Opinion
No. 1 CA-CV 11-0174
02-14-2012
THOMAS ROTHWEILER, Plaintiff/Appellant, v. JO BERNADETTE CLUTE, Defendant/Appellee.
Davis Miles, PLLC By Lori A. Curtis Attorneys for Plaintiff/Appellant Jo Bernadette Clute Defendant/Appellee
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)
Appeal from the Superior Court in Maricopa County
Cause No. CV2010-097137
The Honorable Karen A. Potts, Judge
REVERSED AND REMANDED
Davis Miles, PLLC
By Lori A. Curtis
Attorneys for Plaintiff/Appellant
Tempe
Jo Bernadette Clute
Defendant/Appellee
Phoenix GOULD, Judge
¶1 Plaintiff/Appellant Thomas Rothweiler appeals from the trial court's dismissal with prejudice of his breach of contract action against Defendant/Appellee Jo Bernadette Clute for lack of jurisdiction. The court found that the promissory sales agreement that was the subject of the complaint waived jurisdiction for enforcement of the contract in any court other than the courts of Puerto Peñasco, State of Sonora, Mexico. For the following reasons, we reverse and remand for further proceedings.
Factual and Procedural History
¶2 Rothweiler and Clute entered into a promissory sales agreement ("Agreement") by which Rothweiler agreed to sell to Clute a parcel of real property ("the Property") in Puerto Peñasco, Sonora, Mexico. The Agreement provided that Clute would pay a down payment and the balance would be financed by Rothweiler with payments due monthly by Clute for forty-seven months; Rothweiler retained all rights of ownership until the amount owed was fully paid. In the Agreement, the parties stated that they were authorized by the laws of Mexico to sell and to purchase the Property. The Agreement provided that the parties agreed that the price set for the sale was fair and "waive[d] actions that could be pursued [alleging the contrary] and to that which has been set forth in the Civil Code of the State of Sonora." The parties also agreed that "[i]n case of controversy, [they would] equally share the cost of translation into Spanish for the purpose of litigation in Mexico." Paragraph THIRTEEN ("Paragraph Thirteen") of the Agreement provided:
THIRTEEN-JURISDICTION AND COMPETENCEThe related promissory note included a similar but not identical statement:
For the interpretation and compliance hereof, the parties are subject to the jurisdiction and competence of the Courts of Puerto Peñasco, State of Sonora, at the election of the plaintiff, waiving any other jurisdiction that could correspond to them due to any other reason.
For interpretation, execution and compliance of the present promissory note the subscriber submits herself to the courts of Puerto Peñasco, Sonora, renouncing to any other law which may correspond to him on account of the buyer's either present or future address.The promissory note was signed only by Clute. Rothweiler signed the Agreement on October 5, 2006, and Clute signed it on October 7, 2006. Their signatures were notarized by different notaries in Maricopa County, Arizona, on the dates they signed the Agreement.
¶3 In August 2010, Rothweiler filed a complaint against Clute for breach of contract, specific performance, and rescission. Rothweiler alleged that Clute had made no payments required under the Agreement other than the down payment and had demolished the house on the Property without Rothweiler's consent. The complaint alleged that the court had jurisdiction and that venue was proper, noting that the Agreement was executed and delivered in Maricopa County and that both parties were citizens of Arizona and residents of Maricopa County. Rothweiler sought a judgment against Clute for the amount owed or an order requiring Clute to disclaim interest in the Property; an order directing Clute to comply with the contract; or an order rescinding the contract, terminating Clute's interest in the Property, and ordering that Clute forfeit amounts already paid.
¶4 Clute filed a motion to dismiss the complaint. She argued that the court lacked subject matter jurisdiction and that Maricopa County Superior Court was an improper venue. Clute noted several references in the Agreement and the promissory note to the laws of Mexico.
¶5 Rothweiler argued that the superior court had subject matter jurisdiction over contract actions and that, as a transitory action, a suit on a contract could be brought against a defendant where found. Rothweiler further argued that venue was proper based on Clute's residence in Maricopa County. Rothweiler noted that, although Paragraph Thirteen stated that the parties subject themselves to the jurisdiction and competence of the Courts of Puerto Peñasco for interpretation and compliance with the contract, the provision also says "at the election of the plaintiff." Rothweiler argued that, as plaintiff, he elected to bring the action in Maricopa County.
¶6 The court granted the motion to dismiss, finding "that the Promissory Sales Agreement . . . expressly waives jurisdiction for compliance (enforcement) in any court except the Courts of Puerto Peñasco, State of Sonora." The court dismissed the action with prejudice for lack of jurisdiction. Rothweiler filed a timely notice of appeal.
Discussion
¶7 This court reviews de novo a trial court's decision dismissing an action for lack of subject matter jurisdiction. Fairway Constructors, Inc. v. Ahern, 193 Ariz. 122, 124, ¶ 6, 970 P.2d 954, 956 (App. 1998). We accept as true the allegations of the complaint and resolve all reasonable inferences in favor of the plaintiff. McDonald v. City of Prescott, 197 Ariz. 566, 567, ¶ 5, 5 P.3d 900, 901 (App. 2000); Walters v. Maricopa Cnty. , 195 Ariz. 476, 477, ¶ 2, 990 P.2d 677, 678 (App. 1999).
