AZAPP Blog

Mayer Unified School District v. Winkleman (5/19/2008): Arizona Court of Appeals Division Two Holds that the United States Supreme Court’s 1967 Decision Requiring the Arizona State Land Department to Receive Compensation for Easements on State Land Trust Property For Public Highways Does Not Apply Retroactively

Parents of Arizona public school students, joined later by two school districts, sued the State Land Commissioner and other state defendants, alleging failures to comply with the Arizona-New Mexico Enabling Act by granting easements prior to 1967 over school trust lands.  The lawsuit alleged that the Defendants had breached their fiduciary duty by conveying the easements without compensation, and that the easements were void.  The Plaintiffs also sought an accounting and declaratory relief.  The trial court dismissed the parent plaintiffs for lack of standing, joined the easement holders as defendants, and then dismissed the complaint under the doctrine of laches.  The school districts appealed.

The Court of Appeals reversed the laches finding, but affirmed dismissal of the complaint on the alternative ground that the U.S. Supreme Court decision on which Plaintiffs based their claim did not apply retroactively.  Before the Supreme Court’s 1967 decision in Lassen v. Arizona ex. rel. Ariz. Highway Dep’t, 385 U.S. 458 (1967), Arizona law held that the State Land Department was not required to receive compensation for easements granted for public highways.  The 1967 decision held that such compensation was required for future easements, but expressly declined to decide whether to invalidate earlier easements granted without compensation.

To determine the retroactivity of the Lassen decision, the Arizona Appeals Court applied the balancing test announced in Fain Land & Cattle Co. v. Hassell, 163 Ariz. 587 (1990).  The test considers (1) whether the decision establishes a new legal principle by overruling clear and reliable precedent; (2) whether retroactive application will further or retard application of the rule; and (3) whether retroactive application will produce substantially inequitable results.  Id. at 596. 

Because the Lassen decision overturned established Arizona Supreme Court precedent, the first factor weighed against retroactivity.  The second factor, however, weighed in favor of retroactivity because such application would further the intent of the rule, to fund the beneficiaries of state land trust assets.  But the third factor weighed heavily against retroactive application because “it would be impossible to undo all the [conveyances] that have transpired and put everyone back in his original position.”  The Court reasoned that retroactive application could cause great hardship to many innocent people and disrupt the economy of the state.  Because the rule of Lassen did not apply to pre-1967 easements, the complaint failed to state a claim for which relief could be granted.

Judge Vásquez wrote the opinion; Judges Eckerstrom and Espinosa concurred. 

Posted by azapp @ Wed, May 28, 2008

Spaulding v. Pouliot (4/23/2008):  Arizona Court of Appeals Division Two Holds That Where a Claimant Has Demonstrated Open, Visible, Continuous, and Unmolested Use of Land, the Claimant’s Use Is Presumed to Be Under Claim of Right and Without Permission.     

Defendant Michael Pouliot owned a parcel of land adjacent to vacant lot owned by a trust (“the Trust”).  He and the previous owner of his parcel had used an unpaved road across the Trust’s lot and also maintained a parcel of the Trust’s land (“adjoining parcel”) since 1968.  The Trust brought suit against Pouliot for trespass and Pouliot answered and counterclaimed, claiming a prescriptive easement for the road and adverse possession over the adjoining parcel.  After a bench trial, the trial court entered judgment in favor of the Trust despite finding that Pouliot and his predecessor had used the land openly and continuously since 1968.  The court also awarded the Trust attorneys’ fees and costs.  Pouliot appealed.

The Arizona Appeals Court reversed in part, vacated, and remanded, holding that “[w]here a claimant has shown an open, visible, continuous, and unmolested use of the land . . . for the [limitations period], the use will be presumed to be under a claim of right, and . . . the burden is upon the owner to show that the use was permissive.”  Gusheroski v. Lewis, 64 Ariz. 192, 198, 167 P.2d 390, 393 (1946).  In reaffirming Gusheroski, the Court interpreted several seemingly contradictory Arizona opinions dealing with the presumption set forth in that case.  Ultimately, the Court held that because the Trust did not contest the fact that Pouliot’s use of the land was open, visible, continuous, and unmolested, it had the burden of showing that his use of the Trust’s land was permissive. 

