Triyar v. Rem ( 2017 )


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  •                        NOTICE: NOT FOR OFFICIAL PUBLICATION.
    UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
    AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
    IN THE
    ARIZONA COURT OF APPEALS
    DIVISION ONE
    TRIYAR CAPITAL, L.L.C., an Arizona limited liability corporation,
    Plaintiff/Appellee,
    v.
    REM INVESTMENT COMPANY, an Arizona general partnership;
    SAMUEL J. SUTTON, a married man; ANNE V. SUTTON, a married
    woman; JAMES VAN DOLAH and JANE DOE VAN DOLAH, husband
    and wife; ASPEN RESEARCH LTD., an Arizona corporation,
    Defendants/Appellants.
    No. 1 CA-CV 15-0538
    FILED 4-20-2017
    Appeal from the Superior Court in Maricopa County
    Nos. CV2003-016817, CV2010-005058 (Consolidated)
    The Honorable Mark H. Brain, Judge
    AFFIRMED
    COUNSEL
    Lake & Cobb PLC, Tempe
    By Richard L. Cobb, Joseph J. Glenn, Hank E. Pearson
    Co-Counsel for Plaintiff/Appellee
    Dickinson Wright PLLC, Phoenix
    By James T. Braselton, Michael J. Plati
    Co-Counsel for Plaintiff/Appellee
    Mandel Young PLC, Phoenix
    By Taylor C. Young
    Counsel for Defendants/Appellants REM, Anne V. Sutton, Samuel J. Sutton, and
    James Van Dolah
    Wilkins Law Firm PLLC, Phoenix
    By Amy M. Wilkins
    Counsel for Defendant/Appellant Aspen Research LTD
    MEMORANDUM DECISION
    Judge Donn Kessler delivered the decision of the Court, in which Presiding
    Judge Michael J. Brown and Judge Kent E. Cattani joined.
    K E S S L E R, Judge:
    ¶1             This matter arises out of a sale of real property from REM
    Investment Company (“REM”) to Triyar Investment Company, L.L.C.
    (“Triyar”) and a related condemnation action. REM’s former partners
    Samuel Sutton, Anne Sutton, and James Van Dolah (collectively with REM,
    “REM Appellants”), and Aspen Research Ltd. (“Aspen”) challenge the
    superior court’s judgment divesting the Suttons of any right, title, and
    interest in the disputed real property (the “Half Acre”), declaring Aspen’s
    mortgage on the Half Acre void, dismissing the Suttons’ and REM’s
    counterclaim with prejudice, and awarding costs and attorneys’ fees to
    Triyar. For the following reasons, we affirm the judgment.
    FACTUAL AND PROCEDURAL HISTORY
    I.    Purchase of the Property
    A.     The Agreement
    ¶2           In May 2006, Shawn Yari (“Yari”) entered an option
    agreement (“Agreement”) with REM to purchase certain real property in
    Phoenix (“Property”). The Agreement did not contain a legal description,
    but it described the Property using tax assessor parcel numbers as
    “approximately 17 acres of land . . . (Parcels 301-30-002 and 301-30-003A).”
    It required escrow through First American Title Company (“First
    American”) and required Yari to close on or before May 23, 2007.
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    TRIYAR v. REM et al.
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    ¶3            In the Agreement, REM and Yari acknowledged that the
    Property was subject to an ongoing condemnation proceeding by the City
    of Phoenix (“condemnation litigation”). The Agreement clarified REM
    would (1) “remain fully responsible for all past and future legal fees, costs
    and expenses incurred in conjunction with the pending condemnation
    litigation” and (2) be “exclusively entitled to any proceeds from settlement
    or adjudication of the condemnation litigation.” By its express terms, the
    Agreement “replace[d] any previous agreements,” was “the entire
    agreement between the parties,” and could only be modified or amended
    by a signed writing.
    B.     Conveyance of the Half Acre Outside of Escrow and Closing
    of Escrow
    ¶4            One month before the end of the option period and despite
    the two parcels being in escrow, the Suttons and Van Dolah, as the REM
    partners, conveyed the Half Acre within one of the parcels to the Suttons
    and recorded the deed outside of escrow. The REM Appellants did not
    inform Yari, Triyar, Triyar’s attorney Gary Drummond (“Drummond”), or
    the First American escrow officer, Angelique Sizemore (“Sizemore”) about
    the conveyance.
    ¶5            Less than one month after the transfer of the Half Acre and
    without knowledge of the conveyance, Yari exercised the option to
    purchase the Property.1 First American’s underwriter then prepared a legal
    description that contained a metes-and-bounds description of the Property
    (“Legal Description”). The Legal Description referred to the same tax parcel
    numbers as the Agreement, but also included a metes-and-bounds
    description which effectively excluded the Half Acre. The record does not
    reflect who provided information to First American’s underwriter about the
    Legal Description, only that the underwriter prepared it and the Suttons
    1      The REM Appellants assert REM previously entered an agreement
    with another buyer, Kohan, that excluded the Half Acre in 2004 and that
    Kohan assigned this agreement to Triyar. The description of the Property
    in that agreement was identical to the description in the Agreement,
    identifying the Property only by parcel number. The 2004 agreement did
    not mention a carve-out of the Half Acre, neither Triyar nor Yari had any
    part in drafting that agreement, and Yari testified he understood the 2004
    agreement to address the same two parcels as the Agreement.
