                    NOTICE: NOT FOR OFFICIAL PUBLICATION.
       UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
          PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.




                                    IN THE
            ARIZONA COURT OF APPEALS
                                DIVISION ONE


       FERNANDO ESTRADA, a married man, Plaintiff/Appellee,

                                       v.

     CARLOS FIGARI and KATHRYN FIGARI, husband and wife,
                     Defendants/Appellants.

                            No. 1 CA-CV 14-0364
                              FILED 6-9-2015


            Appeal from the Superior Court in Yuma County
                       No. S1400CV201201275
             The Honorable Lawrence C. Kenworthy, Judge

                      VACATED AND REMANDED


                                  COUNSEL

Garcia, Kinsey & Villarreal, PLC, Yuma
By Arturo I. Villarreal
Counsel for Plaintiff/Appellee

Law Offices of Kevin Koelbel, PC, Chandler
By Kevin Koelbel
Counsel for Defendants/Appellants
                            ESTRADA v. FIGARI
                            Decision of the Court



                       MEMORANDUM DECISION

Presiding Judge Lawrence F. Winthrop delivered the decision of the Court,
in which Judge Samuel A. Thumma and Judge Donn Kessler joined.


W I N T H R O P, Judge:

¶1             Defendants Carlos and Kathryn Figari appeal from the entry
of summary judgment against them determining they are liable for debt
incurred by Figari Enterprises, Inc. Because the record does not provide a
sufficient factual or legal basis for holding the Figaris personally liable as a
matter of law for corporate debt incurred by Figari Enterprises, we vacate
the entry of summary judgment and remand for further proceedings.

               FACTUAL AND PROCEDURAL HISTORY

¶2             In 2007, Estrada loaned Figari Enterprises $40,000 evidenced
by a note secured by a deed of trust. Carlos Figari signed the note and deed
of trust as “President” of Figari Enterprises, Inc. and Figari Enterprises was
identified as the trustor. The parties later modified the note to increase the
principal amount to $60,000.1          In 2010, the Arizona Corporation
Commission administratively dissolved Figari Enterprises, Inc.

¶3           Estrada, not having been paid on the note, filed this action
alleging breach of contract and unjust enrichment counts. The complaint
named Carlos and Kathryn Figari as defendants, in addition to “Carlos
Figari Enterprises, Inc., a defunct corporation.”2




1     The modification identified the borrower/trustor as Figari
Enterprises.

2        In 2009, Figari Enterprises deeded the property identified in the deed
of trust to Carlos Fabian subject to “encumbrances, liens . . . obligations, and
liabilities as may appear of record.” The complaint also named Carlos and
Jane Doe Fabian as defendants, and Estrada obtained a default judgment
against them. A third party foreclosed on the property.




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                           ESTRADA v. FIGARI
                           Decision of the Court

¶4             The Figaris and Figari Enterprises filed a joint answer.
Thereafter, Estrada served requests for admission on the Figaris, which the
Figaris never answered. Based on the admissions, which were deemed
admitted pursuant to Arizona Rule of Civil Procedure (“Rule”) 36(a)
(2015)3, Estrada filed a motion for summary judgment against the Figaris,
only. Estrada argued that “[w]ith all the forgoing admissions being
conclusively established, there are no remaining issues to be heard by the
Trier of fact” and “Estrada is entitled to judgment as a matter of law.” The
Figaris never responded to the motion for summary judgment, and the
court entered judgment against them.4

¶5            Thereafter, the Figaris retained new counsel and filed a
motion for new trial under Rule 59 arguing they could not be held liable for
the corporate debt. The court denied their motion, and this timely appeal
followed. We have jurisdiction pursuant to Arizona Revised Statutes
(“A.R.S.”) sections 12-2101(A)(1) and (A)(5)(a).

