Kuehn v. Stanley, Charter Funding, First Magnus ( 2004 )

IN THE COURT OF APPEALS
STATE OF ARIZONA
DIVISION TWO
ERNEST W. KUEHN and JO ANN C. ) 2 CA-CV 2003-0136
KUEHN, ) DEPARTMENT A
)
Plaintiffs/Appellants, ) OPINION
)
v. )
)
THERESA C. STANLEY and JOHN )
DOE STANLEY, FIRST MAGNUS )
FINANCIAL CORPORATION, and )
CHARTER FUNDING, )
)
Defendants/Appellees. )
)
APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY
Cause No. C20020978
Honorable Ted B. Borek, Judge
AFFIRMED
Albert H. Hartwell, Jr. Tucson
Attorney for Plaintiffs/Appellants
Munger Chadwick, P.L.C.
By John F. Munger and Laura P. Chiasson Tucson
Attorneys for Defendants/Appellees
H O W A R D, Judge.
¶1 Appellants Ernest and Jo Ann Kuehn appeal the trial court’s grant of summary
judgment and award of attorney fees in favor of appellees Theresa Stanley and First
Magnus Corporation on the Kuehns’ claims of negligence, consumer fraud, negligent
supervision, and breach of contract. The Kuehns contend that issues of law and material
fact exist precluding summary judgment and that the trial court abused its discretion when
it granted attorney fees to First Magnus as a prevailing party to a contract claim. Finding
no error or abuse of discretion, we affirm.
¶2 Although the dispositive facts are not in dispute here, we view the facts in the
light most favorable to the party opposing summary judgment. Link v. Pima County, 193
Ariz. 336, ¶12, 972 P.2d 669, ¶12 (App. 1998). In July 2000, the Kuehns entered into a
contract to purchase real property. The contract specified a purchase price of $282,000;
the Kuehns offered $3,000 of this amount in earnest money and agreed to pay approximately
$57,000 at the close of escrow. The contract was contingent on the Kuehns qualifying for
sufficient financing for the remainder of the purchase price.
¶3 The Kuehns subsequently applied for a mortgage loan in the amount of
$220,000 from Charter Funding Corporation, a division of First Magnus. As part of its
loan-approval process, First Magnus asked Theresa Stanley to appraise the property.
Stanley was employed by CRG Valuations, another division of First Magnus. After Stanley
appraised the property at $282,000, First Magnus lent the Kuehns $220,000. Before the
close of escrow, First Magnus provided a copy of the appraisal report to the Kuehns. After
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they purchased the property, the Kuehns showed the appraisal report to a family member
who was also a licensed appraiser. This family member analyzed the report and concluded
that Stanley had “deviated severely” from standard appraisal practices. The Kuehns then
had another appraisal performed, which resulted in a value of $245,000, a difference of
$37,000 from Stanley’s appraisal.
¶4 The Kuehns sued Stanley and First Magnus, alleging claims of negligence,
gross negligence, negligent supervision, fraud, consumer fraud, and breach of contract. 1
First Magnus moved for partial summary judgment on all claims of negligence or fraud,
which the trial court granted. First Magnus then filed a second motion for summary
judgment, seeking dismissal of the remaining breach of contract claim. The trial court also
granted this motion and awarded First Magnus its attorney fees. The Kuehns now appeal
to this court.
TORT CLAIMS
¶5 The Kuehns argue that the court erred when it granted summary judgment on
the tort claims in favor of First Magnus. We review a grant of summary judgment de novo.
Strojnik v. Gen. Ins. Co. of Am., 201 Ariz. 430, ¶10, 36 P.3d 1200, ¶10 (App. 2001).
¶6 In its first motion for partial summary judgment, First Magnus sought
dismissal of the Kuehns’ negligence-related claims, arguing it had not owed the Kuehns any
1
In their opening brief, the Kuehns concede that they did not present evidence as to
the gross negligence and fraud claims to the trial court. Accordingly, these issues are
waived. See Cimarron Foothills Cmty. Ass’n v. Kippen, 206 Ariz. 455, ¶9, 79 P.3d 1214,
¶9 (App. 2003).
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duty. First Magnus also asked the court to dismiss the fraud claims on the ground the
Kuehns had had no right to rely, and had not relied, on the appraisal. The Kuehns
responded, first arguing that the parties had been in privity of contract. The Kuehns then
noted that “the issue here is not privity, but reliance,” arguing that they had had a right to
rely on the allegedly negligent appraisal. In support of this argument, the Kuehns quoted
extensively from Restatement (Second) of Torts § 552 (1977), which states the law on
negligent misrepresentation.
