Hernandez v. Old Town

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

RUFINA HERNANDEZ, Plaintiff/Appellant,

v.

OLD TOWN AVONDALE RECEPTION HALL LLC, Defendant/Appellee.

No. 1 CA-CV 24-0206
FILED 12-17-2024

Appeal from the Superior Court in Maricopa County
No. CV 2020-016009
The Honorable Joan M. Sinclair, Judge

AFFIRMED

COUNSEL

Law Office of Lisa M. Hanger PLLC, Phoenix
By Lisa M. Hanger
Counsel for Plaintiff/Appellant

Perez Law Group PLLC, Glendale
By Cristina Perez Hesano
Counsel for Defendant/Appellee
 HERNANDEZ v. OLD TOWN
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Michael S. Catlett delivered the decision of the Court, in
which Judge Jennifer M. Perkins and Vice Chief Judge Randall M. Howe
joined.

C A T L E T T, Judge:

¶1 Rufina Hernandez (“Hernandez”) appeals the superior
court’s entry of summary judgment in favor of Old Town Avondale
Reception Hall (“Old Town”), the court’s award of attorney fees and costs
to Old Town, and the court’s denial of her prior motion for summary
judgment. We affirm in all respects.

FACTS AND PROCEDURAL HISTORY

¶2 On February 20, 2020, Hernandez contracted with Old Town
to rent Old Town’s facilities (“Contract”) for her daughter’s quinceñera on
September 12, 2020 (“Event”). The Contract allowed up to 200 guests and
contained a clause protecting Old Town from cancellation of the Event due
to “causes of nature.” The total price was $7,472 and Hernandez made full
payment in installments between February and May.

¶3 In the Spring of 2020, Governor Ducey issued a series of
executive orders aimed at combatting the COVID-19 pandemic. In June
2020, the Governor issued Executive Order 2020-43 (“Executive Order”)
prohibiting “organized public events of more than 50 people” unless
otherwise approved. The City of Avondale subsequently implemented the
Executive Order and prohibited “organized events of more than 50 people.”
Fearing the Executive Order would interfere with the Event, Hernandez’s
cousin-in-law, Celina Ramirez (“Ramirez”), reached out to Old Town in
July to discuss enforcement of the Executive Order and how to proceed
with the Event. Old Town informed Ramirez that the contract prohibited
changes and cancellations after July, but Old Town offered to reschedule
the Event in 2021 for a fee. Old Town also claimed the Executive Order did
not apply to the Event because it was not open to the public and thus
assured Ramirez that the Event could take place.

¶4 Ramirez then spoke with the Avondale Police Department
and the City of Avondale to discuss the Executive Order. The City

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informed her that “any event over 50 people was subject to police
intervention,” and the Police Department stated that if it received a call
about the Event, it would first give attendees a chance to leave before
issuing tickets and fines.

¶5 Given the uncertainty surrounding the Executive Order,
Hernandez decided not to hold the Event as scheduled. By that point, Old
Town had already paid $3,905 to various vendors for the Event and no other
events were scheduled for September 12, 2020. Old Town offered to
reschedule the Event to September 10, 2021, without charging a fee, but
Hernandez demanded the Event be held on September 11, 2021. Old Town
was unable to accommodate that demand. Hernandez did not proceed
with the Event on September 12, 2020.

¶6 In December 2020, Hernandez sued Old Town for breach of
contract, breach of the covenant of good faith and fair dealing, unjust
enrichment, and rescission of the Contract. Old Town filed a counterclaim
for breach of contract, but eventually stipulated to its dismissal. In July
2021, Hernandez moved for summary judgment, seeking rescission of the
contract under the doctrine of impracticability of performance and
frustration of purpose. The superior court denied the motion, reasoning
that even if the Event was subject to the Executive Order, it could have gone
forward “with no more than 50 guests at any one time during the seven-
hour usage of the facility.”

¶7 Old Town later moved for summary judgment, which the
superior court granted. Hernandez appealed. This court vacated the
judgment because Old Town failed to properly serve Hernandez with the
motion. On remand, Old Town again sought summary judgment, but this
time it properly served Hernandez. The superior court granted the motion.
The court concluded Hernandez—not Old Town—was the party in breach
of the contract, no evidence supported the claim of breach of the covenant
of good faith and fair dealing, and the doctrine of unjust enrichment did
not apply because a contract governed the relationship between the parties.
The court reiterated that Hernandez was not entitled to rescission of the
contract. Having disposed of all claims, the court dismissed the complaint
and awarded Old Town its attorney fees and costs.

¶8 Hernandez timely appealed. We have jurisdiction. See A.R.S.
§§ 12-2101(A)(1), 12-120.21(A)(1).

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DISCUSSION

¶9 Hernandez appeals the superior court’s entry of summary
judgment for Old Town, award of attorney fees and costs to Old Town, and
denial of her motion for summary judgment.

