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S Development Company v. Pima Capital Management Co.8/30/2001
may not be led into involuntary error." Edward Greenband Enters. of Ariz. v. Pepper, 112 Ariz. 115, 118, 538 P.2d 389, 392 (1975).
We conclude that the appellants failed to preserve this issue for appeal. First, although not dispositive of the issue, the appellants' objection to the appellees' proposed jury instructions was devoid of any objection to the inclusion of the appellees' proposed "as is" instruction. Second, when the parties were settling final jury instructions with the trial court, counsel for the appellants stated that " he objection to the [appellees' 'as is'] instruction is simply if you're going to be giving an instruction like that, we are asking that you also give [the appellants'] proposed jury instruction No. 5, which is an additional sentence that talks about the as is clause." When advised by the trial court that it was "not inclined to give either" instruction because it felt that both proposed instructions were argumentative, counsel for the appellants responded, "That's another option." The appellants' counsel continued, "Like I said, your Honor, if you're going to give one, we are asking you to give the other. We can live with neither one of those." (Emphasis added.) The trial court then stated, "I'm not going to give either one." That was the end of the discussion. Clearly, the appellants objected to the giving of only the appellees' instruction without the appellants' instruction, but they maintained that they would be satisfied if neither instruction was given. Accordingly, the appellants cannot predicate error upon the trial court's refusal to give any "as is" instruction because they have waived that issue on appeal.
We also note that the trial court, even though refusing to give either instruction, did permit both parties to "say what you want about an as is clause in closing argument." The appellants capitalized on the trial court's permissive gesture and argued as follows:
Since my clients didn't make any representations, they didn't make any false ones.
And that's the significance of all this business about the contracts and this as is and all of that. They did an as is deal. They said you have the right to inspect. As is means, you know, we are letting you decide in your judgment whether you want to buy these places or not.
You got to decide. That's why you get to, you know, kick the tires . We want to sell them, so you decide if you want them. Just like if you bought a car as is. It's eight years old. Nobody knows whether the carburetor is going to last a day, a week, a year, so we're selling it as is.
That's why we are not making any representations to the [appellees] in this case, because we are selling property as is. If we weren't selling them as is, we would make some representations, I guess. . . . It's just a business decision that was sold as is, bought as is. There's nothing wrong with that. It's not like it's against the law. (Emphasis added.)
III. The Trial Court's Imputed Knowledge Instruction
The appellants contend that the trial court committed reversible error by allowing the jury to consider imputed knowledge of the plumbing defect flowing from the appellants' agents to the appellants, rather than instructing the jury that, under § 551 of the Restatement (Second) of Torts, the appellants were required to have actual knowledge of the defect. This issue has been preserved for appeal.
We first determine whether § 551 of the Restatement (Second) of Torts requires a principal to have actual knowledge as opposed to constructive knowledge imputed to it by an agent. If we conclude that actual knowledge is required, the trial court's instruction
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