Opinion
No. 1 CA-CV 12-0626
01-07-2014
In the matter of the Estate of: T. MARIE SMITH aka THELMA MARIE SMITH, deceased RONALD L. SMITH, as Personal Representative of the T. Marie Smith Estate and Successor Trustee of the Smith Family Trust, Plaintiff/Appellee/Cross-Appellant, v. L. MARTIN DEL GIORGIO aka LEE MARTIN DEL GIORGIO, Defendant/Appellant/Cross-Appellee.
Gammage & Burnham, PLC, Phoenix By Richard K. Mahrle, Carolyn V. Williams Counsel for Plaintiff/Appellee/Cross-Appellant Jackson White, PC, Mesa By Bradley D. Weech, Roger R. Foote Counsel for Defendant/Appellant/Cross-Appellee
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT
AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Coconino County
No. S0300PB20090098
The Honorable Ted Stuart Reed, Judge Pro Tempore
AFFIRMED
COUNSEL
Gammage & Burnham, PLC, Phoenix
By Richard K. Mahrle, Carolyn V. Williams
Counsel for Plaintiff/Appellee/Cross-Appellant Jackson White, PC, Mesa
By Bradley D. Weech, Roger R. Foote
Counsel for Defendant/Appellant/Cross-Appellee
MEMORANDUM DECISION
Presiding Judge Andrew W. Gould delivered the decision of the Court, in which Judge Donn Kessler and Judge Michael J. Brown joined. GOULD, Judge:
¶1 Both parties appeal from the court's amended ruling; for the reasons that follow we affirm.
Facts and Procedural History
¶2 This is a probate case to administer the Estate of Dr. T. Marie Smith ("the Estate"). Dr. Smith's Estate consists of a will and a trust. Dr. Smith created the Smith Family Trust ("the Trust") in 1984. On August 10, 2007, she executed her Last Will and Testament, which contained a pour-over clause transferring her estate assets to the Trust. Dr. Smith died on June 22, 2009. Dr. Smith's three surviving children, Ronald Smith, Teresa Lewis, and Eugene Smith, are beneficiaries of the Trust. Ronald Smith ("Petitioner") was appointed as personal representative of the Estate and trustee of the Trust.
¶3 The issues in this case relate to certain property jointly owned by Lee Martin Del Giorgio ("Appellant") and Dr. Smith.
¶4 Appellant and Dr. Smith were in a dating relationship and lived together for more than 20 years prior to Dr. Smith's death. During their relationship Appellant and Dr. Smith had both separate and joint accounts which they used without distinction to pay for separate and joint expenses. They also associated as co-owners of various real estate parcels for profit. Appellant and Dr. Smith would purchase real estate, develop it and re-sell it for profit; the proceeds of these joint ventures would be reinvested into new properties. As of May 2009, Appellant and Dr. Smith held the following properties as joint tenants with right of survivorship ("Yavapai lots"):
• Lot 311 of Lake Montezuma Hills SubdivisionAppellant and Dr. Smith also held a 12-acre parcel in Coconino County ("12-acre Parcel") and Lot 139, Kangaroo Trail, Nakusp, British Columbia ("the Canadian Property") as joint tenants with right of survivorship. They held Lot 81 of Montezuma Park, Unit 7 as tenants in common, and Appellant held Lot 243 of Lake Montezuma Estates as his individual property and an A-Frame house located at 671 Awatabi Ovi, Flagstaff, Arizona ("the A-Frame") as his individual property.
• Lot 312 of Lake Montezuma Hills Subdivision
• Lot 313 of Lake Montezuma Hills Subdivision
• Lot 314 of Lake Montezuma Hills Subdivision
• Lot 80 of Montezuma Park, Unit 7
• Lot 49 of Montezuma Park, Unit 11
• Lot 50 of Montezuma Park, Unit 11
• Lot 51 of Montezuma Park, Unit 11
¶5 In May 2009, Dr. Smith, Appellant, and Petitioner entered into an agreement to divide their interests in these properties. Pursuant to the agreement, they agreed that Appellant would be given the Yavapai Lots, the 12-acre Parcel, and the A-Frame; and that the Canadian Property would go to the Trust. Other property belonging to Dr. Smith would also be placed in the Trust and intended for certain of her three children, all beneficiaries of the Trust. This agreement was referred to as the Property Division Agreement, and it addressed and allocated the joint venture properties between Appellant and Dr. Smith.
¶6 However, after Dr. Smith died and before the transfer of the Canadian Property could be completed, Appellant halted registration of the title documents in Canada. Six months after Dr. Smith's death in June 2009, Appellant sold the Canadian Property for $137,500 (Canadian). This action breached the Property Division Agreement. In light of these actions, the Estate elected to rescind the Property Division Agreement.
¶7 In addition to the Property Division Agreement, Dr. Smith had set up a joint bank account with her daughter, Teresa, to deposit $100,000 of her separate funds. After Dr. Smith's death, however, Appellant initially diverted that money into a Scottrade account he held jointly with Dr. Smith, and over which he had exclusive control; he eventually returned $85,000 of the $100,000 to the Estate/Trust.
