McA Financial Group, Ltd. v. Enterprise Bank & Trust , 236 Ariz. 490 ( 2014 )


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  •                               IN THE
    ARIZONA COURT OF APPEALS
    DIVISION TWO
    MCA FINANCIAL GROUP, LTD.,
    Appellant,
    v.
    ENTERPRISE BANK & TRUST,
    Plaintiff/Appellee.
    No. 2 CA-CV 2014-0007
    Filed December 30, 2014
    Appeal from the Superior Court in Santa Cruz County
    No. CV2010000422
    The Honorable Anna M. Montoya-Paez, Judge
    VACATED
    COUNSEL
    Snell & Wilmer L.L.P., Tucson
    By Christopher H. Bayley, Jonathan M. Saffer, and Katherine V. Foss
    Counsel for Appellant
    Minkin & Harnisch PLLC, Phoenix
    By Ethan B. Minkin and Andrew A. Harnisch
    Counsel for Plaintiff/Appellee
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    OPINION
    Judge Espinosa authored the opinion of the Court, in which
    Presiding Judge Miller and Judge Brammer1 concurred.
    E S P I N O S A, Judge:
    ¶1           MCA Financial Group, Ltd. (MCA) appeals from an
    order requiring it to disgorge over $118,000 in fees paid to it by
    Enterprise Bank & Trust (Enterprise), arguing that, because MCA
    was not a party to the underlying proceeding, it was not subject to
    the trial court’s jurisdiction. It also contends the court erred by
    failing to hold an evidentiary hearing on the merits of the
    disgorgement claim and by failing to conclude Enterprise had
    waived any objection to MCA’s fees. Because we agree the court
    lacked jurisdiction, its order must be vacated.
    Factual and Procedural Background
    ¶2           “We view the facts in the light most favorable to
    upholding the trial court’s ruling.” Hammoudeh v. Jada, 
    222 Ariz. 570
    ,
    ¶ 2, 
    218 P.3d 1027
    , 1028 (App. 2009). In April 2009, Enterprise
    agreed to loan $4,182,000 to Americana Nogales, LLC (Americana)
    to acquire a hotel in Santa Cruz County. The following year,
    Enterprise filed a lawsuit alleging that Americana had defaulted on
    its loan obligations by failing to remit payments as required under
    the loan agreement and promissory note.2 In addition to seeking
    1The   Hon. J. William Brammer, Jr., a retired judge of this
    court, was called back to active duty to serve on this case pursuant
    to orders of this court and the supreme court.
    2Enterprise initiated the action as successor in interest to the
    Federal Deposit Insurance Corporation, which was acting as receiver
    for the original lender, Valley Capital Bank, N.A. The named
    defendants included the borrower, Americana, the guarantor,
    Michael A. Clausen, and several parties believed to possess
    2
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    monetary relief, Enterprise requested that a receiver be appointed
    pursuant to a provision in the deed of trust that Americana had
    executed to secure the loan.
    ¶3           In January 2011, the trial court appointed “Robert Itkin
    of MCA Financial Group, Ltd.” as receiver in an order that directed
    him to, among other things, “operate, manage, maintain, preserve
    and protect the Receivership Property; . . . employ any person or
    firm to collect, manage, lease, maintain and operate the Receivership
    Property[; and] hire . . . consultants, property management
    companies, brokers and any other personnel or employees which the
    Receiver deems necessary to assist it in the discharge of its duties.”
    Enterprise subsequently filed an “Oath of Receiver,” in which Itkin
    swore to “faithfully discharge the duties of receiver” and “obey all
    orders of the Court.” Itkin executed this oath on a line designated
    for his signature.
    ¶4           From January to October 2011, MCA on a monthly basis
    submitted bills to Enterprise for “professional services” rendered by
    several of its employees, including Itkin. Enterprise paid the
    invoices by checks made out to “MCA Financial Group.” In
    October, Enterprise filed a “Notice of Receiver’s Change of Firm,” in
    which it stated that Itkin, who had been “appointed as Receiver over
    the subject collateral pursuant to this Court’s Order,” had become a
    managing director at Simon Consulting Group, LLC. Following
    Itkin’s departure, both he and MCA continued to perform
    management and consulting services, but MCA ceased billing for
    Itkin’s services.    In November 2012, the trial court granted
    Enterprise’s application to appoint a new receiver, Resolute
    Commercial Services, LLC (Resolute), and an amended order of
    appointment was filed to reflect this change.
