NOTICE: NOT FOR PUBLICATION.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 

## A RIZONA 

## C OURT OF 

## A PPEALS

D IVISION O NE

ABROMOVITZ INVESTMENT PROPERTIES, L.L.C.

, Plaintiff/Appell ee,

v.

RED EYED JACK SPORTS BAR, INC, a Nevada corporation; JACK GALARDI and JANE DOE GALAR DI, husba nd and wife; NEVADA

LAND COMMER CIAL REAL ESTATE, INC.

, Defendant s /Appell ants

,

a nd

KEN MAR CHIOL and JANE DOE MARCHIOL, hu sband and wife;

TANYA MARCHIOL ; TEAM INVESTMENTS, LLC, an Arizona limited

liability company; MAR CHIOL FAMILY LIMITED PARTNERSHIP, a Colorado limited partnership, Defendants/Appellees.

No. 1 CA

- CV 12

- 0869

Appeal from the Superior Court in M aricopa County

No. CV2008

- 01220 0

The Honorable Eileen S. Willett

, Judge

AFFIRMED IN PART; RE VERSED IN PART

COUNSEL

Moyes Sellers & Hendricks , Phoenix By Keith L. Hendricks, Stephen Brower, Louis D. Lopez

Counsel for Plaintiff/ Appell ee2 Dickinson Wright/Mariscal Weeks PLLC, Phoenix By Timothy J. Thomason, Michael J. Plati

Counsel for Defendant s /Appell ant s

Bonn ett Fairbourn Friedman & Balint PC

, Phoenix By William G. Fairbourn, William F. King

C ounsel for Defendant s /Appellee s

MEMORANDUM DECISION

Judge Patricia K. Norris deliver ed the decision of the Court, in which Presiding Judge Donn Kessler and Judge Maurice Portley joined.

N O R R I S

, Judge:

¶1 This appeal arises out of claims that Red Eyed Jack Sports Bar, Inc. (“REJ”), through Jack Galardi and real estate broker Nevada
Land Commercial Real Estate, Inc.

, (collectively, “ REJ defendants ”) attempted to sell commercial real property to Abr omovitz Investment Properties, L.L.C., even though, as the superior court found, Marchiol Family Limited Partnership ( “ MFLP ” ), and not REJ, owned it. On appeal, the REJ defendants argue the superior court should not have found them

liable to Abromovitz fo r breach of contract, fraud, and breach of fiduciary duty or liable to MFLP for the attorneys’ fee s it incurred in proving that it, and not REJ or Abromovitz, owned the property. For the following
reasons, we affirm the superior court ’ s judgment except fo r that portion of the judgment finding Galardi personally liable to Abromovitz for REJ ’ s breach of contract

.

FACTS AND PROCEDURAL BACKGROUND

¶2 In 2002, Galardi and Ken Marchiol purchase d commercial

real property in downtown Phoenix (“the Property”). Galardi contributed $623,000 of the $1.2 million purchase price, and Marchiol contributed $577,000. Despite their unequal contributions, Galardi and Marchiol agreed the Property would be titled in the name of REJ and they wouldABROMOVITZ v. RED EYED, et al.

Decision of the Court

3 each own 50% of the shares

. 1 At the time, Galardi was the sole owner of
REJ. 2 Despite repeated requests, Galardi never issued the shares to

Marchiol because Galardi was “ very busy. ”

¶3 In 2004, REJ conveyed the P roperty by warranty deed (“the 2004 deed”) to MFLP

-- an entity creat ed by Marchiol for his children . The county recorder’s office rejected the deed, preventing its recordation

. 3 Tanya Marchiol, Marchiol’s sister

, then sent the deed to Marchiol’s mother to hold for safekeeping. Although Galardi did not remember signing the

2004 deed conveying the Property to MFLP and at various times asserted

the deed was fraudulent , the superior court found the deed to be a valid

conveyance and quieted title of the Property in favor of MFLP

. 4

¶4 In 2007, d espite having previously conveyed the Property to
MFLP, REJ listed the Property for sale with Nevada Land through its

owner , Nevada

- licensed broker Alberto Jauregui. 5 Abro movitz contacted

Nevada Land in Febru ary 2008 and began negotiating a purchase price for the Property. From that point forward, Jauregui, on behalf of Nevada

1 Galardi and Marchiol presented conflicting testimony whether they had agreed they would each own 50% of REJ or 50% of the Property. This distinction, however, is immaterial to the issues we resolve on appeal.

2 Galardi acted for REJ at all relevant times unless otherwise

no ted.

3 The record fails to explain why the county recorder rejected the deed, but the parties presented evidence at trial suggesting the recorder likely rejected it because it was on the wrong type of paper and/or lacked an affidavit of value. See Ariz . Rev. Stat. (“A.R.S.”) § 11

- 1133 (Supp. 2013).

4 On appeal, the REJ defendants do not challenge the superior court’s ruling as to the validity of the 2004 deed.

5 The Property had been mostly vacant since mid

- 2005. Galardi operated a club on the P roperty from 2003 through mid

- 2005 ; Marchiol was not an owner of or otherwise involved in the club. Galardi’s club did not make rental payments to REJ, MFLP, Marchiol, or any other entity for its use of the Property.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

4 Land as broker for REJ, conducted all discussions and negotiations with Abromovitz regarding the Property. And, Jauregui and Nevada Land

conducted those discussions and negotiation s with Abromovitz at the direction of Galardi, who in turn was acting as REJ ’s agent

.

