Lucas v. Crawford

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

WILLA LUCAS and RICHARD LUCAS, a married couple,
Plaintiffs/Appellants,

v.

KRISTY CRAWFORD and JOHN DOE CRAWFORD, wife and husband,
STUTZ INVESTMENTS, LLC, Defendants/Appellees.

No. 1 CA-CV 23-0378
FILED 3-7-2024

Appeal from the Superior Court in Mohave County
No. S8015CV202101282
The Honorable Steven C. Moss, Judge

AFFIRMED

COUNSEL

Knochel Knochel & Darus, Bullhead City
By Nicholas Darus
Counsel for Plaintiffs/Appellants

DeConcini McDonald Yetwin & Lacy, P.C., Tucson
By Steven J. Itkin, Clayton R. Kramer
Counsel for Defendant/Appellee
 LUCAS, et al. v. CRAWFORD, et al.
Decision of the Court

MEMORANDUM DECISION

Judge Jennifer M. Perkins delivered the decision of the Court, in which
Presiding Judge Andrew M. Jacobs and Judge David D. Weinzweig joined.

P E R K I N S, Judge:

¶1 In this property dispute, the Mohave County Superior Court
dismissed Willa and Richard Lucases’ claims against Kristy and Rod
Crawford and Stutz Investments. The court found in favor of Stutz on its
counterclaims, and awarded the Crawfords and Stutz (collectively the
“Crawfords”) damages and attorney fees. The Lucases appeal and we
affirm for the following reasons.

FACTS AND PROCEDURAL BACKGROUND

¶2 In March 2021, the Lucases sold property containing a
museum and shop located in Oatman (the “Property”) to Stutz for $180,000.
Stutz is a limited liability company whose sole member is Kristy Crawford.
Consistent with the purchase contract, Stutz made a $20,000 down payment
in March 2021 and received a loan from the Lucases for the remaining
principal payable over 144 months beginning in September 2021. Stutz also
began paying for insurance coverage of the building in April 2021.

¶3 The Lucases filed a complaint against the Crawfords to quiet
title to the Property alleging the parties never came to a final purchase
agreement and therefore the Lucases were its rightful owners. The Lucases
also brought a claim for conversion of personal property that the Crawfords
allegedly removed after the sale. Upon the filing of their complaint, the
Lucases filed a notice of lis pendens against the Property.

¶4 The Crawfords answered and Stutz raised counterclaims
alleging, as relevant, breach of contract, breach of the implied covenant of
good faith and fair dealing, and wrongful lis pendens.

¶5 Throughout litigation, the Lucases repeatedly obstructed the
Crawfords’ efforts to conduct discovery and prepare for trial. Richard
Lucas failed to comply with the Crawfords’ attempts to depose him on five
separate occasions, despite two court orders requiring him to sit for a
deposition. The Lucases also did not participate in preparing a required
joint pre-trial statement or disclose Richard as a potential witness. See Ariz.

2
 LUCAS, et al. v. CRAWFORD, et al.
Decision of the Court

R. Civ. P. 16(f), 26.1(a)(3). Richard, who was 88 years old at trial, claimed
that he could not sit through a deposition because it would be too stressful
for him to testify. Despite his claim, Richard was an active participant
throughout the litigation, including sitting though ten hours of Willa’s
deposition, attending hearings, and attending the entire bench trial.

¶6 The Crawfords moved to exclude Richard from testifying at
trial. The court granted the Crawfords’ motion because the Lucases failed
to participate in the joint pretrial statement and to identify Richard as a
witness. Richard nonetheless twice attempted to participate and offer
testimony during the trial.

¶7 At the conclusion of the trial, the court entered judgment in
favor of the Crawfords on nearly all claims, noting, “[t]his case wasn’t even
close. . . . [T]his case was just that clear.” First, the court dismissed the
Lucases’ conversion claim because they failed to present evidence of
damages. Second, the court dismissed the Lucases’ quiet title claim because:
(1) Kristy on behalf of Stutz, the Lucases, and a public notary all signed the
purchase contract; (2) the parties also signed a warranty deed describing
the property; and (3) Stutz complied with the terms of the purchase contract
by making a downpayment and the required monthly payments, which the
Lucases accepted.