¶8 Petitioner applied for informal probate of Dr. Smith's will and was appointed as the Personal Representative. Appellant objected and requested a formal proceeding. Appellant had submitted a claim against the Estate on August 24, 2009 requesting $299,750.58 that he claimed was a loan to Dr. Smith and $71,336.15 from a Scottrade joint tenancy account he claimed was proceeds from his contracting business. Petitioner disallowed Appellant's claim in full. The court proceeded with informal probate of Dr. Smith's will.
¶9 In February 2010, Petitioner filed a petition for recovery of estate assets pursuant to Arizona Revised Statutes ("A.R.S.") section 14-3709. Petitioner claimed that Appellant had failed to produce records or assets and otherwise refused to give Petitioner access to the records in order to account for property of the Estate and Trust. The petition (1) sought return of the property and documents and double damages for any property belonging to the Estate/Trust, (2) charged Appellant with breaching his fiduciary duty arising from a confidential relationship with Dr. Smith and sought imposition of a constructive trust over any assets Appellant wrongfully withheld from the Estate/Trust, (3) claimed Appellant took advantage of Dr. Smith, a vulnerable adult, and (4) asked for reformation of the deeds of property that were, Petitioner claimed, intended to be held jointly by Appellant and Dr. Smith. The court held a hearing regarding the petition and ultimately the parties stipulated to produce the needed records and Appellant agreed that no property in dispute would be transferred.
¶10 Appellant filed a counterclaim. The court permitted Appellant to amend the counterclaim twice; his second amended counterclaim (1) made a claim against the Estate in the amount of $1,390,292.73, (2) alleged the lis pendens were improperly recorded and requested damages under A.R.S. § 33-420, (3) claimed Petitioner breached his fiduciary duty, (4) asked that non-probate assets be used to satisfy his claims, and (5) alleged Petitioner was unjustly enriched when he denied Appellant's claims. As to count six of his counterclaim, Appellant asked for special action relief to find the lis pendens on the A-Frame, the 12-acre parcel, and the Yavapai lots invalid and an award of damages.
¶11 Following a bench trial the court issued its findings of fact and conclusions of law in detail. The portions relevant to this appeal held as follows.
¶12 One of the issues disputed by the parties was the nature of the business relationship between Appellant and Dr. Smith with respect to the jointly owned properties. The court found that at the time of Dr. Smith's death, she and Appellant associated as co-owners of the Yavapai lots, the 12-acre Parcel, the Canadian Property and the A-Frame, and that all of these properties were held as investments for profit.
¶13 The court found there was no written business partnership agreement or verbal agreement to be in a general partnership between Appellant and Dr. Smith. The court concluded, however, that Appellant and Dr. Smith held the investment properties as joint venturers. The court also determined that the A-Frame property was included with the other jointly held properties based on evidence indicating the parties intended to share ownership of the A-Frame property.
¶14 The court also found that the Property Division Agreement was a valid contract that constituted the agreement for dissolution and winding up of Appellant's and Dr. Smith's joint ventures. It further determined that Appellant's actions halting the registration of the Canadian property and selling it was a material breach of the Property Division Agreement and represented a substantial failure of consideration, thereby entitling Petitioner to rescind the Agreement. In attempting to restore the parties to the status quo existing prior to the Agreement, the court concluded that the deeds of the joint venture properties did not reflect the parties' intentions prior to implementation of the Agreement due to mutual mistake. The court therefore ordered the deeds be reformed to reflect that Appellant and Dr. Smith owned them as tenants in common.
¶15 The court found that Dr. Smith intended to deposit $100,000 of her funds into a joint bank account with Teresa, but that Appellant diverted those funds to a Scottrade account held jointly by him and Dr. Smith before returning all but $15,000 to the Estate.
¶16 Finally, the court concluded that Appellant violated A.R.S. § 14-3709 when he improperly sold the Canadian Property, and that as a result, the Estate was entitled to double damages under the statute. It also concluded that Appellant's diversion of the $15,000 constituted "embezzlement" in violation of § 14-3709, and the Estate was also entitled to double damages on this claim. The court's remaining resolution of the claims and counterclaims are not relevant to this appeal.
¶17 Following the court's ruling, Appellant filed a motion to amend the judgment and Petitioner filed an application for attorneys' fees. The court considered both filings and issued an amended ruling.
¶18 The court reexamined whether rescission and reformation were appropriate remedies. In its amended ruling the court modified its view of the deeds to the joint venture properties, and concluded that they did reflect Appellant's and Dr. Smith's intentions at the time they were executed, e.g., prior to the execution of the Property Division Agreement in May 2009. However, once the Property Settlement Agreement was executed in May 2009, the Agreement, and not the deeds, reflected the intentions of Appellant and Dr. Smith concerning "settlement and division of their respective interests in all of their joint venture properties." Accordingly, if the Agreement were rescinded, the intent of Dr. Smith in executing the Agreement would be frustrated; the joint venture properties would be held as titled, thereby depriving Dr. Smith's Estate of all the joint venture properties. As a result, the court denied Petitioner's request for rescission and instead granted termination of the Property Division Agreement and awarded damages.
