Opinion
No. 2 CA-CV 2015-0044
11-23-2015
RICKY J. BROSCHAT, AN UNMARRIED MAN, Plaintiff/Counterdefendant/Appellee, v. JEFFREY FRANCONE AND EMILY FRANCONE, HUSBAND AND WIFE, Defendants/Counterclaimants/Appellants.
COUNSEL Law Office of Ronald J. Newman, Tucson By Ronald J. Newman Law Office of Dennis A. Rosen, Tucson By Dennis A. Rosen and Gayle D. Reay Co-Counsel for Plaintiff/Counterdefendant/Appellee Snell & Wilmer L.L.P., Tucson By Sarah K. Jezairian and Robert A. Bernheim Counsel for Defendants/Counterclaimants/Appellants
THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
NOT FOR PUBLICATION
See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f).
Appeal from the superior court in Pima county
No. C20130635
The Honorable Charles V. Harrington, Judge
AFFIRMED
COUNSEL Law Office of Ronald J. Newman, Tucson
By Ronald J. Newman
Law Office of Dennis A. Rosen, Tucson
By Dennis A. Rosen and Gayle D. Reay
Co-Counsel for Plaintiff/Counterdefendant/Appellee
Snell & Wilmer L.L.P., Tucson
By Sarah K. Jezairian and Robert A. Bernheim
Counsel for Defendants/Counterclaimants/Appellants
MEMORANDUM DECISION
Judge Howard authored the decision of the Court, in which Presiding Judge Vásquez and Judge Kelly concurred. HOWARD, Judge:
The Hon. Virginia C. Kelly, a retired judge of this court, is called back to active duty to serve on this case pursuant to orders of this court and our supreme court.
¶1 Jeffrey and Emily Francone appeal the trial court's order enjoining them from interfering with a portion of an easement across their property providing access to Ricky Broschat's property. The Francones argue the court erred by relying on an "Easement Maintenance Agreement" (EMA) as evidence of an express easement, by finding they had failed to prove their affirmative defenses, and by granting Broschat his attorney fees and costs. Because we find no error, we affirm.
Factual and Procedural Background
¶2 In reviewing a judgment entered after a bench trial, we view the facts in the light most favorable to upholding the trial court's decision. Bennett v. Baxter Grp., Inc., 223 Ariz. 414, ¶ 2, 224 P.3d 230, 233 (App. 2010). The Francones and Broschat are neighbors in Pima County. The Francones' property is bordered on the north and east sides by Via Noriega, a private road created by the easement at issue in this case. Broschat's property is directly south of the Francones' and can only be accessed by Via Noriega.
¶3 In the early 1980s, Mark Dykman built the home in which the Francones currently live. He later sold the property to the Koppenhavers in 2005, who, in turn, sold it to the Francones in 2012.
¶4 Broschat's current home was built by Carol Martell shortly after Dykman built his home. She later sold the property to the Zoubs, who then sold the property to the Millers, who then sold it to Broschat in 2005.
¶5 Around the time the homes were built, Dykman, Martell, and two other neighbors agreed to create an access easement allowing each of the houses ingress and egress on Via Noriega. That easement was signed and recorded. The four parties further agreed upon how the easement would be maintained jointly. In 1992, after the Zoubs bought Martell's property, Dykman, the Zoubs, and the two other original neighbors signed the EMA, which described how maintenance of the easement would be handled and included a description of the thirty-foot easement.
¶6 After agreeing to the original easement, Dykman began laying "river rocks" around the boundary of his property "lined up directly next to where [he] thought the easement began." The rocks laid by Dykman were "kind of flat" and could be driven over without incurring damage. The Koppenhavers, after moving into the home, added more river rocks to the boundary line and moved the rock line into the roadway. After the Koppenhaver's moved the rocks, Via Noriega was no longer wide enough for two cars to pass each other. Cars, however, could still drive over the rocks without incurring damage.
¶7 The Francones made additional changes to the rock boundary after moving into the home in May 2012. They replaced the river rocks with "larger jagged boulders" which could not be driven over. And in order to access Broschat's property, most people would need to drive onto the property directly east of the Francones', depending on the size of their vehicle.
¶8 In September 2012, a land survey was done showing the boundaries of the easement. Another survey was conducted in March 2013, showing that the rock boundary of the Francones' property encroached onto the easement by seventeen feet.
¶9 In February 2013, Broschat sought an injunction preventing the Francones from encroaching on the easement. In their answer, the Francones filed several counterclaims against Broschat, one of which was later dismissed by the trial court. The court bifurcated Broschat's and the Francones' claims and determined it would hold a bench trial on Broschat's claim before holding a jury trial on the Francones' because the outcome of Broschat's claim could affect one of the Francones' counterclaims.
