Opinion
2 CA-CV 2022-0144
08-21-2023
Cherlyn Evans, Plaintiff/Appellee, v. Robert O. Reyes, Defendant/Appellant.
Lewis Brisbois Bisgaard &Smith LLP, Phoenix By Robert C. Ashley and Michael P. Obert Jr. Counsel for Plaintiff/Appellee Law Office of Maria Bettwy Wolfinger, Kingman By Maria B. Wolfinger Counsel for Defendant/Appellant
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Gila County No. S0400CV202100283 The Honorable Bryan B. Chambers, Judge
Lewis Brisbois Bisgaard &Smith LLP, Phoenix By Robert C. Ashley and Michael P. Obert Jr. Counsel for Plaintiff/Appellee
Law Office of Maria Bettwy Wolfinger, Kingman By Maria B. Wolfinger Counsel for Defendant/Appellant
Judge Eckerstrom authored the decision of the Court, in which Presiding Judge Brearcliffe and Judge Kelly concurred.
MEMORANDUM DECISION
ECKERSTROM, JUDGE
¶1 This case stems from a dispute between Cherlyn Evans and Robert Reyes regarding the ownership of an undeveloped parcel of real property in Payson ("the property"). After a mediation and related arbitration, the superior court granted summary judgment in favor of Evans, enforcing the settlement agreement reached during mediation and finalized at arbitration. The court then approved the sale of the property and awarded Evans damages, attorney fees, and costs. For the reasons that follow, we affirm.
Factual and Procedural Background
¶2 When reviewing a grant of summary judgment, we view the evidence and all reasonable inferences to be drawn from it in the light most favorable to the party who opposed the motion. Andrews v. Blake, 205 Ariz. 236, ¶ 12 (2003). However, doing so does not require us to credit assertions that are unsupported or contradicted by the record.
¶3 Evans and Reyes do not dispute that they purchased the property together in 2014 for approximately $79,000. It was deeded solely in Evans's name.
¶4 The parties' relationship deteriorated, and a dispute arose regarding the property. In April 2020, Evans recorded an affidavit of forgery with the Gila County Recorder claiming that a forged warranty deed had been recorded in 2019 to wrongfully place title to the property in Reyes's name. Then, in July 2020, Evans contracted to sell the property to C.G. for $57,500. Reyes contends he did not learn about this purchase contract until April 2021.
I. Reyes's Quiet Title Action
¶5 In August 2020, when he claims to have been unaware of the pending sale, Reyes filed an action to quiet title against Evans in Gila County Superior Court due to the cloud caused by the affidavit of forgery. He then filed a notice of lis pendens in that action.
¶6 The parties ultimately agreed to mediate the quiet title action. They selected the Honorable Bruce Meyerson, a retired appellate court judge, as the mediator. In furtherance of mediating the dispute in good faith, Evans withdrew the affidavit of forgery.
A. September 2020 Mediation
¶7 On September 29, 2020, the parties conducted the mediation virtually from their attorneys' respective offices via video conferencing. Judge Meyerson reduced to writing ("Agreement 1") the essential terms of the settlement reached by the parties at mediation. These included an agreement that the property would be sold with the assistance of a real estate commissioner approved by the parties, with Evans receiving the first $30,000 (less a 1% commission paid to the commissioner) and Reyes receiving the remaining balance of the net sale proceeds. Agreement 1 also stipulated that Judge Meyerson would serve as arbitrator to resolve any disagreement with respect to the documentation of a final settlement agreement and that, due to the virtual nature of the mediation, the parties would manifest their agreement to the outlined terms by responding with their assent via email. Meyerson emailed Agreement 1 to the parties on the evening of the mediation. A few minutes later, Reyes's attorney confirmed his client's agreement to the outlined terms, stating "Robert Reyes is sitting here and he confirms the terms are agreeable" and volunteering to "take the first stab at drafting the comprehensive settlement agreement." Evans's counsel suggested a minor change, and Reyes's counsel again responded in the affirmative, emailing "Yes. We Agree." Evans's attorney then confirmed her approval of Agreement 1. The next day, as promised, Reyes's attorney circulated a proposed draft settlement agreement and related documents.
B. Reyes Seeks to Avoid Result of Mediation
¶8 However, one day later-on October 1-Reyes fired his counsel. The next morning, he filed with the superior court a notice of voluntary dismissal of his quiet title action, noting that Evans had not filed an answer. Later that afternoon, Evans filed a notice of settlement. She then opposed Reyes's notice of withdrawal of the complaint and notified the court that she intended to seek a ruling from Judge Meyerson to finalize the terms of the settlement agreement reached at mediation. In the latter part of October, Evans twice sent a proposed final settlement agreement to Reyes, built on the version that had been prepared and circulated by his former counsel, but she received no response.
