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Maricopa County Superior Court Case CV2018-009167: public docket details, parties, minute entries, documents, and official source links for Desert Ridge Community Association.

Case Number

CV2018-009167

County

Maricopa

Caption

Not captured

Filed

6/22/2018

Case Type

Civil

Judge

Julian, Melissa

Location

Downtown

Official Court Record

Official Court Record

Parties

Minute Entries

Clerk of the Superior Court

*** Electronically Filed ***

03/04/2020 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

03/03/2020

Docket Code 002
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATION JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
MICHAEL J PLATI

HEARING VACATED

Pursuant to the Final Judgment entered on August 14, 2019 and on the Court's own
motion,

IT IS ORDERED vacating the Trial Setting Conference set on March 3, 2020, at 8:30
a.m. in this division.

Clerk of the Superior Court

*** Electronically Filed ***

03/07/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

03/06/2019

Docket Code 041
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATON
JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

JUDGE BRODMAN

RULE 16 COMMERCIAL COURT CONFERENCE SET

The Court is in receipt of the February 26, 2019 Rule 16(b) Joint Report filed by plaintiff.

IT IS ORDERED setting this matter for an in-person Rule 16(d) Commercial Court
Conference on April 3, 2019 at 8:30 a.m. (time allotted: 30 minutes) before:

The Honorable Roger E. Brodman
Maricopa County Superior Court
East Court Building, Fourth Floor
101 West Jefferson, Courtroom 413
Phoenix, AZ 85003
Phone: 602-372-2943

The proceedings will take place in the Superior Court’s “e-courtroom.” A record of the
proceedings will be made digitally in lieu of a court reporter. Should you want an unofficial
copy of the proceedings, the parties or counsel may request a CD of the proceedings for a $30.00

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

03/06/2019

Docket Code 041
Form V000A
Page 2

charge. For copies of hearings or trial proceedings recorded previously, please call
Electronic Records Services at 602-506-7100.

Pursuant to Local Rule 2.22, if a party desires a court reporter for any proceeding in
which a court reporter is not mandated by Arizona Supreme Court Rule 30, the party must
submit a written request to the assigned judicial officer at least ten (10) judicial days in advance
of the hearing, and must pay the authorized fee to the Clerk of the Court at least two (2) judicial
days before the proceeding. The fee is $140 for a half-day and $280 for a full day.

Clerk of the Superior Court

*** Electronically Filed ***

03/25/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

03/22/2019

Docket Code 063
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATON
JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

JUDGE BRODMAN

MINUTE ENTRY

The Court has reviewed and considered the March 21, 2019 Parties’ Stipulation Pursuant
to Arizona Rule of Civil Procedure 15(a)(2).

IT IS ORDERED approving the stipulation and allowing BRE to amend its pleading.

Clerk of the Superior Court

*** Electronically Filed ***

04/04/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

04/03/2019

Docket Code 029
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATON
JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

JUDGE BRODMAN

MINUTE ENTRY

Courtroom: ECB 413

8:31 a.m. This is the time set for Rule 16(d) Commercial Court Conference. Plaintiff is
represented by counsel, Jeffrey D. Gross. Counterdefendant is represented by counsel, J. Gary
Linder. Defendant/Counterclaimant, BRE Thunder Desert Ridge Property Owner, LLC, is
represented by counsel, Steven M. Aaron and Jacqueline M. Whipple.

A record of the proceedings is made digitally in lieu of a court reporter.

Discussion is held regarding the current case status.

The Court will consider proportionality when considering attorneys’ fees. A factor this
Court takes into account in awarding attorneys' fees is whether any party has "unduly expanded"
litigation. See Fulton Homes Corp. v. BBP Concrete, 214 Ariz. 566, 570, ¶ 15 (App. 2007).

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

04/03/2019

Docket Code 029
Form V000A
Page 2

LET THE RECORD REFLECT that the discovery dispute resolution procedure for
commercial court matters before this division apply to this case. If there is a discovery dispute,
counsel for the movant shall contact opposing counsel directly to attempt to resolve the
discovery dispute issue pursuant to Rule 37. Absent resolution, counsel for the movant may
contact the Court’s Judicial Assistant and all other counsel to advise them of his/her request for a
telephonic hearing. Each party shall thereafter email or fax to the Court’s Judicial Assistant a
one-page summary of the dispute. The emails will be filed with the clerk. Once the Court
receives a summary from each party, the Court’s Judicial Assistant will contact the parties to
schedule a telephonic conference.

