Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_04-cv-02005/USCOURTS-azd-3_04-cv-02005-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

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1

 Also pending before the Court is Plaintiff's Motion to Strike Portions of Affidavit of

Linda Foster and Statement of Facts (doc. #39), wherein the plaintiff seeks to strike paragraph 8

of the defendant's affidavit (doc. #36) and the (second) paragraph 8 of the defendant's

statement of facts (doc. #37) on the ground that Ms. Kverner's alleged statement to the plaintiff

that the defendant had agreed to sign a mutual cancellation of the escrow is inadmissible

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Scott Kenton, )

)

Plaintiff, ) No. CV 04-2005-PCT-PHX

)

vs. )

) OPINION and ORDER

Linda Foster, )

)

Defendant. ) )

Pending before the Court is Plaintiff's Motion for Summary Judgment (doc.

#26), where in the plaintiff seeks judgment on his breach of contract claim and on

both of the defendant's counterclaims pursuant to Fed.R.Civ.P. 56. Having

considered the parties' memoranda in light of the evidence of record, the Court

finds that the motion should be granted as to the defendant's counterclaims and

denied as to the plaintiff's claim.1

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hearsay. In light of the defendant's failure to file any response in opposition to the motion to

strike, the Court finds that the motion should be granted pursuant to LRCiv 7.2(i).

2

 The summary judgment record contains an unsigned, partially completed Real

Estate Offer and Acceptance Contract dated July 12, 2004 that provided for a $250,000

purchase price and a $5,000 earnest money deposit by the plaintiff. The document has no

evidentiary value.

3

 The plaintiff has submitted as an exhibit a copy of a warranty deed signed by the

defendant on July 20, 2004 conveying real property in Mohave County to him. The document

does not constitute significant probative evidence for purposes of the summary judgment motion

inasmuch as the actual description of the property to be conveyed is stated on the warranty

deed to be contained in an exhibit attached to the deed but that attachment is not included in

the summary judgment record.

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This action involves an alleged contract for the purchase of a residential

property at 2081 Bryce Circle in Lake Havasu City, Arizona. The defendant

states in her affidavit that she originally listed the property for sale for $575,000

with Joanna & Associates Realty on March 2, 2004, with the listing to expire on

August 31, 2004.

The parties agree that they entered into some type of a contract in July

2004 in which the plaintiff was to purchase the house for $250,000. Although

there is no written purchase contract in the record2

, the parties both signed

escrow instructions dated July 20, 2004 through the Chicago Title Insurance Co.

The plaintiff states in his affidavit that the signed escrow instructions set forth the

terms of the parties' contract.3

The defendant states in her affidavit that she and the plaintiff entered into a

verbal agreement on July 12, 2004 to the effect that the plaintiff would purchase

the defendant's property for $250,000 with the understanding (1) that the

defendant would not be required to pay a real estate commission to Joanna &

Associates, and (2) that the plaintiff would provide the defendant with a place to

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4

 The unsigned, undated, hand-printed note submitted as an exhibit states in toto:

"250,000 + place to live til next check from Cal Lotte is recieved [sic]/not to exceed 7 years"

5

 The plaintiff has attached several of the notes as exhibits - the notes show that he

paid the defendant approximately $1,524. The defendant states in her affidavit that the

plaintiff's exhibit shows "some" of the notes memorializing the advances he made to her. The

complaint alleges that the plaintiff paid the defendant $1,823.71 as consideration.

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live rent free until her next check from the California lottery was received but not

to exceed seven years. The defendant further states in her affidavit that the

plaintiff gave her an unsigned note setting forth the free rent agreement.4

The plaintiff made a series of small payments to the defendant that the

parties memorialized in several signed writings in mid-July 2004 as being down

payments towards the $250,000 purchase price of the house.5

 The defendant

states in her affidavit that the plaintiff repeatedly told her after July 20, 2004 that

he was not going to provide her with a place to live for seven years.

