Outfront v. Hart & Associates ( 2019 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
OUTFRONT MEDIA LLC,
Plaintiff/Appellee,
v.
HART & ASSOCIATES ATTORNEYS & COUNSELORS AT LAW PC,
Defendant/Appellant.
No. 1 CA-CV 18-0605
FILED 12-5-2019
Appeal from the Superior Court in Maricopa County
No. CV2017-001782
The Honorable Timothy J. Thomason, Judge
AFFIRMED
COUNSEL
Dessaules Law Group, Phoenix
By Jonathan A. Dessaules, Jacob A. Kubert
Counsel for Defendant/Appellant
Iannitelli Marcolini, PC, Phoenix
By Claudio Eduardo Iannitelli, Jason Kelly Thomas
Counsel for Plaintiff/Appellee
OUTFRONT v. HART & ASSOCIATES
Decision of the Court
MEMORANDUM DECISION
Judge James B. Morse Jr. delivered the decision of the Court, in which
Presiding Judge Kenton D. Jones and Judge Diane M. Johnsen joined.
M O R S E, Judge:
¶1 Hart & Associates Attorneys & Counselors at Law P.C.
("Hart") appeals the superior court's grant of summary judgment to
Outfront Media LLC ("Outfront") in this breach of contract action. For the
following reasons, we affirm.
FACTS1 AND PROCEDURAL BACKGROUND
¶2 In May 2016, Hart contracted with Outfront for billboard
advertising in the Atlanta, Georgia area. The contract consisted of an
"Advertiser Agreement" and an appended "Terms and Conditions of
Advertising Service" (collectively "the Agreement"). The Agreement
specified that Hart's advertising would be posted on fifteen of Outfront's
billboards for an "advertising period" of four weeks, and then on twenty
billboards for eleven "advertising periods" of four weeks each. Though
Outfront's form agreement did not allow a client to cancel before the end of
the contract's term, Hart specifically negotiated with Outfront to include a
provision that would allow Hart to cancel the Agreement with 30 days
notice after the sixth "advertising period." Despite the addition of this
negotiated term, the Agreement retained Outfront's typical language
reflecting that the contract was "non-cancelable." Prior to execution of the
Agreement, an Outfront representative purportedly told one of Hart's
employees that the billboard advertising would increase the call volume to
Hart's "vanity number," a custom number created through a third-party
vendor that would forward calls to Hart.
¶3 Hart paid for the first two advertising periods, but then
stopped paying Outfront's invoices. Outfront and Hart began discussing
1 Because we are reviewing a grant of summary judgment, we recount
the facts in the light most favorable to the non-movant. United Dairymen of
Ariz. v. Schugg, 212 Ariz. 133, 140, ¶ 26 (App. 2006). Though we recognize
some of these facts are disputed by Outfront, none of the disputes are
material to its claim for breach of contract.
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OUTFRONT v. HART & ASSOCIATES
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the past-due payments and attempted to negotiate a resolution of their
dispute. Representatives of the parties met on December 1, 2016. Hart's
chief executive officer ("CEO") attended the meeting and later described the
following events in a declaration submitted on summary judgment:
I stated that we were inclined to cancel the contract and return
all billboards to Outfront at which point he offered to take
back half the boards.
Another representative of Outfront who was also present at
this meeting falsely stated that it was not possible to cancel
the contract. However, the contract expressly stated that
"Hart & Associates ha[d] the right to cancel after 6 periods of
advertising with a 30 day notice."
I assumed that I had been clear in providing notice of the
Firm's intention to cancel the advertising contract at the
December 2016 meeting.
¶4 Another of Hart's employees who attended the meeting
submitted a declaration saying that the CEO had "stated that he wanted to
cancel the advertising."
¶5 About a month and a half after the December 1 meeting,
Outfront's representative sent an email to Hart that read:
[Hart's CEO], if I have offended you or your firm in any kind
of way I would like to apologize because in no way was that
my intent.
If money is an issue please email me a cancelation email and
we will cancel the campaign. I keep receiving compliments
from my friends that live down south and in Gwinnett about
how great your campaign looks and your placement. I hope
you have been satisfied as well. I have a great deal of respect
for you [Hart’s CEO] and want to find a solution. That can
only happen through communication and I would like any
amount of time you are willing to give me in order to find that
solution. Feel free to call my cell whenever.
