THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
HALL, Judge.
¶ 1 Mark Flood and Blake Taylor (the homebuyers) appeal from the superior court's order finding that Celebrity Homes and Robert and Kathleen Ryan (the homebuilders) satisfied all of their obligations under the parties' settlement agreement and do not owe any interest. For the reasons discussed below, we affirm the superior court's order.
FACTUAL AND PROCEDURAL BACKGROUND
¶ 2 The following relevant facts are not disputed. On April 23, 2007, the homebuyers entered into a contract to purchase a home from the homebuilders for the price of $1,650,000. On June 18, 2008, the homebuyers filed a complaint against the homebuilders alleging, among other things, that the homebuilders failed to provide them a copy of the subdivision public report as required by statute. On August 24, 2009, the superior court entered summary judgment in favor of the homebuyers, rescinding the sale of the property, on the basis that the homebuilders had failed to provide the homebuyers with a public report.1 The superior court ordered the homebuilders to pay the homebuyers $1,591,500 and attorneys' fees and costs.
¶ 3 On February 2, 2010, the homebuyers filed a petition for order to show cause, asking the superior court to enter a sanction for contempt against the homebuilders in the amount of the rescission price, $1,591,500. In response, the homebuilders asserted that they were unable to raise sufficient funds to satisfy the judgment.
¶ 4 On April 23, 2010, the superior court held an evidentiary hearing on the order to show cause in which the homebuyers alleged that the homebuilders had fraudulently transferred their assets. The evidentiary hearing was continued to April 28, 2010. At the outset of the April 28, 2010 hearing, the attorney for the homebuyers informed the court that the parties had reached a settlement agreement and "would like to put the basic terms [on] the record[], subject to a final agreement being worked out in the next week or so." The homebuyers' attorney then set forth the terms of the settlement agreement as follows, in pertinent part:
The terms of the settlement are that there will be $100,000 payable immediately, upon the execution of the final agreement, from [homebuilders] to [homebuyers], an additional $320,000 payable within 60 days of that same date.
The parties will agree to a stipulated judgment that will be identical in amount to the prior judgment entered by the court in this case, one point — $1,591,500, that judgment against [the homebuilders] to be reduced by payments made by [the homebuilders], including the $320,000 payment to be made in 60 days and any other payments that are made by [the homebuilders].
. . . .
If the judgment is not fully paid within nine months, [the homebuyers] may recover possession of the property. They may enter the judgment and record and execute upon the judgment, and may receive, as additional damages, the costs of ownership of the home going forward after that time.
. . . .
Interest on the judgment, if it's not paid, is to accrue at the rate of 10 percent.
After the homebuyers' attorney presented the terms of the agreement, the court placed each of the parties under oath and they each stated for the record that they agreed to the terms of the agreement as outlined in open court.
¶ 5 On July 7, 2010, the parties filed a notice to the court that they had executed a written settlement agreement. On October 5, 2010, the homebuilders filed a motion asking the court to resolve a dispute that had arisen regarding the parties' settlement agreement. Primarily, the parties disputed whether the homebuilders were required to pay the homebuyers ten percent interest from August 24, 2009 on the settlement amount of $1,591,500.
¶ 6 On December 2, 2010, the superior court held oral argument on the homebuilders' motion. Counsel for the homebuilders averred that the parties never discussed the mandatory payment of interest during their settlement negotiations. The homebuyers' attorney acknowledged that he did not recall having any discussion regarding the payment of interest during settlement negotiations either, but he nonetheless argued that the parties' written settlement agreement provides for the payment of interest and the content of the parties' negotiations is therefore irrelevant. After hearing the parties' respective arguments, the superior court ruled in favor of the homebuilders, stating:
Gentlemen, I will tell you that this is one of the few cases where I didn't need to thoroughly review the file because I have a clear recollection of what was going on in this case.
I was of the opinion that Mr. Ryan was an actor who needed to be dealt with by the Court, and I was going to deal with him sternly. There was, in fact, an 80(d) agreement reached in this particular case.
In that agreement, which was binding upon the parties immediately, there was nothing about payment of interest. There was nothing in there. What the structure was is that if he didn't pay on a timely fashion, then that judgment was going to be triggered. That's what happened in court. That's what happened.
. . . .
It is the Court's finding that Mr. Ryan has complied with the agreements as provided. There was nothing on the record concerning interest, not before me, that he was going to pay or was liable for interest. That was not a part of what was put on the record as the 80(d) agreement in this case.2
This case is settled, gentlemen.
¶ 7 On February 10, 2011, the superior court reduced its December 2, 2010 minute entry findings to a signed order. The homebuyers timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) section 12-2101(B) (2003).
DISCUSSION
¶ 8 The homebuyers contend that the superior court erred by finding that the homebuilders fully satisfied the terms of the parties' settlement agreement. Specifically, the homebuyers argue that the settlement agreement clearly and unambiguously requires the homebuilders to pay interest that commenced accruing at a rate of ten percent on August 24, 2009.
