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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

RACHEL A. TURLEY, et al., Plaintiffs/Appellees,

v.

LEO R. BEUS, et al., Defendants/Appellants.

No. 1 CA-CV 15-0107

Appeal from the Superior Court in Maricopa County

No. CV2014-009811

The Honorable Katherine M. Cooper, Judge

AFFIRMED

COUNSEL

Bryan Cave LLP, Phoenix

By J. Alex Grimsley, Robert J. Miller, Sean K. McElenney

Counsel for Plaintiffs/Appellees

Stinson Leonard Street LLP, Phoenix

By Michael C. Manning, James E. Holland Jr.

Co-Counsel for Defendants/Appellants Cardon

Moyes Sellers & Hendricks, Phoenix

By Keith L. Hendricks, Joshua T. Greer, Lawrence Palles

Co-Counsel for Defendants/Appellants Cardon
TURLEY et al. v. BEUS et al.

Decision of the Court

2

Osborn Maledon, P.A., Phoenix

By David B. Rosenbaum, Nathan Arrowsmith

Counsel for Defendants/Appellants Beus/Nelson

MEMORANDUM DECISION

Presiding Judge Kenton D. Jones delivered the decision of the Court, in 

which Judge Randall M. Howe and Judge Donn Kessler joined.

J O N E S, Judge:

¶1 Appellants appeal the trial court’s orders denying their 

motion to compel arbitration. For the following reasons, we affirm.

FACTS1 AND PROCEDURAL HISTORY

¶2 This family dispute arose over an alleged promise by Wilford 

Cardon to give his son, Wil, 50% of the family’s considerable assets in 

exchange for Wil’s agreement to manage the family businesses. Wilford

disputed making such a promise to the detriment of his seven other 

children.

2 In an attempt to settle the dispute, Wilford and Wil met with two 

high-ranking leaders of their church (the Church Leaders). 

¶3 The meeting resulted in an agreement (the November 2013 

Agreement), signed by Wilford and Wil, their wives, and the Church 

Leaders, all in their individual capacities, that granted Wil 35% of the total 

Cardon assets — 28.75% “as compensation” for his management services

plus 6.25% as his inheritance — and allocated 6.25% of the assets to each of 

Wilford’s seven other children. The November 2013 Agreement also 

contained a provision whereby the numerous Cardon companies would be 

“governed by a board of directors” that “would include Wilford, Wil, 

another rotating family member, and others,” with final selection to be

determined by the Church Leaders. The November 2013 Agreement 

purported to create a board of directors (the Board) for the purpose of 

 

1 We view the facts in the light most favorable to upholding the trial 

court’s ruling. Estate of DeCamacho ex rel. Guthrie v. La Solana Care & Rehab, 

Inc., 234 Ariz. 18, 19 n.1, ¶ 1 (App. 2014) (citing Ruesga v. Kindred Nursing 

Ctrs., L.L.C., 215 Ariz. 589, 597, ¶ 26 (App. 2007)).

2 Neither Wilford nor one of Wil’s siblings are parties to this appeal. 
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3

disentangling Cardon investments by selling the real estate properties in 

which those investments were held and distributing the liquidated cash to 

the various Cardon children in accordance with the agreed-upon schedule. 

¶4 Leo Beus, a longtime attorney and friend of Wilford’s, later 

averred that, shortly after the execution of the November 2013 Agreement,

the Church Leaders had asked him “to take affirmative steps to . . . 

implement that Agreement” and “to serve on the Board.” As part of these 

responsibilities, Beus informed Wil’s brother, Patrick, that Patrick had been 

elected to the Board by a unanimous vote of the three then-existing Board 

members — Wilford, Wil, and Beus. Those four Board members further 

agreed to a five-member Board in total and selected Todd Nelson, who was 

to be “independent of all persons involved,” as the final Board member. 

An initial Board meeting was scheduled for early December 2013. The 

Cardons’ estate-planning attorney drafted a “Comprehensive Management 

Agreement” (the Management Agreement) in preparation for the initial 

Board meeting. 

¶5 The parties to the Management Agreement purport to be Boa 

Sorte L.P., Rio Claro, Inc., and Harvard Capital L.P. (the Companies), all of 

which hold Cardon assets and are, in turn, owned by a number of 

irrevocable and multi-generational trusts.

