Kuehn v. Stanley, Charter Funding, First Magnus

                            IN THE COURT OF APPEALS
                                STATE OF ARIZONA
                                  DIVISION TWO


ERNEST W. KUEHN and JO ANN C.                 )        2 CA-CV 2003-0136
KUEHN,                                        )        DEPARTMENT A
                                              )
                     Plaintiffs/Appellants,   )        OPINION
                                              )
                    v.                        )
                                              )
THERESA C. STANLEY and JOHN                   )
DOE STANLEY, FIRST MAGNUS                     )
FINANCIAL CORPORATION, and                    )
CHARTER FUNDING,                              )
                                              )
                   Defendants/Appellees.      )
                                              )


            APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY

                                 Cause No. C20020978

                             Honorable Ted B. Borek, Judge

                                       AFFIRMED


Albert H. Hartwell, Jr.                                                        Tucson
                                                     Attorney for Plaintiffs/Appellants

Munger Chadwick, P.L.C.
 By John F. Munger and Laura P. Chiasson                                      Tucson
                                                   Attorneys for Defendants/Appellees


H O W A R D, Judge.
¶1            Appellants Ernest and Jo Ann Kuehn appeal the trial court’s grant of summary

judgment and award of attorney fees in favor of appellees Theresa Stanley and First

Magnus Corporation on the Kuehns’ claims of negligence, consumer fraud, negligent

supervision, and breach of contract. The Kuehns contend that issues of law and material

fact exist precluding summary judgment and that the trial court abused its discretion when

it granted attorney fees to First Magnus as a prevailing party to a contract claim. Finding

no error or abuse of discretion, we affirm.

¶2            Although the dispositive facts are not in dispute here, we view the facts in the

light most favorable to the party opposing summary judgment. Link v. Pima County, 193

Ariz. 336, ¶12, 972 P.2d 669, ¶12 (App. 1998). In July 2000, the Kuehns entered into a

contract to purchase real property. The contract specified a purchase price of $282,000;

the Kuehns offered $3,000 of this amount in earnest money and agreed to pay approximately

$57,000 at the close of escrow. The contract was contingent on the Kuehns qualifying for

sufficient financing for the remainder of the purchase price.

¶3            The Kuehns subsequently applied for a mortgage loan in the amount of

$220,000 from Charter Funding Corporation, a division of First Magnus. As part of its

loan-approval process, First Magnus asked Theresa Stanley to appraise the property.

Stanley was employed by CRG Valuations, another division of First Magnus. After Stanley

appraised the property at $282,000, First Magnus lent the Kuehns $220,000. Before the

close of escrow, First Magnus provided a copy of the appraisal report to the Kuehns. After



                                              2
they purchased the property, the Kuehns showed the appraisal report to a family member

who was also a licensed appraiser. This family member analyzed the report and concluded

that Stanley had “deviated severely” from standard appraisal practices. The Kuehns then

had another appraisal performed, which resulted in a value of $245,000, a difference of

$37,000 from Stanley’s appraisal.

¶4               The Kuehns sued Stanley and First Magnus, alleging claims of negligence,

gross negligence, negligent supervision, fraud, consumer fraud, and breach of contract. 1

First Magnus moved for partial summary judgment on all claims of negligence or fraud,

which the trial court granted. First Magnus then filed a second motion for summary

judgment, seeking dismissal of the remaining breach of contract claim. The trial court also

granted this motion and awarded First Magnus its attorney fees. The Kuehns now appeal

to this court.

                                      TORT CLAIMS

¶5               The Kuehns argue that the court erred when it granted summary judgment on

the tort claims in favor of First Magnus. We review a grant of summary judgment de novo.

Strojnik v. Gen. Ins. Co. of Am., 201 Ariz. 430, ¶10, 36 P.3d 1200, ¶10 (App. 2001).

¶6               In its first motion for partial summary judgment, First Magnus sought

dismissal of the Kuehns’ negligence-related claims, arguing it had not owed the Kuehns any

       1
       In their opening brief, the Kuehns concede that they did not present evidence as to
the gross negligence and fraud claims to the trial court. Accordingly, these issues are
waived. See Cimarron Foothills Cmty. Ass’n v. Kippen, 206 Ariz. 455, ¶9, 79 P.3d 1214,
¶9 (App. 2003).
                                              3
duty. First Magnus also asked the court to dismiss the fraud claims on the ground the

Kuehns had had no right to rely, and had not relied, on the appraisal. The Kuehns

responded, first arguing that the parties had been in privity of contract. The Kuehns then

noted that “the issue here is not privity, but reliance,” arguing that they had had a right to

rely on the allegedly negligent appraisal. In support of this argument, the Kuehns quoted

extensively from Restatement (Second) of Torts § 552 (1977), which states the law on

negligent misrepresentation.

