Shamrock v. Evans ( 2014 )

NOTICE: NOT FOR PUBLICATION.
UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT
AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
SHAMROCK GLEN OWNERS’ ASSOCIATION, an Arizona non-profit
corporation, Plaintiff/Appellant,
v.
GEORGE L. EVANS, an unmarried man, Defendant/Appellee.
No. 1 CA-CV 13-0156
FILED 4-10-2014
Appeal from the Superior Court in Maricopa County
No. CV2011-018285
The Honorable Arthur T. Anderson, Judge
AFFIRMED
COUNSEL
Brown Olcott PLLC, Phoenix
By Jonathan J. Olcott, Lydia Peirce Linsmeier
Counsel for Plaintiff/Appellant
Mead & Associates, Glendale
By Terrance C. Mead
Counsel for Defendant/Appellee
SHAMROCK v. EVANS
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Samuel A. Thumma delivered the decision of the Court,
in which Judge Randall M. Howe and Judge Diane M. Johnsen joined.
T H U M M A, Judge:
¶1 This breach of contract case was resolved by the superior
court on cross-motions for summary judgment. Finding no genuine
dispute of material fact or legal error, the judgment in favor of defendant
is affirmed.
FACTS 1 AND PROCEDURAL HISTORY
¶2 Shamrock Glen, L.L.C. (Developer) converted a Phoenix
apartment complex into a 57-unit condominium called Shamrock Glen. In
2006, Developer incorporated plaintiff Shamrock Glen Owners’
Association (Association).
¶3 Developer was the declarant under the Condominium
Declaration and Declaration of Covenants, Conditions and Restrictions
(CC&Rs), recorded in April 2006.2 The CC&Rs provided for a period of
“declarant control,” starting on the date the CC&Rs were recorded. In
October 2006, during the period of declarant control, defendant George L.
Evans purchased a Shamrock Glen condominium unit from Developer for
$175,900. Developer offered certain purchasers, including Evans, a waiver
of ordinary monthly fees and assessments, with the agreement that
Developer “would pay the assessments on behalf of the” purchaser.
Developer waived Evans’ monthly regular assessment for as long as he
owned his unit in exchange for Evans providing engineering and
1 On appeal from a grant of summary judgment, this court views the
evidence and reasonable inferences in a light most favorable to the non-
moving party. Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12, 69 P.3d 7, 11
(2003).
2This court may take judicial notice of documents recorded in the County
Recorder’s Office. See Sitton v. Deutsche Bank Nat’l Trust Co., 233 Ariz. 215,
218 n.2, ¶ 14, 311 P.3d 237, 240 n.2 (App. 2013).
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SHAMROCK v. EVANS
Decision of the Court
consulting services. Ingrid Warrick, Developer’s operations manager,
prepared a written waiver agreement allocating $15,000 of the purchase
price Evans paid toward the waiver. Developer and Evans signed the
waiver agreement, and Evans provided the agreed-upon services.
¶4 The period of declarant control then ended and Developer
relinquished control over the Association and relinquished control over
Shamrock Glen to the Association. When the Association assumed control,
on behalf of the Developer, Warrick delivered files for each condominium
unit to the Association. The file the Developer delivered to the Association
for Evans’ unit included the signed waiver agreement and other
documents. In April 2008, Association president Shakirah-Joy Karim
delivered the unit files and original accounting records to her successor,
Sharyn Miller. Evans’ unit file, including his original signed waiver
agreement and a record of Evans’ satisfaction of $15,000 in regular
assessment obligations, was among the records transferred.
¶5 In July 2010, after Evans refused to pay regular assessments,
the Association sued him in justice court for $6,258.50 (including late fees
and related costs), alleging breach of contract, open account and quantum
meruit. Evans denied liability and asserted setoff and quantum meruit
counterclaims. After Evans filed a third-party complaint against
Developer, the justice court determined that the amount in controversy
exceeded the jurisdictional limit, and the case was transferred to superior
court. See Arizona Revised Statutes (A.R.S.) section 22-201 (2014). 3
¶6 The Association moved for partial summary judgment, and
Evans cross-moved for summary judgment. The superior court granted
summary judgment to Evans, finding there was no disputed issue of
material fact; that, at the very least, there was an oral agreement between
Evans and Developer waiving Evans’ obligation to pay regular
assessments; that the agreement was not barred by the statute of frauds
given Evans’ full performance and that Evans was not responsible to
ensure that the Developer properly transferred to the Association the fees
and assessments for which Evans received credit. Evans then dismissed
the third-party complaint and the court entered judgment in Evans’ favor
and awarded him $46,822 in attorneys’ fees and $454 in costs. This court
has jurisdiction over the Association’s timely appeal pursuant to A.R.S. §
12-2101(A)(1).
