NGUYEN v. STEPHENSON

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

LONG M. NGUYEN, Plaintiff/Appellant,

v.

ELIZABETH A. STEPHENSON, et al., Defendants/Appellees.

No. 1 CA-CV 24-0122
FILED 12-17-2025

Appeal from the Superior Court in Maricopa County
No. CV2023-051810
The Honorable Melissa Iyer Julian, Judge

REVERSED AND REMANDED

COUNSEL

Radix Law, Scottsdale
By C. Adam Buck
Counsel for Plaintiff/Appellant

Ellett Law Offices, PC, Phoenix
By Ronald J. Ellett
Counsel for Defendants/Appellees
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MEMORANDUM DECISION

Judge Anni Hill Foster delivered the decision of the Court, in which
Presiding Judge Cynthia J. Bailey and Judge Angela K. Paton joined.

F O S T E R, Judge:

¶1 Plaintiff Long Nguyen appeals the superior court’s dismissal
of his complaint against Defendants Elizabeth and James Stephenson and
denial of his motions for reconsideration and to amend his complaint.
Nguyen claims entitlement to a finder’s fee for presenting the Stephensons
with an investment opportunity related to a real estate deal. He argues that
the superior court erred in finding that the agreement needed to be in
writing because neither A.R.S. § 32-2151.02(A) nor the Statute of Frauds
(A.R.S. § 44-101) applied in this case. This Court agrees, reversing the
superior court’s order and remanding for further proceedings.

FACTS AND PROCEDURAL HISTORY

¶2 Nguyen is a licensed real estate salesperson hired by non-
party clients to help them purchase a home. Nguyen found a house still
under construction for the clients and helped them execute a purchase
contract. The clients secured the contract with a deposit. Several months
later, due to changed circumstances, the clients were no longer able to
complete the purchase. But to prevent the loss of their deposit and the
accrued equity, they asked Nguyen for help. With the clients’ permission,
Nguyen sought an investor to partner with the clients to complete the
purchase and then re-sell the house for a profit. The clients permitted
Nguyen to negotiate a finder’s fee from the investor.

¶3 Nguyen discussed this opportunity with Mrs. Stephenson, a
colleague, who also held a real estate license and was a designated real
estate broker. Nguyen offered to give her a copy of the purchase agreement
and the clients’ contact information, conditioned on her agreement to pay
him a finder’s fee. During their discussions, Mrs. Stephenson orally agreed
to pay Nguyen a finder’s fee and sent him the following text message:

Hi – I am. All in- we could pay cash for our half but I think
finance company will want set up as loan maybe more down
payment. I will also give you a bonus plus of course your

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commission. I have apt in f ok nursing hills at 10 am
tomorrow but can meet later at office and let’s do joint call
with lender and buyer and see if we can save the deal.

Nguyen gave Mrs. Stephenson the purchase contract and the clients’
contact information.

¶4 Soon after, the seller added the Stephensons to the purchase
contract and the property deal closed. After the sale, Nguyen reached out
to Mrs. Stephenson to discuss the finder’s fee. But Mrs. Stephenson failed
to respond and refused to sign paperwork for Nguyen to collect a finder’s
fee. Two months later, the Stephensons sold the property for a profit and
never paid Nguyen a finder’s fee.

¶5 Nguyen sued the Stephensons, bringing four claims: breach
of contract, breach of implied covenant of good faith and fair dealing, fraud
and negligent misrepresentation. The Stephensons moved to dismiss the
case, arguing the suit violated the Statute of Frauds because real estate
agent employment contracts require a written agreement. See Ariz. R. Civ.
P. 12(b)(6) (defense of “failure to state a claim upon which relief can be
granted”). Nguyen responded that (1) the dispute concerned a business
finder’s fee, not a real estate commission, (2) the Stephensons were
equitably estopped from raising a Statue of Frauds defense and (3) the
Stephensons failed to attach a Good Faith Consultation Certificate with
their motion as required by Arizona Rule of Civil Procedure 7.1(h).
Alternatively, Nguyen asked for an opportunity to amend his complaint.
The Stephensons replied and attached the certificate. The court granted the
motion to dismiss in part, dismissing all claims except the fraud claim and
denied Nguyen’s request to amend because he failed to state with
particularity how the complaint’s defects could be corrected.

