Greenwood v. Block

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

GREENWOOD VILLAS HOMEOWNERS’ ASSOCIATION, an Arizona
non-profit corporation, Plaintiff/Appellee/Cross-Appellant,

v.

DESIREE BLOCK, Defendant/Appellant/Cross-Appellee.

No. 1 CA-CV 15-0210
FILED 9-20-2016

Appeal from the Superior Court in Maricopa County
No. CV2012-056443
The Honorable John R. Hannah, Jr., Judge

AFFIRMED

COUNSEL

Maxwell & Morgan, P.C., Mesa
By Penny L. Koepke
Co-counsel for Plaintiff/Appellee/Cross-Appellant

Carpenter, Hazlewood, Delgado & Bolen, PLC, Tempe
By Katherine J. Merolo, Edith I. Rudder
Co-counsel for Plaintiff/Appellee/Cross-Appellant

Desiree Block, Upland, California
Defendant/Appellant/Cross-Appellee
 GREENWOOD v. BLOCK
Decision of the Court

MEMORANDUM DECISION

Judge Lawrence F. Winthrop delivered the decision of the Court, in which
Presiding Judge Kent E. Cattani and Judge Samuel A. Thumma joined.

W I N T H R O P, Judge:

¶1 Desiree Block appeals the trial court’s grant of summary
judgment in favor of Greenwood Villas Homeowners’ Association (“the
Association”) on the Association’s complaint for foreclosure and breach of
contract based on Block’s alleged failure to pay a lien. The Association
cross-appeals several issues, including challenging the amount of the
court’s attorneys’ fees award. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Block is the legal owner of a property within a condominium
development known as Greenwood Villas. All owners of condominium
units within Greenwood Villas are members of the Association and are
subject to the Declaration of Horizontal Property Regime and Covenants,
Conditions, and Restrictions for Greenwood Villas (“the Declaration”). The
Declaration requires that owners pay assessments to the Association “for
the purpose of promoting the recreation, health, safety and welfare of the
residents in the Condominium Project and in particular for the
improvement and maintenance of the properties, services and facilities
devoted to this purpose and related to the use and enjoyment of the
Common Elements.” Pursuant to the Declaration, any unpaid assessments
constitute a lien on the property to secure the payment of such amounts.

¶3 In November 2012, the Association filed a lien foreclosure
action against Block pursuant to Arizona Revised Statutes (“A.R.S.”)
section 33-1256(A) (2015 Supp.).1 The complaint alleged that Block’s failure
to pay assessments, interest, late charges, and costs of collection constituted
a lien on the property and entitled the Association to foreclose its lien.

¶4 In March 2013, the Association timely and successfully moved
for an extension of time to serve process on Block on the ground that, after

1 We cite the current version of all statutes unless changes material to
our decision have occurred since the relevant date(s).

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diligent efforts, it had been unable to effect service. Ultimately, the
Association served Block by publication in July 2013.

¶5 In early September 2013, Block filed an answer admitting the
existence of monthly assessments but contesting the “legal charges,” the
late fees, the lien, and the foreclosure action. Block also stated that she was
not aware of the Association’s complaint until June 2013.

¶6 In April 2014, the Association moved for summary judgment.
The Association argued that no genuine dispute of material fact existed
because Block admitted owing the assessments and had no legally
justifiable defense for her failure to pay. The Association also argued that
it was entitled to attorneys’ fees and costs incurred in the action.

¶7 After Block failed to timely respond, on June 2, 2014, the court
granted the Association’s motion for summary judgment.2 Between June 6,
2014, and July 16, 2014, Block filed a series of responses to the Association’s
motion for summary judgment, requesting that the court deny the motion
it had already granted. On July 24, 2014, the court vacated its June 2, 2014
order granting the Association’s motion for summary judgment on the
grounds that Block had not intentionally disregarded the rules and the
Association would not be prejudiced if Block was given an opportunity to
be heard. The court also ordered the Association to file its reply to Block’s
response to the motion for summary judgment. 3

¶8 In October 2014, the court granted the Association’s motion
for summary judgment against Block. The court found that the Association
was entitled to a foreclosure judgment and a personal judgment against
Block for unpaid assessments, unpaid charges for late payment of
assessments, and reasonable collection costs in the amount of $4,510.

