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					                    IN THE COURT OF APPEALS
                        STATE OF ARIZONA
                           DIVISION II



J.A. PHELPS, D.V.M. and KATARINA S. Court of Appeals Division Two
PHELPS, husband and wife,           Case No. 2 CA-CV 2010-0052

             Appellants,
                                          Santa Cruz County Superior
vs.                                       Court Case No. CV200800174

THOMAS J. GILBRAITH and AUDREY
J. WYSTRACH, D.V.M., husband and
wife,

              Appellees.




                RESPONSIVE BRIEF OF APPELLEES




                     MONROE McDONOUGH
                  GOLDSCHMIDT & MOLLA, PLLC
                          D. Rob Burris, Esq.
                     Arizona State Bar No. 024961

                      4578 N. First Ave., Suite 160
                        Tucson, Arizona 85718
                       Telephone (520) 325-2000
                         Attorney for Appellees
                                         TABLE OF CONTENTS

Table of Contents ......................................................................................................i

Table of Authorities ...........................................................................................ii-vii

Statement of the Case ......................................................................................... 1-2

Statement of the Facts ........................................................................................ 3-6

Jurisdiction and Scope of Review ...................................................................... 6-8

Statement of the Issues ............................................................................................8

        I.       Whether or not Appellants satisfied their burden of proving their
                 alleged damages.

        II.      Whether or not the trial court’s award of nominal damages to
                 Appellant was supported by the evidence.

        III.     Whether or not Appellees were the “successful party” within the
                 meaning of A.R.S. §12-341.01.

Argument ........................................................................................................... 8-40

        I.       The trial court properly found that Appellants failed to prove their
                 alleged damages.

        II.      The trial court’s award of nominal damages was supported by the
                 evidence.

        III.     Appellees, not Appellants, were the successful party and therefore are
                 entitled to an award of their attorney’s fees and costs.

Conclusion...............................................................................................................40

Certificate of Service ……………………………………………………….. .... viii

                                                        i
Certificate of Compliance …………………………………………… .................ix

Appendices (separate submission)

         A.        Appellees’ Trial Exhibits
                   1.   Veterinary Practice and Asset Purchase Agreement
                   2.   Security Agreement
                   3.   Lease Agreement with Option to Purchase
                   4.   Promissory Note dated June 15, 2007
                   5.   Letter from Trish Nelson
                   6.   Boarding and Training Contract

         B.        B1 – B4, Excerpts from deposition of Plaintiff J.A. Phelps

         C.        C1 – C23, Excerpts from trial transcripts dated April 23, 2009 and
                   May 7, 2009

                                        TABLE OF AUTHORITIES

CASE LAW:

Ad Hoc Committee of Parishioners of Our Lady of Sun Catholic Church, Inc.
v. Reiss, 223 Ariz. 505, 224 P.3d 1002 (Ariz.App. Div. 1,2010) .......................... 8

Allstate Ins. Co. v. Universal Underwriters, Inc., 199 Ariz. 261, 17 P.3d 106,
(App.2000) .............................................................................................................39

A.O. Smith Corp. v. Allstate Ins. Companies, 222 Wis.2d 475, 588 N.W.2d
285 (Wis.App.1998) ...............................................................................................35

Associated Indemnity Corp. v. Warner, 143 Ariz. 567, 694 P.2d 1181
(1985) .....................................................................................................................36

A.R. Teeters & Associates, Inc. v. Eastman Kodak Co., 172 Ariz. 324, 836
P.2d 1034 (1992) ....................................................................................................18

Aztec Film Productions v. Tucson Gas & Elec. Co., 11 Ariz.App.
241, 463 P.2d 547 (1969) .......................................................................................12
                                                          ii
Baker v. Hooper, 50 S.W.3d 463, 470 (Tenn.Ct.App., 2001) ...............................35

Cano v. Neill, 12 Ariz.App. 562, 473 P.2d 487 (1970) .........................................21

Carrillo v. State, 169 Ariz. 126, 817 P.2d 493 (1991) ....................................13, 35

Castro v. Ballesteros-Suarez, 222 Ariz. 48, 213 P.3d 197
(Ariz.App.Div.1,2009) ..................................................................................... 7, 10

Cauble v. Osselaer, 150 Ariz. 256, 722 P.2d 983 (App.1986) ..............................10

Coury Bros. Ranches, Inc. v. Ellsworth, 103 Ariz. 515, 446 P.2d 458
(1968) .....................................................................................................................16

Delbridge v. Salt River Project Agric. Improvement & Power Dist.,
182 Ariz. 46, 893 P.2d 46 (App.1994) ................................................................... 7


Drew v. United Consumers and Producers Coop, 161 Ariz. 331,
778 P.2d 1227 (1984) .............................................................................................10

Dunn v. Ward, 105 Idaho 354, 670 P.2d 59 (Idaho App.,1983) ............... 29, 30, 31

Estate of Reinen v. Northern Arizona Orthopedics, Ltd., 198
Ariz. 283, 9 P.3d 314 (Ariz. 2000) .........................................................................28

Farr v. Transamerica Occidental Life Ins. Co., 145 Ariz. 1, 699 P.2d
376 (1984) ....................................................................................................... 9, 16

Fulton Homes Corp. v. BBP Concrete, 214 Ariz. 566,
155 P.3d 1090 (App.2007) ..................................................................................... 7

Gann v. Morris, 122 Ariz. 517, 596 P.2d 43 (1979) ................. 9, 13, 14, 21, 28, 29

General Cable Corp. v. Citizens Utility Co., 27 Ariz.App.
381, 555 P.2d 350 (1976) .......................................................................................37

                                                         iii
General Elec. Capital Corp. v. Osterkamp, 172 Ariz. 191, 836 P.2d 404
(Ariz.App.Div.2, 1992) ..........................................................................................11

Gilmore v. Cohen, 95 Ariz. 34, 386 P.2d 81 (1963) ................................. 16, 19, 21

Hale v. Amphitheater School Dist. No. 10, 192 Ariz. 111,
961 P.2d 1059 (App.1998) .....................................................................................35

Hannan v. Alltel Publishing Co., 270 S.W.3d 1 (Tenn., 2008) .............................21

Harris v. Reserve Life Ins. Co., 158 Ariz. 380,
762 P.2d 1334 (Ariz.App., 1988) ...........................................................................27

Hibbitts v. Walter Jacoby and Sons, 9 Ariz.App. 486, 453 P.2d 997
(1969) .....................................................................................................................22

Isenberg v. Lemon, 84 Ariz. 340, 327 P.2d 1016 (1958) .......................................10

Jacob v. Miner, 67 Ariz. 109, 191 P.2d 734 (1948) ..............................................33

Joel Erik Thompson, Ltd. v. Holder, 192 Ariz. 348, 965 P.2d 82 (1998) ..............35

Johnson v. Elson, 192 Ariz. 486, 967 P.2d 1022 (Ariz.App.Div.1,1998) ....... 11, 12

Kadish v. Kallof, 3 Ariz.App. 344, 414 P.2d 193 (1966) ...................................... 12

Larsen v. Decker, 196 Ariz. 239, 995 P.2d 281 (Ariz.App.Div.1,2000) ................. 7

Linsenmeyer v. Flood, 1 Ariz.App. 502, 405 P.2d 293 (1965) .............................. 12

McCarthy v. Kenosha Auto Transport Corporation,
2 Ariz. App. 620, 411 P.2d 58 (1966) .................................................................... 22

Mood v. Kronos Products, Inc., 245 S.W.3d 8, 12 (2007) .................................... 14

Morton v. Rogers, 20 Ariz.App. 581, 514 P. 2d 752 (1973) .................................. 14

Mountain States Broadcasting Co. v. Neale, 783 P.2d 551
                                                         iv
(Utah Ct.App. 1989) ............................................................................................... 37

Nataros v. Fine Arts Gallery of Scottsdale, Inc., 126 Ariz. 44,
612 P.2d 500 (App.1980) ....................................................................................... 38

Pelletier v. Johnson, 188 Ariz. 478, 937 P.2d 668 (App.1996) ............................ 35

Plunkett v. Reeves Apothercary, Inc., 351 So.2d 867 (1977) .......................... 33, 34

Pullen v. Pullen, 223 Ariz. 293, 222 P.3d 909
(Ariz.App. Div. 1,2009) ................................................................................... 7, 11

Rancho Pescado v. Northwestern Mut. Life Ins., 140 Ariz. 174,
680 P.2d 1235 (1984) .................................................................................. 9, 16, 21

Robert E. Mann Constr. Co. v. Liebert Corp., 204 Ariz. 129,
60 P.3d 708 (App.2003) ........................................................................................ 37

Rowland v. Great States Ins. Co., 199 Ariz. 577, 20 P.3d 1158
(Ariz.App. Div. 2,2001) ................................................................................... 7, 35

Ruck Corp. v. Woudenberg 125 Ariz. 519, 611 P.2d 106
(Ariz. App. 1980) .................................................................................................... 30

Sanborn v. Brooker & Wake Property Management, Inc.,
178 Ariz. 425, 874 P.2d 982 (Ariz.App. Div. 1,1994) .......................................... 36

Salt River Project Agr. Imp. and Power Dist. v. Miller Park, L.L.C.,
216 Ariz. 161, 164 P.3d 667 (Ariz.App. Div. 1,2007) .................................... 10, 22

Schwartz v. Farmers Ins. Co. of Arizona, 166 Ariz. 33, 800 P.2d 20
(Ariz.App.,1990) .............................................................................................. 37, 38

Schweiger v. China Doll Restaurant, Inc., 138 Ariz. 183,
673 P.2d 927 (1983) ............................................................................................... 39

