Opinion
No. 1 CA-CV 13-0373
03-25-2014
BHB CAPITAL, LLC, an Arizona limited liability company, Plaintiff/Appellee, v. BRYAN ZEMAN and PAT ZEMAN, husband and wife, Defendants/Appellants.
Laird Law Firm PLLC, Tucson By Brian A. Laird Counsel for Defendants/Appellants Martinez Law, P.L.C., Mesa By Adam D. Martinez Counsel for Plaintiff/Appellee
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT
AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Mohave County
No. L8015CV201207028
The Honorable Randolph A. Bartlett, Judge
REVERSED IN PART, VACATED IN PART, AND REMANDED
COUNSEL
Laird Law Firm PLLC, Tucson
By Brian A. Laird
Counsel for Defendants/Appellants
Martinez Law, P.L.C., Mesa
By Adam D. Martinez
Counsel for Plaintiff/Appellee
MEMORANDUM DECISION
Judge Maurice Portley delivered the decision of the Court, in which Presiding Judge Donn Kessler and Judge Patricia K. Norris joined. PORTLEY, Judge:
¶1 Bryan Zeman ("Zeman") appeals the partial summary judgment granted in favor of BHB Capital, L.L.C. ("BHB") on its breach of contract claim. Zeman contends there are genuine issues of material fact to preclude summary judgment. He additionally challenges the rulings on various motions. For the following reasons, we reverse the grant of partial summary judgment, vacate the award of attorneys' fees and costs to BHB, and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
¶2 BHB is the successor-in-interest to PCF Manufacturing, LLC ("PCF"), also known as PlumCrazy Firearms, a company that produced and sold firearms. Zeman, doing business as A.O. Engineering, designs and manufactures molds used to produce firearms. In 2009, PCF and Simpex Enterprises ("Simpex"), a third-party machinery provider, entered into an arrangement where Simpex would supply machines to PCF and would also provide "a new set of molds - two bottoms and one top" for $65,000. Because Simpex did not make molds, Zeman was drafted to make the new set of molds.
¶3 Three years later, after receiving an assignment of claim from PCF, BHB filed a lawsuit against Zeman seeking damages for his failure to deliver the three molds. Zeman filed an answer and BHB subsequently filed a motion for partial summary judgment on its claims for breach of contract and unjust enrichment. Specifically, BHB argued that the facts were undisputed that Zeman agreed to manufacture and deliver three molds to PCF, its assignor, for $65,000; that PCF wired the funds to Simpex; and Simpex, in turn, paid the $65,000 to Zeman. In response, Zeman denied the existence of a written agreement with PCF, but stated that he had fulfilled his agreement with Simpex to produce and deliver one mold. After briefing and argument, the superior court granted partial summary judgment in favor of BHB on its breach of contract claim. The court subsequently certified the issue as final pursuant to Arizona Rule of Civil Procedure ("Rule") 54(b) and Zeman filed this appeal.
BHB successfully moved to amend its complaint and filed its first amended complaint in December 2012 shortly after filing its motion for partial summary judgment. The amended complaint added the owners of Simpex as defendants and clarified which claims were specifically against Zeman and which were against all defendants. We note that the amended complaint alleged that "Zeman did not deliver the Receiver Molds to Simpex or PCF" and that "Simpex has never delivered the Receiver Molds as required" despite a demand from BHB.
JURISDICTION
¶4 This court has an independent duty to review its jurisdiction over an appeal. Musa v. Adrian, 130 Ariz. 311, 312, 636 P.2d 89, 90 (1981). "In Arizona, with certain exceptions, jurisdiction of appeals is limited to final judgments which dispose of all claims and all parties." Id. Rule 54(b), however, "allows a trial court to certify finality to a judgment which disposes of one or more, but not all, of the multiple claims, if the court determines that there is no just reason for delay and directs the entry of judgment." Davis v. Cessna Aircraft Corp., 168 Ariz. 301, 304, 812 P.2d 1119, 1122 (App. 1991).
