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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE

MEMORANDUM DECISION

CATTANI, Judge.

¶1 Dr. Dennis Kilpatrick and the SSP Trust ("Kilpatrick Trust") appeal from the judgment in favor of Dr. David Johnson and the Number Eight Trust ("Johnson Trust") on the Kilpatrick Trust's claims arising from operation of a limited liability company and on Johnson's counterclaim on Kilpatrick's personal guarantee of a loan. For reasons that follow, we affirm the judgment except as it relates to the fictitious party "Jane Doe Kilpatrick" and remand with instructions to amend the judgment to remove any reference to Jane Doe Kilpatrick.

FACTS AND PROCEDURAL BACKGROUND

¶2 Kilpatrick and Johnson are Phoenix-area ophthalmologists, who along with two other ophthalmologists, Dr. Lawrence Kahn and Dr. Randall Tozer, formed a limited liability company—Scottsdale Laser Vision Center, LLC ("SLVC"). The four doctors were shareholders in the Scottsdale Eye Surgery Center ("SESC"), a professional corporation that owned a VISX laser, a piece of equipment used to perform vision correction procedures. Around 2005, SESC decided to dispose of the laser, and Kilpatrick, Johnson, Kahn, and Tozer, all of whom wanted to continue using the laser, formed SLVC to lease the laser and provide a facility for its use. Broadly speaking, SLVC would rent the laser (in a fully-equipped and staffed office) to qualified physicians (including the founding doctors) to perform vision correction procedures.

¶3 An operating agreement entered on September 1, 2005, delineated the rights, duties, and powers of the members, the managers, and SLVC itself. Four trusts (one associated with each of the founding doctors) were the co-equal members of SLVC, and the doctors themselves were the company's four managers. Johnson was designated administrative manager, with limited authority to direct the company's day-to-day operations and sign documents on behalf of the company, although more substantial actions generally required approval of two-thirds of the managers. Each founding doctor signed the operating agreement individually and on behalf of his respective trust.

¶4 The doctors and their trusts also entered into a funding agreement to provide start-up financing for SLVC's operation. First, each trust paid a small amount in initial capitalization ($1,000 each) to establish its 25% ownership interest in SLVC. Each founding doctor also provided SLVC an initial loan ($11,500) and an operating loan (in various amounts, proportional to each doctor's anticipated use of the laser), with the four operating loans totaling $20,000. If or when SLVC's rental income from physicians' use of the laser exceeded its operating expenses, the company would repay first the operating loans, then the initial loans, and thereafter would distribute excess cash flow to the founding doctors to reimburse the fees they paid for use of the laser.

¶5 Additionally, the funding agreement recognized a preexisting $80,883.87 loan from Johnson (the "Johnson Loan") that had financed the design and construction of tenant improvements to the office housing the laser. The agreement specified that SLVC would repay the Johnson Loan, plus 6.75% annual interest, in 60 equal monthly installments ($1,593.12) pursuant to a promissory note. Each doctor (other than Johnson, the holder of the note) also individually guaranteed 25% of SLVC's repayment obligation under the note. The funding agreement further recognized the Johnson Loan by providing that the doctors would contribute additional operating loans to the company if SLVC's rental income did not cover its "operating expenses, including its payment obligations under the Johnson Loan." Each founding doctor signed the funding agreement individually and on behalf of his respective trust, and Johnson signed as administrative manager on behalf of SLVC.

¶6 Although the operating agreement authorized any member or manager of SLVC to call a formal meeting on three days' written notice, the managers' consistent practice was to meet informally after SESC's monthly board meetings. The managers would then discuss any issues and jointly make decisions about SLVC's business. Throughout SLVC's operation, the managers never took meeting minutes.

¶7 SLVC initially set up its laser facility in September 2005 in leased space next to Johnson's existing office and arranged to use Johnson's staff at cost as necessary to run the facility. SLVC agreed to a five-year lease for the space, and each founding doctor personally guaranteed 25% of SLVC's payment obligations under the lease. Each physician using the laser would pay a facility fee of $750 per eye, which would be used to pay SLVC's ongoing expenses.