Skousen v. Nidy, 90 Ariz. 215, 367 P.2d 248 (1961) ............................................. 35

                                                       v
Stallworth Timber Co. v. Triad Bldg. Supply , 968 F.Supp.
279 (D.Virgin Islands,1997) .................................................................................. 34

Starkweather v. Conner, 44 Ariz. 369, 38 P.2d 311 (Ariz.1934) ........................... 35

Trilogy Network Systems, Inc. v. Johnson, 144 Idaho 844,
172 P.3d 1119 (2007) ................................................................................ 16, 17, 37

U. S. Fidelity & Guaranty Co. v. Davis, 3 Ariz.App. 259, 413 P.2d 590
(1966) ............................................................................................................... 10, 16

Verdugo v. Po Shing Gee, 4 Ariz. App. 113, 417 P.2d 747 (1966) ....................... 22

Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370,
710 P.2d 1025 (Ariz.,1985) .................................................................................... 36

Yoo Thun Lim v. Crespin, 100 Ariz. 80, 411 P.2d 809 (1966) .............................. 11


STATUTES:

A.R.S. §§12-120.21................................................................................................... 6

A.R.S. §12-341 ....................................................................................................... 39

A.R.S. §12-341.01......................................................... 9, 28, 30, 35, 36, 37, 39, 40

A.R.S. § 12-341.01(A) .................................................................................... 29, 36

A.R.S. §§12-2101.................................................................................................... 6


RULES:

Rule 7.1(a), Ariz.R.Civ.P........................................................................................39

Rule 8, Ariz.R.Civ.P ................................................................................................ 1

                                                        vi
Rule 54(g), Ariz.R.Civ.P................................................................................... 36, 38

Rule 54(g)(1), Ariz.R.Civ.P. ................................................................................... 38

Rule 54(g)(2), Ariz.R.Civ.P. ................................................................................... 38

Rule 54(g)(3), Ariz.R.Civ.P. ................................................................................... 39

Rule 21, Ariz.R.Civ.App.P. .............................................................................. 29, 39

Rule 25, Ariz.R.Civ.App.P. .................................................................................... 39

Rule 401, Ariz.R.Evid............................................................................................. 27


OTHER AUTHORITIES:

Article 6, §9 of the Arizona Constitution ................................................................. 6

Black’s Law Dictionary 418 (8th ed. 1999) ............................................................18

Black's Law Dictionary 1036 (8th ed.1999) ..........................................................39

Crane McClennen, Arizona Courtroom Evidence Manual, § 401 .........................27

Restatement 2nd, Contracts §19, Damages for Lost Profits ............................. 8, 16

RAJI (Civil) 4th ........................................................................................................9

S.M. Waddams, The Law of Damages, 477-78 (3d ed. 1997) ............................ 18

22 Am.Jur.2d, Damages §172 (1965) .................................................................. 16




                                                       vii
                           STATEMENT OF THE CASE

  ¶1 Appellants sued Appellees for declaratory judgment and breach of contract.

[See Clerk’s Index of Record on Appeal (“ROA”) at # 22] Appellees answered the

Complaint by denying any alleged breach and, to the extent there was a breach,

Appellees affirmatively alleged Appellants had not suffered any damages as a result

thereof. [ROA # 23]

  ¶2 On December 5, 2009, Appellees served Appellants with discovery requests

seeking information and evidence substantiating Appellants’ alleged damages. [ROA #

28] Appellants thereafter refused to comply with Appellees’ discovery requests. [ROA

# 33]

   ¶3 On December 31, 2009, the parties filed cross motions for summary judgment.

[ROA # 29-41.] Appellants sought partial summary judgment on two issues: (1) that

the Veterinary Practice and Asset Purchase Agreement dated August 16, 2004

(“Agreement”) was valid and binding, and (2) that Appellees breached the Agreement

by providing veterinary services to Nelson Farms in violation of the Agreement’s

covenant not to compete (“Covenant”). [Id.] Appellees sought summary judgment on

two issues as well: (1) that Appellees did not breach the Agreement, and (2) that

Appellants had the burden of proving their lost profits with reasonable certainty. [Id.]

   ¶4 The trial court ultimately granted Appellants’ MSJ and Appellees’ MSJ in part.

                                            1
[ROA # 43.] The trial court found that the Agreement was valid and enforceable

against Appellees and that Appellees breached the Agreement by providing veterinary

services to Nelson Farms. [Id.] Furthermore, and central to this appeal, the trial court

found that Appellants had the burden of proving their alleged damages. [Id.] In

particular, Appellants’ were required to prove their net profits specifically established

by the evidence. [Id.]

  ¶5 Thereafter, the trial court held a two (2) day trial solely on the issue of damages

(“Trial”). [ROA # 54.] Based on the evidence presented at trial, the trial court issued

its Under Advisement Ruling on July 24, 2009 (“Ruling”). [ROA # 64.] Among other

things, the trial court found that Appellants had failed to prove their damages. [Id.] The

trial court’s Ruling was confirmed through a judgment entered on August 7, 2009

(“Judgment”). [ROA # 66.]

   ¶6 On August 24, 2009, Appellants filed a Motion for New Trial which the trial

court ultimately denied after the matter was fully briefed and a hearing was held. [ROA

# 67-74.] The trial court confirmed its findings of fact and legal conclusions set forth

in the Judgment through the issuance of a “Final Judgment.” [ROA # 79] Appellants

thereafter sought this appeal. [ROA # 80.]




                                             2
                           STATEMENT OF THE FACTS

    ¶7 Appellee Audrey Wystrach, D.V.M., is a licensed veterinarian specializing in

large animal care and former owner of Desert Mountain Veterinary Clinic located at

3425 N. Highway 83, Sonoita, Arizona (“Practice”). On August 16, 2004, the parties

entered into the Agreement whereby Appellees agreed to sell the Practice to

Appellants. [ROA # 55, Appellees’ Trial Exhibits (“ATE”), Exhibit A-3] 1

    ¶8 The Agreement contained the Covenant which precluded Dr. Wystrach from

engaging in the practice of veterinary medicine within a forty (40) mile radius of

Sonoita, Arizona for a period of five (5) years. [Id.] Section 2(c) of the Agreement

expressly excluded the transfer of those “records of customers who have notified

[Appellees] before August 17, 2008, that they do not wish such records be transferred

to [Appellants].” [Id. at §2(c)]

    ¶9 The purchase price for the Practice was $150,000.00. [Id.] Because Appellants

could not secure the requisite financing, Appellees agreed to carry $140,000.00 of said

purchase price for a period of ten (10) years (“Loan”). [ROA # 55, ATE, Exhibits A-6

– A-8] To date, Appellees continue to carry the remaining balance of the loan.

    ¶10 Just prior to filing this lawsuit in 2008, Appellants defaulted on the Loan. As a


1
 For the Court’s convenience, all exhibits referenced in this Responsive Brief are
attached to the Appendix and thereby incorporated herein.

                                            3
result thereof, Appellees declared Appellants in breach of the Loan agreement and

threatened to take legal action. It was not until after Appellees declared Appellants in

default that Appellants filed this lawsuit.

    ¶11 Nelson Farms is located in Tucson, Arizona, and is a breeder, boarder, and

trainer of Arabian show horses. The principal of Nelson Farms is Ms. Trish Nelson

(“Trish Nelson”). As part of its services offered to its clients, Nelson Farms facilitates

the provision of veterinary care to its clients’ horses on an as needed basis. All

Nelson Farms clients sign a Boarding and Training Contract (“Boarding Agreement”)

wherein they can specify a preferred veterinarian to be used if and when the need

arises. [ROA # 57, Exhibit C-1, Transcript 22, pgs. 36-37, lns. 2-6; ROA # 55, ATE,

Exhibit A-11] Nelson Farms allows their clients to name their preferred veterinarian

because, similar to a human doctor/patient relationship, horse owners are particular

about who provides veterinary care to their horse(s). [ROA # 57, Exhibit C-2,

Transcript 2, pgs. 32-33, lns. 12-8] If a client does not name a particular veterinarian,

Nelson Farms will use one of several local Tucson veterinarians with whom Nelson

Farms has a preexisting and long standing relationship. [ROA # 57, Exhibit C-3,



2
 Contemporaneously herewith, Appellees have filed their Supplement of the Record
containing certified copies of the trial transcript, testimony of Appellant J.A. Phelps
and Trish Nelson, dated April 23, 2009, pages 1-90 (“Transcript 1”) and May 7, 2009,
pages 1-15, and 26-82 (“Transcript 2”).
                                              4
Transcript 2, pgs. 31-39, lns. 21-10] Nelson Farms uses only those veterinarians with

whom it has a relationship and knows are fit to provide the services required. [Id.]

   ¶12 For the majority of its veterinary needs, Nelson Farms has used and continues

to use Reata Equine Veterinary Group (“Reata”), specifically Mr. Mike Conaway

D.V.M. (“Dr. Conaway”). [ROA # 57,Exhibit C-4,Transcript 2, pgs. 37-39, lns. 7-10]

Dr. Conaway has a longstanding relationship with Nelson Farms. [Id.] Dr. Conaway

has been providing veterinary services to Nelson Farms and its clients for over twenty

(20) years. [Id.] Importantly, Reata is located in Tucson within several miles of the

Nelson Farms facilities and always provides its service on-site at the Nelson Farms’

facilities. [Id.]

   ¶13 Prior to August 2004, Nelson Farms also used Appellee Dr. Audrey Wystrach

for some of its veterinary needs. [ROA # 57, Exhibit C-5, Transcript 2, pgs. 29-31, lns.

