                          NOTICE: NOT FOR PUBLICATION.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


        COMMERCE REALTY ADVISORS, LTD; AND CRA, LLC,
                     Plaintiffs/Appellants,

                                        v.

     ZINKE INVESTMENTS LIMITED PARTNERSHIP, an Arizona
 limited partnership; and BERNARD L. ZINKE and GLORIA J. ZINKE,
                husband and wife, Defendants/Appellees.

                             No. 1 CA-CV 13-0742
                              FILED 12-09-2014


           Appeal from the Superior Court in Maricopa County
                          No. CV2011-019472
               The Honorable Arthur T. Anderson, Judge

   AFFIRMED IN PART; VACATED AND REMANDED IN PART


                                   COUNSEL

Roshka, DeWulf & Patten, PLC, Phoenix
By John E. DeWulf, Jennifer A. Stevens
Counsel for Plaintiffs/Appellants

Richard Q. Nye, LTD, Scottsdale
By Richard Q. Nye, Benjamin J. Branson
Counsel for Defendants/Appellees
                     COMMERCE/CRA v. ZINKE et al
                         Decision of the Court



                      MEMORANDUM DECISION

Presiding Judge Margaret H. Downie delivered the decision of the Court,
in which Judge Andrew W. Gould and Judge Samuel A. Thumma joined.


D O W N I E, Judge:

¶1             After the sale of real property subject to an exclusive listing
agreement between Zinke Investments Limited Partnership (“Zinke”) and
Commerce Realty Advisers, Ltd. (“Commerce”), Zinke refused to pay a
commission to Commerce or its assignee, CRA, L.L.C. (“CRA”)
(collectively, “Appellants”).      The superior court entered summary
judgment against Appellants, dismissing their claims for breach of contract
and breach of the implied covenant of good faith and fair dealing. For the
following reasons, we affirm in part and vacate and remand in part.

                FACTS AND PROCEDURAL HISTORY1

¶2           Zinke owned approximately 410 acres of real property (“the
Property”) near the Town of Gilbert (“the Town”). Commerce and Zinke
partner Bernard Zinke entered into an Exclusive Listing Agreement
(“Listing Agreement”) on November 4, 2003. Phillip DeAngelis, a licensed
broker, signed the Listing Agreement on behalf of Commerce.

¶3             Under the Listing Agreement, Zinke employed Commerce
“as its sole and exclusive agent for the term of this Agreement to negotiate
the sale of the Property.” The Listing Agreement provided for a 60-month
listing period that would extend under the following circumstances:

       If during the Listing Period, an option or right of first refusal
       to purchase the Property or any interest in the Property is
       granted by Client or an escrow is opened by Client or if
       negotiations involving the sale, transfer or conveyance of the
       Property to a prospective purchaser have been commenced
       by Client and are continuing, then the term of the Listing


1     We view the evidence and inferences drawn from it in the light most
favorable to Appellants. See Comerica Bank v. Mahmoodi, 224 Ariz. 289, 291,
293, ¶¶ 13, 21, 229 P.3d 1031, 1033, 1035 (App. 2010).



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                    COMMERCE/CRA v. ZINKE et al
                        Decision of the Court

      Period shall be extended with respect to such transaction(s)
      and negotiations for a period through the exercise or
      termination of the option or right of first refusal, the closing
      or termination of the escrow, or the termination or
      consummation of the negotiations.

If the Property were to sell “through a transaction commenced during the
Listing Period,“ Commerce was entitled to receive a commission of 2.5% of
the sales price, “whether the person or entity was procured by Broker or
from any other source.”

¶4            DeAngelis signed a letter resigning as Commerce’s
designated broker effective November 4, 2008, though Arizona Department
of Real Estate (“ADRE”) records list November 5, 2008 as DeAngelis’ last
day as Commerce’s designated broker. Commerce signed an Assignment
Agreement transferring its “rights, privileges, and interest” under the
Listing Agreement to CRA, effective November 5, 2008. Zinke was not
asked to consent to the assignment and did not consent to it.

