I N TH E CO UR T OF A PP EALS S T AT E OF AR I Z ONA D I V I S I O N T WO
KAM AN A EROS P ACE C O R P O R A T IO N , a D elaw are corpor at i on, P lain tiff

/C o u n ter d e f

e n d a n t/ A p p e llee /C ro ss -A p p e llan t,
v . TH E A RI ZO N A BO A RD O F RE G EN TS, UNI VE RS I T Y OF AR I Z ONA, a pol i t i cal s ubdi vi s i on of the St at e of A r i zona, D e f

e n d a n t/C o u n ter c laim a n t/ A ppel l ant/ C r os s - A ppel l ee. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) 2 C A
- C V 2006- 0177

DEPA RTM ENT A O P I N I O N

APPEAL FROM THE SUPERI OR CO UR T OF PI M A C OU NTY

C aus e N o. C 20045114 H onor abl e C arm i ne C ornel i o, J udge REVE RS ED I N PART , AFF I RM ED I N PART A UG 23 20 07 

### F I L E D BY CLE RK

C OU RTOF A PP E A LS DI VIS ION TWOA tt r i a l a n d o n a p p e a l , t h e p a r t i e s a n d t h e t r i a l c o u r tu s e t h e t e r m “ t h e U n i v e r s i ty” 1 in te rc h a n g e a b ly w ith “ A B O R .” 2 F e n n e mo r e Cr a i g , P
. C. B yG e o rg e O . K ra u

ja a n d E rw in D . K ra tz

Le wi s a n d Roc a LLP B yB ri a n J . P o llo c k , L a w re n c e A . K a s te n , and D al e A
. D anneman T ucs on A t t orney s for P lain tiff /C o u n ter d e f

e n d a n t/ A ppel l ee/ C r os s - A ppel l ant

P h o e n ix A t t orney s for D e f e n d a n t/C o u n ter c laim a n t/ A ppel l ant/ C r os s - A ppel l ee
B R A M M E R , J udge. ¶1 T he A r i zona Boar d of R egent s ( AB OR ) appea l s fr om a j udgm entent er ed af t er 1 a jury ren d ere d it s v erd ictin f av o r of K am an A ero sp ac e C o rpo rati o n (K am an ) on A B O R ’s count er cl ai m forbr eac h of contr actand K aman’ s br eac h of contr actcl ai m , aw ar di ng K aman $0
. A B O R assert s the tr i al cou rterr ed w hen i tden i ed A B O R ’s m oti on s for j ud gm ent as a
m a tt e r o f

law o n K a m a n ’s c laim b e c a u se th e re w a s n o w ritten a g re e m e n t o b lig a tin g it t o compensa t e K aman foraddi t i onal w or k and bec aus e K aman had fai l ed t o p r o v e a n author i zed sign at or yhad exe cut ed contr actm odi fi cat i ons on A B O R ’ s behal f. A B O R cont ends t hat K am an fa il ed to p rov e the d am ag es e lem en t of it s claim an d fa il ed to est ab li sh that A B O R ’s br eac h w as m at er i al
. A B O R al s o ar gues K aman’ s br eac h of contr actcl ai m w as unt i m el yand t hatt he tr i al cour terr ed i n deny i ng A B O R ’ s m ot i ons for a new t r i al on t hatcl ai m and on the3

j ury ’s v e rd ict in K am an’s favor on A B O R ’s cou nter cl ai m for dam ages. K am an crossappea l s , as s er t i ng t he cour t err ed by not aw ar di ng i t at t orney fee s as t he pre vai l i ng par tyat tr ia l. Fac t ualand Pr oc e dur alBackg r ound ¶2 W e v iew “the ev iden ce in a ligh t m o st fav o rab le t o u p h o lding the ju ry
v e r di ct [s ]
. ” Hu tc h e rs o n v . C ity o f P h o e n ix , 1 9 2 A ri z. 51 , ¶ 1 3 , 9 6 1 P
. 2 d 4 4 9 , 4 5 1 (19 9 8 ). A B O R i s t he governi ng bodyof the U ni ver s i tyof A r i zona; the as t r onom ydepart m entof the U ni ver s i t y“has a r es ear ch w i ng cal l ed St ew ar d O bs ervat ory . ” The obse r vat oryhas a mi r r or l abo rat ory , “a un i qu e facil i t yi n the w orl d, ” t hat m akes l arge m i rr ors w i t h “u nique prop ert i es” to e x a c tin g sp e c if

ica tio n s. In M a rc h 2 0 0 3 , A B O R e n te r e d in to a f ix e d p ric e c o n tra c t w ith L ockhee d M ar t i n, eff

ect i ve Sept ember200 1 , forA B O R t o “[d] es i gn, devel op, fabr i cat e,
as s embl e, t es t , del i ver , and s up p o rt i nt egr at i on of a 6. 5 [m et er ] cl as s C ol l i m at or ” for
a p p ro x im a tely$ 3 2 m ill io n . A c o lli m a to r w a s d e sc rib e d a t trial as “ a tele sc o p e o p e ra tin g in
r ever s e”; i tw oul d be us ed t o t est the acc ur acyof s pace t el es copes w hi l e theyw er e s t i l l on
e a rt h
. ¶3 T he mi r r orl abor at or y ’ s m anage r t es t i fi ed “t he scope of t he proj ectw as l ar ger th a n th e o b s e rv a to ry c o u ld h a n d le a lo n e d u ri n g th e tim e th a t L o c k h e e d . . . w a n te d d e liv e ry.” A ccor di ngl y , A B O R deci ded t o par t nerw i t h K aman. A B O R w as t o pr ovi de the mi r r or s , and K am an w o u ld b e re sp o n sible fo r pro v iding su p p o rtan d co n tr o l com p o nent s of the col l im ator.A B O R as s er t s , and K aman does notdi s put e, thatthe “St at ementof W or k” des cr i bes 2 th e “ w o rk s c o p e ,” a te rm th a t is u s e d in o th e r p a rt s o f th e c o n tr a c t. 4 ¶4 K am an an d A B O R en tered into a w ri tt en co n tr ac t on D ec em b er 2 0 , 2 0 0 1
. It l i s t ed a “ Fi r m Fi xed Pr i ce” of $9, 083, 269 forthe component s K aman w as t o pr ovi de. T he contr actcont ai ned a s t at ementof w or k ( SO W ) , w hi ch des cr i bed var i ous t as ks K aman w as 2 expec t ed t o per form , and i dent i fi ed ce rt ain “bi l l i ng m i l es t ones ” w hen K aman w as t o be compensa t ed forcompl et i ng var i ous t as ks fr om M ar ch 2002 t o M ay2006. T he SO W l i s t ed t hree do cum ents t hat pr ov i ded i t s basi s. ¶5 Par agr aph fourof the cont r act s t at ed t he “pr opos al r efl ect s a fi xed pr i ce f ort he eff or tpr opos ed. I n t he eve ntt hatt her e i s a m odi fi cat i on t o t he w or k s cope, a modi fi ed l evel of ef for tw i l l be i ndi cat ed i n a r evi s ed s cope of w or k t o be agr eed upon by t he part i es atthe t i m e of modi fi cat i on. ” Par tof par agr aph tw o of the “t erm s and condi t i ons of sal e” a t t ache d t o t he contr acts t at ed, “[a ] ft eracc ept ance by [K aman] any change of s peci fi cat i on/ dr aw i ngs
m anu facturi ng process deli veryschedu l e and / or quan t i t ym aybe m ade o nlyw i t h [K am an’s]
w r i t t en cons ent and at a char ge w hi ch [K aman] s hal l det erm i ne r eas onabl ys uffi ci entt o cover i t s addi t i onal cos t s . ” ¶6 E leve n m o d ifi ca ti o n s w ere en tered into b ythe p arti es. R elev an t here are
mo d i f i c a t i o n s t wo a n d f

o u r . M o d i f

i c a t i o n t wo , d a t e d M a y 3 1 , 2 0 0 2 , p r o v i d e d a n e w S OW,
now bas ed on s i x document s , i ncl udi ng t he or i gi nal t hr ee and “des i gn gui del i nes ” fr om the U n i v e r s i t y.5