¶5 Marchiol learned that Galardi was trying to sell the Property

, and he, through his attorney in Colorado and Tanya, recorded

the 2004 deed on March 17, 2008

. 6 On March 27, 2008, REJ entered into a purchase contract to sell the P roperty to Abro movitz.

¶6 As discussed in more detail below, REJ did not convey the Property to Abro movitz. As relevant here, Abro movitz sued REJ for

breach of contract and breach of the covenant of good faith and fair dealing and the REJ defendants for breach of fiduciary duty, fraud, negligent misrepresentation, and consumer fraud

. REJ and Galardi cross

claim ed against MFLP to quiet title and MFLP c ross

- claim ed against REJ

and Galard i for declaratory relief

, quiet title

, indemnification

, and attorneys’ fees.

¶7 T he superior court aw arded Abro movitz $2,924,800 in damages against the REJ defendants and $429,038.50 in attorneys’ fees and

costs against Galardi and REJ

. The court quieted title to the Property in

favor of MFLP and awarded it $ 518,836.81 in attorneys’ fees, plus costs

, against the REJ defendants

.

DISCUSSION

I. Abro movitz’s Breach of Contract Claims Against REJ

¶8 On appeal, REJ argues it did not breach th e purchase

contract with Abro movitz because the purchase contract did not obligate

it to either convey title to the Property free of MFLP’s claim or tender a

deed to Abromovitz on or before the close of escrow. Reviewing the issue
de novo, we disagree. S ee Andrews v. Blake , 205 Ariz. 236, 240, ¶ 12, 69 P.3d 7, 11 (2003) (interpretation of contract is question of law reviewed de novo).

6 Marchiol was able to record the deed because his lawyer in Colorado added a statutory reference to the deed under A.R.S. § 11

- 1134(B)(1) (Supp. 2013) exempting it from the affidavit of value requirement. See A.R.S. § 11

- 1133

.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

5 ¶9 REJ and Abromovitz agreed to a choice of law provision, and thus, Nevada law governs the validity, construction, and performance of the purchase contract. Section 8.1(a) of the purchase contract provided that if Abromovitz notified REJ of defects found in the preliminary t itle

report :

Seller shall have until the Close of Escrow in which to advise Buyer that:

(i) Seller shall remove any objectionable exceptions to title . . . on or before the Closing

D ate; or

(ii) Seller shall not cause the exceptions

to be removed.

If Seller advises Buyer that it shall not cause the exceptions to be removed, Buyer
shall have until the Close of Escrow to elect, as [its] sole remedy, to:

(x) proceed with the purchase and acquire the Property subject to such exceptions

without red uction in the Purchase Price; or

(y) terminate this Agreement by written

notice to Seller and Escrow Holder , in which case the Deposit and any interest thereon shall be returned to Buyer and the cancellation costs shall be divided equally between the Bu yer and Seller.

¶10 The purchase contract did not define “Close of Escrow

, ” but Jauregui, who drafted the contract, testified he used “Close of Escrow” and “Closing Date” synonymously in the contract. The purchase contract

defined the “Closing Date” as 15 days after the expiration of the due diligence period but

, in any event

, no later than May 15, 2008. Based on

th ese provisions

, Jauregui testified he believed the closing date should have been May 12, 2008. A representative of the title company handling

the escrow sent an email to Jauregui , however, that identified May 13,

2008 as the close of escrow

. The record contains no evidence the REJABROMOVITZ v. RED EYED, et al.

Decision of the Court

6 defendants ever objected to either May 12 or May 13 as the date for the

close of escr ow. For purposes of this appeal, whether escrow was to close on May 12 or May 13 is immaterial as it had to close no later than May 15.

¶11 On April 4, 2008, after the title company informed

Abromovitz of the 2004 deed

, Mark Abromovitz , Abromovitz’s pr incipal (“Mark”), called Jauregui who , according to Mark, told him “it was an ex

partner of Jack Galardi’s who had gotten wind of the sale and was trying to stop it.” Mark testified that Jauregui assured him “it’s a fraudulent deed, and we’re going to get it cleared up.” Mark followed up with an

email to Jauregui on April 8, 2008, and Jauregui again confirmed they were “working on trying to resolve the title issue on the fraudulent deed

recorded.” By providing these assurances, REJ, through Jauregui, thu s elected to resolve the issue with the 2004 deed by r emoving it or having it

removed by May 12 or May 13, 2008

. 7 Accordingly, pursuant to the purchase contract, Abromovitz deposited the remainder of the purchase price into escrow on May 9, 2008.

¶12 REJ was unable to r emove the 2004 deed by the c lose of

e scrow. On May 1 6 , 2008

, REJ attempted to rescind its election to remove

the 2004 deed by sending a letter to Abromovitz stating the exception would not be removed and advising it that, pursuant to Secti on 8.1 of the purchase contract, it could either terminate the contract or acquire the Property subject to the 2004 deed . The superior court found REJ’s letter

w as untimely and had no effect on the obligations between the parties.