¶7            After oral argument, the trial court requested supplemental briefing addressing

Hoffman v. Greenberg, 159 Ariz. 377, 767 P.2d 725 (App. 1988), a case that analyzed a

claim for damages resulting from a negligent appraisal under the law of negligent

misrepresentation as stated in Restatement § 552. After reviewing these arguments, the

court granted First Magnus’s motion for summary judgment on the basis that the Kuehns had

had no right to rely on the appraisal under Hoffman. The court further concluded the

Kuehns had made no showing of reliance since they had been shown the appraisal only after

they were already bound contractually to purchase the property.

A. Negligence/negligent misrepresentation

¶8            The Kuehns argue that the trial court erred in granting summary judgment on

negligence by addressing the tort of negligent misrepresentation instead of simple

negligence. The Kuehns contend the “court appear[ed] to have confused the requirements”




                                              4
of both negligence and negligent misrepresentation and, thus, misapplied the Arizona

authorities on which it relied.2

¶9            When considering the duty of care in a negligence claim resulting from failure

to exercise reasonable care in supplying professional information, Arizona courts follow the

law of negligent misrepresentation set forth in Restatement § 552(1), which provides:

              One who, in the course of his business, profession or
              employment, or in any other transaction in which he has a
              pecuniary interest, supplies false information for the guidance
              of others in their business transactions, is subject to liability for
              pecuniary loss caused to them by their justifiable reliance upon
              the information, if he fails to exercise reasonable care or
              competence in obtaining or communicating the information.

See Donnelly Constr. Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184, 188-89, 677 P.2d 1292,

1296-97 (1984); see also Hoffman, 159 Ariz. at 379-80, 767 P.2d at 727-28 (applying §

552 to a claim of damage from a negligent real estate appraisal). Under the Restatement,

the liability resulting from a claim for negligent misrepresentation is limited to losses

suffered:

              (a) by the person or one of a limited group of persons for
              whose benefit and guidance he intends to supply the
              information or knows that the recipient intends to supply it; and



       2
         In its answering brief, First Magnus argues that the Kuehns waived any objection to
summary judgment on the issue of negligence because they did not contradict its argument
that it had no duty in their response to First Magnus’s motion for partial summary judgment.
But in its reply to the partial summary judgment motion, First Magnus stated the exact
opposite when it noted, “[i]n their Response to Defendants’ Motion for Summary Judgment,
[the Kuehns] attempt to argue that First Magnus owed a duty to them to conduct an
appraisal for their benefit.” Accordingly, we consider the negligence issue on its merits.
                                               5
              (b) through reliance upon it in a transaction that he intends the
              information to influence or knows that the recipient so intends
              or in a substantially similar transaction.

Restatement § 552(2). Comment h to § 552 further notes that a claim would succeed so

long as

              the maker of the representation intends it to reach and influence
              either a particular person or persons, known to him, or a group
              or class of persons, distinct from the much larger class who
              might reasonably be expected sooner or later to have access to
              the information and foreseeably to take some action in reliance
              upon it.

The drafters of the Restatement justified this limited liability for negligent misrepresentation

claims “because of the extent to which misinformation may be, and may be expected to be,

circulated, and the magnitude of the losses which may follow from reliance upon it.”

Restatement § 552 cmt. a.

¶10           Based on this rationale, the court in Standard Chartered PLC v. Price

Waterhouse, 190 Ariz. 6, 30, 945 P.2d 317, 341 (App. 1996), held that the gravamen of a

claim of negligence against a provider of professional information is negligent

misrepresentation and that a party may not pursue a claim for negligence separate and

distinct from a negligent misrepresentation claim. The court noted that the drafters of the

Restatement did not narrow the range of liability for negligent misrepresentation “in the

expectation that a plaintiff could escape such limitations merely by attacking the same

conduct in an ordinary negligence count.” Id. at 31, 945 P.2d at 342. Thus, the court said,

to allow a plaintiff to pursue a negligence claim separate and distinct from negligent

                                               6
misrepresentation would “sanction an end-run around Restatement (Second) § 552.” Id. at

30, 945 P.2d at 341. Based on the rule articulated in Standard Chartered, the trial court

properly concluded that the duty in this situation is limited by Restatement § 552 and did

not err when it analyzed the Kuehns’ negligence claim as one of negligent misrepresentation.