17-17)] Nelson Farms used Appellee Dr. Wystrach because Trish Nelson had a

longstanding preexisting relationship with Dr. Wystrach. [Id.] Nelson Farms also used

Dr. Wystrach because she lived in Tucson and provided veterinary services at Nelson

Farms’ facilities. [Id.]

   ¶14 On August 1, 2004, after learning of Appellees’ pending sale of the Practice,

Nelson Farms expressly instructed Appellees, pursuant to §2(C) of the Agreement, not

to transfer any medical records belonging to Nelson Farms and/or its clients to

                                            5
Appellents (“Non-Transfer Request”). [ROA # 57, Exhibit C-6, Transcript 2, pgs. 40-

43, lns. 13-5; ROA # 55, ATE, Exhibit A-10] Pursuant to the Non-Transfer Request

and in accordance with the Agreement, Appellees did not transfer to Appellants any

records belonging to Nelson Farms and its clients. [Id.]

   ¶15 At trial, Appellants could not produce any evidence of their alleged damages.

[ROA # 79, Findings of Fact (“FOF”) ¶ 13 and Conclusions of Law (“COL”) ¶ K;

Exhibit C-7, Transcript 1, pg. 70, lns. 4-22; pgs. 72-73, lns. 8-11] Nor could

Appellents produce any evidence establishing their alleged lost profits caused by

Appellees’ breach. [Id.] The trial court ultimately found that, “[Appellants] have

failed to prove that they in fact suffered damages as a result of [Appellees’] breach of

paragraphs 6 and 7 of the Agreement…” [ROA # 79, FOF ¶ 13 and COL ¶ K.]

  ¶16 Appellants thereafter sought a new trial on the issue of damages. After being

fully briefed and holding a hearing, the trial court denied Appellants’ motion for new

trial ruling. [ROA ## 67-74.]

                   JURISDICTION AND STANDARD OF REVIEW

   A.    Jurisdiction.

   ¶17 This Court has jurisdiction pursuant to Article 6, §9 of the Arizona

Constitution and A.R.S. §§12-120.21 and 12-2101.

   B.    Denial of Appellants’ Motion for New Trial – Abuse of Discretion.

                                           6
    ¶18 The trial court has broad discretion in deciding whether to grant or deny
    a motion for a new trial. Melcher v. Melcher, 137 Ariz. 210, 212, 669 P.2d
    987, 989 (App.1983)…‘[Appellate courts] will not overturn that decision
    absent a clear abuse of discretion.’ Delbridge v. Salt River Project Agric.
    Improvement & Power Dist., 182 Ariz. 46, 53, 893 P.2d 46, 53 (App.1994)

    ¶19 [A] [trial] court abuses its discretion if, in reaching its decision, it applies
    an erroneous rule of law. Twin City Fire Ins. Co. v. Burke, 204 Ariz. 251,
    254, ¶ 10, 63 P.3d 282, 285 (2003); Martinez v. Binsfield, 195 Ariz. 446,
    449-50, ¶ 11, 990 P.2d 647, 650-51 (App.1999), vacated on other grounds,
    196 Ariz. 466, 999 P.2d 810 (2000).

Pullen v. Pullen, 223 Ariz. 293, 296, 222 P.3d 909, 912 (Ariz.App. Div. 1, 2009).

   ¶20 Appellants have the burden of proving that the trial court abused its discretion

in denying their request for a new trial. Delbridge, 182 Ariz. at 53; Pullen, supra;

Castro   v.   Ballesteros-Suarez,     222    Ariz.   48,    52,   213    P.3d    197,      201

(Ariz.App.Div.1,2009); Larsen v. Decker, 196 Ariz. 239, 244, 995 P.2d 281, 286

(Ariz.App.Div.1,2000).

   C.    Denial of Award of Attorney’s Fees – Abuse of Discretion.

    ¶21 We review a trial court's decision to deny discretionary attorney's fees
   under § 12-341.01(A) for an abuse of discretion. Hale v. Amphitheater School
   Dist. No. 10, 192 Ariz. 111, ¶ 20, 961 P.2d 1059, ¶ 20 (App.1998). We will not
   disturb the trial court's ruling unless it is not supported by any reasonable basis.
   Id. … [W]e view the record in the light most favorable to sustaining the trial
   court's decision. See Pelletier v. Johnson, 188 Ariz. 478, 480, 937 P.2d 668, 670
   (App.1996); Gilbert, 155 Ariz. at 181, 745 P.2d at 629.

Rowland v. Great States Ins. Co., 199 Ariz. 577, 587, 20 P.3d 1158, 1168 (Ariz.App.
Div. 2,2001); Fulton Homes Corp. v. BBP Concrete, 214 Ariz. 566, 569, ¶ 9, 155 P.3d
1090, 1093 (App.2007).

                                             7
     ¶22 To find an abuse of discretion, there must either be no evidence to support
     the superior court's conclusion or the reasons given by the court must be ‘clearly
     untenable, legally incorrect, or amount to a denial of justice.’ Charles I.
     Friedman, P.C. v. Microsoft Corp., 213 Ariz. 344, 350, ¶ 17, 141 P.3d 824, 830
     (App.2006) (quoting State v. Chapple, 135 Ariz. 281, 297 n. 18, 660 P.2d 1208,
     1224 n. 18 (1983)).

Ad Hoc Committee of Parishioners of Our Lady of Sun Catholic Church, Inc. v.
Reiss, 223 Ariz. 505, 517, 224 P.3d 1002, 1015 (Ariz.App. Div. 1,2010).

                            STATEMENT OF THE ISSUES

     1.     WHETHER   OR NOT APPELLANTS SATISFIED THEIR BURDEN OF PROVING
            THEIR ALLEGED DAMAGES.

     2.     WHETHER OR NOT THE TRIAL COURT’S AWARD OF NOMINAL DAMAGES WAS
            SUPPORTED BY THE EVIDENCE.

     3.     WHETHER  OR NOT APPELLEES WERE THE           “SUCCESSFUL PARTY”       WITHIN
            THE MEANING OF A.R.S. §12-341.01.

                                      ARGUMENT

     ¶23 Appellants’ brief is ripe with misstatements of the record and unsupported

argument. Appellants would like this Court to believe that merely because there is a

breach of contract, damages are automatic. Appellants neglect the fact that it was and

continues to be their burden to prove their alleged damages. However, both at trial and

in their brief, Appellants failed to prove their alleged damages. As such, the Final

Judgment must be upheld.

I.        THE TRIAL COURT PROPERLY FOUND THAT           APPELLANTS     FAILED TO PROVE
          THEIR DAMAGES.


                                             8
   ¶24 At trial, Appellants had the burden of proving their lost profits with reasonable

certainty based on competent evidence. [ROA # 79, COL ¶ I]; Gann v. Morris, 122

Ariz. 517, 519, 596 P.2d 43, 45 (1979). However, after a two (2) day trial specifically

on damages; after hearing testimony from five (5) witnesses and arguments of

counsel; and after reviewing the entire record, including all of the pleadings, legal

memorandums, proposed findings of fact and conclusions of law, legal authorities as

well as over twenty (20) trial exhibits, the trial court found the Appellants failed to

establish their alleged damages. [ROA # 79, pg. 2, lns 3-5, FOF ¶ 13 and COL # K]

         a. THE TRIAL COURT APPLIED THE PROPER MEASURE OF DAMAGES.

   ¶25 The trial court ruled that, (1) the proper measure of Appellants’ alleged

damages were Appellants’ lost profits proven with reasonable certainty; (2)

Appellants’ alleged damages were limited to those lost profits which Appellants’

would have earned but for Appellees’ breach; (3) Appellants’ alleged damages must

have been the direct and natural consequence of Appellees’ breach; and (4) the

amount of Appellants’ alleged lost profits could not be based on conjecture or

speculation. [ROA # 79 at COL # G-J]; RAJI (Civil) 4th, Contracts §19, Damages for

Lost Profits; Gann, 122 Ariz. at 519; Rancho Pescado v. Northwestern Mut. Life Ins.,

140 Ariz. 174, 184-86, 680 P.2d 1235, 1245-47 (1984); Farr v. Transamerica

Occidental Life Ins. Co., 145 Ariz. 1, 6, 699 P.2d 376, 381 (1984); Drew v. United

                                           9
Consumers and Producers Coop, 161 Ariz. 331, 333, 778 P.2d 1227, 1229 (1984);

Isenberg v. Lemon, 84 Ariz. 340, 327 P.2d 1016 (1958); U. S. Fidelity & Guaranty

Co. v. Davis, 3 Ariz.App. 259, 262, 413 P.2d 590, 593 (1966) (No recovery for lost

profits which are determined to be uncertain, contingent, conjectural, or speculative).

   ¶26 Prior to trial, Appellants expressly agreed to the application of the

aforementioned measure of damages. [ROA # 49, Joint Pretrial Statement, § II]

Additionally, Appellants have not alleged in their brief that the trial court erred in

applying said legal standards. As such, it is indisputable that the proper measure of

damages is that which the trial court applied at trial.

          b. THE JUDGMENT IS PRESUMED VALID.

  ¶27 Because the trial judge sees the witnesses, hears the testimony, and has a
  special ‘perspective of the relationship between the evidence and the verdict
  which cannot be recreated by a reviewing court from the printed record,’
  [appellate courts] will reverse only if the [trial] court's ruling reflects a manifest
  abuse of discretion given the record and circumstances of the case. Reeves v.
  Markle, 119 Ariz. 159, 163, 579 P.2d 1382, 1386 (1978).

Salt River Project Agr. Imp. and Power Dist. v. Miller Park, L.L.C., 216 Ariz. 161,
169, 164 P.3d 667, 675 (Ariz.App. Div. 1,2007) (affirmed in part; vacated in part and
remanded.).

