Arizona Court of Appeals Upholds Lower Court Decision Regarding Third-Party Beneficiaries

Representing defendant Tellurian Development Company, Burch & Cracchiolo attorney Ralph Harris with assistance from Andy Abraham and Daryl Manhart, successfully argued a third-party beneficiary issue to the Arizona Court of Appeals. In Brock Family Partnership v. Tellurian Development Company (No. 1 CA-CV 21-0419 filed 3-8-2022) the Arizona Court of Appeals affirmed a trial court dismissal of the Brock’s claim to be a third-party beneficiary under a redevelopment contract between Tellurian and the City of Tempe, Arizona.  That redevelopment contract covered land owned by Tellurian east of Tempe Marketplace which had in the past been contaminated and used as a landfill.  The Second Amendment to the redevelopment contract called for Tellurian to “use its commercial best efforts to work with other owners to include a [traffic] circulation plan for connectivity to benefit all parcels adjacent to the Tellurian Properties.”  Brock owns land adjacent to Tellurian’s properties and sued Tellurian in 2020, contending that Tellurian breached the Second Amendment by not making “commercial best efforts . . . to provide for connectivity to [Tellurian’s property] by [Brock].” The Court of Appeals held that the redevelopment contract, if carried out, could confer a benefit on Brock.  However there was a clause in the contract which disclaimed third party beneficiaries. The Court of Appeals affirmed the trial court’s dismissal of the Brock claims because the parties to the redevelopment contract had clearly expressed their intent to exclude third-party beneficiary claims.