Best v. Miranda (CA1 3/15/12)

A standard commercial case with, nevertheless, a couple of lessons in it.

Best had an option to buy Miranda’s property, which he could exercise by paying the full purchase price. He gave Miranda two written notices of his intent to exercise the option but didn’t pay the money. The option then expired. Best sued Miranda for not conveying the property to him.

Commercial-litigation folks will recognize a classic: the guy who wants to exercise an option now and pay for it later. That’s why contracts, like this one, tend to make it clear that you can’t do that. The trial court granted Miranda summary judgment.

On appeal Best, who represented himself, argued that there was an oral understanding that he could exercise the option merely by giving notice. The Court of Appeals points out that that’s barred by the Statute of Frauds. Best next argued the duty of good faith but that doesn’t require the exercise of an option contrary to its terms.

Finally, Best argued that summary judgment was improper because reasonable people could reach different conclusions, as shown by the fact that the trial court had granted summary judgment both ways. What happened was that Best had originally moved for summary judgment and Miranda then had the matter stayed pending resolution of litigation by the State AG’s office against Best arising out of several similar transactions. Miranda therefore hadn’t responded to Best’s motion. So the Superior Court, true it its traditions of efficiency and excellence, granted it. Miranda had to get that set aside; then, after the stay was lifted, he filed his own motion, which the court also granted. The opinion says that the first doesn’t count since it was a mistake and in any event the appellate court determines de novo (not italicized in the opinion; we’ve given up on figuring out what rules or style book they use for that sort of thing) whether there’s an issue of fact.

The first lesson here is that while Miranda was theoretically correct not to file a response over a stay, leaving that loose end caused problems. If there’s a reason not to respond, its safer to file a one-sentence explanation of why not; nobody’s going to object if this technically violates a stay. Remember those twin rules: never count on your opponent to make a mistake and never count on the bureaucracy not to. It will be just your luck to get some eager young clerical type who worked at Subway last month but is now in charge of your case because her uncle in Parks and Recreation got her a County job.

Miranda requested attorneys fees. The opinion refuses them because he cited no authority to support the award. Then other lesson, then, is to cite authority for your fee request no matter how obvious the reason is. We’ve mentioned this before since it’s a common problem but apparently somebody wasn’t reading us that day.

The back story, by the way, is that Best got options from a number of Phoenix homeowners in aid of some proposed development and then, when that went south, sued everyone in sight and got sued himself, which cases are at various stages of appeal. The court released this as a memo last month but has now made it an opinion, for reasons we don’t know.

(link to opinion)