The email address for the Court’s Judicial Assistant, Lora Gilbert, is
[email protected], and the fax number for the Division is 602-372-8688.

Further discussion is held regarding completion of discovery, deadlines and the Court’s
calendar availability regarding bench or jury trial.

For matters presented to the bench, counsel may present witnesses’ and/or experts’ direct
testimony via affidavit or expert witness report. Each side is limited to two (2) witness
affidavits, the affidavits are limited to 10 pages each. The witness must be available to testify at
the time of the hearing.

IT IS FURTHER ORDERED affirming telephonic Status/Trial Setting Conference set
for March 3, 2020 at 8:30 a.m. in this division.

9:05 a.m. Matter concludes.

Clerk of the Superior Court

*** Electronically Filed ***

05/07/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/06/2019

Docket Code 028
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATON
JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
JUDGE BRODMAN

STATUS CONFERENCE SET

IT IS ORDERED setting Telephonic Discovery Dispute on May 15, 2019 at 8:30 a.m.
(time allotted: 15 minutes) with the time divided equally between the parties, before:

The Honorable Roger E. Brodman
Maricopa County Superior Court
East Court Building, Fourth Floor
101 West Jefferson, Courtroom 413
Phoenix, AZ 85003
Phone: 602-372-2943

Counsel for defendant shall initiate the call by arranging the presence of all parties and
contacting this division at 602-372-2943 or alternatively provide a call-in number to the Court’s
Judicial Assistant, Lora Gilbert, telephonically or by electronic mail (email) at
[email protected]

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/06/2019

Docket Code 028
Form V000A
Page 2

NOTE: Counsel shall be available for the conference call on a telephone land line and
not on cellular phones, in order to maximize all participants’ ability to hear and be heard.

The proceedings will take place in the Superior Court’s “e-courtroom.” A record of the
proceedings will be made digitally in lieu of a court reporter. Should you want an unofficial
copy of the proceedings, the parties or counsel may request a digital copy of the proceedings for
a $30.00 charge. For copies of hearings or trial proceedings recorded previously, please call
Electronic Records Services at 602-506-7100.

Pursuant to Local Rule 2.22, if a party desires a court reporter for any proceeding in
which a court reporter is not mandated by Arizona Supreme Court Rule 30, the party must
submit a written request to the assigned judicial officer at least ten (10) judicial days in advance
of the hearing, and must pay the authorized fee to the Clerk of the Court at least two (2) judicial
days before the proceeding. The fee is $140 for a half-day and $280 for a full day.

FILED: Emailed correspondence

Clerk of the Superior Court

*** Electronically Filed ***

05/08/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/06/2019

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATON
JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
JUDGE BRODMAN

ORAL ARGUMENT SET

The Court has received the following:

o Defendant’s Motion for Judgment on the Pleadings; Memorandum of Points and
Authorities filed April 10, 2019;
o Response to Defendant’s Motion for Judgment on the Pleadings filed April 24,
2019;
o Defendant’s Reply to its Motion for Judgment on the Pleadings; Memorandum of
Points and Authorities filed May 6, 2019;
o Motion for Judgment on the Pleadings Re Count I of Complaint and Count VI and
VII of Second Amended Counterclaim filed April 24, 2019; and
o Opposition to Plaintiff’s Motion for Judgment on the Pleadings; Memorandum of
Points and Authorities filed May 6, 2019.

Good cause appearing,

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/06/2019

Docket Code 094
Form V000A
Page 2

IT IS ORDERED setting oral argument on June 14, 2019 at 9:00 a.m. (time allotted:
30 minutes) with the time divided equally between the parties, before:

The Honorable Roger E. Brodman
Maricopa County Superior Court
East Court Building, Fourth Floor
101 West Jefferson, Courtroom 413
Phoenix, AZ 85003
Phone: 602-372-2943

IT IS FURTHER ORDERED that all Motions, Responses, Replies and other Court
requested filings in this case must be submitted individually. Counsel shall not combine
any Motion within a responsive pleading. All Motions are to be filed separately and
designated as such. Contact Lora Gilbert at e-mail: [email protected] with
any questions and/or concerns.

The proceedings will take place in the Superior Court’s “e-courtroom.” A record of the
proceedings will be made digitally in lieu of a court reporter. Should you want an unofficial
copy of the proceedings, the parties or counsel may request a digital copy of the proceedings for
a $30.00 charge. For copies of hearings or trial proceedings recorded previously, please call
Electronic Records Services at 602-506-7100.

