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Date: 05-23-2013

Case Style: Estate of Dow Chasan v. Farmers Insurance Exchange

Case Number: 1 CA-CV 12-0397

Judge: Samuel A Thumma

Court: Arizona Court of Appeals, Division One on appeal from the Superior Court, Maricopa County

Plaintiff's Attorney: Law Office of Richard Langerman Phoenix
by Richard Langerman
Attorneys for Appellees, Estate of Dow and Cynthia Chasan

Defendant's Attorney: Broening Oberg Woods & Wilson Phoenix
by James R. Broening
Mark R. Hill
Brian W. Purcell
Attorneys for Appellants, Farmers Insurance Company of Arizona

And
Jones, Skelton & Hochuli, P.L.C. Phoenix
by Donald L. Myles, Jr.
Lori L. Voepel
Attorney for Defendants/Appellees, Farmers Group Inc. and Fire Insurance Exchange

Description: ¶1 This appeal addresses whether a judgment finally obtained by plaintiff Cynthia Chasan was more favorable than a written settlement offer she rejected a dozen years ago (which implicates the successful party determination for a statutory attorneys’ fees award and eligibility for sanctions following an offer of judgment) and the proper dates and rates for interest in three judgments. Finding the proper interest dates and rates differ from those used in the judgments, a finding that changes the successful party determination, the judgments are affirmed in part, modified in part, reversed in part and remanded for further proceedings consistent with this decision.
FACTS AND PROCEDURAL HISTORY
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¶2 In 1998, after a burglary at their home, Cynthia and Dow Chasan1
¶3 Notwithstanding this modest beginning, this case has turned into a juggernaut, with nearly 1,000 superior court docket entries, two special actions and two prior appeals. In this, the third appeal, only the facts pertinent here are addressed, recognizing substantial additional detail may be found elsewhere. See Chasan v. Farmers Group, Inc., No. 1 CA-CV 03-0102 (App. Jan. 20, 2005) (Chasan I); Chasan v. Farmers Group, Inc., No. 1 CA-CV 07-0323, 2009 WL 3335341 (App. Sept. 24, 2009) (Chasan II). made a homeowners’ insurance claim for approximately $37,000. When the insurance carrier denied the claim, the Chasans filed this case.
¶4 Although filing this case in March 1999, the operative pleading is an amended complaint filed September 12, 2000. As to defendants Farmers Insurance Company of Arizona (FICA) and Farmers Insurance Exchange (FIE), the Chasans allege: (1) breach of contract and (2) breach of the duty of good faith and fair dealing (bad faith). The Chasans allege alter ego and breach of fiduciary duty counts against defendants Farmers Group Inc. (FGI) and Fire Insurance Exchange (FIRE).
1 Dow died in 2011 and his estate was substituted as a plaintiff.
4
¶5 On December 14, 2000, Cynthia and Dow each received separate written offers to settle the case, in the forms of offers of judgment. For Cynthia, the offer of judgment proposed to have judgment entered in her favor and against FICA in the amount of $133,333.33 for her damage claims and $66,666.66 for her attorneys’ fees, together with costs incurred to date, to total $199,999.99, with Cynthia agreeing to dismiss her claims against FGI, FIE and FIRE with prejudice. The written offer of judgment to Dow was substantively identical. Collectively, in late 2000, defendants offered to resolve this case by paying the Chasans $400,000. The Chasans, however, rejected those written offers.
¶6 On April 8, 2002, the superior court granted summary judgment for defendants on all claims. The Chasans appealed and Chasan I reversed and remanded for further proceedings. No. 1 CA-CV 03-0102, 1, ¶ 1. The Chasans’ claims against FGI and FIRE were resolved by motion and never tried, as discussed more fully below. The Chasans’ claims against FICA and FIE, however, went to trial and in August 2, 2006 verdicts, the jury found for the Chasans. The jury awarded Cynthia $37,000 on her contract claim; $10,000 on her bad faith claim and $370,000 in punitive damages; the jury awarded Dow $19,650 on his contract claim; $0 on his bad faith claim and $370,000 in punitive damages.
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¶7 After granting Dow a $20,000 additur for his bad faith claim, the superior court entered judgment on February 27, 2007 as follows:
For Cynthia (against FICA and FIE):
$ 37,000 on her contract claim
$ 10,000 on her bad faith claim
$370,000 in punitive damages
For Dow (against FICA and FIE):
$ 19,650 on his contract claim
$ 20,000 on his bad faith claim
$370,000 in punitive damages
For both Cynthia and Dow (against FICA and FIE):
$437,810.00 in attorneys’ fees
$ 25,158.03 in costs
This judgment made various interest awards, discussed when relevant below, and dismissed the Chasans’ claims against FGI and FIRE with each side to bear their own attorneys’ fees and costs.
