Kahn v. Vista Health (Full Text)

NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24

IN THE COURT OF APPEALS
STATE OF ARIZONA
DIVISION ONE

Plaintiff/Appellant,

SHAKEEL AZIZ KAHN, a single
male,

VISTA HEALTH, PLLC, an Arizona
professional limited liability
company; IRFAN MIRZA and HASEENA
B. MIRZA, husband and wife,

Defendants/Appellees.

1 CA-CV 10-0667

DEPARTMENT A

MEMORANDUM DECISION

Not for Publication –
(Rule 28, Arizona Rules
of Civil Appellate Procedure)

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Appeal from the Superior Court in Mohave County

Cause No. CV 2008-0858

The Honorable Lee F. Jantzen, Judge

AFFIRMED IN PART; REVERSED IN PART
AND REMANDED WITH DIRECTIONS

Shakeel Aziz Kahn
Plaintiff/Appellant, In Propria Persona

GABRIEL & ASHWORTH, PLLC
By Stacy M. Gabriel
Attorney for Defendants/Appellees

Fort Mohave

Scottsdale

T H O M P S O N, Judge

¶1

Plaintiff Shakeel Aziz Kahn, M.D., appeals from a jury

verdict in favor of Vista Health, PLLC, Irfan Mirza, M.D., and

Haseena B. Mirza. Dr. Kahn argues the trial court made

erroneous evidentiary rulings at trial, the jury awarded

excessive damages, its verdict was not justified by the evidence

and is contrary to law, and was the result of passion or

prejudice. He also challenges the court?s denial of his motion

for new trial. For the reasons discussed below, we affirm the

jury?s verdict for defendants on Dr. Kahn?s claims and the trial

court?s denial of his motion for new trial. We reverse in part

the judgment for Vista Health on its breach of contract

counterclaim and remand for further proceedings consistent with

this decision.

FACTUAL AND PROCEDURAL HISTORY1

¶2

This action arises out of a dispute between Dr. Kahn

and Vista Health (the Clinic), a family practice medical clinic

located in Fort Mohave, where Dr. Kahn worked in February and

March 2008. At the relevant time, Haseena Mirza, a physician?s

assistant, owned the Clinic. Ms. Mirza?s husband, Dr. Ifran

Mirza, is a cardiologist who practices in Fort Mohave.

1 Defendants complain that Dr. Kahn?s statement of facts did
not cite the record as required by Arizona Rule of Civil
Appellate Procedure 13(a)(4) and request that we impose
sanctions pursuant to Arizona Rule of Civil Appellate Procedure
25. In the exercise of our discretion, we decline to impose
sanctions. We rely on our review of the record for our
recitation of the facts. State Farm Mut. Auto. Ins. Co. v.
Arrington, 192 Ariz. 255, 257 n.1, 963 P.2d 334, 336 n.1 (App.
1998).

¶3

Dr. Kahn also had a relationship with Valley View

Medical Center (Hospital), a medical facility located in Fort

Mohave that had recruited Dr. Kahn in August 2007 to establish a

new family practice in the area. On August 9, 2007, the

Hospital and Dr. Kahn executed a Physician Recruiting Agreement

(recruiting agreement) in which Dr. Kahn agreed to establish a

family medical practice in the geographic area and practice

medicine full-time in the community by November 1, 2007. To

assist Dr. Kahn in establishing his practice, the Hospital

agreed to loan him a maximum of $28,523 per month for the first

twelve months of his practice (the guarantee payments). These

guarantee payments were intended to cover the overhead and

operating expenses (including his salary) that the Hospital

projected Dr. Kahn would incur while starting up his practice,

and would be reduced by the amount of any gross cash receipts

Dr. Kahn collected each month.

