Court Opinion

ID: 4443148
Source: CourtListenerOpinion
Date Created: 2019-10-01 15:03:19.395075+00
Date Added: 2024-06-11T09:37:08.663694
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

             MICHAEL WAYNE SAXTON, Plaintiff/Appellant,

                                        v.

               MAUREEN A. BERKNER, Defendant/Appellee.

                             No. 1 CA-CV 18-0275
                               FILED 10-1-2019

           Appeal from the Superior Court in Maricopa County
                          No. CV2017-053099
           The Honorable Aimee L. Anderson, Judge (Retired)

                                  AFFIRMED

                                   COUNSEL

Schern Richardson Finter, PLC, Mesa
By Aaron M. Finter, Yusra Batool Bokhari
Counsel for Plaintiff/Appellant

Margrave Celmins, P.C., Scottsdale
By Michael L. Kitchen
Counsel for Defendant/Appellee
                          SAXTON v. BERKNER
                           Decision of the Court

                      MEMORANDUM DECISION

Presiding Judge Maria Elena Cruz delivered the decision of the Court, in
which Judge Kent E. Cattani and Judge Jennifer B. Campbell joined.

C R U Z, Judge:

¶1            Michael Wayne Saxton appeals from the superior court’s
grant of summary judgment in favor of Maureen A. Berkner and the court’s
denial of his motion for reconsideration. For the following reasons, we
affirm.

                  FACTS AND PROCEDURAL HISTORY

¶2             As trustee of the Maureen A. Berkner Living Trust
Agreement, Maureen A. Berkner owns a ten-acre property located in New
River. Berkner split the property in half and decided to sell the northern
half of the property with a residence. On March 7, 2017, Berkner and Saxton
executed a purchase contract (“the Contract”) for the sale of the property
for $416,000 with a closing date of March 31, 2017. Saxton paid $5,000
earnest money. The terms of the Contract provided that the survey
dividing the property into northern and southern halves, and a well sharing
agreement to divide the usage of the well between the parcels, would be
conducted and provided to Saxton during the inspection period.

¶3            Berkner provided the survey and well sharing agreement to
Saxton. The survey divided the parent property into two parcels, and it
provided the northern parcel, which Saxton contracted to purchase, an
easement for ingress and egress. The well sharing agreement provided that
each parcel would receive a fifty-percent interest in the well. Saxton
disapproved of both the survey and the well sharing agreement, and
demanded that the parcel be split differently to include additional portions
of the southern parcel and to change the well sharing agreement to provide
additional well capacity.

¶4            Berkner declined to make the requested changes, and
Saxton’s realtor told Saxton he could cancel the contract and get his earnest
money back. Saxton instead demanded mediation and threatened
litigation. On March 27, 2017, Saxton notified Berkner that he would not
close on March 31, 2017, the contracted closing date. In reply, on March 30,

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                           SAXTON v. BERKNER
                            Decision of the Court

2017, Berkner sent Saxton a “cure period notice.” After Saxton failed to
deposit the purchase price in escrow on March 31, 2017, Berkner canceled
the purchase contract.

¶5             Saxton filed suit for breach of contract and specific
performance. Saxton argued that the parcels were not divided in
accordance with the parties’ intent, asking the superior court to enforce
alternative contract terms and have the survey “re-drawn.” Saxton also
placed a lis pendens on the entire property. Berkner filed an answer and a
counterclaim for wrongful recording of the lis pendens. After Berkner filed
a motion for summary judgment, the superior court heard oral argument
and granted summary judgment in Berkner’s favor as to both issues.
Saxton filed a motion for reconsideration, which the court denied. Saxton
timely appealed and now argues that he was at all times willing to move
forward with the purchase of the property pursuant to the Contract, well
sharing agreement, and survey.

¶6            We have jurisdiction pursuant to Arizona Revised Statutes
(“A.R.S.”) section 12-120.21(A)(1).