Pursuant to the signed escrow instructions, the escrow was to close on

September 9, 2004. The plaintiff states in his affidavit that he had deposited his

down payment and had signed all of the necessary closing and loan documents

prior to noon on September 9th. The defendant, however, signed a written

statement on July 30, 2004 with Chicago Title cancelling the escrow; Chicago

Title sent the escrow cancellation document to the plaintiff to sign, but he never

did so. 

The defendant states in her affidavit that she listed the property for sale for

$399,000 on July 30, 2004 with Selman & Associates, and then entered into an

agreement on July 31, 2004 to sell the property for $380,000, less sales

commission to Selman & Associates, to Maureen Sieker, who is associated with

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26 - 4 -

Selman & Associates. The defendant further states that she believed at that time

that the sale to the plaintiff had been cancelled and that she was not obligated to

pay a commission to Johanna & Associates.

The defendant further states in her affidavit that she learned in late August

2004 or early September 2004 that the plaintiff was trying to close the escrow. 

She wrote a letter to both the plaintiff and Chicago Title on September 9, 2004

stating that she had rescinded her agreement to sell the property to the plaintiff

"for undue influence, duress and fraud" and directed that all future communications concerning the matter be directed to her attorney.

There are two different unsigned and undated versions of the Chicago Title

Insurance Company's HUD-1 pre-audit settlement statements in the record. One

shows "Cash to Seller" of $58,220.66 and the other shows $88,874.04. The

difference is the amount of the "Total Sales/Broker's Commission": the former

document shows a $30,000 commission to be paid at settlement solely by the

defendant consisting of a $15,000 commission to Joanna & Associates Realty

and a $15,000 commission to Selman & Associates, and the latter document

shows no commission due at all.

Discussion

The plaintiff seeks summary judgment on his breach of contract claim, the

only claim raised in his complaint; the basic premise of the claim is that the

defendant anticipatorily repudiated their land sale contract by canceling it prior to

the time the plaintiff was to perform. The relief demanded by plaintiff is in the

form of specific performance compelling the defendant to complete the sales

transaction as agreed.

Under Arizona law, specific performance is ordinarily available to enforce

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contracts for the sale of real property because land is viewed as unique and an

award of damages is usually considered an inadequate remedy. Woliansky v.

Miller, 135 Ariz. 444, 446, 661 P.2d 1145, 1147 (App. 1983). Specific

performance of an agreement for the sale of land should be decreed only if the

agreement is in writing signed by the party to be charged, and the agreement is

definite in its terms. LeBaron v. Crismon, 100 Ariz. 206, 208, 412 P.2d 705, 706

(1966). 

The plaintiff contends, albeit somewhat impliedly, that the escrow

instructions signed by the parties fulfill the statute of frauds' requirement for a

written land sale contract. Escrow Instructions may constitute a land sale

contract if the document identifies the parties, gives a legal description of the

property being sold, states the purchase price, and provides a closing date for the

escrow. See T.D. Dennis Builder, Inc. v. Goff, 101 Ariz. 211, 213-14, 418 P.2d

367, 369-70 (1966); see also, Daley v. Earven, 131 Ariz. 182, 185, 639 P.2d 372,

375 (App. 1982) (Signed escrow instructions are properly considered in

determining whether a land sale agreement exists); Richards v. Simpson, 111

Ariz. 415, 417, 531 P.2d 538, 540 (1975) ("Escrow instructions may serve to

comply with the statute of frauds.") 

The Court cannot, however, conclude on the summary judgment record

before it that the plaintiff has established as a matter of law that the escrow

instructions at issue constitute a valid land sale contract. The problem is that the

record contains two different versions of the first page of the escrow instructions -

one showing a requirement for a $5,000 earnest money payment and a $45,000

payment to be made by the close of escrow and the other showing no earnest

money and a requirement for a $50,000 payment by the close of escrow. 

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6

 The defendant, without any explanation, has unacceptably failed to file a

memorandum of points and authorities in opposition to the plaintiff's summary judgment motion

as required by LRCiv 56.1. The defendant's response is in effect merely an affidavit from the

defendant containing no discussion of the relevant law. The defendant's statement of facts is in

effect just a redrafting of the defendant's affidavit.

