Pointe 16 v. Gtis-Hov

IN THE

SUPREME COURT OF THE STATE OF ARIZONA

POINTE 16 COMMUNITY ASSOCIATION,
Plaintiff/Appellant,

v.

GTIS-HOV POINTE 16, LLC, ET AL.,
Defendants/Appellees.

No. CV-24-0182-PR
Filed September 4, 2025

Appeal from the Superior Court in Maricopa County
The Honorable Jennifer C. Ryan-Touhill, Judge
No. CV2022-009451
REVERSED IN PART AND REMANDED

Memorandum Decision of the Court of Appeals, Division One
No. 1 CA-CV 23-0747
Filed July 9, 2024
VACATED IN PART

COUNSEL:

Kyle A. Israel (argued), Israel & Gerity, PLLC, Phoenix, Attorneys for
Pointe 16 Community Association

Aaron M. Finter (argued), Schern Richardson Finter, PLC, Mesa, Attorneys
for GTIS-HOV Pointe 16, LLC and K. Hovnanian Phoenix Division Inc.
 POINTE 16 v. GTIS-HOV, ET AL.
Opinion of the Court

JUSTICE KING authored the Opinion of the Court, in which CHIEF
JUSTICE TIMMER, VICE CHIEF JUSTICE LOPEZ, and JUSTICES
BOLICK,1 BEENE, MONTGOMERY, and CRUZ joined.

JUSTICE KING, Opinion of the Court:

¶1 A purchase agreement between individual homebuyers and
the developer of a community provides that “this Agreement and the rights
of Buyer hereunder may not be assigned or transferred by Buyer” without
the developer’s written consent. We now consider whether this
anti-assignment clause precludes the homeowners from assigning their
accrued claims for breach of the implied warranty of workmanship and
habitability to the community’s homeowners’ association. We conclude it
does not.

BACKGROUND

¶2 Pointe 16 Townhomes (“Pointe 16”) is a residential
community comprised of sixty-seven residences. GTIS-HOV Pointe 16,
LLC (“GTIS”) developed and sold the residences to individual
homebuyers. K. Hovnanian Arizona Operations, LLC f/k/a K. Hovnanian
Great Western Building Company, LLC (“K. Hovnanian”) was the general
contractor that built Pointe 16.

¶3 With the sale of each Pointe 16 residence, the homebuyer and
GTIS executed a “Purchase Agreement and Escrow Instructions”
(“Agreement”). K. Hovnanian was not a party to the Agreement. The
Agreement contains the following anti-assignment clause:

B. Successors and Assigns. In view of the credit qualifications,
processing and other personal matters considered hereunder, this
Agreement and the rights of Buyer hereunder may not be assigned
or transferred by Buyer voluntarily, involuntarily, or by
operation of law without first obtaining Seller’s written

1 Justice Bolick joins in the Opinion except for paragraph 29.

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Opinion of the Court

consent, which may be withheld in Seller’s sole and absolute
discretion. If Buyer attempts to assign Buyer’s interest under
this Agreement before the Close of Escrow or enters into
another escrow for the concurrent resale of the Property,
Buyer is in default and Seller shall have the right to terminate
this Agreement and retain the Earnest Money Deposit in
accordance with Section 7 above, in addition to all rights and
remedies available to Seller set forth in this Agreement.
Escrow Holder is instructed not to assist or participate in any
way in the consummation of any so-called “double-escrows”
initiated by Buyer. This Agreement and the rights, duties and
obligations of the Parties shall be binding upon and shall
inure to the benefit of the representatives, successors and
assigns of Seller and, subject to the preceding sentences, to the
heirs, executors, administrators, representatives, successors
and assigns of Buyer.

(Emphasis added.)

¶4 During the development phase of Pointe 16, GTIS created the
Pointe 16 Community Association (“HOA”). GTIS conveyed ownership of
the Pointe 16 common areas to the HOA via a quit claim deed. GTIS
maintained complete control over the HOA until all lots were sold or GTIS
relinquished control, whichever occurred earlier.

¶5 The HOA is charged with certain duties and authority
prescribed by law and set forth in separate articles of incorporation, bylaws,
and a declaration of covenants, conditions, restrictions, and easements
(“Declaration”). According to the Declaration, the HOA is required to
maintain and manage the common areas. The Declaration also delegates to
the HOA the authority to paint the exterior of dwelling units and repair,
maintain, and replace the exterior walls, stucco, facades, roofs, and other
surfaces of dwelling units.

