Carter Inc. v. Jade II

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

CARTER’S INCORPORATED, a design/build landscape firm, an Arizona
corporation, Cross-Claimant/Appellant,

v.

JADE II ENTERPRISES, LLC, an Arizona limited liability company,
Cross-Defendant/Appellee.

No. 1 CA-CV 13-0734
FILED 2-3-2015

Appeal from the Superior Court in Maricopa County
No. CV2009-001624 and CV2009-090455
(Consolidated)
The Honorable David King Udall, Judge

AFFIRMED

COUNSEL

Baumann Doyle Paytas & Bernstein, PLLC, Phoenix
By Gary T. Doyle
Counsel for Cross-Claimant/Appellant

Pak & Moring, PLC, Scottsdale
By Thomas S. Moring, James L. Pak
Counsel for Cross-Defendant/Appellee
 CARTER’S INC. v. JADE II
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Kent E. Cattani delivered the decision of the Court, in
which Judge Lawrence F. Winthrop and Judge Peter B. Swann joined.

C A T T A N I, Judge:

¶1 Carter’s Incorporated appeals from the superior court’s
decisions granting summary judgment in favor of Jade II Enterprises,
denying summary judgment for Carter’s, and denying Carter’s motion for
new trial on its unjust enrichment claim against Jade II. For reasons that
follow, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 Jade II, as the developer of a large commercial construction
project in Peoria, hired PFG Construction as general contractor to complete
the project. PFG in turn entered into contracts with multiple
subcontractors, including a contract with Carter’s to install landscaping and
irrigation for $40,920. Carter’s completed the full scope of work, but was
never paid.

¶3 Carter’s filed suit seeking to foreclose on a mechanic’s lien on
the project property, as well as asserting a breach of contract claim against
PFG and an unjust enrichment claim against Jade II.1 Carter’s lien claim
was rejected and PFG entered bankruptcy, leaving Carter’s unjust
enrichment claim against Jade II as the only remaining claim.

¶4 Carter’s moved for summary judgment, asserting that it was
entitled to judgment in the amount of the full contract price because Jade II
had received the benefit of landscaping improvements at Carter’s expense.
Jade II opposed the motion and filed a cross-motion for summary
judgment, asserting that it had not been unjustly enriched because it had
paid PFG in full (even though PFG had not paid Carter’s). In support of its
position, Jade II attached PFG’s payment applications (which included all
work performed by Carter’s) and conditional lien releases, along with an

1 Several other subcontractors brought similar claims in the original
suit. All claims raised by other parties have since been dismissed or
otherwise resolved.

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affidavit by Jade II member Yakov Ross stating that “Jade II paid PFG in
full for PFG’s entire scope of work, including all work performed by
Carter’s.” Carter’s, in turn, opposed Jade II’s cross-motion, arguing that the
court should disregard the Ross affidavit as a discovery sanction and that,
in any event, the affidavit was insufficient to prove payment.

¶5 After considering briefing and argument, the superior court
granted Jade II’s motion and denied Carter’s motion, finding that Jade II
had presented uncontroverted evidence that it had paid PFG in full for
Carter’s work. The court denied Carter’s motions for reconsideration and
for new trial, denied Jade II’s application for attorney’s fees, and entered
judgment in favor of Jade II.

¶6 Carter’s timely appealed from the judgment and the denial of
its motion for new trial. We have jurisdiction under Article 6, Section 9, of
the Arizona Constitution and Arizona Revised Statutes (“A.R.S.”) §§ 12-
120.21 and 12-2101(A)(1), (5)(a).2

DISCUSSION

¶7 Carter’s argues that the superior court should have
disregarded the Ross affidavit because Jade II failed to provide a pretrial
disclosure statement and failed to identify Ross as a witness or disclose his
anticipated testimony.

¶8 Under Arizona Rule of Civil Procedure 26.1(a)(3), each party
is required to disclose its witnesses “with a fair description of the substance
of [the] expected testimony.” Rule 37(c) provides that information that is
not timely disclosed shall not be used as evidence unless the disclosure
violation was harmless or the party shows good cause for the untimely
disclosure. Here, although the superior court did not expressly rule on
Carter’s objection to the Ross affidavit, the court implicitly declined to
preclude the affidavit by relying on it in its ruling on the summary
judgment motions. We review the superior court’s decisions on disclosure
and discovery matters for an abuse of discretion. Marquez v. Ortega, 231
Ariz. 437, 441, ¶ 14, 296 P.3d 100, 104 (App. 2013).

