Legal Malpractice & Attorneys’ Fees | A.R.S. § 12-341.01 | CV2019-094307
In this Maricopa County Superior Court case, Sycamore Hills Estates Homeowners Association sued its former law firm, Jones Skelton & Hochuli, and one of the firm’s attorneys over the settlement of an earlier homeowner lawsuit challenging association spending on a property improvement project. The court held that an attorney’s alleged failure to follow a board settlement committee’s oral directions is negligent performance — a tort — not the breach of separate oral “mini-contracts,” granted the firm summary judgment on the contract count, found the association had waived privilege over its dealings with the successor firm it hired to finish the settlement, and ruled the firm was entitled to attorneys’ fees. The remaining tort claims settled and the case was dismissed with prejudice.
Last updated July 2, 2026. Case: Sycamore Hills Estates Homeowners Association, Inc. v. Jones Skelton & Hochuli, P.L.C., et al., Maricopa County Superior Court No. CV2019-094307.
Scope note: This page covers Sycamore Hills Estates Homeowners Association, Inc. v. Jones Skelton & Hochuli, P.L.C., et al. (Maricopa County Superior Court No. CV2019-094307) as a public Arizona superior-court HOA case guide. It is built from the court’s own filed minute entries, including the December 11, 2019 under-advisement ruling on the breach-of-contract count and the April 9, 2020 under-advisement ruling on privilege and attorneys’ fees; the complete set of collected minute entries is available in the source-document index below. Currency caveat: the parties settled, and the last collected minute entry shows the case was dismissed with prejudice as to all parties and claims on June 30, 2020 — the settlement terms and any final fee amount do not appear in the minute entries. Superior-court rulings bind only the parties and are not precedent. This page is educational and is not legal advice.
The takeaway
The superior court granted Jones Skelton & Hochuli summary judgment on the association’s breach-of-contract count, holding under Keonjian v. Olcott that a professional-malpractice claim generally sounds in tort: an attorney’s alleged failure to follow a client’s oral directions — here, directions from the settlement committee of the HOA’s board — is negligent performance of the retainer, not the nonperformance of a specific promise, and does not create separate oral contracts. Because the association had sued on a contract the court found did not exist, the court ruled the firm was entitled to apply for attorneys’ fees under A.R.S. § 12-341.01. The court also held that by filing the malpractice suit the association waived attorney-client privilege over its communications with the successor law firm it hired to finish the settlement. The remaining tort claims were never adjudicated: the parties settled and the case was dismissed with prejudice on June 30, 2020.
Case Participants
Petitioner Side
- Sycamore Hills Estates Homeowners Association, Inc. (Plaintiff)
Homeowners association that retained Jones Skelton & Hochuli to represent it in a prior Pima County lawsuit brought by a homeowner over allegedly wrongful or unauthorized spending of association funds, then sued the firm over its handling of that dispute’s settlement. - Mark E. Chadwick (Counsel)
Counsel for the association, appearing at the December 2019 and March 2020 oral arguments.
Respondent Side
- Jones Skelton & Hochuli, P.L.C. (Defendant)
Phoenix law firm that represented the association in the underlying homeowner dispute; won summary judgment on the breach-of-contract count and a ruling that a fee award in its favor was appropriate. - Diana J. Elston (Defendant)
Jones Skelton & Hochuli attorney through whom, per the court’s April 2020 ruling, the firm represented the association in negotiating the settlement of the underlying homeowner dispute. - Donald Wilson Jr. (Counsel)
Counsel of record for defendants Jones Skelton & Hochuli and Diana Elston throughout the collected minute entries. - Jessica Kokal (Counsel)
Counsel appearing for the defendants at the December 10, 2019 and March 3, 2020 oral arguments. - Danielle Chronister (Counsel)
Co-counsel appearing for the defendants at the March 3, 2020 oral argument.
Neutral Parties
- David J. Palmer (Judge)
Maricopa County Superior Court judge who issued the December 2019 and April 2020 under-advisement rulings and signed the June 30, 2020 dismissal.
What happened
The dispute grew out of an earlier lawsuit against the association itself. A homeowner in the Sycamore Hills community sued the association in Pima County Superior Court (Zablotny v. Sycamore Hills Estates Homeowner’s Association, No. C20154533), alleging the wrongful and/or unauthorized expenditure of association funds on a property improvement project. The association retained the Phoenix law firm Jones Skelton & Hochuli — through one of its attorneys, Diana Elston — to represent it, including in negotiating a settlement of that dispute. Before the settlement was final, the association brought in a Tucson firm, Goldschmidt Shupe, which took over the final stages of negotiations and completed the settlement on or about March 13, 2017.