3 Section 1.1(a) of the 

Management Agreement grants the Board “sole and unfettered authority 

to make . . . any and all determinations . . . regarding the business and affairs 

of [the Companies] and all Cardon Assets . . . and decisions by the Board 

are binding and non-appealable by [the Companies] or any Cardon Family 

Member.” Section 1.1(b) further asserts that the Board “shall also have full 

authority to consider and resolve any . . . disputes raised by any . . . Cardon 

Family Member, and the Board’s decisions and actions shall be binding on 

. . . every Cardon Family Member, none of which shall have any right to 

litigate or arbitrate such decision unless” the Board’s decision involved 

fraud or dishonesty related to self-dealing, in which case the matter would 

be resolved by a qualified arbitrator selected by the American Arbitration 

Association. 

¶6 Upon reviewing the Management Agreement, Wilford 

specifically requested a right of appeal of Board decisions to the Church 

Leaders. The Board members unanimously agreed nothing in Section 1.1(b) 

 

3 As of June 2014, eleven trusts had ownership interests in the 

Companies, with all parties involved — Wilford, Wil, Beus, Patrick, and

five other Cardon children (the Siblings) — serving as a trustee or “power 

holder” for one of the various trusts. 
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would “limit the right of appeal” they agreed to in Section 1.9. As relevant 

here, Section 1.9 provides the right of appeal is “in the sole and absolute 

discretion” of the Church Leaders and “acknowledge[s] that it is the strong 

desire of [the Church Leaders] not to be a final arbiter of any dispute,” but 

notes “[i]f the Appeal is considered, [the Church Leaders’] decision . . . shall 

be binding on the Board.” 

¶7 On the signature page, the Management Agreement 

establishes, with the signatures of the five Board members, that it is to be 

“binding on all signatories hereto and all Cardon Family Members 

concerning management of Cardon Assets as defined herein.” Although 

the document has numerous signature blocks for the Board directors,

managers of the Companies, trustees of the trusts, and individual Cardon 

family members, only Wilford and Patrick ever signed the Management 

Agreement, both of whom signed in December 2013. Additionally, Section 

1.11 provides that “[t]he [Companies’] respective governing instruments 

shall be modified as soon as reasonably possible to expressly grant 

authority to the Board as provided for herein,” but this did not occur. 

¶8 Despite the attempt to settle disputes through the 

Management Agreement, family acrimony continued. Beus met with the 

Siblings in December 2013, where he purportedly circulated copies of the 

Management Agreement, but the document remained substantially 

unexecuted. Although the Siblings were not fully aware of the Board’s 

involvement in managing the Cardon assets, Wilford, Patrick, and the 

Siblings4 would consult either Beus or the Church Leaders for advice, and, 

in so doing, evidenced a basic understanding of the Board’s structure and 

purpose. The Management Agreement’s appeal provision, involving 

recourse to the Church Leaders, was first invoked in January 2014. At that 

time, the Church Leaders declined to consider the dispute, stating “[o]ur 

role never was and is not now to participate in the complex details of the 

Cardon Group. We have neither the time nor responsibility to understand 

the many issues. For this reason, we encouraged the forming of [the Board]

. . . .” 

¶9 The Board met in late December 2013 as well as January and 

March 2014 and discussed, among other issues, the value of two vacation 

homes to be transferred to Wilford and the Siblings such that Wil could be 

credited for his 35% share. Several emails from the Siblings to Beus in 

February 2014 continued to evince a rudimentary awareness of the Board 

 

4 Appellees include Patrick and the Cardon Siblings minus Wil and 

one Cardon child that is not a party to this appeal. See supra nn.2-3.
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and its function in settling disputes within the Cardon family, and Beus 

referred to the Board’s arbitration function in one of his responses. 

Moreover, Patrick communicated to the Board that he and the Siblings, 

together with Wilford, had created their own board — separate from the

one created by the Management Agreement — and Patrick, as chairman of 

the alternate board, was “tasked to report the decisions and progress of the 

[Management Agreement’s] Board to disentangle the assets owned by Boa 

Sorte, Rio Claro, and Harvard.” Patrick also asked Beus how the Board 

intended to “handle the arbitration” on the property valuation issue so he

could prepare for an April 2014 Board meeting and the “related arbitration 

process.” 

¶10 At the April 2014 Board meeting and alleged arbitration 

hearing, Wilford and Patrick presented materials acknowledging “Wilford, 

[Wilford’s wife], and [the] Seven Siblings[‘] desire to separate the 

ownership and control of the [vacation homes]” and the Board’s “authority 

to arbitrate disentanglement” as “empowered through the Comprehensive 

Management Agreement.” Following the presentation, the Board rejected 

Wilford and Patrick’s valuation, and Wilford and Patrick appealed the 

decision to the Church Leaders. 

¶11 The Church Leaders replied “that it would be impossible and 

inappropriate for us . . . to sit in judgment on the large array of complex 

issues before the family, [and] we [have been] very grateful that those 

controlling the Cardon Group accepted to be governed by [the Board].” 