¶11           The Kuehns, however, note that the supreme court in Donnelly allowed claims

of negligence and negligent misrepresentation to proceed. But the allegedly negligent party

in Donnelly was an architect—a design professional—and not an appraiser or auditor as

were the defendants in Hoffman or Standard Chartered. Furthermore, the primary issue

in Donnelly was whether a design professional’s tort duty was limited by privity of contract,

not whether any distinction existed between negligence and professional negligent

misrepresentation. Donnelly, 139 Ariz. at 187, 677 P.2d at 1295; see also Standard

Chartered, 190 Ariz. at 30, n.10, 945 P.2d at 341, n.10. Thus, Donnelly is not helpful to

the Kuehns on this issue.

¶12           The Kuehns further contend that, even under a negligent misrepresentation

analysis, the trial court erred in granting summary judgment in favor of First Magnus

because they submitted adequate proof to raise an issue of fact about their reliance and

right to rely. Because a plaintiff must show “justifiable reliance” to prevail on a claim for

negligent misrepresentation, see Restatement § 552(1), we first determine whether the trial

court erred in finding the Kuehns had no right to rely on Stanley’s appraisal.




                                             7
¶13           After the Kuehns executed the purchase contract and submitted their loan

application, First Magnus directed Stanley to appraise the property. Based in part on

Stanley’s appraisal, First Magnus approved the loan to the Kuehns. But the Kuehns did not

hire Stanley to conduct an appraisal on their intended purchase. In fact, Stanley stated in

her affidavit that she had had no contact with the Kuehns either before or during the

appraisal process. And the Kuehns were already contractually bound to purchase the

property, contingent upon qualifying for funding, before they received the appraisal.

Furthermore, the loan application specifically stated that First Magnus made no

representation about the value of the property; the summary appraisal report also noted that

the appraisal was “intended for use by [First Magnus] for a mortgage finance transaction

only.” Under these circumstances, the trial court properly found that the Kuehns had failed

to raise an issue of fact on whether they could prove justifiable reliance on the appraisal.

¶14           Furthermore, the Kuehns failed to show that Stanley had owed them any duty

under Restatement § 552. See Yauch v. S. Pac. Transp. Co., 198 Ariz. 394, ¶25, 10 P.3d

1181, ¶25 (App. 2000) (we may affirm judgment if it is correct for any reason). Stanley

performed a “short form” appraisal, which is a quick estimate for lending purposes. In

contrast, an appraisal by a purchasing party would likely be more encompassing and in-

depth than an ad-hoc assessment of value. Cf. Bus. Realty of Ariz., Inc. v. Maricopa

County, 181 Ariz. 551, 557, 892 P.2d 1340, 1346 (1995) (“The appraisal of real estate is

an art, not a science. . . . Although the use of such guidelines may be mandatory in



                                             8
appraisal work, their application to various situations calls upon the exercise of

judgment.”). Because First Magnus’s use of the appraisal to decide funding is not related

to the Kuehns’ use of the appraisal, Stanley did not provide the appraisal “for the guidance

of” the Kuehns as the Restatement requires. Restatement § 552(1).

¶15           Although it is foreseeable that other interested parties, such as the Kuehns,

would gain access to the appraisal and, perhaps, even rely on the information in it, these

other parties are not “one of a limited group of persons” protected under the Restatement.

Restatement § 552(2)(a). Instead, the Kuehns belong to “the much larger class [of persons]

who might reasonably be expected sooner or later to have access to the information and

foreseeably” rely on it. Restatement § 552 cmt. h; see also Hoffman, 159 Ariz. at 379-80,

767 P.2d at 727-28. Because Stanley did not owe the Kuehns any duty, summary judgment

was appropriate.

B. Consumer fraud

¶16           The Kuehns next argue that the trial court erred when it summarily dismissed

their claim under Arizona’s consumer fraud statute, A.R.S. § 44-1522. That statute

provides:

                     The act, use or employment by any person of any
              deception, deceptive act or practice, fraud, false pretense, false
              promise, misrepresentation, or concealment, suppression or
              omission of any material fact with intent that others rely upon
              such concealment, suppression or omission, in connection with
              the sale or advertisement of any merchandise whether or not
              any person has in fact been misled, deceived or damaged

                                              9
              thereby, is declared to be an unlawful practice.

