Opinion
No. 1 CA-CV 12-0345
01-28-2014
MARY MARGARET KELLY, Plaintiff/Counterdefendant/Appellee, v. KEVIN LEE KELLY, Defendant/Counterclaimant/Appellant.
Thrasher Jemsek, PLLC, Phoenix By Benjamin R. Jemsek, Bobby O. Thrasher Jr. Counsel for Plaintiff/Counterdefendant/Appellee Law Offices of Kevin Koelbel, PC, Chandler By Kevin Koelbel, Kyle J. Shelton Counsel for Defendant/Counterclaimant/Appellant
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT
AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Maricopa County
No. CV2008-025486
The Honorable Colleen L. French, Judge Pro Tem
AFFIRMED
COUNSEL
Thrasher Jemsek, PLLC, Phoenix
By Benjamin R. Jemsek, Bobby O. Thrasher Jr.
Counsel for Plaintiff/Counterdefendant/Appellee
Law Offices of Kevin Koelbel, PC, Chandler
By Kevin Koelbel, Kyle J. Shelton
Counsel for Defendant/Counterclaimant/Appellant
MEMORANDUM DECISION
Presiding Judge Randall M. Howe delivered the decision of the Court, in which Judge Samuel A. Thumma and Judge Patricia A. Orozco joined. HOWE, Judge:
¶1 Kevin Kelly appeals the judgment entered in favor of Mary Kelly after a jury found that Kevin had breached his agreement with Mary and awarded her liquidated damages. For the following reasons, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 This lawsuit arises out of a series of contentious legal proceedings on two continents over approximately $32,000 involving Kevin and Mary incident to their divorce. In 2005, Kevin sued Mary to recover more than $32,000 that he alleged Mary took without his permission. The money Mary allegedly took belonged to Kevin's half-sister, Madeleine Kelly, who lives in Germany. The parties settled that dispute in a written settlement agreement, with Kevin and Mary each agreeing to pay Madeleine $16,441.75. The settlement agreement reserved the right of either party to assert a claim for offset for money that Madeleine had previously received for Kevin's benefit. The settlement agreement also specified that the settlement "[wa]s not to be construed as an admission of liability or wrongdoing" and included a confidentiality provision prohibiting the parties from disclosing the "exact terms" of the settlement.
¶3 Mary informed Madeleine that the matter had been settled and that the terms of the settlement were confidential and wired her $16,441.75. Kevin paid Madeleine substantially less than Mary did, explaining the difference in a transmittal letter from Kevin's authorized agent that accompanied his check. In addition to claiming a right of offset, Kevin included other remarks that he acknowledged disparaged Mary.
¶4 After Madeleine provided Mary with a copy of the transmittal letter, Mary sued Kevin, alleging, among other things, that Kevin breached the "no admission of liability" provision and confidentiality provisions in the settlement agreement when writing that Mary had agreed to repay one half of the money that she took without his consent. Essentially, Mary argues, this was akin to telling Madeleine that Mary admitted she stole her money.
¶5 Kevin denied Mary's claims and counterclaimed for breach of contract and abuse of process. After compulsory arbitration, the arbitrator declined to award damages to either party, finding that the transmittal letter did not breach the settlement agreement and that Mary was not liable on the counterclaims. Mary appealed the arbitrator's decision to the superior court. After a three-day trial, a jury returned a verdict in favor of Mary and awarded her damages in the liquidated amount of $16,441.75. Mary moved for an award of attorneys' fees pursuant to A.R.S. § 12-341.01 and the court granted her request.
¶6 Kevin moved for judgment as a matter of law and for a new trial, which were denied. Kevin timely appeals.
The superior court denied Kevin's motion in an unsigned minute entry. Kevin filed a premature notice of appeal. After this Court issued an order pursuant to Eaton Fruit Company v. California Spray-Chemical Corporation, 102 Ariz. 129, 426 P.2d 397 (1967), suspending the appeal and revesting jurisdiction in the superior court for the purpose of permitting the court to consider an application for a signed order, the superior court reissued a signed minute entry.
DISCUSSION
¶7 Kevin argues that (1) the letter did not breach the confidential nature of the settlement agreement; (2) his offset was proper; (3) the liquidated damages clause was punitive and unenforceable; and (4) the award of attorneys' fees was in error. Interpretation of a contract is a question of law or a mixed question of law and fact, either of which we review de novo. United Cal. Bank v. Prudential Ins. Co. of Am., 140 Ariz. 238, 257, 681 P.2d 390, 409 (App. 1983). We view the facts and all reasonable inferences therefrom in the light most favorable to sustaining the jury's verdict and resulting judgment. Hyatt Regency Phoenix Hotel Co. v. Winston & Strawn, 184 Ariz. 120, 123, 907 P.2d 506, 509 (App. 1995). We will affirm the judgment resulting from a jury verdict if substantial evidence supports it. Flanders v. Maricopa Cnty., 203 Ariz. 368, 371 ¶ 5, 54 P.3d 837, 840 (App. 2002).
I. The Jury Properly Could Find That Kevin's Transmittal Letter Breached the Settlement Agreement.
¶8 The transmittal letter sent on Kevin's behalf stated:
Kevin has recently settled a lawsuit with his former wife Mary Kelly. A part of that lawsuit and resulting settlement was to recover money for you that Mary Kelly had taken without Kevin's consent.The parties offer conflicting arguments about whether these statements violated the confidentiality provision of the settlement agreement. We need not decide this issue, however, because, as Mary argued at trial and now on appeal, these statements were squarely contrary to the "no admission of liability" provision.