3 Absent material revisions after the relevant dates, statutes cited refer to
the current version unless otherwise indicated.
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SHAMROCK v. EVANS
Decision of the Court
DISCUSSION
I. The Undisputed Evidence Establishes That Evans Satisfied His
Assessment Obligations.
A. Affidavits From Evans’ Witnesses.
¶7 As a party seeking summary judgment, Evans had the
burden to offer evidence to disprove the Association’s claims or present
legal argument why the Association’s claims otherwise failed as a matter
of law. Ariz. R. Civ. P. 56(c)(3); see Nat’l Bank of Ariz. v. Thruston, 218 Ariz.
112, 117, ¶ 22, 180 P.3d 977, 982 (App. 2008). If Evans met that burden, the
Association was required to offer controverting evidence or otherwise
show why Evans’ motion should be denied. Ariz. R. Civ. P. 56(e)(4); see
Thruston, 218 Ariz. at 119, ¶ 26, 180 P.3d at 984.
¶8 Evans offered evidence of the waiver agreement in the form
of lengthy, detailed affidavits from Warrick, Karim and Evans himself.
The affidavits describe the terms of the agreement and state that the
agreement was signed by Evans and the Developer, and transferred to
successor Association president Miller, along with a record of Evans’
satisfaction of $15,000 in regular assessment obligations. The affidavits
also show that Evans performed valuable consulting and engineering
services in exchange for the waiver, with Warrick’s affidavit stating that
bids from engineers indicated the value of such services exceeded $70,000.
The affidavits further state that the only compensation Evans received was
in the form of the assessment waiver.
B. Affidavits From The Association’s Witnesses.
¶9 In response to Evans’ showing, the Association relied on an
affidavit from Donna Murphy and two affidavits from Debora
Katzenberger. None of these affidavits indicate that Murphy or
Katzenberger inspected Evans’ unit file. Indeed, it appears that at some
point (perhaps as early as December 2008) the Association could not find
the files transferred by the Developer. 4 As a result, the affidavits relied
4 Evans’ affidavit states that “[b]y early 2010, I was advised by the
[Association] board of directors that they could not locate, and apparently
had lost, all of its records of my payments and credits.” Karim’s affidavit
states that, at a December 2008 Association meeting, “the new officers and
directors of the [Association] stated that the original financial accounting
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SHAMROCK v. EVANS
Decision of the Court
upon by the Association could not dispute affidavits Evans offered stating
that the Developer transferred his written waiver agreement with his unit
file to the Association.
¶10 Instead, the affidavits offered by the Association purport to
summarize an internal account statement for Evans with the first
substantive entry stating “PREVIOUS BALANCE” dated September 30,
2009; an internal summary from January 2007 to September 2009 showing
a negative starting balance; and bank accounts from December 2006
through July 2007 for an Association account opened December 13, 2006.
None of these affidavits rebut the detailed factual statements regarding
the waiver agreement and related information in the affidavits provided
by Evans.
¶11 Moreover, the affidavits Evans offered show that the
Association’s witnesses lacked personal knowledge regarding the written
waiver agreement. Warrick and Karim state that the Association did not
employ Katzenberger during the relevant time period, meaning she
lacked personal knowledge, and that Katzenberger had no involvement in
the transactions at issue. Likewise, Murphy did not become an
Association board member until June 2009, and had no involvement in the
Association’s day-to-day activities or money transfers before assuming
office.
¶12 The Association claims the Murphy and Katzenberger
affidavits support an assertion that funds equivalent to the services Evans
purportedly provided were not transferred to the Association. The records
on which the affidavits are based, however, do not go back to October
2006 (when Evans bought his unit) or even the beginning of December
2006. Moreover, the Association has not shown how an internal
accounting function proves that a written contract did not exist,
particularly where the Association appears to claim it was unaware of the
contract until after this litigation began in July 2010. As provided in the
CC&Rs, the Developer controlled the Association at the time it granted the
waiver to Evans. Any purported failure by the Developer to transfer the
equivalent funds to the Association would not invalidate the written
waiver agreement between the Developer and Evans. Moreover, even if
the Association’s affidavits had traced back to the relevant time frame and
records were missing and that they intended to recreate the records from
bank deposit records.”
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SHAMROCK v. EVANS
Decision of the Court
were based on personal knowledge, 5 the lack of such a transfer of funds is
not inconsistent with the existence of the waiver agreement, the terms of
which meant there were no assessment payments owed by Evans.