IF ANY ISSUES IN THE MOTION RELATE TO DISCOVERY PROBLEMS,
COUNSEL SHALL CONFER TO ATTEMPT TO RESOLVE THEIR DIFFERENCES OR TO
REDUCE THE AREAS OF DISPUTE. COUNSEL ARE REMINDED THAT THE COURT
WILL LIKELY IMPOSE SANCTIONS AGAINST THE LOSING PARTY IN ACCORDANCE
WITH RULE 37(a)(4), RULES OF CIVIL PROCEDURE.

IT IS FURTHER ORDERED:

If extended oral argument is necessary, counsel must so advise the Court no later than
four court days prior to the date set for hearing so that oral argument can be rescheduled.

Any motion or stipulation for continuance must be filed with the Court no later than four
court days prior to the date set for hearing. After that date, no continuances will be granted
except for extraordinary circumstances.

Counsel are advised that if the answering memorandum is not timely filed in accordance
with the Arizona Rules Of Civil Procedure, oral argument may be vacated and the motion will be
ruled upon in accordance with Rule 7.1 (b), A.R.C.P.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/06/2019

Docket Code 094
Form V000A
Page 3

No agreement by the parties to modify the pleading schedule will be honored by the
Court unless the Court is notified and approves the parties’ agreement. Any such agreement will
not change the argument date without a court Order and will, in any event, require that all
motions are fully briefed and at issue not later than one full week before the argument date.

NOTE: All court proceedings are recorded digitally and not by a court
reporter. Pursuant to Local Rule 2.22, if a party desires a court reporter for any proceeding in
which a court reporter is not mandated by Arizona Supreme Court Rule 30, the party must
submit a written request to the assigned judicial officer at least ten (10) judicial days in advance
of the hearing, and must pay the authorized fee to the Clerk of the Court at least two (2) judicial
days before the proceeding. The fee is $140 for a half-day and $280 for a full day.

Clerk of the Superior Court

*** Electronically Filed ***

05/21/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/15/2019

Docket Code 926
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATION JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
MICHAEL J PLATI
JUDGE BRODMAN

RULING ON DISCOVERY DISPUTE

On May 15, 2019, the Court held oral argument on a discovery dispute. The Court
reviewed the email submissions from the parties.

Defendant BRE subpoenaed the records of Butler Hansen, plaintiff DRCA’s accountant.
Butler Hansen has been DRCA’s auditor since 2012. Butler Hansen refused to produce the
records to BRE, but it did produce discs containing 134,000 records and provided the discs to
DRCA’s attorneys. Butler Hansen and DRCA contend that the documents are privileged.

A.R.S. § 32-749(A) provides an accountant’s privilege to the accountant:

Certified public accountants practicing in this state shall not be required to divulge, nor
shall they voluntarily divulge, client records or information they have received by reason
of the confidential nature of their employment. Information derived from or as a result of
a professional source shall be kept confidential as provided in this section, but this

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/15/2019

Docket Code 926
Form V000A
Page 2

section does not modify, change or affect the criminal for bankruptcy laws of this state or
the United States or limit the authority of this state or any agency of this state to
subpoena and use the information in connection with any investigation, public hearing or
other proceeding.

The documents in possession of the accountant are privileged. The Court was not
persuaded that the privilege does not apply or that Butler Hansen is obligated to prepare a
privilege log.

As an initial matter, the Court finds that the records sought from the accountant are not
particularly relevant and are not proportional to the issues in this case. At issue is the
interpretation of a contractual provision created and recorded more than 20 years ago. Butler
Hansen didn’t start working for DRCA until 2012, and Butler Hansen’s interpretation of this
provision in 2017 does not affect what the parties meant when they entered the contract decades
ago. The thousands of pages of records relating to Butler Hansen’s audit of DRCA have nothing
to do with this issue. At most, communications between Butler Hansen and DRCA concerning
Butler Hansen’s flagging of the disputed contract provision could be relevant for the purpose of
establishing DRCA’s notice or DRCA’s interpretation of the provision before litigation was
filed. However, BRE’s subpoena seeks much more than communications between DRCA and
Butler Hansen concerning the disputed contract provision.

