ARCHICON v. TPI PROPERTIES

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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 ARCHICON, L.C., an Arizona limited liability company, ) ) ) Plaintiff/Appellee ) CounterDefendant, ) ) v. ) ) TPI PROPERTIES, LLC, an Arizona ) limited liability company, ) ) Defendant/Appellant ) CounterClaimant. ) __________________________________) DIVISION ONE FILED: 3/21/2013 RUTH A. WILLINGHAM, CLERK BY: mjt 1 CA-CV 12-0232 DEPARTMENT B MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2007-002844 The Honorable Arthur T. Anderson, Judge AFFIRMED IN PART; REMANDED IN PART Hoopes Adams & Alexander, PLC By John R. Hoopes Patricia Alexander Attorneys for Defendant/Appellant Chandler G O U L D, Judge ¶1 mechanics In this lien. appeal For we the examine the following mechanics lien enforceable, and affirm. enforceability reasons, we find of a the Facts and Procedural Background ¶2 Technology build a company Providers, building on Inc. a ( Technology ) piece of property it owned in Chandler, Arizona. accomplish this purpose, TPI vacant, to unimproved It formed an LLC to Properties, transferred the property to the LLC. desired LLC ( TPI ), and Technology contracted with Exclusive Development, Inc. ( EDI ) to construct a building on the land. firm, to exchange EDI subcontracted provide for with architectural $69,000 plus Archicon, services additional Archicon began work on the project. an for architectural the costs and project in expenses. After Archicon had done substantial work toward the project, it stopped work because its invoices were not being paid. ¶3 On September 5, 2006, Archicon filed a Notice and Claim of Professional Services Lien on the property owned by TPI in the amount of $54,687.69. It had served a preliminary 20-day lien notice on Technology and EDI on May 23, 2005. ¶4 Archicon later filed a complaint against Technology and TPI to foreclose on its lien. Technology and TPI moved for summary judgment, arguing that the lien was invalid because (1) Archicon s professional registration had expired on March 2003 and (2) Archicon s work had not enhanced the value of the land and the vacant improvement. land contained no building, structure, or The trial court denied this motion, explaining that 2 it interpreted Arizona case law to mean that substantial compliance with the registration requirements was sufficient and that factual issues precluded the resolution of the second issue. ¶5 Archicon moved for partial summary judgment regarding Archicon s substantial compliance with the registration, which the court granted without comment on October 25, 2010. ¶6 After a bench trial on the remaining issues, the court ruled in Archicon s favor, and entered judgment on July 20, 2011. TPI originally filed a notice of appeal on July 29, 2011, but the appeal was dismissed determination of Procedure 54(b). 2012. because finality the judgment pursuant to did Arizona not Rule contain of a Civil An amended judgment was filed on February 22, The judgment awarded $176,744.69 (consisting of the value of the mechanics lien, $54,331.69; attorneys fees, $120,000.00; and costs, $2,413.00) plus interest. ¶7 TPI jurisdiction timely pursuant appeals to the amended judgment. Arizona Revised Statutes We have ( A.R.S. ) section 12-2101(A)(1) (West 2012).1 1 Archicon failed to file an answering brief. Although we could consider this a confession of error, see ARCAP 15(c), in the exercise of our discretion, we decline to do so. Thompson v. Thompson, 217 Ariz. 524, 526 n.1, ¶ 6, 176 P.3d 722, 724 (App. 2008). 3 Discussion ¶8 We review the record in a light most favorable to sustaining the trial court s ruling. 171 Ariz. 77, 82, 828 P.2d 1218, Swichtenberg v. Brimer, 1223 (App. 1991). When reviewing a trial court s findings of fact from a bench trial, [w]e will not set aside the [trial] court's findings of fact unless clearly erroneous, giving due regard to the opportunity of the court to judge the credibility of witnesses. In re Estate of Zaritsky, 198 Ariz. 599, 601, ¶ 5, 12 P.3d 1203, 1205 (App. 2000). A finding of fact is not clearly erroneous if substantial evidence supports it, even if substantial conflicting evidence exists. Kocher v. Dep't of Revenue of State of Ariz., 206 Ariz. 480, 482, ¶ 9, 80 P.3d 287, 289 (App. 2003). ¶9 to Moreover, [i]n applying the clearly erroneous standard factual findings, we will defer to any factual findings explicitly or implicitly made, affirming them so long as they are supported by reasonable evidence. Id. (quoting Twin City Fire Ins. Co. v. Burke, 204 Ariz. 251, 253 54, ¶ 10, 63 P.3d 282, 284 85 (2003)); see also Coronado Co. Inc. v. Jacome s Dep t Store, Inc., 129 Ariz. 137, 139, 629 P.2d 553, 555 (App. 1981) ( Implied in every judgment, in addition to express findings made by the court, is any additional finding that is necessary to sustain the judgment, if reasonably supported by the evidence, and not in conflict with the express findings. ). 