Lane v. Gavilan Peak

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

STEVEN LANE, Plaintiff/Appellant/Cross-Appellee,

v.

GAVILAN PEAK ESTATES, LLC, Defendant/Appellee/Cross-Appellant.

No. 1 CA-CV 17-0604
FILED 1-15-2019

Appeal from the Superior Court in Maricopa County
No. CV2014-013584
The Honorable Daniel J. Kiley, Judge

REVERSED AND REMANDED

COUNSEL

Robbins & Curtin P.L.L.C., Phoenix
By Joel B. Robbins
Co-Counsel for Plaintiff/Appellant/Cross-Appellee

Ahwatukee Legal Office, P.C., Phoenix
By David L. Abney (argued)
Co-Counsel for Plaintiff/Appellant/Cross-Appellee

Jones, Skelton & Hochuli P.L.C., Phoenix
By John M. DiCaro, Justin M. Ackerman (argued)
Counsel for Defendant/Appellee/Cross-Appellant
 LANE v. GAVILAN PEAK
Decision of the Court

MEMORANDUM DECISION

Judge Paul J. McMurdie delivered the decision of the Court, in which
Presiding Judge Jennifer B. Campbell and Judge Kent E. Cattani joined.

M c M U R D I E, Judge:

¶1 Steven Lane appeals from the superior court’s grant of
summary judgment in favor of Gavilan Peak Estates, LLC (“Gavilan Peak”).
For the following reasons, we reverse and remand.

FACTS AND PROCEDURAL BACKGROUND

¶2 In 1984, Charles Byers purchased four parcels of property
totaling approximately 120 acres in New River, which he referred to as
“Starflash Ranch.” In 1987, Byers transferred the four parcels comprising
the property to American Security Investments Trust, an irrevocable trust
created by Byers. Byers manufactured and stored large quantities of a
variety of explosive devices and chemicals on the property, and he
conducted training classes using munitions and explosives.

¶3 In September 1997, federal agents searched the property and
found a large quantity of explosives and dangerous reactive chemicals, and
the U.S. Environmental Protection Agency designated the property “for
time-critical removal action under the Comprehensive Environmental
Response, Compensation, and Liability Act.” Federal officials denotated
on-site or removed for disposal approximately four tons of nonexplosive
chemicals and 1000 pounds of explosives. A large quantity of chemicals and
explosives remained on the property, however, and the federal government
determined the only safe option was to burn them on site.

¶4 New River residents and the Governor of Arizona expressed
concern about the danger of the federal government’s plan. So, in March
1999, the federal government terminated its involvement with the property
and allowed the State to take control of the cleanup. The governor declared
a state of emergency at the property, stating “a release or a threat of a release
of hazardous materials and an imminent and substantial endangerment to
the public health or welfare or the environment exist on the Property.” The
governor directed state agencies to “take whatever action is necessary on

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the Property or any other place to eliminate, monitor, abate, mitigate,
remediate, or otherwise remove the hazardous condition thereon . . . .”

¶5 The governor commissioned a task force to perform remedial
activities, and the State removed over 8000 pounds of explosive materials
and hazardous chemicals from the property. In May 1999, the governor
issued a press release saying, “I want to tell the residents of New River the
danger is over . . . the hazardous materials are gone and the residents are
safe.”

¶6 In July 1999, Byers’ brother Robert Byers, as trustee of
American Security Investments, accepted possession and control of the
property from the State. In the Acceptance of Possession, the State
explained it was returning the property in “a better condition than it was
when the State took possession.” However, the State also declared it:

[M]akes no warranty or representation to [Robert] Byers that
all explosives, hazardous materials, or hazardous conditions
have been removed from the Property or that the Property is
fit for any particular purpose. Explosive materials, hazardous
materials, and other hazardous conditions may be present on
the Property despite the diligent efforts of the State to locate
and safely dispose of such explosive materials, hazardous
materials, and hazardous conditions.