Thereafter, Wilford, Patrick, and the Siblings explicitly disavowed the 

Board’s authority, repudiated the validity of the Management Agreement, 

and threatened Beus and Nelson with litigation. In late June 2014, Patrick 

requested that the Church Leaders dissolve the Board. The Church Leaders

continued to reject any formal participation in the management of the 

Cardon assets:

Through the past eight months, we have encouraged family 

members to find solutions through the [B]oard that was 

established. . . . After the request two weeks ago from two 

[B]oard members for a change in two other [B]oard members, 

we, for the first time, asked for a copy of the Comprehensive 

Management Agreement. . . . [W]e were surprised to learn 

that this agreement granted us legal authority with respect to 

the [B]oard, including . . . the power to accept, consider, and 

decide appeals from [B]oard decisions (paragraph 1.9). We 

believed our role was informal, and not legally binding. . . . 

So that there is no misunderstanding, we cannot accept and 
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Decision of the Court

6

refuse to accept the legal powers, responsibilities, and duties 

that the Management Agreement gives to us. 

¶12 In July 2014, Appellees filed suit against Wil, Beus, and 

Nelson (Appellants), seeking: (1) a declaratory judgment that the

November 2013 Agreement and the Management Agreement were void

and unenforceable; (2) removal of Wil and Beus from their management

and trustee positions in the Companies and the irrevocable trusts; (3) the 

appointment of a receiver for the Companies; and (4) a permanent 

injunction prohibiting Appellants from acting in their asserted capacities as 

members of the Board under the Management Agreement. Appellants

moved to compel arbitration of the issues before the Board pursuant to the 

terms of the Management Agreement. 

¶13 The trial court held oral argument and, after taking the matter 

under advisement, issued a partial ruling in November 2014 concluding

that the Siblings, “other than Patrick Cardon, are not signatories to the 

Management Agreement and are not bound by it. They are not required to 

participate in [alternative dispute resolution (ADR)] with the Board.” As to 

Patrick, the trial court found his claims “are subject to ADR with the Board 

if the Management Agreement itself is valid and enforceable” but did not 

find the Agreement to be void as to Patrick “based on the [Church Leaders’]

role.” The court reserved its final ruling pending submission of additional 

pleadings and argument regarding whether the Management Agreement 

was fully executed or whether requiring an ADR that allows Appellants to 

decide the charges against them was a legal absurdity. 

¶14 After further pleadings and oral argument, the trial court 

ruled, in April 2015, that all Appellees, including Patrick, were “not 

required to submit their claims to ADR before the Board.” The court 

concluded the Management Agreement was unconscionable to the degree 

that it allowed Appellants to sit as binding arbitrators over the claims 

against them. The court identified multiple, unresolved factual disputes 

regarding Appellees’ ratification or acceptance of the Management 

Agreement and Board decisions and whether the Management Agreement 

may be voidable for mutual mistake resulting from the Church Leaders

“want[ing] nothing to do with the MA or the Board.” 
TURLEY et al. v. BEUS et al.

Decision of the Court

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¶15 Appellants timely appealed the denial of their motion to 

compel arbitration. We have jurisdiction pursuant to Arizona Revised 

Statutes (A.R.S.) sections 12-120.21(A)(1)5 and -2101.01(A)(1).

DISCUSSION

I. The Siblings Never Consented to the Purported Arbitration 

Agreement.

¶16 We begin with the general rule in Arizona that the courts, 

rather than arbitrators, decide the threshold, jurisdictional issue of whether 

parties have an existing agreement to arbitrate a particular dispute.6 Duenas 

v. Life Care Ctrs. of Am., Inc., 236 Ariz. 130, 140, ¶ 31 (App. 2014) (quoting 

A.R.S. § 12-3006(B)); accord A.R.S. § 12-1502(A); Foy v. Thorp, 186 Ariz. 151, 

153-54 (App. 1996) (citing City of Cottonwood v. James L. Fann Contracting, 

Inc., 179 Ariz. 185, 189-90 (App. 1994)). This determination is governed by 

general principles of contract law. Stevens/Leinweber/Sullens, Inc. v. Holm 

Dev. & Mgmt., Inc., 165 Ariz. 25, 28 (App. 1990). And, it is axiomatic that an 

agreement does not exist unless it is legally enforceable. See, e.g., 17A Am. 

Jur. 2d Contracts § 1 (2016).