Moreover, recently amended Rule 45(E)(1)(A) provides that absent good cause, a
subpoena may not seek production of materials that have already been produced in the action or
that are available from parties to the action. Here, the Court finds no showing of good cause that
the information sought from Butler Hansen could not be obtained from DRCA.

The Court rejects BRE’s argument that Butler Hansen waived the accounting privilege by
providing the documents to DRCA’s attorneys. Providing documents to a client’s counsel is not
a waiver of privilege. And while members of the Association may have a right to inspect the
Association’s financial records, they do not have a right to the accountant’s records. Butler
Hansen represented the Association, not the individual members.

Finally, this matter is set for oral argument on competing dispositive motions on June 14,
2019. Requiring parties to review 134,000 documents for privilege while cross-dispositive
motions are pending seems like an inefficient and potentially unnecessary endeavor.

In conclusion, the Court finds that BRE’s subpoena is premature and disproportional to
the issues in this case. For the reasons stated above the Court sustains Butler Hansen’s objection
to the subpoena.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/15/2019

Docket Code 926
Form V000A
Page 3

For future reference, the Court refers the parties to Rule 45(c)(5)(A) which provides that
the party requesting a privilege log must generally pay the subpoenaed person’s reasonable
expenses in preparing the log. This Court has a practice of requiring parties seeking extensive
documentation from third parties to do so on their own nickel. If a narrowed subpoena requesting
documents subject to the accountant’s privilege is still sought after the Court rules on the
dispositive motions, the Court directs BRE to discuss with Butler Hansen’s counsel the estimated
costs of preparing a privilege log for any narrowed subpoena. Although BRE’s attorney indicated
that BRE would pay for the cost of preparing a privilege log, the Court’s experience is that the
cost of preparing such a log is occasionally significantly greater than the party agreeing to pay
the cost believes is reasonable. The Court is much happier when the parties agree in advance for
a range what the costs will be, instead of litigating the reasonableness of privilege log
preparation costs.

Clerk of the Superior Court

*** Electronically Filed ***

05/17/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/15/2019

Docket Code 020
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATON
JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
MICHAEL J PLATI
JUDGE BRODMAN

MINUTE ENTRY

Courtroom: ECB 413

8:34 a.m. This is the time set for discovery dispute/status conference. Plaintiff is
represented by counsel, Jeffrey D. Gross. Counsel Michael J. Plati is present on behalf of Butler
Hansen. Counterdefendant Desert Ridge Resort, LLC, is represented by counsel, J. Gary Linder.
Defendant/Counterclaimant, BRE Thunder Desert Ridge Property Owner, LLC, is represented
by counsel, Steven M. Aaron and Jacqueline M. Whipple. All counsel appear telephonically.

A record of the proceedings is made digitally in lieu of a court reporter.

LET THE RECORD REFLECT that the Court has reviewed counsels’ pending discovery
dispute issues.

Discussion is held.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

05/15/2019

Docket Code 020
Form V000A
Page 2

IT IS ORDERED taking this matter under advisement.

9:05 a.m. Matter concludes.

Clerk of the Superior Court

*** Electronically Filed ***

06/19/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

06/14/2019

Docket Code 020
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATION JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
MICHAEL J PLATI
JUDGE BRODMAN

ORAL ARGUMENT

Courtroom: ECB 413

8:59 a.m. This is the time set for Oral Argument regarding:
o Defendant’s Motion for Judgment on the Pleadings filed April 10, 2019;
o Motion for Judgment on the Pleadings Re Count I of Complaint and Count VI and
VII of Second Amended Counterclaim filed by plaintiff on April 24, 2019; and
o Plaintiff’s Motion to Strike Citation to Unpublished Authorities filed May 8,
2019.
Plaintiff is represented by counsel, Jeffrey D. Gross. Counterdefendant Desert Ridge Resort,
LLC, is represented by counsel, J. Gary Linder. Defendant/Counterclaimant, BRE Thunder
Desert Ridge Property Owner, LLC, is represented by counsel, Steven M. Aaron and Jacqueline
M. Whipple.

A record of the proceedings is made digitally in lieu of a court reporter.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

06/14/2019

Docket Code 020
Form V000A
Page 2

For the reasons stated on the record,

IT IS ORDERED granting plaintiff’s Motion to Strike Citation to Unpublished
Authorities filed May 8, 2019.

Oral argument is presented to the Court.