    ¶5          The following month, Itkin filed a receivership report
    “containing, among other things, all receivership expenses, fees, and
    a narrative description of [his] performed duties and related
    subordinate interests in the loan collateral. The trial court granted
    default judgments against Americana and the guarantor in early
    2011 after both failed to appear.
    3
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    information for the period of [his] appointment as Receiver.” In
    response, Enterprise filed a motion objecting to Itkin’s receivership
    report and requesting disgorgement of fees it had paid to MCA on
    the ground the fees were excessive. MCA, not having been joined
    by Enterprise as a party for purposes of its disgorgement motion or
    any other matter, entered a special appearance “for the limited
    purpose of responding to the allegations and arguments contained
    in [Enterprise’s motion],” and argued that such a motion for relief
    from a non-party who had “never served as the receiver” was
    “procedurally improper” and should be summarily denied on that
    basis. In the alternative, MCA requested an evidentiary hearing to
    determine whether the fees charged were, in fact, excessive. The
    trial court heard argument on the motion in September 2013, and
    took the issues raised by the parties, including the necessity of an
    evidentiary hearing, under advisement. In October, the court issued
    a ruling that determined a reduction of fees was warranted because
    “MCA did not[] execute their duties appropriately.” Implicitly
    denying MCA’s request for an evidentiary hearing on the matter, the
    court granted Enterprise’s motion and ordered MCA to disgorge
    $118,185.93. Its order expressly referred to the period when “MCA
    served as receiver.”
    Discussion
    ¶6           On appeal, MCA argues the trial court lacked
    jurisdiction to enter the disgorgement order because MCA was a
    “third-party vendor” that was “never appointed receiver” or “joined
    as a party to the case.” Relying on precedents in which we have
    declined to uphold rulings against non-parties who were not given
    “a full opportunity to contest” their liability, Heinig v. Hudman, 
    177 Ariz. 66
    , 71, 
    865 P.2d 110
    , 115 (App. 1993); see also Spudnuts, Inc. v.
    Lane, 
    139 Ariz. 35
    , 37, 
    676 P.2d 669
    , 671 (App. 1984), MCA argues
    that the court’s ability to approve the receiver’s expenses did not
    obviate the joinder requirement because “the only party over whom
    the trial court had jurisdiction relevant to this dispute was [Itkin].”
    In support of its factual claim that Itkin served as the receiver in an
    individual capacity, MCA relies on the court’s order designating
    “Robert Itkin of MCA Financial Group, Ltd.” as receiver, and points
    4
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    to Itkin’s departure from MCA as evidence that the receiver role was
    filled by Itkin in his personal capacity.
    ¶7           Enterprise responds that, although Itkin was the
    receiver “in a very technical sense,” the agency relationship between
    Itkin and MCA “bound MCA to the terms of the Receivership Order,
    including the court oversight provisions” that allowed the trial court
    to exercise control over compensation.3 In support of its agency
    theory, Enterprise points to evidence that MCA transmitted bills and
    collected fees for Itkin’s receiver services. Observing that MCA
    posted the receiver’s bond and performed certain receivership tasks,
    Enterprise also argues the court had the ability to exercise control
    over fees and expenses directed to both Itkin and MCA. We review
    the court’s exercise of personal jurisdiction de novo. Desarrollo
    Immobiliario y Negocios Industrialies De Alta Tecnologia De Hermosillo,
    S.A. De C.V. v. Kader Holdings Co., 
    229 Ariz. 367
    , ¶ 10, 
    276 P.3d 1
    , 5
    (App. 2012); Arizona Tile, L.L.C. v. Berger, 
    223 Ariz. 491
    , ¶ 8, 
    224 P.3d 988
    , 990 (App. 2010).
    Appellate Jurisdiction
    ¶8           Because MCA was neither named as a party to
    Enterprise’s disgorgement request nor ever served with process, we
    first examine our own jurisdiction to consider the merits of this
    appeal.4 See Musa v. Adrian, 
    130 Ariz. 311
    , 312, 
    636 P.2d 89
    , 90 (1981)
    3In a section titled “Payment of Receiver,” the order of
    appointment stated the “Receiver’s fees and administrative expenses
    paid shall be submitted to the Court for final approval and
    confirmation.”