¶8 On Stutz’s counterclaims, the court found the Lucases in
breach of contract because they placed padlocks preventing entry onto the
Property after the sale. The court also found the Lucases breached their
duty of good faith and fair dealing by “trying to get out of their legal
obligations based upon the contract they entered into.” The court awarded
Stutz $3,000 in total damages on the two claims. The court also awarded
Stutz $5,000 in statutory damages for the filing of a wrongful lis pendens. See
A.R.S. § 33-420(A).

¶9 Finally, the court awarded the Crawfords their reasonable
attorney fees and costs: (1) as the successful party in a contested action
arising out of a contract; (2) for the Lucases’ filing of a wrongful lis pendens;
and (3) as a sanction for both Richard Lucas’ willful avoidance of his
deposition and the Lucases’ failure to comply with other discovery-related
orders. The Crawfords requested $139,686 in fees and the court awarded
$110,000 as “reasonable and appropriate.”

¶10 The Lucases timely appealed, and we have jurisdiction. A.R.S.
§ 12-2101(A)(1).

3
 LUCAS, et al. v. CRAWFORD, et al.
Decision of the Court

DISCUSSION

¶11 The Lucases challenge the superior court’s decisions to: (1)
exclude Richard Lucas from testifying at trial; (2) reduce the amount owed
to the Lucases under the purchase contract by the amount of the judgment
awarded to the Crawfords; and (3) award $110,000 in attorney fees. We
address each issue in turn. “We review issues of law de novo,” Nielson v.
Patterson, 204 Ariz. 530, 531, ¶ 5 (2003), but “sustain the superior court’s
factual findings unless they are clearly erroneous,” Town of Florence v.
Florence Copper Inc., 251 Ariz. 464, 468, ¶ 20 (App. 2021) (as amended). “We
also view the facts on appeal from a bench trial in the light most favorable
to upholding the judgment.” Id.

I. Exclusion of Richard Lucas’ Testimony

¶12 The Lucases challenge the exclusion of Richard Lucas’
testimony. We review evidentiary rulings for an abuse of discretion.
Zimmerman v. Shakman, 204 Ariz. 231, 235, ¶ 10 (App. 2003).

¶13 The Crawfords argue the Lucases waived their challenge to
the superior court’s exclusion of Richard Lucas from testifying by failing to
object at trial. “We do not consider arguments raised for the first time on
appeal except under exceptional circumstances.” In re MH 2008-002659, 224
Ariz. 25, 27, ¶ 9 (App. 2010). While this “rule is procedural, not
jurisdictional,” id., the Lucases did not just fail to object to the exclusion at
trial, they told the court Richard did not intend to testify. The Lucases failed
to identify exceptional circumstances under which we should consider this
argument for the first time on appeal. We decline to do so.

¶14 We note however that, even if the Lucases had not waived the
issue, the superior court was within its discretion to exclude Richard’s
testimony. The Lucases never disclosed Richard as a witness and
affirmatively told the court he did not plan to testify. The Lucases argue the
court can exclude specific undisclosed testimony but cannot exclude a
witness from testifying at all. That argument squarely conflicts with
Arizona Rule of Civil Procedure 37(c)(1), which provides that a party who
fails to timely disclose a witness may not use the witness as evidence at trial,
unless the court finds “the failure caused no prejudice or orders otherwise
for good cause.” And here, the Lucases did not request or obtain a finding
from the superior court that the Crawfords were not prejudiced by their
failure to disclose him. Nor do they explain on appeal how the failure to
disclose did not prejudice the Crawfords.