¶4

Dr. Kahn did not establish his medical practice by the

deadline specified in the recruiting agreement, and by January

2008 he did not anticipate doing so until April 2008. In late

January 2008, Dr. Mirza approached Dr. Kahn about the

possibility of him joining the Clinic as a physician. Dr. Kahn

met with the Mirzas to discuss their offer of a $180,000 annual

salary, a productivity bonus, and employee benefits. The terms

of Dr. Kahn?s employment with the Clinic were memorialized in an

employment agreement dated February 1, 2008. The employment

agreement had a three-year term, but either party could

terminate it without cause before the end of the term by

providing six months written notice.

¶5

Prior to entering the employment agreement, the Mirzas

and Dr. Kahn discussed Dr. Kahn?s financial arrangement with the

Hospital; the Mirzas expected Dr. Kahn to relinquish his

guarantee payments to the Clinic each month in order to defray

the overhead and operating expenses associated with supporting

Dr. Kahn?s practice. During Dr. Kahn?s employment with the

Clinic in February and March 2008, the Hospital issued Dr. Kahn

two checks, both of which the Clinic collected and deposited

into its bank account.

¶6

On March 20, 2008, a Clinic staff member, P.B.,

complained about Dr. Kahn?s workplace conduct. On March 26,

2008, the Mirzas and the Clinic?s office manager met with Dr.

Kahn to discuss P.B.?s allegations. Dr. Kahn denied the

allegations. At the conclusion of the meeting, the Mirzas

notified Dr. Kahn that he could return to work on Monday, March

31st after a five-day “cooling-off” period. On March 31st, Dr.

Kahn returned his company property to the Clinic, collected his

personal belongings, and never returned. He revoked the

Clinic?s authority to act on his behalf with respect to any

matter and revoked the Hospital?s authorization to release his

guarantee payments to the Clinic.

¶7

Dr. Kahn filed this action alleging that the Clinic

and the Mirzas had breached the employment agreement and the

covenant of good faith implied therein by terminating him

without notice, that they fraudulently obtained his consent to

deposit monies paid to him by the Hospital in the Clinic?s bank

account, converted his monies, wrongfully terminated his

employment, and intentionally interfered with his recruitment

agreement. The Clinic counterclaimed for breach of the

employment agreement.

¶8

After a three-day trial, the jury returned a verdict

against Dr. Kahn on each of his claims. It found in favor of

the Clinic on its counterclaim and awarded it $37,644.96. Dr.

Kahn moved for new trial. The court denied the motion and

entered judgment for defendants. Dr. Kahn timely appealed.

¶9

We have jurisdiction pursuant to Arizona Revised

Statutes (A.R.S.) section (§) 12-2101(B) and (F)(1) (2003).

ISSUES

¶10

Dr. Kahn argues the trial court made erroneous

evidentiary rulings at trial, the jury awarded excessive

damages, the verdict was not justified by the evidence and is

contrary to law, and was the result of passion or prejudice. He

also challenges the denial of his motion for new trial.

Evidentiary Rulings

DISCUSSION

¶11

Dr. Kahn challenges several of the trial court?s

evidentiary rulings. Generally, we review challenges to the

court?s admission or exclusion of evidence for an abuse of

discretion. Yauch v. S. Pac. Transp. Co., 198 Ariz. 394, 399, ¶

10, 10 P.3d 1181, 1186 (App. 2000). If the evidentiary ruling

is predicated on a question of law, we review that ruling de

novo. Id.

P.B.’s Testimony

¶12

Dr. Kahn contends the trial court erred by allowing

P.B. to testify at trial about her allegations against him

because her testimony was not relevant, and any probative value

of such evidence was outweighed by its prejudicial effect. He

also asserts that P.B.?s testimony constituted improper

character evidence.

¶13

Before trial, Dr. Kahn moved in limine to exclude

P.B.?s testimony on the grounds that it was irrelevant and

prejudicial and violated the prohibition on character evidence.

The court denied the motion.2

2 We are unable to locate the court?s ruling in the record
and the parties do not cite it. Nevertheless, as the parties
agree that the court denied the motion, and P.B. testified at
trial, we presume it did so.