¶7 Six years later, Gavilan Peak purchased the property from
American Security Investments and Wendy Berns-Byers, Charles Byers’
wife. At various times, tenants lived in a home on the property, and,
beginning in 2010, Gavilan Peak leased the property to Troy and Elvan
Hager. In September 2013, Chelsie Garner and Jordan Perrin, after talking
to the Hagers, moved onto the property. The Hagers’ lease agreement with
Gavilan Peak prohibited subleases, and there was not a written sublease
between the Hagers and Garner and Perrin.

¶8 Garner and Perrin paid the Hagers rent in September and
October 2013, but the Hagers did not pay Gavilan Peak rent for either of
those months. Troy Hager told Gavilan Peak’s manager, Allan Johnson, that
Garner and Perrin may be interested in leasing the property. In response,
Johnson sent Garner a sample lease agreement. Gavilan Peak learned
Garner and Perrin were living on the property without its permission
sometime around early November 2013. Johnson told Garner she and
Perrin did not have a right to be on the property and through text messages

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told Garner and Perrin to move out or pay the back-rent owed by
November 4.

¶9 Garner asked a friend, Mike Miller, to help them move off the
property. Miller asked his friend, Steven Lane, to also help with the move,
and together they went to the property. Garner agreed to allow Lane to pick
up scrap metal while he was on the property, which Lane intended to sell.
On November 4, 2013, after helping Garner and Perrin move out of the
home on the property, Lane loaded a refrigerator and scrap metal onto and
into his vehicle. Intending to continue looking for scrap items, Lane walked
around the property. At some point, Lane dragged his left foot on the
ground, triggering an explosion. The explosion severely injured Lane.

¶10 In August 2015, Lane filed a second amended complaint
against: the State of Arizona; Maricopa County Sheriff Joseph Arpaio;
Charles Byers and Wendy Berns-Byers; John Flynn as trustee on behalf of
American Security Investments Trust; and Gavilan Peak. Lane’s claims
against the sheriff were dismissed, and Lane settled his claims against all
other parties except Gavilan Peak. Regarding Gavilan Peak, Lane pled one
count each of premises liability, false light invasion of privacy, and
fraudulent transfers.

¶11 Gavilan Peak moved for summary judgment on all of Lane’s
claims. Concerning Lane’s premises liability claim, Gavilan Peak argued it
was entitled to summary judgment because: (1) Lane was a trespasser at the
time he was injured; (2) Gavilan Peak did not willfully, intentionally, or
wantonly injure Lane; and (3) based on the Restatement (Second) of Torts
(“Restatement”) § 358 (1965), Gavilan Peak is not liable for Lane’s injuries
because Gavilan Peak did not know or have reason to know about the
dangerous condition on the property and Garner and Perrin knew of the
dangerous condition on the property or had a reasonable opportunity to
discover it.

¶12 Lane responded to Gavilan Peak’s summary judgment
motion, arguing: (1) he was not a trespasser at the time he was injured, but
rather an invitee or a licensee; and (2) genuine issues of fact exist regarding
whether Gavilan Peak breached the duty of care it owed Lane and whether
Wendy Berns-Byers’ knowledge about the property should be imputed to
Gavilan Peak. After oral argument, the superior court entered summary
judgment in favor of Gavilan Peak on Lane’s premises liability and
fraudulent transfers claims. The superior court denied Gavilan Peak’s
summary judgment motion on Lane’s false light invasion of privacy claim,
but the parties later stipulated to its dismissal.

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¶13 Pursuant to Arizona Rule of Civil Procedure 59(a)(1)(H), Lane
moved for a new trial, to which Gavilan Peak objected. The superior court
denied Lane’s motion. Lane timely appealed, and Gavilan Peak
cross-appealed. We have jurisdiction pursuant to Arizona Revised Statutes
(“A.R.S.”) sections 12-120.21(A)(1) and -2101(A)(1).

