Court Opinion

ID: 9323918
Source: CourtListenerOpinion
Date Created: 2022-12-08 19:02:34.518977+00
Date Added: 2024-06-11T17:14:51.137169
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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

              PAUL J. GREENWELL, et al., Plaintiffs/Appellants,

                                         v.

                    JANETTE ALLEN, Defendant/Appellee.

                              No. 1 CA-CV 22-0074
                                FILED 12-8-2022

           Appeal from the Superior Court in Maricopa County
                          No. CV2019-054427
          The Honorable Sally Schneider Duncan, Judge (Retired)

            REVERSED IN PART AND AFFIRMED IN PART

                                    COUNSEL

Paul J. Greenwell, Phoenix
Plaintiff/Appellant/Counter-defendant

Barbara Greenwell, Phoenix
Plaintiff/Appellant/Counter-defendant

The Kozub Law Group PLC, Scottsdale
By William A. Kozub
Counsel for Defendant/Appellee/Counter-claimant
                      GREENWELL, et al. v. ALLEN
                         Decision of the Court

                      MEMORANDUM DECISION

Judge Randall M. Howe delivered the decision of the court, in which
Presiding Judge David D. Weinzweig and Judge D. Steven Williams joined.

H O W E, Judge:

¶1            Paul and Barbara Greenwell appeal the trial court’s granting
Janette Allen summary judgment.1 For the following reasons, we reverse in
part and affirm in part.

                FACTS AND PROCEDURAL HISTORY

¶2             In January 2019, Barbara and Janette formed
member-managed Home Options Design Bar, LLC (“Home Options”) to
operate an interior design business. Barbara and Janette were the only
members, and Janette was also the statutory agent. Paul was not expected
to take part in operating the business. Janette owned a commercial building
in Scottsdale, where she and Barbara intended to operate the business.
Before the business opened, Paul renovated the building, changing out the
restroom sink and toilet, hanging tile, and installing hardwood. He also
built displays in the showroom. The parties never executed a written
agreement, and Janette believed that Paul had been paid hourly. Paul
believed his uncompensated work was “a fair trade off for the rent.” He
“worked from 7 to 4, 6 days a week (often 7) without pay.” Paul
acknowledged that Janette “placed a value of around $3,000 to $4,000 a
month on the rent, [he] placed a similar value on [his] labor.” Barbara and
Janette had split some renovation costs evenly. The parties did not have a
lease agreement, nor was one proposed. Renovations lasted from January
through June 2019.

¶3            In June 2019, Janette emailed the Greenwells terminating the
business for their failure to pay rent from January through June. The email
further stated that the Greenwells had conducted business outside of the
parties’ agreement despite their fifty-fifty arrangement, which Janette
claimed showed that the parties had not established an agreement for
running the business. Janette notified the Greenwells that they could

1     We respectfully refer to all the parties by their first names to avoid
confusion.

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remove their personal property from the building by July 2. Janette sent
another email asking the Greenwells to remove their personal property.
They responded that, “[i]t is not possible to have the items removed by July
2” and did not collect their property.

¶4            On June 28, Janette posted a lock-out notice against the
Greenwells but gave them an opportunity to collect their personal property
through professional movers. They never collected their property. In
August, Janette’s sister texted the Greenwells that they could remove their
property from the building. They declined, claiming that one day’s notice
was not enough time to gather movers and trucks. They stated that they
would “go to work on a plan for next week.” Several days later, the
Greenwells notified Janette’s sister that they could not “pick up the
furniture yet, [t]here are issues to be resolved with this matter.” Instead of
collecting their property, the Greenwells, through the Arizona Justice
Center, demanded reimbursement from Janette for renovation and labor
costs in the amount of $8,063.34 with 15 days to collect their personal
property from the building.

