AZAPP Blog

Riendeau v. Wal-Mart Stores, Inc. (2/25/2010): Arizona Court of Appeals Division One Holds that the Tardy Filing of a Cost Bond on Appeal from Compulsory Arbitration Does Not Render the Appeal to Superior Court Jurisdictionally Defective.

Plaintiffs, husband and wife, sued for damages resulting from the wife’s slip and fall at a Wal-Mart store.  The case proceeded to compulsory arbitration pursuant to Ariz. R. Civ. P. 72-77 and the arbitrator rendered a decision.  After prematurely filing a notice of appeal to superior court, Plaintiffs were tardy in filing the cost bond required by Rule 77(b).  The superior court denied Wal-Mart’s motion to strike the notice of appeal based the untimely filing of the cost bond.  The superior court later entered judgment against plaintiffs, and they appealed.

The Court of Appeals affirmed the judgment by unpublished memorandum decision.  The published opinion considered solely the Court’s jurisdiction.  The Court held that the superior court had jurisdiction of the appeal from compulsory arbitration, and that the Court of Appeals thus had jurisdiction to review the superior court judgment.  

The premature appeal to superior court from compulsory arbitration was not jurisdictionally defective.  Instead, the appeal became effective upon entry of the final arbitration award.  See Guinn v. Schweitzer, 190 Ariz. 116, 117-18, 945 P.2d 837, 838-39 (App. 1997).  The tardy filing of the cost bond also did not deprive the superior court of jurisdiction.  A.R.S. § 12-133(H) allows perfection of an appeal “within the time limited by rule of court” and Rule 6(b) authorizes the superior court to extend time for all filings, with exceptions not applicable here. 

The Court disagreed with Varga v. Heburn, 116 Ariz. 539, 570 P.2d 226 (App. 1977), which held that Rule 6(b) did not allow the superior court to extend the time to file a cost bond on appeal from compulsory arbitration.  The Court found Varga’s holding at odds with A.R.S. § 12-133(H).

Judge Kessler wrote the opinion; Judges Irvine and Brown concurred.

Posted by: Mark P. Hummels

Inboden v. Inboden (2/25/2010):  Division One Holds That Upon Dissolution of a Marriage, an Unequal Division of Jointly Held Property Cannot be Made Solely to Reimburse Each Spouse for Separate Funds That Were Used to Purchase the Jointly Held Property.

Shortly before her marriage, wife purchased an undeveloped lot in Yuma, Arizona with her separate funds and she and her future husband took title to the lot as joint tenants.  Following their marriage, husband and wife built a house on the lot and transferred the lot and house to themselves as married persons as joint tenants with rights of survivorship.  Each spouse contributed financially to the construction of the house from their separate funds.  The couple also obtained a loan against the property.  Within months of completing the house, husband moved out and the couple later petitioned for dissolution of their marriage.

The family court concluded that the house was jointly held marital property subject to equitable division, and after deducting the amount of the lien from the value of the house, determined the parties were entitled to reimbursement for their separate financial contributions.  The court awarded possession of the house to wife and ordered her to make an equalization payment to husband.  Husband timely appealed. 

 The Arizona Appeals Court vacated the portion of the dissolution decree related to the division of property held in joint tenancy and remanded the action for further proceedings.  A.R.S. § 25-318(A) governs the division of marital property upon dissolution and provides that each spouse is to be assigned his or her separate property and all jointly held property is to be divided equitably.  The family court has broad discretion in allocating the property but an unequal division of jointly held property cannot solely be made to reimburse each spouse for separate funds that were used to purchase the jointly held property. The Court reasoned that the family court’s order indicates that the property division was based solely on the relative contributions of separate property made toward the purchase of the jointly held property.  Thus, the Court found that the family court abused its discretion.  The Court explained that in making an equitable division of community property upon dissolution of marriage, the family court should consider all factors that bear on the equities of the division.     

Judge Brown authored the opinion, Judges Hall and Portley concurred.

Posted By: Kristin L. Windtberg 

In re the General Adjudication of All Rights to Use Water in the Gila River System & Source (2/19/2010):  Arizona Supreme Court Holds That Its 1991 Special Order Governing the Adjudication of Water Rights Is Constitutional and Appropriately Limits the Scope of Review of Settlements Concerning Water Rights.   

