Court of Appeals of Arizona,

Division 1.

JESUS R. FRANCO RODRIGUEZ, Plaintiff/Appellee,

v.

NELS A. WISE, et al., Defendants/Appellants.

No. 1 CA-CV 16-0331

|

FILED 11-9-2017

Appeal from the Superior Court in Maricopa County

No. CV2013-016284

The Honorable Lori Horn Bustamante, Judge

AFFIRMED IN PART, REVERSED IN PART AND REMANDED

Attorneys and Law Firms

COUNSEL, Miller Pitt Feldman & McAnally PC, Phoenix, By Nathan J. Fidel, Jose de Jesus Rivera, Nathan B. Webb, Stanley G. Feldman, Counsel for Plaintiff/Appellee

Hill Hall & DeCiancio PLC, Phoenix, By Joel DeCiancio, Christopher Robbins, Counsel for Defendant/Appellant

Levenbaum Trachtenberg PLC, Phoenix, By Geoffrey M. Trachtenberg, Law Offices of Raymond J. Slomski, PC, Phoenix, By Adam A. Studnicki, Co-Counsel for Amicus Curiae

Judge Kent E. Cattani delivered the decision of the Court, in which Presiding Judge James P. Beene and Judge Randall M. Howe joined.

 

 

MEMORANDUM DECISION

CATTANI, Judge:

*1 ¶1 This is an appeal following a plaintiff’s verdict in favor of Jesus Franco Rodriguez in a personal injury case. Nels and Dee Wise (collectively, “Wise”) challenge in particular the superior court’s imposition of sanctions against them under Arizona Revised Statutes (“A.R.S.”) § 12-349(A), and the court’s determination of costs under A.R.S. § 12-332(A). For reasons that follow, we reverse the superior court’s inclusion of certain investigative expenses under § 12-332 and remand to determine the nature of expenses awarded for messenger fees. In all other respects, we affirm.

 

 

FACTS AND PROCEDURAL BACKGROUND

¶2 Rodriguez brought a claim for negligence against Wise stemming from an automobile accident. After the accident, Rodriguez was transported by ambulance to the hospital, where he stayed overnight. In the weeks following the accident, Rodriguez received 24 chiropractic treatments for persistent pain. Three months after the accident, Rodriguez received a cranial CT scan to rule out head trauma. He incurred a total of over $44,000 in medical expenses, and his automobile had extensive damage and was not drivable.

 

¶3 Rodriguez disclosed his medical records and the witnesses who would testify that his medical treatment and bills were reasonable, necessary, and caused by the accident. Wise did not provide witnesses to contest these issues, and Rodriguez subsequently sent Wise discovery requests seeking admissions regarding those issues. Wise denied that the medical bills were reasonable and necessary, objecting on the basis that the requests “attempt[ ] to shift the burden of proof” and insisted that all treating physicians testify. Wise also refused to admit that the medical bills were kept in the course of regularly conducted business.

 

¶4 Rodriguez thereafter filed a motion for partial summary judgment and a motion to compel responses to his request for admissions. The superior court denied both motions, reasoning that Wise had the right to require Rodriguez to prove his case to a jury.

 

¶5 Rodriguez deposed six witnesses regarding their respective treatments and bills. During four of the depositions, Wise’s counsel did not ask whether the treatment or bills were reasonable or necessary, and in one deposition Wise’s counsel asked no questions at all. Only during the deposition regarding the CT scan did Wise’s counsel question the reasonableness, necessity, and reasons for the treatment.

 

¶6 Regarding the damage to Rodriguez’s truck, Wise’s counsel disclosed a repair estimate from Wise’s automobile insurance company. But Wise’s counsel refused to identify the appraiser for purposes of trial and would not stipulate to the amount of the appraisal. Only after being ordered by the court to either agree to a stipulated amount or provide the appraiser’s identity did counsel stipulate to the amount of property damage.

