Wallace v. Smith – 7/25/2023

July 31, 2023

Arizona Supreme Court holds that court rule regarding supersedeas bonds controls over conflicting statute.

The superior court entered a judgment against the defendant. The court awarded attorney’s fees, costs, and nominal statutory damages. The defendant filed a notice of appeal and asked the Court to enter a supersedeas bond to stay enforcement of the judgment in the amount of $0, noting the nominal damage award.  The defendant cited to A.R.S. § 12-2108(A)(1), which requires the court to consider “[t]he total amount of damages” when calculating a supersedeas bond. Instead, the court calculated the bond as directed by ARCAP 7(a)(4)(A), which requires the court to consider not only the total amount of damages, but also attorney’s fees, costs, and prejudgment interest. The defendant posted the bond and filed a petition for special action with the Supreme Court, challenging the validity of ARCAP 7(a)(4)(A). The Supreme Court accepted jurisdiction, agreeing that the matter presented an issue of statewide importance likely to recur.

The Supreme Court explained that A.R.S. § 12-2108(A)(1), which requires consideration of only damages when calculating a supersedeas bond, directly conflicts with ARCAP 7(a)(4)(A), which requires consideration of not only damages, but also attorney’s fees, costs, and prejudgment interest. Finding that the statute and the rule cannot be harmonized, the Court then determined that ARCAP 7(a)(4)(A) is a procedural, rather than substantive rule, because it does not affect a defendant’s substantive right to appeal. Because a statute regulating a procedural matter cannot prevail against a procedural rule, the Court held that A.R.S. § 12-2108(A)(1) must yield to ARCAP 7(a)(4)(A) to the extent the two conflict.

Chief Justice Brutinel authored the unanimous opinion.

Disclosure: Osborn Maledon attorneys were involved in this case.

Posted by: BriAnne Illich Meeds