Lyons v. Pmi

Opinion

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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

SEAN LYONS, Plaintiff/Appellant,

v.

PMI REAL ESTATE SERVICES, Defendant/Appellee.

No. 1 CA-CV 26-0048

FILED 08-28-2026

Appeal from the Superior Court in Maricopa County No. CV2025-030371

The Honorable Randall H. Warner, Judge

AFFIRMED

COUNSEL

Sean Lyons, Scottsdale Plaintiff/Appellant

Hull, Holliday, & Holliday, Phoenix By Matthew R. Schlabach Counsel for Defendant/Appellee

MEMORANDUM DECISION

Presiding Judge Jennifer M. Perkins delivered the decision of the Court, in which Judge Brian Y. Furuya and Judge D. Andrew Gaona joined.

LYONS v. PMI Decision of the Court

P E R K I N S, Judge:

¶1 Sean Lyons appeals the superior court’s order dismissing his claims of fraud against his property manager, PMI Real Estate Services (“PMI”) under Arizona Rule of Civil Procedure 12(b)(6) for failure to state a claim and awarding fees against him. For the following reasons, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 Lyons’ fraud claims stem from allegedly false statements PMI made to Lyons and the justice court over the course of three eviction proceedings between December 2024 and March 2025. We view the facts in the light most favorable to Lyons, the non-moving party. Date St. Cap., LLC v. Clearcover Ins. Co., 256 Ariz. 430, 432 ¶ 2 (App. 2023). The facts, as Lyons has alleged them, are as follows.

¶3 Lyons rented a property that PMI managed for Lyons’ landlord. PMI brought the first eviction action in December after the tenant portal payment system went down, causing Lyons to pay rent late. PMI voluntarily dismissed that action once Lyons paid rent. PMI then sought to evict Lyons in February after Lyons paid his rent late again, though Lyons contended PMI was in possession of his rent payment and refused to deposit it. Eventually, PMI voluntarily dismissed that action and accepted the rent.

¶4 PMI sued to evict Lyons a third time in March, alleging he was a willful holdover tenant and had not paid rent. Lyons countered that he was current on rent and was not a holdover tenant because he and the landlord had extended his lease for another year. Alternatively, he argued his lease had converted to a month-to-month periodic tenancy when the previous term expired. The justice court found Lyons guilty of forcible detainer as a willful holdover tenant, guilty of special detainer for the unpaid March rent, and issued PMI a writ to re-obtain the premises.

¶5 In August, Lyons sued PMI for seven claims of fraud relating to PMI’s actions during the three eviction proceedings, including statements PMI made to the justice court during the March eviction proceeding about the status of Lyons’ lease and whether Lyons was current on rent. PMI moved to dismiss under Rule 12(b)(6) for failure to state a claim. The court granted the motion, finding Lyons had not shown he reasonably relied on false representations from PMI.

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LYONS v. PMI Decision of the Court

¶6 PMI then requested attorney fees and costs under a provision of Lyons’ lease, or alternatively as a matter “aris[ing] out of contract” under Arizona Revised Statutes 12-341.01. Lyons moved for leave to amend his complaint by replacing his various fraud claims with a single claim for “Interjudicial Fraud.” The court denied Lyons’ motion to amend because “Interjudicial Fraud” is not a recognized cause of action. The court denied fees under the lease because PMI was not a party to Lyons’ contract, but granted PMI its fees under Section 12-341.01(A). Lyons now appeals the dismissal of his complaint, the denial of his motion to amend, and the fee award. We have jurisdiction. A.R.S. § 12-2101(A)(1).

DISCUSSION

I. Rule 12(b)(6) Dismissal and Denial of Motion to Amend

¶7 We review dismissal for failure to state a claim de novo. Markham Contracting Co., Inc. v. Cahava Springs Phase I, Inc., __ Ariz. __, __ ¶ 10, 591 P.3d 877 (2026). We review denial of a motion to amend a pleading for abuse of discretion. Carranza v. Madrigal, 237 Ariz. 512, 515 ¶ 13 (2015).

¶8 A plaintiff must plead all essential elements of fraud in his complaint with particularity. Ariz. R. Civ. P. 9(b); Green v. Lisa Frank, Inc., 221 Ariz. 138, 155–56 ¶ 53 (App. 2009). Fraud requires:

(1) a representation, (2) its falsity, (3) its materiality, (4) the speaker’s knowledge of its falsity or ignorance of its truth, (5) the speaker’s intent that the information should be acted upon by the hearer and in a manner reasonably contemplated, (6) the hearer’s ignorance of the information’s falsity, (7) the hearer’s reliance on its truth, (8) the hearer’s right to rely thereon, and (9) the hearer’s consequent and proximate injury.

