Opinion
1 CA-CV 12-0197
02-05-2013
SOUTHWEST FERTILITY CENTER, LTD., an Arizona corporation, Plaintiff/Appellant, v. MEDSCAN DIAGNOSTIC SYSTEMS, INC., an Ohio corporation; DIANE SCHULDT, an individual, Defendants/Appellees.
Paul M. Rybarsyk, P.C. Attorney for Appellant Gust Rosenfeld, P.L.C. by Michael S. Woodlock Attorneys for Appellees
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(Not for Publication -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. CV2011-097033
The Honorable Karen A. Potts, Judge
JURISDICTION ACCEPTED; RELIEF DENIED
Paul M. Rybarsyk, P.C.
Attorney for Appellant
Scottsdale Gust Rosenfeld, P.L.C.
by Michael S. Woodlock
Attorneys for Appellees
Tucson THUMMA, Judge ¶1 Plaintiff Southwest Fertility Center appeals from a superior court judgment dismissing Southwest's claims without prejudice on forum selection grounds and awarding attorneys' fees pursuant to Arizona Revised Statutes (A.R.S.) section 12-341.01 to Medscan Diagnostic Systems, Inc. and Diane Schuldt (collectively Defendants). Finding no appellate jurisdiction but accepting special action jurisdiction, Southwest's requested relief is denied because the superior court did not err.
Absent material revisions since the relevant dates, statutes cited refer to the current version unless otherwise indicated.
FACTS AND PROCEDURAL HISTORY
In reviewing the grant of a motion to dismiss, this court "must [] assume the truth of the well-pled factual allegations and indulge all reasonable inferences therefrom." Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, 419, ¶ 7, 189 P.3d 344, 346 (2008).
¶2 In March 2010, through a written quotation, Medscan offered to deliver and install a specialized X-ray machine at Southwest's facility. The "acceptance" portion of the quotation provided that Southwest could accept the offer either by payment of a deposit or by signing the quotation. The acceptance portion also included a forum selection clause stating "[a]ll disputes will be handled within Cuyahoga County, OH." In a telephone conversation between Southwest employee Heather Pisarski and Medscan owner and president Schuldt, the quote was modified to include on-site training. Pisarski wrote this modification at the end of the quotation and signed "H. Pisarski" beneath the modification. Southwest "agreed to purchase [the] unit" and paid a deposit. Later, Southwest paid the remainder of the balance owed and, in December 2010, Medscan delivered an X-ray machine to Southwest. ¶3 In March 2011, a dispute arose regarding the X-ray machine and in July 2011, Southwest filed a verified complaint in Maricopa County Superior Court alleging Defendants breached the contract and committed consumer fraud by delivering the wrong X-ray machine. Defendants moved to dismiss based on the forum selection clause in the written quotation, arguing that the quotation constituted the contract between Southwest and Medscan. Although not attached to the verified complaint, the signed quotation was attached to a declaration by Schuldt in support of the motion to dismiss. Southwest opposed the motion, arguing (among other things) that the written quotation was not a contract; that if the document was a contract, the forum selection clause was unconscionable and unenforceable and that Schuldt was not a party to any contract and could not invoke the forum selection clause. ¶4 The superior court dismissed the claims without prejudice, finding that a signed contract existed, the contract contained an enforceable forum selection clause and the clause was binding on Southwest regarding the contract and consumer fraud claims against Medscan and Schuldt. ¶5 Southwest filed a motion to reconsider arguing the contract and consumer fraud claims were separate, the forum selection clause did not apply to the consumer fraud claim and disingenuously claiming confusion about the identity of H. Pisarski. The superior court denied the motion for reconsideration, noting Southwest's verified complaint alleged a binding contract existed and both parties admitted "that payment was made and the goods were initially accepted." The superior court also found that the consumer fraud claims arose out of the terms of the contract and concluded that, under Bennett v. Appaloosa Horse Club, 201 Ariz. 372, 35 P.3d 426 (App. 2001), the forum selection clause applied to all of Southwest's claims. The superior court entered judgment dismissing Southwest's claims without prejudice and awarding Defendants attorneys' fees pursuant to A.R.S. § 12-341.01(A). Southwest filed a timely appeal from that judgment.
As Defendants noted, Southwest's website lists Heather Pisarski as one of five medical professionals at Southwest; Pisarski is identified as having worked at Southwest since 1996 and is the individual who "coordinates the oocyte donor program and is involved in the sensitive evaluation and counseling of patients." Contrary to Southwest's argument, such information is not "hearsay of the highest order" but, rather, a non-hearsay admission by a party opponent. Ariz. R. Evid. 801(d)(2).
