Wine Education Council v. Arizona Rangers

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Wine Education Council, No. CV-19-02235-PHX-SMB

10 Plaintiff, ORDER

11 v.

12 Arizona Rangers,

13 Defendant. 14 15 Pending before the Court are four separate motions for summary judgement. The 16 first is Defendant/Third Party Plaintiff Arizona Rangers’ (“AZR”) Motion for Summary 17 Judgment on Plaintiff Wine Education Counsel’s (“WEC”) claims against it, which has 18 been fully briefed. (Docs. 190, 209, & 218.) The second is AZR’s Motion for Summary 19 Judgement on Third-Party Defendant Grant Winthrop’s (“Mr. Winthrop”) Counterclaims, 20 which has also been fully briefed. (Doc. 191, 207, & 216.) The third is Mr. Winthrop’s 21 Motion for Summary Judgement on AZR’s remaining claims against him, which has again 22 been fully briefed. (Docs. 192, 202, & 219.) The fourth is WEC’s Motion for Partial 23 Summary Judgement against AZR which has also been fully briefed. (Docs. 194, 205, & 24 217.) The Court heard oral argument on the motions on July 1, 2021. Now having 25 considered the parties arguments and the relevant law, the Court issues the following order. 26 I. BACKGROUND 27 The factual background of this litigation has been fully related in the previous orders 28 of the Court and need not be reiterated in full here. It is sufficient to note that Plaintiff WEC 1 is suing AZR for the return of money given to AZR by way of grants from the American 2 Endowment Foundation. WEC’s original lawsuit alleged a right to the money as assignee 3 and backup beneficiary to the funds, claiming AZR had misused and misappropriated the 4 grant money, and failed to abide by the terms imposed upon the grants. AZR denied any 5 wrongdoing and also filed a Third-Party Complaint (“TPC”) against Mr. Grant Winthrop, 6 whom it alleged had control over distribution of the funds. AZR’s TPC alleged that to the 7 extent it was found liable to WEC for misuse of the funds, Mr. Winthrop would be liable 8 to AZR for that misuse under theories of negligence and breach of fiduciary duty. Mr. 9 Winthrop in turn responded to AZR’s TPC by filing a Counterclaim alleging breach of 10 contract, breach of the duty of good faith and fair dealing, and unjust enrichment. 11 After more than two years of litigation, the parties filed the present summary 12 judgment motions. The majority of argument in the parties respective motions deals with 13 the scope, application, and effect of a provision that is incorporated by reference in a grant 14 received by AZR in June of 2017. The June grant stated that it was made pursuant to a 15 letter requesting the funds dated May 15, 2017 (“the Letter”) and that the grant to be used 16 as that Letter described. The Letter’s pertinent terms read as follows: 17 Please find attached our proposal for a $37,500.00 grant to the Arizona 18 Rangers. If the Wine Education and/or Veritas Fund of the American 19 Endowment Foundation, hereinafter Veritas, makes the grant it will be used per the following guidelines and for the specified purposes set forth below: 20

21 The Arizona Rangers, hereinafter, (“Rangers”) are a law enforcement support corporation holding tax exempt status with the Internal Revenue 22 Service. The East Valley Ranger Company, hereinafter, (“Company”) is a 23 subset of the Rangers. It is currently commanded by Captain Jeff East, as commanding officer he has discretion over unrestricted funds allocated to the 24 Company. If Jeff East is unwilling or unable to decide or is removed from 25 command for any reason, then First Lieutenant Doug Sankey currently acting as Company executive officer shall assume responsibility for the use of 26 discretionary Company funds in this grant. If neither Captain East nor 27 Lieutenant Sankey are able to exercise discretion over these funds for any reason, then the funds become discretionary funds of the East Valley Ranger 28 Troop. 1 The East Valley Troop, hereinafter, (“Troop”) is presently composed of one 2 associate Ranger and two Associate Ranger applicants, respectively Grant 3 Winthrop, Vance Ownbey and Peter Steinmetz. Regardless of their application status or other members of the troop at the time the grant is made, 4 if it is made, these three shall be the voting members of the Troop responsible 5 for allocation of Troop discretionary funds…