¶8 Rothweiler argues that the trial court had subject matter jurisdiction over this contract action and so erred in dismissing the matter. The jurisdiction of the trial court is an issue of law we review de novo. Duwyenie v. Moran, 220 Ariz. 501, 503, ¶ 7, 207 P.3d 754, 756 (App. 2009). "[S]ubject matter jurisdiction is the power to hear and determine cases of the general class to which the particular proceedings belong." Gurr v. Willcutt, 146 Ariz. 575, 579, 707 P.2d 979, 983 (App. 1985). The superior court is a court of general jurisdiction and has jurisdiction over cases and proceedings in which exclusive jurisdiction is not vested by law in another court. Ariz. Const. art. 6, § 14, cl. 1; Indus. Park Corp. v. U.S.I.F. Palo Verde Corp., 19 Ariz. App. 342, 344-45, 507 P.2d 681, 683-84 (1973). This general jurisdiction extends to breach of contract cases. Gatecliff v. Great Republic Life Ins. Co. , 154 Ariz. 502, 506-07, 744 P.2d 29, 33-34 (App. 1987). Where the plaintiff seeks a money judgment or equitable relief, the action is one against the person, or in personam, and the court has jurisdiction if it has jurisdiction over the defendant. Santa Cruz Ranch v. Superior Court, 76 Ariz. 19, 26, 258 P.2d 413, 417-18 (1953); Price v. Sunmaster, 27 Ariz. App. 771, 775, 558 P.2d 966, 970 (1976). This is true even where the subject of the contract at issue is real property outside the territorial jurisdiction of Arizona. Santa Cruz, 76 Ariz. at 26, 258 P.2d at 417-18 (stating, "equity having jurisdiction of the person of the defendant will, in case of fraud, trust or contract, grant relief though it affects land without the jurisdiction of the court on the principle that in equity the primary decree is in personam and not in rem" (citing Butterfield v. Nogales Copper Co. , 9 Ariz. 212, 216, 80 P. 345, 347 (1905))); TWE Ret. Fund Trust v. Ream, 198 Ariz. 268, 272, ¶ 14, 8 P.3d 1182, 1186 (App. 2000) ("[A] court of equity, acting upon the person of the defendant may decree a conveyance of land situated in another jurisdiction, and even in a foreign country, and enforce the execution of the decree by process against the defendant." (emphasis omitted) (quoting Fall v. Eastin, 215 U.S. 1, 9 (1909))).
¶9 Rothweiler sought a money judgment for the amount Clute still owed on the contract, equitable relief in the form of an order for specific performance of the contract, or rescission of the contract. These are actions against Clute arising out of her breach of the Agreement between herself and Rothweiler, not actions against the Property in Mexico. The superior court has subject matter jurisdiction provided it has personal jurisdiction over Clute. Clute has not disputed that the court has personal jurisdiction over her. The superior court therefore has subject matter jurisdiction over the breach of contract action absent any other restriction.
¶10 The court found that the parties expressly waived jurisdiction for enforcement of the contract in any court except the courts of Puerto Peñasco, Sonora, Mexico. Rothweiler argues that the court misinterpreted the Agreement, pointing out that Paragraph Thirteen allows, but does not require, the plaintiff in an action to elect to bring the action in Mexico.
¶11 Contract interpretation presents a question of law, which we review de novo. Ahwatukee Custom Estates Mgmt. Ass'n v. Turner, 196 Ariz. 631, 634, ¶ 5, 2 P.3d 1276, 1279 (App. 2000). In interpreting a contract, the goal is to find and give effect to the parties' intent. Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 152, 854 P.2d 1134, 1138 (1993). "When the terms of a contract are plain and unambiguous, its interpretation is a question of law for the court." ELM Ret. Ctr., LP v. Callaway, 226 Ariz. 287, ____, ¶ 15, 246 P.3d 938, 942 (App. 2010). The court may admit extrinsic evidence to determine the meaning of the words in a contract. Taylor, 175 Ariz. at 159, 854 P.2d at 1145.
¶12 Paragraph Thirteen governs jurisdiction and enforcement of the Agreement. It states that, for interpretation and enforcement of the Agreement, the parties subject themselves to the jurisdiction and competence of the Courts of Puerto Peñasco and waive jurisdiction elsewhere. Viewing the provision in its entirety, the language is reasonably susceptible to different meanings. It could be read to provide that the plaintiff may elect to bring an action in Puerto Peñasco and, if he or she does so, the defendant has subjected herself or himself to that jurisdiction and has waived any other. It could also be construed as the parties' agreement to submit themselves to the exclusive jurisdiction of Puerto Peñasco. In short, the language in the Agreement is reasonably susceptible to differing interpretations, and the only way for the trial court to resolve the ambiguity is to admit extrinsic evidence that may shed light on the meaning of the language. See Taylor, 175 Ariz. at 154, 854 P.2d at 1140 (stating that the judge should consider "the offered evidence and, if he or she finds that the contract language is 'reasonably susceptible' to the interpretation asserted by its proponent," the judge should admit the evidence to determine the intended meaning).
Conclusion
¶13 The court's order is reversed, and the matter remanded for further proceedings consistent with this decision.
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ANDREW W. GOULD, Judge
CONCURRING: ____________
MAURICE PORTLEY, Presiding Judge
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ANN A. SCOTT TIMMER, Judge