Weidert v. Precision Air

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

KEITH A. WEIDERT, et al., Plaintiffs/Appellants,

v.

PRECISION AIR & PLUMBING, INC., Defendant/Appellee.

No. 1 CA-CV 22-0439
FILED 4-6-2023

Appeal from the Superior Court in Maricopa County
No. CV2020-054698
The Honorable Pamela S. Gates, Judge

AFFIRMED

COUNSEL

Mengedoth Law PLLC, Scottsdale
By Paul B. Mengedoth
Counsel for Plaintiffs/Appellants

Ellsworth Cobb, PLC, Phoenix
By Richard L. Cobb
Co-Counsel for Defendant/Appellee

Dentons US LLP, Phoenix
By Karl M. Tilleman, Erin Norris Bass, Douglas J. Janicik
Co-Counsel for Defendant/Appellee
 WEIDERT, et al. v. PRECISION AIR
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MEMORANDUM DECISION

Presiding Judge Samuel A. Thumma delivered the decision of the Court, in
which Judge Randall M. Howe and Judge Anni Hill Foster joined.

T H U M M A, Judge:

¶1 Plaintiffs Keith and Dianne Weidert appeal from the grant of
a motion for judgment on the pleadings in favor of defendant Precision Air
& Plumbing, Inc. Because plaintiffs have shown no error, the judgment is
affirmed.

FACTS AND PROCEDURAL HISTORY

¶2 In 2019, plaintiffs saw a television interview of defendant’s
manager recommending that homeowners regularly inspect their air
conditioning (AC) units and mentioning a service check promotion.
Plaintiffs contacted defendant for a service check of their AC unit at their
Maricopa County home. At plaintiffs’ request, one of defendant’s
technicians came to their home in August 2019. After the inspection, the
technician first said the AC unit was “working just fine.” The technician
then tripped a circuit breaker and, after trying to reset it, the AC unit no
longer worked. Telling plaintiffs they would not be charged for the
inspection, the technician scheduled a follow-up by one of defendant’s
other technicians.

¶3 During that follow-up, a different technician said the AC unit
compressor was frozen and that it would be more cost-effective to replace
the unit. Plaintiffs agreed to purchase a replacement unit for $10,231.
Plaintiffs signed a one-page contract and paid defendant the full purchase
price using a credit card. The contract stated that if plaintiffs “cancel any
scheduled work, there is a 20% non-refundable charge,” repeating that
“there will be a 20% non-refundable amount for all scheduled work.”

¶4 The contract stated the new AC unit would be installed two
days later. However, the day after signing the contract, plaintiffs told
defendant they were cancelling the purchase and were reversing the credit
card charge. Given plaintiffs’ cancellation, defendant responded it would
retain 20 percent of the purchase price ($2,046.20), purportedly saying it

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was a “restocking fee.” Plaintiffs then hired a different contractor to fix the
circuit breaker, which apparently allowed the original AC unit to operate.

¶5 Plaintiffs then filed this case, alleging two counts. Count I
alleged defendant failed to provide notice of plaintiffs’ right to cancel their
purchase within three business days, claiming a violation of Arizona’s
Consumer Fraud Act (CFA). See A.R.S. §§ 44-1521 to -1534 (2023).1 As
relevant here, this CFA claim turned on an assertion that defendant violated
a Federal Trade Commission rule requiring that a purchaser of any “door-
to-door sale” had three business days to cancel the purchase and that any
purchase contract had to properly disclose that right. See 16 C.F.R. § 429.1
(1972) (the FTC Rule).2 Count II alleged defendant failed to provide “clear
and conspicuous disclosure of the restocking fee charges” in violation of the
CFA and A.R.S. § 44-1377 (“Disclosure of restocking fee; enforcement;
definition”). The complaint was a putative class action, seeking certification
of: (1) a home solicitation sales notice class and (2) a restocking fee class.