¶ 9 We review the interpretation of a contract de novo. Rand v. Porsch Fin. Servs., 216 Ariz. 424, 434, ¶ 37, 167 P.3d 111, 121 (App. 2007). General contract principles govern the construction and enforcement of a settlement agreement. Emmons v. Superior Court, 192 Ariz. 509, 512, ¶ 14, 968 P.2d 582, 585 (App. 1998). When the terms of an agreement are clear and unambiguous, we give effect to the agreement as written. Goodman v. Newzona Inv. Co., 101 Ariz. 470, 472, 421 P.2d 318, 320 (1966). If the terms of the agreement are ambiguous, "parol evidence may be used to explain [the ambiguity], but in the absence of fraud or mistake, it may not be used to change, alter or vary the express terms in a written agreement." Brand v. Elledge, 101 Ariz. 352, 358, 419 P.2d 531, 537 (1966). When parties submit competing interpretations of a contract's meaning, the court should consider "the offered evidence and, if [the court] finds that the contract language is reasonably susceptible to the interpretation asserted by its proponent, the evidence is admissible to determine the meaning intended by the parties." Taylor v. State Farm Mut. Automobile Ins. Co., 175 Ariz. 148, 154, 854 P.2d 1134, 1140 (1993) (internal quotation omitted). "Whether contract language is reasonably susceptible to more than one interpretation so that extrinsic evidence is admissible is a question of law." Id. at 158-59, 854 P.2d at 1144-45. We uphold a superior court's ruling if it is correct for any reason. See Earthworks Contracting, Ltd. v. Mendel-Allison Constr., 167 Ariz. 102, 109, 804 P.2d 831, 838 (App. 1990).
¶ 10 As set forth in Section 2 of the parties' written settlement agreement, the homebuyers and the homebuilders agreed to execute a "Stipulated Judgment" "against Robert Ryan, Kathleen Ryan, and Celebrity Homes, LLC in favor of Mark Flood and Blake Taylor in the principal amount of $1,591,500 plus pre-judgment interest at ten percent (10%) per annum, accruing from August 24, 2009, plus post-judgment interest at ten percent (10%) per annum." Section 3 of the agreement states that the homebuyers agree not to file or execute the "Stipulation . . . or otherwise enforce the Judgment, so long as" the homebuilders comply with three obligations: (a) pay the homebuyers $100,000 for attorneys' fees and costs concurrent with the execution of the settlement agreement, (b) pay the homebuyers $320,000 within 60 days of the execution of the settlement agreement, (c) pay the homebuyers "the balance of the Stipulated Judgment within 270 days" of the execution of the settlement agreement.
¶ 11 The homebuyers argue that the third provision, requiring the homebuilders to pay "the balance of the Stipulated Judgment," expressly and unequivocally requires the homebuilders to pay interest accruing at a rate of ten percent since August 24, 2009. Specifically, the homebuyers assert that Section 2 of the settlement agreement defines the term "Stipulated Judgment" as encompassing interest. The homebuilders, on the other hand, contend that the phrase "balance of the Stipulated Judgment," as used in Section 3(c), refers solely to the rescission price of $1,591,500, less the $320,000 paid under the second provision of Section 3.
¶ 12 We conclude that the settlement agreement language is ambiguous and reasonably susceptible to both interpretations advocated by the parties. As noted by the homebuilders, the term "Stipulated Judgment," as discussed in Section 2 of the agreement, does not include a calculation of interest, but instead contemplates that such an amount may be calculated at a future date when, and if, the stipulated judgment is filed with the court. Nonetheless, as the homebuyers argue, "Stipulated Judgment" as outlined in Section 2 provides for the payment of interest and sets forth the manner in which it is to be calculated. Had Section 3(c) required that the homebuilders pay $1,271,500, the rescission price less the $320,000 owed under Section 3(b), it would be clear that no payment of interest was included. As written, however, the parties' intent is unclear. See Taylor, 175 Ariz. at 155 n.3, 854 P.2d at 1141 n.3 (explaining an agreement is ambiguous if it is "capable of being understood in two or more possible ways") (internal quotation omitted).
¶ 13 The homebuilders' attorney submitted an affidavit avowing that the parties did not discuss any mandatory payment of interest during their settlement negotiations and the homebuyers failed to present any contrary evidence. Perhaps more importantly, however, the homebuyers' attorney addressed the payment of interest at the Rule 80(d) hearing and expressly stated that "[i]nterest on the judgment, if it's not paid, is to accrue at the rate of 10 percent." (Emphasis added). This explanation, that the payment of interest would only be required if the homebuilders failed to make the three timely payments set forth in Section 3 of the settlement agreement, is consistent with the homebuilders' interpretation. We therefore conclude that, because the homebuilders timely paid the $1,591,500 owed under the settlement agreement, the superior court correctly found that they do not owe any interest.3
¶ 14 Both parties' request an award of their attorneys' fees pursuant to Section 31 of the settlement agreement and A.R.S. § 12-341.01(A) (2003). Because the homebuilders are the "prevailing" party, we award them their reasonable attorneys' fees and costs as provided for in the settlement agreement.
CONCLUSION
¶ 15 For the foregoing reasons, we affirm the superior court's order.
MICHAEL J. BROWN, Presiding Judge, PATRICIA K. NORRIS, Judge, concurring.