¶8 Around January 2008, SLVC (through the agreement of all four managers) decided to move the laser into the office of Dr. Paul Petelin, another ophthalmologist. He owned equipment that improved the laser procedure, and he agreed to charge the same facility fee of $750 per eye to use the laser and the other equipment. Petelin further agreed to pay SLVC $120 from each facility fee for each use of the laser by any physician. SLVC's arrangement with Petelin was never reduced to writing. At the same time, Johnson unsuccessfully attempted to renegotiate the existing office lease (for the space SLVC would no longer be using), and SLVC remained obligated to pay monthly rent under the lease.

¶9 By July 2009, Petelin approached SLVC to renegotiate the arrangement because, due to cost increases and volume decreases, he was losing money on every procedure performed using SLVC's laser. At prior SESC board meetings, Petelin had briefly informed all four managers of his dissatisfaction with the arrangement. Eventually, Petelin proposed two options: either increase the facility fee paid by all physicians using the laser (including the founding doctors) by $200 per eye, or eliminate Petelin's $120 remittance to SLVC for each use of the laser.

¶10 Johnson, Kahn, and Tozer discussed the issue after an SESC board meeting, as was the managers' custom; Kilpatrick had not attended the board meeting and thus was not present. Kahn, who performed more procedures on SLVC's laser than the other three founding doctors combined, indicated that he would no longer use SLVC's laser if Petelin were to increase the facility fee because other facilities nearby charged only $750.

¶11 Although recognizing that waiving Petelin's payment of $120 per procedure would effectively drive SLVC's income to zero, the three managers opted to do so to keep the facility fee at $750. They did not consult Kilpatrick before reaching the decision, and Kilpatrick apparently did not learn that Petelin was no longer remitting fees to SLVC until almost a year later.

¶12 SLVC did not generate a profit, and in fact lost money. To continue making payments on the office lease and the Johnson Loan, Johnson made repeated calls for additional capital contributions, and the doctors (either individually or on behalf of their trusts) made the contributions, each covering 25% of the total. As Johnson explained it, from the perspective of the founding doctors, the capital contributions were offset by the professional fee each received for performing procedures on the laser: the trade-off made economic sense because, had the facility fee been increased, the doctors' net income from the professional fee would have decreased more than SLVC's loss of income from Petelin's $120 fee, and each founding doctor was individually a 25% guarantor of the SLVC obligations that the capital contributions were funding.

¶13 SLVC effectively ceased operations in 2010 after the office lease terminated in May and SESC sold the laser in November. At the end of 2010, Johnson calculated the remainder owed on the Johnson Loan, and rather than have SLVC satisfy the loan (which would necessitate further capital contributions), Johnson asked the three other doctors to pay $4,720.58 each on their respective 25% guaranties. Kahn and Tozer paid that amount, but Kilpatrick declined to pay.

¶14 A year later, the Kilpatrick Trust sued Johnson alleging breach of contract, breach of the covenant of good faith and fair dealing, and breach of fiduciary duty arising out of Johnson's role in SLVC.1 Johnson filed a counterclaim against Kilpatrick and "Jane Doe Kilpatrick, husband and wife" seeking payment on Kilpatrick's guaranty of the Johnson Loan. The superior court subsequently granted summary judgment in favor of Johnson on the breach of fiduciary duty claim, and after trial, a jury returned verdicts in favor of Johnson on both of the Kilpatrick Trust's remaining claims as well as on Johnson's counterclaim.

¶15 The court entered judgment to that effect. After denying the Kilpatrick parties' motion for new trial, the court entered an amended judgment in favor of Johnson on the Kilpatrick Trust's claims and against Kilpatrick and Jane Doe Kilpatrick on the guaranty. The court also awarded Johnson over $90,000 in attorney's fees.