Southwest filed a notice of appeal prior to the superior court's decision on the motion for reconsideration and award of attorneys' fees. Contrary to Southwest's argument, after that original notice of appeal, the superior court retained jurisdiction to issue an award of attorneys' fees and costs prior to the entry of judgment. Britt v. Steffen, 220 Ariz. 265, 270, ¶ 22, 205 P.3d 357, 362 (App. 2008). Although Southwest's original notice of appeal was premature, Southwest cured that defect by filing a upplemental notice of appeal after entry of judgment.
JURISDICTION
¶6 Southwest relies on A.R.S. § 12-2101(B) (2010) -- now A.R.S. § 12-2101(A)(1) -- as providing jurisdiction over this appeal. "We are obligated to examine our jurisdiction over an appeal . . . ." Grand v. Nacchio, 214 Ariz. 9, 15, ¶ 12, 147 P.3d 763, 769 (App. 2006). A "dismissal without prejudice is not appealable." McMurray v. Dream Catcher USA, Inc. , 220 Ariz. 71, 74, ¶ 4, 202 P.3d 536, 539 (App. 2009) (citation omitted). Similarly, an award of attorneys' fees after dismissal without prejudice is not appealable. See Kool Radiators, Inc. v. Evans, 229 Ariz. 532, 535, ¶¶ 10-11, 278 P.3d 310, 313 (App. 2012). Accordingly, this court lacks appellate jurisdiction over Southwest's appeal. ¶7 Although lacking appellate jurisdiction, this court properly can review the judgment by exercising special action jurisdiction. See Villares v. Pineda, 217 Ariz. 623, 624, ¶ 10, 177 P.3d 1195, 1196 (App. 2008) ("Special action jurisdiction is appropriate where there is no 'equally plain, speedy, and adequate remedy by appeal.'") (quoting Ariz. R.P. Spec. Act. 1); see also Danielson v. Evans, 201 Ariz. 401, 411, ¶ 35, 36 P.3d 749, 759 (App. 2001) (after finding appellate jurisdiction lacking, court sua sponte accepted special action jurisdiction). Because Southwest has no adequate remedy by appeal, this court sua sponte elects to exercise discretionary review, treating Southwest's appeal as a petition for special action and accepting special action jurisdiction. See A.R.S. § 12-120.21(A)(4) (court may assume special action jurisdiction "without regard to its appellate jurisdiction").
DISCUSSION
I. Standard Of Review.
¶8 The grant of a motion to dismiss based on a forum selection clause, including the enforceability of the forum selection clause, is reviewed de novo. Bennett, 201 Ariz. at 375, ¶ 11, 35 P.3d at 429. This court will affirm the superior court's judgment if correct for any reason. Gen. Elec. Capital Corp. v. Osterkamp, 172 Ariz. 191, 193, 836 P.2d 404, 406 (App. 1992).
II. Southwest And Medscan Entered Into A Valid Contract That Contains An Enforceable Forum Selection Clause.
¶9 Southwest argues that no signed contract exists between the parties. That argument, however, does not mean there is no binding written contract. ¶10 Southwest's verified complaint admits that Medscan, through a written quotation and verbal representations, offered to sell Southwest an X-ray machine. Southwest further admits that, after receiving the written quotation, Southwest agreed to purchase the X-ray machine and paid both a deposit and the entire balance owed on its order. In seeking dismissal, Medscan provided the written quotation that became the contract, which included a handwritten on-site training provision signed by Southwest employee Pisarski. This document provided for two methods of acceptance: either by payment of a deposit or by signing the quotation. ¶11 The superior court found Pisarski's signature on the quotation meant "that a signed contract exists." Even if Pisarski's signature did not constitute acceptance, Southwest's verified complaint admits that it contracted with Medscan and that Southwest paid the required deposit. By doing so, Southwest accepted Medscan's offer, as contemplated by one method of acceptance stated in the express terms of the written quotation. See Empire Mach. Co. v. Litton Bus. Tel. Sys. , 115 Ariz. 568, 572, 566 P.2d 1044, 1048 (App. 1977) ("[W]here the offer to purchase is made on forms supplied by the seller, the buyer may adopt the manner of acceptance suggested by the seller."). Moreover, in the verified complaint, Southwest admitted that a contract for sale was made; to having paid the entire amount for the X-ray machine that Medscan agreed to sell Southwest; and