C. December 2020 Arbitration
¶9 On November 6, 2020, Evans filed a motion with Judge Meyerson to enforce the settlement agreement the parties had reached on September 29. Shortly thereafter, she learned that, despite the parties' agreement and her pending motion to enforce it, the disputed deed had successfully been recorded to place the property in Reyes's name. This had been possible due to Evans having withdrawn the affidavit of forgery in furtherance of the mediation. Evans advised the Gila County Recorder's Office of the ongoing dispute and settlement agreement, filed her own notice of lis pendens on the property, and requested an expedited hearing with Judge Meyerson. Counsel for both parties, including Reyes's new attorney, agreed to participate at an arbitration hearing on December 14 to determine the final terms of the settlement agreement.
¶10 However, on December 9, Reyes's counsel wrote a letter to Judge Meyerson challenging his selection as arbitrator, purporting to terminate Reyes's participation in the mediation proceedings, and requesting cancellation of the arbitration hearing. Meyerson issued a ruling denying the request that the hearing be vacated. Then, on December 11, Reyes's counsel sent another letter in which she reiterated her challenge to Meyerson acting as arbitrator, disputed that any agreement to arbitrate existed, and advised that she and Reyes would not participate in the arbitration hearing. Judge Meyerson informed the parties that the hearing would not be vacated unless Evans's counsel agreed to vacate. Evans's counsel responded that his client did not waive or wish to vacate the hearing. Meyerson thus confirmed that the hearing would take place as scheduled.
Reyes's argument on appeal that Judge Meyerson cancelled the hearing is contradicted by the record. As was explained both in Evans's reply in support of her motion for summary judgment and at the hearing on that motion, and as is apparent from email correspondence between the parties and Judge Meyerson, his office redundantly sent two calendar invitations for the arbitration hearing and then cancelled one of them, but he expressly confirmed to all parties that the hearing would proceed as scheduled.
¶11 The hearing to decide the final terms of the settlement agreement occurred on December 14, 2020. Evans presented evidence, including sworn testimony and exhibits. Reyes and his counsel did not appear.
¶12 The following day, Judge Meyerson issued his findings of fact and conclusions of law and entered an arbitration award. With regard to the September mediation, he found: that it had culminated in an agreement between the parties, including Reyes, on "the global terms of a settlement" as outlined in Agreement 1; that "at no point prior to the end of the mediation where Agreement 1 was reached did Mr. Reyes ever withdraw his consent to the agreement nor did he terminate his participation in the mediation"; and that the parties' agreed-to assent to Agreement 1 via email constituted valid electronic acceptance, pursuant to the Arizona Electronic Transactions Act, in particular A.R.S. §§ 44-7005(B) and 44-7007(D). Therefore, Judge Meyerson found he had authority to determine the terms of a final agreement, pursuant to Agreement 1 and A.R.S. § 12-3006(A), rejecting Reyes's arguments to the contrary. He further found that Reyes's "non-appearance, despite earlier agreement to appear and participate, constitute[d] a waiver of all defenses to the terms" of the final agreement determined at the arbitration. Finally, Meyerson adopted as the final terms of the settlement agreement and attached to his award the revised version Evans had twice proposed to Reyes in October 2020 with no response.
D. Dismissal of Quiet Title Action
¶13 In January 2021, the superior court denied Evans's request for enforcement, concluding it had lost jurisdiction when Reyes filed his voluntary dismissal on October 2, 2020. As the court explained, a notice of dismissal under Rule 41(a)(1)(A)(i), Ariz. R. Civ. P., is self-executing and "completely effective upon the filing of a written notice of dismissal." Spring v. Spring, 3 Ariz.App. 381, 383 (1966) (quoting 5 Moore's Federal Practice at 1009 (2d ed. 1963)). It therefore could not consider the relief requested in Evans's motion to enforce the settlement or impose sanctions.
II. Evans's Current Contract Action
¶14 The next week, Evans filed in Maricopa County Superior Court a complaint for breach of contract, which forms the basis for this appeal. She asserted that she and Reyes had reached a settlement agreement during the September 2020 mediation and that Reyes was in breach of a contract with her as a result of his failure to comply with the terms of that agreement. In an amended complaint filed in February, she asserted additional claims of a breach of the covenant of good faith and fair dealing and unjust enrichment. She also requested an order enforcing the settlement agreement and a declaratory judgment that Reyes's voluntary dismissal of his quiet title action had "no legal significance to the settlement" into which the two had entered.
