Johnson v. Earnhardt's Gilbert Dodge, Inc.

SUPREME COURT OF ARIZONA
En Banc

BRENDA JOHNSON, ) Arizona Supreme Court
) No. CV-05-0204-PR
Plaintiff-Appellant, )
) Court of Appeals
v. ) Division One
) No. 1 CA-CV 02-0656
EARNHARDT’S GILBERT DODGE, INC., )
) Maricopa County
Defendant-Appellee. ) Superior Court
) No. CV 01-009418
)
) O P I N I O N
__________________________________)

Appeal from the Superior Court in Maricopa County
The Honorable Gary E. Donahoe, Judge

REVERSED AND REMANDED

Opinion of the Court of Appeals, Division One
210 Ariz. 375, 111 P.3d 417 (App. 2005)

VACATED
________________________________________________________________

KROHN & MOSS, LTD. Phoenix
By Marshall Meyers
Attorney for Brenda Johnson

MARY LaRUE WALKER Chandler

And

OSBORN MALEDON, P.A. Phoenix
By Thomas L. Hudson
Jason J. Romero
Attorneys for Earnhardt’s Gilbert Dodge, Inc.

SACKS TIERNEY P.A. Scottsdale
By James W. Armstrong
Gaye L. Gould
Attorneys for Amici Curiae Arizona Automobile Dealers Association and
Arizona Recreational Vehicle Dealers Association
BOWMAN AND BROOKE LLP Phoenix
By Negatu Molla
Abram N. Bowman
Attorneys for Amicus Curiae DaimlerChrysler Corporation
________________________________________________________________

R Y A N, Justice

¶1 With most goods, “a warranty that the goods shall be

merchantable is implied in a contract for their sale if the seller

is a merchant with respect to goods of that kind.” Ariz. Rev. Stat.

(“A.R.S.”) § 47-2314(A) (2005). However, the implied warranty of

merchantability for the sale of a used motor vehicle may be limited

to fifteen days or five hundred miles, whichever occurs first. A.R.S.

§ 44-1267(B) (2003). To limit the implied warranty of merchantability

to the statutory minimum, a dealer must include in the sales agreement

a conspicuous statement in bold type that the “vehicle will be fit

for the ordinary purposes for which the vehicle is used for 15 days

or 500 miles after delivery, whichever is earlier.” Id. §

44-1267(G).1

¶2 The statutory ability to limit the implied warranty is

subject to an important caveat. Under the Magnuson-Moss Warranty Act

(“Warranty Act” or “Act”), 15 U.S.C. §§ 2301-2312 (2000), if a used

car dealer enters into a service contract with the purchaser at the

1
A purchaser also “may waive the implied warranty of
merchantability” for specific defects in the vehicle if the dealer
“fully and accurately discloses” the defect, “[t]he purchaser agrees
to buy the . . . vehicle after disclosure of the defect,” and a
“conspicuous statement” is printed on the sales agreement describing
the specific defect. A.R.S. § 44-1267(I).

2
time of sale or ninety days thereafter, no limitation on an implied

warranty of merchantability is permitted. 15 U.S.C. § 2308(a). 2

Under such circumstances, the terms of the service contract govern

the duration of the implied warranty of merchantability. See id. §

2308(b).

¶3 We address two questions in this case: first, whether the

used car dealer here entered into a service contract with the

purchaser, and second, whether the service contract was a warranty

under the Warranty Act. We have jurisdiction under Article 6, Section

5(3), of the Arizona Constitution and A.R.S. § 12-120.24 (2003).

I

¶4 In May 2000, Brenda Johnson purchased a used 1997 Kia

Sportage “AS IS” from Earnhardt’s Gilbert Dodge, Inc. (“Earnhardt”).

The sales agreement expressly limited the implied warranty of

merchantability to fifteen days or five hundred miles, whichever

occurred first. In the same transaction, Johnson, through Earnhardt,

applied to purchase a DaimlerChrysler service contract. Both

Earnhardt’s Finance Manager and Johnson signed the application.

Johnson paid an amount in addition to the purchase price of the vehicle

for the service contract. The service contract was subsequently

issued to Johnson by DaimlerChrysler.

2
This prohibition also applies if a supplier “makes any written
warranty to the consumer.” 15 U.S.C. § 2308(a).

3
¶5 Johnson experienced mechanical problems with the Kia in

June 2000, April 2001, and May 2001. These problems were not resolved

to Johnson’s satisfaction and she attempted to revoke acceptance of

the vehicle nearly a year after she had purchased it.

