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Maricopa County Superior Court Case CV2024-031553: public docket details, parties, minute entries, documents, and official source links for Safari Drive Condominium Association.

Case Number

CV2024-031553

County

Maricopa

Caption

Not captured

Filed

11/5/2024

Case Type

Civil

Judge

Herrod, Michael

Location

Downtown

Official Court Record

Official Court Record

Parties

Minute Entries

Clerk of the Superior Court

*** Electronically Filed ***

02/06/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

02/05/2025

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE MICHAEL J. HERROD
J. Lizardi

Deputy

OLEG BORTMAN
KIM ROBERT MAEROWITZ

v.

FIRST SERVICE RESIDENTIAL ARIZONA L L
C, et al.
ERIN E MCMANIS

JUDGE HERROD

ORAL ARGUMENT SET

The Court having reviewed Defendants’ Motion to Dismiss, filed January 13, 2025;
Plaintiff’s Response to Defendants’ Motion to Dismiss, filed January 17, 2025; and
Defendants’ Reply in Support of Defendants’ Motion to Dismiss, filed January 27, 2025,

IT IS ORDERED setting virtual Oral Argument on March 21, 2025 at 11:00 a.m.
(time allotted: 30 minutes) in this division.

Please join the courtroom from your computer, tablet or smartphone.
www.Tinyurl.com/jbazmc-cvj13 or enter it in the browser of your device

You can also dial in using your phone (audio only)
+1 917-781-4590
Phone Conference ID: 776 371 089#

More information regarding Court Connect can be found at:
https://superiorcourt.maricopa.gov/court-connect/

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

02/05/2025

Docket Code 094
Form V000A
Page 2

PLEASE NOTE: If a party files a pleading within 1 week of a scheduled event, the
party should also e-mail same to the Court’s Judicial Assistant and Courtroom Assistant. All
correspondence to this Division should be sent to [email protected].

Oral argument time generally will be divided equally between the plaintiffs’ side and
the defendants’ side, subject to modification when the positions of the parties are not aligned
or when equity otherwise requires.

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.

The Arizona Constitution requires the Arizona Commission on Judicial Performance
Review
to conduct performance evaluations of superior court judges. The Commission is asking for your
help to evaluate Maricopa County Superior Court judges currently undergoing performance
review. After your hearing, if the judge you are in front of is undergoing review, a survey will
either be given to you by court staff or will be emailed to you and you can take the survey online.
The survey is conducted by the Docking Institute of Public Affairs at Fort Hays State University
and is anonymous and confidential. Your participation in the review process is important! More
information on Judicial Performance Review can be found at www.azjudges.info.

La Constitución de Arizona exige que la Comisión de la Evaluación del Desempeño
Judicial
realice evaluaciones de desempeño de los jueces de los tribunales superiores. La comisión pide su
ayuda para evaluar a los jueces del Tribunal Superior del Condado de Maricopa a quienes
actualmente se les está evaluando su desempeño. Después de su audiencia, si el juez frente a usted
está siendo revisado, el personal de la corte le entregará una encuesta o se le enviará por correo
electrónico y usted puede realizar la encuesta en línea. La encuesta es realizada por el Docking
Institute of Public Affairs de la Fort Hays State University y se mantiene anónima y confidencial.
¡Su participación en el proceso de la evaluación es importante! Para obtener más información
sobre la evaluación del desempeño judicial, diríjase a www.azjudges.info.

Clerk of the Superior Court

*** Electronically Filed ***

03/20/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

03/19/2025

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE MICHAEL J. HERROD
J. Lizardi

Deputy

OLEG BORTMAN
KIM ROBERT MAEROWITZ

v.

FIRST SERVICE RESIDENTIAL ARIZONA L L
C, et al.
ERIN E MCMANIS

JUDGE HERROD

ORAL ARGUMENT SET

The Court having received Defendants’ two (2) Rule 26(D) Joint Statements of
Discovery Dispute, both filed March 17, 2025 and Rule 7.1(h) Good Faith Consultation
Certificate, filed March 17, 2025.

