Sirrah Enterprises, LLC, an Arizona limited liability company, Plaintiff/Counterdefendant/Appellant,
Wayne and Jacqueline Wunderlich, husband and wife, Defendants/Counterclaimants/Appellees.
from the Superior Court in Yavapai County The Honorable David
L. Mackey, Judge No. CV 20070399
of the Court of Appeals, Division One 240 Ariz. 163 (App.
J. Belanger (argued), Bremer Whyte Brown & O'Meara,
Tempe, Attorneys for Sirrah Enterprises, LLC.
Jeffrey R. Adams (argued), The Adams Law Firm, PLLC,
Prescott, Attorneys for Wayne and Jacqueline Wunderlich
Stephen E. Richman (argued), Vail C. Cloar, Dickinson Wright
PLLC, Phoenix, Attorneys for Amicus Curiae Home Builders
Association of Central Arizona.
JUSTICE TIMMER authored the opinion of the Court, in which
CHIEF JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, and
JUSTICES BRUTINEL, BOLICK, GOULD, and LOPEZ joined.
The law implies a warranty of workmanship and habitability
into every residential construction contract. This Court has
wrestled with application of this warranty on several
occasions. We reenter the fray and here decide whether the
successful party on a claim for breach of the warranty
qualifies for an attorney-fee award under either a
contractual fee provision or A.R.S. § 12-341.01. Because
the warranty is imputed into the construction contract, it is
a term of the contract. Any claim for breach of that term
arises from the contract. The successful party therefore
qualifies for fees under a controlling contractual fee
provision or, barring that, § 12-341.01.
Wayne and Jacqueline Wunderlich contracted with Sirrah
Enterprises, LLC to build "a basement through exterior
walls" at the Wunderlichs' home. Sirrah performed
the work. The Wunderlichs partially paid Sirrah but refused
to pay the full contract amount, claiming construction
Sirrah sued for the unpaid contract amount. The Wunderlichs
counterclaimed for breach of the implied warranty of
workmanship and habitability (the "Implied
Warranty" or "Warranty") and other claims. A
jury found in Sirrah's favor on its claim and awarded it
$31, 374. The jury further found in Sirrah's favor on the
Wunderlichs' claims for breach of contract and breach of
the covenant of good faith and fair dealing. But the jury
found in the Wunderlichs' favor on their claim for breach
of the Implied Warranty and awarded them $297, 782.
The trial court determined that the Wunderlichs were the
prevailing parties and awarded them attorney fees pursuant to
a contractual fee provision and § 12-341.01. The court
of appeals affirmed the award as authorized by the
contractual fee provision. Sirrah Enters., LLC v.
Wunderlich, 240 Ariz. 163, 171 ¶ 25 (App. 2016).
(The court variously stated that § 12-341.01 did and did
not apply here, but ultimately rested its decision on the
contractual fee provision. Id. at 168-69
¶¶ 11, 15, 171 ¶ 24.)
We granted review because the recovery of fees under a
contractual fee provision or § 12-341.01 for an Implied
Warranty claim is a recurring legal issue of statewide
importance. This Court has jurisdiction pursuant to article