6 ***** ***** ***** 7 We recognize that if for any reason the East Valley Ranger Troop ceases to operate all property acquired for the Troop shall be turned over to the Wine 8 Education Counsel. Similarly, any Troop discretionary funds shall be turned 9 over to the Wine Education Counsel should the Troop cease to operate for any reason… 10 11 (Doc. 98-28.) Also included in the Letter were various terms allocating sections of the 12 $37,500.00 grant to the Troop, the East Valley Company, and Ranger Headquarters. (Id.) 13 The Letter is featured heavily in three of the present motions. AZR argues that it is 14 entitled to summary judgement in this case as to all grants other than the June 2017 grant 15 because the Letter only states that “the grant” (singular) will be used according to the terms 16 of the letter. According to AZR, the fact that the Letter of a single grant unambiguously 17 means that its conditions, including the term requiring funds and property be turned over 18 to WEC, apply only to the funds of that single grant. (Doc. 190 at 10-12.) AZR further 19 contends that even with regards to the funds of the June 2017 grant, the Letter’s correctly 20 construed terms show WEC is not currently entitled to the grant funds. (Id. at 12-15.) 21 The motion for summary judgment filed by WEC also largely concerns the terms of 22 the Letter, albeit seeking opposing results. WEC’s motion seeks an order declaring the 23 contracts associated with the grants to be unintegrated and thus potentially subject to an 24 oral condition incorporating the Letter’s terms into the terms of the other grants. The 25 Motion also requests a ruling by the Court that the terms of the Letter are ambiguous, and 26 as such, subject to the admission of parol evidence to explain them. (Doc. 194 at 8-13.) 27 The motion for summary judgment filed by Mr. Winthrop against AZR also 28 references the Letter. Mr. Winthrop argues that this entire case is really only about WEC’s 1 right to have property and money turned over via the recovery clause contained in the 2 Letter. (Doc. 192.) Mr. Winthrop points out that AZR’s TPC has all along been premised 3 on the argument that if AZR were found to have misused the grant funds, Mr. Winthrop 4 would be liable to it for such misuse. Mr. Winthrop argues that because the sole issue in 5 the case is whether the recovery clause requires funds to be turned over, there is no 6 remaining theory by which he could be liable to AZR. 7 The remaining motion for summary judgement has been filed by AZR and seeks 8 resolution of Mr. Winthrop’s counterclaims against it. Mr. Winthrop’s counterclaims 9 allege that AZR is liable to him for breach of contract, breach of the duty of good faith and 10 fair dealing, and in the alternative, for unjust enrichment. Mr. Winthrop alleges that AZR 11 breach an implied contract with him when it failed to reimburse him for funds allegedly 12 spend on AZR’s behalf and similarly breached an implied contractual duty to put adequate 13 safeguards and controls in place over the use of the grant funds. His claims for breach of 14 the duty of good faith and fair dealing and for unjust enrichment follow similar theories. 15 AZR’s motion for summary judgment argues that Mr. Winthrop’s claim for breach of 16 contract must fail because he cannot show any contractual duty owed to him which was 17 breached and further cannot show damages. (Doc. 191 at 4-10.) AZR has also argued that 18 Mr. Winthrop cannot prove all the elements necessary to survive summary judgment for 19 his unjust enrichment and good faith and fair dealing claims. (Id.) 20 II. LEGAL STANDARD 21 Summary judgment is appropriate when “there is no genuine dispute as to any 22 material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 23 56(a). A material fact is any factual issue that might affect the outcome of the case under 24 the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 25 A dispute about a fact is “genuine” if the evidence is such that a reasonable jury could 26 return a verdict for the nonmoving party. Id. “A party asserting that a fact cannot be or is 27 genuinely disputed must support the assertion by . . . citing to particular parts of materials 28 in the record” or by “showing that materials cited do not establish the absence or presence 1 of a genuine dispute, or that an adverse party cannot produce admissible evidence to 2 support the fact.” Fed. R. Civ. P. 56(c)(1)(A), (B). The court need only consider the cited 3 materials, but it may also consider any other materials in the record. Id. 56(c)(3). Summary 4 judgment may also be entered “against a party who fails to make a showing sufficient to 5 establish the existence of an element essential to that party’s case, and on which that party 6 will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 7 Initially, the movant bears the burden of demonstrating to the Court the basis for the 8 motion and “identifying those portions of [the record] which it believes demonstrate the 9 absence of a genuine issue of material fact.” Id. at 323. If the movant fails to carry its 10 initial burden, the nonmovant need not produce anything. Nissan Fire & Marine Ins. Co. 11 v. Fritz Cos., 210 F.3d 1099, 1102–03 (9th Cir. 2000). If the movant meets its initial 12 responsibility, the burden then shifts to the nonmovant to establish the existence of a 13 genuine issue of material fact. Id. at 1103. The nonmovant need not establish a material 14 issue of fact conclusively in its favor, but it “must do more than simply show that there is 15 some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith 16 Radio Corp., 475 U.S. 574, 586 (1986). The nonmovant’s bare assertions, standing alone, 17 are insufficient to create a material issue of fact and defeat a motion for summary judgment. 18 Liberty Lobby, 477 U.S. at 247–48. “If the evidence is merely colorable, or is not 19 significantly probative, summary judgment may be granted.” Id. at 249–50 (citations 20 omitted). However, in the summary judgment context, the Court believes the nonmovant’s 21 evidence, id. at 255, and construes all disputed facts in the light most favorable to the non- 22 moving party, Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). If “the evidence 23 yields conflicting inferences [regarding material facts], summary judgment is improper, 24 and the action must proceed to trial.” O’Connor v. Boeing N. Am., Inc., 311 F.3d 1139, 25 1150 (9th Cir. 2002). 26 III. ANALYSIS 27 A. AZR and WEC’s Cross-Motions for Summary Judgement 28 The Courts will first turn to AZR’s Motion for Summary Judgement on WEC’s 1 claims and WEC’s motion for partial summary judgement on two issues of contract 2 interpretation. AZR’s motion argues it is entitled to summary judgement on WEC’s claims 3 against it. First, AZR argues that WEC cannot succeed on its breach of contract claims 4 because the provision requiring it turn over property to WEC, found in a May 15, 2017 5 letter, by its own terms unambiguously applies to one of the six grants. (Doc. 190 at 10- 6 12.) Second, AZR argues that even for the grant to which the Letter applies, the “turnover” 7 provision is ambiguous and should be construed in AZR’s favor. (Id. at 12-15.) Third, AZR 8 asserts that, as it previously argued in its first motion for summary judgment, (Doc. 98), 9 there is no evidence of misappropriation of funds by AZR. (Doc. 190 at 15-16.) AZR also 10 argues WEC cannot show breach of the duty of good faith and fair dealing because there 11 is no evidence it has acted in bad faith, and the contracts upon which the claim is brought 12 have not been breached. (Id. at 16-17.) Finally, AZR argues that summary judgement is 13 merited on WEC’s unjust enrichment claim because “if there is ‘a specific contract which 14 governs the relationship of the parties, the doctrine of unjust enrichment has no 15 application.’” (Doc. 190 at 17 (quoting Trustmark Ins. Co. v. Bank One, Ariz., N.A., 48 16 P.3d 485, 492 (App. 2002)). 