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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

METRO AUTO AUCTION, LLC, Plaintiff/Appellee,

v.

VERDONE MOTORS, LLC, et al., Defendants/Appellants.

No. 1 CA-CV 22-0227 

Appeal from the Superior Court in Maricopa County

No. CV2019-052714

The Honorable Sara J. Agne, Judge

AFFIRMED IN PART; VACATED AND REMANDED IN PART

COUNSEL

Munger Chadwick & Denker PLC, Tucson

By Thomas A. Denker, David Ruiz, John G. Anderson

Counsel for Defendants/Appellants

Clark Hill PLC, Scottsdale 

By Darrell E. Davis, Christopher Thomas Curran 

Counsel for Plaintiff/Appellee

FILED 2-28-2023
METRO AUTO v. VERDONE MOTORS, et al.

Decision of the Court

2

MEMORANDUM DECISION

Judge Michael J. Brown delivered the decision of the Court, in which 

Presiding Judge Paul J. McMurdie and Judge Michael S. Catlett joined.

B R O W N, Judge:

¶1 Verdone Motors, LLC (“VM”), Armand Verdone Jr.

(“Verdone”), and Shiree Verdone (collectively, “Defendants”), appeal the 

superior court’s order granting summary judgment in favor of Metro Auto

Auction, LLC, (“Metro”) on Metro’s claims for breach of contract and

violations of the bad check and civil racketeering statutes. We affirm the 

court’s ruling on the breach of contract claim and the related damages 

award. We vacate, however, the court’s judgment on the statutory claims 

and remand for further proceedings. 

BACKGROUND

¶2 Metro is a licensed automotive auction that permits 

authorized brokers to buy and sell cars at its auction facilities. VM is a 

licensed wholesale car dealer, with Verdone as its sole member and 

manager. In 2016, VM started participating in Metro’s auction. Under 

Metro’s terms and conditions (“Contract”), VM agreed that (1) all 

transactions must be “paid for on the day of sale;” (2) upon issuance of the 

check, or when presented for payment, there would be sufficient funds to 

cover it; and (3) any checks returned for insufficient funds “must be settled 

and replaced immediately with cash or certified funds to prevent collection 

action.” Verdone signed a personal guaranty, agreeing to undertake

personal liability for performance of the Contract. 

¶3 Between 2016 and 2019, VM often used Metro’s auction 

facility to buy and sell cars. During their business dealings, they often 

handled transactions less formally than called for in their contractual

arrangement, partly because Verdone had worked for a Metro affiliate for 

years. The informalities between the parties facilitated their dealings and 

generated greater profits. For example, when Metro was pressed to meet 

required sales targets, Metro’s owners instructed Verdone to buy a certain 

number of cars to help meet those targets. Because VM did not have 

adequate working capital to cover the purchases on its own, and despite

the Contract, Metro credited VM’s account with the bid amount for each car 
METRO AUTO v. VERDONE MOTORS, et al.

Decision of the Court

3

and paid the seller directly to facilitate the large volume of transactions. 

VM, in turn, reimbursed Metro by writing checks for each car purchase,

often after VM had proceeded to sell the acquired cars through the auction 

to other buyers. These checks were often “hold checks,” meaning checks 

that Metro agreed not to deposit until it received further authorization from 

Verdone. Alternatively, the checks were sometimes replaced with a 

cashier’s check or by a wire transfer. This arrangement allowed Metro to 

earn double profits because it earned auction fees on VM’s car purchases 

and again on VM’s sale of the same cars through its auction. 

¶4 Metro supported VM in other ways. For instance, VM hired 

several of Metro’s employees as its support staff, paying individuals to

conduct its banking and related business matters. One of the employees 

handled VM’s checkbook and had authority to write checks pre-signed by 

Verdone as needed to complete transactions throughout the business day. 

And despite being aware of VM’s lack of capital, Metro encouraged and 

facilitated VM’s transactions at its auction because VM had become Metro’s

largest customer by a substantial margin, buying and selling roughly 4,200 

cars through the auction in 2018. 

¶5 Between December 4, 2018, and January 29, 2019, VM bought

59 cars through Metro’s auction. Verdone had signed checks for the 

purchase price of each car, but each check was returned for insufficient 

funds because the corresponding accounts were frozen, blocked, or closed. 