2 The court declined to consider a May 13, 2014 letter from Block as a
response because there was no indication that Block had mailed a copy to
the Association’s attorney and there was no evidence the letter had been
filed with the clerk of the court.

3 The court deemed Block’s collective filings between June 6, 2014, and
July 16, 2014, as her response to the Association’s motion for summary
judgment. The court further ordered that Block’s June 18, 2014 filing was
deemed a motion to amend the answer and to add a counterclaim for
removal of a lis pendens filed by the Association.

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¶9 The Association filed a timely application for attorneys’ fees
that, as amended, requested an award of $11,113.50. The Association also
requested costs in the amount of $1,713.30. Block contested the
Association’s request for attorneys’ fees and costs.

¶10 In February 2015, the court entered a judgment of foreclosure
and awarded the Association attorneys’ fees and nontaxable costs in the
amount of $5,774.50 and taxable costs in the amount of $854.

¶11 Block timely appealed, and the Association cross-appealed.
We have appellate jurisdiction pursuant to the Arizona Constitution,
Article 6, Section 9, and A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).

ANALYSIS

I. Summary Judgment

¶12 Summary judgment is proper where there is no genuine
dispute as to any material fact and the moving party is entitled to judgment
as a matter of law. Ariz. R. Civ. P. (“Rule”) 56(a); Orme Sch. v. Reeves, 166
Ariz. 301, 305, 802 P.2d 1000, 1004 (1990). We review the evidence “in the
light most favorable to the party against whom summary judgment was
entered” and review de novo “whether any genuine issues of material fact
exist.” TWE Ret. Fund Trust v. Ream, 198 Ariz. 268, 271, ¶ 11, 8 P.3d 1182,
1185 (App. 2000).

II. Block’s Arguments on Appeal

¶13 To affirm summary judgment for the Association, we must
find undisputed evidence that Block failed to pay the required assessments
and other related charges. Although Block concedes that she fell behind on
assessments, she asserts multiple defenses on appeal that she did not raise
with the trial court.4 As a general rule, however, “[a]n issue not raised in

4 For the first time on appeal, Block asserts that (1) service of process
was improper; (2) the “economic loss rule” applies because financial
hardship prevented her from paying the assessment fees; (3) foreclosure
will unjustly enrich the Association; (4) the Association’s foreclosure action
was not timely and should be extinguished pursuant to A.R.S. § 33-1256(F);
(5) the lien should be removed because the Association misappropriated
Block’s assessment payments in violation of A.R.S. § 33-1256(J) by applying
her payments to the entire balance due instead of applying it first to her
unpaid assessments; and (6) the Association improperly claimed its lien had
priority over the lien of the first deed of trust.

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the trial court may not be raised for the first time on appeal.” Mullins v.
Horne, 120 Ariz. 587, 592, 587 P.2d 773, 778 (App. 1978). We therefore
decline to consider the defenses Block failed to assert in the trial court.

A. Validity of Lien

¶14 The Association “has a lien on a unit for any assessment
levied against that unit from the time the assessment becomes due.”
Further, the Association may foreclose on the lien “in the same manner as
a mortgage on real estate.” A.R.S. § 33-1256(A).

¶15 Block asserts the trial court erred by determining the
Association’s assessment lien was valid, and she argues the lien should
have been removed from the property entirely because the Association
improperly recorded the lien amount and provided the trial court with an
inaccurate ledger. Block previously raised this issue before the trial court
in a supplemental filing that the court deemed a motion to amend and to
add a counterclaim. The Association then filed a motion to dismiss the
counterclaim, which the trial court granted. We review the trial court’s
decision to grant the motion to dismiss de novo. Coleman v. City of Mesa, 230
Ariz. 352, 355-56 ¶ 7, 284 P.3d 863, 866-67 (2012).

¶16 We find no error by the trial court. Although the court found
Block was correct with respect to a filing charge that should not have been
included in the pre-litigation lien, the court dismissed Block’s counterclaim
on the ground that an inaccuracy in the ledger did not entitle her to have
the entire lien removed. Given Block’s failure to dispute that she was
delinquent in her payment of assessments, under A.R.S. § 33-1256(A), the
trial court did not err in permitting the Association to maintain the lien.