¶16 The Kilpatrick parties timely appealed after the denial of their motion for new trial. We have jurisdiction under Arizona Revised Statutes ("A.R.S.") § 12-2101(A)(1).2

DISCUSSION

¶17 The Kilpatrick parties' position on appeal, as at trial, is premised on their view that Johnson effectively controlled SLVC as administrative manager. The Kilpatrick parties assert that Johnson used his position to wrongfully exclude Kilpatrick from a critical SLVC decision regarding fees from Petelin, and then wrongfully removed SLVC's sole source of revenue by not requiring Petelin to remit payment to SLVC for use of the laser, which in turn led to Johnson wrongfully collecting, without authorization, capital contributions to repay himself (the Johnson Loan) at the expense of the company and the members.

I. Summary Judgment on Fiduciary Duty Claim.

¶18 The Kilpatrick parties first argue that the superior court erred by granting summary judgment in favor of Johnson on the Kilpatrick Trust's breach of fiduciary duty claim. Summary judgment is proper if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(a); Orme Sch. v. Reeves, 166 Ariz. 301, 305 (1990). This includes instances in which the facts supporting a claim "have so little probative value, given the quantum of evidence required," that no reasonable person could find for its proponent. Orme Sch., 166 Ariz. at 309.

¶19 We review the grant of summary judgment de novo, viewing the facts in the light most favorable to the party against which judgment was entered. Wells Fargo Bank, N.A. v. Allen, 231 Ariz. 209, 213, ¶ 14 (App. 2012). We will affirm summary judgment if it is correct on any basis supported by the record, even if not relied upon by the superior court. See Mutschler v. City of Phx., 212 Ariz. 160, 162, ¶ 8 (App. 2006). We similarly review de novo a determination regarding the existence of a fiduciary duty. TM2008 Invs., Inc. v. Procon Capital Corp., 234 Ariz. 421, 424, ¶ 12 (App. 2014).

¶20 The Kilpatrick Trust's complaint alleged that Johnson "was the administrative manager of [SLVC] and owed a fiduciary duty to Plaintiff and the other members." The complaint listed several acts that allegedly showed Johnson's "self-dealing and mismanagement" in breach of his fiduciary duty, including allowing Petelin to use the laser without paying a fee to SLVC, holding meetings without notice to or participation of the Kilpatrick Trust, and making capital calls and using the funds for his own benefit (to pay back the Johnson Loan). Johnson moved for summary judgment, arguing that he did not owe a fiduciary duty to the members of SLVC, but rather was bound by the contractual duties set forth in the operating agreement. See A.R.S. § 29-682(B). After briefing and argument, the superior court granted summary judgment in favor of Johnson on the fiduciary duty claim.

¶21 The Kilpatrick Trust argues that issues of fact as to the existence of a fiduciary duty should have precluded summary judgment. The Trust claims that the operating agreement gave Johnson specific duties as administrative manager that created a fiduciary relationship between him and the members. The Trust further asserts that the facts showed the members trusted Johnson to handle all aspects of SLVC's business and did not question his decisions.

¶22 A fiduciary relationship is "something approximating business agency, professional relationship, or family tie impelling or inducing the trusting party to relax the care and vigilance he would ordinarily exercise." Cook v. Orkin Exterminating Co., Inc., 227 Ariz. 331, 334, ¶ 14 (App. 2011) (citation omitted). The existence of a fiduciary relationship and an accompanying fiduciary duty is generally dependent on the particular circumstances governing the relationship between the parties. Standard Chartered PLC v. Price Waterhouse, 190 Ariz. 6, 24 (App. 1996) (as corrected). "[T]rust in another's competence or integrity" does not by itself establish a fiduciary relationship. Id. Such a relationship arises when the trusting party's secrets or power are entrusted to the fiduciary and requires that the fiduciary act for the benefit of the trusting party. Cook, 227 Ariz. at 334, ¶¶ 14-15.

¶23 Fiduciary duties may also be created by law, as in the case of partners and corporate directors and officers. See A.R.S. §§ 10-830(a), — 842(A), 29-1034(A). But as relevant to limited liability companies such as SLVC, Arizona's Limited Liability Company Act does not outline any baseline fiduciary duties, instead allowing the members to adopt an operating agreement to govern the relationships between members, managers, and the company; the statute specifies that the operating agreement "may contain any provision that is not contrary to law and that relates to the business of the limited liability company, the conduct of its affairs, its rights, duties or powers and the rights, duties or powers of its members, managers, officers, employees or agents." A.R.S. § 29-682(B); see TM2008, 234 Ariz. at 424-25, ¶¶ 14-15.