The first check returned, because the account was on an uncollectible hold, 

was deposited on January 15, 2019. On January 25, Metro received notice 

that 16 more checks had been returned for the same reason. Metro received 

additional notices that checks had been returned on January 28 and 29. 

Between January 30 and February 11, VM paid Metro $536,048 through 

“replacement checks or transferred vehicle titles that Metro eventually 

sold.” On February 12, Verdone informed Metro that VM would no longer 

buy or sell cars through the auction. On the same day, 34 additional checks

totaling $972,854 were deposited and later returned because the account 

was closed. The total of the returned checks was $1,779,411. 

¶6 On March 1, 2019, Metro gave Defendants written notice 

under A.R.S. § 12-671(E) that they had 12 days to make payments on all the 

bad checks, notwithstanding VM’s earlier payment of $536,048. Defendants 

did not respond to the demand or make additional payments to Metro. On 

March 6, Metro filed suit alleging breach of contract against VM and 

Verdone, as well as violations of A.R.S. § 12-671 (“bad check statute”) and 

A.R.S. § 13-2314.04 (“civil racketeering statute”) against Defendants. 

Following Verdone’s deposition, and after the court extended discovery 
METRO AUTO v. VERDONE MOTORS, et al.

Decision of the Court

4

deadlines several times at the parties’ request, Metro eventually moved for 

summary judgment on its three claims. 

¶7 In support of its motion, Metro included the Contract, the 

personal guaranty, copies of the checks, a ledger summarizing each of the 

59 transactions, excerpts from Verdone’s depositions taken as part of this 

action and a separate lawsuit in court. Metro also provided a declaration 

from its office manager, who oversaw the parties’ accounts. Explaining the 

background of each transaction, the manager declared in part that 

“[c]onsistent with the parties’ arrangement,” Metro advanced the proceeds 

of the car to the seller, and in turn, VM “wrote a check (or authorized his 

agent to write a check that [Verdone] signed) to Metro for the vehicle’s 

purchase price.” 

¶8 After giving credit for to VM’s payments, Metro calculated its 

losses to be $1,243,363 for breach of the Contract and an additional

$422,499.56 for unpaid auction fees and resale losses. It also sought double 

damages under the bad check statute, which ”entitled [it] to an award of 

$2,486,726.” See A.R.S. § 12-671(A). And finally, under the civil 

racketeering statute’s provision for treble damages, Metro asserted it was 

entitled to an award of $4,997,622. See A.R.S. § 13-2314.04(D)(4). 

¶9 Defendants filed a pro per response to the motion, summarily 

denying all allegations. They obtained counsel several weeks later, and

with the court’s permission, filed a supplemental response arguing that the

Contract was orally modified. Defendants asserted that Metro had agreed 

to hold checks pending Verdone’s authorization to deposit them, as 

evidenced in part by Metro’s concession that it extended credit to VM and 

paid the sellers of VM’s cars using its funds. As to the statutory claims, 

Defendants pointed to the parties’ business dealings to argue such facts 

negated any suggestion that they intended to defraud Metro. Defendants 

broadly disputed the damages claims, stating they had not been proven 

with reasonable certainty because a qualified accounting professional had 

not evaluated the calculations, and Metro incorporated unexplained losses 

into its calculations. 

¶10 After oral argument, the superior court granted Metro’s 

motion. As to the violation of the bad check statute, the court found that 

Defendants’ “proffered evidence does not defeat the statutory prima facie 

evidence of intent to defraud that arises from undisputed facts.” As to 

damages, the court held that Defendants’ contention that an accounting 

expert was needed to prove damages with reasonable certainty was 

unsupported. Defendants’ motion for reconsideration was denied. 
METRO AUTO v. VERDONE MOTORS, et al.

Decision of the Court

5

¶11 The court issued a final judgment awarding damages to 

Metro against Defendants for $2,486,726. Although not clearly stated in the 

judgment, consistent with Metro’s summary judgment motion, half of the 

award was based on unpaid debt (the bad checks) for breach of the 

Contract, and the other half was the statutory doubling of damages under

the bad check statute; no damages were awarded under the civil 

racketeering statute. The court also awarded Metro $422,499.56 on the 

breach of contract claim (for auction fees and resale losses) against VM and 

Verdone. The court then awarded Metro $75,889.65 in attorneys’ fees and 

$4,127.58 in costs. Defendants timely appealed, and we have jurisdiction 

under A.R.S. § 12–2101(A)(1). 