¶17 The validity and enforceability of an arbitration clause 

present mixed questions of fact and law subject to de novo review. Duenas, 

236 Ariz. at 135 n.1, ¶ 6 (quoting DeCamacho, 234 Ariz. at 20, ¶ 9). We also

review the denial of a motion to compel arbitration de novo. Sun Valley 

Ranch 308 Ltd. P’ship ex rel. Englewood Props., Inc. v. Robson, 231 Ariz. 287, 

291, ¶ 9 (App. 2012) (citing Nat’l Bank of Ariz. v. Schwartz, 230 Ariz. 310, 311, 

¶ 4 (App. 2012)). Notwithstanding our de novo review, we defer to the trial 

 

5 Absent material changes from the relevant date, we cite a statute’s 

current version.

6 Appellees argue Appellants rendered this appeal moot by conceding 

the Board lacks authority to arbitrate certain counts in Appellees’ complaint

involving the validity of the trusts or the Management Agreement as a 

whole. However, in reviewing the denial of a motion to compel arbitration, 

such claims are outside this Court’s jurisdiction in first deciding whether 

an agreement to arbitrate exists. Compare A.R.S. § 12-3006(B) (“The court 

shall decide whether an agreement to arbitrate exists . . . .”), with A.R.S. 

§ 12-3006(C) (“An arbitrator shall decide whether . . . a contract containing 

a valid agreement to arbitrate is enforceable.”); see also A.R.S. § 12-

3007(A)(2).
TURLEY et al. v. BEUS et al.

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8

court’s factual findings unless clearly erroneous. Austin v. Austin, 237 Ariz. 

201, 204, ¶ 2 (citing Harrington v. Pulte Home Corp., 211 Ariz. 241, 245, 246-

47, ¶¶ 8, 16 (App. 2005)).

¶18 “Although public policy supports arbitration agreements, 

‘only when the arbitration provision is enforceable will the court compel 

arbitration.’” Id. at 206, ¶ 12 (quoting WB, The Bldg. Co. v. El Destino, L.P., 

227 Ariz. 302, 306, ¶ 11 (App. 2011)). In defining the validity and

enforceability of an arbitration agreement, A.R.S. § 12-3006(A) states:

An agreement contained in a record to submit to arbitration 

any existing or subsequent controversy arising between the 

parties to the agreement is valid, enforceable and irrevocable, 

except on a ground that exists at law or in equity for the 

revocation of a contract.

The legal and equitable grounds for revoking a contract include lack of 

mutual consent, consideration, or capacity; fraud, duress, or mistake; or 

procedural or substantive unconscionability. Austin, 237 Ariz. at 206, ¶ 12 

(quoting Stevens/Leinweber, 165 Ariz. at 28-29); Falcone Bros. & Assocs., Inc. v. 

City of Tucson, 240 Ariz. 483, 490, ¶ 21 (App. 2016) (citation omitted).

¶19 Appellants argue the Siblings’ signatures on the Management 

Agreement were not required to enforce the arbitration provision contained 

therein, see Smith v. Pinnameneni, 227 Ariz. 170, 177, ¶ 23 (App. 2011)

(“Nonsignatories . . . can be required to arbitrate under certain 

circumstances.”) (citations omitted), because they either: (1) impliedly

accepted the arbitration agreement by their conduct; (2) designated Patrick 

as an agent to enter the agreement on their behalf; or (3) are estopped from 

now contesting the arbitration agreement because they availed themselves 

of the benefits of the Board’s arbitration decisions before April 2014. As 

detailed below, Appellants have not met their burden in proving any 

circumstances existed such that the arbitration provision should be 

enforced against the Siblings as nonsignatories.

A. Implied Consent and Assumption

¶20 A nonsignatory may be bound by an arbitration clause if his 

conduct indicates he is assuming the duty to arbitrate. See Duenas, 236 Ariz. 

at 139, ¶ 26 (citing Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 345 F.3d 347, 

356 (5th Cir. 2003)); see also Thomson-CSF, S.A. v. Am. Arbitration Ass’n, 64 

F.3d 773, 777 (2d Cir. 1995) (citations omitted). Indeed, an implied and 

enforceable agreement may be inferred from an individual’s acts or 

conduct, though the burden of proving such an agreement is on the party 
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9

asserting it. See Carroll v. Lee, 148 Ariz. 10, 13 (1986); Alexander v. O’Neil, 77 

Ariz. 91, 98 (1954) (citing Kellogg v. Gleeson, 178 P.2d 969, 972 (Wash. 1947)); 

Johnson Int’l, Inc. v. City of Phx., 192 Ariz. 466, 470-71, ¶ 26 (App. 1998). 

However, “a distinct intent common to both parties must exist” before an 

enforceable agreement is created, “and until all understand alike there can 

be no contractual assent.” Hartford v. Indus. Comm’n, 178 Ariz. 106, 112 

(App. 1994) (citing Hill-Shafer P’ship v. Chilson Family Tr., 165 Ariz. 469, 473 

(1990)). Whether mutual assent exists is a factual question, resolved by 

consideration of objective evidence, “not the hidden intent of the parties.” 