IT IS ORDERED setting virtual Oral Argument on March 21, 2025 at 11:00 a.m. in
this division. The two (2) Rule 26(D) Joint Statements of Discovery Dispute Shall be heard
simultaneously with Defendants’ Motion to Dismiss, filed January 13, 2025.

Please join the courtroom from your computer, tablet or smartphone.
www.Tinyurl.com/jbazmc-cvj13 or enter it in the browser of your device

You can also dial in using your phone (audio only)
+1 917-781-4590
Phone Conference ID: 776 371 089#

More information regarding Court Connect can be found at:
https://superiorcourt.maricopa.gov/court-connect/

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

03/19/2025

Docket Code 094
Form V000A
Page 2

PLEASE NOTE: If a party files a pleading within 1 week of a scheduled event, the
party should also e-mail same to the Court’s Judicial Assistant and Courtroom Assistant. All
correspondence to this Division should be sent to [email protected].

Oral argument time generally will be divided equally between the plaintiffs’ side and
the defendants’ side, subject to modification when the positions of the parties are not aligned
or when equity otherwise requires.

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.

The Arizona Constitution requires the Arizona Commission on Judicial Performance
Review to conduct performance evaluations of superior court judges. The Commission is
asking for your help to evaluate Maricopa County Superior Court judges currently undergoing
performance review. After your hearing, if the judge you are in front of is undergoing review,
a survey will either be given to you by court staff or will be emailed to you and you can take
the survey online. The survey is conducted by the Docking Institute of Public Affairs at Fort
Hays State University and is anonymous and confidential. Your participation in the review
process is important! More information on Judicial Performance Review can be found at
azjudges.info.

La Constitución de Arizona exige que la Comisión de la Evaluación del Desempeño
Judicial realice evaluaciones de desempeño de los jueces de los tribunales superiores. La
comisión pide su ayuda para evaluar a los jueces del Tribunal Superior del Condado de
Maricopa a quienes actualmente se les está evaluando su desempeño. Después de su audiencia,
si el juez frente a usted está siendo revisado, el personal de la corte le entregará una encuesta
o se le enviará por correo electrónico y usted puede realizar la encuesta en línea. La encuesta
es realizada por el Docking Institute of Public Affairs de la Fort Hays State University y se
mantiene anónima y confidencial. ¡Su participación en el proceso de la evaluación es
importante! Para obtener más información sobre la evaluación del desempeño judicial, diríjase
a azjudges.info.

Clerk of the Superior Court

*** Electronically Filed ***

03/25/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

03/21/2025

Docket Code 020
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE MICHAEL J. HERROD
T. Williams/C. Hall

Deputy

OLEG BORTMAN
KIM ROBERT MAEROWITZ

v.

FIRST SERVICE RESIDENTIAL ARIZONA L L
C, et al.
ERIN E MCMANIS

JUDGE HERROD

MINUTE ENTRY

East Court Building – Courtroom 911

11:01 a.m. This is the time set for an Oral Argument regarding Defendants’ two (2) Rule
26(D) Joint Statements of Discovery Dispute and Defendants’ Motion to Dismiss, filed January
13, 2025. Plaintiff, Oleg Bortman, is represented by counsel, Kim Robert Maerowitz.
Defendants, First Service Residential Arizona, LLC, Safari Drive Condominium Association,
Suzanne Hawk, Dirk Claussen, Michael Brady, Charlie Ray, Fritz Beesemeyer, and Brenda
Vogel are represented by counsel, Erin E. McManis and co-counsel Josh Bolen.

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

Arguments are presented.

IT IS ORDERED taking Defendants’ Motion to Dismiss under advisement.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

03/21/2025

Docket Code 020
Form V000A
Page 2

IT IS FURTHER ORDERED that the time for responses to Discovery that has been
propounded by the Plaintiff will start on the date of the Court’s ruling on the Motion to Dismiss,
if the motion to dismiss is granted.

IT IS FURTHER ORDERED that Plaintiff may not serve Defendant by email because
there was no agreement to receive service by email. The sole exception is the service of
discovery that has already occurred by e-mail.