DISCUSSION

¶14 Lane argues the superior court erred by granting summary
judgment because: (1) Gavilan Peak is liable under Restatement § 358; (2)
Lane was an invitee when he was injured and Gavilan Peak breached the
duty of care it owed to Lane as an invitee; (3) Gavilan Peak is also liable
under the Restatement (Second) of Property: Landlord and Tenant § 17.1
(1977); and (4) absolving Gavilan Peak of liability under either restatement
section would violate Arizona’s version of the Uniform Contribution
Among Tortfeasors Act. Gavilan Peak counters by arguing the superior
court correctly granted summary judgment in its favor under Restatement
§ 358, but alternatively argues on cross-appeal that it is not liable to Lane
because: (1) Lane was a trespasser when he was injured, and even assuming
Lane was an invitee it did not breach any duty it may have owed to Lane;
(2) Lane was a guest of a sublessee; and (3) Lane was attempting to steal
ferrous or non-ferrous metals when he was injured.

¶15 Summary judgment is proper if “there is no genuine dispute
as to any material fact and the moving party is entitled to judgment as a
matter of law.” Ariz. R. Civ. P. 56(a). On review from the grant of summary
judgment, we view all facts and reasonable inferences in the light most
favorable to Lane and review the superior court’s decision de novo. See
Normandin v. Encanto Adventures LLC, 245 Ariz. 67, 71, ¶ 7 (App. 2018),
review granted (Jan. 8, 2019). To establish a claim for negligence, Lane must
prove: (1) a duty requiring Gavilan Peak to conform to a certain standard
of care; (2) a breach by Gavilan Peak of that duty; (3) a causal connection
between the breach and the resulting injury; and (4) actual damages. See
Quiroz v. ALCOA Inc., 243 Ariz. 560, 564–65, ¶ 7 (2018).

A. Genuine Disputes of Material Fact Exist Whether Gavilan Peak or
Garner and Perrin Knew of or Had Reason to Know a Dangerous
Condition or Risk Existed on the Property.

¶16 As an initial matter, Gavilan Peak contends Lane waived his
arguments regarding Gavilan Peak’s liability under Restatement § 358.
Although Lane did not directly respond to Gavilan Peak’s Restatement
arguments made in its motion for summary judgment, the parties argued

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its applicability at oral argument, and the superior court considered the
issue when ruling on Gavilan Peak’s summary judgment motion. Thus, we
find the issue has not been waived. See Normandin, 245 Ariz. at 72, ¶ 12
(argument was not waived where it presented a question of law and the
superior court considered it); Evenstad v. State, 178 Ariz. 578, 582 (App. 1993)
(“If application of a legal principle, even if not raised below, would dispose
of an action on appeal and correctly explain the law, it is appropriate for us
to consider the issue.”).

¶17 Regarding the merits of the claim, our supreme court has
explained the general rule that a landlord is “under a duty of ordinary care
to inspect the premises when he has reason to suspect defects existing at the
time of the taking of the tenancy and to either repair them or warn the
tenant of their existence.” Cummings v. Prater, 95 Ariz. 20, 26 (1963). But cf.
Restatement § 356 (“Except as stated in §§ 357–362, a lessor of land is not
liable to his lessee or to others on the land for physical harm caused by any
dangerous condition, whether natural or artificial, which existed when the
lessee took possession.”); see also id., cmt. a (“When land is leased to a
tenant, the law of property regards the lease as equivalent to a sale of the
land for the term of the lease. The lessee acquires an estate in the land, and
becomes for the time being the owner and occupier, subject to all of the
liabilities of one in possession, both to those who enter the land and to those
outside of it. Therefore, as in the case of the vendor under § 352, it is the
general rule that the lessor is not liable to the lessee, or to others on the land,
for injuries occurring after the lessee has taken possession, even though
such injuries result from a dangerous condition existing at the time of the
transfer.”).

