                      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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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.




                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE


              ALAN ROBERT OTTO, et al., Plaintiffs/Appellees,

                                         v.

           MARK WILLIAM OTTO, et al., Defendants/Appellants.

                              No. 1 CA-CV 18-0080
                                 FILED 2-14-2019


            Appeal from the Superior Court in Maricopa County
                           No. CV2014-011726
                   The Honorable David B. Gass, Judge

                                   AFFIRMED


                                    COUNSEL

Coppersmith Brockelman PLC, Phoenix
By Andrew S. Gordon, Marvin C. Ruth, Katherine L. Hyde
Counsel for Plaintiffs/Appellees

Kercsmar & Feltus PLLC, Scottsdale
By Geoffrey S. Kercsmar, Eric B. Hull, Callie P. Maxwell
Counsel for Defendants/Appellants
                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court



                      MEMORANDUM DECISION

Presiding Judge Lawrence F. Winthrop delivered the decision of the Court,
in which Judge Maria Elena Cruz and Judge Kenton D. Jones joined.


W I N T H R O P, Judge:

¶1            This appeal involves a dispute between two brothers, Alan
and Mark Otto, regarding the meaning of and obligations arising from a
2012 Equity Interest Purchase Agreement (“the Purchase Agreement”)
pursuant to which Alan purchased Mark’s share of a group of jointly-
owned family businesses (collectively, “the Otto Companies”).1 The
dispute boils down to two primary questions: (1) Did Alan owe a duty to
indemnify Mark for taxes owed in excess of estimated taxes projected in a
“Schedule F” Purchase Price Allocation Schedule to the Purchase
Agreement; and (2) Did Alan breach any terms of the Purchase Agreement?
The trial court concluded that Alan did not owe such a general duty to
indemnify Mark and did not breach the Purchase Agreement. Mark
appeals the trial court’s judgment in favor of Alan, raising numerous issues.
Concluding that the trial court did not misinterpret the Purchase
Agreement and substantial evidence supports the court’s rulings, we
affirm.

                FACTS AND PROCEDURAL HISTORY

¶2           Alan and Mark were in business together for many years
before they decided to part ways. The terms of the Purchase Agreement
were heavily negotiated, with each brother represented by separate legal

1       Alan and Mark also controlled trusts that, in some instances, held
separate     interests    in  the    businesses.        In    this  appeal,
Plaintiffs/Counterdefendants/Appellees consist of Alan and Lori Otto;
Alan Otto, as trustee of the Overlook Irrevocable Trust; Otto Trucking, Inc.;
Otto Logistics, LLC; Otto Logistics of Colorado, LLC; Superstition Trailers,
LLC; 4A Equipment, LLC; Otto Transportation, LLC; 6886 Properties, LLC;
and 6886 Aviation, LLC, who we refer to collectively as “Alan.”
Defendants/Counterclaimants/Appellants consist of Mark and Tamela
Otto, and Mark Otto, as trustee of the AOM Irrevocable Trust, who we refer
to collectively as “Mark.”



                                     2
                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court

counsel—Alan by Andrew Gordon and Mark by Scott Weiss. The Otto
Companies retained MCA Financial Group (“MCA”)—Morrie Aaron and
Paul Roberts—as an independent financial consultant to help broker the
deal.

¶3            The structure of the Otto Companies complicated the sale, as
each business had its own financials and tax history.2 Further, over the
years, Alan and Mark had each maximized tax advantages and deferrals
from the companies to minimize their personal taxes, which they would
need to account for through the sale and change of ownership, meaning the
sale would likely result in a significant tax event.3 Otto Trucking’s CFO,
Bryan Adamson, and Jim Raftery, the Otto Companies’ long-time
accountant, used the companies’ available financial information for cash
flow projections and liquidation analysis.          Raftery provided this
information to Mark’s tax accountant and financial advisor, William
Hodges, to estimate Mark’s tax obligations going forward. The projections,
often referred to by the parties as Schedule F, were a spreadsheet called the
Purchase Price Allocation Schedule. The numbers in Schedule F allowed
for a preliminary estimate as to the values of the Otto Companies and set
forth an estimated tax basis in the various companies.