¶6 The HOA filed this lawsuit against GTIS and K. Hovnanian
(collectively “Defendants”), alleging that Pointe 16 was not constructed in
a workmanlike manner and there are various defects in Pointe 16’s real
property and structures. The complaint asserts two causes of action: (1) a

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Opinion of the Court

dwelling action claim under A.R.S. § 12-1361, et seq., and (2) a claim for
breach of the implied warranty of workmanship and habitability.

¶7 Defendants moved for summary judgment on both claims.
As to the dwelling action claim, Defendants argued § 12-1361 does not
establish an independent cause of action. On the breach of implied
warranty claim, Defendants argued the HOA cannot prevail because (1) the
implied warranty was created in favor of homebuyers, and (2) the HOA “is
not a homeowner, does not represent the homeowners, and is not pursuing
claims belonging to any homeowner.”

¶8 A majority of the Pointe 16 homeowners then signed a
“Homeowner Assignment of Certain Defect Claims to Association”
(collectively “Assignments”). The HOA filed the signed Assignments with
the trial court as part of its opposition to Defendants’ summary judgment
motion. In the Assignments, the homeowners affirmed their understanding
that the HOA was pursuing claims against Defendants for construction
defects in Pointe 16, including defects in units owned by homeowners.
They also declared:

[1] I hereby assign to the [HOA] all rights to bring any and all
claims that the [HOA] has to date sought to bring regarding
unit defects in this matter against the Defendants, as
referenced in [the HOA’s] expert reports and notices of claim
(the “Assigned Claims”).

[2] I understand and agree that the [HOA] shall have the sole
right to pursue the Assigned Claims against Defendants and
that the [HOA], in its sole discretion, shall have the authority
to resolve the Assigned Claims. I relinquish any right that I
may have to pursue these claims. I agree to be bound by any
decision regarding the Assigned Claims in this matter.

[3] I further agree that the Association shall have discretion to
repair any Assigned Claims based on its judgment at the
conclusion of this matter.

The homeowners did not obtain GTIS’s written consent for the
Assignments.

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 POINTE 16 v. GTIS-HOV, ET AL.
Opinion of the Court

¶9 The trial court granted summary judgment in favor of
Defendants and dismissed the case in its entirety. As relevant here, the
court determined the HOA has no legal right to assert a claim for breach of
the implied warranty, and the Agreement prohibits Pointe 16 homeowners
from assigning their claims to the HOA.

¶10 The HOA appealed the trial court’s grant of summary
judgment in favor of Defendants on the implied warranty claim, and the
court of appeals affirmed. See Pointe 16 Cmty. Ass’n v. GTIS-HOV Pointe 16,
LLC, No. 1 CA-CV 23-0747, 2024 WL 3341355, at *1 ¶ 1 (Ariz. App. July 9,
2024) (mem. decision). The court reasoned that because the implied
warranty is “part of the contract, ‘a party’s rights under an implied
warranty of workmanship and habitability’ may be assigned unless the
assignment itself is ‘validly precluded by contract.’” Id. at *3 ¶ 19 (quoting
Highland Vill. Partners v. Bradbury & Stamm Constr. Co., 219 Ariz. 147, 150
¶¶ 11–12 (App. 2008)). With respect to the Agreement at issue here, the
court determined: “The HOA does not suggest the non-assignment
provision is invalid. As such, the homeowners were precluded from
assigning to the HOA their rights to enforce the implied warranty.” Id.

¶11 We granted review to consider whether an anti-assignment
clause in a purchase agreement precludes a homeowner from assigning a
breach of implied warranty claim to a homeowners’ association, an issue of
statewide importance. 2 We have jurisdiction pursuant to article 6,
section 5(3) of the Arizona Constitution.

DISCUSSION

¶12 “[W]e review a grant of summary judgment de novo, viewing
the evidence in the light most favorable to the party against whom

2 We also granted review on a second issue—whether the anti-assignment
clause precludes the homeowners from assigning to the HOA their claims
against K. Hovnanian, which was not a party to the Agreement. In light of
our conclusion on the first issue, this second issue is now moot and we will
not consider it.
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Opinion of the Court

summary judgment was entered.” Dabush v. Seacret Direct LLC, 250 Ariz.
264, 267 ¶ 10 (2021).

