Everson v. Tucci

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

DEREK EVERSON, a married man, Plaintiff/Appellee,

v.

DAVID TUCCI and JANE DOE TUCCI, husband and wife; 137 ECOR,
LLC, an Arizona limited liability company, et al ., Defendants/Appellants.

No. 1 CA-CV 20-0202
FILED 12-1-2020

Appeal from the Superior Court in Yavapai County
No. P1300CV201800555
The Honorable Krista M. Carman, Judge

AFFIRMED

COUNSEL

The Cavanagh Law Firm PA, Phoenix
By Kerry M. Griggs, Joshua M. Conway
Counsel for Plaintiff/Appellee

Davis Blase Stone & Holder PLLC, Scottsdale
By Greg R. Davis, Robin L. Dugas
Counsel for Defendants/Appellants
 EVERSON v. TUCCI, et al.
Decision of the Court

MEMORANDUM DECISION

Judge Cynthia J. Bailey delivered the decision of the Court, in which
Presiding Judge Randall M. Howe and Judge Kent E. Cattani joined.

B A I L E Y, Judge:

¶1 David Tucci and 137 ECOR, LLC (“ECOR”) (together,
“Appellants”) argue the superior court erred in granting summary
judgment to Derek Everson on Everson’s claims for breach of contract. We
affirm.

FACTS AND PROCEDURAL HISTORY

¶2 In December 2015, Tucci and Everson executed a writing
titled, “Operating Agreement of 137 ECOR, LLC, an Arizona limited
liability company” (“Agreement”). The Agreement contemplated the
purchase and development of mobile home lots near Prescott. It provided
that Tucci would contribute $1 million to finance the project and have a
sixty percent interest in the company and be its managing member.
Everson would have a forty percent interest and run the development.
After the company acquired the acreage but before it could finish the
development, Tucci reconsidered the wisdom of the project, and he
eventually sold the property without consulting Everson.

¶3 Everson sued, alleging breach of contract, breach of the
implied covenant of good faith and fair dealing, negligent
misrepresentation, unjust enrichment, fraud, and conversion. Appellants
moved for summary judgment on Everson’s claims for breach of contract
and breach of good faith. Appellants argued that, assuming the Agreement
was valid and in force, it allowed Tucci, as manager, to sell the property
without Everson’s consent because Tucci was a majority owner of the
company. Everson filed a cross-motion for summary judgment, arguing
that the Agreement allowed the manager of the company to sell the
property only with approval of a “majority” of the members.

¶4 The superior court denied Appellants’ motion and entered
judgment for Everson on his claims that Appellants breached the
Agreement (and the covenant of good faith) by selling the property without
Everson’s consent. The court reasoned that the provision of the Agreement

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 EVERSON v. TUCCI, et al.
Decision of the Court

requiring the consent of a “majority” meant the consent of a majority of the
members, not the consent of a member or members who hold a majority
interest in the company.

¶5 Tucci moved for reconsideration, arguing for the first time
that he did not sign the Agreement. He also argued the court incorrectly
interpreted the contract due to disputed material facts. The court denied
Tucci’s motion.

¶6 After the court granted Tucci’s motion to dismiss Everson’s
unjust enrichment, fraud, and punitive damages claims, the remaining
claims and the issue of damages went to a jury. The jury found in favor of
Tucci on conversion but awarded Everson $158,576 in contract damages,
$427,560 in implied warranty damages, and $20,440 in negligent
misrepresentation damages. The court granted Everson $93,270 in
attorneys’ fees pursuant to A.R.S. § 12-341.01.

¶7 Tucci filed a timely notice of appeal. We have jurisdiction
pursuant to Article 6, Section 9, of the Arizona Constitution and A.R.S.
§§ 12-120.21(A)(1) and -2101(A)(1).

DISCUSSION

¶8 On appeal, Tucci argues only that the superior court erred by
entering summary judgment against him based on the language of the
Agreement. Summary judgment is appropriate if the moving party is
entitled to judgment as a matter of law and there is no genuine dispute as
to any material fact. Ariz. R. Civ. Proc. 56(a); S & S Paving & Const., Inc. v.
Berkley Reg’l Ins. Co., 239 Ariz. 512, 514, ¶ 7 (App. 2016). It is also
appropriate where the facts supporting a claim “have so little probative
value, given the quantum of evidence required,” that no reasonable person
could find for its proponent. Orme Sch. v. Reeves, 166 Ariz. 301, 309 (1990);
see Ariz. R. Civ. P. 56(e). We review questions of law de novo but review
the facts in the light most favorable to the party against whom judgment
was entered. See Nelson v. Phx. Resort Corp., 181 Ariz. 188, 191 (App. 1994).

