Court Opinion

ID: 3210089
Source: CourtListenerOpinion
Date Created: 2016-06-07 17:02:37.125936+00
Date Added: 2024-06-11T14:03:28.921302
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
       UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
          PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                    IN THE
            ARIZONA COURT OF APPEALS
                                DIVISION ONE

BLACKHAWK INC. PROFIT SHARING PLAN, an Arizona corporation,
its heirs and assign, ARIZONA CASITAS ACQUISITION, LLC, a limited
                   liability company, Plaintiffs/Appellants,

                                       v.

  CHARLES MCCOMB and DOLORES MCCOMB, husband and wife,
                  Defendants/Appellees.

                            No. 1 CA-CV 15-0064
                              FILED 6-7-2016

          Appeal from the Superior Court in Maricopa County
                         No. CV2012-001926
            The Honorable Christopher T. Whitten, Judge

                                 AFFIRMED

                                  COUNSEL

Law Office of Thomas F. Harper PC, Scottsdale
By Thomas F. Harper
Counsel for Plaintiffs/Appellants

Fidelity National Law Group, Phoenix
By Patrick J. Davis, David M. LaSpaluto
Counsel for Defendant/Appellee Dolores McComb
                    BLACKHAWK et al. v. MCCOMB
                        Decision of the Court

                     MEMORANDUM DECISION

Judge Samuel A. Thumma delivered the decision of the Court, in which
Presiding Judge Kent E. Cattani and Judge Randall M. Howe joined.

T H U M M A, Judge:

¶1           Plaintiffs Blackhawk Inc. Profit Sharing Plan and Arizona
Casitas Acquisition, LLC (collectively Blackhawk) appeal from the grant of
summary judgment in favor of Dolores McComb (McComb) on
Blackhawk’s claims for ejectment and quiet title and McComb’s adverse
possession counterclaim. Because Blackhawk has shown no error, the
judgment is affirmed.

                FACTS1 AND PROCEDURAL HISTORY

¶2            This case addresses the title to “Unit B, Lot 2 of Casitas
Tempe” (the Property). The Property is part of a parcel that was subdivided
in 1978, with the original owner building townhomes and issuing a 99-year
ground lease for each subdivided lot. At that time, the owner recorded a
memorandum of lease summarizing the ground lease.

¶3             The leasehold on the Property changed hands several times
over the next decades. Recorded assignments of the ground lease
accompanied some of these conveyances. The original owner conveyed its
interest in the Property to Blackhawk in 1997.

¶4           After conveyances in 2001 and 2003, Toby and Louise
Campbell, husband and wife, accepted and held an assignment of the
ground lease jointly. In July 2006, pursuant to a contract of sale, the
Campbells conveyed the Property to Charles, Dolores, Kenneth and Lisa
McComb via a recorded warranty deed that was recorded at the request of
a title company. The McCombs were not assigned, and did not accept an

1  Although the superior court resolved cross-motions for summary
judgment, this court “view[s] the evidence and reasonable inferences in the
light most favorable to” Blackhawk. Andrews v. Blake, 205 Ariz. 236, 240 ¶
12 (2003). In addition, although McComb’s ex-husband Charles was named
as a defendant, he was never served, was later dismissed as a party and is
not a part of this appeal.

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                    BLACKHAWK et al. v. MCCOMB
                        Decision of the Court

assignment for, the ground lease. By 2010, as a result of other transfers,
Dolores was the sole owner of the property transferred by the July 2006
recorded warranty deed.

¶5             According to Blackhawk, the Campbells were current on their
rent at the time of the July 2006 warranty deed to the McCombs. Between
2008 and 2011, Blackhawk sent several rent invoices to the McCombs that
were never paid. In June 2011, Blackhawk gave Dolores “notice that she was
not the owner of the [Property] and, in order to continue to stay in
possession of the [Property], she would have to pay rent.” McComb,
however, never paid any rent to Blackhawk.