¶8 Defendants appealed. Chasan II affirmed in part, reversed in part and remanded. Specifically, Chasan II reduced Cynthia’s punitive damages award to $40,000, reversed and vacated the additur for Dow, vacated Dow’s punitive damages award and vacated the attorneys’ fees and costs awarded to Dow and Cynthia. 2009 WL 3335341 at *5, *6, *11-12, ¶¶ 16, 25, 47-48. Chasan II remanded for a new trial on damages for Dow’s bad faith claim unless FICA and FIE accepted the additur, and for reallocation of attorneys’ fees and costs. Id. at *16, ¶ 71. Chasan II also determined FGI and FIRE were successful parties
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entitled to attorneys’ fees and costs. Id. at *16, ¶ 70. Chasan II issued September 24, 2009 and, after further appellate filings, the mandate issued November 18, 2010, awarding FGI and FIRE $616.97 in costs on appeal.
¶9 On remand, the superior court reaffirmed Cynthia’s $37,000 contract award; $10,000 bad faith award; $40,000 punitive damage award and awarded Cynthia $12,591.72 in taxable costs, to total $99,591.72. With prejudgment interest, the court found that the judgment Cynthia finally obtained against FICA and FIE exceeded the December 14, 2000 offer of judgment, making Cynthia the successful party pursuant to Arizona Revised Statutes (A.R.S.) section 12-341.01(A),2
¶10 For Dow, on January 28, 2011, FICA and FIE accepted the $20,000 additur and on October 17, 2011, the superior court awarded Dow $80,000 in punitive damages. With prejudgment interest, the court found the judgment Dow finally obtained against FICA and FIE exceeded the December 14, 2000 offer of judgment, making Dow the successful party pursuant to A.R.S. § 12-341.01(A), and awarded him $234,453.75 in attorneys’ fees, findings not challenged in this appeal. and awarded her $255,656.25 in attorneys’ fees.
2 Absent material revisions after the relevant dates, statutes and rules cited refer to the current version unless otherwise indicated.
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¶11 Given these rulings, the superior court denied as moot a motion by FICA and FIE for sanctions under Arizona Rule of Civil Procedure (Rule) 68. Noting Chasan II held that FGI and FIRE were the successful parties, the superior court awarded FGI and FIRE attorneys’ fees and taxable costs.
¶12 After additional motion practice, on April 4, 2012, the superior court entered three judgments. Where applicable, the judgments for Dow and Cynthia reaffirmed the February 27, 2007 judgment. As relevant here, the April 4, 2012 judgments, as amended to correct an admitted typographical error, provide as follows:
For Cynthia (against FICA and FIE):
$ 37,000.00 on her contract claim, with interest at 10% from February 4, 1999 (which the parties agree is the proper accrual date for interest on the Chasans’ contract claims) until July 20, 2011 and then at 4.25% until paid.
$ 10,000.00 on her bad faith claim, with interest at 10% from August 2, 2006 (the jury verdict) until July 20, 2011 and then at 4.25% until paid.
$ 40,000.00 in punitive damages, with interest at 10% from August 2, 2006 until July 20, 2011.
$ 12,591.72 in costs, with interest at 10% from September 14, 2006 until July 20, 2011, and then at 4.25% until paid.
$215,743.75 in attorneys’ fees incurred prior to August 16, 2006, with interest at 10% from January 31, 2007 until July 20, 2011, and then at 4.25% until paid.
$ 9,912.50 in attorneys’ fees incurred after August 16, 2006, with interest at 4.25% from October 17, 2011 (the date ordered) until paid.
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For Dow (against FICA and FIE):
$ 19,650.00 on his contract claim, with interest at 10% from February 4, 1999 until July 20, 2011 and then at 4.25% until paid.
$ 20,000.00 on his bad faith claim, with interest at 10% from December 14, 2006 (when the superior court ordered the additur) until July 20, 2011 and then at 4.25% until paid.
$ 80,000 in punitive damages, with no interest awarded.
$ 12,591.72 in costs, with interest at 10% from September 14, 2006 until July 20, 2011, and then at 4.25% until paid.
$222,066.25 in pre-August 16, 2006 attorneys’ fees, with interest at 10% from January 31, 2007 until July 20, 2011, and then at 4.25% until paid.
$ 12,387.50 in post-August 16, 2006 attorneys’ fees, with interest at 4.25% beginning October 17, 2011 until paid.
For FGI and FIRE (against the Chasans):
$ 94,800.00 in attorneys’ fees through October 4, 2002, with interest at 10% from October 4, 2002 until July 20, 2011, and then at 4.25% until paid.
$ 12,222.28 in costs through October 4, 2002, with interest at 10% from October 4, 2002 until July 20, 2011, and then at 4.25% until paid.
$ 83,372.00 in attorneys’ fees after October 4, 2002, with interest at 4.25% beginning October 17, 2011 until paid.
