IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Appeal from the Superior Court in Maricopa County
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1 NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c; ARCAP 28(c; Ariz. R. Crim. P IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE In the Matter of the Estate of: MANUEL QUIROZ RAZO, Deceased. SANDRA FLORES, an adult; JESUS MICHAEL RAZO, an adult; MANUEL J. RAZO, an adult, Plaintiffs/Appellants/ Cross-Appellees, v. DAVID F. RAZO, a single man, Defendant/Appellee/ Cross-Appellant. 1 CA-CV DEPARTMENT A MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure Appeal from the Superior Court in Maricopa County Cause Nos. PB and CV (Consolidated The Honorable Michael L. Barth, Judge Pro Tempore AFFIRMED Bellah and Associates, PLLC By Richard Bellah Sheila E. Harmer Attorneys for Plaintiffs/Appellants/Cross-Appellees Glendale
2 Dyer & Ferris, LLC By Scott R. Ferris Co-Counsel for Defendant/Appellee/Cross-Appellant and Jaburg & Wilk, PC By Kathi Mann Sandweiss Roger L. Cohen Co-Counsel for Defendant/Appellee/Cross-Appellant Phoenix Phoenix P O R T L E Y, Judge 1 Plaintiffs-Appellants Sandra Flores, Jesus Michael Razo, and Manuel J. Razo (collectively Appellants appeal the summary judgment granted to their brother, Defendant-Appellee David F. Razo ( David. David cross-appeals the denial of his request for attorneys fees. For the following reasons, we affirm. FACTS AND PROCEDURAL HISTORY 2 Manuel Quiroz Razo and Marina D. Razo had six children: Sandra Flores, Jesus M. Razo, Manuel J. Razo, Rebecca Castaneda, Denise Hilliard, and David Razo. 1 Marina died from complications caused by prescription medications in April A wrongful death action was filed and was subsequently settled. The settlement proceeds were deposited into two Wells Fargo Bank accounts under the name The Estate of Marina D. Razo in February Marina Razo also had an additional child, Roberta Polanco, who received settlement proceeds from her estate and was initially a named plaintiff, but who later withdrew from the action. 2
3 3 Six months later, on August 13, 2005, Manuel Razo executed a handwritten will that he dictated to Denise Hillard, and nominated David F. Razo as executor of his estate. The will stated, The... accounts of Wells Fargo... ********22 [sic] and ********12 willed to David F. Razo. David was the only child who received any bequest. 4 The attorney for Marina s estate sent a letter dated August 25, 2005, to the family members explaining how the proceeds of the settlement were divided and allocated, and included a proposed distribution schedule. Because Manuel died approximately two days later, a supplemental distribution schedule gave the majority of the proceeds to the Estate of Manuel Razo, and $30, to each of the children. The children accepted their shares in writing in January Appellants subsequently asserted that their father s share passed to all his children through intestacy. David took possession of the proceeds destined for the Estate of Manuel Razo, except for $180,000; which represented the amount that Appellants would collectively receive through intestacy if the devise was found invalid. 6 Appellants then sued David for conversion, unjust enrichment, seeking a constructive trust, and punitive damages, because he exercised, controlled, and retained possession of the settlement proceeds. David filed an answer and a petition for 3
4 formal probate of the will and appointment as personal representative. Appellants objected to the petition. Both matters were subsequently consolidated. David then filed an affidavit by Denise Hilliard, which outlined the creation and execution of the will. 7 Appellants filed a motion for summary judgment and argued that Manuel did not own the Wells Fargo accounts identified in his will, that his will did not dispose of the settlement proceeds, and that his will did not contain a residuary clause. As a result, they asserted that the settlement proceeds had to pass through intestacy. 8 David responded and filed a cross-motion for summary judgment. He noted that Appellants had not contested the validity of the will or the fact that their father wanted him to get the settlement proceeds. He also argued that, as the nominated personal representative, he was authorized to take possession of estate assets. As a result, he claimed he could not be liable to Appellants. 9 The trial court granted David s cross-motion for summary judgment, and stated: It was uncontested that the only funds in the Wells Fargo accounts were proceeds of the settlement of the wrongful death action brought by the Estate of Maria [sic] Razo. Whether an agreement to the apportionment of those funds had been reached prior to Manuel Razo s execution of the will was contested. 4
5 However, the timing of that agreement is not a material issue of fact for it was further uncontested that at the time he executed the will, Manuel Razo was entitled to a share of those wrongful death settlement proceeds, Manuel Razo was aware that those accounts held the wrongful death settlement proceeds and subsequent to the death of Manuel Razo, the Plaintiffs, as well as all other beneficiaries of the wrongful death action, had approved and received an apportionment of the settlement proceeds consistent with the Supplemental Distribution Schedule reflecting that a share of the settlement proceeds in the amount of $354, was to be distributed to the Estate of Manuel Razo. Citing La Tourette v. La Tourette, 15 Ariz. 200, 137 P. 426 (1914, the court noted that a testator is presumed to have intended to bequeath that alone which he owned that only over which his power of disposal extended and, therefore where the testator does not give property specifically but employs general words of description, the prima facie presumption as to his interest controls as long as there is an interest belonging to the testator to which the disposing language can apply. Because the court concluded that Manuel had an interest in the Wells Fargo accounts, the will language giving them to David was a valid devise of Manuel s interest in those accounts. 10 Appellants objected to David s request for attorneys fees, in part, because he did not provide a statutory basis for his request. After David s response, oral argument, and supplemental briefing, the court denied the fee request because 5
