NOTICE: NOT FOR PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE

LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

RALPH THOMAS and CAROLEE THOMAS, husband 

and wife, Plaintiffs/Appellants,

v.

MONTELUCIA VILLAS, LLC, a Delaware

limited liability company, Defendant/Appellee.

No. 1 CA-CV 15-0489

Appeal from the Superior Court in Maricopa County

No. CV 2009-004659

The Honorable Mark H. Brain, Judge

REVERSED AND REMANDED

COUNSEL

Beus Gilbert, PLLC, Phoenix

By Franklyn D. Jeans, Cassandra H. Ayres

Counsel for Plaintiffs/Appellants

Udall Shumway, PLC, Mesa

By Joel E. Sannes, Phil David Ortega

Counsel for Defendant/Appellee
THOMAS v. MONTELUCIA

Decision of the Court

2

MEMORANDUM DECISION

Judge Margaret H. Downie delivered the decision of the Court, in which 

Presiding Judge Patricia K. Norris and Judge Samuel A. Thumma joined.

D O W N I E, Judge:

¶1 Ralph and Carolee Thomas appeal the superior court’s grant 

of summary judgment to Montelucia Villas, LLC. For the following 

reasons, we reverse and remand for further proceedings consistent with 

this decision. 

FACTS AND PROCEDURAL HISTORY

¶2 Both this Court and the Arizona Supreme Court have 

considered this case previously. See Thomas v. Montelucia Villas, LLC, 229 

Ariz. 308, 309, ¶ 1 (App. 2012) (“Thomas I”); Thomas v. Montelucia Villas, 

LLC, 232 Ariz. 92, 97, ¶ 17 (2013) (“Thomas II”). We rely on the factual 

recitation set forth in Thomas II, adding facts and procedural background 

as necessary to provide context for the issues framed by the current 

appeal. 

¶3 On January 20, 2006, the Thomases signed a contract with 

Montelucia for the construction of a custom villa. Thomas II, 232 Ariz. at 

94, ¶ 2. The purchase price was $3,295,000, and the contract required the 

Thomases to make a 10% “earnest money deposit,” followed by two 5% 

deposits payable at specified construction benchmarks. The Thomases 

made three payments totaling $659,000, or 20% of the purchase price. Id. 

The remaining 80% was due “on or before Closing.” The parties’ contract

provided that closing would occur “at the time specified by [Montelucia] 

in an oral or written notice to [the Thomases].” 

¶4 On April 25, 2008, Montelucia notified the Thomases by 

letter that it had set the closing for May 16, 2008. Id. at ¶ 3. When that 

letter was sent, Montelucia did not yet have a certificate of occupancy for 

the Thomases’ property, which the contract required as a condition for 

closing escrow. Id. The Thomases responded on May 6 with a letter 

stating that they would not close on May 16 and that they were 

terminating the purchase contract because the agreement was illusory, 

Montelucia had not performed, and Montelucia had violated Arizona 
THOMAS v. MONTELUCIA

Decision of the Court

3

statutes governing the sale of subdivided land. Id. at ¶ 4. The Thomases 

requested return of their deposits. Id. Montelucia did not respond to the 

May 6 letter and did not return the deposits. 

¶5 In February 2009, the Thomases sued Montelucia to recover 

their deposits. Id. at ¶ 5. Montelucia counterclaimed for breach of 

contract, alleging the Thomases anticipatorily breached the contract by 

“refusing to close on the Property as required under the Purchase 

Agreement” and seeking specific performance, including “a late closing 

fee of $1,000 per day from May 16, 2008 until closing occurs.” 

¶6 On cross-motions for summary judgment, the superior court 

ruled that Montelucia had breached the contract by, among other things, 

not completing certain resort amenities, access points, and infrastructure 

and by not providing a certificate of occupancy by the closing date. Id. 

The superior court concluded the Thomases were entitled to a refund of 

their deposits. Id. Montelucia appealed. 

¶7 This Court reversed and remanded, holding that the 

Thomases anticipatorily repudiated the contract. Thomas I, 229 Ariz. at 

309–10, ¶¶ 1, 7. We further concluded Montelucia was not required to 

demonstrate its ability to perform under the contract. Id. at ¶¶ 8, 10. 

¶8 The Thomases petitioned for review, which the Arizona 

Supreme Court granted. In June 2013, the court issued an opinion 

vacating this Court’s opinion — with the exception of paragraphs six and 

seven — and remanding to the superior court for a determination of 

whether “Montelucia was ready, willing, and able to perform as required 

by the contract.” Thomas II, 232 Ariz. at 97, ¶¶ 17, 19.

¶9 On remand, both the Thomases and Montelucia again 

moved for summary judgment. The superior court granted Montelucia’s 

motion. In its ruling, the court rejected the Thomases’ contention that it

must assume a May 16, 2008 closing date and instead concluded 

Montelucia had until January 2, 2009 to perform its obligations under the 

contract. The superior court found that “a reasonable jury would be 

forced to conclude that [Montelucia] could have performed by the 

[January 2, 2009] deadline.” 