¶5 We review the trial court's certification that a judgment is final, pursuant to Rule 54(b), de novo. Davis, 168 Ariz. at 304, 812 P.2d at 1122. In a multi-claim action, certification of one claim is appropriate if the "claim is separable from others remaining to be adjudicated when the nature of the claim already determined is 'such that no appellate court would have to decide the same issues more than once even if there are subsequent appeals.'" Cont'l Cas. v. Superior Court, 130 Ariz. 189, 191, 635 P.2d 174, 176 (1981) (quoting Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 6 (1980)). Stated differently, in a multi-claim action, separable claims exist "when the facts give rise to more than one legal right or cause of action." Musa, 130 Ariz. at 313, 636 P.2d at 91 (quoting Wright & Miller, Federal Practice and Procedure: Civil § 2657 (1973)).
¶6 Here, the complaint alleged seven claims against Zeman: (1) embezzlement; (2) conversion; (3) fraud; (4) negligent misrepresentation; (5) breach of contract; (6) breach of the implied covenant of good faith and fair dealing; and (7) unjust enrichment. BHB subsequently filed a motion for partial summary judgment on its claims of breach of contract and unjust enrichment. The superior court did not address the unjust enrichment claim, but granted summary judgment in favor of BHB on its breach of contract claim, and subsequently certified the judgment as final pursuant to Rule 54(b).
¶7 The superior court did not err in certifying the judgment as final. The breach of contract claim was separable from the remaining tort claims. Although there is factual overlap between the claims, the tort claims allege different independent facts and several of the claims request additional remedies such as punitive damages and constructive trust. Cf. Davis, 168 Ariz. at 305, 812 P.2d at 1123 (finding Rule 54(b) certified judgment improper because, based on a single negligent act, "plaintiffs are limited to a single recovery against [defendant] no matter how many theories they may advance").
¶8 Moreover, both parties responded to our order and provided supplemental briefing on our jurisdiction. Neither party suggested that we lack jurisdiction over this appeal, but each cited different reasons for their conclusion. Zeman, for example, argues that we have jurisdiction because BHB has "waived and abandoned" its additional claims through its admission that "[w]hile Plaintiff may have had multiple theories of recovery, Plaintiff only has one claim for damages."
We will allow the superior court on remand to determine whether BHB has abandoned its other legal claims.
DISCUSSION
I. Summary Judgment
¶9 Zeman argues that the superior court erred by granting partial summary judgment because BHB failed to prove sufficient facts to warrant judgment. He also contends that there are genuine issues of material fact that should have precluded summary judgment.
¶10 We review the grant of summary judgment de novo and view the facts and all reasonable inferences from those facts in the light most favorable to Zeman, the nonmoving party. Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12, 69 P.3d 7, 11 (2003); Scalia v. Green, 229 Ariz. 100, 102, ¶ 6, 271 P.3d 479, 481 (App. 2011). A court may grant summary judgment if the moving party shows that after consideration of "the pleadings, deposition, answers to interrogatories, and admissions on file, together with the affidavits, if any, . . . there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Ariz. R. Civ. P 56(a), (c)(1). The determination of whether a genuine issue of material fact exists is based on the record made in the trial court. Phx. Baptist Hosp. & Med. Ctr., Inc. v. Aiken, 179 Ariz. 289, 292, 877 P.2d 1345, 1348 (App. 1994). "If any issue of material fact exists upon which reasonable people might reach different conclusions, summary judgment is not appropriate." Bishop v. State, Dep]t of Corr., 172 Ariz. 472, 475, 837 P.2d 1207, 1210 (App. 1992) (citing Orme Sch. v. Reeves, 166 Ariz. 301, 309-10, 802 P.2d 1000, 1008-09 (1990)).
We cite to the 2012 version of the Arizona Rules of Civil Procedure because the motion was filed under those rules and Rule 56 has since been revised.