 

¶7 Ten days before trial, Wise admitted negligence but continued to deny the extent of causation and damages. However, during opening statements at trial, Wise’s counsel acknowledged that the “vast majority” of medical bills and treatment were related to the accident. At that point—and only after being pressed by the court—Wise’s counsel indicated that out of the over $44,000 of claimed medical expenses, only two treatments were contested: $275 for a physician’s consultation and $4,165 for the CT scan.

 

*2 ¶8 The jury returned a verdict in favor of Rodriguez for $100,000. Rodriguez then moved for sanctions under Arizona Rules of Civil Procedure 68(g) and A.R.S. § 12-341 because Wise had rejected an offer of judgment for $100,000, and as relevant here, for sanctions under A.R.S. § 12-349 because Wise “needlessly created unnecessary costs … and prolonged trial.” The superior court granted sanctions of $28,169.08 under Rule 68(g) and § 12-341, and $39,700 under (among other alternative grounds) § 12-349.

 

¶9 Wise timely appealed, and we have jurisdiction under A.R.S. § 12-2101(A)(1).

 

 

DISCUSSION

¶10 Wise argues that the superior court erred by imposing sanctions under § 12-349, and that the superior court erred by including expenses in the award under Rule 68(g) and § 12-341 that are not taxable costs under § 12-332. We address each argument in turn.

 

 

1. Sanctions Under A.R.S. § 12-349(A)(3).

¶11 We review application of § 12-349 de novo. Phx. Newspapers, Inc. v. Dep’t of Corr., 188 Ariz. 237, 244 (App. 1997). Under § 12-349(A)(3), if an attorney or party “unreasonably expands or delays the proceeding” the court must award reasonable attorney’s fees and expenses. The relevant question is whether “a party’s (or attorney’s) actions caused unreasonable delay and expansion of the proceedings.” Solimeno v. Yonan, 224 Ariz. 74, 82, ¶ 32 (App. 2010). To evaluate whether a discovery sanction was proper, we determine (1) whether the superior court had a proper basis for the sanction, and (2) if so, whether the amount was appropriate. See id. at 81–82, ¶¶ 28, 34. An assessment whether the costs requested are reasonable is “peculiarly within the discretion of a trial court, and will not be disturbed absent a showing of abuse of that discretion.” Id. at 82, ¶ 36.

 

¶12 Here, nearly all the treatment Rodriguez received was within 24 hours of the accident. Wise was given the medical records relating to the treatment, but nevertheless insisted (without indicating which issues were disputed) that testimony would be required from all treating physicians. The parties conducted six lengthy depositions, with Wise substantively cross-examining only one of the witnesses regarding Rodriguez’s bills and treatment. Wise’s counsel waited until opening statements at trial to narrow issues by conceding that only two of the six treatments and bills were contested.

 

¶13 Similarly, although Rodriguez was willing to stipulate to the property damage estimated by Wise’s own appraiser, Wise would not agree to do so. And refused to identify the appraiser so Rodriguez could subpoena him. Only when the court ordered Wise to stipulate or provide the appraiser’s identity did Wise agree to the amount of property damage.

 

¶14 Under these circumstances, there was a basis for sanctions under § 12-349(A)(3). Wise was entitled to deny Rodriguez’s requests for admissions and require Rodriguez to prove his case. But after receiving and reviewing the relevant medical records, Wise could have narrowed the scope of the issues to be addressed at trial and avoided significant costs by agreeing to forgo depositions that were apparently of little importance to him, as evidenced by the absence of meaningful cross-examination of the witnesses.

 

¶15 Wise argues the superior court abused its discretion because it is unfair to impose sanctions after trial when the court originally agreed that there was a basis to deny the requests for admissions. But the superior court’s pretrial ruling does not end the analysis regarding whether Wise unnecessarily increased the cost of the litigation. Even assuming the requests for admission were overbroad or that Wise otherwise had a legitimate basis for denying them, Wise could have admitted which issues were contested before insisting that witnesses be deposed or provide trial testimony. Thus, the fact that the court agreed Rodriguez had a legitimate basis to oppose the requests for admissions does not call into question its post-trial sanctions determination.