The Court also explained that permission may be either express or implied, and that once permission is given, any subsequent use presumptively remains permissive.  The Trust, however, was unable to show that any permission was given to either Pouliot or his predecessor for use of the land.  The Court rejected the Trust’s claim that permission given to Pouliot in 1996 to use the road defeated his claim for a prescriptive easement because the easement already existed due to the continuous use of the road by Pouliot’s predecessor beginning in 1968.  The Court, however, remanded with regard to the prescriptive easement because Pauliot’s predecessor made statements indicating that she believed that her right’s to the road were subordinate to the property owner’s right’s, which may have demonstrated permissiveness.  With regard to the adjoining parcel, the Court held that the superior court erred because there were no facts whatsoever demonstrating permissiveness.  Finally, the Court vacated the award of attorneys’ fees and costs to the Trust, and instead awarded Pouliot attorneys’ fees and costs for his adverse possession claim.     

Judge Brammer authored the opinion; Chief Judge Pelander and Presiding Judge Howard concurred.

Posted by azapp @ Wed, May 28, 2008

Redhair v. Kinerk, Beal, Schmidt, Dyer & Sethi, P.C. (4/30/2008): Arizona Court of Appeals Division Two Holds that the One-Year Statute of Limitations in A.R.S. § 12-541(3) Applies to an Oral Contract for the Payment of an Employee Bonus and the One-Year Statute of Limitations in A.R.S. § 12-541(5) Applies to Employee’s Claim for Unpaid Wages.

Michael Redhair was an associate with the law firm of Kinerk, Beal, Schmidt, Dyer & Sethi, P.C.  Through Redhair’s father, Redhair was able to retain a potentially high paying medical malpractice case.  The Kinerk firm agreed to pay Redhair a bonus in the event of a successful recovery in the malpractice case.  After Redhair left the firm, the firm received two million dollars in fees from the case.  The firm then refused to pay Redhair the promised bonus.  Redhair sued for breach of oral contract and unpaid wages, among other claims.  The firm, however, objected that Redhair’s claims were barred because they were precluded by the applicable statutes of limitations, both of which permitted only one year to bring the claims.  The trial court agreed and dismissed Redhair’s claims with prejudice.  Redhair appealed. 

The Arizona Appeals Court affirmed.  The Court held that Redhair’s claim for breach of the oral contract was barred by A.R.S. § 12-541(3), which requires that actions “[f]or breach of an oral or written employment contract” be brought within one year.  The court specifically rejected Mr. Redhair’s narrower, but reasonable, reading of the statute, which would have limited its applicability to “agreements affecting a term of employment or altering or limiting the at-will presumption from which an employee could state a claim for termination of employment . . . .”  The court then concluded that Redhair’s claim for unpaid wages (based on the same facts as above) likely was barred by A.R.S. § 12-541(5), which requires that actions for “liabilit[ies] created by statute” be brought within one year.  Redhair’s unpaid wage claim was statutory; it was brought under A.R.S. § 23-355.  Mr. Redhair claimed that the statute did not apply because it excepts penalties or forfeiture, and A.R.S. § 23-355 mandates treble damages for unpaid wage claims.  The court held, however, that the treble damage provision was not a penalty because it was based on the amount of actual damages; it was not a statutory penalty that applied irrespective of actual damages.  The court noted in closing that it had not decided whether A.R.S. § 12-541(3) or (5) applied to Redhair’s unpaid wage claim because both sections permitted only one year to bring the claim, which Redhair failed to do, and therefore it was unnecessary to decide which one actually applied.