DISCUSSION 

¶12 Defendants argue the court erred in granting summary

judgment for Metro on the bad check and civil racketeering claims. They 

do not dispute the court’s judgment finding them liable for breach of 

contract, but they contest the corresponding damages award. Thus, the two 

issues we address are whether the court erred by (1) granting summary 

judgment on the alleged violations of the bad check statute and the civil 

racketeering statute, and (2) accepting Metro’s damages calculation on the 

breach of contract claim. 

¶13 Summary judgment is appropriate when no genuine issues of 

material fact exist, and the moving party is entitled to judgment as a matter 

of law. Ariz. R. Civ. P. 56(a). We review the court’s ruling de novo, viewing 

the evidence and reasonable inferences in the light most favorable to the 

party opposing the motion. Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12 (2003). 

We will affirm the court’s ruling if it is correct for any reason supported by 

the record. KB Home Tucson, Inc. v. Charter Oak Fire Ins. Co., 236 Ariz. 326, 

329, ¶ 14 (App. 2014). 

A. Intent To Defraud

¶14 Defendants argue the superior court erred by concluding 

there were no genuine issues of material fact on whether they acted with 

fraudulent intent when tendering bad checks. Arizona law provides that a 

person who, with the intent to defraud, delivers a check knowing that he 

lacks sufficient funds to cover the check is liable to the holder of such check. 

A.R.S. § 12-671(A). “Proof that, at the time of presentment, the maker, issuer 

or drawer did not have sufficient funds with the bank or depositary, and 

that he failed within twelve days after receiving notice of nonpayment or 
METRO AUTO v. VERDONE MOTORS, et al.

Decision of the Court

6

dishonor to pay the check or draft is prima facie evidence of intent to 

defraud.” A.R.S. § 12-671(C) (emphasis added). 

¶15 It is undisputed Defendants wrote or authorized 59 checks 

payable to Metro, and there were insufficient funds for each check. It is also 

undisputed Metro complied with the provisions of the bad check statute by 

providing notice to Defendants of their bad checks and of their obligation 

to remedy the non-payment within 12 days. Metro therefore established a 

prima facie case that Defendants intended to defraud Metro “at the time of 

presentment.” Id. A prima facie showing is made where there is sufficient 

evidence to “establish a fact or raise a presumption unless disproved or 

rebutted . . . .” Prima Facie, Black’s Law Dictionary (11th ed. 2019). 

¶16 Defendants outline various reasons why there was more than 

enough evidence to refute or disprove the statutory presumption made 

against them. First, they cite this court’s decision in Morrison v. Shanwick 

Int’l Corp., 167 Ariz. 39, 44–45 (App. 1990), asserting that the presumption 

of fraudulent intent under § 12-671(C) can be negated by showing that the 

plaintiff accepted a post-dated check as an extension of credit to the 

defendant. Id. at 44. In Morrison, the plaintiff had loaned a sum of money 

to the defendant. Id. at 40–41. The plaintiff then accepted two post-dated 

checks from the defendant as its repayment. Id. at 41. Plaintiffs filed suit 

and sought statutory relief under the bad check statute after both checks 

were returned for insufficient funds, and they had made several demands

for repayment. Id. at 41. In reviewing the judgment ordered against the

defendant, we held that post-dated checks, which are “fully negotiable 

instruments upon which the demand date is fixed at some latter time,” are 

included under the protections of § 12-671(C). Id. at 44–45. However,

because such checks may constitute an extension of credit, accepting postdated checks “coupled with other factors may overcome the presumption of 

intent contained in A.R.S. § 12-671(C).” Id. at 44–45 (emphasis added). 

¶17 Here, the record shows that Metro and VM engaged in a 

course of dealing whereby Metro encouraged VM to buy cars through its 

auction on credit, and that for years Metro accepted “hold checks” and 

agreed to wait to deposit them until the cars were resold. Thus, Metro often 

extended its credit to assist VM in buying and selling many cars. Given this 

evidence, together with the other evidence in this record showing the 

various components of the parties’ business relationship, Defendants have 

shown there are triable issues of fact on whether they rebutted the 

presumption of fraudulent intent.
METRO AUTO v. VERDONE MOTORS, et al.

