Tony's Constr., Inc. v. Select Dev., LLC

Decision Date28 July 2014
Docket NumberNo. 2 CA-CV 2013-0153,2 CA-CV 2013-0153
PartiesTONY'S CONSTRUCTION, INC., AN ARIZONA CORPORATION, PLAINTIFF/APPELLANT, v. SELECT DEVELOPMENT, LLC, AN ARIZONA LIMITED LIABILITY COMPANY; SELECT DEVELOPMENT & CONSTRUCTION, INC., AN ARIZONA CORPORATION; SELECT, AN ENTITY; SELECT DEVELOPMENT, AN ENTITY; BRANDON J. NEAL; THOMAS B. "BRIAN" NEAL; FAC LEASING, LLC, A NEVADA LIMITED LIABILITY COMPANY; PWBCO INVESTMENT SERVICES, LLLP, AN ARIZONA LIMITED LIABILITY PARTNERSHIP; BLSH INVESTMENT SERVICES, LLLP, AN ARIZONA LIMITED LIABILITY PARTNERSHIP, DEFENDANTS/APPELLEES.
CourtCourt of Appeals of Arizona

THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.

NOT FOR PUBLICATION

See Ariz. R. Sup. Ct. 111(c); Ariz. R. Civ. App. P. 28(c).

Appeal from the Superior Court in Pima County

No. C20081406

The Honorable Stephen C. Villarreal, Judge

The Honorable Charles V. Harrington, Judge

AFFIRMED IN PART, VACATED IN PART, AND REMANDED WITH INSTRUCTIONS

COUNSEL

Carl M. Tootle, Tucson Counsel for Plaintiff/Appellant

Law Offices of Dennis A. Rosen, Tucson By Dennis A. Rosen and Gayle D. Reay Counsel for Defendants/Appellees

MEMORANDUM DECISION

Presiding Judge Kelly authored the decision of the Court, in which Judge Howard and Judge Brammer1 concurred.

KELLY, Presiding Judge:

¶ In this contract action, appellant Tony's Construction, Inc. (TCI) argues the trial court erred in various rulings against it, including the court's grant of summary judgment and judgment as a matter of law in favor of Select Development, LLC (Select LLC). For the following reasons, we affirm the court's rulings on the merits but vacate the award of attorney fees and remand with instructions.

Factual and Procedural Background

¶ In January 2006, Select LLC contracted with TCI to work as a subcontractor on a housing development. After TCI performed its work between late 2006 and early 2007, it received payments in January and March 2007. TCI contended the payments did not represent the full amount it was owed for work and materials.

¶ In March 2008, TCI filed a complaint for mechanic's lien foreclosure and breach of contract against Select LLC and other persons or entities it believed were affiliated with Select LLC or the housing development project. Two years later, in March 2010, Select LLC stipulated to a judgment on the breach of contract claim and judgment was entered against it in the principal sum of $107,250.63, plus interest, attorney fees, and costs. Thereafter, the trial court dismissed TCI's lien foreclosure claim with prejudice, and denied its requests for leave to amend its complaint to assert a claim for equitable relief and for additional discovery. TCI appealed, but this court dismissed the appeal with prejudice based upon the parties' stipulation.

¶ In the fall of 2011, the trial court granted Select Development, an entity, and Select Development & Construction, Inc.'s joint motion for summary judgment, ruling that Select LLC was the only party that had contracted with TCI and thus was the only proper defendant in TCI's breach of contract action.2 TCI subsequently was permitted to amend its complaint to add additional defendants and three new causes of action for alter ego, fraudulent transfer, and breach of the corporate trust fund doctrine (CTFD). In April 2012, the court granted summary judgment on TCI's fraudulent transfer and alter ego claims as to all defendants, and for breach of the corporate trust fund doctrine as to certain defendants.3 The court denied TCI's motion for reconsideration in June 2012 and, in January 2013, denied TCI's motion for summary judgment on the fraudulent transfer claim.

¶ TCI then filed its second motion to amend its complaint seeking to add claims of unjust enrichment and a violation of A.R.S. § 29-706. The trial court denied the motion, stating it was "unwilling to revisit [the fraudulent transfer] issue for [the] fourth time" and that "it would be futile to allow the amendment." The court also concluded the unjust enrichment claim was futile, the statutory claim based on § 29-706 was inapplicable and futile, and TCI had unduly delayed bringing the claims.

¶ TCI's sole remaining claim—breach of the CTFD— proceeded to trial. At the close of TCI's case, defendants moved for judgment as a matter of law. The trial court found a transfer of corporate assets had occurred between December 2006 and March 2007. With respect to that time period, it concluded TCI had failed to prove the elements of its claim for breach of the CTFD or the amount of Select LLC's liability, and that TCI lacked standing to bring the claim for its individual benefit. The court entered judgment in favor of defendants in July 2013, and awarded defendants their attorney fees and costs. It subsequently denied TCI's motion for new trial and TCI timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).

