GALACTIC VENTURES v. MONSALVE

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

GALACTIC VENTURES, LLC, Plaintiff/Appellant/Cross-Appellee,

v.

MICHAEL MONSALVE, et al., Defendants/Appellees/Cross-Appellants.

No. 1 CA-CV 25-0335
FILED 6-25-2026

Appeal from the Superior Court in Maricopa County
No. CV2022-015325
The Honorable John L. Blanchard, Judge

VACATED AND REMANDED

COUNSEL

Simbro & Stanley, PLC, Phoenix
By Edwin B. Stanley
Counsel for Plaintiff/Appellant/Cross-Appellee

Dempsey Law PLLC, Phoenix
By Casey C. Dempsey
Counsel for Defendants/Appellees/Cross-Appellants
GALACTIC VENTURES v. MONSALVE, et al.
Decision of the Court

MEMORANDUM DECISION

Presiding Judge David B. Gass delivered the decision of the court, in which
Judge Anni Hill Foster and Chief Judge Randall M. Howe joined.

G A S S, Judge:

¶1 Galactic Ventures, LLC, an Arizona company, appeals the
superior court’s summary judgment for Michael Monsalve and Monsalve
Motorsports, LLC, a California company, on Galactic’s claims for
intentional interference with contract and intentional interference with
business expectancy. In turn, Michael Monsalve and Monsalve
Motorsports, LLC cross-appeal the superior court’s denial of their request
for an award of attorney fees.

¶2 The court vacates the superior court’s summary judgment on
Galactic’s claims and remands for further proceedings. This decision moots
Monsalve’s cross-appeal.

FACTUAL AND PROCEDURAL HISTORY

I. The appeal concerns the ownership and related claims for a classic
collectible vehicle, a 1958 Ferrari GT LWB Berlinetta.

¶3 Various individuals and companies have alleged competing
ownership of the Ferrari. For clarity, this memorandum decision uses the
following collective names when discussing the various individuals and
companies:

• Monsalve: Michael Monsalve is the sole owner of Monsalve
Motorsports, LLC. Wil Silva allegedly signed some documents on
behalf of Monsalve Motorsports, LLC. This memorandum decision
refers to Monsalve, Monsalve Motorsports, and Wil Silva collectively
as Monsalve.

• Galactic: Galactic Ventures, LLC is the successor-in-interest to David
Hurowitz. This memorandum decision refers to Galactic even when
discussing the acts of its predecessor-in-interest.

• Original Owner: Eric Edenholm owned the Ferrari and engaged
with both Galactic and Monsalve regarding its ownership. When

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Edenholm proposed selling the Ferrari to Galactic, the purchase
agreement listed Zoey Air, L.L.C., an entity owned and controlled
by Edenholm, as the owner. This memorandum decision refers to
Edenholm and Zoey Air L.L.C. collectively as Original Owner.

• Potential Buyer: Steve Berkowitz entered an agreement to buy the
Ferrari from Galactic, but cancelled that agreement.

II. The parties’ versions of the relevant events differ significantly.

A. Monsalve’s Factual Allegations: Monsalve claims it owned the
Ferrari and never authorized its sale to Galactic.

¶4 Monsalve says it bought the Ferrari from the Original Owner
for $1,000,000 in March 2016 and titled it in Monsalve’s name in California
in December 2017. Monsalve then stored the Ferrari in California, had sole
control over it, and drove it whenever Monsalve wanted. The agreement
allowed the Original Owner to buy the Ferrari back at any time for
$1,000,000 plus any unpaid interest. With Monsalve’s permission, the
Original Owner would remove the Ferrari to show it to potential purchasers
so he could exercise his buy-back option.

¶5 Monsalve says it allowed the Original Owner to take the
Ferrari to Arizona in August 2019 to show it to others who were interested
in buying it. As of January 2020, the Original Owner had not returned the
Ferrari and ceased all payments to and contact with Monsalve. Two months
later, Monsalve learned the Original Owner sold or collateralized the
Ferrari to a third party without Monsalve’s permission or authority.
Monsalve filed a report with a California police department, which entered
the Ferrari into a database of stolen vehicles.

