Schenk v. Casebolt II

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

MARVIN J. SCHENK, et al.,
Plaintiffs/Appellants-Cross Appellees,

v.

VICTOR S. CASEBOLT II, et al.,
Defendants/Appellees-Cross Appellants.

No. 1 CA-CV 18-0753
FILED 4-14-2020

Appeal from the Superior Court in Maricopa County
No. CV2013-002402
The Honorable Connie Contes, Judge

AFFIRMED IN PART AND VACATED AND REMANDED IN PART

COUNSEL

Broening Oberg Woods & Wilson, P.C., Phoenix
By Robert T. Sullivan, Jathan P. McLaughlin
Counsel for Plaintiffs/Appellants/Cross-Appellees

Sacks Tierney, P.A., Scottsdale
By Michael L. Kitchen
Counsel for Defendants/Appellees/Cross-Appellants Victor S. Casebolt II and
Amy J. Strack
 SCHENK, et al. v. CASEBOLT II, et al.
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MEMORANDUM DECISION

Presiding Judge Samuel A. Thumma delivered the decision of the Court, in
which Judge Randall M. Howe and Judge Diane M. Johnsen1 joined.

T H U M M A, Judge:

¶1 This appeal involves a claim and counterclaim for breach of a
written contract involving the sale of Marvin J. Schenk’s law practice.

¶2 Plaintiffs Marvin J. and Kathryn L. Schenk, husband and wife
(collectively Schenk) filed this case in 2013. By the end of that year, Schenk
was granted summary judgment on Schenk’s claim that defendants Victor
S. Casebolt and Amy J. Strack, husband and wife (collectively Casebolt)2
materially breached the parties’ Office Sharing and Practice Purchase
Agreement (PPA) by failing to timely make required payments. The
superior court awarded Schenk liquidated amounts of more than $200,000
in damages and $12,000 in attorneys’ fees and costs, with interest accruing
until paid.

¶3 Years of motion practice then followed. Finally, in May 2018,
a jury found Schenk had breached the contractual duty of good faith and
fair dealing implied in the PPA and awarded Casebolt $275,000 in damages.
The court then awarded Casebolt more than $86,000 in fees and costs, with
interest accruing from the entry of the October 2018 final judgment until
paid.

1 Judge Johnsen was a sitting member of this court when the matter was

assigned to this panel of the court. She retired effective February 28, 2020.
In accordance with the authority granted by Article 6, Section 3, of the
Arizona Constitution and pursuant to A.R.S. § 12-145, the Chief Justice of
the Arizona Supreme Court has designated Judge Johnsen as a judge pro
tempore in the Court of Appeals, Division One, for the purpose of
participating in the resolution of cases assigned to this panel during her
term in office.

2 Although they had signed the PPA, Kathryn L. Schenk and Amy J. Strack

were named only for community property purposes; neither was alleged to
have committed any act giving rise to a claim.

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¶4 On appeal, Schenk challenges the denial of his motion for
judgment as a matter of law on Casebolt’s counterclaim, arguing Casebolt
was not a party to the PPA (meaning Schenk owed him no duty of good
faith and fair dealing) and that Casebolt failed to show damages. Schenk
also argues evidence of the superior court’s pretrial rulings should have
been admitted at trial and that the court erred in awarding Casebolt
attorneys’ fees. Casebolt’s cross-appeal does not challenge the 2014 entry of
summary judgment for Schenk but, instead, argues Casebolt is entitled to
credits and offsets and that he should have been awarded an additional
$188,000 in fees and costs.

¶5 Affirming the liability and damages awards, the court vacates
the attorneys’ fees and costs awards and remands for the superior court to
address which party (if any) is the prevailing party and, after that
determination, make any awards of fees and costs that may be appropriate.
The final judgment issued on remand also should account for any credits
supported by the record and state a net amount of damages owed after
accounting for credits and offsets.