$ 616.97 in costs on appeal in Chasan II, with interest at 10% from November 18, 2010 until July 20, 2011, and then at 4.25% until paid.
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¶13 FICA and FIE timely appealed from the judgments in favor of the Chasans.3
DISCUSSION The Chasans timely appealed from the judgment in favor of FGI and FIRE. This court has jurisdiction pursuant to A.R.S. § 12-2101(A)(1).
I. Standard of Review.
¶14 This court reviews questions of law de novo, including the interpretation of statutes and rules of civil procedure as well as the entitlement to prejudgment interest. See, e.g., Hall v. Read Dev., Inc., 229 Ariz. 277, 279, ¶ 6, 274 P.3d 1211, 1213 (App. 2012); Berry v. 352 E. Virginia, L.L.C., 228 Ariz. 9, 13, ¶ 18, 261 P.3d 784, 788 (App. 2011); Warner v. Sw. Desert Images, LLC, 218 Ariz. 121, 136, ¶ 49, 180 P.3d 986, 1001 (App. 2008). When based on discretionary factual findings, a determination of “who is the successful party for purposes of awarding attorneys’ fees [under A.R.S. § 12-341.01(A)] is within the sole discretion of the trial court, and will not be disturbed on appeal if any reasonable basis exists for it.” Berry, 228 Ariz. at 13, ¶ 21, 261 P.3d at 788 (quotation omitted).
II. Applicable Legal Principles.
3 Although filing cross-appeals, the Chasans withdrew their cross-appeals and, as a result, do not challenge any aspect of the judgments in their favor.
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¶15 The parties dispute: (1) whether an August 6, 1999 amendment to A.R.S. § 12-341.01(A) defining successful party applies; (2) how a July 20, 2011 amendment to A.R.S. § 44-1201 regarding prejudgment interest applies and (3) when prejudgment interest begins and ends. This decision first discusses these legal issues and then applies the applicable legal principles to the specific arguments made in this appeal.
A. The August 6, 1999 Amendment To A.R.S. § 12-341.01(A) Applies To This Case.
¶16 Pursuant to A.R.S. 12-341.01(A), the “successful party” in an action arising out of contract may be awarded its reasonable attorneys’ fees. Effective August 6, 1999, the Legislature added the following language to this statute (which is now the second sentence of A.R.S. § 12-341.01(A)):
If a written settlement offer is rejected and the judgment finally obtained is equal to or more favorable to the offeror than an offer made in writing to settle any contested action arising out of a contract, the offeror is deemed to be the successful party from the date of the offer and the court may award the successful party reasonable attorney fees.
1999 Ariz. Legis. Serv. Ch. 140, § 1 (West). Arguing this amendment was substantive and became effective after the filing of this case, the Chasans claim this amendment does not apply.
¶17 The Chasans correctly note Bouldin v. Turek held that the 1976 enactment of A.R.S. § 12-341.01 –- which authorized fee
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shifting in cases arising out of contract -- established a substantive right and therefore did not apply to suits filed before its effective date. 125 Ariz. 77, 78, 607 P.2d 954, 955 (1979). Bouldin made plain, however, that a statute applies retroactively “if it is merely procedural and does not affect an earlier established substantive right.” Id. Unlike the substantive enactment of A.R.S. § 12-341.01 in 1976, the 1999 amendment does not create a substantive right but, instead, defines as a procedural matter when a party is “the successful party” in certain circumstances. Compare id. (discussing procedural versus substantive distinction).
¶18 Moreover, even if this was a substantive change, this 1999 amendment was not applied retroactively in this case. Although filing this case in March 1999, the Chasans first joined the current defendants in September 2000, after the effective date of the 1999 amendment. Moreover, the written settlement offers were not made until December 2000, long after the effective date of the 1999 amendment. Accordingly, the application of the 1999 amendment in this case is prospective because the defendants’ written offers were made after the effective date of that procedural amendment. See Leapai v. Milton, 595 So. 2d 12, 15 (Fla. 1992) (finding similar fee statute was not applied retroactively because defendant’s right to recover attorneys’ fees attached when plaintiff rejected
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defendant’s offer, not when plaintiff filed its complaint); see also Aida Renta Trust v. Maricopa County, 221 Ariz. 603, 613, ¶ 32, 212 P.3d 941, 951 (App. 2009) (“Although
§ 12–348 [addressing fee shifting in another context] does not apply retroactively, it does apply to prospectively incurred fees in pending litigation.”); Abril v. Harris, 157 Ariz. 78, 81, 754 P.2d 1353, 1356 (App. 1987) (noting A.R.S. § 12-349 (authorizing sanctions) “is not applicable to actions taken by [counsel] prior to its effective date. However, it does apply to this litigation subsequent to that date.”). Accordingly, because it is not being applied retroactively, the 1999 amendment to A.R.S. § 12-341.01(A) applies to this case.