¶18 Under different circumstances, however, a lessor may remain
liable based on dangerous conditions on the land. Restatement § 358
provides:

(1) A lessor of land who conceals or fails to disclose to his
lessee any condition, whether natural or artificial, which
involves unreasonable risk of physical harm to persons on
the land, is subject to liability to the lessee and others upon
the land with the consent of the lessee or his sublessee for
physical harm caused by the condition after the lessee has
taken possession, if

(a) the lessee does not know or have reason to know of the
condition or the risk involved, and

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(b) the lessor knows or has reason to know of the
condition, and realizes or should realize the risk
involved, and has reason to expect that the lessee will
not discover the condition or realize the risk.

This court has adopted Restatement § 358. Piccola ex rel. Piccola v. Woodall, 186 Ariz. 307, 312 (App. 1996).

¶19 Under § 358, Gavilan Peak is liable for Lane’s injuries if
Gavilan Peak knew or had reason to know of the dangerous condition or
risk that caused Lane’s injuries and if Garner and Perrin did not know or
have reason to know about the condition or risk. Relying primarily on
deposition testimony from Johnson, Garner, and Charles Byers, Lane
argues Gavilan Peak “knew and had reason to know the land harbored
potentially dangerous explosive devices, materials, or booby traps” and
that Garner and Perrin did not know or have reason to know of the
condition. Lane also argues there are several “disputed questions of fact
concerning the nature and scope of the knowledge and ‘reason to know’ of
all relevant actors.” We agree genuine disputes of material fact exist about
whether Gavilan Peak knew or had reason to know a dangerous condition
or risk existed on the property and about whether Garner and Perrin knew
or had reason to know of the condition or risk and realized or should have
realized that risk. See Restatement § 358. Therefore, the superior court erred
by granting summary judgment. See Ariz. R. Civ. P. 56(a).

¶20 “Whether a person has ‘reason to know’ something is a fact
question.” Verduzco v. Am. Valet, 240 Ariz. 221, 225, ¶ 12 (App. 2016).
Reason to know exists if a reasonable person would “either infer the
existence of the fact in question or would regard its existence as so highly
probable that his [or her] conduct would be predicated upon the
assumption that the fact did exist.” Id. (alteration in original) (quoting
Williamson v. PVOrbit, Inc., 228 Ariz. 69, 73, ¶ 20, n.1 (App. 2011)); see also
Restatement § 12(1).

¶21 It is undisputed that before Gavilan Peak purchased the
property it knew Charles Byers ran an explosives manufacturing business
there. Johnson testified he and Charles Byers talked about the property’s
history, and Charles Byers showed Johnson where on the property he made
and stored explosives. Gavilan Peak also knew at some point the federal
and state governments had taken control of the property to clean it up.
Johnson testified Charles Byers told him the property had been cleaned up,
but Gavilan Peak did not do any further investigation or conduct further

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inquiry into the extent or success of the cleanup efforts or whether any
explosives potentially remained on the property.

¶22 Lane argues a jury could reasonably conclude Gavilan Peak
“should have done far more to investigate the premises’ true condition.”
For example, Lane asserts Gavilan Peak never: (1) requested all documents
regarding the property at the time of purchase, including the Acceptance of
Possession form with the State’s disclaimer; (2) researched Charles Byers’
and the property’s history; (3) asked the title company to research whether
dangerous materials were left on the land; or (4) hired an expert to actually
inspect the property.

¶23 A landlord is not required to have actual knowledge of the
dangerous condition existing on the premises. Piccola, 186 Ariz. at 311.
“Information from which a reasonable person could infer that a dangerous
condition exists is sufficient to impose liability,” and a landlord’s duty of
care requires inspection of the property “if there is reason to suspect defects
existing at the time the tenant takes possession.” Id. at 310–11.

¶24 Gavilan Peak argues none of the facts in this case gave it
reason to know a dangerous condition continued to exist on the property
such that it had a duty to further investigate. It maintains it was entitled to
rely on the government cleanup efforts and Charles Byers’ assertions the
property had been remediated. Furthermore, Gavilan Peak argues that even
if it had conducted further investigation, all it would have discovered is the
governor’s proclamation that the property was safe. The superior court
agreed with Gavilan Peak, finding “no basis in the record for [Lane’s]
contention that, had Gavilan Peak conducted an investigation into the
history of Starflash Ranch, Gavilan Peak would have uncovered
information that would lead it (or a reasonable person) to suspect that a
hazardous condition remained on the property.”

