PC, Phoenix
By Adam A. Studnicki
Co-Counsel for Amicus Curiae

MEMORANDUM DECISION

Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge James P. Beene and Judge Randall M. Howe joined.

C A T T A N I, Judge:

¶1 This is an appeal following a plaintiff’s verdict in favor of
Jesus Franco Rodriguez in a personal injury case. Nels and Dee Wise
(collectively, “Wise”) challenge in particular the superior court’s imposition
of sanctions against them under Arizona Revised Statutes (“A.R.S.”) § 12-
349(A), and the court’s determination of costs under A.R.S. § 12-332(A). For
reasons that follow, we reverse the superior court’s inclusion of certain
investigative expenses under § 12-332 and remand to determine the nature
of expenses awarded for messenger fees. In all other respects, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 Rodriguez brought a claim for negligence against Wise
stemming from an automobile accident. After the accident, Rodriguez was
transported by ambulance to the hospital, where he stayed overnight. In
the weeks following the accident, Rodriguez received 24 chiropractic
treatments for persistent pain. Three months after the accident, Rodriguez
received a cranial CT scan to rule out head trauma. He incurred a total of
over $44,000 in medical expenses, and his automobile had extensive
damage and was not drivable.

¶3 Rodriguez disclosed his medical records and the witnesses
who would testify that his medical treatment and bills were reasonable,
necessary, and caused by the accident. Wise did not provide witnesses to

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contest these issues, and Rodriguez subsequently sent Wise discovery
requests seeking admissions regarding those issues. Wise denied that the
medical bills were reasonable and necessary, objecting on the basis that the
requests “attempt[] to shift the burden of proof” and insisted that all
treating physicians testify. Wise also refused to admit that the medical bills
were kept in the course of regularly conducted business.

¶4 Rodriguez thereafter filed a motion for partial summary
judgment and a motion to compel responses to his request for admissions.
The superior court denied both motions, reasoning that Wise had the right
to require Rodriguez to prove his case to a jury.

¶5 Rodriguez deposed six witnesses regarding their respective
treatments and bills. During four of the depositions, Wise’s counsel did not
ask whether the treatment or bills were reasonable or necessary, and in one
deposition Wise’s counsel asked no questions at all. Only during the
deposition regarding the CT scan did Wise’s counsel question the
reasonableness, necessity, and reasons for the treatment.

¶6 Regarding the damage to Rodriguez’s truck, Wise’s counsel
disclosed a repair estimate from Wise’s automobile insurance company.
But Wise’s counsel refused to identify the appraiser for purposes of trial
and would not stipulate to the amount of the appraisal. Only after being
ordered by the court to either agree to a stipulated amount or provide the
appraiser’s identity did counsel stipulate to the amount of property
damage.

¶7 Ten days before trial, Wise admitted negligence but
continued to deny the extent of causation and damages. However, during
opening statements at trial, Wise’s counsel acknowledged that the “vast
majority” of medical bills and treatment were related to the accident. At
that point—and only after being pressed by the court—Wise’s counsel
indicated that out of the over $44,000 of claimed medical expenses, only two
treatments were contested: $275 for a physician’s consultation and $4,165
for the CT scan.

¶8 The jury returned a verdict in favor of Rodriguez for $100,000.
Rodriguez then moved for sanctions under Arizona Rules of Civil
Procedure 68(g) and A.R.S. § 12-341 because Wise had rejected an offer of
judgment for $100,000, and as relevant here, for sanctions under A.R.S. §
12-349 because Wise “needlessly created unnecessary costs . . . and
prolonged trial.” The superior court granted sanctions of $28,169.08 under

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Rule 68(g) and § 12-341, and $39,700 under (among other alternative
grounds) § 12-349.

¶9 Wise timely appealed, and we have jurisdiction under A.R.S.
§ 12-2101(A)(1).

DISCUSSION

¶10 Wise argues that the superior court erred by imposing
sanctions under § 12-349, and that the superior court erred by including
expenses in the award under Rule 68(g) and § 12-341 that are not taxable
costs under § 12-332. We address each argument in turn.

