                          NOTICE: NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE LEGAL
             PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.




                                    IN THE
                ARIZONA COURT OF APPEALS
                                 DIVISION ONE


  ABROMOVITZ INVESTMENT PROPERTIES, L.L.C., Plaintiff/Appellee,

                                        v.

   RED EYED JACK SPORTS BAR, INC, a Nevada corporation; JACK
   GALARDI and JANE DOE GALARDI, husband and wife; NEVADA
   LAND COMMERCIAL REAL ESTATE, INC., Defendants/Appellants,

                                       and

    KEN MARCHIOL and JANE DOE MARCHIOL, husband and wife;
 TANYA MARCHIOL; TEAM INVESTMENTS, LLC, an Arizona limited
  liability company; MARCHIOL FAMILY LIMITED PARTNERSHIP, a
             Colorado limited partnership, Defendants/Appellees.

                             No. 1 CA-CV 12-0869
                              FILED 4-17-2014


            Appeal from the Superior Court in Maricopa County
                           No. CV2008-012200
                  The Honorable Eileen S. Willett, Judge

               AFFIRMED IN PART; REVERSED IN PART


                                   COUNSEL

Moyes Sellers & Hendricks, Phoenix
By Keith L. Hendricks, Stephen Brower, Louis D. Lopez

Counsel for Plaintiff/Appellee
Dickinson Wright/Mariscal Weeks PLLC, Phoenix
By Timothy J. Thomason, Michael J. Plati

Counsel for Defendants/Appellants

Bonnett Fairbourn Friedman & Balint PC, Phoenix
By William G. Fairbourn, William F. King

Counsel for Defendants/Appellees



                      MEMORANDUM DECISION

Judge Patricia K. Norris delivered the decision of the Court, in which
Presiding Judge Donn Kessler and Judge Maurice Portley joined.


N O R R I S, Judge:

¶1            This appeal arises out of claims that Red Eyed Jack Sports
Bar, Inc. (“REJ”), through Jack Galardi and real estate broker Nevada
Land Commercial Real Estate, Inc., (collectively, “REJ defendants”)
attempted to sell commercial real property to Abromovitz Investment
Properties, L.L.C., even though, as the superior court found, Marchiol
Family Limited Partnership (“MFLP”), and not REJ, owned it. On appeal,
the REJ defendants argue the superior court should not have found them
liable to Abromovitz for breach of contract, fraud, and breach of fiduciary
duty or liable to MFLP for the attorneys’ fees it incurred in proving that it,
and not REJ or Abromovitz, owned the property. For the following
reasons, we affirm the superior court’s judgment except for that portion of
the judgment finding Galardi personally liable to Abromovitz for REJ’s
breach of contract.

             FACTS AND PROCEDURAL BACKGROUND

¶2            In 2002, Galardi and Ken Marchiol purchased commercial
real property in downtown Phoenix (“the Property”). Galardi contributed
$623,000 of the $1.2 million purchase price, and Marchiol contributed
$577,000. Despite their unequal contributions, Galardi and Marchiol
agreed the Property would be titled in the name of REJ and they would




                                      2
                    ABROMOVITZ v. RED EYED, et al.
                        Decision of the Court

each own 50% of the shares. 1 At the time, Galardi was the sole owner of
REJ. 2 Despite repeated requests, Galardi never issued the shares to
Marchiol because Galardi was “very busy.”

¶3            In 2004, REJ conveyed the Property by warranty deed (“the
2004 deed”) to MFLP -- an entity created by Marchiol for his children. The
county recorder’s office rejected the deed, preventing its recordation. 3
Tanya Marchiol, Marchiol’s sister, then sent the deed to Marchiol’s mother
to hold for safekeeping. Although Galardi did not remember signing the
2004 deed conveying the Property to MFLP and at various times asserted
the deed was fraudulent, the superior court found the deed to be a valid
conveyance and quieted title of the Property in favor of MFLP. 4

¶4           In 2007, despite having previously conveyed the Property to
MFLP, REJ listed the Property for sale with Nevada Land through its
owner, Nevada-licensed broker Alberto Jauregui. 5 Abromovitz contacted
Nevada Land in February 2008 and began negotiating a purchase price for
the Property. From that point forward, Jauregui, on behalf of Nevada


             1Galardi   and Marchiol presented conflicting testimony
whether they had agreed they would each own 50% of REJ or 50% of the
Property. This distinction, however, is immaterial to the issues we resolve
on appeal.

             2Galardi   acted for REJ at all relevant times unless otherwise
noted.

             3The  record fails to explain why the county recorder rejected
the deed, but the parties presented evidence at trial suggesting the
recorder likely rejected it because it was on the wrong type of paper
and/or lacked an affidavit of value. See Ariz. Rev. Stat. (“A.R.S.”) § 11-
1133 (Supp. 2013).

             4On    appeal, the REJ defendants do not challenge the
superior court’s ruling as to the validity of the 2004 deed.

             5The      Property had been mostly vacant since mid-2005.
Galardi operated a club on the Property from 2003 through mid-2005;
Marchiol was not an owner of or otherwise involved in the club. Galardi’s
club did not make rental payments to REJ, MFLP, Marchiol, or any other
entity for its use of the Property.



