A Summary of Possible Arizona Claims for Relief

Many lawsuits seek some type of monetary award, known as damages. But in Arizona, as with other states, there are many other types of affirmative relief a litigant can seek.

An injunction is “a court order commanding or preventing an action.” Black’s Law Dictionary (11th ed. 2019). There are four primary types of injunctions in Arizona: (1) temporary restraining orders; (2) preliminary injunctions; (3) permanent injunctions; and (4) specific performance. Injunctions are decided by judges, not juries, in Arizona. See Mozes v. Daru, 4 Ariz. App. 385, 391 (1966) (“in an equity case a jury may be demanded, although the verdict is only advisory”).

Temporary Restraining Orders

A temporary restraining order (“TRO”) is a short-term injunction that a court issues to keep the status quo until the court can determine whether to issue a preliminary or permanent injunction. See Firchau v. Barringer Crater Co., 86 Ariz. 215, 219 (1959). A TRO lasts only a short period of time and simply “fixes a day for the defendant to appear and show cause why a [preliminary] injunction should not be issued and continues the order in force and effect until such hearing.” Id.

“The standard for issuing a TRO is the same as that for issuing a preliminary injunction.” Spears v. Arizona Bd. of Regents, 372 F. Supp.3d 893, 926 (D. Ariz. 2019). To obtain a TRO, the movant must establish: (1) a strong likelihood of success on the merits; (2) a possibility of irreparable injury if the injunction is not granted; (3) a balance of hardships weighing in favor of the injunction; and (4) public policy favoring the injunction. See TP Racing, LLLP v. Simms, 232 Ariz. 489, 495 ¶ 21 (Ct. App. 2013). TROs should only operate to “preserve the status quo.” Firchau, 86 Ariz. at 219. Typically, a court may only issue a TRO with notice to the adverse party. See Ariz. R. Civ. P. 65(a)(1).

On rare occasion, a court can grant a TRO without notice to the adverse party. See Ariz. R. Civ. P. 65(b). To obtain a TRO without notice, in addition to the above referenced elements, the movant must present “specific facts in an affidavit or a verified complaint [that] clearly show that immediate and irreparable injury, loss, or damage will likely result to the movant before the adverse party can be heard in opposition, or that prior notice will likely cause the adverse party to take action resulting in such injury, loss, or damage” and the movant or movant’s attorney must “certif[y] in writing any efforts made to give notice or the reasons why it should not be required.” Ariz. R. Civ. P. 65(b)(1).

 If the court grants a TRO without notice, the TRO must state the date and hour it was issued, describe the injury and state why it is irreparable, state why the order was issued without notice, and be promptly filed in the clerk’s office and entered in the record. See Ariz. R. Civ. P. 65(b)(2). A TRO issued without notice automatically expires on the date the court sets, which cannot exceed ten days, unless the court orders an extension for good cause or the parties agree to an extension. See Ariz. R. Civ. P. 65(b)(3).

If a TRO is issued without notice, the motion for preliminary injunction must be set for hearing at the earliest possible time, taking precedence over all other matters except the same type of hearings, and the party who obtained the TRO must proceed with the motion, otherwise the court will dissolve it. See Ariz. R. Civ. P. 65(b)(4). The adverse party can move to dissolve or modify the TRO issued without notice on two-days’ notice or on even shorter notice set by the court, who must promptly hear and decide such motion. See Ariz. R. Civ. P. 65(b)(5).

A court may only issue a TRO if the movant gives security in an amount the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained. See Ariz. R. Civ. P. 65(c). However, the State and its agencies, counties, municipalities and other governmental agencies are not required to give security. Id.

Every TRO must state the reasons why it issued, state its terms specifically and describe in reasonable detail — not by referring to the complaint or other document — the act(s) restrained or required. See Ariz. R. Civ. P. 65(d)(1). The TRO is then binding on the parties, their officers, agents, servants, employees and attorneys, and other persons who are in active concert or participation with said persons provided they receive actual notice of the TRO by personal service of otherwise. See Ariz. R. Civ. P. 65(d)(2).

Preliminary Injunctions

Preliminary injunctions are also temporary, though they can last much longer than TROs. Courts issue preliminary injunctions after a hearing, which can be consolidated with the trial on the merits with reasonable notice of the parties, and these injunctions can last until the court rules on a permanent injunction. See Ariz. R. Civ. P. 65(a)(2). The same standards discussed above for TROs, including the requisite elements, notice, security, and contents and scope of order, apply to preliminary injunctions.

