ELM RETIREMENT CENTER, LP v. Callaway, 246 P.3d 938

Elm Retirement Center contracted to buy a Scottsdale home in July 2005 and alleged the home’s advertised 3,792 square feet was false.
The purchase agreement states square footage is approximate and must be verified if square footage is material to Buyer during the inspection period.
Elm alleges the home contains 3,605 square feet, making the discrepancy material.
Elm asserts breach of contract, implied covenant, fraud and negligence theories against sellers and brokers; trial court dismissed tort claims on economic loss doctrine and contract claims on the verification clause.
The trial court did not convert the motion to summary judgment; contract was central to the claims and considered on the motion to dismiss.
Elm appeals challenging the contract interpretation and the denial of leave to amend.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the court should have converted the motion to dismiss to summary judgment.	Elm contends the contract attached to the motion requires treating it as summary judgment.	Sellers contend centrality of contract allows consideration without conversion.	Not required to convert; contract central to claims allowed dismissal.
Whether tort claims are timely under Texas? (discovery rule)	Elm says discovery rule tolls limitations due to late discovery of misrepresentation.	Elm failed to plead facts showing reasonable diligence; discovery rule inapplicable.	Tort claims barred by limitations; discovery rule not satisfied.
Whether the verification provision bars breach of warranty for square footage	Elm argues the general warranty overrides the verification clause.	Contract-specific verification clause controls; it is a disclaimer of liability for square footage representations.	Contract interpretation favors verification provision as disclaimer, barring breach of warranty claim.
Whether the trial court erred in denying leave to amend	Elm sought to amend to strengthen reliance on the warranty and square footage statements.	Amendment would be futile; no new theories or facts.	No abuse of discretion; amendment would be futile.

Dressler v. Morrison, 212 Ariz. 279, 130 P.3d 978 (Ariz. 2006) (standard for abuse of discretion on motions to dismiss)
Mohave Disposal Inc. v. City of Kingman, 186 Ariz. 343, 922 P.2d 308 (Ariz. 1996) (assumption of true allegations on dismissal; proper relief if none entitle to relief)
Strategic Dev. & Constr., Inc. v. 7th & Roosevelt Partners, LLC, 224 Ariz. 60, 226 P.3d 1046 (App. 2010) (centrality of contract to claims; court may consider attached contract on motion to dismiss)
State v. Burnley, 114 Ariz. 300, 560 P.2d 818 (App. 1977) (limitations and notice-pleading considerations)
Ritchie v. Krasner, 221 Ariz. 288, 211 P.3d 1272 (App. 2009) (discovery rule requires knowledge of wrongdoing; due diligence gatekeeping)
Walk v. Ring, 202 Ariz. 310, 44 P.3d 990 (App. 2002) (discovery rule tolling standards for claims)
Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, 189 P.3d 344 (App. 2008) (pleading requirements; notice pleading standard)
Chandler Med. Bldg. Partners v. Chandler Dental Grp., 175 Ariz. 273, 855 P.2d 787 (App. 1993) (contract interpretation; context and intent)
Aztar Corp. v. U.S. Fire Ins. Co., 223 Ariz. 463, 224 P.3d 960 (App. 2010) (read contract terms in context; specific controls general)
Salt River Project Agric. Improvement & Power Dist. v. Westinghouse Elec. Corp., 143 Ariz. 368, 694 P.2d 198 (Ariz. 1984) (warranty disclaimer in commercial sales)