Nick Hardy v. Nyberg ( 2016 )


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  •                      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    UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
    PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
    IN THE
    ARIZONA COURT OF APPEALS
    DIVISION ONE
    NICK HARDY CONSTRUCTION, INC.,
    Plaintiff/Counter-Defendant/Appellee,
    v.
    NORMA J. NYBERG,
    Defendant/Counter-Claimant/Appellant.
    No. 1 CA-CV 14-0671
    FILED 1-14-2016
    Appeal from the Superior Court in Mohave County
    No. L8015CV20077171
    The Honorable Randolph A. Bartlett, Retired Judge
    VACATED AND REMANDED
    COUNSEL
    Law Offices of Phillip G. Krueger, Lake Havasu City
    By Phillip G. Krueger
    Jones, Skelton & Hochuli, PLC, Phoenix
    By Eileen Dennis GilBride
    Co-Counsel for Plaintiff/ Counter-Defendant/Appellee
    Wachtel, Biehn & Malm, Lake Havasu City
    By Jay B. Bidwell
    Counsel for Defendant/ Counter-Claimant/Appellant
    NICK HARDY v. NYBERG
    Decision of the Court
    MEMORANDUM DECISION
    Judge Maurice Portley delivered the decision of the Court, in which
    Presiding Judge Margaret H. Downie and Judge Patricia A. Orozco joined.
    P O R T L E Y, Judge:
    ¶1            Norma J. Nyberg appeals the partial summary judgment
    granted to Nick Hardy Construction, Inc. (“Hardy”) on her counterclaims.
    For the following reasons, we vacate the judgment against Nyberg, direct
    entry of partial summary judgment in favor of Nyberg on the counterclaim
    for breach of contract, and remand for further proceedings relating to
    Nyberg’s damages.
    FACTUAL AND PROCEDURAL BACKGROUND
    ¶2           Nyberg hired Hardy to construct a house. Under the contract,
    Hardy was required to complete all work “in a workman-like manner and
    in compliance with all current building code[]s and other applicable laws.”
    During construction, Nyberg saw cracks and heaving in the concrete slab,
    and demanded Hardy stop construction.
    Registrar of Contractor Proceedings
    ¶3            Nyberg filed a complaint against Hardy with the Registrar of
    Contractors (“ROC”) listing ten complaints—some of which related to the
    concrete slab. The matter went to a hearing before an administrative law
    judge (“ALJ”) and Nyberg testified that the non-concrete slab items in her
    ROC complaint were within standard and no longer issues. The ALJ
    subsequently found that the concrete slab “fails to comply with applicable
    industry and workmanship standards and requires appropriate correction”
    and concluded that Hardy failed to perform work in a professional and
    workman-like manner in violation of Arizona Revised Statutes (“A.R.S.”)
    section 32-1154(A)(3).1 The ALJ recommended Hardy’s contractor license
    be suspended until the concrete slab problems were corrected.
    ¶4          The ROC adopted the ALJ’s recommended order. Hardy did
    not appeal the ROC order, made the repairs, and filed a notice of
    compliance with the ROC. There was, at Nyberg’s request, a compliance
    1   We cite the current version of applicable statutes unless otherwise stated.
    2
    NICK HARDY v. NYBERG
    Decision of the Court
    hearing, and the ALJ found that Hardy’s “corrective actions” had been
    “completed to within applicable workmanship and industry standards.”
    Because the ALJ concluded that Hardy had complied with the terms and
    conditions of the ROC’s order, it was recommended the matter be closed.
    The ROC adopted the ALJ’s recommended compliance hearing order.
    Nyberg appealed the ROC order to the superior court, which affirmed the
    ROC’s decision. Nyberg v. Nick Hardy Construction, Inc. et al, CV 2009-4175,
    Court Order, dated Oct. 26, 2010.
    Superior Court Proceedings in this Case
    ¶5            During the ROC proceedings, Hardy sued Nyberg for breach
    of contract and unjust enrichment for amounts due under the contract.
    Nyberg filed a counterclaim alleging breach of contract, negligence, and
    false reporting of a lien. She reiterated Hardy’s negligence in pouring the
    foundation and concrete slabs and sought incidental and consequential
    damages.
