Opinion
No. 1 CA-CV 14-0138
05-28-2015
STEPHEN S. EDWARDS, INC., an Arizona Corporation dba Super Limo Company; and STEPHEN S. EDWARDS, individually, Plaintiff/Appellant, v. CIT GROUP/EQUIPMENT FINANCING, INC., a Delaware company, Defendant/Appellee.
COUNSEL Stephen S. Edwards, Mesa Plaintiff/Appellant Jaburg & Wilk, P.C., Phoenix By David L. Allen, Jeffrey A. Silence Counsel for Defendant/Appellee
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
No. CV2012-096539
The Honorable David M. Talamante, Judge
AFFIRMED
COUNSEL Stephen S. Edwards, Mesa
Plaintiff/Appellant
Jaburg & Wilk, P.C., Phoenix
By David L. Allen, Jeffrey A. Silence
Counsel for Defendant/Appellee
MEMORANDUM DECISION
Presiding Judge Randall M. Howe delivered the decision of the Court, in which Judge Andrew W. Gould and Judge Peter B. Swann joined. HOWE, Presiding Judge:
¶1 Stephen S. Edwards and Stephen S. Edwards, Inc., (collectively, "Edwards") appeal the trial court's order granting summary judgment in favor of CIT Group/Equipment Financing, Inc. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 In 2002, Edwards entered into a Security Agreement & Conditional Sale Contract with Edson Financial, Inc., to secure a loan made to Edwards to finance the purchase of a Lincoln limousine. Edson subsequently assigned the contract to CIT, after which Edwards defaulted on its payment obligations under the contract. As a result, CIT accelerated the balance due and filed a suit against Edwards to recover the balance and the vehicle.
¶3 CIT moved for summary judgment. The trial court granted the motion and entered judgment for CIT for the principal amount of $32,945.28 with an 18% accruing interest rate and attorneys' fees and costs with a 10% annual interest rate. The court ordered that CIT was entitled to immediate possession of the vehicle and that "upon recovery of the vehicle," CIT will sell or otherwise dispose of it and apply the proceeds to the judgment. In 2009, because CIT was unable to recover the judgment from Edwards, it filed an affidavit of renewal judgment and the balance due became $66,731.43, which was the sum of "all payments, setoffs, counterclaims, accruing costs, principal and the accruing interest" after the original judgment.
¶4 In June 2012, Edwards contacted CIT to discuss settlement of the judgment. Edwards offered $4,300 in exchange for release of the entire judgment and alleged that CIT had repossessed the vehicle, which Edwards valued at $25,000. Although CIT held the vehicle's certificate of title, it had not repossessed nor located the vehicle. But in "the interest of resolving [the] matter," CIT agreed to a $25,000 reduction and accept payment of $41,731.43.
¶5 Edwards did not respond to CIT's proposed offer and instead filed a suit against CIT. CIT moved for summary judgment and to stay further discovery until the trial court had ruled on the motion. The court initially granted the stay, but later issued a ruling allowing Edwards 90 days to conduct further discovery.
¶6 Even so, Edwards would not provide its disclosure statement, and CIT moved to compel. Edwards continued to refuse, and in response one of CIT's officer did not attend his deposition. Edwards then moved for "ultimate sanctions re failure to appear at deposition and spoliation of evidence."
¶7 Edwards ultimately provided a disclosure statement, but the trial court found that it was deficient, granted CIT's motion to compel, and ordered Edwards to supplement its disclosure with additional information. The court later ordered the deposition of CIT's officer go forward provided that Edwards first produce the documents the court had ordered it to produce. CIT then moved for terminating sanctions, requesting that Edwards' claims be dismissed under Arizona Rule of Civil Procedure 37(b)(2).
¶8 After a hearing, the trial court granted CIT's motion for summary judgment and held that the motion for terminating sanctions was moot. The court found that Edwards had "failed to raise a genuine dispute as to any material fact and that the arguments presented are not properly supported by a statement of facts and evidence which support [its] position." Further, the court noted that both the parties agreed that Edwards' claims were based on Edwards' belief that CIT recovered possession of the vehicle, but nothing in the record supported that position. The court also ordered CIT to submit a form of judgment with Arizona Rule of Civil Procedure 54(c) language.
¶9 Before CIT submitted the form, Edwards filed a notice of appeal. Soon after, CIT moved for an award of attorneys' fees and costs. This Court issued an order staying the appeal and revesting jurisdiction in the trial court. We stated that Edwards' appeal was premature because the trial court had yet to enter a signed judgment and rule on CIT's application for fees and costs. We ordered that a notice of appeal or amended notice must be filed to review the trial court's ruling on attorneys' fees and costs and that the appeal would automatically be reinstated if the trial court entered a final judgment. The trial court subsequently entered a final judgment pursuant to Rule 54(c) and awarded attorneys' fees and costs to CIT. Edwards did not file an amended notice of appeal to include the court's order regarding the fees and costs.