B. Settlement and Arbitration

¶17 Block argues that the trial court abused its discretion by not
ordering a settlement conference and by failing to address the Association’s
refusal to settle. A court may, in its discretion, schedule a settlement
conference on its own motion or at the request of any party. Ariz. R. Civ.
P. 16.1(a). There is nothing in the rules, however, that requires a court to
do so. Further, Block’s contention that the court failed to address the
Association’s refusal to settle is not supported by the record. In fact, the
court’s judgment thoroughly discussed the issue of settlement and even
relied on Block’s continued attempts to settle as grounds for reducing
attorneys’ fees owed to the Association. Noting that the promotion of
settlement “is a primary goal of fee-shifting rules” and that this case in
particular was “ripe for settlement from the start,” the court provided a

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detailed analysis of the parties’ failed negotiations. To the extent that Block
asserts the court should have required the parties to settle, no authority
exists for such a proposition. Moreover, nothing precluded Block from
requesting that the court order a settlement conference. Therefore, on this
record, the court did not abuse its discretion by declining to sua sponte order
a settlement conference or requiring the parties to reach an agreement.

¶18 Block also argues that the court erred by accepting the
Association’s certificate indicating that the case was not subject to
compulsory arbitration.5 Block states that the Association failed to show
that Block had knowledge of the lien foreclosure action or that Block
“conveyed all right or control to the [Association].” However, Block
received a copy of the Association’s certificate concerning compulsory
arbitration on June 14, 2013, but failed to respond. “If the defendant
disagrees with the plaintiff’s assertion as to arbitrability, the defendant shall
file a controverting certificate that specifies the particular reason for the
defendant’s disagreement with plaintiff’s certificate.” Ariz. R. Civ. P.
72(e)(2). By failing to respond, Block waived her right to challenge the
Association’s position. Moreover, even assuming her failure to respond did
not constitute waiver, Block has not shown the case meets the criteria for
compulsory arbitration pursuant to Rule 72(b).6 The trial court therefore
did not err by not sua sponte rejecting the Association’s certificate and
assigning the case for arbitration.

III. The Association’s Arguments on Cross-Appeal

A. Unpaid, Accruing Assessments

¶19 The Association argues on cross-appeal that the trial court
erred by eliminating language in the proffered judgment pertaining to
accruing assessments. As the owner of a condominium unit in Greenwood
Villas, Block has an ongoing obligation to pay assessments as they come
due. See A.R.S. § 33-1256(A). However, the Association does not cite any
legal authority to support its argument that the judgment and decree of
foreclosure should include an amount for assessments that the Association
speculates Block will not pay. See Coury Bros. Ranches, Inc. v. Ellsworth, 103

5 Although Block did not raise this argument before the trial court, we
nevertheless address it because it relates to the issue of settlement, which
she raised below.

6 Block’s argument that the Association’s certificate of compulsory
arbitration “was used only as a tool for foreclosure” is insufficient.

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Ariz. 515, 521, 446 P.2d 458, 464 (1968) (“Damages that are speculative,
remote or uncertain may not form the basis of a judgment.”); Cullison v. City
of Peoria, 120 Ariz. 165, 168, 584 P.2d 1156, 1159 (1978) (stating that
speculation is not competent evidence). Therefore, the trial court did not
err by removing the language regarding accruing assessments from the
judgment.

B. Consensual Lien

¶20 The Association also asserts that the trial court erred by
removing the word “consensual” as a modifier for the word “lien” in
paragraph eight of the judgment. A lien created under A.R.S. § 33-1256 is a
consensual lien. In this case, the term “consensual” is already used to define
the lien in other places throughout the judgment—namely, paragraphs two
and seven—and the court did not remove those descriptors. Moreover, in
crossing out the term “consensual” in paragraph eight, the court did not
change the term to “nonconsensual” or give any indication it deemed the
lien anything other than consensual. Accordingly, the court’s removal of
the term in paragraph eight did not prejudice the Association and was not
an abuse of discretion.