¶6 Monsalve says it later learned the Original Owner transferred
physical possession of the Ferrari to Galactic, but says the Original Owner
never agreed to transfer title—or permanent possession of—the Ferrari to
Galactic. In August 2020, Monsalve sued the Original Owner in California
for conversion and fraud related to the Ferrari. The complaint alleged the
Original Owner sold the Ferrari to a third party using a duplicate title and
did not pay the sale proceeds to Monsalve as agreed.

¶7 Monsalve says it did not know until August 2021 about
Galactic’s claimed ownership of the Ferrari. Monsalve had reported the
Ferrari stolen. When Galactic learned about Monsalve’s report, Galactic
told Monsalve it could lose a potential sale if Monsalve reported the Ferrari
stolen. The next month—September 2021—Galactic’s Potential Buyer

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cancelled the contract to buy the Ferrari from Galactic. Monsalve says it
never spoke to the Potential Buyer.

B. Galactic’s Factual Allegations: Monsalve never owned the
Ferrari and intentionally interfered with Galactic’s contract to
sell the Ferrari to the Potential Buyer and with Galactic’s
related business expectancy.

¶8 Galactic says Monsalve did not buy the Ferrari. Rather,
Monsalve lent the Original Owner $1,000,000 and the Ferrari merely was
collateral for the loan. Monsalve and the Original Owner did not execute a
bill of sale or a promissory note for the transaction, and Monsalve never
possessed the Ferrari. Instead, the Original Owner stored the Ferrari in a
warehouse the Original Owner leased, and Monsalve did not drive it.

¶9 Galactic says the Original Owner stopped making payments
on the loan after about 1 year, and the Original Owner told Monsalve he
would sell the Ferrari and use the proceeds to repay the loan. The Original
Owner removed the Ferrari from his warehouse twice: once in 2017 and
again in 2019, telling Monsalve he was showing it to others who were
interested in buying it. Galactic purchased the Ferrari from the Original
Owner in August 2017 and retitled it in Arizona. Until August 2019,
Galactic allowed the Original Owner to retain physical possession of the
Ferrari, at which point it took physical possession of it.

¶10 Galactic says when Monsalve contacted the California police
department about the Ferrari, Monsalve told the police his transaction with
the Original Owner was a loan, not a purchase. At that time, the California
police department noted that Galactic registered the Ferrari in Arizona in
July 2018.

¶11 In August 2021, Galactic says it told Monsalve it was under
contract to sell the Ferrari and by including the Ferrari in the stolen vehicle
database, Monsalve was jeopardizing the sale. Monsalve refused to remove
the Ferrari from the stolen vehicle database. When Galactic contacted the
California police department about the database, it learned that Monsalve
had titled the Ferrari in California in 2017. When Galactic informed its
Potential Buyer about the California title, he chose to cancel the purchase.

¶12 Galactic says Monsalve obtained the California title for the
Ferrari using forged documents and making misrepresentations to the
California Department of Motor Vehicles. Galactic relies on the following
deposition testimony to support its allegations:

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• Wil Silva, whose name appears on Monsalve’s California title
application, said he did not sign that document, did not authorize
anybody to sign it on his behalf, and had not seen it before his
testimony.

• The Original Owner did not sign the Arizona Certificate of Title
submitted with Monsalve’s title application to the California
Department of Motor Vehicles, the signature was not from his only
employee, he never authorized anyone to sign that document on his
behalf, and he did not know who signed it.

• Monsalve said he did not receive a bill of sale for the Ferrari from the
Original Owner and denied any knowledge of the bill of sale
attached to the California Department of Motor Vehicles title
application.

III. Galactic sued Monsalve for intentional interference with contract
and intentional interference with business expectancy, saying
Monsalve’s actions caused the Potential Buyer to cancel the
purchase and prevented Galactic from selling it.

¶13 Monsalve moved for summary judgment, arguing Galactic
produced no evidence Monsalve intentionally interfered with Galactic’s
contracts or business expectations. To support its motion, Monsalve
claimed it was unaware Galactic had entered a contract to sell the Ferrari,
that Galactic’s attempts to secure Monsalve’s legal interest in the Ferrari
were not improper, and Monsalve’s communications regarding the Ferrari
were privileged and could not support Galactic’s claims.

¶14 Galactic responded, pointing to factual disputes about
whether Monsalve bought the Ferrari, forged documents to acquire the title
to the Ferrari, and interfered with Galactic’s ability to sell the Ferrari by
continuing to assert ownership under a title acquired with forged
documents. Galactic argued those factual disputes were material and
precluded summary judgment.