¶4            Due to the uncertainty regarding how much he would
ultimately owe in taxes, Mark proposed during negotiations that Alan
agree to a blanket tax indemnification provision guaranteeing the tax
projections—to be included as § 6.02(iv) of the Purchase Agreement’s
general indemnification section, 6.02—which would ultimately require
Alan to indemnify Mark for “any obligation of the Mark Otto Parties to pay
amounts related to tax or other obligations that exceed those projections set
forth in the Purchase Price Allocation Schedule.” Alan ultimately rejected


2     Also, the Internal Revenue Service was auditing tax returns of the
Otto Companies, which needed to file amended tax returns for 2010 and
2011.

3      In fact, Mark was concerned Alan might do something to increase
Mark’s tax liability, principally by way of manipulating management fees,
as the assignment of management fees had been a primary device used by
Alan and Mark to shift reported income among the Otto Companies and
reduce and defer their personal tax liabilities. That concern was eventually
addressed by §§ 5.02 and 5.03 of the Purchase Agreement.




                                     3
                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court

the blanket indemnification, and the final version of the Purchase
Agreement, executed by the parties, did not contain that provision.4

¶5            In September 2012, Mark and Alan, their respective trusts,
and the Otto Companies entered the Purchase Agreement, which detailed
the duties and warranties each side promised to uphold. In exchange for
relinquishing his ownership interests in the Otto Companies, Mark agreed
to receive payments totaling approximately $4.05 million (in the amount of
$22,500 per month), and approximately $2 million as reimbursement for
money he had previously lent the Otto Companies. After execution of the
Purchase Agreement, Alan controlled the Otto Companies.

¶6            When the Otto Companies began preparing 2010 and 2011
amended tax returns and 2012 original tax returns, the tax estimates
exceeded the Schedule F projections, and Mark demanded indemnification.
Robert Shull, counsel for Alan, responded that it made sense to first
determine Mark’s actual—rather than estimated—tax liability before
determining whether Alan might owe Mark any indemnification. Further,
as Shull and Raftery later testified, Alan was trying to determine if a re-
allocation of management fees might help Mark reduce his taxes.

¶7            Mark then refused to sign a forbearance agreement on a bank
loan to the Otto Companies unless he received approximately $200,000 for
his estimated taxes. In September 2013, the Otto Companies remitted
$200,000 to cover Mark’s estimated personal tax obligations.

¶8            In 2014, Alan filed a First Amended Complaint against Mark,
asserting claims for declaratory judgment, breach of contract, unjust
enrichment, and specific performance. Alan sought declaratory relief that
he did not owe a duty to indemnify Mark for taxes Mark owed that
exceeded the projections set forth in Schedule F. The breach of contract and
unjust enrichment claims sought return of the $200,000 tax payment, which


4        MCA’s Aaron and Roberts had told Hodges that Alan was unwilling
to indemnify Mark and “each party should just be responsible for their
taxes just like they’d been for many years.” They also told him that Alan
“supplied all the information needed to run different tax scenarios. If you
feel it’s important to advise your client, you need to run those yourself and
provide the advi[c]e. Everyone knows Jim [Raftery] has done an
outstanding job, but he is not advising Mark, you are.” At trial, Mark did
not call Hodges to testify whether he had all the information, ran any tax
scenarios, or had identified any issues with the information provided to
him.


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                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court

Alan asserted had been conditioned upon an understanding that if Mark’s
2012 tax liability was reduced, Mark would then reimburse the Otto
Companies accordingly. Finally, the specific performance claim sought
return of the Purchase Agreement’s loan promissory note, which had
allegedly been paid in full.