Tabler v. Indus. Comm’n, 202 Ariz. 518, 521, ¶¶ 12-13 (App. 2002) (citing Callie 

v. Near, 829 F.2d 888, 890-91 (9th Cir. 1987), and Hartford, 178 Ariz. at 112).

¶21 Appellants attempt to meet their burden of proof through

email communications indicating the Siblings had an opportunity to review 

the Management Agreement, were generally aware of the Board and its 

actions, and occasionally communicated familial disputes to Beus. Mere 

knowledge of a contract is not a sufficient manifestation of intent to be 

bound. See Althaus v. Cornelio, 203 Ariz. 597, 601, ¶ 17 (App. 2002) (“[T]he 

fact that one of the parties, with the knowledge and approval of the other, has 

begun performance is nearly always evidence that they regard the contract 

as consummated and intend to be bound thereby.”) (quoting Schade v. 

Diethrich, 158 Ariz. 1, 10 (1988)). Moreover, Appellants admit they

presented the Management Agreement, with explanation by Beus, to the 

Siblings, thereby providing them with a distinct and objective opportunity 

to unambiguously provide their consent to arbitration by signing; yet, the 

Siblings declined to do so. Appellants’ evidence, in its totality, is 

insufficient to establish error in the trial court’s factual finding that the 

Siblings did not intend to be bound to arbitration. 

B. Agency and Waiver

¶22 The party asserting agency has the burden of showing the 

relevant person was in fact a nonsignatory’s agent and, thus, had authority 

to bind the nonsignatory to an agreement. See Escareno v. Kindred Nursing 

Ctrs. W., L.L.C., 239 Ariz. 126, 129, ¶ 7 (App. 2016) (citing Goodman v. Physical 

Res. Eng’g, Inc., 229 Ariz. 25, 29, ¶ 12 (App. 2011), and Restatement (Third) 

of Agency § 6.01 (2006)); see also Duenas, 236 Ariz. at 139, ¶ 27 (noting agent 

“could not contractually limit [the principals’] personal claims without 

their assent”). “Apparent authority . . . arises when ‘the principal 

intentionally or inadvertently induce[s] third persons to believe [a 

particular] person was his agent although no actual or express authority 

was conferred on him as agent.’” Escareno, 239 Ariz. at 130, ¶ 8 (quoting 

Reed v. Gershweir, 160 Ariz. 203, 205 (App. 1989)). Whether an agency 
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relationship exists is a question of fact. Id. at 129, ¶ 6 (quoting Goodman, 229 

Ariz. at 29, ¶ 12, and Salvation Army v. Bryson, 229 Ariz. 204, 211, ¶ 23 (App. 

2012)). 

¶23 Appellants contend that Patrick’s communication of his

status as chairman of Wilford and Appellees’ alternate board, coupled with 

the materials Patrick presented at the April 2014 meeting acknowledging 

the Board’s authority to arbitrate, are sufficient to create an apparent agency 

relationship between Patrick and the other Appellees. However, Patrick’s 

representations cannot prove apparent authority because such authority 

“can never be derived from the acts of the agent alone.” Reed, 160 Ariz. at

205. The trial court found no evidence that the Siblings authorized Patrick 

to sign the Management Agreement or participate in Board proceedings on 

their behalf, and Appellants have not shown those findings were clearly 

erroneous.

7 And if Patrick was not the Siblings’ agent at the April 2014 

Board meeting, they cannot be found to have waived their objection to

arbitration allegedly occurring at that meeting, given the Siblings did not 

attend, much less participate in, the meeting. 

C. Estoppel and Third-Party Beneficiary

¶24 The equitable estoppel and third-party beneficiary doctrines

each evaluate whether a nonsignatory has received benefits from an 

arbitration agreement or a contract containing an arbitration clause and,

therefore, should be equitably barred from avoiding arbitration. See 

Schoneberger v. Oelze, 208 Ariz. 591, 594 n.6, ¶ 14 (App. 2004) (citing Bridas, 

345 F.3d at 362), superseded by A.R.S. § 14-10205; see also Austin, 237 Ariz. at 

208-09, 210, ¶¶ 23-24, 29 (citations omitted). 

