NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND
MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24
FILED BY CLERK
NOV -3 2011
IN THE COURT OF APPEALS
STATE OF ARIZONA
RUSSELL R. SHOLES and MARY L.
SHOLES, husband and wife,
JUDY R. FERNANDO,
COURT OF APPEALS
2 CA-CV 2011-0060
Not for Publication
Rule 28, Rules of Civil
APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY
Cause No. C20105162
Honorable Carmine Cornelio, Judge
Russell R. Sholes
In Propria Persona
Mary L. Sholes
In Propria Persona
Mesch, Clark & Rothschild, P.C.
By Michael J. Crawford and Paul A. Loucks
B R A M M E R, Judge.
Attorneys for Defendant/
Russell and Mary Sholes (the Sholes) appeal from the trial court’s order
entering summary judgment against them and in favor of Judy Fernando-Sholes and her
marital community, and awarding Judy her costs and attorney fees. The Sholes argue the
court erred in determining their claims were barred by the statute of limitations and the
doctrine of issue preclusion and by granting Judy her attorney fees. We affirm.
Factual and Procedural Background
When reviewing a trial court’s grant of a motion for summary judgment,
we view the evidence in the light most favorable to the non-moving party. Grand v.
Nacchio, 214 Ariz. 9, ¶ 3, 147 P.3d 763, 767 (App. 2006). In June 2010, the Sholes filed
a complaint in Pima County against Judy and her husband alleging breach of contract,
breach of the covenant of good faith and fair dealing, unjust enrichment, and promissory
The Sholes alleged they and Judy had “entered into a verbal agreement,
whereby the Sholes agreed to loan [Judy] and her husband . . . $222,000.00 so that she
could save her home from foreclosure and avoid litigation.” They assert the agreement
provided Judy would repay them with proceeds from the sale of the home or, if the
property did not sell by March 2006, she would execute a promissory note and a deed of
trust in their favor. The Sholes alleged they had demanded execution of the documents,
and Judy had refused to comply.
Judy filed a motion to dismiss for failure to state a claim upon which relief
could be granted, arguing the statute of limitations had expired and the claims previously
had been litigated and reduced to a final judgment in her favor in a 2006 Maricopa county
case.1 After a hearing on the motion, during which the parties stipulated that the trial
court could proceed as if the motion was one for summary judgment, the court found the
Sholes’ claims barred by the doctrine of issue preclusion and because the statute of
limitations had expired. The court granted judgment in favor of Judy and her marital
community and awarded her costs and attorney fees. The Sholes moved for a new trial
and to amend or alter the judgment, and the court denied the motion. This appeal
On appeal from a summary judgment, we review de novo whether the trial
court erred in applying the law and whether any genuine issues of material fact exist.
Grand, 214 Ariz. 9, ¶ 26, 147 P.3d at 772. Summary judgment is proper where “the facts
produced in support of the claim or defense have so little probative value . . . that
reasonable people could not agree with the conclusion advanced by the proponent of the
claim or defense.” Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990).
Statute of Limitations
The trial court found the Sholes’ 2010 complaint was filed beyond the
three-year limit imposed by A.R.S. § 12-543 for oral debts. It found any breach of the
alleged oral agreement had occurred by March 2006 when Judy did not execute the
The Maricopa county case, based on the same alleged oral loan agreement,
asserted claims against Judy of, inter alia, breach of contract, breach of the covenant of
good faith and fair dealing, and unjust enrichment. Although Judy’s husband,
Appellants’ son, was also named a defendant in that case, the claims were directed
against Judy individually as her separate property debt.
promissory note and deed of trust and that the Sholes had “confirmed the breach and
materiality by filing a lawsuit over that breach in May 2006 in Maricopa County.” We
The Sholes argue the limitations period was “tolled by the filing of the
[previous Maricopa county] lawsuit.”2 They support their argument in part by relying on
Third & Catalina Associates v. City of Phoenix, 182 Ariz. 203, 895 P.2d 115 (App.