¶10 Following the bench trial on Broschat's claim, the trial court found the Francones had encroached onto the easement by seventeen feet and ordered the Francones to "restore the easement to its full width of [thirty] feet." The court also granted Broschat's request for attorney fees and costs. The court entered a final judgment on Broschat's claim pursuant to Rule 54(b), Ariz. R. Civ. P. We have jurisdiction over the Francones' appeal pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).
Existence of an Express Easement
¶11 The Francones first argue the trial court erred in finding an express thirty-foot easement existed because no formal deed conveyed the easement. They contend the EMA—"the only purported written evidence of the easement"—was "ineffective to convey an interest in the property." Following a bench trial, we defer to the court's factual findings "unless clearly erroneous," but we review any issues of law de novo. Town of Marana v. Pima County, 230 Ariz. 142, ¶ 46, 281 P.3d 1010, 1020 (App. 2012).
¶12 "[A]n easement is a right that one person has to use the land of another for a specific purpose." Ammer v. Ariz. Water Co., 169 Ariz. 205, 208, 818 P.2d 190, 193 (App. 1991). Easements are generally "created by express conveyance, typically by deed, but may come into being less explicitly, by implication, or against the will of the owner of the burdened estate, by prescription." Rogers v. Bd. of Regents of Univ. of Ariz., 233 Ariz. 262, ¶ 10, 311 P.3d 1075, 1079 (App. 2013).
¶13 The conveyance of an express easement must comply with the same requirements as a conveyance of real property. Restatement (Third) of Property (Servitudes) § 2.7 (2000); see also Paxson v. Glovitz, 203 Ariz. 63, n.3, 50 P.3d 420, 424 n.3 (App. 2002) (Arizona courts look to Restatement "[i]n absence of contrary precedent."). Thus, in Arizona, the conveyance of an express easement must be "in writing, signed, acknowledged, and delivered." Hardine v. Pioneer Nat. Title Ins., 145 Ariz. 83, 84, 699 P.2d 1314, 1315 (App. 1985); see also A.R.S. § 33-401(B).
¶14 If the language creating an express easement is unambiguous, the easement "is enforced so as to give effect to the intent of the parties." Powell v. Washburn, 211 Ariz. 553, ¶ 9, 125 P.3d 373, 376 (2006); see also State v. Mabery Ranch, Co., 216 Ariz. 233, ¶¶ 25, 28, 165 P.3d 211, 218-19 (App. 2007). Likewise, if the language is ambiguous, courts still must give effect to the parties' intentions by considering "'the language used in the instrument, or the circumstances surrounding the creation of the servitude.'" Smith v. Beesley, 226 Ariz. 313, ¶ 15, 247 P.3d 548, 553 (App. 2011), quoting Powell, 211 Ariz. 553, ¶ 13, 125 P.3d at 376-77; see also Restatement § 4.1(1).
¶15 Thus, in Arizona, no particular language must be used for a court to find a valid easement exists if that is what the parties intended, so long as the easement complies with § 33-401(B). See Smith, 226 Ariz. 313, ¶ 15, 247 P.3d at 553 (easement can be validly created by plat); see also Pugh v. Cook, 153 Ariz. 246, 247, 735 P.2d 856, 857 (App. 1987) (language in deeds that land "subject to '[e]stablished and/or existing roads, roadways and highways'" sufficient to create easements); City of Phoenix v. Kennedy, 138 Ariz. 406, 408, 675 P.2d 293, 295 (App. 1983) ("subject to" language created valid easement). This proposition is consistent with other states' case law. See Skeen v. Boyles, 213 P.3d 531, ¶ 18 (N.M. Ct. App. 2009) (if parties intended to create easement, words of grant not necessary); Century Commc'ns, Inc. v. Hous. Auth. of Wilson, 326 S.E.2d 261, 263 (N.C. 1985) ("Generally, whether language in a written instrument creates an easement is to be determined by ascertaining the intention of the parties as gathered from the language of the instrument."); Yager Pontiac, Inc. v. Fred A. Danker & Sons, Inc., 41 A.D.2d 366, 368 (N.Y. 1973) (easement created as intended "[d]espite the absence of words such as 'grant', 'easement' or 'right of way'"); but see Capstar Radio Operating Co. v. Lawrence, 152 P.3d 575, 579 (Idaho 2007) ("subject to" language in sale agreement insufficient to create express easement); Ditmore v. Michalik, 625 N.W.2d 462, 469 (Mich. Ct. App. 2001) (document purporting to create express easement must manifest clear intent on its face).
¶16 The trial court found that the existence of the thirty-foot easement was "proven, inter alia, by the [EMA] and the agreement to create an easement by the property owners." And "that the original agreement is, by definition, a contract," which was recorded.