I. Summary Judgment for Old Town

¶10 We review the superior court’s entry of summary judgment
de novo, viewing the facts in the light most favorable to the non-moving
party. Andrews v. Blake, 205 Ariz. 236, 240 ¶ 11 (2003). We may affirm for
any reason the record supports. Joshua Tree Health Ctr., LLC v. State, 255
Ariz. 220, 222 ¶ 8 (App. 2023). Summary judgment is appropriate when the
evidence does not create a genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. Orme Sch. v. Reeves, 166
Ariz. 301, 305 (1990).

¶11 At the outset, Hernandez argues Old Town filed a motion to
dismiss, which the superior court treated as a motion for summary
judgment. Hernandez argues that, correctly characterized, Old Town’s
motion required it to “contradict allegations made in the complaint.” We
disagree. Although Old Town requested dismissal of the complaint in the
conclusion of its motion for summary judgment, the other portions of its
motion papers and supporting evidence sought relief in the form of
summary judgment. Thus, Old Town was not required to contradict
allegations in the complaint. It was, instead, required to show there was no
genuine issue of material fact and it was entitled to judgment as a matter of
law. See Ariz. R. Civ. P. 56(a); Orme Sch., 166 Ariz. at 305.

¶12 Hernandez asserted four causes of action: breach of contract,
breach of the implied covenant of good faith and fair dealing, unjust
enrichment, and rescission. As the party moving for summary judgment
but without the burden of proof at trial, Old Town could obtain summary
judgment if it showed that “no evidence exist[ed] to support an essential
element of [Hernandez’s] claim[s].” See Nat’l Bank of Ariz. v. Thruston, 218
Ariz. 112, 117 ¶ 22 (App. 2008). When moving for summary judgment, Old
Town filed a separate statement of facts citing to supporting evidence in the
record. Hernandez did not controvert those facts, and thus we ask only
whether the facts and evidence Old Town produced showed that
Hernandez could not, as a matter of law, support one or more elements of
her claims. See id.

¶13 Hernandez’s breach of contract claim required “the existence
of [a] contract, its breach and the resulting damages.” Graham v. Asbury,

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112 Ariz. 184, 185 (1975). Old Town’s evidence showed that Hernandez
could not establish that Old Town breached the Contract. The Contract
stated that Hernandez could not cancel the Event within four months of its
date without forfeiting payments made. Old Town fulfilled its contractual
obligations by paying vendors for catering and music service and otherwise
preparing to hold the Event on September 12, 2020. Old Town was willing
and ready to hold the Event as scheduled, but Hernandez chose to cancel
the Event. Old Town also attempted to return Hernandez’s security
deposit, but she refused to accept it and demanded a full refund, which the
Contract did not require. Under these facts, no reasonable factfinder could
conclude that Old Town breached the contract.

¶14 The same goes for the implied covenant of good faith and fair
dealing. Liability for breach of the implied covenant arises when “one party
exercises discretion retained or unforeclosed under a contract in such a way
as to deny the other a reasonably expected benefit of the bargain.” Wells
Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons Loc. No. 395 Pension
Tr. Fund, 201 Ariz. 474, 492 ¶ 66 (2002). Old Town’s unrebutted statement
of facts shows that Old Town spent $3,905 on vendors in preparation for
the Event and was ready to proceed on September 12, 2020. Old Town also
offered to postpone the Event to September 10, 2021, and agreed to waive
any rebooking fee. Hernandez was willing to reschedule the Event but
demanded it be held on a particular date that Old Town could not
accommodate. There is no evidence in the record that Old Town exercised
discretion in a manner that deprived Hernandez of the benefit of her
bargain. See Coulter v. Grant Thornton, LLP, 241 Ariz. 440, 448-49 ¶ 34 (2017).

¶15 Turning next to unjust enrichment, it “occurs when one party
has and retains money or benefits that in justice and equity belong to
another.” Trustmark Ins. Co. v. Bank One, Ariz., NA, 202 Ariz. 535, 541 ¶ 31
(App. 2002). One element of an unjust enrichment claim is “the absence of
any remedy at law.” Mousa v. Saba, 222 Ariz. 581, 588 ¶ 29 (App. 2009).
Thus, if there is “a specific contract which governs the relationship of the
parties, the doctrine of unjust enrichment has no application.” Brooks v.
Valley Nat’l Bank, 113 Ariz. 169, 174 (1976); see also Trustmark Ins. Co., 202
Ariz. at 542 ¶ 34. Here, a specific contract—the Contract—governed the
relationship between Hernandez and Old Town, and therefore Hernandez,
as a matter of law, cannot recover for unjust enrichment.

¶16 That leaves only Hernandez’s rescission claim. Hernandez
argues she was entitled to rescission because any non-performance of the
Contract was justified under the frustration of purpose doctrine. Old Town
responds that the frustration of purpose doctrine does not apply because

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the Contract contained a force majeure clause. Old Town adds that even if
the frustration of purpose doctrine applies, Hernandez cannot satisfy its
requirements. We agree with Hernandez that she can assert frustration of
purpose, but we agree with Old Town that Hernandez cannot satisfy each
requirement of that doctrine.

