Whiter v. hilton/procaccianti

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

R. L. WHITMER, et al., Plaintiffs/Appellants,

v.

HILTON CASITAS COUNCEL OF HOMEOWNERS, Defendant/Appellee.

and,

PROCACCIANTI AZ II, LP, Intervenor/Defendant/Appellee.

No. 1 CA-CV 24-0095, 1 CA-CV 24-0108,
1 CA-CV 24-0110, 1 CA-CV 24-0114 (Consolidated)
FILED 02-27-2025

Appeal from the Superior Court in Maricopa County
No. CV2015-053091, CV2016-050379, CV2012-051066, CV2014-054346
The Honorable Melissa Iyer Julian, Judge

AFFIRMED

COUNSEL

Meyer & Partners, PLLC, Phoenix
By Ross P. Meyer
Counsel for Plaintiffs/Appellants Witmer et al.

Zadok Eli and Hana Eli, Scottsdale
Plaintiffs/Appellants
Spencer Fane LLP, Phoenix
By Andrew M. Federhar, Jessica A. Gale
Counsel for Defendant/Appellee Procaccianti

Hill, Hall & DeCiancio, PLC, Phoenix
By R. Corey Hill, Chris Robbins
Counsel for Defendant/Appellee Hilton

MEMORANDUM DECISION

Presiding Judge Jennifer M. Perkins delivered the decision of the Court, in
which Judge James B. Morse Jr. and Judge D. Steven Williams joined.

P E R K I N S, Judge:

¶1 This consolidated case involves claims by R.L. Whitmer,
Colleen London, and Zadok and Hana Eli (collectively, “Homeowners”),
against a homeowner’s association (“HOA”) and Procaccianti AZ II, L.P.
(collectively, “Defendants”). For the fourth time in this Court, Homeowners
challenge the HOA’s corporate identity and its ability to act on
Homeowners’ behalf. For the following reasons, we affirm the superior
court’s denial of Homeowners’ motions for relief from judgment.

FACTS AND PROCEDURAL BACKGROUND

¶2 In 1970, Procaccianti’s predecessor-in-interest (the “Hotel”)
signed a ground lease for a 20-acre parcel of land. The Hotel subleased eight
acres to a condominium called Hilton Casitas, divided the land into 29
tracts, and sold the tracts as individual casitas. Each casita owner paid rent
to the Hotel under a sublease agreement. Hilton Casitas was governed by a
Declaration of Covenants, Conditions, and Restrictions. The Hotel recorded
the Declaration in 1972 and established an unincorporated association
named the Hilton Casitas Council of Co-Owners to serve as the HOA under
the Declaration. In 1994, the Council of Co-Owners’ board of directors
incorporated the entity as a non-profit organization and renamed it the
Hilton Casitas Council of Homeowners.

¶3 In 1999, the Hotel amended its sublease with the casita
owners (“1999 subleases”). The amended subleases authorized “the Hilton
Casitas Council of Co-Owners (now called the Scottsdale Hilton Casitas
Homeowners Association)” to negotiate the casita owners’ ground rent.
After those amendments, Homeowners filed multiple lawsuits alleging that

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Decision of the Court

only the earlier, unincorporated Council of Co-Owners, as named in the
Declaration, could act as the HOA and negotiate rent under the 1999
subleases.

¶4 The superior court has repeatedly ruled that the incorporated
Council of Homeowners succeeded the unincorporated Council of Co-
Owners as the HOA and is thus authorized to act on behalf of the casita
owners under the Declaration and the 1999 subleases. This Court has
affirmed the superior court’s ruling on this issue three times. Eli v.
Procaccianti AZ II LP, 1 CA-CV 19-0855, 2021 WL 3088737, at *2, ¶ 10 (Ariz.
App. July 22, 2021) (mem. decision); Shaffer v. Procaccianti AZ II, L.P., 1 CA-
CV 16-0628, 2018 WL 2306949, at *5–6, ¶¶ 23–24 (Ariz. App. May 22, 2018)
(mem. decision); London v. Karatz, 1 CA-CV 15-0070, 2016 WL 5746236, at
*4, ¶ 17 (Ariz. App. Oct. 4, 2016) (mem. decision).

¶5 Homeowners moved under Arizona Rule of Civil Procedure
60 to set aside the superior court’s judgments in four cases—CV2012-
051066, CV2014-054346, CV2015-053091, and CV2016-050379—alleging that
new evidence proved the judgments were obtained by fraud on the court.
Whitmer and London asked to depose the HOA’s president and its lawyers
in support of their Rule 60 motion.

¶6 The court denied Rule 60 relief, finding that Homeowners
“offer[ed] no further evidence of a ‘fraud’ on the Court that would merit
vacating the judgment[s].” Homeowners then moved under Rule 59 to
vacate the court’s Rule 60 rulings, which the court also denied.

¶7 Homeowners timely appealed. We consolidated the four
cases and we have jurisdiction. A.R.S. § 12-2101(A)(1).

DISCUSSION

¶8 Homeowners contend that (1) the Council of Homeowners
defrauded the court about succeeding the previous, unincorporated HOA
and (2) the court erred by denying their deposition requests.

I. Rule 60(d)(3) Relief

¶9 Homeowners challenge the superior court’s denial of their
Rule 60 motions, alleging that new evidence proves Defendants defrauded
the court about the Council of Homeowners’ status as their HOA and its
authority to act on behalf of the casita owners. Ariz. R. Civ. P. 60(d)(3). We
review denials of Rule 60 motions for an abuse of discretion. Fry v. Garcia, 213 Ariz. 70, 72, ¶ 7 (App. 2006).

