Oldenburger v. Del E. Webb Development Co.

• Decision Date: 21 June 1988
• Docket Number: No. 1,CA-CIV,1
• Citation: 159 Ariz. 129,765 P.2d 531
• Parties: Carl OLDENBURGER and Georgina Oldenburger, husband and wife, Plaintiffs-Appellants, v. DEL E. WEBB DEVELOPMENT CO., an Arizona corporation, and Del E. Webb Corporation, an Arizona corporation, Defendants-Appellees. 9419.
• Court: Arizona Court of Appeals

Page 531

765 P.2d 531

159 Ariz. 129

Carl OLDENBURGER and Georgina Oldenburger, husband and wife, Plaintiffs-Appellants, v. DEL E. WEBB DEVELOPMENT CO., an Arizona corporation, and Del E. Webb Corporation, an Arizona corporation, Defendants-Appellees.

No. 1 CA-CIV 9419.

Court of Appeals of Arizona Division 1, Department A.

June 21, 1988.

Reconsideration Denied Aug. 11, 1988.

Review Denied Jan. 10, 1989.

[159 Ariz. 130] Thur, Dawson & O'Sullivan by Roger O'Sullivan, Anita Rosenthal, Scottsdale, for plaintiffs-appellants.

MacLean & Jacques, Ltd. by Cary T. Inabinet, Phoenix, for defendants-appellees.

OPINION

JACOBSON, Presiding Judge.

In this appeal we must determine whether the tort of bad faith lies for breach of a real estate sales contract and whether Del E. Webb Development Company (DEVCO) and Del E. Webb Corporation were entitled to summary judgment on claims made against them for breach of contract.

Carl and Georgina Oldenburger entered into a contract with DEVCO in June 1984 to purchase a residence in Sun City West. The Oldenburgers paid the entire purchase price of $72,479 prior to the completion and construction of the home. They subsequently noticed that the bathtub to be installed in the home had a perpendicular rather than a sloped back. They asked DEVCO either to substitute a different type of tub, allow the Oldenburgers' installers to install a different type of tub or to leave the tub out of the house entirely. DEVCO said it could not allow such changes in production housing.

The Oldenburgers attempted to have DEVCO change its decision through various correspondence and by telling the media of their complaint. By letter dated August 8, 1984 DEVCO informed the Oldenburgers that it would not accommodate their request for a bathtub change and offered to permit them to cancel their agreement with a complete refund. The letter further stated that if DEVCO did not hear from the Oldenburgers in writing to the contrary within seven days, it would assume that they had elected to cancel the agreement.

Georgina Oldenburger responded by letter dated August 15, 1984 saying that she was "stunned" by the August 8th letter and further stating:

It appears, for the moment, that you have me over a barrel. I have absolutely no intention of canceling the contract, however, and want you to be aware that I will continue to pursue this matter of the tub by any and all means I can until it is settled to my satisfaction.

By letter dated August 21, 1984 DEVCO informed Mrs. Oldenburger that it was clear that "you will not accept the house with the bathtub offered." DEVCO claimed that the Oldenburgers had repudiated the agreement and therefore DEVCO cancelled the sale and enclosed a check for a full refund.

In late 1984 Mrs. Oldenburger filed suit in Wickenburg Justice Court against DEVCO and its president, Paul Tatz. The complaint sought recovery for interest on the money during the time it was held by DEVCO and damages for stress, hardship, tensions, headaches and depression, including punitive, consequential, compensatory and other damages. The justice court suit was dismissed without prejudice.

On July 29, 1985 the Oldenburgers filed a complaint in superior court seeking recovery of damages for breach of contract, breach of the duty of good faith and fair dealing, intentional infliction of emotional distress, and conversion. Summary judgment was granted in favor of DEVCO and its parent company, the Del E. Webb Corporation, on all counts. This appeal followed.

The Oldenburgers contend that the trial court erred in granting summary judgment against them because: (1) the evidence did not establish anticipatory repudiation by Mrs. Oldenburger so as to justify cancellation of the contract by DEVCO; (2) tort recovery for breach of an implied covenant of good faith and fair dealing should be applicable to the sale of homes; (3) the justice court action had no res judicata effect on this litigation; and (4) Del E. Webb Corporation was a proper defendant. They have raised no issues on appeal regarding the judgment entered against them on their claims for intentional infliction of emotional distress and conversion.