¶7 M odi fi cat i on num berfour , dat ed A ugus t16, 2002, i ncr eas ed t he t ot al val ue of t he cont r a c t t o $ 1 2 , 8 0 0 , 0 0 0
. Th i s mod i f i c a t i o n i n c l u d e d a n e w “ t e r ms a n d c o n d i t i o n s of
s al e, ” w i t h a r evi sed p ara gr aph tw o, thats t at ed i n par t , “A ft eracc ept ance by[K aman] any
c h a n g e o f

sp e c if ica tio n /d ra w in g s m a n u f a c tu rin g p ro c e ss d e liv e rysc h e d u le a n d /o r q u a n tity
m aybe made onl yw i t h both par t i es ’ w r i t t en agr eementand ata cha r ge w hi ch [K aman] and [A B O R ] s hal l det erm i ne r eas onabl ys uffi ci entt o coveranyaddi t i onal cos t s . ” ¶8 M ark Y okl ey , t he progr am m anage r for K aman, t es t i fi ed thatw hen the part i es agr eed t o t he M ay2002 SO W , t her e w er e t en des i gn gui del i nes i n exi s t ence t hat form ed the b a sis o f 2 2 2 re q u ire m e n ts. N e a rlytw o y e a rs la ter , w h e n K a m a n p re se n ted its c laim to A B O R , Y okl ey s t at ed t her e had been f or t y - s i x r evi s i ons oraddi t i ons t o the des i gn gui del i nes l e a d i n g t o a t o t a l o f

s e v e n t e e n d e s i g n g u i d e l i n e s a n d 4 7 2 r e q u i r e m e n t s , a l t h o u g h o n l y s i x tyt hr ee of t he r equi r ement s w ere “r eal l ynew . ” Y okl eyt es t i fi ed tw enty - t hr ee of t he
re q u ir e m e n ts w e re m o re d if f ic u lt to p e rf

o rm . ¶9 O n D ece m ber18, 2003, K aman gave A B O R a “ve r ypr el i m i nary , r ough” est im ate o f w hati tcl ai m ed w er e addi t i onal cos t s i n i t s “new s cope a nd new / change d
r equi r ement s l i s t . ” Thi s pr opos al l i s t ed tw enty - ei ght“new r equi r ementdes cr i pt i on[s ] ” and
an ex p lana ti o n fo r ea ch ch arg e, w ith a “ tota l e s ti m ated p ri ce im p ac t” of $ 3 , 8 2 1 , 4 0 0
. In J anuary2004, A B O R w r ot e a l et t ert o K aman, r ej ect i ng m os tof K aman’ s cl ai m s and s t at i ng t hat“mostder i ve fr om a fai l ur e by K aman t o per form t o the s t at ementof w or k and t eami ng agr eement . ” Tw enty - fi ve of the tw enty - ei ghtcl ai m s w er e r ej ect ed w i t h s uppor t i ng r at i onal e,In D ec em b er 2 0 0 4 , the tri al co u rtg ran ted A B O R ’s m o ti o n s to d ism iss K am an ’s 3 q u an tum m eru itan d u n

just en ri ch m en t claim s, an d it g ran ted A B O R ’s m o ti o n fo r sum m ary j udgm ent on K aman’ s negl i gentm i s r epr es ent at i on cl ai m i n February2006. K aman does not chall eng e t hese rul i ng s. 6 t w o w er e ac cept ed “pe ndi ng a ful l cos tpr opos al , ” and one w as acc ept ed and a new contr act
w a s f o rm e d w ith re s p e c t to th is ite m , a “ d u a l- u s e c o llim a to r s u p p o rt s tru c tu re s tu d y .” ¶10 K a m a n th e n a ss e m b led a c laim , p re se n tin g it to A B O R o n A p ril 5 , 2 0 0 4 . T h is cl ai m l i s t ed t w enty - ni ne sepa r at e i t ems at a costt ot al l i ng appr oxi m at el y$6. 25 m i l l i on. T hr ee
o f th e c lai m s w ere ac ce p ted b yA B O R “p en d ing co st ev alua ti o n ” w ith a f o u rth , the s u p p o rt
s t ructur e s tudy , havi ng al r eadybeen a cce pt ed. T he r es tof the cl ai m s w er e r ej ect ed by A BO R. I n J ul y20 04 , K a man f i l e d a no t i ce o f c l a i m t hr ou gh c ou ns e l pu r s ua ntt o A. R. S. § 12- 821. 01 as t o A B O R , s t at i ng i t s “cl ai m can be s et t l ed for$6, 250, 110. ” ¶11 K aman st opped w or k on Sept ember 17, 2004, and s ued A B O R , al l egi ng t hat “[ a ]f ter th e p arti es a g ree d to the S O W , [A B O R ] ch an g ed , incre ase d an d ad d ed n ew w o rk
s cope a nd w or k eff

or tr equi r ement s , ” and f ai l ed t o compensa t e K aman forthe i ncr eas ed
w or k. K aman’ s compl ai nti ncl uded count s of br eac h of contr act , negl i gent
m isre p re se n tatio n , u n

ju st e n ric h m e n t, an d q u a n tu m m e ru it. A B O R f iled a c o u n ter c laim in 3

w hi ch i tal l eged K aman ha d br eac hed t he s ubcontr act by fai l i ng t o ful fi l l i t s obl i gat i ons and bya b a n d o n i n g p e r f

o r ma n c e . At th e t i me Kama n s u e d , AB OR h a d p a i d K aman
a p p ro x im a tely$ 9 .3 m ill io n o f th e $ 1 2 .8 m ill io n c o n tra c t.7

¶12 A B O R a lso f iled a re q u e st f

o r a p ro v isio n a l r e m e d y o f p a rtial s p e c if ic per form ance orforr epl evi n s i m ul t aneous l yw i t h fi l i ng i t s count er cl ai m . T he courtgr ant ed t he r eques tfor rep levin u p o n A B O R ’ s pos t i ng of a $4 mi l l i on bond. A B O R al s o gave K am an an ad d it ion al $ 1
. 1 m il li o n fo r p arts an d m aterial s n o t co v ere d b ythe re p levin o rde r. ¶13 A B O R fi l ed a mot i on fors um m aryj udgm enti n O ct ober2005 , arg ui ng t he contr actbetw een the part i es r equi r ed a w r i t t en modi fi cat i on and none ha d been made; any purpor t ed or al m odi fi cat i on of the contr actw as i m perm i s s i bl e un d er it s te r m s ; and, t he A B O R empl oy ees t hatK aman ar gued had modi fi ed the cont r actl acke d t he author i t yt o ent er i nt o contr act s on behal f of A B O R
. K am an responde d t hatthe cha nges t o t he des i gn gui del i nes change d t he w or k i tw as r equi r ed t o per form , an d that the contr actbetw een the par t i es r equi r ed A B O R t o compensa t e K aman for thi s addi t i onal w or k. T he courtdeni ed A B O R ’ s m ot i on, s t at i ng, “a j ur y coul d fi nd t hat s i nce t he S O W i s bas ed par t l y on the des i gn g u id e lin e s, a sig n if

ica n t ch a n g e to th e d e sig n g u id e lin e s c h a n g e s K a m a n ’s le v e l o f e f f o rt, t hus t r i gger i ng ei t herPar agr aph 2 of t he r evi s ed Ter m s and C ondi t i ons orPar agr aph 4 of the
co nt r act , w hi ch ca l l s form odi fi cat i on of Scope of W or k. ” I tal s o found thatw hethert he d e s ig n g u id e lin e s w e re s p e c if ic a tio n s w a s a f

a c tu a l is s u e f

o r t h e ju ry. ¶14 A B O R fi l ed a seco n d m ot i on fors um m aryj udgm enti n D ece m ber2005,
a rg u in g th a t, d u r in g th e n e g o tiatio n s a s to m o d if ica tio n tw o , “K a m a n a g re e d to d ro p its demand t hati t coul d be pai d extr a for change s t o A ppl i cabl e D ocument s . . . . [and ther efor e] K aman cannotnow cl ai m t hata modi fi cat i on t o [the des i gn gui del i nes thatar e a pa r tof the]8

