BLACK MESA v. ANAND

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

BLACK MESA INVESTMENT SERVICES, LLLP, et al., Plaintiffs/Appellees,

v.

KISHLAY ANAND, et al, Defendants/Appellants.

No. 1 CA-CV 25-0377
FILED 05-15-2026

Appeal from the Superior Court in Maricopa County
No. CV2024-022022
The Honorable Melissa Iyer Julian, Judge

AFFIRMED

COUNSEL

Cohen Dowd Quigley PC, Phoenix
By Daniel P. Quigley, J. Neal Stuart, and Drew G. Wegner
Counsel for Plaintiffs/Appellees

Silver Cain, Phoenix
By Leon B. Silver and Rebecca N. Cain
Counsel for Defendants/Appellants

Wolff Law PLLC, Phoenix
By Jordan C. Wolff
Counsel for Defendant/Appellant Preeti Singh
BLACK MESA, et al. v. ANAND, et al.
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Andrew M. Jacobs delivered the decision of the Court, in
which Judge Brian Y. Furuya and Judge James B. Morse Jr. joined.

J A C O B S, Judge:

¶1 Dr. Kishlay Anand, his wife Preeti Singh, and Daan
Investment Services, LLLP ask us to reverse a superior court ruling
declining to vacate an arbitration award against them. This is a tall order,
because A.R.S. § 12-3023 sets a high bar to overturn such an award. They
argue an arbitrator prejudiced them by excluding certain evidence from the
arbitration proceedings. Because the superior court correctly applied A.R.S.
§ 12-3023 and did not abuse its discretion in declining to vacate the
arbitrator’s award based on their claims of prejudice, we affirm.

FACTS AND PROCEDURAL HISTORY

A. The Doctors and Their Entities

¶2 Drs. Anand, Andy Tran, Stephen Smith, and Nirav Mehta
(“the Doctors”) invested together over many years. Dr. Anand led or
participated in many of the Doctors’ ventures through Daan, of which he
and his wife were the sole members. Drs. Mehta, Smith, and Tran also did
business through entities they controlled: Dr. Mehta through Black Mesa
Investment Services, LLLP (“Black Mesa”), Dr. Smith through Cornerstone
Investment Services, LLLP (“Cornerstone”), and Dr. Tran through ETT
October Investment Services, LLLP (“ETT”).

¶3 There were two entities in which the Doctors were co-
venturers, but over which Dr. Anand exercised operational control. The
first was National Cardiovascular Management, LLC (“NCM”) a business
that “develops, staffs, and manages medical facilities.” The Doctors were
all directly or indirectly members of NCM, but Dr. Anand controlled NCM
as its Chair. The second was West Valley Real Estate Investors, LLC (“West
Valley”), a real estate venture the Doctors formed in 2017. Dr. Anand “was
at all relevant times the manager and sole decision maker for West Valley
in his capacity as manager of NCM,” which was West Valley’s manager.

¶4 The Doctors were also members and managers of National
Cardiovascular Associates, LLC (“NCA”) a physician group. Dr. Anand
controlled NCA as the Chair of its board of managers.

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¶5 Dr. Anand also controlled an affiliated group of medical
businesses in which the other Doctors had no interest: CareMap Holdings,
LLC, doing business as Apricus Health (“CareMap/Apricus”), and its
subsidiary Desert Mirage Surgery Center, LLC (“Desert Mirage”).

B. The Doctors Discover Diversions of Funds by Dr. Anand.

¶6 In February 2018, West Valley purchased property in
Avondale. It subdivided the property into two parcels and transferred one
parcel to the single-purpose entity AKOS MOB I, LLC (“AKOS I”). Dr.
Anand “was the manager and sole decision maker for [] AKOS I.” AKOS I
developed a three-story medical office building on its parcel. In September
2021, on behalf of AKOS I, Dr. Anand agreed to sell the property for $33.412
million. From the sale, “AKOS I received a net amount of $11,733,957.27,”
which it transferred to West Valley.