¶17 The Francones have not challenged the trial court's reliance on the EMA and testimony to prove the existence of the easement. They have not argued or cited any legal authority declaring that the court could not have found the easement, as described in the EMA, existed and was recorded based on the undisputed evidence presented at the bench trial. Consequently, they have waived this issue for review. See Ariz. R. Civ. App. P. 13(a)(7); Polanco v. Indus. Comm'n, 214 Ariz. 489, n.2, 154 P.3d 391, 393 n.2 (App. 2007).
¶18 The Francones do, however, cite § 33-401 as codifying formal requirements for the conveyance of land with which, they contend, the easement did not comply. That statute requires an instrument in writing, signed by the grantor, acknowledged, and delivered. § 33-401. But based on Dykman's testimony, the original grant of the easement satisfied all of those requirements. And the EMA also does. Section 33-401 therefore does not support the Francones' argument.
¶19 The Francones also rely on Paxson and contend it stands for the proposition that an easement which does "not comply[] with the formalities" is "imperfect[]," and thus gives "rise to the beginning of adverse possession." 203 Ariz. 63, ¶¶ 23, 25, 50 P.3d at 424-25. This contention, however, mischaracterizes Paxson. That case arose in the context of an adverse possession claim. Id. ¶ 23. The parties did not dispute that they agreed and intended to create an express easement, but a written grant of that easement never was drafted or recorded. Id. ¶¶ 4-5. The court noted that "[h]ad the easement been recorded, as the parties intended it to be, subsequent rights of use would have been permanently fixed," but an "unrecorded easement is a license and does not run with the land or bind subsequent purchasers without notice." Id. ¶ 24. Consequently, the "only issue" in the case was "whether the circumstances of the creation of the easement were, in legal effect, adverse," thus leading to a prescriptive easement, "or merely a permissive license which [the servient estate] could revoke." Id. ¶¶ 23, 31, 34.
¶20 In Paxson, the oral easement agreement was not reduced to writing or recorded. Id. ¶ 5. Here, it was undisputed testimony that the original grant was reduced to writing and recorded. And the EMA also was reduced to writing and recorded. Therefore, Paxson is unhelpful to the Francones.
¶21 Other than Paxson and § 33-401, the Francones have not identified any legal reason the original easement and the EMA were not formal conveyances or any particular requirement that was missing. As discussed above, our courts must interpret an easement, regardless of the precise language, to give effect to the parties' intent. Smith, 226 Ariz. 313, ¶ 15, 247 P.3d at 553. The undisputed evidence adduced at trial showed that the parties intended to create a thirty-foot easement, as described in the EMA, and that the easement complied with § 33-401(B). The Francones have thus failed to show the trial court erred as a matter of law in upholding the thirty-foot easement. See Town of Marana, 230 Ariz. 142, ¶ 46, 281 P.3d at 1020.
Because we are affirming the trial court's finding that an express easement existed, we do not address the Francones' additional contention that the court erred by failing to determine the boundaries of a prescriptive easement.
Adverse Possession
¶22 The Francones next argue the trial court erred by finding they failed to prove by clear and convincing evidence that Broschat was time-barred from enforcing the easement pursuant to A.R.S. §§ 12-525 and 12-526. See Sabino Town & Country Estates Ass'n v. Carr, 186 Ariz. 146, 149, 920 P.2d 26, 29 (App. 1996) (adverse possession claims require clear and convincing evidence). They reason that because Dykman laid the original rock boundary, "and that barrier did not move significantly at any time in the more than [twenty] years it existed," Broschat's claim to enforce the easement was clearly time-barred under the above statutes. As stated above, we defer to the court's factual findings but review its conclusions of law de novo. Town of Marana, 230 Ariz. 142, ¶ 46, 281 P.3d at 1020; see also City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, ¶ 65, 181 P.3d 219, 237 (App. 2008) (appellate court defers to any implicit factual findings not clearly erroneous).
The Francones had filed a counterclaim for quiet title to the easement based on adverse possession. Those claims were dismissed by the trial court for failure to join indispensable parties. Claim preclusion did not prohibit the Francones from then asserting adverse possession as an affirmative defense, however, "because affirmative defenses are not claims." Airfreight Exp. Ltd. v. Evergreen Air Ctr, Inc., 215 Ariz. 103, ¶ 14, 158 P.3d 232, 237 (App. 2007). And although issue preclusion can apply under these circumstances, because the adverse possession issue was dismissed for failure to join indispensable parties, it was not "'actually litigated'" and "'resolution of the issue was [not] essential to the decision.'" Id. ¶ 15, quoting Hullett v. Cousin, 204 Ariz. 292, ¶ 27, 63 P.3d 1029, 1034-35 (2003).