¶5            Janette asked them again in a September email to collect their
personal property, giving them a three-hour window on three separate
dates that month. She stated, “Failing to respond or arrange for removal of
their items by the dates noted above will be confirmation that they no
longer want their belongings and I will be forced to arrange for the items to
be discarded as I need to empty the space in preparation for leasing.”
Several days later, Janette followed up with an email that the Greenwells’
fireplace would be “disassembled for [their] movers simply to load as early
as this morning.” Paul responded that “[t]he requests to remove our items
have not been acknowledged owing to the obvious and intentional
impossibility.” He listed time constraints and lack of manpower as reasons.
In October, Janette disposed of their personal property.

¶6            Without stating clear claims, the Greenwells sued Janette for
$8,063.43 in reimbursement for renovations to the building and return of
their personal property or its equivalent value of $40,656.35. Janette
simultaneously counterclaimed, alleging that the parties had orally agreed
to pay half of the $4,000 monthly rent, which the Greenwells did not pay.
She alleged that they owed $12,000 in unpaid rent from the commencement
of the business in January 2019 through June 2019.

¶7            The parties disputed whether they agreed to split the $4,000
monthly rent of the building. Janette alleged that they had agreed to split
the rent equally. The Greenwells alleged that the parties had agreed to defer

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                         Decision of the Court

rent collection until the business commenced. They also alleged that Janette
never requested rent from them, nor did the parties put money towards
rent, although the Greenwells paid Janette for utilities and building
expenses. Meanwhile, Janette had listed the building for rent and alleged
that the parties agreed that the business would move to another location
once a third-party tenant was found. The parties also disputed whether
Home Options would move locations once the building was rented to a
third party. Janette stated that Home Options began operating in January
2019, while the Greenwells attested that Home Options would not begin
operating until June 2019 after the renovations.

¶8             The court found that the case was subject to arbitration.
Because no specific causes of action were pled, the arbitrator had to identify
the causes of action, which it found were breach of contract, breach of
fiduciary duty, and deprivation of property. The arbitrator found for
Janette, reasoning that the Greenwells failed to demonstrate that (1) a
contract existed between the parties, (2) Janette had breached her fiduciary
duty to the Greenwells, and (3) Janette had converted the Greenwells’
property. The arbitrator dismissed the Greenwells’ complaint without
prejudice. The Greenwells appealed the arbitration award, requesting the
case be set for trial.

¶9             Janette did not move for summary judgment until August
2021, eight months after the parties’ dispositive motion deadline. She
argued that the Greenwells’ $8,063.34 reimbursement claim was barred
because Paul was not a licensed contractor, the Greenwells should have
sued Home Options because they contributed their personal property to the
business, and the Greenwells abandoned this property, thus precluding
their conversion claim. The Greenwells responded that Paul “had no direct
interest in Home Options other than helping to see that his wife’s new
business venture was successful.” They also attested that Paul was not a
licensed contractor, but that the Greenwells, Janette, Janette’s sister, and
Janette’s boyfriend all worked together to complete the renovations. They
also attested that Barbara and Janette agreed to split the renovation costs in
half. The Greenwells amended their response to argue that Janette moved
for summary judgment and filed her affidavit in bad faith. Specifically, they
argued that she lied in her affidavit and moved for summary judgment to
delay the proceeding because she previously had evaded service.

¶10          During oral argument, Janette conceded that the motion was
untimely and had not requested permission to extend the time. The court
granted Janette summary judgment, finding no prejudice from the untimely
motion, and stating that the Greenwells could not recover for the

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                          Decision of the Court

renovations because they were not licensed contractors. The court also
found that the Greenwells abandoned their personal property after having
“ample notice” to remove it, eliminating their conversion claim. The
Greenwells moved for reconsideration, which the court denied. The
Greenwells timely appealed.

