SEYFFERTH v. BLUE HAVEN

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE ROBERT SEYFFERTH COMPANY, INC., an Arizona corporation, ) ) ) Plaintiff/Appellee, ) ) v. ) ) BLUE HAVEN NATIONAL MANAGEMENT, ) INC., a California corporation, ) ) Respondent/Appellant. ) ) __________________________________) 1 CA-CV 11-0406 DIVISION ONE FILED: 10/02/2012 RUTH A. WILLINGHAM, CLERK BY: sls DEPARTMENT E MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2009-090480 The Honorable John R. Ditsworth, Judge AFFIRMED IN PART, VACATED IN PART, AND REMANDED Sanders & Parks, P.C. by J. Steven Sparks Shanks Leonhardt Attorneys for Respondent/Appellant Phoenix Schern Richardson, PLC by Michael A. Schern Mark A. Hanson Attorneys for Plaintiff/Appellee Mesa P O R T L E Y, Judge ¶1 appeals Blue the Haven summary National judgment Management, granted Inc. to ( Blue Robert Haven ) Seyfferth Company, Inc. ( RSC ). For the following reasons, we affirm in part, vacate in part, and remand. FACTS AND PROCEDURAL BACKGROUND ¶2 Robert Seyfferth ( Seyfferth ) was a general manager for Diving Lady of Arizona, Inc. ( Diving Lady ) pursuant to an employment agreement that remained in effect from 2003 to 2007. Seyfferth and Diving Lady had an employment dispute, and Blue Haven, a separate corporation operated by the same individuals operating Diving Lady, stepped in to resolve the dispute. Blue Haven entered into an agreement with Seyfferth and RSC 1 entitled Consultancy Agreement, and agreed to pay $500,000 over the course of six years. In return, Seyfferth released any claims he may have had against Diving Lady and Blue Haven, and he and RSC agreed to provide consulting services to Blue Haven. The agreement further provided that Blue Haven would pay RSC monthly installments until the $500,000 was paid, and that [t]he benefits of this Agreement shall inure to Seyfferth s survivors, heirs and devisees. ¶3 Haven Seyfferth died in March 2007, three months after Blue began agreement. asserted 1 to make the monthly payments pursuant to the Blue Haven continued to make payments, but later that it terminated The agreement specifically Seyfferth and the Robert collectively Seyfferth ). the consultancy listed RSC Seyfferth 2 agreement when as a party: Robert Company (hereinafter Seyfferth died, and that the continued payments were the result of an accounting communicate the oversight. Blue termination to Haven did not, Seyfferth s however, widow, Helga Seyfferth, or to RSC. ¶4 After Blue Haven stopped making payments in December 2008, Mrs. Seyfferth Diving Lady. filed a lawsuit against Blue Haven and The complaint sought damages for the breach of contract and sought the balance of the $500,000 under an account stated theory. 2 ¶5 judgment. Mrs. Seyfferth Blue Haven and was RSC filed granted discovery before filing its response. a motion for summary permission to conduct The court subsequently considered its cross-motion for summary judgment and all related pleadings. After oral argument, the court found that RSC was entitled to partial summary judgment against Blue Haven on the issue of liability for breach of the contract. 3 The court, however, found that the issue of damages could not be summarily resolved. 2 An account stated . . . signifies an agreed balance between the parties to a settlement; that is, that they have agreed after an investigation of their accounts that a certain balance is due from one to the other. Trimble Cattle Co. v. Henry & Horne, 122 Ariz. 44, 47, 592 P.2d 1311, 1313 (App. 1979) (citation and internal quotation marks omitted). 3 The court also granted Blue Haven s cross-motion in part by dismissing the claims against Diving Lady and dismissing Mrs. Seyfferth s individual claims. Those rulings have not been challenged on appeal. 3 ¶6 At a subsequent hearing, RSC limited its claim to the account stated. The court found that there were no remaining issues of fact and granted RSC judgment on the balance of the $500,000 that had not been paid. Blue Haven filed this appeal after the court entered judgment, which included pre-judgment and post-judgment interest as well as an award of attorneys fees and costs. DISCUSSION ¶7 Blue Haven summary judgment. argues that it was error to grant RSC Specifically, Blue Haven contends that the court erred by: considering inadmissible evidence; disregarding ambiguities about the agreement s intended purpose and the payment obligations it imposed on Blue Haven; and ordering Blue Haven to pay the outstanding balance contrary to the agreement s payment terms when there was no pending motion, new evidence, or ruling on damages. ¶8 Summary judgment is appropriate if the facts produced in support of the claim or defense have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion proponent of the claim or defense. advanced by the Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990). We review a grant of summary judgment de novo and examine the evidence in the light most favorable to the party opposing summary judgment. 