In the interest of trying to put the dispute with Mary behind him and because Mary agreed to repay to you one half of the money Mary took, Kevin also agreed to contribute toward that amount.
¶9 The "no admission of liability" provision states that "[t]he parties to this instrument understand and agree that this settlement is not to be construed as an admission of liability or wrongdoing on the part of the Parties, their agents, employees, or assigns, but it is in compromise and settlement of a dispute between the parties." In interpreting the provision, our goal "is to arrive at the intention of the parties as it is expressed in the contract." Phelps Dodge Corp. v. Brown, 112 Ariz. 179, 181, 540 P.2d 651, 653 (1975). Mary testified that one of the intended purposes of the settlement agreement was to preclude either party from placing blame on the other for the loss of Madeleine's money.
Kevin provided only a partial transcript of the trial testimony. He did not include a transcript of his trial testimony, which we presume did not conflict with Mary's testimony and supported the jury verdict. See Retzke v. Larson, 166 Ariz. 446, 449, 803 P.2d 439, 442 (App. 1990); Renner v. Kehl, 150 Ariz. 94, 97 n.1, 722 P.2d 262, 265 n.1 (1986) ("Without a record we must presume that . . . there was substantial evidence in the complete record to support the findings of the trial court.").
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¶10 Kevin acknowledges that the settlement agreement expressly states it "is not to be construed as an admission of liability or wrongdoing on the part of" either Mary or Kevin. He argues, however, that he would violate the "no admission of liability provision" only if he expressly stated that "Mary admitted she stole Madeleine's money." This construction of the provision is too narrow, however. One could certainly infer from Kevin's transmittal letter that Mary had admitted liability and that Kevin agreed to settle the lawsuit and pay Madeleine because Mary admitted that she took the money without Kevin's consent. On this record, substantial evidence supports the jury's determination that Kevin breached the settlement agreement.
¶11 Given this finding, we need not reach Kevin's final argument that the offset he sought in the transmittal letter did not breach the settlement agreement because the jury returned a general verdict. See Mullin v. Brown, 210 Ariz. 545, 551 ¶ 24, 115 P.3d 139, 145 (App. 2005) (We "uphold a general verdict if evidence on any one count, issue or theory sustains the verdict.") (internal citations omitted).
II. The Liquidated Damages Clause Is Enforceable.
¶12 Kevin argues that the liquidated damages clause is unenforceable because it is a penalty. We need not decide this issue, however, because Kevin is precluded from raising it on appeal.
¶13 Both parties alleged that the other party breached the settlement agreement, and both agreed that if the jury found a breach, the measure of damages was $16,441.75. This was a tactical decision on the part of both parties to avoid having to prove actual damages. The jury was not permitted to determine damages. The jury instructions provided that if the jury found Kevin liable to Mary "you must award Mary Kelly her damages as specified in the Settlement Agreement. This amount is $16,441.75 as the parties set forth in the Settlement Agreement." The next jury instruction provided that if the jury found that Mary was liable to Kevin "you must award Kevin Kelly his damages as specified in the Settlement Agreement. This amount is $16,441.75 as set forth by the parties in the Settlement Agreement." Moreover, the jury verdict forms provided that the prevailing party was entitled to damages "in the stipulated amount of $16,441.75." The jury simply had to decide whether it found in favor of either Mary or Kevin (or neither party). The parties discussed this issue on the record and the court used the jury instructions and jury verdict forms verbatim as the parties agreed.
¶14 Kevin now seeks to challenge the enforceability of the liquidated damages clause even though he agreed to use it as the measure of damages against Mary if he prevailed. Having made this tactical decision, Kevin must accept it and cannot use it as an excuse on appeal. See Goldthorpe v. Farmers Ins. Exch., 19 Ariz. App. 366, 368, 507 P.2d 987, 980 (1973). He is judicially estopped from doing so. See State v. Towry, 186 Ariz. 168, 182, 920 P.2d 290, 304 (1996) (Judicial estoppel prevents a party from taking inconsistent positions in successive or separate actions.).
III. The Attorneys' Fee Award Was Proper.
¶15 Kevin also argues that the trial court's award of attorneys' fees under A.R.S. § 12-341.01(A) was improper because Mary did not prove that the letter was a breach of the settlement agreement or show actual damages. We review the superior court's award of attorneys' fees for an abuse of discretion. Charles I. Friedman, P.C. v. Microsoft Corp., 213 Ariz. 344, 350 ¶ 17, 141 P.3d 824, 830 (App. 2006). Section 12-341.01(A) states that in any contested action arising out of a contract, the court may award the successful party reasonable attorneys' fees. Nothing requires the successful party prove breach or actual damages. This case arose from conflicts regarding the settlement agreement. It is a contested action arising out of a contract. Mary was the successful party, and therefore the court did not abuse its discretion in awarding her reasonable attorneys' fees.
CONCLUSION
¶16 For the foregoing reasons, we affirm the judgment against Kevin. Mary requests attorneys' fees on appeal. Because we affirm the judgment in all respects, and the settlement agreement entitles the prevailing party to an award of attorneys' fees, we grant Mary's request for an award of fees and costs on appeal, upon her compliance with Arizona Rule of Civil Appellate Procedure 21.