Opinion
1 CA-CV 21-0709
02-09-2023
HEPLER FAMILY TRUST in care of Trustees ROBERT S. HEPLER and MARILYN S. HEPLER, Plaintiffs/Appellees, v. ELIZABETH HEPLER aka ELIZABETH TAUB; DAVID TELLEZ, Defendants/Appellants.
Kercsmar Feltus & Collins, PLLC, Scottsdale By Todd Feltus, Mitchell P. Reber Counsel for Plaintiffs/Appellees O'Leary Eaton PLLC, Prescott By William J. O'Leary, Michael P. Thieme Counsel for Defendants/Appellants
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Yavapai County No. P1300CV202100730 The Honorable Michael P. McGill, Judge
AFFIRMED IN PART; VACATED IN PART; VACATED AND REMANDED IN PART
Kercsmar Feltus & Collins, PLLC, Scottsdale By Todd Feltus, Mitchell P. Reber Counsel for Plaintiffs/Appellees
O'Leary Eaton PLLC, Prescott By William J. O'Leary, Michael P. Thieme Counsel for Defendants/Appellants
Judge Peter B. Swann delivered the decision of the court, in which Presiding Judge Maria Elena Cruz and Judge Angela K. Paton joined.
Judge Peter B. Swann was a sitting member of this court when the matter was assigned to this panel of the court. He retired effective November 28, 2022. In accordance with the authority granted by Article 6, Section 3, of the Arizona Constitution and pursuant to A.R.S. § 12-145, the Chief Justice of the Arizona Supreme Court has designated Judge Swann as a judge pro tempore in the Court of Appeals for the purpose of participating in the resolution of cases assigned to this panel during his term in office and for the duration of Administrative Order 2022-162.
MEMORANDUM DECISION
SWANN, JUDGE:
¶1 This is an appeal from a forcible detainer judgment. We vacate the judgment as against an occupant who was never served with process identifying him as a defendant. We affirm the judgment as against the remaining defendant, except we vacate and remand with respect to the judgment's award of unrecoverable costs and an unrequested lien authorization.
FACTS AND PROCEDURAL HISTORY
¶2 Robert and Marilyn Hepler ("the Heplers") are the parents of Elizabeth Hepler ("Elizabeth") and the settlors of a living trust, The Hepler Family Trust ("the Trust"). The Trust terms state that all property acquired by the Heplers is owned by the Trust.
¶3 In late 2020, the Heplers offered to purchase a house for Elizabeth's occupancy. According to Elizabeth, the Heplers initially promised that she would hold title to the house. But the Heplers later retreated from that position, and ultimately took title in their names only. They then amended the Trust to provide that Elizabeth would be permitted to live in the house "rent free, as a gift from us," during the Heplers' lifetimes and would receive the house outright upon their deaths.
¶4 In July 2021, however, the Heplers effected a second amendment to the Trust whereby they revoked Elizabeth's permission to occupy the house and excluded her from any bequest related to the house. They then demanded that Elizabeth and any other occupants vacate the house by the end of August. Elizabeth failed to comply with that demand.
¶5 The Trust next commenced this action for forcible entry and detainer, and shortly thereafter the Heplers executed a warranty deed transferring the property to the Trust. Elizabeth answered, moved for dismissal, and filed counterclaims for breach of a lifetime tenancy and the implied covenant of good faith and fair dealing, equitable lien and unjust enrichment, failure to maintain and disclose or provide essential services, intentional infliction of emotional distress, retaliatory eviction, and declaratory relief. The Trust moved to strike the counterclaims. At the initial hearing, the superior court set oral argument on the motions for November 1, 2021, and a full-day bench trial for December 22. Before the hearing, the Trust moved to amend the caption to identify John Doe I as David Tellez ("Tellez"). The Trust also lodged multiple exhibits.
¶6 At the November 1 hearing, the superior court granted the Trust's motions to strike the counterclaims and amend the caption, denied Elizabeth's motion to dismiss, vacated the trial setting, and directed the Trust to provide a form of judgment for signature. The court denied reconsideration and entered a final judgment against Elizabeth and Tellez awarding the Trust immediate possession of the premises along with $4,450 in attorney's fees and approximately $410 in costs. Elizabeth and Tellez, who remain in possession via a supersedeas bond, appeal.