4 Federico v. Maric, 224 Ariz. 34, 36, ¶ 7, 226 P.3d 403, 405 (App. 2010) (citations omitted). court s interpretation of We are not bound by the trial the parties agreement contract interpretation generally is a matter of law. because County of La Paz v. Yakima Compost Co., 224 Ariz. 590, 599, ¶ 14, 233 P.3d 1169, 1178 (App. 2010) (citation omitted). I. Admissibility of Evidence ¶9 Blue Haven first argues that the court inadmissible evidence to grant summary judgment. Although the court did not make findings in relied on We disagree. support of its ruling on the breach of contract claim, we can affirm so long as the ruling is correct for any reason. Rowland v. Great States Ins. Co., 199 Ariz. 577, 581-82, ¶ 6, 20 P.3d 1158, 1162-63 (App. 2001) (citation omitted). ¶10 Here, the court did not need to rely on the challenged evidence the cocktail napkin agreement or Helga Seyfferth s characterization of the parties intent to conclude that Blue Haven was contractually required to make payments to RSC even after Seyfferth s death. 4 The agreement identifies both Seyfferth and RSC as parties, and refers to both collectively as Seyfferth. The agreement further 4 defines the collective Consistent with our analysis, at the hearing to consider RSC s motion for summary judgment, the judge noted: I really do think that we re focusing on the language of the contract and the way it s been pled, there s not going to be that much outside we need to discuss. 5 Seyfferth as such trustee(s), heirs, successors, assigns, Party representatives, itself, executors, offspring, agents, and/or such Party s administrators, issue, spouses, beneficiaries, principals, partners, . . . officers, directors, . . . and any combination of the above, or anyone acting on their behalf. Because of the broad language, the collective Seyfferth includes Seyfferth and RSC, as well as their heirs, such as Mrs. Seyfferth, or any successor to RSC. Our understanding is supported by the Covenants and General Release provision of the agreement, which specifically provides that [t]he benefits of this [a]greement shall Seyfferth s[] survivors, heirs and devisees. plain reading of the agreement supports inure to Consequently, a the trial court s ruling. ¶11 Furthermore, although the agreement repeatedly refers to Blue Haven s desire[] to settle and compromise all claims of any nature attempts between to contract. the portray Despite Parties the this and Diving agreement as contention, the Lady, a Blue personal agreement Haven services cannot be construed as a personal services agreement between Seyfferth and Blue Haven. ¶12 Johnson s Generally, a personal services agreement, like Magic first contract with the owner of the Los Angeles Lakers, involves one party s promise to perform in exchange for 6 the other party s promise to tender a fixed payment. v. City of (1938). Phoenix, Such successors, Ariz. 254, 260, agreements do not bind assigns, and are not and enforcement. 51 See id. 75 See Miller P.2d the 1033, parties subject to 1036 heirs, specific Thus, based on its terms, the agreement here is not a personal services agreement but a settlement of the dispute language between of the Haven was Diving and Diving agreement provides [c]ompromise [c]onsultancy, [r]elease. Seyfferth and Lady. that The it [f]ull is and plain one of [g]eneral The agreement, moreover, expressly states that Blue resolving Lady by any paying needed, for six years. claim Seyfferth Seyfferth and RSC might as have against consultants, as Although the agreement has components of a personal services contract, the fact that the agreement was created to resolve Seyfferth s dispute with Diving Lady, and included RSC to provide consulting services, readily supports the construction that RSC, an intended party to the contract, was entitled away. to continued payments even if Seyfferth passed Consequently, we find no error. II. Alleged Factual Disputes ¶13 Blue Haven next argues that summary judgment was improper because factual disputes existed as to the agreement s primary purpose. According to Blue Haven, the agreement contemplated paying Seyfferth only for his consulting services, 7 and therefore terminated upon his death. We disagree. The agreement indicates that Blue Haven agreed to retain Seyfferth, and RSC, as consultants [i]n consideration of resolving any and all existing or potential disputes between [the parties and Diving Lady]. Furthermore, it provides that in the event of a dispute [the as to agreement s] interpretation, no ambiguity shall be construed for or against any [p]arty. Rather, it is the construe [parties ] intent that the court shall this [a]greement fairly and in a manner that gives full effect to its purpose and intent. ¶14 is Although the main objective of contract interpretation to effectuate the parties intent, extrinsic evidence inadmissible if it contradicts the contract language. is Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 152, 154 n.2, 854 P.2d 1134, 1138, 1140 n.2 (1993) (citations omitted). Here, the contractual waiver of Seyfferth s claims against Diving Lady and Blue Haven was an integral part of the parties bargain and, as a result, any extrinsic evidence offered to undermine the plain language of the contract was properly excluded as incompatible with the terms of the agreement. ¶15 Blue Haven also argues that the settlement of claims was not supported by consideration. agreement that Seyfferth s Despite provisions in the consideration for this agreement shall be his waiver of claims as provided herein, and that Blue 8 Haven agrees resolving Haven to retain and all existing that the claims any argues Seyfferth [i]n potential or consideration disputes, settlement did not of Blue constitute consideration because (1) Seyfferth did not have claims against Blue Haven and (2) Blue Haven was not affiliated with Diving Lady. ¶16 Even if we assume for the purpose of argument that Seyfferth had no claims or potential claims against Blue Haven, his release of claims against