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Heritage Village II Homeowners Association v. Norman

Court of Appeals of Arizona, First Division

May 21, 2019

HERITAGE VILLAGE II HOMEOWNERS ASSOCIATION, Plaintiff/Appellee,
v.
JOHN L. NORMAN; GERRY MOLOTSKY, Intervenors/Appellants-Cross-Appellees. RICHARD WEINBERG, et al., Defendants/Appellees-Cross-Appellants,

          Appeal from the Superior Court in Maricopa County No. CV2014-009229 The Honorable Hugh E. Hegyi, Judge, Retired

          Dickinson Wright, PLLC, Phoenix By Scott A. Holcomb, David J. Ouimette Counsel for Plaintiff/Appellee

          Mandel Young, PLC, Phoenix By Taylor C. Young, Robert A. Mandel Counsel for Defendants/Appellees-Cross-Appellants

          Fennemore Craig, P.C., Phoenix By Douglas C. Northup, Emily Ayn Ward Counsel for Intervenors/Appellants-Cross-Appellees

          Presiding Judge James B. Morse Jr. delivered the opinion of the Court, in which Judge Jon W. Thompson and Vice Chief Judge Peter B. Swann joined.

          OPINION

          MORSE, JUDGE

         ¶1 John L. Norman and Gerry Molotsky ("Movants") appeal the superior court's denial of their motion to intervene and corresponding award of attorneys' fees to Heritage Village II Homeowners' Association ("Heritage") and Richard and Laine Weinberg. The Weinbergs cross-appeal the court's partial denial of their application for attorneys' fees. The superior court denied intervention for two reasons: (1) Movants did not seek intervention in a timely manner, and (2) Movants' ability to protect their interests would not be impaired or impeded because they could pursue a separate cause of action. For the reasons set forth below, we conclude that Movants were not untimely and that the availability of a separate cause of action does not create a per se prohibition to intervention of right. Accordingly, we reverse the superior court's order denying the motion to intervene and vacate the orders awarding fees and dismissing the lawsuit. We remand for further proceedings.

         FACTS AND PROCEDURAL HISTORY

         ¶2 The Weinbergs own a home located in Heritage Village II, which is part of the McCormick Ranch master-planned community in Scottsdale. In July 2014, Heritage sued the Weinbergs alleging they violated the applicable covenants, conditions, and restrictions ("CC&Rs") in building their new home. The complaint included claims for declaratory relief, breach of contract, and breach of the duty of good faith and fair dealing.

         ¶3 After a three-day hearing, the superior court granted declaratory relief, concluding the Weinbergs had violated the CC&Rs and ordering them to bring their home into compliance. Thereafter, the court awarded Heritage $111, 711.53 in attorneys' fees and $3, 932.22 in costs.[1]

         ¶4 The superior court then entered an order directing the Weinbergs to take specific remedial measures to bring their home into compliance with the CC&Rs. Nine months later, Heritage moved to compel compliance with the order. Granting the motion in part, the superior court noted that the parties were still unable to agree on modifications necessary to bring the Weinbergs' home into compliance with the CC&Rs.

         ¶5 Meanwhile, Heritage's Board of Directors (the "Board") began to disagree on litigation strategy, dividing into a four-member majority and a three-member minority. In July 2017, the Board majority voted to settle with the Weinbergs, who agreed to make minor changes to their home in exchange for Heritage's promise to release them from liability for all attorneys' fees, including the $111, 711.53 already awarded. The majority reasoned that there was "no end in sight" to the litigation and that Heritage was not financially able to further pursue the litigation.

         ¶6 Movants are homeowners and members of Heritage. One day before Heritage and the Weinbergs filed their notice of settlement, Movants filed an emergency motion to intervene pursuant to Arizona Rule of Civil Procedure ("Rule") 24(a)(2), and filed an independent lawsuit in superior court against the Weinbergs. See generally Maricopa County Superior Court Case No. CV2017-009249.

         ¶7 Heritage and the Weinbergs opposed Movants' intervention motion. Following oral argument, the superior court denied the motion to intervene and awarded Heritage and the Weinbergs some, but not all, of their attorneys' fees incurred in responding to the motion. The court ...


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