DISCUSSION
I. THE JUDGMENT MUST BE VACATED AS TO TELLEZ.
¶7 As an initial matter, we address the appellants' contention that the superior court erred by adding Tellez as a defendant because he was not named in a summons. The complaint and summons identified Elizabeth and fictitious defendants "John and Jane Does I-X" in the caption. When the process server personally served Elizabeth at the residence, he noted on the certificate of service that Tellez was "John and Jane Does I-X" and that he left copies of process with Elizabeth "for both." But the summons itself identified by true name Elizabeth only.
¶8 Though Arizona Rule of Procedure for Eviction Actions ("Rule") 5(a) permits plaintiffs to name fictitious defendants in the summons and complaint, with liberal leave to amend to reflect such defendants' true names when known, "[f]or the court to have personal jurisdiction over a defendant designated under a fictitious name, it is essential that any party being served must clearly be given notice that he is being served as a defendant in the case, and is being served in place of a defendant designated under a fictitious name, and if the facts do not so show then the service is fatally defective." Safeway Stores, Inc. v. Ramirez, 99 Ariz. 372, 379 (1965). "It is not enough merely to serve a person with a process unless it is made known to him that he is a defendant and is being served in the place of one of the fictitious persons." Id. at 380. The defendant's true name must be added to the face of the fictitious-defendant summons, not merely noted on a certificate of service. Id.
¶9 Because Tellez was never identified as a defendant on the process, the superior court did not acquire personal jurisdiction over him and erred by adding him to the caption. The judgment must be vacated in its entirety as against Tellez. On this record, we express no opinion as to whether Tellez may nonetheless be subject to removal from the property based on privity, or whether he may be held financially liable under community-property law.
II. THE SUPERIOR COURT PROPERLY FOUND ELIZABETH GUILTY OF FORCIBLE DETAINER.
¶10 We conclude that a forcible detainer judgment was properly issued against Elizabeth. A forcible detainer exists when "[a] tenant . . . by sufferance . . . whose tenancy has been terminated retains possession after his tenancy has been terminated or after he receives written demand of possession by the landlord." A.R.S. § 12-1173(1). A tenancy by sufferance need not arise from a true landlord-tenant relationship - rather, "[i]t exists when a party who had a lawful possessory interest in property wrongfully continues in possession of the property after its interest terminated." Grady v. Barth, 233 Ariz. 318, 321, ¶ 12 (App. 2013); see also Andreola v. Ariz. Bank, 26 Ariz.App. 556, 558 (1976).
¶11 The object of a forcible detainer proceeding is "to provide a summary, speedy and adequate means for obtaining possession of premises by one entitled to actual possession." Colonial Tri-City Ltd. P'ship v. Ben Franklin Stores, Inc., 179 Ariz. 428, 433 (App. 1993). Summary relief is, quite logically, unavailable if there is a material predicate dispute regarding the nature of the parties' relationship. See United Effort Plan Trust v. Holm, 209 Ariz. 347, 350-51, ¶¶ 21-24 (App. 2004); Colonial Tri-City Ltd. P'ship, 179 Ariz. at 434. In the absence of such a dispute, however, the proceeding is appropriate to determine, as the sole issue, the right of actual possession. See A.R.S. § 12-1177(A). The merits of title may not be tried in the action, id., and the defendant may not offensively or defensively litigate any counterclaims, offsets, or crossclaims, United Effort Plan Trust, 209 Ariz. at 351, unless they clearly pertain to the issue of possession, Cottonwood Plaza Assocs. v. Nordale, 132 Ariz. 228, 232 (App. 1982).
¶12 Consistent with the nature of forcible detainer proceedings, the eviction procedure rules provide that even when a party has demanded a jury trial, the court may summarily decide the case when no genuine factual dispute exists. Rule 11(e) states that "[i]f no factual issues exist for the jury to determine, the matter shall proceed to a trial by the judge alone regarding any legal issues or may [be] disposed of by motion or in accordance with these rules, as appropriate." (Emphasis added.) Such disposition is analogous to summary judgment under the civil rules and does not amount to a violation of constitutional rights. Montano v. Luff, 250 Ariz. 401, 406, ¶ 16 (App. 2020).
