Flury v. Desert Gold

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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 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE VAN E. FLURY and ROSAURA N. FLURY, husband and wife, ) ) ) Plaintiffs/Appellants, ) ) v. ) ) DESERT GOLD CONSTRUCTION, LLP, ) ) Defendant/Appellee. ) ________________________________) DIVISION ONE FILED: 04/07/11 RUTH WILLINGHAM, ACTING CLERK BY: DLL 1 CA-CV 10-0396 DEPARTMENT E MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2008-019872 and CV2008-032820 (Consolidated) The Honorable Eileen S. Willett, Judge AFFIRMED Van E. Flury Rosaura N. Flury In Propria Persona Plaintiffs/Appellants Laveen The Law Office of Bonny Brogdon by Bonny Brogdon Attorneys for Defendant/Appellee Thorndale, TX P O R T L E Y, Judge ¶1 appeal Van the and Rosaura judgment Flury awarding (collectively, attorneys fees the to Flurys ) Desert Gold Construction, LLP ( Desert Gold ). For the following reasons, we affirm. FACTS AND PROCEDURAL BACKGROUND ¶2 In 2008, the Flurys filed two separate complaints against Edward and Bonny Brogdon (collectively, the Brogdons ); one concerning a construction defect claim and the other for termite damage to their house. 1 amended complaint in the The Flurys subsequently filed an construction Desert Gold as an additional defendant. 2 defect action naming The court consolidated the actions. ¶3 Before dissolving in 2002, Desert limited partners, including the Brogdons. Flurys house and sold it to them. attorney, represented Desert Gold, Gold had five Desert Gold built the Mrs. Brogdon, a licensed as well as her and her spouse s interests. ¶4 motion In August 2009, the trial court granted the Brogdons for summary judgment and dismissed the complaints. Thereafter, Desert Gold filed a motion for summary judgment, which the court also granted. In a signed order entered on December 4, 2009, the court dismissed the Flurys claims against Desert Gold and determined that 1 Desert Gold was entitled to The construction defect action was titled purchaser dwelling action and the termite action was titled contract-money damages. 2 The original and amended complaint also named Gurumay, L.L.C. as a defendant. Gurumay was later dismissed from the action. 2 attorneys fees and costs for defending the action. Desert Gold timely submitted an application for fees and costs, which the Flurys challenged. ¶5 The awarding Desert Arizona trial Revised Gold court subsequently $8,700 Statutes in signed attorneys ( A.R.S. ) section fees a judgment pursuant 12-341.01 to (2003), plus $133 in costs pursuant to A.R.S. § 12-341 (2003). The Flurys appealed, 3 and we have jurisdiction pursuant to A.R.S. § 12-2101(B) (2003). DISCUSSION 4 ¶6 The Flurys argue that the superior court erred in awarding attorneys fees because Desert Gold has no legal status or legal existence and cannot be the beneficiary of a monetary judgment. 5 We review this mixed question of fact and law de 3 Because Mr. and Mrs. Flury both signed the notice of appeal, they are both parties on appeal. See Haberkorn v. Sears, Roebuck & Co., 5 Ariz. App. 397, 399, 427 P.2d 378, 380 (1967). 4 Although Desert Gold argues that this appeal should be dismissed because the notice of appeal is allegedly deficient, the notice of appeal complies with the requirements of ARCAP 8(c), which requires that the notice must specify the parties taking the appeal, the judgment being appealed, and the name of the court to which the appeal is taken. 5 Although the Flurys frame the issue as one of standing, they never argued below that Desert Gold could not be sued. Instead, the issue is whether a dissolved partnership can exist for purposes of being awarded fees. See Strawberry Water Co. v. Paulsen, 220 Ariz. 401, 406, ¶ 8, 207 P.3d 654, 659 (App. 2008) (finding that a party has standing if it has an interest in the outcome of the litigation). 3 novo. 6 Columbia Parcar Corp. v. Ariz. Dep t of Transp., 193 Ariz. 181, 183, 971 P.2d 1042, 1044 (App. 1999); Huskie v. Ames Bros. Motor & Supply Co., 139 Ariz. 396, 401, 678 P.2d 977, 982 (App. 1984). ¶7 Desert Gold was a limited liability partnership. Arizona Revised Uniform Partnership Act states The that a partnership continues after its dissolution for the purpose of winding up its business. A.R.S. § 29-1072(A) (1998). Further: A person winding up a partnership s business may preserve the partnership business or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal or administrative, settle and close the partnership s business, dispose of and transfer the partnership s property, discharge the partnership s liabilities, distribute the assets of the partnership, . . . settle disputes by mediation, arbitration or otherwise and perform other necessary acts. A.R.S. § 29-1073(C) (1998) (emphasis added). Although Desert Gold to dissolved lawsuit. in late 2002, it still had defend this As a result, all of the partnership s business had not been completed. See Arndt v. First Interstate Bank, N.A., 991 P.2d 584, 587 (Utah 1999) (holding that to the extent necessary during the winding up process, a partnership retains the ability to sue and be sued ). 6 Because the Flurys do not challenge the applicability of § 12341.01 or the reasonableness of the fees, we will not address either issue. 4 ¶8 The Flurys, however, contend that Desert Gold admitted that it had resolved all of its business because the Brogdons , in a motion to dismiss, stated that Desert Gold has wound up its business and has not built or sold any property or dwellings since 2003. Assuming that the statement is accurate, § 29- 1072(A) clearly states that a partnership is terminated when the winding up of its business is completed. 