¶13 On appeal, REJ argu es it did not breach the purchase contract because it acted pursuant to Section 8.1(a) of the contract and Abromovitz could only agree to go forward with the purchase subject to the 2004 deed or obtain a return of its deposit. We disagree. As the superio r court found, REJ sen t th e letter after the May 15 close of escrow

, and thus

, its attempt to rescind its election to remove the 2004 deed came too late ; by then , REJ had already materially breached the purchase

contract

-- which contained a “ time is of th e essence ” clause

-- by failing to

remove the 2004 deed

. 8 See Bernard v. Rockhill Dev. Co. , 734 P.2d 1238, 1240

7 Abromovitz and Jauregui discussed extending the closing date, but they did not reach an agreement to do so.

8 The superior court concluded REJ materially breached the agreement by “failing to tender a deed in recordable form into escrowABROMOVITZ v. RED EYED, et al.

Decision of the Court

7 ( Nev. 1987) (breach of contract arises when party materially fail s to

pe rform duty imposed by agreement (citation omitted) ) ; accord Graham v. Asbury , 112 Ariz. 184, 185, 540 P.2d 656, 657 (1975) (party is liable f o r breach of contract when it fails to keep agreement). Thus, the superior court properly found REJ breached the purchase contract.

II. Galardi ’s Personal Liability for REJ’s Breach of the Purchase

Contract

¶14 On appeal, Galardi argues the superior court should not

have found him personal ly liable for REJ’s breach of contract. We accept the superior court’s findings of fact unless they are clearly erroneous but

review its conclusions of law de novo. Powers v. Guaranty RV, Inc. , 229 Ariz. 555, 562, ¶ 26, 278 P.3d 333, 340 (App. 2012) (citation omitted)

. For the following reasons, w e agree with Galardi

.

¶15 The superior court did not explain why it found Galardi personal ly liable for REJ’s breach of contract. At trial, Abromovitz argued Galardi was personally liable because he was acting for an undisclosed principal

-- speci fically, a n alleged partnership between Galardi and

Marchiol

-- in selling the P roperty

. Although the REJ defendants alleged

in their answer to Abromovitz’s second amended complaint and in the joint pretrial statement that if the superior court found a partnership
between Galardi and Marchiol, then Galardi had entered into the purchase contract with e ither the express or implied permission of

Marchiol or within the scope of that partnership, Galardi testified at trial

that he entered into the purchase contract on behalf of REJ and the purchase

contract reflects that

. Further, Galardi’s subjective belief about his arrangement with Marchiol does not change the reality of his dealings on

prior to the Closing Date” as required by Section 6.1 of the purchase contract. REJ argues its failure to tender the deed was not a breach of contract because it would have been a “futile act.” (internal quotation marks omitted). Although related, we construe the true nature of the breach to be that REJ failed to remove the 2004 deed before the close of escrow or timely elect its option to notify Abromovitz it would not

remove the 2004 deed.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

8 behalf of REJ with Abromovitz. A s between Galardi and Abromovitz, REJ was always a fully disclosed principal. 9

¶16 Abromovitz further argues REJ’s corpora te form was not sufficient to protect Galardi from personal liability. As acknowledged by

Abromovitz in its omnibus response to the REJ defendants’ four motions for judgment as a matter of law, however

, “evidence of alter ego or piercing the corporate vei l . . . was not raised in the Joint Pre

- trial or pled as a claim. As such, it has not been litigated and no ruling should be

entered on the issue.” From our review of the record

, w e agree Abromovitz did not raise an alter ego/piercing the corporate veil claim in the superior court

, and the superior court did not decide such a claim.

T herefore, the issue is not properly before us

. S ee S obol v. Marsh , 212 Ariz. 301, 303, ¶ 7, 130 P.3d 1000, 1002 (App. 2006) (party generally cannot argue legal issues on ap peal not specifically presented to superior court (citation omitted) )

.

¶17 Finally, Abromovitz argues Galardi should be personally

liable because he was not an officer, employee, or shareholder of REJ

when he personally promised to clear the Property’s title. Galardi, however, did not directly communicate with Abromovitz. As explained,

supra ¶ 4, acting as REJ’s broker and at the direction of Galardi in his

capac i t y as REJ’s agent, Nevada Land promised Abromo vitz that REJ would clear the Property’s title . Further, although we agree the record

reflects Galardi was not an officer of REJ at this time

, this argument ignores that Galardi was acting as REJ ’s agent in the negotiations with Abromovitz and the promise to clear title was made on behalf of REJ as part of the same transaction. As discussed, supra ¶ 15

, Galardi was an agent for a disclosed principal and therefore not personally liable for REJ ’ s breach of the purchase contract

. See S e igwo r th v. Nevada , 53 9 P.2d 464, 466 (Nev. 1975) (“Unless otherwise agreed, a person making or purporting to

make a contract with another as agent for a disclosed principal does not become a party to the contract.” (citation omitted) ) ; accord Ferrarell v.

Robinson , 11 Ariz. App. 473, 475, 465 P.2d 610, 612 (1970) (“One who signs

an agreement as the agent of a fully disclosed principal is not a party to

9 Abromovitz similarly asserts Galardi was personally liable even if a partnership did not exist because an individual is li able for a

contract he or she enters on behalf of a non

- existent entity. We reject this argument because, as already discussed, the record reflects Galardi signed the purchase contract on behalf of REJ.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

9 that agreement and thus incurs no personal liability for the princip al’s breach of that agreement.” (citations omitted) )

.