A ppl i cabl e D ocument s coul d ent i t l e i tt o extr a paym ent s . ” The cour tr ej ect ed thi s ar gum ent
as w el l , s t at i ng t hateven w i t h t hi s new i nform at i on, a j ury coul d concl ude t hat“al t hough t he U ni ver s i t y chos e t o enac t change s by char act er i zi ng t hem as r evi s i ons t o the D es i gn G u idelines , itd id n o t m ea n that .
. . theyd id n o t ca u se sign ifi ca n t cha n g es to K am an ’s w o rk
as s peci fi cat i ons . ” ¶15 A tt he cl os e of K aman’ s cas e, A B O R agai n m oved forj udgm ent , w hi ch t he trial c o u rt d e n ied . A f

ter th e v e rd ict, A B O R re n e w e d its m o tio n a n d m o v e d f o r a n e w trial, bot h of w hi ch the courtdeni ed. T hi s appea l fol l ow ed. D i s cus s i on D e n ial o f

Ju d g m e n t as a M a tter o f L a w - K a m a n ’s B re a c h o f C o n tra c t C laim ¶16 A B O R con t end s the t ri al cou rt err ed in den y i ng i t s m oti on s for j ud gm ent as a
m at t erof l aw and byal l ow i ng the j ur yt o i nt erpr etthe contr act . W e r evi ew de novo a tr i al
c o u rt ’s ru lin g o n a m o tio n f o r j u d g m e n t a s a m a tte r o f la w . Monaco v. Heal thP ar tners of S. A riz
. , 196 A r i z. 299, ¶ 6, 995 P. 2d 735, 738 ( A pp. 1999)
. Such a “mot i on s houl d be gr ant ed i f t he fact s pr oduced i n s uppor t of t he cl ai m or defe ns e have so l i t t l e pr obat i ve val ue, gi ven t he quantum of evi dence r equi r ed, t hat r eas onabl e peopl e coul d notagr ee w i t h the conc l us i on
a d v a n c e d b y th e p ro p o n e n t o f th e c la i m o r d e f e n s e .” O r m e Sch. v. R eev es , 166 A r i z. 301, 3 0 9 , 8 0 2 P
. 2 d 1 0 0 0 , 1 0 0 8 (19 9 0 ). ¶17 A B O R a s s e r t s K a m a n ’ s b r e a c h o f c o n t r a c tc l a i m m u s tf

a i l b e c a u s e “ o n l y a des i gnat ed contr act i ng offi cer of t he S t at e can bi nd t he U ni ver s i t y . ” I ts t at es , “K aman has9

neveral l eged ( and ca nnotal l ege) thatanyoffi ci al l ydes i gnat ed contr act i ng offi cerever
a s s e n te d to a n ya g re e m e n t, w ri tte n o r o th e rw is e , to p a yK a m a n m o re th a n th e f ix e d p ri c e .” A B O R cont ends t hat , even i f change s t o t he des i gn gui del i nes coul d cons t i tu te a w ri tt en
a g re e m e n t, A B O R n e e d n o t p a yf o r th o se c h a n g e s, re a so n in g th a t “[ n ]o U n iv e rsity
c o n t r a c t i n g o f

f i c e rw a s e v e ri n v o l v e d i n ( l e ta l o n e s i g n e d ) t h e D e s i g n G u i d e l i n e s [ a s t h e y]
w e re p ro m u lg a te d b yth e S te w a rd e n g in e e rs o n th e jo b s ite .” ¶18 A s s t at ed abo v e, the t r i al cour tdeni ed s ever al m ot i ons A B O R m ade f or jud g m en t as a m att er o f law o n this i ssu e. A t tri al du ri n g clos ing arg u m en ts, K am an ’s
c o u n se l sta ted :

K aman i s not s ay i ng t hat w hen t hes e pr ogr am peopl e agr eed on t echn i cal requi rem ents , t echn i cal chan ges, t hat a pr i ce i ncrease w as a u tom ati ca ll yag ree d to, au tom ati ca ll y cre ated
. B u t w e a re s a y i n g t h a t whe n t e c h n i c a l c h a n g e s wer e ma d e [ i t ] b eg[a ] n a pr oces s t hat s houl d have r es ul t ed i n a contr act s per s on ul t i m at el yagr eei ng on a contr actm odi fi cat i on. T h e trial c o u rt in stru c ted th e ju ryth a t, “[ o ]n lyp e rso n n e l w ith a u th o rityto e n ter in to c o n tra c ts on behal f of the U ni ver s i t yof A r i zona can bi nd the U ni ver s i t yt o contr actual pr om i s es . T hat i s, t he U niver si t yof A ri zon a cann o t b e h e ld li able for br eaching an ycon t ractual pr om i se
a g re e d to b yu n a u th o ri z e d p e rs o n n e l.” ¶19 A B O R Pol i cyN um ber3- 103( A ) s t at es t hat“U ni ver s i t y offi cer s des i gnat ed by th e p re sid e n t o f

th e u n iv e rsity, a s c e rtifie d to th e E x e c u tiv e D ire c to r, ar e a u th o riz e d to
e x e c u te c o n tra c ts a n d o th e r w ritten in stru m e n ts o n b e h a lf o f th e B o a rd .” P u rsu a n t to th is pol i cy , a J ul y2001 des i gnat i on bythe U ni ver s i t y ’ s pr es i dentcert i fi ed nine o ffi cer s “asM os tw er e not s i gned atal l , al t hough s om e i ncl uded St ew ar d engi neer s ’ typew r i t t en 4 n a m e s a n d s o m e w e re d a te d
. 10 author i zed s i gnat or i es t o exec ut e contr act s an d o ther w r i t t en i ns t rum ent s on behal f of The U ni ver s i t yof A r i zona a nd [A B O R ]
. ” Tw o offi cer s s o des i gnat ed w er e the D i r ect orand Sponsor ed C ont r actO ffi cerof the O ffi ce of R es ear ch and Cont r actA nal y s i s , pos i t i ons that
w er e h e l d b yRi c h a r d Han e ya n d Le e Ann e Pe t e r s , r e s p e c t i v e l y . Th e c o n t r a c tb e t w een K aman and A B O R w as s i gned byPet er s on behal f of A B O R , and al l el even modi fi cat i ons
w er e s i gned byei t herherorH aney . T he changes t o t he des i gn gui del i nes w er e nots i gned b y a n y U n i v e r s i t y o f

f i c i a l w i t h c o n tr a c t i n g a u t h o r i t y. 4 ¶20 A B O R c o n ten d s th a t th e sta te “ c a n n e v e r b e b o u n d b yu n a u th o riz e d a c ts o f its
e m p lo y e e s ,” a s ta te m e n t th a t K a m a n d o e s n o t d is p u te . A B O R is a s ta te a g e n c y . C i t y of T e m p e v . A riz . B d . o

