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Apodaca v. Keeling

Court of Appeals of Arizona, First Division

March 19, 2019

JESUS APODACA, SR., et al., Plaintiffs/Appellees,
JO ANN AGNES KEELING, Defendant/Appellant.

          Appeal from the Superior Court in Maricopa County No. CV2016-017161 The Honorable Hugh E. Hegyi, Judge (Retired)

          Phillips Law Group PC, Phoenix By Timothy G. Tonkin, Montana Thompson Counsel for Plaintiffs/Appellees

          Law Offices of Kathryn Leonard, Phoenix By Joel A. Buckley Counsel for Defendant/Appellant

          Judge Randall M. Howe delivered the opinion of the Court, in which Presiding Judge Paul J. McMurdie and Judge Jennifer B. Campbell joined.


          HOWE, Judge.

         ¶1 Jo Ann Keeling appeals the superior court's judgment awarding attorneys' fees, expert witness fees, and taxable costs to plaintiffs Jesus Apodaca, Sr. and Christina Flores De Apodaca under Arizona Rule of Civil Procedure ("Rule") 77(h).[1] Keeling contends that, in determining whether the rule mandated such award, the court erred by comparing each plaintiff's monetary share of the judgment to their respective share of a prior compulsory arbitration award. We affirm the superior court's judgment but strike its imposition of Rule 77(h) sanctions against Keeling because the method used to determine whether such sanctions were appropriate was inconsistent with the rule's plain language.


         ¶2 The Apodaca family - Jesus Apodaca, Sr.; Christina Flores De Apodaca; Jesus Apodaca, Jr.;[2] and Maria Jose Apodaca Flores[3]-suffered injuries when Keeling rear-ended their car, and they jointly sued Keeling in a tort action. After a compulsory arbitration hearing, an arbitrator awarded damages of $33, 198.90 to Jesus, Sr.; $27, 439.50 to Christina; $19, 478.00 to Jesus, Jr.; and $16, 492.00 to Maria. The arbitrator also awarded $510.78 in taxable costs, for a total arbitration award of $97, 119.18.

         ¶3 Keeling appealed the arbitration award to the superior court under Rule 77(a), and in the ensuing trial de novo admitted liability but contested damages. The jury awarded $27, 739.00 to Jesus Sr.; $19, 939.00 to Christina; $10, 418.00 to Jesus, Jr.; and $7, 392.00 to Maria. The superior court awarded the Apodacas, as the prevailing parties, their taxable costs of $7, 529.73, bringing their total award to $73, 017.73.

         ¶4 The Apodacas subsequently moved for sanctions under Rule 77(h), asserting that Keeling's appeal did not result in "a verdict 23% more favorable than the arbitration awards with regards to [Jesus, Sr.] and [Christina]." Keeling promptly objected, arguing that Rule 77(h) sanctions are not determined by comparing the amounts awarded to each individual, but by comparing the arbitration award to the trial judgment. Because the trial judgment was 23% more favorable to Keeling than the arbitration award, she maintained that sanctions were inappropriate.

         ¶5 Applying the Apodacas' proposed party-by-party analysis, the superior court found that Keeling did not meet Rule 77(h)'s 23% threshold to avoid sanctions as to Christina and Jesus, Sr. In reaching that determination, the court compared the jury verdict for Jesus, Sr. (plus costs)-$29, 638.35-to his arbitration award (plus costs)-$33, 326.59. The court performed the same computation for Christina - comparing her award on appeal (plus costs)-$21, 824.00-to her arbitration award (plus costs) - $27, 567.19. The court then entered a final judgment, which included the Apodacas' damages, taxable costs, and an award of $30, 593.25 in Rule 77(h) sanctions in favor of Jesus, Sr. and Christina. The Rule 77(h) sanctions were comprised of expert witness fees, attorneys' fees, and taxable costs for the trial. Keeling timely appealed.


         ¶6 Keeling challenges the superior court's award of Rule 77(h) sanctions. She contends that the court erred by separating the arbitration award and judgment "into individual awards and judgments and bifurcating the Rule [77(h)] comparison." We review a court's interpretation and application of Rule 77 de novo. Bradshaw v. Jasso-Barajas, 231 Ariz. 197, 199 ¶ 5 (App. 2013). In construing and interpreting a rule, our goal is to effectuate the intent of the drafters, and we look to the rule's plain language as the best indicator of that intent. Alejandro v. Harrison, 223 Ariz. 21, 22-23 ¶ 8 (App. 2009). When the rule is clear and unambiguous, we apply it as written without further analysis. Poulson v. Ofack, 220 Ariz. 294, 297 ¶ 8 (App. 2009).

         ¶7 Any party who appears and participates in a compulsory arbitration may appeal the arbitration award to the superior court. Rule 77(a). Following such appeal, the trial court must conduct an "apples to apples" comparison of the arbitration award to the judgment entered after a trial de novo. Bradshaw, 231 Ariz. at 200 ¶ 9 (quoting Hales v. Humana of Ariz., Inc., 186 Ariz. 375, 378 (App. 1996)). "If the judgment on the trial de novo is not at least 23 percent more favorable than . . . the arbitration award," the court must award the appellee costs and fees - including reasonable attorneys' fees and reasonable expert fees. Rule 77(h). As used in Rule 77(h), the term "arbitration award" includes any awarded taxable costs and the term "judgment" includes the verdict obtained in the trial de novo and any taxable costs assessed as part of that ...

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