I. Sanctions Under A.R.S. § 12-349(A)(3).

¶11 We review application of § 12-349 de novo. Phx. Newspapers,
Inc. v. Dep’t of Corr., 188 Ariz. 237, 244 (App. 1997). Under § 12-349(A)(3), if
an attorney or party “unreasonably expands or delays the proceeding” the
court must award reasonable attorney’s fees and expenses. The relevant
question is whether “a party’s (or attorney’s) actions caused unreasonable
delay and expansion of the proceedings.” Solimeno v. Yonan, 224 Ariz. 74,
82, ¶ 32 (App. 2010). To evaluate whether a discovery sanction was proper,
we determine (1) whether the superior court had a proper basis for the
sanction, and (2) if so, whether the amount was appropriate. See id. at 81–
82, ¶¶ 28, 34. An assessment whether the costs requested are reasonable is
“peculiarly within the discretion of a trial court, and will not be disturbed
absent a showing of abuse of that discretion.” Id. at 82, ¶ 36.

¶12 Here, nearly all the treatment Rodriguez received was within
24 hours of the accident. Wise was given the medical records relating to the
treatment, but nevertheless insisted (without indicating which issues were
disputed) that testimony would be required from all treating physicians.
The parties conducted six lengthy depositions, with Wise substantively
cross-examining only one of the witnesses regarding Rodriguez’s bills and
treatment. Wise’s counsel waited until opening statements at trial to
narrow issues by conceding that only two of the six treatments and bills
were contested.

¶13 Similarly, although Rodriguez was willing to stipulate to the
property damage estimated by Wise’s own appraiser, Wise would not agree
to do so. And refused to identify the appraiser so Rodriguez could
subpoena him. Only when the court ordered Wise to stipulate or provide
the appraiser’s identity did Wise agree to the amount of property damage.

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¶14 Under these circumstances, there was a basis for sanctions
under § 12-349(A)(3). Wise was entitled to deny Rodriguez’s requests for
admissions and require Rodriguez to prove his case. But after receiving
and reviewing the relevant medical records, Wise could have narrowed the
scope of the issues to be addressed at trial and avoided significant costs by
agreeing to forgo depositions that were apparently of little importance to
him, as evidenced by the absence of meaningful cross-examination of the
witnesses.

¶15 Wise argues the superior court abused its discretion because
it is unfair to impose sanctions after trial when the court originally agreed
that there was a basis to deny the requests for admissions. But the superior
court’s pretrial ruling does not end the analysis regarding whether Wise
unnecessarily increased the cost of the litigation. Even assuming the
requests for admission were overbroad or that Wise otherwise had a
legitimate basis for denying them, Wise could have admitted which issues
were contested before insisting that witnesses be deposed or provide trial
testimony. Thus, the fact that the court agreed Rodriguez had a legitimate
basis to oppose the requests for admissions does not call into question its
post-trial sanctions determination.

¶16 Because there was a basis for sanctions under § 12-349, we do
not address other bases for sanctions considered by the superior court. See
State v. Robinson, 153 Ariz. 191, 199 (1987) (holding that an appellate court
may affirm on any basis supported by the record).

¶17 Sanctions awarded under § 12-349(A) may include
“reasonable attorney fees, [and] expenses.” The superior court is given
“wide latitude in assessing the amount” of sanctions. Fowler v. Great Am.
Ins. Co., 124 Ariz. 111, 114 (App. 1979). Ultimately, sanctions should reflect
the additional expenses caused by the sanctionable conduct. Taliaferro v.
Taliaferro, 188 Ariz. 333, 341 (App. 1996).

¶18 Here, the superior court imposed sanctions for the expenses
of proving that the medical bills and treatments were reasonable and
necessary. The sanctionable conduct was Wise’s unjustified refusal to
admit the reasonableness and necessity of the medical bills and treatment
after having reviewed the medical records. Rodriguez was forced to
prepare for and conduct six depositions regarding the medical bills and
treatments, even though the depositions arguably did not further the
resolution of any disputed issue. Thus, the amount of the sanctions
imposed is properly related to Wise’s conduct.