f R eg e n ts , 11 A r i z. A pp. 24, 25, 461 P. 2d 503, 504 ( 1969)
. A r i zona l aw i s cl eart hat“per s ons deal i ng w i t h publ i c off i cer s ar e bound, at t hei r per i l , t o know t he ext ent and l i m i t s of thei rpow erand that n o ri ghtcan be acqui r ed exc eptt hatpr edi cat ed upon author i zed a ct s of s uch off i cer s . ” P i nal C ount

y v. P om er oy , 60 A r i z. 448, 455, 139 P. 2d 451, 4 5 4 -5 5 (1 9 4 3 ); B ig lerv . G ra h a m C o u n ty , 128 A ri z. 474, 477, 626 P. 2d 1106, 1109 ( A pp. 1 9 8 1 ) ( s a m e ). O th e r j u ri s d ic tio n s h a v e re a c h e d s im ila r c o n c lu s io n s . See, e. g. , Ko n d o s v . W. V a . B d . o f R eg e n ts , 3 1 8 F . S u p p . 3 9 4 , 3 9 7 ( S .D . W . V a . 1 9 7 0 ) (“ [ I]t h a s lo n g b e e n f irm ly
es t abl i s hed i n W es t V i r gi ni a t hat t he s t at e m ay not be hel d l i abl e for i l l egal orunauthor i zed
a c ts o f its o f f ice rs.” ); P e o

p le ex re l. D u n b a r v . D ist. C o u rt In a n d Fo r C h a ffee C o u n ty , 255K aman does notargue thatthes e pr i nci pl es w er e al t er ed bec aus e A B O R m ayhave 5 been a ct i ng i n a pr opr i et ary , r atherthan governm ent al , capa ci t y . C ons equent l y , w e do not cons i dert hi s i s s ue. 11 P
. 2 d 7 4 3 , 7 4 8 ( Co l o . 1 9 5 3 ) ( “ ‘ T h e s t a t e c a n a c to n l yb yi t s a g e n t s , d u l ya u t h o r i z e d b yl a w;
a n d sin c e p u b lic o f

f ice rs c a n n o t b in d th e g o v e rn m e n t th e yre p re se n t b ya c ts o u tsid e th e ir expr es s author i t y , even though w i t hi n thei rappar entpow er s , i t i s onl y w her e off i cer s of the stat e p erf o rm their ac ts a g ree ab ly to the au tho ri ty d eleg ated them that the stat e is b o u n d
. ’”), q u o tin g S tate ex rel. C a ton v. Ind u s. C o m m ’n , 6 1 N
. E
. 2 d 8 0 6 , 8 0 7 (O h io C t. A p p . 1 9 4 5 ). A nd t he U ni t ed St at es Supr eme C our thas s t at ed, “W hat everthe form i n w hi ch the G overnm entfunct i ons , any one ent er i ng i nt o an arr angementw i t h t he G overnm entt akes t he
r i s k o f h a v i n g a c c u r a t e l y a s c e r t a i n e d th a th e w h o p u rp o r t s t o a c tf o rth e G o v e r n m e n ts t a ys
w i t hi n t he bounds of hi s author i t y . ” Fe d . C ro p In s. C o rp . v. Me rr ill , 332 U
. S. 380, 384, 68 S
. C t. 1 , 3 (19 4 7 ). 5 ¶21 K a m a n re sp o n d s th a t

[t ] he part i es ’ conductt hr oughoutthe cour s e of pe r form i ng t he contr acts how s nei t her s i de cont empl at ed change s t o t he w r i t t en D es i gn G ui del i nes w oul d r equi r e a w r i t t en contr act m od ifi cat i on, orw oul d need t o be s i gned bys om eone i n t he U ni ver s i t ycontr actadmi ni s t r at i on offi ce— s uch D es i gn G u i d e l i n e s c h a n g e s wer e l e f tt o . . . th e t e c h n i c a l pr ogr am p e rso n n e l. H ow ever , K aman soughtan addi t i onal s i x m i l l i on dol l ar s forw ork it thoughti thad per form ed orw oul d need t o per form out s i de of t he S O W
. I f i t w ant ed t o be compens at ed for t he w or k, i tneede d t o have ha d s om eone w i t h author i t yt o bi nd A B O R s i gn a new contr actB eca us e K aman does notar gue thatA B O R , byl at eracc ept i ng cl ai m tw enty - s even 6 a n d e n t e r i n g i n t o a n e w c o n t r a c t , s o me h o w r a t i f i e d t h e c o n d u c to f

t h e AB OR e n g i n e e r s , we do notaddr es s t he i s s ue. I n t hatcas e, t he M ary l and C our t of A ppeal s aff i r m ed the M ary l and C our tof Speci al 7 A p p e a ls o n th e sa m e b a sis a n d f o r th e sa m e re a so n s th e lo w e r c o u rt u se d to re a c h its con cl usi on . W e hav e pri m ari l y rel i ed on the i nterm ediat e app el l at e cou rt ’s op i nion bec ause of the sl i gh t l ym ore det ai l ed fa ctual s um m aryi tprovides. 12 o r m o d ifi ca tio n . F o r ex am p le, w h en the p arti es e n tered into m o d ifi ca ti o n n u m b er f o u r,
w hi ch i ncr eas ed the val ue of the contr actbyn ea rl y $ 4 m i l l i on dol l ar s , Pet er s s i gned the
a g re e m e n t, b in d in g A B O R
. ¶22 K a m a n re lie s o n a s in g le c a s e in its re s p o n s e to A B O R ’s a rg u m e n t, G odbey v
. R o o se v e lt Sc h o o l D ist. N o . 6 6o f M a ric o p a C o u n ty , 131 A r i z. 13, 21, 638 P. 2d 235, 243 (A p p . 1 9 8 1 ), f

o r th e p rop o sit ion that “the ac ts of the p arti es u n d er the co n tr ac t, b ef o re dis pu t es ar i se, are the b estevidence o f t he m eaning of d ou btful con t ractual t erm s. ” Ital so
a rg u e s “ [ t] h e U n iv e rs ity’s c o n d u c t p ro v e s th e p a rt ie s [ ’] in te n t w h e n th e ym a d e th e c o n tr a c t.” 6 ¶23 Bu tc o n d u c to f t h e p a r t i e s i s n o tr e l e v a n ti f n o a u t h o r i z e d o f

f i c i a l b o u n d AB OR t o p a y f o rt h e w o r k
. I n a s i m i l a rf a c tu a l c i r c u m s t a n c e i n th e c o n t e x to f s o v e r e i g n i m m u n i ty, the M ary land C o u rto f S p ec ial A p p ea ls r ejec te d a n arg u m en t th at a g o v ern m en tal en ti ty ’s
cou rs e of c on du cthad m od i fi ed a w ri t t en con t ract and had bo un d t he st at e, even i f t hat course
o f c o n d u c t w a s id e n tic a l to th e p a rt ie s ’ i n te n t a t th e tim e o f e n te ri n g in to th e c o n tr a c t. D ep ’t
o f P u b
. Sa

fet y & C o rr. Ser vs . v . A R A He a lth S erv s. , Inc
. ( A R A I) , 6 6 8 A .2 d 9 6 0 (M d . C t. S p e c . A p p . 1 9 9 5 ). T h e M a ryla n d C o u rt o f A p p e a ls a f

f ir m e d
. ARA Hea l th S e r v s . , I nc. v. D ep ’t o f P u b
. Sa fet y & C o rr. Ser vs. (