17 WEC argues both in its response and its own motion for partial summary judgement 18 that summary judgement on its claim is not appropriate because the terms of the parties’ 19 agreement are dependant on disputed issues of fact. (Doc. 194; Doc. 209 at 8-17.) WEC 20 asserts that the terms of the grants cannot be determined on summary judgment because 21 (1) the contract associated with the grants is unintegrated and subject to oral conditions, 22 and (2) even if the written terms of the grant are ambiguous, their interpretation is subject 23 to parol evidence. (Id.) With regard to its claim based on the covenant of good faith and 24 fair dealing, WEC argues that this claim cannot be resolved until the terms of the parties’ 25 agreement are determined by the jury. (Doc. 209 at 17.) After all, the covenant of good 26 faith, implied in every contract, prevents the parties from impairing each others’ right to 27 receive the benefits expected to flow from their contract. Bike fashion corp. v. Kramer, 46 28 P.3d 431, 434 (Ariz. Ct. App. 2002). Thus, WEC argues until the terms of the contract are 1 established, the court cannot find as a matter of law that WEC’s right to benefits of that 2 contract has been impaired. (Doc. 209 at 17.) Finally, WEC argues its unjust enrichment 3 claims is pled in the alternative which is allowed as long as it does not lead to double 4 recovery. 5 AZR’s reply reiterates its argument for interpreting the Letter’s terms in its favor. 6 (Doc. 218 at 1-4.) Additionally, AZR argues both in its reply and in its response to WEC’s 7 motion for partial summary judgement that the terms of the parties’ contract cannot be 8 subject to oral non-integrated terms because those terms would violate the statute of frauds. 9 (Doc. (Doc. 205 at 5; Doc 218 at 4.) Additionally, AZR notes that WEC’s response did not 10 contest AZR’s request for summary judgement on WEC’s claims for misuse or 11 misappropriation of the grant funds. (Doc. 218 at 4.) 12 The Court will grant summary judgment with regard to AZR’s motion on WEC’s 13 claim for breach of contract based on misappropriating or misspending grant funds.1 The 14 Court takes WEC’s failure to answer AZR’s argument as an admission that summary 15 judgment is appropriate. Fed. R. Civ. P. 56(e); Harleysville Ins. Co. v. King's Express, Inc., 16 No. CV 19-3817-DMG (SKx), 2020 U.S. Dist. LEXIS 247748, at *18 (C.D. Cal. July 6, 17 2020) (citing Jenkins v. County of Riverside, 398 F.3d 1093, 1095 n.4 (9th Cir. 2000)). The 18 Court is further confident that summary judgment is appropriate due to an affidavit filed 19 by Mr. John Winthrop, WEC’s general counsel. On the very day AZR filed its motion for 20 summary judgment, AZR’s general counsel signed an affidavit stating that “WEC’s claims 21 in this case are not based on any part of any allegation that the specific items purchased 22 with grant funds were improperly purchased.” (Doc. 193-14 at 3.) In light of the above, the 23 1 As AZR notes, it previously filed a motion for summary judgment that encompassed this 24 same subject. (Doc. 98.) However, the Court granted Rule 56(d) relief to WEC and denied the motion without prejudice after WEC argued it could not adequately evidence its claims 25 without additional discovery. (Docs. 107; 122.) WEC’s counsel, Mr. Braddock filed an 26 affidavit asserting that, among other subjects, additional discovery was necessary “to obtain information relating to…individual Rangers’ use of the Grant Monies or equipment 27 purchased by the Grant Monies—information essential to ascertain the Rangers’ 28 understanding of the restrictions and whether the Rangers materially breached the Grants.” (Doc. 107-4 at 3.) 1 Court finds that AZR is entitled to summary judgment in its favor on WEC’s claim for 2 breach of contract based on alleged misuse and misappropriation of the grant funds. 3 However, The Court finds that summary judgement is not appropriate on WEC’s 4 claim for breach of contract based on the turnover clause. The Court finds that some of the 5 specific terms in the grants are ambiguous and further holds that it cannot as a matter of 6 law find the parties’ agreement integrated. As WEC points out, both parties agree that the 7 term “troop” as used in the recovery clause is ambiguous. (Doc. 190 at 13; Doc. 209 at 13.) 8 WEC also points to testimony on the record supporting its position that the grant 9 agreements were not integrated contracts and are potentially subject to evidence 10 establishing additional oral conditions. 11 i. Written Terms in the Letter are Ambiguous 12 Ambiguities in the parties’ agreement prevent summary judgment. Whether contract 13 language is ambiguous is a question of law for the court. St. Philip’s Plaza, LLC v. Noble 14 Inv. Grp., LLC, No. CIV 15-344-TUC-CKJ, 2015 WL 13816722, at *4 (D. Ariz. Nov. 13, 15 2015). Language is ambiguous when it can reasonably be construed to have more than one 16 meaning. E-Z Livin’ Mobile Homes, Inc. v. Tommaney, 550 P.2d 658, 661 (Ariz. 1976) 17 (finding the purchase order ambiguous in its description, the time of performance, and the 18 financial obligation). 19 The Letter containing the recovery clause defines the terms “East Valley Ranger 20 Company” and “East Valley Troop,” but the recovery clause refers to the “East Valley 21 Ranger Troop” which appears to be an amalgamation of the two defined terms. (Doc. 98- 22 28.) Because it is ambiguous as to what is meant by the “East Valley Ranger Troop,” in 23 the turnover clause the Court cannot as a matter of law determine what event “triggers” the 24 turnover provision of the Letter. Further, the scope of the recovery clause’s application is 25 ambiguous. While AZR argues the language of the Letter clearly applies only to a single 26 grant, (Doc. 190 at 11; Doc. 218 at 2 (“‘It’ does not mean ‘they[,]’ and ‘grant’ does not 27 mean ‘grants’”)), the Court is not persuaded. WEC has proffered the existence of oral 28 evidence that the parties understood the term to apply to the funds of all the grants. 1 Additionally, the recovery clause of the letter speaks of turning over “all property acquired 2 for the Troop” and “any Troop discretionary funds.” While this term could be interpreted 3 as applying “any” and “all” within the scope of the single grant, it could also be interpreted 4 as conditioning the single grant upon AZR’s agreement to turn over all funds and property 5 associated with “the troop,” regardless of their source. The Court finds that the scope of 6 the Letter’s application and the definition of certain terms remains ambiguous. 7 Accordingly, summary judgment is not appropriate. 