    4Although    MCA filed an “Emergency Motion to Intervene”
    after the trial court issued its ruling, that motion had not yet been
    decided at the time this appeal was filed. Regardless, it would not
    affect our jurisdictional analysis because MCA’s motion was based
    on its belief that it could “not properly appeal the disgorgement
    order” unless it became a party to the action. See Nat’l Homes Corp.
    v. Totem Mobile Home Sales, Inc., 
    140 Ariz. 434
    , 437, 
    682 P.2d 439
    , 442
    (App. 1984) (issue of waiver turns on whether party “has manifested
    5
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    (appellate court has independent duty to consider its jurisdiction).
    “Generally, a person who is not a party to an action is not aggrieved
    and cannot appeal from findings adverse to him.” Wieman v.
    Roysden, 
    166 Ariz. 281
    , 284, 
    802 P.2d 432
    , 435 (App. 1990); see also
    Ariz. R. Civ. App. P. 1 (limiting right of appeal to “any party
    aggrieved by the judgment”). However, this court has held that a
    non-party with a “direct, substantial and immediate” interest who
    “would be benefitted by reversal of the judgment” is entitled to
    appeal under Rule 1, Ariz. R. Civ. App. P. 
    Wieman, 166 Ariz. at 284
    ,
    802 P.2d at 435 (attorney permitted to appeal attorney fee award
    imposed against him), quoting Abril v. Harris, 
    157 Ariz. 78
    , 81, 
    754 P.2d 1353
    , 1356 (App. 1987) (same). MCA is clearly an aggrieved
    non-party with a direct and substantial interest in the trial court’s
    disgorgement order. We also, however, must determine whether
    that order is one that may be appealed. See A.R.S. § 12-2101
    (enumerating “[j]udgments and orders that may be appealed”).
    ¶9           Under § 12-2101(A)(4), appeal may be taken from “a
    final order affecting a substantial right made in a special proceeding
    or on a summary application in an action after judgment.” Our
    supreme court has held that a court order requiring a receiver to pay
    a claim is “appealable as a final judgment.”5 In re Prescott State Bank,
    
    36 Ariz. 419
    , 424, 
    286 P. 189
    , 191 (1930); see also Johnson v. Superior
    Court, 
    68 Ariz. 68
    , 72, 
    199 P.2d 827
    , 830 (1948) (where court order
    allows or disallows claim to moneys from receivership or estate
    “order is not intermediate but final”); cf. Ross v. White, 
    46 Ariz. 304
    ,
    306-07, 
    50 P.2d 12
    , 13 (1935) (court’s denial of petition for payment
    an intent to be subject to the jurisdiction of the court, even though it
    has raised jurisdictional defects”).
    5In re Prescott State Bank distinguished between a situation
    where a receiver initiated a proceeding to pay a debt and one in
    which a third party petitioned the court for an order for a receiver to
    pay a claim, and found the latter appealable. 
    36 Ariz. 419
    , 422-24,
    
    286 P. 189
    , 190-91 (1930), citing Ritter v. Ariz. Cattle Co., 
    34 Ariz. 278
    ,
    286, 
    271 P. 25
    , 28 (1928) (court orders approving accounts of receiver
    or authorizing his expenditures reviewable only on appeal from
    final judgment approving or disapproving final accounting).
    6
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    of legal services on behalf of insolvent bank not an “interlocutory
    order,” but “final judgment of the court” and “final order”).6 Here,
    the contested matter was not the receiver’s conduct, which would
    not be appealable until the final accounting, see Ritter v. Ariz. Cattle
    Co., 
    34 Ariz. 278
    , 286, 
    271 P. 25
    , 28 (1928), but rather the trial court’s
    order directing MCA, a non-party, to pay the receivership. As such,
    the order was the converse of, but similar to, an order that the
    receiver pay a third party and, logically, also a final order. Stated
    differently, the order “was clearly final on all of [MCA’s] rights in
    the affected property.” Kemble v. Porter, 
    88 Ariz. 417
    , 419, 
    357 P.2d 155
    , 156 (1960); see Huston v. F.D.I.C., 
    800 S.W.2d 845
    , 847 (Tex. 1990)
    (trial court order “that resolves a discrete issue in connection with
    any receivership has the same force and effect as any other final
    adjudication of a court, and thus, is appealable”).
