Armiros v. Rohr

• Decision Date: 08 March 2018
• Docket Number: No. 1 CA-CV 16-0755,1 CA-CV 16-0755
• Citation: 416 P.3d 864
• Parties: Evangelos ARMIROS, Plaintiff/Appellee/Cross–Appellant, v. Julie R ROHR, Defendant/Appellant/Cross–Appellee.
• Court: Arizona Court of Appeals

416 P.3d 864

Evangelos ARMIROS, Plaintiff/Appellee/Cross–Appellant,

v.Julie R ROHR, Defendant/Appellant/Cross–Appellee.

No. 1 CA-CV 16-0755

Court of Appeals of Arizona, Division 1.

FILED March 8, 2018

Zimmerman Reed LLP, Scottsdale, By Charles S. Zimmerman, Counsel for Defendant/Appellant/Cross–Appellee

Yetnikoff Law Offices PLLC, Scottsdale, By Isidore Yetnikoff, Counsel for Plaintiff/Appellee/Cross–Appellant

Presiding Judge Randall M. Howe delivered the opinion of the Court, in which Judge Kenton D. Jones and Judge James B. Morse Jr. joined.

OPINION

HOWE, Judge:

¶ 1 Julie Rohr appeals the trial court’s granting of summary judgment to Evangelos Armiros holding that a contract existed between them and that Julie¹ breached it. Julie also appeals the trial court’s $135,250 damages award to Evangelos following a bench trial. Evangelos cross-appeals, arguing that the court erred by dismissing Julie’s husband, Daniel Rohr, as a defendant. We affirm the trial court’s finding that a valid contract existed when Julie offered her diamond ring on eBay with the option for users to "Buy It Now" and Armiros accepted the offer by clicking the "Buy It Now" button. We also affirm the trial court’s finding that, although Evangelos had not paid for the ring before Julie breached the contract, he was entitled to the benefit of the bargain and suffered damages. We further hold that Evangelos’s cross-appeal against Daniel must be dismissed because Daniel is not an appellant for purposes of this appeal.

FACTS AND PROCEDURAL HISTORY

¶ 2 In February 2014, Julie listed a 10.17 carat diamond ring for sale on eBay for $100,000 using the "Buy It Now" option. Evangelos, a Georgia resident and sole owner of E–Diamond, LLC, saw Julie’s listing and emailed her about the ring. Julie provided Evangelos with the ring’s Gemological Institute of America ("GIA") report number and stated that she was the ring’s original owner. Evangelos again emailed Julie stating that "[i]f we have a deal, would you be willing to meet face to face at your bank or attorney to do the transaction?" After Julie agreed, Evangelos clicked the "Buy It Now" button on the listing page but was temporarily unable to complete the purchase because eBay requested that he first confirm his identity. While on hold with eBay, Evangelos emailed Julie and asked that she hold the ring until he could make the purchase; Julie stated that she would try. After eBay cleared Evangelos to purchase the ring, he clicked the "Buy It Now" button, which closed Julie’s listing.

¶ 3 Shortly after Evangelos clicked the "Buy It Now" button, he and Julie arranged a time to meet in Phoenix to complete the transaction, and he purchased an airplane ticket from Georgia to Arizona. Evangelos then emailed Julie through eBay stating that he was bringing a friend with more experience because "this is an expensive one to screw up[.]" Julie and Evangelos later texted each other confirming when and where they would meet.

¶ 4 Even though Julie’s original eBay listing had closed, she received an email later that evening from another eBay user offering $150,000 for the ring. Julie responded that she believed she had already sold the ring. The eBay user told Julie that he would make a deposit on the ring and that his $150,000 offer was "well worth canceling the deal with [Evangelos]." Julie accepted the other user’s offer and emailed Evangelos advising that she would no longer sell him the ring. She also texted him that she was sorry, but the other buyer offered her more money and that completing the transaction would be easier with the other buyer. Julie subsequently sent Evangelos a cancelation request through eBay and listed her reason as, "I made a mistake in my listing price." Evangelos denied Julie’s cancelation request, stating that the two had a valid contract for the ring’s purchase.

¶ 5 The next day, Evangelos called and texted Julie several times to change her mind, telling her that they had a legal contract and that he would have to go "the legal way" because she did not want to work it out. Evangelos then offered Julie $150,000 for the ring, but she declined, stating that she had decided to keep the ring and not sell it, even though she had already agreed to sell the ring to the other buyer.