¶7 In a move that gave rise to this dispute, Dr. Anand diverted
$8 million of that net amount from West Valley to Daan and told the other
West Valley investors the property sold for only $25 million. When the
other Doctors discovered the actual sale price, they began to investigate
their business dealings with Dr. Anand.

¶8 They learned Dr. Anand also improperly diverted funds
earmarked to improve a surgery center NCM and Desert Mirage shared. In
2021, NCM took out a loan to fund tenant improvements at the shared
facility. NCM wrote checks to fund the improvements, and Canon Medical
Finance, NCM’s lender, later “paid $1,013,853.48 to NCM in
reimbursement.” Though the funds were NCM’s, Dr. Anand had them
transferred from NCM to Daan. After these discoveries, Drs. Tran, Smith
and Mehta cut ties with Dr. Anand and Daan. They removed Dr. Anand
from his management of NCM, NCA, and West Valley, removed Daan from
NCM, and terminated Daan’s interest in NCA.

C. The Arbitration Proceedings

¶9 In March 2023, Drs. Tran, Smith, and Mehta (through their
LLLPs), and West Valley, NCM, and NCA (“Claimants”) demanded
arbitration, alleging Dr. Anand and Daan converted roughly $8 million
from West Valley in connection with the AKOS I sale and roughly $1
million from NCM in connection with the tenant improvements at the
NCM/Desert Mirage surgery center. They also alleged fraud, breach of
fiduciary duty, and other tortious conduct. They claimed damages of “at
least $28,890,000.” Dr. Anand and Daan denied the conversion claims and
sought damages from the loss of their interests in NCM and NCA.

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¶10 The parties agreed to private arbitration before Phoenix
attorney William Maledon (“the Arbitrator”). See Black Mesa Inv. Servs.,
LLLP, et al. v. Kishlay Anand, et al., AAA Case No. 01-23-0001-0090. They
agreed that “Arizona evidentiary rules shall apply to all claims and
counterclaims” and that the American Arbitration Association Commercial
Arbitration Rules (“AAA Rules”) would “govern procedure, subject to the
Arbitrator’s scheduling orders.”

1. The Arbitrator Sets a Deadline for the Exchange of
Hearing Exhibits.

¶11 In April 2023, the Arbitrator issued a case management order
setting April 22, 2024, as the deadline for the parties to exchange exhibits
ahead of the final arbitration hearing in May 2024. Though other deadlines
in the order changed during the proceedings, the exhibit exchange deadline
did not. Dr. Anand and Claimants jointly proposed a series of scheduling
orders that confirmed the April 22, 2024 deadline to exchange exhibits.

2. Dr. Anand is Served in a Separate Lawsuit.

¶12 In March 2023 — one month before the Arbitrator issued the
first case management order setting the exhibit exchange deadline — Canon
Financial Services, Inc. served Dr. Anand, Daan, and other
CareMap/Apricus entities with a complaint (“the Canon Complaint”) in a
lawsuit filed in New York federal court. Canon alleged Dr. Anand, Daan,
and CareMap/Apricus entities breached medical equipment lease
agreements. Attached to the Canon Complaint as exhibits were lease
agreements and lease schedules (“the Canon Loan Schedules”) between Dr.
Anand, his entities, and Canon. Dr. Anand answered the Canon Complaint
in November 2023 — long before the April 2024 deadline to exchange
exhibits in the arbitration.

3. The Arbitrator Grants Claimants Summary
Judgment on Their $8 Million Conversion Claim.

¶13 In March 2024, Claimants moved for summary judgment on
the $8 million conversion claim related to the AKOS I sale. Dr. Anand
responded by claiming he took the $8 million as reimbursement for money
he or his entities loaned AKOS I to fund tenant improvements at the
property. He offered as evidence “77 contractor invoices or other
documents from contractors or suppliers” who allegedly performed the $8
million in improvements, arguing the documents created issues of fact
precluding summary judgment. Though aware of the Canon Complaint

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and the Canon Loan Schedules, Dr. Anand did not offer them as evidence
of the funds he claimed he loaned to AKOS I.