   ¶28 Appellate courts will not reweigh the evidence or substitute its evaluation of

the facts. Cauble v. Osselaer, 150 Ariz. 256, 258, 722 P.2d 983, 985 (App.1986).

Castro, 222 Ariz. at 52 (appellate courts defer to trial judge with respect to any factual

findings explicitly or implicitly made.). On appeal, the presumption is that the Final
                                             10
Judgment is correct and that the trial court made all necessary findings sufficient to

sustain the Final Judgment. General Elec. Capital Corp. v. Osterkamp, 172 Ariz. 191,

193, 836 P.2d 404, 406 (Ariz.App.Div.2, 1992).

   ¶29 In our review of judgments, we are obliged to affirm the trial court's ruling if
   the result was legally correct for any reason. State v. Perez, 141 Ariz. 459, 687
   P.2d 1214 (1984). Implied in every judgment, in addition to the express
   findings made by the court, are any additional findings necessary to sustain
   the judgment, if reasonably supported by the evidence and not in conflict
   with the express findings. Thus, if the judgment can be sustained on any theory
   framed by the pleadings and supported by the evidence, we must affirm it.
   Coronado Co., Inc. v. Jacome's Dept. Store, 129 Ariz. 137, 139, 629 P.2d 553,
   555 (App.1981).

(emphasis added) General Elec., 172 Ariz. at 193.

   ¶30 On appeal, Appellants must dig into the record and affirmatively point to

conclusive evidence of their alleged damages. Id., citing, Yoo Thun Lim v. Crespin,

100 Ariz. 80, 82, 411 P.2d 809, 810 (1966) (burden is on the party who disagrees with

the judgment to show that the trial court abused its discretion.); Pullen, 223 Ariz. at

296 (Appellants’ burden to prove that the trial court erred in denying request for new

trial.). Additionally, the appellate court may infer such additional findings of fact and

conclusions of law as are necessary to sustain the Final Judgment as long as those

findings are reasonably supported by the evidence, and not in conflict with any

express findings.   Johnson v. Elson, 192 Ariz. 486, 489, 967 P.2d 1022, 1025

(Ariz.App.Div.1,1998). Where, as is the case here, the trial court makes specific

                                           11
findings of fact and conclusions of law, the appellate court is bound by those findings

and conclusions unless Appellants can clearly show such were erroneous. Aztec Film

Productions v. Tucson Gas & Elec. Co., 11 Ariz.App. 241, 243, 463 P.2d 547,

549 (1969) (due regard must be given to trial court’s ability to weigh the credibility of

the evidence and witnesses); Linsenmeyer v. Flood, 1 Ariz.App. 502, 405 P.2d 293

(1965); Kadish v. Kallof, 3 Ariz.App. 344, 348, 414 P.2d 193, 197 (1966).

   ¶31 Appellants have failed to satisfy the minimum requirements to obtain reversal

of an award of nominal damages. The Appellants did not order the trail transcript.

Nowhere in their brief do Appellants cite the trial transcript. Nowhere in their brief do

Appellants point to specific trial exhibits, evidence or any other portions of the record

supporting their argument that the trial court erred in awarding nominal damages

and/or denying their request for new trial. “When no transcript [or other supporting

evidence] is provided on appeal, the reviewing court assumes that the record supports

the trial court's decision. Baker v. Baker, 183 Ariz. 70, 73, 900 P.2d 764, 767

(App.1995).” Johnson, 192 Ariz. at 489.

   ¶32 Before this Court can even begin to review whether or not the trial court erred

in denying Appellants’ request for new trial, it must first determine whether or not

Appellants have cited sufficient evidence meriting such review. Because Appellants

failed to cite any evidence supporting their appeal, the Final Judgment must be

                                           12
sustained.

           c. APPELLANTS FAILED TO PROVE        THEIR   ALLEGED LOST PROFITS       WITH
              REASONABLE CERTAINTY.

   ¶33 A new trial is not appropriate unless the probative force of the evidence clearly

demonstrates that the ruling is incorrect. Cano v. Neill, 12 Ariz.App. 562, 567, 473

P.2d 487, 492 (1970). Here, the trial court weighed the evidence twice, once at trial

and again on Appellants’ motion for a new trial. On both occasions, the trial court

determined that Appellants failed to prove their alleged damages.

   ¶34 Appellants are not entitled to money damages merely because the trial court

found that Appellees’ breached the Covenant. Arizona law clearly provides that

Appellants must prove their damages with reasonable certainty. [ROA # 79 at COL #

G-J]; Gann, 122 Ariz. at 519. Here, Appellants failed to even approach this standard.

The Appellants claim for damages suffered from a total failure of proof at trial. This

probably explains why they did not bother to order or cite the transcript.

   ¶35 In deed, when asked directly, Appellant J.A. Phelps admitted at trial that he

did not know the amount of his alleged damages:

      Q.   Dr. Phelps, as you sit here today, do you know the exact amount of
      damages you are claiming?
      A.     No.

[ROA #57; Exhibit C-8, Transcript 2, at pg. 15, lns. 4-6]

   ¶36 To prove their lost net profits, Appellants had to prove what their net profits
                                           13
would have been but for Appellees’ breach. [ROA # 49, JPS, § II]; Morton v. Rogers,

20 Ariz.App. 581, 586, 514 P. 2d 752, 757 (1973); Mood v. Kronos Products,

Inc., 245 S.W.3d 8, 12 (2007); Gann, 122 Ariz. at 519.         To prove net profits,

Appellants had to produce evidence of their business costs and expenses. Id. At trial,

Appellants failed to produce such evidence.

   ¶37 When asked directly, Appellant J.A. Phelps admitted he did not have any

evidence by which to establish their alleged lost profits:

     Q.    [Dr. Phelps,] [a]s you sit here today, have you disclosed any records
showing your profit margin?
      A.     No.
      Q.    As you sit here today, have you disclosed any computer printout from
      your own computer showing your price list?
      A.     No.
      Q.     Have you disclosed any records showing your inventory costs?
      A.     No.
      Q.     Have you disclosed any reports that [show] your cost and expenses?
      A.     No.
      Q.     No profit and loss statements?
      A.     No.
      Q.     No tax returns?
      A.     No.
      Q.     No expense reports?
      A.     No.

[ROA # 57; Exhibit C-9, Transcript 1, at pg 70, lns. 4-22]
                                            14
      Q.    Dr. Phelps, other than yourself here today, do you have anybody, you
      don’t have anybody that is going to testify as to your profit margin do you?
      A.    No.
      Q.    You don’t have [your office manager] Linda Donnapelli here do you?
      A.    No.
      Q.    You don’t have your accountant here do you?
      A.    No.
      Q.    So as you sit here today, you have no proof, other than your own
      testimony, as to your profit margin or your costs isn’t that correct?
      [Objection – Overruled]
      Q.    As you sit here today, other than your own testimony, you don’t have
      any evidence, no documents, no witnesses to corroborate your profit margin,
      as you have testified, or to show your expenses, your costs, anything of that
      nature?
      A.    No.

[ROA # 57; Exhibit C-10, Transcript 1, at pg 72-73, lns. 8-11]

   ¶38 Dr. Phelps went on to admit that his initial demand of $100,000.00 in alleged

damages was grossly inflated, speculative and intended only to intimidate Appellees:

      Q.   Now your attorney had picked a number of [$]100,000, where did that
      number come from?
      A.     Generosity. He was being very kind to me. Just wanted to get your
      attention, hopefully resolve this without problems, but that number is gone.
      Q.    Okay. Do you have – I mean, how are you making – how are you
      determining this number?
      A.    Estimates.

[ROA # 55; ROA # 57; ATE, Exhibit B-1, deposition of J.A. Phelps, at pg 88-89,
lns. 24-6]

   ¶39 Damages that are speculative, remote or uncertain may not form the basis
                                          15
    of a judgment. The speculations, guesses or estimates of witnesses form no
    better basis of recovery than the speculations of the jury themselves.

Coury Bros. Ranches, Inc. v. Ellsworth, 103 Ariz. 515, 521, 446 P.2d 458, 464 (1968);
Gilmore v. Cohen, 95 Ariz. 34, 37, 386 P.2d 81, 83 (1963); Rancho Pescado, 140
Ariz. at 184-86; Farr 145 Ariz. at 6; U. S. Fidelity, 3 Ariz.App. at 262; 22 Am.Jur.2d,
Damages § 172 (1965) (‘No recovery can be had for loss of profits which are
determined to be uncertain, contingent, conjectural, or speculative.’).