 The Court notes that the defendant's response filed with the Court did not contain

the exhibits that were attached to the Chambers' courtesy copy and the plaintiff's copy of the

response. The defendant, without seeking the Court's permission for a late filing, formally filed

the exhibits in support of her response over two months late. The filed exhibits, however, were

not the scanned copies or photocopies of the originals of the exhibits that had been provided to

Chambers and the plaintiff, but were typed copies of the originals (some of which where wholly

or partially hand-written in their original state.) This was apparently done, without seeking the

Court's permission, because the defendant's counsel was having scanner problems at the time. 

Although it is totally inexplicable to the Court why the defendant's counsel thought that this

"solution" to his problem was in anyway permissible, the Court deems it unnecessary to strike

the exhibits because the plaintiff subsequently filed with the Court his copies of the originals of

the defendant's exhibits.

7

 To the extent that the plaintiff may be raising it as an issue, any oral promise by the

plaintiff, separate from the land sale agreement, to provide the defendant with a place to live for

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Specific performance cannot be granted if the parties have not agreed on or more

of the "important, essential or material terms" of the contract at issue, Daley, 131

Ariz. at 185, 639 P.2d at 375, and the plaintiff has offered no explanation for the

noted discrepancy and has not shown that the differing terms related to earnest

money are not important, essential or material to the parties' alleged contract. 

The defendant, in her "response" to the summary judgment motion6

,

conclusorily raises three arguments as to why the plaintiff is not entitled to

specific performance. The Court is not persuaded by any of the them.

First, the defendant contends that the plaintiff breached his oral agreement

for the purchase of the property, which included his promise to provide her with a

place to live for seven years or until her next lottery installment. This contention 

is meritless as a matter of law because the alleged oral contract violates the

statute of frauds.7

 Pursuant to A.R.S. § 44-101(6), any agreement for the sale of

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either seven years or until the she obtained her next California lottery payment is also subject to

the statute of frauds because the plaintiff has not established that any such agreement could be

performed within one year of its making. A.R.S. § 44-101(6).

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real property requires that the agreement, or some memorandum thereof, be in

writing and signed by the person to be charged. The document that the

defendant states represents the terms of the oral contract also does not satisfy

the statute of frauds because it is unsigned and does not sufficiently set forth the

parties and terms of the alleged agreement. See T.D. Dennis Builder, Inc. v.

Goff, 101 Ariz. at 213, 418 P.2d at 369 ("We have held that to constitute a

sufficient memorandum of an oral agreement the writing must contain: an

identification of the parties, a description of the subject matter of the contract, the

purchase price and the time and conditions of payment.") 

Second, the defendant's contention that the plaintiff agreed to the

cancellation of the escrow also is insufficient to create a triable issue of fact

because the defendant has not provided any admissible evidence in support of it.

Third, the defendant's contention that there was a mutual mistake

regarding her obligation to pay a real estate commission on the sale of the

property is also insufficient to create a triable issue of fact. Under Arizona law, a

mutual mistake exists where "there has been a meeting of the minds of the

parties, and an agreement is actually entered into, but the agreement in its written

form does not express what was really intended by the parties." Hill-Shafer

Partnership v. Chilson Family Trust, 165 Ariz. 469, 473, 799 P.2d 810, 814

(1990). The defendant has not established any mutual mistake because there is

no significantly probative evidence of record showing that the plaintiff ever agreed

to pay a real estate commission to anyone or that he agreed that the contract for

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8

 The ownership of the property at issue is a concern to the Court. While the

defendant stated in her verified answer, filed on January 5, 2005, that she then owned the

property, the Court's Internet review of online records of the Mohave County Assessor and

Mohave County Recorder raises an issue as to the current ownership of the property. While the

Court is not taking judicial notice of those records for purposes of denying the summary

judgment motion, and is in fact not relying on them for any purpose at this time, the Court notes

for the parties' edification that those records appear to show that the defendant quitclaimed the

property to Douglas V. Huntley on June 2, 2004, that Huntley quitclaimed the property to Donald

R. Van Pelt on January 20, 2005, and that Van Pelt is the current owner of the property.

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the sale of the property was in anyway contingent on the defendant not paying a

sales commission to anyone. 

