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Gordon v. Estate of Brooks

Court of Appeals of Arizona, First Division

May 30, 2017

MARK R. GORDON, Plaintiff/Appellant,
v.
ESTATE OF GEORGE BROOKS; SHERI SANBORNE and MARIBEL MAZA, Defendants/Appellees.

         Appeal from the Superior Court in Maricopa County No. CV2013-007561 The Honorable Lisa Daniel Flores, Judge

          Mark R. Gordon, Phoenix Plaintiff/Appellant

          Tiffany & Bosco, P.A., Phoenix By James A. Fassold, Amy D. Sells Counsel for Defendants/Appellees

          Judge Patricia K. Norris delivered the opinion of the Court, in which Presiding Judge Kenton D. Jones and Judge Paul J. McMurdie joined.

          OPINION

          NORRI S, Judge.

         ¶1 In 2007, Plaintiff/Appellant, Mark R. Gordon, purchased a house from the Estate of George Brooks. After the sale closed, Gordon sued Defendants/Appellees, the Estate and the personal representatives of the Estate, Sheri Sanborne and Maribel Maza, [1] both in their representative and individual capacities, and, as relevant here, asserted claims against them for various alleged defects and deficiencies in the house. The superior court dismissed Gordon's complaint. On appeal, Gordon does not take issue with the superior court's dismissal of his claims against the Estate or against Sanborne and Maza in their representative capacities. Instead, he argues the superior court should not have dismissed his claims against Sanborne and Maza in their individual capacities. We agree. Accordingly, we affirm in part, reverse in part, and remand for further proceedings consistent with our instructions.

         BACKGROUND AND PROCEDURAL HISTORY

         ¶2 On January 31, 2007, the probate court appointed Sanborne and Maza as personal representatives of the Estate of George Brooks.[2]While administering the Estate, Sanborne and Maza listed Brooks' house for sale. On May 19, 2007, Gordon presented Sanborne and Maza with a written offer to purchase the house. Sanborne and Maza accepted Gordon's offer the following day.

         ¶3 The purchase contract listed the seller as "George Brooks, " and Sanborne and Maza signed their names under the "seller's signature" section of the contract. The purchase contract did not state or otherwise indicate that Sanborne and Maza were acting on behalf of the Estate or serving as personal representatives of the Estate.

         ¶4 On June 11, 2007, Gordon sent a letter to the escrow agent alleging Sanborne and Maza had breached their contractual obligations to cure several alleged deficiencies in the house. Nevertheless, Gordon submitted the final payment required to close the sale of the house to the escrow agent. The following day, on June 12, 2007, Sanborne and Maza recorded a warranty deed with the Office of the Maricopa County Recorder conveying the house to Gordon. The warranty deed, which the Recorder mailed to Gordon, identified Sanborne and Maza as the grantors acting as "Co-Personal Representatives of the estate of George W. Brooks, deceased. Maricopa County Superior Court Probate No. 2007-000389."

         ¶5 On February 27, 2012, Sanborne and Maza filed closing statements in the probate proceeding and represented the Estate had been fully administered with all claims resolved. In June 2013, Gordon moved to reopen the Estate, alleging he had outstanding claims against the Estate. Specifically, Gordon asserted Sanborne and Maza, as personal representatives of the Estate, had breached express and implied warranties under the purchase contract because warranted items "were not then in working condition." The probate court denied Gordon's motion. Gordon appealed. This court affirmed the probate court's denial of Gordon's motion to reopen the Estate, see In re Estate of Brooks ("Gordon I"), 1 CA-CV 13-0592, 2015 WL 898743, at *5, ¶ 13 (Ariz. App. March 3, 2015) (mem. decision), and held Gordon had failed to present any cognizable claims against the Estate pursuant to Arizona Revised Statutes ("A.R.S.") section 14-3804(1) (2012) (requiring claim against an estate to be presented in writing, "indicating its basis, the name and address of the claimant and the amount claimed").