Decision of the Court

7

¶18 We reject Metro’s assertion that Defendants’ check-holding

theory fails because Verdone needed to provide verbal authorization within 

six months of the issue date. See A.R.S. § 47-4404 (“A bank is under no 

obligation to a customer having a checking account to pay a check, other 

than a certified check, which is presented more than six months after its 

date . . . .”). Metro does not direct us to any evidence in the record showing 

Verdone waited anywhere near six months to provide verbal authorization

for depositing a check. For the 59 checks at issue, Metro presumably takes 

the position that Verdone authorized those deposits; otherwise, it would 

have no basis to claim that Defendants intended to defraud Metro. 

Moreover, under the bad check statute, the relevant time frame to consider 

intent to defraud is “at the time of presentment.” 

¶19 The superior court erred in finding no genuine issues of 

material fact as to whether Defendants acted with fraudulent intent under 

the bad check statute and civil racketeering statute. Thus, we vacate the 

court’s grant of summary judgment against Defendants for violations of 

§ 12-671 and § 13-2314.04. 

B. Damages 

¶20 Defendants also assert the superior court erred in awarding 

Metro its claimed contract damages. The plaintiff in a breach of contract 

action has the burden of proving “the existence of the contract, its breach 

and resulting damages.” Graham v. Asbury, 112 Ariz. 184, 185 (1975). The 

amount of damages must be proven with reasonable certainty. Gilmore v.

Cohen, 95 Ariz. 34, 36 (1963). In seeking summary judgment on breach of 

contract and breach of the personal guaranty, Metro offered copies of the 

dishonored checks, its accounting ledger, and a sworn declaration from

their office manager stating the amount of the unpaid debt. In contrast, 

Defendants did not provide any financial or business records, controverting 

figures, affidavits, or other competent evidence to show that Metro’s 

damages were not sufficiently proven. The court therefore concluded that 

Defendants’ contentions were unsupported, particularly in light of 

Verdone’s concession in a deposition that Metro was never paid as agreed 

and that he owed some amount of money for the dishonored checks. 

¶21 Defendants argue nonetheless that Metro failed to prove its 

damages with sufficient certainty, particularly because the claim was not 

evaluated by a qualified accounting professional, was based on 

unmitigated losses, and incorporated two undocumented and unexplained

figures. Metro, however, made a prima facie showing of the damages it 

incurred, and the burden then shifted to Defendants to respond with proof 
METRO AUTO v. VERDONE MOTORS, et al.

Decision of the Court

8

of specific facts showing there was a genuine issue for trial. See Kelly v. 

NationsBanc Mortg. Corp., 199 Ariz. 284, 287, ¶¶ 14–15 (App. 2000). 

¶22 As noted, Defendants failed to provide any specific 

controverting evidence. They also failed to cite legal authority to support 

their contention that an evaluation by a qualified accounting professional 

was necessary to show damages with reasonable certainty. Instead, they 

simply assert that Metro’s accounting is unreliable, which is insufficient 

when contesting a summary judgment motion. See id. at 287, ¶ 15. (“[A] 

party opposing a motion for summary judgment may not rest on the 

pleadings; it must respond with specific facts . . . .”). The superior court did 

not err in granting summary judgment on Metro’s damages claim for 

breach of contract. 

C. Attorneys’ Fees and Costs 

¶23 Both parties request attorneys’ fees under A.R.S. § 12-341.01, 

which authorizes a discretionary fee award to the prevailing party in cases 

arising out of contract. Defendants have not prevailed on the breach of 

contract claim, so we deny their request. Metro is the prevailing party on 

its breach of contract claim. In our discretion, we award Metro a portion of 

its reasonable attorneys’ fees incurred on appeal subject to compliance with 

ARCAP 21. Metro’s fee application, as well as any response from 

Defendants, must address what percentage of fees should be awarded, 

given that Metro has achieved only partial success on appeal. We decline 

to award taxable costs to either party. 

CONCLUSION 

¶24 We affirm the superior court’s grant of summary judgment on 

Metro’s breach of contract claim and the damages awards of $1,243,363 and 

$422,499.56. We vacate the court’s grant of summary judgments on Metro’s 

claims for an intent to defraud based on the bad check statute (§ 12-671) and 

civil racketeering (§ 13-2314.04) and the corresponding damages award.

Thus, we remand for further proceedings consistent with this decision.