1994), and Gideon v. St. Charles, 16 Ariz. 435, 146 P. 925 (1915). As the trial court
explained below, these cases clearly are distinguishable and do not support the
conclusion that filing the Maricopa county action tolled the statute of limitations in this
case. See Third & Catalina Assocs., 182 Ariz. at 207, 895 P.2d at 119 (statute of
limitations tolled while appellant exhausted administrative remedies as required by law);
Gideon, 16 Ariz. at 439, 146 P. at 927 (cause not barred where complaint filed within
limitations period and summons filed afterward).
The Sholes also suggest the statute of limitations was tolled because a final
determination in the Maricopa county action was a necessary prerequisite to bringing the
subsequent claim because the possibility the loan could be a community debt “could
hardly [have been] anticipated.” The limitations period may be tolled when a pending
action is “practically conclusive as to the nature and extent of a party’s rights, and where
The Sholes argue in their reply brief that the second action was saved by A.R.S.
§ 12-504, which allows a new action to be filed within six months of the termination of a
previous action in some circumstances. However, we decline to address this argument
because it was raised for the first time in the reply brief. See Mason v. Cansino, 195
Ariz. 465, n.1, 990 P.2d 666, 668 n.1 (App. 1999).
his success thereunder is a prerequisite to his right to maintain a new action.” City of
Phx. v. Sittenfeld, 53 Ariz. 240, 249, 88 P.2d 83, 87 (1939). However, the statute of
limitations is not tolled by a related action unless the first action is a legal prerequisite to
the second. For example, in Desruisseau v. Cameron, 125 Ariz. 511, 512, 611 P.2d 98,
99 (App. 1980), the plaintiff argued his right of action for fraud in the purchase of his
property did not accrue until final resolution of an action quieting title to a strip of land in
the neighboring landowner. However, the court determined he had notice of the possible
fraud when the quiet title claim was filed and the limitations period therefore began at
that time. Id. The court explained: “The fact that [the plaintiff] chose not to proceed . . .
was a matter of strategy and fails to relieve [plaintiff] from the effect of A.R.S.
§ 12-543(3).” Id. at 513, 611 P.2d at 100. In this case, as the trial court correctly noted,
the Sholes “did not need to file the Maricopa County suit to obtain a right or
determination that this suit was valid.” Rather, as in Desruisseau, the Sholes decided not
to proceed against the marital community in the first case, a strategic decision that does
not relieve them from the operation of the statute of limitations.
In a related argument, the Sholes urge the statute of limitations period was
tolled by the doctrine of equitable tolling because Judy “concealed the cause of action”
by “not com[ing] out with the community debt argument until well into the Maricopa
[c]ase.” We review the trial court’s determination there was no factual basis for an
equitable tolling defense for an abuse of discretion. See McCloud v. State, 217 Ariz. 82,
¶ 17, 170 P.3d 691, 697-98 (App. 2007) (reviewing for abuse of discretion where
doctrine unavailable based on facts). Equitable tolling may apply when a plaintiff is
“excusably ignorant of the limitations period and the defendant would not be prejudiced
by the late filing.” Kyles v. Contractors/Eng’rs Supply, Inc., 190 Ariz. 403, 405-06, 949
P.2d 63, 65-66 (App. 1997) (equitable tolling applied where right-to-sue notice
incorrectly stated deadline for filing action).
The Sholes do not cite any part of the record to dispute the trial court’s
determination that “there are no facts upon which an equitable tolling defense is
presented” because the fact the Sholes made a loan to Judy or the marital community
during the marriage was not concealed. Where “plaintiffs were aware of a claim they
failed to pursue in a timely manner . . . , equitable tolling simply does not apply.” Stulce
v. Salt River Project Agric. Improvement & Power Dist., 197 Ariz. 87, ¶ 33, 3 P.3d 1007,
1015 (App. 1999). The Sholes’ 2006 complaint in the Maricopa county case alleged Judy
had borrowed money from them while she had been married to their son, and the money
had not been repaid as promised. See Cardinal & Stachel, P.C. v. Curtiss, 225 Ariz. 381,
¶ 6, 238 P.3d 649, 651 (App. 2010) (debt incurred during marriage generally presumed
community obligation absent evidence otherwise). Although the Sholes focus on Judy’s
characterization of the loan during the Maricopa county case, they had independent
knowledge of its nature. The Sholes alleged in this case that they had agreed to loan
“[Judy] and her husband” the money and that both had agreed to repay them. Taking the
Sholes’ allegations as true, they were aware at the time of the agreement that both Judy
and their son were obligated to repay it. Therefore, once the loan was not repaid as
promised, they should have had notice of the claim against the marital community. See
Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of Am., 182 Ariz. 586, 588, 898 P.2d
964, 966 (1995) (under discovery rule, cause of action accrues when plaintiff knows or
should know through reasonable diligence facts underlying cause).