FACTS AND PROCEDURAL HISTORY

¶6 In 2006, Casebolt and Sanford J. Germaine were practicing
law as Casebolt and Germaine. Schenk was a solo practitioner focusing on
collections, as he had for nearly 40 years. The three agreed that Schenk
would join the firm to create Casebolt, Germaine & Schenk, PLC (the Firm).
They also agreed that, upon Schenk’s retirement, the Firm would purchase
Schenk’s collections practice for a specified price. In March 2006, they
memorialized their agreement in the written PPA, with Casebolt and
Germaine also agreeing to personally guarantee the amounts owed Schenk.
Shortly before entering the PPA, Casebolt and Germaine (but not Schenk)
signed a written Operating Agreement of Casebolt, Germaine & Schenk,
PLC, governing various aspects of the Firm’s financing and management.

¶7 The PPA required Schenk to “use good faith reasonable
efforts to integrate the Firm into” his collections practice. The PPA stated
Schenk would retire no later than March 2009, and that the Firm would pay
$500,000 for his practice, to be paid in installments, starting with a $100,000
payment in April 2006 and “equal quarterly payments” over the next four
years, at seven percent interest, simple, per year from the date of his
retirement until paid.

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¶8 Schenk practiced at the Firm until he retired in March 2009.
Casebolt and Germaine then took over Schenk’s practice and began making
timely payments to him under the PPA.

¶9 Although Schenk and Germaine remained on good working
terms, the relationship between Schenk and Casebolt soured. Casebolt later
testified that Schenk did “[l]iterally nothing” to integrate him into the
collections practice, and both testified that they would not acknowledge
each other in the hallways.

¶10 In mid-2011, the tension between Schenk and Casebolt boiled
over when Schenk had a meeting with Germaine to introduce a potential
client. After the meeting, Germaine emailed Casebolt that Schenk had
“some stipulations before [he] would consider referring the business.”
Casebolt later testified that Schenk “was insisting that . . . the new potential
client[‘s work] only go to Mr. Germaine and not go to me at all.” A few days
later, Germaine gave Casebolt a written buy/sell offer for Casebolt’s
interest in the collections practice and other assets. When no agreement was
reached, Germaine left the Firm later in the summer of 2011. Soon after
Germaine left, Casebolt sent Schenk a letter stating the payments under the
PPA would cease. Casebolt’s letter claimed Schenk had “breached [his]
express and implied obligations to [Casebolt] under the” PPA by making
his client referral to Germaine with stipulations.

¶11 In March 2013, Schenk sued Casebolt, Germaine and the Firm,
alleging breach of the express terms of the PPA by failing to make required
payments since September 1, 2011. Casebolt and the Firm answered and
filed counterclaims alleging (1) breach of the express terms of the PPA; (2)
breach of the contractual covenant of good faith and fair dealing implied in
the PPA; (3) interference with the operating agreement; and (4) aiding and
abetting a breach of fiduciary duty.3

¶12 Schenk moved for summary judgment on his claim against
Casebolt, seeking payment of $183,405.23 in principal, $17,596.48 in interest
and attorneys’ fees and costs to be determined. In opposing the motion,
Casebolt argued that Schenk’s material breaches of the PPA, including the

3 Germaine was served but did not file an answer and, other than testifying

at trial, did not take an active role in the case, was not granted any relief
and is not a party to this appeal. The Firm was joined, appeared through
counsel, and asserted counterclaims, but was not granted any relief and is
not a party to this appeal.

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mid-2011 referral with stipulations, suspended the payment obligations to
Schenk or, at very least, created an issue of material fact to be decided at
trial, thereby preventing entry of summary judgment. In reply, Schenk
argued Casebolt cited no express term of the PPA that Schenk allegedly
breached and that “Schenk did not violate the duty of good faith inherent
in the” PPA. Agreeing that Casebolt cited no express provision of the PPA
that Schenk breached, the superior court found Casebolt breached the PPA
payment obligation and granted Schenk’s motion for summary judgment.

¶13 After further briefing, in March 2014, the superior court
issued an order awarding Schenk $201,001.71 ($183,405.23 in principal and
$17,596.48 in pre-judgment interest), $11,560.50 in attorneys’ fees and
$499.08 in costs against Casebolt, “subject to offset for any payments
received from other parties.” Although first designating the order a final
judgment, Ariz. R. Civ. P. 54(b) (2020),4 the court later ruled it an
interlocutory, non-appealable order pending resolution of Casebolt’s
counterclaims.