    ¶10        We also must determine, however, whether the
    disgorgement proceeding was a “special proceeding” pursuant to
    6In  both In re Prescott State Bank and Ross, jurisdiction was
    found under the former version of § 12-2101(A)(1), which provided
    that an appeal may be taken “[f]rom a final judgment entered in an
    action or special proceedings commenced in a superior court.” Ariz.
    Rev. Code, § 3659, subd. 1 (1928); see In re Prescott State 
    Bank, 36 Ariz. at 423-24
    , 286 P. at 191 (trial court’s order reviewable under Ariz.
    Rev. Code, § 3659, subd. 1 (1928)); 
    Ross, 46 Ariz. at 307
    , 50 P.2d at 13
    (same); see also In re Sullivan’s Estate, 
    38 Ariz. 387
    , 390, 
    300 P. 193
    , 194
    (1931) (quoting Ariz. Rev. Code, § 3659, subd. 1 (1928) as granting
    right to appeal “from a final judgment entered in an action or special
    proceeding commenced in a superior court . . . .”). Given that “‘[a]
    final judgment’” has since been defined to mean an order that
    “‘decides and disposes of the cause on its merits, leaving no
    question open for judicial determination,’” Ruesga v. Kindred Nursing
    Centers, L.L.C., 
    215 Ariz. 589
    , ¶ 10, 
    161 P.3d 1253
    , 1257 (App. 2007),
    quoting Props. Inv. Enters., Ltd. v. Found. For Airborne Relief, Inc., 
    115 Ariz. 52
    , 54, 
    563 P.2d 307
    , 309 (App. 1977), and the receivership in
    this case appears to be ongoing, subsection (A)(4) provides the
    jurisdictional basis here rather than (A)(1).
    7
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    § 12-2101(A)(4). Our supreme court has held that where a party
    “institutes a proceeding against the person in charge of the funds to
    obtain moneys from the receivership or estate, . . . such action is a
    separate proceeding in the same sense that it would have been had
    an independent suit been filed.” 
    Johnson, 68 Ariz. at 72
    , 199 P.2d at
    830; see also Black’s Law Dictionary (9th ed. 2009) (defining “special
    proceeding” as “[a] proceeding that can be commenced
    independently of a pending action and from which a final order may
    be appealed immediately”). Thus, a court order allowing or
    disallowing a claim for moneys from a receivership or estate “is the
    final action of the court in a special proceeding in the case.” 
    Johnson, 68 Ariz. at 72
    , 199 P.2d at 830. Similarly, a proceeding to order a
    third party to pay the receivership is of the same species and finality.
    See 
    Huston, 800 S.W.2d at 847
    .
    ¶11          Having determined that the subject order here satisfies
    the first clause of § 12-2101(A)(4) as “a final order affecting a
    substantial right made in a special proceeding,” we last consider
    whether it also must satisfy the latter portion of § 12-2101(A)(4)
    referring to an order entered “in an action after judgment.” A plain
    reading of the statute would suggest that subsection (A)(4) pertains
    to two separate types of final orders: (1) one “affecting a substantial
    right made in a special proceeding”; and (2) a final order made “on a
    summary application in an action after judgment.” In applying
    subsection (A)(4), our supreme court has determined that an order
    was appealable without considering whether it was “after
    judgment.” Miller v. Superior Court, 
    88 Ariz. 349
    , 351-52, 
    356 P.2d 699
    , 700 (1960) (removal of trustee appealable as affecting substantial
    rights of parties to removal proceeding). And we note that other
    states with similar jurisdictional statutes have separate provisions
    for the two types of final orders. See, e.g., State v. Jacques, 
    570 N.W.2d 331
    , 335 (Neb. 1997) (three types of final orders reviewable on appeal
    including “(2) an order affecting a substantial right made during a
    special proceeding, and (3) an order affecting a substantial right
    made on summary application in an action after judgment is
    8
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    rendered”);7 Ross v. Ross, 
    640 N.E.2d 265
    , 268 (Ohio Ct. App. 1994)
    (noting statutory guideline for determining final order includes:
    “(2) An order (a) affecting a substantial right, and (b) made in (i) a
    special proceeding, or (ii) upon a summary application in a motion
    after judgment, is final.”).8 We conclude we have jurisdiction over
    MCA’s appeal under § 12-2101(A)(4), and we have amended the
    caption to accurately reflect the proper parties to this appeal.