11:50 a.m. Matter Concludes.

Clerk of the Superior Court

*** Electronically Filed ***

03/26/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

03/25/2025

Docket Code 926
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE MICHAEL J. HERROD
J. Eaton

Deputy

OLEG BORTMAN
KIM ROBERT MAEROWITZ

v.

FIRST SERVICE RESIDENTIAL ARIZONA L L
C
ERIN E MCMANIS

JUDGE HERROD

UNDER ADVISEMENT RULING

The Court has under advisement, following oral argument on March 21, 2025, Defendants’
January 13, 2025 Motion to Dismiss; Plaintiffs’ January 17, 2025 Response; and Defendants’
January 27, 2025 Reply.
Defendants seek dismissal of Counts One and Two which are counts alleging
Defamation/Libel and Interference with Prospective Economic Advantage based on lack of
standing. Defendants also seek dismissal of Counts One and Two because the alleged statements
cannot be defamatory.
Defendants seek dismissal of Counts Three and Four which are breach of contract and
breach of the implied covenant of good faith and fair dealing because Plaintiffs are not parties to
the alleged contract.
Defendants seek dismissal of Count Five seeking injunctive relief because there are no
actions to enjoin.
Finally, Defendants seek dismissal as to the individual board members, the management
company, and the general manager of the management company because they are inappropriate
parties.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

03/25/2025

Docket Code 926
Form V000A
Page 2

Background Factual Allegations
For purposes of a motion to dismiss, the Court considers all well-plead facts in the First
Amended Complaint (FAC) to be true. Plaintiffs are Oleg Bortman and JIMBO, LLC. Mr.
Bortman is the managing member of JIMBO. JIMBO owns a first-floor business condominium in
the Safari Drive Condominium complex. Mr. Bortman operates a real estate brokerage business
called The Brokery out of the condominium owned by JIMBO. The Brokery is not a party to the
lawsuit, and the Court has no information concerning the structure or ownership of The Brokery.
The condominium complex has an association called Safari Drive Condominium
Association. The Association is a non-profit corporation run by a board. Defendants Vogel,
Claussen, Beesmeyer, Brady and Ray are members of the Board of Directors of Safari. First
Service Residential Arizona, LLC (FRS) is the property manager, and Suzanne Hawk is the general
manager of FRS.
Bortman set up The Brokery office on the premises, in part, with the expectation that The
Brokery would be in a uniquely favorable position to market units in the complex. The complex
contains both residential and commercial units.
Counts One and Two
Count One of the FAC alleges defamation: libel and slander against all Defendants based
on the September 27 Newsletter published by the Association. The Newsletter contained a simple
list of recent sales in the complex. There were no comments about any of the sales. One of the
sales shows the listing agent as Ronn Wadsworth of The Brokery. Based on information and belief,
Plaintiffs allege that Defendants (unspecified) cherry-picked certain sales for a certain time-period,
so that the only sale listed for The Brokery was for an under-market sale.
Count Two of the FAC alleges interference with prospective economic advantage. This
count is also based on the contents of the September 27 Newsletter. Count Two also relies on the
factual allegations in paragraph 13. Paragraph 13 alleges that Defendants (unidentified) listed two
units with another broker; alleges the publication of the September 27 Newsletter; alleges that
Defendants refused to allow The Brokery to put electronic monitors near windows as a promotional
tool; alleges that The Brokery was not allowed to do an open air event in the common area although
others had been allowed to do so; and alleges that during a November 12, 2024 open session of
the Safari Board, the Board announced that Bortman had filed a frivolous and meritless lawsuit
against Safari and the Safari Board.
The Plaintiffs are Bortman and JIMBO, LLC, but the party that was allegedly damaged is
a business called The Brokery. The FAC does not explain the relationship between The Brokery
and Plaintiffs. The Court agrees that, even if true, the allegations in Count One apply to The
Brokery, not to Bortman or JIMBO. On the facts alleged, Bortman and JIMBO lack standing to
sue on behalf of The Brokery. The same is true of Count Two.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