¶19 The amended ruling also reconsidered evidentiary rulings the court had made regarding testimony about Dr. Smith's statements that were used to show her one-half interest in the A-Frame property. The court had previously admitted the testimony over hearsay and dead man's statute objections. In its amended ruling, the court determined that it erred in admitting the evidence and reconsidered the evidence without such testimony. The court specifically noted that there was conflicting evidence on the issue, but that it was clear that the joint venture properties were held to be developed and sold for profit and the A-Frame was not intended to be developed and sold for profit. Upon reconsideration, the court concluded that Appellant owned the A-Frame as his separate property.
¶20 The court also found that the Estate/Trust was the prevailing party and thus entitled to a discretionary award of reasonable attorneys' fees and costs.
¶21 Following the amended ruling, Petitioner filed a motion to amend the judgment regarding the award of fees; Appellant objected to the court's award of attorneys' fees. The court again amended its ruling still awarding fees, but analyzing both whether the Estate/Trust was a prevailing party under A.R.S. § 12-341.01 and whether the Estate/Trust was entitled to fees under the Associated Indemnity Corp. v. Warner, 143 Ariz. 567 (1985), factors.
¶22 The court entered a final judgment and this appeal followed.
Discussion
¶23 Appellant raises the following issues on appeal: (1) the court should not have awarded double damages under A.R.S. § 14-3709, (2) the issue of "embezzlement" was never before the court, (3) the lis pendens were groundless and overbroad, (4) the lis pendens are improperly taking the place of a supersedeas bond, (5) the Estate/Trust was not the prevailing party to be awarded fees, and (6) the Estate/Trust did not file a proper fee affidavit. The Estate/Trust cross-appealed raising the following issues: (1) the court's original ruling granting rescission and reformation was correct, and (2) the court's original ruling admitting testimony about Dr. Smith's statements was correct. We address each in turn.
We note that we have not been provided a complete transcript of the proceedings below. "A party is responsible for making certain the record on appeal contains all transcripts or other documents necessary for us to consider the issues raised on appeal." Baker v. Baker, 183 Ariz. 70, 73, 900 P.2d 764, 767 (App. 1995). "When no transcript is provided on appeal, the reviewing court assumes that the record supports the trial court's decision." Johnson v. Elson, 192 Ariz. 486, 489, 967 P.2d 1022, 1025 (App. 1998).
Appeal
I. Double Damages
¶24 Appellant argues that the court improperly subjected him to an award of double damages under A.R.S. § 14-3709 for the value of the Canadian Property and the $15,000 he diverted from Dr. Smith's bank account. He reasons that the Canadian property was Trust property and the money was the property of Dr. Smith's daughter, and therefore § 143709 does not apply because neither were property of the Estate. Appellant does not provide any cases to support his proposed reading of the statute.
¶25 Appellant's attempt to exclude the Canadian property and the $15,000 from the Estate, and therefore the scope of § 14-3709, by characterizing it as Trust property or as the individual property of Teresa is disingenuous. Both the Canadian property and the $15,000 were part of Dr. Smith's Estate; the fact that under the terms of Dr. Smith's will both assets would eventually be transferred into the Trust does not alter their original character as part of her Estate.
¶26 In pertinent part, the statute states as follows:
Except as otherwise provided by a decedent's will, every personal representative has a right to, and shall take possession or control of, the decedent's property, except that any real property or tangible personal property may be left with or surrendered to the person presumptively entitled to it unless or until, in the judgment of the personal representative, possession of the property by the personal representative will be necessary for purposes of administration.A.R.S. § 14-3709(A). Here, section 14-3709 allowed Petitioner, as personal representative for Dr. Smith's Estate, to take measures to recover the assets that belonged to the Estate that were necessary for proper administration of the Estate. "[T]he language of the statute sets up a process whereby a personal representative may commence an 'action to recover possession of property,' authorized by subsection (A)." In re Estate of Newman, 219 Ariz. 260, 266, 196 P.3d 863, 869 (App. 2008). Appellant argues that the Canadian Property was transferred to the Trust by the Property Division Agreement and could not have been property of the Estate. However, Appellant's own actions halting the transfer of title of the Canadian Property and conveying it to a third party breached that agreement; as a result, the transfer never occurred and the Canadian Property remained property of Dr. Smith's Estate. Petitioner was, therefore, authorized under § 14-3709 to seek recovery of the Canadian property and the $15,000 that were wrongfully conveyed/diverted from Dr. Smith's Estate. II. Embezzlement
¶27 Next, Appellant attempts to escape the court's award of double damages on the $15,000 by arguing that the court's finding that he "embezzled" the $15,000 was never before the court; Appellant states that the pleadings mentioned unjust enrichment/conversion, not embezzlement.
¶28 Section 14-3709(B) authorizes the personal representative to complain to the court "on oath, that a person is suspected of having concealed, embezzled, conveyed or disposed of any property of a decedent." The statute's structure requires the court to indicate which wrongful conduct it finds the defendant engaged in before awarding double damages. A.R.S. § 14-3709(D) ("If on examination or from other evidence adduced at the hearing it appears that a person has concealed, embezzled, conveyed or disposed of any property of a decedent . . . a judgment shall be for double the value of the property"); Matter of Estate of Jorgenson, 159 Ariz. 214, 216, 766 P.2d 87, 89 (App. 1988) (requiring the court to find the property was wrongfully concealed, embezzled, conveyed or disposed of before awarding double damages).