                                      3
                   ABROMOVITZ v. RED EYED, et al.
                       Decision of the Court

Land as broker for REJ, conducted all discussions and negotiations with
Abromovitz regarding the Property. And, Jauregui and Nevada Land
conducted those discussions and negotiations with Abromovitz at the
direction of Galardi, who in turn was acting as REJ’s agent.

¶5           Marchiol learned that Galardi was trying to sell the
Property, and he, through his attorney in Colorado and Tanya, recorded
the 2004 deed on March 17, 2008. 6 On March 27, 2008, REJ entered into a
purchase contract to sell the Property to Abromovitz.

¶6            As discussed in more detail below, REJ did not convey the
Property to Abromovitz. As relevant here, Abromovitz sued REJ for
breach of contract and breach of the covenant of good faith and fair
dealing and the REJ defendants for breach of fiduciary duty, fraud,
negligent misrepresentation, and consumer fraud. REJ and Galardi cross-
claimed against MFLP to quiet title and MFLP cross-claimed against REJ
and Galardi for declaratory relief, quiet title, indemnification, and
attorneys’ fees.

¶7            The superior court awarded Abromovitz $2,924,800 in
damages against the REJ defendants and $429,038.50 in attorneys’ fees and
costs against Galardi and REJ. The court quieted title to the Property in
favor of MFLP and awarded it $518,836.81 in attorneys’ fees, plus costs,
against the REJ defendants.

                              DISCUSSION

I.    Abromovitz’s Breach of Contract Claims Against REJ

¶8             On appeal, REJ argues it did not breach the purchase
contract with Abromovitz because the purchase contract did not obligate
it to either convey title to the Property free of MFLP’s claim or tender a
deed to Abromovitz on or before the close of escrow. Reviewing the issue
de novo, we disagree. See Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12, 69
P.3d 7, 11 (2003) (interpretation of contract is question of law reviewed de
novo).


             6Marchiol  was able to record the deed because his lawyer in
Colorado added a statutory reference to the deed under A.R.S. § 11-
1134(B)(1) (Supp. 2013) exempting it from the affidavit of value
requirement. See A.R.S. § 11-1133.



                                     4
                   ABROMOVITZ v. RED EYED, et al.
                       Decision of the Court


¶9           REJ and Abromovitz agreed to a choice of law provision,
and thus, Nevada law governs the validity, construction, and performance
of the purchase contract. Section 8.1(a) of the purchase contract provided
that if Abromovitz notified REJ of defects found in the preliminary title
report:

             Seller shall have until the Close of Escrow in
             which to advise Buyer that:

                    (i) Seller shall remove any objectionable
             exceptions to title . . . on or before the Closing
             Date; or

                    (ii) Seller shall not cause the exceptions
             to be removed.

                     If Seller advises Buyer that it shall not
             cause the exceptions to be removed, Buyer
             shall have until the Close of Escrow to elect, as
             [its] sole remedy, to:

                   (x) proceed with the purchase and
             acquire the Property subject to such exceptions
             without reduction in the Purchase Price; or

                    (y) terminate this Agreement by written
             notice to Seller and Escrow Holder, in which
             case the Deposit and any interest thereon shall
             be returned to Buyer and the cancellation costs
             shall be divided equally between the Buyer
             and Seller.

¶10           The purchase contract did not define “Close of Escrow,” but
Jauregui, who drafted the contract, testified he used “Close of Escrow”
and “Closing Date” synonymously in the contract. The purchase contract
defined the “Closing Date” as 15 days after the expiration of the due
diligence period but, in any event, no later than May 15, 2008. Based on
these provisions, Jauregui testified he believed the closing date should
have been May 12, 2008. A representative of the title company handling
the escrow sent an email to Jauregui, however, that identified May 13,
2008 as the close of escrow. The record contains no evidence the REJ



                                     5
                     ABROMOVITZ v. RED EYED, et al.
                         Decision of the Court

defendants ever objected to either May 12 or May 13 as the date for the
close of escrow. For purposes of this appeal, whether escrow was to close
on May 12 or May 13 is immaterial as it had to close no later than May 15.

¶11            On April 4, 2008, after the title company informed
Abromovitz of the 2004 deed, Mark Abromovitz, Abromovitz’s principal
(“Mark”), called Jauregui who, according to Mark, told him “it was an ex-
partner of Jack Galardi’s who had gotten wind of the sale and was trying
to stop it.” Mark testified that Jauregui assured him “it’s a fraudulent
deed, and we’re going to get it cleared up.” Mark followed up with an
email to Jauregui on April 8, 2008, and Jauregui again confirmed they
were “working on trying to resolve the title issue on the fraudulent deed
recorded.” By providing these assurances, REJ, through Jauregui, thus
elected to resolve the issue with the 2004 deed by removing it or having it
removed by May 12 or May 13, 2008. 7 Accordingly, pursuant to the
purchase contract, Abromovitz deposited the remainder of the purchase
price into escrow on May 9, 2008.

¶12          REJ was unable to remove the 2004 deed by the close of
escrow. On May 16, 2008, REJ attempted to rescind its election to remove
the 2004 deed by sending a letter to Abromovitz stating the exception
would not be removed and advising it that, pursuant to Section 8.1 of the
purchase contract, it could either terminate the contract or acquire the
Property subject to the 2004 deed. The superior court found REJ’s letter
was untimely and had no effect on the obligations between the parties.

