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Ariz.App. Div. 1,2010.
Arizona Tile, L.L.C. v. Berger
223 Ariz. 491, 224 P.3d 988, 575 Ariz. Adv. Rep. 16
Feb. 2, 2010.
as Amended Feb. 8, 2010.
Background: Supplier that sold tile to buyer, a countertop installation company, brought action against buyer and
against buyer's two corporate officers, as well as spouse of one officer, on basis of breach of fiduciary duty arising
did not reside in Arizona;
(2) materialmen's trusts statute created an obligation on part of buyer to treat funds it obtained from owner-
occupants as funds in trust for the benefit of supplier;
(3) the two officers were personally liable for causing the corporation to breach such trust obligations; but
(4) supplier was not entitled to statutory attorney fees awarded in contested actions arising out of a contract.
106 Courts
106I Nature, Extent, and Exercise of Jurisdiction in General
106k34 Presumptions and Burden of Proof as to Jurisdiction
106k35 k. In general. Most Cited Cases
When a defendant challenges the existence of personal jurisdiction, the plaintiff must come forward with facts estab-
30XVI Review
30XVI(F) Trial De Novo
30k892 Trial De Novo
30k893 Cases Triable in Appellate Court
30k893(1) k. In general. Most Cited Cases
101X Officers and Agents
257II Right to Lien
257II(E) Subcontractors, and Contractors' Workers and Materialmen
257k115 Payment to Principal Contractor, or to Subcontractor Employing Claimant
257k115(1) k. Payments to principal contractor in general. Most Cited Cases
Two officers of countertop installation corporation were personally liable for causing the corporation to breach its
[8] Costs 102 194.32
102 Costs
102VIII Attorney Fees
102k194.24 Particular Actions or Proceedings
257k310 Fees and Costs
257k310(1) k. In general. Most Cited Cases
Tile supplier's claim against buyer's individual corporate officers for breach of statutorily imposed materialmen's
trust relationship did not arise out of a “contract,” and thus, supplier was not entitled to statutory attorney fees
awarded in contested actions arising out of a contract. A.R.S. §§ 12-341.01(A), 33-1005.
30k984 Costs and Allowances
30k984(5) k. Attorney fees. Most Cited Cases
The Court of Appeals generally reviews an award of attorney fees for an abuse of discretion.
[10] Trusts 390 173
on Arizona Revised Statutes (“A.R.S.”) section 33-1005 (2007). The Bergers unsuccessfully moved to dismiss the
complaint against them for lack of personal jurisdiction and failure to state a claim. Arizona Tile then moved to
having failed to pay to Arizona Tile the funds received from the retailers on behalf of the owner-occupants of homes
in which Designer Surfaces had installed countertops. Finally, Arizona Tile argued that the breach of fiduciary duty
arose out of contract, entitling it to attorneys' fees.
¶ 6 The Defendants also moved for summary judgment. They argued that they could not be personally liable on the
FN3. Arizona Tile, however, had provided affidavits from eleven persons who avowed that they owned
their homes before they had purchased granite materials from a retailer and that Designer Surfaces had in-
stalled the materials in their homes. On appeal, Defendants do not assert that a factual dispute existed re-
garding whether those who received the supplies from Arizona Tile were residential owner-occupants.
[1][2] ¶ 8 The Defendants first argue that the superior court lacked personal jurisdiction over them and should have
granted the Bergers' motion to dismiss the complaint. When a defendant challenges the existence of personal juris-
diction, the plaintiff must come forward with facts establishing a prima facie showing of jurisdiction, at which time
the burden shifts to the defendant to rebut the showing. Macpherson v. Taglione, 158 Ariz. 309, 312, 762 P.2d 596,
599 (App.1988). However, the court should resolve any conflicts “in the affidavits and pleadings” in the plaintiff's
(1976), to assert that corporate officers or directors are not liable for a corporation's torts unless they authorized or
participated in the challenged actions or the corporation was their alter ego.
FN4. Although the Bergers also argue here that § 33-1005 did not impose a duty on them, that issue is more
properly addressed in the summary judgment discussion that follows.
101X Officers and Agents
257II Right to Lien
257II(E) Subcontractors, and Contractors' Workers and Materialmen
257k115 Payment to Principal Contractor, or to Subcontractor Employing Claimant
257k115(1) k. Payments to principal contractor in general. Most Cited Cases
Two officers of countertop installation corporation were personally liable for causing the corporation to breach its
[8] Costs 102 194.32
102 Costs
102VIII Attorney Fees
102k194.24 Particular Actions or Proceedings
257k310 Fees and Costs
257k310(1) k. In general. Most Cited Cases
Tile supplier's claim against buyer's individual corporate officers for breach of statutorily imposed materialmen's
trust relationship did not arise out of a “contract,” and thus, supplier was not entitled to statutory attorney fees
awarded in contested actions arising out of a contract. A.R.S. §§ 12-341.01(A), 33-1005.
30k984 Costs and Allowances
30k984(5) k. Attorney fees. Most Cited Cases
The Court of Appeals generally reviews an award of attorney fees for an abuse of discretion.
[10] Trusts 390 173
on Arizona Revised Statutes (“A.R.S.”) section 33-1005 (2007). The Bergers unsuccessfully moved to dismiss the
complaint against them for lack of personal jurisdiction and failure to state a claim. Arizona Tile then moved to
having failed to pay to Arizona Tile the funds received from the retailers on behalf of the owner-occupants of homes
in which Designer Surfaces had installed countertops. Finally, Arizona Tile argued that the breach of fiduciary duty
arose out of contract, entitling it to attorneys' fees.
¶ 6 The Defendants also moved for summary judgment. They argued that they could not be personally liable on the
FN3. Arizona Tile, however, had provided affidavits from eleven persons who avowed that they owned
their homes before they had purchased granite materials from a retailer and that Designer Surfaces had in-
stalled the materials in their homes. On appeal, Defendants do not assert that a factual dispute existed re-
garding whether those who received the supplies from Arizona Tile were residential owner-occupants.
[1][2] ¶ 8 The Defendants first argue that the superior court lacked personal jurisdiction over them and should have
granted the Bergers' motion to dismiss the complaint. When a defendant challenges the existence of personal juris-
diction, the plaintiff must come forward with facts establishing a prima facie showing of jurisdiction, at which time
the burden shifts to the defendant to rebut the showing. Macpherson v. Taglione, 158 Ariz. 309, 312, 762 P.2d 596,
599 (App.1988). However, the court should resolve any conflicts “in the affidavits and pleadings” in the plaintiff's
(1976), to assert that corporate officers or directors are not liable for a corporation's torts unless they authorized or
participated in the challenged actions or the corporation was their alter ego.
FN4. Although the Bergers also argue here that § 33-1005 did not impose a duty on them, that issue is more
properly addressed in the summary judgment discussion that follows.