Id. at 156 ¶ 53. Lyons argues to this Court that his fraud claims are specifically based on PMI’s statements to the justice court, not statements PMI made to Lyons. Meaning, Lyons alleges the justice court was the “hearer.” To the extent Lyons’ original complaint relied on statements directed to Lyons, he has abandoned that issue by not raising it on appeal. See Robert Schalkenbach Found. v. Lincoln Found., Inc., 208 Ariz. 176, 180 ¶ 17 (App. 2004).

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LYONS v. PMI Decision of the Court

¶9 Lyons vaguely asserted PMI lied about his lease extension and whether he paid rent, but he did not state with particularity what PMI said. Even if Lyons could bring a fraud claim on behalf of the court, he needed to allege how the justice court, not Lyons, was injured by PMI’s statements. He did not do so because he alleged he was injured by the statements, not the court. See Green, 221 Ariz. at 156 ¶ 53 (“A showing of actual fraud requires[] . . . the hearer’s consequent and proximate injury.” (emphasis added)). He failed to state with particularity all essential elements of fraud, so the court properly dismissed his claims.

¶10 Lyons next asks us to recognize “Interjudicial Fraud,” which he describes as a private right of action for perjury. We will not recognize a new claim when sufficient remedies already exist. For example, a party can request relief from a superior court judgment due to fraud under Arizona Rule of Civil Procedure 60(b)(3). And the common law claim of wrongful institution of a civil proceeding allows a party to sue when wrongful civil proceedings have been initiated against him. Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 416–17 (1988). Indeed, Lyons even concedes that a wrongful institution of a civil proceeding claim may remedy his grievances. Because we decline to recognize “Interjudicial Fraud,” we also conclude the court did not abuse its discretion by denying Lyons’ motion to amend because the amendment would have been futile. Lewis v. Swenson, 126 Ariz. 561, 566–67 (App. 1980).

¶11 Lyons also argues that various causes of action could fit the facts he has alleged. He complains the superior court should have hinted at the proper cause of action rather than dismiss his claims, and now asks us to weigh in. We will not do so. It is not the court’s responsibility to advise Lyons on which claim he should bring. We also reject Lyons’ argument that his claim should have been allowed to proceed to a bench trial. Because the court properly dismissed his claims, no trial of any kind was warranted.

II. Applicability of Section 12-341.01(A)

¶12 Finally, Lyons challenges the court’s attorney fee award. The court may award reasonable fees to the successful party “[i]n any contested action arising out of a contract, express or implied.” A.R.S. § 12-341.01(A). We review the applicability of Section 12-341.01(A) de novo. Modular Mining Sys., Inc. v. Jigsaw Techs., Inc., 221 Ariz. 515, 521 ¶ 21 (App. 2009).

¶13 Lyons argues Section 12-341.01 does not apply because PMI was not a party to his lease, but the parties’ relationship is not dispositive. See Schwab Sales, Inc. v. GN Constr. Co., Inc., 196 Ariz. 33, 37 ¶ 12 (App. 1998)

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LYONS v. PMI Decision of the Court

(claims in which one litigant is not a party to the contract may still arise under contract).

¶14 Instead, a tort claim arises out of contract “only when the tort could not exist ‘but for’ the breach or avoidance of contract.” Ramsey Air Meds, L.L.C. v. Cutter Aviation, Inc., 198 Ariz. 10, 15 ¶ 27 (App. 2007). The test is whether the plaintiff would have a claim “even in the absence of a contract.” Id. at 16 ¶ 27. Section 12-341.01 does not apply when the contract is a factual predicate to the tort but not the essential basis for it. Kennedy v. Linda Brock Auto. Plaza, Inc., 175 Ariz. 323, 325 (App. 1993).

¶15 Lyons’ fraud claims rely on the truth of two allegations. First, that Lyons had a contract with the landlord as of March 2025, either as a 12-month lease or a month-to-month tenancy. Second, that Lyons complied with that contract by timely paying his rent. Because Lyons’ fraud claims would have required him to prove (1) a contract existed in March 2025 and (2) he complied with it, we conclude the contract was the essential basis of Lyons’ claims. Thus, the claims arose out of contract under Section 12- 341.01. See ML Servicing Co. v. Coles, 235 Ariz. 562, 570 ¶ 30 (App. 2014) (the phrase “arising out of a contract” must be read broadly and encompasses an action when one party asserts a contract and another “successfully proved that no contract existed.”).

III. Attorney Fees and Costs on Appeal

¶16 PMI requests its attorney fees and costs on appeal under Sections 12-341.01 and -341. Because this action arose out of contract and PMI was the successful party, we award PMI its reasonable attorney fees and taxable costs on appeal upon its compliance with ARCAP 21. A.R.S. §§ 12-341.01(A), -341.

CONCLUSION

¶17 We affirm.

MATTHEW J. MARTIN • Clerk of the Court FILED: JR