¶13           On appeal, REJ argues it did not breach the purchase
contract because it acted pursuant to Section 8.1(a) of the contract and
Abromovitz could only agree to go forward with the purchase subject to
the 2004 deed or obtain a return of its deposit. We disagree. As the
superior court found, REJ sent the letter after the May 15 close of escrow,
and thus, its attempt to rescind its election to remove the 2004 deed came
too late; by then, REJ had already materially breached the purchase
contract -- which contained a “time is of the essence” clause -- by failing to
remove the 2004 deed. 8 See Bernard v. Rockhill Dev. Co., 734 P.2d 1238, 1240


              7Abromovitz   and Jauregui discussed extending the closing
date, but they did not reach an agreement to do so.

              8The
                 superior court concluded REJ materially breached the
agreement by “failing to tender a deed in recordable form into escrow



                                      6
                   ABROMOVITZ v. RED EYED, et al.
                       Decision of the Court

(Nev. 1987) (breach of contract arises when party materially fails to
perform duty imposed by agreement (citation omitted)); accord Graham v.
Asbury, 112 Ariz. 184, 185, 540 P.2d 656, 657 (1975) (party is liable for
breach of contract when it fails to keep agreement). Thus, the superior
court properly found REJ breached the purchase contract.

II.   Galardi’s Personal Liability for REJ’s Breach of the Purchase
      Contract

¶14           On appeal, Galardi argues the superior court should not
have found him personally liable for REJ’s breach of contract. We accept
the superior court’s findings of fact unless they are clearly erroneous but
review its conclusions of law de novo. Powers v. Guaranty RV, Inc., 229
Ariz. 555, 562, ¶ 26, 278 P.3d 333, 340 (App. 2012) (citation omitted). For
the following reasons, we agree with Galardi.

¶15           The superior court did not explain why it found Galardi
personally liable for REJ’s breach of contract. At trial, Abromovitz argued
Galardi was personally liable because he was acting for an undisclosed
principal -- specifically, an alleged partnership between Galardi and
Marchiol -- in selling the Property. Although the REJ defendants alleged
in their answer to Abromovitz’s second amended complaint and in the
joint pretrial statement that if the superior court found a partnership
between Galardi and Marchiol, then Galardi had entered into the
purchase contract with either the express or implied permission of
Marchiol or within the scope of that partnership, Galardi testified at trial
that he entered into the purchase contract on behalf of REJ and the purchase
contract reflects that. Further, Galardi’s subjective belief about his
arrangement with Marchiol does not change the reality of his dealings on




prior to the Closing Date” as required by Section 6.1 of the purchase
contract. REJ argues its failure to tender the deed was not a breach of
contract because it would have been a “futile act.” (internal quotation
marks omitted). Although related, we construe the true nature of the
breach to be that REJ failed to remove the 2004 deed before the close of
escrow or timely elect its option to notify Abromovitz it would not
remove the 2004 deed.




                                     7
                    ABROMOVITZ v. RED EYED, et al.
                        Decision of the Court

behalf of REJ with Abromovitz. As between Galardi and Abromovitz, REJ
was always a fully disclosed principal. 9

¶16            Abromovitz further argues REJ’s corporate form was not
sufficient to protect Galardi from personal liability. As acknowledged by
Abromovitz in its omnibus response to the REJ defendants’ four motions
for judgment as a matter of law, however, “evidence of alter ego or
piercing the corporate veil . . . was not raised in the Joint Pre-trial or pled
as a claim. As such, it has not been litigated and no ruling should be
entered on the issue.” From our review of the record, we agree
Abromovitz did not raise an alter ego/piercing the corporate veil claim in
the superior court, and the superior court did not decide such a claim.
Therefore, the issue is not properly before us. See Sobol v. Marsh, 212 Ariz.
301, 303, ¶ 7, 130 P.3d 1000, 1002 (App. 2006) (party generally cannot
argue legal issues on appeal not specifically presented to superior court
(citation omitted)).

¶17           Finally, Abromovitz argues Galardi should be personally
liable because he was not an officer, employee, or shareholder of REJ
when he personally promised to clear the Property’s title. Galardi,
however, did not directly communicate with Abromovitz. As explained,
supra ¶ 4, acting as REJ’s broker and at the direction of Galardi in his
capacity as REJ’s agent, Nevada Land promised Abromovitz that REJ
would clear the Property’s title. Further, although we agree the record
reflects Galardi was not an officer of REJ at this time, this argument
ignores that Galardi was acting as REJ’s agent in the negotiations with
Abromovitz and the promise to clear title was made on behalf of REJ as
part of the same transaction. As discussed, supra ¶ 15, Galardi was an
agent for a disclosed principal and therefore not personally liable for REJ’s
breach of the purchase contract. See Seigworth v. Nevada, 539 P.2d 464, 466
(Nev. 1975) (“Unless otherwise agreed, a person making or purporting to
make a contract with another as agent for a disclosed principal does not
become a party to the contract.”(citation omitted)); accord Ferrarell v.
Robinson, 11 Ariz. App. 473, 475, 465 P.2d 610, 612 (1970) (“One who signs
an agreement as the agent of a fully disclosed principal is not a party to


              9Abromovitz  similarly asserts Galardi was personally liable
even if a partnership did not exist because an individual is liable for a
contract he or she enters on behalf of a non-existent entity. We reject this
argument because, as already discussed, the record reflects Galardi signed
the purchase contract on behalf of REJ.