¶13 The appellants first contend that the superior court erred by concluding that the Trust had standing as the property owner. They contend that the Trust terms did not cause an automatic transfer of the property from the Heplers to the Trust, and that the court could not rely on an unadmitted, unrecorded copy of the warranty deed to recognize a transfer. We need not decide the effect of the Trust terms because we take judicial notice of the recorded warranty deed. See In re Sabino R., 198 Ariz. 424, 425, ¶ 4 (App. 2000).
¶14 We reject the appellants' argument that Elizabeth was deprived of due process when the court disposed of the case at the motions hearing based on exhibits attached to the motion practice. The exhibits were sufficient to support a Rule 11(e) disposition and avoid an unnecessary trial. Contrary to the appellants' contention, there was not a genuine dispute regarding the nature of the parties' relationship. This case is unlike United Effort Plan Trust, 209 Ariz. at 351, ¶¶ 22-24, in which the parties' history of communications created uncertainty regarding whether the defendants were tenants or life-estate holders. Here, the nature of the relationship was clear: Elizabeth was gifted a lifetime possessory interest under the terms of the Trust, the Trust was subject to amendment, and an amendment revoked the gift. Whether the revocation entitled Elizabeth to the relief she sought by her counterclaims was a question beyond the scope of the forcible detainer proceeding. The superior court properly found that the Trust was entitled to possession, vacated the trial, and dismissed the counterclaims.
III. THE JUDGMENT AGAINST ELIZABETH WAS PROPER EXCEPT WITH RESPECT TO THE COSTS AWARD AND LIEN AUTHORIZATION.
¶15 The appellants next contend that the judgment contained multiple errors. First, they challenge its citation to the civil finality rule. But they identify no prejudice caused by the citation, and we find none. Second, they challenge the judgment's authorization of a writ of restitution in view of the court's grant of the motion to post a supersedeas bond. But "until a bond is posted, a party may record a judgment." ARCAP 7(a)(2). And consistent with the supersedeas bond, no writ was ever entered.
¶16 Third, the appellants argue that the judgment improperly awarded attorney's fees. Fees and costs were authorized under A.R.S. § 12-1178(A) and Rule 13(f). The appellants contend that the Trust failed to show a genuine obligation to pay the fees, see Lisa v. Strom, 183 Ariz. 415, 420 (App. 1995), and that certain of the fees were improperly block-billed and vague. We reject those contentions. The fee affidavit stated that the application was made for "attorney's fees pursuant to the contract," identified billing rates, and provided an itemized and adequately specific list of the tasks performed and the time spent thereon. See RS Indus., Inc. v. Candrian, 240 Ariz. 132, 138, ¶ 21 (App. 2016) (recognizing that even block-billed fees may be awarded when billing statements are sufficiently detailed).
¶17 Fourth, the appellants contend that the judgment improperly awarded photocopy costs. The record reveals that the Trust requested $440.60 in costs, including $50.00 for "[c]opies and postage." Such costs were not recoverable, see A.R.S. § 12-332(A), so the maximum cost award was $390.60. The judgment, however, awarded $410.60. That was improper.
¶18 The appellants finally argue that the judgment improperly authorized a lien filing under A.R.S. § 33-421. We agree that the authorization was unwarranted in view of the Trust's failure to request it before the ruling. See Wall v. Superior Court, 53 Ariz. 344, 354-55 (1939). We note that the Trust "take[s] no position" on this and the costs-award issue.
CONCLUSION
¶19 We vacate the judgment as to Tellez. We affirm the judgment as to Elizabeth, except we vacate and remand with respect to the costs award and the lien authorization.
¶20 Both the appellants and the Trust request attorney's fees on appeal under Rule 13(f) and A.R.S. § 12-1178. That statute, however, applies only to trial-court proceedings. Bank of New York Mellon v. Dodev, 246 Ariz. 1, 12, ¶ 40 (App. 2018). Further, in view of the nature of the underlying action, the appellants' reliance on §§ 12-341.01, 33-1368 and -1377 as bases for fees is misplaced. And finally, in view of our disposition of the appeal, we deny the appellants' request for fees as a sanction under § 12-349. We conclude that the Trust substantially prevailed on appeal, and we therefore grant its request for costs on appeal under § 12-341 upon compliance with ARCAP 21. See Montano, 250 Ariz. at 407, ¶ 18.