Lyons v. Pmi

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

SEAN LYONS, Plaintiff/Appellant,

v.

PMI REAL ESTATE SERVICES, Defendant/Appellee.

No. 1 CA-CV 26-0048
FILED 08-28-2026

Appeal from the Superior Court in Maricopa County
No. CV2025-030371
The Honorable Randall H. Warner, Judge

AFFIRMED

COUNSEL

Sean Lyons, Scottsdale
Plaintiff/Appellant

Hull, Holliday, & Holliday, Phoenix
By Matthew R. Schlabach
Counsel for Defendant/Appellee

MEMORANDUM DECISION

Presiding Judge Jennifer M. Perkins delivered the decision of the Court, in
which Judge Brian Y. Furuya and Judge D. Andrew Gaona joined.

LYONS v. PMI
Decision of the Court

P E R K I N S, Judge:

¶1 Sean Lyons appeals the superior court’s order dismissing his
claims of fraud against his property manager, PMI Real Estate Services
(“PMI”) under Arizona Rule of Civil Procedure 12(b)(6) for failure to state
a claim and awarding fees against him. For the following reasons, we
affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 Lyons’ fraud claims stem from allegedly false statements PMI
made to Lyons and the justice court over the course of three eviction
proceedings between December 2024 and March 2025. We view the facts in
the light most favorable to Lyons, the non-moving party. Date St. Cap., LLC
v. Clearcover Ins. Co., 256 Ariz. 430, 432 ¶ 2 (App. 2023). The facts, as Lyons
has alleged them, are as follows.

¶3 Lyons rented a property that PMI managed for Lyons’
landlord. PMI brought the first eviction action in December after the tenant
portal payment system went down, causing Lyons to pay rent late. PMI
voluntarily dismissed that action once Lyons paid rent. PMI then sought to
evict Lyons in February after Lyons paid his rent late again, though Lyons
contended PMI was in possession of his rent payment and refused to
deposit it. Eventually, PMI voluntarily dismissed that action and accepted
the rent.

¶4 PMI sued to evict Lyons a third time in March, alleging he
was a willful holdover tenant and had not paid rent. Lyons countered that
he was current on rent and was not a holdover tenant because he and the
landlord had extended his lease for another year. Alternatively, he argued
his lease had converted to a month-to-month periodic tenancy when the
previous term expired. The justice court found Lyons guilty of forcible
detainer as a willful holdover tenant, guilty of special detainer for the
unpaid March rent, and issued PMI a writ to re-obtain the premises.

¶5 In August, Lyons sued PMI for seven claims of fraud relating
to PMI’s actions during the three eviction proceedings, including
statements PMI made to the justice court during the March eviction
proceeding about the status of Lyons’ lease and whether Lyons was current
on rent. PMI moved to dismiss under Rule 12(b)(6) for failure to state a
claim. The court granted the motion, finding Lyons had not shown he
reasonably relied on false representations from PMI.

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LYONS v. PMI
Decision of the Court

¶6 PMI then requested attorney fees and costs under a provision
of Lyons’ lease, or alternatively as a matter “aris[ing] out of contract” under
Arizona Revised Statutes 12-341.01. Lyons moved for leave to amend his
complaint by replacing his various fraud claims with a single claim for
“Interjudicial Fraud.” The court denied Lyons’ motion to amend because
“Interjudicial Fraud” is not a recognized cause of action. The court denied
fees under the lease because PMI was not a party to Lyons’ contract, but
granted PMI its fees under Section 12-341.01(A). Lyons now appeals the
dismissal of his complaint, the denial of his motion to amend, and the fee
award. We have jurisdiction. A.R.S. § 12-2101(A)(1).

DISCUSSION

I. Rule 12(b)(6) Dismissal and Denial of Motion to Amend

¶7 We review dismissal for failure to state a claim de novo.
Markham Contracting Co., Inc. v. Cahava Springs Phase I, Inc., __ Ariz. __, __
¶ 10, 591 P.3d 877 (2026). We review denial of a motion to amend a pleading
for abuse of discretion. Carranza v. Madrigal, 237 Ariz. 512, 515 ¶ 13 (2015).

¶8 A plaintiff must plead all essential elements of fraud in his
complaint with particularity. Ariz. R. Civ. P. 9(b); Green v. Lisa Frank, Inc.,
221 Ariz. 138, 155–56 ¶ 53 (App. 2009). Fraud requires:

(1) a representation, (2) its falsity, (3) its
materiality, (4) the speaker’s knowledge of its
falsity or ignorance of its truth, (5) the speaker’s
intent that the information should be acted
upon by the hearer and in a manner reasonably
contemplated, (6) the hearer’s ignorance of the
information’s falsity, (7) the hearer’s reliance on
its truth, (8) the hearer’s right to rely thereon,
and (9) the hearer’s consequent and proximate
injury.