Fraudulent Transfer

¶ TCI argues the trial court erred by "dismiss[ing its] fraudulent conveyance claim on the ground of statute of limitations" because the court ruled "without benefit of the records concealed by Defendants[]." In September 2011, TCI had alleged in its amended complaint that defendants transferred assets or equipment in violation of A.R.S. §§ 44-1004 and 44-1009 of the Uniform Fraudulent Transfer Act, either to "hinder, delay or defraud" TCI or "without receiving a reasonably equivalent value in exchange for the transfer or obligation." In December 2011, Select LLC filed a motion for summary judgment, arguing TCI's claim was barred by the limitations period set forth in § 44-1009.

The trial court agreed and granted summary judgment in favor of defendants on the fraudulent transfer claim. The court found the transfer giving rise to TCI's claim had involved certain equipment owned by Select LLC and had occurred betweenDecember 2006 and March 2007. It found that a July 6, 2009 letter provided notice to TCI that the equipment had been transferred to a Nevada leasing corporation; Select LLC had insufficient funds to pay any money it owed to TCI; and Select LLC had provided TCI with contact information for an attorney to whom it could direct questions about the transfer or business. The court then concluded that

[u]pon receipt of the letter, or shortly thereafter, [TCI] could have discovered this transfer was done with the intent to defraud creditors, or left the company insufficiently funded and unable to pay creditors, and therefore either knew or should have discovered, with due diligence, that the transfer may have been fraudulent.

The trial court further concluded that under §§ 44-1004 and 44-1009, TCI was required to bring a claim by "early 2011" at the latest. Because TCI did not assert a claim for fraudulent transfer until it filed its September 2011 amended complaint, "over four years after the completion of the transfer, over two years after the July 2009 letter, and over a year and almost three months after judgment was entered against Select LLC for breach of contract," its claim was barred by the statute of limitations and defendants were entitled to summary judgment.

The trial court denied TCI's motion for reconsideration in June 2012. Three months later, TCI filed a motion for summary judgment "to revisit the previous ruling barring its fraudulent conveyance claim." The court denied the motion on the grounds it was an "improper procedural mechanism" and the court "[could ]not make the findings necessary to revisit [the] earlier decisions." Further, although it found "[d]efendants ha[d] been less than forthcoming with disclosure," the court found TCI had "not been diligent in doing what [was] necessary to counteract defendant[s'] conduct."

¶ On appeal, TCI argues that defendants' "concealment of evidence . . . made the [trial court's] first ruling manifestly erroneous or unjust, and . . . the belated discovery of the new evidence constituted a substantial change in the essential facts, issues and evidence," mandating reconsideration of the court's grant of summary judgment. We review questions of law de novo, and will uphold the court's summary judgment ruling if correct for any reason. See Rowland v. Great States Ins. Co., 199 Ariz. 577, ¶ 6, 20 P.3d 1158, 1162-63 (App. 2001).

¶ With respect to the denial of its motion for reconsideration, TCI restates the arguments it made to the trial court but fails to assert or support specifically how the court purportedly erred, claiming summarily that the court "abused its discretion in failing to provide [it] any relief." We therefore deem this issue waived. See Ariz. R. Civ. App. P. 13(a)(6); In re Aubuchon, 233 Ariz. 2, ¶ 6, 309 P.3d 886, 888-89 (2013) (arguments waived when not "supported by adequate explanation, citations to the record, or authority"). And although we may review the denial of a motion for summary judgment in some circumstances, ordinarily we do not review such orders on appeal even after entry of final judgment, and we decline to do so here.4 See Strojnik v. Gen. Ins. Co. of Am., 201 Ariz. 430, ¶ 11, 36 P.3d 1200, 1203 (App. 2001).

¶ To the extent TCI challenges the trial court's grant of summary judgment in favor of defendants based on its finding that TCI had brought its fraudulent transfer claim after the limitations period had lapsed, we disagree. Although TCI suggests this issue is "better left to a trier of fact," it presents no argument and cites no evidence that the court erred in concluding the 2009 letter placedTCI on notice of the transfer and that, to be timely, its fraudulent transfer claim needed to have been asserted in early 2011. Although TCI alleges it "could not have discovered the fraud before the testimony and production of documents in 2011," the court explicitly concluded that the 2009 letter provided it notice. TCI has failed to demonstrate the court's conclusion was erroneous.5

¶ Although TCI claims that additional discovery and earlier production of documents would have placed it on notice of...

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