¶29 Embezzlement is included in the language of the statute that serves the basis of the Petitioner's claim. The petition for recovery of assets filed by Petitioner sought "return of any assets of the Estate or the Trust improperly obtained or retained" by Appellant. The claim alleged that Appellant assisted and acted on Dr. Smith's behalf before her death; that he had extensive access to her home, financial accounts, credit card and personal property; and that he obstructed administration of the Estate and Trust by concealing information or assets of the Estate/Trust. At the hearing, Appellant's attorney stated that the point of the hearing was to determine whether Appellant "has concealed, embezzled, conveyed or disposed of any property of the decedent."
¶30 Appellant takes issue with the fact that the court did not include a specific finding of fraud in support of its embezzlement finding. There is no requirement under A.R.S. § 14-3709(D) that the court make an express finding of fraudulent intent. The language of the statute is clear and unambiguous; if the court, "on examination or from other evidence adduced at the hearing" determines that a person embezzled property from an estate, the court's judgment "shall be for double the value of the property." A.R.S § 14-3709(D). Here, the court clearly made the requisite finding that Appellant's "failure to return the last $15,000 of Dr. Smith's separate funds constitutes 'embezzlement' . . . of Dr. Smith's property in violation of A.R.S. § 14-3709(D)." Furthermore, because we do not have the complete transcripts, we assume the evidence presented supported the court's findings. Quila v. Schafer's Estate, 7 Ariz. App. 301, 302, 438 P.2d 770, 771 (1968) (stating that where the complete transcripts are not available we conclude the court's judgment was sustained by the evidence). III. The Lis Pendens were Not Groundless or Overbroad
A. Lis Pendens on Arizona Properties not Groundless
¶31 Appellant argues that the lis pendens filed on the Arizona properties were groundless and he should have been awarded damages under A.R.S. § 33-420. Appellant focuses on the fact that the Petitioner's claim for rescission/reformation as to various properties was eventually rejected by the court; however, the proper focus is not on the ultimate outcome of Petitioner's claim, but whether there was any credible basis to the action when the lis pendens was filed. Mining Inv. Grp., LLC v. Roberts, 217 Ariz. 635, 640-41, ¶ 23, 177 P.3d 1207, 1212-13 (App. 2008) ("[T]he appropriate test to determine a groundless lis pendens . . . is whether the underlying action affecting title to the property has no arguable basis."); see also Evergreen West, Inc. v. Boyd, 167 Ariz. 614, 620, 810 P.2d 612, 618 (App. 1991) ("[T]he action under § 33-420 is not intended to be an expedited hearing on the underlying action . . . the trial court need only find 'some basis' for concluding that the action affects title to real property.").
¶32 Here, because Appellant breached the Property Division Agreement, all the property jointly owned by Appellant and Dr. Smith was placed at issue in administering Dr. Smith's Estate and winding up the joint venture. Indeed, the trial court initially found in favor of Petitioner on his rescission/reformation claim. Also, Petitioner initially claimed that certain deeds were forged, thereby placing the deeds at issue such that filing a lis pendens was proper to inform third parties of Petitioner's claim to the property. Coventry Homes, Inc. v. Scottscom P'ship, 155 Ariz. 215, 217, 745 P.2d 962, 964 (App. 1987) ("A notice of lis pendens is a statement that a party is claiming an interest in real property which would affect the title.").
¶33 Based on our review of the record, we are unable to conclude the trial court erred in refusing to find the lis pendens were groundless and award Appellant damages under § 33-420. The court's ultimate award of title in the Arizona properties to Appellant does not compel the conclusion that the lis pendens were groundless. Moreover, we cannot speculate as to what evidence may have been considered at trial as to the merits of Petitioner's claim because we do not have complete transcripts. See Quila, 7 Ariz. App. at 302, 438 P.2d at 771.
B. Lis Pendens for Lot 243 Was Not Overbroad
¶34 Appellant next contends that the lis pendens filed for Lot 243 was overbroad because his individual ownership of that lot was never in dispute. We disagree. The court found in its original ruling that Appellant and Dr. Smith had a lengthy business relationship that involved the buying, selling, and reinvesting in numerous properties. However, they did not document the contributions or specific reinvestment proceeds for these transactions, nor was there any formal partnership or business agreement between the two, Given this background, we are unable to conclude the trial court erred in determining there was some colorable basis for Dr. Smith's Estate to assert a claim against lot 243. "The court need find only some basis that the action is one affecting title to real property, to conclude the lis pendens was not wrongly recorded." Santa Fe Ridge Homeowners' Ass'n v. Bartschi, 219 Ariz. 391, 395, ¶ 11, 199 P.3d 646, 650 (App. 2008). We assume there was such a basis here. See Quila v. Schafer's Estate, 7 Ariz. App. 301, 302, 438 P.2d 770, 771 (1968) ("Where we do not have the complete transcripts we must assume the court's ruling was supported by the evidence."). The court did not err in refusing to find that the lis pendens for lot 243 was wrongly recorded. IV. The Lis Pendens Did Not Take the Place of a Supersedeas Bond
¶35 Appellant's final issue connected to the lis pendens is that the court should have ordered them quashed, and that the court's failure to do so allowed the lis pendens to have the effect of a supersedeas bond. Appellant admits that there is "no Arizona case directly on point" to support his claim. However, Appellant asks this court to quash the lis pendens and award him damages under A.R.S. § 33-420.