After an answer is filed, a party can move to dissolve or modify a preliminary injunction with notice to the opposing party, and unless the motion is unopposed, the court must hold a hearing and allow the parties to present evidence. See Ariz. R. Civ. P. 65(a)(3). “If the court determines that there are insufficient grounds for the injunction, or that it is overbroad, the court may dissolve or modify the preliminary injunction.” Id.

A court can issue sanctions for civil or criminal contempt against a party who violates an injunction based on an application, supporting affidavit and hearing. See Ariz. R. Civ. P. 65(f).

Permanent Injunctions

In contrast to the elements needed for TROs or preliminary injunctions, “[a] plaintiff seeking a permanent injunction must show: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” River Springs Ranch Prop. Owners Ass’n v. L’Heureux, 2010 WL 5030913, at *3, ¶ 10 (Ariz. Ct. App. Oct. 26, 2010) (quoting eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 388 (2006)).

Specific Performance

“Specific performance is a remedy available for breach of contract.” Skydive Ariz., Inc. v. Hogue, 238 Ariz. 357, 368, ¶ 46 (Ct. App. 2015). Specific performance is a type of injunction where the court orders a party to perform a contract. See Restatement (Second) of Contracts § 357 (1981). To obtain an order for specific performance, “(1) there must be a contract; (2) the terms of that contract must be certain and fair; (3) the party seeking specific performance must not have acted inequitably; (4) specific enforcement must not inflict hardship on the other party or public that outweighs the anticipated benefit to the party seeking specific performance; and (5) there must be no adequate remedy at law.” The Power P.E.O., Inc. v. Employees Ins. of Wausau, 201 Ariz. 559, 563, ¶ 22 (Ct. App. 2002).

As for the fifth element, damages are “remedies at law” and therefore, if a court determines that awarding damages would provide adequate compensation for the breach of contract, then the court may not order specific performance. See Woliansky v. Miller, 135 Ariz. 444, 446 (Ct. App. 1983). Courts have “wide discretion . . . to determine whether damages is an adequate remedy . . . and specific performance is never a matter of absolute right.” Id. For example, because of the unique nature of land, damages are not typically adequate to compensate the injured party in a breach of contract for the sale of real property. Id. But “where the purchaser does not desire the real property for personal use but instead wants to acquire the land merely for the profit to be gained upon resale, damages would theoretically be an adequate remedy.” Id. Additionally, “before a buyer is awarded specific performance he generally must satisfy the court that he is ready and able to perform.” Id. But if “the seller repudiates the contract, the purchaser is not required to tender performance before commencing the action in order to preserve his right to enforce the contract.” Id.

In addition to specific performance, there are other remedies available for a breach of contract and other types of legal claims, including (1) rescission; (2) reformation; and (3) declaratory relief, which are discussed in turn below.

Rescission

Rescission is an “undoing of the transaction, whereby each party gives back to the other what it parted with in the original transaction.” Grand v. Nacchio, 214 Ariz. 9, 19, ¶ 27 (Ct. App. 2006). In other words, rescission returns the parties to the status quo. Id. ¶ 47.

Rescission is available when there has been a misrepresentation (whether fraudulent, negligent or innocent) that induced one to enter into a contract. Berry v. Robotka, 9 Ariz. App. 461, 467 (1969). The party does not need to prove that he or she has been damaged by the misrepresentation, only that a misrepresentation was made that induced the transaction. Lehnhardt v. City of Phoenix, 105 Ariz. 142, 144 (1969). Rescission is also available for various statutory securities violations, including the sale of unregistered securities, transactions by unregistered dealers or salesman, and securities fraud. See A.R.S. 44-2001(A).

One who seeks rescission typically must offer whatever goods were received for entering into the transaction. For example, to rescind a purchase of securities, the buyer must tender to the seller the actual or equivalent securities as well as any income received by dividend or otherwise from ownership of the securities. See Grand, 214 Ariz. at 24, ¶ 47; A.R.S. § 44-2001(A).

Reformation

Reformation is an equitable remedy available to correct an agreement to reflect the parties’ intent. See In re Estate of Ganoni, 238 Ariz. 144, 147, ¶ 15 (Ct. App. 2015). The purpose of reformation is to correct a mistake in a contract and conform the contract to what the parties actually negotiated and intended. Holm v. Gateway Anesthesia Assocs. PLLC, 2018 WL 770503, at *6, ¶ 29 (Ariz. Ct. App. Feb. 8, 2018). To obtain reformation of a contract because of a mutual mistake, a party must show “a definite intention on which the minds of the parties had met preexisted the written instrument and that the mistake occurred in its execution.” City of Scottsdale v. Burke, 19 Ariz. App. 11, 14 (1972). Such showing must be established by clear and convincing evidence, which is a higher standard than the preponderance-of-the-evidence standard that courts normally apply in civil lawsuits. Id.

