Commerce v. Zinke
1 CA-CV 16-0153
| Ariz. Ct. App. | Jul 13, 2017Background
- The Zinkes owned ~410 acres and entered an exclusive listing Agreement with Commerce Realty (assigned to CRA) requiring a 2.5% commission on residential sales that commenced during the five-year term; the Agreement specified 18% annual interest on unpaid commissions.
- In 2008–2009 the Zinkes sold ~62 acres to the Town of Gilbert for $300,000/acre; they did not notify Commerce/CRA or pay a commission.
- CRA sued the Zinkes for breach of contract and breach of the covenant of good faith; after prior summary-judgment proceedings and an appeal, the case proceeded to a jury trial in 2015.
- The jury found for CRA and awarded $219,169.84 in damages plus interest at 18% per year from March 4, 2009; the trial court entered judgment awarding compound interest and $449,046 in attorneys’ fees to CRA under the Agreement.
- On appeal the Zinkes challenged sufficiency of evidence for damages, the award of compound interest, and the fee award; the appellate court affirmed the jury’s damages and the fee award but vacated the compound-interest portion and remanded for an amended judgment awarding simple interest.
Issues
| Issue | Plaintiff's Argument (CRA) | Defendant's Argument (Zinkes) | Held |
|---|---|---|---|
| Sufficiency of evidence for damages | Evidence (ordinance, witness testimony) supported a reasonable computation of commissions. | CRA failed to prove with mathematical certainty how many acres were residential and thus damages were speculative. | The jury verdict was supported by substantial/conflicting evidence; damages affirmed. |
| Jury instructions / speculation | No special interrogatories required; existing instructions prevented guessing. | Requested instruction to bar speculation and limit deliberations to evidence should have been given. | Trial court’s instructions were adequate; refusal to give proposed instruction not error. |
| Compound vs. simple interest | Post-trial CRA relied on interest evidence and calculations; did not contest court deciding interest form post-verdict. | Agreement’s 18% per annum interest provision does not expressly provide for compounding; compound interest not allowed absent express agreement. | Interest is a question for the court; absent express agreement, only simple interest allowed — compound interest vacated; remand for simple-interest judgment. |
| Attorneys’ fees under the Agreement | CRA was the prevailing party and is entitled to contractual fees; awarded amount was reasonable and discounted from requested fees. | Fee award improper or excessive; argued some fees related to Commerce not CRA. | Fee award upheld: CRA was prevailing party and the court acted within discretion; Zinkes’ objection unsupported by record. |
Key Cases Cited
- Cherokee Nation v. United States, 270 U.S. 476 (1926) (general rule: compound interest not allowed absent contract or statute)
- Fairway Builders, Inc. v. Malouf Towers Rental Co., Inc., 124 Ariz. 242 (1979) (declined to award compound interest without express agreement)
- Westberry v. Reynolds, 134 Ariz. 29 (App. 1982) (statutory/contract interest construed to require simple interest absent express provision for compounding)
- County of La Paz v. Yakima Compost Co., Inc., 224 Ariz. 590 (App. 2010) (appellate standard: affirm if substantial evidence supports jury verdict)
- Pioneer Constructors v. Symes, 77 Ariz. 107 (1954) (verdict justified where sum can be supported under some theory of law)