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Klesla v. Wittenberg

Court of Appeals of Arizona, First Division

August 18, 2016

ROSTISLAV

         Appeal from the Superior Court in Maricopa County No. CV2013-090313 The Honorable Mark F. Aceto, Judge, Retired.

          Mark A. Tucker, P.C., Mesa By Mark A. Tucker Counsel for Plaintiffs/Appellants

          Manolio & Firestone, PLC, Scottsdale By Veronica L. Manolio, John C. Shorb Counsel for Defendant/Appellee

          Presiding Judge Jon W. Thompson delivered the opinion of the Court, in which Judge Maurice Portley and Judge Patricia K. Norris joined.

          OPINION

          THOMPSON, Presiding Judge

         ¶1 Appellants Rostislav Klesla and Kristyna Kleslova (the Kleslas) appeal from the trial court's order denying their motion for judgment on an arbitrator's award. For the following reasons, we affirm the decision of the trial court.

         FACTUAL AND PROCEDURAL HISTORY

         ¶2 In 2011, the Kleslas entered into a lease agreement (the lease) to rent Ron Wittenberg's residential property in Scottsdale for an initial nine-month lease period. After an initial rent payment, the monthly rental payment was $5495 per month. Pursuant to the lease, the Kleslas put down a $10, 990 security deposit. The lease contained the following attorneys' fees and costs provision:

The prevailing party in any dispute or claim between Tenant and Landlord arising out of or relating to this Agreement shall be awarded all their reasonable attorney fees and costs. Costs shall include, without limitation, expert witness fees, fees paid to investigators, and arbitration costs.

         ¶3 After the initial lease period expired, the Kleslas continued to rent the residence on a month-to-month basis. Subsequently, they moved out and requested the return of their security deposit. Wittenberg declined to return the deposit and the Kleslas filed a complaint in superior court seeking recovery of their deposit, statutory treble damages, and punitive damages for alleged fraud committed by Wittenberg. In their complaint, the Kleslas sought attorneys' fees and costs "pursuant to the parties contract, and A.R.S. §§ 12-341 and 12-341.01." Wittenberg answered and filed a counterclaim for unpaid rent and alleged damage to the property. The case was assigned to an arbitrator for compulsory arbitration due to the amount in controversy. See Ariz. R. Civ. P. 72(b).

         ¶4 The arbitrator held a hearing in November 2013. The arbitrator signed and filed an arbitration award in early December 2013 awarding the Kleslas $10, 000 on their complaint and Wittenberg $904 on his counterclaim. The arbitrator did not award attorneys' fees or costs to either party. Neither party timely appealed from the arbitration award, and the deadline to do so passed in late December 2013. See Ariz. R. Civ. P. 77.

         ¶5 In mid-January 2014, the Kleslas filed a motion in superior court entitled "Expedited Motion for Filing of Decision of Arbitrator and Amended Arbitration Award." The motion requested the arbitrator to 1) enter a notice of decision rather than an arbitration award, 2) change the amount awarded to the Kleslas to $10, 990, to be reduced by the $904 awarded to Wittenberg for a total award of $10, 086, and 3) "permit the parties the opportunity to submit and weigh in on the award of attorney [s'] fees and costs . . .." Wittenberg opposed the motion, arguing that the arbitrator was divested of jurisdiction.

         ¶6 On March 7, 2014, the arbitrator filed a notice of decision awarding the Kleslas $10, 000 plus interest and Wittenberg $904 plus interest. The notice of decision further advised the parties to submit applications for an award of attorneys' fees by March 21, 2014. The Kleslas filed an application for award of attorneys' fees and costs seeking $8820 in attorneys' fees plus costs. Wittenberg sought $9253 in attorneys' fees plus costs.

         ¶7 On April 2, 2014, the Kleslas filed a motion for entry of judgment and request for extension which requested "entry of judgment on eventual Award of Arbitrator which shall be filed" and asked the trial court to "continue its consideration until ...


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