This case involves ongoing adjudication of water rights in the Gila River System and Source.  In 2006, the Gila River Indian Community (“GRIC”) and a number other parties applied to the adjudication court to approve a settlement in which GRIC would receive a certain amount of water from a number of sources, and in exchange would waive certain claims.  The adjudication court ordered the Arizona Department of Water Resources (“ADWR”) to prepare an assessment of the settlement to aid in reviewing the settlement.  A number of tribes referred to collectively as the “Apache Tribes,” a number of entities referred to as the “Lower Gila Water Users” or “LGWUs”, and ASARCO LLC objected to the settlement.  The settling parties responded to the objections and moved for summary disposition, and the Apache Tribes and ASARCO cross-moved for summary disposition.

The adjudication court limited its inquiry to matters specified in the Arizona Supreme Court’s 1991 Special Procedural Order Providing for the Approval of Federal Water Right Settlements, Including Those of Indian Tribes (“Special Order”), which only allows a claimant to object if (1) approval of the settlement would cause material injury to its water rights, (2) conditions warranting the initiation of special proceedings have not been satisfied, or (3) the settlement agreement provides a tribe water rights more extensive than it could prove at trial.  The adjudication court held (1) the Apache tribes had no valid objections because the settlement did not affect their water rights, and (2) the LGWUs and ASARCO’s objections failed because the water quantity GRIC would receive under the settlement was not more extensive than GRIC could show at trial.  Accordingly, it approved the settlement.  The Apache Tribes, LGWUs, and ASARCO requested interlocutory appeal, which the Arizona Supreme Court Granted.

In a unanimous opinion, the Arizona Supreme Court affirmed.  The Court confirmed that the Special Order applied, and held that it did not unfairly or unconstitutionally prevent the objecting parties from challenging the settlement and instead served important purposes.  The Court noted the size and complexity of this general stream adjudication, and explained that the Special Order benefits both settling and non-settling parties by reducing the claimed water rights below the amount a party could have proven at trial.

Turning to the objecting parties’ specific objections, the Court rejected the Apache Tribes’ contention that the adjudication court had a duty to consider the constitutionality, legality, and fairness of the settlement, explaining that these objections fell outside the Special Order.  The Court further explained that San Carlos Apache Tribe v. Superior Court, 193 Ariz. 195, 972 P.2d 179 (1999), cited by the Apache Tribes, did not apply because there were no separation of powers issues presented by the adjudication court’s application of the Special Order.  The Court next rejected the Apache Tribes’ contention that they would not be materially injured by the settlement, explaining that (1) the settlement expressly preserves their water rights, and (2) does not affect their water rights.  The Court also rejected their claim that ADWR failed to comply with the adjudication court’s order, explaining that ADWR’s assessment properly considered the impact of the settlement on other claimants.  The Court also rejected the Apache Tribes’ claim that the adjudication court did not review the executed version of the settlement.  Finally, the Court rejected their claim that GRIC would receive more water by settlement than it could prove at trial, explaining that the settlement provided for less water than claimed on behalf of GRIC, its current water use, and GRIC’s Globe Equity Decree rights.  The Court further noted that this inquiry is limited to water quantity, not quality, under the Special Order.

The Court next addressed and rejected the LGWUs’ objections.  The Court held that the LGWUs will not be materially injured by the settlement because (1) the water from the Gila River system allocated to GRIC retains its pre-existing attributes, and (2) the LGWUs are not bound by the settlement.  The Court next rejected their contention that the Special Order violates their substantive and procedural due process rights, explaining that there were insufficient reasons for the Court to deviate from the Special Order at this late date.  The Court also rejected their argument that they are bound by the settlement, explaining that they are not settling parties and did not enter into any other ancillary agreements.  The Court also rejected their constitutional and statutory challenges, noting that such challenges fall outside the Special Order’s limited scope of review, and that the settlement’s safe harbor provision is appropriate.  The Court also rejected the LGWUs’ claim that CAP and Blue Ridge stored water should have been included when considering the amount of water provided to GRIC in the settlement.  Finally, the Court rejected the LGWUs’ claim that settlement agreement breached the 1945 Arlington Agreement, explaining that the settlement did not alter the rights given to Arlington in that agreement.