¶6 After answering, defendant moved for judgment on the
pleadings or to strike the class action allegations. See Ariz. R. Civ. P. 12(c) &
(f). After full briefing and oral argument, the superior court granted
defendant’s motion. For Count I, the court determined defendant’s sale did
not violate the FTC Rule, which excluded transactions where the buyer
“initiated the contact and specifically requested the seller to visit the buyer’s
home.” Because the CFA claim in Count I turned on whether defendant
violated the FTC Rule, the court held the claim failed. For Count II, the court
determined that defendant’s retention of 20 percent of the contract price
was a “cancellation fee for scheduled work,” not a “restocking fee,” which
is defined as a “fee charged by a business for restocking of the good
purchased on its return or exchange.” A.R.S. § 44-1377 (emphasis added).
The court also concluded the case could not proceed as a class action
“because the individualized issues predominate.”

¶7 Defendant then moved for attorneys’ fees under A.R.S. § 12-
341.01, seeking more than $39,000, which plaintiffs opposed as untimely.
After considering the factors identified in Associated Indem. Corp. v. Warner, 143 Ariz. 567, 570 (1985), the court granted the motion in part, awarding

1Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated.

2Count I also alleged a violation of Arizona’s Home Solicitation Sales Act.
See A.R.S. §§ 44-5001 to -5008. The superior court dismissed that aspect of
Count I, and plaintiffs do not appeal from that ruling.

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defendant $15,000 in fees plus taxable costs. This court has jurisdiction over
plaintiffs’ timely appeal from the final judgment under Article 6, Section 9,
of the Arizona Constitution and A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).

DISCUSSION

¶8 Plaintiffs argue the court erred in granting defendant’s
motion for judgment on the pleadings, concluding the case could not
proceed as a class action and awarding defendant attorneys’ fees. Plaintiffs
also argue the court erred by not granting them leave to amend. In
reviewing a grant of judgment on the pleadings, this court accepts the well-
pled factual allegations as true and reviews the legal conclusions de novo.
See Muscat by Berman v. Creative Innervisions LLC, 244 Ariz. 194, 197 ¶ 7
(App. 2017). This court reviews a ruling on class certification, an award of
attorneys’ fees and a ruling on a motion for leave to amend for an abuse of
discretion. ESI Ergonomic Sols., LLC v. United Artists Theatre Cir., Inc., 203
Ariz. 94, 98 ¶ 11 (App. 2002); In re Conservatorship for Mallet, 233 Ariz. 29, 31
¶ 7 (App. 2013); Tumacacori Mission Land Dev., Ltd. v. Union Pac. R.R. Co.,
231 Ariz. 517, 519 ¶ 4 (App. 2013).

I. Plaintiffs’ Complaint Failed to State a Claim Upon Which Relief
Can Be Granted.

A. Count I – The FTC Rule.

¶9 Count I turns on whether defendant had to provide plaintiffs
a right to cancel their purchase within three days and, if so, whether
defendant properly did so. Although starting with the CFA, resolving that
issue turns on the FTC Rule. The CFA provides:

The act, use or employment by any person of
any deception, deceptive or unfair act or
practice, fraud, false pretense, false promise,
misrepresentation, or concealment, suppression
or omission of any material fact with intent that
others rely on such concealment, suppression or
omission, in connection with the sale or
advertisement of any merchandise whether or
not any person has in fact been misled, deceived
or damaged thereby, is declared to be an
unlawful practice.

A.R.S. § 44–1522(A). The CFA adds that, “in construing subsection A, that
the courts may use as a guide interpretations given by the federal trade

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commission and the federal courts.” A.R.S. § 44–1522(C); see also State ex rel.
Babbitt v. Goodyear Tire & Rubber Co., 128 Ariz. 483, 485 (App. 1981) (citing
FTC rule to guide CFA analysis).

