SAGUARO RESERVE LLC V. STANTEC CONSULTING INC., 2 CA-CV 2009-0183
| Decision Date | 23 June 2010 |
| Docket Number | Cause No. C20083133,2 CA-CV 2009-0183,Cause No. C20085285,Cause No. C20082605,Cause No. C20081383 |
| Parties | SAGUARO RESERVE, LLC, a Delaware limited liability company, Third-Party Plaintiff/ Appellant, v. STANTEC CONSULTING, INC., an Arizona corporation, Third-Party Defendant/ Appellee. |
| Court | Arizona Court of Appeals |
Lorber, Greenfield & Polito, LLP By Holly Davies and Amy Wilkens Tempe Attorneys for Third-Party Plaintiff/Appellant
McEvoy, Daniels & Darcy, P.C. By Sally M. Darcy Tucson Attorneys for Third-Party Defendant/Appellee
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24.
MEMORANDUM DECISIONAPPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY
¶l Saguaro Reserve, LLC ("Saguaro") appeals from the trial court's judgment dismissing its third-party complaint against Stantec Consulting, Inc. ("Stantec"). Saguaro argues the court erred in finding its claims barred on the basis of res judicata because no final judgment had been entered in another lawsuit involving the parties. It also contends that, in any event, Stantec waived the right to challenge the claims on the ground of res judicata and that the claims Saguaro raised in its third-party complaint were not compulsory counterclaims it was required to assert in the other action. For the reasons set forth below, we affirm in part, reverse in part, and remand for proceedings consistent with this decision.
¶ "When reviewing the trial court's grant of a motion to dismiss a complaint for failure to state a claim, 'we must take the alleged facts as true.'" Dube v. Likins, 216 Ariz. 406, | 2, 167 P.3d 93, 97 (App. 2007), quoting Riddle v. Ariz. Oncology Servs., Inc., 186 Ariz. 464, 465, 924 P.2d 468, 469 (App. 1996). Saguaro is the owner and developer of Saguaro Springs, a residential development in Marana, Arizona. Saguaro contracted with Stantec for the provision of design and other services in the construction and development of Saguaro Springs. In May 2008, Stantec sued Saguaro ("the Stantec Action"), alleging Saguaro had failed to pay amounts it owed Stantec under five of the parties' contracts relating to the project. Saguaro did not file a timely answer to the complaint, and default was entered against it. In August, Saguaro filed an answer andcounterclaim. The trial court struck the answer as untimely filed and entered default judgment on Stantec's complaint. However, it explicitly permitted the counterclaim to "stand[] unaffected" by the judgment. The court denied Saguaro's subsequent motion to set aside the judgment.
¶ While the Stantec Action was pending, Saguaro was involved in a separate lawsuit relating to Saguaro Springs with other contractors and subcontractors ("the Consolidated Action"). After Saguaro filed its motion to set aside the default judgment in the Stantec Action, but before the trial court ruled on that motion, Saguaro sought and was granted leave to file a third-party complaint against Stantec in the Consolidated Action and reasserted the counterclaims it had raised in the Stantec Action and asserted new claims as well. Stantec moved to dismiss Saguaro's third-party complaint in the Consolidated Action under Rule 12(b)(6), Ariz. R. Civ. P., on the ground that the claims asserted already had been raised in the pending Stantec Action. In response to the motion, Saguaro voluntarily dismissed its counterclaim in the Stantec Action. After ordering supplemental briefing on the issue whether the third-party claims amounted to compulsory counterclaims in the Stantec Action, the court dismissed Saguaro's third-party complaint. This timely appeal followed.
¶ Preliminarily, we address Saguaro's argument that because "Stantec did not raise its argument that Saguaro's claims were compulsory and subject to res judicata until after Saguaro filed its voluntary dismissal of its [c]ounterclaim... in the Consolidated [Action]," it has waived that defense. Saguaro asserts that Stantec never challenged the filing of the counterclaim in the Stantec Action and, instead, took the position that "Saguaro's [c]ounterclaim was unaffected by the default judgment and stood on its own." However, to the extent Saguaro is arguing "Stantec's failure to raise the issue as an affirmative defense in the Stantec [Action] constitutes waiver," it has forfeited that argument by not raising it below. See Trantor v. Fredrikson, 179 Ariz. 299, 300, 878 P.2d 657, 658 (1994).