4 Thus, we will sustain presumptive findings if they are construction of the evidence. justified by any reasonable Able Distrib. Co., Inc. v. James Lampe, Gen. Contractor, 160 Ariz. 399, 402, 773 P.2d 504, 507 (App. 1989). However, we review the trial court's legal conclusions de novo. In re Estate of Travers, 192 Ariz. 333, 334, ¶ 11, 965 P.2d 67, 68 (App. 1998). ¶10 TPI argues that unenforceable because (1) Archicon s Archicon was mechanics not lien was registered, (2) Archicon did not have a contract with TPI or a contractor who had a contract with TPI, (3) vacant land is not subject to a mechanics lien, and (4) Archicon s work did not add value to TPI s property. TPI also argues that (5) the court improperly awarded compensation to Archicon when Archicon s work had never been furnished to TPI, (6) that the court abused its discretion in considering Archicon s redacted fee application, and (7) that Archicon is liable for knowingly causing to be recorded a false lien. I. ¶11 We consider each issue in turn. Registration According to A.R.S. § 33-981(E), [a] person who furnishes professional services but who does not hold a valid certificate of registration issued pursuant to title 32, chapter 1 shall not have the lien rights provided for in this section. TPI argues that Archicon was required to strictly comply with Arizona s registration statute (A.R.S. § 33-981(E)), and that its 5 failure to maintain its registration is fatal to the enforcement of its mechanics lien. ¶12 To determine whether any given statute requires strict or merely substantial compliance, we must first decide which rule best promotes the statute s legislative purpose. See Aesthetic Prop. Maint., Inc. v. Capitol Indem. Corp., 183 Ariz. 74, 77-78, 900 P.2d 1210, 1213-14 (1995) ( [W]hether substantial or strict compliance is required is largely a question of which test best promotes legislative purpose. ) (citing A.R.S. § 1-211(B) ( Statutes should be liberally construed to effect their objects and to promote justice. )). This is an issue of law, and as such, reviewed de novo. ¶13 The general purpose of Arizona s lien statutes is to safeguard[] materialmen and laborers who enhance the value of another s property . . . by providing them with a lien on the property for the amount of the materials or labor furnished, as well as giving them the ability to enforce pursue remedies directly against the owner these rights and of the property. United Metro Materials, Inc. v. Pena Blanca Props., LLC, 197 Ariz. 479, 484, ¶ 26, 4 P.3d 1022, 1027 (App. 2000) (citations omitted). To determine the specific purpose of the registration requirement in § 33-981(E),2 we refer to § 32-101, which explains 2 does A person who furnishes professional services but who not hold a valid certificate of registration issued 6 that [t]he purpose of this chapter [listing the registration requirements for architects] is to provide for the safety, health and welfare of the public through the promulgation and enforcement of standards of qualification for those individuals registered or certified and seeking registration or certification pursuant to this chapter. appears to have been The registration requirement thus designed to protect the public against individuals who were unqualified to perform the services that were rendered. ¶14 We note that this purpose is very similar to the purpose of the statute that was at issue in Aesthetic, A.R.S. § 32-1153, to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. at 77, 900 P.2d at 1213. Aesthetic, 183 Ariz. Our supreme court found substantial compliance sufficient to achieve the statutory purpose of § 321153. Id. at 78, 900 P.2d at 1214. Given the similarity between the purposes of the two statutes, it appears that substantial compliance would likewise purposes of § 33-981(E). the statutory pertaining to purposes adequately achieve the statutory We find TPI s attempts to distinguish unpersuasive; professional services in the statutory A.R.S. § language 33-981(E) is pursuant to title 32, chapter 1 [§ 32-101 et seq.] shall not have the lien rights provided for in this section. 