¶14 In 2015, Schenk sought summary judgment on Casebolt’s
counterclaims. As relevant here, Schenk argued Casebolt cited no express
provision of the PPA that Schenk allegedly breached and that his referral of
the client to Germaine after he retired could not constitute a breach of the
implied covenant of good faith and fair dealing. Casebolt, in response,
focused on the implied covenant, arguing that Schenk’s post-retirement
referral with stipulations “took steps to destroy the firm and eliminate any
benefit from the” PPA, meaning “[a]t minimum, questions of fact exist
sufficient to demand a trial.”

¶15 After briefing, the superior court granted Schenk’s motion for
summary judgment on all counterclaims except the good faith and fair
dealing counterclaim, explaining “that a party may breach the implied
covenant of good faith and fair dealing by exercising express discretion in
a way inconsistent with a party’s reasonable expectation.” Accordingly, the
court found that “[w]hether, under these circumstances, Plaintiff Marvin J.
Schenk breached the implied covenant presents a question of fact [for] the
jury.”

¶16 In 2018, as trial on the good faith and fair dealing
counterclaim approached, the superior court granted Casebolt’s motion in
limine to preclude admission of the court’s rulings on Schenk’s motion for

4 Absent material revisions after the relevant dates, statutes and rules cited

refer to the current version unless otherwise indicated.

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summary judgment on Casebolt’s other counterclaims. At the four-day
trial, Schenk, Casebolt, Germaine, a representative of the potential client
Schenk referred and two experts testified. Casebolt’s trial theme was that
Schenk’s post-retirement referral with stipulations in mid-2011 caused the
Firm to break up, that such conduct violated the implied covenant of good
faith and fair dealing and that, as a result, Casebolt was entitled to half the
value of the collections practice as damages.

¶17 The trial evidence on damages included expert testimony
valuing the collections practice in its entirety at $722,000 and evidence that
Germaine’s buy/sell offer in mid-2011 was for $550,000. After the close of
the evidence, Schenk moved for judgment as a matter of law, which the
court denied. After deliberation, the jury found for Casebolt and awarded
him $275,000 in damages.

¶18 After further motion practice, including Schenk’s
unsuccessful renewed motion for judgment as a matter of law and motion
for a new trial, the court entered final judgment in October 2018. The final
judgment listed the specific amount awarded to Casebolt, but did not list
the specific amount awarded to Schenk, instead simply referencing the 2014
ruling in favor of Schenk. The following table reflects the specific awards
made in the 2014 ruling and the 2018 final judgment:

Party Damages Fees Costs Total

Schenk (against $201,001.71 $11,560.50 $499.08 $213,061.29
Casebolt)

Casebolt (against $275,000.00 $80,000.00 $6,345.20 $361,345.20
Schenk)

The judgment stated Casebolt was the prevailing party “at least since the”
2014 ruling and awarded Casebolt (but not Schenk) interest from the date
of entry of judgment until paid. Recognizing the possibility of a net
judgment, the judgment nevertheless “[d]ecline[d] to apply offsets” and did
not provide a net award.

¶19 Schenk timely appealed and Casebolt cross-appealed. This
court has jurisdiction pursuant to Article 6, Section 9, of the Arizona
Constitution and Arizona Revised Statutes (A.R.S.) §§ 12-120.21(A)(1) and
-2101(A)(1) (2020).

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DISCUSSION

¶20 Schenk argues the superior court erred in denying his motion
for judgment as a matter of law, erred in granting the motion in limine
precluding evidence of the ruling rejecting three of Casebolt’s
counterclaims and erred in awarding Casebolt attorneys’ fees. On cross-
appeal, Casebolt does not challenge the 2014 order granting Schenk
summary judgment on the breach of contract claim but, instead, argues the
court erred by failing to apply credits and offsets to the damages awarded
in the 2014 order, by refusing to eliminate the interest, attorneys’ fees and
costs awarded Schenk in the 2014 order, and by failing to award Casebolt
more fees.

