Court Opinion

ID: 9534154
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:37:14.145249+00
Date Added: 2024-06-11T13:29:44.341386
License: Public Domain

GRANT, Judge,
concurring in part, dissenting in part.
I concur in the majority opinion except as to the tort claim by Colberg against Rel-linger. I would decline to adopt the Nastri court’s interpretation of Woodward v. Chirco. In his answering brief Rellinger concedes that he could have been found negligent in his supervision of the construction as to some structural defects. I believe Donnelly Const. Co. v. Oberg/Hunt/Gilleland is instructive here. The Donnelly court held that an action in negligence may be maintained upon the plaintiffs showing that the defendants owed a duty to him, that the duty was breached, and that the breach proximately caused an injury that resulted in damages. In Donnelly the injury was purely economic. The Donnelly court went on to say that: “[djesign professionals have a duty to use ordinary skill, care, and diligence in rendering their professional services.” Id. 139 Ariz. at 187, 667 P.2d at 1295. The duty extends to those with whom the design professional is in privity as well as to those with whom he is not. Id. I believe this applies to Rellinger who, like a design professional, had a duty to use ordinary skill, care and diligence in rendering professional service to Colbert. Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo.1983). This position is also supported by Richards v. Powercraft Homes, Inc., 139 Ariz. 242, 678 P.2d 427 (1984) in which the supreme court held that implied warranty of habitability and workmanlike performance “is imposed by law.” Id. at 244, 678 P.2d at 429; see Simmons v. Owens, 363 So.2d 142 (Pla.App.1978). The Restatement (Second) of Torts § 906 comment b (1979), which states that compensatory damages may include compensation for harm to property, also includes physical impairment of anything that is the subject of ownership. In the absence of authority to the contrary Arizona looks to the Restatement (Second) of Torts. Fendler v. Phoenix Newspapers, 130 Ariz. 475, 636 P.2d 1257 (App.1981). I would reverse and remand for trial on the negligence count against Rellinger individually.
SUPPLEMENTAL OPINION
SHELLEY, Presiding Judge.
Alfred and Mildred Colberg (Colbergs) filed a complaint alleging breach of contract against Rellinger Construction Company, Inc. (Company), and breach of contract and negligence against Orlo and Judi Rellinger (Rellingers) with respect to a residential construction contract. The trial court awarded judgment for Colbergs against the Company and denied recovery against Rellingers. The trial court awarded attorney fees to Colbergs against the Company and awarded Rellingers attorney fees against Colbergs in the amount of $11,862.00, pursuant to A.R.S. § 12-341.01(A), which states: “In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees.” Colbergs appealed the judgment in favor of Rellingers.
This court, in an opinion filed July 14, 1988, affirmed the judgment of the trial court on all issues except the award of attorney fees to Rellingers. We reversed the trial court’s order granting attorney fees, and said:
The supreme court dealt with this problem in Barmat v. Doe, 155 Ariz. 519, 747 P.2d 1218 (1987). The court held that with regard to contracts arising from relationships between professionals and their clients and from other special relationships, the law imposes special duties to all within the foreseeable range of harm as a matter of public policy regardless of whether or not there is a contract. Breaches of those duties are generally recognized as torts and the nature of actions to recover for such breaches arise out of tort. Therefore, A.R.S. § 12-341.01(A) is not applicable to such actions. As between Colberg and the Company, the action arises out of contract and A.R.S. § 12-341.01(A) ap*50plies; as between Colberg and Rellinger the action arises out of a tort claim and A.R.S. § 12-341.01(A) does not apply.
We conclude that Colberg’s negligence claim did not arise out of contract within the meaning of A.R.S. § 12-341.01. The mere fact that the contract existed somewhere in the allegedly tortious transaction does not mean that the contract was a factor in causing the dispute. The fact that Rellinger was not a party to Col-berg’s contract reinforces our conclusion.
We also hold that Colberg’s negligent supervision claim did not arise out of a contract. This claim was based on Arizona contractors law, separate from the Company’s contractual duties.
Appellees filed.a motion for reconsideration, asserting that Barmat did not change the law as set forth in Shirley v. Hartford Accident & Indemnity Company, 125 Ariz. 70, 607 P.2d 389, 390 (1979), and Lacer v. Navajo County, 141 Ariz. 392, 687 P.2d 400 (App.1984), and that the law set forth in Shirley and Lacer is germane to the attorney fee issue. We agree. In Lacer, we read:
A party is entitled to an award of its attorney’s fees under A.R.S. § 12-341.01 if judgment in its favor is based upon the absence of the contract sued upon by the adverse party.
Lacer, 141 Ariz. at 394, 687 P.2d at 402. The Shirley case is to the same effect.
Colbergs posit that Barmat is controlling under the facts of this case because they did not pursue a contract theory as to Rellingers. They assert that their lawsuit was based solely on a duty imposed by law, to-wit: the statutory duty of Rellinger to supervise the construction as qualifying agent for the construction company in obtaining its license and a duty under common law negligent supervision. They rely upon Lewin v. Miller Wagner & Co., Ltd., 151 Ariz. 29, 725 P.2d 736 (App.1986), and on Barmat v. John and Jane Doe Partners, 155 Ariz. 519, 747 P.2d 1218 (1987). In Barmat the court stated:
We note that the court of appeals has reached a similar result in Lewin, supra. The rationale there, as we read the opinion, is that where the implied contract does no more than place the parties in a relationship in which the law then imposes certain duties recognized by public policy, the gravamen of the subsequent action for breach is tort, not contract. We approve that view.
