Starkovich v. Noye

Decision Date13 December 1974
Docket NumberNo. 11559--PR,11559--PR
Citation111 Ariz. 347,529 P.2d 698
PartiesRobert L. STARKOVICH and Lois H. Starkovich, his wife; John Chopas and Claire M. Chopas, his wife, Individually and as co-partners dba Guardian Development and Sales Co., Appellants, v. Harry R. NOYE and Evelyn D. Noye, his wife, Appellees.
CourtArizona Supreme Court

Lewis & Roca by John P. Frank, James P. Walsh, Filipe K. Johansson, Phoenix, for appellants.

Sheldon Mitchell, Neal T. Roberts, Phoenix, for appellees.

STRUCKMEYER, Justice.

Robert L. Starkovich and John Chopas, doing business as Guardian Development and Sales Company, have appealed a jury's verdict and a judgment in an action for declaratory judgment in favor of Harry Noye. The judgment reformed a joint venture agreement and awarded punitive damages for fraud. The Court of Appeals 21 Ariz.App. 324, 519 P.2d 77 (1974) reversed. Opinion of the Court of Appeals vacated and judgment affirmed.

In 1965, Noye and Starkovich and Chopas orally agreed on a joint venture to construct a professional services building in Lake Havasu City, Arizona. After the completion of the building, a dispute arose concerning the percentage of ownership of each party. Noye claimed a 50% Interest. Starkovich and Chopas claimed a 90% Interest, with 10% For Noye. The 90--10 division was reflected in a written joint venture agreement signed at about the time the building was started.

As plaintiff, Noye brought this action for declaratory judgment, alleging in a complaint signed only by his lawyer that Starkovich fraudulently induced his wife and himself to sign the written agreement by placing a stack of papers in front of them and having them sign. Later, in a deposition, plaintiff testified that at the signing he had read the papers, that they reflected the 50% Interest to which he was entitled and that the 90--10 percentages could only have been caused by the substitution of a page after he had signed the agreement. At the trial, plaintiff testified again without objection that he had 'glanced' at the percentage arrangements, that they were at the time of the signing 50--50, and that the page which he had read when he signed must have been removed and another page reflecting the 90--10 percentages substituted in its place.

The defendants first urge that the trial court erred in refusing to permit plaintiff's impeachment during cross-examination by showing an asserted variance between the allegations of the complaint and his testimony on direct examination. Similarly, they urge error in the court's directing the defendants not to refer to the allegations of the complaint during arguments to the jury, in refusing an instruction on the pleadings of a party as admissions, in denying their motion to strike plaintiff's testimony and denying their motion for a directed verdict.

It is a rule to which we find no dissent that in the absence of a proper objection to the introduction of evidence on the ground that it is inadmissible under the pleadings because of a variance, the variance will not be considered as material, Thompson v. Hickman, 89 Cal.App.2d 356, 200 P.2d 893 (1949), or fatal, Craft v. Stumpf, 115 Colo. 181, 170 P.2d 779 (1946), and the party failing to make an objection to a variance at the time the evidence is introduced will not be permitted thereafter to take advantage of it.

'It has long been the rule that any variance between pleading and proof is waived if the opposing party does not make timely objection. In Woodard v. Timms, 113 Kan. 413, 215 P. 456 (1923), it is stated:

'A variance between pleading and proof is waived, when no objection thereto is clearly and specifically raised at the time the evidence is presented in the trial court."

Forster v. Fink, 195 Kan. 488, 492, 407 P.2d 523, 527 (1965).

And See, e.g., McDonough v. Chu Chew Shong, 21 Cal.App.2d 257, 68 P.2d 976 (1937); Carey v. Lafferty, 59 Idaho 578, 86 P.2d 168 (1938); Albert M. Greenfield & Co. v. Philadelphia Workingmen's Saving Loan & Bldg. Ass'n, 162 Pa.Super. 350, 57 A.2d 435 (1948).

