Greenberg v. McGowan

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

LINDA H. GREENBERG,
Plaintiff/Appellant,

v.

JOHN MCGOWAN and EILEEN MCGOWAN, husband and wife;
INSCRIPTION CANYON RANCH ARCHITECTURAL REVIEW
COMMITTEE; ICR WATER USERS ASSOCIATION, Inc., an Arizona
corporation, Defendants/Appellees.

No. 1 CA-CV 19-0061
FILED 12-24-2019

Appeal from the Superior Court in Yavapai County
No. P1300CV201600734
The Honorable David L. Mackey, Judge

AFFIRMED

COUNSEL

O’Leary Eaton, P.L.L.C., Prescott
By William J. O’Leary, Michael P. Thieme
Counsel for Plaintiff/Appellant

Murphy, Schmitt, Hathaway, Wilson & Becke, P.L.L.C., Prescott
By Andrew J. Becke
Co-Counsel for Defendants/Appellees John and Eileen McGowan

The Vakula Law Firm, PLC, Prescott
By Alex B. Vakula
Co-Counsel for Defendants/Appellees John and Eileen McGowan
Suits Law Firm, PLC, Prescott
By Douglas J. Suits
Counsel for Defendant/Appellee ICR Water Users Association, Inc.

MEMORANDUM DECISION

Presiding Judge Samuel A. Thumma delivered the decision of the Court, in
which Judge Jennifer M. Perkins and Judge Paul J. McMurdie joined.

T H U M M A, Judge:

¶1 Plaintiff Linda Greenberg challenges the entry of summary
judgment in favor of defendants John and Eileen McGowan, Inscription
Canyon Ranch Architectural Review Committee (ICR ARC) and Inscription
Canyon Ranch Water Users Association, Inc. (ICR WUA). Greenberg also
argues the superior court erred in denying her motion for reconsideration
and to amend her complaint, and in awarding attorneys’ fees to defendants.
Because Greenberg has shown no error, the judgment is affirmed.

FACTS1 AND PROCEDURAL HISTORY

¶2 Greenberg and the McGowans both live in Inscription
Canyon Ranch (ICR), a residential community in Williamson Valley,
Arizona. Their adjoining parcels are about two acres in size. The parcels are
governed by longstanding, recorded Covenants, Conditions and
Restrictions (CC&Rs). The McGowans’ built a structure on their parcel. This
litigation followed and this appeal mainly turns on (1) whether that
structure is a barn or a garage and (2) whether the McGowans are permitted
to keep two donkeys (and later a foal) on their parcel.

¶3 In May 2016, after receiving approval from the ICR ARC, the
McGowans started construction of the structure. By early October 2016,
when the structure was nearly complete, Greenberg sued the defendants to
enjoin any further construction. The parties stipulated to a preliminary
injunction, valid through May 2017, enjoining further construction and any
use of the structure to store vehicles, and prohibiting its use “for the

1This court views the facts in the light most favorable to the party against
whom summary judgment was entered. Nat’l Bank of Ariz. v. Thruston, 218
Ariz. 112, 116 ¶ 17 (App. 2008).

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boarding of donkeys or the storage of items related to donkeys,” but
allowing it to be used “for horse-related purposes.”

¶4 In May 2017, after defendants unsuccessfully moved to
dismiss, the parties stipulated to extend the preliminary injunction, as
modified, through November 2017. This injunction prohibited further
construction and use of the structure to store vehicles but allowed use for
horses as well as “any equine animals permitted under the” CC&Rs “and
any other uses not prohibited by the CC&Rs.” Soon after the entry of the
modified injunction, the McGowans began keeping two foster donkeys on
their parcel and a foal that arrived later.

¶5 Greenberg filed her second amended complaint in October
2017 — her operative complaint — alleging a breach of contract and a
violation of Arizona Revised Statutes (A.R.S.) § 33-1804 (2019)2 (“Open
meetings; exceptions” applicable to homeowners’ associations) and seeking
declaratory and injunctive relief and damages. The court then set a
February 2018 discovery and disclosure deadline and a June 2018 trial.