¶6             Blackhawk sued in February 2012 to eject McComb from the
Property, later adding a quiet title claim. McComb counterclaimed, alleging
she acquired title to the Property by adverse possession after possessing the
Property for five years under a duly recorded deed. See Ariz. Rev. Stat.
(A.R.S.) § 12-525 (2016).2

¶7           Following discovery, Blackhawk moved, and McComb cross-
moved, for summary judgment. After full briefing and oral argument, the
superior court granted summary judgment for McComb and against
Blackhawk, stating:

              Campbell could not legally grant McComb a
              deed transferring a greater interest than he
              possessed. The fact is, however, that he did
              precisely that, and McComb has ever since
              possessed the property openly and notoriously
              on the basis of a fee simple title ostensibly
              granted by that deed.

              …

              Campbell, as a tenant, could not assert title
              adverse to his landlord. But McComb was not a
              tenant: she never signed a lease, she never paid
              rent, and she never in any other way
              acknowledged holding the property at the
              sufferance of a lessor.

2Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated.

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                     BLACKHAWK et al. v. MCCOMB
                         Decision of the Court

The court entered judgment pursuant to Ariz. R. Civ. P. 54(c) awarding fee
title to the Property to Dolores by adverse possession dating back to the
July 2006 recorded warranty deed and awarding McComb $70,686 in
attorney’s fees and $4,300.78 in costs. This court has jurisdiction over
Blackhawk’s timely appeal pursuant to A.R.S. §§ 12-120.21(A)(4) and -
2101(A)(1).

                               DISCUSSION

¶8            Summary judgment is proper “if the moving party shows that
there is no genuine dispute as to any material fact and the moving party is
entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). This court
reviews the entry of summary judgment de novo, to determine “whether
any genuine issues of material fact exist,” Brookover v. Roberts Enters., Inc.,
215 Ariz. 52, 55 ¶ 8 (App. 2007), and will affirm if summary judgment is
correct for any reason, Hawkins v. State, 183 Ariz. 100, 103 (App. 1995).

I.     The Superior Court Correctly Ruled That McComb Adversely
       Possessed the Property.

¶9          The superior court found McComb adversely possessed the
Property under A.R.S. § 12-525, which provides:

              An action to recover real property from a person
              in peaceable and adverse possession, and
              cultivating, using or enjoying the property, and
              paying taxes thereon, and claiming under a
              deed or deeds duly recorded, shall be
              commenced within five years after the cause of
              action accrues, and not afterward.

On appeal, Blackhawk challenges the finding that McComb peaceably and
adversely possessed the Property.3

3 Blackhawk does not, on appeal, challenge the other requirements for
adverse possession, and the record supports the superior court’s findings
as to those requirements. Blackhawk also concedes on appeal that the July
2006 warranty deed was “duly recorded” as required by A.R.S. § 12-525. See
River Farms, Inc. v. Fountain, 21 Ariz. App. 504, 508 (1974)

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                     BLACKHAWK et al. v. MCCOMB
                         Decision of the Court

       A.     McComb Established “Peaceable And Adverse Possession.”

¶10           “Adverse possession” is “an actual and visible appropriation
of the land, commenced and continued under a claim of right inconsistent
with and hostile to the claim of another.” A.R.S. § 12-521(A)(1). “Peaceable
possession” is “continuous, and not interrupted by an adverse action to
recover the estate.” A.R.S. § 12-521(A)(2). McComb had the burden to show
such possession. Tenney v. Luplow, 103 Ariz. 363, 366 (1968).

¶11             McComb’s possession was peaceful; she took possession of
the Property in 2006, and Blackhawk did not sue to recover it until February
2012, more than five years later. For her possession to be adverse, McComb
had to show that it was “actual, open and notorious, hostile, under a claim
of right and . . . exclusive and continuous” during that time. Lewis v. Pleasant
Country, Ltd., 173 Ariz. 186, 189 (App. 1992); A.R.S. § 12-525. McComb met
this burden. McComb presented evidence that she: (1) never accepted an
assignment of the lease from either Blackhawk or the Campbells, (2) never
paid rent despite Blackhawk’s demands, (3) pledged the Property as
security for a mortgage, (4) allowed her son to live at the Property from 2006
to 2009, and (5) rented the Property to various tenants after that time.

