Summers v. Gloor, 1 CA–CV 14–0674.
| Decision Date | 02 February 2016 |
| Docket Number | No. 1 CA–CV 14–0674.,1 CA–CV 14–0674. |
| Parties | Lisa SUMMERS, a single woman, Plaintiff/Counter–Defendant/Appellant, v. Brenda GLOOR, a single woman; The Gloor Family Bakery, Inc. dba The Bread Basket Bakery, an Arizona corporation; 4 Beez Bakery, Inc., an Arizona corporation, Defendants/Counter–Claimants/Appellees. |
| Court | Arizona Court of Appeals |
Sanders & Parks, P.C., By G. Gregory Eagleburger, Patrick B.N. Solomon, Phoenix, Counsel for Plaintiff/Counter–Defendant/Appellant.
Baird, Williams & Greer, L.L.P., By William D. Sawkiw, Phoenix, Counsel for Defendants/Counter–Claimants/Appellees.
OPINION
JONES
, Judge:
¶ 1 Lisa Summers appeals from a judgment (1) in favor of Appellees (collectively Gloor) on their counterclaim for unjust enrichment, and (2) awarding Gloor attorneys' fees and costs. We conclude Gloor was not precluded from seeking equitable relief as an alternative to her defenses of recoupment and offset to Summers' contract claim under the circumstances presented, and the award to Gloor on her counterclaim was consistent with the evidence presented and the jury's verdict and interrogatory response. We further find the trial court acted within its discretion in deeming Gloor the successful party and awarding attorneys' fees and costs. For these reasons, we affirm.
¶ 2 In June 2011, Summers, who owned a successful fruit stand business, filed a complaint alleging Gloor breached a contract between them by failing to repay more than $400,000 in loans Summers had made to Gloor and seeking specific performance of an alleged agreement that Gloor would give Summers a fifty percent partnership interest in her bakery business. Gloor acknowledged Summers had loaned her money to help with her bakery but denied promising Summers any ownership interest in the bakery in exchange. Gloor also maintained she had substantially repaid Summers by providing labor and bakery product to Summers' fruit stand and asserted affirmative defenses to Summers' contract claim, including recoupment and offset,2 as well as a counterclaim for unjust enrichment arising from the value of the goods and services Summers received.3
¶ 3 Summers acknowledged receiving labor and bakery product from Gloor, but denied any agreement to accept goods or services as repayment for the loans. Summers further argued any value received from Gloor's labor and bakery product was outweighed by the value of fruits and vegetables Summers provided to Gloor's bakery.
¶ 4 Summers' contract claim proceeded to a jury trial in February 2014. The jury was not asked to consider Gloor's equitable counterclaim in any respect; rather, the parties agreed the equitable claim would be decided by the court after the jury returned its verdict. See Ariz. R. Civ. P. 39(j)
(). Following the presentation of evidence and argument, the jury was instructed upon the elements of a claim for breach of contract, as well as Gloor's affirmative defenses of recoupment and offset as follows:
¶ 5 Acknowledging the jury's verdict could be dispositive on the equitable claim, the parties agreed to propound certain special interrogatories to the jury. The relevant interrogatory provided:
Defendant Gloor claims that she provided bakery products that were sold by Plaintiff Summers at Summers Fruit Barn. In reach[ing] a verdict on Plaintiff's claims, did you give credit to Defendant Gloor for bakery products allegedly provided by her and allegedly sold at Summers Fruit Barn?
During its deliberations, the jury requested clarification of the meaning of the word "credit," and was advised "[i]n this context ‘credit’ means to reduce an amount you would have otherwise found due and owing to Summers."
¶ 6 The jury returned a verdict in favor of Summers on the breach of contract claim and awarded her damages in the amount of $346,854, but found Summers had not proven Gloor agreed to transfer any ownership interest in the bakery to her. It also responded, "no," to the special interrogatory, thus clarifying that it did not reduce its verdict to account for any bakery product Gloor provided to Summers. The jury was not asked to further elaborate and did not do so.
¶ 7 After the jury returned its verdict, Summers unsuccessfully moved to dismiss Gloor's equitable claim for unjust enrichment on the basis that the evidence of the value of the bakery product was too uncertain to support an award of damages. The parties then presented additional evidence and argument, after which the trial court issued its order finding in favor of Gloor on her unjust enrichment counterclaim and awarding her $280,000.4
¶ 8 Summers filed a motion for new trial and motion for judgment notwithstanding the verdict, arguing the trial court's ruling on the counterclaim was unsupported by the evidence and inconsistent with the jury's response to the special interrogatory. The motions were denied.