¶9            Mark answered Alan’s complaint and filed a counterclaim. In
his Amended Counterclaim, Mark alleged claims for breach of contract,
promissory estoppel, breach of the implied covenant of good faith and fair
dealing, and declaratory relief. In part, Mark alleged Alan had breached
§§ 2.05, 4.02, 5.03, and 6.02 related to tax indemnity; § 5.08 related to
financial reporting; and § 5.04 related to Alan’s post-agreement
compensation from the Otto Companies. In general, Mark asserted that, by
allegedly breaching these provisions, Alan had caused Mark’s taxes to
exceed the figures projected in Schedule F of the Purchase Agreement.
Mark’s promissory estoppel claim arose out of numerous promises Alan or
his agents had allegedly made that Alan would pay for Mark’s taxes that
exceeded the allegedly warranted amounts in Schedule F.

¶10           On July 24 to 27, 2017, the trial court held a four-day bench
trial. As ordered by the court, the parties submitted closing memoranda on
August 21, 2017, and the court took the matter under advisement.

¶11           On October 4, 2017, the court issued its verdict. Neither side
had requested findings of fact or conclusions of law, see Ariz. R. Civ. P.
52(a)(1), and the court summarily found (1) Alan did not owe a duty to
indemnify Mark for taxes owed in excess of the estimates set forth in the
Schedule F Purchase Price Allocation Schedule to the Purchase Agreement;
(2) Alan did not breach the Purchase Agreement; (3) Mark had not proven
damages as a result of any alleged breaches of the Purchase Agreement; (4)
Alan was entitled to recover the $200,000 tax payment advanced to Mark;
(5) Alan was not entitled to pre-judgment interest on the $200,000 payment
advanced to Mark; (6) Alan had paid Mark all amounts due under the loan
promissory note and the attached payment schedule; (7) Alan was entitled
to the return of the original executed loan promissory note; and (8) Mark
was not entitled to relief on any counterclaims.

¶12           On January 16, 2018, the trial court entered a final judgment
pursuant to Arizona Rule of Civil Procedure 54(c) in favor of Alan on all
counts, awarding $200,000 in compensatory damages, $528,000 in
attorneys’ fees under Arizona Revised Statutes (“A.R.S.”) section 12-341.01,
and $12,181.65 in taxable costs under A.R.S. § 12-341.




                                     5
                         OTTO, et al. v. OTTO, et al.
                           Decision of the Court

¶13          Mark filed a timely notice of appeal. We have jurisdiction
pursuant to A.R.S. § 12-2101(A)(1).

                                 ANALYSIS

       I.     Standard of Review

¶14            “When reviewing issues decided following a bench trial, we
view the facts in the light most favorable to upholding the court’s ruling.”
Bennett v. Baxter Grp., Inc., 223 Ariz. 414, 417, ¶ 2 (App. 2010) (citation
omitted). We give due regard to the opportunity of the trial court to judge
the credibility of witnesses and will not set aside the court’s findings unless
they are clearly erroneous. Castro v. Ballesteros-Suarez, 222 Ariz. 48, 51, ¶ 11
(App. 2009) (citation omitted). If substantial evidence supports a finding of
fact, that finding is not clearly erroneous, even if substantial conflicting
evidence exists. Id. at 51-52, ¶ 11 (citation omitted). In our review, we do
not reweigh the evidence or substitute our evaluation of the facts. Id. at 52,
¶ 11. We will, however, review de novo the court’s legal conclusions and
interpretation of a contract. See id. at ¶ 12; Grubb & Ellis Mgmt. Servs., Inc.
v. 407417 B.C., L.L.C., 213 Ariz. 83, 86, ¶ 12 (App. 2006).

       II.    The Trial Court’s Alleged Use of Parol Evidence

¶15            Mark argues the trial court erred in using parol evidence—
specifically, evidence of the blanket warranty/indemnification contained in
the proposed but ultimately rejected § 6.02(iv)—to create an ambiguity that
contradicted the otherwise unambiguous meaning of the Purchase
Agreement, thereby rendering several unambiguous provisions of the
Purchase Agreement unenforceable.