¶12            Blackhawk did not dispute this evidence. Blackhawk,
however, argues McComb’s possession was not adverse because she had
constructive notice of the ground lease via the recorded memorandum of
lease. See A.R.S. § 33-416. Blackhawk also argues McComb’s realtor and title
company knew of the ground lease because it was mentioned in the listing
for the Property, among other places, and that their knowledge should be
imputed to McComb. See Manley v. Ticor Title Ins. Co. of Cal., 168 Ariz. 568,
572 (1991) (“The general rule, of course, is that knowledge acquired by an
agent in the course of employment is imputed to the principal.”).

¶13             The record is unclear whether such knowledge, particularly
the title company’s knowledge, should be imputed to McComb. Even if it
should, however, McComb’s awareness of the ground lease is not
dispositive. Blackhawk did not offer any evidence to show McComb ever
acknowledged she was subject to the ground lease. See Lewis, 173 Ariz. at
190 (“In order for a possession to be permissive, the possessor must
acknowledge that he holds the property in subordination to the owner’s
title.”).4 Similarly, although Blackhawk contends that McComb’s claim of

4In fact, Blackhawk admitted knowing for some time that the McCombs
had not accepted an assignment of the ground lease.

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                     BLACKHAWK et al. v. MCCOMB
                         Decision of the Court

right was not made in good faith and that McComb is not a bona fide
purchaser for value, A.R.S. § 12-525 does not contain such requirements. See
Lewis, 173 Ariz. at 192 (“[A] claim of right is nothing more than the intention
of the party in possession to appropriate and use the land as his own to the
exclusion of others irrespective of any semblance or shadow of actual title
or right”) (quoting Higginbotham v. Kuehn, 102 Ariz. 37, 38 (1967)).
Accordingly, on this record, the superior court also correctly concluded
McComb’s possession of the Property was adverse to Blackhawk. See id. at
191 (“[A] person may bring an adverse possession claim regardless of how
he came into possession of the property.”).

       B.     McComb Did Not Take Possession Of The Property As A
              Tenant.

¶14           Blackhawk next contends that McComb took possession of
the Property as a tenant under a lease, making adverse possession
inapplicable:

              When a person enters into possession of real
              property under a lease, he may not, while in
              possession, deny the title of his landlord in an
              action brought upon the lease by the landlord or
              a person claiming under him.

A.R.S. § 33-324. McComb, however, did not take possession as a tenant
under a lease; she took possession under a warranty deed as a result of a
contract of sale. See Lewis, 173 Ariz. at 190 (finding A.R.S. § 33-324 did not
apply because the adverse possessor “came into possession . . . under a
contract of sale and not under a lease agreement”).5 Moreover, as noted
above, Blackhawk did not offer any evidence to show that McComb ever
acknowledged she was subject to the ground lease.

¶15           Blackhawk also argues McComb took possession as a tenant
because the warranty deed could not convey any interest greater than the
Campbells’ leasehold. A.R.S. § 33-433 (addressing effect “of alienation
purporting to pass greater right than possessed by person making
alienation”). McComb, however, did not obtain fee simple title through the
warranty deed; she did so by meeting the requirements for adverse

5 Blackhawk’s companion argument (that McComb failed to “convert her
tenancy to a hostile and adverse possession” because McComb never
overtly rejected or repudiated the lease) also fails. McComb did not have to
reject or repudiate a lease she never entered into or accepted.

                                      6
                    BLACKHAWK et al. v. MCCOMB
                        Decision of the Court

possession under A.R.S. § 12-525. See Phx. Jewish Cmty. Council v. Leon, 102
Ariz. 187, 190 (1967) (noting where elements of adverse possession claim
are otherwise met, “it matters not whether [the claimant] made her initial
entry as a tenant or as a purchaser”).

