Opinion
1 CA-CV 21-0467
05-03-2022
MARTIN TREPEL, Plaintiff/Appellant, v. GREGORY HODGINS, et al., Defendants/Appellees.
Rothstein Law Group PLC, Southfield, Michigan By P. David Palmiere Co-Counsel for Plaintiff/Appellant Law Office of Frank Adamo, Phoenix By Frank Adamo Co-Counsel for Plaintiff/Appellant Arizona Attorney General's Office, Tucson By Robert R. McCright Co-Counsel for Defendants/Appellees Arizona Attorney General's Office, Phoenix By Daniel P. Schaak Co-Counsel for Defendants/Appellees
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Maricopa County No. CV2020-014152 The Honorable James D. Smith, Judge
Rothstein Law Group PLC, Southfield, Michigan
By P. David Palmiere
Co-Counsel for Plaintiff/Appellant
Law Office of Frank Adamo, Phoenix
By Frank Adamo
Co-Counsel for Plaintiff/Appellant
Arizona Attorney General's Office, Tucson
By Robert R. McCright
Co-Counsel for Defendants/Appellees
Arizona Attorney General's Office, Phoenix
By Daniel P. Schaak
Co-Counsel for Defendants/Appellees
Judge Samuel A. Thumma delivered the decision of the Court, in which Presiding Judge Maria Elena Cruz and Judge Michael J. Brown joined.
MEMORANDUM DECISION
THUMMA, Judge:
¶1 Plaintiff Dr. Martin Trepel appeals from a final judgment entered after the grant of a motion to dismiss by defendants Dr. Gregory Hodgins and the Arizona Board of Regents that his claims were time-barred. Because Trepel has shown no error, the judgment is affirmed.
FACTS AND PROCEDURAL HISTORY
¶2 Trepel bought a wooden headdress, purportedly carved by members of the Baga Tribe of Western Guinea and of ancient origin. Trepel sought to have the headdress carbon dated to establish its age and to facilitate recognition by the art community.
¶3 In January 2016, Trepel entered a written contract with Hodgins, director of the University of Arizona's Accelerator Mass. Spectrometry Laboratory, and the University of Arizona for Hodgins to perform Carbon-14 testing to determine the age of the headdress. Later that same month, Hodgins apparently took samples for testing.
¶4 In mid-March 2016, the parties entered into a similar contract for Hodgins to take additional samples with results to be reported by May 6, 2016. Hodgins apparently took those additional samples for testing in late March 2016.
¶5 Trepel timely made the payments required by the contracts. On April 29, 2016, Hodgins provided Trepel a 21-page report detailing his work and concluding that the headdress was carved in the late 1970s. The report stated the headdress was "a young piece, of modern manufacture, and neither old nor valuable."
¶6 Challenging the conclusion, Trepel sent Hodgins various reports in what Trepel later characterized as "an attempt to have a scientific dialogue intended to correct errors in the [Hodgins' report] and . . . reach accurate conclusions" about the age of the headdress. Hodgins maintained that the report was accurate and, in April 2017, wrote Trepel that "he considered the matter 'closed'."
¶7 In late September 2017, Trepel served a notice of claim on Hodgins, the University of Arizona and the Arizona Board of Regents, challenging Trepel's April 2016 report and seeking $15 million in damages. The notice stated the claims accrued in April 2017, when Trepel wrote that the matter was closed.
¶8 In February 2018, Trepel sued Hodgins, the Arizona Board of Regents and others in New York state court alleging breach of contract and tort claims. Hodgins moved to dismiss, arguing Trepel's claims were time-barred under Arizona's notice of claim statute and Arizona's statute of limitations. See Ariz. Rev. Stat. (A.R.S.) § 12-821.01(A) (2022) (requiring notice of claim against public entity or public employee to be filed within 180 "days after the cause of action accrues"); A.R.S. § 12-821 ("All actions against any public entity or public employee shall be brought within one year after the cause of action accrues and not afterward."). The New York court granted the motion to dismiss "on statute of limitations grounds." Although Trepel appealed, in May 2020, the New York appellate court found it lacked subject matter jurisdiction over Hodgins and the Arizona Board of Regents. See Trepel v. Hodgins, 121 N.Y.S.3d 605 (2020) (relying on Franchise Tax Bd. of California v. Hyatt, 139 S.Ct. 1485 (2019) (holding states retain sovereign immunity from private suits brought in courts of other states)).
Absent material revisions after the relevant dates, statutes and rules cited refer to the current version unless otherwise indicated.