 

*3 ¶16 Because there was a basis for sanctions under § 12-349, we do not address other bases for sanctions considered by the superior court. See State v. Robinson, 153 Ariz. 191, 199 (1987) (holding that an appellate court may affirm on any basis supported by the record).

 

¶17 Sanctions awarded under § 12-349(A) may include “reasonable attorney fees, [and] expenses.” The superior court is given “wide latitude in assessing the amount” of sanctions. Fowler v. Great Am. Ins. Co., 124 Ariz. 111, 114 (App. 1979). Ultimately, sanctions should reflect the additional expenses caused by the sanctionable conduct. Taliaferro v. Taliaferro, 188 Ariz. 333, 341 (App. 1996).

 

¶18 Here, the superior court imposed sanctions for the expenses of proving that the medical bills and treatments were reasonable and necessary. The sanctionable conduct was Wise’s unjustified refusal to admit the reasonableness and necessity of the medical bills and treatment after having reviewed the medical records. Rodriguez was forced to prepare for and conduct six depositions regarding the medical bills and treatments, even though the depositions arguably did not further the resolution of any disputed issue. Thus, the amount of the sanctions imposed is properly related to Wise’s conduct.

 

¶19 Further, the superior court excluded from the computation expenses related to activities unrelated to Wise’s failure to narrow the issues—such as expenses associated with the motion for summary judgment, the disclosure and joint pretrial statement, and delivery of trial exhibits. Accordingly, the superior court did not abuse its discretion in determining the appropriate sanction amount.

 

 

332. Classification of Costs Under A.R.S. § 12-332.

¶20 Costs are defined by statute and include: “1. Fees of officers and witnesses. 2. Cost of taking depositions. 3. Compensation of referees. 4. Cost of certified copies of papers or records.” A.R.S. § 12-332(A)(1)–(4). Wise concedes Rodriguez is entitled to costs under § 12-341, and double costs under Rule 68(g). However, Wise argues the superior court erred by considering certain expenses as taxable costs.

 

¶21 We review de novo whether an expense is included within the definition of taxable cost under A.R.S. § 12-332(A) because it is a question of law. Reyes v. Frank’s Serv. & Trucking, LLC, 235 Ariz. 605, 608, ¶ 6 (App. 2014). However, a determination that a particular expense is factually within a category of taxable costs is reviewed for an abuse of discretion. Graville v. Dodge, 195 Ariz. 119, 130, ¶ 53 (App. 1999). Here, Wise challenges the inclusion of the following items as taxable costs: (1) videotaped depositions, (2) investigator expenses, (3) certain TurboCourt fees, and (4) messenger service fees.

 

¶22 Wise argues the videotaped depositions are not taxable “costs of taking depositions” because the intent was always that they be used at trial. But expenses related to videotaped depositions are “undeniably costs of taking depositions” under A.R.S. § 12-332(A)(2). Reyes, 235 Ariz. at 610–11, ¶ 20 (quotations omitted). Accordingly, the expenses for the videotaped depositions are taxable costs under § 12-332(A)(2).

 

¶23 Wise next argues that investigator expenses should not have been included. Although investigator expenses are not generally taxable costs, see A.R.S. § 12-332(A), here, some of the investigator expenses were attributable to locating already known witnesses for deposition. Thus, those expenses were essential for the witnesses to be “meaningfully deposed” and may be considered “ancillary deposition expenses.” See Reyes, 235 Ariz. at 610, ¶¶ 16–17 (holding that an interpreter fee was “a cost of taking the deposition” because the interpreter was required for the witness to be “meaningfully deposed”).