IT IS FURTHER ORDERED taking Defendant’s Motion for Judgment on the
Pleadings and plaintiff’s Motion for Judgment on the Pleadings Re Count I of Complaint and
Count VI and VII of Second Amended Counterclaim filed April 24, 2019 under advisement.

9:25 a.m. Matter concludes.

Clerk of the Superior Court

*** Electronically Filed ***

06/19/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

06/17/2019

Docket Code 926
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATION JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
MICHAEL J PLATI
JUDGE BRODMAN

RULING ON CROSS MOTIONS FOR JUDGMENT ON THE PLEADINGS

The Court reviewed the parties’ cross motions for judgment on the pleadings, the
responses and replies. The Court held oral argument on June 14, 2019.

This case involves interpretation of a contract provision that both parties claim is
unambiguous.

Plaintiff Desert Ridge Community Association (“Association”) is suing JW Marriott
Phoenix Desert Ridge Resort & Spa (“Resort”), which operates a resort in Desert Ridge
containing 950 rooms.

The facts in this case are undisputed. The parties’ relationship is governed by the July 7,
1993 Declaration of Covenants, Conditions, Restrictions and Easements for Desert Ridge (“the
Declaration”), as amended. The Declaration controls the calculation of assessments that are
charged to property owners. Construction of the Resort was completed in 2002. For the last 14

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

06/17/2019

Docket Code 926
Form V000A
Page 2

years, the Resort (or its predecessor) has been paying for 95 memberships -- one for each 10
rooms. In May 2015, the Association signed an estoppel certificate indicating that the Resort had
no unpaid assessments. In June 2016, the Association’s auditor suggested that the Association
had wrongfully calculated assessments.

Pulling a flip turn, the Association now asserts that it has erroneously calculated
assessments for the last 14 years and the Resort owes 950 memberships. The Association alleges
that “After completion of construction in 2002, the Association mistakenly continued to assess
the Resort based on 95 memberships.” In other words, the Association is seeking to increase the
Resort’s monthly membership fee by a factor of ten and is seeking to collect 14 years of
underpaid assessments.

Section 8.1.5 is the provision in dispute. It reads:

For an Owner of a Parcel designated for use as a resort under the Land Use Plan, one (1)
Membership for each ten (10) rooms which may be constructed within its resort under the
Land Use Plan. After the resort is constructed, the number of Memberships shall be
adjusted to reflect the actual number of rooms constructed within the resort.

The Court’s purpose in interpreting a contract is to ascertain and enforce the parties’
intent. Elm Retirement Center, LP v. Callaway, 226 Ariz. 287, 290, ¶ 15 (App. 2010). Elm
Retirement summarizes Arizona law concerning the interpretation of contracts. To determine the
parties’ intent, the Court will look to the plain meaning of the words as viewed in the context of
the contract as a whole. When terms of a contract are plain and unambiguous, its interpretation is
a question of law for the Court. Id. at 290-91, ¶ 15. A disagreement about a contract’s meaning
does not establish an ambiguity. Id. at ¶ 21.

The Court does not consider the contract to be ambiguous. The contract is not reasonably
susceptible to the interpretation offered by the Association for several reasons.

The language is clear and unambiguous. The Resort must pay memberships in a 1:10
ratio. Section 8.1.5 provides that the Resort will pay “one (1) Membership for each ten (10)
rooms which may be constructed.” Then, if there is a different number of rooms than the planned
950, “[a]fter the resort is constructed, the number of Memberships shall be adjusted to reflect the
actual number of room constructed within the resort.” Thus, if only 900 rooms were constructed
instead of the planned 950 rooms, the number of Memberships would be adjusted accordingly.

If the drafters of the Declaration had intended the resort to be charged with a membership
for each room once construction was completed, the last sentence of Section 8.1.5 would read:
“After the resort is constructed, the resort will be assessed one Membership for each resort

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

06/17/2019

Docket Code 926
Form V000A
Page 3

room.” The drafters clearly knew how to adjust Membership ratios once construction was
complete,1 but did not in Section 8.1.5.

The Association argues that following completion of construction, assessments should
have been adjusted upward to reflect a single membership for each room. This interpretation
does not comport with the terms of the Declaration. The word “adjust” applies to the number of
rooms, not to the ratio. Moreover, no language of the Declaration supports the Association’s
claim that “adjust” means changing the 1:10 ratio. Nothing in the Declaration describes how the
Membership ratio for a resort room is to be adjusted. Nothing in the Declaration suggests that the
Resort must pay a Membership for each individual room. The Declaration clearly provides that
different land uses will pay different ratios. Nowhere does the Declaration provide that the ratio
for resort rooms is anything other than 1:10.