¶25 Appellants argue the Siblings accepted two primary benefits 

from Board decisions that compel them to arbitrate the present disputes —

financial distributions and the implementation of a “timeout” between Wil 

and the rest of the family. Regarding the financial distributions, we cannot 

say the Siblings claimed any direct benefits from the Board’s decision, given

the Siblings were unaware they derived from Board action. Austin, 237 

Ariz. at 210, ¶ 29 (“[A] nonsignatory may be compelled to arbitrate only 

when the nonsignatory . . . knowingly exploits the benefits of an agreement 

 

7 Appellants also assert the Siblings themselves consented to Patrick 

representing their interests on the Board in the December 2013 meetings, an 

assertion the Siblings deny. These conflicting assertions were reconciled by 

the trial court, and we defer to the court’s findings in the absence of clear 

error. 
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11

containing an arbitration clause . . . .”) (emphasis added) (citation omitted). 

And though some of the Siblings acknowledged Beus’ hand in directing the 

“timeout” between Wil and the family, such an informal and indirect 

benefit relative to an agreement designed to disentangle significant, illiquid 

financial assets is insufficient to overcome the court’s discretionary findings

and establish an equitable requirement to arbitrate under the Management 

Agreement. See id. at 209, ¶¶ 24, 28. Again, Appellants have not established 

error in the trial court’s findings. 

II. Mutual Mistake as to the Availability of an Appeal of the Board’s 

Decisions Renders the Arbitration Agreement Void as to Patrick.

¶26 Appellants argue the trial court erred in determining the 

arbitration agreement was unconscionable as to Patrick. Whether a contract 

is unconscionable and unenforceable are questions of law subject to de novo 

review. See Duenas, 236 Ariz. at 135 n.1, ¶ 6 (citations omitted). 

Accordingly, we may affirm the trial court for any reason supported by the 

record. Navajo Nation v. Ariz. Dep’t of Econ. Sec., 230 Ariz. 339, 344, ¶ 14 

(App. 2012) (citing St. Joseph’s Hosp. v. Ariz. Health Care Cost Containment 

Sys., 185 Ariz. 309, 312 (App. 1996)); WB, 227 Ariz. at 309, ¶ 16 (citing United 

Effort Plan Tr. v. Holm, 209 Ariz. 347, 351, ¶ 24 (App. 2004)). 

¶27 Procedural unconscionability addresses the fairness of the 

bargaining process, including whether mistakes of important facts 

occurred. Duenas, 236 Ariz. at 135, ¶ 8 (quoting Clark v. Renaissance W., 

L.L.C., 232 Ariz. 510, 512, ¶ 8 (App. 2013)). “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 contains a mistake regarding an 

essential part of the contract.” Hartford, 178 Ariz. at 111 (citing Renner v. 

Kehl, 150 Ariz. 94, 97 (1986), and Hill-Shafer, 165 Ariz. at 473); see also 

Restatement (Second) of Contracts § 152 cmt. b (1981) (“A mistake of both 

parties does not make the contract voidable unless it is one as to a basic 

assumption on which both parties made the contract.”). A party seeking to 

rescind an agreement on the basis of mutual mistake must do so through 

clear and convincing evidence. Estate of Nelson ex rel. Franz v. Rice, 198 Ariz. 

563, 566, ¶ 7 (App. 2000) (citing Emmons v. Superior Court, 192 Ariz. 509, 513, 

¶ 15 (App. 1998)).

¶28 Appellees argue clear and convincing evidence exists to show 

the Church Leaders were never aware of nor consented to binding appellate 

jurisdiction over Board decisions, an integral provision of the arbitration 

agreement for which all Board members, including Patrick, specifically 

negotiated. Appellants counter with the assertion that the Church Leaders 
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12

were merely exercising their right of discretionary review under the 

Management Agreement, or, alternatively, Patrick had already been put on 

notice that the Church Leaders would not issue binding decisions. 

Although the discretionary nature of the Management Agreement’s appeal

provision is clearly delineated, the record portrays a fundamental 

misunderstanding regarding the binding force of the appeal provision. 

¶29 Before the Management Agreement’s creation, the Board 

negotiated and discussed a right of a binding appeal to the Church Leaders 

“so that the board would have a safety check on its decision making.” An 

appeal provision was included within the Management Agreement that 

stated the Church Leaders would act as binding arbitrators of disputed 

Board decisions. Yet, eight months later, when the Church Leaders 

reviewed a copy of the Management Agreement for the first time, they

unequivocally “refuse[d] to accept the legal powers, responsibilities, and 

duties that the Management Agreement” gave to them. See supra ¶ 11. 

Although the Church Leaders had “denied review” once before, in January 

2014, their statements at the time were not so unmistakable as to lead 

Patrick to believe they would never issue a binding decision regarding

Board action. See supra ¶ 8. And there is a fundamental distinction between 

denying review of a particular dispute and universal unwillingness to 

participate in binding arbitration. 