    ¶6            The parties filed competing motions for summary judgment
    on Nyberg’s counterclaims. Hardy argued that the doctrines of collateral
    estoppel and res judicata barred Nyberg’s counterclaims because she had
    litigated the workmanship of the concrete slab in the ROC proceeding.
    Hardy also argued that Nyberg testified before the ALJ that the other items
    were within standard and were no longer issues.
    ¶7            Nyberg argued she was entitled to summary judgment
    because “Hardy’s breach of contract was clearly established in prior
    litigation.” She also argued that her ROC testimony that she “had no
    workmanship issue” with the non-concrete slab related items did not
    preclude her from raising those issues because they related to her
    consequential damages. At oral argument on the competing motions,
    Hardy added that Nyberg did not request a civil penalty during the ROC
    proceedings.
    ¶8            The superior court denied Nyberg’s motion and granted
    Hardy summary judgment. The court found that the legal doctrines of res
    judicata and collateral estoppel applied and precluded Nyberg’s
    counterclaims based on the ruling affirming the ROC’s decision, Nyberg’s
    testimony at the ROC hearing that the only remaining construction issues
    were related to the concrete slab, and her failure to disclose or assert a claim
    for money damages or seek restitution during the ROC proceeding.
    3
    NICK HARDY v. NYBERG
    Decision of the Court
    ¶9            The superior court then entered judgment in Hardy’s favor
    on Nyberg’s counterclaims, which Nyberg timely appealed.2 We have
    jurisdiction pursuant to A.R.S. § 12-2101(A)(1).
    DISCUSSION
    ¶10           Nyberg argues the trial court erred in applying the equitable
    doctrines of res judicata and collateral estoppel to preclude her
    counterclaim for breach of contract and associated damages.3 She asks us
    to vacate the order granting summary judgment to Hardy and to enter
    summary judgment as to her claim that Hardy is liable on her breach of
    contract claim.
    ¶11           We review the grant of summary judgment de novo and view
    all facts and reasonable inferences drawn therefrom in the light most
    favorable to Nyberg, against whom the judgment was granted. Lowe v.
    Pima Cty., 
    217 Ariz. 642
    , 646, ¶ 14, 
    177 P.3d 1214
    , 1218 (App. 2008) (citations
    omitted). Although we generally do not review the denial of a motion for
    summary judgment, we may do so if the denial is based on a point of law.
    Hourani v. Benson Hosp., 
    211 Ariz. 427
    , 430, ¶ 4, 
    122 P.3d 6
    , 9 (App. 2005)
    (citations omitted). Further, we may direct entry of summary judgment in
    2 We dismissed Nyberg’s first appeal because the judgment lacked Rule
    54(b) language and Hardy’s claims were pending. After the superior court
    granted Hardy judgment on its claims, Nyberg filed a second notice of
    appeal. Because that judgment did not contain language indicating that “no
    further matters remain[ed] pending,” we suspended the appeal and
    remanded the matter for an order complying with Rule 54(c). After the
    order was entered, we reinstated the appeal. And Nyberg’s second notice
    of appeal was timely. ARCAP 9(c).
    3 Although Nyberg’s notice of appeal includes the judgment on Hardy’s
    claims, her opening brief only contests the judgment in Hardy’s favor on
    her breach of contract counterclaim. She has, as a result, waived any
    argument challenging the judgment on Hardy’s claims and the judgment
    on her negligence and false reporting of a lien counterclaims. See ARCAP
    13(a)(6)–(7) (opening brief shall include “‘statement of the issues’ presented
    for review” and “contentions concerning each issue presented for review”);
    MacMillan v. Schwartz, 
    226 Ariz. 584
    , 591, ¶ 33, 
    250 P.3d 1213
    , 1220 (App.
    2011) (noting that the failure to argue a claim in the opening brief
    constitutes abandonment and waiver). Accordingly, we affirm the
    judgment on Hardy’s claims.
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    NICK HARDY v. NYBERG
    Decision of the Court
    Nyberg’s favor if she is entitled to judgment as a matter of law and there
    are no genuine issues of material fact. Ariz. R. Civ. P. 56(a); Bothell v. Two
    Point Acres, Inc., 
    192 Ariz. 313
    , 316, ¶ 7, 
    965 P.2d 47
    , 50 (App. 1998); Anderson
    v. Country Life Ins. Co., 
    180 Ariz. 625
    , 628, 
    886 P.2d 1381
    , 1384 (App. 1994).