                                DISCUSSION

¶11            The Greenwells argue that (1) Janette’s motion for summary
judgment was untimely and filed in bad faith, (2) they are entitled to
reimbursement for supplying materials and renovating Janette’s building,
and (3) Janette converted their personal property. We review a grant of
summary judgment de novo, “viewing the facts and inferences in the light
most favorable to the non-prevailing party.” Hale v. Window Rock Unified
Sch. Dist., 252 Ariz. 420, 423 ¶ 6 (App. 2021) (quoting BMO Harris Bank N.A.
v. Wildwood Creek Ranch, LLC, 236 Ariz. 363, 365 ¶ 7 (2015)). A court properly
grants summary judgment if no genuine dispute of material fact exists and
“the moving party is entitled to judgment as a matter of law.” Ariz. R. Civ.
P. 56(a). A trial court should grant summary judgment “if the facts
produced in support of the claim or defense have so little probative value,
given the quantum of evidence required, that reasonable people could not
agree with the conclusion advanced by the proponent of the claim or
defense.” Orme Sch. v. Reeves, 166 Ariz. 301, 309 (1990).

I.            Preliminary Matters

¶12             As a threshold matter, the Greenwells argue that Janette’s
motion for summary judgment was untimely and that the court did not
“state on the record the reasons for granting or denying the motion.” Ariz.
R. Civ. P. 56(a). First, even though Janette’s motion was untimely, the court
did not err in ruling on the motion. The trial court has discretion to grant
extensions for filing motions. See State v. Colvin, 231 Ariz. 269, 271 ¶ 7 (App.
2013) (The trial court has “discretion to extend the time for filing motions
and, implicitly, to hear untimely motions.”). “A summary judgment motion
may not be filed later than the dispositive motion deadline set by the court
or local rule, or absent such a deadline, 90 days before the date set for trial.”
Ariz. R. Civ. P. 56(b)(3). Here, the dispositive motion deadline was
December 1, 2020. Janette moved for summary judgment in August 2021
and had not first requested an extension. Although the trial court found the
motion untimely, it found that the Greenwells were not prejudiced and
ruled on the motion. They had opportunity to respond to the motion and
file their affidavit and exhibits. Because the record shows no prejudice and
the Greenwells have not argued that they were prejudiced, the court did

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                          Decision of the Court

not err. See Wilson v. Savon Stations, Inc., 15 Ariz. App. 136, 136–37 (App.
1971) (holding no error for trial court’s grant of untimely motion for
summary judgment because the record showed no prejudice; the plaintiffs
had opportunity to oppose the motion via oral testimony).

¶13            Second, the court did state its reasons on the record at the
hearing, even if not in its written ruling, which satisfies Rule 56(a). Cf.
Kopacz v. Banner Health, 245 Ariz. 97, 102 ¶ 21 (App. 2018) (holding that the
court satisfied Rule 56(a) although it stated its reason for granting summary
judgment in the minute entry rather than on the record). The court therefore
did not err.

¶14             The Greenwells also argue that Janette filed her motion for
summary judgment and affidavit in bad faith, lying to the court and
delaying proceedings by avoiding a jury trial. But the trial court granted
summary judgment, which defeats any argument that the motion was filed
in bad faith. See In re Ghostley, 248 Ariz. 112, 117 ¶ 21 (App. 2020) (stating
that our function is not “to reweigh the facts or to second-guess the
credibility determinations of the judge who had the opportunity to evaluate
the witnesses’ demeanor and make informed credibility determinations).
And prevailing on summary judgment “does not deprive a plaintiff of his
constitutional rights to a jury trial because, in such cases,” no genuine issues
of fact exist for a jury to consider. Cagle v. Carlson, 146 Ariz. 292, 298 (App.
1985). Further, the Greenwells argue that Janette made false statements in
her affidavit that they identified in their amended response to Janette’s
motion. But the statements that the Greenwells identified, though they are
disputed, are not material or relevant to the relief sought. The court did not
err in ruling on the motion for summary judgment.