In interpreting a contract, each part of the contract must be read together to bring
harmony, if possible, between all parts of the writing. Elm Retirement at ¶ 18. Although other
parts of the Declaration provide clear calculations for how membership ratios are to be re-
assessed or changed once construction is complete, the provision in question provides no such
mechanism. Moreover, the Declaration provides that apartments are to be assessed one-half of a
membership. The Association provides no logical explanation for why an apartment would be
assessed on a fraction of a Membership but a hotel room would be assessed as a whole.

Third, the Association has been making assessments on the 1:10 ratio for 14 years. The
Court does not consider the interpretation of the provision in question to be doubtful, but even if
it was, in interpreting a contract the “acts of parties under a contract, before disputes arise, are
the best evidence of the meaning of doubtful contractual terms.” Associated Students of Univ. of
Arizona v. Arizona Bd. of Regents, 120 Ariz. 100, 105 (App. 1978). See also RAJI Contract 26
(provision is interpreted by what the parties meant at the time the contract is formed; jury to
consider “acts and statements of parties before any dispute arose”). The interpretation advocated
by the Association was not discovered by anyone who had involvement in the original
Declaration, but rather a third-party auditor looking for a loophole. The Association presents no
evidence that its recent interpretation comports with the drafters’ intent. In fact, as recently as
May 2015 the Association signed an estoppel certificate confirming that there were no claims for
unpaid assessments.

1. Compare Section 8.1.5 to Section 8.1.2 which applies to apartments. Section 8.1.2 reads:
“Apartment Units. One-half (1/2) Membership for each completed Apartment Unit owned by an
Owner.” (Emphasis added) If the Association’s interpretation was correct, instead of the last
sentence of 8.1.5 the Court would expect a companion statement to the effect that “Resort
Rooms. One (1) Membership for each completed resort room.”

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

06/17/2019

Docket Code 926
Form V000A
Page 4

The Court finds that the Resort is entitled to summary judgment as a matter of law. As a
result, there is no need to resolve the statute of limitations argument. Nevertheless, the Court
would reject the Association’s claim that the discovery rule applies. Here, the Association claims
that its interpretation of the contract is clear and unambiguous. If so, this interpretation would
have been clear to any member of the Association who read the contract. As noted in Elm
Retirement, the discovery rule does not permit a party to hide behind its ignorance when
reasonable investigation would have alerted it to the claim. Elm Retirement, 226 Ariz. at 290, ¶
12. Failing to read a contract for 14 years is not reasonable diligence. Plaintiff fails to make any
showing of reasonable diligence and plaintiff alleges no facts suggesting that the Resort covered
up or precluded the Association from discovering its cause of action. In fact, the Association’s
auditors reviewed the books and found no problems for more than a decade. Any lien claims
after June 22, 2015 would be barred. All other claims before June 22, 2012 would likewise be
barred.

IT IS ORDERED that the Association’s motion for partial judgment on the pleadings is
denied.

IT IS ORDERED that the Resort’s motion for judgment on the pleadings on Count 7 is
granted. This would seem to moot the Resort’s other counts.

Given this Court’s ruling, it is unclear what additional disputes remain between the
parties. The Court suspects that it should make a ruling on the inevitable application for
attorneys’ fees and costs and then render a final judgment under Rule 54(c). As a result, the
Court offers two options.

IT IS FURTHER ORDERED that, within ten days of the filed date of this order, the
Resort is to do either (not both) of the following: 1) submit a report describing any issues
remaining to be litigated; or 2) submit a proposed form of final judgment containing Rule 54(c)
language and any application for attorneys’ fees and costs supported by an appropriate China
Doll affidavit.

Clerk of the Superior Court

*** Electronically Filed ***

07/16/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

07/15/2019

Docket Code 016
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
C. Mai

Deputy

DESERT RIDGE COMMUNITY ASSOCIATION JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
MICHAEL J PLATI
JUDGE BRODMAN

MINUTE ENTRY

The Court reviewed the Emergency Motion for Additional Time. The Motion is granted.
Plaintiff has until July 22, 2019 to respond to the Application for Attorneys’ Fees.

Clerk of the Superior Court

*** Electronically Filed ***

08/14/2019 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

08/12/2019

Docket Code 019
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATION JEFFREY D GROSS

v.