¶10 Count I alleges defendant failed to provide notice of a right to
cancel the purchase in violation of the FTC Rule. The FTC Rule requires a
seller, for “any door-to-door sale,” to provide the buyer three business days
to cancel a purchase, and to provide written notice of that right. See 16 C.F.R.
§ 429.1(a) & (b).3 It is undisputed that the FTC Rule is “a guide” under the
CFA. See A.R.S. § 44-1522(C). The FTC Rule, however, does not apply to
transactions where:

the buyer has initiated the contact and
specifically requested the seller to visit the
buyer’s home for the purpose of repairing or
performing maintenance upon the buyer’s
personal property. If, in the course of such a
visit, the seller sells the buyer the right to
receive additional services or goods other than
replacement parts necessarily used in
performing the maintenance or in making the
repairs, the sale of those additional goods or
services would not fall within this exclusion. . .

16 C.F.R. § 429.0(a)(5) (emphasis added).

¶11 Plaintiffs concede they initiated the contact with defendant
and asked defendant to visit their home. Plaintiffs argue, however, that this
exception to the FTC Rule does not apply because defendant: (1) did not
visit plaintiffs’ home “for the purpose of repairing or performing
maintenance;” and (2) sold plaintiffs goods “other than replacement parts
necessarily used in performing the maintenance or in making the repairs.”
For several reasons, these arguments fail to show that the court erred in
concluding Count I failed as a matter of law.

3 Because plaintiffs are pressing a CFA claim that relies, in its entirety, on
the FTC Rule, this court need not (and expressly does not) address
defendant’s argument that there is no private cause of action under the FTC
Rule. See, e.g., Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1174 n.5 (11th Cir.
1985).

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¶12 First, the FTC Rule is limited to “any door-to-door sale.” 16
C.F.R. § 429.1. There is no suggestion that defendant’s visits to plaintiffs’
home, at plaintiffs’ request, involved a “door-to-door sale” under the FTC
Rule. See 16 C.F.R. § 429.0(a) (defining “door-to-door sale”).

¶13 Second, the FTC Rule does not apply when “the buyer has
initiated the contact and specifically requested the seller to visit the buyer’s
home.” 16 C.F.R. § 429.0(a)(5). Here, plaintiffs initiated the contact with
defendant.

¶14 Third, plaintiffs argue they never “specifically requested” that
defendant come to their home to repair their AC unit. But plaintiffs concede
that they “specifically requested” that defendant “come perform an
inspection and service their unit as needed during the inspection.” The
complaint alleges plaintiffs scheduled the inspection so that defendant
could “perform service checks” and ensure “their [AC] unit was working
just fine.” Plaintiffs have not shown that, in substance, their allegations are
something other than specifically requesting defendant to visit their home
to repair or perform maintenance on their AC unit. Cf. McCarthy Integrated
Sys., LLC v. Evoqua Water Techs., LLC, 240 Ariz. 366, 369 ¶ 10 (App. 2016)
(explaining statutory words and phrases typically are construed according
to their ordinary meanings). Plaintiffs soliciting defendant to come to their
home to service their AC unit is conduct that falls within the “repairing or
performing maintenance” exception to the FTC Rule.

¶15 Finally, plaintiffs argue this exception to the FTC Rule does
not apply because the sale of a replacement AC unit is an “additional good
or service” that was “not just a ‘replacement part necessarily used in
performing’ the initial promotional inspection and potential maintenance.”
See 16 C.F.R. § 429.0(a)(5). But plaintiffs contacted defendant to inspect their
AC unit, the inspection revealed the AC unit no longer worked and
plaintiffs bought a replacement AC unit as a result. These facts fall within
this exception to the FTC Rule. Cf. Smaldino v. Larsick, 630 N.E.2d 408, 410–
11 (Ohio App. 1993) (reaching the same conclusion on similar facts in
addressing a similar provision).