¶5           For purposes of its motion for summary judgment, Zinke
conceded it began sales negotiations with the Town during the Listing
Agreement’s 60-month term. Zinke and the Town closed a sale for a portion
of the Property and associated rights of way on March 4, 2009. Zinke did
not pay Appellants any commission.

¶6             Appellants sued Zinke, Bernard Zinke, and Gloria Zinke
(collectively, “defendants”) for breach of contract and breach of the implied
covenant of good faith and fair dealing. Defendants moved for summary
judgment, arguing: (1) Commerce’s failure to employ a licensed broker at
the time its claim arose precluded recovery; and (2) Commerce’s
assignment to CRA was invalid. The superior court granted the motion for
summary judgment and awarded defendants costs and attorneys’ fees.
This timely appeal followed. We have jurisdiction pursuant to Arizona
Revised Statutes (“A.R.S.”) section 12-2101(A)(1).

                              DISCUSSION

I.    Standard of Review

¶7              Summary judgment is not warranted if there are material
factual disputes or if the court must “choose among competing inferences,”
determine witnesses’ credibility, or weigh the quality of the evidence. Taser
Int’l, Inc. v. Ward, 224 Ariz. 389, 393, ¶ 12, 231 P.3d 921, 925 (App. 2010).
This Court reviews a grant of summary judgment de novo. L.F. v. Donahue,


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                      COMMERCE/CRA v. ZINKE et al
                          Decision of the Court

186 Ariz. 409, 411, 923 P.2d 875, 877 (App. 1996). Likewise, we review de
novo issues of contract and statutory interpretation. Pi’Ikea, LLC v.
Williamson, 234 Ariz. 284, 285, ¶ 5, 321 P.3d 449, 450 (App. 2014).

II.    Commerce’s Claims Arose When It Had No Designated Broker

¶8            A civil action brought to recover a real estate commission is
subject to A.R.S. § 32-2152(A), which provides:

       An action for the collection of compensation earned may be
       maintained in the courts of the state by any broker or
       salesperson. To commence the action the complaint shall allege
       that the plaintiff was a qualified licensed broker or salesperson at the
       time the claim arose. Prior to hearing the action the court shall
       require the plaintiff to prove the alleged qualifications.

(Emphasis added.). The parties disagree about when Appellants’ claim
“arose” within the meaning of § 32-2152(A). The superior court ruled the
claim arose when the Property was sold to the Town, finding Appellants
conflated the “at the time the claim arose” language of § 32-2152(A) with
A.R.S. § 32-2155(B), which makes it unlawful to pay compensation to a real
estate broker “who is not licensed at the time the service is rendered.” We
agree.

¶9            Addressing a claim for a real estate commission owed under
an exclusive listing agreement, the Arizona Supreme Court stated:

       When an owner gives one agent the exclusive right to sell
       within a specified time, he in effect contracts he will not
       within such time make a sale through another agent and if
       such be done, the owner has breached his exclusive agency
       contract. It is not always necessary to constitute a sale that a
       conveyance must be made or the title pass. The word sale has not a
       fixed and invariable meaning. It may be given a narrow or broad
       meaning depending upon the circumstances and what the parties
       reasonably intend.

Mattingly v. Bohn, 84 Ariz. 369, 371, 329 P.2d 1095, 1097 (1958) (emphasis
added).

¶10          Mattingly makes clear that the parties’ agreement is pivotal in
resolving whether and when a commission is due under an exclusive listing
agreement. See also J.D. Land Co. v. Killian, 158 Ariz. 210, 213, 762 P.2d 124,
127 (App. 1988) (interpreting parties’ exclusive listing agreement as


                                          4
                     COMMERCE/CRA v. ZINKE et al
                         Decision of the Court

requiring payment of a commission “upon the execution of a binding
contract for sale.”). The Listing Agreement here is unambiguous. It states
a commission is “due and payable at the closing, but only if the sale or
exchange actually culminates in the transfer of an interest in the Real Property.”
(Emphasis added.). The parties’ agreed-upon contractual language makes
clear that Commerce has no claim to a commission unless and until there is
a “transfer of an interest in the Real Property.” As such, Appellants’ claims
did not arise until Zinke transferred its interest in the Property to the Town
on March 4, 2009.