7 nearly identical to the language pertaining to contractors in A.R.S. § 33-981(C).3 ¶15 Having found that substantial compliance with § 33- 981(E) is sufficient to achieve its purpose, we next determine whether Archicon substantially complied with the statute. To answer in this question, we consider the factors developed Aesthetic. ¶16 First, we must consider whether suspension of the license was by operation of law or for cause and whether the Registrar s failure contributed to noncompliance. Ariz. at 78, 900 P.2d at 1214. facts implicitly found by Aesthetic, 183 In doing so, we defer to the the trial court when it concluded Archicon was at all times properly registered with the Arizona State Board of Technical Registration . . . pursuant to A.R.S. § 32-101 et seq. See Coronado, 129 Ariz. at 139, 629 P.2d at 555 ( If the judgment can be sustained on any theory framed by the pleadings and supported by the evidence, we must affirm. ) ¶17 An affidavit submitted by Archicon in support of its motion for architectural summary firms judgment did explained not have to that renew prior or applications for their firm s license with the Board. to file 2001, new Prior to A.R.S. § 33-981(C) provides that A person who is required to be licensed as a contractor but who does not hold a valid license as such contractor issued pursuant to title 32, Chapter 10 shall not have the lien rights provided for in this section. 3 8 2001, once the architectural firm obtained its license and paid the initial fee, no other actions were required unless there was a change of address or of a principal architect. In 2001, new legislation was enacted that required architectural firms to file a new application each year with an annual application fee. The Board notified the architectural firms of the new requirement through the Board s newsletter. However, the Board did not send out any other mailings to the architectural firms informing them of this new requirement. ¶18 Thus, during the first year of the statutory change, many firms failed to pay the new fee or file anything to maintain their registration. As a result, in November and December of 2005, the Board started to mail out annual firm registration application notices to architectural firms notifying them of the annual firm application and registration fee. Archicon, however, did not receive the notice in 2005 or 2006 and thus did not realize that it had failed to pay the registration fee or to register. Archicon had notified the Board of its change of address when it sent in a notification of change of address for one of its architects. However, the Board failed to change the firm s address when it changed the architect s address, and this failure contributed to Archicon s lapse. ¶19 Given that Archicon s non-registration was caused by operation of law (and was not for cause), this factor supports 9 the presumptive substantially Board s finding complied failure to of with update the the trial court statute, the firm s that especially address is Archicon when taken the into consideration. ¶20 Next, we consider whether the architect/contractor was financially responsible while its license was suspended by doing things such as maintaining liability and workman s compensation insurance. Archicon Aesthetic, maintained 183 Ariz. professional at 78, liability 900 P.2d insurance at 1214. for the years 2006 through 2008 with coverage for $2,000,000 aggregate and $1,000,000 per incident. It also maintained an umbrella insurance policy that provided $2,000,000 in coverage for 2007 and 2008. It also maintained workman s compensation insurance for 2006 years Archicon s through Managing 2009 in Architect, the Jere amount Planck, of $1,000,000. testified in an affidavit that Archicon exceeded the amount of insurance normally procured by similarly sized architectural firms. Based on this evidence, the trial court s presumptive finding of substantial compliance is likewise supported by this factor. ¶21 The next factor asks whether the contractor knowingly ignored the registration requirements. 1214. Knowingly ignoring such requirements is fatal to a claim of substantial compliance. lapse Id. at 78, 900 P.2d at was due to rule Id. changes 10 Here, as explained above, the by the Board that were not communicated to Archicon or that Archicon failed to catch in a newsletter; lapse. essentially, administrative error resulted in the Archicon did not discover the registration requirement until June 15, 2007, when Archicon s director, Jeff Koski, was checking on the status of another firm on the Board s website and decided to also check the status and contact information for Archicon. He determined that Archicon s registration had lapsed and that the wrong address was being displayed. Within fourteen days of his discovery, Archicon paid its registration fee in the amount of $20 and requested an address change with the board on June 27, 2007. Although Mr. Planck went personally to the Board to pay all fines, penalties, interest and past registration fees, he was informed by the Assistant Director and Investigations Manager for the Board that doing so was not required and that all he had to do was pay the current registration fee of $20. The Assistant Director also explained that the Board had no way of accepting interest, penalties, fines or past registration fees. Given that Archicon s failure to register does not appear to have been knowing, this factor also supports the trial court s presumptive finding of substantial compliance. ¶22 The