    Trial Court Jurisdiction
    ¶12         Enterprise’s failure to include or join MCA as a party
    below, however, remains relevant to our analysis of MCA’s due
    process argument. Although collaterally involved in the underlying
    receivership through its performance of services in connection with
    the management of the receivership estate, MCA never was served
    with process, or named in either Enterprise’s lawsuit, the
    receivership proceedings, or the disgorgement motion as a party
    against whom relief was sought. Therefore, under basic principles
    7Nebraska      statutes define “final order” as:
    An order affecting a substantial right in an action, . . .
    and an order affecting a substantial right made in a
    special proceeding, or upon a summary application
    in an action after judgment, is a final order which
    may be vacated, modified or reversed.
    Neb. Rev. Stat. § 25-1902.
    8Ohio   Rev. Code Ann. § 2505.02 (West 2013) specifies:
    B) An order is a final order that may be reviewed,
    affirmed, modified, or reversed, with or without
    retrial, when it is one of the following:
    ....
    (2) An order that affects a substantial right
    made in a special proceeding or upon a
    summary application in an action after
    judgment . . . .
    9
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    of due process and in personam jurisdiction, it was not subject to the
    trial court’s jurisdiction. See Safeway Stores, Inc. v. Ramirez, 
    99 Ariz. 372
    , 379, 
    409 P.2d 292
    , 297 (1965) (“For the court to have personal
    jurisdiction over a defendant . . . [the] party being served must
    clearly be given notice that he is being served as a defendant in the
    case.”); Barlage v. Valentine, 
    210 Ariz. 270
    , ¶ 4, 
    110 P.3d 371
    , 373
    (App. 2005) (“Proper, effective service on a defendant is a
    prerequisite to a court’s exercising personal jurisdiction over the
    defendant.”); see also Sec. & Exch. Comm’n v. Ross, 
    504 F.3d 1130
    , 1138
    (9th Cir. 2007) (noting “‘[s]ervice of process is the mechanism by
    which the court [actually] acquires’ the power to enforce a judgment
    against the defendant’s person or property”), quoting United States v.
    2,164 Watches, More or Less Bearing a Registered Trademark of Guess?,
    Inc., 
    366 F.3d 767
    , 771 (9th Cir. 2004) (alterations in Ross).
    ¶13          Here, the trial court did not address the issue of
    personal jurisdiction in its ruling, nor, as MCA points out, has
    Enterprise cited any authority to support its contention that a court
    may order a non-party to disgorge compensation merely because
    such compensation had been paid in connection with a receivership.
    This absence of authority is not surprising, however, in light of our
    prior decisions concerning the imposition of non-party liability.
    ¶14          In Spudnuts, for example, the trial court had granted a
    post-judgment motion to amend the pleadings to add an additional
    
    party-defendant. 139 Ariz. at 35
    , 676 P.2d at 669. On appeal, we
    observed that “‘[t]he part[y] to be added must be properly brought
    before the court or no judgment can be entered or enforced.’” 
    Id. at 36,
    676 P.2d at 670, quoting Sarne v. Fiesta Motel, 
    79 F.R.D. 567
    , 570
    (E.D. Pa. 1978).     We reversed the judgment, concluding the
    additional defendant could not be subjected to liability without
    violating due process because “the court does not obtain jurisdiction
    over the person” where “service of process does not comply with the
    statutory requirements.” 
    Id. at 37,
    676 P.2d at 671.
    ¶15          Similarly, in Heinig v. Hudman, we rejected appellant’s
    argument that a judgment against one party could be converted into
    a judgment against his wife where it was clear from the record that
    she never had been a party to the underlying 
    proceeding. 177 Ariz. at 70
    , 865 P.2d at 114. We were not persuaded by the fact that she
    10
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    had “sat through the arbitration hearing” and “may have assisted in
    presenting [her husband’s] case.” 
    Id. Rather, the
    spouse was
    entitled to “a full opportunity to contest . . . liability” in a subsequent
    action against her as a named defendant in order to satisfy the
    strictures of due process. 