¶25 Gavilan Peak has not established, as a matter of law, that it
did not have reason to know, or reason to suspect, a dangerous condition
or risk may have existed on the property such that it is not liable to Lane.
Admittedly, Johnson testified Charles Byers told him the property had been
cleaned up. However, given Gavilan Peak’s knowledge that the property
had been used to store and manufacture explosives, a jury could conclude
that a reasonable person would not have relied on the title company or
Charles Byers’ statements and would have sought more information about
the cleanup, or assurance from the State that no explosives remained on the
property.

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¶26 Additionally, despite Johnson’s testimony that if Gavilan
Peak had further investigated all it would have discovered is the governor’s
proclamation, Johnson also testified at some point after purchasing the
property, Gavilan Peak received a copy of the State’s “Explosives
Remediation Report.” The report detailed the federal and state cleanup
activities, referenced the governor’s proclamation, and stated “the clean up
effort afforded the opportunity to make a final and complete inspection of
the property to ensure nothing hazardous had been overlooked.” However,
it primarily discussed the cleanup of just two locations on the property and
stated the property is “still very disorderly and cluttered.” The report
referenced an appendix, which included a copy of the Acceptance of
Possession. The Acceptance of Possession specifically warned that
explosive or hazardous materials may still be on the property. It is not clear
from the record whether Gavilan Peak received a copy of the appendix, and
it maintains it never received a copy of the Acceptance of Possession, but at
the very least, a jury could conclude a reasonable person would have asked
for the appendix referenced in the report if it was not included.
Accordingly, from this record, a jury could conclude a reasonable person
should have known, or had to reason to suspect, that a dangerous condition
or risk existed on the property. See Piccola, 186 Ariz. at 311.

¶27 Lane also argues Wendy Berns-Byers knew explosives and
munitions were manufactured and detonated at Starflash Ranch, and that
a jury could conclude she also knew about the “incomplete” cleanup efforts
at the property. Because she was a member of Gavilan Peak, Lane contends
her knowledge should be imputed to Gavilan Peak and gave Gavilan Peak
“reason to know” of the potentially dangerous condition that should have
been disclosed to anyone who entered the property. Wendy Berns-Byers
lived on the property with Charles Byers when he was operating the
munitions and explosives business. But it is unclear from the record how
much Wendy Berns-Byers knew about the government cleanup, whether
she ever saw a copy of the Acceptance of Possession, or whether she knew
or had reason to know explosives may have remained on the property.
Accordingly, we find a fact question also exists as to whether any
knowledge Wendy Berns-Byers may have had gave Gavilan Peak reason to
know a dangerous condition or risk continued to exist on the property.

¶28 We likewise find a fact question exists as to whether Garner
or Perrin had reason to know of the condition or the risk involved. See
Restatement § 358(1)(a). Garner testified she and Perrin found grenade pull
pins, grenade fuses, used blasting caps, and spent shell casings on and
around the property. She also testified Perrin, who had seen bombs explode
while in the military, told Garner the items they found on the property were

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ingredients to build bombs and booby traps. Based on this, the superior
court found Garner and Perrin learned of the dangerous condition that
ultimately caused Lane’s injury and thus any duty Gavilan Peak may have
owed Lane devolved onto them. See Piccola, 186 Ariz. at 312 (landlord not
liable for tenants’ guest’s injuries because landlord’s “duty to warn of or
remedy the [dangerous] . . . condition devolved upon the tenants” once
tenants knew of the dangerous condition).

¶29 However, Garner also testified that finding items that could
be used to make explosives did not motivate her and Perrin to move off the
property; they found a canister of lead styphnate on the property and left it
in their kitchen; and they and Garner’s children commonly walked about
the property. Accordingly, Lane argues a jury could find Garner and Perrin
did not know about or have reason to know about the possible existence of
a dangerous condition or appreciate its risk.

