We blogged the Court of Appeals opinion here; go there for the facts. The Supreme Court disagrees with the Court of Appeals, deciding that Montelucia does after all have to prove its ability to perform before it can retain the earnest money.
The rule is salutary but the court sullies it by playing games with words, suggesting that the issue is whether “a defendant who seeks to retain damages” must show ability to perform. To call the benefits received by one party under a contract “damages” when the other decides to repudiate it is spin, not analysis.
On remand Montelucia must prove that it was ready to perform in order to keep the earnest money. For some reason the court seems uneasy about this since it spends several paragraphs explaining that this earnest money wasn’t, contrary to the contract language and Montelucia’s claim, really earnest money, it was progress payments. Maybe that’s right but since when is it for the Supreme Court to resolve disputed facts? This was a contract – the money’s function was what the parties intended it to be. And what does all this mean to the analysis – if it really was “earnest money” would it not be “damages?” Apparently not, because the court tells us that earnest money “typically” remains in escrow and “usually” does not finance construction. But what if it doesn’t and does, respectively?
(link to opinion)
We will not blog this for one or more reasons set forth in our FAQ. Insurance attorneys will want to note, though, that the written offer of UM/UIM coverage for auto policies must under this case include a premium quote. There is a dissent, so perhaps the Supreme Court will speak to this.
(link to opinion)
A small case about an obscure point of law but interesting nonetheless.
In 2001 Pinetop abandoned to Cook a piece property next to his that it no longer intended to use for a road. In 2007 a neighbor complained that the abandonment landlocked him; turns out there’s a statute prohibiting road abandonments that do that. So Pinetop, at a hearing at which Cook was present, voted to “rescind” the abandonment. Over a year later he sued to quiet title. Pinetop moved for summary judgment on the statute of limitations.
A.R.S. 12-821 provides that “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 court first concludes that “all” does indeed mean “all,” including actions to quiet title.
The next question was when the statute accrued. Pinetop argued that it accrued at the time of the vote to rescind because Cook knew then that his property would be taken. Cook argued that it hadn’t accrued because he hadn’t been damaged, in the sense that no one had attempted to interfere with his use of the property. The court holds that “the statute of limitations does not run against a plaintiff in possession who brings a quiet title action purely to remove a cloud on the title to his property,” citing a long string of cases from Arizona and other jurisdictions. Pinetop’s “argument would be correct if Cook was [sic] suing to collect monetary damages” but this wasn’t a damage case.
Even though it spurns the subjunctive mood this is a nice opinion. There is reason to think Cook’s brief poor; that can lead to a confused opinion, as we’ve pointed out often enough, but the court avoids that here. The opinion is twelve pages long; its nice to know that CA1 can make them that short – now please do it more often. There are four footnotes but one of them is actually a decent, legitimate footnote: “The question whether the October 2007 resolution effectively rescinded and reversed the 2001 abandonment is not before us. We express no opinion regarding the effect of the 2007 action.” We wonder whether the court mentions the issue because the parties thought of it or because they didn’t.
(link to opinion)