¶36 A trial court may abuse its discretion in failing to quash a lis pendens. Muchesko v. Muchesko, 191 Ariz. 265, 274, 955 P.2d 21, 30 (App. 1997). However, "[t]he denial of a motion to quash is not an appealable order." Tucson Estates, Inc. v. Superior Court In & For Pima Cnty., 151 Ariz. 600, 602-03, 729 P.2d 954, 956-57 (App. 1986) (stating that an appellate court may grant relief by special action when a court has abused its discretion). Appellant did include a request for special action relief quashing the lis pendens in his second amended counterclaim filed in August 2011. In his motion for new trial filed June 28, 2012, he again asked the court to quash the lis pendens but did not specifically argue that the lis pendens were improperly acting as a supersedeas bond. Appellant filed a petition for special action to quash the lis pendens below following the court's final ruling. In the petition he asked the court to quash the lis pendens and to direct Mr. Smith to file a supersedeas bond to stay execution of judgment for the appeal. This court declined jurisdiction. See Stapert v. Ariz. Bd. of Psychologist Examiners, 210 Ariz. 177, 182, ¶ 21, 108 P.3d 956, 961 (App. 2005) (stating that a decision to decline or accept special-action jurisdiction is discretionary).
¶37 Although Appellant did object to the court's refusal to quash the lis pendens upon entry of final judgment, he did not specifically request that the court set a supersedeas bond pending the appeal if the lis pendens was not quashed. His failure to do so precludes him from now arguing that the court erred in continuing the lis pendens without setting a bond. Ritchie v. Krasner, 221 Ariz. 288, 303, ¶ 51, 211 P.3d 1272, 1287 (App. 2009). Furthermore, even if we concluded the court should have ordered the lis pendens released pending appeal, Appellant is not entitled to damages under § 33-420 because Mr. Smith was acting in accordance with the court's direction. See A.R.S. § 33-420 (stating that a person is liable for damages for recording a document he knows or has reason to know is invalid or for willfully refusing to release or correct such document). V. The Estate/Trust was the Successful Party
¶38 Next, Appellant argues the court erred in concluding that Petitioner was the successful party when it awarded costs and attorneys' fees. Appellant claims that the court wrongly concluded the judgment was more favorable to Petitioner than Petitioner's settlement offer in deciding to award fees to Petitioner.
¶39 We review the court's determination of who was the successful party for an abuse of discretion. Berry v. 352 E. Virginia, L.L.C., 228 Ariz. 9, 13, ¶ 21, 261 P.3d 784, 788 (App. 2011) ("Determining 'who is the successful party for purposes of awarding attorneys' fees is within the sole discretion of the trial court, and will not be disturbed on appeal if any reasonable basis exists for it.'"). Furthermore, we view the record in a light most favorable to upholding the trial court. Rowland v. Great States Ins. Co., 199 Ariz. 577, 587, ¶ 31, 20 P.3d 1158, 1168 (App. 2001). When findings of fact and conclusions of law have been requested "[a] trial court's findings of fact satisfy Arizona law if they are 'pertinent to the issues and comprehensive enough to provide a basis for the decision.'" Miller v. Bd. of Sup'rs of Pinal Cnty., 175 Ariz. 296, 299, 855 P.2d 1357, 1360 (1993) (quoting Gilliland v. Rodriquez, 77 Ariz. 163, 167, 268 P.2d 334, 337 (1954)).
¶40 Where "there are multiple-claims brought against a defendant, with varied success, and both parties seek an award of their attorneys' fees pursuant to A.R.S. § 12-341.01(A) we hold that the trial court has discretion to determine who is the successful party under the circumstances." Schwartz v. Farmers Ins. Co. of Arizona, 166 Ariz. 33, 38, 800 P.2d 20, 25 (App. 1990). We defer to the trial court because it is "better able to evaluate the parties' positions during the litigation and to determine which has prevailed." Berry, 228 Ariz. at 13, ¶ 22, 261 P.3d at 788.
¶41 The court can determine the successful party through (1) "an overall assessment of whether the [party] prevailed on his or her contractual claim" or (2) "a comparison of a settlement offer against the final judgment." Hall v. Read Dev., Inc., 229 Ariz. 277, 280, ¶ 10, 274 P.3d 1211, 1214 (App. 2012) ("[N]othing in the language of the statute indicates that these methods are necessarily mutually exclusive directives for determining the successful party."). In a case such as this, where the values of the written settlement offers and the final judgment are not clearly quantifiable, we think the more appropriate approach is to consider the totality of the litigation. See Berry, 228 Ariz. at 13-14, ¶ 22, 261 P.3d at 788-89 ("[I]n a case involving multiple claims and varied success, the trial court may apply a 'percentage of success' or a 'totality of the litigation' test.").
