from the Superior Court in Maricopa County No. CV2011-098405
The Honorable David M. Talamante, Judge.
IN PART; REVERSED IN PART; REMANDED.
Shumway, PLC, Mesa By Ryan P. Dyches Counsel for
Plaintiff/Appellant/Cross-Appellee ABCDW LLC.
Plattner Schneidman Schneider Jeffries & Plattner, PC,
Scottsdale By Jeff Schneidman Counsel for
Plaintiff/Appellant/Cross-Appellee Van Leeuwen Buckeye, LLC.
Zwillinger Greek Zwillinger & Knecht, PC, Phoenix By
Monty L. Greek and Sara Witthoft Counsel for
Plaintiffs/Appellants/Cross-Appellees Melanie Nevitt, LLC;
Melanie Gila Bend II, LLC; Pantano Banning, LLC.
Jennings Strouss & Salmon, PLC, Phoenix By Brian
Imbornoni and Eric D. Gere Counsel for
Defendant/Appellee/Cross-Appellant Lloyd E. Banning, Sr.
Presiding Judge Andrew W. Gould delivered the opinion of the
Court, in which Judge Peter B. Swann and Judge Patricia A.
ABCDW, LLC, Van Leeuwen Buckeye, LLC, Melanie Nevitt, LLC,
and Pantano Banning, LLC ("Landlords") appeal the
superior court's denial of their motion for judgment as a
matter of law and motion for new trial on Lloyd E. Banning,
Sr.'s counterclaims. They also appeal from the
court's grant of summary judgment for Banning on their
statutory claim under Arizona Revised Statutes
("A.R.S.") section 3-114. Banning cross-appeals the
court's order granting summary judgment on Landlords'
claims and its award of attorneys' fees to Landlords as
the prevailing party at trial. For the following reasons we
affirm in part, reverse in part, and remand for further
AND PROCEDURAL BACKGROUND
Banning farmed several parcels of land he leased from
Landlords ("Banning Lease"). The Banning Lease,
entered into in 2006, provided an initial term of two years
with three automatic one-year extensions. If Landlords sought
to lease the land beyond the initial five-year term, which
ended in January 2011, the Banning Lease gave Banning a right
of first refusal to continue leasing the
In 2009, one year before the end of his lease, Banning
planted 549 acres of alfalfa. In the fall of 2010, he planted
another 360 acres of alfalfa. At the time Banning planted the
alfalfa, there was no assurance from Landlords that the
Banning Lease would be renewed.
In November 2010, Landlords informed Banning they would not
be renewing the Banning Lease. Pursuant to the right of first
refusal, Landlords provided Banning notice of a third party
offer to lease the parcels. The third party, Double Anchor
Farms, agreed to lease the property at a rate of $275.00 per
acre; this offer was based on the understanding the existing
alfalfa stands would remain and continue to produce a crop
for a number of years.
Banning informed Landlords he would not exercise his right of
first refusal at the rental rate of $275.00 an acre, and that
if Landlords could provide a copy of a signed lease at that
rate, he would relinquish the property at the end of the
lease term. Landlords provided Banning a signed copy of the
lease with Double Anchor Farms ("Double Anchor
Lease"). The Double Anchor Lease provided for a rental
rate of $275.00 per acre for a term of one year, commencing
on January 23, 2011, and expiring on January 22, 2012. At the
time it signed the lease, Double Anchor Farms tendered full
payment for the entire term of the lease. Additionally,
Section 4.3 of the Double Anchor Lease stated that "in
the event the crops currently planted on the Premises are
disced or otherwise destroyed prior to the commencement date
of the term of this Lease, the rent set forth in Section 2.1
shall be equitably adjusted by Landlord and Tenant."
After receiving a copy of the Double Anchor Lease, Banning
declined to exercise his right of first refusal. Thereafter,
Banning informed Landlords that he would complete his last
alfalfa cutting in early January 2011, and that the newly
planted alfalfa stands were available for Double Anchor Farms
to purchase. Banning stated that if he was not paid for the
alfalfa, he would plow it under at the conclusion of his
lease. Landlords objected and refused to pay Banning for the
alfalfa because they contended Banning did not own it. The
parties ceased communication at that point and did not reach
In January, shortly before the conclusion of the lease,
Banning harvested his last alfalfa cutting and then disced
the fields, destroying all of the alfalfa plants. In doing
so, he also plowed under the borders in place to control
irrigation of the fields. Accordingly, pursuant to section
4.3 of the Double Anchor Lease, Landlords renegotiated the
rental rate in the Lease to $125.00 per acre. This litigation
Landlords sued Banning for intentional interference of
contractual relations, unauthorized destruction of a crop
under A.R.S. § 3-114, conversion, and breach of
contract. Banning counterclaimed that Landlords had breached
both the Banning Lease and the implied covenant of good faith
and fair dealing by not offering Banning a valid right of
The parties filed cross-motions for summary judgment. Banning
sought summary judgment on all of the Landlords' claims,
arguing he was the rightful owner of the alfalfa and was
entitled to plow it under at the end of his lease. Landlords
argued the alfalfa was a fixture under the Banning Lease that
belonged to Landlords and Banning was not authorized to
destroy it. The court concluded that the alfalfa plants were
fixtures and should have remained with the land; thus, it
granted Landlords' motion for summary judgment as to
Banning's liability on Landlords' claims, reserving
the issue of damages for the jury.