¶14

P.B. testified at trial that while she worked for Dr.

Kahn he made unprofessional sexual remarks and used profanity.3

Eventually, after an incident on March 20, 2008, she complained

to the Clinic?s office manager about Dr. Kahn?s conduct. Dr.

Kahn contends the court erred in admitting P.B.?s testimony

because it was not relevant to the facts at issue in this case.

¶15

“„Relevant evidence? means 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. Dr. Kahn alleged at trial that the Clinic terminated

him without cause in violation of the employment agreement in

retaliation for his request that the Clinic return the monies

paid to him by the Hospital, which the Clinic had deposited in

its bank account. P.B.?s testimony was relevant to the Clinic?s

defense that it had cause to discipline Dr. Kahn and to refute

Dr. Kahn?s accusation that P.B. had colluded with the Clinic to

manufacture false charges to provide the Clinic a pretext for

terminating him. Accordingly, the trial court did not abuse its

discretion by admitting such evidence at trial. State v. Smith,

136 Ariz. 273, 276, 665 P.2d 995, 998 (1983) (stating trial

3 P.B. recorded some of Dr. Kahn?s remarks in a log, which
was admitted in evidence at trial without objection.

judge has considerable discretion in determining the relevance

and admissibility of evidence).

¶16

Dr. Kahn alleges that even if P.B.?s testimony was

relevant, its prejudicial effect outweighed its probative value.

Arizona Rule of Evidence 403 allows a court to exclude relevant

evidence if its probative value is “substantially outweighed by

the danger of unfair prejudice, confusion of the issues, or

misleading the jury. . . .” The balancing of factors under Rule

403 is peculiarly a function of trial, not appellate courts.

Yauch, 198 Ariz. at 403, ¶ 26, 10 P.3d at 1190. “The balancing

process under Rule 403 . . . is left to the trial judge, who

must determine whether the probativeness of the offered evidence

is substantially outweighed by its unfair prejudice, confusion

of the issues, etc.” English-Clark v. City of Tucson, 142 Ariz.

522, 526, 690 P.2d 1235, 1239 (App. 1984). Here, P.B. testified

briefly, and without substantial detail, about her allegations

against Dr. Kahn. We find no error in the court?s implicit

determination that any prejudicial effect of P.B.?s testimony

was outweighed by its probative value. Further, although Dr.

Kahn argues P.B.?s testimony unfairly prejudiced him by

presenting him in a negative light and created a risk that the

jury would confuse the issues in the case, he did not request

that the court instruct the jury that it was only to consider

P.B.?s testimony for a limited purpose, and therefore waived any

error. See Rustin v. Cook, 143 Ariz. 486, 490-91, 694 P.2d 316,

320-21 (App. 1984) (stating a party?s failure to request a

limiting instruction regarding disputed evidence amounts to a

waiver).

¶17

Finally, Dr. Kahn complains that P.B.?s testimony

constituted improper character evidence that was inadmissible

pursuant to Arizona Rule of Evidence 404(a), which prohibits

admission of character evidence, “for the purpose of proving

action in conformity therewith on a particular occasion.”

There is no indication that defendants introduced P.B.?s

testimony for the purpose of proving that Dr. Kahn acted in

conformity with some aspect of his character. Rather, they used

P.B.?s testimony to support their position regarding the purpose

of the March 26th meeting and the circumstances of Dr. Kahn?s

separation from the Clinic.

¶18

We find no error in the trial court?s admission of

P.B.?s testimony.

Wyoming Board of Medicine

¶19

Dr. Kahn complains the court allowed defendants?

counsel to read a portion of his deposition testimony that

referred to him “having issues with the Wyoming Board of

Medicine.”

¶20

In the mid-1990s, Dr. Kahn attended the University of

Toronto School of Medicine. The school conducted disciplinary

proceedings against him, which he challenged both in the

disciplinary forum and in court. The proceedings ultimately

resulted in Dr. Kahn?s expulsion from the school.