B. Prejudgment Interest And The Application Of The July 20, 2011 Amendments To A.R.S. § 44-1201 To This Case.
¶19 Prejudgment interest is governed by A.R.S. § 44-1201 and “is awarded as a matter of right on a liquidated claim.” John C. Lincoln Hosp. & Health Corp. v. Maricopa County, 208 Ariz. 532, 544, ¶ 39, 96 P.3d 530, 542 (App. 2004).4
4 A.R.S. § 44-1201 provides, in relevant part: A claim is
B. Unless specifically provided for in statute or a different rate is contracted for in writing, interest on any judgment shall be at the lesser of ten per cent per annum or at a rate per annum that is equal to one per cent plus the prime rate as published by the board of governors of the federal reserve system in statistical release H.15 or any publication that may
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liquidated if a party provides a basis for precisely calculating the amount owed. Id. A claim can be liquidated in a variety of ways, including a pre-filing demand, a claim in a pleading, a jury verdict, a superior court order, a judgment or an appellate court decision or mandate. See, e.g., Metzler v. BCI Coca–Cola Bottling Co. of Los Angeles, Inc., 230 Ariz. 26, 29, ¶ 10, 279 P.3d 1188, 1191 (App. 2012) (entry of judgment after reversal on appeal); Alta Vista Plaza, Ltd. v. Insulation Specialists Co., 186 Ariz. 81, 83, 919 P.2d 176, 178 (App. 1995) (demand or pleading); Hall v. Schulte, 172 Ariz. 279, 284-85, 836 P.2d 989, 994-95 (App. 1992) (jury verdict); see also John C. Lincoln Hosp., 208 Ariz. at 544, ¶ 39, 96 P.3d at 542 (“A claim is liquidated if” the party against whom the claim is made is “provide[d] a basis for precisely calculating the amount[] owed.”). Prejudgment interest starts (or accrues) from the date of the demand for, or award of, a liquidated amount. See, e.g., Scottsdale Ins. Co. v. Cendejas, 220 Ariz. 281, 289, ¶ 37, 205
supersede it on the date that the judgment is entered. The judgment shall state the applicable interest rate and it shall not change after it is entered.
* * *
F. If awarded, prejudgment interest shall be at the rate described in subsection . . . B of this section.
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P.3d 1128, 1136 (App. 2009); Alta Vista Plaza, 186 Ariz. at 83, 919 P.2d at 178.
¶20 By statute, prejudgment interest stops upon the entry of a “judgment;” in other words, prejudgment interest ends when the applicable judgment is entered. See A.R.S. § 44-1201(B), (F). The superior court found that the Chasan II issuance date was the proper end date for some prejudgment interest calculations. An appellate decision and mandate, however, are very different from a superior court judgment. Compare ARCAP 20 (“Notice of Decisions and Orders”) and ARCAP 24(a)(1) (clerk of court issues mandates) with Ariz. R. Civ. P. 54(a) (defining judgment as “an order from which an appeal lies”) and Ariz. R. Civ. P. 58 (“Entry of Judgment”). The end-point for prejudgment interest is not the date of an appellate court decision or mandate but, rather, the date of entry for the judgment on the applicable claim, when that amount is not later modified, vacated or reversed. See Metzler, 230 Ariz. at 28, ¶ 8, 279 P.3d at 1190 (holding proper end date for prejudgment interest where case is reversed on appeal is entry of judgment by superior court following issuance of mandate on appeal; “‘A vacated judgment lacks force or effect and places parties in the position they occupied before entry of judgment.’”)(quotation omitted).
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¶21 Taken together, these principles direct that prejudgment interest accrues from the date of the demand for, or award of, a liquidated sum and runs until the entry of judgment on that specific amount, when that amount is not later modified, vacated or reversed.
¶22 Prior to July 20, 2011, the applicable prejudgment interest rate was 10%, simple, per year. See A.R.S. § 44-1201(A) (2010); Envtl. Liners, Inc. v. Ryley, Carlock & Applewhite, 187 Ariz. 379, 385, 930 P.2d 456, 462 (App. 1996). As applicable here, amendments to A.R.S. § 44-1201 effective July 20, 2011, (1) reduced the prejudgment interest rate to 4.25%, simple, per year and (2) prohibited any award of interest on punitive damages. See A.R.S. § 44-1201(B), (D)(1) and (F) (2011). As applied, the April 4, 2012 judgments use a 10% interest rate until July 20, 2011 and, from July 20, 2011 forward, apply the amendments to A.R.S. § 44-1201 reducing the interest rate to 4.25% and not awarding any interest on punitive damages. The Chasans, FGI and FIRE agree with this approach. FIE and FICA, however, argue the July 20, 2011 amendments require that all interest be reduced to 4.25% for any judgment entered on or after July 20, 2011, even if the amounts included in the judgment were liquidated long before July 20, 2011.