next factor asks whether the architect/contractor, immediately upon learning of the license suspension or other statutory noncompliance, applied to reactivate the license or remedy the statutory violation. Aesthetic, 183 Ariz. at 78, 900 11 P.2d at 1214. Here, it appears that Archicon did so within fourteen which days, implicitly supports the trial court s presumptive finding of substantial compliance. ¶23 The final factor is whether the lienholder s failure to comply with the registration statute prejudiced the party the statute seeks to protect. therefore determine Id. at 78, 900 P.2d at 1214. whether Archicon s failure to We must register prejudiced the safety, health and welfare of the public. A.R.S. § 32-101 requirements (describing referenced in the purpose A.R.S. of the § 33-981(E)). See registration The safety, health, and welfare of the public do not appear to have been affected by Archicon s failure to register. TPI does not argue that Archicon s plans were defective or that they would have harmed the public if they had been implemented. According to affidavits filed below, Arizona Business Magazine ranked Archicon as the third best architectural firm in Arizona in 2006 and the fifth best in 2007 and 2008. The same magazine ranked Archicon as the eighth best interior design firm in Arizona in 2006 and 2007, and the sixth best in 2008. The Phoenix Business Journal ranked Archicon as the fourteenth best architectural firm in 2006 and the thirteenth best in 2007. It also ranked Archicon eighteenth in 2006 and seventeenth in 2007 in the best interior design firms category. In addition, the principal architect on the project, Mr. Planck, was always licensed by the Board and 12 fully insured when the contract was entered into and the work was completed. These facts support the trial court s presumptive finding that the public s health, safety, and welfare were not prejudiced by Archicon s failure to register. ¶24 Given that all the Aesthetic factors support the trial court s presumptive finding of substantial compliance, we reject Appellant s Archicon arguments regarding substantially registration complied with and the find that registration requirement. ¶25 Contrary to TPI s arguments we do not find Sanders v. Foley, 190 Ariz. 182, 945 P.2d 1313 (App. 1997), applicable here. In Sanders, we discussed the difference between a residential contracting license and a general commercial contracting license. Because residential contractors had to furnish an additional bond or cash deposit of $100,000 to cover actual damages suffered by residential real property owners, but nonresidential contractors had no similar commercial obligations, contracting contracting. license we concluded does not that authorize a general residential Sanders, 190 Ariz. at 188, 945 P.2d at 1319. We also found that an individual who performed such work was not permitted to file a mechanics lien on the property. ¶26 Id. The obvious difference between Sanders and this case is that here, there was no individual performing work for which the individual was not licensed (and arguably, not qualified). 13 The individual architect who performed the work was properly licensed at all times. Thus, the implicit danger to the public s health, safety, and welfare of having an unqualified individual perform faulty work is not present. ¶27 We likewise reject Appellant s reliance on Schlict v. Curtin, 117 Ariz. 30, 570 P.2d 801 (App. 1977), which involved a general contractor who lacked the special licensing credential to perform masonry work. specialized ruled that masonry the Although the contractor later obtained the license after contractor was the work barred was from completed, enforcing mechanics lien. Id., 117 Ariz. at 30, 570 P.2d at 801. Sanders, is Schlict inapplicable because the individual we the Like who performed the work at Archicon was properly licensed. ¶28 We must affirm the trial court s presumptive findings if there is any evidence to support them. See Able Distrib., 160 Ariz. at 402, 773 P.2d at 507 (explaining that we will sustain presumptive findings if they construction of the evidence). are justified by any reasonable Here, the affidavits submitted in support of Archicon s motion for partial summary judgment support the trial court s presumptive finding that Archicon substantially complied with the registration statute and that such compliance was sufficient to meet the requirements of A.R.S. § 33-981(E). Accordingly, we affirm the trial court s finding that Archicon 14 was properly registered with the Arizona State Board of Technical Registration pursuant to A.R.S. § 32-101. II. Lack of a Contract ¶29 TPI next argues the trial court erred by allowing Archicon to enforce its lien when it had earlier found that technically, [Technology], Archicon TPI had no Properties, agreement L.L.C., or with with either an TPI