Woensdregt v. Handyman ( 2019 )


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  •                       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    UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
    MARTIN WOENSDREGT, et al. Plaintiffs /Appellants-Cross Appellees,
    v.
    HANDYMAN CONNECTION, Defendant /Appellee-Cross Appellant.
    No. 1 CA-CV 18-0340
    FILED 9-12-2019
    Appeal from the Superior Court in Maricopa County
    No. CV2015-012465
    The Honorable Sherry K. Stephens, Judge
    AFFIRMED IN PART; VACATED AND REMANDED IN PART
    COUNSEL
    McGill Law Firm, Scottsdale
    By Gregory G. McGill
    Counsel for Plaintiff/Appellant-Cross Appellee
    Harry L. Howe, P.C., Scottsdale
    By Harry L. Howe
    Counsel for Defendant/Appellee-Cross Appellant
    Lang & Klain, P.C., Scottsdale
    By Jason A. Clark
    Counsel for Counterclaimant/Appellee-Cross Appellant
    WOENSDREGT v. HANDYMAN
    Decision of the Court
    MEMORANDUM DECISION
    Judge Paul J. McMurdie delivered the decision of the Court, in which
    Presiding Judge Samuel A. Thumma and Judge Jennifer M. Perkins joined.
    M c M U R D I E, Judge:
    ¶1             Martin Woensdregt and Burt Leibold (collectively
    “Homeowners”) appeal the superior court’s denial of their motion for a
    new trial following a four-day jury trial adjudicating several claims
    between Homeowners and their contractor, Handyman Connection
    (“Handyman”). Handyman cross appeals the reduction of its award for
    attorney’s fees on the basis it would cause a hardship. For the following
    reasons, we affirm the superior court’s denial of Homeowners’ motion for
    a new trial, vacate the award of attorney’s fees, and remand for the superior
    court to reconsider the requested attorney’s fees according to the parties’
    contract.
    FACTS AND PROCEDURAL BACKGROUND
    ¶2             Homeowners entered into a bathroom remodeling contract
    with Handyman on May 22, 2015. Under the contract, Homeowners were
    to provide all materials and Handyman would supply the labor for $7125.
    Homeowners paid $2850 as a down payment, and the parties agreed upon
    a start date of July 27, 2015. The contract did not specify a completion date,
    but the parties understood the project would take approximately three
    weeks.
    ¶3            When Handyman’s craftsman Robert Dickson arrived on July
    27, 2015, to begin the project, Homeowners informed Dickson that they
    wanted to expand the project. Homeowners’ expansion included: tiling
    nearly the entire bathroom with one-by-two-inch glass tile rather than only
    tiling the shower; changing the light fixtures from recessed cans to a
    hanging fixture; changing the medicine cabinets to recessed cabinets and
    running electricity to them; adding additional electric outlets; and changing
    the switches and outlets throughout the bathroom. The tiling addition alone
    more than doubled the square footage of the original estimate. Dickson
    agreed to the expansion of the project and began working without
    executing a new contract or supplying Homeowners with a revised
    proposal.
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    WOENSDREGT v. HANDYMAN
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    ¶4             On August 23, Homeowners emailed Handyman stating that
    “our handyman is doing a good job for the most part” but complained that
    the carpet in the bedroom was dirty and the vanity countertops were
    scratched. In response, Handyman’s general manager Allen Hopkins
    arranged for the carpets to be cleaned throughout the entire house and to
    have the countertops repaired. By the end of August, Handyman was
    waiting for Homeowners to receive replacement vanity drawers and
    additional tile to complete the job. On August 28, Leibold wrote Hopkins:
    I had been in sales, sales management, customer and technical
    support most of my life and I know that going beyond what
    the customer expects will always result in a happy, satisfied,
    repeat customer who will tell many people about their
    experiences with companies that go the extra mile. I had no
    idea yours would be one of them and I am so very pleased in
    the way your [sic] are handling our problems.
    He went on to state: “Once the tile is completed and we finish the
    painting . . ., it will be a standout bathroom.”
    ¶5            On August 30, Leibold contacted Handyman stating that he
    had discovered a crack—later determined to be a scratch—in the
    20-year-old bathtub that he believed was “probably caused” by Handyman.
    Leibold stated he did not know whether Handyman was responsible for the
    scratch. Nevertheless, Handyman hired a company to repair it, and Leibold
    indicated that he was “very satisfied” with the result.