II.           Reimbursement for contracting work

¶15          With the possible exception of certain items, the trial court
properly granted Janette summary judgment on the Greenwells’ claim
requesting reimbursement of $8,063.34 in renovation expenses. A
contractor shall not

       commence or maintain any action in any court of the state for
       collection of compensation for the performance of any act for
       which a license is required by this chapter without alleging
       and proving that the contracting party whose contract gives
       rise to the claim was a duly licensed contractor when the
       contract sued upon was entered into and when the alleged
       cause of action arose.

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                       GREENWELL, et al. v. ALLEN
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A.R.S. § 32–1153. A contractor is a person who

       for compensation, undertakes to or offers to undertake to,
       purports to have the capacity to undertake to . . . does himself
       or by or through others, or directly or indirectly supervises
       others to . . . [c]onstruct, alter, repair, add to, subtract from,
       improve, move, wreck or demolish any building . . . or other
       structure, project, development or improvement, or to do any
       part thereof . . . .

A.R.S. § 32–1101(A)(3)(a)(i). “[T]he purpose of [A.R.S.] § 32–1153 is to
protect the public from unscrupulous, unqualified, and financially
irresponsible contractors.” Aesthetic Prop. Maintenance Inc. v. Capitol Indem.
Corp., 183 Ariz. 74, 77 (1995). An unlicensed contractor may recover if he
“furnishes finished products, materials or articles of merchandise” and
“does not install or attach such items or installs or attaches such items if the
total value of the sales contract or transaction involving such items and the
cost of the installation or attachment of such items to a structure does not
exceed $1,000, including labor, materials and all other items.” A.R.S.
§ 32–1121(A)(4); Butch Randolph & Assocs. Inc. v. Int’l Fid. Ins. Co., 212 Ariz.
550, 552 ¶¶ 10–11 (App. 2006).

¶16            Here, the record supports that Paul engaged in contracting
work in renovating Janette’s property, rendering him a contractor for
purposes of the Greenwells’ collection claim. The contracting work
included building displays in the showroom, changing out the restroom
sink and toilet, hanging tile, and installing hardwood. The Greenwells do
not dispute that Paul did not have a contractor’s license. The Greenwells
alleged in their complaint that Paul “would renovate the suite at no labor
cost, and in exchange [Janette] would defer rent collection until the business
was up and running and generating revenue.” Neither did Paul’s work fall
under the licensure exemption because he installed items that along with
materials and labor totaled over $8,000. Thus, without a license, Paul may
not maintain an action in court to collect for costs associated with the
renovation.

¶17            The Greenwells argue that Janette was unjustly enriched. An
unjust enrichment claim requires proof of “(1) an enrichment, (2) an
impoverishment, (3) a connection between the enrichment and
impoverishment, (4) the absence of justification for the enrichment and
impoverishment, and (5) the absence of a remedy provided by law.” Perdue
v. La Rue, 250 Ariz. 34, 42 ¶ 31 (App. 2020) (quoting Wang Elec., Inc. v. Smoke
Tree Resort, LLC, 230 Ariz. 314, 318 ¶ 10 (App. 2012)). But unlicensed

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contractors may not recover under an equitable remedy such as unjust
enrichment. Chavira v. Armor Designs of Del., Inc., 238 Ariz. 48, 49 ¶ 9 (App.
2015) (stating that “the court cannot use concepts of equity to allow an
unlicensed contractor to sue to collect payment”); see Span v. Maricopa Cnty.
Treasurer, 246 Ariz. 222, 227 ¶ 15 (App. 2019) (stating that unjust enrichment
is an equitable remedy). As a matter of law, the Greenwells are not entitled
to recover for the contracting work to Janette’s building.

¶18            However, although the trial court properly granted summary
judgment on these grounds, certain expenses that make up the Greenwells’
requested $8,063.34 do not fall under A.R.S. § 32–1153’s scope, including
payment for candles, internet, and the Arizona transaction privilege tax
license. Thus, a genuine dispute does exist about which expenses of the total
$8,063.34 fall outside the scope of A.R.S. § 32–1153, and whether the
Greenwells are entitled to recover for them. We therefore remand for the
trial court to make this determination.