¶30 We agree with Lane. Garner testified she was unaware of the
history of the property, and a jury could find that her and Perrin’s
discoveries on the property did not necessarily give them reason to know
of the risk that undetonated explosives continued to exist on the property.
Genuine disputes of material fact exist, and a reasonable jury could find: (1)
Gavilan Peak did know or have reason to know, or have reason to suspect,
the dangerous condition or risk existed; or (2) Garner and Perrin did not
know or have reason to know a dangerous condition existed on the
property or appreciate its risk. Accordingly, we hold the superior court
erred by granting Gavilan Peak’s motion for summary judgment.

B. Genuine Disputes of Material Fact Exist as to Whether Lane was a
Trespasser or an Invitee When He Was Injured.

¶31 Gavilan Peak alternatively argues it is not liable for Lane’s
injuries because Lane was a trespasser when he was injured. Lane,
however, argues he was an invitee. The duty a landowner owes to an
entrant on land is defined by the entrant’s status. McMurtry v. Weatherford
Hotel, Inc., 231 Ariz. 244, 255, ¶ 34 (App. 2013). Landowners have an
affirmative duty to use reasonable care to make the premises safe for an
invitee’s use, Markowitz v. Ariz. Parks Bd., 146 Ariz. 352, 355 (1985), but a
landowner owes no duty to trespassers other than to refrain from willfully
or intentionally injuring them, Spur Feeding Co. v. Fernandez, 106 Ariz. 143,
145 (1970). An invitee is a person “invited to enter or remain on land for a
purpose directly or indirectly connected with business dealings” of the
landowner; a trespasser is someone who enters or remains on another’s

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land “without a privilege to do so.” Nicoletti v. Westcor, Inc., 131 Ariz. 140,
142–43 (1982) (quoting Restatement §§ 329, 332).

¶32 Gavilan Peak argues Lane was a trespasser because Garner
and Perrin did not have authority to allow Lane to collect scrap metal from
the property and Lane was stealing the scrap metal when injured. Lane
counters that by cleaning up the property he was performing tasks for
Gavilan Peak’s benefit; he had Garner’s permission to collect the scrap
metal; and at a minimum the nature of his presence on the premises and the
lawfulness of his conduct “were contested questions of fact for the jury to
resolve.”

¶33 In denying Gavilan Peak’s summary judgment motion on
Lane’s false light invasion of privacy claim, 1 the superior court found it
could not conclude as a matter of law that Lane was a trespasser when he
was injured. The court found several genuine issues of material fact existed,
including: (1) whether Garner and Perrin were lawfully on the premises the
day Lane was injured; (2) whether Garner and Perrin were entitled to give
Lane permission to be on the premises; (3) whether Lane was stealing a
refrigerator from the property when he was injured, “or simply gathering
up old junk”; and (4) whether Lane exceeded the scope of any invitation to
be on the premises. The record supports these findings and the conclusion
that several fact questions remain. Therefore, Lane’s status as an invitee or
a trespasser presents a jury question. See State v. Juengel, 15 Ariz. App. 495,
499 (1971) (“Plaintiff’s status as trespasser, licensee or invitee was contested
and properly treated as a question of fact for the jury’s determination.”),
disagreed with on other grounds by New Pueblo Constructors, Inc. v. State, 144
Ariz. 95, 109 (1985); McMurtry, 231 Ariz. at 256, ¶ 36 (whether hotel guest
exceeded the scope of her invitation and became a trespasser presented a
material question of fact). Gavilan Peak is not entitled to summary
judgment on the ground that Lane was a trespasser when injured.

1 Gavilan Peak argued it was entitled to summary judgment on Lane’s
premises liability claim because Lane was a trespasser when he was injured
and because it was not liable under Restatement § 358. The superior court
only addressed Gavilan Peak’s Restatement § 358 argument because it
found the argument “dispositive” of Lane’s premises liability claim.
Gavilan Peak relied on the same facts to support its summary judgment
motion on both Lane’s premises liability and false light claims.

