The takeaway

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What happened

Caroline Brown owned a unit in the Camelback Village community, governed by Camelback Village Improvement Association, Inc. (“CVIA”) under the community’s CC&Rs. According to the complaint as recited in the court’s rulings, CVIA had the right, which it exercised, to “procure a blanket insurance policy [which] shall insure each of the Units within the Properties,” and the Declaration required that proceeds payable from that policy be payable to the unit owner and the association jointly. Pinnacle Restoration, L.L.C. was contracted to perform covered repairs. Brown sued both CVIA and Pinnacle in 2011, and in May 2011 applied for default judgments against each; the court routed those applications to Commissioner Michael Barth’s default-judgment process, and both defendants went on to litigate the case.

Both defendants moved for judgment on the pleadings, and Judge Dean M. Fink heard argument on November 23, 2011. In a November 30, 2011 under-advisement ruling the court split the case. Pinnacle won: Brown’s unjust-enrichment claim failed because a defendant must be enriched at the claimant’s expense, and any enrichment here “was by the CVIA and/or its insurer, not by Ms. Brown” — her impoverishment from having to contract for work after Pinnacle’s alleged nonperformance did not enrich Pinnacle, and her insurance premiums went to CVIA, not the contractor. An alternative third-party-beneficiary theory could not be considered because it was never pled. CVIA lost its motion: while a “blanket” policy is a single policy on the entirety — so individual owners could not each be named insureds — the CC&Rs still obligated CVIA to insure the individual owners and to make proceeds payable to them and the association “jointly,” and to that extent the complaint stated a breach-of-contract claim. The duplicative good-faith-and-fair-dealing claim was left in, and the court declined to resolve on the pleadings whether CVIA owed Brown a fiduciary duty.

The Pinnacle side of the case then wound down at the trial level. The court denied Brown’s motion for new trial on March 6, 2012, explaining that her theory depended “not on what the insurance policy under which Pinnacle was contracted said, but on what it should have said,” and that it was unrealistic to impute to “a simple contractor” knowledge of CVIA’s specific contractual obligations to her. On April 11, 2012 the court awarded Pinnacle $12,500 in attorneys’ fees under A.R.S. § 12-341.01 — some, but not all, of what it requested under the Associated Indemnity Corp. v. Warner factors — plus $241 in taxable costs, and a judgment in Pinnacle’s favor was signed on June 4, 2012.

Meanwhile Brown moved for partial summary judgment on contract liability against CVIA. The court gave CVIA a Rule 56(f) continuance to take discovery before responding, then heard argument on June 18, 2012 — declining to consider CVIA’s untimely supplemental response. In the June 25, 2012 under-advisement ruling, the court granted the motion. There was no dispute the Declaration required CVIA to procure a blanket policy insuring the owners with proceeds payable to the unit owner and the association jointly, and CVIA did not argue that it did so. Nor was it a defense that CAU — the insurance company — and not CVIA decided how the checks were issued: it was CVIA’s obligation to make sure, “if necessary by including express language in the contract,” that checks would issue as the Declaration required, and “if CAU would not agree, there are many other insurance companies.” The court concluded: “CVIA’s breach is clear.”

With liability established, the case moved toward a damages trial. A four-day jury trial was set for July 30 through August 2, 2013, but on June 18, 2013 the court vacated it after discussing the Court of Appeals’ decision on Pinnacle’s unjust-enrichment claim and the possibility of resetting the trial so all claims could be tried at one time; at a July 1, 2013 conference the court was advised Pinnacle would be filing a Petition for Review, and the jury trial was reset for December 10 through 13, 2013. An August 15, 2013 ruling on motions in limine framed the damages issues: CVIA was liable for the consequential damages of its breach, so Brown could not recover for work she chose to undertake “outside what should have been in CVIA’s policy” — but whether the money she used came from another insurance company, such as the Farmers payments at issue in the motion, or out of her own pocket was immaterial. The court granted the motion as to Mutual Management and CAU and denied it as to Pinnacle.

The trial never happened. On October 30, 2013 the court was advised the case had settled. It placed the matter on the inactive calendar for dismissal on December 23, 2013 unless a judgment or stipulation for dismissal was filed first, deemed all pending motions moot, and vacated the December trial and the final trial-management conference. The settlement terms do not appear in the collected minute entries.

Procedural timeline

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