8 ii. The Grant Agreements may be Subject to Additional Oral Conditions 9 “The question of integration and interpretation of a contract is initially one for the 10 court and is decided as a preliminary question before applying the parol evidence rule.” 11 Anderson v. Preferred Stock Food Markets, Inc., 854 P.2d 1194, 1187 (Ariz. Ct. App. 12 1993). To determine whether the contract is integrated courts should consider “all the 13 surrounding circumstances,” Burkons v. Ticor Title Ins. Co. of Cal., 813 P.2d 710, 716 14 (Ariz. 1991), including the parties’ “negotiations, prior understandings, and subsequent 15 conduct” to determine the extent of integration and/or the parties’ formative intent. 16 Anderson, 854 P.2d at 1197; see also Shirley J. McAuliffe, 1 Ariz. Prac., Law of Evidence 17 § 104:8 (4th ed. 2020) (“Arizona has always permitted parol evidence to be received on 18 the issue whether the written agreement is truly an integrated statement of the parties’ 19 intended bargain.”). 20 The Court finds that the grant contracts may be unintegrated and subject to an oral 21 condition incorporating the “turnover provision” of the Letter into the other grants. In 22 considering all the surrounding circumstances, the Court finds that WEC has presented 23 specific evidence on the record by which a jury could find the remaining grants were made 24 subject to an oral term incorporating the Letter’s recovery clause into the other grants. 25 (Docs. 195 at 4; 195-8 at 4; 195-9 at 6, 9; & 195-13 at 2-3.) The Court disagrees with 26 AZR’s assertion that such an oral term would “vary or contradict” the meaning of the 27 written words of the contracts. (Doc. 205 at 4 (citing Taylor v. State Farm Mut. Auto Ins. 28 Co., 175 Ariz. 148, 158-59 (1993).) As AZR’s motion shows, the grant letters associated 1 with the other five grants contain almost no written terms. (Doc. 205 at 2-3.) Thus, no term 2 is varied or contradicted by an oral term incorporating the Letter’s turnover provision. 3 The Court also rejects AZR’s argument that the statute of frauds prevents WEC 4 from asserting oral conditions or modifications on the grants. AZR argues that “the grants 5 were statutorily required to comply with the statute of frauds.” (Doc. 205 at 4. (citing 6 A.R.S. § 44-101(8)). The provision cited by AZR states that the statute of frauds applies to 7 “an agreement which by its terms is not to be performed during the lifetime of the promisor, 8 or an agreement to devise or bequeath any property, or to make provision for any person 9 by will.” A.R.S. § 44-101(8). AZR argues that “bequeath” in the statute should be 10 interpreted as meaning “to…transfer real or personal property by formal declaration…” 11 (Doc. 218 at 4 n.2.) The Court rejects this broad interpretation of the term based on the 12 canons of “noscitur a sociis” and “ejusdem generis.” See Yates v. United States, 574 U.S. 13 528, 543-44 (2015) (“noscitur a sociis…‘avoid[s] ascribing to one word a meaning so 14 broad that it is inconsistent with its accompanying words’…ejusdem generis, counsels: 15 ‘[W]here general words follow specific words…the general words are [usually] construed 16 to embrace only objects similar in nature to…the preceding specific words.’”). The Court 17 interprets “bequeath” narrowly in light of the proceeding and surround words of the clause, 18 which deal solely with promises performed on or after the promisor’s death. A.R.S. § 44- 19 101(8). The Statue of Frauds does not apply to the grants in question. 20 B. Mr. Winthrop’s Motion for Summary Judgement Against AZR 21 The Court will next turn to Mr. Winthrop’s motion for summary judgment on AZR’s 22 TPC. Mr. Winthrop’s motion argues that at this stage in the litigation there is no longer any 23 basis for AZR’s claims against him. AZR’s TPC only alleges Mr. Winthrop is liable to it 24 to the extent AZR’s liability to WEC is based on his actions. Mr. Winthrop argues, “WEC’s 25 damage claim rests entirely upon [AZR’s] refusal to return funds and inventory, pursuant 26 to the recovery clause.” (Doc. 192 at 6.) Because AZR’s liability to WEC is fully based 27 upon the recovery clause, which was triggered after Mr. Winthrop left the organization, he 28 argues summary judgement in his favor is appropriate on AZR’s claims for breach of 1 fiduciary duty and negligence. (Id. at 6-10.) 2 AZR’s response disagrees more with the focus of Mr. Winthrop’s motion than with 3 any factual contention within it. AZR points out that it has always maintained that its claims 4 against Mr. Winthrop are contingent third-party claims. Thus, AZR argues that as long as 5 the issue of whether it misused or misappropriated the funds remains an active claim in 6 WEC’s complaint, there will continue to be a disputed issue of whether Mr. Winthrop is in 7 turn liable to AZR as the agent who caused the misuse or misappropriation to occur. (Doc. 8 202 at 1-5.) AZR further argues that Mr. Winthrop’s motion starts with the premise that 9 WEC is not asserting a claim based on misuse of the funds but rests the entirety of its claim 10 on the recovery clause. AZR points out that if that were the case it would be more than 11 willing to agree to dismissal of its claims against Mr. Winthrop but notes to the Court that 12 prior to the filing of summary judgment, WEC took no steps to amend its complaint to 13 remove the claims of misuse. (Id. at 5-8.) Finally, AZR argues that Mr. Winthrop’s motion 14 is in substance a “strawman” argument, seeking victory against a claim it never asserted. 15 (Id. at 8-9.) AZR points out that Mr. Winthrop is arguing as if its claims of breach of 16 fiduciary duty and negligence were based on Mr. Winthrop’s failure to turnover grant funds 17 after the recovery clause was triggered rather than addressing its actual claims against Mr. 18 Winthrop which are contingent upon WEC’s prevailing on the theory that funds were 19 misused. (Id. at 9-13.) 20 Mr. Winthrop’s reply contains two main arguments. First, Mr. Winthrop accuses 21 AZR’s response of “recharacterizing [WEC’s] claims…to ignore WEC’s actual claims, its 22 disclosures, and the parties’ discovery.” (Doc. 219 at 2; but see Doc. 107-4 at 3 23 (“information relating to…individual Rangers’ use of the Grant Monies or equipment 24 purchased by the Grant Monies [is] essential to ascertain…whether the Rangers materially 25 breached the Grants.” (emphasis added)).) Mr. Winthrop claims that AZR should have 26 know that WEC’s claims were fully based on the recovery clause found in the Letter 27 because WEC “updated its required disclosures to focus on the Recovery Clause,” and the 28 recovery clause was “the clear focus of WEC’s discovery.” (Id. at 6.) Thus, while Mr. 1 Winthrop does not seem to contest the fact that WEC never amended its complaint, he 2 seems to argue that AZR should have known the sole grounds for recovery in this case 3 depends on the recovery clause of the Letter. Second, Mr. Winthrop challenges AZR’s 4 contention that his motion is a “strawman” and that it never asserted a claim against him 5 based on the Letter’s Recovery Clause. Mr. Winthrop argues that AZR’s TPC asserts in 6 broad terms that “[t]o the extent it is determined Arizona Rangers is liable to [WEC],” it 7 would be because of Mr. Winthrop’s breach of fiduciary duty or negligence. (Id. at 7-9.) 8 Mr. Winthrop points out that this claim in its broadest term could be interpreted as AZR 9 claiming Mr. Winthrop is liable to it under every theory asserted by WEC and not just for 10 recovery based on misuse. 