Opinion
No. 1 CA-CV 12-0334
02-26-2013
ARNESON RANCH, INC., a Montana corporation, Plaintiff/Appellee, v. QUEEN CREEK CAFE, LLC, an Arizona limited liability company; GARRET R. MOSS and JOEY T. MOSS, husband and wife, Defendants/Appellants.
Tiffany & Bosco PA By Lance R. Broberg Attorneys for Plaintiff/Appellee Reynolds & Reynolds PLLC By Michael T. Reynolds Attorneys for Defendants/Appellants
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)
Appeal from the Superior Court in Maricopa County
Cause No. CV2010-033086
The Honorable Sally S. Duncan, Judge
AFFIRMED
Tiffany & Bosco PA
By Lance R. Broberg
Attorneys for Plaintiff/Appellee
Phoenix Reynolds & Reynolds PLLC
By Michael T. Reynolds
Attorneys for Defendants/Appellants
Phoenix BROWN, Judge ¶1 Garret and Joey Moss, husband and wife, and Queen Creek Café, L.L.C. ("QCC") (collectively referred to as "Defendants" unless specified otherwise) appeal the trial court's grant of summary judgment in favor of Arneson Ranch, Inc. ("Arneson"). For the reasons that follow, we affirm.
BACKGROUND
¶2 In June 2009, QCC entered into a ten-year commercial lease agreement with Arneson for the purpose of establishing a restaurant in a shopping center. Under the lease, QCC agreed to pay Arneson monthly rent, which periodically increased throughout the term of the lease. Any failure to pay QCC's obligations or abandonment of the property constituted default. In the event of default, the lease allowed Arneson to either terminate the lease or, without terminating the lease, relet the premises, although it had no "obligation so to do." Contemporaneous with the execution of the lease, Mr. and Mrs. Moss executed a written guaranty of the lease, personally guaranteeing full performance of the lease, including payment of the rent. ¶3 QCC failed to pay the rent due under the lease beginning in November 2009. Arneson filed suit against Defendants the following month, alleging breach of the lease and guaranty and seeking damages "[f]or unpaid Rent, Taxes, management fees and all applicable Late Charges and interest." Defendants denied the allegations of the complaint and affirmatively asserted that Arneson failed to mitigate damages. ¶4 Arneson moved for summary judgment, asserting it was undisputed that Defendants had breached their contractual obligations and were therefore responsible for damages for unpaid rent and related charges for the remainder of the lease term. The motion was supported by copies of the lease and guaranty, and a declaration of the property manager with an attached spreadsheet showing his calculation of damages. ¶5 In response, Defendants argued that "[s]ince there is a question of fact as to the proper amount of damages owed," the court was required to hold an evidentiary hearing. In support, they filed a "controverting statement of facts," which admitted or denied Arneson's factual allegations and again asserted Arneson failed to mitigate damages. In support of this assertion, Defendants submitted a declaration by Garret Moss, managing member of QCC, avowing in part as follows:
Plaintiff in this case failed to properly mitigate any damages stemming from the alleged breach of contract in this case. . . . A suitable renter was brought to Plaintiff, and was allowed to open for business; however, this only lasted for four months. Plaintiff could have found another suitable renter.In reply, Arneson countered that these "conclusory statement[s]" were not enough to avoid summary judgment. Arneson also explained its efforts to mitigate damages and included with its reply a declaration detailing those efforts. ¶6 Following oral argument, the trial court granted Arneson's motion and entered judgment against Defendants in the amount of $354,784.61, with interest to accrue at 18% pursuant to the lease terms. Defendants timely appealed.
DISCUSSION
¶7 Summary judgment is appropriate "if the pleadings, deposition, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that 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(c)(1). We determine de novo whether any genuine issues of material fact exist. L. Harvey Concrete, Inc. v. Agro Constr. & Supply Co., 189 Ariz. 178, 180, 939 P.2d 811, 813 (App. 1997). We view the evidence and reasonable inferences in favor of the non-moving party. Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 482, ¶ 13, 38 P.3d 12, 20 (2002). ¶8 Defendants do not dispute that they breached their contractual obligations under the lease and guaranty. Rather, Defendants argue that a material issue of fact exists as to whether Arneson failed to properly mitigate its damages. We disagree. ¶9 "A basic principle of the law of damages is that one who claims to have been injured by a breach of contract must use reasonable means to avoid or minimize the damages resulting from the breach." W. Pinal Family Health Ctr., Inc. v. McBryde, 162 Ariz. 546, 548, 785 P.2d 66, 68 (App. 1989). The party in breach of a contract "has the burden of proving that mitigation was reasonably possible but not reasonably attempted." Fairway Builders, Inc. v. Malouf Towers Rental Co., Inc., 124 Ariz. 242, 255, 603 P.2d 513, 526 (App. 1979). As they did in the trial court, Defendants assert generally that any rents Arneson received from third parties after QCC abandoned the property should have been credited against the damages claimed by Arneson. But Defendants failed to provide any support for their contention that Arneson received any such rent or the related assertion in the Moss declaration that Defendants could have found another tenant for the property. ¶10 The only arguable evidence Defendants submitted was the Moss declaration, which included the statement that "[a] suitable renter was brought to Plaintiff, and was allowed to open for business; however, this only lasted for four months." Moss' declaration is simply insufficient to create a material issue of fact as to Defendants' argument that Arneson failed to mitigate its damages; the declaration does not state the identity of the alleged renter, the time period involved, the amount of money paid to Arneson, the basis for the assertion set forth in the declaration or any specific factual information to support Moss' broad conclusion that someone or some entity leased the property for four months and that Arneson could have found another "suitable renter" for the property. See Florez v. Sargeant, 185 Ariz. 521, 526, 917 P.2d 250, 255 (1996) (explaining that "affidavits that only set forth ultimate facts or conclusions of law can neither support nor defeat a motion for summary judgment"); State ex rel. Corbin v. Challenge, Inc. , 151 Ariz. 20, 26, 725 P.2d 727, 733 (App. 1986) ("Conclusory statements are simply insufficient to raise any genuine issues of material fact under Rule 56(e), Arizona Rules of Civil Procedure."); Ariz. R. Civ. P. 56(e)(4) (adverse party's affidavit must "set forth specific facts showing a genuine issue for trial"). Thus, Defendants failed to establish the existence of a genuine issue of material fact regarding Arneson's duty to mitigate damages.
CONCLUSION
¶11 For the foregoing reasons, we affirm the judgment of the trial court.
____________________
MICHAEL J. BROWN, Judge
CONCURRING: ____________________
SAMUEL A. THUMMA, Presiding Judge
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DIANE M. JOHNSEN, Judge