6 the action arose out of the interpretation of a will and not a contract, and the claims were not in violation of Arizona Revised Statutes ( A.R.S. section (2003 or Arizona Rule of Civil Procedure We have jurisdiction over the appeal and cross-appeal pursuant to A.R.S (B, (J (2003. DISCUSSION 12 Summary judgment may be granted when there is no genuine issue as to any material fact and [] the moving party is entitled to [] judgment as a matter of law. Ariz. R. Civ. P. 56(c. In reviewing a grant of summary judgment, we determine de novo whether any genuine issues of material fact exist and whether the trial court properly applied the law. Eller Media Co. v. City of Tucson, 198 Ariz. 127, 130, 4, 7 P.3d 136, 139 (App We view the facts and the inferences drawn from those facts in the light most favorable to the party against whom judgment was entered. Prince v. City of Apache Junction, 185 Ariz. 43, 45, 912 P.2d 47, 49 (App The controlling factor in construing a will is the intent of the testator; a court liberally construes the language of a will to give effect to that intent. In re Conness Estate, 73 Ariz. 216, 218, 240 P.2d 176, 178 (1952. The testator s intent is determined based on the language of the entire instrument and, where appropriate, the circumstances under which 6
7 the will was executed. In re Estate of Smith, 119 Ariz. 293, 295, 580 P.2d 754, 756 (App Courts favor testacy over intestacy, but a court cannot write a will the testator did not write. In re Estate of Krokowsky, 182 Ariz. 277, 280, 896 P.2d 247, 250 (1995. The language of a will may be clear on its face, but reveal a latent ambiguity in light of extrinsic facts. In re Estate of Zilles, 219 Ariz. 527, 530, 200 P.3d 1024, 1027 (App Where a will is ambiguous, the court may consider extrinsic evidence to determine what the testator meant by what he said, but not to show what [the testator] intended to say. In re Blacksill s Estate, 124 Ariz. 130, 132, 602 P.2d 511, 513 (App A will is ambiguous when it can be interpreted in more than one way. In re Estate of Pouser, 193 Ariz. 574, 578, 10, 975 P.2d 704, 708 (1999. I. 14 Appellants argue that the will is not ambiguous and therefore any extrinsic evidence is inadmissible Manuel s bequest of the bank accounts was clear on its face. He, however, bequeathed accounts that he did not own and, therefore, could not devise. Because all agree, however, that the accounts contained funds destined for Manuel, the bequest 2 Appellants argue that to the extent that David attempts to claim that the language used by Denise [Hilliard] was a [draftsman s] mistake, the court is not permitted to reform the will. Because David does not claim that the language was the result of a draftsman s error, we will not address the argument. 7
8 language is susceptible to at least two interpretations: (1 that Manuel intended to bequeath to David the accounts and their contents, which he could not do, or (2 he intended to bequeath to David that portion of the contents of the accounts that belonged to him. The bequest was therefore latently ambiguous. Consequently, the court was free to consider extrinsic evidence to determine what Manuel intended to bequest. 16 Appellants also argue that the court was precluded from considering Denise Hilliard s affidavit by the dead man s statute, A.R.S (2003. The statute provides: In an action by or against [a] personal representative[]... in which judgment may be given for or against them as such, neither party shall be allowed to testify against the other as to any transaction with or statement by the testator... unless called to testify thereto by the opposite party, or required to testify thereto by the court. A.R.S The statute applies only to parties to the action. Condos v. Felder, 92 Ariz. 366, 372, 377 P.2d 305, 309 (1962. Because Denise Hilliard was not a party to the action, the statute does not apply to her. Consequently, the court did not err in considering her affidavit. 18 Appellants also contend that the trial court erred in relying on La Tourette for the presumption that a testator intends to bequeath only the property he owns. They argue that the presumption only applies when the testator uses words of 8
9 general description, and because Manuel did not use such words, the presumption is inapplicable. We disagree. 19 La Tourette does not support Appellants argument. It states that where the relevant language is general, an election is unnecessary because the language can be applied to the testator s interest in the property. La Tourette, 15 Ariz. at 209, 137 P. at 429 ( wherever... the testator... employs general words of description and donation... it is well settled that no case for an election arises. La Tourette does not hold that, if the language is more specific, the bequest fails even if the testator s interest in the property is discernible and his intent known. Thus, the court did not err in applying the presumption that Manuel intended to bequeath only the property he owned. 20 Appellants ignore the fact that although the accounts were not in Manuel s name, they contained funds belonging to him. Although the will language referred to specific accounts, Manuel s interest in those accounts was readily determinable. His will did not attempt to devise property in which he had no interest. In fact, the record demonstrates that Manuel knew that the settlement proceeds were in those accounts and that he was entitled to a portion of those funds. Denise Hilliard s affidavit avowed that Manuel told her, and another of his 9
