Opinion
No. 1 CA-CV 20-0261
04-01-2021
HARRY TAPIA CADRIEL, et al., Plaintiffs/Appellants, v. JOSE SARATIEL HEREDIA NIEBLAS, Defendant/Appellee.
APPEARANCES Gregory Best, Phoenix Plaintiff/Appellant Harry Tapia Cadriel, Phoenix Plaintiff/Appellant The Hallstrom Law Firm, PLLC, Phoenix By Kyle Hallstrom Counsel for Defendant/Appellee
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
No. CV2019-014225
The Honorable Margaret R. Mahoney, Judge
AFFIRMED
APPEARANCES Gregory Best, Phoenix
Plaintiff/Appellant Harry Tapia Cadriel, Phoenix
Plaintiff/Appellant The Hallstrom Law Firm, PLLC, Phoenix
By Kyle Hallstrom
Counsel for Defendant/Appellee
MEMORANDUM DECISION
Presiding Judge D. Steven Williams delivered the decision of the Court, in which Judge Jennifer B. Campbell and Judge James B. Morse Jr. joined. WILLIAMS, Judge:
¶1 Gregory Best and Harry Tapia Cadriel appeal the dismissal of their complaint against Jose Saratiel Heredia Nieblas. Best also appeals the award of attorneys' fees to Nieblas as a sanction against Best under A.R.S. § 12-349. For reasons that follow, we affirm the dismissal and the award of attorneys' fees.
In a separate matter, the superior court recommended the superior court presiding judge declare Best a vexatious litigant pursuant to A.R.S. § 12-3201. The presiding judge did so, noting Best's "lengthy history of lawsuits" in which he filed court actions to harass defendants and defense counsel, "repeatedly filing claims or requests for relief" subject to previous rulings, and violated A.R.S. § 12-349. Maricopa Cnty. Super. Ct. Admin. Ord. No. 2019-146, http://www.superiorcourt.maricopa.gov/SuperiorCourt/AdministrativeOrders/AdminOrders/AO%202019-146.pdf.
FACTUAL AND PROCEDURAL HISTORY
¶2 In 2012, Nieblas acquired property previously owned by Cadriel, located at 4016 S. 12th Street in Phoenix (the "Property"). While not directly at issue in this appeal, the parties dispute whether Cadriel sold the property to Nieblas, as well as the validity of Nieblas' deed. In 2016, Best's company acquired an adjacent property, 4004 S. 12th Street (the "Adjacent Property") from Cadriel. In 2017, Best sued Cadriel and Nieblas for trespass, conversion, interference with business expectancy, and to quiet title, by way of adverse possession, over a portion of the Property (the "2017 litigation").
We take judicial notice of the entire record in Best's appeal from the 2017 litigation, 1 CA-CV 19-0312. See Ariz. R. Evid. 201; State v. Rhome, 235 Ariz. 459, 461, ¶ 8 (App. 2014) ("[A] court may properly take judicial notice of its own records.").
¶3 On Nieblas' motion, the court dismissed the quiet title claim. Cadriel, although properly served, chose not to appear, and Best obtained a default judgment against him on the remaining claims. Best moved the superior court to reconsider its dismissal of the quiet title claim, contending that Nieblas' deed to the Property was forged, and that Cadriel owned the Property. As supporting evidence, Best produced an affidavit from the notary who notarized the deed to the Property. In the notary's affidavit she stated she never "drafted or created [the] document." The court denied Best's motion.
¶4 In 2019, Best obtained a judgment in the amount of $2,380.10 against Nieblas for trespass and the sheriff's office subsequently sold the Property to satisfy the judgment. After the judgment was satisfied, approximately $50,000.00 remained from the sale proceeds. Nieblas, Cadriel, and Best each moved the court to release the excess proceeds to them. Both Best and Cadriel argued that Cadriel was the rightful owner of the Property, and Best contended he was entitled to a portion of the excess proceeds as satisfaction of his judgment against Cadriel with Cadriel being entitled to the remainder.
¶5 Shortly after each party applied for the excess proceeds, Best sought Arizona Rule of Civil Procedure ("Rule") 60(b)(2) relief from the judgment against Nieblas based on "newly discovered evidence" and moved to invalidate Nieblas' deed to the Property. In support of both motions, Best produced the notary's affidavit and an affidavit from Cadriel alleging that he never sold the Property to Nieblas. The court denied Best's motion for relief, the motion to invalidate Nieblas' deed, and Best's and Cadriel's applications for release of excess proceeds. Before the court ruled on the applications for release of excess proceeds, however, Best and Cadriel brought this action against Nieblas to quiet title and for damages under A.R.S. § 33-420. Best and Cadriel allege that the deed purporting to convey the Property from Cadriel to Nieblas was forged, and that Cadriel is the rightful owner of the Property (the "2019 litigation").
The denial of Best's motion for relief from judgment was affirmed on appeal. Best v. Nieblas, 1 CA-CV 19-0312, 2020 WL 6065961, at *5, ¶ 29 (Ariz. App. Oct. 15, 2020) (mem. decision).