Lastly the Court rejected ASARCO’s objections.  The Court rejected ASARCO’s claim that the settlement violates a prior 1977 Water Rights Settlement and Exchange Agreement, noting that this contract claim falls outside the scope of review allowed by the Special Order, and that any claims involving that 1977 agreement must be brought in federal court.  The Court next held that ASARCO will not be materially injured by the settlement because its rights to the San Pedro River will not be impacted.  The Court also rejected ASARCO’s claim that the settlement’s safe harbor provision denies it equal protection and confers special benefits to GRIC under the Arizona Constitution, explaining that this claim fell outside the purview of the Special Order, and in any event, the settlement did not violate ASARCO’s equal protection rights nor confer special benefits to GRIC.  The Court next rejected ASARCO’s claim that the settlement allows GRIC to select which upstream users will be called to fulfill its water rights, explaining that the Special Order only allows a quantitative, not qualitative review.  Finally, the Court rejected ASARCO’s argument that it would be materially injured by the “rebound call” provision in the settlement, noting that this argument was premature and speculative.

Justice Pelander authored the unanimous opinion.

Posted by Sharad H. Desai.

Ad Hoc v. Reiss / Schmuki v. Our Lady of the Sun (2/23/2010): Arizona Court of Appeals Division One Holds That, Under the Ecclesiastical Abstention Doctrine, Courts Lack Jurisdiction to Resolve Disputes That Require an Inquiry Into Church Doctrine or Belief and that the Ecclesiastical Abstention Doctrine Applies Equally to Congregational and Hierarchical Churches

Our Lady of the Sun Catholic Church, Inc. (“OLS”) is an independent church organized outside the structure of the Diocese of Phoenix. It was organized to conduct the Tridentine Latin Mass and promote the traditional doctrine, rites, and liturgy of the Roman Catholic faith. After Father Francis LeBlanc, the original founder and priest of OLS passed away, the OLS board of directors elected Father Paul Andrade to replace him. One director and a member of the congregation brought a derivative suit against OLS and against current and former OLS board members, alleging that the board had failed to select Father Andrade in accordance with OLS’s articles of incorporation, which required that OLS’s priest must have been ordained according to pre-1968 Roman Catholic rites. Their suit also involved two claims involving a dispute over the disposition of some of Father LeBlanc’s property. The superior court dismissed the claims regarding the improper hiring of Father Andrade on grounds of standing and lack of subject matter jurisdiction under the ecclesiastical abstention doctrine; the court dismissed the claims regarding Father LeBlanc’s property because the superior court was not the right forum for the claims. A related suit was also filed by the Ad Hoc Committee of Parishioners of Our Lady of the Sun Catholic Church (the “Committee”), an unincorporated association of members of OLS. The Committee alleged that Father Andrade had later been improperly suspended by the OLS board, and that the board had improperly used OLS funds. The superior court dismissed this complaint on the issue of standing.

The Arizona Appeals Court affirmed the dismissal of both actions. The Appeals Court held that, because of the ecclesiastical abstention doctrine, the superior court did not have subject matter jurisdiction over the claims from the first complaint alleging that Father Andrade was improperly hired and the claims from the second complaint alleging that he was improperly suspended. Under the ecclesiastical abstention doctrine, courts lack jurisdiction over claims which involve ecclesiastical disputes which require an “inquiry into church doctrine or belief.” The Court held that, contrary to the appellants’ argument, the ecclesiastical abstention doctrine applies equally to disputes involving hierarchical churches and congregational churches like OLS. Additionally, secular courts will not involve themselves in disputes related to “hiring, firing, discipline, or administration of clergy.” Because the dispute over the hiring of Father Andrade would require a court to determine whether Father Andrade had been ordained according to pre-1968 Roman Catholic rites, and because the second dispute would involve a dispute involving a priest’s employment relationship with his church, the ecclesiastical abstention doctrine applied and the superior court had no jurisdiction. Because the Committee did not allege conversion in its claims regarding the board’s improper use of OLS funds, and because the Committee did not seek a return of the funds to OLS, the Court affirmed the dismissal of these claims on First Amendment grounds. The First Amendment prohibited resolution of the Committee’s claims because it would require the court to determine which uses of the funds were in compliance with the purposes of OLS in conducting church business. The Court held that the claims regarding the disposition of Father LeBlanc’s property were properly dismissed under the doctrine of abatement, because there was already a parallel probate proceeding regarding the property in question.

