Zahler v. Swift Transportation

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

MARK ZAHLER, Plaintiff/Appellant,

v.

SWIFT TRANSPORTATION COMPANY, LLC, Defendant/Appellee.

No. 1 CA-CV 22-0191
FILED 12-29-2022

Appeal from the Superior Court in Maricopa County
No. CV2021-013751
The Honorable Randall H. Warner, Judge

AFFIRMED

COUNSEL

Ahwatukee Legal Office, PC, Phoenix
By David L. Abney
Co-Counsel for Plaintiff/Appellant

Negretti & Associates, PLC, Phoenix
By Jonathan Negretti, Dylan McGurk
Co-Counsel for Plaintiff/Appellant

Jones Skelton & Hochuli, PLC, Phoenix
By Phillip H. Stanfield, Clarice A. Spicker, Justin M. Ackerman
Counsel for Defendant/Appellee
 ZAHLER v. SWIFT TRANSPORTATION
Decision of the Court

MEMORANDUM DECISION

Judge Angela K. Paton delivered the decision of the Court, in which
Presiding Judge Maria Elena Cruz and Judge Peter B. Swann1 joined.

P A T O N, Judge:

¶1 Mark Zahler appeals from the confirmation of an arbitration
award in his favor against Swift Transportation Company, LLC (“Swift”).
Zahler argues the arbitrator exceeded his powers under the arbitration
agreement by declining to award him attorneys’ fees and some of his costs,
despite finding him to be the prevailing party. For the following reasons,
we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Zahler entered a contract with Swift as an independent
contractor. This agreement required the parties to arbitrate any disputes
arising out of the relationship created by the agreement. The contract also
included an attorneys’ fees provision, providing in relevant part:

In the event either party hereto brings an action . . . to collect
damages of any kind for any claim that arises out of or relates
to the relationship created by this Agreement, the prevailing
party shall be entitled to recover its costs and reasonable
attorney’s fees.

¶3 Zahler later sued Swift for his injuries sustained on the job
resulting from a Swift employee’s negligence. The case was arbitrated
pursuant to the agreement, and the arbitrator found that Swift was
negligent and awarded damages to Zahler. The arbitrator found Zahler to

1 Judge Peter B. Swann was a sitting member of this court when the matter
was assigned to this panel of the court. He retired effective November 28,
2022. 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 Swann as a judge pro
tempore in the Court of Appeals for the purpose of participating in the
resolution of cases assigned to this panel during his term in office and for
the duration of Administrative Order 2022-162.

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 ZAHLER v. SWIFT TRANSPORTATION
Decision of the Court

be the prevailing party but declined to award attorneys’ fees and some of
his costs.

¶4 Zahler filed a petition to vacate the arbitration award in
superior court, alleging that the arbitrator had exceeded his powers within
the meaning of Arizona Revised Statutes (“A.R.S.”) section 12-3023(A)(4)
by failing to award attorneys’ fees and all costs. The superior court denied
Zahler’s petition.

¶5 We have jurisdiction over Zahler’s timely appeal pursuant to
Article 6, Section 9 of the Arizona Constitution, and A.R.S. §§ 12-2101(A)(1)
and -2101.01(A)(6).

DISCUSSION

¶6 Zahler argues the award must be vacated because the
arbitrator failed to award him his total costs and reasonable attorneys’ fees,
thereby exceeding the arbitrator’s powers. “The superior court may reject
an arbitration award only on narrow statutorily enumerated grounds . . . .”
Nolan v. Kenner, 226 Ariz. 459, 461, ¶ 5 (App. 2011). We view the record in
the light most favorable to affirming the confirmation of the arbitration
award and will affirm the superior court’s ruling absent an abuse of
discretion. RS Indus., Inc. v. Candrian, 240 Ariz. 132, 135, ¶ 7 (App. 2016).

¶7 “An arbitrator’s decisions regarding questions of law and
fact are final, and will not be disturbed unless the arbitrator has purported
to decide a matter that is beyond the scope of the issues submitted for
arbitration.” RS Indus., Inc., 240 Ariz. at 135, ¶ 7. In Arizona, “an arbitration
award is not subject to attack merely because one party believes that the
arbitrators erred with respect to factual determinations or legal
interpretations.” Hirt v. Hervey, 118 Ariz. 543, 545 (App. 1978).

¶8 Here, the arbitrator did not decide an issue beyond those
submitted for arbitration. Zahler submitted his claim for fees and costs
during arbitration, and his claim arose out of the relationship created by the
contract. This question was necessarily submitted to the arbitrator. The
interpretation of the contract is a matter of law, see Roe v. Austin, 246 Ariz.
21, 26, ¶ 16 (App. 2018), and regardless of the correctness of the arbitrator’s
award, our review of his award under Section 12-3023(A)(4) is limited to
whether the arbitrator resolved any issue not submitted to him. See RS
Indus., Inc., 240 Ariz. at 135, ¶ 7. We cannot review the substance of the
arbitrator’s findings, which Zahler asks us to do. We find no error in the
superior court’s confirmation of the award.

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Decision of the Court

¶9 Zahler cites to several authorities from outside Arizona for
the proposition that an arbitration award may be vacated under statutes
analogous to Section 12-3023 if the arbitrator improperly failed to award
attorneys’ fees under a mandatory fee award provision in a contract
governing the arbitration. See e.g., Am. Int’l Specialty Lines Ins. Co. v. Allied
Cap. Corp., 149 N.E.3d 33, 37 (N.Y. 2020); Magenis v. Bruner, 187 P.3d 1222,
1224 (Colo. App. 2008); DiMarco v. Chaney, 37 Cal. Rptr. 2d 558, 559 n.1 (Cal.
Ct. App. 1995). Adopting this test would require us to second guess the
arbitrator’s interpretation of the contract. But, even if we assume, without
deciding, that we ought to follow the reasoning of this line of cases, we still
may not vacate the award.

¶10 Here, as the superior court noted, the terms of the contract
provided several grounds on which the arbitrator could decline to award
attorneys’ fees and costs. Swift argued, and the arbitrator could have
found, “that attorneys’ fees for a personal injury case were not awardable”
pursuant to the fee provision, or “he could have determined that the
reasonableness of the attorneys’ fees requested was not adequately
documented.” The former point is more than colorable. Cf. Ramsey Air
Meds, L.L.C. v. Cutter Aviation, Inc., 198 Ariz. 10, 15–16, ¶¶ 27–29 (App. 2000)
(Negligent tortfeasor owes duty of care even in the absence of a contract so
an award of fees under A.R.S. § 12-341.01 is not appropriate even if a
contract relationship is implicated in the negligence action.). And the latter
point is supported by the lack of evidence in the record substantiating the
reasonableness of the fees requested by Zahler—the award under the
contract is limited to a reasonable fee. In either case, we view the record in
the light most favorable to confirming the fee award, and either rationale
provides a basis for declining to award attorneys’ fees.

ATTORNEYS’ FEES AND COSTS

¶11 Zahler requests his reasonable attorneys’ fees and costs
pursuant to A.R.S. §§ 12-341 and -341.01. Because Zahler is not the
prevailing party on appeal, we decline his request.

¶12 Swift requests its reasonable attorneys’ fees and costs
pursuant to A.R.S. §§ 12-349 and -3025. In our discretion, we decline to
award fees. As the prevailing party, Swift may recover its taxable costs
upon compliance with Arizona Rule of Civil Appellate Procedure 21.

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Decision of the Court

CONCLUSION

¶13 We affirm.

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

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