¶6 Nguyen again moved to amend his complaint with additional
factual allegations and exhibits, including an unsigned “joint venture
agreement” supporting the investment deal that Nguyen brought together.
The Stephensons moved for reconsideration, arguing a fraud claim cannot
be based on an agreement that violates the Statute of Frauds—the same
argument presented in their motion to dismiss. The court granted the
Stephensons’ motion for reconsideration, concluding that the finder’s fee
agreement constituted a real estate employment agreement subject to A.R.S.
§§ 32-2151.02(A) and 44-101(7). In its final judgment, the court dismissed
the remaining fraud claim and again denied Nguyen’s motion to amend.
Nguyen timely appealed.

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¶7 This Court has jurisdiction under A.R.S. §§ 12-120.21(A)(1)
and -2101(A)(1).

DISCUSSION

¶8 Nguyen raises six issues on appeal but the central question
that resolves his appeal is whether noncompliance with A.R.S. § 32-
2151.02(A) and the Statute of Frauds bars enforcement of an oral finder’s
fee agreement entered for the purposes of introducing parties for a joint
venture agreement. Dismissal is appropriate “under Rule 12(b)(6) only if as
a matter of law plaintiffs would not be entitled to relief under any
interpretation of the facts susceptible to proof.” Coleman v. City of Mesa, 230
Ariz. 352, 356, ¶ 8 (2012) (cleaned up). This Court reviews rulings on
motions to dismiss de novo and assumes the truth of all well-pled facts in
the complaint. Ariz. R. Civ. P. 12(b)(6); Hammer Homes, LLC v. City of
Phoenix, 256 Ariz. 526, 528, ¶ 10 (App. 2023). Interpretation of statutes is
reviewed de novo. Stambaugh v. Killian, 242 Ariz. 508, 509, ¶ 7 (2017).

I. The court erred in dismissing Nguyen’s claims.

A. The finder’s fee agreement is not a real estate employment
agreement.

¶9 Nguyen argues that the superior court erred when it found
that the agreement providing for a finder’s fee constituted a “real estate
employment agreement” pursuant to A.R.S. § 32-2151.02(A). The superior
court reasoned that Nguyen’s finder’s fee agreement fell within this
statutory provision because he agreed “to procure an additional investor to
co-purchase the Property with the [non-party clients] in exchange for a
finder’s fee.” The court also concluded that “the structure of the transaction
between the Buyers and Stephensen does not change the nature of the
services Nguyen provided as an agent.” Thus, the court found that because
the agreement related to a real estate transaction, it had to comply with
A.R.S. § 32-2151.02(E). This Court disagrees.

¶10 A “real estate employment agreement” is “a written
agreement by which a real estate broker is entitled to compensation for
services rendered pursuant to § 44-101, paragraph 7.” A.R.S. § 32-
2151.02(E). Section 44-101(7) includes agreements “authorizing or
employing an agent or broker to purchase or sell real property, or mines,
for compensation or a commission.” A.R.S. § 44-101(7). Section 32-
2151.02(A) requires all real estate employment agreements to: (1) be written
in clear and unambiguous language; (2) fully set forth all material terms,

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including broker compensation; (3) have a definite duration or expiration
date; and (4) be signed by all parties. A.R.S. § 32-2151.02(A).

