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Baumgartner v. Meritage Homes Inc.

ARIZONA COURT OF APPEALS DIVISION ONE
Jun 30, 2020
No. 1 CA-CV 19-0641 (Ariz. Ct. App. Jun. 30, 2020)

Opinion

No. 1 CA-CV 19-0641

06-30-2020

JESSE BAUMGARTNER, et al., Plaintiffs/Appellants, v. MERITAGE HOMES OF ARIZONA INC, Defendant/Appellee.

COUNSEL Shinnick & Ryan LLP, Phoenix By Luke P. Ryan, Lucas A. Edwards Counsel for Plaintiffs/Appellants Stinson LLP, Phoenix By James E. Holland Jr., Michael Vincent Counsel for Defendant/Appellee


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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

Appeal from the Superior Court in Maricopa County
No. CV2013-055537 CV2014-008113 (Consolidated)
The Honorable Theodore Campagnolo, Judge

VACATED AND REMANDED

COUNSEL

Shinnick & Ryan LLP, Phoenix
By Luke P. Ryan, Lucas A. Edwards
Counsel for Plaintiffs/Appellants

Stinson LLP, Phoenix
By James E. Holland Jr., Michael Vincent
Counsel for Defendant/Appellee

MEMORANDUM DECISION

Judge David B. Gass delivered the decision of the Court, in which Presiding Judge Lawrence F. Winthrop and Judge Maria Elena Cruz joined.

GASS, Judge:

¶1 This case began as a construction-defect litigation involving more than 150 homeowners. This appeal involves ten of those homeowners (appellant owners). The superior court dismissed appellant owners' claims with prejudice based on an email between counsel. Appellant owners argue the superior court erred by dismissing their claims without an enforceable stipulation signed by the parties. See Ariz. R. Civ. P. 41(a)(1)(A)(ii).

¶2 Because the email from appellant owners' counsel was not a binding stipulation to dismiss, the superior court abused its discretion when it dismissed the claims. This court, therefore, vacates the superior court's order dismissing the appellant owners with prejudice and remands the case for further proceedings.

FACTUAL AND PROCEDURAL HISTORY

¶3 Appellant owners filed a construction-defect suit against Meritage. Meritage subsequently filed a third-party complaint naming several subcontractors as third-party defendants. The superior court consolidated the two cases.

¶4 For several years, the parties engaged in discovery, stipulating several times to extend the superior court's deadlines. During this ongoing process, on March 9, 2016, counsel for appellant owners sent an email (the March 9th email), saying "[h]ow about we agree to make the homes available for inspection no later than March 31st or [those claims] will be dismissed, unless there is good cause for their not being inspected." After the March 9th email, discovery continued.

¶5 Several months later, during the process of again asking the superior court to extend its scheduling deadlines, Meritage and several codefendants filed a Joint Motion to Enforce Stipulation to Dismiss Several Plaintiffs (the Joint Motion). The Joint Motion alleged appellant owners'

counsel stipulated to dismiss appellant owners in the March 9th email. In response, appellant owners flatly denied any stipulation existed, noting the motion "is not based on any actual agreement by the homeowners themselves, but based a single e-mail from [appellant owners'] counsel which suggests a timeline for moving these claims forward." No party alleged a signed stipulation existed.

¶6 Without oral argument, the superior court granted the Joint Motion and denied appellant owners' motion for reconsideration. After the underlying case reached final settlement as to the other claims, appellant owners filed this timely appeal. This court has jurisdiction under Article 6, Section 9, of the Arizona Constitution, and A.R.S. § 12-2101.A.1.

ANALYSIS

¶7 Generally, when presented with a mixed question of law and fact, this court will "defer to the superior court's factual findings but will review de novo its legal conclusions." See In re MH 2008-001752, 222 Ariz. 567, 569, ¶ 7 n.3 (App. 2009). Here, the superior court held no evidentiary hearing and issued no factual findings. Accordingly, this court has no factual findings upon which it can defer.

¶8 The ultimate question before the superior court and this court is whether the March 9th email is a legally enforceable stipulation to dismiss appellant owners. The answer is no. Meritage itself agrees, saying:

The fundamental misconception throughout [appellant owners'] opening brief is treating the March 9 emails as a stipulation to dismiss. This cannot be the case because a stipulation to dismiss is an agreement signed by all parties to dismiss certain parties from an action. See Ariz. R. Civ. P. 41. The only subject discussed in the emails was a deadline for the visual inspections of the homes.

¶9 Appellant owners' "fundamental misconception" is well grounded and based on the record. The Joint Motion asked the superior court to treat the March 9th email as a stipulation to dismiss. The superior court granted Meritage relief based on that request.

¶10 Meritage now asks this court to affirm the superior court on a different ground, saying the superior court dismissed appellant owners as a sanction under Arizona Rule of Civil Procedure 16(h)(1). Relying on Green v. Lisa Frank, Inc., Meritage further argues this court should review

the superior court's "sanction" for an abuse of discretion. See 221 Ariz. 138, 153, ¶ 40 (App. 2009). Neither Green nor the record support Meritage's argument.

¶11 As Green explained:

. . . a claim should not be dismissed absent extreme circumstances. Arizona courts prefer that claims be adjudicated on their merits . . . Whether a trial court has the discretion to impose the sanction of dismissal depends on whether the specific facts and circumstances of the case are sufficiently extreme to warrant such a sanction.

See 221 Ariz. at 153, ¶ 40 (internal citations omitted).

¶12 The Joint Motion—the motion the superior court granted—did not allege any bases for sanctions. And rightly so, because it was not a motion for sanctions—it was a motion to enforce an alleged stipulation to dismiss. As a result, the superior court issued no factual findings identifying the "sufficiently extreme" circumstances justifying a dismissal of appellant owners. See id. Without those findings, this court cannot affirm the superior court's order based on Meritage's sanction theory—a theory never raised before the superior court.

¶13 In short, Meritage correctly concedes the March 9th email was not a stipulation to dismiss. See Ariz. R. Civ. P. 41(a)(1)(A)(ii) (stipulation to dismiss must be "signed by all parties"). Further, the record contains no factual support for Meritage's contention the superior court dismissed appellant owners as a sanction. See Green, 221 Ariz. at 153, ¶ 40.

CONCLUSION

¶14 For the above reasons, this court vacates the superior court's order and remands for further proceedings consistent with this decision.


Summaries of

Baumgartner v. Meritage Homes Inc.

ARIZONA COURT OF APPEALS DIVISION ONE
Jun 30, 2020
No. 1 CA-CV 19-0641 (Ariz. Ct. App. Jun. 30, 2020)
Case details for

Baumgartner v. Meritage Homes Inc.

Case Details

Full title:JESSE BAUMGARTNER, et al., Plaintiffs/Appellants, v. MERITAGE HOMES OF…

Court:ARIZONA COURT OF APPEALS DIVISION ONE

Date published: Jun 30, 2020

Citations

No. 1 CA-CV 19-0641 (Ariz. Ct. App. Jun. 30, 2020)