¶6 When Earnhardt refused to accept return of the vehicle,

Johnson filed suit in superior court alleging breach of the implied

warranty of merchantability and revocation of acceptance under the

Warranty Act.3 The superior court granted Earnhardt’s motion for

summary judgment, finding that Johnson had not entered into a service

contract with Earnhardt.

¶7 Johnson appealed. A divided court of appeals reversed the

trial court’s grant of summary judgment, holding that, as a matter

of law, Earnhardt had entered into a service contract with Johnson,

and that Earnhardt had also “made a warranty in connection with the

sale”; therefore, Earnhardt was not permitted to limit the implied

warranty of merchantability. Johnson v. Earnhardt’s Gilbert Dodge,

Inc., 210 Ariz. 375, 378, 379, 381, ¶¶ 11-13, 20, 26, 111 P.3d 417,

420, 421, 423 (App. 2005).4

3
Because Johnson has since sold the vehicle, revocation is no
longer an available remedy. See Parrot v. DaimlerChrysler Corp., ,
Ariz. , ¶ 41, 130 P.3d 530, 537 (2006); Hull v. DaimlerChrysler
Corp., 209 Ariz. 256, 259, ¶ 16, 99 P.3d 1026, 1029 (App. 2004).
4
Concluding that “Earnhardt was not a warrantor here” because
DaimlerChrysler was responsible for the vehicle’s performance and
also for any costs of “warranty work” on the vehicle, Judge Thompson
dissented. Johnson, 210 Ariz. at 381, ¶ 28, 111 P.3d at 423 (Thompson,
J., dissenting).

4
 II

A

¶8 The Warranty Act defines a service contract as “a contract

in writing to perform, over a fixed period of time or for a specified

duration, services relating to the maintenance or repair (or both)

of a consumer product.” 15 U.S.C. § 2301(8). A service contract

requires “some consideration in addition to the purchase price of the

consumer product.” 16 C.F.R. § 700.11(c) (2005); see also Id. §

700.11(b). Moreover, “[n]o supplier may disclaim or modify (except

as provided in [15 U.S.C. § 2308(b)]) any implied warranty to a

consumer with respect to such consumer product if . . . at the time

of sale, or within 90 days thereafter, such supplier enters into a

service contract with the consumer which applies to such consumer

product.” 15 U.S.C. § 2308(a) (emphasis added).

¶9 The Act and its implementing regulations does not provide

any guidance on when a supplier “enters into” a service contract with

a consumer. See Barkley Clark & Christopher Smith, The Law of Product

Warranties § 19:5 n.4 (Westlaw 2002) (“The legislative history of [15

U.S.C. § 2308] does not shed any light on the meaning of the phrase

‘enters into.’”). When the Warranty Act does not define a term or

phrase, we look to state law to resolve this issue. See, e.g., Curtis

R. Reitz, Consumer Product Warranties Under Federal and State Laws

§ 2.01, at 13 (2d ed. 1987) (stating that the Warranty Act “is partial

and corrective legislation that begins with acceptance of the

5
continuation of existing state law as the foundation. The reform of

federal law is overlaid on that body of state law . . . [b]ut familiar,

traditional state law remains in place unless displaced by the Act

or its regulation”); Henry Weinstock, Comment, Consumer Warranty Law

in California Under the Commercial Code and the Song-Beverly and

Magnuson-Moss Warranty Acts, 26 UCLA L. Rev. 583, 675 (1979) (“The

Magnuson-Moss Warranty Act does not attempt to supplant state law;

its goal is to supplement the consumer’s rights.”).5

B

¶10 A contract is “a bargain in which there is a manifestation

of mutual assent to the exchange and a consideration.” Restatement

(Second) of Contracts § 17(1) (1981) (“Restatement”); see also

Hill-Shafer P’ship v. Chilson Family Trust, 165 Ariz. 469, 473-74,

799 P.2d 810, 814-15 (1990) (requiring a meeting of the minds for

contract formation).