¶18 For the foregoing reasons

, the superior court should not

have found Galardi personally liable for REJ’s breach of contract. 10
Therefore, we reverse that portion of the judgment finding Galardi personally liable for REJ’s breach of contract. 11

III. Abromovitz’s Claim for Breach of Fiduciary Duty Against Nevada

Land

¶19 On appeal, Nevada Land argues the superior court misapplied the law when it found Nevada Land liable for breach of fiduciary dut y by failing to disclose to Abromovitz information regarding REJ’s inability to perform and failing to deal fairly with other parties to

the transaction

. We disagree. Although Abromovitz entitled its claim against Nevada Land “ B reach of F iduciary D uty

, ” Abromovitz generally alleged breach of duties owed by real estate licensees to other parties and

further clarified the scope of its claim asserting “ B reach of R eal E state

B roker’s D uties” before trial . Indeed, the superior court found Nevada Land liable for breach of duty and found Nevada Lan d had “breached its

duties as a real estate broker owed to Abromovitz.” The superior court

based its decision on the duties owed (and here, breached) by a n Arizona

real estate licensee 12 to third parties under applicable statutes, regulations,

and case law

. See Ariz. Admin. Code (“A.A.C.”) R4

- 28

- 1101( A ) ( licensee

10 At oral argument, Galardi argued that if we con cluded the superior court should not have found him personally liable for REJ’s breach of contract, then we must also vacate the fee award against him. Galardi did not raise this argument in his briefing on appeal and therefore prevented Abromovitz from r esponding to it. Thus, we deem the argument waived. See Mitchell v. Gamble , 207 Ariz. 364, 369

- 70, ¶ 16, 86
P.3d 944, 949

- 50 (App. 2004) (arguments raised for first time at oral argument are generally untimely and deemed waived (citations omitted)).

11 Our conclusion here applies equally to Galardi’s personal liability for REJ’s breach of the covenant of good faith and fair dealing.

12 Although Nevada Land was not licensed in Arizona, it s
activities in connection with the sale of the Property require d it to be an

Arizona licensee. See generally A.R.S. § 32

- 2122 (2012)

.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

10 must deal fairly with other parties to transaction ) ; A.A.C. R4

- 28

- 1101( B ) (requiring brokers to disclose

, inter alia , “any information that the seller . . . is or may be unable to perform ” ); Lombardo v. Albu , 199 Ariz. 97, 100, ¶¶

12

- 13, 14 P.3d 288, 291 (2000) ( ability to close goes to heart of transaction, is not confidential information, and requires disclosure to third parties (citations omitted) ). 13 Based o n the evidence presented, t he su perior court properly found Nevada Land had breached the legal duties it owed to

Abromovitz under Arizona law, regardless of the title A bromovitz gave to

this claim in its pleadings.

IV. Abromovitz’s Fraud Claims Against REJ, Galardi, and Nevada

Land 14

¶20 T he REJ defendants argue the superior court should not have found they defrauded Abromovitz because three of their representations were not material or relied upon. 15 S ee Enyart v.

Transamerica Ins. Co. , 195 Ariz. 71, 77, ¶ 18, 985 P.2d 556, 562 (App. 1998) ( listing elements of fraud (citation omitted) ). We disagree. See supra ¶ 14 for the applicable standard of review.

13 These duties are remarkably similar to duties imposed on

real estate licensees in Nevada. See Nev. Rev. Stat. Ann. § 645.252 (West 2013). Indeed, Nevada Land had Abromovitz sign an agreement acknowledging the duties Nevada Land owed to the parties in the

transaction under Nevada law.

14 Although Nevada law governs the breach of contract
claim, supra ¶ 9, the parties do not dispute that Arizona law governs the

fraud claims. See Wi nsor v. Glasswerks PHX, L.L.C. , 204 Ariz. 303, 306

- 07, ¶¶ 9

- 10, 63 P.3d 1040, 1043

- 44 (App. 2003) (claims arising out of tort usually governed by forum state, although choice of law provision may apply if resolution of claims requires interpretation of con tract (citations omitted)).

15 We only address materiality and reliance because the REJ defendants only challenged these two elements.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

11 ¶21 The superior court concluded the REJ defendants 16

defrauded Abromovitz by ma king statements they knew were false and disclosing some fac ts while concealing others. See Hill v. Jones , 151 Ariz.
81, 85, 725 P.2d 1115, 1119 (App. 1986) (nondisclosure given same legal effect as fraud and misrepresentation). Although the superior court did not specifically state which facts directly supported its conclusion , it made factual findings

-- all amply supported by the evidence at trial

-- that supported its conclusion . Specifically, the court found

, inter alia

, REJ had misrepresented it owned the Property , the Property was not encumbered

, and it could convey the P roperty . The court also found the REJ

defendants had misrepresented that the 2004 deed w as “ fraudulent ” and they were “working on resolving the [ issue

, ] ” and had failed to disclose they knew Marchiol had not and was not going to consent to selling the

P roperty

. Additionally

, the court found the REJ defendants had failed to

disclose that Galardi had entered into the contract on behalf of REJ in an effort to force Marchiol to buy him out of the Property

.