¶24 The Kilpatrick Trust argues that the duties of administrative manager specified in SLVC's operating agreement gave Johnson daily control over SLVC's financial affairs and thus constituted fiduciary duties owed to the members. But the operating agreement reserved to all four managers—not just the administrative manager—"full, exclusive and complete power to manage and control the business and affairs of [SLVC]." In contrast, the administrative manager's duties outlined in the operating agreement were largely clerical, not substantive. The administrative manager was tasked with keeping the company's books and preparing an accounting for tax purposes. Although the Trust asserts that Johnson was vested with authority to control SLVC's cash flow, that provision of the agreement simply authorized, for example, payment of expenses or debts, or keeping reserves for future use. And although the operating agreement authorized the administrative manager to sign documents on behalf of SLVC, it expressly reserved the right to make substantive decisions to a two-thirds vote of the managers. Thus, the clerical duties outlined in the operating agreement do not show the requisite fiduciary relationship.

¶25 The Kilpatrick Trust also asserts that the members in fact trusted Johnson to handle the business and manage all aspects of the company. To support this position, the Trust improperly relies on Kahn's trial testimony, not on evidence presented during the summary judgment proceedings. See Brookover v. Roberts Enters., Inc., 215 Ariz. 52, 55, ¶ 8 (App. 2007) ("We review the [summary judgment] decision on the record made in the trial court, considering only the evidence presented to the trial court when it addressed the motion.").

¶26 Moreover, the trial testimony does not establish a fiduciary relationship. Kahn affirmed that Johnson wrote checks, sent out bills, and collected money for SLVC, but also that the managers discussed SLVC monthly and that all four managers participated in—and agreed on—cash call decisions. Kahn acknowledged that he did not review financial data pertaining to the cash calls because he "trusted Dr. Johnson." But this simply shows "trust in another's competence or integrity," not the "peculiar reliance" on Johnson's trustworthiness as required for a fiduciary relationship. See Standard Chartered, 190 Ariz. at 24. Accordingly, the superior court did not err by granting Johnson summary judgment on the Kilpatrick Trust's fiduciary duty claim based on the record presented and given the particular allegation of Johnson's role as administrative manager.3

II. Preclusion of Consequential Damages Evidence.

¶27 The Kilpatrick parties next argue the superior court erred by precluding evidence of the Kilpatrick Trust's asserted consequential damages. We review evidentiary rulings for an abuse of discretion and will not reverse absent an improper exercise of discretion resulting in prejudice. Golanka v. Gen. Motors Corp., 204 Ariz. 575, 580, ¶ 9 (App. 2003).

¶28 At the end of the first day of trial, Johnson moved to preclude Kilpatrick's assertion of additional damages allegedly incurred as a shareholder of SESC, stating that neither the complaint nor disclosure statements indicated an intent to seek this type of purportedly consequential damages. The Kilpatrick parties' counsel explained his premise that by allowing Petelin to stop paying fees for use of the laser, Johnson caused damage to Kilpatrick as a shareholder of SESC:

Counsel noted that the complaint generally alleged consequential damages (although without giving any specifics), and stated the SESC shareholder consequential damages position had been adequately disclosed in Kilpatrick's declaration in support of a cross-motion for summary judgment and during Kilpatrick's deposition. The court found that the request for damages had not been properly disclosed, however, and precluded the evidence.

¶29 The Kilpatrick parties argue evidence of the alleged consequential damages should not have been precluded because the informal presentation of the information in Kilpatrick's declaration and deposition constituted adequate disclosure. See Bryan v. Riddel, 178 Ariz. 472, 476-77 (1994). But the crux of the issue is not simply informal disclosure of particular facts bearing on amount of damages, but rather a failure to properly plead the cause of action underlying the asserted consequential damages.