¶6 Hart's CEO responded:
Absolutely not. You have been a pleasure to work with. If
anything, I owe you an apology. I am scrambling to
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reorganize a few things and fight with the vanity number. I
will call you tomorrow morning around 9 am. Have a good
night.
¶7 In February 2017, Hart followed up with another email in
which Hart stated that its vanity number had not been working from
September to December, and claimed that no calls were received in January
and the first half of February. In the email, Hart "propose[d] that the
original contract be amended" and offered to make a "good faith payment"
of $15,000.00 in March, and "enter into a new payment schedule per the
amended contract at the same time." Shortly thereafter, Outfront filed this
action.
¶8 Eventually, Outfront filed for summary judgment. Its
argument was simple. Hart had received all of the billboard advertising it
had contracted for but never paid for the final ten advertising periods.
¶9 Hart opposed summary judgment, arguing that factual
disputes existed regarding whether: 1) Hart effectively exercised its right to
cancel when its representative told Outfront at the December 1 meeting that
Hart was "inclined to cancel the Agreement"; 2) Outfront breached the
Agreement first by failing to timely post the billboards and, therefore, its
claim for damages must be reduced accordingly; and, 3) Outfront had
fraudulently induced Hart to enter the Agreement by falsely claiming the
billboards would cause Hart's call volume to rise.
¶10 After briefing and oral argument, the superior court
determined no issues of material fact existed, granted Outfront's motion for
summary judgment, and awarded Outfront a portion of its attorney's fees
and costs pursuant to the terms of the Agreement. Hart timely appealed,
and we have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).
DISCUSSION
I. Standard for Review
¶11 We review de novo a grant of summary judgment, viewing the
facts in the light most favorable to the party against which summary
judgment was entered. United Dairymen of Ariz. v. Schugg, 212 Ariz. 133,
140, ¶ 26 (App. 2006).
¶12 Summary judgment is appropriate when the moving party
"shows that there is no genuine dispute as to any material fact and the
moving party is entitled to judgment as a matter of law." Ariz. R. Civ. P.
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56(a). In a contract case, the plaintiff bears the burden to demonstrate that
a contract exists, its breach, and resulting damages. Thunderbird
Metallurgical, Inc. v. Ariz. Testing Labs., 5 Ariz. App. 48, 50 (1967). "If the
evidence would allow a jury to resolve a material issue in favor of either
party, summary judgment is improper." Comerica Bank v. Mahmoodi, 224
Ariz. 289, 291, ¶ 12 (App. 2010). "Put differently, the mere absence of a
genuine dispute of material fact does not automatically entitle a plaintiff to
judgment—the plaintiff must also demonstrate that the evidence entitles it
to judgment as a matter of law." Wells Fargo Bank v. Allen, 231 Ariz. 209,
213, ¶ 16 (App. 2012). "To carry its burden of persuasion, a plaintiff who
seeks summary judgment must submit 'undisputed admissible evidence
that would compel any reasonable juror to find in its favor on every element
of its claim.'" Id. at ¶ 18 (quoting Mahmoodi, 224 Ariz. at 293, ¶ 20).
II. No Genuine Dispute as to Material Facts Precluded Summary
Judgment
¶13 Hart argues that three issues of material fact precluded
summary judgment. Outfront responds that Hart's factual disputes are not
material, and further objects to the admissibility of certain evidence on
which Hart relies. Even assuming all of Hart's evidence is admissible, we
agree with the superior court that the record presents no dispute of any
material fact. We address each of Hart's alleged factual disputes in turn.
A. No Dispute Exists Regarding the Alleged "Cancellation" of
the Agreement
¶14 "Notice of termination of a contract must be clear, positive
and unequivocal." Thermo-Kinetic Corp. v. Allen, 16 Ariz. App. 341, 345
(App. 1972) (citing Shaw v. Beall, 70 Ariz. 4, 7 (1950); 17(A) C.J.S. Contracts
§ 402, p. 488 (1963)). "Evasive tactics and equivocal references to [concerns
about the contract] can hardly be equated to notice of termination." Id.
¶15 Viewing the facts in the light most favorable to the non-
moving party, as noted, Hart's CEO stated that he told Outfront that he
"was inclined to" cancel the Agreement. Recognizing the inherent
ambiguity in that statement, Hart argues that the declaration of the other
employee who was present at the December 2016 meeting should serve to
clarify the CEO's statement. However, that employee only states that the
CEO said he "wanted to cancel" the Agreement, not that he actually
cancelled it. Neither statement constitutes a "clear, positive and
unequivocal" termination of the Agreement. Thermo-Kinetic Corp., 16 Ariz.