B R E THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
STEVEN MARTIN AARON

J GARY LINDER
MICHAEL J PLATI

RULING ON APPLICATION FOR ATTORNEYS’ FEES AND COSTS

The Court reviewed BRE Thunder Desert Ridge Property Owner LLC’s (BRE’s)
application for attorneys’ fees and costs, the response and reply.

The Court finds that the briefing submitted on these issues is sufficient and that oral
argument would not add to the Court’s consideration of the issues presented. Accordingly, oral
argument is waived pursuant to Ariz. R. Civ. P. Rule 7.1(c)(2) to expedite the business of this
Court. The Court issues the following ruling.

BRE seeks $707,673.37 in attorneys’ fees and $1,748.02 in costs.

I. INTRODUCTION

On June 17, 2019, this Court granted BRE’s motion for judgment on the pleadings and
denied Desert Ridge Community Association’s (Association) cross-motion. As noted in the

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

08/12/2019

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ruling, “this case involves interpretation of a contract provision that both parties claim is
unambiguous.”

The instant dispute arises out of a contract and BRE may recover its attorneys’ fees as the
successful party under A.R.S. § 12-341.01(A).

II. ANALYSIS OF WARNER FACTORS

Considering all relevant factors, an award of attorneys’ fees is appropriate. The Court
makes the following findings as to relevant factors. Associated Indemnity Corp. v. Warner, 143
Ariz. 567 (1985).

1. Whether the unsuccessful party’s claim or defense was meritorious. The Association
was wholly unsuccessful in this litigation. BRE has been successful in demonstrating that its
interpretation of the contract was correct and has defeated a claim the Association asserted was
worth millions of dollars.

2. Whether the litigation could have been avoided or settled and whether the successful
party’s efforts were completely superfluous in achieving the results. A.R.S. § 12-341.01(A)
provides that the Court may consider a “written settlement offer” that is equal to or more
favorable than the final judgment. Here, there is no suggestion that the Association made a
settlement offer that is more favorable to BRE than the final judgment. BRE’s litigation efforts
were therefore necessary to achieve the result, especially the declaration interpreting the contract.
This factor strongly cuts in favor of an award of fees to BRE.

3. Whether a fee award would be an extreme hardship. The Court was not persuaded that
a fee award would be an “extreme” hardship to the Association. From BRE’s standpoint, this
was a case involving millions of dollars. The Association has the financial means to pay an
award of fees. But even if there was some evidence of hardship, the hardship is outweighed by
other factors. The Association decided to aggressively engage in multimillion dollar litigation
against BRE in the face of a Declaration which, in the Court’s mind, contradicts the
Association’s position. The Association took a risk, lost, and should bear the consequences of
this litigation decision.

4. Whether the successful party prevailed with respect to all of the relief sought. BRE
prevailed with respect to all relief sought.

5. Whether the matter presented a novel legal question. The case was about interpretation
of a disputed contract provision. Nothing about the nature of the question presented cuts against
an award of attorneys’ fees.

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6. Whether the award would discourage other parties with tenable claims or defenses
from litigating them. The Court does not believe an award would discourage parties with tenable
claims from pursuing them. On the other hand, any party that undertakes litigation pursuant to
rights granted under a declaration should be aware that, if it loses, it will be subject to attorneys’
fees.

Thus, the Warner factors cut in favor of an award of fees to BRE. Having determined that
a fee award is appropriate, the question is the amount.

A trial court may, of course, award a party some but not all of its requested fees. Lee v.
IMG Inv. Mgt., LLC, 240 Ariz. 158, 161, ¶ 13 (App. 2016). In addition, unsuccessful parties
should not be required to pay for tasks that take an unreasonable amount of time, nor should they
be required to pay for unnecessary or unproductive tasks. Hawk v. P.C.Vill. Ass’n, Inc., 233 Ariz.
94, 100, ¶ 22 (App. 2013); In re Guardianship of Sleeth, 226 Ariz. 171, 176, ¶ 25 (App. 2010).

The Court expresses surprise at the magnitude of the fee request. The case was resolved
by a cross motion to interpret a single paragraph (§ 8.1.5) in a Declaration. The parties agreed
that the provision was unambiguous. No material facts were in dispute. No depositions were
taken. Neither party submitted expert reports. Discovery in the case would be minimal.1 BRE’s
disclosure statement was adequate but unremarkable. The motion for judgment on the pleadings
was not complicated and did not require specialized expertise. In fact, BRE’s motion was
foreshadowed by its disclosure statement.