    Additionally, by its express terms, the Agreement “replace[d] any previous
    agreements,” and was “the entire agreement between the parties.”
    3
    TRIYAR v. REM et al.
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    knew it excluded the Half Acre. Two days before escrow was to close,
    Sizemore delivered supplemental escrow instructions incorporating the
    Legal Description to REM and Drummond.
    ¶6              Drummond noticed the metes-and-bounds description
    contained an additional exception that did not match previous descriptions
    of the Property he had received. He contacted a surveyor to determine what
    effect, if any, the additional exception had on the Property. The surveyor
    was only able to compare the Legal Description and title commitment to a
    2005 survey that did not reflect the conveyance of the Half Acre. The
    surveyor told Drummond that the property described in the 2005 survey
    was the same property in the Legal Description and updated title
    commitment. Drummond testified he did not have any reason to believe
    the 2005 survey was inaccurate because the Property had been in escrow
    since 2004.
    ¶7           The day before escrow was to close, Yari assigned his rights
    under the Agreement to his company, Triyar (“Assignment”). The
    Assignment incorporated the Legal Description. That same day, the REM
    Appellants executed a special warranty deed conveying the Property to
    Triyar. The special warranty deed also incorporated the Legal Description.
    ¶8            Triyar and REM closed escrow on May 23, 2007. The Suttons
    and Van Dolah formally dissolved REM immediately after closing.
    Approximately two months after closing, Drummond discovered the
    conveyance of the Half Acre to the Suttons, and Triyar sued the REM
    Appellants for breach of contract and fraud in March 2010 (“2010
    litigation”).
    II.   Consolidation with the Condemnation Litigation
    ¶9            In 2007, the superior court awarded the Suttons
    approximately $100,000 in condemnation proceeds from the City of
    Phoenix. The court later vacated the judgment due to an error in the
    description of the property that pervaded the entire condemnation
    proceeding and ordered the Suttons to deposit the condemnation proceeds
    with the court. The Suttons went to Aspen, of which Sutton had been
    president and his wife vice-president, borrowed the money to deposit with
    the court and granted Aspen a mortgage on the Half Acre in August 2008.
    By this time, Triyar had already purchased the Property pursuant to the
    Agreement and held record title to some of the condemned property.
    ¶10         Due to Triyar’s purchase of the Property, the City added
    Triyar as a defendant to the condemnation litigation after the 2007
    4
    TRIYAR v. REM et al.
    Decision of the Court
    judgment was vacated. At trial in the condemnation action, Triyar argued
    it held title to the Half Acre and was entitled to condemnation damages on
    the basis that REM would no longer have legal standing in the
    condemnation action following closing. The superior court awarded
    condemnation proceeds to Triyar, found Triyar owned the Half Acre, and
    declared Aspen’s mortgage void ab initio. However, we reversed, finding
    (1) the superior court should have awarded condemnation damages to
    REM and the Suttons; (2) material issues of fact regarding the parties’ intent
    with respect to the Half Acre precluded summary judgment in favor of
    Triyar; and (3) the court lacked jurisdiction to expunge Aspen’s mortgage
    because Aspen was not a party to the condemnation litigation. City of
    Phoenix v. R.E.M. Inv. Co., 1 CA-CV 11-0190, 
    2012 WL 1255195
    , at *4-6, ¶¶
    19-21, 28 (Ariz. App. Apr. 12, 2012) (mem. decision).
    ¶11         On remand, the superior court consolidated the
    condemnation litigation and this matter. It also awarded REM and the
    Suttons damages relating to the condemnation.
    III.   Entry of Default and Judgment
    ¶12           After consolidation, Triyar added Aspen as a defendant and,
    in addition to the claims for fraud and breach of contract, added claims for
    quiet title and imposition of a constructive trust on the Half Acre for
    Triyar’s benefit. It sought, in the alternative, for the court to reform the
    warranty deed to include the Half Acre, establish Triyar’s fee simple estate
    on the Half Acre, expunge Aspen’s mortgage as to the Half Acre, and that
    the Suttons and Aspen be “barred and forever estopped from having or
    claiming any right, title, or interest in the Half Acre adverse to” Triyar.
    ¶13            After answering, Aspen unsuccessfully moved for summary
    judgment, contending the statute of limitations barred Triyar’s quiet title
    action. In their answer, the REM Appellants filed a counterclaim for breach
    of contract, alleging Triyar had breached its obligations under the
    Assignment and Option Agreement when it pursued condemnation
    damages and sought to be named owner of the Half Acre in the
    condemnation litigation.
    ¶14          In January 2014, the superior court allowed counsel
    representing all the Appellants to withdraw, warning that failure of any
    corporate entity to appear through counsel within a month could result in
    their answer being stricken. When REM and Aspen failed to appear
    through counsel by the specified date, Triyar moved to strike REM and
    Aspen’s answers and enter a default against them for failure to appear
    5
    TRIYAR v. REM et al.
