Wingfoot California Homes Co. v. Valley Nat. Bank of Phoenix

• Citation: 80 Ariz. 133,294 P.2d 370
• Decision Date: 21 February 1956
• Docket Number: No. 6058,6058
• Parties: WINGFOOT CALIFORNIA HOMES CO., a corporation, Appellant, v. The VALLEY NATIONAL BANK OF PHOENIX, a National Banking Association, Appellee.
• Court: Supreme Court of Arizona

Page 370

294 P.2d 370

80 Ariz. 133

WINGFOOT CALIFORNIA HOMES CO., a corporation, Appellant, v. The VALLEY NATIONAL BANK OF PHOENIX, a National Banking Association, Appellee.

No. 6058.

Supreme Court of Arizona.

Feb. 21, 1956.

Rehearing Denied March 20, 1956.

Herbert Mallamo, Phoenix, Leslie O. Parry, Phoenix, of counsel, for appellant.

Gust, Rosenfeld, Divelbess & Robinette, Phoenix, for appellee.

PHELPS, Justice.

This is an appeal from an order granting a motion for summary judgment in favor of plaintiff below in an action brought to recover the principal, interest and attorneys' fees on 37 notes and mortgages, each of which constitutes a separate cause of action. Each note provides that should suit be brought thereon the maker agrees to pay all costs incurred in the collection thereof including reasonable attorneys' fees.

Paragraphs VII and VIII of each cause of action are as follows:

'VII

'That the sum of $150.00 is a reasonable sum to be allowed to the plaintiff as and for its attorneys' fees in this cause of action, and that the same is secured by the mortgage aforesaid.

'VIII

'That the plaintiff is the lawful owner and holder of the promissory note and mortgage securing the same described in this cause of action; that there is now due, owing and unpaid to the plaintiff from the defendant Wingfoot California Homes Co. on said note and mortgage the principal sum of $2,275.92 together with interest on the principal sum of $2,282.59 at the rate of 4 1/4 per cent per annum from December 1, 1953, to the date of the filing of this complaint, together with interest on the principal sum of $2,275.92 at the rate of 4 1/4 per cent per annum from the date of the filing of this complaint until paid, together with the sum of $150.00 for plaintiff's attorneys' fees, together with plaintiff's costs of suit.'

Paragraph IV of defendants' answer to each cause of action 'denies the allegations contained in Paragraphs VII and VIII.'

Thereafter plaintiff filed a motion for summary judgment which was granted upon the basis that there was no genuine issue of any material fact. The court granted recovery on the notes in full including $100 for attorneys' fees on each of the 37 causes of action and decreed foreclosure.

Defendants' assignment of error is predicated upon one question: Was there a genuine issue of fact before the court as to what constituted reasonable attorneys' fees in this case at the time of the granting of the summary judgment? If so, summary judgment was improperly granted. It is defendants' contention that the denial of Paragraph VII of the complaint placed the matter of attorneys' fees in issue so that defendants were entitled to put in evidence on the subject and have this matter tried as an issue of fact. It was contended by plaintiff that defendants' denial constituted a negative pregnant with an admission and that it did not raise an issue of fact on the question of the reasonablencess of attorneys' fees.

A denial wherein defendants admit certain stated allegations and allege that they are without knowledge or information sufficient to form a belief as to the truth of certain allegations, and deny generally other allegations, constitutes a qualified general denial. 2 Moore's Federal Practice 2d 1679, section 8.23, General Denial, footnote 2. In the present case defendants admitted the allegations in Paragraphs I through V, alleged insufficient knowledge and information as to form a belief as to the truth of Paragraph VI which was equivalent to a denial; denied Paragraphs VII and VIII and alleged insufficient knowledge or information to form a belief as to the truth of the allegations in Paragraphs IX, X and XI.