¶30 Considering the evidence as a whole, clear and convincing 

evidence exists to establish the appeal provision was a basic tenet of the 

arbitration agreement (which comprises both Section 1.1(b)’s grant of

arbitration authority to the Board and Section 1.9’s right of appeal). Because 

both parties were mistaken regarding their understanding of the Church 

Leaders’ role in review of the Board’s decisions, Section 1.9 is a nullity and 

the entire arbitration agreement is unenforceable as to Patrick. On this 

basis, we hold, as a matter of law, that Patrick is not bound by the 

arbitration agreement on the grounds of mutual mistake.8 

¶31 We are mindful of Appellants’ argument that Patrick waived 

his objection to the April 2014 Board meeting and alleged arbitration

hearing. See A.R.S. § 12-3023(A)(5) (“[T]he court shall vacate an award 

made in the arbitration proceeding if . . . [t]here was no agreement to 

arbitrate, unless the person participated in the arbitration proceeding 

without raising [an] objection [concerning lack of notice] not later than the 

 

8 Because the existing record supports this determination, Appellees’ 

motion to supplement the record on appeal is denied. 
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Decision of the Court

13

beginning of the arbitration hearing.”); see also Pinnamaneni, 227 Ariz. at 177, 

¶ 24 (“[O]ne who consents to arbitration without objection — even when 

there is no binding contract . . . — must abide by the arbitrator’s decision

. . . .”) (citing Verdex Steel & Constr. Co. v. Bd. of Supervisors, 19 Ariz. App. 

547, 550 (1973)). But in our de novo interpretation of the arbitration 

agreement, we construe Section 1.1(b)’s Board arbitration proceedings and 

Section 1.9’s right of appeal to the Church Leaders as inextricable parts of 

the whole agreement to arbitrate.

¶32 As applied narrowly to the facts of this case, we interpret the 

agreed-upon proceeding encompassed both an opportunity to be heard by 

the Board and a right to seek review from the Church Leaders. Because the

right to seek binding review by the Church Leaders was the illusory 

product of a mutual mistake, the April 2014 “arbitration proceeding” could 

never be completed, and Patrick cannot have waived his objection thereto.

¶33 Moreover, even if Patrick had waived his right to object to the 

purported April 2014 arbitration hearing, any award derived from that 

arbitration would be unenforceable against the Siblings, who did not agree 

to arbitrate and cannot be bound to the outcome.9 See supra Part I.

The test of indispensability in Arizona is whether the absent 

person’s interest in the controversy is such that no final 

judgment or decree could be entered, doing justice between 

the parties actually before the court and without injuriously 

affecting the rights of others not brought into the action.

Copper Hills Enters. v. Ariz. Dep’t of Revenue, 214 Ariz. 386, 392, ¶ 21 (App. 

2007) (quoting Town of Gila Bend v. Walled Lake Door Co., 107 Ariz. 545, 549 

(1971)). Indispensability of parties is a question of law subject to de novo 

review. Gerow, 192 Ariz. at 14, ¶ 19 (citing Connolly v. Great Basin Ins., 6 

Ariz. App. 280, 285 (1967), and Tovrea Land & Cattle Co. v. Linsenmeyer, 100 

Ariz. 107, 114 (1966)). 

¶34 Applying this principle to the facts before us, we conclude 

there is no way the Board could address the valuation of the vacation homes 

 

9 Although the indispensability defense was not addressed by the trial 

court, it is not waivable and may be raised at any time. Gerow v. Covill, 192 

Ariz. 9, 14, ¶ 19 (App. 1998) (citing City of Flagstaff v. Babbitt, 8 Ariz. App. 

123, 127 (1968)).
TURLEY et al. v. BEUS et al.

Decision of the Court

14

and apportion the proper percentage interest among the Cardon family 

members without affecting the rights of the Siblings as trust beneficiaries 

with ownership interests in those homes.

10 The Siblings are therefore

indispensable to a just determination of the action. Without their 

participation, arbitration of this issue under the Management Agreement is 

a meaningless nullity. 

¶35 Accordingly, we find no error in the trial court’s order 

declining to compel Patrick to arbitrate the dispute before the Board.

III. Appellants Waived Their Opportunity to Request an Evidentiary 

Hearing.

¶36 Appellants contend the trial court’s determination that 

certain questions of fact remained regarding whether the Appellees ratified 

and accepted the Management Agreement or the Board’s decisions, 

generally, requires this Court to remand the matter for an evidentiary 

hearing. Appellants have not shown how the factual disputes on these 

issues are relevant to the sole question before the trial court — whether 

Appellees could be compelled to participate in arbitration. But we need not

reach that issue because the record reflects Appellants waived their 

opportunity to contest the court’s decision not to hold an evidentiary 

hearing. 