I. The Superior Court Did Not Err in Denying Schenk’s Motion for
Judgment as a Matter of Law.

¶21 This court reviews de novo a superior court’s denial of a
motion for judgment as a matter of law, Glazer v. State, 237 Ariz. 160, 167 ¶
29 (2015), viewing the evidence in the light most favorable to the
nonmoving party, Desert Palm Surgical Group, P.L.C. v. Petta, 236 Ariz. 568,
578 ¶ 25 (App. 2015). A grant of judgment as a matter of law is proper “only
when the facts presented in support of a claim have so little probative value
that reasonable people could not find for the claimant.” Monaco v.
HealthPartners of S. Ariz., 196 Ariz. 299, 302 ¶ 6 (App. 1999).

A. Casebolt Was a Party to the PPA.

¶22 Schenk first argues he did not owe a duty of good faith and
fair dealing to Casebolt because the PPA was between Schenk and the Firm,
not Casebolt, and that Casebolt signed the PPA only on behalf of the Firm,
not individually. Not so. The PPA lists Casebolt, individually, as a party
and Casebolt signed the PPA both as a member of the Firm and
individually. The face of the PPA clearly shows Casebolt, as an individual,
was a party.

¶23 Along with the express terms of the PPA, Schenk’s complaint
avowed that Casebolt was a party to the PPA. In obtaining summary
judgment on his breach of contract claim, Schenk signed a declaration
stating Casebolt was a party to the PPA. Having used that declaration to
win summary judgment, he cannot now claim the facts were to the contrary.
See Levine v. Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., 244 Ariz. 234,
239 ¶ 16 (App. 2018) (“‘[A party] should not be permitted to ‘blow hot and
cold’ with reference to the same transaction’”) (quoting Miles v. Franz
Lumber Co., 14 Ariz. 455, 457 (1913)).

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¶24 Schenk’s argument that Casebolt was not a party to the PPA
fails. Accordingly, as a party to that contract, Schenk owed Casebolt was
owed a duty of good faith and fair dealing implied in the PPA. See Rawlings
v. Apodaca, 151 Ariz. 149, 153 (1986) (“The law implies a covenant of good
faith and fair dealing in every contract.”).

B. The Superior Court Properly Granted Casebolt’s Motion in
Limine to Preclude Evidence of its Ruling Rejecting Three
of Casebolt’s Counterclaims.

¶25 Schenk argues that the jury should have received evidence of
the summary judgment in his favor on Casebolt’s three other counterclaims,
particularly the claim alleging breach of express terms of the PPA. Schenk
contends preclusion of that evidence left “the impression with the Jury that
Mr. Schenk breached an express provision of the PPA.” At a hearing the
day before trial, the court granted Casebolt’s motion in limine to preclude
the admission of evidence of those rulings at trial.5 During trial, Schenk
more than once sought to revisit the issue, but the court denied his requests,
while also making clear that if Casebolt referred to an express breach of the
PPA, he would risk opening the door to the evidence. Ultimately, the court
did not allow such evidence, rulings this court reviews for an abuse of
discretion. See Bogard v. Cannon & Wendt Elec. Co., Inc., 221 Ariz. 325, 332 ¶
20 (App. 2009). Schenk’s arguments that these ruling were erroneous fail
for several reasons.

¶26 First, the only prejudice Schenk asserts is that Casebolt
repeatedly told the jury that Schenk breached his obligation to “use good
faith reasonable efforts to integrate the Firm into the Schenk Practice.”
Schenk cannot show he was prejudiced by any references to that term of the
PPA. Schenk stipulated that the PPA was admissible, and it was admitted
at trial without objection. The lawyers’ opening statements both briefly
referenced integration, again without objection. Both on direct and cross-
examination, again without objection, Casebolt was asked about Schenk’s
efforts to integrate Casebolt and Germaine into the practice. On cross-
examination, when asked about his mid-2011 letter to Schenk claiming
breach, Casebolt testified he did not mention integration because the client
referral with stipulations “was the primary obligation that I was worried

5 The resulting minute entry states the court granted the motion “[f]or the

reasons stated on the record.” Schenk, however, did not provide a transcript
of that hearing, which is presumed to support the ruling. See Myrick v.
Maloney, 235 Ariz. 491, 495 ¶ 11 (App. 2014).