architect, engineer or contractor who had an agreement with TPI Properties, L.L.C. TPI relies on A.R.S. § 33-981(F), which provides that [a] person who furnishes professional services is entitled to enforce the lien rights provided for in this section only if such person has an agreement with the owner of the property or with an architect, an engineer or a contractor who has an agreement with the owner of the property. ¶30 Here, Archicon had a contract with EDI, and EDI had a contract with Technology, the original owner of the property. This contract was entered into on March 7, 2005, when, according to public property. records, Technology was still the owner of the While Technology maintained that it transferred the property to TPI Properties, L.L.C., prior to March 7, 2005, the conveyance was not recorded until March 24, 2005, as both Technology and TPI acknowledged in the joint pretrial statement. Thus, Archicon had a contract with EDI, who at one time had a contract with the owner of the property, Technology, Technology transferred the property to TPI Properties, LLC. 15 until ¶31 We find Fagerlie v. Markham Contracting Co., Inc., 227 Ariz. 367, 258 P.3d 185 (App. 2011), analogous. original owner of various lots sold the In Fagerlie, the lots after having contracted with Markham to perform services to the lots. subsequent lot Markham s lien. owners argued that they were not The subject to We relied on agency principles to find that the original owner was the agent for the subsequent lot owners for purposes of the lien statutes. P.3d 189. We interpreted the agency definitions contained in Arizona s include 227 Ariz. at 371, ¶¶ 14-15, 258 lien a statutes person very broadly, having charge explaining or control that they of the construction, or improvement of work on any such lot or parcel of land. Id. at 372, ¶ 17, 258 P.3d at 190. Accordingly, the court found that the original owner was the lot owner s agent for lien purposes because the original owner s sales contract with the lot owners effectively placed it in control of the improvement project when it hired Markham to perform. Id. The court further explained that actual agency was irrelevant because Arizona s lien statutes make the contractor a statutory agent for the sole purpose of securing the rights of the workman. Id. ¶ 18. ¶32 Applying the same broad statutory definitions of agency to our case, we conclude that Technology was an agent of TPI when it contracted with EDI (who 16 subsequently contracted with Archicon). Accordingly, contrary to TPI s arguments, there is no violation of A.R.S. § 33-981(F) because Archicon has a contract with an individual who has a contract with the owner of the property via the extended agency A.R.S. §§ 33-981(B) and 983(B). relationships as defined by See Paul C. Helmick Corp. v. Lucky Chance Min. Co., Inc., 127 Ariz. 82, 86, 618 P.2d 252, 256 (App. 1980) (explaining that [t]he statutory right to a lien does not depend upon privity of contract between supplier and owner. ); Fagerlie, 227 Ariz. at 372, ¶ 18, 258 P.3d 185 ( This statutory agency subcontractor or fiction material was supplier created to to pursue allow his [a] remedies directly against the owner when privity is lacking. ) (quoting Stratton v. Inspiration Consol. Copper Co., 140 Ariz. 528, 531, 683 P.2d 327, 330 (App. 1984). We find no error. III. Vacant Land ¶33 TPI next argues that vacant land cannot be subject to a mechanics lien based on A.R.S. § 33-981(A), which provides that every person who labors or furnishes professional services in the construction, alteration or repair of any building, or other structure or improvement, shall have a lien on such building, structure or improvement for the . . . professional services . . . furnished, whether the work was done or the articles were furnished at the instance of the owner of the building, structure or improvement, or his agent. (Emphasis added.) 17 ¶34 However, TPI overlooks A.R.S. § 33-991(B), which states [i]f the land on which an improvement is made or labor or professional services have been performed lies within the limits of a recorded map or plat of a townsite, an incorporated city or town, or a subdivision, the lien shall extend to and include only the particular lot or lots upon which the improvement is made and the labor has been performed. (Emphasis added.) Under the express terms of this statute, a lien for professional services may extend to the land that has been improved by such services. ¶35 Thus, in discussing A.R.S. § 33-981(A) and A.R.S. § 33- 991, albeit in a slightly different context, our supreme court explained that Arizona s mechanics liens apply to the building improvement under § 33-981, and extend to the land under § 33991. Hayward Lumber & Inv. Co. v. Graham, 104 Ariz. 103, 449 P.2d 31 (Ariz. 1968). court concluded California, that Oregon, improvements which After