    Id. at 71,
    865 P.2d at 115. We thus agree
    with MCA that the trial court was precluded from asserting
    jurisdiction over it when there had been no service of process in the
    underlying action or a full opportunity to contest the allegations
    against it.
    ¶16          Enterprise contends, however, that the trial court’s
    order nevertheless was sanctioned by its authority over the actions
    of the receiver. See Mashni v. Foster ex rel. Cnty. of Maricopa, 
    234 Ariz. 522
    , ¶ 17, 
    323 P.3d 1173
    , 1178 (App. 2014) (receiver’s authority
    derived “‘solely from the act of the court’”; receiver is “‘subject of its
    order only’”), quoting Sawyer v. Ellis, 
    37 Ariz. 443
    , 
    448, 295 P. at 322
    ,
    324 (1931); Cauble v. Osselaer, 
    150 Ariz. 256
    , 258, 
    722 P.2d 983
    , 985
    (App. 1986) (fixing of receiver’s fee within court’s discretion). This
    argument rests on the court’s finding that MCA served as court-
    appointed receiver—a determination we review for clear error. See
    Mashni, 
    234 Ariz. 522
    , ¶ 
    17, 323 P.3d at 1178
    (interpretation of
    appointment order question of fact); Gravel Res. of Ariz. v. Hills, 
    217 Ariz. 33
    , ¶ 14, 
    170 P.3d 282
    , 287 (App. 2007) (appellate court will
    affirm factual findings unless clearly contrary to evidence).
    ¶17           As noted above, the trial court’s appointment order
    states: “It is hereby ordered, adjudged and decreed that . . . Robert
    Itkin of MCA Financial Group, Ltd., is hereby appointed Receiver.”
    In contrast, the court’s order designating Resolute as receiver reads:
    “It is hereby ordered, adjudged and decreed that . . . Resolute
    Commercial Services, LLC, acting by and through its principal,
    Jeremiah Foster, is hereby appointed Receiver in this action.”
    Moreover, the oath of receiver was signed “Robert J. Itkin,” with no
    reference to MCA. See Focus Point Props., LLC v. Johnson, 689 Ariz.
    Adv. Rep. 4, ¶¶ 32-33 (Ct. App. June 19, 2014) (relying on signature
    block as evidence of capacity in which signator bound); Ferrarell v.
    Robinson, 
    11 Ariz. App. 473
    , 475, 
    465 P.2d 610
    , 612 (App. 1970)
    (same).
    11
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    ¶18          On this record, we cannot conclude that Itkin was
    appointed receiver in conjunction with MCA. Had that been the
    case, Enterprise would have had to amend the order of appointment
    when Itkin left MCA to join Simon Consulting Group, LLC, just as it
    did when Resolute later was appointed to replace Itkin. See Sawyer,
    
    37 Ariz. 443
    , 448, 
    295 P. 322
    , 324 (receiver’s authority “derived solely
    from the act of the court appointing him”). Instead, Enterprise
    merely submitted a “Notice of Receiver’s Change of Firm” that listed
    his new mailing address. Indeed, even Enterprise acknowledges
    that MCA’s contention regarding the identity of the receiver is “true
    in a very technical sense,” echoing the position it took in
    correspondence immediately before Itkin’s departure from MCA:
    “the receiver is in the name of the individual (Rob[ert Itkin]) not the
    company (MCA).” Consequently, because the evidence in the
    record contravenes the trial court’s finding on this point, we cannot
    uphold its order requiring MCA to disgorge compensation on this
    ground.9
    ¶19           Finally, we reject Enterprise’s argument that an agency
    relationship between Itkin and MCA operated to confer personal
    jurisdiction over MCA. We are unaware of any authority for the
    proposition that a plaintiff can expand the trial court’s jurisdiction
    merely by alleging an agency relationship between a court-
    appointed receiver and an unserved third party. Were this the case,
    the strictures of due process could be avoided altogether to reach the
    assets of a stranger to the underlying proceeding without providing
    9We    recognize that the schedule of fees attached to the
    receivership order and the bond filed by MCA may have caused
    confusion regarding the receiver’s identity. Nevertheless, the
    undisputed facts in the record do not reasonably support the trial
    court’s ruling. See Davis v. Zlatos, 
    211 Ariz. 519
    , ¶ 18, 
    123 P.3d 1156
    ,
    1161 (App. 2005) (findings clearly erroneous if they lack evidence
    that “‘permit[s] a reasonable person to reach the trial court’s
    result’”), quoting In re United States Currency in the Amount of
    $26,980.00, 
    199 Ariz. 291
    , ¶ 9, 
    18 P.3d 85
    , 89 (App. 2000).