    ¶6          Around this time, Dickson provided Homeowners with a
    summary of the hours expended for the expanded project, which
    represented $5560. Dickson testified that he gave Woensdregt the
    information without issue, but when Dickson returned the next morning,
    Woensdregt’s attitude and demeanor changed.
    ¶7            On September 1, 2015, four days after stating how pleased he
    was with Handyman’s service, Leibold sent Hopkins a lengthy email
    detailing his dissatisfaction. Leibold asserted—among other things—that
    Dickson never “present[ed] [Homeowners with] any paperwork for
    amendments to the job in writing, dated and signed by the craftsman and
    customer per the [contract]”; and that Dickson failed to “protect areas
    surrounding with drop cloths and plastic, as needed.” He also informed
    Hopkins that he would not discuss any of the additional labor charges until
    the “job is completed to our satisfaction within a preapproved time frame.”
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    WOENSDREGT v. HANDYMAN
    Decision of the Court
    ¶8             All through September, Handyman worked to resolve
    Homeowners’ complaints. However, each repair generated new
    grievances. For example, although Handyman repaired the countertops,
    Homeowners were still unhappy, so Handyman offered a credit or to have
    the countertops replaced. Homeowners first wanted the credit but later
    decided Handyman should replace the countertops or suggested: “at this
    rate it actually might just be cheaper for [Handyman] to buy new vanities
    and have them professionally installed.” They also requested Handyman
    replace the bathtub because of the scratch, even though they were not sure
    it was caused by Handyman, claiming they were unhappy with the repair.
    ¶9            Although the agreement was for Handyman to provide the
    labor and Homeowners to provide the materials, Homeowners consistently
    held Handyman responsible for problems with the materials. The vanities
    Homeowners purchased for the project were “floating” vanities that were
    to fit inside an alcove area on the bathroom wall. The vanity drawers,
    however, were flush with the side of the vanity and would slide against the
    wall when they were opened or closed. Handyman offered to remove the
    drawer faces and trim the sides so they could adequately function within
    the allotted space. Homeowners were not happy with the result. So,
    Handyman ordered new drawer fronts from the manufacturer and again
    modified them to work correctly. Homeowners then complained that the
    new drawer faces had blemishes, admittingly not caused by Handyman,
    but asserted that, because Handyman caused the need for a replacement, it
    was Handyman’s responsibility to fix them. Homeowners also complained
    of chips on the glass shelves for the medicine cabinet that Homeowners
    provided. Hopkins contacted the manufacturer and replaced the shelves. In
    one email, Woensdregt warned Hopkins that: “By the time this bathroom
    is done, the house will need an other [sic] carpet cleaning…or maybe we’ll
    switch to tile…ha!”
    ¶10           By the beginning of October 2015, Hopkins offered to provide
    Homeowners a credit instead of more repairs but remained willing to work
    with Homeowners to fix the problems if they preferred. On October 4,
    Homeowners wrote that they were going to their vacation cabin and they
    would notify Handyman of how they would like to proceed when they
    returned the following week. Leibold later testified that they did not intend
    to allow Handyman to complete the project, and were preparing to take
    legal action. After visiting with an attorney on October 10, Homeowners
    filed a four-count complaint against Handyman alleging: (1) breach of
    contract; (2) negligent misrepresentation; (3) consumer fraud seeking
    punitive damages; and (4) promissory estoppel. Homeowners requested
    more than $200,000 in total damages. They also sought an award of
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    WOENSDREGT v. HANDYMAN
    Decision of the Court
    attorney’s fees under Arizona Revised Statutes (“A.R.S.”) section 12-341.01
    and “under law.”
    ¶11           Handyman contacted Homeowners and offered to accept
    Leibold’s final offer that both parties “walk away.” Homeowners did not
    accept that offer and, instead, opted to continue with the lawsuit. In its
    answer, Handyman filed a counterclaim alleging breach of contract and
    unjust enrichment. In April 2016, Handyman served Homeowners with a
    written offer of judgment for $2501, agreeing to waive recovery of
    attorney’s fees, and dismiss the counterclaim. Homeowners declined.
    ¶12           In July 2016, Homeowners filed a complaint with the Arizona
    Registrar of Contractors (“ROC”). The ROC sent Jack Grimm to inspect the
    bathroom in October. Grimm testified that after inspecting Homeowners’
    property, he issued a directive for Handyman to complete the project and
    make specific corrections to comply with proper workmanship standards.