                                ANALYSIS

¶6             We review the superior court’s entry of summary judgment
“on the basis of the record made in [that] court, but we determine de novo
whether the entry of judgment was proper.” Schwab v. Ames Constr., 207
Ariz. 56, 60, ¶ 17, 83 P.3d 56, 60 (App. 2004). In determining whether
summary judgment was proper, we apply the same standard as the trial
court. United Bank of Ariz. v. Allyn, 167 Ariz. 191, 195, 805 P.2d 1012, 1016
(App. 1990). That standard is set forth in Rule 56(a), which provides that a
court should enter summary judgment “if the moving party shows that
there is no genuine dispute as to any material fact and the moving party is
entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). Applying
that standard, this court must determine whether the superior court
properly entered summary judgment against the Figaris, personally, for
debt incurred by Figari Enterprises, the corporation.




3      Absent material revisions after the relevant dates, we cite the current
version of a statute or rule unless otherwise indicated.

4      The record indicates the Figaris were aware of the motion for
summary judgment and instructed their attorney to respond. After
judgment was entered against the Figaris, the attorney moved to withdraw
due to “irreconcilable differences.” The court granted her motion over the
Figaris’ opposition.


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                            ESTRADA v. FIGARI
                            Decision of the Court

       I.     The Figaris’ failure to respond to the requests for admission.

¶7             The Figaris contend they should not be held to their
admissions. Relying on DeLong v. Merrill, 233 Ariz. 163, 310 P.3d 39 (App.
2013), they argue that “[w]hen upholding admissions ‘would practically
eliminate any presentation of the merits of the case,’ it is an abuse of
discretion to not allow a party to file late answers.” In response, Estrada
points out that “at no time, prior to the entry of Judgment” did the Figaris
seek relief from their failure to timely respond to the requests for admission.

¶8            If a party does not respond to requests for admission within
40 days after service, the matter is deemed admitted. Ariz. R. Civ. P. 36(a).
Rule 36(c) provides that, “[a]ny matter admitted under this rule is
conclusively established unless the court on motion permits withdrawal or
amendment of the admission.” Ariz. R. Civ. P. 36(c). It is undisputed the
Figaris never responded to the requests for admission; therefore, the
matters contained in the requests were admitted. Moreover, the Figaris
never moved to seek relief from their deemed admissions. Accordingly, the
matters were conclusively established, and the superior court properly
considered them in ruling on Estrada’s motion for summary judgment.5

       II.    The Figaris’ failure to respond to the motion for summary judgment.

¶9             The Figaris argue that “[e]ven when a party does not respond
to summary judgment, the court must review the record.” Estrada counters
that summary judgment was proper because the Figaris “did not ‘show any
competent evidence’ nor did Defendants ‘produce any facts’ in opposition
. . . they simply did not [o]bject.”

¶10           It is undisputed the Figaris did not respond to Estrada’s
motion for summary judgment and risked an unfavorable result. See
Choisser v. State ex rel. Herman, 12 Ariz. App. 259, 261, 469 P.2d 493, 495
(1970) (“The admonition in Rule 56(e) means that an adverse party who fails
to respond does so at his peril because uncontroverted evidence favorable
to the movant, and from which only one inference can be drawn, will be
presumed to be true.”). A party’s failure to respond or controvert a motion
for summary judgment, however, does not automatically lead to entry of
judgment. See Schwab, 207 Ariz. at 59, ¶ 15, 83 P.3d at 59 (“A failure to


5     The Figaris are bound by their admissions on appeal. See Cont’l Bank
v. Wa-Ho Truck Brokerage, 122 Ariz. 414, 418, 595 P.2d 206, 210 (App. 1979)
(“The Bank having failed to request the trial court to be relieved of this
admission, is bound by the admission on appeal.”).


                                        4
                            ESTRADA v. FIGARI
                            Decision of the Court

respond to a motion for summary judgment with a written memorandum
or opposing affidavits cannot, by itself, entitle the moving party to
summary judgment.”). Even if the non-moving party fails to respond, the
court must still determine whether the record supports summary
judgment. Strategic Dev. & Constr., Inc. v. 7th & Roosevelt Partners, LLC, 224
Ariz. 60, 65 n.7, ¶ 17, 226 P.3d 1046, 1051 n.7 (App. 2010).

¶11          As this court has explained, the moving party bears the
burden of proof:

              A movant who . . . will bear the burden of
              proving its claim at trial thus bears the burden
              on a motion for summary judgment of
              producing uncontroverted prima facie evidence
              in support of its motion. . . .