A R A II) , 6 8 5 A .2 d 4 3 5 (M d . 1 9 9 6 ). T h e r e , A R A , a 713

pr ovi der o f h ea lth car e s ervi ces t o pr i s on i nm at es , s oughtr ei m bur s ementfr om t he D epart m entfort he co st of A cqui r ed I m m une D efi ci encySyndr om e ( A I D S) m edi cat i on. ARA I, 668 A
. 2d at 962. A R A had ent er ed i nt o a cont r actw i t h t he D epart m ent , w hi ch had b e e n a p p ro v e d a s re q u ire d b yth e B o a rd o f P u b lic W o rk s, to p ro v id e h e a lth c a re se rv ice s to M a ryl a n d in m a te s . Id . at 9 6 3 -6 4 ; see a lso A R A II, 68 5 A
. 2d 43 6-37. Th e con t ractal so p ro v id e d A R A w a s to re c e iv e a d d iti o n a l co m p e n sa tio n f o r A ID S m e d ica tio n d e liv e re d to a ll i nm at es w ho w er e hos pi t al i zed, but w as not t o get t hi s exce s s compensa t i on form edi cat i on d is p e n s e d in c o rr e c tio n a l f a c i l i t i e s . ARA I, 668 A
. 2d at963- 64. A s ubs equentand
r etr oact i ve modi fi cat i on appr oved byt he B oar d, how ever , pr ovi ded thatt he D epart m ent
w o u ld reim b u rse A R A fo r a ll co sts o f A ID S m ed icati o n n o m att er w h ere the p ri so n ers w ere l ocat ed, butfai l ed t o acc ountforan ei ght een- m ont h per i od s t art i ng fr om t he begi nni ng of the in itia l c o n tr a c t a n d e n d in g o n th e e f f e c tiv e d a te o f

th e m o d if

ic a tio n . Id . at 9 6 4 ; s e e a l s o ARA II, 685 A
. 2d 437. R egar dl es s , A R A had al r eadybeen pa i d r oughl y$135, 000 byt he D e p a rt m e n t in c o m p e n s a tio n f o r t h e e ig h te e n -m o n th p e ri o d
. ARA I, 668 A
. 2d at964
. ¶24 S tate a u d ito r s o b je c te d to th e p a ym e n t a n d la te rw it h h e ld m o n e y in th a t am o u n t,
a n d a n a d m in is tr a tiv e a g e n c yre je c te d A R A ’s c la im f

o r re im b u rs e m e n t. Id
. T h e tri al co u rt
r ever s ed, fi ndi ng t hatal t hough t he contr actw as unambi guous on i t s face and w oul d not ent i t l e A R A t o r ei m bur s ement for t he ei ght een- m onth per i od, bythei rcour s e of c onductt he p a rt ie s h a d m o d if

ie d t h e c o n t r a c t. Id
. at 96 4 -65
. T h e c o u rtreli ed o n the D ep artm en t’ s paym ent s t o A R A fort he ei ght een- m onth per i od and i t s at t empt t o defe nd i t s pol i cyt o t heA s t he courti n A R A I not ed, M ary l and l aw “pr ovi des t hat , i n or der t o avoi d the bar 8 of s over ei gn i m m uni t y , a contr act cl ai m agai ns t the S t at e m us t be bas ed on a w r i t t en contr act exec ut ed bya St at e empl oy ee ‘ w i t hi n the s cope of [hi s orher ] author i t y . ’ ” ARA I, 668 A
. 2d a t 9 6 7 , quot i ng M d. C ode A nn. , St at e G ov’ t§ 12- 201. 14 a u d ito rs, e v e n g o in g so f a r a s to sta te th a t it “ h a d c o n tem p late d f ro m th e b e g in n in g th a t [ it]
w oul d r ei m bur s e [A R A ] fori t s expens es i n pr ovi di ng A I D S m edi cati o n . . . [and] thatt he $135, 446. 00 i n di s put ed paym ent s w er e i n acc or d w i t h t he i nt entof the part i es . ” I d. ¶25 O n a p p e a l, A R A c o n ten d e d th a t th e p a rties h a d m o d if ied th e c o n tra c t b yth e ir
c o n d u c t. I

d. at 9 6 5. T he D epart m entar gued, how ever , thatA R A ’ s cl ai m w as “barr ed by
s over ei gn i m m uni t ybeca us e i t s offi ci al s w ho engage d i n the conduc tt hatal l egedl ym odi fi ed its C o n tr a c t . . . h a d n o a u th o ri ty to d o s o .” Id . at 9 6 7 . T h e a p p e llate c o u rt lo o k e d a t a 8

n u m b e r o f

M a ry lan d sta tu tes a n d re g u latio n s a n d f o u n d th e D e p a rtm e n t lac k e d th e a u th o rity to cre ate the m odi fi cat i on beca us e the contr acthad notbeen s ubj ect ed t o the r equi r ed
a p p ro v a l p ro c e d u re s . Id
. a t9 6 8
. T h e c o u r th e l d th a t , “ [ i ] n th e a b s e n c e o f a c tu a l a u t h o r i ty, t he St at e mayavoi d t he contr act , r egar dl es s of the r eas onabl enes s of the bel i efs of t he other par t y . ” Id
. at969. A s not ed above, t he M ary l and C our tof A ppeal s aff i r m ed, s t at i ng, “The purpor t ed modi fi cat i on w as notappr oved bythe B oar d of Publ i c W or ks , and thus exce eded th e sc o p e o f

th e [ D e p a rtm e n t’s] a u th o rity
. F u rth e rm o re , as b e tw e e n [ A R A ] a n d th e p u b lic g e n e ra lly , [A R A ] b e a r s th e r is k o f in ju ryp o se d b yth e u n a u th o riz e d c o n d u c t o f a p u b lic agent . ” A R A II, 685 A
. 2d at440.15

¶26 ARA I

i s r el evan tfor sev e ra l r e a so ns. Ini t i al l y , i tdem on strat es that a course
o f c o n d u c t b y u n a u th o riz e d sta te o f f icia ls c a n n o t b in d th e sta te. T h is re su lt o b tain s d e sp ite t he evi dence of the D epart m ent ’ s unambi guous i nt entt o compensa t e A R A form edi cat i on it p ro v id e d d u rin g th e e ig h tee n -m o n th p e rio d ; in d e e d , the D e p a rtm e n t ar g u e d th is i n ten t to t he s t at e audi t or s . T hi s cas e al s o s how s t hat , abs entappr oval byan author i zed of fi ci al , the
s t at e s i m pl ycoul d notbe r equi r ed to com pens at e A R A , r egar dl es s of w hatthe part i es had i nt ended. Si m i l ar l yher e, t he St ew ar d engi neer s coul d notbi nd A B O R i n contr act , even i f,
w hen theychange d t he des i gn gui del i nes , t heyhad i nt ended A B O R w oul d be bound t o pay addi t i onal cos t s t o K aman. ¶27 N o th in g in p a ra g ra p h tw o o f th e ter m s a n d c o n d iti o n s c h a n g e s th is re su lt. T h is p ara g raph pr ovi des : “A ft eracc ept ance by[K aman] anychange of s peci fi cat i on/ dr aw i ngs
m anu facturi ng process del i verys c he du l e a nd/ orqu anti t ym aybe m ade o nlyw i t h b oth part i es’
w ritten a g re e m e n t an d a t a c h a rg e w h ich [ K a m a n ] a n d [ A B O R ] sh a ll d e ter m in e re a so n a b ly
s uffi ci entt o coveranyaddi t i onal cos t s . ” K aman ar gues t hi s l anguage bound A B O R t o a pr oces s byw hi ch a St ew ar d engi neerw oul d agr ee t o a cha nge t o des i gn gui del i nes , and at
s om e l at ert i m e an A B O R officerw i t h contr act i ng author i t yw oul d eval uat e and a cce pt K aman’ s cl ai m fort he w or k. T hus , under K aman’ s i nt erpr et at i on, a desi gn gui del i ne cha nge agr eed t o byengi neer s fort he r es pect i ve part i es w oul d bi nd A B O R t o negot i at e and a gr ee
on a r eas onabl e pr i ce f