      C.     Blackhawk Held A Present Interest In The Property Subject
             To Adverse Possession.

¶16           Blackhawk contends it only held a future expectancy interest
in the Property that could not be extinguished via adverse possession. See
A.R.S. § 33-225 (discussing “indefeasibility of expectant estates” in Article
2, which discusses future interests). But Blackhawk alleged in its verified
amended complaint that “the Premises were, and continue to be, owned by
. . . Blackhawk” and that McComb “willfully refused to pay rent … and has
remained in possession . . . despite receiving notice that Blackhawk is the
owner of the Premises.” Moreover, Blackhawk sought to eject McComb,
negating any claim that it lacked a present interest in the Property.
Blackhawk cannot be heard to contradict its own verified allegations on
appeal. Armer v. Armer, 105 Ariz. 284, 288 (1970).

¶17        For these reasons, the superior court did not err by granting
summary judgment on McComb’s adverse possession claim.

II.   The Superior Court Did Not Abuse Its Discretion By Awarding
      McComb Attorneys’ Fees.

¶18           A fee award under A.R.S. § 12-341.01(A) is reviewed for an
abuse of discretion and will be affirmed unless the award lacks any
reasonable basis. Hawk v. PC Vill. Ass’n, Inc., 233 Ariz. 94, 100 ¶ 19 (App.
2013). Blackhawk first contends McComb should not recover fees because
her title company paid the fees. Blackhawk provides no authority
supporting that contention. Moreover, the mere fact that a third party may
reimburse or pay a party’s attorney’s fees does not disqualify a fee award
under A.R.S. § 12-341.01(A). Wilcox v. Waldman, 154 Ariz. 532, 538 (1987);
Catalina Foothills Ass’n v. White, 132 Ariz. 427, 428 (App. 1982).

¶19           Blackhawk also argues it should not be liable for McComb’s
fees because “the events leading to this lawsuit were caused by the title
insurance agency when it failed to find the recorded” memorandum of
lease. Blackhawk cites no record evidence or legal authority supporting this
argument. Accordingly, Blackhawk has not shown the superior court erred
in awarding fees to McComb. Polanco v. Indus. Comm’n, 214 Ariz. 489, 491
n.2 ¶ 6 (App. 2007).

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                     BLACKHAWK et al. v. MCCOMB
                         Decision of the Court

III.   McComb May Recover Reasonable Attorneys’ Fees And Costs On
       Appeal.

¶20           McComb requests attorneys’ fees and costs on appeal under
A.R.S. §§ 12-341 and -341.01. Blackhawk concedes its claims against
McComb arose from a contract, namely, the ground lease. See Marcus v. Fox,
150 Ariz. 333, 336 (1986) (stating that an action to invalidate an alleged
contract is “one ‘arising out of a contract’ within the meaning of § 12-
341.01(A)”). However, an adverse possession claim does not arise out of
contract. Herzog v. Boykin, 148 Ariz. 131, 133-34 (App. 1985).

¶21             A party that succeeds on a contract claim, as McComb did
here, can recover fees on interwoven claims. Ramsey Air Meds, L.L.C. v.
Cutter Aviation, Inc., 198 Ariz. 10, 13 ¶ 17 (App. 2000). Claims are interwoven
if they are based on the same set of facts and involve common allegations
that require the same factual and legal development. Skydive Ariz., Inc. v.
Hogue, 238 Ariz. 357, 369 ¶ 52 (App. 2015). McComb’s adverse possession
counterclaim overlapped substantially with her defenses to Blackhawk’s
contract claim. See Hiatt v. Shah, 238 Ariz. 579 ¶ 18 (App. 2015) (“When the
contract in question is central to the issues of the case, it will suffice as a
basis for a fee award.”) (quoting In re Larry’s Apartment, L.L.C., 249 F.3d 832,
836–37 (9th Cir. 2001)). Accordingly, on the record presented, McComb is
awarded taxable costs pursuant to A.R.S. § 12-341, and this court exercises
its discretion and awards McComb reasonable attorneys’ fees on appeal
pursuant to A.R.S. § 12-341.01, contingent upon her compliance with
Arizona Rule of Civil Appellate Procedure 21.

                               CONCLUSION

¶22           The judgment is affirmed.

                                    :AA

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