¶6 Best and Cadriel also moved to "freeze" resolution and distribution of the excess proceeds (the "Motion to Freeze"). The superior court found the motion was not properly served on Nieblas and that the applications for excess proceeds were already part of the 2017 litigation. Consequently, the court denied the Motion to Freeze.
¶7 Nieblas moved to dismiss the complaint under Rule 12(b)(6), arguing the claims were compulsory counterclaims that should have been asserted in the 2017 litigation. See Ariz. R. Civ. P. 13(a). In considering the motion, the superior court took judicial notice of fourteen exhibits attached to Nieblas' motion, reasoning that all but one of the exhibits were "records of actions" the court had previously taken. The remaining exhibit Best challenged was one he had attached to his own complaint. The court dismissed the complaint with prejudice, finding:
[T]he claims made against Nieblas herein to be compulsory counterclaims under Rule 13(a) which arise out of the same transaction or occurrence that was the subject matter of a previous complaint, such as for example in [the 2017 litigation], and which were required to be asserted therein, failing which they are now barred. . . . There is no question that there is a logical or legal relationship between the claim made herein and the claims in the prior litigation.Additionally, the court imposed sanctions against Best under A.R.S. § 12-349, awarding Nieblas his reasonable attorneys' fees.
¶8 Following entry of final judgment pursuant to Rule 54(c), Best and Cadriel timely appealed. We have jurisdiction under Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).
DISCUSSION
I. The Court was Not Required to Treat the Rule 12(b)(6) Motion as a Motion for Summary Judgment
¶9 Appellants argue that by considering the exhibits attached to the motion to dismiss, the court converted the Rule 12(b)(6) motion into a motion for summary judgment and was obligated to notify the parties and allow them to submit additional evidence. Contrary to Appellants' argument, however, a "Rule 12(b)(6) motion that presents a document that is a matter of public record need not be treated as a motion for summary judgment." Strategic Dev. & Constr., Inc. v. 7th & Roosevelt Partners, LLC, 224 Ariz. 60, 64, ¶ 13 (App. 2010). Furthermore, in determining the sufficiency of the complaint, the court may take judicial notice of its own and other records, including for actions involving similar parties and issues and of pleadings therein. Regan v. First Nat'l Bank, 55 Ariz. 320, 327 (1940); In re Sabino R., 198 Ariz. 424, 425, ¶ 4 (App. 2000) ("It is proper for a court to take judicial notice of its own records or those of another action tried in the same court."). Therefore, because the exhibits attached to the motion were records of other actions tried in the same court, the court did not err in considering them and was not required to treat Nieblas' motion as a motion for summary judgment.
While Exhibit 6 was not a record of another action in the same court, it was attached to the complaint as Exhibit A and could therefore be considered by the court. See Coleman v. City of Mesa, 230 Ariz. 352, 356, ¶ 9 (2012) ("A complaint's exhibits . . . are not 'outside the pleading,' and courts may consider such documents without converting a Rule 12(b)(6) motion into a summary judgment motion."). --------
¶10 Lastly, we note that Appellants contend the court should have given them the opportunity to be heard on the "propriety of taking judicial notice." The record before us, however, does not indicate that Appellants made a timely request to be heard on the judicially noticed facts, as required by Arizona Rule of Evidence 201(e). See Ariz. R. Evid. 201(e) ("On timely request, a party is entitled to be heard on the propriety of taking judicial notice and the nature of the fact to be noticed. If the court takes judicial notice before notifying a party, the party, on request, is still entitled to be heard."). No such hearing was requested. Therefore, no such hearing was required. II. Dismissal of the Complaint
¶11 Appellants argue the court erred in dismissing their complaint, contending the claims asserted were not compulsory counterclaims and are therefore not barred in the present action. We review de novo the court's dismissal of a complaint under Rule 12(b)(6). Coleman, 230 Ariz. at 355, ¶ 7.
¶12 Litigants must state as a counterclaim any claim which, at the time of serving the pleading, the pleader has against an opposing party if it "arises out of the transaction or occurrence that is the subject matter of the opposing party's claim." Ariz. R. Civ. P. 13(a). A claim arises from the same "transaction or occurrence" if there is a logical relationship between the current cause of action and the previous one. Mirchandani v. BMO Harris Bank, N.A., 235 Ariz. 68, 70-71, ¶ 8 (App. 2014); see also Technical Air Prods., Inc. v. Sheridan-Gray, Inc., 103 Ariz. 450, 452 (1968) (holding that when two claims are "intimately bound up" in the subject matter of the dispute, a logical relationship exists, thereby creating compulsory counterclaims). If a compulsory counterclaim is not pled in the first action, it is waived and barred in any subsequent action. Mirchandani, 235 Ariz. at 70, ¶ 8. Accordingly, the court may properly dismiss such claims under Rule 12(b)(6). See id. at 71, ¶ 9 (affirming the court's dismissal of plaintiff's claim against defendant on the basis that it was a compulsory counterclaim not pled in the previous case).