¶21

Dr. Kahn subsequently sought a license to practice

medicine in Wyoming, but did not accurately answer a question on

his application concerning whether he had ever been disciplined

by an educational institution. The Wyoming Board of Medicine

initiated a disciplinary action in April 2007 when it learned of

this inaccuracy. After an interview with Dr. Kahn in October

2007, the Board determined that he had not acted with intent to

deceive in obtaining a medical license and issued him a private

letter of reprimand. Dr. Kahn referred to this Wyoming

proceeding in his deposition when questioned about the delay he

encountered in obtaining his license to practice medicine in

Arizona.

¶22

Prior to trial, Dr. Kahn moved in limine to preclude

any reference to his issues with the University of Toronto.4 On

cross-examination at trial, defendants? counsel asked Dr. Kahn

whether he accepted any personal responsibility for the delay in

establishing his medical practice in Fort Mohave. Counsel then

4 Again, the parties do not direct us to that portion of the
record containing the court?s ruling, if any, on the motion.
However, as defendants admit they did not oppose the motion, we
presume the court granted it.

attempted to impeach Dr. Kahn with the following deposition

testimony:

Question: Did you assume any responsibility at all in
the delay in getting your practice up and
running by November of ?07?

Answer: No, other than having issues with the
Wyoming board, no, I did not take – – there
is nothing I was doing. I did everything I
had to do.

At a subsequent bench conference, Dr. Kahn?s counsel expressed

concern with that portion of the deposition testimony that

referred to the Wyoming Board of Medicine. Defendants? counsel

asserted that Dr. Kahn?s motion in limine only related to his

discipline at the University of Toronto and not his problems

with the Wyoming Board of Medicine, but avowed that she would

not follow up on that issue. The court instructed defendants?

counsel not to ask further questions about the Wyoming Board of

Medicine in order to avoid areas covered by the motion in

limine.

¶23

Dr. Kahn argues that the court erred by failing to

strike the testimony or issue a limiting instruction directing

the jury not to consider it. However, he waived any such

argument by failing to ask the court to do so. See Rustin, 143

Ariz. at 490-91, 694 P.2d at 320-21. Indeed, his counsel told

the court, “I don?t really want the court to pay a lot of

attention to it or point it out to the jury again . . . .”

Accordingly, we find no error in the court?s failure to strike

the evidence or to issue a limiting instruction.

Parol Evidence

¶24

Dr. Kahn complains that the court improperly admitted

evidence of the parties? pre-contractual discussions concerning

the distribution of the guarantee payments from the Hospital to

the Clinic. He argues that because this testimony contradicted

the plain terms of the employment agreement it was barred by the

parol evidence rule and the court should have stricken it or

issued a limiting instruction.

¶25

Dr. Kahn did not object to the admission of this

evidence at trial and therefore waived any error. State v.

McDaniel, 136 Ariz. 188, 196, 665 P.2d 70, 78 (1983) (“It has

long been the law in Arizona that failure to object to an offer

of evidence is a waiver of any ground of complaint against its

admission.”).5 Moreover, the parol evidence rule would not have

excluded the testimony about which Dr. Kahn complains.

Generally, when two parties have executed a contract that

purports to be a complete and accurate integration of their

agreement, the parol evidence rule precludes the admission of

antecedent understandings and negotiations for the purpose of

5 Although Dr. Kahn?s counsel “recommended” that the court
include a parol evidence instruction, he did not submit an
instruction.

varying or contradicting the writing, although they may be

admissible for other purposes. Taylor v. State Farm Mut. Auto.

Ins. Co., 175 Ariz. 148, 152, 854 P.2d 1134, 1138 (1993). For

example, Arizona law permits the admission of parol evidence to

clarify or explain a document when an ambiguity exists on its

face or the language would allow differing interpretations.