¶16            We review de novo whether evidence is admissible under the
parol evidence rule. Terry v. Gaslight Square Assocs., 182 Ariz. 365, 368 (App.
1994). In general, when parties have a written agreement, neither may
present parol (extrinsic) evidence that would contradict or vary the terms
of the writing. Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 152
(1993). However, in determining whether to allow parol evidence, the court
first considers the offered evidence and, if the court “finds that the contract
language is ‘reasonably susceptible’ to the interpretation asserted by its
proponent, the evidence is admissible to determine the meaning intended
by the parties.” Id. at 154 (citations omitted); see also Smith v. Melson, Inc.,
135 Ariz. 119, 121 (1983) (“A contract should be read in light of the parties’
intentions as reflected by their language and in view of all the
circumstances.”). “The meaning that appears plain and unambiguous on
the first reading of a document may not appear nearly so plain once the


                                       6
                         OTTO, et al. v. OTTO, et al.
                           Decision of the Court

judge considers the evidence.” Taylor, 175 Ariz. at 154. Consequently, a
court need not find the contract is ambiguous on its face before allowing
the introduction of parol evidence. Id. at 152-53. Rather, the court should
“consider the alleged interpretation of the agreement offered by the
proponent of the extrinsic evidence in light of the extrinsic evidence
offered.” State v. Mabery Ranch, Co., 216 Ariz. 233, 241, ¶ 28 (App. 2007).

¶17            Mark fails to provide us with any citation to the record in
support of his parol evidence argument, fails to assert or show he ever
objected to the admission of parol evidence and, ultimately, has not
challenged any evidentiary ruling by the trial court. See Cedic Dev. Corp. v.
Sibole, 25 Ariz. App. 185, 186-87 (1975) (concluding that the parol evidence
rule may be waived by a failure to object to allegedly improper testimony
such that the trial court is entitled to consider the parol evidence in reaching
its decision). Moreover, contrary to his argument, nothing within the
record or the trial court’s minute entry ruling or judgment suggests the
court improperly admitted parol evidence to eliminate any alleged
contractual indemnification obligations on the part of Alan. Instead, the
court simply found Alan had not breached any clause of the contract that
would have triggered the limited contractual indemnity obligations agreed
to by the parties in the executed Purchase Agreement. Further, in this case,
evidence regarding the negotiations surrounding Schedule F and the
proposed § 6.02(iv) indemnity clause was relevant to illuminate the parties’
understanding of the particular contractual provisions Mark alleged Alan
had breached and to determine whether the parties had contracted into a
general tax indemnification obligation pursuant to the Purchase Agreement
or otherwise. On this record, we find no error.

       III.   Interpretation of the Purchase Agreement

¶18           Mark argues the trial court erred in ignoring an interpretation
of the Purchase Agreement that both parties ascribed to it after execution—
in which Alan owed a duty to indemnify him for taxes owed in excess of
estimated taxes projected within the Schedule F Purchase Price Allocation
Schedule—and that he presented evidence Alan had breached numerous
terms of the Purchase Agreement—specifically, §§ 2.05, 4.02, and 5.03,
triggering indemnity obligations as provided in § 6.02.

¶19           Mark’s argument ignores that the parties ultimately agreed
not to include the blanket indemnity clause, § 6.02(iv), that serves as the
cornerstone of Mark’s argument here, within the finalized Purchase
Agreement; it being specifically removed from the draft document prior to
execution, clearly indicating that neither Alan nor Mark interpreted the


                                       7
                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court

Purchase Agreement as containing such a broad general tax indemnity
clause. See Polk v. Koerner, 111 Ariz. 493, 495 (1975) (“It is a fundamental
rule in the interpretation of contracts that the court must ascertain and give
effect to the intention of the parties at the time the contract was made if at
all possible.” (citation omitted)). Further, we decline Mark’s invitation to
read the sections of the Purchase Agreement he cites in such an expansive
fashion as to support the conclusion that Alan owed a duty to indemnify
Mark for taxes owed in excess of the estimated taxes projected within the
Schedule F Purchase Price Allocation Schedule, despite the specific
exclusion of § 6.02(iv).5

¶20           Also, Mark relies for much of his indemnification argument
upon his premise that he proved Alan breached numerous terms of the
Purchase Agreement and the trial court erred in finding otherwise. In
doing so, Mark in effect argues the trial court was required to believe his
characterization of the evidence over Alan’s, and essentially asks this court
to reweigh the evidence.