BREACH OF CONTRACT

DEVCO's motion for summary judgment on the Oldenburgers' breach of contract claim was based on its contention that the Oldenburgers had anticipatorily repudiated the contract. They contended that the evidence established that the Oldenburgers' conduct conveyed an intent not to accept the home with the production model bathtub installed.

In determining whether there were undisputed facts to establish anticipatory repudiation as a matter of law, we are reviewing a record which is composed primarily of the parties' respective statements of fact filed in the trial court. These statements refer to deposition testimony which was apparently available to the trial judge in considering the motions. However, the deposition testimony itself was not appended to the motions and neither the excerpts nor the depositions in their entirety are part of the record on appeal. The record does contain correspondence between the Oldenburgers and DEVCO and an affidavit of Georgina Oldenburger.

This limited record must be viewed in a light most favorable to the party opposing the motion for summary judgment. Sahf v. Lake Havasu City Ass'n for the Retarded and Handicapped, 150 Ariz. 50, 53, 721 P.2d 1177, 1180 (App.1986). Where a party's statement of facts cites to deposition testimony and the opposing party does not dispute the accuracy of such statements, we may consider those facts as undisputed in determining whether summary judgment was properly granted. See Gordinier v. Aetna Casualty and Surety Co., 154 Ariz. 266, 268 n. 2, 742 P.2d 277, 279 n. 2 (1987).

Anticipatory breach of contract exists where the repudiating party expresses a positive and unequivocal manifestation that he will not render the required performance when it is due. Kammert Bros. Enterprises, Inc. v. Tanque Verde Plaza Co., 102 Ariz. 301, 428 P.2d 678 (1967); Diamos v. Hirsch, 91 Ariz. 304, 372 P.2d 76 (1962). In order for DEVCO and Del E. Webb Corporation to prevail on their contention that the Oldenburgers anticipatorily repudiated the sales agreement, they were required to present undisputed facts that the Oldenburgers conveyed an unequivocal intent to repudiate their purchase agreement if the home was furnished with the original production model bathtub. A mere implication that a party will not perform is not sufficient. Rancho Pescado, Inc. v. Northwestern Mutual Life Ins. Co., 140 Ariz. 174, 680 P.2d 1235 (App.1984).

DEVCO's statement of facts in support of its motion included the assertion that Mrs. Oldenburger told Ann Loos, the DEVCO ombudsman, that she would not accept the house with the production model tub. In addition, letters between the parties and statements made to the media are cited as a repudiation of the contract.

In response to DEVCO's motion, the Oldenburgers specifically controverted DEVCO's statement of facts concerning what Mrs. Oldenburger had stated to Ms. Loos. Attached to their response was the affidavit of Georgina Oldenburger stating "[t]hat at no time during my conversations with Ms. Loos did I state that the house being built was 'unacceptable' or that I would refuse to accept the home upon completion."

The Oldenburgers also relied upon Mrs. Oldenburger's letter to DEVCO on August 15, 1984 which stated that the Oldenburgers did not intend to cancel the sales agreement.

The record clearly indicates disputed facts concerning what Mrs. Oldenburger stated to Ms. Loos. These statements are relevant to whether the Oldenburgers' conduct can reasonably be treated as a clear and unequivocal repudiation of the contract. Mrs. Oldenburger's insistence upon getting a bathtub that she wanted cannot by itself be equated with stating that if she did not get the tub, she was not going to accept the home. Further, Mrs. Oldenburger's letter of August 15, 1984 which states "you have me over a barrel. I have absolutely no intention of canceling the contract" conveys the contrary inference, i.e., they would buy the home.

Assuming the applicability of the doctrine of anticipatory breach as a defense to the Oldenburgers' breach of contract claim, we find that there are disputed facts precluding summary judgment. Repudiation may be shown by language that under a fair reading "amounts to a statement of intention not to perform except on conditions which go beyond the contract." Restatement (Second) of Contracts § 250 comment b (1981). By itself, the parties' correspondence fails to establish repudiation. Moreover, there is a dispute as to what Mrs. Oldenburger told Ms. Loos. This factual dispute cannot be resolved on summary judgment. Also, when this alleged conversation took place is not clear from the record before us. Therefore, we do not determine whether the Oldenburgers' letter of August 15, 1984 could be deemed a withdrawal of that alleged repudiation.

BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING

Every contract contains an implied covenant of good faith and fair dealing. Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. 370, 383, 710...