Johnson v. Earnhardt’s Gilbert Dodge, Inc., 212 Ariz. 381, 384,

¶ 12, 132 P.3d 825, 828 (2006). Here, because the employment

agreement did not address the Hospital?s guarantee payments,

the evidence was not offered to vary or contradict the

agreement, but as evidence of the parties? purported separate

agreement regarding those payments. Accordingly, the court did

not err by admitting this evidence at trial.

¶26

Verdicts

The Verdicts are Supported by the Evidence and
Not Contrary to Law

Dr. Kahn argues the jury?s verdicts were not justified

by the evidence and are contrary to law. We view the evidence

and the inferences therefrom in the light most favorable to

upholding the jury?s verdict and will affirm if there is

substantial evidence to support it. Romero v. Southwest

Ambulance, 211 Ariz. 200, 202, ¶ 2, 119 P.3d 467, 469 (App.

2005); Flanders v. Maricopa County, 203 Ariz. 368, 371, ¶ 5, 54

P.3d 837, 840 (App. 2002). We will only reverse the trial

court?s denial of a motion for new trial on the grounds that the

verdict is against the weight of the evidence if it reflects a

manifest abuse of discretion. Styles v. Ceranski, 185 Ariz.

448, 450, 916 P.2d 1164, 1166 (App. 1996).

Breach of Contract / Breach of the Implied
Covenant / Wrongful Termination

¶27

Dr. Kahn alleged the Clinic terminated his employment

without cause or notice in breach of the employment agreement

and the covenant of good faith and fair dealing implied therein

and he was therefore entitled to six months of severance

payments. He also alleged the Clinic wrongfully terminated him

in retaliation for his complaint about defendants? alleged

misappropriation of his payments from the Hospital.

¶28

The evidence at trial showed that the Clinic received

a complaint on March 20th from P.B. about Dr. Kahn?s conduct and

the Mirzas and the Clinic?s office manager met with Dr. Kahn on

March 26 to discuss P.B.?s allegations. The Mirzas denied that

Dr. Kahn had complained about the Clinic?s receipt of his

Hospital payments prior to the March 26th meeting and Dr. Kahn

admitted that issue was not discussed at the meeting. At the

conclusion of the meeting, the Clinic issued Dr. Kahn an

Employee Warning Notice that stated he was being given a written

warning and placed on probation. The Employee Warning Notice

did not notify Dr. Kahn that he was being terminated, and the

Mirzas testified that the Clinic did not intend to, and did not,

terminate Dr. Kahn before, during, or after the March 26th

meeting. At the conclusion of the meeting, the Mirzas notified

Dr. Kahn that he could return to work on Monday, March 31st

after a five-day “cooling-off” period. The Clinic kept Dr. Kahn

on the patient schedule and informed its staff that he would

return on March 31st. On March 31st, Dr. Kahn returned his

company property to the Clinic, collected his personal

belongings, and never returned. He testified, “as of March 31st

I was pretty well convinced that I was done with them.” That

same day, Dr. Kahn revoked the Clinic?s authority to act on his

behalf with respect to any matter and revoked the Hospital?s

authorization to release his payments to the Clinic.

¶29

From this evidence, the jury could have reasonably

concluded that the Clinic did not terminate Dr. Kahn?s

employment and therefore rejected his claims for breach of

contract, breach of the implied covenant of good faith and fair

dealing, and wrongful termination.

Conversion / Fraud / Intentional Inference
with Contract

¶30

Dr. Kahn alleged defendants intercepted two of his

checks from the Hospital (for $3,000 and $29,328, respectively)

and refused his demand that they return the monies. He also

alleged that defendants falsely represented that they would

temporarily deposit his checks from the Hospital into the

Clinic?s bank account and later reimburse those amounts to him,

and intentionally and improperly interfered with his recruiting

agreement causing the Hospital to breach that contract by

failing to pay him the appropriate guarantee payment for March

2008.