Dissatisfied with the settlement, the association sued Jones Skelton & Hochuli in Pima County Superior Court on November 27, 2018 (No. C20185762); venue was changed to Maricopa County Superior Court on or about July 12, 2019, where the case became CV2019-094307. The complaint pleaded three counts: negligence/legal malpractice, breach of fiduciary duty, and — against the firm only — breach of contract. The association alleged the firm entered into a settlement agreement without appropriate approval from the association’s board of directors and failed to abide by “oral directions” given by board members, arguing that those oral directions formed a series of “mini-contracts” separate from the written retainer agreement.
The firm moved for summary judgment on the contract count on July 24, 2019. After briefing and a December 10, 2019 oral argument, Judge David J. Palmer issued an under-advisement ruling on December 11, 2019 granting the motion. Relying on Keonjian v. Olcott and Collins v. Miller & Miller, Ltd., the court explained that claims for professional malpractice are generally tort claims, and that the distinction is between nonfeasance and malfeasance: carrying out a task negligently does not change the gravamen of the action from tort to contract. The court was unpersuaded that oral directions from the settlement committee of the association’s board created a new contract separate from the signed retainer agreement, found no genuine issues of material fact, and ordered the firm to submit a proposed form of judgment with Rule 54(b) language.
Two follow-on fights were argued together on March 3, 2020 and decided in an April 9, 2020 under-advisement ruling. The first was discovery: the firm — which had filed a notice naming Goldschmidt Shupe as a non-party at fault — subpoenaed the association’s communications with that successor firm, and the association objected on attorney-client privilege grounds, arguing the parties had agreed to limit discovery to November 29, 2016 through March 15, 2017. Applying the three-part waiver test from Elia v. Pifer, the court found that by filing the lawsuit the association put its Goldschmidt Shupe communications at issue, that those discussions were “clearly relevant and vital” to the malpractice claims, and that privilege was therefore waived as to any communications with Goldschmidt Shupe related to the underlying litigation, the settlement negotiations, or the settlement agreement. It ordered the association and Goldschmidt Shupe to comply with the firm’s second subpoena.
The second issue was attorneys’ fees. Both parties agreed the court had discretion under A.R.S. § 12-341.01 to award fees based on its resolution of the contract question. Citing Lacer v. Navajo County — “[a] party is entitled to an award of its attorney’s fees under A.R.S. §12-341.01 if judgment in its favor is based upon the absence of the contract sued upon by the adverse party” — the court found that an award of attorneys’ fees to be paid by Sycamore Hills to Jones Skelton was appropriate, and set a schedule for the firm’s fee application and the association’s response.
The case never reached trial on the remaining tort counts. The court had ordered a mandatory settlement conference in January 2020 (with the completion deadline later extended to October 30, 2020), and on June 10, 2020 the defendants filed a Notice of Settlement. The court vacated the pretrial conference, placed the matter on the dismissal calendar, and — after the parties filed a stipulation to dismiss on June 28, 2020 — dismissed the case with prejudice as to all parties and claims on June 30, 2020. The settlement terms and any final fee amount do not appear in the minute entries.
Procedural timeline
Complete uploaded source-document index
This index is generated from every public-facing source file currently present in assets/court_case_downloads/sycamore-hills-estates-homeowners-association-v-jones-skelton-hochuli/raw/: 12 PDFs. Files are ordered by the date/sequence embedded in the normalized filename; AI-generated review materials are labeled separately and should not be treated as court filings.
Oral Argument Set
Type: Court/source PDF
Uploaded source file in the case record; read it in sequence with the surrounding filings to follow the procedure.
Oral Argument Set
Type: Court/source PDF
Uploaded source file in the case record; read it in sequence with the surrounding filings to follow the procedure.
Minute Entry
Type: Court order/minute entry
Court or agency order; this is usually the document that tells readers what changed next.
Under Advisement Ruling
Type: Court order/minute entry
Under-advisement ruling granting Jones Skelton summary judgment on the aiding-and-abetting count.
Oral Argument Set
Type: Court/source PDF
Uploaded source file in the case record; read it in sequence with the surrounding filings to follow the procedure.
Minute Entry
Type: Court order/minute entry
Court or agency order; this is usually the document that tells readers what changed next.
Minute Entry
Type: Court order/minute entry
Court or agency order; this is usually the document that tells readers what changed next.
Minute Entry
Type: Court order/minute entry
Court or agency order; this is usually the document that tells readers what changed next.
Under Advisement Ruling
Type: Court order/minute entry
Court or agency order; this is usually the document that tells readers what changed next.
Minute Entry
Type: Court order/minute entry
Court or agency order; this is usually the document that tells readers what changed next.
Minute Entry
Type: Court order/minute entry
Court or agency order; this is usually the document that tells readers what changed next.