App. at 345. And, in any event, Hart has conceded that the other employee's
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declaration was solely submitted to "rebut the charge that [the CEO] [ ]
falsified his testimony." As we have already stated, our analysis assumes
that the CEO actually stated that he was inclined to cancel the Agreement.
¶16 The word "incline" is defined, in relevant part, as "to lean,
tend, or become drawn toward an opinion or course of conduct." Incline,
Webster's Ninth New Collegiate Dictionary (1983). It can hardly be said
that being "inclined to cancel" amounts to a clear effort to cancel the
Agreement. If one is inclined to do something it necessarily suggests that
the action has not yet been taken. The CEO's subjective belief that his
statement would be sufficient to serve as an unequivocal cancelation is
irrelevant to the question of whether the Agreement was effectively
terminated and directly contradicted by the equivocation in what he
actually said.
¶17 Moreover, the CEO's subsequent actions demonstrated he did
not believe he had canceled the contract. Only six weeks after the December
meeting, the CEO responded to an email from Outlook that requested
clarification about whether Hart wished to cancel. The CEO responded
"[a]bsolutely not," saying it was "a pleasure to work with [Outfront],"
offering his apologies for the ongoing issues, and noting that he was
attempting to resolve the technical problems with Hart's vanity number.
See Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 157 (1993) (noting
that a contracting party's subsequent conduct may inform what the parties
intended). Hart argues the CEO's response to the email was ambiguous,
but we disagree. The only fair reading of the CEO's response is to say that
he was "[a]bsolutely not" canceling the Agreement.2 This reading is further
buttressed by Hart's February 2017 email in which it sought to renegotiate
the Agreement and enter into a new payment schedule. Accordingly, we
agree with the superior court that there was no genuine dispute regarding
whether Hart canceled the Agreement. See Orme Sch. v. Reeves, 166 Ariz.
301, 309 (1990) (stating that "affidavits that . . . are internally inconsistent . .
. and similar items of evidence may provide a 'scintilla' or create the
'slightest doubt' and still be insufficient to withstand a motion for summary
judgment" (citations omitted)).
2 Hart asserts that "[a]bsolutely not" was meant as a response to
Outfront's representative's concern, stated in the email, about whether he
had offended the CEO in some way. The CEO's email response cannot
reasonably be interpreted in that way. See supra ¶¶ 5-6.
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B. Hart's Arguments Regarding Outfront's Performance Do
Not Give Rise to a Dispute of Material Fact
¶18 We may similarly dispense with Hart's argument regarding
Outfront's supposed breach of the Agreement. Hart argues that there was
a seventeen-day delay in posting the first set of billboards under the
Agreement, and that such a breach would excuse its failure to pay.
Outfront disputes that any delay occurred, but correctly points out that the
Agreement expressly limits Hart's remedies for any delay. The Agreement
states that if "[Outfront] fails to timely meet its posting requirements [under
the Agreement], any resulting loss of advertising shall not be deemed a
breach or termination of this Contract." Hart's remedies for any delay were
to receive an extension to the advertising period.
¶19 Hart does not argue that Outfront failed to keep Hart's
advertising up for the required number of days, but instead argues that a
delay of seventeen days in the initial posting relieves Hart of all further
payment requirements under the contract. Even if true, such a delay would
not create any dispute material to Outfront's breach of contract claim.
C. Hart Fails to Demonstrate a Genuine Dispute of Material
Fact as to Fraudulent Inducement
¶20 Hart's final argument is that fraudulent misrepresentations
by Outfront, that its billboards would increase the number of calls to Hart's
vanity number, induced Hart to enter the Agreement. Assuming arguendo
that such promises were made, the trial court correctly determined that any
statement regarding the future benefits of the advertising campaign was
"puffery."
¶21 "In order that a representation constitute actionable fraud, it
must relate to either a past or existing fact. It cannot be predicated on
unfulfilled promises, expressions of intention or statements concerning
future events unless such were made with the present intention not to
perform." Staheli v. Kauffman, 122 Ariz. 380, 383 (1979) (citations omitted).