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about and the one that had damaged me at that point.” And Germaine
testified that Schenk “in fact did integrate his practice into the” Firm.

¶27 More importantly, at trial and again without objection,
Casebolt testified about what he was, and what he was not, claiming:

Q. Okay. And your claim against Mr. Schenk is
for breach of the covenant of good faith and fair
dealing; is that correct?

A. That’s right.

Q. And that’s a little different than breach of
contract. Do you know what the difference is?

A. Yes.

Q. Can you please briefly explain to the jury
what your understanding of the difference is?

A. Okay. A breach of contract would be a
default or a breach of promises that are
specifically written or expressly written in the
written contract. Breach of the Covenant of
Good Faith and Fair Dealing would be one
party failing to act in good faith in carrying out
the contract.

In closing, Casebolt did not reference the PPA’s integration obligation,
while Schenk argued “no one has disputed that the practice was integrated
into the firm.” Thus, Schenk has shown no prejudice in the court’s
excluding evidence of the prior rulings. See Ariz. R. Evid. 103(a) (“A party
may claim error in a ruling to admit or exclude evidence only if the error
affects a substantial right of the party” and if other requirements are met).

¶28 Second, the claims on which the superior court had entered
summary judgment in favor of Schenk alleged breaches of Schenk’s express
obligations under the PPA, not the covenant of good faith and fair dealing.
The court found:

The Court concurs with Plaintiffs that assuming
the truth of these allegations there is nothing in
the context of the parties’ agreement that would
expressly prohibit placing such a restriction on

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the referral of new business. The agreement is
silent on this topic and contains no provision
controlling new client referrals from Plaintiff
Marvin J. Schenk.

Thus, the issue resolved in Schenk’s favor in the earlier motion for summary
judgment was different than the implied covenant of good faith and fair
dealing issue the jury was asked to decide, and did decide, at trial.

¶29 Finally, Casebolt’s claimed damages were tied to the value of
the collections practice, which he alleged collapsed when the Firm broke up
over his dispute with Germaine as a result of Schenk’s client referral “with
stipulations,” not due to Schenk’s failure to integrate. Indeed, Casebolt
testified without objection that he did not consider himself damaged by
Schenk’s failure to integrate:

Q. Did you consider suing Mr. Schenk when he
was not including you in the collections
practice? Or were you considering maybe
calling the deal off and getting your $50
thousand back?

A. Well, I maybe thought about it, but I didn’t
do it or didn’t pursue that because, again, my
partner, my long-time law partner had assured
me, you know, just bide your time, wait until
Mr. Schenk retires. The practice would be ours.
We would run it 50/50. It wouldn’t be a
problem. And I really hadn’t been damaged at
that point. And so there really, you know,
would have been not a whole lot I could sue for.

¶30 For these reasons, Schenk has not shown that the superior
court erred in precluding evidence of its summary judgment ruling on
Casebolt’s counterclaims.

C. The Evidence Supported the Jury’s Award of Damages.

¶31 Casebolt argued at trial he was entitled to damages of half the
value of the collections practice, which Casebolt argued he lost as a result
of Schenk’s breach of the covenant of good faith and fair dealing. On appeal,
Schenk argues Casebolt failed to offer evidence to support the amount of
damages the jury awarded. Damages must be proven “‘with reasonable
certainty.’ . . . [The] evidence [must] provide some basis for estimating” the

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loss. Walter v. F.J. Simmons & Others, 169 Ariz. 229, 236 (App. 1991) (quoting
Gilmore v. Cohen, 95 Ariz. 34, 36 (1963)). However, once the fact of damage
is shown, “the amount of an award for damages is a question peculiarly
within the province of the jury.” Larriva v. Widmer, 101 Ariz. 1, 7 (1966)
(emphasis added).

¶32 At trial, the jury heard competing evidence of the value of the
collections practice. Casebolt’s expert testified that the Firm’s collections
practice was valued at $722,000. Germaine testified that the written offer he
made Casebolt in 2011 to purchase Casebolt’s interest in the Firm’s
collection practice was based on a market value for the Firm of $550,000.
Schenk’s expert did not offer a competing valuation, instead criticizing the
methodology of Casebolt’s expert. Although Casebolt argued that he was
entitled to half of the collections practice — $361,000 — the jury awarded
him $275,000 in damages.