§ 44-1522(A). To succeed on a claim of consumer fraud, a plaintiff must show a false

promise or misrepresentation made in connection with the sale or advertisement of

merchandise and consequent and proximate injury resulting from the promise.3 Correa v.

Pecos Valley Dev. Corp., 126 Ariz. 601, 605, 617 P.2d 767, 771 (App. 1980). An injury

occurs when a consumer relies, even unreasonably, on false or misrepresented information.

Id.

¶17           The Kuehns first argue that the trial court did not consider their consumer

fraud claim when it granted summary judgment in favor of First Magnus. But the Kuehns

failed to differentiate between the fraud claims in their response, so the trial court addressed

the issues presented. And the court expressly found that “there [wa]s no showing of

reliance” on the appraisal by the Kuehns. Because reliance is a required element under

Arizona’s consumer fraud statute, see § 44-1522(A), the trial court implicitly rejected the

consumer fraud claim also.

¶18           The Kuehns next argue that the trial court erred in finding that they had not

relied on the appraisal. In their opening brief, they contend that, had they known the true

value of the property, they might have pursued other options such as, breaching the contract,

renegotiating the contract, or invoking the mortgage contingency clause of the contract. But



       3
     Section 44-1521, A.R.S., defines “merchandise” as “objects, wares, goods,
commodities, intangibles, real estate, or services.”
                                              10
First Magnus argues in their answering brief that the Kuehns waived the “other options”

argument by not raising it before the trial court. The Kuehns then countered the waiver

issue in their reply brief, contending that the “other options” were discussed in their

response to the Kuehns’ second motion for summary judgment. And, at oral argument, the

Kuehns further noted that the mortgage contingency clause had been expressly discussed

in both the supplemental memorandum concerning Hoffman and the oral argument

concerning the first motion for summary judgment.

¶19           In their response to First Magnus’s second motion for summary judgment, the

Kuehns referred to these other options only to show that they suffered damage from a

breach of contract. And the court had already granted summary judgment on the tort claims.

Additionally, in the supplemental memorandum, the Kuehns merely stated that the mortgage

contingency clause distinguished this case from Hoffman; the Kuehns did not discuss

whether any options were available to them or if these options had caused them to rely on

the appraisal. Although the Kuehns did mention the mortgage contingency clause in the

context of reliance at the oral argument, it was to support the idea that a lender would not

have completed the deal if the appraisal showed a lesser value. Thus, in all three of these

instances, the Kuehns did not contend that, in the context of the tort claims, they had shown

reliance on the appraisal because they would have had other options prior to closing on the

property. Furthermore, the Kuehns did not dispute First Magnus’s claim that it would have

granted the loan and, thus, satisfied the mortgage contingency clause even if the appraisal


                                             11
had shown the lower amount. Accordingly, because the Kuehns did not raise the “other

options” issue to the trial court, it is waived. See Schoenfelder v. Ariz. Bank, 165 Ariz. 79,

90, 796 P.2d 881, 892 (1990) (on appeal from summary judgment, we will not consider new

factual theories raised in attempt to secure reversal of trial court’s determinations of law).

¶20           After reviewing the record, we agree with the trial court that the Kuehns failed

to raise a fact issue on whether they had relied on the appraisal. The Kuehns received the

appraisal report only after they were already contractually bound to purchase the real

estate. Although Jo Ann Kuehn stated in her affidavit that she had relied on the appraisal

report “as an accurate indicator of value” as well as “a reassurance” that she and her

husband were paying a fair market price, it is unclear how these belated “reassurances”

translate into evidence of detrimental reliance. And because they have waived the “other

options” argument, the Kuehns have failed to present any evidence that they relied on the

appraisal report in entering into or performing the contract. The trial court therefore did not

err when it granted summary judgment on their claim under Arizona’s consumer fraud

statute.

C. Negligent supervision

¶21           The Kuehns additionally argue that First Magnus was negligent in supervising

Stanley and, thus, that the trial court erred in dismissing their claim of negligent supervision.

For an employer to be held liable for the negligent hiring, retention, or supervision of an

employee, a court must first find that the employee committed a tort. Mulhern v. City of

                                               12
Scottsdale, 165 Ariz. 395, 398, 799 P.2d 15, 18 (App. 1990). If the theory of the

employee’s underlying tort fails, an employer cannot be negligent as a matter of law for

hiring or retaining the employee. See id.