         ¶6 On May 17, 2013, before Gordon moved to reopen the Estate, Gordon filed this case. As discussed below, in his complaint, as amended, Gordon asserted claims against the Estate and Sanborne and Maza, both in their representative and individual capacities. Sanborne and Maza moved to dismiss for failure to state a claim, arguing Gordon's claims were time-barred by the probate code because they had closed the Estate and precluded by the doctrine of claim preclusion.[3] The superior court agreed with Sanborne and Maza's arguments and granted their motion to dismiss.

         DISCUSSION

         I. Gordon's Claims

         ¶7 As relevant here, in his amended complaint, Gordon alleged nine causes of action against Sanborne and Maza: count 1, failure to disclose various defects in the home; count 2, breach of warranties in the purchase contract regarding the condition of the property; count 3, breach of the purchase contract by failing to take curative action as required under the contract and by forcing Gordon to close the escrow; count 4, breach of the purchase contract by failing to have the refrigerator/freezer and irrigation systems properly repaired; count 5, breach of the purchase contract by keeping the Estate open to avoid having to participate in alternative dispute resolution as required by the contract; count 6, abuse of process by failing to comply with their statutory obligations regarding their administration of the Estate and in closing the Estate without paying or settling his claims;[4]count 7, estoppel by refusing to comply with their contractual obligations and promises; count 8, breach of their fiduciary duty to the Estate and its creditors to pay and resolve creditor claims against the Estate; and count 9, breach of the covenant of good faith and fair dealing owed to him under the purchase contract by failing to disclose and repair defects to the house and by administering the Estate in such a manner as to avoid having to pay his creditor claims against the Estate.

         ¶8 As reflected by the foregoing summary, Counts 5, 6, 8, and 9 (in part) were grounded on allegations the Estate had failed to pay Gordon's creditor claims or that Sanborne and Maza had failed to properly administer the Estate by failing to settle and pay Gordon's creditor claims against the Estate (the "Estate Claims"). In contrast, Counts 1, 2, 3, 4, 7, and 9 (in part) were grounded on allegations that Sanborne and Maza were personally liable to him under the purchase contract for alleged defects and deficiencies in the house (the "Personal Liability Claims").

         ¶9 On appeal, Gordon acknowledges that this case "is not about probate administration nor about me being a creditor with probate claims against the Estate; that was the previously decided Probate Matter. This Civil Suit at-bar is against the remaining defendants, Appellees, as individuals ..... Given this acknowledgment, we do not need to decide whether the superior court properly dismissed the Estate Claims, and we deem Gordon to have abandoned the Estate Claims. See DeElena v. S. Pac. Co., 121 Ariz. 563, 572, 592 P.2d 759, 768 (1979) (issues not argued on appeal are deemed abandoned); see also Torrez v. Knowlton, 205 Ariz. 550, 552 n.1, ¶ 3, 73 P.3d 1285, 1287 n.1 (App. 2003) (appellate court deemed appellant to have abandoned any argument that superior court improperly granted summary judgment on one claim when, on appeal, appellant only challenged summary judgment on a different claim).

         ¶10 Gordon has not, however, abandoned the Personal Liability Claims against Sanborne and Maza. On appeal, Gordon argues the superior court should not have dismissed those claims because Sanborne and Maza are individually liable on the purchase contract and the Personal Liability claims are neither time-barred nor barred by the doctrine of claim preclusion. Reviewing the superior court's ruling under the applicable standards of review, we agree with Gordon.[5]

         II. Sanborne and Maza as Parties to the Purchase Contract

         ¶11 Gordon argues that because Sanborne and Maza failed to identify the Estate in the purchase contract, they cannot be shielded from personal liability as personal representatives of the Estate pursuant to A.R.S. § 14-3808(A) (2012). At common law, an estate was not liable on contracts entered by its personal representative in administering the estate even if the contracts were for the benefit of the estate. See Vance v. Myers' Estate,494 P.2d 816, 818 (Alaska 1972). This rule of personal liability was grounded on the notion that an estate was not a legal entity. 14 Amy M. Hess et al., Bogert's Trusts and Trustees ยง 712 (3d ed., Sep. 2016) (similar to personal representative of an estate, trustee was the only legal entity who promised to perform a contract). This rule applied even when the personal representative disclosed to the other contracting party that he was acting on behalf of the estate in entering the contract. In this situation, assuming the contract benefited the estate, the personal representative could ...


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