Ariz. Custom Contracting, Inc. v. Green

• Decision Date: 29 May 2020
• Docket Number: No. 2 CA-CV 2019-0108,2 CA-CV 2019-0108
• Parties: ARIZONA CUSTOM CONTRACTING, INC., DBA ALL VALLEY CUSTOM CONTRACTING, AN ARIZONA CORPORATION, Plaintiff/Appellant, v. DAVID GREEN, AN INDIVIDUAL; THOMAS GREEN, AN INDIVIDUAL; CASA DE VERDE ENTERPRISES, INC., AN ARIZONA CORPORATION; GREEN FURNITURE & APPLIANCE; BRAND SOURCE APPLIANCE; ARIZONA GUNS & AMMO, Defendants/Appellees.
• Court: Court of Appeals of Arizona

ARIZONA CUSTOM CONTRACTING, INC., DBA ALL VALLEY CUSTOM CONTRACTING,AN ARIZONA CORPORATION, Plaintiff/Appellant, v. DAVID GREEN, AN INDIVIDUAL; THOMAS GREEN, AN INDIVIDUAL;CASA DE VERDE ENTERPRISES, INC., AN ARIZONA CORPORATION;GREEN FURNITURE & APPLIANCE; BRAND SOURCE APPLIANCE;ARIZONA GUNS & AMMO, Defendants/Appellees.

No. 2 CA-CV 2019-0108

ARIZONA COURT OF APPEALS DIVISION TWO

May 29, 2020

THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.

NOT FOR PUBLICATION

See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f).

Appeal from the Superior Court in Graham County

No. CV201800058

The Honorable Timothy M. Wright, Judge

REVERSED AND REMANDED

COUNSEL

Keith R. Lalliss, Mesa

Counsel for Plaintiff/Appellant

Larson & Simpson PLC, Chandler

By Gregory J. Larson and John A. Salskov

Counsel for Defendants/Appellees

MEMORANDUM DECISION

Judge Brearcliffe authored the decision of the Court, in which Presiding Judge Staring and Chief Judge Vásquez concurred.

BREARCLIFFE, Judge:

¶1 Arizona Custom Contracting, Inc. ("ACC") appeals from the trial court's judgment in favor of David Green, Thomas Green, Casa De Verde Enterprises, Inc., Green Furniture & Appliance, Brand Source Appliance, and Arizona Guns & Ammo (collectively "Green"), its November 27, 2018 order granting Green's motion to enforce settlement agreement, and its March 22, 2019 order refusing to grant ACC's motion for new trial. ACC contends that the court erred when it enforced the settlement agreement because the wording of the offer was open to interpretation, ambiguous, and the only "fair" interpretation is that there was no meeting of the minds. Green contends that the "parties entered into a binding settlement agreement complete with offer, acceptance, and consideration." We reverse and remand for proceedings consistent with this decision.

Factual and Procedural Background

¶2 In determining that the parties had reached a settlement, based on the undisputed facts, the trial court "effectively granted summary judgment regarding the existence, terms, and enforceability of the parties' settlement agreement" and we thus "employ the summary judgment standard of review" and view the facts in the light most favorable to ACC, as the non-prevailing party. See Robertson v. Alling, 237 Ariz. 345, ¶ 8 (2015). On June 12, 2018, ACC filed a complaint against Green, alleging breach of contract. ACC alleged that it had contracted with Green to perform roofing services, and Green agreed to pay ACC for services rendered. ACC claimed that although it had performed the roofing services, Green had not paid the full amount for the services. Specifically, ACC alleged that Green had paid $50,000 at the time the complaint was filed and that he owed ACC an additional $99,018.84. The parties agreed to an open-ended extension of time for Green to file an answer to facilitate settlement negotiations.

¶3 On August 9, 2018, Green's counsel sent an email to ACC's counsel with an attachment titled "Settlement Correspondence." The email, in part, stated:

My clients offer to settle this dispute for a walk away agreement with Arizona Custom Contracting, Inc. to pay the $30,000 allegedly owed to Roofline Supply & Delivery, accepting $0.00 from my clients. In exchange, my clients will walk away and waive any claims they may have against Arizona Custom Contracting, Inc. . . . .

It also stated the specific counterclaims Green would allege against ACC, including fraud, breach of contract, and racketeering. On August 15, 2018, ACC's counsel emailed a response stating:

This email serves as a response to your letter dated August 9, 2018. My client hereby accepts your client[']s offer of $30,000.00 to resolve all disputes between the parties. Would you like to draft the mutual release agreement?

¶4 Eleven minutes later, Green's counsel emailed a reply to ACC's counsel stating, "I want to make sure we are on the same page." He then quoted language from his email and stated that it meant, "that Arizona Custom Contracting, Inc. pays the $30k allegedly owed to Roofline Supply & Delivery, and my clients pay a total of $0.00," and concluded by stating, "if we are not in agreement, please advise." No response was sent.