¶7 After oral argument, the trial court requested supplemental briefing addressing
Hoffman v. Greenberg, 159 Ariz. 377, 767 P.2d 725 (App. 1988), a case that analyzed a
claim for damages resulting from a negligent appraisal under the law of negligent
misrepresentation as stated in Restatement § 552. After reviewing these arguments, the
court granted First Magnus’s motion for summary judgment on the basis that the Kuehns had
had no right to rely on the appraisal under Hoffman. The court further concluded the
Kuehns had made no showing of reliance since they had been shown the appraisal only after
they were already bound contractually to purchase the property.
A. Negligence/negligent misrepresentation
¶8 The Kuehns argue that the trial court erred in granting summary judgment on
negligence by addressing the tort of negligent misrepresentation instead of simple
negligence. The Kuehns contend the “court appear[ed] to have confused the requirements”
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of both negligence and negligent misrepresentation and, thus, misapplied the Arizona
authorities on which it relied.2
¶9 When considering the duty of care in a negligence claim resulting from failure
to exercise reasonable care in supplying professional information, Arizona courts follow the
law of negligent misrepresentation set forth in Restatement § 552(1), which provides:
One who, in the course of his business, profession or
employment, or in any other transaction in which he has a
pecuniary interest, supplies false information for the guidance
of others in their business transactions, is subject to liability for
pecuniary loss caused to them by their justifiable reliance upon
the information, if he fails to exercise reasonable care or
competence in obtaining or communicating the information.
See Donnelly Constr. Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184, 188-89, 677 P.2d 1292,
1296-97 (1984); see also Hoffman, 159 Ariz. at 379-80, 767 P.2d at 727-28 (applying §
552 to a claim of damage from a negligent real estate appraisal). Under the Restatement,
the liability resulting from a claim for negligent misrepresentation is limited to losses
suffered:
(a) by the person or one of a limited group of persons for
whose benefit and guidance he intends to supply the
information or knows that the recipient intends to supply it; and
2
In its answering brief, First Magnus argues that the Kuehns waived any objection to
summary judgment on the issue of negligence because they did not contradict its argument
that it had no duty in their response to First Magnus’s motion for partial summary judgment.
But in its reply to the partial summary judgment motion, First Magnus stated the exact
opposite when it noted, “[i]n their Response to Defendants’ Motion for Summary Judgment,
[the Kuehns] attempt to argue that First Magnus owed a duty to them to conduct an
appraisal for their benefit.” Accordingly, we consider the negligence issue on its merits.
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(b) through reliance upon it in a transaction that he intends the
information to influence or knows that the recipient so intends
or in a substantially similar transaction.
Restatement § 552(2). Comment h to § 552 further notes that a claim would succeed so
long as
the maker of the representation intends it to reach and influence
either a particular person or persons, known to him, or a group
or class of persons, distinct from the much larger class who
might reasonably be expected sooner or later to have access to
the information and foreseeably to take some action in reliance
upon it.
The drafters of the Restatement justified this limited liability for negligent misrepresentation
claims “because of the extent to which misinformation may be, and may be expected to be,
circulated, and the magnitude of the losses which may follow from reliance upon it.”
Restatement § 552 cmt. a.
¶10 Based on this rationale, the court in Standard Chartered PLC v. Price
Waterhouse, 190 Ariz. 6, 30, 945 P.2d 317, 341 (App. 1996), held that the gravamen of a
claim of negligence against a provider of professional information is negligent
misrepresentation and that a party may not pursue a claim for negligence separate and
distinct from a negligent misrepresentation claim. The court noted that the drafters of the
Restatement did not narrow the range of liability for negligent misrepresentation “in the
expectation that a plaintiff could escape such limitations merely by attacking the same
conduct in an ordinary negligence count.” Id. at 31, 945 P.2d at 342. Thus, the court said,
to allow a plaintiff to pursue a negligence claim separate and distinct from negligent
6
misrepresentation would “sanction an end-run around Restatement (Second) § 552.” Id. at
30, 945 P.2d at 341. Based on the rule articulated in Standard Chartered, the trial court
properly concluded that the duty in this situation is limited by Restatement § 552 and did
not err when it analyzed the Kuehns’ negligence claim as one of negligent misrepresentation.