    Decision of the Court
    through counsel. The trial court granted the motion to strike, but did not
    state that a default was being entered.2
    ¶15           At trial, neither Aspen nor any of the REM Appellants
    appeared other than Sam Sutton, who represented himself. Triyar
    successfully moved for entry of judgment against Van Dolah, Anne Sutton,
    and Aspen for failure to appear, but did not request a default judgment.
    ¶16           After a bench trial, the superior court entered its final
    judgment, divesting the Suttons of any right, title, and interest in the Half
    Acre, declaring Aspen’s mortgage on the Half Acre void, dismissing the
    Suttons’ and REM’s counterclaim with prejudice, and awarding costs and
    attorneys’ fees to Triyar. In so ruling, it found Sutton’s testimony less
    credible than Yari’s and Drummond’s. It concluded Triyar was entitled to
    judgment against Anne Sutton, Van Dolah, REM, and Aspen both because
    they failed to appear at trial and on the merits. The court found the
    Agreement gave Yari the right to purchase the Property, which included
    the Half Acre; the REM Appellants breached the Agreement both by
    transferring the Half Acre before the end of the option period and by doing
    so outside of escrow; Triyar was entitled to specific performance and an
    order requiring the Suttons to convey the Half Acre to Triyar due to REM’s
    breach; and Triyar was entitled to an order expunging Aspen’s mortgage
    on the Half Acre because Aspen had notice of the Agreement when it
    loaned the money. With regards to the REM Appellants’ counterclaim, the
    court concluded Triyar did not breach the Agreement by pursuing a claim
    for condemnation proceeds. It also held Sutton was not entitled to legal fees
    in relation to his counterclaim because he failed to file an application for
    attorneys’ fees in the condemnation litigation and because he failed to
    introduce admissible, credible evidence of damages incurred as a
    consequence of Triyar’s pursuit of condemnation proceeds.
    ¶17          Appellants timely appealed. We have jurisdiction pursuant
    to Arizona Revised Statutes (“A.R.S.”) section 12-2101(A)(1) (2016).3
    2      However, later in the proceedings, the court recognized that a
    default had been entered against Aspen. It did not mention entry of default
    against REM.
    3      We cite to the current version of statutes unless changes material to
    this decision have since occurred.
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    TRIYAR v. REM et al.
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    DISCUSSION
    ¶18            When reviewing issues decided following a bench trial, we
    view the facts in the light most favorable to upholding the superior court’s
    ruling. Bennett v. Baxter Grp., Inc., 
    223 Ariz. 414
    , 417, ¶ 2 (App. 2010)
    (citation omitted). We will not set aside the court’s findings of fact unless
    they are clearly erroneous or not supported by substantial evidence. Ariz.
    R. Civ. P. (“Rule”) 52(a); Nordstrom, Inc. v. Maricopa County, 
    207 Ariz. 553
    ,
    558, ¶ 18 (App. 2004) (citation omitted). We are not bound by the superior
    court’s holding on questions of law or mixed questions of law and fact.
    Guirey, Srnka, & Arnold, Architects v. City of Phoenix, 
    9 Ariz. App. 70
    , 71
    (1969) (citations omitted).
    I.     Sam Sutton
    ¶19            Sutton argues the court erred by concluding (1) Triyar proved
    its claim for breach of the Agreement, and (2) the REM Appellants did not
    prove their counterclaim for breach of the Agreement.4 We find no error
    and affirm the judgment on the contract claims.
    A.     Sutton Breached the Agreement Because the Property
    included the Half Acre, but REM did not Convey the Half
    Acre to Triyar
    ¶20           Sutton asserts the court erred by concluding the parties
    intended the term “Property” in the Agreement to include the Half Acre.
    Sutton argues the clear and unambiguous terms of the Agreement did not
    include the Half Acre as part of the purchase, and therefore the superior
    court erred in interpreting “Property” to include all the Parcels.
    ¶21            We review issues of contract interpretation de novo. ELM Ret.
    Ctr., LP v. Callaway, 
    226 Ariz. 287
    , 290, ¶ 15 (App. 2010) (citation omitted).
    We interpret contracts with the purpose of ascertaining and giving force to
    the parties’ intention at the time the contract was made. Polk v. Koerner, 
    111 Ariz. 493
    , 495 (1975) (citation omitted). We “look to the plain meaning of
    the words as viewed in the context of the contract as a whole” to determine
    the parties’ intent. United Cal. Bank v. Prudential Ins. Co. of Am., 
    140 Ariz. 4
          The superior court entered a judgment against the other REM
    Appellants and Aspen for their failure to appear at trial and on the merits.
    Thus, while we discuss the arguments about breach of contract in reference
    to Sutton, who appeared at trial and represented himself, these arguments
    also dispose of the other REM Appellants’ arguments on the breach of
    contract claim and counterclaim.
    7
    TRIYAR v. REM et al.
    Decision of the Court
    238, 259 (App. 1983). Because this Court previously determined the
    Agreement’s language is reasonably susceptible to more than one meaning,
    see City of Phoenix, WL 1255195 at *4, ¶ 20, extrinsic evidence may be
    admitted to interpret the contract, Polk, 
    111 Ariz. at 495
     (citation omitted)
    (“Where the written language of the agreement offers more than one
    reasonable interpretation, the surrounding circumstances at the time that it
    was made should be considered in ascertaining its meaning.”).