¶14 The Arbitrator granted Claimants’ motion for summary
judgment. He concluded that, even if Dr. Anand or his entities made loans
to or on behalf of AKOS I for which the $8 million was reimbursement,
nothing in the AKOS I operating agreement allowed them to “unilaterally
reimburse” themselves for such loans, and Dr. Anand “demonstrated [no
other] legal right to the $8 Million at the time that the funds were
transferred from AKOS I.” Thus, “[b]ased on the undisputed evidence—
i.e., a lack of actual legal entitlement to the $8 Million at the time of transfer
in the form of a contractual right in the AKOS I Operating Agreement or at
least promissory notes or accounting entries evidencing the debt allegedly
owed to [Dr. Anand] by AKOS I,” the Arbitrator found “the $8 Million
transfer of AKOS I funds to [Daan] in November 2021 was wrongful and
constituted a conversion.” The Arbitrator nonetheless made his ruling
“subject to [Dr. Anand’s] right to prove” at the hearing that he was “entitled
to offset [the $8 million] with evidence of legitimate and required loans
made by [Dr. Anand] to or for the benefit of AKOS I.”

4. The Arbitrator Excludes the Canon Complaint from
Evidence.

¶15 After a pre-hearing conference on April 23, 2024, the
Arbitrator instructed the parties to submit pre-hearing briefs to him by
April 29, and to exchange exhibit books and submit them to him by May 2.
Dr. Anand’s pre-hearing brief argued he would “demonstrate at the
hearing” that he “invested millions of dollars in improvements in AKOS
MOB I with the understanding that these investments would be repaid . . .
when the property was sold.” But his pre-hearing brief did not mention the
Canon Complaint or the Canon Loan Schedules. Nor did he mark them as
exhibits ahead of the hearing.

¶16 From May 6 to May 13, 2024, the Arbitrator conducted the
hearing. On hearing day one, Dr. Anand attempted to introduce into
evidence the Canon Complaint and the attached Canon Loan Schedules.
The Arbitrator did not allow the Canon Complaint or the Canon Loan
Schedules into evidence because they were not timely marked as exhibits
ahead of the hearing and were deemed inadmissible hearsay.

¶17 Dr. Anand’s post-hearing brief acknowledged the Arbitrator
allowed testimony regarding the loans. Dr. Anand also conceded that the
Arbitrator had all information necessary to find Dr. Anand had not

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converted the roughly $8 million from West Valley or the roughly $1
million from NCM. Dr. Anand’s brief stated “the Arbitrator allowed Dr.
Anand to testify regarding [the Canon] loans and that testimony is
sufficient” to establish the “simple truth [] that Canon lent money to
CareMap, and then CareMap used that money to pay for $8 million in
tenant improvement expenses . . . based on the understanding that it would
be reimbursed by [AKOS I], and the $8 million should be counted in full as
reimbursement for its investment in improving the [AKOS I] building.” Dr.
Anand’s brief also argued the “$1,013,853.48 that was transferred from
NCM’s bank account to Daan” “was warranted because CareMap[] had a
right to the funds.” Finally, Dr. Anand argued that right was “firmly
established by Claimants’ Exhibit 76” and “[t]hat exhibit demonstrates
unequivocally that the $1,013,853.48 that was first deposited by Canon
Medical Finance USA into NCM’s bank account in September 2021
constituted loan proceeds on a loan for which” Dr. Anand and his
CareMap/Apricus entities were solely obligated.

5. The Arbitrator’s Decision and Award.

¶18 The Arbitrator issued his decision and order on June 24, 2024,
ruling for Claimants on the two claims at issue in this appeal: (1) the
roughly $8 million conversion claim related to AKOS I; and (2) the roughly
$1 million conversion claim related to the shared facility.