¶23 Section 12-526 establishes a ten-year limitation period for the recovery of property in adverse possession. Section 12-525 establishes a five-year limitation for recovery of property on which the adverse possessor has a recorded deed and pays the applicable taxes. Under either statute, the possession must be "'actual, open and notorious, hostile, under a claim of right, continuous for the statutory period . . . , and exclusive.'" See Sabino Town, 186 Ariz. at 149, 920 P.2d at 29, quoting Inch v. McPherson, 176 Ariz. 132, 135, 859 P.2d 755, 758 (App. 1992); see also A.R.S. § 12-521.
¶24 "Where enclosure is relied upon as the evidence of possession, it must be complete and so open and notorious as to charge the owner with knowledge thereof." Knapp v. Wise, 122 Ariz. 327, 329, 594 P.2d 1023, 1025 (App. 1979). In other words, the party claiming adverse possession must "fly the flag" of ownership over the property. Id. Because Broschat filed his complaint in February 2013, his claims would be time-barred if a valid adverse possession claim accrued prior to February 2008, see § 12-525, or February 2003, see § 12-526.
¶25 The trial court found the following facts relevant to the adverse possession claims: The rock boundary around the property originally was placed by Dykman "directly next to where he thought the easement began." That boundary allowed two cars to pass each other on Via Noriega. "[A]t some unspecified time after" the Koppenhavers purchased the property in 2005, they moved and expanded upon the rock boundary so that two cars no longer could pass each other on Via Noriega. The court could not determine when this occurred. But while the Koppenhavers owned the property, vehicles still could drive over the rock boundary. The Francones purchased the property in 2012 and, subsequently, removed the rocks that were "relatively flat and smooth" and replaced them with "large and sometimes jagged 'boulders'" which "could not be drive[n] over."
¶26 The Francones, however, point to evidence supporting their claim the rock boundary did not move since Dykman originally laid it. Seth Koppenhaver testified he placed additional rocks along the boundary "in some places where there were not rocks but along that same line" as those placed by Dykman. The rocks Koppenhaver placed "correspond[ed] to the ends of the driveways" which were "fixed positions." Additionally, after looking at photos of the rock boundary since the Francones lived at the property, Koppenhaver testified he did not see a difference in its position. Two other neighbors who lived in the area when Dykman, the Koppenhavers, and the Francones owned the property testified the rock boundary had not moved noticeably since Dykman first laid it.
¶27 Conversely, Dykman, who laid the original rock boundary and occasionally visited the area after selling the property, testified the rock boundary had moved eastward into the easement since the Koppenhavers bought the property. And when Dykman lived at the property, the rock boundary along Via Noriega only ran along the northeast corner, and lined the northern and southern driveways and driveway entrances. Consequently, local traffic and service vehicles using Via Noriega could turn around by using the property in between the driveways without driving over rocks. It was not until the Koppenhavers "closed in that side of the line" that the rock boundary extended all the way along Via Noriega, although vehicles still could drive over the rocks laid by the Koppenhavers.
¶28 The record supports the trial court's findings. In light of the conflicting evidence, we "defer to the . . . court's determination of witnesses' credibility and the weight to give conflicting evidence." See Gutierrez v. Gutierrez, 193 Ariz. 343, ¶ 13, 972 P.3d 676, 680 (App. 1998). The court thus properly concluded that the Francones did not produce clear and convincing evidence of their adverse possession of part of the roadway. See Sabino Town, 186 Ariz. at 149, 920 P.2d at 29.
¶29 Additionally, the trial court properly could have concluded that the nature of the rock boundary prior to the Francones' replacement of those rocks with jagged boulders failed to give proper notice that the claim was adverse and hostile. If Broschat and others could drive over the river rocks and onto the property, then Dykman's and the Koppenhavers' use was not hostile or exclusive. See Berryhill v. Moore, 180 Ariz. 77, 84, 881 P.2d 1182, 1189 (App. 1994) (in order for "enclosure coupled with the claimant's mere general use of property" to be sufficient to prove adverse possession, enclosure must be "complete"); see also Knapp, 122 Ariz. at 329, 594 P.2d at 1025. And Koppenhaver testified that he did not place the rocks to keep people out of his yard, but only to "define a line." Thus the court could have found any possession by Dykman or the Koppenhavers was not adverse and did not "fly the flag" of ownership over the disputed section of Via Noriega. See Knapp, 122 Ariz. at 329, 594 P.2d at 1025.
¶30 In concluding the Francones had not met their burden of proof, the trial court implicitly found they had failed to show by clear and convincing evidence that the easement had been subject to notorious, hostile, and exclusive possession prior to February 2008. The adverse possession period therefore did not begin to run until sometime after that. See Sabino Town, 186 Ariz. at 149, 920 P.2d at 29. Based on that finding, the court correctly concluded that Broschat's claim was not time-barred under §§ 12-525 or 12-526. See Town of Marana, 230 Ariz. 142, ¶ 46, 281 P.3d at 1020; see also Clear Channel Outdoor, Inc., 218 Ariz. 172, ¶ 65, 181 P.3d at 237.