    ¶40 In Trilogy Network Systems, Inc. v. Johnson, 144 Idaho 844, 848, 172 P.3d

1119, 1123 (2007), the Idaho Supreme Court reviewed a case identical to this one.3

There, the plaintiff sued the defendant for breach of a covenant not to compete. Id. at

1121. The trial court found defendant had breached the non-compete agreement and

therefore the only issue for trial was plaintiff’s alleged damages. Id. Like Arizona law,

the Trilogy plaintiff’s damages were limited to lost net profits proven with reasonable

certainty. Id. At trial, plaintiff relied solely on witness testimony to prove its lost net

profits. Id. at 1123. Specifically, the plaintiff failed to produce any evidence of its

costs and expenses necessary to determine what its net profits would have been but for

defendant’s breach. Id. The Idaho Supreme Court affirmed the trial court’s finding

that plaintiff had not established its lost net profits with reasonable certainty:



3
  The Trilogy court considered three issues: (1) whether there was sufficient evidence
from which the trial court could calculate damages and whether or not the trial court’s
failure to award damages was in error; (2) whether or not the trial court erred in
denying plaintiff’s request for attorney’s fees; and (3) whether either party is entitled to
attorneys fees on appeal.
                                             16
  Trilogy argues that stating a conclusion regarding its profit margin, without any
  factual support, is enough to take the issue of damages out of the realm of
  speculation. Such is not the standard under Idaho law. See Dunn, 105 Idaho at
  357, 670 P.2d at 62. Trilogy failed to offer into evidence any proof of what its
  costs and profits would have been had Seastrom awarded it the contract. Its only
  proof was conclusory statements that Trilogy would have made similar profits.
  Trilogy failed to offer into evidence its bid to Seastrom for the software portion
  of the project, which would have shown its costs and the profit margin it
  expected for that portion of the bid. Although Trilogy had a list of the software
  Johnson supplied Seastrom, there was no showing as to what the costs to Trilogy
  would have been for the software ultimately used by Johnson to complete the
  project. As such, Trilogy failed to persuade the district court of any
  correspondence between what its profit would have been and Johnson's actual
  profit, and thus failed to take the measure of its damages out of the realm of
  speculation. Therefore, the district court did not err when it declined to award
  damages.

Trilogy, 172 P.3d at 1123.

   ¶41 Like Trilogy, here, there is no evidence of Appellants’ alleged damages.

Appellants could have produced tax returns, profit and loss statements, and expense

and cost reports necessary to prove their profit margin. Appellants could have had

their office manager, book keeper, or accountant testify at trial. Yet, Appellants failed

to produce any such evidence. Certainly, based on the trial court’s MSJ Ruling,

Appellants understood what they would be required to prove at trial. [ROA # 43] The

only conclusion that can be drawn from Appellants’ failure is that Appellants have not

suffered damages. A new trial is not warranted when Appellants had a full opportunity

to present their case but failed to do so. A.R. Teeters & Associates, Inc. v. Eastman

Kodak Co., 172 Ariz. 324, 836 P.2d 1034 (1992).
                                           17
II.      THE TRIAL COURT DID NOT ERR IN AWARDING NOMINAL DAMAGES.

      ¶42 Nominal damages are defined as a sum awarded when a legal wrong is suffered

but when there is no substantial loss or injury to be compensated. Black’s Law

Dictionary 418 (8th ed. 1999). “Nominal damages are awarded if the plaintiff

establishes a breach of contract…but fails to establish a loss caused by the

wrong…The practical significance of a judgment for nominal damages is that the

plaintiff thereby establishes a legal right…[sufficient to] enable the plaintiff to obtain

an injunction to restrain a repetition of the wrong…” but fails to establish a loss or

injury for which plaintiff should be compensated.          S.M. Waddams, The Law of

Damages, 477-78 (3d ed. 1997).

      ¶43 In denying Appellants’ request for new trial, the trial court found, among other

things, that:

       ...[T]he arguments made by counsel for [Appellants] in his Motion for New
       Trial were previously considered by the court prior to its July 24, 2009
       decision and a new trial is not warranted. The court incorporates by reference
       herein its findings of fact and conclusions of law set out by the court in its
       July ruling. Before the court can consider the proper measure of
       damages, the court must first find that the [Appellants] were in fact
       damaged. The court affirms its prior finding that the [Appellants] have
       failed to prove that they were in fact damaged.

(emphasis added). [ROA # 74]

      ¶44 Before receiving any monetary award, Appellants must first prove that they

were in fact damaged by Appellees’ breach. At trial, Appellants were unable to provide
                                             18
any evidence that they had been damaged. Likewise, in their brief, Appellants failed to

cite any evidence that they have been damaged. Thus, this Court need not reach the

issue of how to measure or quantify Appellants’ alleged damages.

   ¶45 On Appeal it is the duty of the Court of Appeals to uphold the ruling of the trial

court unless the appellant can show there is no substantial evidence to support the

ruling of the Court. In the present case, not only is there substantial evidence to

support the ruling of the trial court, there is NO evidence to support any other ruling.

The Appellants totally failed to prove a claim for damages and anything but a nominal

award would have been an abuse of discretion by the trial court.

   ¶46 In Gilmore, 95 Ariz. 34, the Arizona Supreme Court addressed the damages

issue presently before this Court. There, the trial court found that even though the

defendants breached the contract, plaintiffs failed to prove their damages with

reasonable certainty. Id. at 35-37. As such, the plaintiffs were only awarded nominal

damages. Id. The Supreme Court affirmed the trial court’s ruling:

 The only question remaining for our consideration is whether, on the basis of the
 evidence presented, it was error for the trial judge to limit his award to nominal
 damages. The burden was on the plaintiffs to show the amount of their damages
 with reasonable certainty. Jacob v. Miner, supra; Martin v. LaFon, 55 Ariz. 196,
 100 P.2d 182 (1940). It is firmly established, of course, in this state as elsewhere,
 that ‘certainty in amount’ of damages is not essential to recovery when the fact of
 damage is proven. Story Parchment Co. v. Patterson Parchment Paper Co., 282
 U.S. 555, 51 S.Ct. 248, 75 L.Ed. 544 (1931); Grummel v. Hollenstein, 90 Ariz.
 356, 367 P.2d 960 (1962); Brear v. Klinker Sand & Gravel Co., 60 Wash.2d 443,
 374 P.2d 370 (1962). This is simply a recognition that doubts as to the extent of
                                           19
 the injury should be resolved in favor of the innocent plaintiff and against the
 wrongdoer. But it cannot dispel the requirement that the plaintiff's evidence
 provide some basis for estimating his loss. This court stated in McNutt Oil &
 Refining Co. v. D'Ascoli, 79 Ariz. 28, 281 P.2d 966 (1955), that ‘conjecture or
 speculation’ cannot provide the basis for an award of damages, and said in Martin
 v. LaFon, supra, that the evidence must make an ‘approximately accurate
 estimate’ possible.

 The requirement of ‘reasonable certainty’ in establishing the amount of damages
 applies with added force where a loss of future profits is alleged. See Isenberg v.
 Lemon, 84 Ariz. 340, 327 P.2d 1016 (1958). This is so because such loss is
 capable of proof more closely approximating ‘mathematical precision.’ In other
 words, the plaintiff in every case should supply some reasonable basis for
 computing the amount of damage and must do so with such precision as, from the
 nature of his claim and the available evidence, is possible. See Shannon v. Shaffer
 Oil & Refining Co., 51 F.2d 878, 78 A.L.R. 851 (10th Cir. 1931); Pye v. Eagle
 Lake Lumber Co., 66 Cal.App. 584, 227 P. 193 (1924). In our view, the trial judge
 here was justified in finding that plaintiffs failed to satisfy either requirement.

 The evidence relating to damages was all in the form of testimony by plaintiffs
 Raymond and Doris Gilmore. No books of account or other record of the costs of
 developing the first six tracts and their selling price were introduced. Even if
 formal accounts had not been kept, and there was no showing that they were not,
 informal memoranda of previous transactions or even past income tax returns
 showing the profits from the construction and sale of the first six houses, would
 have given added weight to plaintiffs' claim.

 In addition to the inherent weakness of testimonial evidence in cases such as this,
 we note also that the testimony itself was ambiguous and confused. The plaintiffs
 seemed uncertain that they had ever shown a profit from the operation or that
 future profits were likely to occur…

 In short, we are not convinced that the evidence concerning damages was
 calculated to inspire confidence in the trial judge, and his conclusion that the
 amount was not established with reasonable certainty is justified on the record.

Gilmore, 95 Ariz. at 35-37.

                                          20
   ¶47 Here, the trial court did not err in awarding nominal damages. Appellants

cannot prove the fact that they have been damaged much less the amount of their

alleged damages. Therefore, while the trial court found there had been a legal wrong,

i.e. Appellees’ breach of the Agreement, and enjoined Appellees to prevent further

repetition of said wrong; the trial court also found Appellants suffered no loss or

compensable injury as a result thereof.

         a. NO EVIDENCE APPELLANTS WOULD HAVE REALIZED ANY PROFIT.

   ¶48 Appellants’ alleged damages are limited to those lost profits Appellants would

have earned but for Appellees’ breach. Gann, 122 Ariz. at 519; [ROA # 49, JPS, §II;

ROA # 79, COL ¶¶ G-J]       Appellants failed to prove they would have realized any

profits from Nelson Farms but for Appellees’ breach. In fact, the trial court found that

all of the evidence was to the contrary. [ROA # 79, ¶ 13]

   ¶49 In Arizona there can be no reasonable basis for an award of lost profits where

Appellants have failed to produce even a scintilla of evidence that they would have

earned profits but for Appellees’ breach. Gann, 122 Ariz. at 519; Rancho Pescado,

140 Ariz. at 184-86; Hannan v. Alltel Publishing Co., 270 S.W.3d 1, 10 (Tenn.,2008)

(no recovery for loss of profits when it is uncertain whether any profits would have

been made.).

   ¶50 In reviewing the Final Judgment, this Court must view the evidence in a light

                                           21
most favorable to sustaining the Final Judgment. Salt River Project, supra, 216 Ariz.

at 169. If there is substantial evidence in the record to support the Final Judgment,

this Court must affirm. Id.; Hibbitts v. Walter Jacoby and Sons, 9 Ariz.App. 486, 487,

453 P.2d 997, 998 (1969) (“all competent evidence supporting the judgment will be

taken as true.”); Verdugo v. Po Shing Gee, 4 Ariz. App. 113, 417 P.2d 747 (1966);

McCarthy v. Kenosha Auto Transport Corporation, 2 Ariz. App. 620, 411 P.2d 58

(1966).