¶6 In March 2018, defendants moved for summary judgment
and Greenberg also moved for partial summary judgment on her contract
and injunctive relief claims. In May 2018, after briefing and oral argument,
the court granted defendants’ motions and denied Greenberg’s motion.
Greenberg then moved to amend her complaint a third time and for
reconsideration, which the court denied.

¶7 After entry of the final judgment awarding the McGowans
attorneys’ fees and costs, Greenberg timely appealed. This court has
jurisdiction over her appeal pursuant to Article 6, Section 9, of the Arizona
Constitution and A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).

DISCUSSION

¶8 Greenberg argues the superior court erred in: (1) granting
summary judgment in favor of defendants; (2) denying Greenberg’s motion
for leave to amend her complaint a third time and for reconsideration; and
(3) awarding the McGowans attorneys’ fees.

2Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated.

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I. The Court Properly Granted Summary Judgment in Favor of
Defendants on Greenberg’s Claims.

¶9 This court reviews the grant of summary judgment de novo.
Ochser v. Funk, 228 Ariz. 365, 369 ¶ 11 (2011). A “court shall grant summary
judgment if the moving party shows that 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. 56(a). As applied, the defendants were required to
show the absence of a genuine issue of material fact and that they had a
right to judgment as a matter of law. See Orme Sch. v. Reeves, 166 Ariz. 301,
310 (1990); Nat’l Bank of Ariz. v. Thruston, 218 Ariz. 112, 115 ¶ 14 (App. 2008).
In response, if Greenberg failed to “establish a prima facie case worthy of
submission to a jury,” then the defendants are “necessarily entitled to
judgment as a matter of law.” Comerica Bank v. Mahmoodi, 224 Ariz. 289, 292
¶ 18 (App. 2010); accord Wells Fargo Bank, N.A. v. Allen, 231 Ariz. 209, 213 ¶
16 (App. 2012) (plaintiff must establish claims with admissible evidence).

¶10 The interpretation of CC&Rs and contract provisions are
issues of law reviewed de novo. Powell v. Washburn, 211 Ariz. 553, 555 ¶ 8
(2006) (citations omitted); see also Taylor v. State Farm Mut. Auto Ins. Co., 175
Ariz. 148, 158–59 (1993) (“Whether contract language is reasonably
susceptible to more than one interpretation . . . is a question of law.”). In
considering the CC&Rs, this court is “to give effect to the intention of the
parties as determined from the language of the document in its entirety and
the purpose for which the covenants were created.” Powell, 211 Ariz. at 554
¶ 1 (adopting Restatement (Third) of Property: Servitudes (2000)).

A. The CC&Rs Do Not Prohibit Donkeys.

¶11 Greenberg asserts the CC&Rs prohibit the McGowans from
keeping donkeys on their property. At its core, Greenberg’s argument is
that the CC&Rs create an exclusive list of what animals are allowed on ICR
property, and because donkeys are not listed, they are not allowed. The text
of the CC&Rs, however, is different than what Greenberg claims.

¶12 Paragraph 10 of the CC&Rs addresses what “Livestock and
Poultry” are prohibited, and lists some examples of what is allowed, but
does not purport to address the topic comprehensively. In its entirety,
paragraph 10 states:

10. Livestock and Poultry: No poultry or fowl
of any kind shall be raised, bred or kept on any
lot, except that birds, not in excess of three (3) in
number owned as pet(s) may be kept inside a

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dwelling house in a manner that it/they do not
bother a neighboring Lot owner. Dogs, cats or
other household pets may be kept on a lot
provided that they are not kept, bred or
maintained for any commercial purpose.
Horses or 4-H Animal Projects, excluding
poultry, fowl and swine, may be kept on any lot
in the subdivision as allowed by the Planning
and Zoning Ordinances of Yavapai County,
Arizona. Fences and/or corrals for livestock
and 4-H Animal Projects must be of pipe, sucker
rod, white rail or chain link, and such fences,
together with any barns, corrals and stables or
other outbuildings must be approved by the
Architectural Review Committee. Corrals or
other areas fenced for purposes of maintaining
animals and pets of any kind shall not exceed in
size one-half of the area located behind the main
dwelling house.