that Medscan had delivered an X-ray machine to Southwest. See A.R.S. § 47-2201(C)(2)-(3). By these actions and admissions, the quotation became the contract between the parties. ¶12 Southwest argues that the contract was one of adhesion and that the forum selection clause was not fairly bargained for or enforceable. The forum selection clause in the contract broadly states that "[a]ll disputes shall be handled within Cuyahoga County, OH." A forum selection clause will be enforced where it is fairly bargained for, not the result of fraud and will not result in depriving a party of its day in court. Societe Jean Nicolas Et Fils v. Mousseux, 123 Ariz. 59, 61, 597 P.2d 541, 543 (1979). Southwest "bears a heavy burden of proof" in challenging the enforceability of the forum selection clause. Desarrollo Immobiliario y Negocios Industriales de Alta Tecnologia de Hermosillo, S.A. de C.V. v. Kader Holdings Co., 229 Ariz. 367, 373, ¶ 17, 276 P.3d 1, 7 (App. 2012). ¶13 Southwest did not provide any evidence supporting a claim that the contract was one of adhesion or was not fairly bargained for or enforceable. Citing Bennett, Southwest argues on appeal that the superior court was required to hold an evidentiary hearing to determine the enforceability of the forum selection clause. Bennett, however, affirmed the grant of a motion to dismiss without an evidentiary hearing. 201 Ariz. at 375, ¶ 9, 35 P.3d at 429. Moreover, Southwest did not request an evidentiary hearing to challenge enforceability and cannot now claim error because no such hearing was held. Brake Masters Sys., Inc. v. Gabbay, 206 Ariz. 360, 365, ¶ 15, 78 P.3d 1081, 1086 (App. 2003). ¶14 Undercutting any claim that the forum selection clause was one of adhesion or not fairly bargained for is the fact that Southwest actually negotiated a training clause that was included in the contract. Having successfully negotiated for such a modification, Southwest cannot now claim that it lacked the ability to bargain. See Phoenix Baptist Hosp. & Med. Ctr., Inc. v. Aiken, 179 Ariz. 289, 293, 877 P.2d 1345, 1349 (App. 1994) (unenforceable adhesion contract "is typically a standardized form offered . . . on essentially a 'take it or leave it' basis without affording the consumer a realistic opportunity to bargain") (citation omitted). On this record, Southwest has failed to show the forum selection clause is not enforceable, has not shown that the clause was obtained by fraud or that litigating in Ohio would deprive Southwest of its day in court, meaning the clause is enforceable. See Mousseux, 123 Ariz. at 61, 597 P.2d at 543; Desarrollo Immobiliario, 229 Ariz. at 373, ¶ 17, 276 P.3d at 7.
Southwest argues that, because the superior court considered the contract provided by Medscan (which was referenced in but not attached to the verified complaint), Defendants' motion to dismiss was converted to a motion for summary judgment and Southwest was denied the opportunity to present evidence. Contrary to Southwest's argument, the superior court properly may consider documents central to the plaintiff's claims (such as a contract sued upon) when considering a motion to dismiss without converting the motion to one for summary judgment. Lerner v. DMB Realty, LLC, 648 Ariz. Adv. Rep. 35 ¶ 10 n.3 (App. Nov. 27, 2012) (citing Coleman v. City of Mesa, 230 Ariz. 352, 356, ¶ 9, 284 P.3d 863, 867 (2012)).
Given these actions and admissions by Southwest, the contract became enforceable regardless of whether the quotation was signed by an authorized Southwest representative. Accordingly, there was no need for an evidentiary hearing to address the various questions Southwest raises regarding Southwest employee Pisarski. Moreover, Southwest did not request an evidentiary hearing before the superior court and cannot now assert error because no such hearing was held. Brake Masters Sys., Inc. v. Gabbay, 206 Ariz. 360, 365, ¶ 15, 78 P.3d 1081, 1086 (App. 2003).
This appeal does not involve the merits of the parties' competing positions regarding the enforceability of the contract (other than the forum selection provision) or breach of the contract or the merits of Southwest's consumer fraud claims. Those issues must await final resolution for another time and this court need not (and expressly does not) address or decide those issues here.