¶13 On this record, Evans discharged his burden on summary
judgment, and the Association failed to offer controverting evidence or
otherwise show why Evans’ motion should not be granted. See Thruston,
218 Ariz. at 119, ¶ 26, 180 P.3d at 984.
II. The Statute Of Frauds Does Not Bar Enforcement Of The Waiver
Agreement.
¶14 The Association argues the statute of frauds precludes
enforcement of the waiver agreement because there is no signed writing
containing the agreement. See A.R.S. § 44-101. Setting aside whether a
statute of frauds can be invoked by a party that apparently lost or
discarded the very writing it claims cannot be enforced, full performance
by one party to the contract takes an agreement outside the statute of
frauds. See, e.g., Cavanagh v. Kelly, 80 Ariz. 361, 364, 297 P.2d 1102, 1104
(1956). The record indicates that Evans performed his obligations under
the waiver agreement by providing engineering and related services.
Accordingly, because Evans fully performed, the statute of frauds does
not bar enforcement of the agreement. See Long v. City of Glendale, 208
Ariz. 319, 329-30, ¶¶ 35-37, 93 P.3d 519, 529-30 (App. 2004) (applying full
performance exception to statute of frauds); In re Estate of MacDonald, 4
Ariz. App. 94, 99, 417 P.2d 728, 733 (1966) (same). 6
5 Evans argues that the documents relied upon by the Association were
inadmissible for purposes of summary judgment. Ariz. R. Civ. P. 56(e)(1);
Ariz. R. Evid. 803(6) and 901. As with the superior court, this court need
not resolve that issue given the analysis of the substance of the affidavits.
6The court also rejects the Association’s claim that Evans was required to
provide the original written waiver agreement. Setting aside whether such
a claim properly can be pressed by the party that apparently lost or
discarded the original written agreement it claims must be produced, “[i]n
cases of loss or destruction, the contents of a memorandum may be shown
by an unsigned copy or by oral evidence.” Restatement (Second) of
Contracts § 137 cmt. a (1981). The affidavits Evans offered suffice for this
purpose. See, e.g., Combs v. Lufkin, 123 Ariz. 210, 214, 598 P.2d 1029, 1033
(App. 1979); Ariz. R. Evid. 1004(a).
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SHAMROCK v. EVANS
Decision of the Court
III. Enforcement Of The Waiver Agreement Does Not Violate The
CC&Rs Or Arizona Law.
¶15 The Association argues that the Developer and Evans
illegally modified the CC&Rs and that the waiver agreement is otherwise
inconsistent with the CC&Rs and Arizona law. The CC&Rs, however,
contain no prohibition on payment through services, and there is no
evidence that other unit owners paid more than 1/57th of common
expenses. Unlike in La Esperanza Townhome Ass’n, Inc. v. Title Security
Agency of Arizona, the waiver the Developer granted to Evans does not
result in inconsistent burdens or a violation of the limiting language in the
CC&Rs. 142 Ariz. 235, 237-39, 689 P.2d 178, 180-82 (App. 1984).
¶16 Nor has the Association shown that enforcing the waiver
agreement violates any statute or public policy. Evans met his obligation
by providing services that represent an alternative form of payment and
Shamrock Glen received the benefit of those services during the period of
declarant control. That benefit remained with Shamrock Glen when the
Developer relinquished control over the Association and relinquished
control over Shamrock Glen to the Association. Accordingly, the
Association’s cases on land use restrictions do not apply here.
IV. Attorneys’ Fees.
¶17 The superior court awarded Evans his attorneys’ fees
pursuant to A.R.S. §§ 33-1256(H) and 12-341.01(A). On appeal, the
Association does not address A.R.S. § 33-1256(H) but argues instead that
the fee award under A.R.S. § 12-341.01(A) is excessive and will have a
chilling effect on condominium owners who rely upon declarations.
Finding no abuse of discretion, the court affirms the superior court’s fee
award pursuant to A.R.S. §§ 33-1256(H) and 12-341.01(A).
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SHAMROCK v. EVANS
Decision of the Court
CONCLUSION
¶18 The superior court’s grant of summary judgment to Evans is
affirmed. Because the Association is not the prevailing party on appeal, its
request for an award of attorneys’ fees and costs is denied. Recognizing
Evans is the prevailing party on appeal, in the exercise of the court’s
discretion, Evans is awarded his reasonable attorneys’ fees on appeal
pursuant to A.R.S. § 33-1256(H), and Evans is awarded his costs on
appeal, all contingent upon his compliance with Arizona Rule of Civil
Appellate Procedure 21.
:MJT
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