¶5 On October 5, 2018, Green's counsel emailed a settlement agreement to ACC's counsel for signature, and stated that he expected to report to the judge, at a scheduled status conference, that the parties had settled and would file dismissal paperwork with the trial court. On October 5, 2018, ACC's counsel replied, "We did not come to an agreement on this matter . . . I believe it is time for your client to file their answer."

¶6 On October 24, 2018, Green filed a Motion to Enforce Settlement Agreement. Green requested that the trial court "enter an order enforcing the settlement agreement between the parties and dismissing the case." Green reasoned that the settlement agreement was valid and binding because there was consideration, the agreement was in writing, and the terms were sufficiently specific. ACC filed an opposition to the motion, claiming that there was no "meeting of the minds" because ACC did not agree to the terms Green proposed, because ACC had understood the offer to be that Green would pay $30,000 to ACC. The court granted Green's motion, and found that "a settlement agreement was reached by the Partiesand therefore the Parties are bound by such agreement." The court identified the issue as whether the August 15, 2018 email was an acceptance of the August 9, 2018 offer. It found that the email was an acceptance because it had explicit language assenting to the terms of the offer, contained no language indicating a rejection of the offer, a counter-offer, or a conditional acceptance, and the objective evidence indicated an "unequivocal" acceptance.

¶7 ACC then filed a Motion for New Trial or to Amend the Minute Order, arguing that the trial court should reconsider the reasoning of the order or reconsider the order in light of the contemporaneously filed affidavit of its counsel. Green responded, reasserting his arguments as to the motion to enforce, and additionally asserted that ACC had waived and was estopped from arguing that the settlement agreement was not enforceable. The court denied ACC's motion, reasoning that the affidavit was not newly discovered evidence, thus was not proper grounds to obtain the relief of a new trial, and generally reaffirmed the reasoning of its order to enforce the settlement agreement. It further determined that "[b]ased on the Court's ruling above, it is not necessary for the Court to decide the waiver and/or estoppel arguments."

¶8 The trial court entered a final judgment pursuant to Rule 54(c), Ariz. R. Civ. P. in favor of Green, and against ACC. This appeal followed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).

Analysis

¶9 As stated above, in our review, we "employ the summary judgment standard of review." Robertson, 237 Ariz. 345, ¶ 8. Thus, we review de novo whether the parties presented any genuine issue of material fact that could prevent judgment as a matter of law and whether the trial court correctly applied the law. Id.; see also Republic Ins. Co. v. Feidler, 178 Ariz. 528, 531 (App. 1993).

¶10 The only evidence offered below to the trial court before its ruling of November 27, 2018, was the correspondence between counsel for the parties; that is, the August 2018 e-mails and the later October 2018 e-mails described above. Neither party has disputed the authenticity of those communications.¹

¶11 ACC argued below, and on appeal, that the language of the settlement agreement was ambiguous and subject to multiple interpretations, and thus that ACC "believed that the offer was that there would be a walk away between the parties and that the materials bill would be paid by Green." This misunderstanding, it contends, is why the purported acceptance reads "My client accepts your client's offer of $30,000 . . . ." and not "My client accepts [ACC's] obligation to pay $30,000 for the materials . . . ." Green, to the contrary, argued below, and on appeal, that ACC "clearly expressed its assent to enter into the settlement agreement, communicated by its lawyer of record." Additionally, in support of their arguments below, the parties provided and referenced evidence of their e-mail correspondence, including the "offer," "acceptance," and Green's clarification e-mail.

¶12 "Construction and enforcement of settlement agreements, including determinations as to the validity and scope of release terms, are governed by general contract principles." Emmons v. Superior Court, 192 Ariz. 509, ¶ 14 (App. 1998). "For an enforceable contract to exist, there must be an offer, an acceptance, consideration, and sufficient specification of terms so that obligations involved can be ascertained." K-Line Builders, Inc. v. First Fed. Sav. & Loan Ass'n, 139 Ariz. 209, 212 (App. 1983). "[B]efore a binding contract is formed, the parties must mutually consent to all material terms. A distinct intent common to both parties must exist without doubt or difference, and until all understand alike there can be no assent." Hill-Shafer P'ship v. Chilson Family Tr., 165 Ariz. 469, 473 (1990).

¶13 An "[a]cceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer." Restatement (Second) of Contracts § 50 (1979); see also Perry v. Ronan, 225 Ariz. 49, ¶ 10 (App. 2010) ("Absent Arizona law to the contrary, we may rely on the Restatement for guidance."). "To create mutual consent and therefore a contract, acceptance of the offer must be unequivocal." Richards v. Simpson, 111 Ariz. 415, 417 (1975); see also Clark v. Compania Ganadera de Cananea, S.A., 94 Ariz. 391, 400 (1963) ("An acceptance must comply exactly with the requirements of the offer . . . ."). "It is not enough that the words of a reply justify a probable inference of assent." Restatement § 57...