    ¶22           The Agreement defines the Property as “approximately 17
    acres of land located 288’ west of the southwest corner of 24th Street and
    Baseline Road in Phoenix Arizona (Parcels 301-30-002 and 301-30-003A).”
    It does not contain a legal description, identifying the Property by assessor
    tax parcel number only.
    ¶23            Sutton asserts the use of “approximately 17 acres” indicates
    the Property only included part of the Parcels. The Agreement’s language
    and the record do not support this interpretation. Sutton agreed at trial that
    the Property consists of fewer than seventeen acres even if the Half Acre is
    included, therefore the significance of “approximately 17 acres” is
    ambiguous at best. Furthermore, Sutton testified that the Half Acre was
    part of Parcel 301-30-003A before REM’s conveyance of the Half Acre to the
    Suttons, and Sutton approved plans for Triyar that included the Half Acre
    as part of the development of the Parcels. In light of the Agreement’s use
    of parcel numbers that included the Half Acre at the time of the
    Agreement’s execution, in the absence of any limiting language or
    admissible evidence5 showing the parties intended to exclude the Half
    5      The REM Appellants assert Triyar should have understood the
    Agreement excluded the Half Acre due to communications between Sam
    Sutton and Kohan, who had originally negotiated an option agreement
    which included a metes-and-bounds description excluding the Half Acre.
    We reject that argument for the reasons stated supra, n.1. Nor can we
    consider evidence of antecedent understandings and negotiations to
    contradict the language of the contract. Taylor v. State Farm Mut. Auto. Ins.
    Co., 
    175 Ariz. 148
    , 152 (1993) (citations and quotation omitted).
    8
    TRIYAR v. REM et al.
    Decision of the Court
    Acre, and in light of the superior court’s conclusion that Sutton was less
    credible than Yari and Drummond, we conclude the court did not err by
    determining that the Property as described in the Agreement included the
    Half Acre. Accordingly, REM breached the Agreement when it conveyed
    the Parcels to Triyar less the Half Acre.
    ¶24          Sutton also argues Triyar ratified the Legal Description by
    incorporating it into the Assignment and several closing documents. It is
    unclear whether Sutton argues this “ratification” effected a modification of
    the Agreement or served as notice to Triyar that the Half Acre was to be
    excluded. On either theory, we are unpersuaded.
    ¶25            “[A] contract, once made, must be performed according to its
    terms, and . . . any modification of those terms must be made by mutual
    assent and for consideration.” Demasse v. ITT Corp., 
    194 Ariz. 500
    , 509, ¶ 30
    (1999) (citations omitted). Sutton has waived any challenge to the court’s
    finding that there was no consideration to modify the Agreement because
    he did not object to the finding at the trial level. See Winters v. Ariz. Bd. of
    Educ., 
    207 Ariz. 173
    , 177, ¶ 13 (App. 2004) (citations omitted) (“When a
    challenge is not raised with specificity and addressed in the trial court, we
    generally do not consider it on appeal.”). Moreover, Triyar paid the full
    price for the Property under the Agreement, therefore REM was
    contractually obligated to convey all the Parcels to Triyar, including the
    Half Acre. See J.D. Halstead Lumber Co. v. Hartford Acc. & Indem. Co., 
    38 Ariz. 228
    , 235 (1931) (citations omitted) (“A promise to do something which a
    party is already legally obliged to do is no consideration for a contract.”).
    Because there was no consideration to modify the Agreement, we reject
    Sutton’s argument that the Legal Description modified the Agreement and
    Similarly, we reject Sutton’s argument that Triyar should have been
    aware of the Half Acre’s exclusion because the Legal Description identified
    the deed through which REM conveyed the Half Acre to the Suttons. An
    employee from the county assessor’s office testified that it can take several
    months to update the assessor’s records in response to a recorded
    document and that in this case, the assessor’s records did not reflect the
    change for two years. Accordingly, Triyar would not have been notified of
    the change by referring to the assessor’s records prior to closing.
    Additionally, Yari testified that even if he had seen the deed conveying the
    Half Acre, he would not have understood that it removed a half acre from
    one of the Parcels. In any case, Triyar’s awareness of the deed is irrelevant
    because Sutton’s transfer of the Half Acre out of escrow was a breach of the
    Agreement for the sale of both Parcels.
    9
    TRIYAR v. REM et al.
    Decision of the Court
    conclude the court did not err by finding the Property included the Half
    Acre.
    ¶26           Sutton’s argument that the Legal Description acted as notice
    to Triyar that the Half Acre was not being sold to Triyar also fails. The
    superior court found that Yari, Drummond, and Sizemore’s failure to
    understand that the Legal Description excluded the Half Acre was
    excusable, accepting their explanation and finding them more credible than
    Sutton. Sutton contends the court erred in making that finding. We review
    a finding of fact for clear error. Nordstrom, 
    207 Ariz. at 558, ¶ 18
     (citation
    omitted). We will not reverse if there is evidence supporting the finding.
    
    Id.