                               DISCUSSION

¶7            Summary judgment may be granted when “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). In reviewing a motion
for summary judgment, we determine de novo whether there are any
genuine issues of material fact and whether the trial court properly applied
the law. Eller Media Co. v. City of Tucson, 198 Ariz. 127, 130, ¶ 4 (App. 2000).
We view the facts and inferences to be drawn from those facts in the light
most favorable to Saxton, the party against whom judgment was entered.
See AROK Constr. Co. v. Indian Constr. Servs., 174 Ariz. 291, 293 (App. 1993).
We review the denial of a motion for reconsideration for an abuse of
discretion. Tilley v. Delci, 220 Ariz. 233, 238, ¶ 16 (App. 2009).

¶8            Saxton argues that the superior court erred because there is
insufficient evidence showing that (1) Saxton breached the Contract, (2)
Berkner terminated the Contract according to its terms, and (3) Berkner
provided Saxton with required disclosures. Saxton contends the Contract
has not been canceled and that he is still entitled to purchase the property.
We disagree.

¶9           Issues pertaining to contract interpretation present questions
of law, which we review de novo. Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12
(2003). We interpret a contract to make it effective and reasonable, giving

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                           SAXTON v. BERKNER
                            Decision of the Court

its words their ordinary meaning and construing its provisions from the
language of the parties in view of all the circumstances. Cty. of La Paz v.
Yakima Compost Co., 224 Ariz. 590, 599, ¶ 16 (App. 2010). We give preference
to an interpretation that gives “a reasonable meaning to the manifested
intent of the parties rather than an interpretation that would render the
contract unreasonable.” Bryceland v. Northey, 160 Ariz. 213, 216 (App. 1989).
An unambiguous contract is “interpreted according to its terms.” Isaak v.
Mass. Indem. Life Ins. Co., 127 Ariz. 581, 584 (1981). A contract is not
ambiguous simply because the parties disagree as to its meaning. Chandler
Med. Bldg. Partners v. Chandler Dental Grp., 175 Ariz. 273, 277 (App. 1993). If
the parties’ intent is clear from the contract language and the surrounding
circumstances, then the contract is not ambiguous. Harris v. Harris, 195
Ariz. 559, 562, ¶ 15 (App. 1999).

¶10              Under the “Additional Terms and Conditions” of the
Contract, Berkner was required to provide a survey and shared well
agreement during the inspection period. Saxton could then approve or
disapprove them. If Saxton disapproved of the survey or the well sharing
agreement, Section 6(j) of the Contract provided that Saxton “shall deliver
to [Berkner] a signed notice of the items disapproved and state in the notice
that [Saxton] elects to either (1) Immediately cancel this Contract, in which
case . . . the Earnest Money shall be released to [Saxton]. . . . OR (2) Provide
[Berkner] an opportunity to correct the items disapproved.” Further,
Section 6(j)(2)(c) provides:

       If Seller is unwilling or unable to correct any of the items
       disapproved, Buyer may cancel this Contract within five (5)
       days after delivery of Seller’s response or after expiration of
       the time for Seller’s response, whichever occurs first, and the
       Earnest Money shall be released to Buyer. If Buyer does not
       cancel this Contract within the five (5) days as provided,
       Buyer shall close escrow without correction of those items
       that Seller has not agreed in writing to correct.

¶11            Forcing Berkner to offer a modified version of the survey and
shared well agreement was not an option available to Saxton under the
Contract. Instead, Section 6(j) of the Contract clearly provides that Saxton’s
choice in the event of a disagreement was to either cancel the contract or go
forward under Berkner’s proposed terms. Saxton’s time to act expired on
March 31, 2017, and it is undisputed that instead of canceling the contract
or closing escrow, Saxton notified Berkner that Saxton would seek
mediation. Moreover, Saxton later failed to satisfy the Contract’s
requirement to either cancel the Contract or to tender the remaining

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                           SAXTON v. BERKNER
                            Decision of the Court

purchase price and close escrow. Section 8(e) of the Contract included a
“time is of the essence” clause. Saxton failed to timely act, materially
breached the Contract, and therefore Berkner canceled the sale. See Mining
Inv. Grp. v. Roberts, 217 Ariz. 635, 639-40, ¶¶ 17-18 (App. 2008) (failure to
close on real estate transaction when “time is of the essence” is a material
breach).