    I
    ¶12             We need not examine the judgment because Hardy concedes
    that res judicata and collateral estoppel should not have been applied to
    Nyberg’s breach of contract counterclaim. Nyberg complained to the ROC
    and, after a hearing, the ALJ found that the cracks in the interior concrete
    slab were not completed in a workman-like manner. Although the ALJ’s
    findings that were not appealed have preclusive effect, see J.W. Hancock
    Enters., Inc. v. Ariz. State Registrar of Contractors, 
    142 Ariz. 400
    , 409-10, 
    690 P.2d 119
    , 128–29 (App. 1984) (noting that Arizona courts give preclusive
    effect to decisions made by administrative agencies in adjudicative
    capacities), Hardy also concedes that the ROC could not award
    compensatory damages to Nyberg. Citing to Bentivegna v. Powers Steel &
    Wire Prods., Inc., 
    206 Ariz. 581
    , 
    81 P.3d 1040
    (App. 2003), Hardy
    acknowledges that:
    [a]lthough the ROC may order restitution as a condition of
    license reinstatement, it cannot issue an enforceable order or
    judgment for money damages against a contractor. If a
    contractor subject to an ROC restitution order were to choose
    not to have his license reinstated, the restitution order would
    be ineffective. To fully protect a plaintiff’s rights, he must be
    allowed to seek money damages in the courts in addition to any
    remedies available through the ROC complaint procedure.
    
    Id. at 585,
    15, 81 P.3d at 1044
    (internal citations omitted) (emphasis added).
    As a result, the ROC proceeding did not resolve Nyberg’s alleged damages
    claim. Consequently, because the equitable doctrines do not apply to
    Nyberg’s breach of contract counterclaim, we vacate the summary
    judgment.
    ¶13          Hardy’s concession also suggests that a remand is
    appropriate to allow the superior court to specifically determine if Hardy is
    liable to Nyberg on her breach of contract counterclaim as a matter of law
    because the ROC resolved the concrete slab issue against Hardy. See J.W.
    
    Hancock, 142 Ariz. at 409
    –10, 690 P.2d at 128–29. And Hardy recognizes
    that on remand Nyberg can attempt to prove any damages she may have
    suffered stemming from the workman defects related to the concrete slab.
    5
    NICK HARDY v. NYBERG
    Decision of the Court
    II
    ¶14            Nyberg also contends that the superior court erred by
    precluding any evidence of her non-concrete slab related issues. She
    suggests she did not pursue those issues before the ROC and can now do
    so, especially as an element of damages encompassed within her breach of
    contract counterclaim. Hardy, however, argues the court correctly barred
    her from using those items and she should be judicially estopped from
    relying on them because she testified at the ROC hearing that they were not
    at issue. See KCI Rest. Mgmt. LLC v. Holm Wright Hyde & Hays PLC, 
    236 Ariz. 485
    , 488, ¶ 11, 
    341 P.3d 1156
    , 1159 (App. 2014).
    ¶15            The ROC proceeding was one between Hardy and the ROC
    to determine whether Hardy violated its statutory obligations. See J.W.
    
    Hancock, 142 Ariz. at 408
    , 690 P.2d at 127. And Nyberg, the complaining
    witness, was not a party to the action. Twin Peaks Constr. Inc. of Nev. v.
    Weatherguard Metal Constr., Inc., 
    214 Ariz. 476
    , 478, ¶ 9, 
    154 P.3d 378
    , 380
    (App. 2007). As a result, Nyberg is not precluded from presenting evidence
    of the non-slab issues as part of her claim for damages. Likewise, Hardy is
    free to present her testimony at the ROC hearing. Consequently, on
    remand, the superior court may consider the non-concrete slab related
    issues listed in her ROC complaint in resolving Nyberg’s damages claims.
    ¶16          Nyberg also requests attorney’s fees and costs on appeal.
    Because we are remanding this matter, we will allow the superior court to
    consider any request for fees on appeal as it resolves the damages claim.
    We, however, award Nyberg her costs on appeal upon compliance with
    ARCAP 21.
    CONCLUSION
    ¶17           For the foregoing reasons, we vacate the summary judgment
    for Hardy on Nyberg’s breach of contract counterclaim filed on March 29,
    2012, including the claim for attorney’s fees and costs. We also remand the
    case for further proceedings consistent with this decision.
    :ama
    6