DISCUSSION
1. Motion for Summary Judgment
¶10 Edwards argues that the trial court erred by granting summary judgment in favor of CIT because Edwards had produced the required documents establishing genuine issues of material facts. Summary judgment may be granted when no genuine issue of any material fact exists, and the moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(c)(1). "We review the grant of summary judgment de novo to determine whether any genuine issue of material fact exists, and we view the evidence and all reasonable inferences in favor of the non-moving party." Russell Piccoli P.L.C. v. O'Donnell, 237 Ariz. 43, 46-47 ¶ 10, 344 P.3d 345, 348-49 (App. 2015). Summary judgment should be granted "if the facts produced in support of [a] claim . . . 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. . . ." Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990).
¶11 Further, "when a party moves for summary judgment with supporting affidavits containing sworn facts on material issues, it is incumbent upon the [opposing] party to contradict the facts in a positive manner with sworn proof." Kiser v. A. J. Bayless Markets, Inc., 9 Ariz. App. 103, 106, 449 P.2d 637, 640 (1969). The opposing party may not rely on allegations or denials of its own pleadings; it must come forward with specific facts showing a genuine issue for trial. Ariz. R. Civ. P. 56(e). If the opposing party does not so respond, summary judgment, if appropriate, shall be entered against that party. Id. Because no genuine issue of any material facts exists, as discussed below, we affirm the trial court's order.
1a. Breach of Contract
¶12 Edwards alleges that CIT breached the contract by failing to offset the judgment by not retrieving the vehicle and by failing to disclose the correct amount of the judgment. But the contract provides: "After default by Buyer, Seller's right and remedies include but are not limited to a number of choices. . . . Buyer agrees that Seller, among its other rights and remedies, may by itself or its agent enter the premises [and] . . . take possession of the Collateral. . . ." Thus, CIT was not required to repossess the vehicle. More importantly, the record shows that CIT has not located nor repossessed the vehicle. Regarding the judgment amount, CIT has no obligation under the contract to tell Edwards the judgment amount. The contract was a security agreement and conditional sale for the vehicle; it makes no mention of the judgment. In response to CIT's proffered facts, Edwards relies on allegations in its complaint and offers no evidence showing a genuine issue for trial. Consequently, Edwards cannot maintain a breach of contract claim.
1b. Negligence
¶13 Edwards alleges that CIT was negligent by "filing two different judgment amounts without performing due diligence," "disclosing two different judgments in amounts that were vastly different amounts," and "by not conducting a thorough search . . . of the judgments thereby damaging [its] credit report." To establish a prima facie claim for negligence, a plaintiff must prove duty, breach, causation, and actual damages. Gipson v. Kasey, 214 Ariz. 141, 143 ¶ 9, 150 P.3d 228, 230 (2007). But here, Edwards has not provided specific facts—and the record does not indicate—that CIT owed Edwards any duty, let along the duties Edwards claimed CIT was required to perform. Therefore, Edwards' claim for negligence fails. See Delci v. Gutierrez Trucking Co., 229 Ariz. 333, 335 ¶ 8, 275 P.3d 632, 634 (App. 2012) (providing that whether a defendant owes the plaintiff a common law duty is a threshold issue; absent some duty, an action for negligence cannot be maintained).
1c. Fiduciary Duty
¶14 Edwards also alleges that CIT breached its fiduciary duty. But no fiduciary relationship exists between a lender and a borrower customer where the lender did not act as the borrower's financial advisor and the borrower did not rely on the lender for financial advice. McAlister v. Citibank (Ariz.), a Subsidiary of Citicorp, 171 Ariz. 207, 212, 829 P.2d 1253, 1258 (App. 1992). Here, the record indicates that CIT and Edwards are parties to a contract under which CIT's predecessor-in-interest lent Edwards $52,233.12 for the purchase of a vehicle. Nothing in the record shows—and Edwards has presented no evidence outside the allegations in his complaint—that CIT acted as its financial advisor and that Edwards relied on CIT for financial advice. Accordingly, Edwards cannot maintain a breach of fiduciary duty claim.
1d. Implied Covenant of Good Faith and Fair Dealing
¶15 Edwards next alleges that CIT breached the implied covenant of good faith and fair dealing by "misplacing their paperwork, renewing a much larger judgment[] than originally sought" and "by failing to properly enter two judgments in two different amounts." "Implied in every contract is a covenant of good faith and fair dealing, which requires each contracting party to refrain from acting in a manner that would impair the right of the other to receive the benefits of their agreement." FL Receivables Trust 2002-A v. Ariz. Mills, L.L.C., 230 Ariz. 160, 169 ¶ 41, 281 P.3d 1028, 1037 (App. 2012). A party breaches the covenant by denying the other party the "reasonably expected benefits" of the contract. Nolan v. Starlight Pines Homeowners Ass'n, 216 Ariz. 482, 489 ¶ 27, 167 P.3d 1277, 1284 (App. 2007). But here, CIT has not acted in a manner that impaired Edwards' right to receive the contract's benefits. When Edwards contacted the CIT officer, the officer indeed initially stated that the amount of the judgment was $32,945.28, but he later corrected himself with a letter indicating that the amount was actually $66,731.43. Further, Edwards has not contradicted CIT's facts with its own specific facts showing a genuine issue for trial; instead, it merely relies on the allegations in its complaint. Consequently, Edwards' claim for breach of the implied covenant of good faith and fair dealing fails.