¶11 Mutual assent is ascertained from “objective evidence, not

[from] the hidden intent of the parties.” Hill-Shafer P’ship, 165

Ariz. at 474, 799 P.2d at 815. Objective evidence includes written

and spoken words as well as acts. Corbin-Dykes Elec. Co. v. Burr,

18 Ariz. App. 101, 103, 500 P.2d 632, 634 (1972) (holding that the

5
The service contract in this matter contains a choice of law
clause stating that “[e]xcept where prohibited by law, this contract
will be governed by Michigan law.” Neither party has raised the choice
of law clause in this matter. Moreover, Michigan contract law does
not appear to differ materially from Arizona contract law with respect

6
manifestation of mutual assent “is determined by the words used and

the other manifestations of intent having reference to the

contract”); Restatement § 19(1) (“The manifestation of assent may be

made wholly or partly by written or spoken words or by other acts or

by failure to act.”).

¶12 Under Arizona’s parol evidence rule, “[w]here . . . an

ambiguity exists on the face of [a] document or the language admits

of differing interpretations, parol evidence is admissible to clarify

and explain the document.” Standage Ventures, Inc. v. State, 114

Ariz. 480, 482, 562 P.2d 360, 362 (1977); see also Leo Eisenberg &

Co. v. Payson, 162 Ariz. 529, 532, 785 P.2d 49, 52 (1989). The court

may also admit evidence to determine the intention of the parties if

“the judge . . . finds that the contract language is ‘reasonably

susceptible’ to the interpretation asserted by its proponent.”

Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 154, 854 P.2d

1134, 1140 (1993).

C

¶13 The court of appeals held that “the trial court erred when

it determined that Earnhardt did not ‘enter into’ a service contract

with Johnson” because “[b]y the plain language of the application and

the service agreement, Earnhardt is a party to the agreement among

Johnson, Earnhardt and DaimlerChrysler to provide service for

to this case. Thus, we refer to Arizona contract law throughout this
opinion.

7
Johnson’s Kia.” Johnson, 210 Ariz. at 378, ¶¶ 11-12, 111 P.3d at 420.

We agree with the court of appeals that the superior court erred in

granting summary judgment against Johnson. We conclude, however,

that the court of appeals erred in holding, as a matter of law, that

Earnhardt was a party to the service contract.

1

¶14 In considering Earnhardt’s motion for summary judgment,

the superior court stated that Congress intended the phrase “enters

into” to apply only to parties. Because it granted the motion, the

court must therefore have implicitly concluded that Earnhardt was not

a party to the service contract.

¶15 “Summary judgment is appropriate only if no genuine issues

of material fact exist and the moving party is entitled to judgment

as a matter of law.” Wells Fargo Bank v. Ariz. Laborers, Teamsters

& Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 482,

¶ 14, 38 P.3d 12, 20 (2002) (citing Ariz. R. Civ. P. 56(c); Orme School

v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990)). “Thus,

summary judgment in favor of either party is appropriate only ‘if the

facts produced in support of the [other party’s] claim or defense have

so little probative value, given the quantum of evidence required,

that reasonable people could not agree with the conclusion advanced

by the proponent of the claim or defense.’” Andrews v. Blake, 205

Ariz. 236, 240, ¶ 13, 69 P.3d 7, 11 (2003) (quoting Orme School, 166

Ariz. at 309, 802 P.2d at 1008) (alteration in original).

8
¶16 We agree that a service contract that merely obligates a

third party to provide services has not been “entered into” by the

dealer, even when sold by the dealer. We also assume that to be the

case even if the third party (such as DaimlerChrysler) has contractual

arrangements with the dealer requiring the dealer to provide the

service. In this case, however, language in the documents comprising

the transaction, combined with parol evidence, both supports and

undermines the conclusion that Earnhardt itself entered into the

service contract. This evidence raises a question of fact as to

whether Earnhardt was a party to the service contract.

¶17 First, the service contract contains conflicting language

about who was a party to the service contract. Some language in the

contract supports the proposition that only Johnson and

DaimlerChrysler are parties to the service contract. For example,

the service contract defines “you, your” to mean “the Plan purchaser.”

It defines “we, us, our” as “DaimlerChrysler Corporation.” And, the

contract states that “[t]his Plan is a service contract between you

and us” and “[w]e are solely responsible (liable) for fulfillment of

the provisions of the Plan.”