Laches
¶31 The Francones next argue the trial court erred in finding they had failed to show that Broschat's claim was time-barred under the doctrine of laches. We review a trial court's ruling on laches for an abuse of discretion, deferring to its factual findings "unless clearly erroneous, but review de novo its legal conclusions." Rash v. Town of Mammoth, 233 Ariz. 577, ¶ 17, 315 P.3d 1234, 1240 (App. 2013).
¶32 "Laches is the 'equitable counterpart to the statute of limitations, designed to discourage dilatory conduct.'" In re Indenture of Trust Dated Jan. 13, 1964, 235 Ariz. 40, ¶ 22, 326 P.3d 307, 315 (App. 2014), quoting Sotomayor v. Burns, 199 Ariz. 81, ¶ 6, 13 P.3d 1198, 1200 (2000). Even where the applicable statute of limitations has not yet expired, laches can bar a claim if the delay was unreasonable and the opposing party thus has been prejudiced. Id.
¶33 The Francones argue Broschat's delay in bringing his claim was unreasonable because he waited at least twenty years before attempting to enforce the easement. This assertion fails. First, Broschat did not purchase his property until 2005. Thus, assuming arguendo that the rock boundary remained in its current location from the time Dykman originally laid it, this only resulted in a delay of eight years, not twenty. The Francones have not argued an eight-year delay was unreasonable. Their sole argument that a twenty-year delay was unreasonable therefore is meritless.
The Francones have not provided any authority that the previous owners' delay should count against Broschat.
¶34 Second, as discussed above, the trial court found the rock boundary did not encroach onto the easement until sometime after February 2008. See Town of Marana, 230 Ariz. 142, ¶ 46, 281 P.3d at 1020. The court also found that the rocks placed by Koppenhaver were small and could be driven over. The Francones purchased and moved into the property in May 2012, after which they replaced the small rocks with "boulders" which could not be driven over, thus substantially inhibiting the use of the roadway and "pos[ing] a danger to the vehicular traffic." In September 2012, Broschat commissioned a land survey defining the boundaries of the easement and wrote the Francones requesting that they remove the encroachment. He sought the injunction in February 2013.
¶35 Thus, Broschat acted promptly after the Francones changed the character of the rock boundary. And, even if we consider the entire time Broschat owned the property, the Francones have failed to show this delay was unreasonable given the nature of the rock boundary, or cite any case law that a delay of a few years constitutes an unreasonable delay where the parties have a contractual easement. Cf. Sabino Town, 186 Ariz. at 149, 920 P.2d at 29 (termination of easement by adverse possession not favored in law). The trial court therefore did not abuse its discretion in finding laches did not apply. See Rash, 233 Ariz. 577, ¶ 17, 315 P.3d at 1240.
¶36 Moreover, even if Broschat's delay had been unreasonable, the Francones have not shown they were prejudiced. See League of Ariz. Cities & Towns v. Martin, 219 Ariz. 556, ¶ 9, 201 P.3d 517, 520 (2009) ("delay alone will not satisfy the test for laches," party must also show prejudice). Although they claim they would not have bought the house had they known of the easement, Jeffrey Francone testified he knew about the easement from his title documents, and the easement was included with his deed. And, the Francones have not cited any legal authority that a landowner may rely on a movable rock boundary to determine the actual boundaries of their property rather than the legal description contained in their deed, nor have they contended the easement included with the deed conflicted with the easement described in the EMA. See Manicom v. CitiMortgage, Inc., 236 Ariz. 153, ¶ 16, 336 P.3d 1274, 1279 (App. 2014) (purchaser charged with knowledge of property contained in deed); see also A.R.S. § 33-416 (recorded instrument provides notice of contents). The Francones thus have failed to show they were prejudiced by any unreasonable delay and the trial court properly could have found laches did not apply on this basis. See Rash, 233 Ariz. 577, ¶ 17, 315 P.3d at 1240.
Attorney Fees and Costs
¶37 The Francones next argue the trial court abused its discretion in awarding Broschat his attorney fees and costs pursuant to A.R.S. § 25-341.01. We review an award of attorney fees for an abuse of discretion and view the record in the light most favorable to upholding the trial court's decision. Solimeno v. Yonan, 224 Ariz. 74, ¶ 36, 227 P.3d 481, 489 (App. 2010). "'We will not disturb the trial court's discretionary award of fees if there is any reasonable basis for it.'" Orfaly v. Tucson Symphony Soc'y, 209 Ariz. 260, ¶ 18, 99 P.3d 1030, 1035 (App. 2004), quoting Hale v. Amphitheater Sch. Dist. No. 10, 192 Ariz. 111, ¶ 20, 961 P.2d 1059, 1065 (App. 1998).