¶31

Defendants did not deny that they took possession of

two checks the Hospital issued to Dr. Kahn during his employment

at the Clinic, but asserted that Dr. Kahn had authorized the

Clinic to deposit the checks into its account. In support of

their position, they offered a letter in which Dr. Kahn

authorized the Clinic to deposit checks received in his name

(from the Hospital or other sources) in the Clinic?s account and

a second letter in which Dr. Kahn informed the Hospital that the

Clinic?s office manager had authority to deal with the Hospital

with respect to all matters relating to his practice.

¶32

In addition, the Mirzas testified that they had agreed

with Dr. Kahn that he would relinquish his guarantee payments to

the Clinic each month in order to defray the overhead and

operating expenses associated with supporting his practice. The

Mirzas explained that this arrangement was similar to one that

Dr. Mirza?s cardiology practice had entered with another

physician who the Hospital had recruited to the area. The

Hospital?s Chief Financial Officer corroborated the Mirzas?

position when he testified that he expected that Dr. Kahn would

relinquish his guarantee payments to the Clinic and would have

objected to any arrangement that allowed Dr. Kahn to retain the

guarantee payments in addition to his Clinic salary. The Chief

Financial Officer testified that he had communicated this

expectation to Dr. Kahn when he learned he was working for the

Clinic and Dr. Kahn did not object.

¶33

Thus, substantial evidence supports the jury?s verdict

against Dr. Kahn on his claims for conversion, fraud, and

intentional interference with contract.

Counterclaim – Breach of Contract

¶34

The Clinic?s counterclaim for breach of contract was

based on Dr. Kahn?s alleged violation of his employment

agreement when he failed to provide six months notice prior to

his resignation. As discussed, defendants offered substantial

evidence at trial that Dr. Kahn resigned without notice on March

31, 2008.

¶35

Dr. Kahn Waived Any Inconsistency in the Verdicts

Dr.

Kahn

contends

the

jury?s

verdicts

are

irreconcilably inconsistent and must be set aside. In

particular, he argues that Verdict Forms Nos. 1 and 7 are

inconsistent because on Verdict Form No. 1 (Dr. Kahn?s breach of

contract claim), the jury found that no contract existed between

Dr. Kahn and defendants, whereas on Verdict Form No. 7

(defendants? breach of contract counterclaim), it found a

contract did exist. Dr. Kahn waived his objection to any error

by failing to move for resubmission of the verdict to the jury

before it was excused. Trustmark Ins. Co. v. Bank One, Arizona,

N.A., 202 Ariz. 535, 543, ¶ 39, 48 P.3d 485, 493 (App. 2002)

(holding Arizona Rule of Civil Procedure 49(c) requires a party

to object to a jury verdict that it believes is inconsistent,

defective, or nonresponsive before the jury is excused so the

trial court may call the jury?s attention to the inconsistency

and send it to further deliberate). Accordingly, we do not

consider this issue.

Damage Award

¶36

Finally, Dr. Kahn argues the jury awarded excessive

damages that were the result of passion or prejudice. “When

faced with a motion for new trial based on a claim of excessive

damages or that the verdict resulted from passion or prejudice

or was not justified by the evidence, the trial court asks

whether the verdict is so manifestly unfair, unreasonable and

outrageous as to shock the conscience.” Hutcherson v. City of

Phoenix, 192 Ariz. 51, 55, ¶ 23, 961 P.2d 449, 453 (1998)

(citation omitted). We review the trial court?s denial of Dr.

Kahn?s motion for new trial on these grounds for an abuse of

discretion. Id., at 53, ¶ 12, 961 P.2d at 451.