¶11 Nguyen’s complaint establishes that there were three
separate and distinct relevant “agreements” in this case. First, the original
purchase agreement with Nguyen’s non-party clients listed Nguyen as
their broker/agent. This agreement was in writing and for the purchase of
real estate. The second “agreement” at issue is Nguyen’s “agreement” with
Mrs. Stephenson that she pay him a finder’s fee. Nguyen contends this
agreement is supported by a text message from Mrs. Stephenson agreeing
to pay a “bonus” that Nguyen attached to his complaint. This “agreement,”
though tangentially related to a real estate transaction, is not a real estate
agreement that would implicate A.R.S. § 32-2151.02(A). The third
“agreement” is the purchase agreement that included the clients and the
Stephensons. This agreement was in writing and for the purchase of real
estate.

¶12 The critical distinction between the finder’s fee and the other
two agreements is that the finder’s fee agreement did not authorize or
employ Nguyen “to purchase or sell real property” on behalf of the
Stephensons. A.R.S. § 44-101(7). Rather, it compensated him for
introducing the Stephensons to a business opportunity. The fact that this
finder’s fee agreement tangentially related to the purchase of real property
does not turn the agreement into a real estate employment agreement.
Notably, this Court’s conclusion is supported by the superior court’s factual
finding that the Stephensons and Nguyen did not enter the finder’s fee
agreement for the purpose of purchasing real property. The court stated,
“Mrs. Stephenson promised to pay Nguyen ‘a finder’s fee’ in exchange for
bring[ing] her the investment opportunity.”

¶13 The court also disagreed with Nguyen’s reliance on Swingle v.
Myerson, 19 Ariz. App. 607 (1973), which involved an oral agreement for a
finder’s fee, because the transaction in that case did not involve the sale of
property. But as Nguyen’s complaint outlines and the court’s factual
recitation confirms, the complaint alleges the finder’s fee was not for the
sale of the property; it was for connecting Mrs. Stephenson with the non-
party clients to set up an investment deal where they would partner
together. Based on the statutory definition of “real estate employment
agreement,” the court’s classification of the finder’s fee as requiring
compliance with § 32-2151.02(A) was error. A.R.S. § 32-2151.02(E).

¶14 The Stephensons cite Young v. Rose, contending that “Arizona
places ‘strict requirements’ on real estate professionals who seek to recover

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commissions.” 230 Ariz. 433, 436, ¶ 16 (App. 2012). But Young concerned
whether a plaintiff could recover real estate commissions without a written
agreement as required by A.R.S. § 32-2151.02(A). Id. That is not what
occurred here. Nguyen’s commission is not in question—just his finder’s fee.
The Stephensons also argue that labeling a commission a “finder’s fee”
rather than a commission cannot circumvent the statutory writing
requirements and cite Red Carpet-Barry & Assocs., Inc., v. Apex Assocs., Inc.,
130 Ariz. 302, 305 (App. 1981), to support their position. Though a broker
“should not be able to avoid the necessity of a written listing agreement
. . . by labeling the agreement a finder’s fee contract,” Red Carpet, 130 Ariz.
at 305, that principle applies only when the underlying service is, in
substance, real estate brokerage. Nguyen does not contend that he is
entitled to a commission he did not receive, he claims that he is entitled to
compensation for putting together an investment deal.

¶15 Because the complaint alleged an agreement separate from
the real estate purchase agreement, the court erred in dismissing Nguyen’s
complaint under A.R.S. § 32-2151.02(E).

B. The Statute of Frauds does not apply to the finder’s fee.

¶16 Similarly, if the rules of a real estate employment agreement
do not govern the finder’s fee in this case, the Statute of Frauds does not
apply. Under A.R.S. § 44-101, certain agreements are unenforceable unless
the agreement “is in writing and signed by the party to be charged.”
Agreements with this requirement include those “authorizing or
employing an agent or broker to purchase or sell real property, or mines,
for compensation or a commission.” A.R.S. § 44-101(7).