¶ 6 Two months later, Evangelos sued Julie and Daniel (collectively, "the Rohrs") for breach of contract and breach of the covenant of good faith and fair dealing. Evangelos also named as a defendant the other buyer who had purchased the ring, but the buyer was dismissed as a party and subsequently settled by paying Evangelos $60,000. Daniel moved to be dismissed from the lawsuit, arguing that although he had originally purchased the ring as an engagement ring for Julie in 2005, he currently had no property interest in the ring and was not a party to Julie and Evangelos’s eBay transaction. The trial court denied Daniel’s motion as premature.

¶ 7 In January 2016, Evangelos moved for summary judgment. He attached to his motion relevant portions of eBay’s user agreement to show that a valid contract existed. The attached eBay user agreement stated that "[y]ou agree to comply with all the above when accessing or using our Services." It also stated that a user must be able to form a legally binding contract and that the actual contract for sale was directly between the seller and buyer. Under the "Purchase Conditions" section, the user agreement stated that buyers agree that a "legally binding contract" is entered when an item is bought or the buyer has the winning bid. After a buyer clicks the "Buy It Now" button, the buyer is "obligated" to complete the transaction and must send payment to the seller within three days. The user agreement also set a monetary limit on when a seller can request immediate payment on items less than $10,000 and allowed the buyer to pay "by any method the seller accepts" if the buyer picked up the item in person.

¶ 8 The Rohrs cross-moved for summary judgment, asserting that no enforceable contract existed and that Evangelos had no provable damages. After hearing oral argument, the court found that both Julie and Evangelos agreed to be bound by eBay’s user agreement and that listing an item under the "Buy It Now" option obligates the seller to sell the item to the "Buy It Now" buyer for the listing’s specified price. Consequently, the court found that a binding contract existed. The court held that "[t]he written contract is an unambiguous manifestation of mutual assent: [Julie] offered to sell for $100,000 and [Evangelos] accepted the offer" but that Julie repudiated the contract before the time for payment. The court denied Evangelos’s request for summary judgment on damages, however, because the amount of damages was disputed.

¶ 9 In August 2016, the court held a one-day trial on damages. Before the presentation of evidence, Julie argued that Evangelos sought only lost profits damages and not damages under the Uniform Commercial Code ("UCC"), representing the difference in market value at the time of breach and the contract price for the ring. Evangelos responded that he had alleged UCC damages in his original complaint and the pretrial statement and therefore had the right to elect which type of damages he was pursuing, and he was pursuing UCC damages under A.R.S. § 47–2713(A). The court agreed that the damages sought to that point in the litigation were phrased in terms of lost profits but that "the law of contracts has always been that for a purchase and sale contract, the measure of damages is benefit of the bargain." The court advised the parties that it would address the measure of damages following trial.

¶ 10 At trial, Evangelos testified that he had the ability to purchase the $100,000 ring and that he had intended to complete the transaction in Phoenix. Evangelos also testified that he had $155,000 available to him from a home equity line of credit. He further testified that the reason he wanted to bring his friend was to ensure that the diamond was the same as the one that Julie had advertised and not a fraud. Evangelos’s gemologist testified about Rapnet, an international network that producers and wholesalers use to sell diamonds at diamond exchanges. He testified that the price listed on Rapnet for a diamond is the price a buyer would actually pay. To determine the fair market value of Julie’s ring, the expert conferred with colleagues in the industry and had found three similar rings listed on Rapnet ranging in price from $372,000 to $402,000. Additionally, the expert stated that one of the rings he found, listed for $389,000, appeared to be a little smaller than Julie’s ring, but that after comparing the two GIA reports, he believed the diamond listed on Rapnet was Julie’s ring.² Lastly, he testified that the platinum setting and smaller diamonds that surrounded the ring in its setting had a market value of $3,500.

¶ 11 The court then heard evidence from Julie’s gemologist. He testified that he had not been asked to determine the ring’s market value. He stated that "Rapnet may be a shadow of the market. It is not the actual market." He further testified that market value should be determined by actual transactions and not asking prices—like those on Rapnet. The expert conceded that the diamond listed on Rapnet for $389,000 was the same diamond in question, albeit slightly smaller. Although the expert did not opine on the ring’s market value, he did provide a report on two-carat diamonds listed on Rapnet to show that prices varied up to 25%.

¶ 12 The Rohrs testified next. Daniel testified that he and Julie went to New York together to pick out an engagement ring. Julie picked the ring she liked and Daniel purchased it for $166,765. Daniel stated that although the two had a prenuptial agreement, it did not address the ring. Daniel testified that he did not participate in the eBay transaction and did not communicate with either Evangelos or the other eBay user. Julie testified that...