¶23 The authority relied upon by FIE and FICA is a Session Law applicability note stating that the July 20, 2011 amendments
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(which govern both pre- and post-judgment interest) apply to “all judgments that are entered on or after the effective date of this act.” 2011 Ariz. Legis. Serv. Ch. 99, § 17 (West). Because the July 20, 2011 amendment applies to both pre- and post-judgment interest, this applicability note can be read as either a directive to apply the amendment to post-judgment interest on judgments entered after the effective date or to apply the amendment to both pre- and post-judgment interest on judgments entered after the effective date. The applicability note does not, however, expressly state that the 4.25% interest rate was to apply retroactively. Moreover, retroactivity is not presumed. See A.R.S. § 1-244 (“No statute is retroactive unless expressly declared therein.”).
¶24 The superior court’s bifurcated approach complies with the applicability note by applying the statutory amendments from and after July 20, 2011. The bifurcated approach also is consistent with McBride v. Superior Court, cited by the Chasans. 130 Ariz. 193, 194, 635 P.2d 178, 179 (1981) (finding prior amendment to interest rate in A.R.S. § 44-1201 “was not retroactive but prospective after the effective date”). Accordingly, the court properly adopted a bifurcated approach, using 10% for prejudgment interest prior to July 20, 2011 and, from that date forward, 4.25% for prejudgment interest with no
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interest on punitive damages. See A.R.S. § 44-1201(B), (D)(1) and (F) (2011).
III. Because Cynthia’s Recovery Against FICA And FIE Was Less Favorable Than The Written Settlement Offer, Her Attorneys’ Fee Award Cannot Be Sustained.
¶25 Under the second sentence of A.R.S. § 12-341.01(A), if the written settlement offer to Cynthia was the same as or more favorable to her than the judgment she “finally obtained,” FICA and FIE are “the successful part[ies] from the date of the offer” and eligible for an award of attorneys’ fees.5 “The plain language of the second sentence of § 12–341.01(A) requires a comparison of the amount of the settlement offer versus the amount of the ‘judgment finally obtained,’” which is determined by the court’s entry of final judgment. Hall, 229 Ariz. at 281, ¶ 13, 274 P.3d at 1215;6
5 The Chasans argue that, under A.R.S. § 12-341.01(A), the offer was made by FICA only, and therefore FIE never made an offer that would qualify it as a successful party. The offers were sent by counsel for FICA and FIE and, if accepted, would have terminated Cynthia’s claims against those parties. Accordingly, the superior court did not err in finding the written offer was made by both FICA and FIE.see also Berry, 228 Ariz. at 14, ¶ 28, 261 P.3d at 789 (“‘judgment finally obtained’ . . . refer[s] to the court’s rendering of a final judgment.”).
6 Although the Chasans argue Hall was wrongly decided, they have provided no persuasive reason to reject the Hall analysis, which this court applies to this case.
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¶26 The applicable written settlement offer was an offer of judgment made pursuant to a prior version of Rule 68 that required the separate allocation of damages and attorneys’ fees and costs. Ariz. R. Civ. P. 68(c)(1) (2000).7 This prior version of Rule 68 compared only the damages portion of the offer and the judgment finally obtained to determine whether a party was eligible for sanctions. Ariz. R. Civ. P. 68(d) (2000).8
7 The current version of Rule 68 does not require such allocation. The parties have stipulated that the version of Rule 68 in effect at the time of the December 2000 offers of judgment should apply, noting application of the current version would work an injustice, a stipulation expressly adopted by this court. See Ariz. R. Civ. P. 81; see also Metzler, 230 Ariz. at 28, ¶ 6 n.1, 279 P.3d at 1190 n.1 (noting amendments to Rule 68 apply retroactively, unless such retroactive application “would work injustice”). Whether comparing only the portion of the offer regarding damages with the damages judgment finally obtained, or comparing the entire amount of the offer with the entire judgment finally obtained, the written settlement offer to Cynthia was more favorable to her than the judgment she “finally obtained.” Accordingly, FICA and FIE are the successful parties from the date of the offer pursuant to A.R.S. § 12-341.01(A).
8 “If the offer made included amounts for costs or attorneys’ fees, an award of sanctions under this Rule shall only be made if the judgment finally obtained, exclusive of any attorneys’ fees or costs awarded and included therein, is equal to, or more favorable to the offeror than, that portion of the offer stating the award to be made on the causes of action asserted.” Ariz. R. Civ. P. 68(d) (2000).
