Nguyen v. Nguyen

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

NAM V. NGUYEN, Plaintiff/Appellee,

v.

ANH T. NGUYEN, et al., Defendant/Appellants.

No. 1 CA-CV 23-0360
FILED 3-12-2024

Appeal from the Superior Court in Maricopa County
No. CV2022-002860
The Honorable Katherine Cooper, Judge

AFFIRMED

COUNSEL

AZ Legacy Law Group PLLC, Phoenix
By Luan Mai
Counsel for Plaintiff/Appellee

Law Office of Kimberly A. Eckert, Tempe
By Kimberly A. Eckert
Counsel for Defendant/Appellants
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Decision of the Court

MEMORANDUM DECISION

Judge James B. Morse Jr. delivered the decision of the Court, in which
Presiding Judge Angela K. Paton and Judge Michael S. Catlett joined.

M O R S E, Judge:

¶1 Ahn Nguyen and Quy Van Hoang appeal from the superior
court's judgment, entered after a bench trial, quieting title to a property in
Phoenix (the "House") in favor of Nam Nguyen. For the following reasons,
we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 In 1997, Nam1 provided his son Hieu Nguyen and
daughter-in-law Hongyen Le with a $5,000 downpayment to purchase the
House. Because Nam could not qualify for the mortgage, Hieu and
Hongyen titled the House in their names. From 1997 until 2010, Nam lived
at the House with Hieu and Hongyen. In 2010, Hieu and Hongyen moved
out of the House. In 2011, Hieu and Hongyen signed a quitclaim deed
transferring their interest in the House to Quy and Ahn, Nam's son-in-law
and daughter. Quy and Ahn lived with Nam for several months in 2011
but then moved to Colorado. In 2022, Nam filed a complaint against Quy
and Ahn seeking to quiet title to the House and damages for unjust
enrichment.

¶3 At trial, Nam, Hieu, and Hongyen testified about the initial
purchase of the House and their arrangement from 1997 to 2010. Hieu and
Hongyen both testified that Nam was the true purchaser of the House and
they had only titled the House in their name for financing purposes. Nam
also testified that he paid the utilities while living with Hieu and Hongyen.
Hieu testified that Nam paid all mortgage payments between 1996 and
2011, and Hongyen testified that Nam gave her money to pay off the
mortgage when they moved out of the House.

¶4 Nam, Hieu, and Hongyen all testified that after Hieu and
Hongyen moved, Nam paid for the House's repairs, utilities, insurance, and

1 Because several of the parties and witnesses share a last name, we
refer to them by first name.

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property taxes between 2011 and the time of trial. Nam also submitted
checks purporting to represent these payments. Nam testified that he did
not receive financial assistance from Quy and Ahn in paying for the
mortgage and utilities.

¶5 Quy and Ahn claimed they purchased the House from Hieu
and Hongyen for $95,000 in 2010. Quy testified that he paid Hieu and
Hongyen with a $66,625.90 cashier's check but also said he paid $95,000 if
he added up all the funds. Quy and Ahn further testified that Nam paid
them $55,000 for the right to remain in the House until he died. But Quy
and Ahn did not present any documentary evidence of the payment. Nam
denied this claim and testified that he did not pay Quy and Ahn any money.
At trial, Ahn deferred to Quy and was frequently unable to answer
questions regarding finances, payments, and paperwork.

¶6 Quy produced a quitclaim deed notarized by Quy's tax
preparer that transferred Hieu and Hongyen's interest to Quy and Ahn. But
both Hieu and Hongyen testified that they never received any money from
Quy and Ahn and did not understand the quitclaim deed because they did
not speak English. And Nam testified that, to pay the mortgage, he
borrowed approximately $40,000 from Quy, which Quy distributed in
$1,000–$2,000 monthly increments.

