ANDERSON v. LIFEDEVINE5040

── ANDERSON v. LIFEDEVINE5040 ── Court: Court of Appeals of Arizona Date: May 07, 2026 Category: General NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. IN THE ARIZONA COURT OF APPEALS DIVISION ONE JOSEPH ANDERSON, et al., Plaintiffs/Appellees, v. LIFEDEVINE5040, LLC, et al., Defendants/Appellants. No. 1 CA-CV 25-0623 FILED 05-07-2026 Appeal from the Superior Court in Maricopa County No. CV2023-014321 The Honorable Jennifer C. Ryan-Touhill, Judge VACATED COUNSEL Ballard Spahr, LLP, Phoenix By Jay A. Zweig, Mitchell Turbenson Counsel for Plaintiffs/Appellees Enara Law, PLLC, Scottsdale By Ross P. Meyer, Sara N. Rock Counsel for Defendants/Appellants  ANDERSON et al. v. LIFEDEVINE5040 et al. Decision of the Court MEMORANDUM DECISION Judge Cynthia J. Bailey delivered the decision of the Court, in which Presiding Judge Daniel J. Kiley and Judge D. Steven Williams joined. B A I L E Y, Judge: ¶1 This is an appeal from a $200,000 “pocket judgment” entered under a settlement agreement after the promisors were four days late in paying the first installment on a $75,000 settlement sum. We hold that the judgment was an unenforceable penalty, and we therefore vacate it. FACTS AND PROCEDURAL HISTORY ¶2 Rozaliya Heinen and Arvin Thomas, through their company LifeDevine5040 LLC, (collectively, “the Thomases”) own a home (“the Property”) in the same neighborhood as Joseph Anderson and Stefanie and Michael Lotz (collectively, “the Neighbors”). In late 2023, the Neighbors sued the Thomases for renting out the Property as an event venue, seeking an injunction and damages for nuisance. ¶3 The Neighbors obtained a preliminary injunction restricting the Thomases’ use of the Property. At some point, the Thomases moved to Canada, leaving the Property as their only significant domestic asset. By early 2025, when the parties participated in a court-ordered settlement conference, the Thomases were “actively attempting to sell” the Property. ¶4 The settlement conference resulted in the parties executing a “Mediator’s Proposal” resolving all claims in early February 2025 (“the Settlement Agreement”). The Settlement Agreement stated that it represented a binding settlement under Arizona Rule of Civil Procedure 80(a) even if the parties failed to prepare contemplated formal settlement documents. The Settlement Agreement further provided that “any dispute . . . regarding these Settlement Terms” would be submitted to the judge assigned to the litigation as “Arbitrator” for “a binding, non- appealable determination to the extent that this Arbitrator is not prohibited from making such a determination.” ¶5 Under the Settlement Agreement, with “time . . . of the essence for all terms,” the Thomases promised to pay a “Settlement Amount” of $75,000 in three equal installments, due to the Neighbors’ 2  ANDERSON et al. v. LIFEDEVINE5040 et al. Decision of the Court counsel by February 28, July 31, and December 10, 2025, respectively. The agreement further provided: Unpaid portions of the Settlement Amount shall be secured by a “pocket judgment” in the customary amount of 300% of the unpaid portion of the Settlement Amount. The Court will retain jurisdiction to enter the pocket judgment. The pocket judgment will not be requested, filed or entered unless a payment of the Settlement Amount is not timely made. Notwithstanding the timing of paym