ort he cha nge.16

¶28 H ow ever , K aman’ s i nt erpr et ati o n cannotover come t he fa ctt hat , unt i l an A B O R offi cer w i t h contr act i ng author i t y exec ut ed a document embody i ng bot h t he cha nge
a n d its c o st, A B O R w a s n o t b o u n d
. F u rth e rm o re , alth o u g h a n A B O R o f f icia l w ith contr act i ng author i t yagr eed t o t he l anguage i n para gr aph tw o, w e ca nnotconcl ude s uch a contr actual pr ovi s i on coul d fur t her del egat e contr act i ng author i t y t o t he engi neers at t he
o b serv atory . A n y s u ch d eleg ati o n w o u ld b e c o n tr aryto A B O R P o li cyN u m b er 3 -10 3 (A ),
w h ic h o n ly p ro v id e s f

o r t h e p re s id e n t to “ d e le g a te h is /h e r a u th o ri ty to e x e c u te c o n tr a c ts . . . w ith o u t ce rtific a tio n to th e E x e c u tiv e D ire c to r,” a n d e v e n th e p re sid e n t ca n o n lyd e leg a te th is author i t yforobl i gat i ons under$10, 000 and w hen i t“does notundul yexpos e the B oar d or t he uni ver s i t yt o fi nanci al l os s . ” See C l ay v. A r iz . I nt ers cholas t i c Ass ’ n, I

nc . , 161 A r i z. 474, 476, 779 P. 2d 349, 351 ( 1989) ( “[A ] n [admi ni s t r at i ve] agenc y m us tfol l ow i t s ow n rul es and
re g u latio n s; to d o o th e rw ise is u n law f u l.”); P or ta H

ous e, I nc. v. Scot t

s dal e Aut o Leas e, I

nc ., 1 2 0 A riz . 1 1 5 , 1 1 9 , 5 8 4 P .2 d 5 7 9 , 5 8 3 (A p p . 1 9 7 8 ) ( p e r so n s d e a lin g w ith p u b lic e n tity

“ c h a rg e d w ith n o tice ” o f e x ten t an d lim its o f its p o w e r); Sc h . D ist. N o . O n e o f P im a C o u n ty
v. Lohr , 1 7 A riz . A p p . 4 3 8 , 4 3 9 , 4 9 8 P .2 d 5 1 2 , 5 1 3 (A p p . 1 9 7 2 ) (s a m e ); s ee al s o Schaef

er
v. A nne A r undel C ount y, Md. , 1 7 F
. 3 d 7 1 1 , 7 1 3 (4th C ir
. 1 9 9 4 ) (go v ern m en tal en ti ty ’s
au tho ri ze d p u rch asin g ag en t had n o p o w er to d eleg ate a u tho ri tyto o thers to s ign co n tr ac ts) ; P eck v. B oa rd of Ed
. of Y um a U nion High Sch
. D ist . , 126 A r i z. 113, 11 5 , 6 1 2 P
. 2 d 1076, 1 0 7 8 (A p p . 1 9 8 0 ) (sc h o o l b o a rd c a n n o t d e leg a te f u n c tio n s to su p e rin ten d e n t w h e n it “w o u ld circu m v en t th e lan g u ag e o f th e statute” ).17

¶29 “ T h e sa m e p rin c ip les o f c o n stru c tio n th a t ap p lyto sta tu tes a lso a p p lyto admi ni s t r at i ve rul es and r egul at i ons , ” K i m bl e v. C i t y of P age , 199 A r i z. 562, ¶ 19, 20 P. 3d 6 0 5 , 6 0 8 (A p p . 2 0 0 1 ), an d a p u b li c e n tity ’s reg u lat ion s, if co n sist en t w ith it s statutory
s cheme, “ar e ent i t l ed t o be gi ven the for ce a nd eff ectof l aw , ” C i vi lSer vi ce Com m is s i on of C i t y of Tucs on v. Fol ey , 7 5 Ar i z . 3 6 4 , 3 6 8
- 6 9 , 2 5 7 P
. 2 d 3 8 4 , 3 8 7 ( 1 9 5 3 )
. T h e r e f o r e , AB OR offi ci al s w i t h contr act i ng author i t ycoul d not del egat e contr act - m odi fi cat i on author i t yt o the St ew ar d engi neer s , r egar dl es s of the l anguage of par agr aph tw o. M or eove r, ev en if a contr act i ng offi cercoul d del eg ate h is orherauthor i t y , not hi ng i n t he contr actcl ear l ydoes
s o h e re . S ee D u n b ar , 255 P. 2d at748 ( “‘ Publ i c off i cer s cannotbi nd t he governm entt hey
re p re s e n t b ya c ts o u ts id e th e ire x p re s s a u th o r ity.’” ), quot i nq C at on , 61 N
. E
. 2d at807; Lut z ken v. C i t

y of R oches t er , 1 8 4 N
. Y
. S
. 2 d 4 8 3 , 5 0 1 (N
. Y
. A p p . D iv. 19 5 9 ) (“[W ]he re the re i s a l a c k o f a u t h o r i t y o n t h e p a r t o f a g e n t s o f a [ g o v e r n m e n t a l e n t i t y] t o c r e a t e a l i a b i l i ty,
exce ptbycompl i ance w i t h w el l
- es t abl i s hed r egul at i ons , no li ab il itycan r es ul tunl es s t he p resc ri b ed p roc ed u re is co m p li ed w ith an d fo ll o w ed
. ”). ¶30 B e c a u se th e S tew a rd e n g in e e rs w e re n o t au th o riz e d b yA B O R to b in d it in
c o n tr a c t, K a m a n ’s b re a c h o f c o n tr a c t c la im m u s t f

a il a s a m a tte r o f

la w . See P o m eroy , 60 A riz . at 4 5 5 , 1 3 9 P .2 d a t 4 5 4 -5 5 ; B igl er , 1 2 8 A ri z. at 47 7 , 6 2 6 P
. 2 d at 11 0 9
. T h e tri al co u rt t her efor e err ed i n deny i ng A B O R ’s m o ti o n s forj udgm entas a mat t erof l aw on t hi s i s s ue. In lig h t o f

th is c o n c lu s io n , w e n e e d n o t ad d re ss A B O R ’s a rg u m e n t th a t th e c o u rt e rre d in al l ow i ng K aman’ s br eac h of contr act cl ai m t o be deci ded bya j uryi n t he abs ence of a w r i t t en18

agr eement . N or need w e consi der A B O R ’ s cont ent i on t hat t he j ury ’ s aw ar d of $0 t o K aman “nega t ed an e s s ent i al el ementof K aman’ s br eac h of contr actcl ai m and com pel l ed entr yof j udgm ent ” forA B O R , ort hatt hi s fi ndi ng m andat ed a new t r i al beca us e i tw as i ncons i s t ent
w ith it s d eterm ination that A B O R h ad b rea ch ed the co n tr ac t. N eith er d o w e a d d ress A B O R ’s
as s er t i on t hatt he tr i al cour t“err oneous l yadmi t t ed evi dence r ega rding a s uppos ed or al agr eementbetw een [ A B O R ] and K aman ” b e c a u s e th i s c l a i m s o l e l yc oncerns K aman’ s br eac h
o f contr actcl ai m . Fi nal l y , w e nee d notcons i derA B O R ’ s ar gum ent s thatK aman’ s br eac h of co ntr actcl ai m w as u nti m el yun der the n oti ce of cl ai m st atute and t he st atute of l i m i t at i on s,
ort hatK aman’ s evi den ce w as i ns uffi ci entt o es t abl i s h br eac h of contr actdamages , ort hat
a n yb re a c h b yA B O R w a s n o t m a ter ial. Ju d g m e n t as a M a tter o f L a w - A B O R ’s C o u n ter c laim ¶31 A B O R cont ends t hat , i f thi s court“fi nds t hatj udgm entw as i m pr oper l yent er ed forK aman on K aman’ s br eac h of contr act cl ai m , [w e] s houl d di r ect t he t r i al cour tt o ent er j udgm entfort he U ni ver s i t yon i t s br eac h of contr actcount er cl ai m . ” I n i t s under devel oped
ar gum ent , A B O R as s er t s “K aman’ s s ol e defens e t o [A B O R ’ s br eac h of contr act ] cl ai m has al w ay s been thati t s per form ance undert he S u bcontr actw as excus ed bec aus e of the U niver si t y ’s al l eged m at eri al breach, ” and , i f A B O R did not br each the con t ract , A B O R m ustK a m a n d id n o t re sp o n d d ire c tl y to th is a rg u m e n t, bu t ra th e r c o n f in e d itse lf