¶38 Rule 54(g)(1), Ariz. R. Civ. P., requires that a claim for attorney fees be made in the pleadings. That requirement serves the purpose of putting each side on notice that the other is requesting attorney fees, thus "'promot[ing] settlement of disagreements out of court.'" King v. Titsworth, 221 Ariz. 597, ¶ 14, 212 P.3d 935, 938 (App. 2009), quoting Wagenseller v. Scottsdale Mem'l Hosp., 147 Ariz. 370, 391, 710 P.2d 1025, 1046 (1985).
¶39 The Francones first argue the trial court erred because Broschat made his claim for attorney fees in the prayer for relief in his complaint, and it was therefore not properly made pursuant to Ariz. R. Civ. P. 54(g)(1). See King, 221 Ariz. 591, ¶ 11, 212 P.3d at 937 (claim for attorney fees must be made in Rule 7(a), Ariz. R. Civ. P. pleading). Relying on Fletcher v. State ex rel. Morrison, 90 Ariz. 251, 367 P.2d 272 (1961) and McClanahan v. Cochise College, 25 Ariz. App. 13, 540 P.2d 744 (1975), they contend the prayer for relief is not a part of the complaint and, therefore, Broschat did not properly file a claim for attorney fees. These cases, however, do not support their argument.
¶40 In Fletcher, the court found that the state had waived its claim for an easement contract setoff by failing to assert such a counterclaim and instead requesting only the amount of the setoff in the prayer for relief. 90 Ariz. at 252-53, 367 P.2d at 273-74. And McClanahan held that a court could not consider the prayer when considering the sufficiency of a complaint to state a claim for relief. 25 Ariz. App. at 17, 540 P.2d at 748. Those cases thus address whether causes of action can be raised properly in the prayer for relief and not, as is at issue here, whether a request for attorney fees pursuant to § 12-341.01(A), which is not an independent cause of action, can. See § 12-341.01(A) (discretionary award of fees turns on party's success in action arising out of contract).
¶41 Moreover, in Murphy Farrell Development, LLLP v. Sourant, this court noted that a request for attorney fees made in the prayer in an answer was appropriate. 229 Ariz. 124, n.9, 272 P.3d 355, 364 n.9 (App. 2012); see also Robert E. Mann Constr. Co. v. Liebert Corp., 204 Ariz. 129, ¶¶ 3, 12-16, 60 P.3d 708, 710, 712-13 (App. 2003) (reviewing whether attorney fees request under § 12-341.01 sufficient where general request for fees made in prayer). Additionally, the Francones requested fees pursuant to § 12-341.01 in the prayer for relief in their answer. The request for fees in Broschat's prayer sufficiently put Francones on notice that Broschat was requesting fees, thus promoting out-of-court settlement. See King, 221 Ariz. 597, ¶ 14, 212 P.3d at 938. We therefore reject the Francones' argument that Broschat did not properly request his fees as required by Rule 54(g)(1).
¶42 The Francones next argue the trial court erred because Broschat did not follow the procedures set forth in A.R.S. § 12-1103(B), which govern actions to quiet title. They reason that Broschat's claim, effectively, was an action to quiet title, and therefore § 12-1103(B) provided the only basis for an attorney fees award in this case. They do not, however, cite any legal authority to support their claim that an action to enforce an express easement is an action to quiet title.
¶43 The trial court here found that a contract, creating the easement at issue, existed between Broschat's and the Francones' predecessors-in-interest, which provided the basis for this action. Broschat's action to enforce the express easement "is, in essence, an action to enforce the mutual contractual obligations assumed by the various" parties to the contract. See Pinetop Lakes Ass'n v. Hatch, 135 Ariz. 196, 198, 659 P.2d 1341, 1343 (App. 1983). Broschat was not seeking to establish a prescriptive easement through adverse possession, and thus claim quiet title over the property in question, but instead was seeking to enforce an already-existing obligation. Cf. Tumacacori Mission Land Dev., Ltd. v. Union Pac. R.R. Co., 228 Ariz. 100, ¶¶ 1-2, 5, 9, 263 P.3d 649, 650-52 (App. 2011) (action to create prescriptive easement through adverse possession brought as quiet title). Accordingly, Broschat was not required to use the procedure in § 12-1103 and the Francones' contrary argument fails.
¶44 The Francones further argue the trial court erred in awarding fees pursuant to A.R.S. § 12-341.01(A) because this action did not arise out of a contract. They contend the action revolved around the boundaries of the easement and that the only relevant contract, the EMA, was merely "collateral evidence" used to support Broschat's claim that the easement was thirty-feet wide. The application of § 12-341.01 is a question of law we review de novo. Ariz. Tile, L.L.C. v. Berger, 223 Ariz. 491, ¶ 35, 224 P.3d 988, 995-96 (App. 2010).