Although expressly prohibiting poultry, fowl and swine, paragraph 10 does
not mention donkeys, let alone prohibit them. It expressly permits “horses,”
and Greenberg has not shown how keeping donkeys is substantively
different than keeping horses. Moreover, paragraph 10 does not purport to
identify all permissible livestock and poultry that can be kept on the
property. Nor does paragraph 10 (or any other CC&R provision) include a
catch-all stating that paragraph 10 lists all permissible animals or any
general principle for what kinds of animals are prohibited.

¶13 Although the parties concede that the McGowans’ donkeys
are not “4-H Animal Projects,” if they were, paragraph 10 clearly would
allow donkeys on the McGowans’ property. Such a donkey-based 4-H
project might (or might not) be somewhat shorter in duration than the
McGowans housing rescue donkeys. But Greenberg has not shown how
such a difference — donkeys prohibited as regular livestock, but
permissible as 4-H projects — would have meaning on this record.

¶14 Although expressly prohibiting poultry, fowl and swine, and
explicitly allowing horses, paragraph 10 by its terms contemplates that
other animals may be kept on the property. Among other things, paragraph
10 discusses what is required for “[f]ences and/or corrals for livestock and
4-H Animal Projects,” as well as fencing “for purposes of maintaining
animals” and pets. These broad terms, encompassing horses, donkeys and

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other faunae, would be unnecessary if horses were the only non-household
animals allowed by the CC&Rs. See also A.R.S. § 3-1201(5) (in “Agriculture”
title of A.R.S., including the following definition: “Livestock means cattle,
equine, sheep, goats and swine, except feral pigs”). Indeed, the drafters of
the CC&Rs would have had no reason to include provisions in paragraph
10 discussing “livestock” and “animals” if horses were the only non-
household animals allowed.

¶15 Greenberg’s argument also runs counter to the Arizona
Supreme Court’s directive that a “contract should be interpreted, if at all
possible, in a way that does not render parts of it superfluous.” Taylor 175
Ariz. at 158 n.9. Greenberg’s reliance on the doctrine of expressio unius est
exclusio alterius similarly is misplaced because, as applicable here,
paragraph 10 does not describe a class of animals that are prohibited. See,
e.g., Pima Cty. v. Heinfeld, 134 Ariz. 133, 134 (1982).3

¶16 In short, on its face, paragraph 10 does not purport to provide
a comprehensive list of permissible and prohibited uses on the land.
Accordingly, the superior did not, as Greenberg argues on appeal,
“improperly enlarge[] the list of permitted animals to include donkeys.”
Moreover, given the text of paragraph 10, including the lack of any catch-
all provision, Greenberg is incorrect in claiming external evidence was
required “to support the McGowans’ claim that the list is incomplete.”

¶17 Although the text of paragraph 10 is sufficient by itself, other
provisions in the CC&Rs further support this conclusion. Greenberg points
to paragraph 30 of the CC&Rs (“Construction”), which states that the
CC&R’s provisions “shall be liberally construed to effectuate its purpose of
creating a plan for the development of a first class, single family residential
community.” The CC&Rs, however, do not elaborate on the meaning of
“first class” nor do the parties offer any extrinsic evidence. See Taylor, 175
Ariz. at 154 (courts can look, among other things, to extrinsic evidence). But
given that donkeys as 4-H Animal Projects would be allowed under the

3 The parties’ conduct during this litigation further indicates paragraph 10
does not prohibit donkeys. Cf. Taylor, 175 Ariz. at 157 (noting that, among
other things, “subsequent conduct may shed light on [the party’s]
understanding of what was covered by the agreement”). Although the
original stipulated injunction prohibited donkeys but allowed horses, when
extended and revised by stipulation in May 2017, the injunction allowed
“equine animals.” In other contexts, “equine” is not limited to horses, but
includes animals like donkeys. See A.R.S. § 3-1201(4).

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CC&Rs, this provision cannot be read to show that a prohibition of donkeys
is required to make the development a “first class” community.