    ¶27            As we have already noted, the Agreement was clear that the
    option included the Half Acre. The Legal Description, which contained
    both the metes-and-bounds description and the parcel numbers from the
    Agreement, was conveyed by First American’s underwriter to Sizemore,
    Triyar, and Drummond two days before escrow was to close. Drummond
    noticed a change in the Legal Description and, relying on a survey done
    while the Property was in escrow, concluded that there was no conflict
    between the listing of the Parcels in the Agreement and the Legal
    Description. Sutton could have expressly disclosed to Triyar that the Half
    Acre had been sold while the Property was in escrow and that the metes-
    and-bounds description excluded the Half Acre, but he did not. An
    employee from the county assessor’s office also testified that it took nearly
    two years for the assessor’s records to reflect the conveyance of the Half
    Acre.6 Nor was the Aspen Mortgage recorded until August 2008, well after
    close of escrow. It was only after escrow closed, once Triyar and
    Drummond met with the City of Phoenix in relation to the condemnation
    litigation, that Yari and Drummond realized the Legal Description did not
    include the Half Acre. Based on these facts and on the superior court’s
    credibility findings, we conclude the court did not err in finding that
    Triyar’s failure to understand the Legal Description did not include the Half
    Acre prior to closing was excusable. See Vinnell Corp. v. State ex rel. Bob
    Skousen Contractor, Inc., 
    109 Ariz. 87
    , 89 (1973) (citation and quotation
    omitted) (“If, after a careful consideration of the words of a contract, in the
    light of all the relevant circumstances . . . a plain and definite meaning is
    achieved by the court, a meaning actually given by one party as the other
    6  These facts also dispose of Sutton’s argument that the Half Acre was not
    included because the title was limited by any matter of record.
    10
    TRIYAR v. REM et al.
    Decision of the Court
    party had reason to know, it will not disregard this plain and definite
    meaning and substitute another that is less convincing.”).
    B.      REM Breached the Agreement By Conveying the Half Acre
    to the Suttons outside of Escrow
    ¶28           The superior court also found REM breached the Agreement
    because it had sold the Half Acre to the Suttons out of escrow. Sutton does
    not deny REM conveyed the Half Acre to the Suttons out of escrow before
    the end of the option period. Rather, he argues that doing so was not a
    breach of the Agreement because the Agreement did not originally include
    the Half Acre. Because Triyar demonstrated that the Agreement included
    the Half Acre, REM’s conveyance of the Half Acre to the Suttons outside of
    escrow before the end of the option period also constituted a breach of the
    Agreement’s express terms. See Dunlap v. Fort Mohave Farms, Inc., 
    89 Ariz. 387
    , 391 (1961) (citations omitted) (stating an option-giver who repudiates
    or makes performance impossible or more difficult by conveying land to a
    third person is liable for damages). The superior court accordingly did not
    err by concluding Triyar was entitled to judgment against the REM
    Appellants on its breach of contract claim for the sale of the Half Acre out
    of escrow.
    C.     The Counterclaim
    ¶29         Sutton argues the superior court erred in holding Triyar did
    not breach the Agreement by seeking condemnation proceeds and in
    denying Sutton his legal fees or damages related to Triyar’s pursuit of
    11
    TRIYAR v. REM et al.
    Decision of the Court
    condemnation proceeds. We affirm because Sutton failed to offer any
    admissible evidence of damages in support of his counterclaim.7
    ¶30           Sutton’s only support for his claim of damages was his
    testimony that REM incurred $143,900 in attorneys’ fees fighting Triyar in
    the condemnation litigation. Although Sutton sought attorneys’ fees from
    the condemnation proceeding as part of his damages, he failed to present
    an affidavit or any other documentation proving these fees.
    ¶31           The superior court was “not compelled to believe the
    uncontradicted evidence of an interested party.” Estate of Reinen v. N. Ariz.
    Orthopedics, Ltd., 
    198 Ariz. 283
    , 287, ¶ 13 (2000) (citation omitted). The court
    did not find Sutton’s testimony credible, and we defer to the court’s
    credibility determinations. Rule 52(d).
    ¶32            Sutton claims the court erred by instructing him that evidence
    of attorneys’ fees as damages for the alleged breach would only be received
    at the end of the case in the form of a fee application compliant with
    7      We note that although the REM Appellants assert the court erred in
    failing to address the second component of their damages—namely,
    damages sustained as a result of the court order requiring disgorgement of
    the settlement proceeds after the court vacated the 2007 condemnation
    judgment—the REM Appellants had no right to these damages. The
    disgorgement order was not a result of Triyar’s involvement in the case, it
    was a result of setting aside the 2007 condemnation judgment. See Hirsch v.
    Ariz. Corp. Comm’n, 
    237 Ariz. 456
    , 466, ¶ 41 (App. 2015) (citations and
    quotation omitted) (“Disgorgement wrests ill-gotten gains from the hands
    of a wrongdoer . . . and is meant to prevent the wrongdoer from enriching
    himself by his wrongs.”); see also State ex rel. Goddard v. Gravano, 
    210 Ariz. 101
    , 105, ¶ 14 (App. 2005) (citation omitted) (noting “disgorgement has not
    been historically viewed as punishment, but rather . . . has long been
    recognized as civil” and “is designed in part to ensure that defendants do
    not profit from illegal acts; a nonpunitive goal”). Additionally, the superior
    court already determined the amount of condemnation damages owed to
    the Suttons, and the City of Phoenix has already paid them.
