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Wingfoot California Homes Co. v. Valley Nat. Bank of Phoenix

Supreme Court of Arizona

February 21, 1956

WINGFOOT CALIFORNIA HOMES CO., a corporation, Appellant,
v.
The VALLEY NATIONAL BANK OF PHOENIX, a National Banking Association, Appellee.

Rehearing Denied March 20, 1956.

Page 371

[80 Ariz. 135] Herbert Mallamo, Phoenix, Leslie O. Parry, Phoenix, of counsel, for appellant.

Gust, Rosenfeld, Divelbess & Robinette, Phoenix, for appellee.

PHELPS, Justice.

This is an appeal from an order granting a motion for summary judgment in favor of plaintiff below in an action brought to recover the principal, interest and attorneys' fees on 37 notes and mortgages, each of which constitutes a separate cause of action. Each note provides that should suit be brought thereon the maker agrees to pay all costs incurred in the collection thereof including reasonable attorneys' fees.

Paragraphs VII and VIII of each cause of action are as follows:

'VII

'That the sum of $150.00 is a reasonable sum to be allowed to the plaintiff as and for its attorneys' fees in this cause of action, and that the same is secured by the mortgage aforesaid.

'VIII

'That the plaintiff is the lawful owner and holder of the promissory note and mortgage securing the same described in this cause of action; that there is now due, owing and unpaid to the plaintiff from the defendant Wingfoot California Homes Co. on said note and mortgage the principal sum of $2,275.92 together with interest on the principal sum of $2,282.59 at the rate of 4 1/4 per cent per annum from December 1, 1953, to the date of the filing of this complaint, together with interest on the principal sum of $2,275.92 at the rate of 4 1/4 per cent per annum from the date of the filing of this complaint until paid, together with the sum of $150.00 for plaintiff's attorneys' fees, together with plaintiff's costs of suit.'

Paragraph IV of defendants' answer to each cause of action 'denies the allegations contained in Paragraphs VII and VIII.'

Thereafter plaintiff filed a motion for summary judgment which was granted upon the basis that there was no genuine issue of any material fact. The court granted recovery on the notes in full including $100 for attorneys' fees on each of the 37 causes of action and decreed foreclosure.

Defendants' assignment of error is predicated upon one question: Was there a genuine issue of fact before the court as to what constituted reasonable attorneys' fees [80 Ariz. 136] in this case at the time of the granting of the summary judgment? If so, summary judgment was improperly granted. It is defendants' contention that the denial of Paragraph VII of the complaint placed the matter of attorneys' fees in issue so that defendants were entitled to put in evidence on the subject and have this matter tried as an issue of fact. It was contended by plaintiff that defendants' denial constituted a negative pregnant with an admission and that it did not raise an issue of fact on the question of the reasonablencess of attorneys' fees.

A denial wherein defendants admit certain stated allegations and allege that they are without knowledge or information sufficient to form a belief as to the truth of certain allegations, and deny generally other allegations, constitutes a qualified general denial. 2 Moore's Federal Practice 2d 1679, section 8.23, General Denial, footnote 2. In the present case defendants admitted the allegations in Paragraphs I through V, alleged insufficient knowledge and information as to form a belief as to the truth of Paragraph VI which was equivalent to a denial; denied Paragraphs VII and VIII and alleged insufficient knowledge or information to form a belief as to the truth of the allegations in Paragraphs IX, X and XI.

To this, plaintiff's argument was that this general denial that the reasonable value of attorneys' fees in each cause of action was $150, constituted a negative pregnant in that it admitted that any sum less than $150 was a reasonable sum. A negative pregnant with an admission may be defined as that form of denial which involves an affirmative implication favorable to the adversary. The general rule is that

Page 372

since a negative pregnant is a negative which implies an affirmative, it cannot be found in a general denial, because a general denial puts in issue every averment of the complaint which a plaintiff is required to prove to sustain his cause of action including jurisdiction. Rule 8(b), 21-405, A.C.A.1939. But where the defendant merely denies that a debt or damage is the precise sum alleged by the plaintiff it is an admission of the value, debt or damage in a lesser ...


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