¶11 The Kuehns, however, note that the supreme court in Donnelly allowed claims
of negligence and negligent misrepresentation to proceed. But the allegedly negligent party
in Donnelly was an architect—a design professional—and not an appraiser or auditor as
were the defendants in Hoffman or Standard Chartered. Furthermore, the primary issue
in Donnelly was whether a design professional’s tort duty was limited by privity of contract,
not whether any distinction existed between negligence and professional negligent
misrepresentation. Donnelly, 139 Ariz. at 187, 677 P.2d at 1295; see also Standard
Chartered, 190 Ariz. at 30, n.10, 945 P.2d at 341, n.10. Thus, Donnelly is not helpful to
the Kuehns on this issue.
¶12 The Kuehns further contend that, even under a negligent misrepresentation
analysis, the trial court erred in granting summary judgment in favor of First Magnus
because they submitted adequate proof to raise an issue of fact about their reliance and
right to rely. Because a plaintiff must show “justifiable reliance” to prevail on a claim for
negligent misrepresentation, see Restatement § 552(1), we first determine whether the trial
court erred in finding the Kuehns had no right to rely on Stanley’s appraisal.
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¶13 After the Kuehns executed the purchase contract and submitted their loan
application, First Magnus directed Stanley to appraise the property. Based in part on
Stanley’s appraisal, First Magnus approved the loan to the Kuehns. But the Kuehns did not
hire Stanley to conduct an appraisal on their intended purchase. In fact, Stanley stated in
her affidavit that she had had no contact with the Kuehns either before or during the
appraisal process. And the Kuehns were already contractually bound to purchase the
property, contingent upon qualifying for funding, before they received the appraisal.
Furthermore, the loan application specifically stated that First Magnus made no
representation about the value of the property; the summary appraisal report also noted that
the appraisal was “intended for use by [First Magnus] for a mortgage finance transaction
only.” Under these circumstances, the trial court properly found that the Kuehns had failed
to raise an issue of fact on whether they could prove justifiable reliance on the appraisal.
¶14 Furthermore, the Kuehns failed to show that Stanley had owed them any duty
under Restatement § 552. See Yauch v. S. Pac. Transp. Co., 198 Ariz. 394, ¶25, 10 P.3d
1181, ¶25 (App. 2000) (we may affirm judgment if it is correct for any reason). Stanley
performed a “short form” appraisal, which is a quick estimate for lending purposes. In
contrast, an appraisal by a purchasing party would likely be more encompassing and in-
depth than an ad-hoc assessment of value. Cf. Bus. Realty of Ariz., Inc. v. Maricopa
County, 181 Ariz. 551, 557, 892 P.2d 1340, 1346 (1995) (“The appraisal of real estate is
an art, not a science. . . . Although the use of such guidelines may be mandatory in
8
appraisal work, their application to various situations calls upon the exercise of
judgment.”). Because First Magnus’s use of the appraisal to decide funding is not related
to the Kuehns’ use of the appraisal, Stanley did not provide the appraisal “for the guidance
of” the Kuehns as the Restatement requires. Restatement § 552(1).
¶15 Although it is foreseeable that other interested parties, such as the Kuehns,
would gain access to the appraisal and, perhaps, even rely on the information in it, these
other parties are not “one of a limited group of persons” protected under the Restatement.
Restatement § 552(2)(a). Instead, the Kuehns belong to “the much larger class [of persons]
who might reasonably be expected sooner or later to have access to the information and
foreseeably” rely on it. Restatement § 552 cmt. h; see also Hoffman, 159 Ariz. at 379-80,
767 P.2d at 727-28. Because Stanley did not owe the Kuehns any duty, summary judgment
was appropriate.
B. Consumer fraud
¶16 The Kuehns next argue that the trial court erred when it summarily dismissed
their claim under Arizona’s consumer fraud statute, A.R.S. § 44-1522. That statute
provides:
The act, use or employment by any person of any
deception, deceptive act or practice, fraud, false pretense, false
promise, misrepresentation, or concealment, suppression or
omission of any material fact with intent that others rely upon
such concealment, suppression or omission, in connection with
the sale or advertisement of any merchandise whether or not
any person has in fact been misled, deceived or damaged
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thereby, is declared to be an unlawful practice.
