§ 6.5.3 Election of Remedies

• Jurisdiction: Arizona

§ 6.5.3 Election of Remedies . Mobile Home Sales Management, Inc. v. Brown, 115 Ariz. 11, 562 P.2d 1378 (Ct. App. 1977), also involved an election of remedies defense. The buyers (plaintiffs) sought cancellation of the contract, return of the purchase price paid, and incidental and consequential damages, under the provisions of the Arizona UCC. The seller (defendant) maintained that buyers’ suit was a suit for rescission, and, therefore, that the buyers had to tender the goods before recovering against seller. See §§ 6.3.6, 6.5.2, supra.

The appellate court distinguished the suit from the traditional equitable action for rescission:

First, plaintiffs in their complaint have not termed their action as one in rescission. In other words, it is not the traditional equitable action for rescission where a party may not rescind a contract and at the same time also sue to recover damages, nor is it an action where a party, seeking to rescind a contract, must restore or offer to restore to the other party that which he has received under the contract. Cf. Jennings v. Lee, 105 Ariz. 167, 461 P.2d 161 (1969). It is, as we interpret it, an action where plaintiffs are suing under the UCC for cancellation of the contract and for the return to them of the purchase price which they as buyers had paid, and also for their incidental and consequential damages (A.R.S. § 44-2394) resulting from the seller’s breach.

Mobile Home Sales , 115 Ariz. at 13-14, 562 P.2d at 1380-81. Thus, plaintiffs “elected” to sue on the basis of rights outlined in the Arizona UCC. According to the court’s reasoning, because the suit fit into the UCC category instead of the “equitable rescission” category, plaintiffs could seek and receive both rescission and damages.

The McCormick opinion also relied on the Arizona UCC. McCormick v. Ornstein, 119 Ariz. 352, 580 P.2d 1206 (Ct. App. 1978). See generally §§ 6.3.6, 6.4, 6.5.1, supra. The appellate court concluded that Ornstein did not have to prove that damages were an inadequate remedy before he had a right to rescission, 119 Ariz. at 355, 580 P.2d at 1209. Ornstein properly cancelled the contract under A.R.S. § 44-2390. After revocation and cancellation, Ornstein was entitled to recover all sums paid on the contract.

The first issue addressed by the Arizona Court of Appeals in Fousel v. Ted Walker Mobile Homes, Inc., 124 Ariz. 126, 602 P.2d 507 (Ct. App. 1979), was the doctrine of election of remedies:

Appellant correctly maintains that the

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