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
Offices of Kathryn Leonard, Phoenix By Joel A. Buckley
Counsel for Defendant/Appellant
Randall M. Howe delivered the opinion of the Court, in which
Presiding Judge Paul J. McMurdie and Judge Jennifer B.
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). 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
AND PROCEDURAL HISTORY
The Apodaca family - Jesus Apodaca, Sr.; Christina Flores De
Apodaca; Jesus Apodaca, Jr.; and Maria Jose Apodaca
Flores-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.
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.
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.
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
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.
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 ...