 

*4 ¶24 Investigator expenses to “interview” witnesses, however, are not ancillary deposition expenses. Unlike locating a witness, or interpreting for a witness, interviewing a witness prior to a deposition is not necessarily essential to a meaningful deposition. Thus, only the investigator expenses for locating witnesses for depositions are taxable costs under A.R.S. § 12-332(A)(2), and the superior court should not have considered the $202.90 expense for interviewing a witness as a taxable cost.

 

¶25 Wise also argues that because “various … fees are not associated with the date of any filing,” the superior court incorrectly found that some TurboCourt fees were “fees of officers.” But the TurboCourt fees correspond with filing dates, and as all parties acknowledge, filing fees are fees of officers and thus taxable under § 12-332(A)(1).

 

¶26 Finally, Wise argues the superior court erred by considering Rodriguez’s messenger expenses as taxable costs. Rodriguez listed several messenger expenses on the application for judgment but described many of them as investigation, filing, service of process, or subpoena fees. Messenger and delivery fees are not taxable costs under A.R.S. § 12-332. Ahwatukee Custom Estates Mgmt. Ass’n v. Bach, 193 Ariz. 401, 402, ¶ 6 (1999). Because the superior court did not specify which of the claimed messenger expenses were taxable costs, we remand for a determination of whether those expenses should be excluded as delivery fees as opposed to taxable fees of officers paid through the messenger service.

 

 

CONCLUSION

¶27 For the foregoing reasons, we affirm the superior court’s imposition of sanctions, but reverse the award of costs for interviewing a witness and remand to determine the nature of Rodriguez’s expenses denominated as messenger expenses. In an exercise of our discretion, we decline Rodriguez’s request for an award of attorney’s fees on appeal.

 

Supreme Court of Tennessee,

Special Workers Compensation Appeals Panel,

AT MEMPHIS.

Thomas LEE

v.

FEDERAL EXPRESS CORPORATION

No. W2016–02126–SC–R3–WC

|

June 19, 2017 Session

|

Mailed September 29, 2017

|

Filed October 30, 2017

Appeal from the Court of Workers’ Compensation Claims, No. 2015–08–0247 Jim Umsted, Judge

Attorneys and Law Firms

William Steven Taylor, Memphis, Tennessee, for the appellant, Thomas Lee.

Stephen W. Vescovo and Laura L. Deakins, Memphis, Tennessee, for the appellee, Federal Express Corporation.

James F. Russell, J., delivered the opinion of the court, in which Holly Kirby, J., and Rhynette N. Hurd, J., joined.

 

 

JUDGMENT ORDER

PER CURIAM

This case is before the Court upon the entire record, including the order of referral to the Special Workers’ Compensation Appeals Panel, and the Panel’s Opinion setting forth its findings of fact and conclusions of law, which are incorporated herein by reference.

Whereupon, it appears to the Court that the Opinion of the Panel should be accepted and approved; and

It is, therefore, ordered that the Panel’s findings of fact and conclusions of law are adopted and affirmed, and the decision of the Panel is made the judgment of the Court.

Costs are assessed to Thomas Lee and his surety, for which execution may issue if necessary.

It is so ORDERED.

 

OPINION

JAMES F. RUSSELL, JUDGE

 

Factual and Procedural Background1

Thomas Lee (“Employee”) worked for Federal Express Corporation (“Employer”). He worked in the Audio–Visual department, located in Collierville, Tennessee. He filed this claim, alleging that he sustained a compensable injury to his left shoulder on July 24, 2014. Employer denied the claim, based on conflicting descriptions of the incident to various medical personnel. A Compensation Hearing was held on August 15, 2016. The trial court found Employee had failed to sustain his burden of proof and dismissed the claim. Employee appealed to the Supreme Court pursuant to Tennessee Code Annotated section 50–6–239(c)(7). The appeal has been referred to the Special Workers’ Compensation Appeals Panel for a hearing and a report of findings of fact and conclusions of law pursuant to Tennessee Supreme Court Rule 51. We affirm the judgment.