A. Review Of Assignment Principles

¶13 “Generally, rights and duties under a contract are freely
assignable.” Highland Vill. Partners, 219 Ariz. at 150 ¶ 11 (quoting 6A C.J.S.
Assignments § 32 (2008)). An unconditional and valid “assignment passes
to the assignee all the rights, title or interest of the assignor in or to the
property or property rights comprehended by the assignment.” Martinez v.
Bucyrus-Erie Co., 113 Ariz. 119, 120 (1976). “Essentially the right acquired
by the assignee is simply that previously possessed by the assignor.” Id.;
see also Highland Vill. Partners, 219 Ariz. at 150 ¶ 11 (“Assuming the
assignment is valid, the assignee acquires the rights previously held by the
assignor.”).

¶14 Although the common law at one time reflected a broad
prohibition on assignment of claims, that “prohibition on assignment
gradually became the exception rather than the rule.” Webb v. Gittlen, 217
Ariz. 363, 364–66 ¶¶ 6–13 (2008). In Webb, this Court summarized “[t]he
current principles under Arizona law for determining if an unliquidated
claim may be assigned” in this manner: “(1) claims generally are assignable
except those involving personal injury; (2) the legislature may specify
whether particular claims are assignable; and (3) absent legislative
direction, public policy considerations should guide courts in determining
whether to depart from the general rule.” Id. at 366 ¶ 13.

¶15 Consistent with these principles, breach of contract claims
generally are assignable. See Deatsch v. Fairfield, 27 Ariz. 387, 397–98 (1925)
(“It is generally held that all claims and choses in action sounding ex
contractu are assignable, including not only rights of action for breaches of
contract, but also those based on negotiable and nonnegotiable instruments,
and on judgments, bonds, book accounts, annuities, and similar choses in
action.” (citation omitted)).

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Opinion of the Court

B. General Assignability Of Claims For Breach Of The Implied
Warranty Of Workmanship And Habitability

¶16 At issue here is the assignability of a claim for breach of the
implied warranty of workmanship and habitability, which is a warranty
imposed by law “to protect innocent purchasers and hold builders
accountable for their work.” Sirrah Enters. v. Wunderlich, 242 Ariz. 542, 544
¶ 8 (2017) (quoting Richards v. Powercraft Homes, Inc., 139 Ariz. 242, 245
(1984)). With new home construction, “the builder-vendor impliedly
warrants that the construction was done in a workmanlike manner and that
the structure is habitable.” Lofts at Fillmore Condo. Ass’n v. Reliance Com.
Constr., Inc., 218 Ariz. 574, 575 ¶ 5 (2008) (quoting Columbia W. Corp. v. Vela, 122 Ariz. 28, 33 (App. 1979)).

¶17 “[W]e impute the implied warranty of workmanship and
habitability into all contracts between builder-vendors and homebuyers as
a matter of common law.” Zambrano v. M & RC II LLC, 254 Ariz. 53, 59 ¶ 14
(2022); see also Sirrah Enters., 242 Ariz. at 546 ¶ 18 (“Although implied by
law, the [w]arranty is imputed into an express contract for home
construction.”); Richards, 139 Ariz. at 244 (explaining that the implied
warranty is imposed by law).

¶18 As the implied warranty is “imputed by law into all express
contracts” for home construction, it “is ‘as much a part of a contract as are
the express terms.’” Sirrah Enters., 242 Ariz. at 546 ¶ 18 (quoting Wells Fargo
Bank v. Ariz. Laborers, Teamsters & Cement Masons Local No. 395 Pension Tr.
Fund, 201 Ariz. 474, 490 ¶ 59 (2002)). Therefore, a “claim for breach of the
implied warranty sounds in contract.” Id. at 545 ¶ 11 (quoting Lofts, 218
Ariz. at 575 ¶ 5); see also Woodward v. Chirco Const. Co., 141 Ariz. 514, 516
(1984) (explaining “the implied warranty . . . provides for a cause of action
in contract”).

¶19 To summarize, Arizona law provides that (1) the implied
warranty of workmanship and habitability is part of the contract between a
homebuyer and builder, (2) a claim for breach of the implied warranty
sounds in contract, and (3) breach of contract claims generally are
assignable. It necessarily follows that homeowners’ claims for breach of the
implied warranty generally are assignable, as occurred here.

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Opinion of the Court

¶20 To be clear, this Court has held that public policy prohibits
the enforcement of a contractual provision that disclaims and waives the
implied warranty of workmanship and habitability. Zambrano, 254 Ariz.
at 57 ¶ 3, 64 ¶ 36. Thus, the implied warranty cannot be contracted away.
But the default rule that rights and claims generally are assignable is subject
to the terms of a contract, as parties may contract away the ability to assign
rights or claims. See Highland Vill. Partners, 219 Ariz. at 150 ¶ 11. For that
reason, we now turn to whether the Agreement’s anti-assignment clause
prohibits the assignment of an accrued claim for damages for breach of the
implied warranty.