Although it is not an issue raised by any party, the Court notes that it could

not enter summary judgment awarding specific performance to the plaintiff on the

current record even if he had properly established the existence of a written

contract for the sale of the property and the defendant's breach of that contract. 

Under Arizona law, specific performance is never a matter of absolute right. 

Woliansky v. Miller, 135 Ariz. at 446, 661 P.2d at 1147. In order for specific

performance to be an appropriate remedy at this time, the record must establish

that the defendant still owns the property. See Canton v. Monaco Partnership,

156 Ariz. 468, 753 P.2d 158 (App. 1987) ("Because equity will not undertake to

do a vain and useless thing, specific performance will not be awarded against a

seller in a land contract when the seller has no title to the land he contracted to

convey. This is true even where the want of title is caused by the seller's own

action in conveying the property to a third party.") The plaintiff does not discuss

the issue of the current ownership of the property in his memoranda and nowhere

in the summary judgment record is there any evidence establishing that the

defendant still owns the property. This alone is enough of a reason not to enter a

summary judgment granting specific performance.8

 

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9

 A copy of the lis pendens is not part of the summary judgment record.

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The plaintiff also seeks summary judgment on the defendant's two

counterclaims. Having reviewed the evidence of record, and all legitimate

inferences arising therefrom, in the defendant's favor, the Court concludes that

the plaintiff is entitled to entry of summary judgment in his favor on the two

counterclaims because the defendant has not presented any evidence relevant to

her counterclaims from which a fair-minded jury might return a verdict in her

favor.

There is no issue as to the defendant's first counterclaim, wherein she

conclusorily alleges that she is a "vulnerable adult" for purposes of A.R.S. § 46-

455 and § 46-456, because the defendant has stated in documents filed with the

Court that she has dropped that counterclaim, albeit not formally so.

The plaintiff is entitled to summary judgment on the defendant's second

counterclaim, wherein she alleges that the plaintiff is liable for statutory damages

pursuant to A.R.S. § 33-420 for knowingly recording a lis pendens on the property

that was groundless, contained a material misstatement or was otherwise

invalid.9

 First, the defendant has conceded the issue by failing to raise any

argument in her response opposing the plaintiff's argument that the counterclaim

fails as a matter of law. 

Second, the counterclaim does in fact fail as a matter of law. The

recording of a lis pendens is groundless for purposes of § 33-420 "only where the

claim that the underlying action is one affecting title to real property has no

arguable basis or is not supported by any credible evidence." Evergreen West,

Inc. v. Boyd, 167 Ariz. 614, 621, 810 P.2d 612, 619 (App. 1991). In resolving this

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10

 The parties are directed to review paragraphs 6 and 7 of the Scheduling Order (doc.

#19), entered on June 14, 2005.

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issue, the Court need only determine if there is "some basis" for concluding that

the action affects title to real property, and in doing so it should not determine

which party will prevail on the merits unless that is necessary to its decision. Id.,

167 Ariz. at 618, 810 P.2d at 618; TWE Retirement Fund Trust v. Ream, 198

Ariz. 268, 274, 8 P.3d 1182, 1188 (App. 2000). The defendant has not submitted

any significant probative evidence establishing that the plaintiff had no legitimate

basis for recording the lis pendens. Therefore,

IT IS ORDERED that Plaintiff's Motion to Strike Portions of Affidavit of

Linda Foster and Statement of Facts (doc. #39) is granted.

IT IS FURTHER ORDERED that Plaintiff's Motion for Summary Judgment

(doc. #26) is granted to the extent that the defendant's counterclaims are

dismissed in their entirety and is denied with respect to the plaintiff's breach of

contract claim.

IT IS FURTHER ORDERED that the parties shall file their Joint Pretrial

Statement and any motions in limine no later than November 6, 2006.10

IT IS FURTHER ORDERED that the Pretrial Conference shall be held on

Monday, December 4, 2006 at 3:00 p.m., in Courtroom 601.

DATED this 13th day of September, 2006.

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