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S Development Company v. Pima Capital Management Co.8/30/2001
t depends on a standard of reasonableness in the given circumstances."), whether the appellants knew about the defective plumbing, see Favour v. Joseff, 5 Ariz. App. 244, 246, 425 P.2d 432, 434 (1967) ("The questions of intent and knowledge are questions of a state of mind and the state of mind which must be determined is that of a party. These questions are questions of fact . . . ."), whether the appellees undertook a reasonable inspection, see de la Cruz v. State, 192 Ariz. 122, 124 n.3, 8, 961 P.2d 1070, 1072 n.3 (App. 1998) (" he jury's role was . . . to determine whether the State breached its duty to act reasonably [when undertaking an inspection] . . . ."), and whether the appellants did not give the appellees equal opportunity to discover the defect. See Restatement (Second) of Torts ยง 551 cmt. m (" isputed facts bearing upon the existence of the duty, as for example the defendant's knowledge of the fact, the other's ignorance of it or his opportunity to ascertain it . . . are to be determined by the jury . . . ."). Viewing the evidence in the light most favorable to upholding the jury's verdict, we conclude that reasonable minds could differ on the inferences to be drawn from the evidence. The appellants were not entitled to judgment as a matter of law merely because the purchase contracts contained "as is" clauses.
The dissent makes a good point. It appears, however, that the dissent posits that a contract containing an "as is" clause relieves the seller of the obligation to act in good faith, which is the obligation of every contracting party. The choice we are given is to elevate form over the moral and ethical duties inherent in our day-to-day lives. We choose the latter--that which reaffirms the policies underlying the covenant of good faith and fair dealing.
II. The Trial Court's Refusal to Give an Instruction on the "As Is" Clauses
The appellants next contend that the trial court erred by failing to give the jury an instruction on what the legal effect of an "as is" clause had on the underlying transaction. Although both parties requested an "as is" instruction, the trial court did not give one. The appellants submitted the following instruction: "The 'as is' clause in a contract puts the buyer on notice that the property may be defective, and it precludes the buyer from justifiably relying on the seller's silence as a warranty of fitness." The appellees' proposed instruction stated:
The realty purchase contracts under which plaintiffs purchased the apartment complexes at issue contain a disclaimer of warranty clause that provides in part: "Buyer is purchasing the property as a result of its own examination thereof in its 'AS IS' condition, and upon the exercise of its own judgment and investigation." Although that clause may be considered as evidence, a party cannot free himself from fraud or misrepresentation with a clause in a contract. Clauses in realty purchase contracts do not preclude actions by buyers for non-disclosure.
"In order to properly preserve an objection to jury instructions on appeal, counsel must state distinctly what is being objected to and the grounds for the objection." Williams ex rel. Dixon v. Thude, 180 Ariz. 531, 533, 885 P.2d 1096, 1098 (App.), review granted in part (1994), aff'd, 188 Ariz. 257, 934 P.2d 1349 (1997); Ariz. R. Civ. P. 51(a) ("No party may assign as error the giving or the failure to give an instruction unless that party objects thereto before the jury retires to consider its verdict, stating distinctly the matter objected to and the grounds of the objection." (emphasis added)). "The purpose of this rule is to fully advise the trial court of the basis of a litigant's position so that it
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