 

*1 Employee testified that he had worked for Employer for twenty-three years, and had recently retired for reasons unrelated to his alleged injury. His department was responsible for all events at Employer’s World Technology Center (“WTC”), including all audio-visual materials, managing the auditorium, and otherwise preparing it for events. Employee testified that he injured himself on July 24, 2014, while moving a “pelican case” containing heavy audio cables. He was in the process of clearing a path for some stools that were being delivered from Target. After confusion arose about the date of injury, he obtained a shipping document that placed the delivery on July 24.

 

Employee was alone in the auditorium when the incident occurred. He testified that he reported the incident to his supervisor, Glenn Davis, on the following day. Mr. Davis asked Employee if he wanted to file a workers’ compensation claim, and Employee answered that he did not. Employee stated that he made this decision because he “didn’t think it was anything major,” and didn’t want to go through the workers’ compensation process.

 

Medical records showed that Employee went to his primary care provider, Baptist Medical Group (“BMG”) on August 4, 2014. At that time, Employee reported to his physician that he had left shoulder pain for three weeks, and that the injury was not caused by a fall or trauma. He was referred to Campbell Orthopaedic Clinic. His first appointment was on August 6, 2014. On that date, he completed an intake form stating that his complaint was “frozen shoulder,” which had started two or three weeks earlier, and was not related to his work. The accompanying note of the physician’s assistant who saw him said that Employee reported a gradual onset of left shoulder pain, with a significant increase in the previous week.

 

Employee was then referred to physical therapy. A physical therapist’s evaluation, dated August 13, 2014, stated Employee had awakened one morning with (indecipherable) and there were no precipitating factors. At that time, Employee also answered “No” to the question “Is this a workers’ compensation claim?” on an intake form. After several physical therapy treatments, Employee was referred to Dr. Patrick Toy, an orthopaedic surgeon, for additional evaluation and treatment. He had previously seen Dr. Toy for a separate problem. The first date that Dr. Toy evaluated Employee’s shoulder was September 15, 2014. He gave Dr. Toy no information about the cause of the injury at that time. Dr. Toy’s initial diagnosis was chronic tendinitis. Employee was referred to Dr. Santos Martinez for conservative treatment.

 

Dr. Martinez saw Employee on three occasions. On the first visit, October 9, 2014, Employee stated on his intake form that the injury might be work-related. The injury date given was August 6, 2014. Dr. Martinez treated Employee with steroid injections and medications. These provided only temporary relief. Employee returned to Dr. Toy on March 9, 2015. Dr. Toy performed surgery on Employee’s left shoulder on March 23, 2015. During the procedure, Dr. Toy observed some arthritis, a labral tear, a partial tear of the biceps tendon and a type II acromion. By May 13, Employee’s physical therapist reported full range of motion. On June 15, he had full range of motion and no weakness. Dr. Toy permitted Employee to work without restrictions.

 

*2 Dr. Toy opined that Employee’s shoulder conditions were degenerative in nature. He did not find any basis to find that Employee had suffered a work-related injury. He stated “My opinion is that this was something that would happen over time as opposed to something that had happened in one episode.” Dr. Toy had not been asked to evaluate the extent of any residual impairment, but stated that it would be minimal, based on his findings.

 

Dr. Apurva Dalal, an orthopaedic surgeon, performed an independent medical evaluation of Employee on May 20, 2015. Employee gave him a history of injuring his shoulder at work on July 23, 2014. In response to a hypothetical question from Employee’s attorney, Dr. Dalal opined Employee had sustained a work-related tear of his biceps tendon, although his biceps tendinitis was preexisting. He assigned 7% anatomical impairment based on diminished range of motion of the shoulder. He was unconcerned about the variety of dates and mechanisms of injury described by Employee at various times, because the injury and pathology were consistent with the event described to him.