    12
    TRIYAR v. REM et al.
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    Schweiger v. China Doll Restaurant, Inc., 
    138 Ariz. 183
     (App. 1983).8 However,
    this is not supported by the record. When Sutton failed to produce
    admissible evidence of his fees beyond his conclusory testimony, the court
    asked whether he had any other documentation, using a China Doll affidavit
    to demonstrate the level of specificity with which a claim for attorneys’ fees
    is typically supported. At no point during the trial or in its findings of fact
    and conclusions of law did the court state it was denying Sutton’s request
    for lack of a China Doll affidavit.
    ¶33            Because Sutton failed to prove his damages, the court did not
    err by dismissing his breach of contract claim. Am. Pepper Supply Co. v. Fed.
    Ins. Co., 
    208 Ariz. 307
    , 310, ¶¶ 13-20 (2004) (clarifying that plaintiff must
    prove the existence of the contract, its breach, and the resulting damages by
    a preponderance of the evidence to prevail on a breach of contract claim);
    see Forszt v. Rodriguez, 
    212 Ariz. 263
    , 265, ¶ 9 (App. 2006) (citation omitted)
    (“We may affirm the trial court’s ruling if it is correct for any reason
    apparent in the record.”).
    II.    The Non-Appearing Appellants
    A.     REM, Anne Sutton, and James Van Dolah
    ¶34           REM, Anne Sutton, and James Van Dolah challenge the
    superior court’s entry of a judgment against them for failing to appear at
    trial. Although they argue that such judgment was a default judgment, that
    is not supported by the record. The court expressly stated the judgments
    against them were on the merits. Moreover, when a defendant pleads to
    the merits of a complaint but fails to appear at trial, the court cannot enter
    a judgment on default. Gillette v. Lanier, 
    2 Ariz. App. 66
    , 68 (1965). Instead,
    the court may proceed to hear the plaintiff’s evidence as if the defendant
    were present and render appropriate judgment if the plaintiff establishes
    its prima facie case. 
    Id.
     (citation omitted). Because REM, Aspen, Anne
    Sutton, and James Van Dolah pled to the merits of Triyar’s complaint and
    8      In China Doll, this Court established that the starting point in
    determining the reasonableness of attorneys’ fees is the actual billing rate
    charged by the lawyers involved in the matter. 
    138 Ariz. at 187-88
    . It
    accordingly concluded that applications for awards of attorneys’ fees
    should be supported by an affidavit of counsel indicating the type of
    services provided, the date the service was provided, the identity of the
    attorney providing the service, and the time spent providing the service. 
    Id.
    13
    TRIYAR v. REM et al.
    Decision of the Court
    then failed to appear at trial, the judgments against them were judgments
    on the merits rather than default judgments.9
    ¶35           Accordingly, we review the record only to determine whether
    Triyar established its prima facie case against these appellants. Id. at 68. “A
    prima facie case requires that there be evidence to justify, not necessarily
    compel, an inference of liability.” Robledo v. Kopp, 
    99 Ariz. 367
    , 371 (1965).10
    9       Although the superior court struck REM and Aspen’s answers and
    later recognized it had entered a default against Aspen, they still pled to the
    merits by moving for summary judgment and filing a counterclaim. See
    Coulas v. Smith, 
    96 Ariz. 325
    , 329 (1964); Gillette, 2 Ariz. App. at 68. “The
    words ‘otherwise defend’ refer to attacks on the service, or motions to
    dismiss, or for better particulars, and the like, which may prevent default
    without presently pleading to the merits.” Coulas, 
    96 Ariz. at 328
     (quotation
    and citation omitted). Because Aspen moved for summary judgment after
    filing its answer and REM filed a counterclaim, they “otherwise defended”
    and the judgments against them were not “defaults” in the sense of Rule
    55(b). See 
    id. at 329
    ; Gillette, 2 Ariz. App. at 68.
    10      The REM Appellants also argue the superior court erred in striking
    REM’s answer and the entry of default against REM. They have waived
    these arguments because they failed to oppose Triyar’s motion to strike
    REM’s answer and enter default. See Rule 7.1(b)(2) (allowing the court to
    summarily grant a motion if the opposing party does not file a responsive
    memorandum); State v. Holder, 
    155 Ariz. 83
    , 85 (1987) (citation omitted)
    (“Absent fundamental error, error is usually considered to be waived on
    appeal unless it was objected to at trial.”).
    In any event, Rule 16 allows a court to strike a party’s pleadings in
    whole or in part if the party “fails to obey a scheduling or pretrial order or
    . . . to meet the deadlines set in the order.” Rule 16(i)(1)(A); Rule
    37(b)(2)(A)(iii). We review an imposition of sanctions under Rule 16 for an
    abuse of discretion. Gamboa v. Metzler, 
    223 Ariz. 399
    , 402, ¶ 13 (App. 2010)
    (citation omitted). To prevail, REM must also show it incurred some harm
    as a result of the court’s time limitations. See Brown v. U.S. Fid. & Guar. Co.,
    
    194 Ariz. 85
    , 91, ¶ 30 (App. 1998) (citation omitted).
    14
    TRIYAR v. REM et al.