¶11           In urging a contrary conclusion, Appellants rely on Bersani v.
Basset, 585 N.Y.S.2d 245, 246 (N.Y. App. Div. 1992), which stands for the
unremarkable proposition that a real estate broker who renders “specific
services, namely, bringing together the minds of the buyer and seller,” is
entitled to a commission when a sale later closes between those same
parties, even though the broker’s license has since expired. This holding is
consistent with Arizona law. See, e.g., Barrett v. Duzan, 114 Ariz. 137, 140,
559 P.2d 693, 696 (App. 1976) (broker bringing together parties who agree
on sales terms and sign a binding contract is entitled to commission based
on services rendered). Here, however, Appellants did not procure a buyer
for the Property and have identified no services they rendered in
connection with the Zinke-Town sale. Their commission claim does not
arise from services they rendered but, instead, from the Listing
Agreement’s contractual terms regarding sales closing after November 5,
2008.2

¶12          Because Appellants’ claims arose on March 4, 2009,
Commerce may not maintain an action to recover a commission under the
Listing Agreement because it did not have a designated broker at that time.
See A.R.S. §§ 32-2125(A), -2152(A). The superior court properly entered
summary judgment against Commerce. We next consider whether CRA




2     Appellants’ supplemental citation to Focus Point Props., LLC v. Johnson,
235 Ariz. 170, 174-75, ¶¶ 19-23, 330 P.3d 360, 364-65 (App. 2014), is similarly
unavailing. Focus Point held that a real estate agent could maintain an
action to recover a commission because he “held an active Arizona real
estate license at the time he earned the commission.” Id. at 174, ¶ 17, 330
P.3d at 364. Here, however, a commission was not earned until ownership
of the Property transferred to the Town.




                                        5
                     COMMERCE/CRA v. ZINKE et al
                         Decision of the Court

may maintain its claims to the commission based on the Assignment
Agreement.3

III.   Questions of Fact Exist Regarding CRA’s Claims Under the
       Assignment Agreement

¶13            For the first time on appeal, Zinke raises Commerce’s
licensing history as a basis for arguing the Assignment Agreement is
invalid. “We do not consider arguments raised for the first time on appeal
except under exceptional circumstances.” In re MH 2008-002659, 224 Ariz.
25, 27, 226 P.3d 394, 396 (App. 2010). No exceptional circumstances exist
here. We therefore confine our review to the argument Zinke advanced in
its motion for summary judgment regarding the Assignment Agreement:
that the assignment was “unlawful and void” because Zinke did not
consent to it, as required by A.R.S. § 32-2151.02(B).

¶14            A.R.S. § 32-2151.02(B) states that a broker “shall not assign a
real estate employment agreement to another broker without the express
written consent of all parties to the agreement at the time of the
assignment.” If, however, Commerce assigned only its right to collect a
commission from Zinke, § 32-2151.02(B) does not bar CRA’s claims. “As a
contract includes both rights and duties, there is nothing to prevent these
various interests from being separated, with the benefits of the contract
being assigned, and the obligations of performance remaining with the
assignor.” Valley Nat’l Bank of Ariz. v. Byrne, 101 Ariz. 363, 365, 419 P.2d 720,
722 (1966) (holding the right to money under an existing contract is
assignable, even though the entire contract, which included personal
services, could not be assigned), superseded by statute on other grounds as
recognized in In re Vigil Bros. Constr., Inc., 193 B.R. 513, 516 (9th Cir. B.A.P.
1996). Indeed, Arizona courts have specifically upheld assignment of the
right to collect real estate commissions. See Bustrum v. Gardner, 154 Ariz.
409, 410-11, 743 P.2d 5, 6-7 (App. 1987) (right of licensed real estate broker
to commission is assignable).

¶15           Appellants argue that, at a minimum, genuine issues of
material fact exist regarding the assignment to CRA. We agree.