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¶27 If looking solely at the damages component of the written settlement offer, FICA and FIE made Cynthia an offer to settle the case for $133,333.33. The proper comparison for such an offer is to look at the components of the judgment finally obtained for damages and prejudgment interest on those damages. See Berry, 228 Ariz. at 15, ¶ 29, 261 P.3d at 790; Hales v. Humana of Arizona, Inc., 186 Ariz. 375, 378, 923 P.2d 841, 844 (App. 1996) (directing “an apples to apples comparison” for an offer of judgment and judgment obtained) (construing prior version of Rule 68). As applicable here, the judgment Cynthia finally obtained awarded her (1) $37,000 in contract damages; (2) $10,000 in bad faith damages and (3) $40,000 in punitive damages. These amounts total $87,000, significantly less than the $133,333.33 written settlement offer. Accordingly, when looking at damages, Cynthia can only be the successful party after the date of the written offer if prejudgment interest on these components caused her award to equal or exceed $133,333.33.
¶28 The parties agree that prejudgment interest on Cynthia’s $37,000 contract claim runs from February 4, 1999 to February 27, 2007 at 10% per year, resulting in $29,833.15 in prejudgment interest.
¶29 Cynthia’s bad faith claim was not liquidated until the August 2, 2006 jury verdict for $10,000. Judgment on that claim
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was entered on February 27, 2007 and was never modified. Accordingly, Cynthia was entitled to prejudgment interest on her $10,000 bad faith claim from August 2, 2006 to February 27, 2007 at 10% per year, totaling $572.60 in prejudgment interest.
¶30 Chasan II reduced Cynthia’s $370,000 punitive damage award to $40,000 on September 24, 2009, which was never modified. 2009 WL 3335341 at *11, *16, ¶¶ 47, 72. Accordingly, Cynthia was entitled to prejudgment interest on that amount at 10% per year from September 24, 2009 until July 20, 2011, when the amendments to A.R.S. § 44-1201 became effective, totaling $7,272.
¶31 Collectively, for comparison with the written settlement offer, the proper damages and prejudgment interest components are as follows:
Contract damages: $ 37,000.00
Prejudgment interest on
contract damages: $ 29,833.15
Bad faith damages: $ 10,000.00
Prejudgment interest on
Bad faith damages: $ 572.60
Punitive damages: $ 40,000.00
Prejudgment interest on
punitive damages: $ 7,272.00
Total: $124,677.75
Because this total is less favorable than the written settlement offer of $133,333.33 that Cynthia rejected, FICA and FIE –- not Cynthia -- are the successful parties under the second sentence of A.R.S. § 12-341.01(A) from the date of the December 14, 2000
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written offer forward. For similar reasons, FICA and FIE are eligible to request sanctions pursuant to Rule 68(d) (2000). See Hall, 229 Ariz. at 282, ¶ 17, 274 P.3d at 1216 (harmonizing A.R.S. § 12-341.01(A) with Rule 68);
Drozda v. McComas, 181 Ariz. 82, 85, 887 P.2d 612, 615 (App. 1994) (“‘[o]ur rules of procedure and statutes should be harmonized wherever possible and read in conjunction with each other’” and “reading A.R.S. section 12-341 and Rule 68 together and harmonizing them”) (quoting Phoenix of Hartford, Inc. v. Harmony Restaurants, Inc., 114 Ariz. 257, 258, 560 P.2d 441, 442 (App. 1997)).
¶32 Including attorneys’ fees and costs and prejudgment interest for the comparison does not change the outcome. The written offer agreed to settle Cynthia’s claims for damages, attorneys’ fees and costs for payment of $199,999.99. For comparison purposes, as discussed above, the proper damages component of the judgment Cynthia actually obtained was $124,677.75. The parties do not dispute that Cynthia had incurred $68,190 in attorneys’ fees and $5,375 in taxable costs at the time the written offer was made, which is the relevant date for comparison. See Hall, 229 Ariz. at 283, ¶ 20, 274 P.3d at 1217. Together with the damages component, these amounts total $198,150.75, again a total less favorable than the written offer Cynthia rejected.
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¶33 Cynthia claims she was entitled to prejudgment interest on the $68,190 in attorneys’ fees and $5,375 in costs for some unspecified period of time. However, at no point has any court issued an award of $68,190 in attorneys’ fees or $5,375 in costs. Moreover, as recently as mid-August 2011, Cynthia acknowledged that Chasan II vacated a prior award of attorneys’ fees and remanded for reallocation of fees as well as costs, which had yet been done at that time. That reallocation, which the parties do not dispute included $68,190 in attorneys’ fees and $5,375 in costs, did not occur until the superior court’s October 17, 2011 minute entry (and, even then, by awarding very different amounts for both fees and costs). See Flood Control Dist. v. Paloma Inv. Ltd. P'ship, 230 Ariz. 29, 49, ¶ 80, 279 P.3d 1191, 1211 (App. 2012) (“[A]n application for an award of attorneys’ fees . . . is not liquidated until the trial court enters an order awarding reasonable fees.”); Hall, 229 Ariz. at 282, ¶ 16, 274 P.3d at 1216 (in nearly identical context, noting “trial courts will have no choice but to exercise their discretion to determine the amount of reasonable attorneys’ fees incurred up to the date of the offer (and would thus be included in the final judgment) when comparing a settlement offer to the judgment finally obtained”).