¶15 The superior court granted Monsalve’s motion, ruling
Monsalve’s actions to protect and pursue Monsalve’s rights in the Ferrari
were privileged and not improper. The superior court found Galactic had
not presented “credible admissible evidence” showing Monsalve knew
about Galactic’s contract to sell the Ferrari or Monsalve’s actions caused the
Potential Buyer to terminate his agreement with Galactic.

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¶16 Monsalve applied for attorney fees, citing Arizona Revised
Statutes A.R.S. §§ 12-341.01 and -349. The superior court denied the
application, finding Galactic’s claims did not arise out of contract as
required by § 12-341.01 and an award was not appropriate under § 12-349
because Galactic’s claims were “fairly debatable.”

¶17 The court has jurisdiction over Galactic’s timely appeal and
Monsalve’s timely cross-appeal under Article VI, Section 9, of the Arizona
Constitution, and A.R.S. §§ 12-120.21.A.1, and -2101.A.

DISCUSSION

¶18 Galactic argues the superior court should not have granted
summary judgment for Monsalve. Monsalve argues the superior court
should have granted its request for attorney fees.

I. Monsalve was not entitled to summary judgment on Galactic’s
claims for intentional interference with the contract and
intentional interference with business expectancy.

A. Galactic established disputed issues of material fact as to
each element of its intentional interference with contract
claim.

¶19 The court reviews a grant of summary judgment de novo and
views the evidence and reasonable inferences in the light most favorable to
the non-moving party. Zambrano v. M & RC II LLC, 254 Ariz. 53, 58 ¶ 9
(2022).

¶20 The superior court may grant summary judgment if the
moving party establishes “no genuine dispute as to any material fact and
the moving party is entitled to judgment as a matter of law.” Ariz. R. Civ.
P. 56(a). “A ‘genuine’ issue is one that a reasonable trier of fact could decide
in favor of the party adverse to summary judgment on the available
evidentiary record.” Modular Mining Sys., Inc. v. Jigsaw Techs., Inc., 221 Ariz.
515, 520 ¶ 15 (App. 2009) (citation omitted). The governing substantive law
is used to identify which facts are material. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). “Only disputes over facts that might affect the
outcome of the suit under the governing law will properly preclude the
entry of summary judgment. Factual disputes that are irrelevant or
unnecessary will not be counted.” Id.

¶21 To succeed on a claim for intentional and tortious interference
with the contract, a party must prove (1) the existence of a valid contractual

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relationship, (2) the interferer’s knowledge of the relationship, (3)
intentional interference inducing or causing a breach, (4) damage to the
party whose relationship was disrupted, and (5) the defendant acted
improperly. Snow v. W. Sav. & Loan Ass’n, 152 Ariz. 27, 33 (1986).

¶22 Galactic argues the superior court erred because it proffered
evidence to support each of the 5 elements. Monsalve concedes Galactic
offered sufficient evidence to survive summary judgment as to elements 1
and 4, but argues Galactic failed to establish a material issue of fact as to
elements 2, 3, and 5.

¶23 The court addresses a threshold matter about the evidence
before the superior court. Monsalve’s reply to the motion for summary
judgment raised evidentiary objections. Monsalve preserved those issues
before the superior court, but the superior court implicitly overruled
Monsalve’s objections because it did not rule any evidence was
inadmissible. See Compassionate Care Dispensary, Inc. v. Ariz. Dep’t of Health
Servs., 244 Ariz. 205, 211 ¶ 16 (App. 2018). Monsalve waived any challenge
to that implied denial because it did not raise the issue in its cross-appeal.
Id.

1. Galactic established an issue of material fact on
element 2—Monsalve’s knowledge of the Berkowitz
contract.

¶24 Monsalve denies having any knowledge of Galactic’s contract
with the Potential Buyer. But Galactic’s evidence showed Galactic told
Monsalve about a potential sale of the Ferrari under the Potential Buyer
contract from August 13, 2021. Galactic’s evidence also shows it told
Monsalve’s counsel it was under contract to sell the Ferrari (referring to the
Potential Buyer contract) on August 20, 2021.