¶9 Almost three years before the superior court made its
summary judgment ruling, the parties prepared a joint pretrial statement
in which Jade II unequivocally asserted its position that it had paid PFG in
full and listed Ross as one of three anticipated witnesses. The pretrial

2 Absent material revisions after the relevant date, we cite a statute’s
current version.

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statement did not include a separately-delineated statement of Ross’s
anticipated testimony as contemplated under Rule 26.1(a)(3). Nevertheless,
the statement provided Carter’s with notice as to the substance of Jade II’s
position (payment in full) and the three witnesses (including Ross)
supporting that position. In opposing the affidavit, Carter’s adopted an all-
or-nothing approach, seeking only to preclude use of the affidavit entirely,
rather than seeking a continuance under Rule 56(f) to develop controverting
evidence.

¶10 The underlying purpose of the disclosure rules is notice; there
is no obligation to “script” the anticipated testimony of witnesses. Bryan v.
Riddel, 178 Ariz. 472, 476 n.5, 875 P.2d 131, 135 n.5 (1994). Because the key
information in the Ross affidavit—and the identities of those witnesses
expected to provide that information—was provided to Carter’s years
before the summary judgment proceedings, we conclude the superior court
did not err by declining to preclude the affidavit.

¶11 Carter’s next contends the superior court erred by granting
summary judgment in favor of Jade II on the unjust enrichment claim
because the evidence Jade II presented was insufficient to establish
entitlement to judgment as a matter of law. We review the grant of
summary judgment de novo, viewing the facts in the light most favorable
to the party against whom judgment was entered. Wells Fargo Bank, N.A. v.
Allen, 231 Ariz. 209, 213, ¶ 14, 292 P.3d 195, 199 (App. 2012).

¶12 Summary judgment is appropriate if there are no genuine
issues of material fact and, on the basis of those undisputed facts, the
moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P.
56(a). To qualify for summary judgment, the party with the burden of proof
on a claim or defense “must submit ‘undisputed admissible evidence that
would compel any reasonable juror to find in its favor on every element of
its claim.’” Allen, 231 Ariz. at 213, ¶ 18, 292 P.3d at 199 (quoting Comerica
Bank v. Mahmoodi, 224 Ariz. 289, 293, ¶ 20, 229 P.3d 1031, 1035 (App. 2010)).
In contrast, the opponent may simply “point out by specific reference to the
relevant discovery that no evidence exist[s] to support an essential element
of the claim.” Orme Sch. v. Reeves, 166 Ariz. 301, 310, 802 P.2d 1000, 1009
(1990).

¶13 A claim of unjust enrichment requires proof of “(1) an
enrichment, (2) an impoverishment, (3) a connection between the
enrichment and impoverishment, (4) the absence of justification for the
enrichment and impoverishment, and (5) the absence of a remedy provided
by law.” Wang Elec., Inc. v. Smoke Tree Resort, LLC, 230 Ariz. 314, 318, ¶ 10,

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283 P.3d 45, 49 (App. 2012). The underlying consideration is whether one
party received a benefit at the other’s expense under “circumstances [] such
that in good conscience [the first party] should make compensation.”
Murdock-Bryant Constr., Inc. v. Pearson, 146 Ariz. 48, 53, 703 P.2d 1197, 1202
(1985) (quoting Pyeatte v. Pyeatte, 135 Ariz. 346, 352, 661 P.2d 196, 202 (App.
1983)).

¶14 When an unjust enrichment claim arises from an owner–
general contractor–subcontractor relationship based on the general
contractor’s failure to pay the subcontractor, whether the owner has paid
the general contractor in full is dispositive. See Wang Elec., 230 Ariz. at 318,
¶ 12, 283 P.3d at 49. If the owner has fully paid the general contractor, the
subcontractor cannot recover from the owner for unjust enrichment
“because the owner is not unjustly enriched if it fully paid its obligation”;
in contrast, if the owner has not paid in full under its contract with the
general contractor, an unjust enrichment remedy may be available “because
permitting the owner to retain the benefit without fully paying for it would
be unjust.” Id. at 318–19, ¶ 12, 283 P.3d at 49–50 (collecting cases).