¶30 The asserted consequential damages are premised on the assumption that SLVC breached its obligation to make payments to SESC pursuant to the equipment lease for the laser. SESC, however, is not a party to this action (and nothing indicates that SESC has otherwise pursued any claims against SLVC). Moreover, the SESC lease does not indicate that the Kilpatrick Trust was an intended third-party beneficiary. See Norton v. First Fed. Sav., 128 Ariz. 176, 178 (1981). To the extent the Kilpatrick Trust seeks to assert SESC's contractual right to payments, any such claim would be derivative rather than direct because it is premised on an alleged injury to the corporation at large, see Albers v. Edelson Tech. Partners L.P., 201 Ariz. 47, 52, ¶¶ 17-18 (App. 2001), and the Kilpatrick Trust has neither asserted any such derivative claim nor apparently complied with the formal prerequisites to a derivative action, see A.R.S. §§ 10-740 to -747. The superior court accordingly did not err by precluding evidence related to an unpled claim.

III. Denial of Motion for Judgment as a Matter of Law.

¶31 The Kilpatrick parties argue the superior court erred by denying their motion for judgment as a matter of law ("JMOL") on several grounds. JMOL is appropriate "if the facts produced in support of the claim or defense have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion advanced by the proponent of the claim or defense." A Tumbling-T Ranches v. Flood Control Dist. of Maricopa Cnty., 222 Ariz. 515, 524, ¶ 14 (App. 2009) (quoting Orme Sch., 166 Ariz. at 309). We consider the evidence in the light most favorable to upholding the jury's verdicts and assess de novo whether any substantial evidence supports the denial of JMOL and the jury's verdicts. Id.

A. Breach of Operating and Funding Agreements.

¶32 The Kilpatrick Trust asserts that the superior court should have granted JMOL on its breach of contract claim because the trial evidence unequivocally showed that Johnson breached the operating and funding agreements. A breach of contract claim requires the plaintiff prove "the existence of the contract, its breach and the resulting damages." Thomas v. Montelucia Villas, LLC, 232 Ariz. 92, 96, ¶ 16 (2013).

¶33 The Kilpatrick Trust first argues Johnson violated the terms of the operating agreement by making capital calls without a majority vote of SLVC's members. But the operating agreement expressly contemplated that the members would contribute, pro rata, additional capital "if the Members determine by majority vote . . . that additional capital is necessary to fund the operations of [SLVC]." Although Kilpatrick testified that the members never voted on the need for additional capital contributions, other witnesses testified that, at the informal SLVC meetings following the monthly SESC board meetings, the four manager doctors voted on and approved every capital call. Given these disputed facts, the superior court properly denied JMOL on this ground.

¶34 Additionally, even assuming the capital calls were made without a formal majority vote of the membership, Kilpatrick waived his right to insist on adherence to these formalities. A party can waive contractual rights either expressly or by a course of conduct showing an intentional relinquishment of the right. In re Estate of Cortez, 226 Ariz. 207, 210-11, ¶ 4 (App. 2010). Kilpatrick paid at least 15 capital calls over a two and a half year period without objecting to the lack of a formal meeting and vote. Although Kilpatrick claimed that he did not know he was paying capital calls because Johnson disguised them as facility fees, other witnesses testified to the contrary. On this basis, the jury could readily have determined that Kilpatrick waived the majority-vote provision by conduct.

¶35 The Kilpatrick Trust next argues Johnson impermissibly used funds from the capital calls to make payments on the Johnson Loan, thereby using the capital calls for his own benefit as one of SLVC's creditors, in breach of the operating agreement's admonition that the capital call provision was "solely for the benefit of the Members" and that "no third party, including creditors of [SLVC] or its Members, shall benefit therefrom." But the operating agreement itself allowed capital calls to raise money "necessary to fund the operations of [SLVC]," and the funding agreement contemplated SLVC's "operating expenses [as] including its payment obligations under the Johnson Loan." Although this designation appears only in the provision authorizing additional operating loans, the jury could have concluded that the payments on the Johnson Loan constituted operating expenses properly made by Johnson on behalf of SLVC.