¶19 As to the $8 million claim, the Arbitrator ruled: “[T]he ever
shifting and often implausible explanations by Respondents for the
removal of the $8 Million from the net sales proceeds of the AKOS I
property only serves to underscore what the Arbitrator believes to be a
complete failure of proof on the part of Respondents regarding their
claimed entitlement to the $8 Million in question.” He noted that none of
Dr. Anand’s witnesses could “point to accounting records or other
documents that substantiate [his] claims regarding tenant improvement
expenditures at the AKOS I property for which [he is] entitled to be
reimbursed.” Because Dr. Anand and Daan had not met their burden of
proving entitlement to any of the $8 million, the Arbitrator awarded that
amount as damages against Dr. Anand, Singh and Daan.

¶20 As to the $1 million claim, the Arbitrator found: the tenant
improvements were paid for by NCM from an SBA loan; “there was no
evidence that Daan or other Respondents had deposited funds in NCM that
were used to pay the tenant improvement costs that Canon reimbursed”;
and the tenant improvements “were for the benefit of Dr. Anand’s entity
(Desert Mirage).” Because “there was no credible evidence . . . that showed

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that the $1,013,853.48 paid by Canon to NCM rightfully belonged to Daan
as opposed to NCM,” the Arbitrator awarded that amount as damages
against Dr. Anand, Singh and Daan.

D. The Superior Court Confirms the Award Over Dr. Anand’s
Objections and This Appeal Follows.

¶21 After the Arbitrator finalized the award in August 2024,
Claimants promptly moved the superior court to confirm it. Dr. Anand
objected and moved to vacate the award. Dr. Anand argued the court
should vacate the award under A.R.S. § 12-3023(A)(3) because the
Arbitrator “refused to consider evidence material to the controversy,” by
excluding the Canon Loan Schedules. He argued this exclusion caused him
substantial prejudice because the Canon Loan Schedules evidenced his
entitlement to the approximately $8 million transferred from West Valley
to Daan and to the approximately $1 million transferred from NCM to
Daan. Claimants opposed the motion to vacate, arguing Dr. Anand
“fail[ed] to meet [his] heavy burden to show” the Arbitrator “failed to
consider material evidence resulting in substantial prejudice.” They argued
the Arbitrator properly excluded the Canon Complaint and the Canon Loan
Schedules as an untimely disclosed exhibit and as inadmissible hearsay.
And they argued Dr. Anand could not demonstrate substantial prejudice
because the Arbitrator “permitted multiple days of testimony concerning
the Canon loans,” and found the testimony unconvincing.

¶22 After argument, the court denied the motion to vacate and
confirmed the arbitration award. The court explained that under A.R.S. §
12-3023(A)(3), Dr. Anand had to show the “arbitrator [] refused to consider
material evidence” and “that [his] rights were prejudiced by the exclusion.”
Citing federal cases, the court reasoned that: “[t]he exclusion of evidence is
prejudicial only if it deprives the offering party of a fair hearing,” and a
hearing “is fundamentally fair if it includes adequate notice, a hearing on
the evidence, and an impartial decision by the arbitrator.” The court found
the Arbitrator’s evidentiary rulings were not “improper and unfairly
prejudicial” because: (1) the Arbitrator “expressly considered and rejected
the Canon Complaint on ground that it was inadmissible hearsay” and Dr.
Anand “demonstrate[d] [no] error in that evidentiary ruling”; and (2) Dr.
Anand concedes he “did not timely mark the Complaint as an exhibit as
required by [the Arbitrator’s] pretrial orders.” The court concluded
“[e]ither ground would have been a proper basis for excluding the
document from evidence.” As to substantial prejudice, the court ruled
“even if the exclusion of the Canon complaint had been improper, the
record does not support a finding that its exclusion substantially

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prejudiced” Dr. Anand because the Arbitrator “admitted other evidence
concerning the [Canon] Complaint and [the] alleged use of Canon loan
proceeds to fund tenant improvements to [AKOS I],” so “the exclusion of
the document itself cannot be deemed prejudicial where other evidence of
the loans was admitted and considered.”