¶37

The Clinic alleged Dr. Kahn breached the employment

agreement by resigning without notice and, as a result of the

breach, it suffered damages in the amount of $27,292.96 because

it did not receive Dr. Kahn?s March 2008 guarantee payment from

the Hospital even though it paid his salary and the expenses for

his practice for the month of March.6 In addition, it requested

$10,352, which equaled the amount of hospital charges for

patients Dr. Kahn treated while he was employed by the Clinic

that he did not submit to the Clinic and for which it was

therefore unable to bill. The jury awarded the Clinic

$37,644.96, which amount equals $27,292.96 plus $10,352.

¶38

Dr. Kahn argues the jury erred in awarding the Clinic

both the maximum guarantee payment amount for March 2008 and

$10,352 for hospital charges that it was unable to bill because

the guarantee payment would have been reduced by the amount of

the hospital charges.7 However, as defendants pointed out in

response to Dr. Kahn?s motion for new trial, because the $10,352

in hospital charges at issue were incurred in March 2008, they

6 The Clinic arrived at this figure by deducting the amount
of Dr. Kahn?s cash receipts for the month of March, $1,230.04,
from the maximum guarantee payment amount of $28,523.

7 Defendants moved to strike the portion of Dr. Kahn?s reply
brief that contained this argument on the grounds that it had
not been raised in the opening brief. We deferred ruling on the
motion until the appeal was considered on the merits. Because
Dr. Kahn raised this argument in his opening brief, we deny the
motion to strike.

were not “cash receipts” collected that month and therefore

would not have reduced the amount of the March guarantee payment

under the terms of the recruitment agreement.8

¶39

Dr. Kahn also argues the award was excessive because

he was only entitled to receive a maximum of $23,769.17 as his

guarantee payment for the month of March.9 Defendants concede

that a mathematical error occurred in the calculation of the

March 2008 guarantee payment, but argue that a new trial is not

warranted because the error may be corrected pursuant to Arizona

Rule of Civil Procedure 59(i). Dr. Kahn argues this remedy is

insufficient “under the totality of the circumstances.”

¶40

The court erred by not following the procedure set

forth in Rule 59(i), which allows it to conditionally grant a

motion for new trial unless the party opposing the motion agrees

to a reduction of damages in an amount specified by the court.

We remand and direct the trial court to grant Dr. Kahn?s motion

for a reduction in the damage award to $34,121.17 ($23,769.17

8 In addition, we reject Dr. Kahn?s argument that by

awarding the amount of the March 2008 guarantee payment to the
Clinic, the jury exposed him to double-damages because he may
not practice for 48 months and might therefore be required to
repay that amount to the Hospital. Because the Hospital never
disbursed the March 2008 guarantee payment, Dr. Kahn would not
be obliged to repay it.

9 Beginning in March, the Hospital reduced Dr. Kahn?s
maximum guarantee payment to account for a payment it had
advanced to him in January 2008.

plus $10,352). Pursuant to Rule 59(i)(1), the Clinic may either

accept or reject the reduction. If accepted, judgment should be

entered in that amount. If the Clinic chooses to reject the

remittitur, the trial court is directed to grant Dr. Kahn a new

trial, limited to the question of damages on the Clinic?s

counterclaim.

CONCLUSION

¶41

For the foregoing reasons, we affirm the jury?s

verdict for defendants on Dr. Kahn?s claims and the trial

court?s denial of his motion for new trial. We reverse in part

the judgment for the Clinic on its breach of contract

counterclaim and remand for further proceedings consistent with

this decision.

¶42

Defendants request an award of attorneys? fees on

appeal pursuant to A.R.S. § 12-341.01(A) (2003), which provides

for a discretionary award of fees to the successful party in an

action arising out of a contract. In the exercise of our

discretion, we deny defendants? request. We will award

defendants taxable costs on appeal upon their compliance with

Arizona Rule of Civil Appellate Procedure 21.

/s/
________________________________
JON W. THOMPSON, Judge

CONCURRING:

/s/
______________________________
PHILIP HALL, Presiding Judge

/s/
_____________________________
LAWRENCE F. WINTRHOP, Judge