¶36 The Kilpatrick Trust also asserts that payments on the Johnson Loan violated the funding agreement because the Johnson Loan was neither an operating loan nor an operating expense, and thus could not be repaid absent excess cash flow (which never occurred). The funding agreement specified the priority of payments to be made with any excess cash flow—that is, income from facility fees for use of the laser "in excess of the amount necessary to pay the current portion of [SLVC's] operating expenses": first to pay down operating loans, then to repay initial loans and to reimburse the member-doctors' facility fees. But as described above, the funding agreement's language provided a basis from which the jury could conclude that the Johnson Loan constituted an operating expense, so the Trust's excess-cash-flow argument is unavailing.

¶37 The Kilpatrick Trust next asserts Johnson wrongfully failed to prepare or keep minutes of SLVC meetings in violation of the operating agreement provision that the "Administrative Manager shall keep or cause to be kept at the Principal Office of the Company . . . minutes of every meeting." But Kilpatrick impliedly consented to the lack of minutes by failing to object to the practice for a period of years. See In re Estate of Cortez, 226 Ariz. at 210-11, ¶ 4 (waiver of contractual rights by a course of conduct showing an intentional relinquishment of the right). Moreover, even assuming Kilpatrick did not consent, the Trust offered no link between this alleged breach of the operating agreement and any resulting damages. See Thomas, 232 Ariz. at 96, ¶ 16.

¶38 Finally, the Kilpatrick Trust argues Johnson undisputedly breached the operating agreement by dissolving SLVC without the members' unanimous written consent, as required by the operating agreement. Johnson testified, however, that the company was never dissolved and in fact remains in existence, albeit without activity. Even Kahn's testimony (on which the Kilpatrick Trust relies) was simply that SLVC shut down its surgical facility, not that the company was dissolved.

¶39 Because the evidence provided a basis from which the jury could conclude that Johnson had not breached the operating or funding agreements, the superior court properly denied JMOL on the Kilpatrick Trust's contract claim.

B. Good Faith and Fair Dealing.

¶40 The Kilpatrick Trust also argues that the superior court should have granted JMOL on its claim for breach of the implied covenant of good faith and fair dealing. Under Arizona law, every contract includes an implied covenant of good faith and fair dealing, the essence of which is that "neither party will act to impair the right of the other to receive the benefits which flow from their agreement." Rawlings v. Apodaca, 151 Ariz. 149, 153 (1986). A party may breach the implied covenant by exercising contractual discretion to the detriment of another party's reasonable expectations, or by actions that (although not strictly inconsistent with the contract's terms) impair another party's reasonably expected benefit of the bargain. Bike Fashion Corp. v. Kramer, 202 Ariz. 420, 424, ¶ 14 (App. 2002).

¶41 The Kilpatrick Trust asserts that Johnson's actions in allowing Petelin to use the laser without paying any fee to SLVC—and particularly in doing so without notice to Kilpatrick—breached this covenant. The Trust recites that SLVC lost more than $70,000 in income as a result of waiving Petelin's fees, which would have allowed SLVC to cover operating expenses, repay member loans, and turn a profit. But this argument ignores that more than two-thirds of the managers approved the arrangement, and that the alternative to waiving Petelin's fees was an increase in the facility fee charged for each member-doctor's use of the laser. Furthermore, Kahn—who accounted for approximately half of the laser's use—indicated that he would use a different facility if the facility fee increased. The alternative thus would have cut SLVC's revenue by half (given the loss of fees from Kahn's procedures) and increased the cost to the founding doctors (thereby decreasing their income from professional fees), while still requiring additional capital contributions to make up for the difference in volume. Given this context, the evidence supported a finding that waiving Petelin's fees was a reasonable, good faith decision.

¶42 Moreover, multiple witnesses testified that the founding doctors' intent in creating SLVC was not to independently generate a profit for its members but rather to provide the doctors with a reasonably-priced facility for laser vision correction procedures, through which they would make money on their professional fees. The decision to maintain the facility fee at $750—albeit by losing Petelin's $120 per use payments to SLVC—thus did not impair but rather ensured this benefit would continue. See Bike Fashion Corp., 202 Ariz. at 424, ¶ 14. Accordingly, the superior court did not err by denying the Kilpatrick Trust's request for JMOL on the good faith and fair dealing claim.

