McMurray v. Dream Catcher USA, Inc. (1/30/2009)

February 10, 2009

Arizona Court of Appeals Division Two Holds That a Seller May Only Be a “Successful Party” Under the Purchaser Dwelling Actions Act After a Final Judgment.

In 2003, the McMurrays hired Dream Catcher USA to build them a home.  After several construction problems, the McMurray’s filed a complaint with the Arizona Registrar of Contractors in 2006, alleging multiple construction defects.  Dream Catcher subsequently attempted to repair the defects, but apparently did not correct all of them.  Following these repairs, the McMurrays’ construction expert discovered additional defects, prompting the McMurray’s to file an amended complaint with the Registrar.  In February 2007, the McMurray’s filed suit under the Purchaser Dwelling Actions Act (“Act”), A.R.S. §§ 12-1361 to -1366.  Dream Catcher moved to dismiss the McMurrays’ claims because they did not satisfy the Act’s requirement to provide Dream Catcher with notice and an opportunity to repair.  The court dismissed the action without prejudice and required each party to bear its own costs and fees.  Dream Catcher appealed the denial of its fees and the McMurrays cross-appealed the dismissal.

Judge Vázquez, writing for a unanimous court, affirmed the denial of Dream Catcher’s request for fees and dismissed the McMurrays’ cross-appeal for lack of jurisdiction.  Because the superior court dismissed the claims without prejudice, the Court held that the dismissal was not a final order and therefore the cross-appeal was not suitable for appellate jurisdiction. 

Turning to the question of Dream Catcher’s fees, the Court held that Dream Catcher was not entitled to fees because it was not the “successful party.”  The Act provides for an award of attorney fees to the successful party in a contested dwelling action.  The Act requires a home-seller to respond to a purchaser’s notice of defects by making an offer to repair, replace, or monetarily compensate for alleged defects.  If the purchaser rejects the seller’s offer, but “the judgment finally obtained” is less than the offer, then the Act defines the seller as the “successful party.”  The Court construed the Act to mean that a party can only become the “successful party” upon a final resolution of the purchaser’s claim.  Thus, because the court’s dismissal was not a final judgment, Dream Catcher could not be a “successful party” under the Act.

Judge Vázquez authored the opinion; Judges Eckerstrom and Brammer concurred.