Newman v. Hess

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
PAMELA NEWMAN, et al., Plaintiffs/CounterDefendants/Appellees,
v.
BARRY HESS, Defendant/CounterClaimant/Appellant.
No. 1 CA-CV 22-0772
FILED 8-24-2023
Appeal from the Superior Court in Maricopa County
No. CV2021-010754
The Honorable Bradley H. Astrowsky, Judge
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
COUNSEL
Udall Shumway, PLC, Mesa
By Joel E. Sannes, Timothy D. Butterfield
Counsel for Defendant/CounterClaimant/Appellant
Medalist Legal PLC, Chandler
By Patrick R. MacQueen, Brandon P. Bodea, Devin M. Tarwater
Counsel for Plaintiffs/CounterDefendants/Appellees
NEWMAN, et al. v. HESS
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Jennifer B. Campbell delivered the decision of the Court,
in which Judge Kent E. Cattani and Judge Anni Hill Foster joined.
C A M P B E L L, Judge:
¶1 Barry Hess challenges the superior court’s granting summary
judgment in favor of Pamela and Richard Newman (the Newmans) in a
quiet title dispute over a residential property (the Property). Hess also
challenges the denial of his cross-motion for summary judgment. We
conclude neither party was entitled to summary judgment and therefore
affirm in part, reverse in part, and remand for further proceedings.
BACKGROUND
¶2 Pamela Newman and Hess grew up in the same home but are
not biologically related. Pamela became the Property’s sole owner when
their legal guardian died. Hess and his long-term partner, Gina Kynast,1
began renting the Property after losing their home to foreclosure.
¶3 In 2017, Pamela conveyed the Property to Kynast via
quitclaim deed. The parties agree Hess was intentionally left off the deed
but offer conflicting reasons for the omission. The quitclaim deed was
recorded, and its validity is not in dispute. Roughly a year later, Kynast
executed a second quitclaim deed (the 2018 Deed) in Hess’ favor. Instead of
recording the 2018 Deed, someone placed it in a filing cabinet, where it sat
until 2021. The parties dispute (1) why Kynast executed the 2018 Deed; and
(2) who—Hess or Kynast—put the 2018 Deed in the filing cabinet.
¶4 Hess and Kynast’s relationship ended acrimoniously in 2021.
Kynast then executed a third quitclaim deed conveying the Property back
to the Newmans (the 2021 Deed). After recording the 2021 Deed, the
Newmans filed this quiet title action. Hess counterclaimed, asserting he had
“valid and clear title” under the 2018 Deed.
¶5 After discovery, the parties filed cross-motions for summary
judgment. Hess argued he should prevail because the 2018 Deed was
delivered and the transfer of interest was immediate. He also asserted that
1 Hess and Kynast incorrectly believed they were married.
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the Newmans were not bona fide purchasers for value because they knew
of the 2018 Deed. See A.R.S. § 33-412. On the other hand, the Newmans
argued the 2018 Deed was not delivered, and therefore, transfer of title was
not effectuated. Accordingly, they were the rightful titled owners of the
Property under the 2021 Deed. After concluding “[t]he 201[8] deed was
never delivered,”2 the superior court denied summary judgment for Hess
and granted summary judgment for the Newmans quieting title in the
Property in their favor.
¶6 Hess filed a motion for new trial under Rule 59 of the Arizona
Rules of Civil Procedure, which the superior court summarily denied. The
court also awarded the Newmans attorneys’ fees as the prevailing parties.
See A.R.S. § 12-1103(B). Hess timely appealed.
DISCUSSION
¶7 Summary judgment is appropriate when “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. 56(a). We review de novo a grant of
summary judgment, viewing the facts in the light most favorable to the non-
moving party. BMO Harris Bank, N.A. v. Wildwood Creek Ranch, LLC, 236
Ariz. 363, 365, ¶ 7 (2015).
