We think the Court of Appeals is probably correct to imply that this plaintiff was planning on default judgment and, when that didn’t happen, didn’t quite know what to do. The court takes the opportunity to say some things about how summary judgment works.

Wells Fargo sued to collect a credit-card debt. It attached to the Complaint the card agreement and the last bill; collections lawyers tend to do things that way, more because that’s the way these things are traditionally done than because they’ve thought about why they’re doing it. But defendants answered and disputed the documents. Wells Fargo moved for summary judgment based on an affidavit by a Wells Fargo paralegal saying basically that he was the custodian of business records, he had reviewed them, and they say that the defendants owed the money. The affidavit didn’t include the documents. Defendants’ Response argued that it was hearsay. The Reply, in addition to presenting – without further affidavit – some business records, argued that the defendants had “failed to satisfy their burden to . . . disclose or put forth . . . evidence to defeat summary judgment.”

The trial court granted the motion. Defendants moved for reconsideration, arguing that there was a question of fact about the applicability of the documents attached to the Complaint (which may have thrown the trial court off the track a bit since this wasn’t really the dispositive issue). The court ordered Wells Fargo to respond; the response tried to explain why the documents had been presented – which evidently it hadn’t done before. The trial court denied the motion for reconsideration.

If you can’t anticipate that it gets reversed then you need to study this opinion and learn its morals.

Moral #1 is that “it is the party moving for summary judgment who bears the ‘burden of persuasion,” which burden “never shifts to the non-moving party.” So, “the question presented by Wells Fargo’s motion . . . was not whether the [defendants] had succeeded in
presenting genuine disputes of material fact –- it was whether Wells Fargo had presented sufficient undisputed admissible evidence to establish its entitlement to judgment.”

Moral #2: “The purpose of a custodian’s affidavit is to authenticate evidence.” We don’t know what’s hard about that but the mistake here – trying to squeeze substantive evidence as well as authentication into a custodian’s affidavit – is not uncommon. “Conclusory affidavits . . . may be sufficient in the default context” but not when you have to prove a disputed case.

Moral #3: Be careful in preparing the custodian’s affidavit. This one didn’t attach the records (“such an affidavit is of little value when it does not attach the evidence at issue”) and fouled up the business-records language by not describing how they were prepared and kept. You need to include all the 803(6) stuff.

Moral #4: Your Reply is too late. ‘It was improper to introduce new evidence with the Reply memorandum.”

None of this is new. But too many people need to be reminded of it.

(link to opinion)

                                             THIS OPINION HAS BEEN MODIFIED

This at first seems to be an anti-abrogation case but the principal analysis is of negligent misrepresentation (and is arguably dicta).

“After [Plaintiffs] unwittingly bought a home next door to a registered sex offender, they sued the couple who sold them the home and the real estate broker that represented both couples in the transaction. The defendants moved to dismiss, arguing the . . .  claims of fraud, misrepresentation and breach of fiduciary duty were barred by the sales documents and by . . . A.R.S. §32-2156(A)(3) . . . which prohibits a civil action against a seller or real estate broker for failing to disclose that a home is located ‘in the vicinity of a sex offender.’”

That’s how the court begins – pleasantly concise. Unfortunately, it turns out that that’s just an introduction; the opinion soon reverts to standard Division One style.

The fraud claim was that defendants were moving because of the sex offender but told plaintiffs that they wanted to be nearer their family. On appeal the defendants apparently agreed that the statute wouldn’t cover fraud. They argued instead that what they said couldn’t be material or relied on because the documents specifically said that the sellers weren’t required to disclose sex offenders and that the buyers had to investigate that for themselves. The court says that contract language can’t excuse fraud and that materiality, etc., was for the jury; it reverses the trial court’s dismissal on fraud. The dissent (which agrees with the majority except for this issue) argues that a party’s reason for entering into a contract is generally not material. The opinion adds a footnote to counter this, suggesting that it isn’t always true as a matter of law. But the dissent points out that motivation’s only alleged relevance here is that it omitted something that needn’t be disclosed anyway.

The court next rules that the allegation of negligent misrepresentation stated a claim – subject to being barred by the statute – because “we draw from the Restatement [§551] . . . the principle that a seller may be required to disclose information when the buyer reasonably cannot discover the information for himself.” This lesson is drawn from a Restatement comment discussing the “continuing development of modern business ethics,” which the ALI professors are all too happy to conflate with law. The facts indicated that the location of a level one sex offender is not public record.

As for A.R.S. §32-2156(A)(3), plaintiffs argued that it was unconstitutional as an abrogation of common-law rights. The court holds it valid. A right to sue because of an undisclosed sex offender did not “evolve out of common-law antecedents” since at common law the seller had no duty to disclose “latent defects” absent a special relationship. Since the court’s negligent-misrepresentation conclusion is based on “modern business ethics” its not based on common law. So dismissal of the claims other than fraud – including the misrepresentation claim that the court had just spent several pages upholding – was okay after all.

(link to opinion)

This contract case says a little about the Statute of Frauds and a bit about attorney’s fees. But its main feature, to us, is an unfortunate footnote.

The parties were real estate agents. Rudinsky contracted, in return for a split of commission, to refer buyers to Harris’ outfit (called “Green Light”), which represented developers. This was in writing. But she alleged an oral agreement that Green Light could never, without compensating her, deal directly with any buyers she referred to it nor with any buyers those buyers referred it (“second-generation” buyers), even 10-20 years in the future. Harris moved for summary judgment on the Statute of Frauds, which the court granted. It then awarded fees and entered a Rule 54(b) judgment (Rudinsky’s Complaint also sued for defamation because of some things Harris said about her in connection with her deals with Green Light). The Court of Appeals affirms.

Rudinsky argued on appeal that the contract was capable of performance within one year because she might die that soon. She had an Arizona for this but it discussed the promisor’s death, not the promisee’s; the court says that it doesn’t apply because “there is no provision in the contract allowing Green Light to terminate the agreement within the year.” Rudinsky also argued that there might never be any second-generation buyers; Green Light’s alleged obligations as to them, though, would continue even if they took forever to exist.

As to fees, Rudinsky argued that they shouldn’t be awarded until her defamation claim, with which her contract claim was “interwoven,” was decided. But cases about the interweaving of tort and contract claims mean that you can get attorneys fees for the former, not that you can’t get them for the latter. And the point of the Rule 54(b) certification is that Green Light is entitled to relief now.

But the court includes a footnote implying that Rule 54(b) language shouldn’t have been granted. Perhaps that wasn’t its intent; if the court thinks 54(b) certification incorrect then the proper course is to remand for lack of jurisdiction. The footnote’s effect, though, is to suggest that “interweaving” is, after all, a reason not to certify. Yet in this case certification was, from what this opinion tells us, correct. The causes of action were separate. The opinion doesn’t explain why the outcome of one depended in any significant way on the outcome of the other. That some facts involved in one may also have been involved in the other is not a reason to deny 54(b) language.

(link to opinion)