    After the first directive, Homeowners contacted Grimm’s supervisor
    raising additional issues, and Grimm went back to the residence for another
    inspection. Grimm issued an addendum based on Homeowners’ new
    complaints. Grimm testified that he could not know if some of the
    problems, like the scratches on the countertop, were caused by Handyman,
    or made in the year before his inspection.
    ¶13           Although Handyman’s license classification previously
    permitted it to do small electrical and plumbing work before beginning
    Homeowners’ remodel, the ROC had recently limited the scope of the
    license and Handyman was no longer authorized to perform electrical and
    plumbing. Nevertheless, Grimm did not find any defects in the electrical or
    plumbing work performed by Handyman.
    ¶14         Handyman agreed to make the corrections per the directive,
    but Homeowners refused Handyman access to complete the work. The
    ROC closed the complaint without taking any disciplinary action against
    Handyman’s license. Homeowners testified that, even at the time of filing
    the ROC complaint, they never had any intention to cooperate and allow
    Handyman to complete or remedy their perceived problems.
    ¶15          During the four-day trial, the parties presented evidence of
    the above-described events, and the jury issued a defense verdict on all
    claims and awarded Handyman $8835 in damages on its breach of contract
    counterclaim. Homeowners moved for the court to set aside the verdict and
    grant a new trial under Rule 59 of the Arizona Rules of Civil Procedure
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    WOENSDREGT v. HANDYMAN
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    (“Rule”), claiming that the jury ignored evidence and the verdict was
    contrary to the weight of the evidence.
    ¶16           Handyman submitted its application for attorney’s fees. It
    had retained separate counsel for the two actions. As the defendant,
    Handyman requested attorney’s fees of $79,794.25, and as the
    counterclaimant for $30,522.50. Handyman claimed that it was entitled to
    fees according to the parties’ contract, or in the alternative, under A.R.S.
    § 12-341.01. The contract stated:
    The customer agrees to pay all collection fees/legal
    fees/court costs should nonpayment result in action to collect
    the debt. Interest on unpaid balances accrues at 1 1/2% per
    month.
    ¶17           Homeowners’ objection to the fee application argued the
    same issues raised in their Rule 59 motion—that numerous admissions of
    breach by Handyman and its expert at trial rendered the verdict “arbitrary
    and unjust.” Concerning the fees, Homeowners argued, without further
    explanation that “[t]here was no mandatory fee provision in the contract.
    Thus, on this record fees are discretionary with the trial court under ARS
    12-341.01(A).” They argued that fees were not justified under A.R.S.
    § 12-341.01 because “two of the three trial claims were in tort not contract”
    and that granting the entire fee award would cause them hardship. As
    support, Woensdregt and Leibold submitted declarations stating that each
    was unemployed; had health problems; and, Woensdregt claimed that
    granting the fee award in full would force him into Chapter 7 bankruptcy,
    while Leibold claimed it would “force [him] to consider” a Chapter 7
    bankruptcy.
    ¶18            The court found that Handyman was entitled to fees under
    both A.R.S. § 12-341.01(A) and the parties’ contract but limited the award
    of attorney’s fees to Handyman as a defendant to $29,700, and as
    counterclaimant to $22,000. Homeowners timely appealed the court’s
    denial of the Rule 59 motion and Handyman timely cross appealed the
    award of attorney’s fees. We have jurisdiction under A.R.S. § 12-2101(A)(1)
    and (A)(5)(a).
    DISCUSSION
    ¶19          On appeal, Homeowners argue that the court abused its
    discretion by denying its motion for a new trial because no evidence
    supports a defense verdict on Homeowners’ breach of contract claim.
    Handyman responds noting that the jury instructions allowed the jury to
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    WOENSDREGT v. HANDYMAN
    Decision of the Court
    find that Handyman did not commit a material breach because the law
    required that Homeowners provide Handyman with the opportunity to
    cure, but Homeowners failed to do so. Handyman cross appeals the
    superior court’s fee award, contending the court erred by reducing its
    award of attorney’s fees for hardship without sufficient evidence that
    granting the full fee request would cause a hardship.
    A.    The Superior Court Did Not Err By Denying Homeowners’ Motion
    for a New Trial.