03/25/2025

Docket Code 926
Form V000A
Page 3

Defendants also argue that the factual allegations supporting Counts One and Two cannot
be defamatory because the allegations are true. Plaintiffs argue that the newsletter sales list is not
true because it is not a complete listing of sales and is cherry-picked to make The Brokery look
weaker.
The Court finds that the facts set forth in the September 27 Newsletter were true, even if
not complete. Therefore, those facts cannot be defamatory.
Plaintiff argues that the statement that the lawsuit is frivolous and meritless is defamatory.
Plaintiff does not name who made the statement, and attributes the statement to the entire board.
The statement is not a statement of fact that can be true or false but is a statement of opinion. Such
a statement is not defamatory.
While statements cast as subjective beliefs are generally insulated from defamation
liability, “statements of opinion are actionable when they imply a false assertion of fact.”
Turner, 174 Ariz. at 208, 848 P.2d at 293 (internal quotation omitted and emphasis added).
In other words, if a statement of opinion may be proven false, “it is actionable as
defamatory,” Dube v. Likins, 216 Ariz. 406, 419, ¶ 46, 167 P.3d 93, 106 (App. 2007), but a
statement is not actionable if it does not present “the kind of empirical question a fact-
finder can resolve,” Yetman, 168 Ariz. at 81, 811 P.2d at 333.
Takieh v. O'Meara, 252 Ariz. 51, 57, 497 P.3d 1000, 1006 (Ct. App. 2021).
The statement that the lawsuit is frivolous and without merit is just such a statement of
opinion. It does not imply a false assertion of fact. The statement is a subjective belief of the
speaker, not an objective statement of fact that is demonstrably false.
The Court finds that the statement that the lawsuit was frivolous and without merit is not
defamatory.
Counts Three and Four
Count Three alleges breach of contract by the Association and the Safari Board. Count Four
alleges breach of the implied covenant of good faith and fair dealing by the Association and the
Safari Board. The alleged contract is the Board Members Code of Conduct adopted by the Safari
Board. It is attached to the FAC as Exhibit 1 and sets forth principles and guidelines to constitute
a code of conduct for Board members. Plaintiff alleges that the code of conduct is signed by each
board member upon becoming a member of the board.
Although some parts of the code of conduct applies to behavior towards association
members, members of the association are not overtly named as third-party beneficiaries to the code
of conduct.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

03/25/2025

Docket Code 926
Form V000A
Page 4

The Court finds that the Code of Conduct is not a contract based upon which an individual
member of the association can bring a breach of contract action or allege a breach of the implied
covenant of good faith and fair dealing.
Count Five
Count Five seeks injunctive relief to prevent Defendants from disparaging Bortman’s real
estate brokerage business and from taking any action to unreasonably interfere with that business.
The relief sought in Count Five is not something that injunctive relief can solve. The Court cannot
order the Board or the Association “not to say that.” Defamation cases allow for damage awards
to deter conduct. Injunctive relief is not appropriate in this type of case.
Individual Directors, the Management Company, and the General Manager of the
Management Company
The FAC lists individual members of the Board of Directors as defendants but makes no
individual allegations as to any of them. Likewise the FAC names the management company and
the general manager of the management company, Suzanne Hawk, but lists no individual
allegations as to the management company or Ms. Hawk.
The directors are directors of a non-profit corporation. Unless specific actions of specific
directors are identified, any action taken by the directors as a group are the actions of the
association and there is no individual liability.
The Court finds that the individual directors cannot be held individually liable for the
actions alleged in the FAC.
The management company and Ms. Hawk are agents of the Board and the Association.
They cannot be liable for alleged actions by the Board or the Association, unless the management
company or Ms. Hawk committed specific acts, outside of board authority, that damaged Plaintiffs.
No such acts are alleged.
The Court finds that the management company and Suzanne Hawk are not appropriate
parties.
IT IS ORDERED dismissing the Complaint without prejudice.
IT IS FURTHER ORDERED that Defendants submit a proposed form of judgment and
an Application and Affidavit for attorneys’ fees.