¶ 9 Both parties requested an award of attorneys' fees and costs pursuant to Arizona Revised Statutes (A.R.S.) section 12–341.01
,5 each asserting she was the successful party in a contract action. The trial court determined Gloor was the successful party and ordered Summers pay her attorneys' fees and costs in the total amount of $108,456. Judgment entered, and Summers timely appealed. We have jurisdiction pursuant to A.R.S. §§ 12–120.21(A)(1), –2101(A)(1) and (A)(5)(a).
¶ 10 Summers first argues the trial court erred in denying her motion for new trial because its order in favor of Gloor on her unjust enrichment claim is inconsistent with the jury's verdict in favor of Summers on her contract claim. Specifically, Summers asserts that "by rejecting [Gloor]'s affirmative defenses of offset and recoupment, the jury found that [Summers] had not received a benefit from [Gloor]," and therefore, Gloor was unable to recover on a theory of unjust enrichment. We review a trial court's decision denying a motion for new trial for an abuse of discretion. Styles v. Ceranski, 185 Ariz. 448, 450, 916 P.2d 1164, 1166 (App.1996)
.
¶ 11 Summers is correct that, to recover under a theory of unjust enrichment, the proponent must demonstrate, among other things, that the other party received a benefit. See Freeman v. Sorchych, 226 Ariz. 242, 251, ¶ 27, 245 P.3d 927, 936 (App.2011)
(citing Murdock–Bryant Constr., Inc. v. Pearson, 146 Ariz. 48, 53, 703 P.2d 1197, 1202 (1985) ). However, we disagree that the jury's response to the special interrogatory in resolving the contract claim foreclosed a later finding by the trial court that Summers received a benefit from the bakery product Gloor provided to the fruit stand for purposes of Gloor's unjust enrichment claim.
¶ 12 Although the jury heard testimony regarding Gloor's theory that she had repaid Summers with labor and bakery product, it was not advised of or asked to consider Gloor's unjust enrichment claim and was, instead, only instructed on and asked to decide Summers' contract claim. Assuming the jury followed those instructions, as we must, Hyatt Regency Phx. Hotel Co. v. Winston & Strawn, 184 Ariz. 120, 140, 907 P.2d 506 (App.1995)
(citing Perkins v. Komarnyckyj, 172 Ariz. 115, 119, 834 P.2d 1260, 1264 (1992) ), two distinctly different conclusions could be drawn from the jury's decision not to award Gloor a contractual offset or recoupment for the bakery product she provided Summers.
¶ 13 First, the jury could have accepted Summers' testimony that any value she received from Gloor's goods and services was outweighed by the value of fruits and vegetables Summers provided to Gloor's bakery—essentially that Gloor should not receive any credit. Encompassed within this interpretation is the conclusion Summers now proffers: that Summers did not benefit from Gloor's bakery product and therefore was not entitled to an offset.
¶ 14 Second, the jury could have accepted Summers' testimony that she never agreed to accept bakery product as payment for the loans—essentially that Gloor could not receive a credit even if it found Summers benefited from the bakery product, because this method of repayment was not contemplated by the parties' oral contract. See Fain Land & Cattle Co. v. Hassell, 163 Ariz. 587, 593, 790 P.2d 242, 248 (1990)
(). Such a finding would not preclude the trial court from later determining Summers received and benefitted from Gloor's bakery product and, more broadly, that Gloor was entitled to an unjust enrichment award under principles of equity, notwithstanding the jury's rejection of payment in-kind against the outstanding loan obligation.
¶ 15 Summers argues this second interpretation is impermissible because the doctrine of unjust enrichment does not apply where the parties' relationship is governed by a specific contract. See Trustmark Ins. v. Bank One, Ariz., N.A., 202 Ariz. 535, 542, ¶ 34, 48 P.3d 485, 492 (App.2002)
(quoting Brooks v. Valley Nat'l Bank, 113 Ariz. 169, 174, 548 P.2d 1166 (1976) ). According to Summers, once the jury found a contract existed between the parties, Gloor was precluded from seeking equitable relief.
¶ 16 We agree with the parties that had the jury responded "yes"...
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