¶21            However, when a matter is tried before the court and findings
of fact and conclusions of law were neither made nor requested pursuant
to Arizona Rule of Civil Procedure 52(a)(1), we interpret all reasonable
inferences in favor of the appellee—in this case, Alan—and assume the trial
court made all findings of fact necessary to support the court’s judgment.
See Stautz v. Pence, 21 Ariz. App. 153, 155 (1973); Gardner v. Royal Dev. Co.,
11 Ariz. App. 447, 449 (1970). Moreover, when evidence conflicts, as it does
here, we defer to the trial court’s determination of the witnesses’ credibility
and the weight to give such conflicting evidence. Gutierrez v. Gutierrez, 193
Ariz. 343, 347, ¶ 13 (App. 1998). Thus, we do not reweigh any conflicting
evidence; instead, we examine the record only to determine whether
substantial evidence exists to support the trial court. In re Estate of Pouser,
193 Ariz. 574, 579, ¶ 13 (1999) (citation omitted).

¶22           In this case, and interpreting all reasonable inferences in favor
of Alan, as we must, we conclude that substantial evidence supports the
trial court’s ruling that Alan did not breach the Purchase Agreement.

5      We also disagree with Mark’s suggestion that the trial court’s finding
that the Purchase Agreement did not create a general right of
indemnification if his taxes exceeded the estimates set forth in the Schedule
F Purchase Price Allocation Schedule rendered meaningless other
provisions of the Purchase Agreement. Alan’s limited contractual
indemnification obligations were not eliminated by the trial court, and Alan
never argued he was immune from any and all indemnity obligations.


                                      8
                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court

Although § 2.05 required Alan (and Mark) to “file all tax returns
consistently with the Purchase Price Allocation Schedule,” it did not
guarantee that all tax returns would exactly match the estimates provided
for in Schedule F, and whether the tax returns and allocation of the
purchase price were inconsistent with Schedule F—and whether Mark
assented to the late appraisal from MCA supporting the allocation of values
assigned to the Otto Companies—were questions of fact to be decided by
the trial court. As for Mark’s claim that Alan breached § 4.02, subsection (c)
of that section expressly acknowledges the Purchase Price Allocation
Schedule was prepared for the purpose of “estimating” Mark’s taxes, and
although it warrants that the schedule accurately sets forth the adjusted tax
basis of Mark’s interests as of June 30, 2012, and is “true and complete in all
material respects,” it does not guarantee that any estimate provided within
that schedule could not change. Such is, in fact, the nature of “estimates.”
Whether a breach precipitated any change was a question driven by the
competing facts, and upon this record, we cannot say the trial court erred
in finding no breach. As for Mark’s claim that Alan breached § 5.03, Mark
points to no evidence identifying any related party transactions that
negatively affected Mark’s tax position or any non-standard market rate
transactions that ultimately impacted Mark’s taxes. Although Mark points
to evidence—including Alan’s remittance of the $200,000 for Mark’s
estimated 2012 taxes and statements from Alan’s agents—from which a
trier of fact might conclude Alan believed he had contractually guaranteed
the tax projections in Schedule F and Mark was entitled to indemnification
for any excess taxes, Alan presented substantial evidence and explanations
from which a trier of fact also could have reasonably concluded that,
viewed in context, Mark’s interpretation was incorrect. Accordingly, we
find no error.