¶9 Trepel did not seek further review of that decision in the New York courts. Instead, in November 2020, he filed this case in Arizona superior court, alleging breach of contract and tort claims. Hodgins moved to dismiss, arguing Trepel's claims were time-barred under Arizona's notice of claim statute and Arizona's statute of limitations. After full briefing, the court granted the motion to dismiss, finding Trepel's claims accrued in April 2016 when he received Hodgins' written report. Because there was no allegation that the contracts had been modified to require more than one report, Trepel was required (but failed) to provide a notice of claim within 180 days and he failed to sue within one year.
¶10 The court granted Trepel's motion for leave to amend. Trepel's amended complaint omitted the tort claims but added an allegation that the parties orally agreed that the April 2016 report "would be considered 'preliminary' and 'a draft.'" Given this alleged modification, Trepel argued the action did not accrue until April 2017, when Hodgins wrote that the matter was closed. Accordingly, Trepel argued, his claim was timely.
¶11 Hodgins moved to dismiss Trepel's amended complaint, arguing that the alleged modification was not supported by consideration. The court granted Hodgins' motion, concluding that the parties performed all they agreed to do under the written contracts; that "Trepel did not plead facts showing added consideration for a post-performance modification" and that, based on an April 2016 accrual date, Trepel's claim was time-barred. After entry of final judgment, see Ariz. R. Civ. P. 54(c), Trepel filed a timely notice of appeal. This court has jurisdiction over Trepel's timely appeal pursuant to Article 6, Section 9, of the Arizona Constitution and A.R.S. § 12-120.21(A)(1) and -2101(A)(1).
DISCUSSION
I. The Superior Court Properly Dismissed Trepel's Complaint as Time-Barred.
¶12 A person who seeks to press a claim against a public entity (like the Arizona Board of Regents) or public employee (like Hodgins) must file a notice of claim within 180 "days after the cause of action accrues." A.R.S. § 12-821.01(A). If a proper and timely notice of claim is made, the person must then sue "within one year after the cause of action accrues and not afterward." A.R.S. § 12-821. A claim accrues "when the damaged party realizes he or she has been damaged and knows or reasonably should know the cause, source, act, event, instrumentality or condition that caused or contributed to the damage." A.R.S. § 12-821.01(B). "This language has been interpreted as a codification of the discovery rule for determining when causes of action against public entities and employees accrue." Thompson v. Pima Cnty., 226 Ariz. 42, 46 ¶ 12 (App. 2010) (citations omitted). This discovery rule applies to contract cases. Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of Am., 182 Ariz. 586, 590 (1995). The statute of limitations begins when the act on which legal action is based occurs, even though the plaintiff may be unaware of facts underlying the claim. Id. at 588.
A. Trepel's Claim Accrued When Hodgins Provided His Written Report in April 2016.
¶13 Trepel asserts that Hodgins' breach occurred in April 2017 when "Hodgins unilaterally withdrew from the on-going work without completing performance of the contract." A cause of action for breach of contract accrues when the plaintiff "knew or should have known by exercise of reasonable diligence that [he] had been injured." Gust, Rosenfeld & Henderson, 182 Ariz. at 588. Hodgins provided his written report in April 2016 stating that the headdress was created in the 1970s and was not ancient. That report, received by Trepel a year before April 2017, is the basis for Trepel's breach of contract claim.
¶14 In arguing that accrual did not occur until April 2017, Trepel asserts he did not know and could not reasonably know of Hodgins' breach until that time. A breach of contract accrues when a party fails to perform as required. Graham v. Asbury, 112 Ariz. 184, 185 (1975). The written contracts required Hodgins to provide Trepel a written report by no later than May 2016. Hodgins provided Trepel a written report on April 29, 2016. By delivering his required report, Hodgins discharged his contractual obligations at that time. Thus, any breach of contract claim Trepel had accrued at that time, meaning Trepel's contract claim, is time-barred. Gust, Rosenfeld & Henderson, 182 Ariz. at 588.
¶15 Trepel argues that the April 2016 report "could not be considered as concluded so long as reasonable questions remained about the methodology or accuracy of such study." But in alleging Hodgins failed to provide a proper report in April 2016, Trepel confirms that he knew of any claimed contract breach at that time. Trepel's counsel told the superior court that Trepel "knew about" the purportedly incorrect dating of the headdress when he received the report in April 2016. Moreover, Trepel immediately disagreed with Hodgins' conclusions and disputed the adequacy of the report. Indeed, Trepel's complaint alleges he quickly criticized Hodgins' April 2016 conclusions and promptly provided Hodgins "reports, data, issues, questions and concerns."