Clerk of the Superior Court

*** Electronically Filed ***

05/01/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

04/30/2025

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE MICHAEL J. HERROD
J. Zinkowich

Deputy

OLEG BORTMAN
KIM ROBERT MAEROWITZ

v.

FIRST SERVICE RESIDENTIAL ARIZONA L L
C, et al.
ERIN E MCMANIS

JUDGE HERROD

MINUTE ENTRY

The Court has received and reviewed the Defendants’ Application for Attorneys’ Fees
and Costs, filed April 8, 2025. Accordingly,

The Court finds that although the matter was plead partially under a breach of contract
theory, the matter did not arise out of contract. The Court will deny attorneys’ fees under A.R.S.
12-341.01.

IT IS ORDERED setting Oral Argument on the issue of an award of attorneys’ fees
under A.R.S. 12-349 on 6/13/2025 at 10:45 a.m.

Please join the courtroom from your computer, tablet or smartphone.
www.Tinyurl.com/jbazmc-cvj13 or enter it in the browser of your device

You can also dial in using your phone (audio only)
+1 917-781-4590
Phone Conference ID: 776 371 089#

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

04/30/2025

Docket Code 094
Form V000A
Page 2

More information regarding Court Connect can be found at:
https://superiorcourt.maricopa.gov/court-connect/

PLEASE NOTE: If a party files a pleading within 1 week of a scheduled event,
the party should also e-mail same to the Court’s Judicial Assistant and Courtroom Assistant.
All correspondence to this Division should be sent to [email protected] .

Oral argument time generally will be divided equally between the plaintiffs’ side and
the defendants’ side, subject to modification when the positions of the parties are not aligned
or when equity otherwise requires.

PLEASE 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 ***

06/17/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

06/13/2025

Docket Code 020
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE MICHAEL J. HERROD
A. Villela

Deputy

OLEG BORTMAN
KIM ROBERT MAEROWITZ

v.

FIRST SERVICE RESIDENTIAL ARIZONA L L
C, et al.
ERIN E MCMANIS

JUDGE HERROD

MINUTE ENTRY

East Court Building – Courtroom 911

10:45 a.m. This is the time set for a virtual Oral Argument regarding Defendants’
Application for Attorneys’ Fees and Costs, filed April 8, 2025. Plaintiff, Oleg Bortman, is
represented by Counsel, Kim Robert Maerowitz. Defendants, First Service Residential Arizona,
LLC, Safari Drive Condominium Association, Suzanne Hawk, Dirk Claussen, Michael Brady,
Charlie Ray, Fritz Beesmeyer, and Brenda Vogel, are represented by Counsel, Erin E. McManis,
and Co-Counsel, Josh M. Bolen.

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

Arguments are presented.

For the reasons stated on the record,

IT IS ORDERED taking this matter under advisement.

11:03 a.m. Matter concludes.

Clerk of the Superior Court

*** Electronically Filed ***

06/18/2025 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

06/16/2025

Docket Code 926
Form V000A
Page 1

CLERK OF THE COURT
HONORABLE MICHAEL J. HERROD
L. Gilbert

Deputy

OLEG BORTMAN
KIM ROBERT MAEROWITZ

v.

FIRST SERVICE RESIDENTIAL ARIZONA L L
C, et al.
ERIN E MCMANIS

JUDGE HERROD

UNDER ADVISEMENT RULING

The Court has before it, following oral argument on 6/13/2025, Defendant’s 4/8/2025
Application for Attorneys’ Fees; Plaintiffs’ 4/9/2025 Objection; and Defendant’s 4/15/2025
Response.

The Court also has before it Defendants’ 4/8/2025 Notice of Lodging Judgment;
Defendants’ 4/8/2025 Statement of Costs; and Plaintiffs’ 4/9/2025 Objections to Defendants’
Proposed Form of Judgment.

1. Factual Background
Plaintiffs’ First Amended Complaint made claims for defamation, interference with
prospective economic advantage, breach of contract, breach of covenant of good faith and fair
dealing, and injunctive relief.