¶18 Other language, however, supports the proposition that

Earnhardt is also a party to the service contract. The service

contract application contained an express signed promise from

Earnhardt that it would “provide service to [Johnson] in accordance

with the provisions of the service contract DaimlerChrysler will

9
issue to the purchaser.” A reasonable consumer in Johnson’s position

could interpret this language as meaning that Earnhardt was obligated

under the service contract to provide service to Johnson. See Darner

Motor Sales, Inc. v. Universal Underwriters Ins. Co., 140 Ariz. 383,

389-90, 682 P.2d 388, 394-95 (1984) (recognizing the doctrine of

reasonable expectations in contract law).

¶19 Parol evidence also supports finding Earnhardt a party to

the contract. In her response to Earnhardt’s motion for summary

judgment, Johnson provided an affidavit stating in relevant part:

At the time I purchased this extended warranty/service
contract, it was explained to me that I was purchasing
Earnhardt’s extended warranty and that Chrysler was the
“administrator” of the warranty. The way it was explained
to me was that I could always bring the Kia into Earnhardt’s
for repair at no charge but that I just had to call Chrysler
first. I understood this to mean that the warranty I was
buying from Earnhardt’s was Chrysler and Earnhardt’s joint
extended warranty.

It was never explained to me that I was buying a Chrysler
warranty only. To the contrary, when I asked the question
about extra warranty protection, I was told there were
numerous extended warranties on the market but that I
wanted to buy a “specific one,” the one “we do with
Chrysler.”

Such parol evidence is admissible to determine the intention of the

parties because the conflicting language in the documents comprising

the transaction is reasonably susceptible to the interpretation that

Earnhardt is a party to the contract. See Taylor, 175 Ariz. at 154,

854 P.2d at 1140.

¶20 Language in the service contract application also raises

10
a question of fact as to whether Earnhardt was a party to a conditional

contract to provide service to Johnson. A conditional contract is

“an executory contract, the performance of which depends on a

condition.” Ross v. Bumstead, 65 Ariz. 61, 63, 173 P.2d 765, 766-67

(1946); see also 17A C.J.S. Contracts § 355 (1999).

¶21 The service contract application contains the clause

“[Earnhardt] will provide service to [Johnson] in accordance with the

provisions of the service contract DaimlerChrysler will issue to

[Johnson].” This clause could reasonably be read as a conditional

promise by Earnhardt to Johnson to repair her vehicle. Also, the

Retail Installment Contract contains the statement “[Earnhardt] may

be retaining a portion of [Johnson’s payment of $1,235].” This

statement suggests that Earnhardt received consideration for the

promise.

¶22 But the language at issue could also be read as a promise

by Earnhardt solely to DaimlerChrysler to repair Johnson’s vehicle,

and not a promise by Earnhardt to Johnson. The face of the application

provides the evidence for this proposition. The application is titled

“DaimlerChrysler Service Contract Application.” In addition, the

application states the following: “NOTE: . . . This document is an

application for the DaimlerChrysler Service Contract and does not

constitute a service contract until accepted by DaimlerChrysler

Service Contracts.” Thus, the application could reasonably be

interpreted as creating just one contract – between the applicant and

11
DaimlerChrysler. As a result, evidence both supports the existence

of a conditional contract between Johnson and Earnhardt and refutes

the existence of such a contract.

¶23 The conflicting language of the service contract and the

service contract application, along with the parol evidence, creates

sufficient questions of fact for Johnson’s case to survive summary

judgment on the issue of whether Earnhardt entered into the service

contract.

2

¶24 In examining the same evidence, the court of appeals found

as a matter of law that Earnhardt had entered into a service contract

with Johnson. Johnson, 210 Ariz. at 378, ¶¶ 10-12, 111 P.3d at 420.

Pointing to Johnson’s affidavit, id. at ¶ 10, along with “the plain

language of the application and the service agreement . . . among

Johnson, Earnhardt and DaimlerChrysler,” id. at ¶ 12, the court found

that Earnhardt was a party to the service agreement, id. But, as

discussed above, some of the language in the documents involved in

this transaction supports Earnhardt’s contention that it did not

enter into a service contract with Johnson. See supra ¶¶ 17, 22.

Specifically, portions of the service contract support Earnhardt’s

claim that the service contract was between Johnson and

DaimlerChrysler and that Earnhardt simply sold the contract to

Johnson.