11 Attached to his motion, Mr. Winthrop has filed an affidavit written by WEC’s 12 general counsel, who is also Mr. Winthrop’s father. WEC’s general counsel declares in the 13 affidavit that the entirety of WEC’s claims in this action are based on the recovery clause 14 found in the May 15, 2017 Letter. (Doc. 193-14 at 3.) Further, WEC did not challenge 15 AZR’s contention on summary judgment that there was no evidence to support WEC’s 16 claims that grant funds were misused. (Docs. 190, 209, & 218.) As AZR has repeatedly 17 clarified, its claims against Mr. Winthrop are contingent upon WEC’s claims that AZR had 18 misused or misappropriated the grant funds. In light of the contingent nature of AZR’s 19 claim, the Court’s resolution granting summary judgement against WEC’s claim for misuse 20 or misappropriation of the funds also resolved AZR’s claim against Mr. Winthrop. As such, 21 Mr. Winthrop’s request for summary judgment on AZR’s claims is denied as moot. 22 Mr. Winthrop’s argument seeking summary judgment due to his lack of 23 involvement with the “turnover provision” of the letter is also denied as moot because no 24 such claim was made or brought through this litigation. All throughout this litigation, AZR 25 has demonstrated repeatedly that its claims against Mr. Winthrop were tied specifically to 26 the theory that grant funds had been misappropriated or misused. Its TPC against Mr. 27 Winthrop speaks extensively and exclusively of WEC’s theory based on misuse or 28 misappropriation of the funds yet says nothing about WEC’s theory of relief based on the 1 recovery clause of the Letter. (Doc. 109 at 100-109.) His construction of AZR’s claim as 2 seeking indemnification based on the turnover clause is based only on a partial line from 3 the TPC where AZR asserts Mr. Winthrop will be liable to it “to the extent” it is found 4 liable to WEC. This construction ignores the fact that the entirety of the surrounding 5 complaint speaks purely of liability based on the allegations of misuse and 6 misappropriation of grant funds. (Id.) Further, it is not lost on the Court that Mr. Winthrop 7 argues AZR’s TPC be interpreted in its broadest possible terms to include a theory never 8 litigated or mentioned by AZR while simultaneously contending WEC effectively 9 “refined” its theory of relief in the case merely by focussing on certain subjects in its 10 MIDP’s and discovery requests. (Compare Doc. 219 at 3 (“AZR’s Third Party Complaint 11 is not so narrow.”) with id. at 4 (arguing AZR should have known WEC’s claim was fully 12 based on the recovery clause because it was the focus of WEC’s discovery.)). The Court 13 finds that AZR made no claim against Mr. Winthrop based on the “recovery clause” in the 14 Letter, so Mr. Winthrop’s Motion seeking summary judgement is moot. 15 B. AZR’s Motion for Summary Judgement on Mr. Winthrop’s Counterclaims 16 AZR has filed a motion seeking summary judgement on Mr. Winthrop’s 17 counterclaims against it. AZR argues that Mr. Winthrop cannot produce evidence sufficient 18 to establish the elements of any of his claims. Noting that the burden is on Mr. Winthrop 19 to establish the existence of a contract, the breach of one of its terms, and resulting 20 damages, AZR argues he has not adequately proven the existence of a contractual 21 agreement to reimburse Mr. Winthrop for contractual expenditures and further has not 22 presented competent evidence to support his damages. (Doc. 191 at 6.) Further, AZR 23 argues Mr. Winthrop has not put forward any competent evidence of a duty owed to him 24 by AZR to “implement reasonable safeguards.” While AZR admits its handbook and rules 25 do state that rangers should implement safeguards over funds and property in their 26 individual possession, it claims that this rule does not create a duty owed to Mr. Winthrop. 27 (Id. at 7.) Finally, AZR argues that Mr. Winthrop has not presented any evidence of legally 28 cognizable damages flowing from the alleged breach of this duty, even if he could show 1 the duty was owed to him. (Id. at 7-8.) 2 Mr. Winthrop responds that summary judgement is not appropriate on his breach of 3 contract claim because disputed facts remain as to “what the parties implied contract 4 consisted of” and “key terms” remain highly disputed. (Doc. 207 at 6.) Mr. Winthrop 5 argues he has presented evidence establishing both a contractual duty to reimburse him, 6 and a duty under the bylaws to maintain safeguards over funds. (Id. at 8-9). Further, Mr. 7 Winthrop contends that AZR “cannot prove a complete absence of breach” and that 8 additional damages, other than those reimbursed by AZR, remain. (Id. at 9-12.) He alleges 9 these same facts prevent summary judgment on his claims for breach of the duty of good 10 faith and fair dealing and for unjust enrichment. (Id. at 13-14.) 11 i. Lost Wages Claim 12 The Court will first turn to the arguments regarding Mr. Winthrop’s lost wages. Mr. 13 Winthrop claims that summary judgment is not appropriate because he has remaining 14 damages in the form of lost wages. Mr. Winthrop argues that he has been “unable to obtain 15 licensure in Washington state due to the claims asserted in this litigation. (Doc. 207 at 12.) 16 Mr. Winthrop’s argument references his additional statement of facts filed with the Court 17 which states in pertinent part that “Section 29 of the Washington Bar Application requires 18 [he]…disclose if [he] is party to any civil action. (Doc. 208 at 11.) Because Mr. Winthrop 19 “would be required to disclose [AZR’s] complaint” which contains allegations regarding 20 his character, “Mr. Winthrop’s counsel advised him not to apply…until after this litigation 21 was concluded.” (Id. at 12.) 22 First, the Court recalls to the parties’ attention the representations made to the Court 23 by counsel for Mr. Winthrop and WEC during oral argument on the parties’ motions to 24 dismiss. There, the Court specifically inquired about whether the litigation privilege would 25 bar claims for damages that were based on statements made by AZR in the course of 26 litigation. The inquiry went as follows: 27 THE COURT: And then one last, counsel, because I need to move on, that 28 you've cited a bunch of authority for why the litigation privilege does not 1 apply in tort cases but you are applying it in a contract case. I don't see any 2 authority and you haven't cited any authority that says it applies in a contract 3 case -- 4 MR. DRAYE: We're not asserting -- 5 THE COURT: -- or doesn't apply. 6 MR. DRAYE: -- the litigation privilege. The other side is asserting litigation 7 privilege. In short, our position on that is that we're not basing any of our 8 claims on things that they filed in court in this proceeding… 9 10 (Oral Arg. Trans. at 12:25-13:11.) Mr. Winthrop has not amended his counterclaim since 11 this hearing was held. Thus, to the extent Mr. Winthrop’s claim was not already barred by 12 the Court’s order on the parties’ motions to dismiss, (Doc. 176 at 23), the Court will simply 13 hold Mr. Winthrop to the statements made by his counsel. Winthrop cannot bring any claim 14 of damages based upon statements made in the parties’ court documents. 