¶22          In this case, the Kuehns waived the issues of gross negligence and common

law fraud by not raising them in the trial court. And we have already affirmed the trial

court’s grant of summary judgment on their claims of negligence, negligent

misrepresentation, and consumer fraud. Because the Kuehns have not shown that Stanley

committed any tortious act against them, their claim of negligent supervision against First

Magnus also fails. Accordingly, the trial court did not err in granting summary judgment

on the claim of negligent supervision.




                         BREACH OF CONTRACT CLAIM

¶23          The Kuehns next argue that the trial court erred in granting First Magnus’s

second motion for summary judgment on their claim for breach of contract. The Kuehns

entered into the contract for the sale of real property in July 2000. The following month,

they submitted to First Magnus a “Uniform Residential Loan Application,” asking First

Magnus to finance their purchase in the amount of $220,000. As part of this agreement, the

Kuehns acknowledged and agreed to nine specific provisions, including a disclaimer that

First Magnus “ma[d]e no representations or warranties, express or implied, to the [Kuehns]

regarding . . . the value of the property.” First Magnus had Stanley appraise the property;

                                            13
First Magnus then provided the Kuehns a copy of the appraisal report before the close of

escrow.

¶24             The Kuehns argue that, because the purchase contract called for an appraisal

to obtain the loan, First Magnus was obligated to provide an accurate appraisal pursuant to

the purchase contract. In essence, the Kuehns seem to argue that the appraisal requirement

in the purchase contract obligated First Magnus to provide an appraisal and that, based on

this obligation and the fact that First Magnus did provide them a copy of the appraisal

report, the Kuehns had an expectation under the purchase contract that the appraisal was fair

and accurate.

¶25             But First Magnus was not a party to the purchase contract; it was only

between the Kuehns and the seller of the real property. The only contract between First

Magnus and the Kuehns was the loan agreement in which First Magnus agreed to lend the

Kuehns $220,000. Because privity of contract must exist before a party may seek to

enforce a contract, Stratton v. Inspiration Consolidated Copper Co., 140 Ariz. 528, 531,

683 P.2d 327, 330 (App. 1984), the real estate purchase contract created no rights between

the Kuehns and First Magnus.

¶26             The Kuehns next argue that the disclaimer of the property value in the loan

agreement was “boiler-plate language” and that the trial court erred in concluding that this

language was enforceable because the loan application “[wa]s only two pages long, most

of which [wa]s blank space, and the language [wa]s comprehensible.” In Darner Motor

                                             14
Sales, Inc. v. Universal Underwriters Insurance Co., 140 Ariz. 383, 682 P.2d 338 (1984),

the supreme court adopted Restatement (Second) of Contracts § 211 (1981) to govern the

enforcement of boilerplate language in standardized contracts. Section 211 provides:

              (1) Except as stated in Subsection (3), where a party to an
              agreement signs or otherwise manifests assent to a writing and
              has reason to believe that like writings are regularly used to
              embody terms of agreements of the same type, he adopts the
              writing as an integrated agreement with respect to the terms
              included in the writing.


              (2) Such a writing is interpreted wherever reasonable as
              treating alike all those similarly situated, without regard to their
              knowledge or understanding of the standard terms of the
              writing.


              (3) Where the other party has reason to believe that the party
              manifesting such assent would not do so if he knew that the
              writing contained a particular term, the term is not part of the agreement.

¶27           In Darner, our supreme court recognized that modern commercial business

practice depends upon the use of standardized forms, yet also acknowledged that customers

often sign these forms without fully being aware of all their terms. Darner, 140 Ariz. at

393-94, 682 P.2d at 398-99. In adopting the Restatement section, the supreme court

authorized a trial court to enforce a boilerplate term unless the drafter had reason to believe

that the adhering party would not have assented to the term. Id. at 394, 682 P.2d at 400.

This belief that the adhering party would not have assented may be inferred if the language

is “‘bizarre or oppressive, . . . [if] it eviscerates the non-standard terms explicitly agreed



                                                  15
to, or . . . eliminates the dominant purpose of the transaction.’” Id. at 391-92, 682 P.2d at

396-97, quoting Restatement (Second) of Contracts § 211 cmt. f.