¶18 Paragraph 1 of the CC&Rs contains “Land Use” restrictions.
Although prohibiting commercial endeavors on the land, this provision
expressly contemplates the construction of “barns and other out buildings”
used to house domestic animals of all kinds, without specifying livestock
that could be allowed. Paragraph 1 expressly provides that “[a] barn and a
corral may be constructed on any lot subject to the approval of the” ARC.
Paragraph 3, addressing structure size, provides “a prefabricated barn may
be placed and maintained on a Lot after first obtaining approval of the”
ARC and paragraph 4, addressing building locations, also approves barns
on lots, all without restrictions to the types of animals.

¶19 Paragraph 6 describes a bridle path on the property “for the
exclusive use of riding horses, mules, donkeys or other such animal that
may be ridden and for purposes of human walking and hiking.” Although
not directly applicable here, this permissible use negates any claim that
horses, but not donkeys, could be present on the property. Further,
although paragraph 7 prohibits, as a nuisance, any “noxious or offensive
activity . . . on, in or upon any lot,” Greenberg did not make a timely
nuisance claim.

¶20 Other CC&R provisions show that the drafters knew how to
comprehensively prohibit uses when desired. For example, paragraph 13
contains a prohibition of oil and mining, which includes broad, expansive,
comprehensive terms like “of any kind” and “for any purpose associated
with oil or gas drilling or mining.” As another example, paragraph 19
contains a prohibition of abandoned or inoperable vehicles that similarly
uses broad, expansive, comprehensive terms like “of any type” and “in any
manner.” And paragraph 8 has a similarly-broad flat prohibition for
temporary structures. Paragraph 10, however, contains no such broad,
comprehensive prohibition.

¶21 Greenberg ultimately asks this court to vary or contradict
paragraph 10 of the CC&Rs, something a court cannot do. See Taylor, 175
Ariz. at 152. Because the CC&Rs, read in their entirety, do not preclude ICR
property owners like the McGowans from keeping donkeys on their
property, the superior court properly granted the McGowans’ motion for
summary judgment.

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B. There Was No Factual Dispute That the McGowans’
Structure Currently is Used as a Barn, Meaning Summary
Judgment Was Proper.

¶22 Greenberg next argues the superior court erred in concluding
the McGowans’ structure is a barn (the approved use), not a garage (which
could be subject to different construction requirements). Greenberg,
however, concedes “the undisputed fact was that the structure had to-date
been used only as a barn.” Although Greenberg disputes “whether it could
be used as a garage in the future, and whether it was constructed with the
intent for such use,” this court need not address hypothetical future actions
that may (or may not) occur. See Bennett v. Brownlow, 211 Ariz. 193, 196 ¶ 16
(2005) (Arizona “courts refrain from issuing advisory opinions.”).
Furthermore, Greenberg does not cite any authority suggesting the intent
of a party is relevant to determining how to properly classify a structure
pursuant to the CC&Rs when the structure’s current use is undisputed.
Accordingly, because any different use has not yet occurred (and may never
occur), such a dispute is not ripe. Therefore, the superior court properly
granted summary judgment against Greenberg on her claim that the
McGowans’ structure is not being used as a barn.

C. Because Greenberg Failed to Show Compensable Damages,
Her Contract Claim Fails.

¶23 Greenberg next challenges the entry of summary judgment on
her breach of contract claim, arguing the superior court’s grant was an
improper discovery sanction under Ariz. R. Civ. P. 37. This court “will
affirm the trial court’s decision if it is correct for any reason, even if that
reason was not considered by the trial court.” Glaze v. Marcus, 151 Ariz. 538,
540 (App. 1986).

¶24 At the outset, there is no evidence that the superior court
granted summary judgment against Greenberg as a discovery sanction.
When faced with the McGowans’ motion for summary judgment,
Greenberg had the burden to “respond with specific facts showing a
genuine issue for trial.” Kelly v. NationsBanc Mortg. Corp., 199 Ariz. 284, 287
(App. 2000) (citation omitted); accord Ariz. R. Civ. P. 56(e). Among other
things, that included facts showing damages. See Steinberger v. McVey ex
rel. Cty. of Maricopa, 234 Ariz. 125, 140 ¶ 67 (App. 2014) (citing Thunderbird
Metallurgical, Inc. v. Ariz. Testing Labs., 5 Ariz. App. 48, 50 (1967)). This
showing included “some basis for estimating [her] loss.” Gilmore v. Cohen, 95
Ariz. 34, 36 (1963) (emphasis added; citations omitted). “’[C]onjecture or
speculation’ cannot provide the basis for an award of damages[;] . . . the

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evidence must make an ‘approximately accurate estimate’ possible.” Id.
(citations omitted).