¶22 Although t he REJ defendants argue on appeal their representations to Abromovit z

-- the 2004 deed was fraudulent and they were working on resolv ing it

-- a nd their failure to dis close REJ lacked authority to convey the Property without Marchiol’s approval (collectively, “the three frauds ”) were immaterial

, the record demonstrates

otherwise. 17 The three frauds were material because REJ’s ability to

16 On appeal, the REJ defendants have combined their arguments regarding common law fraud, negligent misrepresenta tion, and consumer fraud even though the superior court only found Galardi and Nevada Land liable for common law fraud. We only address the common law fraud claim because, although these claims incorporate
certain similar elements, the elements of the com mon law fraud claim are the most rigorous.

17 The REJ defendants only challenge the three frauds, but the record amply supports the superior court’s conclusion they had

defrauded Abromovitz based on their misrepresentation that REJ owned the Property and their failure to disclose Galardi had entered the contract on behalf of REJ to force Marchiol to buy him out. Indeed, the REJ defendants knew they needed Marchiol’s permission to sell the P roperty, and they were aware of a dispute between Galardi and Marchiol about the Property before REJ entered into the purchase contract with Abromovitz. Moreover, Galardi admitted he entered into the purchase contract withABROMOVITZ v. RED EYED, et al.

Decision of the Court

12 convey the Property and the existence of a known superior claim to the Property go to the underlying purpose of the purchase contract.

¶23 Abromovitz also presented ample evidence it relied on the

three frauds (and others) both before it entered the pur chase contract with REJ and after. Based on the REJ defendants’ representations and

omissions, Abromovitz entered into the purchase contract, deposited $250,000 of nonrefundable earnest money into escrow, spent time and money conducting due diligence, let its earnest money “go [ ] hard,” and eventually fully performed under the purchase contract by depositing the

remainder of the purchase price into escrow.

V. Lost Profits Award to Abromovitz

¶24 On appeal, the REJ defendants argue the superior court

shoul d not have awarded Abromovitz lost profits on either the breach of

contract or the fraud claim s

. We disagree. See supra ¶ 14 for the applicable standard of review.

A. Lost Profits Causation

¶25 The REJ defendants first argue Abromovitz failed to prove a causal nexus between their conduct and the awarded lost profits. They essentially argue it would have been impossible for Abromovitz to earn profits from the Property because MFLP owned it and

, therefore, the REJ

defendants did not cause the lost profit s. We disagree.

¶26 REJ , through Galardi and with the assistance of Nevada
Land, entered into a contract to sell property to Abromovitz that it had already conveyed to MFLP. In connection with this transaction, the REJ defendants made various misrepresent ations to Abromovitz. REJ could

have resolv ed its differences with Marchiol and obtain ed the Property

Abromovitz on behalf of REJ to force Marchiol to buy him out of the Property, and Nevada Land tried to negotiate a deal between Galardi and Marchiol in which Marchiol would have bought out Galardi after REJ entered into the contract with Abromovitz. Although the REJ defendants

have no t addressed these findings on appeal, they are more than sufficient

to sustain the superior court’s conclusion the REJ defendants defrauded

Abromovitz

.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

13 from MFLP

-- albeit perhaps at an unfavorable price . If it had done so,
REJ would have been able to fulfill its obligations to Abromovitz. 18 We

therefor e reject the REJ defendants’ argument they cannot be liable for lost profits. But for REJ’s refusal to clear the title and perform under the purchase contract, Abromovitz would have been able to purchase and develop the Property. Thus, Abromovitz present ed sufficient evidence
REJ , through Galardi and with the assistance of Nevada Land, caused its lost profits.

B. Reasonable Certainty of Lost Profits

¶27 The REJ defendants also argue the superior court should not have awarded Abromovitz lost profits because Abromovitz failed to prove lost profits with reasonable certainty. We disagree.

¶28 To recover lost profits, a party must establish “a reasonably certain factual basis” for computing lost profits. Rancho Pescado , Inc. v. Nw. Mut. Life Ins. Co. , 140 Ariz. 174, 184, 680 P.2d 1235, 1245 (App. 1984) ( q uoting another source) . A party need not establish lost profits with absolute certainty, but “the court or jury must be guided by some rational standard in making an award.” Id. Once a party has proven the rig ht to damages, the amount of damages may be proven to “a lesser degree of certainty.” Short v. Riley , 150 Ariz. 58 3, 58 5, 724 P.2d 1252, 1254 (App. 1986) (citation omitted)

. “The evidence required to prove loss of future profits depends on the individual circumstances of each case . . . .” Id. at 586, 724 P.2d at 1255

.

¶29 In this case, Abromovitz offered expert testimony from a forensic economist, who calculated the value of the Property’s earning capacity using a discounted cash flow (“DCF”) model. A D CF model is an

18 The REJ defendants cite Keister v. Talbo t t , 391 S.E.2d 895 (W. Va. 1990) , in support of their argum ent they did not cause Abromovitz’s lost profits, but that case is factually distinguishable. In Keister , a jury found an attorney liable for malpractice for erroneously advising the purchasers of property that the property had mineral rights. Id. at 897

- 98. The court concluded the attorney had not caused the purchasers to lose the property’s mineral rights because, even if the attorney had correctly examined the title, the property had already lost the mineral rights. Id . at

900 . Here, the REJ defenda nts’ conduct deprived Abromovitz of the Property.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

14 appropriate method for estimating the present value of regular or irregular income. See generally Appraisal Inst

. , The Appraisal of Real Estate

539

- 5 8 (13th ed. 2008) (explaining DCF analysis and its application) . The expert used methodolo gies to account for risk and uncertainty and adjust ed for vacancy rates and collection losses. The expert calculated the lease for ten years

-- a lease period common for that type of property.