to 9 exp l ai ning ho w t he jury c o u ld hav e bo t h fo un d fo r K am an b ut aw arded i tno dam ages. A l t hough w e mayr egar d t hi s fai l ur e t o s peci fi cal l yr es pond as a conf es s i on of err oras t o any d e b a ta b le is s u e , w e a re n o t r e q u ir e d to d o s o . See Ari z . Mi nor i t

y C oal
. f orFai rR edis tr i ct i ng v. A riz. Ind ep . R ed istrict ingC o m m ’n , 211 A r i z. 337, n . 2 8 , 121 P. 3d 843, 869 n. 28 ( A pp. 2 0 0 5 ). 19 b e su c c e ss f

u l as a m a tter o f

law o n its c o u n ter c laim
. W e n o te A B O R h a s n o t a s k e d u s to 9
re m a n d its c o u n ter c laim f o r a n e w trial. ¶32 B efor e t he j ur y announce d i t s ver di ct , A B O R as ked t he t r i al cour t t o gi ve sp e c ial in ter ro g a to rie s to th e ju ry , a re q u e st th e c o u rt d e c lin e d . A f ter th e ju r y fo u n d in K aman’ s favoron A B O R ’ s br eac h of contr act count er cl ai m , but fai l ed t o pr ovi de a ve r di ct
o n K am an ’s claim ag ains t A B O R , A B O R ag ain s o u g h t spe cial i n terrog ato ri es. T h e c o u rt
s i m pl ys entt he j ur yb ac k to del i ber at e al l cl ai m s aft erhavi ng pr ovi ded i tw i t h addi t i onal i n s t ru c t i o n s . T h e j u r yt h e n r e tu r n e d two g e n e r a l v e r d i c t s , b o t h i n f a v o ro f Ka ma n , o n i t s o wn br eac h of contr actcl ai m and on A B O R ’ s count er cl ai m . “A gener al ver di cti m pl i es a fi ndi ng byt he j ur yon everyes s ent i al fac ti n favorof the pr evai l i ng par t y . ” Lohm ei erv. H am m er , 2 1 4 A ri z. 57 , ¶ 1 4 , 1 4 8 P
. 3 d 1 0 1 , 1 0 6 (A p p . 2 0 0 6 ). ¶33 B e c a u se it w a s a g e n e r a l v e rd ict, w e c a n n o t k n o w th e b a sis o f th e v e rd ict in favor of K aman on A B O R ’ s count er cl ai m . O ur l egal concl us i on t hat a d u lyau thor i zed cont r act i n g o f

f i c e rd i d n o tb i n d t h e s t a t e d o e s n o tn e c e s s a r i l yp r e c l u d e th e j u r y ’ s f a c tualIn d e e d , the ju ryc o u ld p o s s ib ly h a v e c o n c lu d e d th a t A B O R w a s n o t en tit led to 10 pr evai l on i t s br eac h of contr actcl ai m beca us e i t had ant i ci pat or i l y br eac hed t he contr actby r eques t i ng addi t i onal w ork fo r w hi ch i thad no i nt ent i on of pay i ng, even i f the j uryw as unabl e t o fi nd as a mat t erof l aw on K aman’ s theoryof the ca s e thatA B O R had br eac hed the or i gi nal contr act by agr eei ng t o change s i n t he des i gn gui del i nes , thus bi ndi ng A B O R t o pay K a m a n a d d itio n a l c o m p e n s a tio n . I n i t s ci t at i on of s uppl ement al author i ty , A B O R l i s t s s ever al cas es i n w hi ch an 11 app el l at e cou rt ov erturned a gen eral verdi ct and rem and ed the case fo r a new tri al becau se o f trial err o r an d b e c a u se it w a s im p o ss ib le f o r th e c o u rt to tell w h e th e r th e ju rye rro n e o u sly f o u n d f o r t h e p a rt y . S e e W

ig gs v . C ity o

f P h o e n ix , 198 A r i z. 367, ¶ 17, 10 P. 3d 625, 629- 30 (2 0 0 0 ); S
. Cas
. Co. v. Hughes , 3 3 A riz . 2 0 6 , 2 1 8 -1 9 , 2 6 3 P . 5 8 4 , 5 8 8 -8 9 (1 9 2 8 ); B r uce Ch u r c h , I

n c . v . Un i t e d

Fa r m Wo rke rs o

f A m. , 169 A r i z. 22, 34- 35, 816 P. 2d 919, 931- 32 (A p p . 1 9 9 1 ); Lew i n v. Mi l l erW agner& Co. , 151 A r i z. 29, 34- 35, 725 P. 2d 736, 741- 42 ( A pp. 1986)
. T hes e ca s es ar e i nappos i t e, how ever , for i n none di d the appe l l at e courtent er j u d g me n ton a c o u n t e r c l a i m b e c a u s e o f t h e r e v e r s a l o f

t h e v e r d i c to n t h e p r i n c i p a l c l a i m. O n l y L e w in i nvol ved a c ount er cl ai m , w hi ch w entunchal l enged on a ppeal , al t hough t he d e f e n d a n t s wer e s u c c e s s f

u l i n t h e i ra t t e mptt o r e v e r s e a n d r e ma n d f o rn e w t r i a l a g e n e r al ver di ctagai ns tt hem i n t he pl ai nt i ffs ’ m al pr act i ce c l ai m . 151 A r i z. at37, 725 P. 2d at744. 20 f in d in g o n a se p a ra te c a u se o f a c tio n th a t K a m a n d id n o t b re a c h th e c o n tra c t. A B O R f a ils 10 to c ite a n ya u th o ritysu p p o rtin g its p o sitio n , an d w e d e c lin e to a g re e w ith it. 11 ¶34 M or e o v e r , t h e j u r ywas i n s t ru c t e d th a t“ [ t ] o s u c c e e d o n a b r e a c h o f cont r act cl ai m , t he part ybr i ngi ng t he cl ai m has the bur den of pr ovi ng t he exi s t ence of a contr act , t he ot hers i de’ s br eac h of the contr act , and thati thas i ncurr ed damages as a r es ul tof the other sid e ’s b re a c h .” A n d , itw a s to ld th a t “[ i]n o rd e r to re c o v e r d a m a g e s f o r b re a c h o f

c o n tra c t,
a par t y m us t pr ove t he amount of t hos e damages w i t h r eas onabl e cert ai nty . ” T hr oughoutt he t ri al , K am an ex t ensi velycross -exam i ned the w i t nesses A B O R had used to pr ov e i t s dam ages, in c lu d in g q u e stio n in g th e n e e d f o r v a rio u s e x p e n d itu re s, th e h o u r s A B O R h a d b ill e d in its effo rt s t o co m plet e K am an’s w ork, t he acc uracyof A B O R ’s est i m at es o f proj ect ed d am ages,21