   ¶51 At trial, Appellant J.A. Phelps admitted he made no effort to do business with

Nelson Farms:

      Q.    Okay. And as you sit here today, you have never personally met
      Trish Nelson have you?
      A.    At the deposition. I did at the deposition.
      Q.    Did you personally talk to Trish Nelson?
      A.    I don’t believe I have, no.
      Q.   So as you sit here today, you have never personally talked to Trish
      Nelson?
      A.    Never personally talked to her.
      Q.    Have you ever called her yourself and introduced yourself?
      A.    No.
      Q.     You testified that you have never done any work for Nelson Farms; is
      that right?
      A.    Yes.
      Q.    And you have never gone to Nelson Farms to offer your services?
      A.    No.

                                          22
      Q.     Never gone there to introduce yourself?
      A.     No.
      Q.     In fact, you have never even been to Nelson Farms; have you?
      A.     No.

[ROA # 57; Exhibit C-11, Transcript 1, at pg 50-51, lns. 2-1]

   ¶52 Appellants also admitted that they did not care about Nelson Farms’ business

and thus did not want to “waste [their] time” seeking enforcement of the Covenant.

[ROA # 57, Exhibit C-12, Transcript 1, at pg 87-88, lns. 16-15; ROA # 55, ATE,

Exhibit B-2, pgs. 82-83, lns. 3-3]

   ¶53 The trial court also considered the testimony of Nelson Farms’ principal, Trish

Nelson:

      Q.     Do you know Dr. Phelps?
      A.     No.
      Q.     Have you ever spoken with Dr. Phelps?
      A.     No.
      Q.     Has he ever contacted you to offer his services?
      A.     No.
      Q.     Has Dr. Phelps ever come to Nelson Farms?
      A.     No.
      Q.     Has Nelson Farms ever used Dr. Phelps?
      A.     No.
      Q.     At any time did Dr. Wystrach ever tell you not to use Dr. Phelps?
      A.     No.
      Q.     Do you know if anybody at Nelson Farms uses Dr. Phelps?
                                          23
      A.    No.
      Q.    Nelson Farms clients?
      A.    No.
      Q.    You testified earlier that if the clients wanted to use Dr. Phelps they
      could?
      A.    Absolutely.
      Q.    Are you aware of any Nelson Farms’ clients that Dr. Phelps has
      contacted to offer his service and to introduce himself.
      A.    Not to my knowledge.

[ROA # 57; Exhibit C-13, Transcript 2, at pg 57-58, lns. 3-14]

   ¶54 Trish Nelson made clear that Nelson Farms would not have used Appellants

under any circumstances:

      Q.   So as you sit here today, can you think of any reason why Nelson
      Farms would use Dr. Phelps?
      A.    No.
      Q.     Can you think of any incentive that Dr. Phelps offers that might
      interest Nelson Farms?
      A.    No.
      Q.    Do you know if [Dr. Phelps] offers any type of special services?
      A.    I know nothing about him.
      Q.    Would Nelson Farms have used Dr. Phelps if [Dr. Wystrach] had
      stopped practicing altogether?
      A.    No.

[ROA # 57; Exhibit C-14, Transcript 2, pgs. 60-61, lns. 15-4; Exhibit B-3, pgs. 86-87,
lns. 14-10]

   ¶55 In fact, Trish Nelson was offended by Appellants’ lack of personal attention

                                          24
when contacted by Appellants’ office manager rather than Appellant J.A. Phelps

himself:

      Q.     Did it upset you that Nancy called instead of Dr. Phelps?
      A.     Oh yeah.
      Q.     Why is that?
      A.    Because most people when they want your business or wanted some
      of your business they would come and introduce themselves. That’s what
      has happened in the past, you know, the people that I have done business
      with have always been on a one-on-one relationship.

[ROA # 57; Exhibit C-15, Transcript 2, at pg. 59, lns. 12-20]

   ¶56 Additionally, well before acquiring the Practice, Nelson Farms made it clear it

would not use Appellants’ services, regardless of Appellees’ breach. [ROA # 55, ATE,

Exhibit A-3 at §2(c), and A-10] Appellants clearly understood not all of Appellees’

clients would choose to use Appellants. [ROA # 57; Exhibit C-16, Transcript 1, at pg

62-63, lns. 5-16]

   ¶57 Furthermore, Nelson Farms is located in Tucson, over thirty-seven (37) miles

away from Appellants’ clinic; Appellants are not board certified and offer no services

or incentives which are not readily available in Tucson:

      Q.     And did you want to stay with Dr. Phelps subsequent [to] the sale of
      the practice?
      A.     No.
      Q.     And why not?
      A.     Because we already had – if, we already had an agreement that we
      were going to stick with anybody that was up in Tucson. I wasn’t really
      interested in having a vet in Sonoita. If I lived in Sonoita, maybe it would
                                           25
      be different, but I don’t live in Sonoita. I live in Tucson. If in fact, any vet
      that is that far away, I’m not going to hire because its very far, too far away
      if we have a problem.

[ROA # 57; Exhibit C-17, Transcript 2, pgs 40-41, lns 13-17]

   ¶58 Lastly, Nelson Farms has a preexisting and long standing relationship with

several local Tucson veterinarians, specifically, Reata Equine and Dr. Mike Conaway;

Nelson Farms’ need for veterinary services has diminished substantially since 2004 as

well. [ROA # 57; Exhibit C-18, Transcript 2, pgs 28-29, lns. 6-16; Exhibit C-19,

Transcript 2, pgs 31-34, lns 21-16; Exhibit B-4, pgs 37-39, lns 7-10]

   ¶59 Therefore, under no circumstances would Appellants have earned any profits

from Nelson Farms. Appellants have failed to produce any evidence to the contrary.

         b. TRISH NELSON’S TESTIMONY IS RELEVANT.

   ¶60 Appellants allege the trial court erred in considering the testimony of Trish

Nelson. Appellants urge that the trial court relied entirely on Nelson’s testimony and

thereby created a new contractual term which placed an unreasonable burden on

Appellants. However, Appellants argument is a misstatement of the record. Trish

Nelson’s testimony was but one of many pieces of evidence the trial court considered.

In deed, the trial court “reviewed and considered the entire record…including

testimony and exhibits presented at trial…pleadings…argument of counsel…and

legal authorities cited to the Court…” (emphasis added) [ROA # 79, pg. 2, lns. 3-5]

   ¶61 Appellants’ brief is devoid of any legal authority supporting the proposition
                                           26
that the trial court could not consider the testimony of Nelson Farms. The trial court

has wide discretion in determining what is relevant evidence.

  ¶62 A decision is discretionary because it is based on an assessment of
  conflicting procedural, factual or equitable considerations which vary from case
  to case and which can be better determined or resolved by the trial judge, who
  has a more immediate grasp of all the facts of the case, an opportunity to see the
  parties, lawyers and witnesses, and who can better assess the impact of what
  occurs before him. Where a decision is made on that basis, it is truly
  discretionary and we will not substitute our judgment for that of the trial judge;
  we will not second guess…If the trial court has rendered the correct decision for
  any reason apparent in the record, we will affirm. City of Phoenix v. Geyler, 144
  Ariz. 323, 697 P.2d 1073 (1985).

Harris v. Reserve Life Ins. Co., 158 Ariz. 380, 383, 762 P.2d 1334, 1337
(Ariz.App.,1988).

   ¶63 “‘Relevant evidence’ means any evidence having any tendency to make the

existence of any fact that is of consequence to the determination of the action more

probable or less probable than it would be without the evidence.” Ariz.R.Evid. 401.

   ¶64 The threshold question that the trial court must decide when considering the

admissibility of any evidence is whether the evidence, in any manner, aids the trier of

fact in resolving the case. Crane McClennen, Arizona Courtroom Evidence Manual, §

401 at 401-1. An item of evidence is relevant if it bears some relationship to a matter

which is properly provable in the case and assists in the determination of the action. Id.

The standard used in making this determination is one of probability. Id. If the

evidence has “any tendency” to make the existence of “any fact ... of consequence”

                                           27
“more probable or less probable” than without the evidence, the evidence is “relevant.”

Id. As such, the trial court has broad discretion when determining whether or not

evidence as “relevant.”

   ¶65 Here, the trial court did not abuse its discretion by considering the testimony of

Trish Nelson. Trish Nelson’s testimony is relevant on the issue of whether or not

Appellants would have earned profits from Nelson Farms but for Appellees’ breach.

Appellants could have called Nelson Farms’ clients to testify at trial regarding whether

or not they would have used Appellants’ services. Undoubtedly, had their testimony

been favorable, Appellants would have called such witnesses at trial. Most assuredly,

under those circumstances, Appellants would have argued that such testimony was

relevant. Likewise, had Trish Nelson’s testimony been favorable to Appellants’

position, Appellants would insist that her testimony was relevant. Appellants did not

object to the relevance of her testimony at trial and have waived such argument by

their failure to object at trial. Estate of Reinen v. Northern Arizona Orthopedics, Ltd.,

198 Ariz. 283, 9 P.3d 314 (Ariz. 2000).

   ¶66 Appellants rely on Gann to support their argument that the trial court should

have disregarded Trish Nelson’s testimony. However, Appellants’ reliance on Gann is

misleading in two key regards. First, the trial court in Gann had critical evidence

which is lacking in this case: documentary evidence establishing Appellants’ business

                                           28
costs, expenses and profit margin. Gann, 122 Ariz. at 519. As detailed in Section I

hereinabove, Appellants failed to produce any evidence of their costs, expenses, and/or

profit margin. Second, Appellants ignore the central requirement set forth in Gann, i.e.

that Appellants must prove that they would have realized profits from Nelson Farms

but for Appellees’ breach. Id. There can be no better way to determine the Gann “but

for” test than to consider, among other things, direct testimony from Nelson Farms

and/or its clients.

          c. APPELLEES’ ALLEGED REVENUES ARE IRRELEVANT.