7 statement, although assumedly accurate, does The Brogdons not, however, control the legal determination of whether the partnership might have to defend itself, as in conducted before it was dissolved. this lawsuit, for business In fact, Desert Gold later stated that it continues to wind up its business by defending itself against legal actions brought by the Flurys. there is evidence in the record that the Flurys Because have filed multiple lawsuits against Desert Gold that the partnership has to defend against, it continues to wind up its business. See Grossman v. Davis, 34 Cal. Rptr. 2d 355, 357 (Cal. Ct. App. 1994) ( [W]inding up a legal partnership's unfinished business may require the filing of new litigation. ). 7 The Flurys concede that if Desert Gold was merely dissolved, but not terminated, it would have the legal existence necessary to collect attorneys fees. See Rhue v. Dawson, 173 Ariz. 220, 226 n.8, 841 P.2d 215, 221 n.8 (App. 1992) (noting the differences between dissolution and termination of a partnership). 5 ¶9 The Flurys are, moreover, estopped from denying that the partnership exists because they named and served Desert Gold as a defendant, separate and apart from the Brogdons or other partners. See, e.g., Jones v. Teilborg, 151 Ariz. 240, 247, 727 P.2d 18, 25 (App. 1986) (stating that the parties cannot take advantage of the corporate entity when convenient, and disregard it when inconvenient ). partnership entitled to still winding collect Therefore, up its attorneys Desert Gold, unfinished fees as business, incurred in a is defending itself. ¶10 The Flurys next argue that Mrs. Brogdon is improperly attempting to collect fees for representing herself. attorney may not collect attorneys fees for A licensed representing herself due to the absence of an attorney-client relationship. See Connor v. Cal-Az Props., Inc., 137 Ariz. 53, 56, 668 P.2d 896, 899 (App. 1983) (holding that an attorney herself is not engaged in the practice of law). a partner cannot attorney-client represent a relationship partnership, because a representing Nevertheless, except in partnership an has interests beyond that of just one partner, Hunt Inv. Co. v. Eliot, 154 Ariz. 357, 363, 742 P.2d 858, 864 (App. 1987), and a partnership cannot represent itself because it is not a natural person. Id. at 362, 742 P.2d at 863. An award of attorneys fees, however, requires a genuine financial obligation on the 6 part of the litigants to pay such fees. Lisa v. Strom, 183 Ariz. 415, 419, 904 P.2d 1239, 1243 (App. 1995). ¶11 Here, Desert Gold is a named defendant separate from the Brogdons. See Hunt, 154 Ariz. at 362, 742 P.2d at 863 (partnership as plaintiff); cf. Lisa, 183 Ariz. at 416, 420, 904 P.2d at 1240, 1244 (marital community as plaintiffs). Although Desert Gold and the Brogdons jointly responded to some of the Flurys motions, Desert Gold filed separate pleadings after the Brogdons were dismissed. ¶12 Mrs. Brogdon was the attorney of record for Desert Gold throughout these proceedings. 8 In the fee application, she asserted that Desert Gold agreed to pay her $300 per hour, a fact that the Flurys do not challenge. 420, 904 agreement, P.2d the at 1244 Lisas (holding admitted Cf. Lisa, 183 Ariz. at that that despite the fee an would reimbursed without a court award of attorneys fees). oral not fee be The fee application and its attachments detail the legal fees Desert Gold incurred to defend this action. As a result, the trial court did not err by awarding attorneys fees to Desert Gold. ¶13 Finally, the Flurys argue that the trial court erred when it entered a separate judgment for attorneys fees three 8 The Brogdons were two Brogdon was not acting community. Cf. Lisa, 183 financial obligation from obligation at all. ). of five Desert Gold partners. Mrs. solely for herself or her marital Ariz. at 420, 904 P.2d at 1244 ( [A] the marital community to itself is no 7 months after signing an order on the merits. The Flurys did not, however, raise the issue before the trial court and have waived the issue on appeal. 9 See Alano Club 12, Inc. v. Hibbs, 150 Ariz. 428, 431, 724 P.2d 47, 50 (App. 1986) (holding that we do not consider arguments made for the first time on appeal). ¶14 Desert Gold does not request attorneys fees or costs on appeal. Desert Gold, however, requests sanctions on appeal pursuant to ARCAP 25. is guilty of an appellate procedure. ARCAP 25 authorizes sanctions if a party unreasonable infraction of the rules of See, e.g., Jhagroo v. City of Phx. Mun. Court, 143 Ariz. 595, 598, 694 P.2d 1209, 1212 (App. 1984). Although the Flurys failed to identify the proper standard of review in violation of ARCAP 13(a)(6) and did not file a bond in violation of ARCAP 10, we exercise our discretion and decline to find the Flurys in civil contempt or otherwise impose sanctions. See Davies v. Beres, 224 Ariz. 560, 568, ¶ 30, 233 P.3d 1139, 1147 (App. 2010). 9 Even if we assume the argument was not waived, the court did not err. In its order of December 4, 2009, which awarded Desert Gold attorneys fees, the court ordered it to submit a fee application. The court followed Arizona Rule of Civil Procedure 54(b) which provides that a claim for attorneys fees may be considered a separate claim from the related judgment regarding the merits of a cause. Accordingly, the court properly gave the Flurys the opportunity to see the fee request and challenge it. Thus, the court did not err or abuse its discretion in handling the claim for attorneys fees separate from the merits. 8 CONCLUSION ¶15 For the foregoing reasons, we affirm the superior court s judgment awarding Desert Gold attorneys fees. /s/ ____________________________ MAURICE PORTLEY, Judge CONCURRING: /s/ _______________________________ PETER B. SWANN, Presiding Judge /s/ _______________________________ PATRICK IRVINE, Judge 9