§ 44-1522(A). To succeed on a claim of consumer fraud, a plaintiff must show a false
promise or misrepresentation made in connection with the sale or advertisement of
merchandise and consequent and proximate injury resulting from the promise.3 Correa v.
Pecos Valley Dev. Corp., 126 Ariz. 601, 605, 617 P.2d 767, 771 (App. 1980). An injury
occurs when a consumer relies, even unreasonably, on false or misrepresented information.
Id.
¶17 The Kuehns first argue that the trial court did not consider their consumer
fraud claim when it granted summary judgment in favor of First Magnus. But the Kuehns
failed to differentiate between the fraud claims in their response, so the trial court addressed
the issues presented. And the court expressly found that “there [wa]s no showing of
reliance” on the appraisal by the Kuehns. Because reliance is a required element under
Arizona’s consumer fraud statute, see § 44-1522(A), the trial court implicitly rejected the
consumer fraud claim also.
¶18 The Kuehns next argue that the trial court erred in finding that they had not
relied on the appraisal. In their opening brief, they contend that, had they known the true
value of the property, they might have pursued other options such as, breaching the contract,
renegotiating the contract, or invoking the mortgage contingency clause of the contract. But
3
Section 44-1521, A.R.S., defines “merchandise” as “objects, wares, goods,
commodities, intangibles, real estate, or services.”
10
First Magnus argues in their answering brief that the Kuehns waived the “other options”
argument by not raising it before the trial court. The Kuehns then countered the waiver
issue in their reply brief, contending that the “other options” were discussed in their
response to the Kuehns’ second motion for summary judgment. And, at oral argument, the
Kuehns further noted that the mortgage contingency clause had been expressly discussed
in both the supplemental memorandum concerning Hoffman and the oral argument
concerning the first motion for summary judgment.
¶19 In their response to First Magnus’s second motion for summary judgment, the
Kuehns referred to these other options only to show that they suffered damage from a
breach of contract. And the court had already granted summary judgment on the tort claims.
Additionally, in the supplemental memorandum, the Kuehns merely stated that the mortgage
contingency clause distinguished this case from Hoffman; the Kuehns did not discuss
whether any options were available to them or if these options had caused them to rely on
the appraisal. Although the Kuehns did mention the mortgage contingency clause in the
context of reliance at the oral argument, it was to support the idea that a lender would not
have completed the deal if the appraisal showed a lesser value. Thus, in all three of these
instances, the Kuehns did not contend that, in the context of the tort claims, they had shown
reliance on the appraisal because they would have had other options prior to closing on the
property. Furthermore, the Kuehns did not dispute First Magnus’s claim that it would have
granted the loan and, thus, satisfied the mortgage contingency clause even if the appraisal
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had shown the lower amount. Accordingly, because the Kuehns did not raise the “other
options” issue to the trial court, it is waived. See Schoenfelder v. Ariz. Bank, 165 Ariz. 79,
90, 796 P.2d 881, 892 (1990) (on appeal from summary judgment, we will not consider new
factual theories raised in attempt to secure reversal of trial court’s determinations of law).
¶20 After reviewing the record, we agree with the trial court that the Kuehns failed
to raise a fact issue on whether they had relied on the appraisal. The Kuehns received the
appraisal report only after they were already contractually bound to purchase the real
estate. Although Jo Ann Kuehn stated in her affidavit that she had relied on the appraisal
report “as an accurate indicator of value” as well as “a reassurance” that she and her
husband were paying a fair market price, it is unclear how these belated “reassurances”
translate into evidence of detrimental reliance. And because they have waived the “other
options” argument, the Kuehns have failed to present any evidence that they relied on the
appraisal report in entering into or performing the contract. The trial court therefore did not
err when it granted summary judgment on their claim under Arizona’s consumer fraud
statute.
C. Negligent supervision
¶21 The Kuehns additionally argue that First Magnus was negligent in supervising
Stanley and, thus, that the trial court erred in dismissing their claim of negligent supervision.
For an employer to be held liable for the negligent hiring, retention, or supervision of an
employee, a court must first find that the employee committed a tort. Mulhern v. City of
12
Scottsdale, 165 Ariz. 395, 398, 799 P.2d 15, 18 (App. 1990). If the theory of the
employee’s underlying tort fails, an employer cannot be negligent as a matter of law for
hiring or retaining the employee. See id.