extensive analysis, our supreme [a]s and has Arizona extends improvements are located. been all to shown, the contemplate the land upon statutes a of lien upon which the Id., 104 Ariz. at 110, 449 P.2d at 38; see also Wang Elec., Inc. v. Smoke Tree Resort, LLC, 230 Ariz. 314, 325, ¶ 36, 283 P.3d 45, 56 (App. 2012) (explaining, in the context of discussing whether a lien against a lessee applies to the land on which the improvements are made, that A.R.S. § 33-991(A) and (B), which provide 18 such liens [liens on any building, or other structure or improvement] extend to the real property underlying the improvements. ). ¶36 Another, related statutory section, A.R.S. § 33-983(A), provides an alternative basis for holding that a mechanics lien may be enforced against a lot or parcels of land: A person who furnishes professional services or material or labors upon a lot in an incorporated city or town, or any parcel of land not exceeding one hundred sixty acres in the aggregate, or fills in or otherwise improves the lot or such parcel of land, or a street, alley or proposed street or alley, within, in front of or adjoining the lot or parcel of land at the instance of the owner of the lot or parcel of land, shall have a lien on the lot or parcel of contiguous land not exceeding one hundred sixty acres in the aggregate, and the buildings, structures and improvements on the lot for professional services or material furnished and labor performed. (Emphasis added.) Section 33-983 was designed to permit the enforcement of mechanics liens when no building, structure, or tangible improvement exists on the land. See Adams Tree Serv., Inc. v. Transamerica Title Ins. Co., 20 Ariz. App. 214, 216-217, 511 P.2d 658, 660-661 (1973) (analyzing whether a subcontractor could lien lots that were not improved and explaining that § 33983 applies whenever labor or materials are something other than a structure or a building ). supplied to Thus, A.R.S. § 33-983 would still permit the mechanics lien on a vacant lot. 19 IV. Added Value ¶37 TPI next argues that Archicon s pre-construction work did not add value to TPI Properties realty. implicitly [i]f no relies labor on A.R.S. commences § on 33-992(C), a property TPI s argument which or no provides that materials are furnished to the property, a registered professional may record and foreclose on professional s a lien work at has any time commenced after if the the professional s work has added value to the property. registered registered (Emphasis added.) ¶38 Jere The trial court rejected this argument, explaining that Planck and work Archicon s Michael added Parker to testified the regarding property, the value including site development, city approvals, and entitlements that run with the property. Because this is a finding of fact, we defer to the trial court s ruling if there is any evidence to support it. See Zaritsky, 198 Ariz. at 601, ¶ 5, 12 P.3d at 1205. ¶39 Jere Planck testified that entitlement work done by his firm significantly affects the value of the property. . . . [b]ecause they take a blank piece of dirt that has no vision, and detail the exact size, the exact yield of the property, everything. The entitlement work done by Archicon with regard to this project included the site plan, the building s position on the site plan, the dumpster location, all the parking, the 20 fire lane, the fire lane locations, the building footprint, the exterior materials of the used building, in the the colors building, of the the building, landscape, the landscape materials, and plant materials, according to Mr. Planck. Based on this testimony, the trial court could have reasonably inferred that the property s value was increased by the entitlement work done by Archicon. ¶40 Contrary to TPI s arguments, Mr. Planck s testimony was not barred by Rule of Evidence 602 based on lack of foundation because he gave evidence sufficient to support a finding that [he] had personal knowledge of the matter. He stated that he had been engaged in the architectural and development business for twenty-nine years and that he had developed an immense number of real estate projects ( We ve done thousands and thousands of projects. ). He also testified that he observed the effect of entitlements on the value of the real estate all the time. ¶41 While Mr. Planck did admit during cross-examination that the plans might increase the cost of the property if a buyer elected to reject them, this testimony did not mean the work had no value. The fact that TPI commissioned the work (through EDI) demonstrates that the work was valuable to TPI. Whether or not the work would be valuable (or add value ) to any other property owner is irrelevant. 