¶19            Janette argues that the Greenwells’ claim against her is barred
because of their legal relationship as members of Home Options. But a
member of an LLC may “maintain a direct action against another member
. . . to enforce the member’s rights and protect the member’s interests,
including rights and interests . . . arising independently of the membership
relationship.” A.R.S. § 29–3801. This action against Janette is therefore
proper.

¶20            Janette also argues that A.R.S. § 29–3403 bars the Greenwells
from suing her to enforce her contribution to Home Options because they
do not have an operating agreement. But the Greenwells seek
reimbursement from Janette for their expenses toward Home Options. Cf.
A.R.S. § 29–3403(A) (“A person’s obligation to make a contribution to a
limited liability company is not enforceable unless the obligation is set forth
in a record signed by the person.”). Thus, their claim is not barred, and we
remand.

II.           Conversion

¶21            The court also properly granted Janette summary judgment
on the Greenwells’ conversion claim. “Conversion is an intentional exercise
of dominion or control over a chattel which so seriously interferes with the
right of another to control it that the actor may justly be required to pay the
other the full value of the chattel.” Miller v. Hehlen, 209 Ariz. 462, 472 ¶ 34
(App. 2005) (quoting Restatement (Second) of Torts § 222A(1) (1965)). But a
conversion action cannot stand where a party abandons their property. See

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Strawberry Water Co. v. Paulsen, 220 Ariz. 401, 408 ¶ 16 (App. 2008) (holding
that water company had standing to bring conversion action because
abandonment was not alleged). A party abandons personal property by
“voluntarily and intentionally giv[ing] up a known right.” Grande v.
Jennings, 229 Ariz. 584, 588 ¶ 13 (App. 2012). The party asserting
abandonment must affirmatively prove it by clear and convincing evidence,
Paulsen, 220 Ariz. at 408 ¶ 16, and can prove intent through words or
conduct, Montano v. Luff, 250 Ariz. 401, 405 ¶ 13 n.6 (App. 2020).

¶22            Here, the record supports that the Greenwells abandoned
their personal property. Janette gave them several opportunities to pick up
their property between June and September. But they did not do so. Even
when a letter from the Arizona Justice Center on behalf of the Greenwells
demanded that they have 15 days to collect their property, they never
followed through. Later, in Janette’s response, she notified the Greenwells
that if they failed to remove their property, she would discard it. The
Greenwells gave reasons for not retrieving their property, such as lack of
time and manpower, but they do not dispute that they were notified to
retrieve their property, nor do they claim that they attempted to retrieve the
property. Although the Greenwells argue that Janette placed limitations on
the timing of their property retrieval and who was permitted in the
building, their responses and failure to act demonstrate their intent to
abandon the property. No genuine dispute of material fact exists on this
claim, and as a matter of law, the Greenwells are not entitled to recover their
abandoned property or an amount equivalent to it.

¶23            The Greenwells also argue that Allen performed an illegal
lock-out because the parties did not have a lease, Janette had never
requested rent, and she locked them out four days earlier than the initial
vacate date. They raise this argument in service of their conversion claim.
Regardless whether they had a lease, the lock-out would be proper. Allen
owned the building, and the Greenwells had no right or title to it, whether
as a tenant or otherwise. See A.R.S. § 33–361(D) (“If the tenant refuses or
fails to pay rent owing and due, the landlord shall have a lien on and may
seize as much personal property of the tenant located on the premises and
not exempted by law as is necessary to secure payment of the rent.”). The
court, therefore, did not err.

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              GREENWELL, et al. v. ALLEN
                 Decision of the Court

                      CONCLUSION

¶24   For the reasons stated, we reverse in part and affirm in part.

                   AMY M. WOOD • Clerk of the Court
                   FILED: AA

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