¶45 Section 12-341.01(A) states, in relevant part, that "[i]n any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees." The statute is not limited to breach of contract claims, and instead applies to any claim, even those sounding in tort, if "the cause of action . . . could not exist but for the breach of contract." Sparks v. Republic Nat'l Life Ins. Co., 132 Ariz. 529, 543, 647 P.2d 1127, 1141 (1982). The contract must be an "essential basis" to the claim and not merely a "factual predicate." Hanley v. Pearson, 204 Ariz. 147, ¶ 17, 61 P.3d 29, 33 (App. 2003).
¶46 The trial court here found that "an access easement as described in the [EMA]" exists, that easement was "by definition, a contract," and the "easement was recorded and therefore . . . runs with the land." The easement, agreed to by the original neighbors in the 1980's—Broschat's and the Francones' predecessors-in-interest—thus provided the contractual basis for Broschat's action to enforce those obligations. See Squaw Peak Cmty. Covenant Church of Phx. v. Anozira Dev., Inc., 149 Ariz. 409, 410, 414-15, 719 P.2d 295, 296, 300-01 (App. 1986) (action to enjoin interference with easement arose out of contract under § 12-341.01); see also Pinetop Lakes Ass'n, 135 Ariz. at 198, 659 P.2d at 1343 (action to enforce restrictive covenant arises out of contract within § 12-341.01). The easement contract is what allowed Broschat to enforce the thirty-foot easement and, thus, provided the "essential basis" for his claim. See Hanley, 204 Ariz. 147, ¶ 17, 61 P.3d at 33. The trial court did not err in awarding Broschat his fees pursuant to § 12-341.01(A).
¶47 The Francones, however, ask this court to find that their duty to not interfere with the easement arose out of a legal duty, and not a contractual one, based on Four Seas Prop. Mgmt., LLC v. Bruce & Ann Brown Ltd. P'ship, No. 1 CA-CV 14-0005, 2015 WL 2410114 (memorandum decision filed May 5, 2015). Four Seas is an unpublished memorandum decision and has no precedential value. See Ariz. R. Sup. Ct. 111(c). Parties may only cite to unpublished memorandum decisions issued on or after January 1, 2015 "for persuasive value" if "no opinion adequately addresses the issue before the court." Ariz. R. Sup. Ct. 111(c). The Francones contend that, other than Four Seas, "no other authority directly on point for this matter" exists.
The rule allowing parties to cite to unpublished memorandum decisions issued after January 1, 2015 for persuasive authority also dictates that parties relying on such decisions "provide either a copy of the decision or a hyperlink to the decision where it may be obtained without charge." Ariz. R. Sup. Ct. 111(c)(3). The Francones failed to do either and we therefore could consider this argument waived. See Polanco, 214 Ariz. 489, n.2, 154 P.3d at 393-94 n.2 (failure to comply with rules waives argument for review). In our discretion, we address their argument.
¶48 In Squaw Peak, a published opinion, this court awarded the prevailing party its attorney fees on appeal pursuant to § 12-341.01 following an action in the trial court for an injunction to prevent interference with an easement—the same claim filed by Broschat in this case. 149 Ariz. at 410, 414-15, 719 P.2d at 296, 300-01. The Francones have not cited Squaw Peak, nor explained why that case would not dictate the result here. The fact that the published opinion on this issue contradicts the Francones' argument does not mean no published opinion is on point. Based on Squaw Peak, we conclude the trial court did not err by awarding Broschat his attorney fees pursuant to § 12-341.01(A). See Ariz. Tile, L.L.C., 223 Ariz. 491, ¶ 35, 224 P.3d at 995-96; see also Squaw Peak, 149 Ariz. at 414-15, 719 P.2d at 300-01.
Because we conclude the trial court did not err in finding the easement justified an award of fees pursuant to § 12-341.01, we do not address the Francones' additional contention that there was no implied contract which would justify an award pursuant to § 12-341.01. --------
¶49 Furthermore, even if we were to consider Four Seas for its persuasive value, we find it distinguishable from the case here. In Four Seas, the plaintiffs filed a complaint for tortious interference of an easement which ran across the defendant's property and provided access to the plaintiff's property, but which had not been included with the defendant's deed when they purchased their property. 2015 WL 2410114, ¶¶ 1, 3-6. The trial court first ordered that the defendant's deed be reformed to include the easement. Id. ¶ 7. The defendants removed the obstruction a few days before the reformation was recorded. Id. ¶ 14. The court then found, however, that equity demanded the easement not be considered effective as to the plaintiffs prior to the reformation, and thus their claim for interference with that easement prior to the date of reformation failed. Id. ¶ 15.
¶50 The trial court awarded the defendants their attorney fees pursuant to § 12-341.01(A). Id. ¶ 29. The appellate court concluded, however, because the easement was not effective during the time period the plaintiffs alleged the defendants tortiously interfered with the easement, the claim did not arise out of a contract pursuant to § 12-341.01 and the trial court therefore erred in awarding fees under that statute. Id. ¶¶ 29, 33.