21 ¶42 The trial court also relied on the testimony of Mike Parker, TPI Properties listing agent, to conclude that the plans added value to the property. When asked whether a preliminary building plan approved by the City of Chandler would add any value to the property, Mr. Parker initially said no, but later admitted that it would be a value to Mr. Cruz in the event he was going to build exactly what he wanted to build. He agreed that if the site plan were built for the specific use intended, the site plan would be a value, but stated [i]f it s not going to be built, then it s of no use to anybody. ¶43 Archicon had no control implement its architectural plans. over whether TPI chose to Allowing TPI to unilaterally choose not to use the architectural plans in order to render them valueless Archicon undermines unprotected the from purpose of the statute nonpayment for its by leaving services. United Metro, 197 Ariz. at 484, ¶ 26, 4 P.3d at 1027. See Moreover, the testimony of both Parker and Cruz supports the trial court s finding that the plans added value to the property because they could have been used to construct the office/warehouse building on the property. 289 (explaining See Kocher, 206 Ariz. at 482, ¶ 9, 80 P.3d at that we defer to the trial court s factual findings if there is any reasonable evidence to support them). 22 V. Delivery of the Plans to TPI ¶44 TPI next argues that Archicon cannot enforce a lien based on its unpaid work when Archicon did not deliver the unpaid work to TPI. However, TPI does not furnish any citations to the record to support this assertion, nor does it appear to have raised this argument below. See ARCAP 13(a)(6) (requiring the opening brief to contain citations to the parts of the record relied on for each contention raised on appeal). Spillos v. Green, 137 Ariz. 443, 447, 671 P.2d 421, 425 (App. 1983) ( We have no obligation to search the therefore find this argument waived. record for error. ). We See Richter v. Dairy Queen of S. Ariz., Inc., 131 Ariz. 595, 596, 643 P.2d 508, 509 (App. 1982) ( an appellate court cannot consider issues and theories not presented to the court below ). VI. The Redacted Fee Application ¶45 Next, discretion when application. (excluding TPI contends it After its that considered Archicon unjust the trial Archicon s prevailed enrichment court on claim), abused redacted its fee the merits below it submitted an application for attorneys fees and costs based on A.R.S. §§ 33998(B) and 44-1201(A).4 As part of its application, it submitted Section 33-998(B) provides that [i]n any action to enforce a lien granted under this article, the court may award the successful party reasonable attorney fees. Section 444 23 redacted invoices in order to avoid disclosing privileged information regarding trial preparation and strategy that were included in its time records. The redacted invoices still showed the date of each time entry, the timekeeper involved, the amount of time involved, and a general description of how the time was spent (i.e., Examine issues re: [redaction] ). Archicon also submitted an unredacted version of the invoices for the court s in-camera review as Exhibit K. ¶46 TPI moved to strike the unredacted invoices, arguing that Exhibit K should not be considered because it prevented TPI from being able to make specific reasonableness of the fees requested. the motion to strike and granted objections to the The trial court denied Archicon a portion of its requested fees.5 1201(A) provides the statutory interest rate is ten percent per annum unless the parties agree otherwise in writing. 5 Archicon had requested attorneys fees in the amount of $162,212.58. The court ultimately awarded Archicon $120,000.00 in attorneys fees against TPI Properties, LLC. In making its award, the court explained that [i]n assessing the reasonableness of the fees sought, the court has looked at each page of Archicon s un-redacted time entries. In addition to the acknowledged errors (i.e., wrong client, wrong matter), the court found several discrepancies and problems. See, e.g., 11/17/10-11/18-10, 7.8 hours, research on statute of limitations for federal copyright claim. As to this entry, the court found that although Archicon may or may not have a copyright for the use of its plans, this has nothing to do with Archicon s state court mechanics lien claim. The court also noted that it was troubled by minor items that raise the court s skepticism over 24 ¶47 To award attorneys fees, a trial court must be able to assess the reasonableness of the time incurred. See Schweiger v. China Doll Rest., Inc., 138 Ariz. 183, 188, 673 P.2d 927, 932 (App. 1983) ( In order for the court to make a determination that the hours claimed are justified, the fee application must be in sufficient detail to enable the reasonableness of the time incurred. ). court to assess the It is axiomatic to due process that the opposing party must also be able to assess the reasonableness of the time incurred in order to protect itself from time entries that bill