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Valdez v. Delgado

Court of Appeals of Arizona, First Division

September 10, 2019

THEODORE BOHN VALDEZ, SR., Plaintiff/Appellee,
RANDY DONOLD DELGADO, Defendant/Appellant.

          Appeal from the Superior Court in Maricopa County No. CV2016-005573 The Honorable Kerstin Lemaire, Judge

          Kutak Rock LLP, Scottsdale By Douglas H. Allsworth and London A. Burns Counsel for Defendant/Appellant

          Jimmy Borunda, Phoenix Counsel for Plaintiff/Appellee

          Judge Jennifer M. Perkins delivered the opinion of the Court, in which Presiding Judge Randall M. Howe and Judge David D. Weinzweig joined.


          PERKINS, JUDGE

         ¶1 This case requires us to assess the interplay between two standards of review where a legal question is raised on appeal, and reviewed de novo, but the answer to the legal question hinges on the factual findings of a jury, which are reviewed for clear error.

         ¶2 This dispute concerns the part performance exception to Arizona's Statute of Frauds, Arizona Revised Statute ("A.R.S.") section 44-101(6) ("Statute of Frauds"). Theodore Valdez Sr. sued Randy Delgado for breaching an alleged oral agreement to purchase a residence and later convey title to Valdez. Valdez prevailed after a three-day jury trial. The jury found that Valdez and Delgado entered an enforceable oral contract, Valdez satisfied the part performance exception to the Statute of Frauds, and Delgado breached the contract. Delgado unsuccessfully moved for judgment as a matter of law, arguing the alleged contract was unenforceable under the Statute of Frauds. Delgado now appeals the trial court's denial and award of specific performance in favor of Valdez. For the reasons set forth below, we affirm.


         ¶3 "We view the facts and the reasonable inferences therefrom in the light most favorable to upholding the jury's verdicts." Crackel v. Allstate Ins. Co., 208 Ariz. 252, 255, ¶ 3 (App. 2004).

         ¶4 Valdez and Delgado were friends in 1998 when Delgado offered to assist Valdez in purchasing a home. Valdez learned that his barber was selling a run-down home (the "Property") and told Delgado. Delgado agreed to purchase the Property in 1999 and later convey title to Valdez in 2014 if Valdez contributed $8, 000 toward the initial down-payment and paid Delgado $438 per month for fifteen years thereafter. Valdez also agreed to cover all costs for cleanup, materials, and repairs.

         ¶5 On June 18, 1999, Delgado purchased the Property for $40, 000 in cash. Within the month, Valdez cleaned and remodeled the home with help from family and friends before moving in. In addition to the cleanup, Valdez made a number of improvements to the home in 1999 and 2000 including installing new plumbing; constructing a patio, carport, and porch; and remodeling the bathroom and kitchen. In total, Valdez estimated he spent $12, 000 on materials for cleaning up and improving the Property. Valdez testified that he and Delgado agreed that he was purchasing the Property for $8, 000 plus $438 per month for fifteen years. Valdez further testified he did not recall any agreement about the rate of interest on the outstanding $32, 000, the total amount to be paid over the fifteen-year period, who would pay property taxes, or whether Delgado had lien rights over the Property.

         ¶6 In contrast, Delgado testified that he purchased the Property for tax purposes and agreed to let Valdez rent the Property. After discussing monthly rent with Valdez, he and Valdez entered into a written month-to-month rental agreement, signed in November 1999, that called for $600 per month in rental payments with Valdez responsible for any repairs under $300. At trial, Valdez testified that he did not remember signing the rental agreement but that it looked like his signature on the agreement. According to Delgado, Valdez complained that $600 per month was too high and the two orally modified the rental payments to $530 per month, which Valdez paid from at least December 1999 through January 2016. Delgado also testified he paid for a new water heater at some point between 1999 and 2016 and agreed to give Valdez $1, 200 from his homeowner's insurance on the Property after a hail storm in 2010.

         ¶7 Seventeen years after the alleged oral agreement, and two years after Valdez should have received title from Delgado under the agreement, Valdez stopped making monthly payments and sued Delgado to quiet title in the Property. Delgado moved for summary judgment under the Statute of Frauds. Valdez countered that the Statute of Frauds was inapplicable under the part performance exception.

         ¶8 After argument, the trial court denied Delgado's motion for summary judgment, citing Valdez's "apparent reliance on the purchase agreement by making significant repairs, by paying a monthly amount that varied from the amount alleged in the rental agreement, and the potential application of the lost document exception to the statute of frauds." In April 2018, the case proceeded to a three-day jury trial, during which Valdez, Delgado, and four other witnesses testified. At the close of evidence Delgado unsuccessfully moved for judgment as a matter of law. The jury found, by special verdict, that: (1) Valdez paid $8, 000 in cash to Delgado in 1999 "as a down payment" for the Property; (2) Valdez made "substantial repairs and improvements" to the Property "at his sole expense, in reliance on an oral . . . agreement with Defendant Delgado to convey title after 15 years"; (3) Valdez made "15 years of monthly payments to Defendant Delgado in reliance on an agreement of sale"; and (4) Delgado breached a contract to transfer title to ...

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