¶7 In its judgment, the superior court quieted title in favor of
Nam. The court found Hieu and Hongyen acquired and held the House in
trust for Nam. In evaluating the evidence, the court found Hieu and
Hongyen credible because they "responded to questions directly and
non-evasively." In contrast, the court found Quy and Ahn lacked credibility
because Quy "contradicted himself and his discovery responses" and Ahn
"was defensive and deferred to her husband throughout the testimony."

¶8 The superior court found the quitclaim deed did not transfer
title to Quy and Ahn because Hieu and Hongyen did not have any rights to
transfer. The court also found the deed was void for lack of capacity and
mutual consent because Hieu and Hongyen did not understand the
contents of the deed and did not wish to deprive their father of the House.
The court dismissed Nam's unjust enrichment claim because Nam was the
true owner of the House.

¶9 Quy and Ahn timely appealed, and we have jurisdiction
under A.R.S. § 12-2101(A)(1).

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DISCUSSION

¶10 Quy and Ahn argue the superior court erred by quieting title
in favor of Nam and finding their affirmative defenses waived. "On review
after a bench trial, we accept the superior court's factual findings unless
clearly erroneous," but review de novo "any questions of law, including the
ultimate legal conclusions drawn from the superior court's factual
findings." Lake v. Hobbs, 254 Ariz. 570, 574, ¶ 13 (App. 2023), vacated on other
grounds, CV 23-0046-PR, 2023 WL 7289352 (Ariz. Mar. 22, 2023) (decision
order).

I. Standing.

¶11 Quy and Ahn assert Nam lacked standing to bring the action
because he was not the legal owner of the House. But A.R.S. § 12-1101(A)
permits a quiet title action to be brought "by any one having or claiming an
interest therein, whether in or out of possession, against any person . . .
[who] claims an estate or interest in the real property which is adverse to
the party bringing the action." Because Nam's claim of ownership is
directly adverse to Quy and Ahn's claim, Nam has standing.

II. Waiver of Affirmative Defenses.

¶12 Arizona Rule of Civil Procedure 12(h)(1)(B) provides that an
affirmative defense is waived if a party fails to either "make [the defense]
by motion under this rule" or "include it in a responsive pleading." But even
if a party pleads an affirmative defense in their answer, the party may waive
that defense by subsequent litigation conduct. City of Phoenix v. Fields, 219
Ariz. 568, 574, ¶¶ 27–29 (2009). Waiver by litigation conduct is generally a
factual determination to which we must defer "unless we conclude that the
finding is clearly erroneous." Minjares v. State, 223 Ariz. 54, 58, ¶ 17 (App.
2009); see Fields, 291 Ariz. at 575, ¶ 32 ("Typically, waiver is 'a question of
fact.'"). A party waives a defense when it "has taken substantial action to
litigate the merits of the claim that would not have been necessary had the
[party] promptly raised the defense." Fields, 291 Ariz. at 575, ¶ 30 (quoting
Jones v. Cochise County, 218 Ariz. 372, 380, ¶ 26 (App. 2008)); see Ponce v.
Parker Fire Dist., 234 Ariz. 380, 383, ¶ 11 (App. 2014) (finding waiver when
a party "engages in substantial conduct to litigate the merits that would not
have been necessary had the defendant not delayed in asserting the
defense").

¶13 Quy and Ahn argue the superior court erred in finding their
affirmative defenses waived. We address each in turn.

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A. Verified Complaint.

¶14 During closing argument, Quy and Ahn's counsel argued
Nam's complaint was invalid because it was not verified. The superior
court found Quy and Ahn waived the defense because they raised it for the
first time at trial. On appeal, Quy and Ahn argue they did not waive the
defense because A.R.S. § 12-1102 requires a verified complaint.

¶15 Quy and Ahn never filed a motion to dismiss and failed to
raise the complaint's lack of verification in their answer. Thus, the superior
court did not err in finding that Quy and Ahn waived this defense. See Ariz.
R. Civ. P. 12(h)(1)(B) (waiving a defense when the defendant fails to "make
it by motion" or "include it in a responsive pleading"); Michael Weller, Inc. v.
Aetna Cas. & Sur. Co., 126 Ariz. 323, 327 (App. 1980) (noting a party's failure
to raise a complaint's lack of verification by pretrial motion waives the
defense when the party proceeds to a merits hearing).