   ¶67 Appellants argue that even though they failed to establish their alleged

damages, the trial court should have still awarded them money damages in the amount

of the revenue allegedly received by Appellees. However, such argument is irrelevant

and unsupported by the evidence.

   ¶68 [A] plaintiff must prove that he was injured by the breach and show the
   amount of damage caused to him. The measure of damages is not the amount of
   profits made by the defendant, rather it is the amount of profit lost to the
   plaintiff because of the breach. Vancil v. Anderson, supra; Ryska v. Anderson,
   70 Idaho 207, 214 P.2d 874 (1950).”

Dunn v. Ward, 105 Idaho 354, 356, 670 P.2d 59, 61 (Idaho App.,1983); accord,
Trilogy, supra.

   ¶69 Appellants have cited no evidence of Appellees’ net profits. Any mention of

Appellees’ alleged gross revenues is irrelevant.     Appellants fail to point to any

evidence by which to establish Appellees’ costs, expenses, etc. Without such
                                          29
evidence, it is impossible to determine Appellees’ net profit. Dunn, 105 Idaho at 357

(defendant’s gross revenue was irrelevant where plaintiff failed to show any relation

between defendant’s gross revenue and plaintiff’s alleged lost profits.). There is no

basis in the law which would allow the trial court to speculate or guess as to

Appellees’ profit margin and/or net profits.

   ¶70 Appellants had their day in court; they had their opportunity to try their case

and produce evidence to support their claim for damages. There can be no abuse of

discretion where Appellants had a full and complete opportunity to present their

case but failed to do so.

            d. NO LOSS OF GOODWILL.

   ¶71 Appellants claim for loss of goodwill was not an issue considered at trial. An

issue cannot be raised for the first time in a Motion for New Trial. Ruck Corp. v.

Woudenberg 125 Ariz. 519, 611 P.2d 106 (Ariz. App. 1980). In fact, damages for loss

of goodwill was not even mentioned in the parties’ Joint Pretrial Statement. [ROA #

49] Appellants raised such issue for the first time in their motion for new trial. As

such, there exists no evidence in the record to support Appellants’ claim for loss of

goodwill.

   ¶72 Even if Appellants had presented their loss of goodwill claim at trial, which

Appellees contend they did not, this case would be no different than Dunn, 670 P.2d

                                           30
59. There, the Idaho Supreme Court affirmed the trial court’s ruling that the plaintiff

had failed to prove his damages resulting from loss of goodwill. The Dunn court

found the plaintiff had “presented no evidence at all showing any loss of business, loss

of customers or loss of profit to his own business attributable to [defendant’s] breach.”

Id. at 670 P.2d at 61. Likewise, the Dunn plaintiff failed to establish the value of the

goodwill allegedly lost as a result of Defendant’s breach. Id.

   ¶73 Here the parties did not separately state the value of the goodwill in their
   contract although goodwill was specifically included in the transaction. Through
   his own testimony and the testimony of Ward, Dunn sought to establish that the
   parties had agreed to a value of $5,000 for the goodwill. However, that testimony
   fell short of establishing any agreement between the parties that the goodwill was
   valued at $5,000. The trial judge made no finding as to the value of the goodwill
   which Dunn had purchased. We conclude that this was not error because the
   evidence was conflicting and insufficient to establish the value.

   ¶74 Loss or impairment of goodwill can also be measured by the amount of
   profits lost to the buyer as a result of the breach. Havre Daily News, Inc., v.
   Floren, 163 Mont. 131, 515 P.2d 673 (1973); Lieman-Scott, Inc., v. Holmes, 142
   Mont. 58, 381 P.2d 489 (1963); Shields v. DeVries, 70 Wash.2d 296, 422 P.2d
   828 (1967). However, as noted already, Dunn failed to prove with sufficient
   certainty the loss of his profits. We conclude the trial court did not employ the
   wrong standard of proof required to establish the amount of Dunn's damages. Nor
   did the court err in denying damages to Dunn for impairment of goodwill
   although there had been a violation of the covenant not to compete.

Dunn, 670 P.2d. at 61.

   ¶75 As detailed hereinabove, Appellants failed to present any evidence at all

showing any loss of Nelson Farms’ business attributable to Appellees’ breach.

Appellants also did not produce any evidence establishing the value of the goodwill
                                           31
allegedly lost. Certainly, there was no such valuation provided in the Agreement. The

trial court cannot speculate or guess as to the value thereof. As such, there was no

evidence before the trial court with which it could consider Appellants’ loss of

goodwill claim.

   ¶76 Additionally, Appellants’ claim for loss of goodwill is disingenuous.

Appellants admitted at trial that Nelson Farms was not part of the practice being

purchased under the Agreement.

      Q.    Okay. At the time that you took over the practice had you heard of
      the name “Trish Nelson”?
      A.    No.
      Q.    Had you heard [of] “Nelson Farms”?
      A.    No.
      Q.     When you took over the practice, did you have any records in your
      practice, medical records, veterinary medical records, related to anything or
      any customer, client or animal at Nelson Farms?
      A.    No.

[ROA # 57; Exhibit C-20, Transcript 1, at pg 18, lns. 2-11, and pg. 12-13, lns. 18-11]

    ¶77 Appellants also admitted that they knew not all of Appellees’ then existing

 clients would choose to remain with Appellants subsequent their acquisition of the

 Practice. Under such circumstances, said clients would not be conveyed to

 Appellants through the Agreement. [ROA # 57; Exhibit C-21, Transcript 1, at pg

 62-63, lns. 5-16]

    ¶78 Furthermore, Appellants admitted that all of their clients are from Sonoita
                                          32
 and Sierra Vista, Arizona.

      Q.    In your deposition you testified that 75 percent of your clients live
      within 15 miles of Sonoita; is that correct?
      A.    That’s a good estimation.
      Q.     And you went on to testify that the majority, the remaining 25 percent
      are from the Sierra Vista area; is that right?
      A.    Yes.
      Q.    And those clients primarily come to you; isn’t that correct?
      A.    Yes.

[ROA # 57; Exhibit C-22, Transcript 1, at pg 57, lns. 10-20.]

   ¶79 Appellants could not have reasonably considered Nelson Farms as part of the

goodwill allegedly conveyed by the Agreement if: (1) Appellants did not even know

Nelson Farms existed at the time they acquired the practice, (2) None of Nelson

Farms’ records were transferred to Appellants, and (3) Appellants had not one client in

Tucson.

   ¶80 Appellants did nothing to gain much less retain Nelson Farms’ business. [ROA

# 57; Exhibit C-23, Transcript 1, at pg 50-51, lns. 2-1] Nor did Appellants try to

prevent Appellees from working with Nelson Farms for over five years after acquiring

the Practice. Appellants’ “do nothing” attitude proves that they did not believe they

actually lost goodwill as a result of Appellees’ actions. Jacob, 67 Ariz. at 116

(Damages for loss of goodwill must be natural and proximate result of breach,

excluding speculative and conjectural damages.) (overruled on other grounds).
                                          33
   ¶81 Appellants’ reliance on Plunkett v. Reeves Apothercary, Inc., 351 So.2d 867

(1977) is equally unpersuasive. Unlike this case, Plunkett involved the sale of a

business in a small community wherein all of the business’ customers were derived

from said community. Id. at 868-69. The Plunkett court found that defendant’s

competition within the community would likely draw defendant’s former clients away

from plaintiff. Id. Here, Appellees were not providing any veterinary services in

Sonoita. Nor is there any evidence that Nelson Farms would have used Appellants

under any circumstances.

   ¶82 Goodwill is an amorphous concept which requires a sufficient and specific
   factual basis for support. The determination of the existence and the value of
   goodwill is a fact-intensive process which depends on the circumstances of the
   specific case. See Miller v. C.I.R., 333 F.2d 400 (8th Cir.1964); Pacific Coast
   Med. Enter. v. Department of Benefit Payments, 140 Cal.App.3d 197, 189
   Cal.Rptr. 558 (1983); Baldwin v. Stuber, 187 Mont. 430, 610 P.2d 160 (1980).
   The burden is on the party seeking to establish goodwill to prove the
   components of goodwill in the particular situation. Although valuation need not
   be proved with mathematical precision, the best possible evidence must be
   considered. See generally Master Records, Inc. v. Backman, 133 Ariz. 494, 652
   P.2d 1017 (1982); Delano Growers' Co-op. Winery v. Supreme Wine Co., 393
   Mass. 666, 473 N.E.2d 1066 (1985). But see *284 Kinetico, Inc. v. Independent
   Ohio Nail Co., 19 Ohio App.3d 26, 482 N.E.2d 1345 (1984).

Stallworth Timber Co. v. Triad Bldg. Supply , 968 F.Supp. 279, 283-284 (D.Virgin
Islands,1997).

   ¶83 Appellants failed to prove any damages resulting from an alleged loss of

goodwill.

            e. APPELLANTS ARE BARRED FROM PRESENTING EVIDENCE FOR THE FIRST
                                         34
             TIME IN THEIR REPLY BRIEF

       ¶84 Given Appellants’ failure to produce any evidence in support of their claim,

this Court must presume that no such evidence exists; or, if it did exist, it would be

prejudicial to Appellants’ claim. Starkweather v. Conner, 44 Ariz. 369, 377, 38 P.2d

311, 314-15 (Ariz.1934); Baker v. Hooper, 50 S.W.3d 463, 470 (2001).