¶22 In this case, the Kuehns waived the issues of gross negligence and common
law fraud by not raising them in the trial court. And we have already affirmed the trial
court’s grant of summary judgment on their claims of negligence, negligent
misrepresentation, and consumer fraud. Because the Kuehns have not shown that Stanley
committed any tortious act against them, their claim of negligent supervision against First
Magnus also fails. Accordingly, the trial court did not err in granting summary judgment
on the claim of negligent supervision.
BREACH OF CONTRACT CLAIM
¶23 The Kuehns next argue that the trial court erred in granting First Magnus’s
second motion for summary judgment on their claim for breach of contract. The Kuehns
entered into the contract for the sale of real property in July 2000. The following month,
they submitted to First Magnus a “Uniform Residential Loan Application,” asking First
Magnus to finance their purchase in the amount of $220,000. As part of this agreement, the
Kuehns acknowledged and agreed to nine specific provisions, including a disclaimer that
First Magnus “ma[d]e no representations or warranties, express or implied, to the [Kuehns]
regarding . . . the value of the property.” First Magnus had Stanley appraise the property;
13
First Magnus then provided the Kuehns a copy of the appraisal report before the close of
escrow.
¶24 The Kuehns argue that, because the purchase contract called for an appraisal
to obtain the loan, First Magnus was obligated to provide an accurate appraisal pursuant to
the purchase contract. In essence, the Kuehns seem to argue that the appraisal requirement
in the purchase contract obligated First Magnus to provide an appraisal and that, based on
this obligation and the fact that First Magnus did provide them a copy of the appraisal
report, the Kuehns had an expectation under the purchase contract that the appraisal was fair
and accurate.
¶25 But First Magnus was not a party to the purchase contract; it was only
between the Kuehns and the seller of the real property. The only contract between First
Magnus and the Kuehns was the loan agreement in which First Magnus agreed to lend the
Kuehns $220,000. Because privity of contract must exist before a party may seek to
enforce a contract, Stratton v. Inspiration Consolidated Copper Co., 140 Ariz. 528, 531,
683 P.2d 327, 330 (App. 1984), the real estate purchase contract created no rights between
the Kuehns and First Magnus.
¶26 The Kuehns next argue that the disclaimer of the property value in the loan
agreement was “boiler-plate language” and that the trial court erred in concluding that this
language was enforceable because the loan application “[wa]s only two pages long, most
of which [wa]s blank space, and the language [wa]s comprehensible.” In Darner Motor
14
Sales, Inc. v. Universal Underwriters Insurance Co., 140 Ariz. 383, 682 P.2d 338 (1984),
the supreme court adopted Restatement (Second) of Contracts § 211 (1981) to govern the
enforcement of boilerplate language in standardized contracts. Section 211 provides:
(1) Except as stated in Subsection (3), where a party to an
agreement signs or otherwise manifests assent to a writing and
has reason to believe that like writings are regularly used to
embody terms of agreements of the same type, he adopts the
writing as an integrated agreement with respect to the terms
included in the writing.
(2) Such a writing is interpreted wherever reasonable as
treating alike all those similarly situated, without regard to their
knowledge or understanding of the standard terms of the
writing.
(3) Where the other party has reason to believe that the party
manifesting such assent would not do so if he knew that the
writing contained a particular term, the term is not part of the agreement.
¶27 In Darner, our supreme court recognized that modern commercial business
practice depends upon the use of standardized forms, yet also acknowledged that customers
often sign these forms without fully being aware of all their terms. Darner, 140 Ariz. at
393-94, 682 P.2d at 398-99. In adopting the Restatement section, the supreme court
authorized a trial court to enforce a boilerplate term unless the drafter had reason to believe
that the adhering party would not have assented to the term. Id. at 394, 682 P.2d at 400.
This belief that the adhering party would not have assented may be inferred if the language
is “‘bizarre or oppressive, . . . [if] it eviscerates the non-standard terms explicitly agreed
15
to, or . . . eliminates the dominant purpose of the transaction.’” Id. at 391-92, 682 P.2d at
396-97, quoting Restatement (Second) of Contracts § 211 cmt. f.
