Crown v. Ap Wireless ( 2015 )


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  •                           NOTICE: NOT FOR PUBLICATION.
    UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
    CROWN ATLANTIC COMPANY, LLC,
    a Delaware limited liability company,
    Plaintiff/Appellant,
    v.
    AP WIRELESS INVESTMENTS I, LLC,
    a Delaware limited liability company,
    Defendant/Appellee.
    No. 1 CA-CV 14-0159
    FILED 3-10-2015
    Appeal from the Superior Court in Maricopa County
    No. CV2013-003332
    The Honorable Katherine M. Cooper, Judge
    AFFIRMED
    COUNSEL
    Lake & Cobb, PLC, Tempe
    By R. Kris Bailey, Kiel S. Berry
    Counsel for Plaintiff/Appellant
    Stinson Leonard Street, LLP, Phoenix
    By Craig A. Morgan, Sharon Ng
    Counsel for Defendant/Appellee
    CROWN v. AP WIRELESS
    Decision of the Court
    MEMORANDUM DECISION
    Judge Patricia A. Orozco delivered the decision of the Court, in which
    Presiding Judge Samuel A. Thumma and Judge Michael J. Brown joined.
    O R O Z C O, Judge:
    ¶1           This appeal reviews a judgment on the pleadings in favor AP
    Wireless Investments I, LLC (AP Wireless), resolving Crown Atlantic
    Company LLC’s (Crown) breach of contract and tortious interference
    claims against AP Wireless. Because judgment on the pleadings was
    proper, we affirm.
    FACTS AND PROCEDURAL BACKGROUND
    ¶2            Crown is the lessee successor-in-interest to a lease for a
    mobile telephone communications facility. The lease, signed in May 1985,
    provided for a term of twenty years. The lease also provided that the lessee
    could exercise “an option for an additional five (5) year lease term to be
    acted upon prior to the completion of the original stated lease term.” This
    provision was later amended to grant the lessee “two additional
    consecutive five (5) year terms in addition to the existing five (5) year option
    to renew as stated in [the original lease], for a total of fifteen (15) years.”
    Another provision in the lease granted the lessee “the first right of refusal
    on any lease term at the completion of the original stated lease term[.]” In
    2005, Crown exercised the first five-year option to extend the lease and the
    second option in 2010.
    ¶3           In 2012, AP Wireless purchased the lease from the lessor. AP
    Wireless and the lessor also agreed to a successor lease that would make
    AP Wireless the property’s tenant “commencing upon the expiration or
    termination of the Lease [to Crown].”
    ¶4            In April 2013, Crown filed an action in the trial court claiming
    that AP Wireless breached the lease and alleging tortious interference with
    contract, claiming the right of first refusal provision in the original lease
    obligated the lessor to first offer the successor lease to Crown.
    ¶5            AP Wireless answered and moved for judgment on the
    pleadings. The trial court awarded judgment on the pleadings in AP
    Wireless’s favor and held that the lease’s plain language shows the right of
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    CROWN v. AP WIRELESS
    Decision of the Court
    first refusal expired when the “original stated lease term” ended in 2005.
    This timely appeal followed. We have jurisdiction pursuant to Article 6,
    Section 9 of the Arizona Constitution and Arizona Revised Statutes (A.R.S.)
    sections 12-120.21.A.1. and -2101.A.1. (West 2015).1
    DISCUSSION
    ¶6              Crown contends that judgment on the pleadings was
    improper because the lease is “reasonably susceptible to multiple
    interpretations.” “A motion for judgment on the pleadings . . . tests the
    sufficiency of the complaint, and judgment should be entered for the
    defendant if the complaint fails to state a claim for relief.” Giles v. Hill Lewis
    Marce, 
    195 Ariz. 358
    , 359, ¶ 2, 
    988 P.2d 143
    , 144 (App. 1999). We view the
    complaint’s well-pled factual allegations as true and review de novo the
    trial court’s legal rulings. Mobile Cmty. Council for Progress, Inc. v. Brock, 
    211 Ariz. 196
    , 198, ¶ 5, 
    119 P.3d 463
    , 465 (App. 2005). Issues of contract
    interpretation are legal questions subject to de novo review. ELM
    Retirement Ctr., LP v. Callaway, 
    226 Ariz. 287
    , 290, ¶ 15, 
    246 P.3d 938
    , 941
    (App. 2010).
    ¶7            When interpreting contracts, we look “to the plain meaning
    of the words as viewed in the context of the contract as a whole.” United
    Cal. Bank v. Prudential Ins. Co. of Am., 
    140 Ariz. 238
    , 259, 
    681 P.2d 390
    , 411
    (App. 1983). Here, the trial court correctly observed that the lease’s plain
    language is unambiguous. The lease established two distinct periods of
    time: (1) the “original stated lease term” of twenty years and (2) the
    “additional” five-year option terms. The lessee’s right of first refusal is
    made available “at the completion of the original stated lease term.”
    (Emphasis added.) Although the lease was amended to grant additional
    five-year option terms, the amendments do not state or suggest that the
    additional option terms were considered part of the original lease term.