¶10 After the superior court denied the Thomases’ motion for 

reconsideration and entered a final judgment, this timely appeal followed. 

We have jurisdiction pursuant to Arizona Revised Statutes (“A.R.S.”) 

12-120.21(A)(1) and -2101(A)(1).
THOMAS v. MONTELUCIA

Decision of the Court

4

DISCUSSION

¶11 The Thomases contend the superior court was required to 

use a May 16, 2008 closing date in determining whether Montelucia “was 

ready, willing, and able to perform as required by the contract.” Thomas 

II, 232 Ariz. at 97, ¶ 17. We agree.

¶12 Although the phrase “law of the case” is context-dependent, 

as applicable here, the doctrine provides “that the decision of an appellate 

court in a case is the law of that case on the points presented throughout all 

the subsequent proceedings in the case in both the trial and appellate 

courts, provided the facts and issues are substantially the same as those on 

which the first decision rested.” Ziegler v. Superior Court, 134 Ariz. 390, 

393 (App. 1982). “[T]he trial court is absolutely bound by the decision and 

mandate of an appellate court and . . . it is not within the jurisdiction of 

the trial court to review the appellate court’s determination.” Tovrea v. 

Superior Court, 101 Ariz. 295, 297 (1966). The law of the case doctrine does 

not apply, though, if the prior appeal did not actually decide the issue, is 

ambiguous, or did not address the merits. See Grand v. Nacchio, 214 Ariz. 

9, 17, ¶ 19 (App. 2006) (citing cases). 

¶13 As relevant here, the following issues were decided in 

Thomas I and Thomas II and became the law of the case upon remand to the 

superior court:

 “On April 25, 2008, Montelucia notified the Thomases by 

letter that it had set the closing date for May 16.”1 Thomas II, 

232 Ariz. at 94, ¶ 3.

 The Thomases’ May 6, 2008 letter “constituted an 

anticipatory repudiation of the purchase agreement.”

 

1 This factual determination refutes Montelucia’s assertion that the 

May 16 date was merely an “estimate.” Moreover, Montelucia’s 

counterclaim alleged the Thomases had refused to close escrow and 

sought to recover “a late closing fee of $1,000 per day from May 16, 2008

until closing occurs.” (Emphasis added.) And in its cross-motion for 

summary judgment, Montelucia argued that, “On the date of the scheduled 

closing, May 16, 2008,” the Town of Paradise Valley had completed its 

inspection. (Emphasis added.)
THOMAS v. MONTELUCIA

Decision of the Court

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 Thomas I, 229 Ariz. at 310, ¶ 7.2

 “At the time of the May 6 letter, Montelucia had not 

breached the purchase agreement; it still had until the May 

16, 2008 closing date to perform its obligations under the 

contract.” Id. (emphasis added).

 The Thomases’ anticipatory repudiation, standing alone, did 

not entitle Montelucia to damages. Thomas II, 232 Ariz. at 96, 

¶ 12. Montelucia must also prove it could “have closed in 

accordance with the contract.” Id. (emphasis added).

¶14 This Court’s conclusion that Montelucia “had until the May 

16, 2008 closing date to perform its obligations under the contract,”

Thomas I, 229 Ariz. at 310, ¶ 7, was undisturbed by Thomas II. And 

contrary to Montelucia’s contention, the May 16, 2008 closing date was 

central to the issue decided in Thomas I: whether, as Montelucia alleged, 

the Thomases breached the purchase contract by refusing to close escrow 

on May 16, 2008. The Thomases’ anticipatory repudiation and 

Montelucia’s ability to perform must be measured by the same standard. 

See, e.g., Thomas I, 229 Ariz. at 310, ¶ 7 (“Before an anticipatory repudiation 

will be found, there must be a positive and unequivocal manifestation on 

the part of the repudiating party that he will not render the required 

performance when it is due.”) (emphasis added). 

¶15 Nor does the record support Montelucia’s contention that 

applying the law of the case doctrine to this determination would be 

“manifestly unjust.” See Dancing Sunshines Lounge v. Indus. Comm’n of 

Ariz., 149 Ariz. 480, 482–83 (1986) (Law of the case doctrine “should not be 

strictly applied when it would result in a manifestly unjust decision.”); 

Sibley v. Jeffreys, 81 Ariz. 272, 277 (1956) (“We are of the opinion that a 

ruling on one appeal if manifestly or palpably erroneous is not to be 

treated as conclusive on subsequent appeal of the same case.”). On the 

contrary, permitting Montelucia to now rely on a closing date other than 

May 16 would be manifestly unjust.