Id. at 156 ¶ 53. Lyons argues to this Court that his fraud claims are
specifically based on PMI’s statements to the justice court, not statements
PMI made to Lyons. Meaning, Lyons alleges the justice court was the
“hearer.” To the extent Lyons’ original complaint relied on statements
directed to Lyons, he has abandoned that issue by not raising it on appeal.
See Robert Schalkenbach Found. v. Lincoln Found., Inc., 208 Ariz. 176, 180 ¶ 17
(App. 2004).

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LYONS v. PMI
Decision of the Court

¶9 Lyons vaguely asserted PMI lied about his lease extension
and whether he paid rent, but he did not state with particularity what PMI
said. Even if Lyons could bring a fraud claim on behalf of the court, he
needed to allege how the justice court, not Lyons, was injured by PMI’s
statements. He did not do so because he alleged he was injured by the
statements, not the court. See Green, 221 Ariz. at 156 ¶ 53 (“A showing of
actual fraud requires[] . . . the hearer’s consequent and proximate injury.”
(emphasis added)). He failed to state with particularity all essential
elements of fraud, so the court properly dismissed his claims.

¶10 Lyons next asks us to recognize “Interjudicial Fraud,” which
he describes as a private right of action for perjury. We will not recognize a
new claim when sufficient remedies already exist. For example, a party can
request relief from a superior court judgment due to fraud under Arizona
Rule of Civil Procedure 60(b)(3). And the common law claim of wrongful
institution of a civil proceeding allows a party to sue when wrongful civil
proceedings have been initiated against him. Bradshaw v. State Farm Mut.
Auto. Ins. Co., 157 Ariz. 411, 416–17 (1988). Indeed, Lyons even concedes
that a wrongful institution of a civil proceeding claim may remedy his
grievances. Because we decline to recognize “Interjudicial Fraud,” we also
conclude the court did not abuse its discretion by denying Lyons’ motion
to amend because the amendment would have been futile. Lewis v. Swenson, 126 Ariz. 561, 566–67 (App. 1980).

¶11 Lyons also argues that various causes of action could fit the
facts he has alleged. He complains the superior court should have hinted at
the proper cause of action rather than dismiss his claims, and now asks us
to weigh in. We will not do so. It is not the court’s responsibility to advise
Lyons on which claim he should bring. We also reject Lyons’ argument that
his claim should have been allowed to proceed to a bench trial. Because the
court properly dismissed his claims, no trial of any kind was warranted.

II. Applicability of Section 12-341.01(A)

¶12 Finally, Lyons challenges the court’s attorney fee award. The
court may award reasonable fees to the successful party “[i]n any contested
action arising out of a contract, express or implied.” A.R.S. § 12-341.01(A).
We review the applicability of Section 12-341.01(A) de novo. Modular Mining
Sys., Inc. v. Jigsaw Techs., Inc., 221 Ariz. 515, 521 ¶ 21 (App. 2009).

¶13 Lyons argues Section 12-341.01 does not apply because PMI
was not a party to his lease, but the parties’ relationship is not dispositive.
See Schwab Sales, Inc. v. GN Constr. Co., Inc., 196 Ariz. 33, 37 ¶ 12 (App. 1998)

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LYONS v. PMI
Decision of the Court

(claims in which one litigant is not a party to the contract may still arise
under contract).

¶14 Instead, a tort claim arises out of contract “only when the tort
could not exist ‘but for’ the breach or avoidance of contract.” Ramsey Air
Meds, L.L.C. v. Cutter Aviation, Inc., 198 Ariz. 10, 15 ¶ 27 (App. 2007). The
test is whether the plaintiff would have a claim “even in the absence of a
contract.” Id. at 16 ¶ 27. Section 12-341.01 does not apply when the contract
is a factual predicate to the tort but not the essential basis for it. Kennedy v.
Linda Brock Auto. Plaza, Inc., 175 Ariz. 323, 325 (App. 1993).

¶15 Lyons’ fraud claims rely on the truth of two allegations. First,
that Lyons had a contract with the landlord as of March 2025, either as a
12-month lease or a month-to-month tenancy. Second, that Lyons complied
with that contract by timely paying his rent. Because Lyons’ fraud claims
would have required him to prove (1) a contract existed in March 2025 and
(2) he complied with it, we conclude the contract was the essential basis of
Lyons’ claims. Thus, the claims arose out of contract under Section 12-
341.01. See ML Servicing Co. v. Coles, 235 Ariz. 562, 570 ¶ 30 (App. 2014) (the
phrase “arising out of a contract” must be read broadly and encompasses
an action when one party asserts a contract and another “successfully
proved that no contract existed.”).

III. Attorney Fees and Costs on Appeal

¶16 PMI requests its attorney fees and costs on appeal under
Sections 12-341.01 and -341. Because this action arose out of contract and
PMI was the successful party, we award PMI its reasonable attorney fees
and taxable costs on appeal upon its compliance with ARCAP 21. A.R.S. §§
12-341.01(A), -341.

CONCLUSION

¶17 We affirm.

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

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