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C. Gavilan Peak Can Be Held Liable for Lane’s Injuries Despite
Gavilan Peak Not Being in Possession of the Land and Garner and
Perrin Not Having a Valid Sublease.

¶34 Gavilan Peak also argues it is not liable to Lane because Lane
was a guest of sublessees, Garner and Perrin, at the time he was injured.
Specifically, Gavilan Peak argues Arizona law requires privity of estate and
contract to “impose liability on a landlord not in possession of the land.”
Gavilan Peak thus maintains that because no privity runs between Gavilan
Peak and Garner or Perrin, there cannot be liability between it and Lane.

¶35 Gavilan Peak primarily relies on our decision in Mac
Enterprises, Inc. v. Del E. Webb Development Co., 132 Ariz. 331 (App. 1982), to
support its contention that privity of estate and contract are prerequisites
to imposing liability on landlords not in possession of the land. Mac
Enterprises did recognize the general proposition that when a tenant
executes a sublease, a landlord-tenant relationship exists between the
tenant and the sublessee, not between the sublessee and original lessor. Id.
at 334. However, the issue in Mac Enterprises was whether the lessor was a
party to the sublease and, because it was not, whether the statute of frauds
provided the lessor a defense to the sublessee’s complaint. Id. The case
involved the lessor’s liability for termination of a contract, not premises
liability or personal injury. See id. at 335. Although the court held the
sublessee was not in privity with the lessor, id. at 336, we do not read the
case to hold that before any liability may be imposed on any lessor there
must be privity of estate or contract. To the contrary, in Arizona there is no
requirement of privity to maintain a tort action. See, e.g., Toy v. Katz, 192
Ariz. 73, 89 (App. 1997) (“[T]here is no requirement of privity in tort actions
for professional negligence.”); Mur-Ray Mgmt. Corp. v. Founders Title Co., 169 Ariz. 417, 423 (App. 1991) (duty in a negligent misrepresentation claim
may exist notwithstanding a lack of privity between the parties); Wetzel v.
Commercial Chair Co., 18 Ariz. App. 54, 56 (1972) (privity is not required in
order to bring a products liability claim). Accordingly, we reject Gavilan
Peak’s argument that privity is a necessary prerequisite to imposing
liability.

¶36 Gavilan Peak further relies on Alcombrack v. Ciccarelli, 238
Ariz. 538 (App. 2015), for the assertion that a landowner is not liable to a
third party injured on the property when the landowner is not in possession
of the property. In Alcombrack, landowners defaulted on a loan for a house
they leased to a tenant, resulting in eventual foreclosure. Id. at 539, ¶¶ 1–2.
The landowners did not tell their tenant about the foreclosure, and the
tenant shot and injured a locksmith sent to the house to change the locks.

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Id. at ¶¶ 2–3. The locksmith sued the landowners, alleging they breached a
duty owed to him. Id. at ¶ 4. On appeal, this court affirmed the superior
court’s grant of summary judgment in favor of the landowners, explaining
in part that “[u]nder a landowner-licensee/invitee relationship . . . a
landowner not in possession of property owes no duty to a third party who
is injured on the property.” Id. at 540, ¶ 7.

¶37 Alcombrack is distinguishable from the facts of the present
case. The cases cited by Alcombrack for the proposition that a landowner not
in possession of a property does not owe a duty to a third person injured
on the property also suggest that a landlord’s liability is not so limited when
the landowner knows or has reason to know of a dangerous condition that
existed when the landowner leased the premises. For example, in Rendall v.
Pioneer Hotel, 71 Ariz. 10, 15–16 (1950), our supreme court recognized that
“[a]t common law, subject to certain exceptions not here material, the
occupier or tenant and not the landlord was liable to a third person on the
premises for injury caused by the condition or use of the demised
premises.” But the court also noted the defect that led to an injury in that
case did not exist when the tenant took possession and the court expressly
“refrain[ed] from a discussion of the duties of a landlord to invitees of a
tenant under any other circumstances than that presented by the facts in
this case.” Id. at 15.