C. Statutory Violation.

¶43 The Kilpatrick Trust next asserts that Johnson violated A.R.S. § 29-706(A), which prohibits distributions from a limited liability company to its members when the company's liabilities exceed its assets. But the Johnson Loan payments were reasonably considered operating expenses, not distributions to a member, and the statute is thus inapposite. Accordingly, the superior court did not err by denying JMOL on this ground.

D. Counterclaim on Personal Guaranty of Johnson Loan.

¶44 Kilpatrick contends that no evidence supported Johnson's counterclaim on Kilpatrick's guaranty of the Johnson Loan. Kilpatrick argues that Johnson had already received more than $98,000 on the $80,883 promissory note, leaving no further debt. The note bore 6.75% annual interest, however, so the total obligation (principle plus interest) exceeded the face value of the note.

¶45 Although the note originally contemplated 60 monthly payments of $1,593.12 (for a total obligation of $95,587.20), Johnson testified that SLVC (with the agreement of the managers) renegotiated the loan to reduce monthly payments by extending the loan's term. The repayment modification, although decreasing the payment each month, increased the aggregate amount of interest to be paid. Although the evidence of the terms of the modification and the resulting total obligation was less than clear, Johnson testified that Kilpatrick's obligation under the 25% guaranty of the promissory note was $4,720.58, and Kilpatrick offered no evidence to controvert that figure.

¶46 Kilpatrick also asserts that Johnson was estopped to demand payment of the guaranty because Johnson's own actions (waiving Petelin's obligation to pay a fee for use of SLVC's laser) caused SLVC to default on the promissory note, which in turn triggered Kilpatrick's obligation under the guaranty. For the reasons described above, however, the jury could have concluded that SLVC's decision—approved by all three managers other than Kilpatrick—to waive Petelin's fee avoided even greater potential losses, and thus did not wrongfully cause the default. Accordingly, the court did not err by declining to grant Kilpatrick JMOL on the counterclaim.

E. Sufficiency of Service and Judgment Against Fictitious Party Jane Doe Kilpatrick.

¶47 Kilpatrick argues the superior court erred by denying his request for JMOL on the counterclaim because neither he nor "Jane Doe Kilpatrick" was properly served with the counterclaim. After the Kilpatrick Trust sued Johnson, Johnson filed a counterclaim against Kilpatrick individually and against Kilpatrick's alleged wife "Jane Doe Kilpatrick."4 Kilpatrick moved to dismiss the counterclaim, but did not raise lack of service on him in his individual capacity until his reply to the motion. The court denied the motion to dismiss, expressly noting it was not addressing the issue of service because Johnson had not had an opportunity to address it. Kilpatrick thereafter answered the counterclaim, but "Jane Doe" did not appear.

¶48 Kilpatrick asserts that the court lacked jurisdiction over him individually because he was never served with the counterclaim. But "a general appearance by a party who has not been properly served has exactly the same effect as a proper, timely and valid service of process." Montano v. Scottsdale Baptist Hosp., Inc., 119 Ariz. 448, 452 (1978). Here, Kilpatrick responded to the counterclaim and proceeded to trial on the merits, thereby waiving the alleged defect in service.

¶49 Although Kilpatrick had noted lack of service before responding to the counterclaim, he did not raise the issue until the reply to his motion; the court thus expressly declined to address the argument raised for the first time in a reply. Kilpatrick thereafter failed to press the issue to a ruling, and instead joined the suit by answering the counterclaim. Although proceeding to trial after receiving an adverse ruling on a jurisdictional defense does not constitute waiver, see Ariz. Real Estate Inv., Inc. v. Schrader, 226 Ariz. 128, 130, ¶ 7 (App. 2010), here Kilpatrick proceeded directly to a general appearance without timely and effectively raising the issue of service and without receiving an adverse ruling. Accordingly, he waived the alleged defect.