15 Second, even if the statements of Mr. Winthrop’s counsel did not bar this claim, the 16 prior ruling of this Court did. The Court’s order on the parties’ motion to dismiss 17 specifically found that to the extent Mr. Winthrop’s damages were “directly tied to the 18 existence of the court case against him” they were barred “by the litigation privilege.” (Doc. 19 176 at 23.) The Court explained that Arizona recognizes the “‘overriding public interest 20 that persons should speak freely and fearlessly in litigation’ underlying the absolute 21 litigation privilege entitles defendants to immunity from claims arising out of defamatory 22 statements in a judicial proceeding.” Taraska v. Brown, No. 1 CA-CV 18-0714, 2019 Ariz. 23 App. Unpub. LEXIS 1296, at *5-6 (Ct. App. Nov. 26, 2019) (citing Green Acres Tr. v. 24 London, 141 Ariz. 609, 613 (1984)). Thus, Arizona extends the litigation privilege not just 25 to in-court statements and filed pleadings, but also to statements “relating to pending or 26 proposed litigation.” Goldman v. Sahl, 462 P.3d 1017, 1017 (Ariz. Ct. App. 2020). Here, 27 the theory of Mr. Winthrop’s claim for lost wages is entirely based on what he alleges to 28 be false statements made by AZR in its Court filings. He argues he would have to disclose 1 these statements to the Washington State Bar due to an application question asking whether 2 he is “party to any civil action.” (Doc. 208 at 11.) Mr. Winthrop’s claim for lost wages is 3 entirely based upon documents filed and statements made in a court case against him. As 4 such, they are barred by the litigation privilege. (Doc. 176 at 23.) 5 Third, even apart from issues surrounding the litigation privilege, the Court notes 6 that Mr. Winthrop cannot recover lost wages as consequential damages without showing 7 the item of damages was foreseeable and contemplated by the parties at the time of 8 contracting. Mr. Winthrop argues that “[a] party may recover lost wages as consequential 9 damages to a breach of contract claim.” (Doc. 207 at 12 (citing E-Z Livin’ Mobile Homes, 10 Inc. v. Tommaney, 550 P.2d 658, 662 (1976).) But this is of course subject to the “well- 11 established rule in Arizona that the damages for breach of contract are those which arise 12 from the breach itself or which fall within the reasonable contemplation of the parties.” E- 13 Z Livin’ Mobile Homes, Inc., 550 P.2d 662; see also McFadden v. Shanley, 16 Ariz. 91, 96 14 (1914) (quoting Hadley v. Baxendale, 9 Exch. 341, 156 Eng. Rep. 145 (1854)). Mr. 15 Winthrop has proffered no evidence showing the parties contemplated such damages when 16 entering their alleged contract. As such, he has failed his burden on summary judgement 17 under Celotex. 477 U.S. at 322 (finding summary judgment proper when a party “fails to 18 make a showing sufficient to establish the existence of an element essential to that party’s 19 case, and on which that party will bear the burden…”). 20 Fourth, even did the Court set aside the issues of foreseeability, there still remains 21 issues regarding the speculative nature of Mr. Winthrop’s damages. “Damages that are 22 speculative or uncertain cannot support a judgment; the plaintiff must prove the fact of 23 damage with reasonable certainty.” Larsen v. Snow Prop. Servs., No. 1 CA-CV 16-0205, 24 2017 Ariz. App. Unpub. LEXIS 241, at *7 (Ct. App. Mar. 7, 2017) (quoting Coury Bros. 25 Ranches, Inc. v. Ellsworth, 103 Ariz. 515, 521 (1968)). Such proof "must be of a higher 26 order than proof of the amount of damages.” Id. Here, Mr. Winthrop cannot show with 27 anything more than speculation that the allegations of the case would have prevented him 28 from being barred in Washington. He did not apply to the bar. He never submitted any 1 character and fitness application. Instead, he chose to wait. He suggests he was forced to 2 wait because if he had applied while the litigation was pending his application would have 3 been denied but offers absolutely no proof as to why this would be the case. While he 4 makes a passing reference to following the advice of Washington counsel, but gives no 5 detail regarding who this counsel was or how they determined the allegations of the 6 complaint would alone result in denial of Mr. Winthrop’s admission. On such a scant 7 record of proof, it is mere speculation to assert that Mr. Winthrop’s application would have 8 been subjected to “heightened scrutiny” due to the litigation, that the scrutiny would have 9 resulted in his application’s denial, or that by such denial he would have lost wages to the 10 tune of $11,540 per month. See Thunderbird Metallurgical Inc. v. Arizona Testing Labs., 11 5 Ariz. App. 48, 50 (1967) (damages must be proximately caused); Smartcomm License 12 Servs. LLC v. Palmieri, Nos. 1 CA-CV 16-0265, 1 CA-CV 16-0281, 2018 Ariz. App. 13 Unpub. LEXIS 42, at *8 (Ct. App. Jan. 9, 2018) (noting speculative damages are not 14 recoverable and “[a]ffidavits and testimony by plaintiffs, without supporting 15 documentation, may be found insufficient to overcome summary judgment.”) 16 Fifth, and perhaps most germane, Mr. Winthrop leaves essentially unrebutted 17 AZR’s assertion that he cannot present any evidence showing that the alleged implied 18 contract established a duty owed to Mr. Winthrop to keep reasonable safeguards in place 19 regarding the funds. As AZR points out, under Celotex, summary judgment may be granted 20 “against a party who fails to make a showing sufficient to establish the existence of an 21 element essential to that party’s case, and on which that party will bear the burden of proof 22 at trial.” Celotex, 477 U.S. at 322. AZR has argued that Mr. Winthrop can point to no 23 evidence on the record showing AZR owed a contractual duty to Mr. Winthrop to 24 implement reasonable safeguards and controls. The existence of a contractual duty is of 25 course “an element essential to” Mr. Winthrop’s case, and one on which he will “bear the 26 burden of proof at trial.” Id. 27 Mr. Winthrop does not adequately respond to this argument. As Celotex makes 28 clear, a Plaintiff cannot survive summary simply by pointing out the parties disagree; 1 parties in litigation are often in disagreement. Further, no matter how much dust has been 2 kicked in the air, a Plaintiff may not proceed to trial simply by appealing to the absence of 3 evidence disproving its claim. 477 U.S. at 322. Instead, under Celotex, the Plaintiff is put 4 to his burden and must reach out into the disputed facts and point the Court to specific 5 evidence by which a jury could find in the Plaintiff’s favor on the elements of its claim. Id. 6 AZR put Mr. Winthrop to this burden by asserting that there was no evidence on the record 7 to support the existence of a contractual duty owed by AZR to Mr. Winthrop to maintain 8 adequate safeguards and controls over the grant funds. (Doc. 191 at 7.) Mr. Winthrop’s 9 response puts forward no such evidence.2 The AZR by-laws create no such duty owed by 10 AZR to individual rangers. While the by-laws do lay out the duties specific AZR officers 11 and members owe to the organization, no evidence suggests this document creates an 12 enforceable contractual right by which individual rangers may sue AZR. Thus, when Mr. 13 Winthrop points to by-laws requiring the company treasurer “maintain accurate records of 14 the company receipts, disbursements and property[,]” (Doc. 207 at 8), he has at best shown 15 a duty owed by the treasurer to AZR. He has not shown a duty owed by AZR to him. 16 This, of course, also defeats Mr. Winthrop’s argument stating summary judgment is 17 not appropriate because “[AZR] cannot prove the absence of breach.” (Id. at 10.) Mr. 18 Winthrop points out there is conflicting evidence regarding who actually controlled the 19