¶17 Here, the Stephensons argue that the finder’s fee was so
intimately connected with the purchase of real property that the Statute of
Frauds applies. But nothing in Nguyen’s complaint suggests that the
purpose of the agreement between Nguyen and Mrs. Stephenson was to
employ or authorize him as an agent or broker. Because Nguyen’s the
finder’s fee agreement was separate from the real estate purchase
agreement, the court erred in determining it was subject to the Statute of
Frauds. Coleman, 230 Ariz. at 356, ¶ 8.

¶18 The court also cited Lininger v. Sonenblick, 23 Ariz. App. 266
(1975), to support its order dismissing Nguyen’s fraud claim after
reconsideration. In Lininger, the parties disputed the sale of stocks and a
denial to reduce the sale agreement to writing. Id. In that case, this Court
focused on the elements of fraud: the hearer’s right to rely on the

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misrepresentation or agreement. Id. at 267–68. This Court reasoned that
“the alleged agreement was no agreement at all until it was placed in
written form” because the Statute of Frauds required the agreement to be
in writing. Id. at 268. But, as determined, the Statute of Frauds does not
apply to the finder’s fee agreement and therefore, Lininger does not support
the court’s dismissal.

¶19 Because A.R.S. §§ 32-2151.02 and 44-101 do not apply to the
finder’s fee “agreement,” the superior court’s dismissal is reversed.

II. The court should have granted Nguyen the opportunity to amend.

¶20 Nguyen also challenges the superior court’s denial of his
request to amend his complaint. This Court reviews a denial of a motion to
amend for an abuse of discretion. Dube v. Likins, 216 Ariz. 406, 415, ¶ 24
(App. 2007). “Before the trial court grants a Rule 12(b)(6) motion to dismiss,
the non-moving party should be given an opportunity to amend the
complaint if such an amendment cures its defects.” Id. “Leave to amend,
although discretionary should be liberally granted.” Id.

¶21 Here, Nguyen, in response to the motion to dismiss,
requested leave to amend his complaint if the court was inclined to dismiss
the case. But after the court’s dismissal, he immediately requested leave to
amend. As part of the motion to amend, Nguyen attached documents
outlining the “joint venture” that he brought together in support of his
finder’s fee claim. The court relied on its Statute of Frauds reasoning to find
amendment of Nguyen’s complaint futile. Based on this Court’s holding
above, Nguyen may amend his complaint.

III. Nguyen’s remaining issues on appeal are moot.

¶22 Nguyen’s remaining arguments on appeal are that: (1) Mrs.
Stephenson is liable for fraud even if the finder’s fee agreement is
unenforceable, (2) the Stephensons are equitably estopped from asserting
the Statute of Frauds as a defense and (3) the court should have denied the
motion to dismiss because the Stephensons did not attach a Good Faith
Consultation Certificate. Because this Court reverses the superior court’s
dismissal of Nguyen’s complaint and holds the Statute of Frauds does not
apply to the finder’s fee “agreement” at issue here, these issues are moot
and this Court will not address them. See Vinson v. Marton & Assocs., 159
Ariz. 1, 4 (App. 1988) (“A decision becomes moot for purposes of appeal
whe[n] . . . action by the reviewing court would have no effect on the
parties.”). “[A]s a policy of judicial restraint, we will not address moot or
abstract questions.” Lana A. v. Woodburn, 211 Ariz. 62, 65, ¶ 9 (App. 2005).

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IV. Attorneys’ fees.

¶23 As a case arising from a contract, both parties seek attorneys’
fees under A.R.S. § 12-341.01. As the unsuccessful party on appeal, this
Court denies the Stephensons’ request for attorneys’ fees. A.R.S. § 12-
341.01(A). In its discretion, this Court awards Nguyen his attorneys’ fees as
the successful party. A.R.S. § 12-341.01(A). This Court also awards Nguyen
his costs on appeal. A.R.S. § 12-341.

CONCLUSION

¶24 This Court reverses the superior court’s dismissal of
Nguyen’s claims and its denial of the request to amend. This Court remands
for further proceedings consistent with this decision.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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