Banning filed a motion for reconsideration. He challenged the
court's rationale for finding him liable under A.R.S.
§ 3-114. He also argued the Landlords had not shown they
were entitled to summary judgment on their interference with
contract claim. Additionally, because the court concluded
that the alfalfa was a fixture, and thus part of the realty,
Banning argued he could not be liable for conversion because
a conversion claim requires that personal property be
Landlords objected to Banning's motion for
reconsideration both on the merits and procedurally; they
argued Banning had waived these arguments by not raising them
during the summary judgment briefing. However, the court
granted Banning's motion for reconsideration as to
Landlords' A.R.S. § 3-114 claim and their conversion
claim. Upon reexamination, the court concluded that A.R.S.
§ 3-114 did not apply to the alfalfa plants and that
Banning could not be found liable for conversion.
The parties filed another set of motions for summary
judgment. Based on the court's prior rulings, Banning
moved for summary judgment regarding Landlords' damage
claims for breach of contract and intentional interference
with contract. Landlords sought summary judgment on
Banning's counterclaims for breach of contract and breach
of the implied covenant of good faith and fair dealing. The
court denied both parties' motions, and sent the
Landlords' claims for damages and Banning's
counterclaims to the jury.
On a single verdict form, the jury awarded Landlords $520,
000.00 in compensatory damages and $75, 000.00 in punitive
damages. The compensatory damage award did not distinguish
the amount of damages awarded to Landlords on each of their
respective claims for breach of contract and intentional
interference with contract. It also found for Banning on his
claims for breach of contract and breach of the duty of good
faith and fair dealing; it awarded Banning $318, 150.00 in
damages against Landlords.
After trial, Landlords filed a motion for judgment as a
matter of law and a motion for new trial on Banning's
counterclaims. Landlords continued to argue that Banning had
been given a bona fide offer that triggered his right of
first refusal, and that Banning had waived that right. The
court denied Landlords' motions, and this appeal
Landlords appeal the court's denial of their motion for
judgment as a matter of law and motion for new trial on
Banning's counterclaims. They also argue the court
incorrectly granted Banning summary judgment on their
statutory claim under A.R.S. § 3-114. Banning appeals
the court's determination that the alfalfa was a fixture
belonging to Landlords at the end of the lease. He argues he
should have been granted summary judgment on Landlords'
claims and that he should have been awarded attorneys'
fees in the trial court.
Standard of Review
When reviewing a grant of summary judgment, we consider the
evidence in the light most favorable to the non-moving party.
Unique Equip. Co. v. TRW Vehicle Safety Sys., Inc.,
197 Ariz. 50, 52, ¶ 5 (App. 1999). We decide de novo
whether there are any genuine issues of material fact, and
whether the trial court correctly applied the law.
Airfreight Exp. Ltd. v. Evergreen Air Center, Inc.,
215 Ariz. 103, 110 (App. 2007). We will affirm a grant of
summary judgment if the judgment is correct for any reason.
Desarrollor Immobiliario y Negocios Indus. De Alta Tech.
De Hermosillo, S.A. De C.V. v. Kader Holdings Co. Ltd.,
229 Ariz. 367, 373-74, ¶ 21 (App. 2012). We review the
denial of a motion for judgment as a matter of law de novo.
Goodman v. Physical Res. Eng'g. Inc., 229 Ariz.
25, 27, ¶ 6 (App. 2011).
Ownership of the Alfalfa
The key issue in this case is which party owned the alfalfa
plants. The law generally makes a distinction between the
ownership of a perennial plant, i.e., the roots of the
alfalfa that will produce cuttings for a period of years, and
the alfalfa crop, which consists of the alfalfa cuttings
periodically harvested from the plant. See Mattis v. St.
Louis & S.F. Ry. Co., 119 S.W. 998, 998 (Kan. App.
1909) (distinguishing between the perennial root and the
matured crop); see also Gentry v. Alexander, 224
S.W.2d 143, 144 (Ken. App. 1949) (distinguishing the crop
from the perennial root or plant that produces the crop).
Here, the parties agree that Banning owned the alfalfa crops
he cut and harvested during the term of the Banning Lease.
The parties disagree, however, as to whether the entirety of
the perennial alfalfa plants were fixtures that belonged to
The parties can direct by contract whether a plant will be
considered a fixture to the realty. Here, Section 7(c) of the
Banning Lease provides that:
all alterations, improvements, additions and utility
installations . . . which may be made on the Premises and
which become fixtures to the Premises, shall become property
of lessor and shall remain and be surrendered with the
Premises at the expiration of the term.
If applicable, this provision is ambiguous in terms of
explaining whether the alfalfa plants are considered
fixtures. Additionally, because we have no extrinsic evidence
of the parties' intent in the contract, we must look to
the presumed intent that arises from their actions. See
Dept. of Rev. v. Outdoor Advertisers,202 Ariz. 93, 98
(App. 2002) (stating that objective actions indicate a
party's intent to ...