¶25 Neither Greenberg’s operative pleading, nor her disclosures
or discovery responses, ever specified an amount of damages sought. See
Ariz. R. Civ. P. 26.1(a)(7). Nor did Greenberg seek additional time to
provide disclosure or discovery before responding to the motion for
summary judgment. Cf. Ariz. R. Civ. P. 56(d). Instead, Greenberg has
steadfastly taken the position that she “clearly disclos[ed] Plaintiff’s
damages” because she had disclosed that she would testify at trial. Such an
approach does not, however, adequately disclose damages and cannot be
used to defeat a motion for summary judgment. See Ariz. R. Civ. P.
26.1(a)(7) (requiring disclosure of “a computation and measure of each
category of damages alleged by the disclosing party”). More importantly,
such an approach does not “set forth specific facts showing a genuine issue
for trial” regarding damages, meaning “summary judgment, if appropriate,
shall be entered against” Greenberg. Ariz. R. Civ. P. 56(e). Greenberg’s
failure to provide a computation and measure of her damages in response
to the McGowans’ motion for summary judgment meant there was no
genuine issue of material fact on the point to be tried. See Kelly, 199 Ariz. at
287. As a result, the superior court properly granted summary judgment
against her on her contract claim.

II. The Court Did Not Abuse Its Discretion in Denying Greenberg’s
Motion to Amend.

¶26 Greenberg argues the superior court erred when it would not
allow her to file a third amended complaint, an issue reviewed for abuse of
discretion. Tumacacori Mission Land Dev., Ltd. v. Union Pac. R.R. Co., 231
Ariz. 517, 519 ¶ 4 (App. 2013) (citation omitted). Although Greenberg
correctly notes the court expressed a willingness to consider a third
amended complaint in its order granting summary judgment for the
defendants, setting a filing deadline in no way obligated the court to grant
such a motion. And to the extent Greenberg claims she sought leave to file
a third amended complaint in her second amended complaint, she has
failed to show how such a request properly would warrant such relief. See
Ariz. R. Civ. P. 15(a)(4) (“A party moving for leave to amend a pleading
must attach a copy of the proposed amended pleading as an exhibit to the
motion.”); Ariz. R. Civ. P. 7.1 (listing requirements for motions).

¶27 By the time Greenberg filed a motion for leave to file a third
amended complaint in June 2018, this case had been pending for 20 months,
discovery and disclosure had ended, and the superior court had granted

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summary judgment against her on all claims. Although “[l]eave to amend
must be freely given when justice requires,” Ariz. R. Civ. P. 15(a)(2), such
leave may be denied “when the amendment comes late and raises new
issues requiring preparation for factual discovery which would not
otherwise have been necessitated nor expected, thus requiring delay in the
decision of the case,” Owen v. Superior Court, 133 Ariz. 75, 81 (1982). A
motion to amend can be denied when “the court finds undue delay in the
request, bad faith, undue prejudice, or futility in the amendment.”
MacCollum v. Perkinson, 185 Ariz. 179, 185 (App. 1996) (citation omitted).
“Prejudice is ‘the inconvenience and delay suffered when the amendment
raises new issues or inserts new parties into the litigation.’” Owen, 133 Ariz.
at 79 (citation omitted).

¶28 As applied, Greenberg’s motion came long after disclosure
and discovery closed and after the court rejected all of her claims, factors
weighing against granting leave. See id. (citation omitted). Greenberg’s
proposed amendment sought to add new defendants that had been known
for some time and would have required reopening of discovery on the latest
allegations, claims and parties, resulting in further delay, again weighing
against granting leave. See id. Greenberg also failed to explain why she
sought leave so late in the litigation, even when the additions she sought to
make arose from the same set of operative facts present when she first filed
in October 2016. Nor did she explain why she had not sought leave far
sooner.