 

2 The Thomases did not seek review of this Court’s anticipatory 

repudiation determination. See Thomas II, 232 Ariz. at 95, ¶ 8. As a result, 

the supreme court left intact paragraphs six and seven of Thomas I 

addressing anticipatory repudiation. See id. at 97, ¶ 19. 
THOMAS v. MONTELUCIA

Decision of the Court

6

¶16 Montelucia selected the May 16 date. And the counterclaim 

makes clear that May 16, 2008 was the operative date for Montelucia’s 

anticipatory repudiation claim. The counterclaim alleged that the 

Thomases repudiated the purchase contract by refusing to close escrow on 

May 16 and asserted Montelucia was entitled to a “late closing fee” of 

$1,000 per day “from May 16, 2008 until closing occurs.” There would, of 

course, be no “late” closing fee commencing on May 16 if May 16 were not 

the closing date. 

¶17 Montelucia argues that, even assuming a May 16, 2008

closing date, summary judgment in its favor was appropriate because it 

could have performed its contractual obligations as of that date or within 

the purchase contract’s 60-day cure period. Although we may affirm the 

superior court’s judgment if it is correct for any reason, Wertheim v. Pima 

Cty., 211 Ariz. 422, 424, ¶ 10 (App. 2005), the record reveals disputed 

issues of material fact regarding Montelucia’s ability to perform as of May 

16. 

¶18 The purchase contract required a certificate of occupancy for 

the Thomases’ property as a condition for closing escrow. Thomas II, 223 

Ariz. at 94, ¶ 3. The contract also included other requirements, stating:

BUYER ACKNOWLEDGES THAT ESCROW WILL 

NOT CLOSE UNTIL THE TOWN OF PARADISE 

VALLEY HAS ISSUED AN OCCUPANCY 

CLEARANCE AND THE “VILLAS 

INFRASTRUCTURE” AND “VILLAS AMENITIES” 

HAVE BEEN COMPLETED. IN ADDITION, IN 

ACCORDANCE WITH THE TOWN DOCUMENTS, 

AN OCCUPANCY CLEARANCE WILL NOT BE 

ISSUED AND ESCROW WILL NOT CLOSE UNTIL 

CERTAIN PORTIONS OF THE MONTELUCIA 

HOTEL HAVE BEEN COMPLETED AND/OR

FINANCED. 

¶19 Montelucia obtained a certificate of occupancy for the 

Thomases’ property on August 27, 2008. Id. at ¶ 4. Even assuming 

(without deciding) that Montelucia was entitled to avail itself of the 

60-day cure period included in the purchase contract, August 27 is 103 

days after May 16. 

¶20 Montelucia contends the Town of Paradise Valley (“the 

Town”) would have issued a certificate of occupancy for the Thomases’ 
THOMAS v. MONTELUCIA

Decision of the Court

7

villa as of May 16, 2008. But the record suggests that, at that point in time, 

the Town would issue the certificate only if the Thomases signed a 

“waiver” letter, acknowledging the ongoing “active construction site” and 

uncompleted improvements that the Town required in the Special Use 

Permit (“SUP”), including “life safety and building code requirements.” 

¶21 The parties dispute whether the Thomases had any 

obligation to sign such a waiver and whether it materially altered the 

benefit of their bargain. Additionally, factual questions exist regarding 

whether Montelucia had completed the “Villas Infrastructure” and “Villas 

Amenities” as of May 16, 2008 and whether the contractually 

contemplated “portions of the Montelucia Hotel [had] been completed 

and/or financed” — all of which the purchase contract required before the 

close of escrow, notwithstanding the Town’s waiver of other requirements

in the SUP.

3 

CONCLUSION

¶22 The superior court erred by not adopting a May 16, 2008 

closing date in determining whether Montelucia had the ability to perform 

its contractual obligations. Because genuine issues of material fact exist 

regarding Montelucia’s ability to perform as of that date, we reverse the 

judgment of the superior court and remand for resolution of that issue. 

We express no opinion about whether, on remand, that question is 

susceptible to resolution by further motion practice or whether it must be 

submitted to a trier of fact. 

¶23 The Thomases request an award of attorneys’ fees incurred 

on appeal pursuant to A.R.S. § 12-341.01. We deny this request without 

 

3 Montelucia relies on deposition testimony by a Town official, who 

testified the Town would not have issued certificates of occupancy if 

infrastructure and amenities remained incomplete. Although this 

evidence tends to support Montelucia’s position on this point, it is not 

irrefutable proof that the obligations imposed by the purchase contract (as 

opposed to the SUP) were in fact complete. Montelucia argued before this 

Court that the requirements contained in paragraph four of the purchase 

contract were somehow vitiated by a subsequent clause in the contract. 

Whether that interpretation is factually and legally correct is an issue the 

superior court can address on remand, after both sides have had an 

opportunity to litigate the issue. 
THOMAS v. MONTELUCIA

Decision of the Court

8

prejudice to the superior court awarding appellate fees to the party 

ultimately prevailing on the substantive merits. The Thomases, however,

are entitled to recover their taxable costs on appeal upon compliance with 

Arizona Rule of Civil Appellate Procedure 21.