¶28           Here, the clause disclaiming any warranty of value does not appear to be

bizarre or oppressive. The disclaimer was not incomprehensible nor did it bind the Kuehns

to an unconscionable term; it simply disclaimed any representation on the value of the

property they had already agreed to purchase in a separate contract. And, notwithstanding

the disclaimer, the Kuehns still received the very loan they had asked for on the terms set

forth in the loan agreement. Thus, the disclaimer neither eviscerated the nonstandard terms

nor negated the dominant purpose of the transaction.              Because the disclaimer is

conscionable under the Restatement, the Kuehns are bound by the terms of the loan

agreement. See Angus Med. Co. v. Digital Equip. Corp., 173 Ariz. 159, 165, 840 P.2d

1024, 1030 (App. 1992). The trial court therefore did not err in rejecting the Kuehns’

argument that the disclaimer was unenforceable.

¶29           The Kuehns also contend the trial court erred in concluding that they had

failed to raise an issue of fact on whether First Magnus had violated the covenant of good

faith and fair dealing. A covenant of good faith and fair dealing is implicit in every

contract. Rawlings v. Apodaca, 151 Ariz. 149, 153, 726 P.2d 565, 569 (1986). This

covenant requires that neither party act to impair the right of the other to receive the benefits

that flow from their agreement or contractual relationship. Id. at 154, 726 P.2d at 570. As

a general rule, an implied covenant of good faith and fair dealing cannot directly contradict


                                               16
an express contract term. Bike Fashion Corp. v. Kramer, 202 Ariz. 420, ¶14, 46 P.3d 431,

¶14 (App. 2002). Accordingly, “the relevant inquiry always will focus on the contract

itself, to determine what the parties did agree to.” Rawlings, 151 Ariz. at 154, 726 P.2d at

570.

¶30           As noted above, the parties agreed that First Magnus would lend the Kuehns

$220,000. But the parties did not agree that First Magnus would provide the Kuehns an

appraisal. Instead, the agreement expressly disclaimed any representation on the value of

the property, a disclaimer we have already upheld as valid. Because First Magnus’s

contract obligation did not extend to providing a valid appraisal, the trial court did not err

in concluding the Kuehns had failed to raise any issue of fact on whether First Magnus had

violated the covenant of good faith and fair dealing implicit in the loan agreement.

                                    ATTORNEY FEES

¶31           In its motion for summary judgment on the contract claim, First Magnus asked

the court for attorney fees pursuant to either A.R.S. § 12-341.01(A) or § 12-341.01(C).

The court granted the request, noting, “[a]s this is a contract matter, defendants are entitled

to fees and costs” pursuant to § 12-341.01.

¶32           The Kuehns argue that the trial court abused its discretion under § 12-

341.01(A) by awarding First Magnus attorney fees, arguing their claims were “novel” and

“meritorious.” The Kuehns further contend that the trial court’s findings are insufficient to

merit an award under § 12-341.01(C). An award of attorney fees pursuant to § 12-341.01

                                              17
is left to the sound discretion of the trial court, whose decision we will not reverse absent

an abuse of that discretion. State Farm Mut. Auto. Ins. Co. v. Arrington, 192 Ariz. 255,

¶27, 963 P.2d 334, ¶27 (App. 1998).

¶33           Section 12-341.01(A) permits a trial court to award reasonable attorney fees

to the successful party in a contested contract action. In doing so, a court may consider a

number of factors, including the merits of the unsuccessful party’s claim. Associated

Indem. Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1985). Because the

trial court granted judgment to First Magnus on the contract claim and could have found that

the Associated Indemnity factors favored an award of fees, the court did not abuse its

discretion in awarding attorney fees to First Magnus. And because we affirm the award of

attorney fees under § 12-341.01(A), we do not consider the Kuehns’ argument under § 12-

341.01(C). See Uyleman v. D.S. Rentco, 194 Ariz. 300, ¶27, 981 P.2d 1081, ¶27 (App.

1999) (decision to award prevailing party attorney fees will be affirmed if it has any

reasonable basis).

                                     CONCLUSION

¶34           Because the trial court did not err in granting First Magnus’s motions for

summary judgment and did not abuse its discretion in awarding attorney fees to First

Magnus as the prevailing party in a contract claim, we affirm. We also grant First Magnus

reasonable attorney fees on appeal pursuant to § 12-341.01(A), upon its compliance with

Rule 21, Ariz. R. Civ. App. P., 17B A.R.S.

                                             18
                                            ____________________________________
                                            JOSEPH W. HOWARD, Judge


CONCURRING:



____________________________________
M. JAN FLÓREZ, Judge



____________________________________
JAMES A. SOTO, Judge*



*A judge of the Santa Cruz County Superior Court authorized and assigned to sit as a judge
on the Court of Appeals, Division Two, pursuant to Arizona Supreme Court Order filed
February 25, 2004.




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