    Decision of the Court
    To establish a prima facie case of breach of contract against REM, Anne
    Sutton, and Van Dolah, Triyar needed to prove the existence of a contract,
    the breach of the contract, and resulting damages. Clark v. Compania
    Ganadera de Cananea, S.A., 
    95 Ariz. 90
    , 94 (1963) (citation omitted). REM,
    Anne Sutton, and Van Dolah do not dispute the existence of the Agreement
    or the resulting damages, only whether conveying the Half Acre
    constituted a breach.
    ¶36          Because we have already concluded Triyar proved its case for
    breach of contract, supra, ¶¶ 20-27, the superior court did not err by
    concluding Triyar was entitled to judgment against REM, Anne Sutton, and
    Van Dolah on its breach of contract claim.
    Here, after allowing the withdrawal of Appellants’ counsel, the
    superior court provided a month’s warning to the parties that “[a]ny
    corporate entities must make an appearance through counsel no later than
    February 11, 2014 or their answer/complaint may be stricken.” Despite this
    warning, REM did not appear through counsel before the court’s deadline
    and, in fact, only appeared through counsel after entry of the final judgment
    over a year later. Although the court must give a corporation a reasonable
    opportunity to cure its ineffective performance before entering default,
    Boydston v. Strole Dev. Co., 
    193 Ariz. 47
    , 50, ¶ 12 (1998) (citation omitted),
    appearing though counsel after the final judgment has been entered is
    insufficient to cure a defective appearance, see State v. Eazy Bail Bonds, 
    224 Ariz. 227
    , 229, ¶ 12 (App. 2010) (citation omitted).
    REM also asserts the superior court erred in striking its answer for
    failing to appear through counsel because REM no longer existed as an
    entity at the time, and to the extent its interests needed to be represented,
    all necessary parties in interest were already parties in the suit. We disagree.
    In Arizona, “a partner cannot represent a partnership, except in an
    attorney-client relationship.” Hunt Inv. Co. v. Eliot, 
    154 Ariz. 357
    , 363 (App.
    1987). No counsel appeared on behalf of REM, and Sutton and the other
    partners could only represent their own individual partnership interests.
    
    Id.
     Because REM did not appear through counsel before the expiration of
    the court’s deadline, the court did not abuse its discretion in striking REM’s
    answer and entering default against it.
    15
    TRIYAR v. REM et al.
    Decision of the Court
    B.     Aspen
    ¶37           Aspen asserts the superior court erred by (1) failing to grant
    summary judgment to Aspen on the quiet title claim because of the statute
    of limitations and (2) entering judgment against Aspen.
    1.      Denial of Summary Judgment
    ¶38             We may review a denial of summary judgment if the order
    was based on a point of law. Strojnik v. Gen. Ins. Co. of Am., 
    201 Ariz. 430
    ,
    433, ¶ 11 (App. 2001) (citation omitted). The applicability of a statute of
    limitations is a legal issue, see Cook v. Town of Pinetop-Lakeside, 
    232 Ariz. 173
    ,
    174, ¶ 6 (App. 2013) (citation omitted), therefore we may review the court’s
    denial of Aspen’s motion for summary judgment, see Strojnik, 
    201 Ariz. at 433, ¶ 11
     (reviewing a court’s denial of a motion for partial summary
    judgment because denial was based on court’s interpretation of statutory
    and common law).11 We review questions of law concerning the statute of
    limitations de novo. Cook, 232 Ariz. at 175, ¶ 10 (citation omitted).
    ¶39             Aspen argues that because Triyar asserted a claim for quiet
    title and reformation against Aspen but was not in possession of the Half
    Acre, the statute of limitations began to run in August 2008 when the
    Suttons recorded the mortgage on the Half Acre. See Rogers v. Bd. of Regents
    of Univ. of Ariz., 
    233 Ariz. 262
    , 266, ¶ 13 (App. 2013) (“A statute of limitations
    defense to a quiet title action turns on whether the claimant asserts a
    possessory interest in the land.”). Aspen argues that because Triyar did not
    seek to quiet title until December 2012, more than four years after the claim
    arose, the claim was time barred under A.R.S. § 12-546 (2017) or,
    alternatively, A.R.S. § 12-543 (2017) (providing for a three-year limitations
    period).
    11      Triyar argues we should not address Aspen’s argument regarding
    the denial of summary judgment because Aspen failed to state it was
    appealing the order in its notice of appeal. However, a notice of appeal from
    a final judgment includes any intermediate orders entered which relate to
    the final judgment. Rourk v. State, 
    170 Ariz. 6
    , 12-13 (App. 1991) (citations
    omitted).
    16
    TRIYAR v. REM et al.