The relationship between the parties arises out of the Safari Drive Condominium
Association, the operation of the Association, the election of board members and officers of the

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

06/16/2025

Docket Code 926
Form V000A
Page 2

association, and the conduct of members and board members. The condominium association is
governed by Covenants, Conditions, and Restrictions, as well as rules and regulations.

Plaintiffs are Oleg Bortman and Jimbo, LLC. Jimbo owns a commercial condominium in
the property. Bortman is the designated representative for Jimbo. The commercial condominium
is occupied by The Brokery which is a real estate brokerage company.

The defamation claim was for libel and slander alleged to have been done by the board,
board members, and the association manager(s) that were allegedly made in an Association
newsletter.

There were also allegations of oral defamatory comments by a board member. The
interference with prospective economic advantage claim involved the same events as the
defamation claims.

The breach of contract claim alleged breaches of the Board Members Code of Conduct
based on the same statements in the defamation count and the intentional interference count.

The breach of covenant of good faith and fair dealing claim arose out of the same claimed
defamatory statements.

The claim for injunctive relief sought to prevent disparaging comments about Plaintiffs.
The only contact mentioned in the First Amended Complaint is the Board Members Code of
Conduct.

The Court granted a motion to dismiss by Defendants. As part of that Order, the Court
found that the Board Members Code of Conduct was not a contract that applied to Plaintiffs.

2. Attorneys’ Fees Claim
Defendants are seeking attorneys’ fees under A.R.S. § 12-341.01 and A.R.S. § 12-349.

A. § 12-341.01
Defendants allege that the claims arose out of contract because the parties are bound
together by the CC&Rs that govern the Association. None of the claims involved were to enforce
the CC&Rs or violations of the CC&Rs. The only contract mentioned in the First Amended
Complaint is the Board Members Code of Conduct.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

06/16/2025

Docket Code 926
Form V000A
Page 3

Plaintiff argues that the First Amended Complaint sounded primarily in tort. Plaintiff also
argues that the claim for breach of the Board Members Code of Conduct is not intertwined with
the tort claims.

Even though the Court found that the Board Members Code of Conduct did not apply, the
Court may still award attorneys’ fees on the basis of A.R.S. § 12-341.01. However, the award of
attorneys’ fees is discretionary.

Even if appellee had taken the position that there was no contract and had prevailed on
that basis, it still would have been entitled to attorney's fees under A.R.S. § 12–341.01.
The law in Arizona is contrary to appellant's position that the court must find as a matter
of law that there was a contract between the parties before fees can be awarded.
Mullins v. S. Pac. Transp. Co., 174 Ariz. 540, 543, 851 P.2d 839, 842 (Ct. App. 1992).
Under the Shirley (Shirley v. Hartford Accident & Indemnity Company, 125 Ariz. 70, 607
P.2d 389, 390 (1979)) and Lacer (Lacer v. Navajo County, 141 Ariz. 392, 687 P.2d 400
(App.1984)) cases, when a contract is alleged by a plaintiff and the defendant
successfully proves that there was no contract, the action is still one arising out of
contract under A.R.S. § 12–341.01, entitling the defendant to attorney fees. We are
therefore of the opinion that we erred in holding that the action arose solely out of a tort
claim and that A.R.S. § 12–341.01(A), which allows attorney fees to a successful party in
a claim arising out of contract, did not apply. (Case citations added).
Colberg v. Rellinger, 160 Ariz. 42, 51, 770 P.2d 346, 355 (Ct. App. 1988).

In Sparks v. Republic Nat. Life Ins. Co., the Arizona Supreme Court addressed the award
of attorneys’ fees in cases involving both tort and contract claims.

First, defendants argue the award was improper because the tort claims of bad faith and
misrepresentation under the Insurance Code dominated the case, and § 12-341.01 allows
recovery of attorney's fees only in contract cases. In support, defendants rely heavily on
Amphitheater Public Schools v. Eastman, 117 Ariz. 559, 574 P.2d 47 (App.1977).
Plaintiffs maintain that the tort claims were actions “arising out of a contract” and
therefore, the statute applies.