                                      8
                      ABROMOVITZ v. RED EYED, et al.
                          Decision of the Court

that agreement and thus incurs no personal liability for the principal’s
breach of that agreement.” (citations omitted)).

¶18           For the foregoing reasons, the superior court should not
have found Galardi personally liable for REJ’s breach of contract.10
Therefore, we reverse that portion of the judgment finding Galardi
personally liable for REJ’s breach of contract. 11

III.   Abromovitz’s Claim for Breach of Fiduciary Duty Against Nevada
       Land

¶19             On appeal, Nevada Land argues the superior court
misapplied the law when it found Nevada Land liable for breach of
fiduciary duty by failing to disclose to Abromovitz information regarding
REJ’s inability to perform and failing to deal fairly with other parties to
the transaction. We disagree. Although Abromovitz entitled its claim
against Nevada Land “Breach of Fiduciary Duty,” Abromovitz generally
alleged breach of duties owed by real estate licensees to other parties and
further clarified the scope of its claim asserting “Breach of Real Estate
Broker’s Duties” before trial. Indeed, the superior court found Nevada
Land liable for breach of duty and found Nevada Land had “breached its
duties as a real estate broker owed to Abromovitz.” The superior court
based its decision on the duties owed (and here, breached) by an Arizona
real estate licensee 12 to third parties under applicable statutes, regulations,
and case law. See Ariz. Admin. Code (“A.A.C.”) R4-28-1101(A) (licensee


              10Atoral argument, Galardi argued that if we concluded the
superior court should not have found him personally liable for REJ’s
breach of contract, then we must also vacate the fee award against him.
Galardi did not raise this argument in his briefing on appeal and therefore
prevented Abromovitz from responding to it. Thus, we deem the
argument waived. See Mitchell v. Gamble, 207 Ariz. 364, 369-70, ¶ 16, 86
P.3d 944, 949-50 (App. 2004) (arguments raised for first time at oral
argument are generally untimely and deemed waived (citations omitted)).

              11Our   conclusion here applies equally to Galardi’s personal
liability for REJ’s breach of the covenant of good faith and fair dealing.

              12Although  Nevada Land was not licensed in Arizona, its
activities in connection with the sale of the Property required it to be an
Arizona licensee. See generally A.R.S. § 32-2122 (2012).



                                       9
                     ABROMOVITZ v. RED EYED, et al.
                         Decision of the Court

must deal fairly with other parties to transaction); A.A.C. R4-28-1101(B)
(requiring brokers to disclose, inter alia, “any information that the seller . . .
is or may be unable to perform”); Lombardo v. Albu, 199 Ariz. 97, 100, ¶¶
12-13, 14 P.3d 288, 291 (2000) (ability to close goes to heart of transaction,
is not confidential information, and requires disclosure to third parties
(citations omitted)). 13 Based on the evidence presented, the superior court
properly found Nevada Land had breached the legal duties it owed to
Abromovitz under Arizona law, regardless of the title Abromovitz gave to
this claim in its pleadings.

IV.    Abromovitz’s Fraud Claims Against REJ, Galardi, and Nevada
       Land 14

¶20           The REJ defendants argue the superior court should not
have found they defrauded Abromovitz because three of their
representations were not material or relied upon. 15 See Enyart v.
Transamerica Ins. Co., 195 Ariz. 71, 77, ¶ 18, 985 P.2d 556, 562 (App. 1998)
(listing elements of fraud (citation omitted)). We disagree. See supra ¶ 14
for the applicable standard of review.




              13These  duties are remarkably similar to duties imposed on
real estate licensees in Nevada. See Nev. Rev. Stat. Ann. § 645.252 (West
2013). Indeed, Nevada Land had Abromovitz sign an agreement
acknowledging the duties Nevada Land owed to the parties in the
transaction under Nevada law.

              14Although   Nevada law governs the breach of contract
claim, supra ¶ 9, the parties do not dispute that Arizona law governs the
fraud claims. See Winsor v. Glasswerks PHX, L.L.C., 204 Ariz. 303, 306-07,
¶¶ 9-10, 63 P.3d 1040, 1043-44 (App. 2003) (claims arising out of tort
usually governed by forum state, although choice of law provision may
apply if resolution of claims requires interpretation of contract (citations
omitted)).

              15Weonly address materiality and reliance because the REJ
defendants only challenged these two elements.




                                       10
                     ABROMOVITZ v. RED EYED, et al.
                         Decision of the Court

¶21            The superior court concluded the REJ defendants 16
defrauded Abromovitz by making statements they knew were false and
disclosing some facts while concealing others. See Hill v. Jones, 151 Ariz.
81, 85, 725 P.2d 1115, 1119 (App. 1986) (nondisclosure given same legal
effect as fraud and misrepresentation). Although the superior court did
not specifically state which facts directly supported its conclusion, it made
factual findings -- all amply supported by the evidence at trial -- that
supported its conclusion. Specifically, the court found, inter alia, REJ had
misrepresented it owned the Property, the Property was not encumbered,
and it could convey the Property. The court also found the REJ
defendants had misrepresented that the 2004 deed was “fraudulent” and
they were “working on resolving the [issue,]” and had failed to disclose
they knew Marchiol had not and was not going to consent to selling the
Property. Additionally, the court found the REJ defendants had failed to
disclose that Galardi had entered into the contract on behalf of REJ in an
effort to force Marchiol to buy him out of the Property.

