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Hayden v. Duncan

Court of Appeals of Arizona, First Division, Department E

August 1, 2013

MARY HAYDEN, Petitioner,
v.
THE HONORABLE SALLY SCHNEIDER DUNCAN, Judge of the SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of MARICOPA, Respondent Judge, STEVEN PITTENDRIGH, Real Party in Interest.

Not for Publication -103(G) Ariz. R.P. Juv. Ct.; Rule 28 ARCAP

Maricopa County Superior Court No. CV2008-024245

DECISION ORDER

ANDREW W. GOULD, Presiding Judge

The court, Presiding Judge Andrew W. Gould and Judges Patricia K. Norris and Kent E. Cattani, participating, has considered the special action petition of the Petitioner, Mary Hayden ("Wife"). Petitioner seeks relief from the trial court's order entering final judgment on mandate regarding her breach of contract claim against her former husband, Steven Pittendrigh ("Husband").

We accept jurisdiction of this special action because the entry of final judgment on mandate is not appealable; consequently, Wife has no equally plain, speedy, or adequate remedy by appeal. See Sepo v. Case, 25 Ariz.App. 176, 180, 541 P.2d 1160, 1164 (1975) (explaining that a special action is the appropriate method "to test whether the trial court is acting contrary to the directives of the appellate court"); Ariz. R.P. Spec. Act. 1(a).

We reject Husband's argument that Wife's petition is a collateral attack on the memorandum decision. Wife does not ask us to vacate the memorandum decision, but simply to clarify the scope of the decision in light of the trial court's interpretation of the mandate.

In 2005, Husband and Wife entered into a property settlement agreement dividing all of their marital assets including their interest in InPulse Response Group, Inc. ("IRG"). Husband was awarded IRG as his sole and separate property, and in exchange he was required to pay Wife $1 million over a three-year period. The agreement made all outstanding payments due and payable upon the sale of IRG. On October 5, 2006, Husband sold IRG, but did not inform Wife of the sale or pay her the remaining $700, 000 he owed her on the date of the sale. She did not learn of the sale until May 2007 and later sued him for fraud and breach of contract.

The trial court granted Husband's motion to dismiss all claims. Wife appealed, and another panel of this court affirmed the trial court's dismissal of the fraud claim but held the court should not have dismissed her breach of contract claim. That panel's memorandum decision remanded the breach of contract claim to the trial court with the following instruction, which appears to have been directed at Husband's argument that his payment of 5% interest foreclosed Wife's claim for breach of contract:That panel’s memorandum decision remanded the breach of contract claim to the trial court with the following instruction, which appears to have been directed at Husband’s argument that his payment of 5% interest foreclosed Wife’s claim for breach of contract:

We remand to the trial court for a calculation of the prejudgment interest owed to Wife on all unpaid equalization payments at the rate of 10% per annum beginning on October 5, 2006 (the date IRG was sold) and accruing until the date each such equalization payment was actually paid.

The decision also found that "the trial court erred in holding that Wife failed to state a claim for breach of contract."

After remand, Husband moved for entry of final judgment on mandate. Wife responded to Husband's motion by arguing that she had not had the opportunity to litigate her breach of contract claim. She further argued that several aspects of her breach of contract claim were never considered on appeal because the allegations in the complaint were accepted as true given the nature of a motion to dismiss: (1) the "prejudgment interest on the amount owed that began to accrue after [Husband] paid the principal, but not the outstanding interest, " (2) consequential damages arising from [Husband's] breach, and (3) attorneys' fees. Wife also pointed out that our memorandum decision "did not, and could not, decide liability and all damages arising from the breach" because this issue had never been presented to the trial court and the matter was resolved on the pleadings, without any discovery. The trial court entered final judgment on mandate without Husband ever filing an answer to Wife's complaint and without further disclosure or discovery relating to Wife's breach of contract claim.[1]

Wife initially filed a notice of appeal from the court's entry of judgment on mandate; after realizing that the proper avenue of relief was by way of a special action, [2] she filed the petition before us. She seeks (1) to litigate her breach of contract claim by presenting evidence proving liability and damages, (2) to conduct further discovery regarding compensatory damages, including consequential damages, (3) to be permitted to seek all damages, including consequential damages, at trial, and (4) to obtain reversal of the attorneys' fees awarded to Husband as a result of the court's original dismissal of her claims, and which the trial court offset in its judgment on the mandate.

Under normal circumstances, when a motion to dismiss has been improperly granted, our reversal of that motion entitles the claimant to proceed with litigation as though the motion to dismiss had never been granted. Usually, this means that the opponent would file an answer and disclosure and discovery would begin, as well as any other procedures authorized by the Arizona Rules of Civil Procedure.

Here, this court's memorandum decision explained that "the trial court erred in holding that Wife failed to state a claim for breach of contract" and "remand[ed] for proceedings consistent with [the court's] decision." Accordingly, the court should not have entered judgment on the mandate as ...


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