¶16           The Assignment Agreement assigns Commerce’s “rights,
privileges, and interest under [the Listing Agreement],” and CRA accepted
the “assignment of rights, privileges and interest under the Commission


3      It is undisputed that CRA was licensed and had a designated broker
as of March 4, 2009.


                                       6
                    COMMERCE/CRA v. ZINKE et al
                        Decision of the Court

Agreement.” According to Zinke, the agreement transferred not only
Commerce’s right to a commission, but also continuing obligations or
duties Commerce had under the Listing Agreement. Appellants, on the
other hand, contend only the right to collect a commission was assigned.
The superior court ruled:

      The Court disagrees with CRA’s underlying premise, i.e., that
      Commerce Realty had no obligation to perform under the
      Listing Agreement post-November 4, 2008. The Listing
      Agreement clearly provided that “the term of the Listing Period
      shall be extended with respect to [the sale of the Property to the
      Town] for a period through . . . the closing or termination of the
      escrow.” [(Emphasis added.).] If Commerce Realty assigned
      only its interest in collecting the Commission, the obligation
      of performance itself remained with Commerce Realty. See
      Byrne, 101 Ariz. at 365. But Commerce Realty could not
      perform its obligation post-November 4, 2008. . . . Thus, the
      Listing Agreement was unlawful post-November 4, 2008
      because Commerce Realty was unlicensed . . . and CRA stood
      in the same position as Commerce Realty insofar as its “rights,
      privileges, and interest” in the Commission.

¶17          The superior court thus concluded Commerce had remaining
performance duties under the Listing Agreement when the assignment
occurred. However, conflicting evidence and inferences exist regarding the
scope of the assignment. In opposing summary judgment, Appellants
provided declarations from DeAngelis and CRA broker Martindale, stating
the Assignment Agreement transferred only the right to any commission
due as a result of a sale involving negotiations before November 4, 2008.
Furthermore, according to DeAngelis,

      [a]s of November 5, 2008, the only ‘rights, privileges and
      interest’ that Commerce Realty retained under the Listing
      Agreement were the right to payment of commissions owed
      if Zinke commenced negotiations for the sale of the Property
      before November 4, 2008. Thus, Commerce Realty intended
      to assign its interest in payment and right to collect [a]
      commission under the Listing Agreement to CRA, LLC.

Martindale’s declaration similarly states that the intent of the assignment
was to transfer Commerce’s “interest in payment and right to collect
commission[s] under the Listing Agreement.”




                                      7
                     COMMERCE/CRA v. ZINKE et al
                         Decision of the Court

¶18           Whether Commerce had continuing duties under the Listing
Agreement after November 5, 2008, such that its assignment transferred
personal service duties in addition to the right to collect a commission, is a
disputed issue that cannot be resolved from the four corners of the Listing
Agreement and Assignment Agreement — at least not on the record before
us. See Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 158-59, 854
P.2d 1134, 1144-45 (1993) (when “contract language is reasonably
susceptible to more than one interpretation,” its interpretation should be
submitted to the fact-finder); J.D. Land Co., 158 Ariz. at 212, 762 P.2d at 126
(An agreement is ambiguous “if the language can reasonably be construed
in more than one sense and the construction cannot be determined within
the four corners of the instrument.”).

¶19            The operative documents are reasonably susceptible to
conflicting interpretations regarding what Commerce assigned to CRA. As
such, the scope and validity of the assignment could not be resolved as a
matter of law based on this record. See Taylor, 175 Ariz. at 158-59, 854 P.2d
at 1144-45. We therefore vacate the entry of summary judgment against
CRA and remand for further appropriate proceedings regarding the
validity of the Assignment Agreement.

IV.    Equitable Estoppel Does Not Apply

¶20            Appellants argue Zinke is equitably estopped from raising
the brokerage statutes as a defense. We generally review a decision not to
apply equitable estoppel for an abuse of discretion. Flying Diamond Airpark,
LLC v. Meienberg, 215 Ariz. 44, 50, ¶ 27, 156 P.3d 1149, 1155 (App. 2007).
Trial judges, not juries, determine whether equitable estoppel applies,
“regardless of the presence of a factual dispute.” McCloud v. State, 217 Ariz.
82, 86, ¶ 9, 170 P.3d 691, 695 (App. 2007).