10 daughters, that he wanted his share of the settlement proceeds to go to David, a fact that Appellants do not dispute. 21 Based on the record, it is clear from the language of the will and the record, that Manuel, in bequeathing the Wells Fargo bank accounts to David, intended to bequeath to David his share of the settlement proceeds. See Valley Nat l Bank v. Hartford Accident & Indem. Co., 57 Ariz. 276, 282, 113 P.2d 359, 362 (1941 (stating that the court s goal is to determine and give effect to the testator s intent. Because the court s ruling gave effect to Manuel s intent, we affirm. II. 22 On cross-appeal, David seeks attorneys fees as an action arising out of contract pursuant to A.R.S (A (2003, or as a sanction pursuant to Rule 11, and A.R.S Section (A provides that [i]n any contested action arising out of contract, express or implied, the court may award the successful party reasonable attorney fees. A matter arises out of contract if it could not exist, but for the contract, but does not arise if the contract is not the 3 David additionally argues that he was entitled to an award of sanctions pursuant to A.R.S (C. Because he did not raise this argument in the trial court, we will not address it. See CDT, Inc. v. Addison, Roberts & Ludwig, P.C., 198 Ariz. 173, 178, 19, 7 P.3d 979, 984 (App (stating that the court considers only those theories, arguments, and facts properly presented below. 10
11 essential basis of the action. Kennedy v. Linda Brock Auto. Plaza, Inc., 175 Ariz. 323, 325, 856 P.2d 1201, 1203 (App We independently review whether an action arises out of contract under (A. See Schwab Sales, Inc. v. GN Constr. Co., 196 Ariz. 33, 36-37, 9, 992 P.2d 1128, (App David asserts that, because the complaint alleged unjust enrichment which arose out of an alleged implied contract, applies. Appellants did not, however, allege or even contend that their unjust enrichment claim was based on the existence of a contract or agreement. Consequently, the unjust enrichment claim was not based on an implied contract, and (A is inapplicable. See Schwab Sales, 196 Ariz. at 36-37, 10-11, 992 P.2d at (finding that a claim of unjust enrichment arises from a contract when the claim could not exist, but for the breach of contract. 25 David also contends that he is entitled to attorneys fees because he relied in substantial part on the argument that Appellants claims were barred by the distribution agreement. He urges us to expand the application of where the existence of a contract is asserted as a defense to a non-contract claim. We do not have to address the issue because the distribution agreement was tangential to the actual dispute 11
12 and was never asserted as a defense in his answer, his response to the summary judgment motion, or his cross-motion pleadings. 26 David s argument that fees should have been awarded as sanctions is not supported by the record. Although David initially raised as a basis for sanctions, and later asserted that both and Rule 11 applied, Appellants accurately note that he never argued that their action constituted harassment or was brought for the purpose of harassment. 4 Consequently, the court did not abuse its discretion in denying fees as a sanction pursuant to See City of Casa Grande v. Ariz. Water Co., 199 Ariz. 547, 555, 27, 20 P.3d 590, 598 (App (holding that, to merit an award of attorneys fees pursuant to , a party must prove a claim constitutes harassment, is groundless and is not made in good faith. 4 In his reply brief, David concedes that he did not assert harassment, and argues that he requested sanctions under (A(3 on the grounds that the claims unreasonably expanded or delayed the proceedings. David did not present that argument in his opening brief on cross-appeal, and we will not consider it. See In re Marriage of Pownall, 197 Ariz. 577, 583 n.5, 5 P.3d 911, 917 n.5 (App (stating that arguments made first in the reply brief are deemed waived. 5 In anticipation of David s cross-appeal, Appellants argued in support of the court s ruling on attorneys fees. As a result, David moved to strike the response to his cross-appeal, but not in the opening brief. We deny the motion because Appellants are entitled to respond to a cross-appellant s opening brief. ARCAP 13(e. 12
13 27 Moreover, the trial court did not abuse its discretion by refusing to impose Rule 11 sanctions. David took the funds and deposited them into an account in his and Denise Hilliard s names. Appellants discussed the proceeds with David s attorney, but when they began having problems contacting his attorney and receiving information, they filed the lawsuit. Moreover, David does not challenge the fact that Appellants right to the funds depended on the court s interpretation of the will, nor does he argue that Appellants arguments were frivolous. Because the trial court was in the best position to decide the issue based on the pleadings and arguments, we find that the trial court s denial of fees as a Rule 11 sanction was not an abuse of discretion. 28 David requests an award of attorneys fees on appeal pursuant to A.R.S and The request is denied. CONCLUSION 29 For the foregoing reasons, the grant of summary judgment, and denial of attorneys fees are affirmed. CONCURRING: /s/ DIANE M. JOHNSEN, Presiding Judge /s/ MAURICE PORTLEY, Judge /s/ DANIEL A. BARKER, Judge 13
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