¶29 To the extent Greenberg seeks to justify this timing by
claiming defendants “hid the ball” requiring her to seek to add the board
members of the ICR ARC individually, ICR ARC raised that issue in
January 2017 when seeking dismissal. Accordingly, the record shows
Greenberg had notice of that issue before filing her operative pleading in
October 2017 and long before seeking to file yet another amended pleading
in June 2018.

¶30 On this record, and adding that some of the attempted
amendments would have been futile (given the summary judgment
rulings), Walls v. Ariz. Dep’t. of Pub. Safety, 170 Ariz. 591, 597 (App. 1991),
Greenberg has not shown the superior court abused its discretion in
denying her motion for leave to file a third amended complaint.

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III. The Court Properly Denied Greenberg’s Motion for
Reconsideration.

¶31 Greenberg argues the superior court abused its discretion by
denying her motion for reconsideration for failure to raise any new issues.
Although Greenberg contends her motion to reconsider raised new issues,
the filings show Greenberg only sought to proffer new interpretations of
the CC&Rs that are simply revisions or extensions of the arguments she had
been making all along, arguments the superior court had already correctly
rejected. Moreover, its unclear that raising new arguments is the proper
scope of a motion to reconsider (as opposed to other motion practice). Ariz.
R. Civ. P. 7.1(e). Greenberg has shown no error in the superior court’s denial
of her motion for reconsideration.

IV. The Court Properly Awarded Attorneys’ Fees.

¶32 After briefing from all parties, in which the defendants sought
attorneys’ fees pursuant to A.R.S. § 12-341.01 and the CC&Rs, the superior
court awarded the defendants’ attorneys’ fees. In a contested action arising
out of a contract, the superior court’s award of attorneys’ fees is governed
by the terms of the contract, and pursuant to A.R.S. § 12–341.01(A), as long
as the statute does not “effectively conflict[] with an express contractual
provision governing recovery of attorney’s fees.” Am. Power Prods., Inc. v.
CSK Auto, Inc., 242 Ariz. 364, 368 ¶ 14 (2017) (quoting Jordan v. Burgbacher,
180 Ariz. 221, 229 (App. 1994)). An award of fees is reviewed for abuse of
discretion. In re Guardianship of Sleeth, 226 Ariz. 171, 174 ¶ 12 (App. 2010).

¶33 The CC&Rs provide that the “party prevailing in [an action to
enforce its provisions] shall be entitled to recover from the other party
thereto as part of the judgment reasonable attorneys’ fees and costs of suit.”
Cf. A.R.S. § 12-341.01 (“the court may award the successful party reasonable
attorney fees”). In its entry of judgment, the court, without specifying either
the CC&Rs or A.R.S. § 12–341.01, awarded attorneys’ fees and costs to the
defendants because the court had granted summary judgment on behalf of
the defendants on all claims pleaded by Greenberg. Greenberg does not
challenge whether the defendants were the prevailing parties. Instead,
Greenberg first argues that the defendants were required to (but failed to)
“disclose the signed letters of representation.” By rule, however,
defendants were only required to provide an “affidavit [that] disclose[s] the
terms of any fee agreement for the services for which the claim is made.”
Ariz. R. Civ. P. 54(g)(4). The defendants complied with this rule, and
Greenberg offers no authority for her claim that the signed letters of

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representation were required. Because the defendants provided affidavits
that complied with Rule 54(g)(4), Greenberg’s argument fails.

¶34 Greenberg also argues ICR ARC could not be awarded fees
because it is not a legal entity. Again, however, the fee application
submitted by ICR ARC complied with the applicable rule and included an
affidavit under oath that the relevant fee agreement required defendants to
pay the rate specified for attorney services provided. Accordingly, the
record contradicts Greenberg’s argument.

IV. Attorneys’ Fees and Costs on Appeal.

¶35 Both Greenberg and defendants seek an award of attorneys’
fees and taxable costs on appeal pursuant to A.R.S. §§ 12-341.01, 12-342 and
the CC&Rs; Greenberg’s request is denied. Because they are prevailing
parties, the defendants’ request for reasonable attorneys’ fees and taxable
costs on appeal under the CC&Rs is granted contingent upon their
compliance with Ariz. R. Civ. App. P. 21.

CONCLUSION

¶36 The judgment is affirmed.

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

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