The Sholes alternatively argue § 12-543, which provides that actions to
collect an oral debt must be commenced within three years of accrual, is “the wrong
statute of limitations” to apply to their action. The Sholes’ complaint alleged “the parties
[had] entered into a verbal agreement” about the loan. However, the Sholes later alleged
a facsimile (fax) sent by Judy converted the agreement into a “contract in writing”
controlled by the six-year limitation period in A.R.S. § 12-548.3 The fax, attached as an
exhibit to the Sholes’ response to Judy’s motion to dismiss, appears to be a printout of an
electronic mail message (email) or letter from Judy to Bruce in response to a request for
execution of a promissory note and deed.
The email requests evidence of alleged
payments and proposes an agreement to limit future claims, concluding with the
statement: “My lawyer will look at these and then I may sign.” There are various notes
on the margins of the unsigned page in what appear to be the handwriting of several
people. The fax does not include the required elements of a contract, and the Sholes offer
no reason the fax should be considered a separate contract absent those elements. See
Contempo Constr. Co. v. Mountain States Tel. & Tel. Co., 153 Ariz. 279, 281, 736 P.2d
The Sholes also propose the five-year limitations period for a “demand note” or
the four-year period for “specific performance to convey . . . real estate” should apply.
However, they fail to identify the relevant statutes of limitation or to explain how the
facts of this action support their interpretation. Therefore, they have waived this
argument. See Ariz. R. Civ. App. P. 13(a)(6) (appellate brief argument shall contain
“citations to the authorities, statutes and parts of the record relied on”); Polanco v. Indus.
Comm’n, 214 Ariz. 489, n.2, 154 P.3d 391, 393-94 n.2 (App. 2007) (appellant’s failure to
develop and support argument waives issue on appeal).
13, 15 (App. 1987) (enforceable contract must contain offer, acceptance, consideration,
Alternatively, the Sholes suggest Judy’s fax was a written acknowledgment
that began a new limitations period. An acknowledgment of the justness of a claim may
terminate operation of the applicable statute of limitations where it is in writing and
signed by the party to be charged. A.R.S. § 12-508; De Anza Land & Leisure Corp. v.
Raineri, 137 Ariz. 262, 266-67, 669 P.2d 1339, 1343-44 (App. 1983). However, the
portion of the fax to which the Sholes appear to refer in their brief is an unsigned,
handwritten note at the bottom of a page which discusses “not be[ing] threatened and
bullied anymore” and contains a postscript including the phrase, “You will get every
penny back!” Even assuming, without deciding, the fax acknowledges sufficiently the
justness of the Sholes’ claim, it is not signed and therefore does not comply with
§ 12-508 so as to preclude operation of the statute of limitations. Moreover, any new
promise under the statute “must be sufficient in itself to support an action for the debt,
independent of the original promise.” De Anza, 137 Ariz. at 267, 669 P.2d at 1344. As
discussed above, the fax is not an enforceable contract. Therefore, it does not prevent the
statute of limitations from barring the Sholes’ claims.4
The Sholes also allege a 2008 affidavit signed by Judy acknowledges the
“justness” of their claim because it admits she offered to settle the claim by paying the
amount requested. However, the affidavit makes no such acknowledgment, clearly
stating even though she “owe[d] them nothing,” she had offered to pay the Sholes to
settle the dispute and “extricate” them from her personal affairs.