¶23             The trial court also found Mark had failed to prove damages
as a result of any alleged breach by Alan of the Purchase Agreement. Mark
argues he provided sufficient proof of his damages, while Alan counters in
part that Mark’s expert witness on damages, Elizabeth Monty, failed to tie
Mark’s alleged damages to any alleged inaccuracy in Schedule F or any
other alleged breach. Because the trial court found Alan did not breach the
Purchase Agreement, and we discern no error related to that finding, there
are no damages for which Alan can be liable where there is no breach. We
note, however, that even were we to consider this argument, our scope of
review would be limited by the parties’ decision not to request findings of
fact or conclusions of law.




                                      9
                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court

       IV.    Promissory Estoppel

¶24           Mark argues he proved his counterclaim for promissory
estoppel, and the trial court erred in failing to find Alan was estopped from
refusing to indemnify him and in ordering him to return the $200,000 to
Alan.

¶25             “To prove promissory estoppel, a [plaintiff] must show that
the [defendant] made a promise and should have reasonably foreseen that
the [plaintiff] would rely on that promise and further that the [plaintiff] did
in fact rely on that promise.” Double AA Builders, Ltd. v. Grand State Constr.
L.L.C., 210 Ariz. 503, 507, ¶ 19 (App. 2005) (citations omitted). “The
[plaintiff] must also show that he had a ‘justifiable right to rely’ on the
promise.” Id. (citation omitted).

¶26            For the same general reasons that the trial court did not err in
finding Mark failed to prove a breach of any contractual provision requiring
indemnification, the court also did not err in concluding Mark failed to
prove the existence of any promise by Alan guaranteeing indemnification
if Mark’s actual taxes exceeded the estimates in Schedule F. Whether any
statements by Alan’s agents, payment of the $200,000, and the September
2013 letter accompanying the $200,000 payment constituted a promise, and
whether Mark justifiably relied upon that alleged promise and changed his
position to his detriment in reliance upon that promise as he claims, were
contested issues of fact for the trial court to decide based in part upon
witnesses’ credibility. See Gutierrez, 193 Ariz. at 347, ¶ 13. Taking all
reasonable inferences in favor of Alan, see Stautz, 21 Ariz. App. at 155, we
conclude substantial evidence exists to support the trial court’s
determination, see Estate of Pouser, 193 Ariz. at 579, ¶ 13. Accordingly, the
trial court did not err in declining to apply promissory estoppel and in
ordering Mark to return the $200,000 to Alan.

       V.     Motion to Compel/Accountant-Client Privilege

¶27           During discovery, Mark filed a motion to compel, seeking
disclosure of work papers and communications Alan had withheld based
upon the accountant-client privilege. Following full briefing and oral
argument, the trial court ordered in camera review of the documents. After
reviewing the documents in camera, the trial court held a telephonic status
conference and denied the motion to compel, explaining as follows:

              THE COURT FINDS that the Accountant-Client
       privilege attaches to communications between Alan Otto and



                                      10
                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court

       others within Otto Trucking and Jim Raftery and others
       within his firm.

              IT     IS THEREFORE ORDERED                that    the
       communications between Alan Otto and others within Otto
       Trucking and Jim Raftery and others within his firm,
       including those contained in Exhibit 6, are privileged.
       Plaintiffs, however, shall amend the privilege log and their
       document production by redacting all privileged
       communications from the documents in Exhibit 6 and
       producing the redacted versions. The privilege log also shall
       identify the documents that were attached to the emails in
       Exhibit 6.

             THE COURT FURTHER FINDS that effective
       September 14, 2015, the Accountant-Client privilege attaches
       to communications between MCA and Jim Raftery and others
       within his firm.

              IT    IS THEREFORE ORDERED                  that    the
       communications between MCA and Jim Raftery and others
       within his firm, including those contained in Exhibit 7, are
       privileged. Plaintiffs, however, shall amend the privilege log
       and their document production by redacting all privileged
       communications from the documents in Exhibit 7 and
       producing the redacted versions. The privilege log also shall
       identify the documents that were attached to the emails in
       Exhibit 7.

