Drh Enterprises v. Ryan

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

DRH ENTERPRISES LLC, Plaintiff/Appellant,

v.

NOLAN RYAN, Defendant/Appellee.

No. 1 CA-CV 19-0610
FILED 11-24-2020

Appeal from the Superior Court in Maricopa County
No. CV2019-000127
The Honorable Pamela S. Gates, Judge

VACATED AND REMANDED

COUNSEL

Cohen Dowd Quigley P.C., Phoenix
By Daniel P. Quigley, Gabriel R. Aragon, Jenna L. Brownlee
Counsel for Plaintiff/Appellant

May, Potenza, Baran & Gillespie, P.C., Phoenix
By Jesse R. Callahan, Julia M. Kolsrud, Andrew S. Lishko
Counsel for Defendant/Appellee
 DRH ENTERPRISES v. RYAN
Decision of the Court

MEMORANDUM DECISION

Judge David B. Gass delivered the decision of the Court, in which Presiding
Judge Jennifer M. Perkins and Judge Michael J. Brown joined.

G A S S, Judge:

¶1 DRH Enterprises LLC appeals a superior court order granting
attorney fees and costs to Nolan Ryan. Because Ryan did not make a proper
request for his fees, he did not preserve the claim. Accordingly, we vacate
the superior court’s award regarding fees and remand to the superior court
to enter appropriate orders.

FACTUAL AND PROCEDURAL HISTORY

¶2 On January 10, 2019, DRH simultaneously filed a complaint
and an application for a temporary restraining order (TRO) to prevent Ryan
from making DRH a party to pending arbitration proceedings. On January
22, Ryan moved to re-assign the case to the judge who presided over
previous litigation between DRH and Ryan. On the same day, Ryan filed
an opposition to DRH’s application. Ryan did not request his fees in these
two filings. He also never filed an answer or a motion under Rule 12,
Arizona Rules of Civil Procedure.

¶3 Ryan first requested attorney fees and costs in his February 6
pre-hearing memorandum. The superior court held an evidentiary hearing
on DRH’s TRO application on February 13. On February 21, the superior
court denied DRH’s application.

¶4 On March 27, DRH filed a notice of voluntary dismissal. On
April 9, the superior court filed a signed minute entry dismissing the case.
Twenty days later, Ryan filed his application for attorney fees and
statement of costs. The superior court found the requests for fees and costs
appropriate and timely under Arizona Rules of Civil Procedure 54(f) and
54(g)(3)(B), and A.R.S. § 12-341.01. Accordingly, the superior court awarded
Ryan $47,300.00 in attorney fees and $2,215.85 in taxable costs.

¶5 DRH timely appealed the award of fees. This court has
jurisdiction with respect to the superior court’s award of fees, under Article
6, Section 9, of the Arizona Constitution, and A.R.S. § 12-2101.A.1.

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Decision of the Court

ANALYSIS

¶6 Arizona allows the superior court to award attorney fees to a
successful party in an action arising out of a contract. A.R.S. § 12-341.01.A.
But a party must request fees “in the pleadings or in a Rule 12 motion filed
before the movant’s responsive pleading.” Ariz. R. Civ. P. 54(g)(1).

¶7 DRH argues Rule 54(g)(1) precludes the superior court from
awarding Ryan his attorney fees because he did not request them in a
pleading or a Rule 12 motion. Ryan counters he did not need to request his
fees in a pleading or Rule 12 motion because he was not required to file
either document in response to the TRO application. Accordingly, he
argues, he validly requested his attorney fees in his pre-hearing
memorandum.

¶8 This court reviews an award of attorney fees for abuse of
discretion but interprets statutes and court rules de novo as issues of law.
King v. Titsworth, 221 Ariz. 597, 598, ¶ 8 (App. 2009). The same canons of
statutory construction apply when interpreting a court rule as when
interpreting a statute. See City of Phoenix v. Johnson, 220 Ariz. 189, 191, ¶ 9
(App. 2009). When interpreting a court rule, this court’s primary objective
is to discern and give effect to the supreme court’s intent in promulgating
the rule, which is most reliably shown by the rule’s language. See King, 221
Ariz. at 599, ¶ 11. “In construing a rule, we apply the usual, ordinary
meaning of its words unless doing so creates an absurd result.” Sholem v.
Gass, 248 Ariz. 281, 285, ¶ 9 (2020) (quotation omitted).

¶9 This court has once before held a defendant may recover
attorney fees under Rule 54(g)(1) when not in compliance with its strict
language. See Balestrieri v. Balestrieri, 232 Ariz. 25, 27, ¶ 8 (App. 2013). When
Balestrieri was decided, Rule 54(g) required a party to include a request for
fees in the pleadings but was silent as to Rule 12 motions. Id. at 26–27, ¶ 4.
In Balestrieri, the defendant filed a Rule 12 motion, seeking to dismiss an
adverse breach of contract claim for lack of personal jurisdiction. Id. at 26,
¶ 2. The superior court granted the defendant’s motion, after which he filed
a request for fees. Id. The Balestrieri panel recognized a Rule 12 motion may
effectively take the place of a pleading, and it would make “little sense” to
bar a litigant from recovering fees simply because they prevailed at an
earlier stage of the litigation. Id. at 27, ¶ 6. “Consistent with the purpose of
promoting settlement of disputes,” the Balestrieri panel held a Rule 12
motion could validly contain a party’s request for fees because it “puts the
opposing party on immediate notice that he or she risks a fees award if the

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Decision of the Court

case is not settled before the court decides the motion.” Id. at ¶ 8 (emphasis
added).