The expert assumed the Property would be leased in one year following purchase, and , at the time Abromovitz entered the purchase contract, it already had a tenant interested in the Property. Further , Abromovitz had successfully leased properties in the same geographic area, which supported his claim at trial he had the ability to successfully lease the Property. Thus, Abromovitz presented sufficient evidence the lost profits were reasonably certain.

C. Lost Profits Awarded for Breach of Contract

¶30 As a general matter, lost profits is a measure of
compensatory damages (Nevada), Rd

. & Highway Builders , LLC v. N. Nev

. Rebar, Inc.

, 284 P.3d 377, 382 (Nev. 2012) (citation omitted), or consequential damages (Arizona)

, McAlister v. Citibank (Ariz.), a Subsidiary of Citicorp , 171 Ariz. 207, 211, 829 P.2d 1253, 1257 (A pp. 1992) (citations omitted), available for breach of contract.

¶31 REJ argues the superior court should not have awarded Abromovitz lost profits on its breach of contract claim for four different

reasons . As we explain, we disagree with each reason

.

¶32 First, REJ argues it did not willfully breach the contract. REJ provides no authority that a breach must be willful in order to

support a lost profits award. Nevertheless

, the record supports REJ

willfull y breached the purchase contract

. See discussion supra ¶¶ 21, 26

.

¶33 Second, REJ argues Abromovitz did not present evidence the Property’s market val ue exceeded the contract price. Abromovitz, however, did not need to present evidence the market value exceeded the

co ntract price because it pursued, and the superior court aw arded

, damages based on a lost profits theory, rather than market value.

¶34 Third, REJ argues the Property’s market value encompassed potential future rental profits. Although REJ mentioned this point in its

mo tion for judgment as a matter of la w regarding plaintiff’s damages and its renewed motion for judgment as a matter of law, REJ did not presentABROMOVITZ v. RED EYED, et al.

Decision of the Court

15 any evidence at trial, either through its own valuation expert or through

cross

- examination of Abromovitz ’s exper t, that the market value of the

P roperty encompassed future lost profits. Further, the authority REJ cites

for this argument merely states “the potential f or profit bears on market

value. ” 3 Dan B. Dobbs, Dobbs Law of Remedies § 12.11(1)

, at 289 (2d ed. 1993)

. 19 That profit capability might b ear on market value does not preclude recovery for lost profits here

.

¶35 Fourth, REJ argues neither it nor Abromovitz contemplate d

non

- market damages, specifically lost profits. Lost profits are available

for breach of contract if they are within the contemplation of the parties.

See Gen

. Elec tric Supply Co . v. Mt. Wheeler Power, Inc. , 587 P.2d 1312, 1313 (Nev. 1978) (lost profits sustained as damages reasonably foreseeable and within contemplation of parties); accor d Short , 150 Ariz. at 585

- 86, 724 P.2d

at 1254

- 55 (lost profits sustained as damages naturally flowing from breach of contract and within contemplation of parties). Abromovitz presented evidence REJ knew that it was going to use the Property for

income

- pr oducing purposes. First, Nevada Land , on behalf of REJ, specifically marketed the Property to breweries and business owners within two blocks of the Property

. Second, Abromovitz requested the brewing equipment and fixtures that were in the Property to be part of the sale. Further, REJ knew Abromovitz was a “player in the area” and owned rental properties in the same geographic area as the Property.
Thus, based on the use for which REJ marketed the Property and the

intended use for which Abromovitz ent ered into the purchase contract, Abromovitz presented sufficient evidence lost profits were within the contemplation of the parties. Based on the foregoing, the superior court properly awarded Abromovitz lost profits on its breach of contract claim.

D. Lost Profits Awarded for Fraud

¶36 T he REJ defendants also argue , as a matter of law, lost profits damages are not available for fraud

. Because consequential

19 REJ also cites Dobbs for the proposition that “[i]f . . . lost profits are claimed, the plaintiff must further prove that the future profits were not encompassed within the determination of the propert y’s market

value and were ‘contemplated’ by the parties.” (emphasis added). Dobbs, however, only supports the latter assertion. See Dobbs, supra ¶ 34, at 288

- 89.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

16 damages are available for fraud and can include lost profits , we disagree. 20 See Ulan v. Richtars , 8 Ariz. App. 351, 359, 446 P.2d 255, 263 (1968) (“A defrauded party is entitled to all out

- of

- pocket losses[,] . . . benefit of his bargain[, ] . . . and . . . all consequential damages.” (quoting another source) ) ; Restatement (Second) of Torts § 549(1)(b) (1977) (recipient of fraud entitled to pecuniary loss suffered as consequence of reliance on misrepresentation); 2 Dan B

. Dobbs, Dobbs Law of Remedies § 9.2(3)

, at 557 (2d ed. 1993) (“Recoverable consequential or special damages also include loss of profits resulting from reliance on the representation . .

