Section 103. Remedies on Breach
(e) Rescission and Restitution
In Thomas v. Montelucia Villas, LLC, 232 Ariz. 92, 302 P.3d 617 (2013), the contract between purchasers and builder provided that builder could retain progress payments as liquidated damages in event of purchasers' breach. The builder notified the buyers of proposed closing date, but the buyers stated that they would not close on that date and requested the return of their deposits. The court held that in order to retain the money for their anticipatory repudiation claim, the builder had to prove that it was able to perform its obligations under the contract.
(g) Other Damages Problems
In Tech. Const. v. City of Kingman, 229 Ariz. 564, 278 P.3d 906 (App. 2012), the court of appeals held that judgment was properly awarded to the contractor in its breach of contract action against the city. The contractor was entitled to delay damages pursuant to A.R.S. § 34-221(F). There were multiple change orders that altered the price of the construction contract once work was begun. The court held the damages were proximately caused by the city's delay, and delay damages were readily foreseeable. The fact that Hurricane Katrina drove up the price of asphalt materials subsequent to the signing of the contract did not mean that delay damages were unforeseeable.
In Richard E. Lambert, Ltd. v. City of Tucson Dep't of Procurement, 223 Ariz. 184, 221 P.3d 375 (App. 2009), the court held that the city was justified in assessing liquidated damages against the contractor. In reaching its decision, the court pronounced several basic principles of construction delay law, including:
1. A contractor seeking to avoid liquidated damages has the burden of proving that any delays in performance were excusable;
2. A delay is excusable when it is due to "unforeseeable causes beyond the control and without the fault or negligence of the contractor"; and
3. A contractor has the burden of proving that "the excusable event caused a delay to the overall completion of the contract;" an excusable delay affects the overall comple-tion of a project when it affects the project's critical path.
The Lambert court held that record provided substantial evidence to support the owner's decision that the contractor failed to sustain its burden of proving excusable delay as to the overall completion of the project by critical path analysis or any other method. Based on this conclusion, the court decided to "leave for another day the decision of whether critical path analysis is the only method of proving excusable delay."
(h) Statute of Limitations
There is considerable discussion in Section 106 of the text that bears on issues regarding Section 103(h), the statute of limitations, and the statute of repose, A.R.S. § 12-552(B).
City of Phoenix v. Glenayre Electronics, Inc., 240 Ariz. 80, 315 P.3d 1189 (App. 2016) concerned the application of the statute of repose to city...