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¶19 Further, the superior court excluded from the computation
expenses related to activities unrelated to Wise’s failure to narrow the
issues—such as expenses associated with the motion for summary
judgment, the disclosure and joint pretrial statement, and delivery of trial
exhibits. Accordingly, the superior court did not abuse its discretion in
determining the appropriate sanction amount.

II. Classification of Costs Under A.R.S. § 12-332.

¶20 Costs are defined by statute and include: “1. Fees of officers
and witnesses. 2. Cost of taking depositions. 3. Compensation of referees. 4.
Cost of certified copies of papers or records.” A.R.S. § 12-332(A)(1)–(4).
Wise concedes Rodriguez is entitled to costs under § 12-341, and double
costs under Rule 68(g). However, Wise argues the superior court erred by
considering certain expenses as taxable costs.

¶21 We review de novo whether an expense is included within
the definition of taxable cost under A.R.S. § 12-332(A) because it is a
question of law. Reyes v. Frank’s Serv. & Trucking, LLC, 235 Ariz. 605, 608, ¶
6 (App. 2014). However, a determination that a particular expense is
factually within a category of taxable costs is reviewed for an abuse of
discretion. Graville v. Dodge, 195 Ariz. 119, 130, ¶ 53 (App. 1999). Here,
Wise challenges the inclusion of the following items as taxable costs: (1)
videotaped depositions, (2) investigator expenses, (3) certain TurboCourt
fees, and (4) messenger service fees.

¶22 Wise argues the videotaped depositions are not taxable “costs
of taking depositions” because the intent was always that they be used at
trial. But expenses related to videotaped depositions are “undeniably costs
of taking depositions” under A.R.S. § 12-332(A)(2). Reyes, 235 Ariz. at 610–
11, ¶ 20 (quotations omitted). Accordingly, the expenses for the videotaped
depositions are taxable costs under § 12-332(A)(2).

¶23 Wise next argues that investigator expenses should not have
been included. Although investigator expenses are not generally taxable
costs, see A.R.S. § 12-332(A), here, some of the investigator expenses were
attributable to locating already known witnesses for deposition. Thus,
those expenses were essential for the witnesses to be “meaningfully
deposed” and may be considered “ancillary deposition expenses.” See
Reyes, 235 Ariz. at 610, ¶¶ 16–17 (holding that an interpreter fee was “a cost
of taking the deposition” because the interpreter was required for the
witness to be “meaningfully deposed”).

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¶24 Investigator expenses to “interview” witnesses, however, are
not ancillary deposition expenses. Unlike locating a witness, or interpreting
for a witness, interviewing a witness prior to a deposition is not necessarily
essential to a meaningful deposition. Thus, only the investigator expenses
for locating witnesses for depositions are taxable costs under A.R.S. § 12-
332(A)(2), and the superior court should not have considered the $202.90
expense for interviewing a witness as a taxable cost.

¶25 Wise also argues that because “various . . . fees are not
associated with the date of any filing,” the superior court incorrectly found
that some TurboCourt fees were “fees of officers.” But the TurboCourt fees
correspond with filing dates, and as all parties acknowledge, filing fees are
fees of officers and thus taxable under § 12-332(A)(1).

¶26 Finally, Wise argues the superior court erred by considering
Rodriguez’s messenger expenses as taxable costs. Rodriguez listed several
messenger expenses on the application for judgment but described many of
them as investigation, filing, service of process, or subpoena fees.
Messenger and delivery fees are not taxable costs under A.R.S. § 12-332.
Ahwatukee Custom Estates Mgmt. Ass’n v. Bach, 193 Ariz. 401, 402, ¶ 6 (1999).
Because the superior court did not specify which of the claimed messenger
expenses were taxable costs, we remand for a determination of whether
those expenses should be excluded as delivery fees as opposed to taxable
fees of officers paid through the messenger service.

CONCLUSION

¶27 For the foregoing reasons, we affirm the superior court’s
imposition of sanctions, but reverse the award of costs for interviewing a
witness and remand to determine the nature of Rodriguez’s expenses
denominated as messenger expenses. In an exercise of our discretion, we
decline Rodriguez’s request for an award of attorney’s fees on appeal.

AMY M. WOOD • Clerk of the Court
FILED: AA

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