C. Attorneys’ Fees and Taxable Costs

¶21 The Association next argues that the court abused its
discretion by awarding the Association less than what it requested in
attorneys’ fees and costs.7

¶22 Generally, an award of attorneys’ fees is not permitted unless
expressly provided for by statute or contract. First Fed. Sav. & Loan Ass’n of
Phoenix v. Ram, 135 Ariz. 178, 181, 659 P.2d 1323, 1326 (App. 1982).
Similarly, expenses not enumerated in A.R.S. § 12-332 are not recoverable
as costs. Fowler v. Great Am. Ins. Co., 124 Ariz. 111, 114, 602 P.2d 492, 495
(App. 1979). Here, the Declaration provides that “each Owner shall pay
and reimburse the Association for any and all costs and expenses in
connection with . . . [a]ll costs incurred in the enforcement of the provisions

7 The Association requested $11,030.50 in attorneys’ fees, $83 in out-
of-pocket expenses, and $1,713.30 in taxable costs. The court awarded the
Association $5,774.50 in attorneys’ fees (including $54 in out-of-pocket
costs) and $854 in taxable costs.

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of this Declaration against any owner including, but not limited to,
attorney[s’] fees and court costs.”

¶23 The Association argues that a court cannot refuse to award
attorneys’ fees where a specific contractual provision provides for an
award. Here, however, the trial court did not refuse to award attorneys’
fees. Rather, the court found that the amount of fees the Association
requested was excessive and, in its discretion, reduced the amount to what
it regarded as appropriate considering the circumstances. 8 Implicit in the
enforcement of any fee provision is the authority of the court to determine
the reasonableness of the fee request. See McDowell Mountain Ranch Cmty.
Ass’n, Inc. v. Simons, 216 Ariz. 266, 270-71, 165 P.3d 667, 671-72 (App. 2007)
(finding that, even where an attorneys’ fees provision entitles the prevailing
party to “all attorneys’ fees and costs,” fees that are “obviously excessive”
will not be awarded); Geller v. Lesk, 230 Ariz. 624, 629-30, 285 P.3d 972, 977-
78 (App. 2012) (stating that, where a party seeking fees fails to make a prima
facie showing of reasonableness, the trial court must determine the amount
of reasonable fees incurred). Here, the trial court found that the
Association’s request was unreasonable, noting that the Association’s
attorneys had duplicated work and “spent more time and effort than
necessary to prevail in a routine, more-or-less undefended case.” Further,
the court found that, at a certain point, the litigation was no longer about
the unpaid assessments. Instead, the parties were fighting over attorneys’
fees, and the Association’s lawyers were “in effect, litigating for
themselves.”

¶24 On this record, the court did not abuse its discretion in finding
that the Association’s fee request was excessive. See Woliansky v. Miller, 146
Ariz. 170, 172, 704 P.2d 811, 813 (App. 1985) (stating that, where a
contractual agreement entitles the prevailing party to reasonable attorneys’
fees, the determination of the reasonable amount is “peculiarly within the
discretion of the trial court”). The trial court’s decision to reduce the award
of taxable costs was similarly within its discretion. See Fowler, 124 Ariz. at
113-14, 602 P.2d at 494-95 (stating that the trial court is given “wide
latitude” in assessing the amount of taxable costs); Reyes v. Frank’s Serv. &
Trucking, LLC, 235 Ariz. 605, 609, ¶ 12, 334 P.3d 1264, 1268 (App. 2014)
(awarding taxable costs where they were reasonably and necessarily

8 The trial court noted that the Association’s Bylaws state the
Association is entitled to “recover . . . reasonable attorneys’ fees as may be
deemed by the court.” (emphasis added).

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incurred). Accordingly, we find no error in the trial court’s determination
with respect to attorneys’ fees and taxable costs.

IV. Costs and Attorneys’ Fees on Appeal

¶25 The Association also requests costs and attorneys’ fees on
appeal. In this case, however, neither Block nor the Association has entirely
prevailed on appeal. Accordingly, in our discretion, we decline to award
costs and fees.

CONCLUSION

¶26 The trial court’s judgment is affirmed.

AMY M. WOOD • Clerk of the Court
FILED: AA

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