Goodman v. Physical Resource Engineering, Inc.
270 P.3d 852
Ariz. Ct. App.2011Background
- Goodman hired Tortolita Valley Homes (TVH) to oversee construction of two duplexes on his Fort Lowell Road property.
- TVH hired PRE to stake the building locations according to a site plan approved by the City of Tucson.
- PRE stakes were placed roughly six feet north of the planned location, causing setback and floodplain violations.
- TVH and Isles later determined the staking was incorrect, leading Goodman to sue PRE for breach of contract and negligence.
- PRE moved for summary judgment arguing no contract existed; trial court denied; trial proceeded with additional Rule 50 and Rule 59 motions.
- The jury found a contract existed between Goodman and PRE and awarded damages; on appeal, the court reversed and remanded, ruling there was insufficient evidence of a contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a contract existed between Goodman and PRE | Goodman contends agency theory or implied contract from conduct created privity. | PRE argues there was no direct contract with Goodman and no agency-based contract via TVH. | No contract existed between Goodman and PRE based on agency or implied agreement. |
| Whether TVH acted as Goodman’s agent to bind PRE | Goodman asserts agency through TVH's control and dealings on the project. | PRE contends no agency relationship and no disclosure of agency by TVH at contract formation. | No agency relationship supported; TVH did not disclose agency, so no privity through agency. |
| Whether there was implied contract between PRE and Goodman | Goodman points to past dealings and owner awareness to infer an implied contract. | PRE notes no offer/acceptance between Goodman and PRE and post hoc conduct cannot form a contract. | Insufficient evidence to infer an implied contract between PRE and Goodman. |
| Whether TVH’s role as general contractor creates privity with Goodman for PRE’s contract | Goodman argues TVH's role and conduct established an agency that bound PRE. | PRE maintains that general contractor role does not imply owner’s agency outside mechanics’ lien context. | No privity via agency between Goodman and PRE; contract not established. |
| Whether undisclosed principal doctrine affects potential contract liability | Goodman relies on undisclosed-principal concepts to hold PRE liable. | PRE emphasizes lack of notice of any principal and absence of agency disclosure by TVH. | Undisclosed-principal theory not sufficient to create contract liability here. |
Key Cases Cited
- Hutcherson v. City of Phoenix, 192 Ariz. 51 (1998) (standard for reviewing evidentiary sufficiency to uphold a verdict)
- A Tumbling-T Ranches v. Flood Control Dist. of Maricopa Cnty., 217 P.3d 1220 (App. 2009) (de novo review of judgment as a matter of law; substantial evidence standard)
- Brown v. Beck, 202 P.2d 528 (1949) (no implied contract where express contract existed for labor)
- Curran v. Indus. Comm’n, 752 P.2d 523 (App. 1988) (tests for apparent agency and authority)
- Stratton v. Inspiration Consol. Copper Co., 683 P.2d 327 (App. 1984) (general contractor not owner’s agent except for mechanics’ liens)
- Schenks v. Earnhardt Ford Sales Co., 454 P.2d 873 (App. 1969) (agency question framework and evidence standard)