¶25 We also note that Johnson did not move for summary judgment

12
in the superior court. She instead contended there were questions

of fact concerning whether Earnhardt was a party to the service

contract. “[T]he propriety of granting summary judgment in favor of

a party who did not so move is often a ‘close question.’” Kassbaum

v. Steppenwolf Prods., Inc., 236 F.3d 487, 494 (9th Cir. 2000)

(quoting Sohappy v. Hodel, 911 F.2d 1312, 1320 (9th Cir. 1990)). If

a court should conclude “that a non-moving party is entitled to

judgment, ‘great care must be exercised to assure that the original

movant has had an adequate opportunity to show that there is a genuine

issue and that his [or her] opponent is not entitled to judgment as

a matter of law.’” Id. (quoting Ramsey v. Coughlin, 94 F.3d 71, 74

(2d Cir. 1996)) (alteration in original). Moreover, a court “should

not reverse a summary judgment and order judgment for a non-moving

party based on an issue that the movant had no opportunity to dispute

in the [trial] court.” Id. at 495 (citing Fountain v. Filson, 336

U.S. 681, 683 (1949)); see also Century Med. Plaza v. Goldstein, 122

Ariz. 583, 585, 596 P.2d 721, 723 (App. 1979) (“The weight of authority

allows summary judgment for the non-movant, provided the movant had

a full opportunity to show there is a material factual dispute under

the adversary’s theory and that the non-movant is not entitled to

judgment as a matter of law.”).

¶26 In its supplemental brief, Earnhardt asserts that it had

documents (that were not part of the record before the court of

appeals) relating to a Federal Trade Commission’s Advisory Letter

13
that would help explain when a used car dealer enters a service

contract or merely acts as the seller of a service contract. Because

of the court of appeals’ sua sponte decision to find, as a matter of

law, that Earnhardt entered into a service contract, Earnhardt did

not have the opportunity to present this evidence or other arguments

to oppose summary judgment. As a result, the court of appeals erred

in entering judgment for Johnson as a matter of law. See Kassbaum,

236 F.3d at 495.

III

¶27 The court of appeals also held that the service contract

constituted a written warranty between Earnhardt and Johnson.

Johnson, 210 Ariz. at 378, 379, ¶¶ 13, 16, 111 P.3d at 420, 421. We

disagree because, under the Warranty Act, a service contract differs

in significant ways from a written warranty. See 15 U.S.C. § 2301(6),

(8); 16 C.F.R. § 700.11(b), (c).

A

¶28 As noted above, under the Warranty Act, a “service

contract” is “a contract in writing to perform, over a fixed period

of time or for a specified duration, services relating to the

maintenance or repair (or both) of a consumer product.” 15 U.S.C.

§ 2301(8). On the other hand, a “written warranty” is defined as:

(A) any written affirmation of fact or written promise made
in connection with the sale of a consumer product by a
supplier to a buyer which relates to the nature of the
material or workmanship and affirms or promises that such
material or workmanship is defect free or will meet a

14
 specified level of performance over a specified period of
time, or

(B) any undertaking in writing in connection with the sale
by a supplier of a consumer product to refund, repair,
replace, or take other remedial action with respect to such
product in the event that such product fails to meet the
specifications set forth in the undertaking,

which written affirmation, promise, or undertaking becomes
part of the basis of the bargain between a supplier and a buyer
for purposes other than resale of such product.

Id. § 2301(6) (emphasis added).

¶29 Thus, under the plain language defining a written warranty,

the “affirmation, promise, or undertaking” must be a part of the basis

of the bargain. Id. “This means that it must be conveyed at the time

of sale of the consumer product and the consumer must not give any

consideration beyond the purchase price of the consumer product in

order to benefit from the agreement.” 16 C.F.R. § 700.11(b). In

contrast, a service contract is “an agreement which calls for some

consideration in addition to the purchase price of the consumer

product, or which is entered into at some date after the purchase of

the consumer product to which it applies.” Id. § 700.11(c); see also

Clark & Smith, supra ¶ 9, § 19:3 (“If the consumer must give any

consideration beyond the purchase price of the product in order to

benefit from the agreement, it will be a service contract rather than

a written warranty.”). Thus, a service contract cannot also be a

written warranty.

15
 B

¶30 Johnson argues that the DaimlerChrysler service contract

application created a written warranty in addition to a service

contract. We disagree because the plain language of the three

documents comprising the transaction shows that Johnson paid a sum

in addition to the price of the vehicle for the service contract.