Alan later served Mark with revised privilege logs and redacted versions
of the accountant-client privileged communications identified on Exhibits
6 and 7 of Mark’s motion to compel.

¶28            Mark later moved for a protective order preventing Alan from
deposing Mark’s tax accountant, Hodges, or, in the alternative, limiting the
scope of that deposition by precluding any questions that would elicit
information: (1) protected by the accountant-client privilege, or (2) based
on knowledge Hodges gained in his capacity as a consulting expert during
the litigation. After briefing and further oral argument, the trial court took
the matter under advisement and later further ordered as follows:

             IT IS THEREFORE ORDERED that at this time and
       based on the arguments presented, neither the Alan Otto



                                     11
                         OTTO, et al. v. OTTO, et al.
                           Decision of the Court

       plaintiffs nor the Mark Otto defendants have waived the
       accountant-client privilege.

              IT IS FURTHER ORDERED that the accountants
       James Rafferty [sic] and Mark Hodges and their associates are
       subject to depositions as fact witnesses about information that
       they received from the parties and about their
       communications with third parties, but Mr. Rafferty [sic] and
       Mr. Hodges and their associates are not subject to discovery
       regarding privileged communications with their clients,
       advice given to their clients, and about the accounting
       theories on which they relied in preparing the relevant
       documents.

              IT IS THEREFORE ORDERED consistent with the
       court’s rulings on the record and above, granting in part and
       denying in part the Mark Otto defendants’ Motion for
       Protective Order (Docket # 70).

¶29            Without citing to the trial court’s rulings, Mark argues the
court erred in denying his motion to compel. He also suggests in a footnote
that the court erred in conducting the in camera review, and states that the
court’s failure to consider recusal after conducting that review “potentially
colored the outcome of the bench trial.”

¶30            Arizona protects from discovery or disclosure in civil
litigation client records or information that certified public accountants
practicing in this state have received by reason of the confidential nature of
their employment, including information derived from or as a result of such
professional source. A.R.S. § 32-749(A). The accountant-client privilege
extends “to communications between accountant and client when those
communications pertain to the client’s financial affairs,” but “does not
apply to communications received by the client from an accountant
employed as an expert to examine the affairs of a non-client.” Brown v.
Superior Court, 137 Ariz. 327, 338 (1983).

¶31            In general, we review the trial court’s discovery rulings for an
abuse of discretion. See Lund v. Myers, 232 Ariz. 309, 312, ¶ 17 (2013) (citing
State Farm Mut. Auto. Ins. Co. v. Lee, 199 Ariz. 52, 57, ¶ 12 (2000) (noting that
discovery rulings relating to privilege are reviewed for an abuse of
discretion)); see also Romley v. Schneider, 202 Ariz. 362, 363, ¶ 5 (App. 2002)
(review a ruling on a motion to compel for an abuse of discretion).




                                       12
                        OTTO, et al. v. OTTO, et al.
                          Decision of the Court

¶32            In this case, although the proceedings were recorded, Mark
has not provided transcripts of the oral arguments conducted upon the
issue of the attorney-client privilege, and in the absence of such transcripts,
we presume that whatever transpired at the hearings supported the court’s
decision to conduct the in camera review and its ultimate rulings that the
documents were entitled to the protection of the accountant-client
privilege. See Johnson v. Elson, 192 Ariz. 486, 489, ¶ 11 (App. 1998). The
record provides no indication that Mark ever objected to the court’s in
camera review of the allegedly privileged documents, that Mark requested
the court appoint a different judicial officer to conduct the in camera review
in a Discovery Master capacity, or that Mark later moved for recusal of the
judge, that the court was biased, or Mark was actually prejudiced by the
court’s in camera review. See Lund, 232 Ariz. at 312-13, ¶ 19. Accordingly,
Mark may be deemed to have waived this argument, see generally Andrew
Brown Co. v. Painters Warehouse, Inc., 111 Ariz. 404, 407 (1975); Ritchie v.
Krasner, 221 Ariz. 288, 303, ¶ 51 (App. 2009), and in any event, we cannot
conclude the court abused its discretion in denying Mark’s motion to
compel.