¶16 Citing one of various definitions for the word “part” in a 1990
edition of Black’s Law Dictionary, and comments when the FTC Rule was
promulgated in 1972, 37 Fed. Reg. 22,934, 22,947 (Oct. 26, 1972), plaintiffs
argue that the replacement of the AC unit does not fall within this
exception. When expressing concern about upsales during a home visit --
“in the course of such a visit, the seller sells the buyer the right to receive
additional services or goods” -- the FTC noted this exception would “not

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permit the seller to replace a furnace.” 37 Fed Reg. at 22,947. At that time,
however, the FTC noted that “[h]igh-pressure sales tactics are the leading
cause for consumer complaints about door-to-door selling.” 37 Fed Reg. at
22,937. Here, there was no “door-to-door sale” as used in the FTC Rule.
Moreover, there were two visits to plaintiffs’ home, both at plaintiffs’
request. And the second visit revealed that the AC unit “was frozen and
that it would be more cost effective to replace the entire air conditioning
unit,” meaning the fix was to install a new AC unit. Plaintiffs agreed to that
fix during this second visit, signing the written contract to do so. Thus, the
concerns expressed when promulgating the FTC Rule are not implicated
here. Moreover, and in any event, the CFA itself provides that such FTC
commentary is instructive, but not binding. See Babbitt, 128 Ariz. at 485
(noting “that the guideline in [an FTC rule] is just that, a guideline”).

¶17 On appeal, plaintiffs assert that disputed issues of material
fact preclude entry of judgment on the pleadings for defendant on Count I.
Plaintiffs, however, did not raise this argument in superior court, meaning
it is waived on appeal. See Odom v. Farmers Ins. Co. of Ariz., 216 Ariz. 530,
535 ¶ 18 (App. 2007). Apart from waiver, plaintiffs point to their allegation
that they ultimately got their old AC unit operating by paying $265 to fix a
circuit breaker. But that allegation was not part of Count I. Count I is solely
based on the claim that defendant had to, but failed to, advise plaintiffs “of
their right to cancel the transaction until expiration of three business days
from the signing of their agreement(s)” under the FTC Rule. Indeed,
plaintiffs captioned Count I as “FAILURE TO PROVIDE NOTICE OF
RIGHT TO CANCEL,” and nowhere mentioned the cost to fix the circuit
breaker. On this record, the superior court did not err in concluding Count
I failed to state a claim.

B. Count II – Restocking Fee.

¶18 Count II alleges defendant violated the CFA when it charged
a restocking fee after failing to disclose in “clear and conspicuous” writing
“that a restocking fee may apply to the purchase of goods.” See A.R.S. § 44-
1377(B)(1). The written contract for the new AC unit that plaintiffs signed
references a 20 percent non-refundable charge if plaintiffs cancelled the
scheduled work. When plaintiffs cancelled the contract, defendant retained
the 20 percent ($2,046.20) charge.

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¶19 On the record presented, the factual nature of this charge is
treated inconsistently. Right after quoting the “20% non-refundable charge”
provision, the complaint states the contract “contains no provision for a
‘restocking fee.’” Elsewhere, however, the complaint alleges the 20 percent
charge was “a restocking fee.” Defendant’s answer agrees that the contract
“does not reference a ‘restocking fee.’” The answer then denies an
allegation that the contract included a “restocking fee,” but in the next
paragraph admits that defendant “retained $2,046.20 as a restocking fee.”
The superior court concluded the fee was not a “restocking fee” under
A.R.S. § 44-1377 and the CFA, but was a cancellation fee. As plaintiffs
conceded at oral argument before this court, whether the charge was a
restocking fee is a question of law for the court to decide. The issue here,
then, is whether the court erred in reaching that legal conclusion,
recognizing the pleadings do not bind the court in making legal
determinations. Cf. Young v. Bishop, 88 Ariz. 140, 143 (1960) (“[c]onclusions
of law are not deemed admitted” in pleadings).

¶20 By statute, a “‘restocking fee’ means a fee charged by a
business for restocking of the good purchased on its return or exchange.”
A.R.S. § 44-1377(D). As plaintiffs concede, defendant “never delivered or
installed” the AC unit. And plaintiffs could not return or exchange a good
that had not been delivered. The $2,046.20 was a non-refundable amount
that represented a percentage of all scheduled work. Despite the
inconsistent nature of how the pleadings treat the matter factually, nothing
shows that this was a “restocking fee” under A.R.S. § 44-1377. Nor do
plaintiffs challenge the $2,046.20 charge on any other basis. Thus, plaintiffs
have shown no error in the court dismissing Count II for failure to state a
claim. Given this conclusion, the court need not (and expressly does not)
address the superior court’s conclusion that class certification would be
improper.