¶34 FICA and FIE concede that the superior court’s October 17, 2011 minute entry liquidated the $68,190 in attorneys’ fees
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(and, by implication, the $5,375 in costs). From that date until the entry of judgment on April 4, 2012, using a 4.25% interest rate yields $1,357.73 in prejudgment interest on the $68,190 in fees and $107.02 in prejudgment interest on the $5,375 in costs. Collectively, the attorneys’ fees and costs Cynthia incurred as of the date of the offer, coupled with applicable prejudgment interest, totals $75,029.75.
¶35 Together, the $124,677.75 in damages and prejudgment interest plus the $75,029.75 in attorneys’ fees and costs and prejudgment interest incurred as of the date of the written offer totals $199,707.25, which is less than the written offer of $199,999.99.9
* * * * * Accordingly, even under this alternative analysis, FICA and FIE –- not Cynthia –- are the successful parties under the second sentence of A.R.S. § 12-341.01(A) from December 14, 2000 forward.
¶36 The impact of this analysis on the April 4, 2012 judgment in favor of Cynthia and against FICA and FIE is as follows:
• The accrual dates for interest are modified as set forth above.
9 Given these totals, the court need not decide the argument set forth by FICA and FIE, based on cases from other jurisdictions, “that only prejudgment interest which accrued up to the date of the offer should be included as part of the judgment finally obtained.”
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• The judgment is affirmed to the extent that Cynthia is awarded, and FICA and FIE are required to pay, $68,190 in attorneys’ fees and $5,375 in costs incurred as of December 14, 2000. See Hall, 229 Ariz. at 279-80, ¶¶ 9, 10 n.3, 274 P.3d at 1213-14 & n.3 (noting “[i]f the offer is more favorable than the judgment finally obtained, then the offeror is ‘deemed’ to be the successful party ‘from the date of the offer;’” also noting parties acknowledged “the second sentence of § 12-341.01(A) may change the successful party status as of the date of an offer and the offeree could still be the prevailing party prior to that point”). Interest on these awards is to accrue from October 17, 2011 at 4.25% per annum until paid in full. See 2009 WL 3335341 at *16, ¶ 71; A.R.S. § 12-341 (awarding “successful party” costs); A.R.S. § 12-341.01(A) (providing, as applicable here, FICA and FIE are “the successful part[ies] from the date of the offer”).
• The remaining attorneys’ fees and costs awarded to Cynthia and against FICA and FIE are vacated. See A.R.S §§ 12-341; 12-341.01(A).
• FICA and FIE are the successful parties from December 14, 2000 forward pursuant to the second sentence of A.R.S. § 12-341.01(A). Given the context-dependent nature of resolving a request for attorneys’ fees and costs incurred before the superior court, this court denies without prejudice the request by FICA and FIE that this court issue such an award. Instead, on remand, FICA and FIE are eligible to seek an award of their attorneys’ fees and taxable costs against Cynthia incurred from and after December 14, 2000. See A.R.S. § 12-341. For any such attorneys’ fees request, the superior court will have the discretion to award reasonable fees “to mitigate the burden of the expense of litigation to establish a just claim or a just defense.” A.R.S. § 12-341.01(B); see also Hall, 229 Ariz. at 279-80, ¶ 9, 274 P.3d at 1213-14 (noting, in similar circumstances, “trial court still retains its broad discretion to award the successful party some, all, or none of its claimed
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attorneys' fees”). On remand, the court also may consider Cynthia’s argument that, although FICA and FIE were jointly represented, FICA cannot recover attorneys’ fees because the bills were sent to and paid by FIE, an issue this court does not decide.
• Because in relevant part the judgment finally obtained was more favorable to FICA and FIE than the offer, on remand, FICA and FIE are eligible to request Rule 68 sanctions. Given the context-dependent nature of such a request, this court denies without prejudice the request by FICA and FIE that this court award Rule 68 sanctions. Instead, on remand, FICA and FIE are eligible to request Rule 68 sanctions. For any such request, the court may order the payment of “reasonable expert witness fees and double the taxable costs of [FICA and FIE], as defined in A.R.S. § 12-332, incurred after the making of the offer.” Ariz. R. Civ. P. 68(d) (2000).
IV. The Proper Accrual Date And Interest Rate In The Judgment For Dow And Against FICA And FIE.
¶37 FICA and FIE argue the judgment for Dow used the wrong accrual dates and interest rate on the $20,000 bad faith award and the $222,066.25 award for attorneys’ fees incurred prior to August 16, 2006.