III. The Forum Selection Clause Covers All Claims Arising Out Of The Contract.
¶15 Southwest next argues that the forum selection clause does not apply to its consumer fraud claim. The forum selection clause is not limited to contract claims and does not purport to except non-contract claims. See Bennett, 201 Ariz. at 377, ¶ 24, 35 P.3d at 431 (in rejecting similar argument, noting "[t]he [forum selection] clause does not except negligence or fraud-based claims"). Moreover, Southwest's consumer fraud claim is based on Southwest's claim that it agreed to purchase an X-ray machine from Medscan, and paid for that machine, but that Medscan delivered a different model than the contract required. Because this claim arises out of the parties' contract, the forum selection clause applies to Southwest's consumer fraud claim. Id. (where "all of" plaintiff's claims arise out of the parties' contract, finding "none of [plaintiff's] claims lie beyond the scope of the forum selection clause"). ¶16 Southwest next argues that the forum selection clause does not apply to the consumer fraud claim against Schuldt because she is not a party to the contract. In its verified complaint, however, Southwest claims Schuldt is a party to the contract. Apart from the verified complaint, Southwest provided no authority to support its legal argument that the forum selection clause could not apply to the consumer fraud claim against Schuldt. See ARCAP 13(a)(6) (requiring Appellant to provide "citations to the authorities, statutes and parts of the record relied on"); Ritchie v. Krasner, 221 Ariz. 288, 305, ¶ 62, 211 P.3d 1272, 1289 (App. 2009) (unsupported argument "can constitute abandonment and waiver of that claim"). ¶17 Southwest's claims against both Defendants are based on the same facts and arise out of the quotation that became the contract. In that contract, Southwest agreed that "[a]ll disputes will be handled within Cuyahoga County, OH." Southwest's claims set forth in the verified complaint constitute just such disputes and, indeed, do not distinguish between Medscan and Schuldt and seek the same relief against Defendants jointly and severally. Forum selection clauses apply to "a range of transaction participants, parties and non-parties," where "the alleged conduct of the non-parties is so closely related to the contractual relationship" that "[t]he claims cannot be adjudicated without analyzing whether the parties were in compliance with the contract." Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 514 & n.5 (9th Cir. 1988); cf. Bennett,201 Ariz. at 377, ¶ 24, 35 P.3d at 431 (applying forum selection clause to all claims, "regardless of the legal theory pursued," arising out of the contract). On this record, the forum selection clause applies to all of Southwest's claims against Defendants.
In the verified complaint, Southwest asserts the same contract and consumer fraud claims against both Medscan and Schuldt. Southwest claims Schuldt, at all relevant times, was acting on behalf of Medscan within her authority as an agent for Medscan.
IV. The Award Of Attorneys' Fees Was Proper Under A.R.S. § 12-341.01.
¶18 Southwest challenges the superior court's award of attorneys' fees under A.R.S. § 12-341.01 on several grounds, none of which are persuasive. First, Southwest argues that the superior court lacked jurisdiction to make a fee award. This argument fails because the superior court retained jurisdiction to award fees, despite Southwest's premature appeal prior to entry of judgment. Britt v. Steffen, 220 Ariz. 265, 270, ¶ 22, 205 P.3d 357, 362 (App. 2008). Second, a party obtaining dismissal without prejudice may be a successful party eligible for an attorneys' fee award under A.R.S. § 12-341.01(A). See, e.g. , id. at 267, ¶ 9, 205 P.3d at 359 (noting when contract action "has been dismissed without prejudice, the defendant is still considered a 'successful party' for purposes of A.R.S. § 12-341.01(A) even though such a dismissal does not operate as an adjudication upon the merits"). ¶19 Finally, Southwest argues the superior court erred in awarding Medscan reasonable attorneys' fees because the contract "did not provide for an award of attorney's fees to the prevailing party." Given that there was no controlling contractual provision regarding attorneys' fees, the superior court properly relied upon A.R.S. § 12-341.01(A) in awarding fees. See Sweis v. Chatwin, 120 Ariz. 249, 252, 585 P.2d 269, 272 (App. 1978) (§ 12-341.01 applicable in absence of contractual fees provision).
V. Attorneys' Fees and Costs on Appeal.
¶20 Both parties request attorneys' fees on appeal. Because relief is denied, Southwest is not a successful party. Accordingly, Southwest's request for attorneys' fees and costs on appeal is denied. A.R.S. § 12-341.01(A). ¶21 As the successful parties on appeal, and in an exercise of the court's discretion, Defendants are awarded reasonable attorneys' fees upon compliance with ARCAP 21. See A.R.S. § 12-341.01(A). As the prevailing party, Defendants are awarded costs upon compliance with ARCAP 21. A.R.S. § 12-341.
CONCLUSION
¶22 Treating Southwest's timely attempted appeal as a petition for special action, special action jurisdiction is accepted and relief is denied.
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SAMUEL A. THUMMA, Judge
CONCURRING: _________________________________
PHILIP HALL, Presiding Judge
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PETER B. SWANN, Judge