TUCSON ESTATES PROPERTY OWNERS ASSOCIATION, INC., AN ARIZONA NONPROFIT CORPORATION, Plaintiff/Appellee,
HOLLY A. MCGOVERN, AN UNMARRIED WOMAN; AND DONALD E. SINES, AN UNMARRIED MAN, Defendants/Appellants
Appeal from the Superior Court in Pima County. No. C20145514. The Honorable Richard S. Fields, Judge.
Carpenter, Hazlewood, Delgado & Bolen, PLC, Tucson, By Jason Smith and Nicholas Nogami, Counsel for Plaintiff/Appellee.
Stephen M. Weeks, Marana, Counsel for Defendants/Appellants.
Judge Miller authored the opinion of the Court, in which Presiding Judge Vásquez and Chief Judge Eckerstrom concurred.
[¶1] We address whether A.R.S. § 12-341.01 requires an award of attorney fees to the prevailing party if the contract that authorizes such fees mandates an award to the other party but is silent as to the prevailing party. As a matter of statutory interpretation, we conclude that § 12-341.01(A) permits a fees award in this situation but does not mandate it.
[¶2] Holly McGovern and Donald Sines (collectively, " Appellants" ) appeal the trial court's denial of their request for attorney fees and costs against Tucson Estates Property Owners Association (TEPOA) after its request for an injunction and breach of contract claims were decided in favor of Appellants. Appellants argue they should have been awarded fees pursuant to A.R.S. § 12-341.01 and costs pursuant to A.R.S. § 12-341
because they were the prevailing parties below; further, they should have been awarded fees pursuant to A.R.S. § 12-349 as a sanction. For the following reasons, we affirm the court's ruling on attorney fees but reverse its denial of costs.
Factual and Procedural Background
[¶3] We view the facts in the light most favorable to upholding the trial court's ruling. McMurray v. Dream Catcher USA, Inc., 220 Ariz. 71, ¶ 6, 202 P.3d 536, 539 (App. 2009). In 2012, Appellants purchased property in Tucson Estates, which included a shed that had been built more than thirty-five years earlier. They were informed in writing that if they moved or replaced the shed, any new structure would have to comply with the current covenants, conditions, and restrictions (CC& Rs).
[¶4] Sines soon submitted a change request to replace the shed in a new location. The request form included this admonition: " The Association has thirty (30) days to respond to this request. Do not start your project until you have received approval." There were multiple handwritten notes on the form, including " Appears shed will fit," and a check mark in a box indicating the plan was denied. Contrary to the suggestion in the document that his plan was rejected, Sines testified that the person who inspected the property for TEPOA gave verbal approval to replace the shed. He also testified he never received a copy of his request with the " Plan Denial" box checked. The trial court accepted Sines's testimony, finding that TEPOA did not send the rejection form to Appellants.
[¶5] More than a year after Sines submitted the request, and after he had completed the shed, TEPOA sent Sines a letter stating he had violated the CC& Rs. Sines continued to correspond with TEPOA and eventually moved the shed to ...