¶9 The Agreement gave Tucci, as manager, broad powers to
conduct the business of the company, except that it specifically stated that
“[t]he affirmative vote of a Majority of the members is required to . . . sell . . .
all of the assets, or any part thereof, of the company.” The Agreement did
not define “Majority of the members,” and Appellants contend that Tucci
constituted a majority of the members because he held a majority interest
(60%) of the company.

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Decision of the Court

¶10 “A general principle of contract law is that when parties bind
themselves by a lawful contract, the terms of which are clear and
unambiguous, a court must give effect to the contract as written.” Grubb &
Ellis Mgmt. Servs., Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, 86, ¶ 12 (App.
2006). When the terms of a contract are plain, its interpretation is a question
of law for the court. Chandler Med. Bldg. Partners v. Chandler Dental Grp., 175
Ariz. 273, 277 (App. 1993). “[T]he mere fact that the parties disagree as to
its meaning does not establish ambiguity.” Id.

¶11 Appellants offer no legal authority for their argument that
“Majority of the members” in the Agreement meant something other than
the phrase’s plain meaning, which is a majority of the persons or entities
who are members of the company. Moreover, the Agreement specified that
there were two members of the company—Tucci and Everson—and
specifically stated the percentages of ownership attributed to each of them.
If the parties to the Agreement had intended “Majority of the members” to
mean “members who hold a majority interest in the company,” we presume
they would have said so.

¶12 Although Appellants now argue that the reference to
“Majority of members” in the Agreement was ambiguous, they waived that
contention by failing to timely raise it on summary judgment. See Sereno v.
Lumbermens Mut. Cas. Co., 132 Ariz. 546, 549 (1982). In fact, in their
summary judgment motion, Appellants argued the Agreement plainly
allowed him, as “Majority Member,” to sell the property without Everson’s
consent. Although Appellants’ motion for reconsideration argued the
Agreement’s reference to “majority” was ambiguous, we generally do not
consider arguments raised for the first time in a motion for reconsideration.
Powers v. Guar. RV, Inc., 229 Ariz. 555, 561, ¶ 24 (App. 2012).

¶13 Appellants also argue that there were really three members of
the company: Everson, Tucci, and Tucci’s trust. Appellants contend Tucci
formed the company using his trust before any of the events at issue here,
so that Everson effectively joined him and the trust as members in
connection with the contemplated land transaction. Appellants thus argue
that the required consent of the “Majority” of those three members was met
because Tucci and his trust both approved of his sale of the property. But
Appellants have waived this contention by failing to raise it in opposition
to Everson’s motion for summary judgment. In any event, their assertion
flies in the face of the plain language of the Agreement, which stated, “[t]he
initial members of the company shall be David Tucci and Derek Everson,”
without any mention of any trust.

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 EVERSON v. TUCCI, et al.
Decision of the Court

¶14 Finally, Appellants argue that the superior court’s summary
judgment ruling left many remaining issues about how the Agreement
should be interpreted. Appellants have not shown, however, that any of
those issues were material to the issue on which Everson’s contract claims
turned, namely, whether the Agreement barred Tucci from selling the
property without Everson’s consent. Factual disputes do not preclude
summary judgment if the disputed facts are not material. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To be material, a fact must
“affect the outcome of the suit under the governing law.” Id. The superior
court correctly determined Everson was entitled to judgment as a matter of
law because there was no genuine dispute as to any material fact. See S &
S Paving, 239 Ariz. at 514, ¶ 7; Ariz. R. Civ. P. 56(a).

ATTORNEYS’ FEES

¶15 We deny Appellants’ request for attorneys’ fees pursuant to
A.R.S. § 12-341.01 because they did not prevail. We award Everson his costs
on appeal, contingent upon compliance with Arizona Rule of Appellate
Procedure 21. See A.R.S. § 12-341.

CONCLUSION

¶16 For the reasons stated above, we affirm.

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

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