Brown Wholesale Elec. Co. v. Safeco Ins. Co. of America, 1

• Decision Date: 12 November 1982
• Docket Number: No. 1,CA-CIV,1
• Citation: 659 P.2d 1299,135 Ariz. 154
• Parties: BROWN WHOLESALE ELECTRIC COMPANY, a California corporation, Plaintiff-Appellee, v. SAFECO INSURANCE COMPANY OF AMERICA, a corporation, Defendant-Appellant. 6331.
• Court: Arizona Court of Appeals

Page 1299

659 P.2d 1299

135 Ariz. 154

BROWN WHOLESALE ELECTRIC COMPANY, a California corporation, Plaintiff-Appellee, v. SAFECO INSURANCE COMPANY OF AMERICA, a corporation, Defendant-Appellant.

No. 1 CA-CIV 6331.

Court of Appeals of Arizona Division 1, Department B.

Nov. 12, 1982.

Rehearing Denied Dec. 29, 1982.

Review Denied Feb. 1, 1983.

Corbet & Eagleburger, Ltd. by G. Gregory Eagleburger, Phoenix, for defendant-appellant.

Strong & Pugh, P.A. by William K. Strong, Phoenix, for plaintiff-appellee.

OPINION

FROEB, Presiding Judge.

This suit is the result of a sale of electrical materials and supplies by appellee, Brown Wholesale Electric Company, to Rocky Mountain Electric, Inc. (RME) during 1980 and 1981 for which appellee was not paid. RME was the electrical contractor on a construction project in Phoenix, Arizona (hereafter referred to as the McKesson Drug Project) for which Case Construction Company, Inc. (Case) was the general contractor. Safeco Insurance Company of America, appellant, was the surety on Case's license bond. Appellant appeals from the granting of appellee's motion for summary judgment holding appellant liable on the bond in the amount of $11,175.93 for unpaid materials furnished by appellee to RME used on the McKesson Drug Project.

Appellee filed suit on February 25, 1981, naming appellant, RME, Case, and other contractors and their respective license bond sureties, seeking recovery of $62,971.03 on open account from RME. ¹ The complaint alleged a balance due appellee of $1,931.93 for electrical materials and supplies furnished RME by appellee which were used on the McKesson Drug Project. Case had a $15,000 license bond as required by A.R.S. § 32-1152 issued by appellant as surety to cover unpaid claims of suppliers and materialmen on the McKesson Drug Project. Appellee later amended its complaint claiming an amount due on the McKesson Drug Project of $11,175.93.

Appellant and Case filed a joint answer denying the allegations of the complaint and, in addition, raised four affirmative defenses: (1) failure to state a claim; (2) statute of frauds; (3) failure to give notice as required by A.R.S. §§ 33-981--1006; and (4) limitation of liability of $4,000. ²

Appellee filed its motion for summary judgment against appellant on July 23, 1981. ³

Appellee's motion was supported by the affidavit of James Hofmann, general manager of RME, which established that appellee had supplied electrical materials and supplies to RME which RME used on the McKesson Drug Project. Appellee also submitted an affidavit by its credit manager, Kathy Robrecht, to establish appellee's prices on the materials furnished RME and to confirm which invoices remained unpaid.

In its response to appellee's motion for summary judgment, appellant contended, generally, that the evidence presented was speculative and conclusory and based upon inadmissible hearsay. Attached to the response was an affidavit by Darryl Wareing, vice-president of Case, stating only that Case did not receive any notice from appellee regarding its claim for reimbursement. In addition, appellant and Case filed a cross-motion for summary judgment against appellee alleging that no notice had been given Case as required by A.R.S. §§ 33-981--1006, and that therefore appellant could not be held liable as surety on its principal's license bond. ⁴

Appellant raises three issues on appeal:

(1) Were the affidavits in support of appellee's motion for summary judgment sufficient to establish a prima facie case for appellee's entitlement to summary judgment?

(2) Did the trial court err in granting appellee's motion for summary judgment because inconsistencies between Hofmann's affidavit and his deposition showed the existence of issues of material fact?

(3) Must a third party seeking to recover on a contractor's license bond pursuant to A.R.S. § 32-1152 first satisfy the prerequisites for filing a claim under Arizona's Mechanics' and Materialmen's Lien Statute, A.R.S. §§ 33-981--1006, including the twenty-day notice provision found in A.R.S. § 33-992.01?

SUFFICIENCY OF THE AFFIDAVITS

Appellant cites three deficiencies in the affidavits in support of appellee's motion which raise issues of material fact under A.R.S. § 32-1152. They are: (1) Did appellee furnish materials to RME? (2) Were these materials used in the direct performance of RME's construction contract with Case on the McKesson Drug Project? (3) Was appellee paid by RME?