an inordinate amount of time or that bill for time spent on unsuccessful issues or noncompensable claims. Id.; see also Nolan v. Starlight Pines Homeowners Ass n, 216 Ariz. 482, 491, ¶ 39, 167 P.3d 1277, 1286 (App. 2007) (requiring specific a party objections opposing to a the fee application reasonableness to of present the fees fees while requested ). ¶48 Allowing maintaining privileged that Archicon a improperly to portion allowed obtain of the Archicon attorneys fee to descriptions use the client privilege as both a sword and a shield. were attorneySee Throop v. F.E. Young & Co., 94 Ariz. 146, 158, 382 P.2d 560, 568 (1963) (explaining that the attorney-client privilege is not to be less minor items and that [n]either party made the court s job particularly easy. 25 both a sword and a shield ) (citing 8 John H. Wigmore, Evidence in Trials at Common Law § 2388, at 855 (J. McNaughton rev. ed. 1961)). A party is not allowed to assert the privilege when doing so places the claimant in such a position, with reference to the evidence, that it would be unfair and inconsistent to permit the retention of the privilege . . . . Mendoza v. McDonald s Corp., 222 Ariz. 139, 155, ¶ 52, 213 P.3d 288, 304 (App. 2009) (quoting State Farm Mut. Auto Ins. Co. v. Lee, 199 Ariz. 52, 56, ¶ 9, 13 P.3d 1169, 1173 (2000)). ¶49 Stated another way, a litigating party cannot use the privilege to block inquiry into an issue that the party itself has raised. See Flores v. Cooper Tire and Rubber Co., 218 Ariz. 52, 58, ¶ 29, 178 P.3d 1176, 1182 (App. 2008). ¶50 As the prevailing party, Archicon was entitled to seek attorneys fees; however, it could not simultaneously claim that the descriptions of the fees were privileged to TPI s detriment. Without a full description of the fees incurred, TPI was left without any meaningful way of arguing that the time spent on various matters was unreasonable. It was unfair to seek payment for only all the fees but to allow the court to see the descriptions of all of the work. ¶51 While the trial court was correct in pointing out that we have occasionally permitted a trial court to review a fee agreement in camera, we have never permitted a party to seek 26 fees while simultaneously asserting description of the fees was privileged. that its itemized See Sparks v. Republic Nat. Life Ins. Co., 132 Ariz. 529, 544, 647 P.2d 1127, 1142 (1982) (permitting the in camera review of a fee contract to ensure the amount awarded did not exceed the amount to which the parties had agreed); Solimeno v. Yonan, 224 Ariz. 74, 83, ¶ 40, 227 P.3d 481, 490 (App. 2010) (permitting in camera review of a fee agreement to determine the hourly rate agreed upon by the client and the lawyer). Allowing the trial court to see the rate prevailing agreed-upon by the party and its lawyer is materially different from allowing the trial court to review hundreds of unredacted time descriptions to which the opposing party does not have access. Accordingly, we vacate the fee award to Archicon and remand to the superior court for it to redetermine the amount of attorneys fees it should award to Archicon pursuant to A.R.S. §§ 33-998(B) and 44-1201(A). VI. ¶52 A.R.S. § 33-410 Finally, TPI argues that Archicon knew or should have known that it had recorded an invalid lien against TPI s property and that Archicon is therefore liable pursuant to A.R.S. § 33420. This section prohibits knowingly filing a lien that is forged, groundless, contains a material misstatement or false 27 A.R.S. § 33-420(C).6 claim or is otherwise invalid. given that we have already determined that the However, trial court properly allowed Archicon to enforce its lien, we reject this argument. 6 The full text of A.R.S. § 33-420(C) is as follows: A person who is named in a document which purports to create an interest in, or a lien or encumbrance against, real property and who knows that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid shall be liable to the owner or title holder for the sum of not less than one thousand dollars, or for treble actual damages, whichever is greater, and reasonable attorney fees and costs as provided in this section, if he wilfully refuses to release or correct such document of record within twenty days from the date of a written request from the owner or beneficial title holder of the real property. 28 Conclusion ¶53 the For the foregoing reasons, we vacate that portion of superior court s judgment awarding fees to Archicon and remand to the superior court for it to redetermine the amount of attorneys fees it should award to Archicon; we affirm the remainder of the judgment. /S/____________________________ ANDREW W. GOULD, Judge CONCURRING: /S/_________________________________ PATRICIA K. NORRIS, Presiding Judge /S/_________________________________ RANDALL M. HOWE, Judge 29

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