Minute Entry
Type: Court order/minute entry
Court or agency order; this is usually the document that tells readers what changed next.
FAQ
Why did a homeowners association sue its own law firm?
The association had been sued by one of its homeowners in Pima County over the allegedly wrongful or unauthorized expenditure of association funds on a property improvement project. Jones Skelton & Hochuli, through attorney Diana Elston, represented the association and negotiated a settlement of that dispute. The association claimed the firm was negligent, breached its fiduciary duty, and breached a contract — alleging the firm entered into the settlement agreement without appropriate board approval and failed to follow oral directions given by board members.
Why did the breach-of-contract claim fail?
Because Arizona case law treats claims for professional malpractice as tort claims unless there is a true failure to perform. Relying on Keonjian v. Olcott and Collins v. Miller & Miller, Ltd., the court explained that the distinction is between nonfeasance and malfeasance: performing a task negligently, even in violation of a client’s instructions, does not change the gravamen of the action from tort to contract. The court rejected the theory that oral directions from the settlement committee of the association’s board created a series of “mini-contracts” separate from the signed retainer agreement.
Why did the association face an attorneys’ fee award after losing the contract count?
A.R.S. § 12-341.01 gives courts discretion to award fees in actions arising out of contract, and both parties agreed the statute applied to the court’s resolution of the contract question. Citing Lacer v. Navajo County, the court noted that a party is entitled to fees under the statute when judgment in its favor is based on the absence of the very contract the other side sued upon. On that basis it found an award of attorneys’ fees to be paid by Sycamore Hills to Jones Skelton appropriate. The minute entries do not show a final fee amount — the case settled before one was entered.
Why did the association have to turn over communications with its new lawyers?
Under Elia v. Pifer, a party waives attorney-client privilege when it (1) affirmatively asserts the privilege after an affirmative act such as filing a lawsuit, (2) thereby puts the protected information at issue, and (3) applying the privilege would deny the opposing party information vital to its defense. The court found the association’s discussions with Goldschmidt Shupe — the successor firm hired to finish the very settlement the association claimed was botched — were clearly relevant and vital to the malpractice claims, so privilege was waived and the association and Goldschmidt Shupe were ordered to comply with the defendants’ subpoena.
How did the case end?
By settlement. The defendants filed a Notice of Settlement on June 10, 2020, the parties filed a stipulation to dismiss on June 28, 2020, and on June 30, 2020 the court dismissed the case with prejudice as to all parties and claims. The negligence and breach-of-fiduciary-duty counts were never adjudicated, and the settlement terms do not appear in the minute entries.
Is this decision binding on other Arizona HOA disputes?
No. Superior-court rulings bind only the parties to the case and are not precedent. The case is still useful reading for association boards: it shows how courts classify claims against former counsel as torts rather than contract claims, how suing on a contract the court finds absent can expose the plaintiff to a fee award under A.R.S. § 12-341.01, and how filing a malpractice suit can waive privilege over communications with successor counsel about the same matter.
Case Dossier
This generated dossier mirrors the structured data surfaced on the OAH/ADRE case pages. It is added from the curated court-case record and the custom page source package, while the hand-authored analysis below remains intact.
Case Summary
| Case ID / citation | CV2019-094307 (Maricopa County Superior Court) |
|---|---|
| Court / tribunal | Superior Court |
| Decision / key date | December 11, 2019 |
| Judge / panel | Hon. David J. Palmer |
| Parties | Sycamore Hills Estates Homeowners Association, Inc. (Plaintiff, homeowners association) v. Jones Skelton & Hochuli, P.L.C. (Defendant, Phoenix law firm) and Diana J. Elston (Defendant, attorney) |
| Governing law | |
| Topics | attorneys-feesboard-governanceprocedure |
| Outcome / holding | The superior court granted Jones Skelton & Hochuli summary judgment on the association’s breach-of-contract count, holding that an attorney’s alleged failure to follow a client’s oral directions — including directions from the settlement committee of the HOA’s board — is negligent performance sounding in tort, not the nonperformance of a specific promise required for a contract claim, and that the oral directions did not create contracts separate from the written retainer agreement. The court later held the association waived attorney-client privilege over its communications with successor counsel by filing the malpractice suit, and that the firm was entitled to an award of attorneys’ fees under A.R.S. § 12-341.01 because judgment in its favor rested on the absence of the contract sued upon. |
| Primary public source | View source opinion/order |
Parties, Court, and Research Coverage
| Uploaded source package | 12 PDFs |
|---|---|
| Step-by-step docket roadmap | 11 roadmap entries |
| Video overview | No video embed currently configured |
| Study / briefing material | 1 section |
| FAQ / homeowner questions | 6 questions |
| Curated download aliases | 1 download link |
Key Issues & Findings
A homeowner in the Sycamore Hills community sued the association in Pima County (Zablotny v. Sycamore Hills Estates Homeowner’s Association, No. C20154533) over allegedly wrongful or unauthorized spending of association funds on a property improvement project. The association retained the Phoenix firm Jones Skelton & Hochuli, through attorney Diana Elston, to represent it, then brought in the Tucson firm Goldschmidt Shupe to finish the settlement, completed on or about March 13, 2017. Unhappy with the result, the association sued Jones Skelton and Elston in November 2018 for negligence/legal malpractice, breach of fiduciary duty, and breach of contract, alleging the firm settled without appropriate board approval and ignored oral directions from board members; venue was transferred to Maricopa County in July 2019. In a December 11, 2019 under-advisement ruling the court granted the firm summary judgment on the contract count, holding under Keonjian v. Olcott that the claim sounded in tort. In an April 9, 2020 under-advisement ruling the court held the association had waived attorney-client privilege over its Goldschmidt Shupe communications by filing suit (Elia v. Pifer) and that a fee award to the firm under A.R.S. § 12-341.01 was appropriate. The parties then settled, and the case was dismissed with prejudice on June 30, 2020.
