Steinfelt v. American Family

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

BURKE STEINFELT, et al., Plaintiffs/Appellants,

v.

AMERICAN FAMILY EDUCATION, Defendant/Appellee.

No. 1 CA-CV 21-0558
FILED 9-6-2022

Appeal from the Superior Court in Maricopa County
No. CV2021-091000
The Honorable Brian Kaiser, Judge Pro Tempore

AFFIRMED

COUNSEL

The Law Office of Mark A. Tucker, P.C., Mesa
By Mark A. Tucker
Counsel for Plaintiffs/Appellants

Schern Richardson Finter, PLC, Mesa
By Aaron M. Finter
Counsel for Defendant/Appellee
 STEINFELT, et al. v. AMERICAN FAMILY
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Maria Elena Cruz delivered the decision of the Court, in
which Judge Angela K. Paton and Judge Peter B. Swann joined.

C R U Z, Judge:

¶1 Burke and Sandy Steinfelt (collectively “the Steinfelts”)
appeal the superior court’s judgment in favor of appellee American Family
Education (“AFE”) dismissing the Steinfelts’ eviction action. For the
following reasons, we affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 Kathryn Koniusey was the CEO of AFE, a non-profit school
in Gilbert . The Steinfelts, parents of school-aged children who were
interested in the school, became acquainted with Koniusey.

¶3 Koniusey attempted to purchase a property for AFE (“the
Recker Road property”) but was unsuccessful. Koniusey asked families
involved with the school to help AFE purchase the Recker Road property,
and the Steinfelts eventually agreed to purchase it. They did so in July 2018.
There were two houses on the property. The larger of the two houses was
used for the school, and the smaller house was used by Koniusey as her
personal residence.

¶4 The month before the Steinfelts purchased the Recker Road
property, the parties’ real estate agent prepared a residential lease
agreement, which Koniusey signed on behalf of AFE. Koniusey understood
that the lease agreement would not be used by the parties except to help the
Steinfelts get a loan to purchase the Recker Road property, and that the
parties’ relationship would be governed by a property sale agreement that
the parties would sign after the Steinfelts owned the property. The parties
signed the property sale agreement on August 1, 2018. The property sale
agreement contained a merger clause, which stated:

This Agreement when executed . . . shall contain the entire
understanding and agreement between the Buyer and Seller
and Agent, if any, with respect to the matters referred to
herein and shall supersede all prior or contemporaneous

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Decision of the Court

agreements, representations and understanding with respect
to such matters.

In November 2018, the parties amended the property sale agreement after
the Steinfelts paid off one of the loans used to purchase the Recker Road
property. The amendment, entitled “First Amendment to Property Sale
Agreement,” provided in part:

Whereas, the Sellers have paid in full one of the liens used for
the purchase of the property and whereas this lien between
the Sellers and the lender is now completely fulfilled and
closed,

Now Therefore, the payoff amount of $244,935.48 is now a
new lien balance between the Seller and the Buyer, to be paid
back with the following terms and conditions:

Lien Agreement

1. Expenses. The Buyer will directly pay a minimum of $500
by the 1st of each month to the Sellers until the principle
(sic) balance is paid back in full (0% interest on this new
and separate loan amount of $244,935.48).

2. Payment. The Buyer can make payments via direct
deposit, check or cash.

AFE thereafter made all monthly payments on the property, up until the
time of the eviction hearing.

¶5 In February 2021, the Steinfelts served AFE with three notices.
In the first notice, the Steinfelts stated they were terminating the
“residential lease agreement” for abuse of access pursuant to Arizona
Revised Statutes (“A.R.S.”) section 33-1376 and demanded AFE vacate the
premises within five days or “an eviction action may be brought against
you to recover possession of the property.” The second notice, entitled
“Notice of Termination of Lease to Own Agreement for Material Breach and
Demand for Possession” demanded AFE to vacate the premises within ten
days. The third notice, entitled “Notice of Intent to Terminate Rental
Agreement for Non-Payment of Rent” demanded $201,750 in unpaid rent
and late charges pursuant to A.R.S. § 33-1368 and warned AFE that “the
filing of a lawsuit against you for Forcible Detainer is imminent.”

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¶6 AFE did not vacate the property, and that same month, filed
a civil action in superior court in CV2021-090588 alleging the Steinfelts had
breached the property sale agreement. The complaint included claims for
specific performance, breach of the implied covenant of good faith and fair
dealing, defamation, false light invasion of privacy, and interference with
contract/business expectancy.