¶50 Kilpatrick also argues that judgment against the fictitious Jane Doe party was improper. Johnson agrees that "the Judgment is enforceable against Dr. Kilpatrick only," not against the fictitiously named wife or against Kilpatrick's marital community. The judgment itself, however, purports to award damages on the counterclaim against Kilpatrick "and Jane Doe Kilpatrick, husband and wife," and purports to award costs and attorney's fees against Jane Doe Kilpatrick along with Kilpatrick and the Kilpatrick Trust. Because the fictitious "Jane Doe Kilpatrick" was never served, did not otherwise appear, and apparently was mentioned solely for community property purposes, we reverse the judgment as against Jane Doe Kilpatrick and remand to the superior court with directions to amend the judgment to remove any reference to Jane Doe Kilpatrick and the Kilpatrick marital community.

IV. Denial of Motion for New Trial.

¶51 The Kilpatrick parties next argue that the superior court erred by denying their motion for new trial. They first reiterate the other arguments raised on appeal, which we reject for the reasons stated above. They also contend that a new trial is required because of improper jury instructions.

¶52 Under Arizona Rule of Civil Procedure 59(a)(6), an "error in the charge to the jury" may warrant a new trial if it "materially affect[ed] [the moving] party's rights." We generally review the denial of a motion for new trial for an abuse of discretion. Sandretto v. Payson Healthcare Mgmt., Inc., 234 Ariz. 351, 355, ¶ 8 (App. 2014). We similarly review the propriety of jury instructions for an abuse of discretion, considering the instructions in their entirety. A Tumbling-T Ranches, 222 Ariz. at 533, ¶ 50. We consider de novo, however, whether an instruction accurately states the law. Id.

¶53 The Kilpatrick parties recite a laundry list of instructions that they contend "created confusion and uncertainty" by focusing on a situation that was not at issue. But the court gave only one of the seven challenged instructions; the six other proposed instructions thus cannot form the basis for a new trial.

¶54 The one instruction given—to which the Kilpatrick parties objected at trial—directed the jury that "[i]n deciding what a contract provision means, you should attempt to determine what the parties intended at the time that the contract was formed." The Kilpatrick parties contend that this instruction was improper because no contract provision was ambiguous. See Leikvold v. Valley View Cmty. Hosp., 141 Ariz. 544, 548 (1984).

¶55 Even assuming the operating and funding agreements were entirely unambiguous, this single instruction was simply superfluous, and did not undermine the instructions as a whole. See Dawson, 216 Ariz. at 105, ¶ 63. Although the Kilpatrick parties posit that the instruction could have led the jury to ignore the contracts, the instruction itself directs the jury to the terms of the contracts.

¶56 Similarly, the suggestion that the instruction confused the jury about why the Kilpatrick Trust would seek damages if the parties forming SLVC did not intend to make a profit misses the mark. The underlying purposes for which SLVC was formed—whether for a profit on others' use of the laser (as Kilpatrick asserted) or simply to provide a cost-effective laser facility for the doctors' own use (as asserted by Kahn, Tozer, and Johnson)—was squarely at issue in determining whether Johnson's actions were reasonable.

¶57 Because the contested instruction was superfluous, the Kilpatrick parties did not show instructional error "materially affecting" their rights. See Ariz. R. Civ. P. 59(a)(6); see also Ariz. R. Civ. P. 61 ("Harmless error"). Accordingly, the court did not err by denying the motion for new trial.

V. Attorney's Fees.

¶58 Johnson requests an award of his attorney's fees expended on appeal by the terms of the funding agreement and under A.R.S. § 12-341.01. As mandated by the terms of the funding agreement, we award Johnson as the prevailing party his reasonable attorney's fees, subject to compliance with ARCAP 21.

CONCLUSION

¶59 For the foregoing reasons, we affirm all but the judgment against Jane Doe Kilpatrick, and we remand to the superior court with instructions to amend the judgment to remove any reference to Jane Doe Kilpatrick and the Kilpatrick marital community.