Judge Eckerstrom authored the opinion; Judges Espinoza and Vasquez concurred. 

Posted by azapp @ Wed, May 28, 2008

Cain v. Horne (5/15/2008):  Arizona Court of Appeal Division Two Holds That School Voucher Programs That Provide Aid to Private Schools Violate Aid Clause of the Arizona Constitution. 

 The Arizona Legislature enacted bills creating two school voucher programs, the Arizona Scholarships for Pupils with Disabilities Program (the “scholarship program”) and the Arizona Displaced Pupils Choice Grant Program (the “grant program”).  Under the school voucher programs the state disburses funds to the parent or guardian, who “restrictively endorses” the payment to the school.  Parents or guardians select the schools their child will attend, and both sectarian and nonsectarian schools can participate.  Appellant filed suit arguing that the school voucher statutes violated the “Religion Clause” (Article II, Section 12) and the “Aid Clause” (Article IX, Section 10) of the Arizona.  Appellee moved for judgment on the pleadings.  The trial court granted Appellee’s motion, finding the programs did not violate either of these constitutional provisions, and dismissed all claims with prejudice.  This appeal followed.

The Arizona Court of Appeals reversed and remanded with direction to enter judgment for Appellant, holding that the school voucher programs violated the Aid Clause, which prohibits any “appropriation of public money made in aid of… private or sectarian school[s].”  The Court declined to adopt a broad application of the “true beneficiary theory,” under which the children receiving the benefit of the vouchers would be characterized as the “true beneficiaries” of the school voucher programs rather than the institutions receiving the funds, finding that this would improperly nullify the Aid Clause.  The Court further found that applying the “true beneficiary theory” would effectively make the Aid Clause redundant since “practically every proper expenditure for school purposes aids the child.”  The Court concurred with the trial court’s finding on the Religion Clause, noting that “[a]s enacted, the State’s school voucher programs do not result in an appropriation of public money for, or an application of public money to, any religious worship, exercise, or instruction or to the support of any religious establishment.”  The Court declined to address Appellant’s argument that the voucher programs violated Article XI, Section 1 of the Arizona Constitution. 

Judge Vásquez authored the opinion; Judges Eckerstrom and Espinosa concurred. 

Posted by azapp @ Wed, May 28, 2008

Devries v. State (5/22/2008):  Arizona Court of Appeals Division One Holds that the Statute Requiring Service on the Attorney General, Speaker of the House of Representatives, and President of the Senate Whenever a State Law Is Alleged to be Unconstitutional Applies to Lawsuits Filed Before Its Effective Date, Applies to Facial Constitutional Challenges First Pressed on Appeal, and Applies to Non-Declaratory Judgment Actions.

In 2006, the Arizona Legislature amended A.R.S. § 12-1841(A) to read as follows:

When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding. . . . In any proceeding in which a state statute, ordinance, franchise or rule is alleged to be unconstitutional, the attorney general and the speaker of the house of representatives and the president of the senate shall be served with a copy of the pleading, motion or document containing the allegation at the same time the other parties in the action are served and shall be entitled to be heard.

The primary result of the amendment is to require service upon the Speaker of the House of Representatives and the President of the Senate, in addition to the Attorney General, when a state law is challenged on constitutional grounds.

In 2003, Appellant Devries sued the State for wrongful death and, in response, the State asserted qualified immunity under A.R.S. § 12-820.02(A)(7).  Devries, in turn, claimed that the qualified immunity statute is unconstitutional.  The trial court ruled that the State could assert qualified immunity at trial and the jury returned a verdict in favor of the State.  On April 26, 2007, after the Legislature amended § 12-1841, Devries filed an appeal, again arguing that the qualified immunity statute is unconstitutional.

