Sun World Corp. v. Pennysaver, Inc.
| Decision Date | 27 November 1981 |
| Docket Number | No. 1,CA-CIV,1 |
| Citation | 637 P.2d 1088,130 Ariz. 585 |
| Parties | SUN WORLD CORPORATION, dba Sun Publishing Co., a Texas corporation, Plaintiff-Appellant, v. PENNYSAVER, INC., an Arizona corporation, Defendant-Appellee. 4695. |
| Court | Arizona Court of Appeals |
In this opinion we must determine if the non-assignability clause in the contract between the parties justified a dismissal of plaintiff's two claims for collection on an open account and for breach of contract. We must further consider the validity of the dismissal order that was granted with prejudice. It is this court's opinion that the trial court erred in the dismissal of the complaint and that the dismissal with prejudice constituted further error.
The appellant, Sun World Corporation, d/b/a Sun Publishing Co., a Texas corporation, filed a complaint in the Maricopa County Superior Court against the appellee, Pennysaver, Inc., an Arizona corporation, for an unpaid open printing account and for breach of contract. Count I of Sun World's complaint alleged that Pennysaver breached the contract by its refusal to pay the sum of $145,943.58 on an open account owed for certain printing delivered under the terms of the contract. In Count II, Sun World seeks damages from Pennysaver in a sum not less than $42,156.24 for the premature wrongful termination of the contract. Sun World also seeks reasonable attorney fees under the terms of the contract.
Pennysaver moved to dismiss Sun World's complaint because the contract entered into between Central Arizona Broadcasting, Inc., Sun World's predecessor, and Pennysaver on August 3, 1973 was nonassignable without consent of the other party. Pennysaver's theory was that Sun World, which was not a party to the original contract, did not have Pennysaver's consent to an assignment and therefore could not bring an action to enforce the contract.
The court granted Pennysaver's motion to dismiss, and a formal judgment dismissing the complaint with prejudice was entered on October 23, 1978. The final paragraph of the judgment reads:
It is Therefore Ordered, Adjudged and Decreed that the defendant's Motion to Dismiss the plaintiff's Complaint is hereby granted with prejudice and judgment is hereby entered against the plaintiff and in favor of the defendant.
Sun World first objected to the dismissal and form of judgment, then moved to amend or alter the judgment. The court denied the motions and this appeal followed.
In our review of a motion to dismiss, we must accept all material facts as alleged by the non-moving party as true. Lakin Cattle Co. v. Engelthaler, 101 Ariz. 282, 419 P.2d 66 (1966). A court should not grant a motion to dismiss for failure to state a claim upon which relief can be granted unless it appears certain that the plaintiff would not be entitled to relief under any state of facts susceptible of proof under the claim stated. Folk v. City of Phoenix, 27 Ariz.App. 146, 551 P.2d 595 (1976).
Pennysaver argues that when Sun World submitted the affidavit of Marvin K House, Jr., its assistant general manager, in response to the motion to dismiss, it thereby converted the motion to dismiss into a motion for summary judgment. The substance of the affidavit was that the two corporate name changes did not "alter the status or operation of Sun Publishing Company as a wholly owned subsidiary of the parent corporation, which was called Central Arizona Broadcasting, Inc., at the time the contract between Sun Publishing and Pennysaver was entered upon, and which parent corporation is now known as Sun World Corporation." Rule 12(b), Arizona Rules of Civil Procedure, states in pertinent part that:
If, on a motion asserting the defense numbered 6 to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56 ....
The record in this case is somewhat confusing. The motion to dismiss was the only motion presented, and the judgment specifically grants the motion to dismiss. On the other hand, the motion, as argued to the trial court and as presented in the briefs and arguments before this court was a combination of both a motion to dismiss and a motion for summary judgment.
We find it makes no difference in our final disposition whether we treat the motion as one to dismiss or as a motion for summary judgment. In either case, the trial court based its decision upon its conclusion that there was an invalid assignment of the contract. It is our opinion that if the appeal is from a motion to dismiss, such judgment must be reversed since Sun World's complaint states facts which are susceptible of proof and the factual allegations do state a claim. If the appeal is from a motion for summary judgment, such judgment must also be reversed since the record presently before us indicates there are material fact disputes with regard to the assignment and its enforceability. Lundy v. Prescott Valley, Inc., 110 Ariz. 362, 519 P.2d 61 (1974).
We will now proceed to consider the issues as presented by the parties in this appeal. Pennysaver argues that the trial court correctly dismissed the complaint for the failure of Sun World to state a claim upon which relief can be granted. Rule 12(b)6, Arizona Rules of Civil Procedure. To develop such argument, Pennysaver states that both Counts I and II of plaintiff Sun World's complaint are based upon an agreement dated August 31, 1973, between Central Arizona Broadcasting, Inc., an Arizona corporation, doing business as Sun Publishing Co., and Gerald A. Story, doing business as Pennysaver Publishers. Paragraph 19 of the agreement provides as follows: Pennysaver reasons that the complaint is filed in the name of Sun World Corporation, a Texas corporation, and not Central Arizona Broadcasting, Inc., an Arizona corporation, and it is therefore apparent from the face of the complaint that there has been an assignment of the contract. It further reasons that since Sun World's complaint is premised on the contract which contains language expressly prohibiting an assignment without the written consent of the other party, and since Sun World has failed to plead or allege such consent, the complaint fails to state a claim and was therefore properly dismissed.
Sun World argues that, as the present corporate...
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