1e. Specific Performance
¶16 Edwards alleges that pursuant to A.R.S. § 12-546, CIT "failed [its] duty of specific performance as required." But § 12-546 is inapplicable because this is not an "action for specific performance of a contract for the conveyance of real property." Therefore, Edwards has failed to state a claim for specific performance.
1f. Fraud or Mistake
¶17 Edwards next argues that pursuant to A.R.S. § 12-543, CIT fraudulently disclosed two different judgments, failed to acknowledge that it repossessed the vehicle, fraudulently discussed settlement negotiations, and reported false information to Edwards' credit reporting agency. But § 12-543 is inapplicable because that statute sets forth the applicable statute of limitations for oral debts, open accounts, and relief on ground of fraud or mistake. Further, besides the complaint's allegations, Edwards has not "stated with particularity" the circumstances constituting fraud or mistake as required by Arizona Rule of Civil Procedure 9(b) ("In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity."). Edwards' allegations "are insufficient to comply with the rule." Spudnuts, Inc. v. Lane, 131 Ariz. 424, 426, 641 P.2d 912, 914 (App. 1982). Consequently, Edwards' claim for relief based on fraud or mistake fails.
1g. Defamation
¶18 Edwards also alleges that CIT defamed it by falsely reporting to Edwards' credit agency the judgment amounts, making false and defamatory statements about it, and disclosing unprivileged publication to the credit agency. A party who publishes a false and defamatory communication concerning a private person is subject to liability if, but only if, it (a) knows that the statement is false and the statement defames the other, (b) acts in reckless disregard of these matters, or (c) acts negligently in failing to ascertain them. Dube v. Likins, 216 Ariz. 406, 417 ¶ 35, 167 P.3d 93, 104 (App. 2007). Here, Edwards has not pleaded specific facts—nor does the record show—that CIT made or published false statements concerning Edwards or that it negligently disregarded the falsity of the statements. Consequently, Edwards' claim for defamation fails.
1h. Deceptive Practices
¶19 Edwards alleges that CIT violated A.R.S. § 44-1522 by advising Edwards that the judgment was $32,945.28 and that CIT would offset the amount with the vehicle that was returned to it, but then advising Edwards the judgment was over two times the amount originally stated and that CIT never repossessed the vehicle. But § 44-1522 of the Consumer Fraud Act is inapplicable; this case does not involve "the sale or advertisement of any merchandise." See A.R.S. § 44-1522(A) (providing that any deceptive or unfair practice or concealment, suppression, or omission of any material fact "with intent that others rely on such concealment, suppression, or omission, in connection with the sale or advertisement of any merchandise" is declared to be unlawful practice). Moreover, besides Edwards' allegations, it presents no specific facts to indicate that the officer's initial advice was intended for Edwards to rely on. See id. Instead, the record indicates that because the officer corrected himself, he had no such intention. Accordingly, Edwards has failed to maintain a claim for deceptive practices.
1i. Unjust Enrichment
¶20 Edwards alleges that CIT has been unjustly enriched because it repossessed the vehicle and refused to reduce the judgment by its value. To recover on a claim of unjust enrichment, a party must show an enrichment, an impoverishment, a connection between the two, the absence of justification for the enrichment and impoverishment, and the absence of any remedy at law. Mousa v. Saba, 222 Ariz. 581, 588 ¶ 29, 218 P.3d 1038, 1045 (App. 2009). Here, Edwards has failed to establish any of the required elements. Edwards has not produced evidence showing that CIT in fact did repossess the vehicle. Moreover, CIT has not been enriched because Edwards has not made any payment for the judgment, as evident by the increased balance due in the renewal judgment, and CIT has not been successful in executing the judgment. Accordingly, Edwards' claim for unjust enrichment fails. Consequently, because no genuine issue of any material facts exists, we affirm the trial court's order granting summary judgment in favor of CIT.
The trial court's order awarding attorneys' fees and costs to CIT is not before this Court because neither party appealed that ruling.
2. Attorneys' Fees and Costs on Appeal
¶21 CIT requests an award of attorneys' fees and costs pursuant to A.R.S. §§ 12-341.01 and -349. In our discretion, we deny its request.
CONCLUSION
¶22 For the foregoing reasons, we affirm.