Two days before the amendment’s effective date, Appellant Green filed a complaint for declaratory relief, alleging that a particular state tax statute is unconstitutional.  The trial court granted the Attorney General’s motion to dismiss.  On May 14, 2007, also after § 12-1841’s effective date, Green filed an appeal and again asserted that the tax statute is unconstitutional.

The Arizona Appeals Court explained that although the Legislature did not expressly make the 2006 amendment to § 12-1841 retroactive, its requirements could still apply retroactively so long as the statute is merely procedural.  Because requiring service upon the Speaker of the House and the President of the Senate does not affect the underlying right to raise a constitutional challenge or any other right, the 2006 amendment is merely procedural and thus applicable to actions filed prior to its effective date.

Next, the Court held that the wording of § 12-1841 is broad enough to apply to assertions of unconstitutionality made during appellate proceedings.  This stems from the fact that the statute requires service of “any court orders,” “[i]n any proceeding,” and when the assertion of unconstitutionality is made “in a . . . document other than the pleading, motion or document that initiated the proceeding.”  As a result, the Attorney General, Speaker, and President must be served even when an assertion of unconstitutionality is made for the first time on appeal. 

Finally, the Court ruled that the service requirement contained within the third sentence of § 12-1841(A) is not limited to actions where “[d]eclaratory relief is sought.”  This is because an allegation of unconstitutionality triggers the service requirement, not the relief sought, and the Legislature’s recognition that an assertion of unconstitutionality could occur within a “motion or other document” suggests that it did not just have declaratory relief ─ which is primarily sought through pleadings ─ in mind.

Judge Norris authored the opinion in which Judges Timmer and Brown concurred.   

Posted by azapp @ Wed, May 28, 2008

Tucson Botanical Gardens, Inc. v. Pima County (5/20/2008):  Arizona Court of Appeals Division One Holds That the Botanical Gardens, a Qualified Non-Profit, Charitable Organization, is Entitled to an Exemption From Property Taxes on Those Portions of Its Property Used to Operate a Gift Shop, Exhibit Art For Sale, and Rent to Various Third Parties.

Tucson Botanical Gardens, Inc. (“TBG”) is a qualified non-profit, charitable organization under §501(c)(3) of the United States Internal Revenue Code and Ariz. Rev. Stat. (“A.R.S.”) § 43-1201.  As such, it is exempt from real property taxes if the property is “used for those [charitable] purposes and not used or held for profit.”  A.R.S. § 42-11116.  For the 2005 tax year, Pima County (“County”) notified TBG that it would receive only a partial exemption, because the county had determined that the gift shop, art exhibition and meeting areas were not exempt from taxation.  TBG paid its 2005 property taxes in full under protest and appealed to the superior court.  The tax court granted summary judgment in favor of TBG and the County timely appealed.

The County argued on appeal that the TBG gift shop and meeting areas are not exempt from property taxes because those areas are used for non-exempt commercial purposes: the sale of non-educational items and renting meeting areas to private parties or using them to exhibit art for sale.  The Arizona Appeals Court rejected this argument, holding that as long as the taxpayer’s principal or primary use of its property is for the designated exempt purpose, the taxpayer is entitled to the exemption notwithstanding its occasional or incidental use of its property for other purposes.  TBG presented uncontroverted evidence that it primarily uses the gift shop and meeting areas for its own charitable, exempt purposes.  Therefore, TBG was entitled to the tax exemption on all of its property.

Judge Norris authored the opinion; Presiding Judge Timmer and Judge Brown concurred.

Posted by azapp @ Wed, May 28, 2008

Avila v. The Industrial Commission of Arizona (5/13/2008):  Arizona Court of Appeals Division One Holds that an Uninsured Respondent Employer May Participate Through Separate Counsel in Workers’ Compensation Proceedings.

Moises Avila suffered a shoulder injury while working as a landscaper.  The Industrial Commission found that Avila had sustained a reduction in earning capacity, entitling him to receive a disability payment of $156.89 per month.  Avila thereafter requested and received a hearing in front of an ALJ, during which the ALJ permitted Avila’s uninsured employer to participate through separate counsel.  The ALJ entered an award for Avila in the amount of $168.36 per month.  This appeal followed.