       VI.    The Trial Court’s Award of Attorneys’ Fees

¶33             Citing American Power Products, Inc. v. CSK Auto, Inc., 242
Ariz. 364 (2017), Mark argues the trial court erred in awarding attorneys’
fees to Alan under A.R.S. § 12-341.01.6 Mark reasons that because Article
VI, § 6.01, of the Purchase Agreement provides for fee indemnification in a
circumstance different than the one presented in this case, and the Purchase
Agreement otherwise contains no general fee provision, the trial court’s
award pursuant to A.R.S. § 12-341.01 necessarily conflicts with the parties’
agreement.7

¶34           Absent an abuse of discretion, we generally will uphold a trial
court’s determination of which party is successful and thus entitled to a fee
award. Am. Power, 242 Ariz. at 367, ¶ 12. However, we review de novo
issues of contract interpretation and statutory application. Id.

¶35          Mark’s argument misconstrues our supreme court’s holding
in American Power, which upheld “the general rule in Arizona that contracts


6      Mark had also sought attorneys’ fees pursuant to A.R.S. § 12-341.01.

7      Mark does not argue the factors cited in Associated Indemnity Corp. v.
Warner, 143 Ariz. 567, 570 (1985), do not weigh in favor of an award of fees
or that the hours or billable rates of Alan’s counsel were unreasonable.


                                      13
                         OTTO, et al. v. OTTO, et al.
                           Decision of the Court

are read to incorporate applicable statutes.” Id. at 368, ¶ 15 (citation
omitted). In American Power, our supreme court held that, “[t]o the extent
prior case law broadly precludes application of § 12-341.01 whenever the
parties’ contract contains an attorney fee provision, regardless of its
content, scope, and other provisions in the contract, we disagree.” Id. at
¶ 14. The court noted that an award under § 12-341.01 is precluded only to
the extent that statute “effectively conflicts with an express contractual
provision governing recovery of attorney’s fees.” Id. (quoting Jordan v.
Burgbacher, 180 Ariz. 221, 229 (App. 1994)). “Thus, rather than being
completely supplanted by any attorney fee provision in the parties’
contract, the statute—consistent with its plain language—applies to ‘any
contested action arising out of contract’ to the extent it does not conflict with
the contract.” Id. (quoting A.R.S. § 12-341.01(A)).

¶36           In this case, as the trial court correctly concluded, the
indemnification provisions in Article VI of the Purchase Agreement do not
conflict with the court’s award of attorneys’ fees pursuant to A.R.S. § 12-
341.01. Moreover, Article VII, § 7.07, of the Purchase Agreement, which
states that Arizona law governs the parties’ agreement, effectively
incorporates § 12-341.01, at least to the extent it does not directly conflict
with the Purchase Agreement. Thus, § 12-341.01 may be construed as
supplementing Article VI.

¶37           Because nothing in Article VI, § 6.01, conflicts with an award
of fees pursuant to A.R.S. § 12-341.01, the trial court did not err in awarding
attorneys’ fees under A.R.S. § 12-341.01.

       VII.   Attorneys’ Fees on Appeal

¶38          Citing Arizona Rule of Civil Appellate Procedure (“ARCAP”)
21(a) and “the parties’ written agreements,” Mark requests attorneys’ fees
on appeal. Neither of these references provides a substantive basis for the
request. See ARCAP 21(a)(2). Moreover, Mark is not the prevailing party
on appeal. Alan, the prevailing party, has not requested attorneys’ fees on
appeal. Accordingly, none are awarded. We award Alan his taxable costs
on appeal upon compliance with ARCAP 21.




                                       14
                OTTO, et al. v. OTTO, et al.
                  Decision of the Court

                      CONCLUSION

¶39   The trial court’s judgment is affirmed.




                 AMY M. WOOD • Clerk of the Court
                 FILED: AA




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