¶22            Although the REJ defendants argue on appeal their
representations to Abromovitz -- the 2004 deed was fraudulent and they
were working on resolving it -- and their failure to disclose REJ lacked
authority to convey the Property without Marchiol’s approval
(collectively, “the three frauds”) were immaterial, the record demonstrates
otherwise. 17 The three frauds were material because REJ’s ability to


             16On   appeal, the REJ defendants have combined their
arguments regarding common law fraud, negligent misrepresentation,
and consumer fraud even though the superior court only found Galardi
and Nevada Land liable for common law fraud. We only address the
common law fraud claim because, although these claims incorporate
certain similar elements, the elements of the common law fraud claim are
the most rigorous.

             17The REJ defendants only challenge the three frauds, but the
record amply supports the superior court’s conclusion they had
defrauded Abromovitz based on their misrepresentation that REJ owned
the Property and their failure to disclose Galardi had entered the contract
on behalf of REJ to force Marchiol to buy him out. Indeed, the REJ
defendants knew they needed Marchiol’s permission to sell the Property,
and they were aware of a dispute between Galardi and Marchiol about the
Property before REJ entered into the purchase contract with Abromovitz.
Moreover, Galardi admitted he entered into the purchase contract with



                                     11
                   ABROMOVITZ v. RED EYED, et al.
                       Decision of the Court

convey the Property and the existence of a known superior claim to the
Property go to the underlying purpose of the purchase contract.

¶23           Abromovitz also presented ample evidence it relied on the
three frauds (and others) both before it entered the purchase contract with
REJ and after. Based on the REJ defendants’ representations and
omissions, Abromovitz entered into the purchase contract, deposited
$250,000 of nonrefundable earnest money into escrow, spent time and
money conducting due diligence, let its earnest money “go[ ] hard,” and
eventually fully performed under the purchase contract by depositing the
remainder of the purchase price into escrow.

V.    Lost Profits Award to Abromovitz

¶24           On appeal, the REJ defendants argue the superior court
should not have awarded Abromovitz lost profits on either the breach of
contract or the fraud claims. We disagree. See supra ¶ 14 for the
applicable standard of review.

      A.     Lost Profits Causation

¶25           The REJ defendants first argue Abromovitz failed to prove a
causal nexus between their conduct and the awarded lost profits. They
essentially argue it would have been impossible for Abromovitz to earn
profits from the Property because MFLP owned it and, therefore, the REJ
defendants did not cause the lost profits. We disagree.

¶26          REJ, through Galardi and with the assistance of Nevada
Land, entered into a contract to sell property to Abromovitz that it had
already conveyed to MFLP. In connection with this transaction, the REJ
defendants made various misrepresentations to Abromovitz. REJ could
have resolved its differences with Marchiol and obtained the Property


Abromovitz on behalf of REJ to force Marchiol to buy him out of the
Property, and Nevada Land tried to negotiate a deal between Galardi and
Marchiol in which Marchiol would have bought out Galardi after REJ
entered into the contract with Abromovitz. Although the REJ defendants
have not addressed these findings on appeal, they are more than sufficient
to sustain the superior court’s conclusion the REJ defendants defrauded
Abromovitz.




                                      12
                      ABROMOVITZ v. RED EYED, et al.
                          Decision of the Court

from MFLP -- albeit perhaps at an unfavorable price. If it had done so,
REJ would have been able to fulfill its obligations to Abromovitz.18 We
therefore reject the REJ defendants’ argument they cannot be liable for lost
profits. But for REJ’s refusal to clear the title and perform under the
purchase contract, Abromovitz would have been able to purchase and
develop the Property. Thus, Abromovitz presented sufficient evidence
REJ, through Galardi and with the assistance of Nevada Land, caused its
lost profits.

       B.     Reasonable Certainty of Lost Profits

¶27           The REJ defendants also argue the superior court should not
have awarded Abromovitz lost profits because Abromovitz failed to
prove lost profits with reasonable certainty. We disagree.

¶28           To recover lost profits, a party must establish “a reasonably
certain factual basis” for computing lost profits. Rancho Pescado, Inc. v.
Nw. Mut. Life Ins. Co., 140 Ariz. 174, 184, 680 P.2d 1235, 1245 (App. 1984)
(quoting another source). A party need not establish lost profits with
absolute certainty, but “the court or jury must be guided by some rational
standard in making an award.” Id. Once a party has proven the right to
damages, the amount of damages may be proven to “a lesser degree of
certainty.” Short v. Riley, 150 Ariz. 583, 585, 724 P.2d 1252, 1254 (App.
1986) (citation omitted). “The evidence required to prove loss of future
profits depends on the individual circumstances of each case . . . .” Id. at
586, 724 P.2d at 1255.

¶29          In this case, Abromovitz offered expert testimony from a
forensic economist, who calculated the value of the Property’s earning
capacity using a discounted cash flow (“DCF”) model. A DCF model is an


              18The REJ defendants cite Keister v. Talbott, 391 S.E.2d 895 (W.
Va. 1990), in support of their argument they did not cause Abromovitz’s
lost profits, but that case is factually distinguishable. In Keister, a jury
found an attorney liable for malpractice for erroneously advising the
purchasers of property that the property had mineral rights. Id. at 897-98.
The court concluded the attorney had not caused the purchasers to lose
the property’s mineral rights because, even if the attorney had correctly
examined the title, the property had already lost the mineral rights. Id. at
900. Here, the REJ defendants’ conduct deprived Abromovitz of the
Property.