¶13 There was a "logical relationship" between Best's claim for quiet title over a portion of the Property and Best and Cadriel's current claim for quiet title involving the same Property. Ownership of the Property was central to Best's complaint in the 2017 litigation and, even after his claim for quiet title was dismissed, ownership continued to be disputed by all parties. The superior court correctly concluded that the current claim was a compulsory counterclaim which should have been asserted by Cadriel in the 2017 litigation. III. Award of Attorneys' Fees
¶14 Best appeals the court's sanction against him under A.R.S. § 12-349 for Nieblas' attorneys' fees. We review the evidence supporting a fee award under § 12-349 in a light favorable to sustaining it and will affirm unless clearly erroneous. Bennett v. Baxter Grp., Inc., 223 Ariz. 414, 422, ¶ 31 (App. 2010). When making an award under § 12-349, the court must "set forth the specific reasons for the award," A.R.S. § 12-350, though the reasons "need only be specific enough to allow [this court] to test the validity of the judgment." Rogone v. Correia, 236 Ariz. 43, 50, ¶ 22 (App. 2014).
¶15 Here, the court noted the "long history" of Best's antics and explained in detail its reason for dismissing the matter. The court also accepted Nieblas' arguments as a valid basis for sanction before concluding that Best "brought his claims without substantial justification, particularly given negative prior [c]ourt rulings, for harassment, and unreasonably expanding the litigation history between the litigants." On this record, Best has failed to show that the court's fee award against him was clearly erroneous. IV. Denial of Emergency Motion to Freeze Resolution and Distribution of Excess Proceeds
¶16 An appellant's opening brief must present significant arguments, supported by legal authority, setting forth an appellant's position on the issues raised. ARCAP 13(a)(7). Failure to argue a claim usually constitutes abandonment and waiver of that claim. Van Loan v. Van Loan, 116 Ariz. 272, 274 (1977) ("The failure to raise an issue . . . in briefs on appeal constitutes waiver of the issue."); State Farm Mut. Auto. Ins. Co. v. Novak, 167 Ariz. 363, 370 (App. 1990) (court will not address arguments on appeal if opening brief does not contain contentions of appellant with respect to issues presented). As noted, supra ¶ 6, the court denied the Motion to Freeze, finding the motion was not properly served on Nieblas, and that the motion addressed competing applications for the excess proceeds which were directly linked to the 2017 litigation. Because Appellants' opening brief does not advance arguments as to why service was proper, or as to why the 2019 litigation was the proper forum for the Motion to Freeze, they have waived those arguments on appeal. See, e.g., Van Loan, 116 Ariz. at 274; State v. Bolton, 182 Ariz. 290, 298 (1995) (finding claims waived for insufficient argument on appeal).
¶17 Appellants' only remaining argument is that the court was statutorily required, under A.R.S. § 33-812(J), to stay the release of the excess proceeds until 180 days after filing of Appellants' complaint. We apply an abuse of discretion standard when reviewing the denial of injunctive relief. Horton v. Mitchell, 200 Ariz. 523, 526, ¶ 12 (App. 2001). However, to the extent that we are called upon to construe A.R.S. § 33-812, our review is de novo. See Garden Lakes Cmty. Ass'n, Inc. v. Madigan, 204 Ariz. 238, 241, ¶ 10 (App. 2003).
¶18 Section 33-812(J) is inapplicable. The Property was not sold pursuant to a trustee's sale; rather, it was sold via a sheriff's sale. See A.R.S. §§ 33-801 to -821 (governing deeds of trust and the disposition of sale proceeds following a trustee's sale); PNC Bank v. Cabinetry By Karman, Inc., 230 Ariz. 363, 365, ¶ 7 (App. 2012) (noting that, after a property has been sold at a trustee's sale, § 33-812 governs the trustee's distribution of sale proceeds). Accordingly, the court did not abuse its discretion in denying Appellants' Motion to Freeze. V. Attorneys' Fees on Appeal
¶19 Nieblas requests his attorneys' fees incurred on appeal pursuant to ARCAP 25. Under ARCAP 25, sanctions may be imposed on a party whose position is not supported by any reasonable legal theory and who presents no colorable legal argument about which reasonable attorneys could differ. See In re Levine, 174 Ariz. 146, 153 (1993). Sanctions may also be imposed under ARCAP 25 when an appeal is brought for an improper motive, such as "to harass the respondent or [to] delay the effect of an adverse judgment." Price v. Price, 134 Ariz. 112, 114 (App. 1982). Our determination under ARCAP 25 does not depend on the outcome of the appeal or the novelty of the issues raised. See Ariz. Tax Research Ass'n v. Dep't of Revenue, 163 Ariz. 255, 258 (1989). We apply this sanction with "great reservation" so as not "to deter the filing of appeals in unique or novel cases out of fear of reprisal." Id.
¶20 In our discretion, we decline the request for attorneys' fees as a sanction. We also deny Appellants' request for attorneys' fees. See ARCAP 21(a)(2). Nieblas is, however, awarded his costs on appeal as the prevailing party subject to compliance with ARCAP 21.
CONCLUSION
¶21 We affirm the superior court's order dismissing the complaint as well as the award of attorneys' fees in favor of Nieblas. We grant Nieblas his costs incurred on appeal upon compliance with ARCAP 21.