¶42 Contrary to Appellant's assertion, the court's determination that the Estate/Trust was the successful party was not based solely on a comparison of the final judgment with the written settlement offers. In its amended ruling regarding attorneys' fees the court awarded reasonable fees pursuant to A.R.S. §§ 14-3709 and 12-341.01(A). The court found that the final judgment was equally or slightly more favorable to the Estate/Trust than its written settlement offer and that the ruling was more favorable to the Estate/Trust than Appellant's counter-offer. The court also noted that the ruling was far less favorable to Appellant than his counter-offer. Additionally, the court analyzed the Warner factors and concluded that although Appellant successfully defended against some of the Estate/Trust's claims, he did not prevail on any of his counterclaims. Furthermore, Appellant does not challenge the court's award of reasonable attorneys' fees based on § 14-3709. Accordingly, we affirm. VI. The Estate/Trust Filed a Proper Fee Application
¶43 Appellant also challenges the fee application submitted by Petitioner. Appellant argues that because the Estate and Trust prevailed on some but not all of their claims, they were required to file a fee application that separated out each claim and each party. We reject Appellant's claim that the Estate and Trust should be treated as separate parties and be required to file individual fee applications. Throughout this litigation the Estate and Trust have been represented together by the same counsel. See Guam Soc‘y of Obstetricians & Gynecologists v. Ada, 100 F.3d 691, 701-02 (9th Cir. 1996) (stating that two parties for all practical purposes present one fee request where both are represented by the same counsel who performed work benefiting both parties).
¶44 Appellant also complains that the volume of the information provided and the fact that the attorneys used block billing made it substantially more difficult to determine what work was done for which party. We need only determine that the fee award has a reasonable basis in order to affirm it. Orfaly v. Tucson Symphony Soc'y, 209 Ariz. 260, 266, ¶ 21, 99 P.3d 1030, 1036 (App. 2004). An application should allow the court to determine whether the hours claimed are justified. Id. at 267, ¶ 23. "[C]ounsel should indicate the type of legal service provided, the date the service was provided, the attorney providing the service, . . . and the time spent in providing the service." Schweiger v. China Doll Restaurant, Inc., 138 Ariz. 183, 188, 673 P.2d 927, 932 (App. 1983). The application states that time expended relating directly to unsuccessful claims such as the forgery claim were removed from the request. The application also notes work done on other unsuccessful claims that could not easily be separated from work on the litigation as a whole was not redacted, but it suggested an amount to be removed for that work. We find that the court did not abuse its discretion in making the award and affirm. See City of Cottonwood v. James L. Fann Contracting, Inc., 179 Ariz. 185, 195, 877 P.2d 284, 294 (App. 1994) (stating that where affidavit indicated the date, time, and nature of the work for which fees were sought the court acted within its significant discretion to award fees in a matter intertwined with another matter for which it may not grant attorneys' fees).
Cross Appeal
¶45 The Estate/Trust has filed a cross appeal setting out two instances of error in the court's amended ruling. We review a court's decision to amend its judgment for an abuse of discretion. Englert v. Carondelet Health Network, 199 Ariz. 21, 25, 13 P.3d 763, 767 (App. 2000). VII. Court's Amended Ruling Rejecting Rescission and Reformation
¶46 The Estate/Trust seeks to reinstate the court's original ruling rescinding the Property Division Agreement and reforming the joint tenancy with right of survivorship deeds to give the Trust an undivided one-half interest in the joint-venture properties. The Estate/Trust argues that the court had the power to do so as part of an equitable remedy for rescission of the Property Division Agreement, or as part of winding up the joint venture between Appellant and Dr. Smith. See First State Serv. Corp. v. Hector's Concrete Const., Inc., 168 Ariz. 442, 442, 814 P.2d 783, 783 (App. 1991) (quoting Crane & Bromberg, Partnership § 35 (1968)) ("In all important respects, the joint venture is treated as a partnership.").
¶47 In its original ruling the court found that the deeds to the joint venture properties did not reflect the intention of Appellant and Dr. Smith to hold them as joint venture properties prior to the implementation of the Property Division Agreement. The significant change in the court's amended ruling was its conclusion that the joint venture property deeds did reflect the intentions of Appellant and Dr. Smith. In coming to this conclusion the court adjusted the time at which it examined the parties' intentions; the deeds did reflect the parties' intentions "before the Property Division Agreement." This clarification altered the court's analysis of the availability of rescission and reformation.
¶48 When rescinding a contract, the court must place the parties in the position they occupied prior to entering the contract. Rescission is an equitable remedy that "contemplates the 'undoing of the transaction,' whereby each party gives back to the other what it parted with in the original transaction." Standard Chartered PLC v. Price Waterhouse, 190 Ariz. 6, 34, 945 P.2d 317, 345 (App. 1996); Reed v. McLaws, 56 Ariz. 556, 562-63, 110 P.2d 222, 225 (1941) (stating that rescission annuls the contract and places the parties in the position they would be in had there never been a contract).