    Decision of the Court
    ¶40            We disagree. First, Aspen failed to raise A.R.S. § 12-546 at the
    trial level, waiving any argument that it applies here.12
    ¶41           Second, even if A.R.S. §§ 12-546 or 12-543 applied, they did
    not bar Triyar’s claims because, as Triyar pointed out below, the statute of
    limitation was tolled by the superior court’s October 2009 order in the
    condemnation action “expunging the void mortgage” held by Aspen.13 See
    City of Phoenix v. Sittenfeld, 
    53 Ariz. 240
    , 249 (1939) (citations omitted)
    (“[W]here the decision in a pending action is practically conclusive as to the
    nature and extent of a party’s rights, and where his success thereunder is a
    prerequisite to his right to maintain a new action, the statute does not begin
    to run as to the new action until the determination of the pending suit,
    which decides whether the new right of action exists.”). The court’s order
    rendered the mortgage void from October 2009 until this Court reversed
    the superior court’s ruling in April 2012. Accordingly, the limitations
    period ran from the recording of the mortgage in August 2008 until at the
    latest October 2009, and from the April 2012 memorandum decision until
    Triyar filed its amended complaint in December 2012. Thus, the total
    elapsed period was less than two years. Even if we were to assume the
    four-year limitation in A.R.S. § 12-546 or the three-year limitation of 12-543
    applied, it would not bar Triyar’s action against Aspen. The superior court
    accordingly did not err in denying Aspen’s motion for summary judgment.
    See State v. Perez, 
    141 Ariz. 459
    , 464 (1984) (citations omitted) (“We are
    obliged to affirm the trial court’s ruling if the result was legally correct for
    any reason.”).
    2.     Entry of Judgment
    ¶42           Although Aspen asserts the superior court abused its
    discretion in entering a default judgment against it, the judgment against
    Aspen was on the merits. Accordingly, we review the record to determine
    whether Triyar proved its prima facie case for a declaratory judgment
    12     At the trial level, Aspen argued for the application of A.R.S. §§ 12-
    542 (1985) (trespass, two years), 12-522 (2017) (claim by right of possession,
    two years), 12-523 (2017) (adverse possession, three years), and 12-530
    (2012) (home inspector liability, four years) applied. It also asserted A.R.S.
    §§ 12-525(a) (2017) and 12-526(a) (2017) (five- and ten-year limits for actions
    to recover real property in adverse possession).
    13     Indeed, in the condemnation action the superior court issued at least
    two earlier minute entries in June and September 2009 which held that
    Triyar owned title to the Property.
    17
    TRIYAR v. REM et al.
    Decision of the Court
    against Aspen. Gillette, 2 Ariz. App. at 68. This merely requires evidence
    to justify, not necessarily compel, an inference of liability. Robledo, 99 Ariz.
    at 371.
    ¶43            An option-giver may not repudiate or make the performance
    of a contract impossible or more difficult by conveying land to a third
    person. Dunlap, 
    89 Ariz. at 391
     (citations omitted). “If the option-giver does
    convey the property to a third person, . . . the third person, if he has actual or
    constructive notice of the existence of the option, takes the land subject to the
    option.” 
    Id.
     (emphasis added) (citations omitted). The third person may also
    “be liable for damages and an action for specific performance of the
    contract.” 
    Id.
     (citations omitted).
    ¶44           “[A] corporation is bound by the knowledge acquired by, or
    notice given to, its agents or officers which is within the scope of their
    authority and which is in reference to a matter to which their authority
    extends.” Fridena v. Evans, 
    127 Ariz. 516
    , 519 (1980). Additionally, a client
    is bound by the knowledge of its attorney. Hackin v. First Nat’l Bank of Ariz.,
    
    5 Ariz. App. 379
    , 385 (1967) (citation omitted).
    ¶45            Here, sufficient evidence supports the superior court’s
    finding that Aspen had notice of the Agreement when the mortgage was
    granted. Sutton, former president and founder of Aspen, testified that Jane
    Shrum, Aspen’s secretary and treasurer, “basically [ran] the operation” at
    Aspen with regards to making loans and negotiated the mortgage. Shrum
    drafted and acted as notary with regards to the August 8, 2008 loan
    agreement for the mortgage, and she also acted as notary for the special
    warranty deed transferring the property from REM to Triyar, and the
    affidavit of value. Additionally, Shrum served as Sutton’s legal secretary
    and assistant for approximately twenty-five years. Sam Sutton was the
    President and Anne Sutton was Vice President of Aspen until at least July
    2006, overlapping with REM’s signing of the Agreement on May 17, 2006.
    In light of this evidence, the court did not err in concluding Triyar proved
    a prima facie case that Aspen had notice of the Agreement when REM
    granted a mortgage on the Half Acre.
    III.   Attorneys’ Fees and Costs on Appeal
    ¶46           The REM Appellants request an award of attorneys’ fees and
    costs pursuant to A.R.S. § 12-341.01(A) (2013). Since they have not
    prevailed, we deny that request. Triyar requests an award of its costs and
    attorneys’ fees on appeal pursuant to A.R.S. §§ 12-1103 (2017), 12-342 (2017),
    and Arizona Rule of Civil Appellate Procedure (“ARCAP”) 21. Because
    18
    TRIYAR v. REM et al.
    Decision of the Court
    Triyar successfully complied with the requirements of A.R.S. § 12-1103(B),
    and Appellants have not disputed the basis for a fee award under A.R.S. §
    12-1103 in their reply briefs, we award Triyar its attorneys’ fees on appeal.
    We also grant Triyar’s taxable costs on appeal upon timely compliance with
    ARCAP 21.
    CONCLUSION
    ¶47          For the foregoing reasons, we affirm the superior court’s
    judgment.
    AMY M. WOOD • Clerk of the Court
    FILED: AA
    19