Appellee argues its affidavits set forth a prima facie case for summary judgment in its favor which was not rebutted with competent evidence by appellant. We agree.

We are mindful of the rule that in reviewing the granting of a motion for summary judgment, we must view the evidence in the light most favorable to the party against whom the motion was granted and give such party the benefit of all favorable inferences that may reasonably be drawn therefrom. Livingston v. Citizen's Utility, Inc., 107 Ariz. 62, 481 P.2d 855 (1971); Taylor v. Mueller, 24 Ariz.App. 403, 539 P.2d 517 (1975). As the moving party, appellee had the initial burden of showing there were no issues as to any material fact and that it was entitled to judgment as a matter of law. Lopez v. Arizona Water Company, Inc., 23 Ariz.App. 99, 530 P.2d 1132 (1975); Hay v. Duskin, 9 Ariz.App. 599, 455 P.2d 281 (1969).

The Hofmann affidavit, based upon personal knowledge and a review of itemized invoices sent to RME, established, first, that appellee sold materials and supplies to RME, and, second, that these materials were used by RME on the McKesson Drug Project. When he could determine the job on which they were probably used, he noted the job on the invoice. To allocate the materials to the various jobs indicated, Hofmann relied on the nature and quantity of the materials required for the various jobs RME had under way during the period it was buying materials from appellee, on the fact that some of the materials were used only on one job, and, in some instances, on information in RME's purchase orders, many of which he had written. He also reviewed RME purchase orders and discussed the jobs with the owner of RME to refresh his recollection. Finally, he considered the nature and quantity of electrical materials RME was obtaining from other sources during the period RME was buying supplies and materials from appellee. Attached to his affidavit is a copy of invoices on which he was able to determine where the materials were used by RME. Robrecht's affidavit determined sales prices for the items shown on each invoice which Hofmann had allocated to the McKesson Drug Project. Robrecht's affidavit also established the balance of $11,175.93 owed appellee.

We find appellee made out a prima facie case that (1) it sold materials and supplies to RME; (2) that RME used the materials and supplies specified by Hofmann on the McKesson Drug Project; (3) that the evidence sets forth an attempt to allocate which of these materials and supplies were applicable strictly to the McKesson Drug Project; and (4) that RME had not paid for materials and supplies in the amount of $11,175.93 used on the McKesson Drug Project. Once appellee made this showing, the burden then shifted to appellant to produce competent evidence that a material issue of fact existed. National Housing Industries, Inc. v. E.L. Jones Development Co., 118 Ariz. 374, 576 P.2d 1374 (App.1978). Appellant failed to produce any competent evidence to rebut the allegations set forth by appellee. Appellant's response was limited to general statements alleging the above-referenced affidavits were speculative, conclusory, and based upon inadmissible hearsay. There were no controverting affidavits. They were therefore insufficient to rebut appellee's prima facie case. A party cannot defeat a motion for summary judgment based solely on the unsupported contention that a dispute exists; it has the burden of showing that competent evidence is available to justify a trial. Sewell v. Brookbank, 119 Ariz. 422, 581 P.2d 267 (App.1978); Byars v. Arizona Public Service Co., 24 Ariz.App. 420, 539 P.2d 534 (1975). Appellant failed to meet this burden.

INCONSISTENCIES BETWEEN HOFMANN'S AFFIDAVIT AND DEPOSITION

For its second argument, appellant argues that there were inconsistencies between the testimony given by Hofmann at his deposition and his affidavit used to support appellee's motion for summary judgment. We find it unnecessary to reach this issue, however, since the content of the deposition was not presented to the trial court to raise a genuine issue of material fact. Matters not presented to the trial court cannot for the first time be raised on appeal. J.H. Mulrein Plumbing Supply Co. v. Walsh, 26 Ariz. 152, 222 P. 1046 (1924); Cote v. A.J. Bayless Markets, Inc., 128 Ariz. 438, 626 P.2d 602 (App.1981).

Appellant argues it was prejudiced because it was not aware of Hofmann's deposition since it never received notice and did not attend the taking of the deposition. We do not find appellant's argument persuasive. Hofmann's deposition was taken prior to either Case's or appellant's answer and without Case's or appellant's knowledge, but it was nevertheless properly taken under the rules of civil procedure without notice to either. ⁵ Appellant undertook no discovery. Since appellee's motion for summary judgment was based entirely upon the affidavits of Hofmann and Robrecht, appellant could have deposed those witnesses itself or obtained further affidavits. In fact, at one point appellant noticed the deposition of Hofmann but did not proceed with it. Appellant's failure to controvert the facts raised in appellee's motion cannot be excused by its lack of knowledge of the Hofmann deposition.

NOTICE

Appellant's third argument raises a question of first impression in this state: whether a materials supplier seeking recovery on a general contractor's license bond under A.R.S. § 32-1152 must give notice of its claim as required...