¶49 In its findings of fact the court determined that Appellant materially breached the Property Division Agreement and the Estate made a seasonable rescission of the contract. See Reed v. McLaws, 56 Ariz. 556, 562, 110 P.2d 222, 225 (1941) ("Whether or not there was a rescission of the contract is also a question of fact."). The effect of that rescission would be to leave the parties in the same position they would have occupied if there had never been an agreement; all joint venture property deeds would be held as joint tenants with right of survivorship. Because Appellant breached the Property Division Agreement six months after Dr. Smith's death, all the joint venture properties would pass to him through the right of survivorship. See In re Estelle's Estate, 122 Ariz. 109, 111, 593 P.2d 663, 665 (1979) ("The distinguishing feature of a joint tenancy is the right of survivorship by which the survivor takes the estate free of any claim of a deceased joint tenant."). The court correctly concluded that this would be an inequitable result.
¶50 The Estate/Trust counters that reforming the joint venture deeds to be held as tenants in common would achieve the equity it sought in rescinding the Property Division Agreement. To support this result the Estate reasons that Dr. Smith's intention just before entering the Property Division Agreement was to transfer her interest in the properties to the trust. However, reformation of the joint venture deeds is not available in this instance. Reformation is not available where the instrument clearly conveys the parties' intent. See Long v. City of Glendale, 208 Ariz. 319, 331-32, ¶ 47, 93 P.3d 519, 531-32 (App. 2004) (stating that party seeking reformation must show the instrument does not reflect his intent by clear and convincing evidence). Furthermore, reformation is available only if the contract or deed being reformed does not reflect the intention of the parties due to fraud, inequitable conduct, or mistake. Arc Elec. Co., Inc. v. Esslinger-Lefler, Inc., 121 Ariz. 501, 504, 591 P.2d 989, 992 (App. 1979). In determining whether there was fraud, inequitable conduct, or mistake, the court must focus on the parties' intention at the time of the deed's execution, not at the execution of the Property Division Agreement. See Corn v. Branche, 74 Ariz. 356, 358, 249 P.2d 537, 538 (1952) (stating that a duly executed and valid deed will not be reformed without clear and convincing evidence of mistake at the time of execution and delivery of the deed). The court found that the joint venture deeds did reflect the intentions of Appellant and Dr. Smith at the time those deeds were executed. Accordingly, its conclusion that reformation was not available was correct.
The Estate/Trust argued that Dr. Smith's intention prior to entering the Property Division Agreement was to divide the joint venture properties in a 50/50 split. The court's ruling makes no reference to evidence supporting this contention, and the record before us does not support the argument. Because we do not have complete transcripts, we assume the court's ruling was supported by the evidence. Am. Nat. Fire Ins. Co. v. Esquire Labs of Ariz., Inc., 143 Ariz. 512, 522, 694 P.2d 800, 810 (App. 1984).
¶51 Where pure rescission will not make a party whole, the court has equitable power to award damages that will. See Jennings v. Lee, 105 Ariz. 167, 173, 461 P.2d 161, 167 (1969) (stating that in order to do complete justice in an equitable rescission action, a party must be allowed to recover sums "as are necessary to restore her to her position prior to entering" the contract). The court achieved an equitable result by denying rescission of the Property Division Agreement and instead terminating it and awarding the Estate/Trust damages resulting from Appellant's breach. Medasys Acquisition Corp. v. SDMS, P.C., 203 Ariz. 420, 423, 55 P.3d 763, 766 (2002) ("Courts must be able to provide the relief to which the parties before them are entitled."); Ariz. R. Civ. P. 54(d) (directing courts to award party relief to which it is entitled "even if the party has not demanded such relief in the party's pleadings").
¶52 The Estate/Trust argues that rescinding the Property Division Agreement should endow Petitioner, as Dr. Smith's personal representative, with the ability to "dispose of the joint venture property that [Dr. Smith] held interests in at the end of May 2009 when the status quo begins." The Estate/Trust feels the court should have ordered Appellant to give the Estate a one half interest in all joint venture properties as its means of "winding up" the joint venture. However, the Estate/Trust has not cited, and we have not found, any authority directing a court to take such action in winding up a joint venture. Rather, courts usually order property be sold and the proceeds divided equally when winding up a partnership or joint venture. See e.g., Seguin v. Boyd, 134 Ariz. 172, 176, 654 P.2d 808, 812 (App. 1982) (stating that partnership property be sold and proceeds be used to pay creditors first then divided among partners equally); Karber v. Karber, 145 Ariz. 293, 295, 701 P.2d 1, 3 (App. 1984) (ordering the partnership assets to be sold and the balance remaining after paying creditors be divided equally among the partners); see also Hector's Concrete Const., 168 Ariz. at 442, 814 P.2d at 783 (quoting Crane & Bromberg, Partnership § 35 (1968)) ("In all important respects, the joint venture is treated as a partnership."). Furthermore, the court found that the Property Division Agreement was the complete agreement for dissolution and winding up of the joint ventures between Appellant and Dr. Smith. The court's action terminating the Agreement and awarding monetary damages for Appellant's breach equitably distributed the joint venture property. VIII. Court's Amended Ruling on Testimony about Dr. Smith's Statements
¶53 Petitioner argues the court erred when it reversed its original evidentiary rulings regarding testimony about statements Dr. Smith made in connection with the A-Frame property. At the trial, the parties contested whether the A-Frame property was owned by Appellant as his separate property or owned by Appellant and Dr. Smith as their joint property. During the trial, the Estate/Trust offered testimony about statements Dr. Smith made about what would happen to the A-Frame property. Appellant objected to the testimony on the ground that it was inadmissible hearsay and that it was barred by the Dead Man's Statute.