¶11 Summary judgment is not intended to resolve factual disputes and is inappropriate if the court must determine the credibility of witnesses, weigh the quality of evidence, or choose among conflicting inferences. Orme Sch., 166 Ariz. at 308-09, 802 P.2d at 1007-08. The moving party has the burden of showing there are no genuine issues of material fact and it is entitled to summary judgment as a matter of law. Nat'l Bank of Ariz. v. Thruston, 218 Ariz. 112, 114-15, ¶ 12, 180 P.3d 977, 979-80 (App. 2008). If the movant bears the burden of proof at trial, it must show a prima facie case and only then does the burden shift to the non-moving party to show the existence of a dispute. Villas at Hidden Lakes Condos. Ass'n v. Geupel Constr. Co., 174 Ariz. 72, 81, 847 P.2d 117, 126 (App. 1992). We also review issues of statutory and contract interpretation de novo. Miller v. Hehlen, 209 Ariz. 462, 465, ¶ 5, 104 P.3d 193, 196 (App. 2005).
¶12 To prevail on its breach of contract claim, BHB had to first prove that PCF had a valid contract with Zeman by demonstrating an offer, acceptance of the offer, consideration, and that the parties had intended to be bound by the agreement. Goodman v. Physical Res. Eng'g, Inc., 229 Ariz. 25, 28, ¶ 7, 270 P.3d 852, 855 (App. 2011). Contrary to Zeman's argument, an agreement need not be in writing to be enforceable, Swingle v. Myerson, 19 Ariz. App. 607, 609, 509 P.2d 738, 740 (1973), but can be implied from the acts of the parties and circumstances that shows the elements of a contract. Carroll v. Lee, 148 Ariz. 10, 13, 712 P.2d 923, 926 (1986).
¶13 In its statement of facts, BHB relied on its original verified complaint, a number of exhibits and requests for admissions that Zeman had not responded to pursuant to Rule 36. The record reveals that: (1) Russ Maxwell of PlumCrazy Firearms received a quote from Simpex in July 2009 for various machines and a "new set of molds - two bottoms and one top" for $65,000.00; (2) BHB's counsel was advised by a letter from Simpex dated March 2012 that the $65,000 was transferred to Zeman, "a mold making company . . . at the request of Mr. Maxwell" because "Simpex was not in the business of mold making" and the details of the mold "were handled directly by Mr. Maxwell and [Zeman];" and (3) "Simpex was later informed by the parties to the agreement that the two lower and one upper molds were delivered to Plumcrazy and a test run was completed on the equipment." Consequently, the record at the superior court demonstrated that there was a contract between PCF and Zeman because there was an offer to create a new set of molds, acceptance of the offer and consideration passed between PCF and Zeman through Simpex.
Although Zeman complains that BHB did not file a separate affidavit, a verified complaint can be used to support or oppose a summary judgment motion. See Kiser v. A. J. Bayless Mkts., Inc., 9 Ariz. App. 103, 105-06, 449 P.2d 637, 639-40 (1969) ("[A] verified complaint may be adequate, in substance and in form, to satisfactorily controvert the affidavits of the moving party and meet the requirements of [Rule 56(e)]."); see also McElyea v. Babbitt, 833 F.2d 196, 197 (9th Cir. 1987) (stating that plaintiff's "complaint has been verified; because it is based on personal knowledge and sets forth specific facts admissible in evidence, it may be considered in opposition to summary judgment"). Moreover, because Zeman did not make a contemporaneous objection or move to strike any portions of the verified complaint or other documents in his response, the superior court was free to consider those documents. See Airfreight Express Ltd. v. Evergreen Air Center, Inc., 215 Ariz. 103, 112, ¶ 26, 158 P.3d 232, 241 (App. 2007).
¶14 BHB, however, contends that PCF never received the molds. This is contradicted by two portions of the record. First, BHB attached to its statement of facts a letter from Simpex suggesting that Zeman provided the molds to PCF and the molds were tested. Second, Zeman specifically challenged the BHB claim that he did not deliver the molds. In his affidavit, Zeman stated that after receiving the $65,000 wire transfer, he "manufactured the mold requested and delivered the mold to Russ Maxwell." BHB contends, however, that Zeman was supposed to deliver three molds.