¶15 In April, Reyes learned that C.G. planned to file a lawsuit regarding the purchase contract she and Evans had executed in July 2020. He filed a motion to dismiss Evans's contract action for improper venue or, in the alternative, to transfer to Gila County. The superior court granted the motion to transfer venue. Reyes then filed his answer, denying that a settlement had been reached at the mediation and asserting three affirmative defenses. He also asserted a counterclaim for fraudulent concealment, alleging that Evans had intentionally failed to disclose her purchase contract with C.G. during both the September 2020 mediation and the December 2020 arbitration hearing.
¶16 In September 2021, Evans filed a motion for summary judgment. She argued that she and Reyes had entered into a binding settlement agreement in September 2020 and that Reyes's having fired his attorney and dismissed the quiet title action did not "change or negate th[at] contract." During a hearing in January 2022, the superior court granted her motion in full. In particular, the court determined that the parties had reached an agreement in September 2020 and that Reyes's former attorney had held actual or apparent authority to bind Reyes to the agreement. The court thus reinstated the settlement agreement reached in mediation and outlined by Judge Meyerson in Agreement 1, including the requirement for arbitration. The court then enforced the resulting December 2020 arbitration award, noting that, by refusing to participate in the arbitration hearing, Reyes had accepted the risk that he would be bound by its result. The court then determined that its order on Evans's summary judgment motion disposed of Reyes's counterclaim. The court also noted that it would award Evans damages after she submitted the requisite affidavits.
During the same hearing, the superior court also denied Reyes's motion to join an insurance corporation as a required party, finding that it was not a required party and that any claim against it was speculative.
¶17 The superior court appointed a special commissioner to determine whether the sale to C.G. would have been reasonable during the six months following the September 2020 mediation. The court stated its intention to affirm the special commissioner's findings and enforce the C.G. sale if it was found to have been reasonable. Reyes filed a motion for reconsideration, which the court denied.
¶18 In February 2022, the special commissioner determined that the price for the sale of the property to C.G. was reasonable. Evans filed a notice of the special commissioner's report and moved for the approval of the sale to C.G., which Reyes opposed. In March, after a hearing on the motion, the superior court granted Evans's motion and approved the sale. In July, after issuing an additional order regarding the sale the month before, the court found that Reyes had delayed the case "in an unreasonable and unjustified manner" and awarded Evans damages, attorney fees, and costs. And in October, the superior court entered final judgment, incorporating its prior orders, confirming its approval for the appointed special commissioner to complete the sale to C.G., and awarding Evans additional damages, attorney fees, costs. This appeal followed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).
Discussion
¶19 On appeal, Reyes presents only two arguments, both related to whether the superior court properly granted summary judgment in favor of Evans. In particular, he contends that summary judgment was improper because: (1) a genuine issue exists regarding the materiality of Evans's failure to disclose her purchase contract with C.G. during the mediation and whether a valid agreement was possible absent knowledge of that contract; and (2) Evans did not directly address Reyes's affirmative defenses in her motion for summary judgment.
¶20 We review de novo a superior court's grant of summary judgment and issues of contract interpretation. Andrews, 205 Ariz. 236, ¶ 12. Summary judgment is appropriate where the moving party shows "that there is no genuine dispute as to any material fact" such that he or she "is entitled to judgment as a matter of law." Ariz. R. Civ. P. 56(a). We will affirm a grant of summary judgment "if the evidence produced in support of the defense or claim has so little probative value that no reasonable person could find for its proponent." Takieh v. O'Meara, 252 Ariz. 51, ¶ 11 (App. 2021) (quoting State Comp. Fund v. Yellow Cab Co. of Phx., 197 Ariz. 120, ¶ 5 (App. 1999)).
I. Evans's Contract to Sell the Property
¶21 Evans disclosed both before and during the mediation that she had a buyer willing to purchase the property for approximately $60,000. The draft settlement agreement, prepared and circulated by Reyes's then-counsel the day after the mediation, confirms this. Reyes's new counsel also admitted as much during oral argument on the motion for summary judgment. However, as Evans admitted in response to Reyes's counterclaim, "the purchase contract with [C.G.] was not specifically discussed at the mediation." Reyes argues that no meeting of the minds was possible during the mediation because he was unaware that "Evans had placed the Property under contract" or that "Evans was facing liability" to C.G. if the sale they had agreed to in July 2020 did not go through.
That draft states, "[Evans] found a buyer named who is willing to pay $60,000 for the Property."