¶17 A force majeure clause allows contracting parties to “allocate
the risk of unforeseeable events beyond their control.” VEREIT Real Est.,
LP v. Fitness Int’l, LLC, 255 Ariz. 147, 151 ¶ 10 (App. 2023). Hernandez
argues the force majeure clause contained in the Contract did not protect Old
Town from losses due to government regulation. In Hernandez’s view, the
force majeure clause applied only to “causes of nature” and thus the parties
did not allocate the risk of loss with respect to government regulations. We
agree with Hernandez. The force majeure clause applied only to “causes of
nature” and was silent with respect to government regulations, including
those that might stem from “causes of nature.” Contra id. at 151 ¶ 8
(considering a force majeure clause that referenced “restrictive laws”). Thus,
the Contract did not entirely allocate—to one party or the other—the risk
that an executive order would result in the Event not ocurring.

¶18 But Old Town still established that Hernandez is not
otherwise entitled to rescission based on frustration of purpose.
Performance may be excused based on frustration of purpose only if the
value of performance is “totally or nearly totally destroyed.” 7200 Scottsdale
Rd. Gen. Partners v. Kuhn Farm Mach., Inc., 184 Ariz. 341, 350 (App. 1995).
Even assuming the Executive Order applied to the Event, Hernandez was
permitted to have a party with no more than 50 guests. Doing so may have
reduced the value of Hernandez’s bargain, but that reduction would not
have been so severe as to qualify as a substantial frustration of purpose. See
id. Similarly, performance was not impracticable—the record is devoid of
evidence that a person necessary for performance died or was
incapacitated, a specific thing necessary for performance was destroyed, or
performance was prohibited by law. Id. at 345. Hernandez argues the
Executive Order prohibited the Event, but, as the superior court correctly
observed, the seven-hour Event could have taken place with no more than
50 people attending at any one time. For example, Hernandez could have
invited 50 guests at a time in one-and-a-half hour increments. The Event
was not prohibited, and Hernandez is not entitled to rescission.

¶19 In sum, Old Town’s unrebutted statement of facts established
that there were no genuine issues of material fact and Old Town was
entitled to judgment as a matter of law.

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II. Denial of Hernandez’s Motion for Summary Judgment

¶20 Hernandez attempts to appeal the superior court’s denial of
her prior motion for summary judgment, arguing the court erroneously
found that having 200 people at the Event was not a principal purpose of
the contract. “It is well settled that a denial of a motion for summary
judgment is a nonappealable, interlocutory order that may be reviewed
only by special action.” Sonoran Desert Investigations, Inc. v. Miller, 213 Ariz.
274, 276 ¶ 2 (App. 2006). In any event, Hernandez’s arguments about the
denial of her prior motion for summary judgment are moot considering our
conclusion that the superior court properly entered summary judgment for
Old Town.

III. Superior Court Attorney Fees and Costs

¶21 Hernandez argues the superior court erred by awarding Old
Town $8,000.00 in attorney fees and $649.55 in costs. Arizona law allows
the “successful party to a civil action” to recover “all costs expended or
incurred” and permits the court to award reasonable attorney fees to the
successful party in any action arising out of contract. A.R.S. §§ 12-341, 12-
341.01. We review a superior court’s award of attorney fees under § 12-
341.01 for an abuse of discretion. Modular Mining Sys., Inc. v. Jigsaw
Technologies, Inc., 221 Ariz. 515, 521 ¶ 21 (App. 2009). The superior court
has discretion to select the successful party, and we will not second-guess
that determination if any reasonable basis exists for it. Ariz. Biltmore Hotel
Villas Condos. Ass’n v. Conlon Grp. Ariz., LLC, 249 Ariz. 326, 334 ¶ 39 (App.
2020).

¶22 The superior court did not abuse its discretion in awarding
Old Town a portion of its requested attorney fees. Hernandez does not
dispute that at least three of her four claims arose out of the Contract.
Considering the totality of the litigation, Old Town was the successful party
because it defeated all of Hernandez’s claims. That is true despite that Old
Town stipulated to dismissal of its counterclaim and this court previously
vacated summary judgment for improper service. See id. at ¶ 40. Old Town
requested $14,763.00 in attorney fees, $649.55 in costs, and $2,372.51 in
sanctions. The superior court instead awarded Old Town $8,000.00 in
attorney fees, $649.55 in costs, and refused to award sanctions. We find no
reason to disturb that partial award.

ATTORNEY FEES

¶23 Both Hernandez and Old Town request attorney fees and
costs on appeal pursuant to A.R.S. §§ 12-341 and 12-341.01. Because Old

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Town is the prevailing party, we award it reasonable attorney fees and costs
on appeal subject to compliance with Arizona Rule of Civil Appellate
Procedure 21.

CONCLUSION

¶24 We affirm the superior court’s judgment for Old Town.

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

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