Diving Lady constituted a benefit to Blue Haven that was sufficient to satisfy the consideration requirement. See K-Line Builders, Inc. v. First Fed. Sav. & Loan Ass'n, 139 Ariz. 209, 212, 677 P.2d 1317, 1320 (App. 1983) (citation omitted) ( Consideration is a benefit to the promisor or a loss or detriment to the promisee, and there is no consideration for a promise where no benefit is conferred on the promisor or a detriment suffered by the promisee. ). Here, because the settlement of Seyfferth s claims was a valid and substantial portion of the parties bargain, and the agreement refers to Seyfferth s survivors, heirs and devisees, the agreement demonstrates that it was reasonably intended to last for the six-year term even if Seyfferth died during the term of the agreement. ¶17 Blue Haven also argues that the court erred when it failed to recognize the provisions that required Seyfferth to 9 provide consulting services as a condition precedent to Blue Haven s payment obligation. not support the argument. The language of the agreement does First, the agreement only provides that Blue Haven will retain Seyfferth for consulting services for six years but does not provide that he has to provide any services before the first and successive monthly payments were due. Moreover, the agreement provides that it would inure to Seyfferth s survivors, heirs and devisees. ¶18 And, with respect to RSC, the agreement does not require active consulting but merely states that the Robert Seyfferth Company will make itself available on an as needed basis during the coveture [sic] of this [a]greement to provide advice and consultation to Blue Haven National Management, Inc. Therefore, even assuming Blue Haven s contention that RSC cannot perform consulting services, RSC is still compensation for the negotiated waiver of claims. entitled to Consequently, the court did not err in granting summary judgment to RSC. III. Damages ¶19 Finally, Blue Haven challenges the court s summary grant of damages and argues that the court was not authorized to enter the damages award in the absence of a corresponding motion or ruling. ¶20 We disagree. After granting partial summary judgment on liability, the court determined that the damages for the breach of contract 10 could not be readily calculated. Once RSC withdrew its claims for consequential and punitive damages in open court, however, the court was free to evaluate whether there was a dispute about the basic damage claim. under the contract. ¶21 Blue The court found there was no dispute As a result, we find no error. Haven additionally argues that the court incorrectly ordered it to pay the entire outstanding balance, with interest, because installment payments. ¶22 the agreement required monthly We agree. Whether the claim is for the breach of contract for a specific amount or as an account stated for a specific amount, Trimble Cattle Co., 122 Ariz. at 48, 592 P.2d at 1314, the agreement does not contain an accelerated payment clause. Instead, Seyfferth and RSC agreed to a six-year payout of the settlement sum; settlement requiring years. in other Blue words, Haven the to parties pay RSC entered monthly into for a six A fair construction of the agreement therefore requires that Blue Haven can only be held responsible for each missed payment since December 2008, plus interest, attorneys fees, and costs. Because the judgment entered by the court accelerated the balance of the $500,000.00, and ordered interest on the full amount, we vacate the award of $339,744 plus pre-judgment and 11 post-judgment interest, and remand for a recalculation of the payments due since December 2008 plus pre-judgment interest. 5 ¶23 Blue Haven and RSC have requested attorneys fees on appeal pursuant to Ariz. Rev. Stat. ( A.R.S. ) § 12-341.01 (West 2012). Both parties have prevailed in part; RSC retained its summary judgment on all but the calculation of the judgment and Blue Haven prevented the complete acceleration of the agreement. Accordingly, in the exercise of our discretion, we decline the attorneys fees requests. Mindful of A.R.S. § 12-342(A) (West 2012), 6 we will allow the trial court to determine whether any party is entitled to costs expended on this appeal when a judgment is entered. 5 We are not vacating the trial court s award of attorneys fees or costs. We also do not address whether RSC will be entitled to further fees or costs when the judgment is recalculated. 6 The statute governing appellate costs provides that: On an appeal by the party against whom judgment was given in the court below, if the judgment of the appellate court is against him, but for a lesser amount, he shall recover costs in the appellate court, but shall be adjudged to pay costs in the court below. If the judgment of the appellate court is against him for the same or a greater amount than in the court below, the adverse party shall recover costs in both courts. A.R.S. § 12-342(A). 12 CONCLUSION ¶24 Based on the foregoing reasons, we affirm the judgment finding that Blue Haven is liable to RSC under the consultancy agreement, vacate the damage award with pre-judgment and postjudgment interest, and remand for a recalculation of the amount owed to RSC pursuant to the directions of this decision. /s/ ________________________________ MAURICE PORTLEY, Presiding Judge CONCURRING: /s/ ________________________________ PHILIP HALL, Judge /s/ ________________________________ MICHAEL J. BROWN, Judge 13

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