Where, however, the duty breached is not imposed by law, but is a duty created by the contractual relationship, and would not exist “but for" the contract, then breach of either express covenants or those necessarily implied from them sounds in contract. Sparks, supra; Lewin, supra. The essence of such actions arises “out of a contract,” eligible for an award of fees under the statute. (Emphasis added; citations omitted.)
Barmat, 155 Ariz. at 523, 747 P.2d at 1222.
Colbergs’ negligent supervision theories sound in tort with duties imposed by law. Barmat holds that the gravamen of an action for breach of duty imposed by law is tort and not contract. If all of Colbergs’ claims sounded solely in tort, attorney fees would be precluded. Such is not the case. The claim of express warranty was one of the factors in dispute in this case.
The complaint alleged that “Rel-linger and Rellinger Construction entered into a written contract ... with Colbergs____” In the pretrial statement, Col-bergs stated as an issue that Rellinger contracted or otherwise held himself out to supervise and control the construction of Colbergs’ residence. This contract issue was thereafter abandoned. The pretrial statement set forth the theories of express warranty and negligence against Rellingers. Colbergs’ opening post-trial memorandum set forth two theories of liability against Rellingers: (a) negligence; and (b) breach of express warranty.
The opening post-trial memorandum also stated:
Rellingers are personally liable to Col-bergs under two theories. First, Orlo failed to exercise reasonable care as qualifying party of Rellinger, Inc., in supervising the construction of Colbergs’ *51residence. Second, Orlo personally warranted to Colbergs that their residence would be constructed to their satisfaction in a workmanlike manner. Rellingers are personally liable to Colbergs under both theories.
The trial court found that an express warranty had not been made by Rellinger. The duty in express warranty is contractual and not one imposed by law. The claim of breach of express warranty sounds in contract. As stated in Barmat: “The essence of such actions arises ‘out of a contract,’ eligible for an award of fees under the statute.” Barmat, 155 Ariz. at 523, 747 P.2d at 1222.
Under the Shirley and Lacer cases, when a contract is alleged by a plaintiff and the defendant successfully proves that there was no contract, the action is still one arising out of contract under A.R.S. § 12-341.01, entitling the defendant to attorney fees. We are therefore of the opinion that we erred in holding that the action arose solely out of a tort claim and that A.R.S. § 12-341.01(A), which allows attorney fees to a successful party in a claim arising out of contract, did not apply.
The motion for reconsideration is granted. That portion of the original opinion filed July 14, 1988, dealing with the attorney fee issue, is hereby vacated.
Colbergs assert that if part of the action consisted of a claim arising out of contract, attorney fees must be apportioned between the contract and tort claims, inasmuch as attorney fees are only allowed for claims arising out of contract.
Rellingers assert that Colbergs failed to raise the apportionment issue in the trial court, therefore it may not be considered on appeal. Rellingers asserted in the trial court that the entire action arose out of contract and that they were entitled to attorney fees.
In Colbergs’ response to the motion for reconsideration, they state: "... Col-bergs strongly urged the trial court that no attorneys’ fees should be awarded to Rel-lingers because the claims against them sounded solely in tort rather than in contract____ Colbergs’ argument that no fees should be awarded obviously encompassed the argument that the fees should be apportioned if the trial court found that the ‘warranty’ claim sounded in contract.” We disagree. Apportionment was never mentioned. The issue of apportionment should have been set forth as an alternative argument.
In the case of Dillig v. Fisher, 142 Ariz. 47, 51, 688 P.2d 693, 697 (App.1984), Division 2 stated:
Finally, appellants argue that the attorney’s fees awarded by the court exceeded the limitation in A.R.S. § 12-341.01(B) of “the amount paid or agreed to be paid,” and alternatively were unreasonable as being far in excess of the amount of actual damages recovered. While appellants’first point has merit, in that Dillig introduced no evidence as to his fee agreement with counsel, appellants did not raise this argument before the trial court and therefore cannot raise it for the first time on appeal. (Emphasis added.)
In the case of Aero Energy, Inc. v. Circle C Drilling Company, 699 S.W.2d 821, 823 (1985), the court stated:
Petitioners also complain of the trial court’s award of attorney’s fees to Circle C. They argue that there was no evidence to warrant submission of this question to the jury. Circle C pleaded causes of action for breach of the drilling contract and for fraudulent inducement of its leasing contract with Manufacturer’s Hanover Leasing Corporation. Aero, Inc. and Aero, Ltd. did not object to the broad issue submitted to the jury, which allowed consideration of attorney fees for both causes. Because they did not object to the failure of the trial court to segregate the attorney’s fees between the claims, they have waived that point. (Emphasis added.)
The issue of apportionment was not raised in the trial court. Therefore, it may not be raised on appeal.
Rellingers request attorney fees on appeal. In the exercise of our discretion, we decline to award attorney fees on appeal.
*52The judgment of the trial court awarding attorney fees to Rellingers is affirmed.
GRANT, C.J., and KLEINSCHMIDT, J., concur.