¶25 Those 2 pieces of evidence are material to the second element,
which the jury could resolve in Galactic’s favor. See Modular Mining Sys.,
221 Ariz. at 520 ¶ 15.

2. Galactic established an issue of material fact on
element 3—Monsalve’s alleged intentional
interference.

¶26 Intentional interference means Monsalve must have intended
to interfere with the Potential Buyer contract or “known that this result was
substantially certain to be produced by [Monsalve’s] conduct.” Snow, 152
Ariz. at 33. And “liability attaches to interferences that are ‘incidental to the

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actor’s independent purpose and desire but known to him to be a necessary
consequence of his action.’” Id. at 34 (quoting Restatement (Second) of Torts
§ 766 cmt. j (A.L.I. 1979)). Generally, the finder of fact determines the
question of intent. Id. at 33–34.

¶27 The superior court based its ruling on Monsalve’s stolen
vehicle report and Monsalve’s litigation against the Original Owner. But
Galactic produced evidence showing Monsalve’s title to the Ferrari was
defective and improperly recorded in California. Galactic also produced
evidence that Monsalve refused to withdraw that title even after Galactic
told Monsalve the Ferrari was under contract to sell. That evidence presents
2 issues of material fact under element 3: (1) a jury could infer Monsalve
should have known Galactic’s buyer would not complete the purchase with
Monsalve’s competing title in place; and (2) Monsalve’s decision to
maintain its title was intended to thwart the sale. Id.

¶28 Monsalve argues the California title could not support a claim
of interference with the Potential Buyer contract because Monsalve
recorded it in 2017, years before the Potential Buyer contract existed. But
Galactic contends it was not just Monsalve’s wrongful recording of the
California title, but also Monsalve’s subsequent refusal to remove it and
continued reliance on the California title which caused the Potential Buyer
to cancel his contract with Galactic. A jury must weigh the competing
evidence and inferences to decide whether Monsalve acted intentionally to
interfere with the Potential Buyer contract. Id. at 34.

¶29 Monsalve also argues a jury could not find Monsalve
interfered with the Potential Buyer contract because Galactic, not Monsalve,
told the Potential Buyer that Monsalve had filed the competing California
title. But undisputed evidence in the Potential Buyer contract shows
Galactic warranted it owned the Ferrari and could convey the Ferrari
without any encumbrances. Once Galactic knew Monsalve had recorded
and refused to remove the competing California title, Galactic was
contractually obligated to tell the Potential Buyer. See A.R.S. § 47-2312
(addressing when a contract for sale contains a warranty of good title);
Restatement (Second) of Torts § 551 (A.L.I. 1977) (recognizing liability for
non-disclosure of material facts in a business transaction); Restatement
(Second) of Contracts § 161 (A.L.I. 1981) (recognizing certain circumstances
when the non-disclosure of a fact may amount to a misrepresentation).

¶30 Monsalve also argues he could not have interfered with the
Potential Buyer contract because Potential Buyer had broad rights to
terminate it. Not so. A plaintiff may establish a claim for intentional

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interference with a contract even if the contract is terminable at will. See
Restatement (Second) of Contracts § 766 cmt. g (A.L.I. 1979) (recognizing a
defendant may not improperly interfere with a contract even if the contract
is terminable at will). The issue is not the contract terms allowing Potential
Buyer to cancel. The issue is the Potential Buyer’s reason for cancelling.

3. Galactic established an issue of material fact on
element 5—whether Monsalve acted improperly.

¶31 “To be liable for tortious interference with a contract, the
defendant’s actions must be improper as to motive or means.” ABCDW LLC
v. Banning, 241 Ariz. 427, 437 ¶ 42 (App. 2016). Seven factors come into play
when determining whether a particular action was improper:

(a) the nature of the actor’s conduct, (b) the actor’s motive, (c)
the interests of the other with which the actor’s conduct
interferes, (d) the interests sought to be advanced by the actor,
(e) the social interests in protecting the freedom of action of
the actor and the contractual interests of the other, (f) the
proximity or remoteness of the actor’s conduct to the
interference and (g) the relations between the parties.