    ¶20            Homeowners argue that the “jury was clearly confused, and
    the verdict that Handyman did not breach the 3-week remodel contract on
    this trial record was an arbitrary miscarriage of justice.” Homeowners’
    contend that the jury ignored the evidence at trial, including numerous
    admissions of breach by Handyman and its expert. Handyman responds
    that, although it agreed that there had been quality issues that were
    addressed and were continuing to be addressed, the problems did not rise
    to the level of a material breach and they were denied the right to resolve
    any claimed breach. Handyman notes that the jury instruction correctly
    stated that:
    A contractor has the right to cure its allegedly deficient work,
    and the contractor must be afforded a reasonable opportunity
    to cure those alleged defects. No curable breach can be
    deemed sufficiently material to warrant termination of the
    contract without the breaching party first having been given
    notice of and an opportunity to cure the breach.
    Handyman also asserts that sufficient evidence supports the jury’s finding.
    Homeowners did not appeal from the law encompassed in the instruction.
    ¶21            “Ordinarily the victim of a minor or partial breach must
    continue his own performance, while collecting damages for whatever loss
    the minor breach has caused him; the victim of a material or total breach is
    excused from further performance.” Zancanaro v. Cross, 
    85 Ariz. 394
    , 400
    (1959) (citation omitted). Homeowners claim that Handyman’s admissions
    are sufficient for this court to hold that—as a matter of law—Handyman
    breached the contract, and remand for the superior court to enter judgment
    in their favor for the breach of contract claim and conduct further
    proceedings to determine damages.
    ¶22          The court, when denying Homeowners’ motion for a new
    trial, found that “substantial evidence support[ed] the verdict.” The
    superior court may grant a motion for a new trial when the verdict “is not
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    WOENSDREGT v. HANDYMAN
    Decision of the Court
    supported by the evidence.” Ariz. R. Civ. P. 59(a)(1)(H). We review the
    superior court’s denial of a motion for a new trial for an abuse of discretion.
    State v. Fischer, 
    242 Ariz. 44
    , 48, ¶ 10 (2017). Although the superior court is
    permitted to reweigh evidence when considering a motion for a new trial,
    “[a]ppellate courts, by contrast, defer to the factual findings of the jury.” 
    Id. at 49, ¶ 15
    . In reviewing the court’s denial of a motion for a new trial, “[w]e
    defer to the discretion of the trial judge who tried the case and who
    personally observed the proceedings.” 
    Id. at 50, ¶ 21
    . And we “generally
    will not set aside the verdict unless no evidence supports it, even if the
    verdict seems unjust or the result of prejudice.” 
    Id. at 49, ¶ 15
    .
    ¶23            Homeowners contend that the following evidence supports
    its argument that the court erred by denying their motion for a new trial:
    the contract stated that “craftsmen will protect areas surrounding with drop
    cloths and plastic, as needed” but Dickson testified that he did not think it
    was necessary to seal off the bathroom with plastic for this job; Hopkins
    sent several emails apologizing for “the issues”; the contract “defined job
    completion as a signed ‘work approved’ document but no such document
    was” produced; Dickson and Hopkins admitted that they did not present a
    change order for the additional tile as required per the contract; Handyman
    did electrical and plumbing work after the licensing standards changed, no
    longer permitting Handyman’s license type to perform that work; and
    Handyman’s expert witness agreed with some of the ROC findings that the
    work should have been corrected.
    ¶24            Homeowners also argue that the contract stated that all
    amendments to the scope of work shall be in writing and signed but that
    neither of them had signed a change order agreeing to a cost for the
    additional work. And that “it was undisputed at trial that the 3-week
    bathroom remodel contract was executed by the homeowners on May 22,
    2015 with Handyman still at the site on October 4, 2015. Defendant’s
    4-month tenure on a 3-week remodel bathroom remodel job was clearly a
    breach . . . and the jury’s arbitrary rejection of that unrefuted fact was a
    manifest injustice and miscarriage of justice.”
    ¶25           The court found that sufficient evidence supported the jury
    verdict and we will not disturb that ruling unless no evidence supports the
    decision. See Fischer, 242 Ariz. at 49, ¶ 15. To prevail in an action for breach
    of contract, the plaintiff must prove that: (1) a contract existed; (2) the
    defendant failed to perform its obligation under the contract; and (3) the
    failure resulted in damages. Graham v. Asbury, 
    112 Ariz. 184
    , 185 (1975).
    Along with the elements for breach of contract, the court also instructed the
    jury that: “A party to a contract has a duty to act fairly and in good faith,”
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    WOENSDREGT v. HANDYMAN
    Decision of the Court
    requiring “that neither party do anything that prevents the other party from
    receiving the benefits of their agreement.” Rev. Ariz. Jury Instr. (Civil)
    Contract 16 (5th ed. 2013).