The Arizona Appeals Court rejected Avila’s argument that the ALJ erred in allowing Avila’s uninsured employer to participate in the proceedings through its own counsel.  Although an employer that fails to obtain workers’ compensation insurance “shall not be entitled to the benefits of [the workers’ compensation laws] during the period of noncompliance,” A.R.S. § 23-907(A), such benefits do not include separate representation.  The Court explained that an uninsured employer has an interest in the outcome of workers’ compensation proceedings because the workers’ compensation laws provide that an award paid by the Special Fund acts as a judgment against the uninsured employer.

Judge Thompson authored the opinion;Judges Johnsen and Ehrlich concurred. 

Posted by azapp @ Tue, May 20, 2008

Queiroz v. Harvey (05/15/2008): Arizona Court of Appeals Division One Holds That Failure to Use the Specified Method of Canceling a Contract Permits the Breaching Party an Opportunity to Cure and That an Agent’s Inequitable Actions Will Only Defeat Specific Performance If the Principal Had Knowledge of or Participated in That Conduct.

In December 2004, Ivo Queiroz (“Buyer”) and Daniel Harvey (“Seller”) entered into a contract for the sale of land.  The contract stated that Buyer was to give his real estate agent $1,000 earnest money, which was to be placed immediately into escrow.  The contract provided space for the agent to sign to indicate that the earnest money had been received; he printed his name but did not sign. The contract further provided that if either party wished to cancel the contract for material breach, they must deliver written cancellation to either the escrow company or the breaching party.  Escrow was opened on December 13.  By Friday, December 17, when the earnest money had not been deposited and Buyer’s agent had not returned Seller’s agent’s phone calls, Seller’s agent called both the escrow agent and Buyer’s agent to state that the deal was cancelled.  The  following Monday, Buyer’s agent used $1,000 of his personal money to deposit in escrow.  Hours later, the escrow company received written notice of the cancellation.

Buyer filed suit for breach of contract, seeking specific performance.  The trial court found that the failure to deposit the earnest money into the escrow account constituted a material breach, permitting Seller to cancel.  The trial court further found that the actions of Buyer’s agent were sufficiently inequitable to defeat specific performance.  Buyer appealed.

The Arizona Appeals Court vacated the judgment and remanded for further proceedings.  The Court explained that when a breach of contract occurs and the contract provides a specific procedure for cancellation, if the non-breaching party fails to follow that procedure, the breaching party may attempt to cure.  The verbal notice of cancellation given on Friday, December 17 by Seller’s agent was ineffective.  Because Seller’s agent did not provide written notice of cancellation until after the earnest money was deposited into escrow, Buyer cured the breach. 

Turning to whether the actions of Buyer’s agent defeated specific performance, the Court further explained that equitable relief can be denied under the doctrine of unclean hands only if the party participated in or had knowledge of the alleged inequitable acts.  The Court reasoned that because it could not determine whether Buyer had knowledge of his agent’s inequitable acts, remand was necessary.     

Judge Johnsen authored the opinion, Judges Irving and Davis concurred. 

Posted by azapp @ Tue, May 20, 2008

Rueschenberg v. Rueschenberg (5/13/2008): Arizona Court of Appeals Division One Holds that Marital Community in Dissolution Action May Be Allocated a Share of the Increase in the Value of Husband’s Separately Owned Business Despite Having Received Nearly All Net Earnings from the Business During the Marriage

In a divorce action, Husband and Wife agreed to mediate all issues except for the marital community's interest in the increase in value, over the life of the marriage, of Husband's separately owned business.  A special master found the community's labor was responsible for two-thirds of the increase in value of the business, which was allocated accordingly.  The special master also found that the community had received nearly 100 percent of the net distributable earnings during the marriage but did not resolve how much those distributed earnings equaled.  Because Husband did not request a finding of the amount of net distributable earnings, the report also did not consider whether the community had been “overpaid” its share of the earnings from the business, or whether any portion of the earnings should be considered as an offset from the community's interest in the value of the business upon dissolution.  The trial court adopted the special master's findings verbatim into its decree of dissolution.  Husband appealed.