Wagenseller v. Scottsdale Mem’l Hosp., 147 Ariz. 370, 387 (1985)
(quoting Restatement (Second) of Torts § 767 (A.L.I. 1979)). And the
determination generally requires weighing “the social importance of the
interest the defendant seeks to advance against the interest invaded.”
Banning, 241 Ariz. at 437 ¶ 42 (citation omitted). “To be improper, an
interference must be wrongful by some measure beyond the fact of the
interference itself.” Snow, 152 Ariz. at 34 (internal quotations omitted).

¶32 Monsalve argues his actions were privileged because he was
acting to protect his legal interest in the Ferrari when he told the police it
had been stolen and discussed his pending legal action against the Original
Owner with third parties. But those actions are not what Galactic relies on
to show Monsalve’s improper interference. Galactic argues Monsalve
improperly interfered when it wrongfully recorded the California title,
refused to remove the title, and continued reliance on the false title to the
Ferrari in 2021, all of which caused the Potential Buyer to cancel his contact
with Galactic.

¶33 Even so, Monsalve is not without a defense. Monsalve was
entitled to act in good faith to protect his own legal interest in the Ferrari,
even if it caused the Potential Buyer to cancel his purchase contract with
Galactic. Snow, 152 Ariz. at 34–35; Restatement (Second) of Torts § 773

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(A.L.I. 1979). To establish such a defense, Monsalve would need to show (1)
he had or honestly believed he had a legally protected interest; (2) he
asserted the interest or threatened to protect it in good faith; and (3) he
threatened to protect it by proper means. Snow, 152 Ariz. at 34–35. In
support, Monsalve says he believed he owned the Ferrari because it was a
condition of Monsalve’s $1,000,000 loan to the Original Owner.

¶34 But Monsalve’s argument is subject to controverting
evidence. Galactic offered evidence showing Monsalve’s transaction with
the Original Owner was a loan, not a purchase, for which the Ferrari was
collateral. Galactic further argues Monsalve acted improperly by forging
documents and falsely recording a title to the Ferrari in California when he
had no ownership interest in it. With the controverting evidence and
inferences, a jury must determine whether Monsalve acted, subjectively, in
good faith, and to defend what it honestly believed was its legally protected
interest when it filed the California title and refused to release it after
Monsalve learned of the Potential Buyer contract. See id. at 34-35.

B. Galactic established a material issue of fact supporting its
intentional interference with business expectancy claim.

¶35 For the same reasons the court vacates the superior court’s
summary judgment for Monsalve on Galactic’s intentional interference
with contract claim, it vacates on the intentional interference with business
expectancy. The elements of both claims are nearly identical, except
Galactic need not prove a valid contract was in place. Dube v. Likins, 216
Ariz. 406, 412–14 ¶¶ 14, 19 (2007) (recognizing business expectancy must be
with a specific third party or specifically identifiable group, such as
customers); Restatement (Second) of Torts § 766B (A.L.I. 1979). Instead, it
need only prove an existing relationship having the potential to develop
into a contractual relationship. Dube, 216 Ariz. at 414 ¶ 19.

¶36 Galactic presented evidence showing Monsalve’s alleged
wrongful title prevented it from selling the Ferrari in the normal course of
business and the eventual sale at auction yielded a significantly lower price
than the Potential Buyer had agreed to pay. At the very least, the Potential
Buyer contract provides evidence of Galactic’s expectation it could sell the
Ferrari for a substantially higher price to the Potential Buyer, if not others.
See id. at 413–14 ¶¶ 19–20.

II. Monsalve’s cross-appeal for attorney fees and costs is moot.

¶37 Monsalve challenges the superior court’s denial of the request
for attorney fees. The decision to vacate summary judgment moots that

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denial. The superior court may consider whether either side may recover
attorney fees based on the final resolution of the case.

ATTORNEY FEES AND COSTS

¶38 On appeal, Galactic seeks an award for costs under A.R.S.
§ 12-341. Monsalve seeks an award for attorney fees and costs under A.R.S.
§§ 12-341, -341.01, and -349. The court exercises its discretion to deny
Monsalve’s request for an award for attorney fees and costs on appeal. Any
award must abide the outcome on remand. Because Galactic is the
prevailing party in this appeal, the court awards Galactic its costs on appeal
upon compliance with Rule 21, Arizona Rules of Civil Appellate Procedure.

CONCLUSION

¶39 The court vacates the superior court’s summary judgment for
Monsalve and remands for further proceedings consistent with this
decision.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JT

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