B. Statute of Limitations.

¶16 During closing argument at trial, Quy and Ahn argued Nam's
action was time barred because the statute of limitations expired by 2015.
See A.R.S. § 12-522. The superior court found the defense waived because
Quy and Ahn never raised the defense by motion and instead litigated the
case for two years.

¶17 Quy and Ahn argue they did not waive their
statute-of-limitations defense because they raised it in their answer and
A.R.S. § 12-1104 does not require filing a motion to dismiss on
statute-of-limitations grounds. But A.R.S. § 12-1104 is a jurisdictional
statute, and it applies only when the "plaintiff would have a defense by
reason of limitation." (Emphasis added.) And pleading a defense in an
answer is insufficient when the party proceeds to engage in subsequent
litigation conduct. Fields, 219 Ariz. at 574, ¶¶ 27–29; see Harding v. Ariz. Bd.
of Dental Exam'rs, 1 CA-CV 18-0597, 2019 WL 6713433, at *3, ¶ 17 (Ariz. App.
Dec. 10, 2019) (mem. decision) (recognizing the statute of limitations is an
affirmative defense that may be waived by litigation conduct). Because
Quy and Ahn did not raise their statute-of-limitations defense in either a
motion to dismiss or a motion for summary judgment, and only raised it in
closing argument at the end of trial, the superior court did not clearly err in
finding waiver by litigation conduct. See Minjares, 223 Ariz. at 58, ¶ 17.

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C. Statute of Frauds.

¶18 On appeal, Quy and Ahn argue the statute of frauds prevents
Nam's quiet-title action because it involves the transfer of real property. But
in their answer, Quy and Ahn only stated that the "state [sic] of frauds
applies as the relevant agreements were between Defendant and a non-
party." And in their pretrial statement, the parties merely listed the "Statute
of Frauds, or an exception thereto," as issues of law to be decided. Quy and
Ahn never provided authority or factual support to demonstrate that the
statute of frauds applied as an affirmative defense. Moreover, they never
raised it by pretrial motion, and, unlike the statute-of-limitations and
verified-title defenses, Quy and Ahn did not even urge the statute of frauds
as a defense during closing argument. As a result, the superior court did
not make explicit findings that Quy and Ahn had waived this defense by
litigation conduct.

¶19 But the "general law in Arizona is that legal theories must be
presented timely to the trial court so that the court may have an opportunity
to address all issues on their merits. If the argument is not raised below so
as to allow the trial court such an opportunity, it is waived on appeal."
Cont'l Lighting & Contracting, Inc. v. Premier Grading & Utils., LLC, 227 Ariz.
382, 386, ¶ 12 (App. 2011) (citation omitted); see Risner v. Alev, 2 CA-CV
2021-0122, 2022 WL 3025585, at *2, ¶ 8 (Ariz. App. Aug. 1, 2022) (mem.
decision) ("An argument must be made below to allow the trial court to
address the issue on its merits. If it is not, the argument is waived. An
argument cannot merely be hinted at during the litigation." (cleaned up)).
The "statute of frauds is an affirmative defense," Double AA Builders, Ltd. v.
Grand State Constr. L.L.C., 210 Ariz. 503, 510, ¶ 34 (App. 2005), and a party
must "plead and prove the statute of frauds for it to be available," Abner v.
Ariz. Newspapers, Inc., 11 Ariz. App. 237, 240 (1970); see Forbach v. Steinfeld, 34 Ariz. 519, 525 (1928) ("A party may, undoubtedly, without trenching
upon public policy, waive the defense . . . of the statute of frauds . . . by
omitting to set up the defense when sued." (quoting Shapley v. Abbott, 42
N.Y. 443, 452 (1870))). Because Quy and Ahn did not present a statute-of-
frauds defense to the superior court, they have waived this issue on appeal.
See Kellejian v. Kesicki, 126 Ariz. 12, 13 (App. 1980) (finding defendant's
failure to "plead and prove" the statute of frauds before the trial court
precluded raising that issue on appeal).