¶38 Bad faith damages are, almost by definition, unliquidated until awarded by a verdict, order, decision or judgment. See John C. Lincoln Hosp., 208 Ariz. at 544, ¶ 40, 96 P.3d at 542 (defining unliquidated amount as “depend[ent] upon the opinion or discretion of the judge or jury”) (quoting Charles T. McCormick, Handbook on the Law of Damages § 54, at 216 (1935)). After the jury awarded Dow $0 for that claim, the
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superior court ordered a $20,000 additur that Chasan II then vacated. 2009 WL 3335341 at *16, ¶ 71. Had that claim gone to trial, the result almost certainly would have been something other than $20,000. Moreover, the Chasans had not provided FICA and FIE (and, indeed, could not provide) “‘data which, if believed, makes it possible to compute the amount [of bad faith damages] with exactness, without reliance upon opinion or discretion.’” John C. Lincoln Hosp., 208 Ariz. at 544, ¶ 39, 96 P.3d at 542 (quoting McCormick, § 54, at 213).
¶39 Accordingly, until FICA and FIE accepted the $20,000 additur on January 28, 2011, Dow’s bad faith damages were not determined with any precision, meaning they were not liquidated prior to that time. See id. Applying the applicable legal principles outlined above, for the $20,000 bad faith award, Dow is entitled to interest at 10% per annum from January 28, 2011 until July 20, 2011, and then at 4.25% per annum until paid in full. The judgment in favor of Dow is modified accordingly.
¶40 Chasan II vacated the attorneys’ fees jointly awarded to Dow and Cynthia and remanded for reallocation. 2009 WL 3335341 at *16, ¶ 71. On remand, in a minute entry dated October 17, 2011, Dow was awarded $234,453.75 in attorneys’ fees, including $222,066.25 in fees incurred prior to August 16, 2006. Prior to that time, however, that award was not liquidated. See Flood Control Dist., 230 Ariz. at 49, ¶ 80, 279 P.3d at 1211.
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Applying the applicable legal principles outlined above, for the $222,066.25 awarded to Dow for attorneys’ fees incurred prior to August 16, 2006, Dow is entitled to interest at the rate of 4.25%, simple, from October 17, 2011 until paid in full. The judgment in favor of Dow is modified accordingly.
V. The Proper Accrual Date And Interest Rate In The Judgment For FGI And FIRE And Against The Chasans.
¶41 The Chasans argue the judgment in favor of FGI and FIRE uses the wrong interest accrual date and rate for the $94,800 award of attorneys’ fees incurred through October 4, 2002 and $12,222.28 award of costs incurred through October 4, 2002 (totaling $107,022.28) and uses the wrong interest rate for the $616.97 award of costs on appeal in Chasan II.
¶42 Chasan I reversed and remanded, finding there was not yet a successful party, and as a result vacated the prior award of fees and costs. No. 1 CA-CV 03-0102 at 12, 17-18, ¶¶ 17, 29. It was not until October 17, 2011, when FGI and FIRE were again deemed successful parties, that their attorneys’ fees and costs were subject to precise calculation. Although FGI and FIRE were awarded $107,022.28 in attorneys’ fees and costs on remand on October 17, 2011, prior to that time, those amounts were not liquidated. Flood Control Dist., 230 Ariz. at 49, ¶ 80, 279 P.3d at 1211. Applying the applicable legal principles outlined above, for the $107,022.28 awarded to FGI and FIRE for
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attorneys’ fees and costs incurred through October 4, 2002, FGI and FIRE are entitled to interest at the rate of 4.25% from October 17, 2011 until paid in full. The judgment in favor of FGI and FIRE is modified accordingly.
¶43 The $616.97 in costs on appeal in Chasan II were awarded (and, as a result, liquidated) in the mandate issued November 18, 2010. Applying the applicable legal principles outlined above, the judgment properly awarded FGI and FIRE interest on that amount at the rate of 10% per annum from November 18, 2010 until July 20, 2011, and then at the rate of 4.25% per annum until paid in full.10
VI. Attorneys’ Fees On Appeal.
¶44 The Chasans, as appellees, seek attorneys fees on appeal pursuant to A.R.S. § 12-341.01. Because the Chasans did not prevail as appellees, that request is denied and, in the exercise of the court’s discretion, each party shall bear its own attorneys’ fees on appeal. Contingent on compliance with ARCAP 21, FICA and FIE may recover from the Chasans their costs on appeal and the Chasans may recover from FGI and FIRE their costs on their appeal from the judgment in favor of FGI and FIRE.
10 Neither FGI nor FIRE sought Rule 68 sanctions or cross-appealed from this judgment, meaning any such claims are waived.

Outcome: ¶45 The judgments subject to this appeal are affirmed in part, modified in part, reversed in part and remanded for further proceedings consistent with this decision. In remanding, the court is mindful that this is the third appeal in this matter. The court is also mindful of the original amount in controversy and that this case was filed a dozen years ago. However, because the issues necessitating remand include issues involving substantial discretion by the superior court, remand for further proceedings is both appropriate and required.

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