4
 LUCAS, et al. v. CRAWFORD, et al.
Decision of the Court

II. Reduction of Purchase Contract Principal

¶15 After awarding damages and attorney fees, the court
announced its intent to “engage in a series of offsets, which would
hopefully minimize the parties’ future interactions with one another.” In its
judgment, the court ordered “the principal amount due and owing by [the
Crawfords] to [the Lucases] under the purchase contract which was the
subject of this litigation is reduced by the [total amount awarded in the
judgment].” The Lucases objected to the offset, but the court concluded that
“recoupment is allowed under the law. This case involved ownership of
real property and personal property associated with the sale of both, where
a debt is still due one party to the other.”

¶16 “[A] recoupment is a reduction by the defendant of part of the
plaintiff’s claim because of a right in the defendant arising out of the same
transaction.” Morris v. Achen Const. Co., Inc., 155 Ariz. 507, 510 (App. 1986),
rev’d and vacated on other grounds, 155 Ariz. 512 (1987). The Lucases argue
the superior court misapplied recoupment because their claim for quiet title
did not arise out of a contract. But the Lucases’ quiet title claim is not the
correct one to consider when evaluating a claim of recoupment. Rather, the
Crawfords’ counterclaims, including breach of contract, are the relevant
claims for purposes of the damages and fees awards. In other words, the
court reduced the Crawfords’ purchase contract obligation to the Lucases
based on the Crawfords’ successful claims arising out of that purchase
contract. The court did not err by invoking the equitable doctrine of
recoupment.

¶17 The Lucases contend the Crawfords must seek a lien against
the contract and foreclose if necessary because this judgment is an
unsecured debt. By allowing the Crawfords to deduct their damages from
the balance owing on the contract, the Lucases argue the court denied their
right to seek bankruptcy protection and inhibited the rights of other
potential creditors against the Lucases.

¶18 But the Lucases cite no legal authority for either argument, as
our rules require. ARCAP 13(a)(7). By failing to cite legal authorities, the
Lucases do not meaningfully develop their argument, which is therefore
waived. Ritchie v. Krasner, 221 Ariz. 288, 305, ¶ 62 (App. 2009) (“Opening
briefs must present and address significant arguments, supported by
authority that set forth the appellant’s position on the issue in question.”).

5
 LUCAS, et al. v. CRAWFORD, et al.
Decision of the Court

III. The Superior Court’s Attorney Fees Award

¶19 “An award of attorney fees is left to the sound discretion of
the trial court and will not be reversed on appeal absent an abuse of
discretion.” Orfaly v. Tucson Symphony Soc’y, 209 Ariz. 260, 265, ¶ 18 (App.
2004). “We will not disturb the trial court’s discretionary award of fees if
there is any reasonable basis for it.” Hale v. Amphitheater School Dist. No. 10,
192 Ariz. 111, 117, ¶ 20 (App. 1998). The factors considered in determining
a reasonable fee include: (1) the qualities of the advocate; (2) the character
of the work to be done; (3) the work actually performed by the lawyer; and
(4) the result. Schweiger v. China Doll Rest., Inc., 138 Ariz. 183, 187 (App.
1983).

¶20 The Lucases argue the court abused its discretion because
$110,000 in attorney fees was “excessive considering the character of work
in this case.” They note that “[t]his case involved a single piece of real
property and personal property contained within,” and “[t]he matter was
resolved in a one (1) day bench trial.”

¶21 We discern no error. After carefully reviewing the rates and
services billed by the Crawfords’ attorneys, the court in its discretion
reduced the Crawfords’ requested $139,686 award to $110,000, a deduction
of more than 20%. The court found the rate at which their counsel billed
work by its paralegals and legal assistants was excessive, but found the
legal work “appropriate and the act of a reasonably prudent attorney.”

¶22 Because the record supports the $110,000 award of attorney
fees to the Crawfords, the court did not abuse its discretion.

CONCLUSION

¶23 We affirm. As the successful party on appeal, the Crawfords
are entitled to their reasonable attorney fees and costs upon compliance
with ARCAP 21. See A.R.S. §§ 12-341, 12-341.01, and 33-420.

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

6