C. Analysis Of The Agreement’s Anti-Assignment Clause

¶21 Just as parties may agree to an assignment, they may also
agree to prohibit certain assignments. See id. (“A party can assign its
contractual rights to a third party unless . . . assignment is validly
precluded by contract.” (quoting Restatement (Second) of Contracts
§ 317(2)(c) (Am. L. Inst. 1981))); Aetna Cas. & Sur. Co. v. Valley Nat’l Bank of
Ariz., 15 Ariz. App. 13, 15 (1971) (recognizing that contracts may expressly
prohibit assignment). This is in line with Arizona’s longstanding public
policy favoring freedom of contract. See, e.g., Merrill v. Gordon, 15 Ariz. 521,
531 (1914) (“Freedom of contract and freedom in the use and disposition of
one’s own are no less sacred than freedom of speech.”); 1800 Ocotillo, LLC
v. WLB Grp., Inc., 219 Ariz. 200, 202 ¶ 8 (2008) (“Our law generally
presumes . . . that private parties are best able to determine if particular
contractual terms serve their interests. Society also broadly benefits from
the prospect that bargains struck between competent parties will be
enforced.” (internal citation omitted)).

¶22 In Certified Collectors, Inc. v. Lesnick, 116 Ariz. 601, 603 (1977),
this Court explained:

It is . . . hornbook law that in order to effect a legal assignment
of any kind there must be evidence of an intent to assign or
transfer the whole or part of some specific thing, debt, or
chose in action, and the subject matter of the assignment must
be described sufficiently to make it capable of being readily
identified.

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Similarly, an anti-assignment clause in an agreement must evidence an
intent to prohibit the assignment of some specific thing, debt, or chose in
action, and the subject matter of what may not be assigned must be
described sufficiently to make it capable of being readily identified.

¶23 Here, the Agreement’s anti-assignment clause begins with a
prefatory statement that the clause exists “[i]n view of the credit
qualifications, processing and other personal matters considered
hereunder.” The clause then states, “this Agreement and the rights of Buyer
hereunder may not be assigned or transferred by Buyer” without GTIS’s
written consent. The prefatory language, which precedes the operative
language, is essentially a stated purpose for the anti-assignment clause, and
we interpret the anti-assignment clause consistent with that purpose. See
Terrell v. Torres, 248 Ariz. 47, 49 ¶ 14 (2020) (“When interpreting a contract,
we seek to discover and effectuate the parties’ expressed intent” and “we
consider a provision’s meaning in the context of the entire contract.”).

¶24 The prefatory language—addressing “credit qualifications,
processing and other personal matters considered hereunder”—makes
clear that certain aspects of the Agreement are essential and were intended
to be covered by the anti-assignment clause, including the identity of the
homebuyer (with his or her background and creditworthiness) and that
GTIS would deal only with this specific homebuyer for the specific property
which is the subject of the Agreement. See Personal, Merriam-Webster,
https://www.merriam-webster.com/dictionary/personal (last visited
Sept. 2, 2025) (defining “personal” as “of, relating to, or affecting a
particular person” and “of, relating to, or constituting personal property”);
see also Matter, Merriam-Webster, https://www.merriam-
webster.com/dictionary/matter (last visited Sept. 2, 2025) (defining
“matter” as “a subject under consideration” and “matters” as “the events
or circumstances of a particular situation”). The anti-assignment clause,
therefore, evidences an intent to preclude an assignment that would change
the homebuyer with whom GTIS had contracted, impair GTIS’s chance of
obtaining the homebuyer’s full performance under the Agreement, or
increase the burdens or risks imposed on GTIS by virtue of the performance
obligations in the Agreement.

¶25 Notably absent from the Agreement’s anti-assignment clause
is a reference to claims, which is what the Pointe 16 homeowners assigned

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Opinion of the Court

to the HOA. The fact the Agreement prohibits the assignment of the
Agreement and the homebuyer’s rights under the Agreement—but not the
homebuyer’s claims accruing from breach of the Agreement—is significant.
An assignment of rights under a contract is different than an assignment of
accrued claims for damages arising from a breach of that contract. See, e.g.,
Farmers Ins. Exch. v. Udall, 245 Ariz. 19, 23 ¶ 14 (App. 2018) (“The insureds
did not assign their insurance policies to EcoDry, but rather they each
assigned a claim under and a right of action on the policy.” (emphasis
omitted)); Aetna Cas. & Sur. Co., 15 Ariz. App. at 15 (explaining that
insurance policies prohibiting assignment support “the right of the insurer
to choose its insured so as to know its risks,” but where an assignment is
made after the liability-causing event, “the general rule is that the
assignment is not of the policy itself, but of a claim under, or a right of action
on, the policy”).