20 2 Mr. Winthrop does argue that evidence demonstrates a genuine dispute of material fact exist as to whether the implied contract between the Rangers and Winthrop included 21 the following terms: 22 • At all times, the Rangers oversaw Winthrop, who reported to his superior; • Winthrop did not have any official title or role in the Rangers, and was not a voting 23 member; 24 • Winthrop routinely submitted his expenses to the Rangers’ East Valley Company Treasurer; and 25 • Winthrop’s regular communications with the Rangers indicated the Rangers had 26 knowledge of, and approved, his purchases. (Doc. 207 at 9.) The Court notes that these appear to be assertions regarding actions taken 27 by the parties rather than contractual duties owed to each other. Regardless, none of the 28 items listed evidences the existence of a contractual duty owed by AZR to Mr. Winthrop to maintain records and safeguards regarding the grant funds. 1 grant funds and what steps were taken by AZR to put safeguards in place. (Id.) Further, 2 Mr. Winthrop points out that “breach is almost always an issue of fact.” (Id.) However, 3 because Mr. Winthrop has failed to show AZR owed Mr. Winthrop a contractual duty to 4 put safeguards in place, the actions taken by AZR are not material facts. Liberty Lobby, 5 Inc., 477 U.S. at 248 (“A material fact is any factual issue that might affect the outcome of 6 the case under the governing substantive law.”) Because AZR has put forward no evidence 7 of duty, disputes as to whether that duty was breached are immaterial. 8 For each of the individual reasons listed above, the Court grants AZR’s Motion for 9 Summary Judgment on Mr. Winthrop’s breach of contract claim for failure to put 10 safeguards in place. This disposes of Mr. Winthrop’s claim for lost wages. 11 ii. Reimbursement Claim 12 AZR also moved for summary judgement on Mr. Winthrop’s remaining claim for 13 breach of contract. Mr. Winthrop’s sole remaining theory for breach of contract argues he 14 and AZR are parties to an implied contract in which AZR agreed to reimburse him for 15 purchases that were “authorised in executing [AZR’s] affairs or were beneficial to [AZR].” 16 (Doc 207 at 7.) According to Mr. Winthrop, AZR’s has breached this implied contract by 17 failing to repay him for a December American Express Payment totalling $299.97, and for 18 $499.74 he spent prototyping Ranger badges. (Id. at 4-5.) Thus, Mr. Winthrop argues he 19 has been damaged to the tune of $799.71. (Id. at 11.) 20 AZR argues that Mr. Winthrop cannot show the existence of an implied contract by 21 which AZR agreed to reimburse him “all expenditures he purportedly made on [AZR’s] 22 behalf.” (Doc. 216 at 4.) It argues that at best the evidence supports an implied contract to 23 reimburse Mr. Winthrop for charges specifically made on his Amex card between June 24 2017 and November 23, 2017. (Id.) AZR argues that the December American Express 25 payment totalling $299.97 was for a hotel purchase made after it expressly told Mr. 26 Winthrop to make no more purchases using the AmEx card, and thus was clearly outside 27 the scope of any possible agreement. (Doc 216 at 6.) With regard to the proffered charge 28 of $499.74 incurred for the prototyping of badges, AZR argues there is no evidence of any 1 agreement to reimburse Mr. Winthrop because the charge was incurred prior to June 2017 2 and was not made on his AmEx card. (Id. at 6-7.) AZR also argues that by asserting he 3 made such a charge, Mr. Winthrop contradicts his former testimony where he claims that 4 the only card he used on AZR’s behalf was his AmEx card. (Id. at 7.) 5 The Court grants AZRs request for Summary Judgement with regard to Mr. 6 Winthrop’s claim for reimbursement of the December American Express Payment totalling 7 $299.97. The credit card statement associated with that purchase clearly indicates the 8 charge was incurred on December 5, 2017. The charge was payment for a hotel stay that 9 spanned December 4-5, 2017. (Doc. 216 at 17.) Mr. Winthrop has admitted that he was 10 instructed to cease using the AmEx card on November 21, 2017. (Doc. 208 at 7.) Thus, no 11 matter what is unknown regarding the parties implied contract, it is uncontroverted that 12 Mr. Winthrop was not authorized to make purchases on the card past that date. In light of 13 the fact that the AmEx statement specifically controverts Mr. Winthrop’s affidavit, 14 (compare Doc. 208-8 at 3 (“I was not reimbursed for $299.97 for Rangers Expenses that 15 were incurred prior to…November 21, 2017), with Doc. 216 at 17 (indicating the $299.97 16 charge was incurred on December 5, 2017)), and shows that the purchase was made after 17 the date he was ordered to stop using the card, summary judgement is granted on this item 18 of damages. 19 Mr. Winthrop’s argument claiming the right to reimbursement through an alleged 20 agency relationship does not change this result. Each of Mr. Winthrop’s cited cases to the 21 contrary discuss the way a principle is bound by its agents’ actions with regard to third 22 parties. Queiroz v. Harvey, 205 P.3d 1120, 1122 (2009) (rejecting a principle’s attempt to 23 escape liability for actions taken by its agent in a suit against a third party injured by the 24 agent); accord Ruesga v. Kindred Nursing Ctrs. W., L.L.C., 215 Ariz. 589, 161 P.3d 1253 25 (Ct. App. 2007); Big Bear Imp. Brokers, Inc. v. LAI Game Sales, Inc., No. CV-08-2256- 26 PHX-DGC, 2010 U.S. Dist. LEXIS 18604 (D. Ariz. Mar. 2, 2010). The cases do not 27 establish the obligations of a principle to its agent when the agent acts against the express 28 orders of the principle. As such, summary judgment is granted as to Mr. Winthrop’s claim 1 for reimbursement of the $299.97 charge. 2 However, summary judgement is denied with regard to the $499.74 Mr. Winthrop 3 allegedly spent prototyping Ranger badges. The Court believes that Mr. Winthrop has 4 pointed to adequate evidence on the record such that a jury could find that the parties had 5 an implied contract for reimbursement. If nothing else, the repeated reimbursement by the 6 Arizona Rangers Treasurer is evidence that some implied contract to reimburse Mr. 7 Winthrop exists. While AZR argues this contract was limited and did not extend to cover 8 purchases made prior to June, the Court believes the actions of the parties together with 9 Mr. Winthrop’s affidavit are sufficient evidence for a jury to find the agreement extended 10 earlier. Indeed, the only reason Mr. Winthrop’s claim for reimbursement on the December 11 charge is disallowed is because the parties do not dispute that any agreement to reimburse 12 charges ended prior that date. (Doc. 208 at 7.) The Court finds no similar agreement setting 13 the date reimbursement was first authorized, and as such, leaves the evidence to the jury. 14 The Court is not persuaded by AZR’s assertion that the $499.97 claim contradicts 15 Mr. Winthrop’s deposition testimony. AZR argues that Mr. Winthrop cannot bring this 16 claim for reimbursement because the charge was not made on the AmEx card. (Doc. 216 17 at 7.) As grounds for this, AZR asserts that Mr. Winthrop stated in his deposition that the 18 only charges he made for AZR were on his AmEx card. The deposition testimony cited by 19 AZR reads as follows: 20 Q. Okay. The second part of this says you were asked to purchase certain 21 items for the benefit of the Arizona Rangers. What does that mean? 22 A. So -- And please let me know, sir, if this is repetitive with a prior 23 deposition. But one of the problems that the public charities regularly face is 24 a difficulty in obtaining credit. So, in order to procure certain items I essentially needed to guarantee or lend my credit to the Rangers so that 25 certain things could be bought. The alternative was for them to write a check 26 and send it across the country, wait for the check to clear, and then wait for something to come in. That was an unduly slow and archaic process. And it 27 was recommended that, since I had the ability to extend my credit, that I 28 simply use my personal card on behalf of the Rangers to procure those things that were either in the grant or I was directed to buy by my superiors. 1 Q. So this is the AmEx card we're talking about, correct? 2