The language employed in subsection (A) makes clear that attorney's fees are recoverable
only in cases “arising out of a contract.” The language is broad enough, however, that it
could be argued, as plaintiffs do here, that attorney's fees may be recoverable in tort cases
which find their basis in contract. Such an argument was rejected in Amphitheater, supra.
In that case, the plaintiff had left her car with an instructor in an auto mechanics program
conducted by the defendant school for an assessment of needed repairs. The instructor
asked a student to notify the plaintiff's son that he should pick up his mother's car that

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

06/16/2025

Docket Code 926
Form V000A
Page 4

day. The instructor stated in front of fifteen other students that he would leave the keys in
the ignition. The car was later stolen. Plaintiff, the successful party, sought attorney's fees
under § 12-341.01 on the theory that her claim arose out of a contract of bailment. The
Court of Appeals, Division Two, responded to this argument by stating:
“Her complaint contains one count in negligence and another alleging breach of the
bailment contract in the negligent failure to care for her car. Regardless of the label on
the second count, the essence of her claim is negligence, and the statute has no
application.”

Id. at 560, 574 P.2d at 48.

The continued validity of this holding was cast in serious doubt by our decision in Wenk
v. Horizon Moving & Storage Co., 131 Ariz. 131, 639 P.2d 321 (1982). In Wenk,
plaintiffs brought an action against a moving and storage company to recover the value of
some lost items of furniture. Plaintiffs alleged both a breach of a bailment contract and
negligence in the loss of their property. The trial court awarded damages in favor of
plaintiffs based upon conclusions of law that there was 1) a common-law bailment and 2)
the moving company had failed to exercise ordinary and reasonable care in handling the
items. Plaintiffs' request for attorney's fees pursuant to § 12-341.01 was denied and
plaintiffs appealed the denial of attorney's fees. In effect, we held that attorney's fees
could be awarded based upon the common-law bailment.

It is apparent from the Wenk case that attorney's fees may be awarded pursuant to s 12-
341.01(A) based upon facts which show a breach of contract, the breach of which may
also constitute a tort. The fact that the two legal theories are intertwined does not
preclude recovery of attorney's fees under § 12-341.01(A) as long as the cause of action
in tort could not exist but for the breach of the contract..

Sparks v. Republic Nat. Life Ins. Co., 132 Ariz. 529, 542–43, 647 P.2d 1127, 1140–41
(1982).
In this instance, the alleged breach of contract is not a breach which could also constitute a tort.
While the statements alleged could have been tortious, the tort of defamation has nothing to do
with the Board Members Code of Conduct. Therefore the tort action and the contract action were
not intertwined. Either of them could have stood independently.

The Court agrees with Plaintiffs that this case sounded primarily in tort.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2024-031553

06/16/2025

Docket Code 926
Form V000A
Page 5

B. § 12-349
Defendants also seek recovery of attorneys’ fees under § 12-349. Section 12-349(A)
provides:

A. Except as otherwise provided by and not inconsistent with another statute, in any civil
action commenced or appealed in a court of record in this state, the court shall assess
reasonable attorney fees, expenses and, at the court's discretion, double damages of not
to exceed five thousand dollars against an attorney or party, including this state and
political subdivisions of this state, if the attorney or party does any of the following:

1. Brings or defends a claim without substantial justification.
2. Brings or defends a claim solely or primarily for delay or harassment.
3. Unreasonably expands or delays the proceeding.
4. Engages in abuse of discovery.

Defendants argue that Plaintiff engaged in abuse of discovery by trying to propound
discovery while the motion to dismiss was pending, and by bringing the case after Defendants
expressed the opinion, before the case was filed, that there was no cognizable claim.
Plaintiffs argue that there are no facts in the Declaration to support an award of attorneys’ fees
under § 12-349.

Even if true, sanctions are not appropriate because although the Court dismissed the case
on a motion to dismiss, the claims were arguable until the parties fully developed the claims in
the proceedings on the motion to dismiss.

IT IS ORDERED denying the Application for Attorneys’ Fees.

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