 

The trial court took the case under advisement and issued its opinion as a written Compensation Hearing Order. The court found that Employee had failed to carry his burden of proof. Specifically, the court found that the inconsistencies between Employee’s trial testimony and the statements made to medical providers concerning the date and mechanism of injury rendered any finding on the subject to be speculative. The claim was dismissed, the order became final and Employee appealed to the Supreme Court, which has assigned the appeal to this Panel. We affirm the trial court’s judgment.

 

 

Analysis

The standard of review of issues of fact in a workers’ compensation case is de novo upon the record of the trial court accompanied by a presumption of correctness of the findings, unless the preponderance of evidence is otherwise. Tenn. Code Ann. § 50–6–225(a)(2) (2014). When the trial judge has had the opportunity to observe a witness’s demeanor and to hear in-court testimony, we give considerable deference to factual determinations made by the trial court. Madden v. Holland Grp. of Tenn., Inc., 277 S.W.3d 896, 898 (Tenn. 2009) (citing Tryon v. Saturn Corp., 254 S.W.3d 321, 327 (Tenn. 2008)). When the issues involve expert medical testimony given by deposition, the weight and credibility must be drawn from the contents of the depositions; therefore, as a reviewing court, we may draw our own conclusions with regard to those issues. Foreman v. Automatic Sys., Inc., 272 S.W.3d 560, 571 (Tenn. 2008) (citing Orrick v. Bestway Trucking, Inc., 184 S.W.3d 211, 216 (Tenn. 2006)). A trial court’s conclusions of law are reviewed de novo with no presumption of correctness. Seiber v. Reeves Logging, 284 S.W.3d 294, 298 (Tenn. 2009) (citing Goodman v. HBD Indus., Inc., 208 S.W.3d 373, 376 (Tenn. 2006); Layman v. Vanguard Contractors, Inc., 183 S.W.3d 310, 314 (Tenn. 2006)).

 

Employee raises two issues in this appeal. First, he contends that the trial court erred by finding that Employee did not sustain a compensable injury. In addition, he asserts that the existence of a preexisting condition does not preclude him from recovery, if he satisfies the standard set out in Tennessee Code Annotated section 50–6–102(12) (2014). We conclude that the first issue is dispositive, and, therefore, the second issue is moot.

 

The trial court explained its decision as follows:

*3 The Court finds Mr. Lee provided inconsistent statements when describing how his left-shoulder pain began, and it would be speculative for the Court to accept Mr. Lee’s current explanation that it occurred at work. Therefore, based upon the evidence and the applicable legal principles, the Court holds Mr. Lee failed to satisfy the burden of proving his left-shoulder injury arose primarily out of and in the course and scope of his employment.

 

Employee was the only witness at trial. He testified that his injury occurred on July 24, 2014. The trial court had to evaluate the credibility of that testimony against numerous statements made by Employee to medical personnel in the months after the alleged injury. Medical records placed into evidence demonstrated that Employee gave different dates, or no particular date at all, for the onset of his symptoms. He gave different descriptions of how his shoulder symptoms arose, stating to one medical provider that the symptoms arose gradually over time but telling another that he simply awoke with shoulder pain that increased quickly. Several documents, some in Employee’s own handwriting, state that the injury was not related to his work.

 

The trial court had the opportunity to see and hear Employee testify in open court. It implicitly found his explanations for his prior inconsistent statements to be wanting. It is our obligation to give deference to a trial court’s findings as to the credibility of live testimony. Madden, 277 S.W.3d at 898. Based on that deference, we conclude that the trial court did not err by finding that Employee failed to satisfy his burden of proof of compensability.

 

 

Conclusion

The judgment is affirmed. Costs are taxed to Thomas Lee and his surety, for which execution may issue if necessary.

 

All Citations

Slip Copy, 2017 WL 5077910

 

 

Footnotes

1

The trial court based its decision on the credibility of Employee’s account of his alleged injury. It did not examine the medical evidence in depth, and we will limit our discussion of the medical evidence to matters relevant to that issue.