                                     13
                    ABROMOVITZ v. RED EYED, et al.
                        Decision of the Court

appropriate method for estimating the present value of regular or
irregular income. See generally Appraisal Inst., The Appraisal of Real Estate
539-58 (13th ed. 2008) (explaining DCF analysis and its application). The
expert used methodologies to account for risk and uncertainty and
adjusted for vacancy rates and collection losses. The expert calculated the
lease for ten years -- a lease period common for that type of property.
The expert assumed the Property would be leased in one year following
purchase, and, at the time Abromovitz entered the purchase contract, it
already had a tenant interested in the Property. Further, Abromovitz had
successfully leased properties in the same geographic area, which
supported his claim at trial he had the ability to successfully lease the
Property. Thus, Abromovitz presented sufficient evidence the lost profits
were reasonably certain.

      C.     Lost Profits Awarded for Breach of Contract

¶30            As a general matter, lost profits is a measure of
compensatory damages (Nevada), Rd. & Highway Builders, LLC v. N. Nev.
Rebar, Inc., 284 P.3d 377, 382 (Nev. 2012) (citation omitted), or
consequential damages (Arizona), McAlister v. Citibank (Ariz.), a Subsidiary
of Citicorp, 171 Ariz. 207, 211, 829 P.2d 1253, 1257 (App. 1992) (citations
omitted), available for breach of contract.

¶31          REJ argues the superior court should not have awarded
Abromovitz lost profits on its breach of contract claim for four different
reasons. As we explain, we disagree with each reason.

¶32           First, REJ argues it did not willfully breach the contract.
REJ provides no authority that a breach must be willful in order to
support a lost profits award. Nevertheless, the record supports REJ
willfully breached the purchase contract. See discussion supra ¶¶ 21, 26.

¶33          Second, REJ argues Abromovitz did not present evidence the
Property’s market value exceeded the contract price. Abromovitz,
however, did not need to present evidence the market value exceeded the
contract price because it pursued, and the superior court awarded,
damages based on a lost profits theory, rather than market value.

¶34           Third, REJ argues the Property’s market value encompassed
potential future rental profits. Although REJ mentioned this point in its
motion for judgment as a matter of law regarding plaintiff’s damages and
its renewed motion for judgment as a matter of law, REJ did not present



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                      ABROMOVITZ v. RED EYED, et al.
                          Decision of the Court

any evidence at trial, either through its own valuation expert or through
cross-examination of Abromovitz’s expert, that the market value of the
Property encompassed future lost profits. Further, the authority REJ cites
for this argument merely states “the potential for profit bears on market
value.” 3 Dan B. Dobbs, Dobbs Law of Remedies § 12.11(1), at 289 (2d ed.
1993). 19 That profit capability might bear on market value does not
preclude recovery for lost profits here.

¶35           Fourth, REJ argues neither it nor Abromovitz contemplated
non-market damages, specifically lost profits. Lost profits are available
for breach of contract if they are within the contemplation of the parties.
See Gen. Electric Supply Co. v. Mt. Wheeler Power, Inc., 587 P.2d 1312, 1313
(Nev. 1978) (lost profits sustained as damages reasonably foreseeable and
within contemplation of parties); accord Short, 150 Ariz. at 585-86, 724 P.2d
at 1254-55 (lost profits sustained as damages naturally flowing from
breach of contract and within contemplation of parties). Abromovitz
presented evidence REJ knew that it was going to use the Property for
income-producing purposes. First, Nevada Land, on behalf of REJ,
specifically marketed the Property to breweries and business owners
within two blocks of the Property. Second, Abromovitz requested the
brewing equipment and fixtures that were in the Property to be part of the
sale. Further, REJ knew Abromovitz was a “player in the area” and
owned rental properties in the same geographic area as the Property.
Thus, based on the use for which REJ marketed the Property and the
intended use for which Abromovitz entered into the purchase contract,
Abromovitz presented sufficient evidence lost profits were within the
contemplation of the parties. Based on the foregoing, the superior court
properly awarded Abromovitz lost profits on its breach of contract claim.

       D.     Lost Profits Awarded for Fraud

¶36         The REJ defendants also argue, as a matter of law, lost
profits damages are not available for fraud. Because consequential


              19REJ also cites Dobbs for the proposition that “[i]f . . . lost
profits are claimed, the plaintiff must further prove that the future profits
were not encompassed within the determination of the property’s market
value and were ‘contemplated’ by the parties.” (emphasis added). Dobbs,
however, only supports the latter assertion. See Dobbs, supra ¶ 34, at 288-
89.




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                      ABROMOVITZ v. RED EYED, et al.
                          Decision of the Court

damages are available for fraud and can include lost profits, we
disagree. 20 See Ulan v. Richtars, 8 Ariz. App. 351, 359, 446 P.2d 255, 263
(1968) (“A defrauded party is entitled to all out-of-pocket losses[,] . . .
benefit of his bargain[,] . . . and . . . all consequential damages.” (quoting
another source)); Restatement (Second) of Torts § 549(1)(b) (1977)
(recipient of fraud entitled to pecuniary loss suffered as consequence of
reliance on misrepresentation); 2 Dan B. Dobbs, Dobbs Law of Remedies §
9.2(3), at 557 (2d ed. 1993) (“Recoverable consequential or special damages
also include loss of profits resulting from reliance on the representation . .
. .”).

