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City Center Executive Plaza, LLC v. Jantzen - 2/24/2015

Arizona Court of Appeals Division One holds that under A.R.S. § 12-2108 and ARCAP 7, the amount of a supersedeas bond cannot exceed the total amount of damages awarded, which does not include attorneys’ fees and costs.


A group of plaintiffs sued City Center Executive Plaza, LLC and other defendants (collectively “City Center”) for damages and injunctive relief.  A jury awarded the plaintiffs $1 in damages, and the trial court granted the plaintiffs a permanent injunction against City Center.  The trial court also entered two Rule 54(b) judgments for attorneys’ fees and costs against City Center totaling approximately $2.4 million.  City Center appealed the money judgments, moved to stay them pending appeal, and asked the trial court to set a supersedeas bond in the amount of $1.  The plaintiffs sought a supersedeas bond in the amount of the judgments, arguing that (a) the supersedeas bond amount should be the amount of the judgment, not just the amount of the damages, and (b) City Center had intentionally dissipated assets, warranting a supersedeas bond in the full judgment amounts.  The trial court set the supersedeas bond at the judgment amounts without holding a hearing. 

In May 2014, the Arizona Court of Appeals granted City Center special action relief, vacated the trial court’s original order on the supersedeas bond, and directed the trial court to conduct a hearing to determine the appropriate amount of the supersedeas bond.  On remand, the trial court did not find clear and convincing evidence that City Center had dissipated assets, yet nonetheless set the supersedeas bond at 25% of the judgment amounts.  City Center again petitioned for special action relief.

The Arizona Appeals Court accepted special action jurisdiction because City Center had no equally plain, speedy, or adequate remedy by appeal and challenged the setting of a supersedeas bond.  The Court granted relief and remanded for the trial court to set the supersedeas bond at $1, the total amount of damages awarded.  Under A.R.S. § 12-2108(A) and (B), absent a finding that an appellant is intentionally dissipating assets, a supersedeas bond must be set at the lower of the “total amount of damages awarded,” fifty percent of the appellant’s net worth, or $25 million.  Citing extensive Arizona authority, the Court held that the term “damages” does not include attorneys’ fees, based on that term’s “peculiar and appropriate meaning in the law.”  A.R.S. § 1-213 (words that have “acquired a peculiar and appropriate meaning in the law” are to be construed according to such meaning).  Accordingly, in light of the trial court’s finding that City Center had not intentionally dissipated assets, the supersedeas bond could not exceed the $1 in damages awarded.

The Court rejected the plaintiffs’ argument that the terms “damages” and “judgment” are synonymous in § 12-2108(A).  The Court explained that those terms are not synonymous under Arizona law because damages may be a part of a judgment, along with attorneys’ fees and costs, but judgments are not damages themselves.  Furthermore, different words used in the same statute are generally assigned different meanings. 

The Court denied both parties attorneys’ fees.

Judge Howe authored the opinion; Presiding Judge Downie and Judge Norris concurred.

Posted by: Sharad H. Desai

Posted On: 3/2/2015