Arguments presented by the Association confirm that the fee request is excessively large.
The Association’s legal fees were only $75,952. BRE did not prevail on a discovery dispute.

1. In a November 12, 2018 letter from Susanna Geltman of Simpson Thacher (attached to Gross
Affidavit), Ms. Geltman characterizes the case as a “Tier 2” case and makes the following
statement accurately outlining the limited scope of the case:

This is a simple case about the proper interpretation of a contract term, and the
Association’s sudden decision to change its own longstanding interpretation of that term.
With respect to both the Association’s claim and BRE’s counterclaim, there are limited
areas of relevant discovery: information about the understanding of Section 8.1.5 of the
Declaration when it was drafted; the Association’s course of performance under the
Declaration, including the Association’s provision of the Estoppel Certificate to BRE;
and the Association’s sudden altered interpretation of the Declaration, which BRE alleges
is asserted in bad faith.

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BRE’s use of three law firms resulted in duplicative efforts. BRE submitted a counterclaim
which is being dismissed.

Nevertheless, BRE’s fees should not be limited to the amount charged by the
Association’s attorneys. First, the damages sought by the Association were significant and the
Association unreasonably sought retroactive damages for 14 years. Having made a decision to
bring a multimillion dollar claim, the Association could reasonably expect that BRE would spend
significant efforts to defend the claim. In other words, the Association took a big risk and lost. It
should bear the consequences of this decision. Moreover, some additional attorneys’ fees were
necessary because of the successful effort to have the title insurance company assume BRE’s
defense. Such efforts were reasonable and entirely appropriate.

Having reviewed dozens of motions and fee applications, the Court believes that
$707,673 is too high for what was accomplished here. The case was resolved with minimal
discovery based on a judicial interpretation of a contract provision. Although a party is free to
choose higher-priced out-of-state counsel to represent it in litigation, that party should not expect
this Arizona Court to order the other party to pay the extra costs caused by the sometimes
duplicative and expensive efforts of out-of-state counsel. This is especially true where, as here,
the legal issues presented were generic and not highly specialized like patent or antitrust
litigation.

The Court finds there is minimal block billing and some duplicative billings. There are
certain inefficiencies resulting from the use of multiple firms and out-of-state counsel. The
Court’s experience is that a fee award of $235,000 (one-third of the requested amount) is
consistent with fees requests in other similarly-litigated cases. The Court awards an additional
$5,000 for the preparation of the attorneys’ fees application.

IV. CONCLUSION

Taking into account the Warner factors and the equities of the situation, the Court awards
BRE its attorneys’ fees in the amount of $240,000 pursuant to A.R.S. § 12-341.01(A). The Court
finds this amount to be a fair and reasonable amount for attorneys’ fees in this case.

BRE is awarded its costs in the amount of $1,748.02. The Court allows defendants their
subpoena costs and the costs of pro hac vice applications.

IT IS ORDERED that BRE is awarded $240,000 in reasonable attorneys’ fees, with said
amount accruing interest at the rate of 6.25% from the date of this Order.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

08/12/2019

Docket Code 019
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IT IS FURTHER ORDERED that BRE is awarded $1,748.02 in costs, with said
amount accruing interest at the rate of 6.25% from the date of this Order.

Chris DeRose, Clerk of Court

*** Electronically Filed ***

11/06/2018 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2018-009167

11/02/2018

Docket Code 017
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE ROGER E. BRODMAN
M. Corriveau

Deputy

DESERT RIDGE COMMUNITY ASSOCIATON
JEFFREY D GROSS

v.

BRE THUNDER DESERT RIDGE PROPERTY
OWNER L L C, et al.
BRIAN C LAKE

JUDGE BRODMAN
DOCKET-CIVIL-CCC
OFFICE OF PUBLIC DEFENSE
SERVICES-CCC

COUNSEL APPOINTED

The Court is in receipt of a Motion to Associate Counsel Pro Hac Vice, filed on October
30, 2018. Accordingly,

IT IS ORDERED that Susannah S. Geltman and Dean McGee shall be admitted pro hac
vice as counsel for defendant BRE Thunder Desert Ridge Property Owner LLC in this matter, all
in accordance with the formal written Order signed by the Court on November 2, 2018, and filed
(entered) by the Clerk on November 2, 2018.

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