¶37            The REJ defendants also argue the superior court should not
have awarded lost profits because lost profits are not available as benefit-
of-the-bargain damages. Benefit-of-the-bargain damages, which here,
would be calculated as “the difference between the value of the land at the
time of the breach and the contract price,” Kammert Bros. Enters. v. Tanque
Verde Plaza Co., 102 Ariz. 301, 308, 428 P.2d 678, 685 (1967) (citations
omitted), however, are not the exclusive measure of damages for fraud.
Cole v. Gerhart, 5 Ariz. App. 24, 26, 423 P.2d 100, 102 (1967) (in addition to
“a normal measure of damages,” such as benefit-of-the-bargain damages,
other consequential damages may be granted that arise from the
fraudulent conduct); Ashley v. Kramer, 8 Ariz. App. 27, 31, 442 P.2d 564,
568 (1968) (“We hold that ‘consequential damage’ is a proper measure of
damages in a fraud action and that the defrauding party may not limit the
proof of damages to the benefit of the bargain . . . .”). Not only are benefit-
of-the-bargain damages not the exclusive measure of damages for fraud,
lost profits resulting from reliance on the representation are recoverable.21
Dobbs, supra ¶ 36, at 557; cf. McAlister, 171 Ariz. at 211, 829 P.2d at 1257
(“Consequential damages include lost future profits” in breach of contract


              20The REJ defendants also argue lost profits damages are not
available for negligent misrepresentation and consumer fraud. Because
lost profits are available for fraud, we need not address whether lost
profits would likewise be available on these claims.

              21TheREJ defendants also argue the superior court should
not have awarded Abromovitz benefit-of-the-bargain damages because
the parties did not consummate the bargain and benefit-of-the-bargain
damages may not be awarded against non-parties to the bargain. We
need not address these arguments because, as discussed, benefit-of-the-
bargain damages are not the exclusive measure of damages for fraud.



                                      16
                   ABROMOVITZ v. RED EYED, et al.
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action. (citation omitted)). Based on the foregoing, the superior court
properly awarded Abromovitz lost profits on its fraud claim.

VI.   Attorneys’ Fees Award to MFLP

¶38           On appeal, REJ and Galardi argue the superior court should
not have awarded attorneys’ fees to MFLP. Although we agree with
certain aspects of their argument, we conclude the superior court properly
awarded fees to MFLP.

      A.     Attorneys’ Fees Under A.R.S. § 33-411.01

¶39           REJ and Galardi first argue the superior court misapplied
A.R.S. § 33-411.01 (2007) when it awarded attorneys’ fees against Galardi
personally. We agree. A.R.S. § 33-411.01 provides:

             Any document evidencing the sale, or other
             transfer of real estate . . . shall be recorded by
             the transferor . . . . In lieu thereof, the transferor
             shall indemnify the transferee in any action in
             which the transferee’s interest in such property
             is at issue, including costs, attorney’s fees and
             punitive damages.

(emphases added). REJ was the transferor in this case. See Black’s Law
Dictionary 1875 (9th ed. 2009) (Transferor means: “One who conveys an
interest in property.”).

¶40           Nevertheless, MFLP argues that because Galardi acted in
bad faith and for his own self-interest, he should be deemed the
transferor. We disagree. REJ owned the Property in 2004 and conveyed
the Property to MFLP; thus, REJ, not Galardi personally, was the
transferor under A.R.S. § 33-411.01. The statute only applies to the
transferor, and therefore, REJ alone is liable for fees under A.R.S. § 33-
411.01.

¶41           REJ next argues A.R.S. § 33-411.01 is inapplicable here
because MFLP always possessed the deed. Perhaps recognizing that REJ
possessed the deed when Galardi signed it, REJ then asserts in its reply
brief that it satisfied the recording requirement when it relinquished
possession of the deed to MFLP. REJ provides no authority in support of
its position, and, in any event, “[w]hen statutory language is clear and



                                      17
                    ABROMOVITZ v. RED EYED, et al.
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unambiguous, we give effect to it and do not use other methods of
statutory interpretation.” Mathews ex rel. Mathews v. Life Care Ctrs. of Am.,
Inc., 217 Ariz. 606, 608, ¶ 6, 177 P.3d 867, 869 (App. 2008) (citation
omitted). Thus, we decline to infer a relinquishment exception into A.R.S.
§ 33-411.01.

¶42          REJ alternatively argues the superior court should not have
awarded fees under A.R.S. § 33-411.01 at all because only A.R.S. § 12-1103
(2003), which governs fee awards in quiet title actions, entitled MFLP to a
fee award and MFLP failed to prove it had complied with the tender
requirements of that statute (the “total bar argument”). REJ did not,
however, raise the total bar argument in the superior court.

¶43            As relevant here, MFLP sought fees in the superior court
under A.R.S. § 33-411.01 and did not seek fees under A.R.S. § 12-1103. In
responding to MFLP’s fee application, REJ and Galardi argued MFLP was
not entitled to “seek any fees for claims related to its claim to quiet title”
and that the superior court should have apportioned MFLP’s fees. They
further argued: “Any fee award to MFLP must, at a minimum, be reduced
to reflect a proper apportionment. A reduction of at least 50% of MFLP’s
claimed total is in order.” The superior court rejected REJ and Galardi’s
apportionment argument and awarded MFLP $518,836.81 in attorneys’
fees and costs.

