Parks v. Abs
1 CA-CV 15-0372
| Ariz. Ct. App. | Oct 18, 2016Background
- Frank and Sue Parks hired ABS Painting to refinish their house siding and later to stain their deck; both coatings later peeled.
- The Parkses sued ABS alleging negligence (and later added other claims); ABS pleaded the economic loss doctrine as an affirmative defense and moved for judgment as a matter of law at trial.
- After the Parkses rested, the superior court granted ABS's Rule 50 motion dismissing negligence (economic loss), defamation, and consumer-fraud claims; the court allowed the Parkses to amend the complaint to assert breach of contract and breach of the covenant of good faith and fair dealing.
- The Parkses did not seek to introduce additional evidence after amending; the jury returned unanimous verdicts for ABS on the contract claims.
- The court denied a new trial, awarded ABS attorney’s fees, costs, and Rule 68 sanctions; the Parkses appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether negligence claim barred by economic loss doctrine | Parks: public policy/estoppel/other-property exceptions apply; claim not purely contractual | ABS: economic loss doctrine bars tort recovery because damage was to the contracted-for work | Court: Affirmed dismissal in substance; ruled any error harmless because Parks could, and did, try breach-of-contract theory to jury and offered no prejudice showing |
| Whether punitive damages should be submitted | Parks: punitive damages appropriate | ABS: insufficient evidence of aggravated, outrageous, malicious, or wanton conduct | Court: No error in refusing punitive instruction—evidence was insufficient |
| Whether defamation claim timely | Parks: defamation based on June 2011 comment; included in amended complaint | ABS: barred by 1-year statute; did not relate back to original complaint | Court: Defamation barred by limitations; Rule 15(c) relation-back inapplicable |
| Whether consumer fraud claim timely | Parks: alleged product substitution and pre-contract misrepresentations | ABS: consumer-fraud claim barred by 1-year limitations; Parkses knew or should have known by June 2010 | Court: Dismissal for limitations proper; no evidence ABS concealed fraud to toll statute |
| Admissibility of Thane Katz's testimony | Parks: Katz could testify about surface prep and causes of peeling | ABS: Katz lacks foundation/reliable basis and another painting expert existed | Court: Properly limited Katz to fact testimony about samples; excluded expert opinion on surface preparation under Rule 702 |
| Award of attorney's fees from case commencement | Parks: fees should run only from when contract claims were pleaded mid-trial | ABS: original tort/negligence claims arose out of the contract, so fees from outset justified under §12-341.01 | Court: Fees properly awarded from commencement because tort claims "could not exist but for" the contract |
Key Cases Cited
- Flagstaff Affordable Hous. Ltd. P'ship v. Design All., 223 Ariz. 320 (2010) (economic loss doctrine limits tort recovery for damage to contracted-for property)
- Hudgins v. Sw. Airlines, Co., 221 Ariz. 472 (App. 2009) (standard for reversing jury-instruction rulings requires showing harm and legal error)
- State Farm Fire & Cas. Ins. v. Grabowski, 214 Ariz. 188 (App. 2007) (review standard and harmless-error framework for jury instructions)
- SWC Baseline & Crismon Inv'rs, L.L.C. v. Augusta Ranch Ltd. P'ship, 228 Ariz. 271 (App. 2011) (punitive damages require clear-and-convincing proof of reprehensible conduct)
- Sec. Title Agency, Inc. v. Pope, 219 Ariz. 480 (App. 2008) (discussion of punitive damages standard)
- Larue v. Brown, 235 Ariz. 440 (App. 2014) (accrual of a cause of action is a question of law; de novo review)
- Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493 (1996) (trial court has broad discretion in ruling on expert witness competency)
- Caruthers v. Underhill, 230 Ariz. 513 (App. 2012) (attorney-fee awards under §12-341.01 may include defense of tort claims that exist only because of a contract)