¶33 To the extent Schenk seeks to challenge the admissibility of
any evidence Casebolt offered about the value of the practice, he failed to
timely object, meaning such a challenge is waived. See Ariz. R. Evid. 103(a).
And to the extent Schenk argues the jury improperly weighed the
competing evidence, this court does not reweigh evidence on appeal. See
Schoels v. Fernando, 228 Ariz. 455, 460 ¶ 15 (App. 2011).

¶34 To the extent Schenk argues the jury’s award of damages was
unsupported by the evidence, he is wrong. Similarly, the record does not
support Schenk’s argument that “[t]he jury appears to have latched on to
the lowest number they observed.” The jury heard the practice was valued
at amounts ranging from essentially zero (Schenk’s expert) to $722,000
(Casebolt’s expert). The verdict (representing the value of Germaine’s buy
out offer) was well within the competing evidence provided, and there is
no contention or showing that it was “the result of passion or prejudice.”
Sandretto v. Payson Healthcare Mgmt., Inc., 234 Ariz. 351, 363 ¶ 53 (2014)
(citation omitted). Accordingly, reasonable admissible evidence supports
the $275,000 jury verdict, meaning the superior court did not err in denying
Schenk’s motion for a judgment as a matter of law.6

6 Given this conclusion, this court need not (and expressly does not) address

Casebolt’s contingent argument for additur, made for the first time on
appeal.

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II. Attorneys’ Fees, Costs, Interest, Credits and Offsets.

¶35 The remaining issues Schenk and Casebolt raise involve their
competing fee and cost awards, credits for payments made by Germaine
against the damages awarded to Schenk, interest awarded to Schenk and
the failure of the final judgment to net out the amounts owed. The court
addresses these interrelated issues in turn, reviewing the superior court’s
authority to award fees and costs de novo. See Ironwood Commons Cmty.
Homeowners Ass’n, Inc. v. Randall, 246 Ariz. 412, 417 ¶ 20 (App. 2019).

¶36 Schenk argues the superior court erred in awarding Casebolt
$80,000 in attorneys’ fees. The court has already rejected Schenk’s argument
that he was not a party to the PPA. Schenk also argues that the fee provision
in the PPA only applies to an action “to enforce any of the terms of this
Agreement,” and the implied covenant of good faith and fair dealing is not
“an express term of the PPA.” Under Arizona law, however, the implied
covenant of good faith and fair dealing is “as much a part of the contract as
are the express terms.” Wells Fargo Bank v. Arizona Laborers, Teamsters and
Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 490 ¶ 59
(2002). Moreover, the superior court found the fee award also was
appropriate under A.R.S. § 12-341.01, a finding Schenk does not challenge
on appeal. See also American Power Prods., Inc. v. CSK Auto, Inc., 242 Ariz.
364, 368 ¶ 14 (2017) (noting A.R.S. § 12-341.01 “applies to any ‘contested
action arising out of contract’ to the extent it does not conflict with the
contract”). Accordingly, Schenk has not shown that Casebolt failed to cite
proper authority for a fee award.

¶37 Turning to a more basic issue regarding fees and costs,
Casebolt argues the superior court erred in finding that Schenk was the
successful or prevailing party, “at least” until the entry of the 2014 order on
summary judgment, and awarding Schenk fees and costs up to that time.
Classically, there is no more than one successful or prevailing party eligible
for an award of fees in a given case. See A.R.S. § 12-341.01(A) (“the court
may award the successful party reasonable attorney fees”);7 PPA § 11
(stating “a party” that prevails is entitled to recover fees from the other
party); see also Ahwatukee Custom Estates Mgmt. Ass’n, Inc. v. Turner, 196

7 Although there may be two successful parties where a written settlement

offer is rejected but the judgment obtained is more favorable, see A.R.S. §
12-341.01(A), nothing in the record indicates that would apply here.

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Ariz. 631, 637 ¶ 22 (App. 2000) (affirming the finding “that both parties
were non-prevailing parties” under contractual fee-shifting provision).