The Arizona Appeals Court affirmed.  Arizona law does not prohibit the apportionment of both profits and increased value of a separate property business where a portion of each resulted from the community's labor.  Instead,  Arizona courts look to the nature, or source, of the profit from or increase in value of the business and allocates as necessary to achieve substantial justice between the parties.  Nor does a finding that the community has received a fair salary for the community's labor contributions to the separately held business preclude apportionment of the increased value of the business.  

The Court also rejected Husband's argument that the trial court abused its discretion by finding, allegedly without any supporting evidence, that the community was responsible for two-thirds of the growth in value of the business.  When the value of separate property is increased during the marriage, the burden is on the spouse claiming the increase as separate property to prove the increase is the result of the inherent value of the property itself and not the product of the work effort of the community.  The presumption that all earnings during the marriage are community in nature may be overcome only by clear and convincing evidence to the contrary.  Husband's argument thus misplaced the burden of proof.

Finally, because there was no request made of the trial court to determine 1) the amount of net distributable earnings paid to the community, or 2) whether the two-thirds/one-third apportionment of the increased value of the business should apply also to apportionment of the net earnings during the marriage, the Court lacked any factual basis to find that the community had received more than its pro rata share of the combined total of net distributable earnings and increases in value of the business. 

Judge Barker authored the opinion; Judges Irvine and Johnsen concurred.

Posted by azapp @ Mon, May 19, 2008

In re MH 2007-000937 (5/6/2008): Arizona Court of Appeals Division One Holds That the Anti-Marital Fact Privilege Under A.R.S. § 12-2231 Applies in Proceedings for Court-Ordered Treatment Initiated by Petition Filed Pursuant to A.R.S. § 36-533.

K.M. had been diagnosed with a mental disorder and had participated in two court-ordered treatments.  After more “unsafe and bizarre behavior” followed, K.M.’s husband, E.M., filed with a health care screening agency an application for involuntary evaluation pursuant to A.R.S. § 36-520.  Following the medical evaluations, the trial court held a hearing to determine whether K.M. “was persistently or acutely disabled and needed treatment as a result of a mental disorder.”  At the hearing, K.M.’s husband testified regarding K.M.’s behavior.  K.M. objected to his testimony as violative of the anti-marital fact privilege contained in A.R.S. § 12-2231, which generally commands that “[i]n a civil action a husband shall not be examined for or against his wife without her consent. . . .”  The court overruled her objection and, based in part on E.M.’s testimony, ordered involuntary treatment for K.M. not to exceed one year.”  K.M. appealed.     

The Arizona Appeals Court reversed.  The Court repeatedly stressed that the Arizona legislature did not except court-ordered treatment proceedings from the broad reach of the statute codifying Arizona’s anti-marital fact privilege in civil actions, and court-ordered treatment proceedings have been held to be civil actions.  While “agree[ing] with Appellee that application of the anti-marital fact privilege in mental health proceedings may be antithetical to the court’s role in determining if treatment is necessary,” the court maintained that “[w]hether mental health proceedings should be excepted from the privilege . . . is a policy decision for the legislature rather than this court.”     

Judge Timmer authored the opinion; Judges Norris and Brown concurred. 