¶28 Here, the clause disclaiming any warranty of value does not appear to be
bizarre or oppressive. The disclaimer was not incomprehensible nor did it bind the Kuehns
to an unconscionable term; it simply disclaimed any representation on the value of the
property they had already agreed to purchase in a separate contract. And, notwithstanding
the disclaimer, the Kuehns still received the very loan they had asked for on the terms set
forth in the loan agreement. Thus, the disclaimer neither eviscerated the nonstandard terms
nor negated the dominant purpose of the transaction. Because the disclaimer is
conscionable under the Restatement, the Kuehns are bound by the terms of the loan
agreement. See Angus Med. Co. v. Digital Equip. Corp., 173 Ariz. 159, 165, 840 P.2d
1024, 1030 (App. 1992). The trial court therefore did not err in rejecting the Kuehns’
argument that the disclaimer was unenforceable.
¶29 The Kuehns also contend the trial court erred in concluding that they had
failed to raise an issue of fact on whether First Magnus had violated the covenant of good
faith and fair dealing. A covenant of good faith and fair dealing is implicit in every
contract. Rawlings v. Apodaca, 151 Ariz. 149, 153, 726 P.2d 565, 569 (1986). This
covenant requires that neither party act to impair the right of the other to receive the benefits
that flow from their agreement or contractual relationship. Id. at 154, 726 P.2d at 570. As
a general rule, an implied covenant of good faith and fair dealing cannot directly contradict
16
an express contract term. Bike Fashion Corp. v. Kramer, 202 Ariz. 420, ¶14, 46 P.3d 431,
¶14 (App. 2002). Accordingly, “the relevant inquiry always will focus on the contract
itself, to determine what the parties did agree to.” Rawlings, 151 Ariz. at 154, 726 P.2d at
570.
¶30 As noted above, the parties agreed that First Magnus would lend the Kuehns
$220,000. But the parties did not agree that First Magnus would provide the Kuehns an
appraisal. Instead, the agreement expressly disclaimed any representation on the value of
the property, a disclaimer we have already upheld as valid. Because First Magnus’s
contract obligation did not extend to providing a valid appraisal, the trial court did not err
in concluding the Kuehns had failed to raise any issue of fact on whether First Magnus had
violated the covenant of good faith and fair dealing implicit in the loan agreement.
ATTORNEY FEES
¶31 In its motion for summary judgment on the contract claim, First Magnus asked
the court for attorney fees pursuant to either A.R.S. § 12-341.01(A) or § 12-341.01(C).
The court granted the request, noting, “[a]s this is a contract matter, defendants are entitled
to fees and costs” pursuant to § 12-341.01.
¶32 The Kuehns argue that the trial court abused its discretion under § 12-
341.01(A) by awarding First Magnus attorney fees, arguing their claims were “novel” and
“meritorious.” The Kuehns further contend that the trial court’s findings are insufficient to
merit an award under § 12-341.01(C). An award of attorney fees pursuant to § 12-341.01
17
is left to the sound discretion of the trial court, whose decision we will not reverse absent
an abuse of that discretion. State Farm Mut. Auto. Ins. Co. v. Arrington, 192 Ariz. 255,
¶27, 963 P.2d 334, ¶27 (App. 1998).
¶33 Section 12-341.01(A) permits a trial court to award reasonable attorney fees
to the successful party in a contested contract action. In doing so, a court may consider a
number of factors, including the merits of the unsuccessful party’s claim. Associated
Indem. Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1985). Because the
trial court granted judgment to First Magnus on the contract claim and could have found that
the Associated Indemnity factors favored an award of fees, the court did not abuse its
discretion in awarding attorney fees to First Magnus. And because we affirm the award of
attorney fees under § 12-341.01(A), we do not consider the Kuehns’ argument under § 12-
341.01(C). See Uyleman v. D.S. Rentco, 194 Ariz. 300, ¶27, 981 P.2d 1081, ¶27 (App.
1999) (decision to award prevailing party attorney fees will be affirmed if it has any
reasonable basis).
CONCLUSION
¶34 Because the trial court did not err in granting First Magnus’s motions for
summary judgment and did not abuse its discretion in awarding attorney fees to First
Magnus as the prevailing party in a contract claim, we affirm. We also grant First Magnus
reasonable attorney fees on appeal pursuant to § 12-341.01(A), upon its compliance with
Rule 21, Ariz. R. Civ. App. P., 17B A.R.S.
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____________________________________
JOSEPH W. HOWARD, Judge
CONCURRING:
____________________________________
M. JAN FLÓREZ, Judge
____________________________________
JAMES A. SOTO, Judge*
*A judge of the Santa Cruz County Superior Court authorized and assigned to sit as a judge
on the Court of Appeals, Division Two, pursuant to Arizona Supreme Court Order filed
February 25, 2004.
19