¶23 The court entered final judgment on April 10, 2025. Dr.
Anand, Singh, and Daan timely appealed. We have jurisdiction. Ariz.
Const. art. 6, § 9; A.R.S. §§ 12-2101(A)(1), -2101.01(A)(6).

DISCUSSION

¶24 “Arizona public policy favors arbitration as a means for
resolving disputes. Accordingly, Arizona’s revised uniform arbitration act
‘strictly limits the superior court’s options after the arbitration process is
complete.’” Chayce Concrete, LLC v. Path Construction Sw., LLC, 258 Ariz.
426, 429-30 ¶ 13 (App. 2024) (cleaned up). “The superior court’s review is
not for factual or legal error, and the court may not substitute its view of
the evidence for the arbitrator’s,” id. (cleaned up), because “the arbitrator’s
decisions are final and binding as to both issues of fact and law, regardless
of the[ir] correctness,” Atreus Cmtys. Grp. v. Stardust Dev., Inc., 229 Ariz. 503,
506 ¶ 13 (App. 2012). “The superior court may reject an arbitration award
only on [the] narrow statutorily enumerated grounds of A.R.S. § 12-3023, as
proved by the party challenging the award.” Chayce Concrete, 258 Ariz. at
430 ¶ 13 (cleaned up).

¶25 “Just as the superior court reviews an arbitrator’s award in
the light most favorable to affirming, we review the superior court’s
decision in the light most favorable to upholding its decision [to] confirm[]
the arbitrator’s award and affirm unless we conclude that the superior court
abused its discretion.” Atreus Cmtys. Grp., 229 Ariz. at 506 ¶ 13.

The Superior Court Did Not Abuse Its Discretion in Declining to
Vacate the Award, Because, Viewed in the Light Most Favorable to
Confirming the Award, the Arbitrator’s Exclusion of the Canon
Loan Schedules Did Not “Substantially Prejudice” Dr. Anand.

¶26 Asking us to reverse under A.R.S. § 12-3023(A)(3), Dr. Anand
argues the court erred by excluding the Canon Loan Schedules attached to
the Canon Complaint to his substantial prejudice. Claimants disagree,
arguing the Arbitrator properly excluded the Canon Complaint and the
Canon Loan Schedules as either inadmissible hearsay or for untimeliness,
and that their exclusion did not prejudice Dr. Anand. We affirm the court’s

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conclusion that the Arbitrator’s evidentiary ruling did not substantially
prejudice Dr. Anand, for four reasons.

¶27 First, Dr. Anand’s disclosure conduct suggests the exclusion
of the Canon Complaint and its attachments did not substantially prejudice
him. Dr. Anand had notice that exhibits had to be disclosed before the
arbitration hearing — he even agreed to the disclosure orders making that
so. Despite that notice, Dr. Anand failed to disclose the Canon Complaint
or the Canon Loan Schedules before the disclosure deadline to which he
agreed. When a party chooses not to disclose materials, in a sense they are
choosing that the materials are not relevant to the proceeding. Dr. Anand’s
disclosure conduct makes the Arbitrator declining to receive his
undisclosed evidence — which he suggests after the fact would have made
all the difference — correct, because Dr. Anand established the documents
were at least arguably nonmaterial by not disclosing them. Were it
otherwise, every arbitration litigant could simply lie in the weeds, refusing
to obey agreed-upon orders requiring disclosure but claiming after they
lose that something material was excluded to their substantial prejudice.
See Gateway Techs., Inc. v. MCI Telecomms. Corp., 64 F.3d 993, 998 (5th Cir.
1995) (A party “cannot stand by during arbitration, withholding certain
arguments, then, upon losing the arbitration, raise such arguments in []
court.”) (quoting Nat’l Wrecking Co. v. Int’l Bhd. of Teamsters, Local 731, 990
F.2d 957, 960 (7th Cir. 1993)). That cannot be the law. Were it so, it would
defeat the purpose and policy of finality attached to arbitrations endorsed
by our legislature. See Chayce Concrete, 258 Ariz. at 429-30 ¶ 13; cf. Fisher v.
USAA Cas. Ins. Co., 245 Ariz. 270, 273 ¶ 14 (App. 2018) (allowing parties to
withhold objections until after an unfavorable result would defeat the
primary purpose of binding arbitration).

