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 ...