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¶10 The superior court may set aside a judgment when the
moving party proves by clear and convincing evidence that the judgment
was the product of fraud on the court. Clark v. Kreamer, 243 Ariz. 272, 275,
¶ 13 (App. 2017). “Fraud upon the court occurs when a party obtains a
judgment by concealing material facts and suppressing the truth with the
intent to mislead the court.” Id. (cleaned up). Clear and convincing evidence
is a “heightened standard of proof [] indicat[ing] that the thing to be proved
is highly probable or reasonably certain.” Kent K. v. Bobby M., 210 Ariz. 279,
284–85, ¶ 25 (2005) (cleaned up).

¶11 Homeowners rely on three new pieces of evidence to support
their Rule 60(d)(3) fraud claim—settlement agreements from CV2019-
052885 and CV2021-054500, and the Lower Court of Appeals ruling in
LC2022-000424. Homeowners direct us to specific portions of each
agreement, which we outline below.

¶12 First, the CV2019-052885 settlement agreement between
Whitmer, London, and the Council of Homeowners states, in part:

The Hilton Casitas Homeowners Association agrees that its
authority is to enforce the use restrictions under the
[Declaration] and to collect HOA dues. The Hilton Casitas
Homeowners Association also agrees, as part of the
settlement, that it is not a party to what it has been referred to
as the 1999 subleases.

¶13 Second, the CV2021-054500 settlement agreement between
Whitmer, London, and the Council of Homeowners states, in part:

WHEREAS, the Arizona Court of Appeals has affirmed that
the Association, which was incorporated in 1994, is the
successor to the pre-1994, unincorporated Council. Therefore,
the Association, although not specifically named in the
Declaration, is subject to the Declaration and A.R.S. § 33-1201
et seq.

¶14 Finally, Homeowners point us to LC2022-000424, a superior
court ruling reviewing an administrative decision by the Arizona
Department of Real Estate. In its ruling, the court interpreted the
Declaration, noting:

As written, the Declaration defines Council as “all of the
owners of the Casitas.” Declaration at 1.4. This Court has no
authority to define it any other way . . . . While actions by the

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Council at times may be cumbersome, the Council must still
abide by the terms of the Declaration, unless and until
amended. Until such a time, the provision at issue here
requires the annual assessment for each Casita to be
determined by a majority vote of a quorum of all of the Casita
owners.

¶15 Homeowners contend these agreements and ruling establish
the Council of Homeowners is not a party to the 1999 subleases and is not
named in the Declaration. Homeowners argue that the settlement
agreements are admissions by the Council of Homeowners that it did not
succeed the unincorporated Council of Co-Owners and thus has no
authority to act on the casita owners’ behalf under the Declaration or 1999
subleases. They contend the court’s finding in LC2022-00424—i.e., the
Declaration defines the Council as the casita owners, not the incorporated
Council of Homeowners—“conclusively demonstrates” that Defendants
deceived the court by claiming the Council of Homeowners succeeded the
previous Council of Co-Owners.

¶16 Homeowners’ new evidence does not prove by clear and
convincing evidence that Defendants concealed material facts with the
intent to defraud the superior court. See Clark, 243 Ariz. at 275, ¶ 13. There
is no dispute that the Council of Homeowners is not named in the
Declaration and is not a party to the 1999 subleases. These facts are readily
ascertainable from the faces of both documents.

¶17 The agreements and ruling are consistent with the Council of
Homeowners’ long-held position that it is the successor-in-interest to the
unincorporated Council of Co-Owners, regardless of whether it is named
in the Declaration or identified as a party in the 1999 subleases. Indeed, the
CV2021-054500 settlement agreement says exactly that. Supra ¶ 13 (“[T]he
Association, which was incorporated in 1994, is the successor to the pre-
1994, unincorporated Council.”). Without more, we cannot say that fraud
on the court as to the Council of Homeowners’ status as HOA “is highly
probable or reasonably certain.” Kent K., 210 Ariz. at 284–85, ¶ 25; see also
Klinger v. Hummel, 11 Ariz. App. 356, 358–59 (1970) (inconclusive,
speculative evidence is insufficient to satisfy the heightened burden of
proof for fraud).

¶18 The superior court did not abuse its discretion by finding
Homeowners’ new evidence was insufficient to prove fraud on the court by
clear and convincing evidence.

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II. Deposition Requests

¶19 Whitmer and London argue the superior court erred by
denying their request to depose the HOA’s president and its lawyers in
support of their Rule 60 motion. “We review a court’s rulings on discovery
issues for abuse of discretion.” Campion v. City of Tucson, 256 Ariz. 256, 264,
¶ 18 (App. 2023).

¶20 Whitmer and London’s deposition request admitted that the
superior court “can rule in favor of Plaintiffs on the Rule 60(d)(3) motion
without additional evidence.” Because Whitmer and London conceded the
depositions were not essential to resolve their motion, the court did not err
in denying their discovery request.

III. Attorney Fees on Appeal

¶21 Defendants request attorney fees incurred on appeal under
both Section 12-341.01 and Section 12-349. In our discretion, we award
Defendants their reasonable attorney fees under Section 12-341.01 and their
taxable costs upon compliance with ARCAP 21.

CONCLUSION

¶22 We affirm.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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