¶16 Trepel's allegations show that he knew of what he now claims was a breach of contract when Hodgins delivered the report to him on April 29, 2016. Because Trepel could have filed a notice of claim and then sued at that time, his contract claim accrued at that time. Gust, Rosenfeld & Henderson, 182 Ariz. at 588. Trepel, however, did not serve a notice of claim until late September 2017, long after the 180-day limitation had expired, and did not file suit until February 2018, long after the one-year limitations period expired. Accordingly, Trepel's claim was time-barred. See A.R.S. §§ 12-821.01(A); -821.
B. Trepel Has Not Shown an Enforceable Agreement that Would Delay the Accrual Date.
¶17 Trepel argues the parties orally modified their contractual obligations, that Hodgins' April 2016 written report was "preliminary" and a "draft" and that his contract claim did not accrue until April 2017, when Hodgins wrote that the matter was closed. The superior court concluded Trepel failed to allege or show any consideration to support such a modification. Trepel now argues that there was adequate consideration because the parties "agree[d] to void or waive some of the terms" and substitute new terms. He also asserts that "[t]he consideration is apparent, because the modifications . . . affected and altered the legal rights and duties of each party."
¶18 A written contract may be modified by a subsequent oral agreement that is supported by consideration. Coronado Co., Inc. v. Jacome's Dep 't Store, Inc., 129 Ariz. 137, 139 (App. 1981). As noted nearly a century ago, however, a "promise to do something which a party is already legally obliged to do is no consideration for a contract." J.D. Halstead Lumber Co. v. Hartford Acc. & Indem. Co., 38 Ariz. 228, 235 (1931). As applied, Hodgins provided his April 2016 report as he was "legally obliged to do." Id. It is blackletter law that performing existing contractual obligations does not provide consideration for a modification of that contract. 48 Am. Jur. 2d Novation § 14 (2022) (noting novation, "like any other contract," must be supported by consideration; "neither a promise to perform what one is already required or bound to do nor the performance of an existing legal obligation constitutes valid consideration" for such a contract); Restatement (Second) of Contracts § 73 (1981) ("Performance of a legal duty owed to a promisor which is neither doubtful nor the subject of honest dispute is not consideration.").
¶19 Trepel contends that, before the purported modification, Hodgins had to submit a final report by May 2016, and "hence had only so much time to complete his report," and Trepel had a "contractual right to receive a final report by a fixed date." He argues that giving up the right to receive a final report by May 2016 provides adequate consideration to support the modification of the original agreement. But the record shows that Hodgins had provided the April 2016 report before any modification alleged by Trepel and that Trepel had paid Hodgins. Adequate consideration required to form or modify a contract is either a benefit that accrues to one party or a detriment incurred by the other party. Demasse v. ITT Corp., 194 Ariz. 500, 506 ¶ 20 (1999). By the time the alleged modification occurred, both parties already had fully performed their contractual obligations. Moreover, Trepel's unilateral efforts to try to change Hodgins' conclusion after April 2016 do not constitute consideration supporting an oral modification of their written contract. Restatement (Second) of Contracts § 71(1) (1981) ("To constitute consideration, a performance or a return promise must be bargained for.").
¶20 On this record, Trepel has alleged no consideration supporting the purported modification. Because there was no enforceable contract modification, Trepel's cause of action accrued in April 2016. Trepel, however, did not serve a notice of claim until long after the 180-day limitation had expired, and did not file suit until long after the one-year limitations period expired. Accordingly, his claim was time-barred. Thus, the superior court properly granted Hodgins' motion to dismiss.
For the first time in his reply on appeal, Trepel presses a promissory or equitable estoppel argument. By failing to meaningfully raise such arguments before the superior court or in his opening brief, that argument is waived. See Romero v. Sw. Ambulance, 211 Ariz. 200, 204 ¶ 7 (App. 2005) (arguments not presented to the superior court are waived on appeal); Nelson v. Rice, 198 Ariz. 563, 567 ¶ 11 n.3 (App. 2000) (arguments not raised in opening brief are waived and cannot be raised for the first time in reply brief).
CONCLUSION
¶21 The judgment dismissing Trepel's claim is affirmed. Although no attorneys' fees are requested on appeal, defendants are awarded their taxable costs on appeal contingent upon their compliance with ARCAP 21.