   ¶85 Upon realizing their utter failure to support their claim, Appellants are likely to

try and repair their blunder in their reply brief or during oral argument. However,

Arizona law prohibits such last ditch efforts. Skousen v. Nidy, 90 Ariz. 215, 217, 367

P.2d 248, 249 (1961) (a party who fails to present supporting evidence, citations to the

record, or authority to support a claim of error are barred present such for the first

time in the reply brief.); accord, Carrillo v. State, 169 Ariz. 126, 132, 817 P.2d 493,

499 (1991); Joel Erik Thompson, Ltd. v. Holder, 192 Ariz. 348, 351, 965 P.2d 82, 85

(1998); A.O. Smith Corp. v. Allstate Ins. Companies, 222 Wis.2d 475, 492, 588

N.W.2d 285, 292 (Wis.App.1998).

III.   THE TRIAL COURT DID NOT ERR           IN   DENYING APPELLANTS’ REQUEST         FOR
       ATTORNEY’S FEES.

   ¶86 In reviewing discretionary attorney's fees allowed under A.R.S. §12-341.01, the

appellate court views the record in the light most favorable to sustaining the trial

court's decision. Rowland, 199 Ariz. at 587; Hale v. Amphitheater School Dist. No. 10,

192 Ariz. 111, ¶ 20, 961 P.2d 1059, ¶ 20 (1998); Pelletier v. Johnson, 188 Ariz. 478,
                                            35
480, 937 P.2d 668, 670 (App.1996). The appellate court will not disturb the trial

court's ruling if it is supported by any reasonable basis. Rowland, 199 Ariz. at 587.

   ¶87 Appellants’ claim for attorney’s fees fails for several reasons. First, Appellants

were not the prevailing party within the meaning of A.R.S. 12-341.01. Second,

Appellants did not establish their claim for attorney’s fees pursuant to Rule 54(g),

Ariz.R.Civ.P., and therefore such claim has been waived.

          a. APPELLEES, NOT APPELLANTS, WERE THE PREVAILING PARTY.

   ¶88 Under A.R.S. §12-341.01 the inquiry as to whether a party should receive a fee

award is a multi-step process. First, the trial court must determine whether or not there

is a “successful party.”

   ¶89 The decision as to who is the successful party for purposes of awarding
   attorneys' fees is within the sole discretion of the trial court, and will not be
   disturbed on appeal if any reasonable basis exists for it. Schwartz v. Farmers
   Ins. Co., 166 Ariz. 33, 800 P.2d 20 (App.1990).

Sanborn v. Brooker & Wake Property Management, Inc., 178 Ariz. 425, 430, 874 P.2d
982, 987 (Ariz.App. Div. 1,1994).

   ¶90 Only if the trial court determines that there is a “successful party” can the trial

court reach the next question of whether or not to award fees to said party. Section

12-341.01 is clear that the trial court’s decision to award or deny a fees request is

purely discretionary.      A.R.S. §12-341.01(A). Mere eligibility does not establish

entitlement to fees. Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370, 394-

                                            36
395, 710 P.2d 1025, 1049-1050 (Ariz.,1985); citing, Associated Indemnity Corp. v.

Warner, 143 Ariz. 567, 569, 694 P.2d 1181, 1183 (1985) (fees award is discretionary;

if there is any reasonable basis for the exercise of such discretion, the judgment will

not be disturbed); Robert E. Mann Constr. Co. v. Liebert Corp., 204 Ariz. 129, 133, ¶

13, 60 P.3d 708, 712 (App.2003). Lastly, if the trial court decides an award of fees is

appropriate, the trial court then has the discretion to determine the amount of any fees

awarded. Id.

   ¶91 Here, the trial court made it clear that Appellants were not the “successful

party.” Appellants alleged hundreds of thousands of dollars in damages and ultimately

failed to prove any damages whatsoever. Appellants’ failure was epitomized by the

trial court’s award of $100.00 in nominal damages. Because Appellants prevailed on

the issue of liability and Appellees prevailed on the issue of damages, the trial court

determined that neither party was the “successful party” pursuant to §12-341.01. [ROA

# 79, COL ¶ M]; accord, General Cable Corp. v. Citizens Utility Co., 27 Ariz.App.

381, 385, 555 P.2d 350, 354 (1976) (finding there was no one “successful party” where

both parties were partly successful and partly unsuccessful); Trilogy, supra, 172 P.3d

at 1122 (plaintiff prevailed on issue of breach, defendant prevailed on issue of

damages, thus, no prevailing party.).

   ¶92 “A.R.S. § 12-341.01.A is remedial in nature and such relief is equally available

                                           37
to those who successfully defend an action as to those who successfully seek

affirmative relief.” Schwartz v. Farmers Ins. Co. of Arizona, 166 Ariz. 33, 38, 800

P.2d 20, 25 (Ariz.App.,1990); Mountain States Broadcasting Co. v. Neale, 783 P.2d

551, 555 (Utah Ct.App. 1989) (if defendant successfully defends and avoids adverse

judgment, defendant has prevailed.). In Schwartz, the trial court employed the “totality

of the litigation” test in determining that the defendant was the successful party entitled

to an award of fees and costs. Schwartz, 166 Ariz. at 38; citing, Nataros v. Fine Arts

Gallery of Scottsdale, Inc., 126 Ariz. 44, 612 P.2d 500 (App.1980). The appellate court

affirmed the trial court’s ruling that the defendant was the successful party because it

successfully defended a central issue to plaintiff’s claim. Schwartz, 166 Ariz. at 38

(finding substantial disparity between plaintiff’s requested relief and actual damages.).

   ¶93 This case is factually similar to Schwartz. Appellants brought several claims

against Appellees. Appellees successfully defended the central issue at trial, i.e.

damages. Given Appellants’ exorbitant and unsubstantiated damages claim as well as

their overzealous pursuit of litigation, Appellees, not Appellants, were the successful

party. As such, it is Appellees who should be awarded their fees and costs.

          b. APPELLANTS’ WAIVED THEIR CLAIM FOR ATTORNEY’S FEES.

   ¶94 Rule 54(g)(1), Ariz.R.Civ.P., requires that Appellants assert their claim for

attorney’s fees in the pleadings. Appellants have done this. However, Appellants have

                                            38
not complied with the other requirements of Rule 54(g), specifically, Appellants failed

to establish their claim for fees.

   ¶95 At no time did Appellants file the requisite motion for attorney’s fees specified

in R. 54(g)(2). Appellants cannot rely on their general request for fees made in the

pleadings prior to trial. A motion must “state with particularity the grounds therefore...

set forth the relief or order sought” and, at a minimum, “the precise legal points,

statutes and authorities relied on.” Ariz.R.Civ.P. 7.1(a); see also Black's Law

Dictionary 1036 (8th ed.1999). As such, Appellants request for fees is not only

untimely but has been waived. Allstate Ins. Co. v. Universal Underwriters, Inc., 199

Ariz. 261, ¶ 16, 17 P.3d 106, 111 (2000) (referring to untimeliness of motion as ground

for upholding denial);

          c. APPELLANTS’ FAILED TO SUBSTANTIATE THEIR CLAIM FOR ATTORNEY’S
             FEES.

   ¶96 Appellants also failed to file any affidavits, exhibits, or testimony to support or

otherwise establish their claim for fees as required by R. 54(g)(3). Without evidence

establishing a claim for attorney’s fees, no award can be made. Schweiger v. China

Doll Restaurant, Inc., 138 Ariz. 183, 673 P.2d 927 (1983). Appellants’ cannot cure

their failure at this point. Thus, the trial court’s denial of said claim must be upheld.

IV.   REQUEST FOR ATTORNEY’S FEES AND COSTS.

   ¶97 In addition to the denial of Appellants’ appeal, Appellees respectfully request
                                             39
an award of Appellees’ reasonable attorney’s fees and costs incurred herein pursuant to

A.R.S. §12-341.01, A.R.S. §12-341, Rule 21,           Ariz.R.Civ.App.P., and Rule 25,

Ariz.R.Civ.App.P.

                                    CONCLUSION

   ¶98 As was the case during trial, Appellants have again failed to prove that they

have actually been damaged by Appellees’ actions. Nor do Appellants point to any

evidence quantifying their alleged damages. As such, the trial court properly found

that Appellants failed to prove their lost profits with any reasonable certainty. The trial

court’s award of nominal damages is supported by the record. While the trial court

appropriately found that Appellants were not the successful party pursuant to A.R.S.

§12-341.01 and therefore the trial court did not err in refusing to award Appellants

their fees.

   ¶99 WHEREFORE, Appellees respectfully request this Court enter an Order

denying Appellants’ appeal. Appellees additionally request this Court enter an Order

awarding Appellees their reasonable attorney’s fees and legal costs.

       RESPECTFULLY SUBMITTED this 2nd day of July, 2010.

                                        MONROE McDONOUGH
                                        GOLDSCHMIDT & MOLLA, PLLC

                                 By:    /s/ D. Rob Burris
                                        D. Rob Burris
                                        Attorney for Appellees
                                            40
                     CERTIFICATE OF COMPLIANCE


      Pursuant to Rule 14(b), A.R.C.A.P., I certify that this Responsive Brief is

proportionately spaced, has a typeface of Times New Roman at 14 points and,

according to Microsoft Word’s word count function, contains 10,093 words

excluding the Table of Contents, Table of Authorities, Certificate of Service, this

Certificate of Compliance, and any addendum.

      Dated this 2nd day of July, 2010.

                                      MONROE McDONOUGH
                                      GOLDSCHMIDT & MOLLA, PLLC


                                By:   /s/ D. Rob Burris
                                      D. Rob Burris




                                          ix

				
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