¶22 Evans asks that we deem waived Reyes's argument that his agreement during the mediation and his assent to Agreement 1 were ineffective due to his lack of knowledge of the purchase contract with C.G. because he did not assert it in his response to the motion for summary judgment. Indeed, Reyes did not develop such an argument in his response, and the superior court rejected the two unrelated arguments he presented, which he has abandoned on appeal.
¶23 However, Reyes's response did mention in its background section that Evans had entered into the purchase contract without his knowledge or consent, that he had not learned of the contract until months after the mediation and arbitration, and that C.G. had filed a lawsuit in May 2021 stemming from her contract with Evans. Then, at the hearing on the summary judgment motion, Reyes, through counsel, argued at length regarding the topic. He stated that although he had known about an offer, he had not been aware when filing his lawsuit, when agreeing to mediation, or during the mediation that Evans had entered into a purchase contract with C.G. He contended he might not have agreed to go to mediation at all had he known about the sale, and that a meeting of the minds during mediation had been impossible "when no one knew that Miss Evans had encumbered the property by entering into this sales contract"-knowledge he claimed "would have changed the whole dynamics of the lawsuit." Reyes also claimed that Judge Meyerson had not known about the sale, a "material and relevant fact" of which he should have been aware. He further argued that Meyerson would not have signed the agreement had he known about the sale, and that Meyerson was willing to testify to that effect. In light of these discussions before the superior court, we decline to deem the issue waived.
¶24 However-as Evans pointed out repeatedly when objecting to these arguments below and notes again on appeal-Reyes failed to present any evidence under Rule 56 to support any of these claims, providing only the assertions and speculation of his counsel. As detailed above, Evans presented evidence that she and Reyes had reached an agreement at mediation, which Judge Meyerson reduced to a writing and which the parties accepted via email. See § 44-7005(B) (agreements to conduct transactions electronically); § 44-7007(D) (electronic signatures); Robertson v. Alling, 237 Ariz. 345, ¶¶ 14-15 (2015) (attorney exchange of emails sufficient to satisfy writing requirement of Ariz. R. Civ. P. 80, as "attorneys can bind clients who have cloaked them with apparent authority to act on their behalf"); United Liquor Co. v. Stephenson, 84 Ariz. 1, 3-4 (1958) (where attorney authorized to settle, his agreement binding on client). That September 2020 agreement formed the basis of the settlement agreement finalized at the December 2020 arbitration hearing Reyes refused to attend. See § 12-3006(A) (agreement to arbitrate valid, enforceable, and irrevocable except on ground that exists in law or equity for revocation of contract); City of Cottonwood v. Fann Contracting, Inc., 179 Ariz. 185, 189 (App. 1995) ("Because of the public policy favoring arbitration, arbitration clauses are construed liberally and any doubts about whether a matter is subject to arbitration are resolved in favor of arbitration."). Evans thereby established that she and Reyes had entered into a contract and that he had breached that contract by failing to comply with its terms. See Emmons v. Superior Court, 192 Ariz. 509, ¶ 14 (App. 1998) (construction and enforcement of settlement agreements governed by contract principles). She was therefore entitled to judgment as a matter of law. See Hays v. Fisher, 161 Ariz. 159, 164 (App. 1989) (where facts undisputed, court has authority to summarily enforce settlement agreement in case pending before it).
¶25 Once Evans made that showing, the burden of production shifted to Reyes "to produce evidence sufficient to raise a triable issue of fact." McCleary v. Tripodi, 243 Ariz. 197, ¶ 21 (App. 2017) (emphasis added). He could have supported his opposition "by affidavit, depositions, answers to interrogatories, or admissions," id., as contemplated by Rule 56(c)(5), (6). Indeed, the rule allows a party who "cannot present evidence essential to justify its opposition" to request additional time "to obtain affidavits or to take discovery before a response to the motion is required." Ariz. R. Civ. P. 56(d). But Reyes requested no such discovery and presented no such evidence. Rather, he presented only "unsworn and unproven assertions of facts" in both his response to the motion for summary judgment and at the related hearing, which are, by law, "insufficient." McCleary, 243 Ariz. 197, ¶ 21; see also Florez v. Sargeant, 185 Ariz. 521, 526-27 (1996) (conclusory allegations and self-serving assertions without factual support in record insufficient to defeat summary judgment).