Posted by azapp @ Mon, May 12, 2008

Watson v. Apache County (5/6/2008):  Arizona Court of Appeals Division One Holds A.R.S. § 12-820.02 Provides Immunity to Public Entities for Negligently Granting Approvals, but Not for Negligently Providing Information

The Watsons contacted the Apache County Assessor’s Office, Planning and Zoning Department, and County Attorney’s office to inquire whether they could build a fence across an easement on their property.  All three offices informed the Watsons they could build the fence so long as it was gated and the gate was kept unlocked.  The Watsons relied on this advice and built the fence with an unlocked gate.  Their neighbors then sued them for erecting a fence on the easement.

The Watsons filed a third party complaint against Apache County, alleging the county had negligently provided them with inaccurate information.  On a motion for summary judgment, the trial court ruled that Apache County had qualified immunity under A.R.S. § 12-820.02, which provides immunity for “approvals” issued by county employees absent intent to injure or gross negligence. 

 On appeal, the Watsons argued the information they sought from county employees was not “approval,” and so the County was not entitled to immunity under §12-820.02.  The Arizona Appeals Court agreed.  Equating the word “approval” with “authorization,” the court reasoned the Watsons were not seeking, and did not even need, authorization to build the fence.  Rather, they were only seeking information they believed county employees could readily provide.  As the County was providing information, and not “approval,” they were not entitled to immunity under § 12-820.02.  The Court of Appeals reversed and remanded to the trial court.

Presiding Judge Ehrlich authored the opinion, Judges Hall and Snow concurred.

Posted by azapp @ Mon, May 12, 2008

Owens v. M.E. Schepp Limited Partnership (5/08/2008):  Arizona Supreme Court Holds That Acts of Part Performance Must Be “Unequivocally Referable” to an Alleged Oral Agreement to Exempt the Agreement From the Statute of Frauds. 

Owens and the M.E. Schepp Limited Partnership (the “Partnership”) owned a parcel of land as tenants in common.  Owens filed suit, seeking a statutory partition of the parcel.  The Partnership counterclaimed, contending that the parties had entered into an oral partition agreement.  Owens moved for summary judgment, denying the existence of an agreement and asserting that even if there had been partition agreement, it was unenforceable under the statute of frauds.  The trial court granted Owens’ motion, ruling there was no partition agreement.  A divided court of appeals reversed, finding that the Partnership had produced sufficient evidence of part performance to take the contract out of the statute of frauds.

In a unanimous opinion, the Arizona Supreme Court vacated the Court of Appeals decision and affirmed the judgment of the trial court, holding that alleged acts of part performance must be “unequivocally referable” to an alleged contract to remove the agreement from the statute of frauds, and finding that the alleged acts in this case did not conclusively establish that a contract existed.  The Court found that the alleged acts of part performance -- the Partnership’s withdrawal of its objection for certain improvements and its payment for one-third of the cost of the improvements -- were more consistent with the continued existence of a co-tenancy than with an agreement to partition.  The Court also rejected the Partnership’s argument under Restatement (Second) of Contracts § 128(2) that the oral agreement was enforceable notwithstanding the Statute of Frauds because the parties took exclusive possession of divided portions of the parcel, finding that the evidence did not support the argument. 

The Court further rejected the Partnership’s argument that the trial court abused its discretion in denying the Partnership’s Rule 56(f) motion to continue the summary judgment proceedings until it could depose Owens and examine his documents.  The Court noted that additional document discovery could not have aided the Partnership in proving part performance because only the Partnership’s own actions could be used to show the required detrimental reliance.  The Court also found that the trial court did not abuse its discretion by refusing to allow the Partnership to depose Owens because he had unequivocally and repeatedly denied under oath that the contract existed. 

Finally, the Court rejected the Partnership’s argument that the trial court erred by failing to include an instruction in its order appointing a three-commissioner panel to partition the parcel that the panel could issue a report partitioning the parcel pursuant to terms of the oral agreement, with any disparity in values offset by an equalization payment.  The Court noted that A.R.S. § 12-1218 does not allow for commissioners to propose an equalization payment. 

Justice Hurwitz authored the unanimous opinion.

Posted by azapp @ Mon, May 12, 2008