              [W]hen the motion fails to show an entitlement
              to judgment, the adverse party need not
              respond to the motion with controverting
              evidence. This proposition is reflected in the
              rule itself, which states: “If the adverse party
              does not so respond [with evidence showing
              specific facts], summary judgment, if
              appropriate, shall be entered against the adverse
              party.”
Allyn, 167 Ariz. at 196, 805 P.2d at 1017 (internal citations omitted); see also
Schwab, 207 Ariz. at 60, ¶ 15, 83 P.3d at 60 (“The burden of showing that no
genuine issue of material fact exists rests with the party seeking summary
judgment.”).

¶12           Here, the Figaris’ failure to respond to the motion for
summary judgment did not automatically entitle Estrada to judgment
against them. Rather, Estrada had the burden of proving that no genuine
issue of material fact existed and he was entitled to judgment against the
Figaris, personally, as a matter of law.

       III.    On this record, Estrada is not entitled to entry of judgment against
              the Figaris as a matter of law.

¶13          The Figaris argue the superior court erred in granting Estrada
summary judgment because the record does not support holding the
Figaris personally responsible for the debt of Figari Enterprises. Estrada,




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                            ESTRADA v. FIGARI
                            Decision of the Court

by contrast, argues Figaris’ admissions support entry of summary
judgment.

¶14            A corporation “is organized as a legal entity to do business in
its own right and on its own credit as distinct from the credit of its officers
and stockholders.” Employer’s Liab. Assur. Corp. v. Lunt, 82 Ariz. 320, 323,
313 P.2d 393, 395 (1957). Corporate officers are not “personally liable for
the corporate debts simply by reason of being officers” of the corporation.
Id. Courts will pierce the corporate veil only in limited circumstances
“when the corporation is the alter ego or business conduit of a person, and
when to observe the corporation would work an injustice.” Dietel v. Day,
16 Ariz. App. 206, 208, 492 P.2d 455, 457 (1972); Honeywell, Inc. v. Arnold
Constr. Co., 134 Ariz. 153, 159, 654 P.2d 301, 307 (App. 1982) (“In order for a
corporate ‘veil’ to be pierced, the corporation must be considered the alter
ego of the individual whose property is sought.”).

¶15            The record before the superior court reveals the following: (1)
Carlos Figari signed the note as president of Figari Enterprises; (2) the note
identifies the trustor as Figari Enterprises; (3) Carlos Figari signed the deed
of trust as president of Figari Enterprises; (4) the deed of trust identifies
Figari Enterprises as the trustor; and (5) the modification to the promissory
note identified the borrower/trustor as Figari Enterprises. The relevant
documents contained in the record establish that the corporation, Figari
Enterprises, was the borrower on the note and the trustor on the deed of
trust.

¶16           Estrada also argues the Figaris are personally liable because
they admitted in their answer that “[a]ll actions taken by Defendants Figari
were in the furtherance of the marital community.” This admission,
however, does not establish the Figaris’ personal liability for the corporate
debt. Carlos Figari signed the note and deed of trust as “President” of Figari
Enterprises, not in his individual capacity, and his signature bound the
corporation only. See Kitchell Corp. v. Hermansen, 8 Ariz. App. 424, 427, 446
P.2d 934, 937 (1968) (holding that when a corporation’s name is followed by
“the name of a corporate officer who affixes his corporate title to his name,
such a signature makes the corporation, not the individual, liable”).

¶17          Estrada also argues that by failing to respond to the requests
for admissions, the Figaris “conclusively admitt[ed] Appellants[’] debt to
Appellee.” We disagree. The following admissions, which define




                                      6
                           ESTRADA v. FIGARI
                           Decision of the Court

“defendants” broadly and ambiguously to include Figari Enterprises6, do
not establish the Figaris’ personal liability for the debt:

             1.    Admit that the attached Exhibit A is a true
                   and correct copy of the First Loan
                   Agreement entered into between Plaintiff
                   and Defendant.
             2.    Admit that pursuant to the attached
                   Exhibit A Defendants were to pay Plaintiff
                   Four Hundred dollars ($400.00) a month
                   beginning on February 7, 2007.
                   ...
             6.    Admit that the attached Exhibit B is a true
                   and correct copy of the Second Loan
                   Agreement entered into between Plaintiff
                   and Defendant.
             7.    Admit that pursuant to the attached
                   Exhibit B Defendants were to pay Plaintiff
                   Six Hundred dollars ($600.00) a month
                   beginning on October 1, 2007.
                   ...
             14.   Admit that[] Defendants have failed or
                   refused to pay Plaintiff.
                   ...
             19.   Admit that Defendants, by failing to pay
                   Plaintiff, materially breached the First
                   Loan Agreement.
             20.   Admit that Defendants, by failing to pay
                   Plaintiff, materially breached the Second
                   Loan Agreement.

These admissions do not establish Estrada’s right to pierce the corporate
veil and hold the Figaris personally liable for debt incurred by the
corporation. The general use of the term “defendants,” broadly defined in

6     The requests for admission define defendants as:

      “Defendant,” “Defendants,” “you,” or “your” refers to
      Defendants Carlos Figari and Kathryn Figari, Defendants
      corporations, limited liability companies, partnerships,
      agents, attorneys, investigators, employees, representatives
      and/or officers.



                                     7
                            ESTRADA v. FIGARI
                            Decision of the Court

the request for admissions, does not supersede the clear intent of the
relevant documents to bind only the corporate entity.

¶18            In response to Figaris’ motion for new trial, Estrada suggests
the corporate veil dissolves along with the corporation. Estrada goes on to
argue that, pursuant to A.R.S. § 10-1405(A)(3), the Figaris “should have
been ‘discharging or making provisions for discharging its liabilities.’”
That statute, however, provides only that a dissolved corporation continues
its corporate existence in order to “wind up and liquidate its business and
affairs,” which includes discharging its debts. A.R.S. § 10-1405(A). Despite
Estrada’s attempted reliance on this statute, there are no facts in the record
reflecting what Carlos Figari, as president of Figari Enterprises, did or did
not do at the time of the corporation’s dissolution.

¶19            Estrada’s motion for summary judgment, when viewed in
light of the underlying documents in the record, presents no sufficient
factual or legal basis for holding Carlos and Kathryn Figaris personally
liable as a matter of law for debt incurred by the corporation, Figari
Enterprises. Accordingly, Estrada has failed to meet his burden of proving
that he is entitled to judgment as a matter of law. Based on this record, the
superior court erred in granting summary judgment in favor of Estrada.7




7       Apart from the breach of contract claim, Estrada alleged an unjust
enrichment claim “[i]n the alternative.” To prevail on such an equitable
claim, Estrada was required to show an “absence of a remedy provided by
law.” See City of Sierra Vista v. Cochise Enters., Inc., 144 Ariz. 375, 381, 697
P.2d 1125, 1131 (App. 1984). Estrada’s motion for summary judgment
claimed the Figaris materially breached contracts, sought attorneys’ fees
under A.R.S. § 12-341.01 and did not claim the absence of a legal remedy.
Although not stating a basis for granting Estrada’s summary judgment
motion, the superior court awarded Estrada attorneys’ fees and costs under
the note, implicitly reflecting a ruling that Estrada stated a valid claim for
breach of contract as a matter of law, a ruling precluding recovery on the
unjust enrichment claim. See USLife Title Co. of Arizona v. Gutkin, 152 Ariz.
349, 354, 732 P.2d 579, 584 (App. 1986). Accordingly, the record indicates
the superior court rejected Estrada’s alternative unjust enrichment claim.
Given that this court is vacating the summary judgment ruling for Estrada
on the breach of contract claim, the superior court’s ruling apparently
rejecting Estrada’s unjust enrichment claim similarly is vacated and the



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                         ESTRADA v. FIGARI
                         Decision of the Court

                           CONCLUSION

¶20          For the foregoing reasons, we vacate the judgment of the
superior court and remand for further proceedings. Although the Figaris
request an award of attorneys’ fees on appeal, they cite no statute
supporting an award, and we decline their request. See ARCAP 21(a)(2).
We award the Figaris their costs on appeal upon compliance with ARCAP
21.




                                 :ama




claims are remanded for further proceedings consistent with this
memorandum decision.




                                  9