. . ” )

.

¶37 The REJ defendants also argue the superior cour t should not have awarded lost profits because lost profits are not available as benefit

of

- the

- bargain damages. Benefit

- of

- the

- bargain damages, which here

, would be calculated as “the difference between the value of the land at the time of the breach and the contract price,” Kammert Bros. Enters

. v. Tanque

Verde Plaza Co. , 102 Ariz. 301, 308, 428 P.2d 678 , 685 (1967) (citations omitted), however, are not the exclusive measure of damages for fraud.

Cole v. Gerhart , 5 Ariz. App. 24, 26, 423 P.2d 100, 102 (1967) ( i n addition to “a normal measure of damages,” such as benefit

- of

- the

- bargain damages,

other consequential damages may be granted that arise from the

fraudulent conduct ) ; Ashley v. Kramer , 8 Ariz. App. 27, 31, 442 P.2d 564, 568 (1968) (“We hold that ‘consequential damage’ is a proper measure of damages in a fraud action and that the defrauding pa rty may not limit the proof of damages to the benefit of the bargain . . . .”). Not only are benefit

of

- the

- bargain damages not the exclusive measure of damages for fraud

, lost profits resulting from reliance on the representation are recoverable. 21

Dobbs

, supra ¶ 36, at 557 ; cf. McAlister , 171 Ariz. at 211, 829 P.2d at 1257 (“ C onsequential damages include lost future profits” in breach of contract

20 The REJ defendants also argue lost profits damages are not available for negligen t misrepresentation and consumer fraud. Because lost profits are available for fraud, we need not address whether lost profits would likewise be available on these claims.

21 The REJ defendants also argue the superior court should

not have awarded Abr omovitz benefit

- of

- the

- bargain damages because the parties did not consummate the bargain and benefit

- of

- the

- bargain damages may not be awarded against non

- parties to the bargain. We need not address these arguments because, as discussed, benefit

- of

- the

b argain damages are not the exclusive measure of damages for fraud.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

17 action

. (citation omitted) )

. Based on the foregoing, the superior court properly awarded Abromovitz lost pro fits on its fraud claim.

VI. Attorneys’ Fees Award to MFLP

¶38 On appeal, REJ and Galardi argue the superior court should not have awarded attorneys’ fees to MFLP. Although we agree with certain aspects of their argument, we conclude the superior court properly

awarded fees to MFLP

.

A. Attorneys’ Fee s Under A.R.S. § 33

- 411.01

¶39 REJ and Galardi first argue the superior court misapplied
A.R.S. § 33

- 411.01 (2007) when it awarded attorneys’ fees against Galardi personally. We agree. A.R. S . § 33

- 411.01 prov ides :

A ny document evidencing the sale, or other transfer of real estate . . . shall be recorded by

the transferor

. . . . In lieu thereof, the transferor shall indemnify the transferee in any action in which the transferee’s interest in such property

is at issue, including costs, attorney’s fees and punitive damages.

( e mphases added). REJ was the transferor in this case

. See Black’s Law Dictionary 1875 (9th ed. 2009) ( T ransferor means: “O ne who conveys an interest in property.”).

¶40 Nevertheless, MFLP argues that because Galardi acted in

bad faith and for his own self

- interest, he should be deemed the transferor. We disagree. REJ owned the Property in 2004 and conveyed the Property to MFLP ; thus, REJ , not Galardi personally , was the

transferor un der A.R.S. § 33

- 411.01

. The statute only applies to the

transferor

, and therefore

, REJ alone is liable for fees under A.R.S. § 33

- 411.01

.

¶41 REJ next argues A.R.S. § 33

- 411. 01 is inapplicable here

because MFLP always possessed the deed. Perhaps recognizing that REJ possessed the deed when Galardi signed it, REJ then asserts in its reply

brief that it satisfied the recording requirement when it relinquished possession of the deed to MFLP

. REJ provides no authority in support of its position, and , in any event, “[w]hen statutory language is clear andABROMOVITZ v. RED EYED, et al.

Decision of the Court

18 unambiguous, we give effect to it and do not use other methods of statutory interpretation.” Mathews ex r el. Mathews v. Life Care Ctrs. o f Am.,

Inc. , 217 Ariz. 606, 608, ¶ 6, 177 P.3d 867, 869 (App. 2008) (citation omitted). Thus, we decline to infer a relinquishment exception into A.R.S.
§ 33

- 411.01

.

¶42 REJ alternatively argue s the superior court should not have

awarded fees under A.R.S. § 33

- 411.01 at all because only A.R.S. § 12

- 1103 (2003) , w hich governs fee award s in quiet title actions, entitled MFLP to a

fee award and MFLP failed to prove it had complied with th e tender requirements of that statute (the “total bar argument”) . REJ did not,
however, raise the total bar argument in the superior court.

¶43 As relevant here, MFLP sought fees in the superior court

under A.R.S. § 33

- 411.01 and did not seek fees under A.R.S. § 12

- 1103

. I n

respon ding to MFLP’s fee application , REJ and Galardi argued MFLP was

not entitled to “seek any fees for claims rela ted to its claim to quiet title ” and that the superior court should have apportioned MFLP’s fees. They further argu ed: “Any fee award to MFLP must, at a minimum, be reduced

to reflect a proper apportionment. A reduction of a t least 50% of MFLP’s

claimed total is in order.” The superior court rejected REJ and Galardi’s apportionment argument and awarded MFLP $518,836.81 in attorneys’

fees and costs.

