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 DECISON

BARKER, Judge.

¶1 Plaintiffs/appellants James and Penny Beito, Alameda Materials, Inc., Insearch Corporation, and Saturn Materials, Inc. (collectively "plaintiffs" or "appellants") appeal from a judgment after a jury trial finding their claim barred and from the trial court's denial of their motion for new trial. Appellants contend that, because an interrogatory submitted to the jury on the statute of limitations omitted reference to the effect of possible concealment of information by defendant/appellee Capital Title Agency, Inc. ("CTA"), the interrogatory was an erroneous instruction to the jury requiring reversal. For the following reasons, we affirm.

Facts and Procedural History

¶2 On or about September 24, 2001, Alameda Building Components Inc. ("ABC"), which was solely owned by Tom Stewart, purchased a parcel of property ("the Property") from Eugene and Virginia Swagel for $344,872, ten percent of which was to be paid at closing with the balance carried by the Swagels by means of a promissory note. CTA served as escrow agent for the transaction and was the account servicer for ABC's promissory note to the Swagels. The purchase money was paid by plaintiff/appellant Insight, Inc. ("Insight"), a company of which plaintiff/appellant James Beito was President. Stewart and Beito incorporated plaintiff/appellant Alameda Materials, Inc. ("AMI") for the purpose of jointly owning the Property. Stewart, who was AMI's President, owned sixty percent, and Beito, who was Secretary, owned forty percent.

¶3 On October 22, 2001, ABC conveyed the Property to AMI. A letter from ABC and AMI to CTA authorized the title company, upon receiving funds from AMI, to record the deed, to deduct the cost of recording, and to remit the balance to an identified trust. The letter provided the recording was a courtesy only with no title or escrow liability to CTA.

¶4 In December 2001, the State of Arizona obtained a preliminary injunction against ABC, Stewart, Beito, Insearch, and others, precluding them from crossing State trust land surrounding the Property without first obtaining the necessary rights of way. AMI and Saturn, Inc. were added as defendants in January 2002. The State contended that the defendants had been mining for rock on the Property and had crushed rock on archaeological sites, resulting in damage.

¶5 On March 18, 2002, Stewart conveyed the Property from AMI back to ABC. CTA prepared and recorded the deed at Stewart's request. About the same time, Insearch began making monthly payments to CTA, the account servicer, on the promissory note to the Swagels. Insearch continued to make monthly payments to CTA on the promissory note through August 2003.

¶6 At the end of April 2002, Stewart, ABC, and Superstition Crushing, LLC, formed 1405 Mine LLP ("1405 Mine"). In early May, Beito's counsel, Craig Mousel, advised Beito by letter that ABC had formed a new company with Superstition Crushing. The same letter indicated that the new partnership was amending the prior land use permit applications on the Property. On or about May 22, 2002, ABC conveyed the Property to 1405 Mine, which eventually developed the Property for use as a mine for "spec aggregate" and other construction materials. CTA was the escrow agent on the transaction.

¶7 A letter dated August 27, 2002, from the Arizona Attorney General to several addressees including Beito's counsel, Craig Mousel, described a meeting between the Arizona State Land Department, principals of Superstition Crushing, and a representative of Tom Stewart. According to the letter, representatives of the Land Department explained what would be needed prior to the Department's issuing land permits, resulting in an agreement that Superstition Crushing would provide evidence that Stewart and Superstition Crushing had taken steps to remediate damage done to the State land. The letter also stated that the State would stipulate to extend the court case on the inactive calendar to allow time for the permits to issue before the case was dismissed. The letter specifically mentioned "Craig's clients," and provided a telephone number to address any objections, comments, or questions. In December 2002, the State's lawsuit was dismissed; Mousel sent a copy of the order of dismissal to Beito.