¶51 Unlike the parties in Four Seas, the easement at issue here was in effect when the Francones encroached upon it and the Francones' obligations not to interfere with it therefore arose out of the easement contract. The trial court explicitly found the original agreement between the four property owners was a contract which created an easement, running with the land and burdening the Francones while benefitting Broschat. Consequently, Four Seas does not support the Francones' argument.
¶52 The Francones next argue the trial court abused its discretion because the factors outlined in Assoc. Indem. Corp. v. Warner, 143 Ariz. 567, 694 P.2d 1181 (1985), weigh against an award of attorney fees. Under Warner, a court should consider six factors, including, as relevant here, "[t]he merits of the claim or defense presented by the unsuccessful party[,] . . . [if t]he litigation could have been avoided or settled and the successful party's efforts were completely superfluous in achieving the result[,] . . . [if a]ssessing fees against the unsuccessful party would cause an extreme hardship[,] . . . [and whether t]he successful party did not prevail with respect to all of the relief sought." Id. at 570, 694 P.2d at 1184.
¶53 The Francones first assert their defenses were meritorious. But the trial court explicitly found they were not—a finding supported by the record as discussed above. "We will not substitute our discretion for that of the trial court in awarding attorney's fees pursuant to [§] 12-341.01 when the record contains a reasonable basis for the award," and we therefore accept the court's finding that this factor weighed in favor of awarding attorney fees. See Ponderosa Plaza v. Siplast, 181 Ariz. 128, 132, 888 P.2d 1315, 1319 (App. 1993).
¶54 The Francones next argue that Broschat did not attempt to avoid litigation in good faith. In September 2012, Broschat paid to have a land survey done, which marked out the easement boundaries based on the description in the EMA. Later that month, Broschat's attorney sent the Francones a letter, including a copy of the survey results, and asked the Francones to move the rock boundary to comply with the terms of the easement. The letter stated it was an "attempt to amicably resolve the dispute" between the Francones and Broschat, and hoped to instigate a "positive dialogue" between the parties. It also noted that if the Francones did not comply with the request, Broschat "reserve[d] the right to enforce by filing an action in the Superior Court accordingly."
¶55 The parties additionally participated in a two-day settlement conference, and, in the joint pretrial statement, indicated they had "made good faith attempts to settle the matter." We thus cannot say the trial court abused its discretion in finding "Broschat was amenable to alternative dispute resolution" two years before the bench trial occurred and thus "[t]his factor militates strongly in favor of an award of attorneys' fees."
¶56 The Francones further argue the award constitutes an extreme financial hardship. "[T]he party asserting financial hardship has the burden of coming forward with prima facie evidence of financial hardship," by "present[ing] specific facts by affidavit or testimony." Woerth v. City of Flagstaff, 167 Ariz. 412, 420, 808 P.2d 297, 305 (App. 1990).
¶57 Below, the Francones presented an affidavit from Jeffrey that the Francones were "a single-income family of five," and they had qualified for pro bono assistance through the Southern Arizona Legal Aid Society's Volunteer Lawyer's Program (VLP), which required proof of their income. They did not, however, provide that income information to the trial court, or even provide a description of the VLP program's qualification guidelines. In light of their failure to present any specific facts which would enable the court to assess whether the award would, in fact, pose an undue financial hardship, the court did not abuse its discretion by finding "this factor is at best, neutral, and at worst, it militates weakly in favor of awarding attorneys' fees."
¶58 The Francones lastly argue "[t]he bifurcation of this case means no party has yet prevailed on every issue." In regards to the claims at issue here, however, Broschat was granted the exact relief he sought and, as discussed by the trial court in its ruling on bifurcation, and as evidenced by its Rule 54(b) certification, the remaining claims either were resolved entirely or unaffected by the outcome of this claim. And this court has found that when a trial court enters a final judgment on a claim arising out of a contract, while other claims in the case are still pending, it may properly award attorney fees to the successful party before those other claims are resolved. Rudinsky v. Harris, 231 Ariz. 95, ¶ 29, 290 P.3d 1218, 1225 (App. 2012). The court therefore considered and weighed the relevant factors and its determinations have a reasonable basis, and we cannot say the trial court abused its discretion. See Fulton Homes Corp. v. BBP Concrete, 214 Ariz. 566, ¶ 9, 155 P.3d 1090, 1093 (App. 2007).
Attorney Fees and Costs on Appeal
¶59 Broschat has requested his attorney fees and costs on appeal pursuant to A.R.S. § 12-341.01. In our discretion, we grant his request, upon his compliance with Rule 21, Ariz. R. Civ. App. P.
Disposition
¶60 For the foregoing reasons, we affirm the trial court's judgment.