¶21           Equitable estoppel may apply when “the conduct of a party
absolutely precludes the party from asserting rights which might have
otherwise existed against another person who in good faith has relied upon
the conduct and as a result of such reliance has changed his position for the
worse.” Heltzel v. Mecham Pontiac, 152 Ariz. 58, 61, 730 P.2d 235, 237 (1986).
A litigant asserting equitable estoppel must demonstrate that the opposing
party induced reliance “by [its] acts, representations or admissions
intentionally or through culpable negligence.” Flying Diamond Airpark,
LLC, 215 Ariz. at 50, ¶ 28, 156 P.3d at 1155 (internal quotation marks
removed).




                                      8
                     COMMERCE/CRA v. ZINKE et al
                         Decision of the Court

¶22            Appellants contend Zinke had a duty to communicate the
status of sales negotiations and that DeAngelis justifiably relied on Zinke’s
silence in resigning as Commerce’s designated broker and in making the
assignment to CRA. However, an “essential element of estoppel is that one
seeking its protection must have lacked knowledge, and the means of
acquiring knowledge, of the facts relied upon. A party’s silence will not
operate as an estoppel against it where the means of acquiring knowledge
were equally available to both parties.” Honeywell, Inc. v. Arnold Constr. Co.,
134 Ariz. 153, 158, 654 P.2d 301, 306 (App. 1982).

¶23            Commerce does not contend it made inquiries or attempted
to acquire knowledge about negotiations between Zinke and potential
buyers before accepting its broker’s resignation and entering into the
Assignment Agreement. Moreover, equitable estoppel requires proof of
intentional or culpably negligent action that caused a change in position.
See Flying Diamond Airpark, LLC, 215 Ariz. at 50, ¶ 28, 156 P.3d at 1155.
“Remaining passive and silent does not deprive a person of his legal rights.
In addition there must be some act to induce or encourage another to alter
his position.” Jarvis v. State Land Dep’t, 104 Ariz. 527, 532, 456 P.2d 385, 390
(1969), modified on other grounds as recognized in Jarvis v. State Land Dep’t, 113
Ariz. 230, 550 P.2d 227 (1976).

¶24           Based on the record before it, the superior court properly
declined to apply equitable estoppel. This determination obviates the need
to consider Appellees’ contention that the licensing statutes prevent
Appellants from asserting an equitable estoppel claim.

                                CONCLUSION

¶25           We affirm the entry of summary judgment against
Commerce. We vacate the entry of summary judgment against CRA and
remand for further proceedings regarding the validity of the Assignment
Agreement. We further vacate the superior court’s order that CRA pay
attorneys’ fees and costs to Appellees, without prejudice to the right of the
prevailing party on remand to seek such an award.4 We affirm the superior
court’s order that Commerce pay attorneys’ fees and costs to Appellees.



4      Because the issue may arise on remand, we address the recoverability
of mediation costs under A.R.S. § 12-332(A)(6), which authorizes an award
for “[o]ther disbursements that are made or incurred pursuant to an order
or agreement of the parties.” Because the superior court ordered the parties



                                        9
                     COMMERCE/CRA v. ZINKE et al
                         Decision of the Court

¶26           Pursuant to § 10 of the Listing Agreement, we grant
Appellees’ request for an award of attorneys’ fees incurred on appeal
against Commerce. See Grubb & Ellis Mgmt. Servs., Inc. v. 407417 B.C., L.L.C.,
213 Ariz. 83, 90, 138 P.3d 1210, 1217 (App. 2006) (when contract provides
for recovery of attorneys’ fees by successful party, court is required to
award fees). Appellees are also entitled to recover their taxable costs on
appeal from Commerce upon compliance with ARCAP 21.

¶27           We deny Appellees’ request for an award of attorneys’ fees
against CRA and deny CRA’s corresponding fee request because neither
party has yet prevailed on the merits. Additionally, because both CRA and
Appellees have partially prevailed on appeal, we make no award of taxable
costs as between those two parties.




                                   :gsh




to participate in mediation, the corresponding costs are recoverable. See
Reyes v. Frank’s Serv. & Trucking, LLC, 235 Ariz. 605, 612, ¶ 29, 334 P.3d 1264,
1271 (App. 2014) (upholding award of mediation costs under § 12-
332(A)(6)).


                                      10