    12
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    such third party either notice or an opportunity to be heard.10 This
    notion is flatly inconsistent with established jurisprudence on the
    limits of jurisdiction; as a result, it cannot serve to support the
    challenged ruling. Cf. Planning Grp. of Scottsdale, L.L.C. v. Lake
    Mathews Mineral Props., Ltd., 
    226 Ariz. 262
    , ¶ 14, 
    246 P.3d 343
    , 347
    (2011) (exercise of jurisdiction must comport with “‘traditional
    notions of fair play and substantial justice’”), quoting Int’l Shoe Co. v.
    Washington, 
    326 U.S. 310
    , 316 (1945).
    Attorney Fees and Costs
    ¶20          MCA has requested an award of its attorney fees and
    costs for both the trial court action and this appeal pursuant to
    A.R.S. § 12-341.01(A), which governs recovery of attorney fees in an
    “action arising out of a contract.” MCA contends “its fees for its
    work as a vendor were received in accordance with its contract
    directly paid by Enterprise.” Despite this assertion, MCA has not
    identified such a contract nor does it appear in the record. More
    importantly, neither the disgorgement motion nor the resulting
    order was predicated on any contractual considerations but rather
    on the court’s mistaken view of MCA as the receiver in the
    proceeding. See Cauble v. 
    Osselaer, 150 Ariz. at 260-61
    , 722 P.2d at
    987-89 (claim for reduction in receivership charges does not “arise
    out of a contract”). Thus, any agreement relating to MCA’s services
    was not the “essential basis” of the disgorgement action. See
    Chaurasia v. Gen. Motors Corp., 
    212 Ariz. 18
    , ¶ 25, 
    126 P.3d 165
    , 173
    10Although   an agency relationship might provide, in part, a
    basis for the exercise of jurisdiction, service of process is the
    mechanism by which the court acquires the power to enforce a
    judgment. S.E.C. v. Ross, 
    504 F.3d 1130
    , 1138 (9th Cir. 2007) (“The
    familiar ‘minimum contacts’ test, coupled with statutory
    authorization, provides a basis for an exercise of jurisdiction, but
    ‘[s]ervice of process is the mechanism by which the court [actually]
    acquires’ the power to enforce a judgment against the defendant’s
    person or property.”), quoting 2,164 Watches, More or Less Bearing a
    Registered Trademark of Guess?, 
    Inc., 366 F.3d at 771
    . Here, it is
    unknown what would have transpired had MCA been made a party
    and we express no opinion on it.
    13
    MCA FINANCIAL GROUP v. ENTERPRISE BANK & TRUST
    Opinion of the Court
    (App. 2006); see also Lewin v. Miller Wagner & Co., Ltd., 
    151 Ariz. 29
    ,
    37, 
    725 P.2d 736
    , 744 (1986) (mere existence of contract does not
    justify fees award where contract only “peripherally involved in a
    cause of action”); In re Larry’s Apartment, L.L.C., 
    249 F.3d 832
    , 836
    (9th Cir. 2001) (where contract “merely somewhere within the
    factual background,” fees under § 12–341.01(A) not awardable).11
    Accordingly, we deny MCA’s attorney fees request. But, as the
    prevailing party on appeal, MCA is entitled to a cost award upon
    compliance with Rule 21. See A.R.S. § 12-341; Assyia v. State Farm
    Mut. Auto. Ins. Co., 
    229 Ariz. 216
    , ¶ 32, 
    273 P.3d 668
    , 675 (App. 2012)
    (cost award mandatory in favor of successful party).
    Disposition
    ¶21        For all of the foregoing reasons, the trial court’s order
    requiring MCA to disgorge $118,185.93 in fees is vacated.
    11We  are not asked to decide and express no opinion as to
    whether a fees award pursuant to § 12-341.01 may be available in a
    receivership action.
    14