¶54 In making its original ruling, the court considered this testimony and found that the A-Frame property was joint venture property because the evidence indicated the parties intended to share ownership of the property. In its amended ruling, the court determined "that it erred in admitting evidence of statements by Dr. Smith that she believed she owned an undivided half-interest in the A-Frame house in May of 2009" and "reconsidered the evidence without such testimony." The court's amended ruling noted:
There was conflicting evidence as to whether the A-Frame was a joint venture property or Mr. Del Giorgio's separate property (as it was recorded) in May of 2009. It was clear, however, that unlike the other joint venture properties, the A-Frame was not intended to be developed and sold "for profit." A.R.S. § 29-1012. The Court herein concludes the facts do not establish that the A-Frame was joint venture property.
¶55 The state of mind exception permits admission of "[a] statement of the declarant's then-existing state of mind (such as motive, intent, or plan)" as long as that statement describes the declarant's present feeling or future intention rather than a memory. Ariz. R. Evid 803; State v. Fulminante, 193 Ariz. 485, 495, ¶ 32, 975 P.2d 75, 85 (1999). The testimony at issue describes Dr. Smith's discussions about how to dispose of the A-Frame property; Petitioner reasons the statements about Dr. Smith's plans indicate she felt she had an ownership interest in the property. Used for this purpose, the statements were not inadmissible hearsay. State v. Huerstel, 206 Ariz. 93, 108, 75 P.3d 698, 713 (2003) (stating that Rule 803 permits statement of decedent's then existing state of mind).
¶56 The Dead Man's Statute bars either party from testifying to statements made by the decedent when a lawsuit is by or against a personal representative of the decedent's estate. Troutman v. Valley Nat. Bank of Arizona, 170 Ariz. 513, 515, 826 P.2d 810, 812 (App. 1992). Under the statute "neither party shall be allowed to testify against the other as to any transaction with or statement by the testator . . . unless called to testify thereto by the opposite party, or required to testify thereto by the court." A.R.S. § 12-2251. The statute does not bar testimony of a person who is not a party to the lawsuit. Murillo v. Hernandez, 79 Ariz. 1, 6, 281 P.2d 786, 789 (1955). Additionally, although "the general incompetency imposed by this statute seems to have only two narrow exceptions, the words 'required to testify thereto by the court' have been given broader meaning than they might initially connote. Those words have long been interpreted to make the application of the statute discretionary." Matter of Mustonen's Estate, 130 Ariz. 283, 284, 635 P.2d 876, 877 (App. 1981) ("[A] party is 'required' to testify when the court, exercising its discretion, overrules an objection to the party's testimony.").
¶57 The court acted within its discretion in permitting Petitioner to testify about Dr. Smith's statements regarding the A-Frame property. As a result, the court's original evidentiary ruling admitting testimony about Dr. Smith's statements regarding the A-Frame property was correct. However, we do not conclude that the court's amended ruling must be reversed. See City of Tucson v. Morgan, 13 Ariz. App. 193, 195, 475 P.2d 285, 287 (1970) ("[I]f the trial court based its ruling upon the wrong reasons but was correct in its ruling for any reason, the appellate court is bound to affirm."). The court's amended ruling acknowledges the conflicting evidence regarding whether the A-Frame property was a joint-venture property or the separate property of Appellant. The court explained that it concluded the A-Frame property is not joint venture property because it was not held jointly for profit. In its findings the court concluded by clear and convincing evidence that Appellant and Dr. Smith held the joint venture properties "with a common purpose to develop such properties for profit." The A-Frame property was originally held as Appellant's separate property. Appellant conveyed the property to Dr. Smith for purposes of obtaining a favorable loan and completing construction of the house; Dr. Smith later deeded the A-Frame property back to Appellant. Thus, regardless of Dr. Smith's statements about her plans for the A-Frame property, none of the excluded evidence overcomes the court's conclusion that the A-Frame property was not owned for the purpose of developing it for profit. Rather, the evidence shows Appellant and Dr. Smith owned the A-Frame property as a residence.
We also note that regardless of whether the evidence shows the A-Frame property was joint venture property, under the terms of the Property Division Agreement, the A-Frame property belongs to Appellant. See supra, pp. 6, 16. As a result, the subject evidence is irrelevant to our decision because we affirm the trial court's decision that the Property Division Agreement governs the intent of the parties as to the disposition of the properties in this case, including disposition of the A-Frame property.
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Attorneys' Fees and Costs on Appeal
¶58 Both parties request an award of attorney's fees and costs on appeal pursuant to ARCAP 21; Appellant under A.R.S. § 12-341.01, and Petitioner under A.R.S. §§ 12-341.01 and 14-3709. Because neither party prevails on the issues they raise, and in the exercise of our discretion, we deny both requests.
Conclusion
¶59 For the foregoing reasons, we affirm.