¶ In its reply to Stantec's supplemental motion to dismiss, Saguaro noted that "Stantec continues to change the basis for its Motion to Dismiss," but Saguaro never argued that Stantec had waived its right to assert this defense by failing to raise it in either the Stantec Action or the motion to dismiss it filed in the Consolidated Action. Indeed, when the trial court requested supplemental briefing on this issue, although Saguaro mentioned the "compulsory counterclaim [argument]... was new," it did not challenge Stantec's motion to dismiss on the ground it had been waived. Thus despite having had two opportunities to argue waiver to the trial court, it failed to do so.1 We therefore do not consider this argument further. Id.; Ruesga v. Kindred Nursing Ctrs., L.L.C., 215 Ariz. 589, 1 39, 161 P.3d 1253, 1263-64 (App. 2007).
¶ Saguaro nevertheless contends it was "bad faith on the part of Stantec to state the [c]ounterclaim was unaffected by its default judgment in the Stantec [Action], then state the complete opposite in the Consolidated [Action]... only after Saguaro had voluntarily dismissed its [c]ounterclaim." To the extent Saguaro is arguing, under an estoppel theory, that Stantec is precluded from asserting a position inconsistent from the one it had taken in the Stantec Action, Saguaro has failed to support this contention with argument or citation to relevant authority. Therefore the estoppel theory, too, has been waived. Ariz. R. Civ. App. P. 13(a)(6) (); In Re U.S. Currency in Amount of $26,980.00, 199 Ariz. 219, ¶ 28, 18 P.3d 85, 93 (App. 2000) ().
¶ Saguaro contends the trial court erred in dismissing its third-party complaint based on res judicata because a final judgment had not been entered on its counterclaims in the Stantec Action, and because res judicata only applies when a final judgment has been entered. Indeed, much of Saguaro's argument on appeal is grounded on general res judicata principles. However, the court's ruling was based on Stantec's argument that the claims Saguaro raised in the third-party complaint constituted compulsory counterclaims in the Stantec Action, and by voluntarily dismissing them from that lawsuit, Saguaro should be precluded from raising them in a separate lawsuit. Thus, the court's ruling appears to have been based on the compulsory and, thus, claim-preclusive effect of the Stantec Action counterclaims with respect to the same claims in the Consolidated Action and not upon general res judicata principles. "Compulsory counterclaims are subject to the principles of res judicata" if not asserted timely. Lansford v. Harris, 174 Ariz. 413, 419, 850 P.2d 126, 132 (App. 1992). See also Brown v. Superior Court, 137 Ariz. 327, 331, 670 P.2d 725, 729 (1983) (). Therefore, the dispositive issue in this case is whether Saguaro's third-party complaint contains claims that were counterclaims Saguaro was required to assert in the Stantec Action, thereby precluding Saguaro from asserting them in the Consolidated Action.2
¶ We review de novo a trial court's dismissal of a complaint pursuant to Rule 12(b)(6), based on its application of a court rule. See Dressler v. Morrison, 212 Ariz. 279, 1 11, 130 P.3d 978, 980 (2006) (); Haroutunian v. Valueoptions, Inc., 218 Ariz. 541, 1 22, 189 P.3d 1114, 1122 (App. 2008) (). Dismissal is only appropriate if, "assum[ing] the truth of the complaint's allegations,... the [party] would not be entitled to relief on any legal theory." Forum Dev., L.C. v. Ariz. Dep't of Revenue, 192 Ariz. 90, 93, 961 P.2d 1038, 1041 (App. 1997). And, in interpreting the claims raised in Saguaro's complaint, we must "construe[ them liberally so] as to do substantial justice." Ariz. R.
¶ Saguaro contends the trial court erred in dismissing its third-party complaint because none of its claims was a compulsory counterclaim in the Stantec Action. A party that fails to assert compulsory counterclaims in an action is "precluded by the judgment [in that action] from raising the same matter in [a] second action." Biaett v. Phoenix Title & Trust Co., 70 Ariz. 164, 170, 217 P.2d 923, 927 (1950). "In other words, a compulsory counter claim must be asserted against a plaintiff... to avoid the application of res judicata" Lansford, 174 Ariz. at 419, 850 P.2d at 132. However, permissive counterclaims, which include "any claim against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party's claim," may be asserted at the party's election as counterclaims or in an independent lawsuit. Ariz. R. Civ. P. 13(b); see Kerby v. State, 62 Ariz. 294, 304-05, 157 P.2d 698, 703 (1945).
¶ "Compulsory counterclaims are those that arise from the same...
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