    ¶26           There was sufficient evidence for a jury to conclude that:
    Homeowners did not act reasonably by preventing Handyman from
    receiving the benefit of the agreement; “technical violations” of the contract
    did not result in damages; and that the parties had orally modified the
    contract to include the additional materials and work. We will not engage
    in an item by item analysis of each of Homeowners’ complaints and the
    evidence that supports the verdict for each. Homeowners’ issues can be
    summed up into two categories—delay and quality defects.
    ¶27           First, Homeowners complain that the three-week project
    lasted four months and accused Handyman of delaying the start of the
    project for nine weeks without any explanation for the “inordinate delay”
    other than “they were busy.” But there was not a nine-week delay.
    Homeowners did not approve the contract until June 10, 2015, and the
    parties agreed that Handyman would begin work on July 27, 2015. The
    three-week estimate did not include the additional work that Homeowners
    requested once the project started. There is no dispute that by October 4,
    2015, Homeowners would no longer allow Handyman to complete the
    project, which was approximately two months from the project start date.
    ¶28           Next, there was evidence supporting a finding that many of
    Homeowners’ “technical violations” did not result in damages. For
    example, Homeowners claim that Handyman breached the contract
    because it performed work without the proper license, but Grimm testified
    that he did not find any issues with the electrical or plumbing work.
    ¶29             Finally, the jury heard evidence about Handyman and its
    efforts to satisfy Homeowners, and there was ample evidence to reasonably
    conclude that it was Homeowners that prevented Handyman from
    completing its obligations under the contract.
    ¶30          Homeowners additionally argue that the verdict was
    arbitrary and contrary to the weight of the evidence because it awarded
    Handyman damages for work and materials for which Handyman could
    not produce a signed change order. Homeowners do not dispute that they
    requested to expand the project. Homeowners were also aware that
    Handyman required additional tile to complete the project. Homeowners
    maintain that they did not sign anything agreeing to a cost as the contract
    required. Hopkins testified that he tried to work with Homeowners to reach
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    WOENSDREGT v. HANDYMAN
    Decision of the Court
    an amount that was fair to both parties for the additional work that
    Handyman performed but that the Homeowners refused to discuss it. His
    testimony is confirmed by the emails. The court correctly instructed the jury
    that parties to a written contract may alter or modify its terms by a
    subsequent oral agreement even though the contract precludes oral
    modification. Again, the jury could reasonably conclude that the parties
    orally agreed to additional labor and supplies.
    ¶31         Accordingly, the superior court did not abuse its discretion
    by denying Homeowners’ motion for a new trial.
    B.     Attorney’s Fees Requested According to the Parties’ Contract are
    Presumed Reasonable and Should be Granted Absent a Showing
    to the Contrary.
    ¶32            Handyman argues on the cross appeal that the court abused
    its discretion by reducing its attorney’s fees based solely on Homeowners’
    declarations that awarding the amount requested would cause a hardship.
    It argues that the declarations alone were not sufficient evidence of
    hardship and that for the court to reduce otherwise reasonable fees based
    on hardship, the party asserting financial hardship must submit facts, not
    just argument, regarding financial hardship, and those facts must be
    documented by affidavit, declaration, at an evidentiary hearing, or
    otherwise be evident in the record. See Rudinsky v. Harris, 
    231 Ariz. 95
    , 102,
    ¶ 32 (App. 2012); Woerth v. City of Flagstaff, 
    167 Ariz. 412
    , 420 (App. 1990)
    (“[T]he party asserting financial hardship has the burden of coming
    forward with prima facie evidence of financial hardship.”).
    ¶33            The court erred if it considered hardship at all when awarding
    attorney’s fees under the contract. When a contract provides for attorney’s
    fees, A.R.S. § 12-341.01 does not apply, and the court will enforce the
    contract’s fee provision according to its terms. Bennett Blum, M.D., Inc. v.
    Cowan, 
    235 Ariz. 204
    , 206, ¶ 8 (App. 2014). “Accordingly, a court lacks
    discretion to refuse to award attorney fees under a contractual provision.”
    Id.; McDowell Mountain Ranch Cmty. Ass'n, Inc. v. Simons, 
    216 Ariz. 266
    , 269,
    ¶ 14 (App. 2007); Chase Bank of Ariz. v. Acosta, 
    179 Ariz. 563
    , 575 (App. 1994)
    (“Unlike fees awarded under A.R.S. § 12-341.01(A), the court lacks
    discretion to refuse to award fees under [a] contractual provision.”).