¶38 Casebolt cites Ayala v. Olaiz, which stated that “[i]n cases
involving various competing claims, counterclaims, and setoffs all tried
together, the successful party is the net winner.” 161 Ariz. 129, 131 (1989).
Schenk counters by citing Schwartz v. Farmers Insurance Company of Arizona,
which stated that the superior court has

discretion to determine who is the successful
party in multiple-party litigation and in cases
where there are multiple-parties as well as
multiple-claims. The use of a “percentage of
success factor” test to determine the relative
success of the parties with regard to the various
claims has been held to be appropriate, as has a
“totality of the litigation” test.

166 Ariz. 33, 38 (App. 1990) (citations omitted). Given the various claims in
this case, their resolution and the timing of that resolution, the superior
court has discretion to employ any of these approaches to determine who
(if anyone) is the successful party.

¶39 In deciding the competing claims for fees, the court should
take into account that Schenk filed this case alleging breach of contract,
prevailed on that claim on summary judgment and by March 2014, that
claim was liquidated at $201,001.71 as of August 30, 2013. With a rough
calculation of interest on that amount through May 1, 2018 — the
approximate date of the jury verdict — at seven percent interest, simple,
per year (the rate listed in the PPA)8 the award approaches $270,000.

8 Although Casebolt argues that Schenk should not receive interest on his

award given the jury’s verdict, years later, that argument misconstrues
when a party is entitled to pre-judgment interest. See Alta Vista Plaza, Ltd. v.
Insulation Specialists Co., 186 Ariz. 81, 83 (App. 1995) (noting a party is
entitled to pre-judgment interest when an amount is liquidated and
demand for payment is made).

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¶40 Casebolt, by contrast, received a jury verdict in May 2018 in
his favor and against Schenk for $275,000 on his implied covenant of good
faith and fair dealing counterclaim, slightly more than the approximate
then-current award approaching $270,000 in Schenk’s favor. Along the
way, however, the court entered summary judgment against Casebolt on
three other counterclaims he had asserted against Schenk.

¶41 On this record, it is unclear whether Schenk or Casebolt (or
neither) was the successful or prevailing party for an award of fees and
costs. The superior court, however, did not consider and decide that issue
at any point revealed by the record. Accordingly, and given that court’s
discretion in making a prevailing party determination in a case like this,
this court vacates the awards of fees and costs and remands the issue to the
superior court. That court can and should consider, first, which party (if
any) is the successful or prevailing party and, depending upon the outcome
of that determination, make appropriate awards of fees and costs.9

¶42 As for the netting out of damages, Casebolt argues on cross-
appeal that payments by Germaine to Schenk under the PPA should be
credited against the 2014 damages award and that any judgment should
state the net amount owed. If such payments were made, as suggested at
trial, they should be credited. The record on appeal, however, does not
show conclusively (1) whether such payments were made, (2) the amount
of any such payments, or (3) when they were made. Accordingly, on
remand, the superior court should consider those issues if presented with
such information and should take into account the amounts and dates of
any such payments in calculating accrued interest on the Schenk award.
Finally, the judgment on remand should state a net amount owed after
offsets and credits (whatever that amount may be).

¶43 Both parties seek an award of attorneys’ fees and costs on
appeal pursuant to A.R.S. §§ 12-341 and -341.01; Casebolt also seeks fees
under the PPA. The requests for fees and costs on appeal are denied without
prejudice to the superior court addressing the requests on remand. See
Watson Constr. Co. v. Amfac Mortg. Corp., 124 Ariz. 570, 584–85 (App. 1979)
(affirming award of no costs to either where there was “the difficulty . . .

9 Given that the fee awards are vacated and remanded for further
consideration, this court need not (and expressly does not) address
Casebolt’s argument on cross-appeal that he should have been awarded
additional fees.

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 SCHENK, et al. v. CASEBOLT II, et al.
Decision of the Court

[in] ascertaining who was the ‘successful party’ in the multiple count
complaint and multiple count counterclaim litigation”).

CONCLUSION

¶44 The judgment is affirmed in part and vacated and remanded
in part for further proceedings as set forth above

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

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