¶26 Moreover, the disputed issue-whether Reyes was aware of the purchase contract between Evans and C.G.-is immaterial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (regarding materiality, only disputes over facts that might affect outcome of case will properly preclude entry of summary judgment, with irrelevant or unnecessary factual disputes insufficient). As Agreement 1 demonstrates, the parties agreed during the mediation to list the property for sale and appoint a special commissioner to handle the sale. And as the draft settlement agreement prepared and circulated by Reyes's then-counsel demonstrates, the parties also agreed that, if the special commissioner proved "unable to get the Property under contract in six months," they would "sell the Property to Defendant's buyer if that buyer is still interested in buying the Property." They further agreed that if "Defendant's buyer is unable [or] unwilling to buy the Property at that time," the special commissioner would resume efforts to sell the property. The same essential terms appear in the version of the settlement agreement amended and circulated by Evans's counsel, which was later adopted at arbitration. Reyes's former counsel also prepared and circulated an order for the appointment of the special commissioner. That order would have provided a mechanism for court approval and sanctions if either party unreasonably objected to a purchase offer deemed acceptable by the special commissioner and the court.
This order for the appointment of the special commissioner was never entered by the superior court. By the time the court appointed said commissioner in January 2022, after Reyes's many attempts to avoid enforcement of the September 2020 agreement, the agreed-upon six-month window for seeking another buyer had long expired. As such, the commissioner was instead ordered to "make a determination on whether the [C.G. sale] represents a reasonable sale during the six months following the mediation of September 29, 2020."
¶27 Thus, Evans's prior purchase contract with C.G. was superseded by the parties' agreement at mediation to list the property for sale for another six months, under an arrangement that mandated protections applicable to both parties. If a sale to another buyer occurred during those six months-which Evans would have been unable to unreasonably prevent in favor of the C.G. sale, given the terms of the parties' agreement-it would have been for Evans to deal with any resulting liability to C.G. Reyes has not articulated how additional knowledge of Evans's agreement with C.G. was essential to the agreement such that it could have prevented agreement altogether or caused him to advocate for different terms. He has therefore failed to establish a material fact sufficient to invalidate the superior court's grant of summary judgment.
II. Reyes's Affirmative Defenses
¶28 Reyes also contends the superior court erred in granting Evans's motion for summary judgment because that motion "did not address Reyes' affirmative defenses, resulting in a failure to satisfy her initial burden of production." Here, Evans correctly asserts that the issue has been waived. Nowhere in his response to the motion for summary judgment or at the hearing on that motion did Reyes raise this argument. And Reyes's opening brief fails to identify any point at which he raised the issue with the superior court to preserve it for appeal. See Ariz. R. Civ. App. P. 13(a)(7)(B). Indeed, the opening brief also fails to articulate what the affirmative defenses in question were. Thus, Reyes has waived the issue by failing to raise it below and by failing to present adequate argument on appeal, see Ariz. R. Civ. App. P. 13(7)(A). Accordingly, we will not address it further. See Zumar Indus., Inc. v. Caymus Corp., 244 Ariz. 163, ¶ 23 (App. 2017) (appeals court will not address arguments raised for first time in opening brief on appeal); Watahomigie v. Ariz. Bd. of Water Qual. Appeals, 181 Ariz. 20, 26 (App. 1994) (appeals court "will not consider issues not properly briefed").
Reyes's opening brief refers vaguely only to his "two affirmative defenses." But his answer contained three: unclean hands, failure to state a claim upon which relief can be granted, and failure to join a party under Rule 19, Ariz. R. Civ. P. Regardless, the first purported defense, which was premised upon the same alleged lack of knowledge of the C.G. purchase contract during the mediation, suffers from the same dearth of evidence discussed above. The second was clearly addressed by Evans in her pleadings and oral argument on summary judgment. And the third was both addressed in Evans's opposition to the motion to join the purportedly required party and rejected by the superior court in its denial of that motion as unfounded and speculative before oral argument on the motion for summary judgment.
III. Attorney Fees and Costs
¶29 Evans requests her attorney fees and costs on appeal pursuant to A.R.S. §§ 12-341.01 and 12-349. We find an award of attorney fees appropriate under both statutes. This is a contested action arising out of contract-the agreement the parties reached during and immediately after the mediation in September 2020-and we may therefore award the successful party, Evans, reasonable attorney fees in our discretion. See § 12-341.01. This appeal has also unreasonably expanded and delayed the already-delayed proceedings, such that we must award Evans her reasonable attorney fees and costs on appeal. See § 12-349(A)(3). However, in our discretion, we decline to award the double damages permitted by the statute.
Disposition
¶30 For the foregoing reasons, we affirm the judgment of the superior court and award Evans her attorney fees and costs on appeal.