To this, plaintiff's argument was that this general denial that the reasonable value of attorneys' fees in each cause of action was $150, constituted a negative pregnant in that it admitted that any sum less than $150 was a reasonable sum. A negative pregnant with an admission may be defined as that form of denial which involves an affirmative implication favorable to the adversary. The general rule is that since a negative pregnant is a negative which implies an affirmative, it cannot be found in a general denial, because a general denial puts in issue every averment of the complaint which a plaintiff is required to prove to sustain his cause of action including jurisdiction. Rule 8(b), 21-405, A.C.A.1939. But where the defendant merely denies that a debt or damage is the precise sum alleged by the plaintiff it is an admission of the value, debt or damage in a lesser amount. Potter v. Home Owners' Loan Corporation, 50 Ariz. 285, 72 P.2d 429; Armer v. Dorton, 50 Cal.App.2d 413, 123 P.2d 94.

In the present instance the attorneys' fees sought to be recovered were $150 in each of the causes of action. The answer admitted certain allegations and denied other allegations of the complaint. The allegation concerning attorneys' fees is found in Paragraph VII of the complaint. The answer specifically denied Paragraph VII. This can only be interpreted to mean that defendants denied that $150 was a reasonable attorneys' fee in each cause of action for the services rendered for the plaintiff. By employing the use of a general specific denial as to Paragraph VII of the complaint does not invest the denial with any of the legal effects of a general denial to the entire complaint which, as above stated, is construed as denial of every allegation in the complaint. The case of Herr v. Kennedy, 22 Ariz. 141, 195 P. 530, is almost 'on all fours' with this case. And that case was cited in Eads v. Commercial Nat. Bank, 33 Ariz. 499, 266 P. 14, 62 A.L.R. 183. See also Stoudt v. Hanson, 62 Mont. 422, 205 P. 253.

Had defendants in this case desired to escape falling into the error of pleading a negative pregnant they should have denied the allegation in Paragraph VII of the complaint and admitted that said services were worth whatever sum in their judgment constituted reasonable attorneys' fees for the services rendered.

We are also of the view that Paragraph III of the answer denying Paragraph VII of the complaint does not meet the requirements of Rule 8(b), supra, which provides insofar as here material that:

'* * * Denials shall fairly meet the substance of the averments denied. When a pleader intends in good faith to deny only a part or a qualification of an averment, he shall specify so much of its as is true and material and shall deny only the remainder. * * *'

Defendants did not deny that an attorneys' fee in some amount less than $150 would be a reasonable fee for the services rendered. In fact such a denial would have indicated on its face a lack of good faith on the part of the defendants in filing such a pleading. The only effect of the denial is that they contend that the sum of $150 is not reasonable. Such a denial does not fairly meet the substance of the averment in the complaint relating to attorneys' fees. If it was defendants' intention to deny that the sum of $150 was an unreasonable fee in order to form an issue of the reasonableness thereof it was incumbent on them, as above stated, to state in their pleadings the specific amount which they considered to be a maximum of the reasonable value thereof.

The order granting plaintiff's motion for summary judgment was correct. There were no genuine issues of a material fact raised by the answer.

Judgment affirmed.

LA PRADE, C. J., and WINDES, J., concur.

UDALL, Justice (dissenting).

It is my view that an issue of fact was raised as to the reasonableness of attorney's fees by defendant's unqualified denial of the allegations of Paragraph VII of plaintiff's complaint and hence, in my opinion, a summary judgment as to this feature should not have been entered. I do not construe this portion of the answer as being an evasive pleading, for as I see it the pleader intended in good faith to thereby create an issue.

Inasmuch as the majority sustains the action of the lower court in granting a summary judgment, on the basis that the portion of the answer in question is a negative pregnant, it would seem advisable to more fully define such term:

'Negative Pregnant. In pleading. A negative implying also an affirmative * * * Such a form of negative expression as may imply or carry within it an affirmative. * * *.

'A 'negative pregnant' is a denial in form, but is in fact an admission, as where the denial in haec verba includes the time and place, which are usually immaterial. * * *.' Black's Law Dictionary, Third Edition, page 1229.

'A negative pregnant is such form of a negative expression as may carry with it an affirmative or at least an implication of some kind favorable to the adverse party. * * *' 71 C.J.S., Pleading, § 151.

The doctrine of negative pregnant is merely a specific application of the general rule that evasive and dilatory pleadings are defective. Thus if a plaintiff sets up a certain hypothesis in his pleading and defendant denies this is the same words used, including inconsequential and qualifying facts of the...