¶10 Balestrieri’s deviation from Rule 54(g)’s plain language,
however, is unique in the context of this court’s other cases. See, e.g., King,
221 Ariz. at 598, ¶ 7; In re Restated Tr. of Crystal H. West, 249 Ariz. 355, 358,
¶ 8 (App. 2020). In Balestrieri, the Rule 12 motion was dispositive and
eliminated the need to file an answer. See 232 Ariz. at 27, ¶ 4. Ryan’s
opposition here is not analogous—his success in opposing the TRO was not
dispositive. The action continued until DRH voluntarily dismissed it. In
short, the opposition here did not stand in place of an answer the way the
Rule 12 motion did in Balestrieri. See id.

¶11 In Crystal H., the plaintiffs made their first attorney fees
request after prevailing at trial. 249 Ariz. at 357, ¶¶ 4–5. That panel noted
Balestrieri declined to follow Rule 54(g)(1)’s plain language only to avoid
the absurdity of denying the prevailing party “any opportunity to claim
attorney fees.” Id. at 360, ¶ 18 (emphasis added). Because the Crystal H.
plaintiffs could have requested fees in their petition, strict application of the
rule did not prevent them from making a timely request. Id.

¶12 Here, as in Crystal H., we apply Rule 54(g)(1)’s plain language.
See id. at 358, ¶ 10. Ryan first put DRH on notice he was seeking fees in his
February 6 pre-hearing memorandum. He made no fee request in his prior
January 22 opposition to DRH’s TRO, a filing he was not required to make
but did anyway. See Ariz. R. Civ. P. 65 (not requiring a party to file an
opposition to a TRO request). Nothing before us demonstrates Ryan was
prevented from filing, for example, a brief answer of general denial to
preserve his right to attorney fees. Ryan argues nothing required him to file
a pleading or Rule 12 motion in this case. But nothing required him to file
an opposition to DRH’s application either, yet he did and still failed to
request his fees. We accordingly hold Ryan’s non-compliance forfeits his
attorney fees award.

¶13 Our holding comports with this court’s prior application of
Rule 54(g)(1)’s plain language and the policy rationales behind the rule.
“Unless each party is on notice before each stage of the lawsuit that its
opponent intends to ask for attorneys’ fees,” the underlying policy of
promoting settlement of disputes between parties is not furthered. See
Balestrieri, 232 Ariz. at 27, ¶ 7 (quoting King, 221 Ariz. at 598, ¶ 8) (emphasis
original). Because Ryan did not request fees in a pleading or Rule 12 motion,
as mandated by Rule 54(g)(1), his inclusion of a request for fees in his pre-
hearing memorandum did not preserve his statutory right. Just as in Crystal

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Decision of the Court

H., “the circumstance here that precludes [Ryan] from receiving attorney
fees was within [his] control.” See 249 Ariz. at 360, ¶ 18.

¶14 Because we conclude Ryan’s Rule 54(g) non-compliance is
dispositive, we need not address the other issues DRH raised in its briefing.
See Sw. Barricades, L.L.C. v. Traffic Mgmt., Inc., 240 Ariz. 139, 142, ¶ 17 n.3
(App. 2016).

¶15 We will not consider an appeal of the award of costs. See
ARCAP 13(a)(7)(A) (opening brief must contain arguments with “citations
of legal authorities and appropriate references to the portions of the record
on which the appellant relies”); Schabel v. Deer Valley Unified Sch. Dist. No.
97, 186 Ariz. 161, 167 (App. 1996) (“Issues not clearly raised and argued in a
party’s appellate brief are waived.”) (emphasis added). We do not read
DRH’s appeal to include the award of costs. Though DRH asks this court to
“reverse the trial court’s grant of the Application and award of attorneys’
fees and costs,” both of the items in its Opening Brief’s “issues presented
for review” section focus solely on the issue of fees. Indeed, the first heading
under its “argument” section reads “Ryan’s Application was Improper and
Untimely Under Rule 54 and the Trial Court Accordingly Erred in
Awarding Ryan Fees.” DRH does not cite the applicable costs statute—
A.R.S. § 12-341—anywhere in its brief. DRH did file a separate objection to
Ryan’s application of costs in the superior court, but DRH briefed none of
those issues on appeal. To the extent we infer DRH seeks to appeal the
superior court’s award of costs to Ryan, DRH waived this issue.

CONCLUSION

¶16 For the foregoing reasons, we vacate the superior court’s
order awarding Ryan his attorney fees. Our decision does not affect the
superior court’s award of taxable costs. We, therefore, remand to the
superior court to enter orders consistent with this decision. In our
discretion, we decline to award DRH its attorney fees incurred in this
appeal but award DRH taxable costs upon compliance with ARCAP 21.

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

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