Next, the Sholes argue Judy was “judicially estopped from denying
Russell Sholes had a disability that prevented the sta[t]ute of limitations from running as
to him.” The Sholes do not contend they have proven the disability’s existence but rely
instead on their allegation that Judy had argued Russell was incompetent during a
However, the document to which the Sholes refer containing
Judy’s alleged previous statements was stricken from the record, and so we may not
Therefore, the argument is waived.
See Ariz. R. Civ. App. P. 13(a)(6)
(appellate brief argument shall contain “citations to the authorities, statutes and parts of
the record relied on”).
The trial court did not err in determining the Sholes’ claims were barred by
the statute of limitations. Because the Sholes’ action was dismissed properly on that
basis, we need not address whether their claims were barred by the doctrine of issue
The Sholes argue the trial court erred in awarding Judy her attorney fees
pursuant to A.R.S. § 12-341.01 because the award was not supported by the record and
because the court failed to make “appropriate findings of fact and conclusions of law.”
We review a court’s decision whether to award attorney fees for an abuse of discretion.
Rowland v. Great States Ins. Co., 199 Ariz. 577, ¶ 31, 20 P.3d 1158, 1168 (App. 2001).
The court found it was appropriate to award Judy attorney fees pursuant to § 12-341.01
but did not specify under which section of that statute the award was made. However, the
record supports a determination that fees were appropriate under § 12-341.01(A), which
provides “[i]n any contested action arising out of a contract, express or implied, the court
may award the successful party reasonable attorney fees.” A defendant is entitled to
attorney fees even where “the plaintiff is not entitled to recover on the contract . . . , or if
the court finds that the contract on which the action is based does not exist.” Berthot v.
Sec. Pac. Bank of Ariz., 170 Ariz. 318, 324, 823 P.2d 1326, 1332 (App. 1991).
In this case, the Sholes brought an action for, inter alia, breach of contract
and breach of the covenant of good faith and fair dealing, specifically alleging this matter
“ar[ose] out of contract.” See Dooley v. O’Brien, 226 Ariz. 149, ¶ 12, 244 P.3d 586, 589
(App. 2010) (breach of duty created by contractual relationship and not by law sounds in
Moreover, § 12-341.01(A) applies to this case because the alleged loan
agreement was “the main factor causing the dispute.” See Keystone Floor & More, LLC
v. Ariz. Registrar of Contractors, 223 Ariz. 27, ¶ 10, 219 P.3d 237, 240 (App. 2009). A
trial court is not required to make specific findings to support an award of attorney fees
under § 12-341.01(A). State v. Richey, 160 Ariz. 564, 565, 774 P.2d 1354, 1355 (1989)
(court must make findings to support award under A.R.S. § 12-341.01(C) because clear
and convincing evidence required, but such findings not required under § 12-341.01(A)).
Therefore, the court was not required to make specific findings to support the attorney fee
award in this case.
The Sholes also argue that Judy did not incur attorney fees and that the
amount of the award was “excessive, unreasonable and . . . outrageous.” To support their
argument that Judy did not incur fees in this case, the Sholes attempt to cite an
attachment to their motion for a new trial; however, the attachment does not appear in the
record. Moreover, the Sholes describe the missing attachment as a motion to set aside
judgment in the Maricopa county case but do not explain how a discussion of fees
incurred in that case would support sufficiently their argument that no fees were incurred
in this one. The trial court noted below that the Sholes provided “no basis” for the
similar argument made in their motion for reconsideration. The Sholes fail to provide
argument or evidence to support their contention the fee award was excessive and
outrageous, and so we do not address it. See Ariz. R. Civ. App. P. 13(a)(6); Polanco v.
Indus. Comm’n, 214 Ariz. 489, n.2, 154 P.3d 391, 393-94 n.2 (App. 2007) (appellant’s
failure to develop and support argument waives issue on appeal).
For the foregoing reasons, we affirm. Judy requests an award of attorney
fees pursuant to § 12-341.01. We grant her request upon compliance with Rule 21, Ariz.
R. Civ. App. P.
/s/ J. William Brammer, Jr.
J. WILLIAM BRAMMER, JR., Judge
/s/ Joseph W. Howard
JOSEPH W. HOWARD, Chief Judge
/s/ Garye L. Vásquez
GARYE L. VÁSQUEZ, Judge