I. The Newmans’ Motion For Summary Judgment
¶8 Hess first argues the superior court erred in concluding that
Kynast had not delivered the 2018 Deed, which was the basis for granting
summary judgment in the Newmans’ favor. We must view the facts and the
reasonable inferences to be drawn from those facts in the light most
favorable to Hess, the non-moving party, see id., and cannot “choose among
competing or conflicting inferences,” Orme Sch. v. Reeves, 166 Ariz. 301, 311
(1990) (noting also that court should not weigh witness credibility).
A. Delivery and Acceptance of the 2018 Deed
¶9 Hess argues that, in reaching its decision, the court made
impermissible credibility determinations. We agree. “[A] deed to real
property does not vest legal title in the grantee until it is delivered and
2 In its ruling, the superior court sometimes conflated the 2017 and
2018 deeds. Because the court properly identified the issue as “whether the
deed from Kynast to Hess [i.e., the 2018 Deed] was delivered,” we treat the
court’s findings and analysis of “the 2017 deed” as regarding the disputed
2018 Deed.
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accepted.” Morelos v. Morelos, 129 Ariz. 354, 356 (App. 1981). Whether
delivery has occurred involves a fact-specific inquiry. Robinson v. Herring,
75 Ariz. 166, 169 (1953) (looking to surrounding circumstances). Delivery
may consist of any action or conduct that “clearly manifests the intention of
the grantor and the person to whom it is delivered that the deed shall
presently become operative and effectual, and that the grantor loses all
control over it, and that by it the grantee is to become possessed of the
estate.” Pass v. Stephens, 22 Ariz. 461, 468 (1921) (citation omitted).
¶10 In granting summary judgment for the Newmans, the
superior court determined that there was no delivery of the 2018 Deed
because “no reasonable finder of fact could find . . . that Kynast intended to
immediately and irrevocably vest all interest in the [P]roperty with Hess
. . . at the time of executing the 201[8] deed.” In so doing, the court
improperly adopted Kynast’s version of events and disregarded Hess’
conflicting evidence.
¶11 In its ruling, the court stated that Kynast placed the 2018 Deed
in the filing cabinet, as Kynast avowed at her deposition. The court then
concluded the 2018 Deed “was always within Kynast’s possession and
control.” However, Hess testified that he put the 2018 Deed “in the
mortgage file” after Kynast handed it to him, asking “if [Hess] would file
it.” If Hess is believed, the finder of fact could infer that Kynast manifested
her intent to immediately convey the Property to Hess by relinquishing
physical control of the 2018 Deed. See Pass, 22 Ariz. at 468. Given the
conflicting evidence, whether the deed was delivered to and accepted by
Hess is a factual issue precluding summary judgment.
B. Intention to Convey Immediate Title
¶12 Whether Kynast intended the 2018 Deed “to become
operative immediately” also remains a material factual dispute. See Parker
v. Gentry, 62 Ariz. 115, 120 (1944) (holding that, absent such intent, “placing
a deed in the hands of a grantee does not constitute delivery”). As the
Newmans argue, Kynast stated in her deposition that she intended the
conveyance to be effective only if she died, and Hess himself stated in his
deposition that the Property “was never transferred just to [him],” but
rather that Kynast “still held equity and that she was entitled to half.” But
Hess also stated that Kynast “[a]bsolutely and unequivocally” intended to
immediately transfer to him the Property in an effort to insulate the
Property from her creditors and argues his deposition testimony to the
contrary was merely an acknowledgment of Kynast’s community property
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or “equitable domestic partnership rights.” And, as Hess notes, the 2018
Deed is unconditional on its face.
¶13 Either Kynast intended the 2018 Deed to be immediately
effective or she did not. These positions are mutually exclusive and material
to the issue of delivery. See Robinson, 75 Ariz. at 170 (emphasizing grantor’s
intent is paramount). It may have been obvious to the superior court who
was more credible, but “summary judgment should not be used as a
substitute for jury trials simply because the trial judge may believe the
moving party will probably win . . . [or] should win the jury’s verdict.”