¶44 Thus, o nly in the context of ar gu ing MFLP was required to apportion its fe es did REJ mention A.R.S. § 12

- 1103

. But, it did not argue

the statute barred MFLP from recovering any fees under A.R.S. § 33

- 411.01

. Accordingly, REJ’s total bar argument is not properly before us.

S ee S obol , 212 Ariz. at 303, ¶ 7, 130 P.3d at 1002 (App. 2006) (party generally cannot argue legal issues on appeal not specifically presented to superior court (citation omitted)).

¶45 Even if we were to assume , however, that MFLP could not recover fees for its quiet title claim under A.R.S. § 33

- 411.0 1, REJ and Galardi did not renew their argument on appeal that MFLP should have been required to apportion its fees among its claims . A lthough they did

mention it in passing in their reply brief , w e will not consider arguments presented for the first time on appeal in the reply brief. Anderson v. Country Life Ins. Co. , 180 Ariz. 625, 636, 886 P.2d 1381, 1392 (App. 1994) (citation omitted)

. For the foregoing reasons, the superior court properly awarded fees against REJ , but not Galardi, under A.R.S. § 33

- 411.01

.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

19 B. Attorneys’ Fee s Under A.R.S. § 12

- 341.01

¶46 MFLP argues in its answering brief that even if it w as not

entitled to be awarded fees against Galardi personally under A.R.S. § 33

- 411.01 , it was nevertheless entitled to a fee award against him under

A.R.S. § 12

- 341.01 (Supp. 2013) because the entire dispute arose out of the purchase contract with Abromovitz

. Although we disagree with MFLP’s precise argument, we ultimately agree the dispute between Galardi and

MFLP arose out of contract. 22

¶47 A lthough MFLP was not a party to the purchase contract between REJ and Abromovitz

, a party seeking fees under A.R.S. § 12

- 341.01 need not be a party to the contract, Chaurasia v. Gen

. Motors Corp.

, 212 Ariz. 18, 30, ¶ 47, 126 P.3d 165, 177 (App. 2006) (citations o mitted)

, and, in any event, the dispute between Galardi and MFLP arose out of various agreements between Galardi and Marchiol / MFLP , rather than REJ and Abromovitz

.

¶48 As discussed, Galardi and Marchiol a greed to purchase the Property and title it in the name of REJ, with each own ing 50% of the

shares of REJ, which Galardi agreed to issue to Marchiol but never did

. Galardi and Marchiol also agreed that both of them would have to consent to selling the Property and would have equal input in the sales price.

Ga lardi and Marchiol further agreed Galardi would convey the Property

to MFLP in 2004 in part to reimburse Marchiol for disparities in operating
losses from their other, unrelated business ventures. Although these agreements were not written and Galardi and Marchiol did business on a “handshake basis,” the dispute between Galardi and Marchiol/MFLP,

and t heir claims against each other

, ultimately arose out of the se agreements

. Therefore

, MF LP was entitled to a fee award against Galardi

u nder A.R.S. § 12

- 341.01

.

22 Galardi argues the superior court should not have awarded
MFLP fees under A.R.S. § 12

- 341.01 because only A.R.S. § 12

- 1103 entitled it to a fee award and it failed to prove it had complied with the tender requirements of that statute. As discussed above, supra ¶ 44, this argument is not properly before us.ABROMOVITZ v. RED EYED, et al.

Decision of the Court

20 VII. Attorneys’ Fees on Appeal

¶49 The REJ defendants and Abromovitz each request attorn eys’ fees and costs on appeal pursuant to Section 20.6 of the purchase contract, which authorizes the prevailing party in an action to recover “its costs and expenses, including actual reasonable attorneys’ fees.” Although we have vacated that portion of the judgment holding Galardi personally liable for REJ’s breach of contract, under the “totality of the litigation test ,”

Abromovitz is the prevail ing party on appeal. See Murphy Farrell Dev

. , LLLP v. Sourant , 229 Ariz. 124, 134

- 35, ¶ 38, 272 P.3d 355, 365

- 66 (App. 2012) . Therefore, we award Abromovitz its reasonable attorneys’ fees and

costs on appeal against the REJ defendants except for those fees in curred by it in arguing Galardi was personally liable for REJ ’ s breach of contract, contingent upon its compliance with Rule 21 of the Arizona Rules of Civil Appellate Procedure

.

¶50 MFLP also request s its attorneys’ fees on appeal p ursuant to A.R.S. § § 12

- 341.01 and 33

- 411.01 . Consistent with the foregoing

discussion and contingent upon its compliance with Rule 21 of the Arizona Rules of Civil Appellate Procedure , we award MFLP its reasonable attorneys ’ fees against Galardi pursuant to A.R.S. § 12

- 341.01 and against REJ pursuant to A.R.S. § 33

- 411.01 and further find Galardi and REJ are jointly liable to MFLP for its costs on appeal.

¶51 For the foregoing reasons, we affirm the judgment of the superior court except for that portion of the judgment holding Galardi personally liable to Abromovitz for REJ’s breach of contract.