¶38 Alcombrack also relied on Clarke v. Edging, 20 Ariz. App. 267,
272–73 (1973), which noted that a landlord is generally not considered a
possessor for purposes of premises liability. Alcombrack, 238 Ariz. at 540,
¶ 7. However, Clarke also recognized “there is no liability upon a landlord,
either to the tenant or to others entering the land, for defective conditions
existing at the time of the lease, unless the lessor knew of such conditions and
failed to inform the lessee of such.” Clarke, 20 Ariz. App. at 272–73 (emphasis
added) (citing Restatement §§ 356, 358).

¶39 Gavilan Peak additionally notes Alcombrack’s citation to
Restatement § 356 for the general rule that “a lessor of land is not liable to
his lessee or to others on the land for physical harm caused by any
dangerous condition . . . which existed when the lessee took possession.”
See 238 Ariz. at 540. But, as discussed above, Restatement § 358 provides an
exception to this rule and our supreme court has disapproved of a
bright-line rule shielding landlords from liability based on conditions
existing when a lessee takes possession. See Cummings, 95 Ariz. at 22–27;
Piccola, 186 Ariz. at 310. Rather, a “landlord is under a duty of ordinary care
to inspect the premises when he has reason to suspect defects existing at the
time of the taking of the tenancy and to either repair them or warn the

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Decision of the Court

tenant of their existence.” Cummings, 95 Ariz. at 26. Restatement § 358
extends the landlord’s liability “to the lessee and others upon the land with
the consent of the lessee or his sublessee.” (Emphasis added.) Thus, we
disagree with Gavilan Peak that because Gavilan Peak was not in
possession of the land and because there was no privity between it and
Garner or Perrin, Gavilan Peak cannot be liable, as a matter of law, to Lane.
See Piccola, 186 Ariz. at 310 (landlord could properly have been held liable
for injuries sustained by tenants’ guest).

D. The Remaining Arguments are Waived on Appeal.

¶40 Lane argues Gavilan Peak is liable under the Restatement
(Second) of Property: Landlord and Tenant § 17.1. Lane raised this
argument for the first time on appeal, which constitutes waiver. See Mitchell
v. Gamble, 207 Ariz. 364, 369–70, ¶ 16 (App. 2004) (arguments raised for the
first time may be deemed waived and a party generally cannot advance
new theories on appeal from summary judgment to secure reversal).
Moreover, Restatement § 17.1 is nearly identical to Restatement § 358, and
our analysis above is applicable.

¶41 Lane additionally argues Restatement § 358 cannot create an
absolute defense to Gavilan Peak’s liability because an absolute defense
would violate Arizona’s version of the Uniform Contribution Among
Tortfeasors Act. However, Lane raised this argument for the first time in
his motion for new trial and therefore waived the argument. See Bobrow v.
Bobrow, 241 Ariz. 592, 598, ¶ 29 (App. 2017) (party may not present new
argument in motion for new trial).

¶42 Finally, Gavilan Peak argues Lane was injured while
“attempting to commit the theft of ferrous or non-ferrous metals” in
violation of A.R.S. § 13-1802(A)(7). It therefore asserts that under A.R.S.
§ 12-712(C), it is not liable to Lane. Gavilan Peak did not raise this argument
below and has therefore waived it on appeal. See Mitchell, 207 Ariz. at
369–70, ¶ 16.

COSTS ON APPEAL

¶43 As the prevailing party on appeal, Lane is entitled to costs
upon compliance with Arizona Rule of Civil Appellate Procedure 21.

CONCLUSION

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Decision of the Court

¶44 For the foregoing reasons, we reverse the superior court’s
grant of summary judgment and remand for proceedings consistent with
this decision.

AMY M. WOOD • Clerk of the Court
FILED: AA

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