¶15 Although the superior court did not find that there was a genuine issue of material fact, we think the critical question is whether "the mold" Zeman delivered to Maxwell was the "new set of molds - two bottoms and one top" called for in the Simpex invoice, a partial delivery of those molds, or some other mold that may have been agreed to by Maxwell and Zeman. It may well be that the mold the contracting parties were talking about are the invoiced items, as the Simpex letter suggests, but it could be something else. Because we cannot determine what was delivered vis-à-vis what was ordered, a genuine question of material fact exists that Zeman breached the contract. Consequently, we reverse the partial summary judgment. II. Motion for Sanctions
Because we are remanding this matter, we need not formally address Zeman's other arguments. We note, however, that the superior court did not have jurisdiction to address the following motions which were filed after the notice of appeal was filed: (1) motion for leave to file supplemental motion papers; (2) supplemental opposition to plaintiff's motion for partial summary judgment; (3) supplemental statement of facts in opposition to plaintiff's motion for partial summary judgment and in support of cross-motion for summary judgment; and (4) cross-motion for summary judgment. See In re Marriage of Johnson & Gravino, 231 Ariz. 228, 230-31, ¶ 6, 293 P.3d 504, 506-07 (App. 2012) (noting that once appellant files notice of appeal, the trial court loses jurisdiction with matters connected to the case, expect in furtherance of the appeal, and any further action is void).
¶16 Zeman also argues that the superior court erred by denying his motion for sanctions against BHB without first holding a hearing. We review the ruling for an abuse of discretion and "grant considerable deference to the trial court's perspective and judgment." State v. Meza, 203 Ariz. 50, 55, ¶ 19, 50 P.3d 407, 412 (App. 2002).
¶17 After the superior court granted partial summary judgment, Zeman sought sanctions against BHB for allegedly "[withholding] relevant adverse facts from the Court in order to obtain judgment." In the motion, Zeman presented a letter and picture that he claimed demonstrated that PCF had received the molds. After briefing, the court denied the motion. Zeman does not challenge the ruling but contends the court abused its discretion for ruling without holding a hearing. Zeman fails to cite any authority that requires the court to hold a hearing before ruling on the pleadings. Accordingly, we find no error.
The disclosure of the photograph and letter raises issues of professionalism. BHB possessed the letter and photograph. BHB disclosed the two documents in its disclosure statement, but sent the statement to Zeman instead of his lawyer who had filed his notice of appearance more than two weeks earlier. We need not resolve whether the mailing to Zeman was inadvertent, negligent or intentional, but this conduct suggests that BHB's counsel's conduct was in tension with the professionalism required of members of the bar.
Moreover, BHB argued at the oral argument before the superior court that "there is no evidence" of Zeman's performance. There was, however, evidence of performancethe Simpex letter inferred performance, even if the BHB did not appreciate the relevance or significance of those items. It was unclear whether Zeman had delivered the molds described in the Simpex letter, or a mold or molds that Maxwell and Zeman had discussed, and only someone at PCF with knowledge of the PCFZeman transaction would have that information. Regardless of the lack of clarity, given BHB's counsel's knowledge of the photo and letter, its statement to the court that there was no evidence of performance at a minimum bordered on violating counsel's duty of candor to the court.
III. Attorneys' Fees and Costs
¶18 BHB was awarded attorneys' fees and costs after the grant of summary judgment. Because we are reversing the partial summary judgment, we vacate the award of attorneys' fees and costs.
¶19 On appeal, both parties request attorneys' fees and costs pursuant to Arizona Revised Statutes ("A.R.S.") sections 12-341 to -341.01. We deny BHB's request because it did not prevail on appeal. Although Zeman prevailed, we deny his request for fees on appeal without prejudice. If he ultimately prevails on the contract claim, the superior court can then consider the attorneys' fees Zeman incurred on appeal. Nelson v. Phx. Resort Corp., 181 Ariz. 188, 200, 888 P.2d 1375, 1387 (App. 1994). We however, award Zeman his costs on appeal pursuant to A.R.S. § 12-341 subject to his compliance with ARCAP 21.
We cite to the current version of the applicable statute because no revisions material to this decision have since occurred.
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CONCLUSION
¶20 For the foregoing reasons, we reverse the grant of partial summary judgment, vacate the award of attorneys' fees and costs, and remand this case to the superior court for further proceedings.