and w hether s om e of t he suppl i es A B O R had or der ed coul d ot herw i s e be r eus ed byi t . A nd, d u ri n g clos ing arg u m en ts, K am an d ispu ted th e d am ag es claim ed b yA B O R , ca ll ing A B O R ’s est i m at es “i nh erent l yun rel i ab le,” an d g eneral l ydis pu t ed A B O R ’s dam age ca l culat i on s. W hetherA B O R had prove n i t s damages w i t h r eas onabl e ce r t ai ntyw as a mat er i al l ydi s put ed f a c t . F o ru s t o e n t e rj u d g me n ta s a ma t t e r o f l a w i n f a v o r o f AB OR o n i t s c o u n t e r c l a i m, we
w o u ld b e re q u ir e d to re s o lv e th e s e d is p u te d f a c ts . See Si lva v. D e Mund , 81 A r i z. 47, 53, 299 P. 2d 638, 642 ( 1956) ( “I f t he fact s ar e undi s put ed, [appe l l at e cour t ] w i l l di r ectthe r endi t i on
o f th e c o rre c t ju d g m e n t.”); Hen d erso n v. L a s C ru ce s P ro d
. C red it A ss’n , 6 A r i z. A pp. 549, 553, 435 P. 2d 56, 60 ( 1967) ( “W hen a r ecor d i s pr es ent ed t o an appe l l at e courtw hi ch l eave s
n o q u esti o n o f fa ct to be de term ined an d o n ly a qu esti o n o f l aw to be de term ined , this C o u rt
m ay d ir ectt he entr yof the j udgm entw hi ch s houl d have be en ent er ed i n the tr i al cou rt . ”). B eca us e the j ur ycoul d have c oncl uded A B O R h ad n o tpr oved K aman had br eac hed the contr act , had i t s el f br each ed t he contr act , orhad notbeen pe r s uaded byA B O R ’ s damages evi dence , ei t heral t ernat i vel yorcol l ect i vel y , w e ther efor e af fi r m the tr i al cour t ’ s deni al of A B O R ’s m o tio n f

o r a n e w tr ia l s o le ly as to d a m a g e s o n its c o u n te rc la im
. C r os s - A ppeal ¶35 O n cr os s - appea l , K aman cont ends t he t r i al courterr ed i n notaw ar di ng i t , as t he prevai l i ng party , at t orneyfees pu rs uan tt o A
. R
. S § 12-341
. 01
. S ect i on 12 -341.01 prov i des, i n r el evantpar tas fol l ow s: “I n anycont es t ed ac t i on ar i s i ng outof a c ontr act , expr es s or i m pl i ed, t he courtm ayaw ar d t he s ucce s s ful par t yr eas onabl e at t orney fee s . ” “The deci s i onK a m a n ’s c o m p lain t a lleg e d sp e c if ic d a m a g e s o f

a p p ro x im a tely$ 5 .9 m ill io n a s w e ll 12 as damages t o be det erm i ned att r i al
. K aman as ked t he j uryforappr oxi m at el y$2. 9 m i l l i on i n “[t ] o t a l d a ma g e s ” d u r i n g c l o s i n g a r g u me n t s . AB OR a s s e r t s i t a s k e d t h e j u r yfor app roxi m at el y$1 0. 8 m i l l i on du ri ng cl osi ng argum ents . 22 a s to w h o is th e su c c e ss f u l p a rty f o r pu rp o se s o f a w a rd in g a tto rn e y s’ f e e s is w ith in th e so le d isc re tio n o f

th e trial c o u rt, an d w ill n o t b e d istu rb e d o n a p p e a l if a n y re a so n a b le b a sis e x ists fori t . ” Sanbor n v. B r ooker& W ake Prop. M

gm t . , I nc . , 178 A r i z. 425, 430, 874 P. 2d 982, 9 8 7 (A p p . 1 9 9 4 ). ¶36 K a m a n a rg u e s tha t it w a s the p re v a ili n g p a rty b e c a u se it p re v a iled o n its c laim and on A B O R ’ s count er cl ai m . T he tr i al cour tr ej ect ed K aman’ s r eques tforatt orneyfee s and
cos t s , “dec l i n[i ng] t o fin d [it ] t he s ucce s s ful par t yaft eri ts oughti n exce s s of Si x M i l l i on D o ll ars a n d it o b tai n ed ze ro. W h il e it is true that [it ] suc ce ssf u ll yd ef en d ed the U n iversity ’s
c laim , the e v id e n c e [ a n d ] w o rk w a s in ter tw in e d . A c c o r d in g ly, [ t]h e C o u rt b e liev e s th is
m at t eres s ent i al l yended i n a dr aw . ” I n l i ghtof o u r re ver s al of the aw ar d i n favorof 12 K a m a n o n its b re a c h o f c o n tra c t c laim , it is n o lo n g e r th e p re v a ili n g p a rty o n its c laim , so th is iss u e is m o o t. ¶37 B eca us e w e r ever s e the j ury ’ s ver di cti n favor of K aman on i t s cl ai m , nei ther par t yhas pr evai l ed on thei rr es pect i ve clai m s . I n s i m i l arfac tual s i tuat i ons w her e nei ther p a rtyp re v a iled o n its c laim a t trial, ap p e llate c o u rts h a v e f o u n d a tr ia l co u rt’s r e f u sa l to
a w a rd a tto rn e yf

e e s p ro p e r. G en. C abl e C or p. v. C i t iz ens Ut i l i t i es C o. , 27 A r i z. A pp. 381, 385, 555 P. 2d 350, 354 ( 1976) ( “U ndert he fa ct s of thi s cas e, w her e a c om pl ai nt s eeks gr eat er23

damages t han the count er cl ai m and the tr i al cour thas deni ed r el i ef t o both par t i es , w e fi nd th a t n e ith e r p a rtyis th e ‘su c c e s s f u l p a rty ’ u n d e r th e p ro v isio n s o f § 1 2 -3 4 1 .”); see al

so C oldw el lB an ker C om m erci al G roup , Inc. v. C am el ba ck O f f i ce P ark , 156 A r i z. 214, 223- 24, 751 P. 2d 530, 539- 40 ( A pp. 1987) ( fi ndi ng i t pos s i bl e t o have no s ucce s s ful par t yw hen one p a rt yp re v a il s o n c o m p la in t a n d o th e r p a rt yp re v a ils o n c o u n te rc la im ), vacated i n par ton othergr ounds , 1 5 6 A riz . 2 2 6 , 7 5 1 P .2 d 5 4 2 (1 9 8 8 ). T h e trial c o u rt d id n o t ab u se its d is c re tio n in d e c lin in g to a w a rd a tto rn e y f e e s to K a m a n . See Sa nb orn , 178 A r i z. at430, 874 P. 2d at987. D i s posi t i on ¶38 W e r ever s e the j udgm ent i n favor of K aman on i t s br eac h of contr actcl ai m but aff i r m t he j udgm enti n i t s favor on A B O R ’ s br eac h of contr actcount er cl ai m . W e af fi r m t he t r i al cour t ’ s deci s i on t o denyK aman’ s r eques tforat t orneyfee s . B oth s i des have s ought at t or neyfee s on appea l pur s uantt o § 12- 341. 01 and R ul e 21( c) , A r i z. R
. C i v. A pp. P. , 17B A .R .S . In o u r d is c re tio n , w e d e n yth e p a rt ie s ’ r e q u e s ts f o r a n a w a rd o f

a tto rn e yf

e e s .

J
. W I L L I A M B R A M M E R , J R
. , J udge CO NC UR RI NG:

J O SE PH W
. H O W A R D , Pr es i di ng J udge
J O H N PE L A N D E R , C hi ef J udge