Opinion
No. 1 CA-CV 13-0346
06-17-2014
CDC POOLS, INC., an Arizona corporation, Plaintiff/Appellant, v. RITA EAGLESON, an individual; LAURA QUIGG, an individual, Defendants/Appellees.
Richardson & Richardson, P.C., Phoenix By William R. Richardson Counsel for Plaintiff/Appellant Rita Eagleson and Laura Quigg, Phoenix Defendants/Appellees
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Maricopa County
No. CV2011-097529
The Honorable David M. Talamante, Judge
AFFIRMED
COUNSEL
Richardson & Richardson, P.C., Phoenix
By William R. Richardson
Counsel for Plaintiff/Appellant
Rita Eagleson and Laura Quigg, Phoenix
Defendants/Appellees
MEMORANDUM DECISION
Judge Samuel A. Thumma delivered the decision of the Court, in which Presiding Judge Patricia K. Norris and Judge Kent E. Cattani joined.
THUMMA, Judge:
¶1 CDC Pools, Inc. (CDC) appeals from the dismissal with prejudice and without an award of attorneys' fees of this declaratory judgment case filed against Appellees Rita Eagleson and Laura Quigg. Finding no error, the dismissal is affirmed.
FACTS AND PROCEDURAL HISTORY
¶2 CDC, a licensed contractor, entered into a written contract with Appellees to resurface a pool and provide related work. Dissatisfied with the work, Appellees filed an administrative complaint with the Arizona Registrar of Contractors (ROC) pursuant to Arizona Revised Statutes (A.R.S.) section 32-1155 (2014). Appellees' ROC complaint alleged that CDC had failed to take appropriate corrective action, violated administrative requirements and abandoned the project without legal excuse. See A.R.S. § 32-1154(A)(1), (3) and (22). After a jobsite inspection, the ROC issued a corrective work order. Ultimately, the ROC and an administrative law judge found the parties had rescinded the contract and, as a result, dismissed Appellees' ROC complaint.
Absent material revisions after the relevant dates, statutes cited refer to the current version unless otherwise indicated.
¶3 While Appellees' ROC complaint was pending, CDC sued Appellees in Maricopa County Superior Court under the Declaratory Judgment Act, seeking: (1) a declaration that the contract was terminated and that Appellees were not entitled to anything more under the contract and (2) attorneys' fees and costs. See A.R.S. §§ 12-1831 to -1846.
¶4 In response to CDC's motion for summary judgment, Appellees requested a stay pending resolution of their appeal from the ROC's ruling. The superior court stayed the declaratory judgment action, denied CDC's motion for summary judgment without prejudice and stated that the declaratory judgment action would become "superfluous" if the ROC's ruling was affirmed on appeal.
¶5 When Appellees' appeal from the ROC's ruling was dismissed as untimely, the ROC's ruling effectively was affirmed (and certainly became final). As a result, the superior court dismissed this declaratory judgment action with prejudice, denied all requested relief and did not award CDC attorneys' fees. From CDC's timely appeal of that dismissal, this court has jurisdiction pursuant to A.R.S. § 12-2101(A)(1).
DISCUSSION
I. CDC Was Not Entitled To Declaratory Relief Or An Award Of Attorneys' Fees.
¶6 This court reviews questions of law, such as whether summary judgment is proper or a party has stated a valid claim for declaratory relief, de novo. Schwab v. Ames Constr., 207 Ariz. 56, 60 ¶ 17, 83 P.3d 56, 60 (App. 2004). This court will affirm the superior court's ruling if it is correct for any reason. Hawkins v. State, 183 Ariz. 100, 103, 900 P.2d 1236, 1239 (App. 1995).
¶7 "An action for declaratory relief is not appropriate to review an administrative decision [where] there exists a procedure to appeal from the administrative ruling. Furthermore, the declaratory judgment procedure may not be used to preempt or prejudge issues that are committed for initial decision to an administrative body." Tanner Cos. v. Ariz. State Land Dep't, 142 Ariz. 183, 187-88, 688 P.2d 1075, 1079-80 (App. 1984) (citing cases). As applied, the superior court properly recognized that the ROC's ruling resolved the parties' dispute based upon rescission and, after Appellees' appeal was dismissed, that decision became final. That final administrative decision meant a separate declaratory judgment seeking rescission was superfluous. Moreover, a declaratory judgment action made superfluous by a final administrative decision cannot support an award of attorneys' fees that were not recoverable in the administrative proceeding. See Semple v. Tri-City Drywall Inc., 172 Ariz. 608, 611, 612, 838 P.2d 1369, 1372, 1373 (App. 1992) (holding party may not recover attorneys' fees under A.R.S. §§ 12-341.01(A) or 32-1155 in ROC proceedings).