    Likewise, the lease itself does not state or suggest that the period of the lease
    extended by any exercise of one or more five-year option terms should be
    considered part of the original lease term. As a result, the trial court
    correctly concluded that the lease established a one-time right of refusal to
    be exercised before or when the original stated lease term expired.
    ¶8           Crown’s argument that the trial court erred in interpreting the
    contract hinges on establishing that the word “at” in the phrase “at the
    completion of the original lease term” could mean “after.” Crown further
    1     We cite the current version of applicable statutes when no revisions
    material to this decision have since occurred.
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    CROWN v. AP WIRELESS
    Decision of the Court
    argues that this could mean the right of first refusal “commenced at the end
    of the initial lease term and could be exercised thereafter.” But the trial
    court correctly rejected this argument because, to the extent the meaning of
    “at” is established in Arizona law, no interpretation of the word has
    resulted in “at” meaning “after.” See Ring v. Taylor, 
    141 Ariz. 56
    , 69, 
    685 P.2d 121
    , 134 (App. 1984) (superseded by statute) (interpreting “at the time
    alleged” and “at that time” to mean “the time of the alleged offense”);
    Blount v. Indus. Comm’n., 
    19 Ariz. App. 245
    , 247, 
    506 P.2d 285
    , 287 (App.
    1973) (interpreting “at the time of the subsequent injury” to mean “the time
    the subsequent injury was received”).
    ¶9             Crown argues that Ring and Blount do not apply because they
    are contextually inapposite. But they, along with several of cases Crown
    cites from other jurisdictions, collectively show the importance of Arizona’s
    interpretive rule that courts must look “to the plain meaning of the words
    as viewed in the context of the contract as a whole.” United Cal. 
    Bank, 140 Ariz. at 259
    , 681 P.2d at 411; see also Tex. Co. v. Blackmon-Scarbrough, Inc., 
    38 S.E.2d 890
    , 891 (Ga. Ct. App. 1946) (“The word ‘at’ in this contract, is
    equivalent in meaning to ’after’”) (emphasis added); Cent. Guarantee Co. v.
    Fourth & Cent. Trust Co., 244 Ill.App. 61, 65-66 (Ill. App. Ct. 1927) (observing
    the word “at” means doing a certain thing on the date named “and not
    afterwards” but holding that the particular contract in question allowed for
    cancellation after a certain date). In other words, even if “at” does not
    necessarily mean a fixed point in time, using the word does not
    automatically make a contract ambiguous; rather, it means we must
    examine how the word fits contextually into the entire contract. Ultimately,
    Crown’s position that “at” could mean “after” would render meaningless
    the unambiguous distinction between the “original stated lease term” and
    the additional option terms. “It is a cardinal rule of contract interpretation
    that we do not construe one term of a contract to essentially render
    meaningless another term.” Aztar Corp. v. U.S. Fire Ins. Co., 
    223 Ariz. 463
    ,
    478, ¶ 56, 
    224 P.3d 960
    , 975 (App. 2010).
    ¶10            Crown’s argument that the lease is susceptible to multiple
    interpretations presupposes that ambiguity is established merely by
    suggesting a possible alternative reading. But having failed to establish that
    “at” could reasonably mean “after” in this lease, Crown has offered no
    evidence that calls the lease’s plain meaning into question. As established
    in Arizona law, a contract’s susceptibility to multiple interpretations is both
    a question of law and contingent on offering extrinsic evidence that calls a
    contract’s plain meaning into question. See Taylor v. State Farm Mut. Auto.
    Ins. Co., 
    175 Ariz. 148
    , 158-59, 
    854 P.2d 1134
    , 1144-45 (1993); State v. Mabery
    Ranch, Co., L.L.C., 
    216 Ariz. 233
    , 241, ¶ 28, 
    165 P.3d 211
    , 219 (App. 2007).
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    CROWN v. AP WIRELESS
    Decision of the Court
    ¶11            Here, no extrinsic evidence was offered for the trial court to
    consider. Crown has made no argument that discoverable extrinsic
    evidence exists or that, given the opportunity, discovery would produce
    extrinsic evidence supporting their proffered interpretation of the lease.
    Had Crown provided some indication that, given opportunity for
    discovery it could produce evidence supporting its interpretation of the
    lease, granting judgment on the pleadings might have been premature. But
    without even a suggestion that such evidence exists or how it might be
    discovered, merely providing the court with a possible alternative reading
    of the contract is not extrinsic evidence as contemplated by Taylor.
    ¶12          The trial court correctly determined the contract’s plain
    meaning, and Crown has not established the lease is susceptible to multiple
    reasonable interpretations. Judgment on the pleadings in AP Wireless’s
    favor was therefore proper.
    CONCLUSION
    ¶13            We affirm the judgment in favor of AP Wireless. As the
    prevailing party and upon compliance with ARCAP 21, AP Wireless is
    entitled to its costs and reasonable attorney fees pursuant to A.R.S. §§ 12-
    341 and -341.01 (West 2015).
    :ama
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