¶37 Pursuant to A.R.S. § 12-3007(A)(2):

 

10 The Appellants argue the Siblings’ claims are derivative of the 

Companies’ because Wil, as the manager of the Companies, consented to 

the Board’s arbitration authority under the Management Agreement. 

However, conferring arbitration authority on the Board was not a mere 

business transaction requiring only management authority. The terms of 

the Management Agreement itself recognized this, as the Agreement 

provided signature lines for the Siblings in their various capacities and 

included a provision calling for the Companies’ governing documents to be 

revised to bestow authority on the Board. See supra ¶ 7. None of the parties 

allege that revision occurred. Moreover, a grant of such broad authority, as 

defined in the Management Agreement, would materially and adversely 

affect the Siblings’ rights under the Companies’ governing documents. As 

members of the entity that manages the “main economic vehicle” of the 

Cardon Companies, the Siblings never voted or consented to amend any 

operating agreements to allow for such a material and adverse effect on 

their rights.
TURLEY et al. v. BEUS et al.

Decision of the Court

15

On motion of a person showing an agreement to arbitrate and 

alleging another person’s refusal to arbitrate pursuant to the 

agreement . . . the court shall proceed summarily to decide the 

issue and order the parties to arbitrate unless it finds that 

there is no enforceable agreement to arbitrate.

To proceed “summarily,” the trial court must first determine whether 

material issues of fact are disputed and, if so, conduct an expedited

evidentiary hearing to resolve those disputes. Ruesga, 215 Ariz. at 596, ¶ 24 

(quoting Haynes v. Kuder, 491 A.2d 1286, 1290 (D.C. 1991)). The party 

claiming the existence of a factual dispute regarding arbitrability bears the 

burden of requesting a hearing. Id. (citing Ex parte Greenstreet, Inc., 806 

So.2d 1203, 1207 (Ala. 2001)). Absent a request, “any error in the trial court’s 

not holding an evidentiary hearing is waived” on appeal. Brake Masters

Sys., Inc. v. Gabbay, 206 Ariz. 360, 365, ¶ 15 (App. 2003) (citing Hahn v. Pima 

Cty., 200 Ariz. 167, 172, ¶ 13 (App. 2001), and Trustmark Ins. v. Bank One, 

Ariz., NA, 202 Ariz. 535, 543, ¶ 38 (App. 2002)).

¶38 The record reflects Appellants made only a passing reference 

to holding an evidentiary hearing in their motions for a new trial and to 

amend the order denying the motion to compel arbitration as to the 

Siblings. And the evidence Appellants asserted as creating a genuine issue 

of material fact was almost wholly contained in Beus’ affidavit, which the

trial court explicitly reviewed, referenced, and apparently rejected in its

order denying Appellants’ motion to compel the Siblings to arbitration. 

Furthermore, the record reflects the court heard oral argument and 

reviewed hundreds of pages of the parties’ pleadings and supporting 

documentation and gave the matter adequate consideration after taking it

under advisement. When the court deferred its decision on Patrick’s 

obligation to participate in arbitration to a later date, Appellants were 

granted a second opportunity to provide additional briefing and exhibits 

and participate in oral argument. At no time did they request an 

evidentiary hearing. 

¶39 With regard to the Siblings, Appellants’ obscure reference to

an evidentiary hearing was both untimely — occurring for the first time in 

motions filed after the trial court ruled on the motion to compel the Siblings 

to arbitration, see Brake Masters, 206 Ariz. at 365, ¶ 15 — and superfluous, 

without reference to additional or previously undiscovered, relevant

evidence not already contained in the robust record upon which the court 

based its ruling. With regard to Patrick, Appellants did not request a 

hearing at all. On this record, Appellants waived any claims of error 

regarding the failure to hold an evidentiary hearing.
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Decision of the Court

16

CONCLUSION

¶40 The trial court’s denial of Appellants’ motion to compel

arbitration is affirmed as to all Appellees. 

¶41 Both parties request an award of attorneys’ fees on appeal. 

Appellants cite A.R.S. § 12-3014(E) as the authority for their request. This 

section authorizes an award of fees to an arbitrator who is determined to be 

immune from civil liability. Because we hold the parties did not have an 

enforceable arbitration agreement, this section does not apply, and 

Appellants request is denied. Appellees request attorneys’ fees pursuant to

A.R.S. § 12-341.01(A). In our discretion, we deny Appellees’ request. 

However, as the successful parties, Appellees are awarded their costs on 

appeal pursuant to A.R.S. § 12-341 and upon compliance with ARCAP 

21(b).