On the contract count, the court’s December 11, 2019 under-advisement ruling applied Keonjian v. Olcott, 216 Ariz. 563, 169 P.3d 927 (App. 2007), and Collins v. Miller & Miller, Ltd., 189 Ariz. 387, 943 P.2d 747 (App. 1996): claims for professional malpractice are generally tort claims, and the distinction to be drawn is between nonfeasance and malfeasance — an attorney who carries out a task negligently, even in violation of the standard of care, has not converted the action from tort to contract. The court noted that Collins declined to hold that a failure to follow client instructions issued after and separate from the retainer constitutes a breach of contract, and it was unpersuaded that oral directions from the settlement committee of the Sycamore Hills board created a new contract — a series of “mini-contracts” — apart from the signed retainer agreement. Finding no genuine issue of material fact, it granted the firm summary judgment on Count 3 under Rule 56 and ordered a proposed form of judgment with Rule 54(b) language.
The April 9, 2020 under-advisement ruling resolved two follow-on disputes. On discovery, the firm — which had named successor counsel Goldschmidt Shupe as a non-party at fault — subpoenaed the association’s communications with that firm about the settlement; the association objected on privilege grounds and argued a stipulated discovery window (November 29, 2016 to March 15, 2017) was binding, while the defendants pointed to HOA board-meeting minutes dated March 18, 2017 indicating later communications. Applying the three-part waiver test of Elia v. Pifer, 194 Ariz. 74, 977 P.2d 796 (App. 1998), the court found that by filing the lawsuit the association put its discussions with Goldschmidt Shupe at issue and that those discussions were clearly relevant and vital to the malpractice defense, so any privilege was waived as to communications with Goldschmidt Shupe related to the underlying litigation, the settlement negotiations, or the settlement agreement, and the association and Goldschmidt Shupe were ordered to comply with the second subpoena.
On fees, both parties agreed the court had discretion under A.R.S. § 12-341.01 given its resolution of the contract question. Quoting Lacer v. Navajo County, 141 Ariz. 392, 687 P.2d 400 (App. 1984) — a party is entitled to fees under the statute “if judgment in its favor is based upon the absence of the contract sued upon by the adverse party” — the court found an award of attorneys’ fees to be paid by Sycamore Hills to Jones Skelton appropriate and set an application-and-response schedule. The remaining negligence and fiduciary-duty counts were never adjudicated: the defendants filed a Notice of Settlement on June 10, 2020, and on June 30, 2020 the court dismissed the case with prejudice as to all parties and claims per the parties’ stipulation. No final fee amount appears in the minute entries.
This case shows what happens when an HOA board, unhappy with how its lawyers settled a homeowner dispute, tries to turn that dissatisfaction into a breach-of-contract claim. Arizona courts classify professional-malpractice claims as torts unless the lawyer failed to perform at all, and oral directions from a board or its settlement committee do not create stand-alone contracts on top of the retainer. Framing matters: the tort/contract line controls which claims survive and which fee-shifting rules apply.
The fee ruling is the sharper lesson for associations. Because the association sued on a contract the court found did not exist, A.R.S. § 12-341.01 exposed it to paying the law firm’s attorneys’ fees — losing the framing fight created out-of-pocket exposure for the association and, ultimately, its members. The privilege ruling is a second trap: by suing former counsel over a settlement, the association waived attorney-client privilege over its communications with the successor firm it hired to finish that same settlement. Boards weighing malpractice claims should expect their entire settlement file, including successor-counsel communications, to become discoverable. As a superior-court decision resolved by settlement and stipulated dismissal, the rulings bind only these parties and are not precedent.