¶15 Here, the parties agreed (and the undisputed facts showed)
that Carter’s landscaping work provided a benefit for Jade II at Carter’s
expense because Carter’s did not receive payment for its work. Thus, the
dispositive issue is whether Jade II paid PFG.

¶16 As evidence of payment, Jade II presented PFG’s payment
applications showing that Jade II was billed for all work performed by
Carter’s. Although the payment applications themselves show only that
Jade II was billed for the work (not that Jade II actually paid those bills), the
Ross affidavit states directly that “Jade II paid PFG in full for PFG’s entire
scope of work, including all work performed by Carter’s.” Although
additional documentation in the form of cancelled checks, bank statements,
or payment receipts would have been better evidence of payment, Ross’s
uncontested sworn statement based on personal knowledge nevertheless
was competent evidence of payment. See Ariz. R. Civ. P. 56(e)(1).

¶17 Relying on B&R Materials, Inc. v. U.S. Fidelity & Guaranty Co.,
132 Ariz. 122, 644 P.2d 276 (App. 1982), Carter’s contends that the Ross
affidavit alone was not sufficient evidence to establish that Jade II paid for
the work performed by Carter’s. In B&R Materials, the defendant in a
breach of contract case offered testimony from a corporate officer that it had
paid the plaintiff in full, but provided no admissible documentary proof of
payment; the superior court, acting as factfinder in a bench trial, weighed
conflicting evidence, assessed witness credibility, and decided against the

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defendant. Id. at 123–24, 644 P.2d at 277–78. Here, in contrast, there was no
conflicting evidence to weigh. Instead, the Ross affidavit was the only
evidence, and it remained uncontroverted. As such, Carter’s reliance on
B&R Materials is inapposite.

¶18 Carter’s also cites Wells Fargo Bank, N.A. v. Allen to suggest
that the Ross affidavit, without underlying documentation, was insufficient
to establish payment. In Allen, a bank filed suit to collect an unpaid credit
card debt. 231 Ariz. at 211, ¶ 2, 292 P.3d at 197. This court held that the
bank had failed to carry its burden of persuasion on summary judgment
when the only evidence it submitted was a paralegal’s affidavit as
custodian of records stating that he had reviewed records that established
the amount of indebtedness, but did not attach or describe the records
themselves. Id. at 213–14, ¶¶ 18, 21, 292 P.3d at 199–200. We noted that
“[t]he purpose of a custodian’s affidavit is to authenticate evidence—such
an affidavit is of little value when it does not attach the evidence at issue.”
Id. at 214, ¶ 19, 292 P.3d at 200. Here, the Ross affidavit was not a
custodian’s authentication, but rather a statement of personal knowledge
and was thus competent evidence under Arizona Rule of Civil Procedure
56(e).

¶19 Finally, Carter’s asserts that statements by Jade II’s counsel—
that a bank, rather than Jade II itself, paid PFG out of Jade II’s line of credit—
undermine the Ross affidavit. But payment by the bank out of Jade II’s line
of credit on Jade II’s behalf is not inconsistent with Ross’s general statement
that Jade II paid PFG.

¶20 The superior court appropriately found no genuine dispute
that Jade II had paid PFG in full for the work completed by Carter’s. In
these circumstances, it was not unfair for Jade II to retain a benefit for which
it paid, see Wang Elec., 230 Ariz. at 318–19, ¶ 12, 283 P.3d at 49–50, and the
superior court did not err by entering summary judgment in favor of Jade
II or, conversely, by denying summary judgment for Carter’s.

¶21 Jade II seeks an award of attorney’s fees and costs on appeal
under A.R.S. § 12-341.01. Jade II did not cite any basis for its fees request in
superior court, and in our discretion we decline to award attorney’s fees.
As the prevailing party on appeal, however, Jade II is entitled to its costs on
appeal upon compliance with ARCAP 21.

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CONCLUSION

¶22 The judgment is affirmed.

:ama

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