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RSP Architects, Ltd. v. Five Star Development Resort Communities, LLC

Court of Appeals of Arizona, First Division, Department C

July 16, 2013

RSP ARCHITECTS, LTD., a Minnesota corporation, Plaintiff/Appellant,
v.
FIVE STAR DEVELOPMENT RESORT COMMUNITIES, LLC, an Arizona Limited liability company; FIVE STAR DEVELOPMENT PROPERTIES, LLC, an Arizona limited liability company; FIVE STAR DEVELOPMENT GROUP, INC., an Arizona corporation; FIVE STAR DEVELOPMENT COMMUNITIES, LLC, an Arizona limited liability company, Defendants/Appellees.

Appeal from the Superior Court in Maricopa County Cause No. CV2009-038240 The Honorable J. Richard Gama, Judge

Gammage & Burnham, P.L.C. Phoenix By James A. Craft Carolyn V. Williams Christopher L. Hering Attorneys for Plaintiff/Appellant

Dickinson Wright/Mariscal Weeks PLLC Phoenix By Scott A. Holcomb Denise H. Troy Attorneys for Defendants/Appellees

OPINION

DIANE M. JOHNSEN, Judge

¶1 RSP Architects, Ltd. appeals the superior court's summary judgment in favor of Five Star Development Resort Communities, LLC, on RSP's claim for violation of the Arizona Prompt Payment Act. We hold the Prompt Payment Act does not apply to a contract for architectural services and so affirm the superior court's order.

FACTS AND PROCEDURAL HISTORY

¶2 RSP and Five Star executed a contract in which RSP agreed to provide a variety of architectural services relating to a development known as "The Palmeraie." The contract charged RSP with "construction administration, " "overall coordination" of the project and the creation of "conceptual design, schematic design, design documents, [and] construction documents." As later amended, the total fee due under the contract was $3, 072, 074.

¶3 After events not relevant to our analysis, RSP ceased work on the project and sued, alleging, among other claims, a violation of Arizona's Prompt Payment Act, Arizona Revised Statutes ("A.R.S.") sections 32-1129 et seq. (West 2013) .[1] On cross-motions for partial summary judgment, the superior court held the Prompt Payment Act does not apply to a contract between an owner and an architect and entered summary judgment in Five Star's favor on that claim.[2]

¶4 We have jurisdiction of RSP's timely appeal pursuant to Article 6, Section 9, of the Arizona Constitution, and A.R.S. §§ 12-120.21(A)(1) (West 2013) and -2101(A) (1) (West 2013).

DISCUSSION

¶5 On contracts to which the Prompt Payment Act applies, a contractor's bill for a progress payment is "deemed certified and approved" unless the owner objects in writing within 14 days. A.R.S. § 32-1129.01(D). With certain exceptions, the owner must make a progress payment within seven days after the bill is certified and approved. A.R.S. § 32-1129.01(A). RSP's complaint alleged that because Five Star did not timely disapprove the invoices RSP sent between December 2008 and May 2009, Five Star violated the Prompt Payment Act by failing to pay those invoices.

¶6 The Prompt Payment Act explicitly applies only to "contractors" and defines a "contractor" as "any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that has a direct contract with an owner to perform work under a construction contract." A.R.S. § 32-1129(A)(2). The question, therefore, is whether the contract here is a "construction contract" within the meaning of the statute. The act defines "construction contract" as

a written or oral agreement relating to the construction, alteration, repair, maintenance, moving or demolition of any building, structure or improvement or relating to the excavation ...

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