¶44           Thus, only in the context of arguing MFLP was required to
apportion its fees did REJ mention A.R.S. § 12-1103. But, it did not argue
the statute barred MFLP from recovering any fees under A.R.S. § 33-
411.01. Accordingly, REJ’s total bar argument is not properly before us.
See Sobol, 212 Ariz. at 303, ¶ 7, 130 P.3d at 1002 (App. 2006) (party
generally cannot argue legal issues on appeal not specifically presented to
superior court (citation omitted)).

¶45           Even if we were to assume, however, that MFLP could not
recover fees for its quiet title claim under A.R.S. § 33-411.01, REJ and
Galardi did not renew their argument on appeal that MFLP should have
been required to apportion its fees among its claims. Although they did
mention it in passing in their reply brief, we will not consider arguments
presented for the first time on appeal in the reply brief. Anderson v.
Country Life Ins. Co., 180 Ariz. 625, 636, 886 P.2d 1381, 1392 (App. 1994)
(citation omitted). For the foregoing reasons, the superior court properly
awarded fees against REJ, but not Galardi, under A.R.S. § 33-411.01.




                                     18
                   ABROMOVITZ v. RED EYED, et al.
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      B.     Attorneys’ Fees Under A.R.S. § 12-341.01

¶46           MFLP argues in its answering brief that even if it was not
entitled to be awarded fees against Galardi personally under A.R.S. § 33-
411.01, it was nevertheless entitled to a fee award against him under
A.R.S. § 12-341.01 (Supp. 2013) because the entire dispute arose out of the
purchase contract with Abromovitz. Although we disagree with MFLP’s
precise argument, we ultimately agree the dispute between Galardi and
MFLP arose out of contract. 22

¶47           Although MFLP was not a party to the purchase contract
between REJ and Abromovitz, a party seeking fees under A.R.S. § 12-
341.01 need not be a party to the contract, Chaurasia v. Gen. Motors Corp.,
212 Ariz. 18, 30, ¶ 47, 126 P.3d 165, 177 (App. 2006) (citations omitted),
and, in any event, the dispute between Galardi and MFLP arose out of
various agreements between Galardi and Marchiol/MFLP, rather than
REJ and Abromovitz.

¶48           As discussed, Galardi and Marchiol agreed to purchase the
Property and title it in the name of REJ, with each owning 50% of the
shares of REJ, which Galardi agreed to issue to Marchiol but never did.
Galardi and Marchiol also agreed that both of them would have to consent
to selling the Property and would have equal input in the sales price.
Galardi and Marchiol further agreed Galardi would convey the Property
to MFLP in 2004 in part to reimburse Marchiol for disparities in operating
losses from their other, unrelated business ventures. Although these
agreements were not written and Galardi and Marchiol did business on a
“handshake basis,” the dispute between Galardi and Marchiol/MFLP,
and their claims against each other, ultimately arose out of these
agreements. Therefore, MFLP was entitled to a fee award against Galardi
under A.R.S. § 12-341.01.




             22Galardiargues the superior court should not have awarded
MFLP fees under A.R.S. § 12-341.01 because only A.R.S. § 12-1103 entitled
it to a fee award and it failed to prove it had complied with the tender
requirements of that statute. As discussed above, supra ¶ 44, this
argument is not properly before us.




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                   ABROMOVITZ v. RED EYED, et al.
                       Decision of the Court

VII.   Attorneys’ Fees on Appeal

¶49           The REJ defendants and Abromovitz each request attorneys’
fees and costs on appeal pursuant to Section 20.6 of the purchase contract,
which authorizes the prevailing party in an action to recover “its costs and
expenses, including actual reasonable attorneys’ fees.” Although we have
vacated that portion of the judgment holding Galardi personally liable for
REJ’s breach of contract, under the “totality of the litigation test,”
Abromovitz is the prevailing party on appeal. See Murphy Farrell Dev.,
LLLP v. Sourant, 229 Ariz. 124, 134-35, ¶ 38, 272 P.3d 355, 365-66 (App.
2012). Therefore, we award Abromovitz its reasonable attorneys’ fees and
costs on appeal against the REJ defendants except for those fees incurred
by it in arguing Galardi was personally liable for REJ’s breach of contract,
contingent upon its compliance with Rule 21 of the Arizona Rules of Civil
Appellate Procedure.

¶50           MFLP also requests its attorneys’ fees on appeal pursuant to
A.R.S. §§ 12-341.01 and 33-411.01.          Consistent with the foregoing
discussion and contingent upon its compliance with Rule 21 of the
Arizona Rules of Civil Appellate Procedure, we award MFLP its
reasonable attorneys’ fees against Galardi pursuant to A.R.S. § 12-341.01
and against REJ pursuant to A.R.S. § 33-411.01 and further find Galardi
and REJ are jointly liable to MFLP for its costs on appeal.

¶51           For the foregoing reasons, we affirm the judgment of the
superior court except for that portion of the judgment holding Galardi
personally liable to Abromovitz for REJ’s breach of contract.




                                 :MJT




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