¶8 Quite apart from the superfluous nature of the declaratory judgment action, the superior court's dismissal is consistent with J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 690 P.2d 119 (App. 1984). In that case, a party appealed to the superior court from an ROC decision while simultaneously seeking declaratory relief. Id. at 403, 690 P.2d at 122. The superior court upheld the ROC's decision and dismissed the declaratory judgment action based upon collateral estoppel. Id. at 403, 409-10, 690 P.2d at 122, 128-29. Applying Hancock here: (1) the parties actually litigated rescission in the ROC proceeding; (2) the parties had a full and fair opportunity to litigate rescission in the ROC proceeding; (3) resolution of the rescission issue was essential to ROC ruling that CDC did not abandon the contract; (4) the ROC ruling was valid, final and on the merits and (5) Appellees and CDC were parties to both actions. See id. at 410, 690 P.2d at 129. Accordingly, collateral estoppel barred CDC's declaratory relief action. See id.
¶9 CDC nevertheless contends that the superior court failed to understand the difference between issue and claim preclusion, and the ROC decision should not bar CDC's ability to obtain "positive relief" in superior court, including attorneys' fees. The type of remedy sought in a separate proceeding may be relevant to claim preclusion, but is not relevant to issue preclusion. See Lawlor v. Nat'l Screen Serv. Corp., 349 U.S. 322, 326 (1955) (collateral estoppel "precludes relitigation of issues actually litigated and determined in the prior suit, regardless of whether it was based on the same cause of action as the second suit"); Matusik v. Ariz. Pub. Serv. Co., 141 Ariz. 1, 3, 684 P.2d 882, 884 (App. 1984) (same). Moreover, Arizona does not recognize an action to collaterally attack a final ROC ruling, absent a claim of lack of jurisdiction or extrinsic fraud, neither of which apply here. See A.R.S. § 12-902(B); Gilbert v. Bd. of Med. Exam'rs, 155 Ariz. 169, 175, 745 P.2d 617, 623 (App. 1987), superseded by statute on other grounds as stated in Goodman v. Samaritan Health Sys., 195 Ariz. 502, 508 n.7 ¶ 25, 990 P.2d 1061, 1067 n.7 (App. 1999).
II. The Superior Court Did Not Improperly Abstain.
¶10 CDC argues the superior court was "effectively abstaining from considering the present case" and lacked authority to dismiss without rendering a decision on the merits. At a hearing on September 21, 2012, the superior court observed that CDC "wants a judgment from the Court that says, in essence, what the [ROC] has already, said, and, that is, the contract was rescinded and that they have no further obligation to you under the contract." The superior court added that Appellees' argument had "some merit" and it was "not inclined to give [CDC] attorneys' fees" because Appellees had filed "an administrative complaint against a licensed contractor" who agreed to submit to the administrative process.
¶11 In a subsequent written ruling, the superior court noted: "At a minimum, these matters are parallel proceedings involving the same issues of fact [and] law," adding that if the ROC ruling was affirmed on appeal, "then these proceedings become superfluous based on [CDC's] own argument" and stating a contrary approach could result in inconsistent rulings. When the appeal of the ROC ruling was dismissed, meaning that ruling became final, the superior court dismissed CDC's declaratory judgment claim with prejudice and without awarding attorneys' fees. Having given its view of the issue and notice to the parties of what would happen if the ROC ruling was not reversed, there is no support for CDC's claim that the court abstained.
CONCLUSION
¶12 The superior court's dismissal of the declaratory judgment action with prejudice and without an award of attorneys' fees is affirmed. Because CDC is not the prevailing party on appeal, its request for attorneys' fees on appeal is denied. Appellees are entitled to costs on appeal contingent upon their compliance with Arizona Rules of Civil Appellate Procedure 21.