    ¶34           Handyman asserted that it was entitled to attorney’s fees
    under the contract and submitted its fee application with an affidavit that
    complied with the requirements outlined in Schweiger v. China Doll
    Restaurant, Inc., 
    138 Ariz. 183
     (App. 1983). The exhibits to the application
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    WOENSDREGT v. HANDYMAN
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    showed a breakdown of fees and costs with contemporaneous records kept
    by attorneys and paralegals. Attorney’s fees requests according to contract
    are presumed reasonable absent evidence of its unreasonableness.
    McDowell Mountain Ranch, 216 Ariz. at 270, ¶¶ 19–20. Facially reasonable
    fees will be awarded in full unless the opposing party can show that they
    were excessive. Id. at 271, ¶ 20; see also State ex rel. Corbin v. Tocco, 
    173 Ariz. 587
    , 595 (App. 1992) (party claiming excessive or unreasonable fees must
    identify specific entries that it claims are not recoverable).
    ¶35           Given Handyman’s application, the burden shifted to
    Homeowners to demonstrate that particular entries were excessive or
    unreasonable. Rudinsky, 231 Ariz. at 102, ¶ 33. In their objection in the
    superior court, Homeowners mostly rehashed their arguments that the
    verdict was against the weight of the evidence but also argued that: an
    $8835 judgment does not support an attorney’s fees award of $107,160.25;
    the billing entries made no effort to allocate fees to the contract claim and
    the fees expended on the tort claims were not compensable; and that the
    time entries were duplicative, excessive, and lumped together.
    Homeowners did not cite to specific entries or state facts concerning why
    the entries were unreasonable.
    ¶36            In its ruling, the court found that Handyman was entitled to
    reasonable fees and costs under both the contract and A.R.S. § 12-341.01.
    The court cited to McDowell Mountain Ranch for the proposition that
    “implicit in any contractual provision for attorneys’ fees is a standard of
    reasonableness even if the contract provides for all attorneys’ fees,” then
    proceeded to analyze the claims using the factors outlined in Associated
    Indemnity Corp. v. Warner, 
    143 Ariz. 567
    , 570 (1985). The court found that
    each Warner factor weighed in favor of Handyman except that “assessing
    the total amount of fees requested by Defendant will create a hardship for
    Plaintiffs who are retired and have no earned income.” The court then
    awarded Handyman $29,700 of the $79,794.25 it had requested as the
    defendant (about a third of the amount requested) and $22,000 of the
    $30,522.50 it asked for as the counterclaimant (nearly three-quarters of the
    amount requested).
    ¶37           The court did not find that the requested fees were
    unreasonable. From the minute entry, it appears that the court, at least in
    part, determined the reasonableness of the requested fees following the
    Warner factors. Warner factors only apply when the court is exercising its
    discretion to award fees under A.R.S. § 12-341.01(A). Moreover, on appeal,
    Homeowners responded to Handyman’s entire cross-appeal in one
    sentence:
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    WOENSDREGT v. HANDYMAN
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    Put simply, on the totality of the record, which included the
    many defense admissions of breach at trial, the trial court was
    well within its discretion to reduce the fee award to the
    defense on the complaint and the counterclaim.
    Fees requested under a contract are presumed reasonable, and
    Homeowners did not make specific objections to the superior court
    concerning why the fees were unreasonable, the court did not find the fees
    facially unreasonable, and Homeowners’ refused to address the issue on
    appeal. We treat Homeowners’ failure to address the issue meaningfully as
    a concession of error. See McDowell Mountain Ranch, 216 Ariz. at 269, ¶ 13
    (in cases when the appellant has raised a debatable issue, we may treat the
    failure to respond as a confession of error). Accordingly, we remand for the
    court to reconsider the award of attorney’s fees under the contract without
    considering hardship to Homeowners.
    C.    Handyman Is Entitled to an Award of Attorney’s Fees on Appeal.
    ¶38           Both parties request attorney’s fees on appeal. Because
    Homeowners are not the prevailing party, we deny their request.
    Handyman is the prevailing party and entitled to attorney’s fees under the
    contract. We award reasonable fees and costs on appeal to Handyman upon
    compliance with ARCAP 21.
    CONCLUSION
    ¶39           Accordingly, we affirm the superior court’s denial of
    Homeowners’ motion for a new trial, vacate the award of attorney’s fees,
    and remand for the superior court to reconsider the award of requested
    attorney’s fees under the contract.
    AMY M. WOOD • Clerk of the Court
    FILED: AA
    12