Court of Appeals of Arizona, First Division, Department C
DAVID URIBE and LISA URIBE, husband and wife, Plaintiffs/Appellants,
INLAND ENGINEERING AND CONSULTING, INC., an Arizona corporation; and BRYAN and EILEEN BURGOZ, husband and wife, Defendants/Appellees.
Not for Publication – Rule 28, Arizona Rules of Civil Appellate Procedure
Appeal from the Superior Court in Maricopa County Cause No. CV2010-005779 The Honorable Eileen S. Willett, Judge
Palecek & Palecek PLLC James J. Palecek Attorneys for Plaintiffs/Appellants.
Ryley Carlock & Applewhite James O. Ehinger Attorneys for Defendants/Appellees.
MICHAEL J. BROWN, Judge.
¶1 David and Lisa Uribe appeal the superior court's judgment in favor of Inland Engineering and Consulting, Inc. ("Inland"). They argue the court erred in granting partial summary judgment on the issue of alleged annual bonuses due to David. For the following reasons, we conclude that even if the court erred in granting partial summary judgment, the error was not prejudicial. We therefore affirm.
¶2 Inland hired David in August 1997. An unsigned document dated August 12, 1997, handwritten by Bryan Burgoz, one of Inland's principals, stated:
Agreed to the following terms of employment:
Wages $19.00 per hour. 5% of gross revenues generated by himself payable at end of year. 10% of company shares of stock with options
to buy additional shares.
¶3 From 1997 until 2003, Inland paid David hourly compensation plus five percent of gross revenues in the form of an annual bonus. In 2004, however, Inland stopped paying the 5% annual bonus based on an alleged policy change that David would receive a salary increase in lieu of the bonus. In the summer of 2009, a dispute arose regarding David's compensation arrangement and, following unsuccessful negotiations, Inland terminated David's employment on October 9, 2009.
¶4 In March 2010, the Uribes sued Inland and Bryan and Eileen Burgoz. The Uribes asserted claims for, among other things, breach of David's employment agreement for failure to pay annual bonuses, breach of the Burgozes' obligation to purchase David's stock, breach of the implied covenant of good faith and fair dealing, and violation of Arizona Revised Statutes ("A.R.S.") section 23-350 (2013) for failure to pay wages upon termination.
¶5 Shortly before trial, Inland moved for partial summary judgment on the Uribes' claim for payment of the annual bonuses due from 2005 to 2009. Inland did not dispute that when David was hired, Inland's practice was to pay its principals a five percent annual bonus based on a predetermined calculation. By 2003, Inland explained, the annual bonus arrangement had become unworkable. Inland claimed that, at a meeting in December 2003, attended by David, it was agreed that the annual bonus would be replaced with an increase in annual salary. Inland offered evidence that David's annual bonus had been approximately $3600; beginning in 2004, he received a salary increase of $4000 in lieu of the annual bonus. According to Inland, David received the increased salary until his termination, and he never objected to the new arrangement until shortly before his termination. Inland asserted that David's acceptance of the increase in salary in lieu of the annual bonus constituted waiver and he was therefore estopped from making a claim for the bonuses. Inland further asserted that because any claim for breach of an employment contract was required to be brought within one year of the breach under A.R.S. § 12-541(3) (2013), the Uribes' claims were time-barred.
¶6 In response, the Uribes asserted Inland's failure to pay bonuses was a continuing breach, meaning that at least the claim for the 2009 bonus was properly filed within one year of when the claim accrued. The Uribes also contended that David never agreed to the change in his compensation. They argued that from 2004 to 2009 David repeatedly asserted a right to the bonuses and that Bryan Burgoz had acknowledged David was entitled to payment. The Uribes supported their response to the motion with David's affidavit avowing "[t]here was never any change in the Annual Bonus" nor any agreement for its elimination.
¶7 The trial court granted Inland's motion for partial summary judgment, finding that the statute of limitations, as well as waiver and estoppel, barred the Uribes' claims for unpaid bonuses from 2005 to 2009. The court subsequently held a bench trial on the Uribes' remaining claims and on Inland's counterclaims. The court found against the Uribes on their claims and found in favor of Inland on its counterclaims. The court awarded damages to Inland in the amount of $40, 733 and awarded Inland $98, ...