III. Evidence and Witness Credibility.

¶20 Quy and Ahn argue the superior court erred by voiding the
quitclaim deed. They argue that Nam, Hieu, and Hongyen all provided

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inconsistent testimony, the parties do not dispute Nam told Hieu and
Hongyen to sign the quitclaim deed, and Nam did not provide evidence of
financial payments showing his ownership prior to 2011.

¶21 But "[f]actual findings are not clearly erroneous if substantial
evidence supports them, even if there is substantial conflicting evidence."
In re U.S. Currency in Amount of $26,980.00, 199 Ariz. 291, 295, ¶ 9 (App.
2000); see Smith v. Ariz. Dep't of Transp., 146 Ariz. 430, 432 (App. 1985) ("If
two inconsistent factual conclusions could be supported by the record, then
there is substantial evidence to support [a] . . . decision that elects either
conclusion."). "Substantial evidence is evidence which would permit a
reasonable person to reach the trial court's result." In re Est. of Pouser, 193
Ariz. 574, 579, ¶ 13 (1999). And "we do not reweigh conflicting evidence or
redetermine the preponderance of the evidence, but examine the record
only to determine whether substantial evidence exists to support the trial
court's action." Id.

¶22 The superior court considered evidence that: (1) Nam
provided $5,000 for the House's downpayment; (2) Nam paid for the
House's mortgage and other expenses; (3) Quy and Ahn either never paid
Nam $40,000 or were reimbursed for the sum; and (4) Hieu, Hongyen, and
Nam did not understand the contents or effect of the quitclaim deed which
was notarized and possibly drafted by Quy and Ahn's tax preparer.
Although Quy's and Ahn's testimony contradicted many of these
assertions, the court found their testimony "wholly unreliable." We must
defer to the superior court's resolution of conflicting evidence. Id. On this
record, a reasonable person could find Nam was the true owner of the
House and the court's judgment was not clearly erroneous. See In re
$26,980.00, 199 Ariz. at 295, ¶ 9.

IV. Quitclaim Deed.

¶23 Quy and Ahn argue the superior court erred in setting aside
the quitclaim deed because the complaint did not provide a basis to
conclude the quitclaim deed was invalid due to lack of capacity or mutual
assent. But the court did not set aside the deed solely on that basis. Rather,
the court found the deed was invalid because Hieu and Hongyen did not
have any ownership interest in the House to convey via a quitclaim deed.
Based on the superior court's evaluation of the documents submitted by
Nam and witness testimony, it found the evidence "rebuts any presumption
arising from the quitclaim deed." On this record, substantial evidence
supported the decision, and the court did not clearly err. See In re
$26,980.00, 199 Ariz. at 295, ¶ 9.

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V. Attorney Fees on Appeal.

¶24 Nam requests an award of attorney fees and costs pursuant to
A.R.S. § 12-341 and ARCAP 21. Section 12-341 authorizes an award of costs
but is silent as to fees. We deny Nam's request for fees because he fails to
cite authority authorizing an award of fees. See ARCAP 21(a)(2) ("A claim
for fees under this Rule must specifically state the statute, rule, decisional
law, contract, or other authority for an award of attorneys' fees."); Ezell v.
Quon, 224 Ariz. 532, 539, ¶ 31 (App. 2010) (explaining ARCAP 21 "is a
procedural rule that does not provide a substantive basis for an appellate
court to consider an award of attorneys' fees"). We award Nam, as the
prevailing party, his costs on appeal upon compliance with ARCAP 21.

CONCLUSION

¶25 We affirm.

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

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