¶8 On May 20, 2003, Beito wrote to Mousel noting that he had been making payments on the Property "in hopes that Tom Stewart and/or Superstition Crushing would make the first steps towards resolving this situation." Beito asked Mousel to meet with the State Land Department to determine if the State's claim for trespassing damages had been resolved, to determine whether the obligations outlined in the August 27, 2002 letter had been fulfilled, and to determine the status of the permits and if Superstition Crushing was still involved.

¶9 In August 2003, Beito prepared a letter to CTA, noting that he had been making payments on the escrow and referring to a conversation by which someone at CTA advised Beito that someone else had also been making payments each month and that the payments had "doubled up," and another payment would not be due until December 15, 2004.1

¶10 On February 2, 2005, Insearch received a price list from 1405 Mine "Owned & Operated by Superstition Crushing, L.L.C.," advertising products from the Property. Beito faxed the price list to Mousel noting it advertised products at "my Alameda property." Mousel sent a letter to the lawyer believed to be Stewart's counsel demanding an inspection of AMI's fiscal records. The attorney responded that he had no fiscal corporate records for AMI, that he had not heard from Stewart "in some time," and that he did not believe he represented either Stewart or AMI.

¶11 On August 24, 2005, AMI and Beito filed suit against Stewart, ABC, Superstition Crushing, and others to quiet title to the Property and for damages. Insearch and Saturn Materials were added as plaintiffs and CTA was added as a defendant on December 4, 2006. Claims against CTA included breach of contract, breach of fiduciary and agency duties, and negligence. The claims arose from CTA's involvement in the March 2002 transfer of the Property from AMI to ABC and its continuing acceptance of payments from Insearch on the promissory note to the Swagels despite the transfer. The quiet title claim was bifurcated from the other claims and was tried first in August 2008. The court ruled that the Property would be titled in 1405 Mine. The parties subsequently stipulated to entry of judgment on all claims between them in favor of 1405 Mine and Superstition Crushing.2

¶12 The claims against CTA were tried to a jury between August 31 and September 9, 2010. An issue at trial was whether the Plaintiffs' claim against CTA was barred by the statute of limitations because Beito knew or should have known about the facts underlying the conveyance of the Property from AMI to ABC earlier than two years before filing suit against CTA. Plaintiffs asserted that CTA concealed information by accepting payments on the mortgage and by not informing Beito who had been making duplicate payments on the mortgage. The court instructed the jury on the statute of limitations as follows:

The first interrogatory on the verdict form stated: "We find that Jim Beito knew, or in the exercise of reasonable diligence, should have known of the March 2002 transfer of the Fort Mountain Property before December 4, 2004." It further stated: "If your answer to #1 is yes, stop here." The verdict form did not mention possible concealment by CTA. Plaintiffs did not object to the jury instruction, but disputed the need for the interrogatory and objected to the inclusion of the interrogatory regarding when Beito knew or should have known of the transfer without also including an interrogatory regarding concealment by CTA.

¶13 The jury answered "yes" by a margin of eight to two to the interrogatory finding that Beito knew or should have known of the transfer more than two years before bringing his claim, resulting in a verdict for CTA.

¶14 Plaintiffs moved for a new trial arguing (1) that the jury interrogatory was erroneous, (2) that evidence of concealment was presented, and (3) that in such a case, actual notice, not constructive notice triggered the limitations period. Plaintiffs asserted that CTA had continued to accept payments even after the transfer of the Property from AMI to ABC and that CTA had represented to Beito that he still owned the Property. The court denied the motion for new trial. Plaintiffs timely appealed.