First, the Purchase Order differentiates between the cash price of

the vehicle ($15,878.48) and the price of the service contract

($1,235.00). The price of the service contract was then added to the

cash price (which had been adjusted based on the down payment,

trade-in allowance, and other costs) for a total cost of $14,063.48.

Second, in the Retail Installment Contract, the cash price of the

vehicle was listed as $14,599.00, while the service contract was

listed separately, under “Amounts paid to others,” as $1,235.00.

Third, the Service Contract Application specifically stated that the

price of the service contract was $1,235.00.

¶31 Because separate consideration was paid for the service

contract, neither that contract nor the service contract application

can give rise to a written warranty.

C

¶32 The court of appeals came to the opposite conclusion for

two reasons. First, the court focused on a provision in the service

contract application stating that Earnhardt would “provide service

to the purchaser in accordance with the provisions of the service

16
contract Daimler Chrysler [sic] will issue to the purchaser.”

Johnson, 210 Ariz. at 378, ¶ 10, 111 P.3d at 420. The court mistakenly

concluded that this provision created a written warranty governed by

the Warranty Act because it was a written undertaking to provide

service and was made “in conjunction with” the sale of the vehicle.

Id. at ¶ 13. While the sale of the service contract to Johnson was

“in conjunction with” the sale of the vehicle to Johnson, it was not

part of the basis of the bargain because Johnson paid separate

consideration for the service contract. Therefore, the service

contract here is not a written warranty. See 15 U.S.C. § 2301(6);

16 C.F.R. § 700.11(b), (c).

¶33 Second, the court drew a connection between language in the

service contract application and language found to constitute a

written warranty in Rothe v. Maloney Cadillac, Inc., 492 N.E.2d 497,

503-04 (Ill. App. Ct. 1986), aff’d in part, rev’d in part, vacated

in part and remanded, 518 N.E.2d 1028 (Ill. 1988), and Ventura v. Ford

Motor Corp., 433 A.2d 801, 809 (N.J. Super. Ct. App. Div. 1981).

Johnson, 210 Ariz. at 379, ¶ 16, 111 P.3d at 421. Because the

circumstances of those cases materially differ from those in this

case, the court of appeals’ reliance on their reasoning is misplaced.

¶34 In Ventura, the dealer’s purchase order-contract contained

the statement: “The selling dealer also agrees to promptly perform

and fulfill all terms and conditions of the owner service policy.”

433 A.2d at 809 (internal quotation marks omitted). The court found

17
that this undertaking “constitute[d] a written warranty within the

meaning of 15 U.S.C.[] § 2301(6)(B).” Id. at 810. But this

undertaking was in relation to the limited warranty provided by Ford

to the purchaser (the “owner service policy”). See id. at 809-10.

The price of this limited warranty was built into the purchase price

of the vehicle – no separate consideration was paid for it. See id.

at 807, 809, 811 (noting that the dealer gave or passed on the

manufacturer’s warranty to the purchaser and the manufacturer gave

the warranty “to induce the sale”). Thus, nothing in Ventura suggests

that a contract for which the vehicle purchaser paid separate

consideration, as is the case here, can constitute a written warranty.

See 16 C.F.R. § 700.11(b), (c). Rothe is to the same effect; it simply

relies upon Ventura to conclude that language in the sales contract

stating that the dealer “agrees to promptly perform and fulfill all

terms and conditions of the owner service policy” forms a written

warranty. Rothe, 492 N.E.2d at 503 (internal quotation marks

omitted).

¶35 In this case, because it is clear that Johnson paid separate

consideration for the service contract, the court of appeals erred

in concluding that it amounted to a written warranty under the

Warranty Act.

IV

¶36 Earnhardt requests an award of reasonable attorneys’ fees

and costs under A.R.S. §§ 12-341, -341.01 (2003). Those statutes

18
permit an award of fees and costs to the “successful party.” Id. §§

12-341, -341.01. Because we remand this case, Earnhardt has not

prevailed, making an award of fees premature.

V

¶37 For the foregoing reasons, we vacate the decision of the

court of appeals, reverse the superior court’s grant of summary

judgment, and remand this case to the superior court for further

proceedings consistent with this opinion.

____________________________________
Michael D. Ryan, Justice

CONCURRING:

_______________________________________
Ruth V. McGregor, Chief Justice

_______________________________________
Rebecca White Berch, Vice Chief Justice

_______________________________________
Andrew D. Hurwitz, Justice

_______________________________________
W. Scott Bales, Justice

19