Orme Sch., 166 Ariz. at 310 (emphases omitted). Nor was it proper for the
court to adopt Kynast’s version of events and ignore the evidence
supporting Hess’ avoidance-of-creditor theory of transfer.
¶14 Viewed in the light most favorable to Hess, the record reveals
genuine issues of material fact that preclude summary judgment. See Taser
Int’l v. Ward, 224 Ariz. 389, 393, ¶ 12 (App. 2010) (“Summary judgment is
. . . inappropriate if the court must determine the credibility of witnesses,
weigh the quality of evidence, or choose among competing inferences.”).
We therefore reverse the court’s ruling granting summary judgment for the
Newmans and vacate the related fee award.
II. Hess Was Not Entitled to Summary Judgment
¶15 Hess also challenges the denial of his cross motion for
summary judgment. See Bothell v. Two Points Acres, Inc., 192 Ariz. 313, 316,
¶ 7 (App. 1998) (noting appellate courts may address denied cross-motion
to avoid piecemeal litigation). In reviewing a denial of Hess’ cross motion
for summary judgment, we accept Kynast’s version of events and
inferences drawn therefrom. See Sonoran Desert Investigations, Inc. v. Miller,
213 Ariz. 274, 276, ¶ 5 (App. 2006) (“We . . . view the facts and all reasonable
inferences therefrom in the light most favorable to the party opposing the
[denied] motion.”)
¶16 Generally, “[t]he intention to pass immediate and irrevocable
title to the property interest is the essential fact for consideration” on the
question of delivery. Robinson, 75 Ariz. at 170 (citation omitted). However,
“[t]he unconditional delivery of a deed or grant of property to a third
person to take effect at the time of the donor’s death, if there is no intention
to revoke or actual revocation, is effective and valid as of the time of
delivery, though the enjoyment thereof may be postponed.” Morelos, 129
Ariz. at 356 (emphasizing that the grantor must “put the deed out of h[er]
control”); see, e.g., Hutton v. Cramer, 10 Ariz. 110, 115–16 (1906) (finding
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delivery where grantor placed deed in grantee’s bank box, which grantor
could access only with grantee’s permission).
¶17 Relying on Kynast’s deposition testimony, Hess contends he
is entitled to summary judgment because, at minimum, Kynast
“immediately” and “unconditional[ly] deliver[ed]” a future interest in the
Property via the 2018 Deed. But the 2018 Deed, on its face, is a quitclaim
deed conveying “all right, title and interest” in the Property (i.e., Kynast’s
fee simple absolute). And according to Kynast, she never physically
delivered the 2018 Deed to Hess; instead she deposited it in the filing
cabinet and told Hess to record it only upon her death. Genuine issues of
material fact remain regarding the delivery of the 2018 Deed.
¶18 Even so, we reject Hess’ argument that Kynast could not
transfer the Property during her lifetime because, based on the 2018 Deed,
he held a future interest in the Property. If, as Kynast alleges, the 2018 was
never transferred to Hess, he had nothing more than a hoped-for
inheritance, and nothing would have prevented Kynast from changing the
intended bequest any time before her death. The court properly denied
Hess’ motion for summary judgment.
III. Attorneys’ Fees on Appeal
¶19 Both parties request costs and attorneys’ fees on appeal under
ARCAP 21 and A.R.S. § 12-1103(B), which authorizes an award to the
prevailing party in a quiet title action if certain prerequisites are met. Cook
v. Grebe, 245 Ariz. 367, 369, ¶ 5 (App. 2008). Neither side has prevailed on
its quiet title claim at this stage of the litigation. We therefore decline to
award attorneys’ fees or costs.
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NEWMAN, et al. v. HESS
Decision of the Court
CONCLUSION
¶20 For the reasons above, we reverse the superior court’s ruling
granting the Newmans’ motion for summary judgment, affirm its ruling
denying Hess’ motion for summary judgment, and remand for further
proceedings. We also vacate the Newmans’ fee award, to be addressed on
remand.
AMY M. WOOD • Clerk of the Court
FILED: AA
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