Discussion

¶15 Appellants argue that the interrogatory was an improper statement of the law of the statute of limitations under the facts of the case because it did not take into account the possibility that CTA had concealed from Beito the transfer of the Property from AMI to ABC. Appellants had contended that CTA was acting as an escrow agent in the March 2002 transfer of the Property from AMI to ABC and was therefore a fiduciary, and under Walk v. Ring, had a duty to disclose to Beito that the Property had been transferred. See Walk v. Ring, 202 Ariz. 310, 319, ¶¶ 34-35, 44 P.3d 990, 999 (2002).3 Appellants do not challenge the propriety of the jury instructions. They argue, however, that the interrogatory should have provided for equitable tolling of the statute of limitations and that the instruction to the jury that it should stop if it found that Beito knew or should have known of the transfer in the exercise of reasonable diligence foreclosed the jury from considering concealment.

¶16 In considering whether reversal of a verdict is required because of a jury instruction, we determine whether the instruction would have misled the jury as to the proper rule of law. Terry v. Gaslight Square Assocs., 182 Ariz. 365, 368, 897 P.2d 667, 670 (App. 1994). We view the jury instructions as a whole to determine whether the jury was given the proper rules to apply in reaching its decision. Id. We will not overturn a jury verdict because of an improper instruction absent "substantial doubt" as to whether the jury was properly guided in its deliberations. Thompson v. Better-Bilt Aluminum Prods. Co., 187 Ariz. 121, 126, 927 P.2d 781, 786 (App. 1996). The instruction must be both erroneous and prejudicial to the substantial rights of the appellant; that prejudice must affirmatively appear on the record. Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493, 504, 917 P.2d 222, 233 (1996). We assume the jury follows the instruction given by the court, whether or not the instruction is correct. Perkins v. Komarnyckyj, 172 Ariz. 115, 118-19, 834 P.2d 1260, 1263-64 (1992). Whether to also provide interrogatories to the jury is within the discretion of the trial court. Patania v. Silverstone, 3 Ariz. 424, 428, 415 P.2d 139, 143 (App. 1966).

¶17 In viewing the instructions and interrogatories as a whole, we do not find substantial doubt that the jury was properly guided in its deliberations. The parties do not dispute that the instruction on the statute of limitations appropriately advised the jury that the plaintiffs were required to file the lawsuit within two years of knowing or in the exercise of diligence having reason to know the relevant facts giving rise to the claim. The instruction further informed the jury that if it found that CTA had fraudulently concealed the facts giving rise to the cause of action, Plaintiffs were relieved of the obligation to exercise reasonable diligence and the duty to investigate did not arise until the concealment was discovered. Although the interrogatory did not include the portion of the instruction concerning concealment, it was not inconsistent or irreconcilable with the instruction. Had the jury found that CTA concealed facts from Beito, thereby relieving him of the duty of reasonable diligence, it could have logically answered "no" to the interrogatory.

¶18 Moreover, counsel apparently argued concealment to the jury in his closing argument.4 In addition to this, we assume the jury initially considered concealment prior to reaching this question because we assume that the jury followed the concealment instruction.

¶19 Appellants have not pointed to anything in the record indicating that members of the jury were confused or unclear as to the instructions. The record contains no juror questions on the subject. Appellants do state that, after the verdict, some of the jurors told their counsel that "they had argued for more than six hours over what `reasonable diligence' in the first jury interrogatory meant and ultimately concluded that because there was a delay in filing the lawsuit, they were required to find that Beito lacked `reasonable diligence.'" Even assuming this statement to be true and assuming it may be considered as part of appellants' argument, it does not support the contention that the absence of instruction on concealment in the interrogatory resulted in improper instruction to the jury. The post-verdict communication by the jurors did not mention any conflict or confusion regarding concealment, and taken on its face (in light of the jury instruction) simply suggests that the jurors had concluded no concealment occurred, that Beito had a duty to exercise reasonable diligence, and that the jury had difficulty agreeing on whether Beito had met the reasonable diligence standard.

¶20 We conclude that when the instructions and the interrogatory are read together, there is no substantial doubt that the jury was properly guided in its deliberations.

Conclusion

¶21 The trial court's judgment is affirmed.

ANN A. SCOTT TIMMER, Presiding Judge, PATRICK IRVINE, Judge, concurring.