¶28 Second, Dr. Anand’s own litigation conduct suggests a lack of
prejudice from the exclusions of which he now complains. Dr. Anand did
not mention the Canon Complaint or the Canon Loan Schedules when
opposing Claimants’ motion for summary judgment on the $8 million West
Valley conversion claim. Nor did he mention them in his pre-hearing brief.
See Smith v. Olson, 257 Ariz. 518, 527 ¶ 25 (App. 2024) (affirming superior
court’s exclusions of certain potentially relevant matters from trial because
party failed to list his exhibits in a joint pretrial statement). Given his after-
the-arbitration arguments emphasizing their supposed centrality, Dr.
Anand’s prior omissions are suspect and reinforce the nonmateriality of
these materials. Because we review the superior court’s ruling in the light
most favorable to upholding the award, his prior omissions, which
demonstrate the Canon Complaint’s and the Canon Loan Schedules’
nonmateriality, provide a sufficient basis for us to affirm. The Spaulding LLC

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v. Miller, 250 Ariz. 383, 387 ¶16 (App. 2020) (“The record contains ample
evidence supporting the arbitration award,” so the superior court did not
abuse its discretion by confirming the award.).

¶29 Third, even assuming the content of the Canon Loan
Schedules were material, the Arbitrator allowed Dr. Anand and his expert
to testify regarding them during the hearing. So even if one ignores Dr.
Anand’s litigation conduct suggesting their nonmateriality, the Arbitrator
considered their content. Dr. Anand gives us no reason to second-guess the
Arbitrator’s decision to discount the relevance of that testimony, and it is
not our job in reviewing a court order affirming an arbitration award to
reweigh the evidence. See RS Indus., Inc. v. Candrian, 240 Ariz. 132, 136 ¶ 11
(App. 2016) (“Pursuant to A.R.S. § 12–3023(A), on appeal, we will not
review the merits of an arbitrator's factual findings or legal conclusions.”).

¶30 Fourth, Dr. Anand’s post-hearing brief also shows the lack of
substantial prejudice to him from the exclusion of these materials. Dr.
Anand could have argued in his post-hearing brief that the Arbitrator’s
evidentiary ruling deprived him of a fair hearing. But he did the opposite.
Dr. Anand argued his testimony regarding the Canon Loan Schedules was
“sufficient” to defeat the $8 million West Valley conversion claim. Though
he now argues the court did not consider whether the exclusion of the
Canon Loan Schedules undermined his ability to defend against the $1
million NCM conversion claim, his post-hearing brief said his right to that
money was “firmly established” by evidence the Arbitrator admitted.
Considering this statement in the light most favorable to upholding the
award, it too demonstrates a lack of prejudice.

¶31 Given these many indicia that Dr. Anand was not
substantially prejudiced by the Arbitrator’s exclusion ruling, we see no
error in the superior court’s affirming the award. While Dr. Anand
questions the superior court’s descriptions of the legal standard for review
of arbitration awards, our ruling as to substantial prejudice makes it
unnecessary to consider those further arguments.

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CONCLUSION

¶32 For these reasons, we affirm the superior court’s denial of the
motion to vacate and its confirmation of the arbitration award. We grant
Claimants their costs, and also their request for attorneys’ fees under A.R.S.
§ 12-3025(C), subject to their compliance with ARCAP 21.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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