¶12           Saxton further argues that Berkner failed to comply with the
Contract’s procedure for cancellation in the event of a breach. Under
Section 7(a) of the Contract:

       A party shall have an opportunity to cure a potential breach
       of this Contract. If a party fails to comply with any provision
       of this Contract, the other party shall deliver a notice to the
       non-complying party specifying the non-compliance. If the
       non-compliance is not cured within three (3) days after
       delivery of such notice (“Cure Period”), the failure to comply
       shall become a breach of Contract.

¶13             Saxton argues that Berkner’s alleged “notice to cure” was sent
on March 30, 2017, but in order to be effective, the notice could not be sent
until April 1, 2017, three days after the closing date passed. In other words,
Saxton argues that it was not possible for him to be in breach on March 30,
2017, prior to closing, and so a timely notice to cure was never sent. While
a contract generally cannot be breached until the date of the performance,
if one party unequivocally indicates he will not perform when the date
arrives, he has committed an anticipatory breach. Aboud v. DeConcini, 173
Ariz. 315, 318 (App. 1992). On March 27, 2017, Saxton unambiguously and
emphatically communicated his refusal to perform under the contract and
close on March 31, 2017, unless Berkner agreed to a different version of the
survey and well sharing agreement. Saxton’s communication put Berkner
on notice of Saxton’s intention not to exercise either option under Section
6(j)(2)(c) of the Contract. Saxton’s refusal to close according to the terms of
the well sharing agreement and survey constituted an anticipatory breach,
and Berkner was not required to wait until after the closing date to send her
notice to cure. See United Cal. Bank v. Prudential Ins. Co. of Am., 140 Ariz.
238, 278 (App. 1983) (finding that “one party’s ‘insistence upon terms which
are not contained in a contract constitutes an anticipatory repudiation
thereof’”) (citation omitted).

¶14          Saxton also claims that Berkner’s correspondence “falls short”
of the content requirements for a notice to cure, but he previously
recognized in email exchanges that the correspondence at issue was a “cure

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                            SAXTON v. BERKNER
                             Decision of the Court

period notice.” Moreover, Saxton’s argument fails to explain why the
notice was substantively deficient.

¶15           Finally, Saxton argues that Berkner breached the contract by
failing to provide additional required disclosures. Specifically, Saxton
alleges that Berkner failed to disclose: (i) the Affidavit of Disclosure; (ii) the
Domestic Water Well/Water Use Addendum to Seller Property Disclosure
Statement (“DWWA SPDS”); (iii) an inspection report of the septic system;
(iv) the Seller Property Disclosure Statement (“SPDS”); and (v) title
insurance. However, the disclosures Saxton references were either timely
disclosed or were not required until closing, and here, Saxton’s rejection of
Berkner’s version of the survey and well agreement caused the contract to
be canceled and relieved Berkner of the duty to continue to perform in
accordance therewith. A party’s failure to perform under a contract excuses
the other party’s obligation to perform. Ceizyk v. Goar Serv. & Supply, Inc.,
21 Ariz. App. 119, 122 (1973). As a result of Saxton’s breach of the Contract,
Berkner properly canceled the same and was no longer required to make
further disclosures.

                                CONCLUSION

¶16           For the foregoing reasons, we affirm the superior court’s grant
of summary judgment in favor of Berkner and the denial of Saxton’s motion
for reconsideration. Both parties request their attorneys’ fees pursuant to
A.R.S. § 12-341.01 and Section 7(e) of the purchase contract, and costs. In
the exercise of our discretion, we grant Berkner her attorneys’ fees. Upon
compliance with Arizona Rule of Civil Appellate Procedure 21, Berkner
may recover her costs on appeal.

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

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