Hart argues it had the right to rely on the alleged promise of increased call
volume because Outfront supposedly had specialized knowledge about
billboard advertising, relying on an Illinois case as support for this
proposition. Duhl v. Nash Realty, Inc., 429 N.E.2d 1267, 1273 (Ill. App. Ct.
1981) (quoting William L. Prosser, Handbook of the Law of Torts § 109, at 726-
27 (4th ed. 1971)). Duhl stands for the principle that in certain scenarios
where a seller has highly specialized knowledge, such as a physician giving
medical opinions, a realtor appraising a house, or a jewelry expert giving
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Decision of the Court
an opinion as to the value of a diamond, a buyer may rely on such opinions
as if they were statements of fact. Id. Billboard advertisers are not
analogous to physicians or expert jewelers. A statement regarding the
efficacy of a billboard advertisement does not involve the same level of
specialized knowledge as a physician giving a medical diagnosis. E.g.,
Power v. Smith, 786 N.E.2d 1113, 1119 (Ill. App. Ct. 2003) (distinguishing
Duhl and finding that statements regarding the future "profitability of an
endeavor" are not actionable). The principle outlined in Duhl is
inapplicable to the scenario here and the alleged promise constitutes
quintessential puffery. See Hall v. Romero, 141 Ariz. 120, 123-24 (App. 1984)
(rejecting fraud claim based on statement that "you'll never find a better,
more secure investment.").
¶22 Hart also alleges Outfront failed to disclose that it "controlled
a disproportionate share of legal billboard advertising in metro-Atlanta and
knew that Hart would be placed in direct competition for placement with"
other law-firm advertising. This, Hart contends, could provide a factual
basis for a jury to find that Outfront knew the advertising campaign would
be ineffective despite telling Hart otherwise. But counsel for Hart conceded
at oral argument that Hart never inquired about competitor advertising
and, aside from the CEO's generalized and unsupported assertion, the
record lacks any evidence that Outfront controls a "disproportionate share
of the legal billboard advertising in metro-Atlanta." Arizona courts have
held that conclusory declarations, without more, are insufficient to defeat a
motion for summary judgment. See Burrington v. Gila County, 159 Ariz. 320,
325 (App. 1988); see also Gesina v. General Elec. Co., 162 Ariz. 35, 38 (App.
1989). Regardless, Outfront's share of the metro-Atlanta law-firm
advertising market is not relevant to the question of whether the alleged
promise was puffery. This was an arms-length commercial transaction and
Outfront was not generally obligated to disclose anything about its
advertising agreements with other law firms. See Cook v. Orkin
Exterminating Co., 227 Ariz. 331, 334, ¶ 15 (App. 2011) (rejecting argument
that a pest control company's specialized knowledge and expertise altered
the arms-length nature of the transaction); Universal Inv. Co. v. Sahara Motor
Inn, Inc., 127 Ariz. 213, 215 (App. 1980) (noting that a duty to disclose only
arises in the context of a special or confidential relationship between the
parties). Even if we were to assume Outfront's billboards
disproportionately hosted other law-firm advertisements, the result would
be the same. In an arms-length transaction, a promise that an advertising
campaign will have some generalized future benefit cannot support a claim
of fraudulent inducement. Staheli, 122 Ariz. at 383.
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¶23 The material facts in this case are undisputed. Hart and
Outfront entered into the Agreement. Outfront fulfilled its responsibilities
under the Agreement. Hart failed to pay for ten of the twelve advertising
periods for which it contracted. Outfront presented sufficient evidence to
prove its claim, and we agree with the superior court that Hart failed to
present evidence or legal authority to support any viable defense.
Accordingly, we affirm the court's grant of summary judgment in all
respects.
III. Attorney's Fees
¶24 Because we affirm the grant of summary judgment, we affirm
the grant of attorney's fees.
¶25 Outfront asks for its attorney's fees and costs on appeal
pursuant to the fee provision contained within the Agreement. The
provision reads, in relevant part:
In the event of legal action arising out of this Contract,
[Outfront] shall be entitled to receive its reasonable attorneys'
fees and out of pocket expenses.
¶26 Because we have affirmed summary judgment in favor of
Outfront, we grant its request for its attorney's fees and costs on appeal.
CONCLUSION
¶27 For the foregoing reasons, the superior court's judgment is
affirmed in all respects, we deny Hart's request for fees and costs on appeal,
and grant Outfront its request for fees and costs on appeal, contingent on
compliance with Arizona Rule of Civil Appellate Procedure 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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