3 A. That's correct.

4 (Id. (citing Doc. 191 Ex. 1).) 5 According to AZR, this testimony can only be interpreted as asserting that all 6 expenditures made by Mr. Winthrop on AZR’s behalf were made using the AmEx card. 7 (Id.) However, the Court disagrees. While it is certainly possible to accept AZR’s 8 interpretation of this testimony, a jury could also infer that Mr. Winthrop’s comments are 9 simply explaining an eventual process by which he normalized or organized payments 10 made on AZR’s behalf. He explains that he has any number of cards tied to his personal 11 credit account, with each card labelled so he can track his charges. (Id.) However he does 12 not affirmatively assert that no charges were made on AZR’s behalf other than those made 13 after he created a sperate linked card. (Id.) The Court does not agree with AZR’s assertion 14 that it must disregard Mr. Winthrop’s affidavit claiming to have spent $499.97 on AZR’s 15 behalf prior to creating a separately named card for such purchases. 16 In light of the above, the Court grants summary judgement on the entirety on Mr. 17 Winthrop’s breach of contract claim with the exception of his claim for reimbursement for 18 the $499.97 spent to prototype badges. 19 iii. Mr. Winthrop’s remaining claims 20 AZR also seeks summary judgment of Mr. Winthrop’s claim for breach of the duty 21 of good faith and fair dealing and for unjust enrichment. With regard to both theories of 22 relief, the Court grants summary judgment on all Mr. Winthrop’s claims except for his 23 claim for reimbursement for the $499.97 spent to prototype badges. 24 With regards to Mr. Winthrop’s claim for lost wages, any attempt to assert such 25 damages under a breach of the duty of good faith suffers the same defects noted in the 26 Court’s analysis of his breach of contract claim. Supra at III.B.ii. Additionally, the essence 27 of the covenant of good faith and fair dealing is that neither party will act to impair the 28 right of the other to receive the benefits which flow from their agreement or contractual 1 relationship. Beaudry v. Ins. Co. of the W, 203 Ariz. at 91 (citing Rawlings v. Apodaca, 151 2 Ariz. 149, 153-54 (1986)) (emphasis added); see Wells Fargo Bank v. Arizona Laborers, 3 Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 490 4 (2002) (“The implied covenant of good faith and fair dealing prohibits a party from doing 5 anything to prevent other parties to the contract from receiving the benefits and 6 entitlements of the agreement.”); Rawlings, 151 Ariz. at 155 (“The essence of that duty is 7 that neither party will act to impair the right of the other to receive the benefits which flow 8 from their agreement or contractual relationship.”). 9 As the Court noted in the order on the parties’ motion to dismiss, the inability of 10 Mr. Winthrop to transfer his bar membership is unrelated to any “‘reasonably expected 11 benefit’ under his implied contract’ with AZR.” (Doc. 176 at 23.) Repackaging the claim 12 as lost wages rather than reputational damages does not somehow turn this alleged harm 13 into the denial of an expected benefit of his alleged agreement to make purchases and be 14 reimbursed by AZR. The same issue prevents Mr. Winthrop from recovering his charge of 15 $299.97 under this theory. He could not reasonably have expected to be reimbursed for a 16 charge he knowingly made after being ordered to stop making expenditures on AZR’s 17 behalf. 18 With regards to Mr. Winthrop’s claim for unjust enrichment, the Court notes that 19 the clear evidence shows that Mr. Winthrop made the $299.97 charge after being ordered 20 to stop make charges on AZR’s behalf. (Compare Doc. 208-8 at 3, with Doc. 216 at 17.) 21 “To recover under a theory of unjust enrichment, a plaintiff must demonstrate five 22 elements: (1) an enrichment, (2) an impoverishment, (3) a connection between the 23 enrichment and impoverishment, (4) the absence of justification for the enrichment and 24 impoverishment, and (5) the absence of a remedy provided by law.” Freeman v. Sorchych, 25 226 Ariz. 242, 251 (App. 2011) (citing City of Sierra Vista v. Cochise Enters., Inc., 144 26 Ariz. 375, 381-82 (App. 1984)). For an award based on unjust enrichment, a plaintiff must 27 show “that the benefit was not 'conferred officiously.'" Freeman, 226 Ariz. at 251 (quoting 28 Murdock-Bryant Constr., Inc. v. Pearson, 146 Ariz. 48, 53 (1985)). As the Arizona 1 || Supreme Court has explained: 2 Officiousness means interference in the affairs of others not justified by the 3 circumstances under which the interference takes place. Policy ordinarily A requires that a person who has conferred a benefit either by way of giving another services or by adding to the value of his land or by paying his debt . 5 . . Should not be permitted to require the other to pay therefor, unless the one 6 conferring the benefit had a valid reason for so doing...[W]here a person has officiously conferred a benefit upon another, the other is enriched but is not 7 considered to be unjustly enriched. 8 9 W. Coach Corp. v. Roscoe, 133 Ariz. 147, 154 (1982) (quoting Restat Ist of Restitution, § 2). 10 If there is ever a time when “interference in the affairs of others” is “not justified by D the circumstances[,]|” it is when someone expressly orders you not to interfere. Even if Mr.

B Winthrop could show that AZR was somehow enriched by his use of the card in December, 4 in light of his admission that such a purchase was made in the face of a direct and

5 acknowledged order not to use the card, the benefit would not be one officiously conferred.

Even if AZR were enriched it “is not considered to be unjustly enriched.” Roscoe, 133 6 Ariz. at 154. 17 13 IV. CONCLUSION

19 Accordingly, 50 IT IS ORDERED that the parties’ motions for summary judgement are granted in

part and denied in part as outlined above.

0 Dated this 29th day of July, 2021.

23 24 > <= fe 25 onorable Susan M. Brnovich 26 United States District Judge 27 28

-24 -