It is also the rule that the admission of evidence without objection will enlarge the pleadings and render it proper for the trial court to treat the pleadings as though amended so as to conform to the proof. Gilliland v. Rodriquez, 77 Ariz. 163, 268 P.2d 334 (1954). And See Schreppel v. Campbell Sixty-Six Express, Inc., 201 Kan. 448, 441 P.2d 881 (1968); Hursh v. Mon-O-Co. Oil Corp., 139 Mont. 302, 363 P.2d 485 (1961); Home Plumbing & Contracting Co. v. Pruitt, 70 N.M. 182, 372 P.2d 378 (1962); Gorham v. Arons, 306 N.Y. 782, 118 N.E.2d 600 (1954); Ketel v. Hovick, 47 Wash.2d 368, 287 P.2d 739 (1955); Jones v. Clark, Wyo., 418 P.2d 792 (1966). The principles enunciated in the cited authorities are so well settled that they have often been adopted into rules of practice and procedure. In Arizona, Rule 15(b), Rules of Civil Procedure, 16 A.R.S. expressly provides:

'When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment, but failure so to amend does not affect the result of the trial of these issues. * * *.'

In Electrical Advertising, Inc. v. Sakato, 94 Ariz. 68, 381 P.2d 755 (1963), we construed Rule 15(b), holding:

'When evidence is presented at trial which presents a new or different theory from that alleged in the pleadings, And the adverse party does not object to the introduction thereof, that issue is then tried by implied consent. Beckwith v. Clevenger Realty Co., 89 Ariz. 239, 360 P.2d 596 (1961); Leigh v. Swartz, 74 Ariz. 108, 245 P.2d 262 (1952). Failure to formally amend the pleadings will not affect a judgment based upon competent evidence. If an amendment to conform the pleadings to the proof should have been made, an appellate court will presume that it was so made to support the judgment.' 94 Ariz. at 71, 381 P.2d at 756--757. (Emphasis supplied)

And See State v. Barnum, 58 Ariz. 221, 118 P.2d 1097 (1941).

The foregoing disposes of the defendants' claim that the trial court erred in denying defendants' motion to strike the plaintiff's testimony and their motion for a directed verdict.

The principle controlling the question of whether the court should have treated the pleadings of the plaintiff as an admission is controllved by Buehman v. Smelker, 50 Ariz. 18, 68 P.2d 946 (1937). There we held that statements in the pleadings which have been shown to be those of a party or to have been approved by him are admissible against him but that a party is not bound without a preliminary showing that the statements emanated from him or were known or approved by him.

In the instant case, the plaintiff was asked this question on cross-examination and gave this answer:

'Q. And did you read (the complaint) at about, on or about the time it was filed?

A. Yes.'

The question was duplicitous and consequently the answer did not establish that the plaintiff was aware of the contents of the complaint Prior to its filing.

Later, on cross-examination, in referring to the paragraph containing the allegations that plaintiff was deceived by the subterfuge of including the joint venture agreement in a pile of documents placed in front of plaintiff for signature, this question was asked:

'Q. Do you recall now this paragraph that I just read, Harry? * * *

A. I don't remember it.'

Here, again, no attempt was made to establish whether plaintiff had read the complaint prior to filing.

We therefore are of the opinion that the defendants did not by this limited cross-examination prove that plaintiff was aware of the statements contained in the complaint at the time of its filing, and we hold that the trial court did not err in its other rulings on the defendants' motions directed to the purported variance in plaintiff's testimony.

Defendants next question whether a court sitting in equity can award punitive damages, arguing that in an action for declaratory judgment where a contract is ordered reformed the reformation cannot be construed as compensatory damages sufficient to satisfy the requirement that actual damages must be awarded in order to support punitive damages. We disagree. Arizona has long abolished the distinction between legal and equitable action, See § 425 R.S.1913. In McRae v. Lois Grunow Memorial Clinic, 40 Ariz. 496, 14 P.2d 478 (1932), we said:

'It should be remembered that forms of action are abolished under our judicial system. They are civil actions and are to be stated without distinction between actions at law and in equity and also without distinction as to the nature of the relief demanded. Section 3746, Revised Code of 1928. And it is provided that judgments shall conform to the pleadings, the nature of the case proved, and the verdict, if any, And shall give all the relief either in law or equity to which a party may show himself entitled.' 40 Ariz. at 510, 14 P.2d at 483. (Emphasis supplied)

Seven years after this pronouncement, the policy of granting complete relief was reaffirmed by the adoption of the following language in Rule 54(d) of the Rules of Civil Procedure:

'Except as to a party against whom a judgment is entered by default, every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.'

The same policy is reflected in the Uniform Declaratory Judgment Act, which Arizona has adopted. Section 12--1838 reads in its relevant part:

'Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper.'

The Uniform Declaratory Judgment Act, McRae and Rule 54(d) seek to avoid multiplicity of actions by providing one...

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