Declaratory Relief

Under Arizona’s Uniform Declaratory Judgment Act, “[a]ny person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status or other legal relations thereunder.” A.R.S. § 12-1832. In other words, party can ask a court to interpret a contract or other writing and advise of the rights thereunder. This is known as declaratory relief.

One may seek declaratory relief “as soon as a justiciable controversy exists.” Rogers v. Bd. of Regents of Univ. of Ariz., 233 Ariz. 262, 267, ¶ 17 (Ct. App. 2013). A justiciable controversy exists when there is an “assertion of a right, status or legal relation in which the plaintiff has a definite interest and a denial of it by the opposing party.” Samaritan Health Servs. v. City of Glendale, 148 Ariz. 394, 395 (Ct. App. 1986). For example, a court determined a justiciable controversy existed for a plaintiff regarding an insurance policy because the insurance company denied the plaintiff’s right to payment under the policy terms. See Keggi v. Northbrook Prop. & Cas. Ins. Co., 199 Ariz. 43, 45, ¶ 10 (Ct. App. 2000).

Accounting

A court may compel the equitable remedy of an accounting. See Mollohan v. Christy, 80 Ariz. 141, 143 (1956). A party can obtain an accounting by showing there is a fiduciary or other trust-based relationship between the plaintiff and the defendant such that the defendant is managing accounts or affairs on the plaintiff’s behalf or has been entrusted with money or other property received from the plaintiff. Id. A plaintiff may also obtain an accounting when a contract between the parties dictates that the defendant must render such an accounting. See 1A C.J.S. Accounting § 32.

Constructive Trust

A constructive trust is an equitable tool courts use to prevent “one person from being unjustly enriched at the expense of another.” Turley v. Ethington, 213 Ariz. 640, 643, ¶ 8 (Ct. App. 2006). When a court imposes a constructive trust, which must be shown by clear and convincing evidence, the court declares the holder of legal title in property is in fact holding that property as a trustee for the benefit of another. See Chirekos v. Chirekos, 24 Ariz. App. 223, 224 (1975). The constructive trust can be imposed over any profits earned off underlying assets. See Snepp v. United States, 444 U.S. 507, 516 (1980) (profits earned from sale of books with misappropriated information were included in constructive trust imposed over books).

Quiet Title

In an action to quiet title, a court determines which party is the true owner of real property and clear the title of the disputed property. See A.R.S. § 12-1101(A). To prevail in a claim to quite title, a plaintiff must show that the plaintiff holds legal title to property above all others and not that, for example, that his adversary’s title has weaknesses. See Steinberger v. McVey ex rel. County of Maricopa, 234 Ariz. 125, 140, ¶ 65 (Ct. App. 2014). If a plaintiff prevails, the defendant is “barred and forever estopped from having or claiming any right or title to the premises adverse to plaintiff.” Cook v. Town of Pinetop-Lakeside, 232 Ariz. 173, 176, ¶ 13 (Ct. App. 2013) (quoting A.R.S. § 12-1102(5)).

Inspection of Corporate Records

Owners of a corporation have a common law right to “to inspect the books and papers of a corporation at reasonable times and places and for proper purposes.” Tucson Gas & Elec. Co. v. Schantz, 5 Ariz. App. 511, 513 (1967). “Generally speaking, the right of a stockholder extends to all books, papers, contracts, minutes or other instruments from which he can derive any information that will enable him to protect his interest.” Id. Arizona has since codified this right. See A.R.S. § 10-1602 (inspection of records by shareholders of corporation). See also A.R.S. § 29-607 (inspection rights of members of limited liability companies). To obtain a court order compelling production of corporate records for examination, a plaintiff must simply prove that it is “a shareholder or holder of record of a voting trust beneficial interest” with a “proper purpose” regardless of how long they have been a shareholder or holder of a voting trust beneficial interest or the amount of shares or voting trust beneficial interest they hold. A.R.S. § 10-1602(E)(2).

Other Claims for Relief

There are other claims for relief available as well. For example, interpleader is available to a person that holds money or property that may be adversely affected by an ongoing lawsuit. See Ariz. R. Civ. P. 22. Interpleader allows that party to join in the lawsuit and be heard by the court before the court rules on the disposition of the property. Id.

 Similarly, intervention is available to a party that “claims an interest relating to the subject of the action and is so situated that disposing of the action in the person’s absence may as a practical matter impair or impede the person’s ability to protect that interest, unless existing parties adequately represent that interest.” Ariz. R. Civ. P. 24(a)(2). Intervention allows an intervening party to join in an action and protect its rights. Id.

Though many lawsuits typically seek only monetary damages, there are over a dozen different types of relief parties may seek in litigation in Arizona.