¶26 Other state courts have recognized the distinction between
rights and claims in the assignment context. Indeed, “contract rights are
distinct from causes of action which accrue from the violation of such rights.
Thus, the prohibition in the contract against assignment of the contract
without the consent of the other party does not bar assignment of causes of
action accruing from breach of the contract.” Korte Const. Co. v. Deaconess
Manor Ass’n, 927 S.W.2d 395, 403 (Mo. Ct. App. 1996); see also Folgers
Architects, Ltd. v. Kerns, 633 N.W.2d 114, 126–27 (Neb. 2001) (“[T]he intent
of the provision against assignment of rights under a contract, which
generally is to allow the parties to choose with whom they contract, is not
affected by allowing an assignment of a right to collect damages for breach
of contract.”); Cordis Corp. v. Sonics Int’l, Inc., 427 So.2d 782, 783 (Fla. Dist.
Ct. App. 1983) (explaining that “while contractual provisions against
assignability are generally enforceable,” a provision that “forbids only the
assignment of a party’s ‘rights’ under a contract simply does not preclude
the assignment of an accrued claim for damages arising from its breach”);
Berschauer/Phillips Constr. Co. v. Seattle Sch. Dist. No. 1, 881 P.2d 986, 993–94,
996 (Wash. 1994) (determining that a clause prohibiting assignment of “any
interest in this Agreement” is “a general anti-assignment clause . . . aimed
at prohibiting the assignment of a contractual performance” and “does not,
absent specific language to the contrary, prohibit the assignment of a breach
of contract cause of action”).

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Opinion of the Court

¶27 The Arizona Legislature has also distinguished between the
assignment of rights under a contract and the assignment of claims for
damages arising from breach of the contract. See A.R.S. § 47-2210(B)
(differentiating, in the uniform commercial code context, between (1) rights
of seller or buyer that materially change a party’s duties, increase the
burden or risk imposed by the contract, or impair the chance of obtaining
return performance, and (2) a right to damages for breach of the whole
contract). Although § 47-2210(B) is not directly applicable here, the Arizona
Legislature’s distinction between rights and claims in the assignment
context is noteworthy.

¶28 We also note the Agreement does not expressly provide a
right to the implied warranty of workmanship and habitability. Instead, the
Agreement takes the opposite approach by expressly disclaiming,
excluding, and waiving the implied warranty. 3 This further supports a
conclusion that the parties did not intend a claim for breach of the implied
warranty to be a right covered by the anti-assignment clause.

¶29 An agreement that only prohibits the assignment of the
agreement and rights under the agreement does not evidence an intent to
prohibit the assignment of accrued claims for damages for breach of the
agreement. See Certified Collectors, Inc., 116 Ariz. at 603; see also Restatement
§ 322(2)(a) (providing that “[a] contract term prohibiting assignment of
rights under the contract, unless a different intention is
manifested, . . . does not forbid assignment of a right to damages for
breach of the whole contract or a right arising out of the assignor’s due
performance of his entire obligation”). Accordingly, the Agreement’s
anti-assignment clause does not prohibit the assignment of accrued claims
for damages for breach of the implied warranty in the Agreement.

¶30 In their Assignments, the homebuyers did not assign the
Agreement or their rights under the Agreement. Instead, they assigned

3 Such a provision is no longer enforceable. See Zambrano, 254 Ariz. at 64
¶ 36 (holding “the public policy underlying the implied warranty of
workmanship and habitability clearly outweighs enforcement of the
disclaimer and waiver of that warranty in the purchase agreement and the
PWC warranty here”).
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Opinion of the Court

their accrued breach of implied warranty claims for damages to the HOA,
an entity that independently owes duties to them under Pointe 16’s
governing documents. The Assignments were permissible and did not
implicate, much less violate, the Agreement’s anti-assignment clause.

CONCLUSION

¶31 We vacate paragraphs 18 and 19 of the court of appeals’
memorandum decision, and the portion of paragraph 1 that addresses the
assignability of a claim for breach of the implied warranty of workmanship
and habitability.

¶32 We reverse the trial court’s grant of summary judgment on
the claim for breach of the implied warranty of workmanship and
habitability and remand for further proceedings consistent with this
Opinion.

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