¶7 The Steinfelts filed this eviction action in superior court in
March 2021. The amended complaint, entitled “Eviction Action,” alleged
that “[t]his matter is governed by the parties’ residential lease agreement
and the provisions of the Arizona Residential Landlord and Tenants Act
(ARLTA), A.R.S. § 33-1301, et. seq.” The amended complaint further
alleged that AFE failed to pay rent of $6700 per month for thirty-one months
(a total of $207,700), as set forth in the lease agreement, see A.R.S. § 33-
1368(B), that AFE had engaged in abuse of access under A.R.S. §§ 33-1343,
-1376, and that AFE was illegally operating a business on the property.

¶8 At the eviction trial, Sandy Steinfelt testified that under the
property sale agreement, AFE was free to pay just the minimum monthly
amounts due on the loans used to purchase the property, and that it had in
fact made all of the loan payments on the property to date. At the
conclusion of the trial, the superior court dismissed the complaint. The
court found that the parties’ relationship was that of a buyer and seller, not
that of landlord and tenant, explaining:

[W]hat I’ve got here appears to me to be a relationship
between a buyer and a seller, and it appears as though it’s
been that way since the beginning, and that’s been the
intention of the parties from the get-go. We had a lease
agreement that was signed and . . . never apparently complied
with, based on the testimony from both parties, and instead,
[the parties] set about to enter . . . shortly thereafter [a] new
agreement to sell the property, and that included
requirements regarding payments of liens on the property
obtained by the [Steinfelts], which both parties agree have all
been . . . paid up to date through today. . . . [AFE] has been in
compliance with the terms of the purchase and sale
agreement . . . . [B]ecause it’s not a landlord-tenant
relationship but rather a seller and buyer relationship
between the parties, forcible entry and detainer is an
inappropriate vehicle through which to seek removal of
[AFE].

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Decision of the Court

The Steinfelts timely appealed, and we have jurisdiction pursuant to A.R.S.
§ 12-2101(A)(1).

DISCUSSION

¶9 We review questions of law de novo but “defer to the superior
court’s findings of fact unless clearly erroneous.” Fleming v. Tanner, 248
Ariz. 63, 68, ¶ 13 (App. 2019). The superior court “is in the best position to
weigh evidence and assess witness credibility . . . .“ Demetrius L. v. Joshlynn
F., 239 Ariz. 1, 3, ¶ 9 (2016).

¶10 “Forcible entry and detainer is a statutory proceeding whose
object is to provide a summary, speedy and adequate means for obtaining
possession of premises by one entitled to actual possession.” Colonial Tri-
City Ltd. P’ship v. Ben Franklin Stores, Inc., 179 Ariz. 428, 433 (App. 1993).
“The purpose of a forcible-detainer action is limited . . . it is not a vehicle to
decide whether the parties have a landlord-tenant relationship or were
under a lease agreement.” United Effort Plan Tr. v. Holm, 209 Ariz. 347, 350-
51, ¶ 21 (App. 2004). “[B]efore the court in a [FED] action can determine
whether the landlord is entitled to possession . . . it must be undisputed that
a lease exists between the parties. If the latter question is disputed, that
dispute must be resolved in a general civil action and not in a summary
proceeding . . . .” Colonial, 179 Ariz. at 433. “The policy behind our holding
is obvious; the summary proceedings authorized by . . . the forcible entry
and detainer statutes do not furnish all of the procedural safeguards
provided in a general civil action.” Id. See also Iverson v. Nava, 248 Ariz. 443,
448, ¶ 11 (App. 2020) (noting in a special detainer matter that “the
accelerated nature of FED actions does not include disclosure or discovery
available in general civil litigation.”).

¶11 Here, the parties dispute the validity of the lease agreement
Koniusey signed on behalf of AFE before the Steinfelts purchased the
Recker Road property. An eviction action is not an appropriate vehicle for
the parties’ dispute. See Colonial, 179 Ariz. at 433. And the court’s
determination that the parties’ relationship was that of buyer and seller was
supported by the record, including the property sale agreement the parties
entered into in August 2018 and the subsequent amendment. In addition,
we note that the Steinfelts brought this action under ARLTA, which
specifically excludes certain arrangements from its application, including
“[o]ccupancy under a contract of sale of a dwelling unit or the property of
which it is a part, if the occupant is the purchaser . . . .” A.R.S. § 33-
1308(1)(2). Accordingly, we find no error in the superior court’s decision
dismissing the eviction complaint.

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Decision of the Court

¶12 Both parties seek an award of attorneys’ fees. Because the
Steinfelts have not prevailed, we deny their request. As the prevailing
party, AFE is entitled to costs and in our discretion, we award it reasonable
attorneys’ fees under A.R.S. § 12-341.01 upon compliance with ARCAP 21.

CONCLUSION

¶13 For the foregoing reasons, we affirm.

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

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