Skydive Arizona, Inc. v. Hogue
238 Ariz. 357
| Ariz. Ct. App. | 2015Background
- Marc Hogue bought a Coolidge skydiving business and associated assets (including the domain arizonaskydiving.com) from Mullins; Lawrence Hill (Skydive Arizona) later negotiated a Settlement Agreement restricting Hogue’s use of the mark/domain.
- Paragraph 8(a) of the Settlement Agreement let Hogue keep the domain while he owned at least 34% of “such business” and was “responsible for and actively involved in the management” of it; the agreement contained multiple references to the Coolidge address but did not define “such business.”
- Dispute arose over whether paragraph 8(a) required Hogue to operate at the Coolidge location to retain the domain; Skydive Arizona sued for breach and specific performance (transfer of the domain) and later added Lanham Act claims (trademark infringement/cybersquatting).
- Procedural history: court entered default summary judgment against Hogue while he was on active military duty; Hogue successfully moved under Ariz. R. Civ. P. 60(c)(6) to vacate the judgment; case went to jury on contract and Lanham claims and bench trial on specific performance.
- Jury found for Hogue on Lanham Act claims; court found no breach of the Settlement Agreement and denied specific performance; the court awarded Hogue attorneys’ fees, costs, and expenses and the award was affirmed on appeal.
Issues
| Issue | Plaintiff's Argument (Skydive Arizona) | Defendant's Argument (Hogue) | Held |
|---|---|---|---|
| Whether trial court abused discretion in granting Rule 60(c)(6) motion to vacate prior judgment | Judgment was proper; vacation was improper | Hogue was on active military duty and had been told case would be inactive; extraordinary circumstances justified relief | No abuse of discretion; Rule 60(c)(6) relief appropriate given military service and circumstances |
| Proper statute of limitations for Lanham Act claims in Arizona | One-year period (A.R.S. § 12-541(5)) applies | Three-year period for fraud (A.R.S. § 12-543(3)) or analogous law governs | Lanham Act claims analogize to fraud; three-year limitations applies; but trial instruction error on one-year limit was harmless |
| Interpretation of paragraph 8(a): whether domain use was limited to operations at Coolidge address | “Such business” means the Coolidge business; domain retention requires operating at Coolidge | “Such business” means the business Hogue bought from Mullins irrespective of location; address was identificatory | Contract ambiguous; extrinsic evidence supports Hogue’s interpretation; construed against drafter if ambiguity remained; Hogue did not breach |
| Whether specific performance (transfer of domain) was warranted | Contract language and fairness warrant specific performance | Hogue complied with paragraph 8(a); no breach occurred, so specific performance not available | Denial of specific performance affirmed because no contractual breach existed |
| Award of attorneys’ fees, costs, and expenses | Fees should be limited to those awarded earlier for specific performance only | Fees for all claims are recoverable because claims were interrelated/inextricably intertwined | Award of full requested fees affirmed; Lanham claims were factually intertwined with contract defense |
Key Cases Cited
- Wood-bridge Structured Funding, LLC v. Ariz. Lottery, 236 Ariz. 26 (App. 2014) (trial court’s Rule 60 discretion reviewed for abuse)
- Rogone v. Correia, 236 Ariz. 43 (App. 2014) (standard of review for Rule 60 relief)
- Hilgeman v. Am. Mortg. Sec., Inc., 196 Ariz. 215 (App. 1999) (Rule 60(c)(6) requires extraordinary circumstances)
- Reed v. United Transp. Union, 488 U.S. 319 (U.S. 1989) (apply most analogous state statute of limitations when federal statute is silent)
- Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829 (9th Cir. 2002) (Lanham Act claims analogous to fraud for limitations purposes)
- Modular Mining Sys., Inc. v. Jigsaw Technologies, Inc., 221 Ariz. 515 (App. 2009) (attorney-fee recovery for interwoven tort claims with contract claims)
- Daley v. Earven, 131 Ariz. 182 (App. 1981) (specific performance is an equitable remedy available for breach of contract)