II. The Superior Court Did Not Err in Awarding Attorneys’ Fees.

¶21 Plaintiffs argue the superior court erred in awarding
defendant $15,000 in attorneys’ fees under A.R.S. § 12-341.01 because the
answer “did not specifically reference or cite to the statute or a particular
contract under which its request for fees was made.” As applicable here, a
party must seek attorneys’ fees in the pleadings. Ariz. R. Civ. P. 54(g)(1).
This requirement “puts the opposing party on immediate notice that he or
she risks a fees award if the case is not settled before the court decides” the
case. Balestrieri v. Balestrieri, 232 Ariz. 25, 27 ¶ 8 (App. 2013).

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¶22 Defendant’s request for attorneys’ fees in its answer put
plaintiffs on notice that they were at risk of a fee award. There was no
mystery about the contract at issue and plaintiffs’ complaint sought fees
under A.R.S. § 12-341.01. Although the answer would have been clearer if
it cited A.R.S. § 12-341.01, the lack of that citation is not fatal to defendant’s
fee request. See Prendergast v. City of Tempe, 143 Ariz. 14, 22 (App. 1984)
(affirming fee award despite the plaintiff not specifically citing A.R.S. § 12-
341.01 in its pleading because defendant “has neither been surprised nor
has it been prejudiced”).

¶23 Plaintiffs argue that Robert E. Mann Const. Co. v. Liebert Corp., 204 Ariz. 129 (App. 2003) is “on all fours with the facts here” and shows
that the fee award was in error. Not so. Much of Mann is inapplicable. To
the extent Mann is relevant, it means that defendant’s answer may have
waived a request for fees under the contract, but not under A.R.S. § 12-
341.01. See 204 Ariz. at 131 ¶ 3 n.1, 133 ¶ 12 (noting answer seeking
“reasonable attorneys’ fees as provided by law” waived fees under the
applicable contract but not under A.R.S. § 12-341.01; “[f]ees pursuant to
A.R.S. § 12-341.01 are another matter.”). On this record, plaintiffs have not
shown the superior court erred in awarding defendant fees under A.R.S.
§ 12-341.01(A).

III. Leave to Amend.

¶24 Plaintiffs argue the superior court should have granted them
leave to amend. Plaintiffs, however, did not move for leave to amend. At
the end of a footnote on page 16 of their opposition to the motion for
judgment on the pleadings, plaintiffs mentioned the possibility of leave to
amend. And the conclusion of that same filing asks that defendant’s motion
for judgment on the pleadings be denied, adding that “alternatively
Plaintiff conditionally requests leave to file an amend[ed] Class Action
Complaint as the Court may deem necessary.” Neither of those passing
references is a proper motion that the superior court had to address. See
Ariz. R. Civ. P. 7.1(a)(1) (requiring, as applicable here, that a request “for an
order must be by motion which . . . must be in writing, state with
particularity the grounds for granting the motion, and set forth the relief or
order sought”). Nor did plaintiffs submit to the court “a copy of the
proposed amended pleading” that showed “the respects in which the
proposed pleading differs from the existing pleading by bracketed or
striking through the text to be deleted and underlying the text to be added,”
as would be required for a proper motion for leave to amend. See Ariz. R.
Civ. P. 15(a)(4). Because plaintiffs did not properly seek leave to file an

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amended pleading, the superior court was not required to grant them leave
to amend sua sponte.

IV. Attorneys’ Fees on Appeal.

¶25 The parties seek their attorneys’ fees on appeal under A.R.S.
§ 12-341.01. Because plaintiffs are not the successful party, their request is
denied. In its discretion, this court declines to award defendant its fees on
appeal. Defendant, however, is awarded its taxable costs contingent upon
compliance with ARCAP 21.

CONCLUSION

¶26 The judgment is affirmed.

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

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