Judge Barker authored the opinion; Judges Norris and Swann concurred.


Posted By: James K. Rogers 

Strait v. Strait (2/11/2010):  Arizona Court of Appeals Division One Holds that Although the Family Court Can Consider a One-Time Insurance Settlement as Income When Modifying Child Support, It Cannot Do So Without Determining Whether the Settlement Represented a Recoupment of Lost Capital or an Offset of Litigation Expenses Incurred.

Several years after dissolving their marriage, Joanne (“Mother”) and Clifford Strait (“Father”) gained joint legal custody of their children.  The Family Court ordered Father to pay Mother $381.69 in child support.  Two years later, the Family Court found Father’s income to be $20,000 per month and ordered child support of $1800.18 per month.  Father later sought to modify child support on grounds that the Family Court incorrectly included as income a $168,000 settlement he received as a result of litigation resulting from mold that had developed in his home.  The Family Court denied Father’s modification request, and this appeal followed.

The Arizona Appeals Court held that, under appropriate circumstances, one-time insurance payments can be considered income.  Although the child support guidelines define “gross income” as “income from any source,” the Family Court can deviate from the guidelines when their application would be inappropriate or unjust.  The Court of Appeals explained, however, that it would be unjust to include a one-time insurance settlement as income without first considering whether (1) all or some of the payment represents recoupment of capital or funds needed to remediate property damage, and (2) all or some of the payment offsets litigation expenses incurred.  Because the Family Court did not make those considerations, the Court of Appeals remanded the matter for further consideration.

Judge Portley authored the opinion; Judges Johnsen and Barker concurred.

Posted By: Michael S. Catlett

Indus. Comm’n of Ariz. v. Word (2/08/2010): Arizona Supreme Court Holds That the Eight-Year Limitations Period In A.R.S. § 23-907(E) For the Industrial Commission of Arizona to Recover Payments From Employers Runs From the Date of the Initial Award Giving Benefits to the Injured Worker, But That Each Payment Made to the Injured Employee by the Commission Qualifies as a Separate Judgment

In 1991, an employee of Tommy Word was injured during the course of employment. Word did not carry workers' compensation, and his employee sought workers' compensation. In 1992, an administrative law judge issued an award for the employee, and accordingly, the Industrial Commission of Arizona (the “Commission”) made payments to the employee. The uninsured employer is liable for such payments. Pursuant to A.R.S. § 23-907(E), the Commission issued “continuing awards” in 1993, 1994, and 1998 notifying Word of the payments made to the employee. In 2000, the Commission issued a final award, and recorded it with the Maricopa County Superior Court Clerk in 2001. Word did not contest any of the awards. The Commission attempted to collect the amounts owed by filing writs of garnishment in 2007. The Superior Court denied Word's motion challenging the garnishment. Word's argument was that the eight year limitations period in A.R.S. § 23-907(E) had expired, thus barring the Commission from collecting any liabilities incurred under the 1992 award. The Court of Appeals reversed the superior court, holding that under A.R.S. § 23-907(E), the Commission was required to file the 1992 award with the clerk of the superior court before pursuing remedies, and that the Commission's ability to recover from Word thus expired 8 years after the 1992 award.

The Arizona Supreme Court vacated the appeals court decision, and reversed the superior court. The Supreme Court stated that the appeals court had reached the correct result, but had incorrectly interpreted the statute. The appeals court correctly rejected the Commission's argument that, under A.R.S. § 23-907(E), it had obtained an eight-year lien by filing the 2000 award. The Supreme Court explained that the award referred to in A.R.S. § 23-907(E) is the initial decision awarding benefits, which in this case was issued in 1992. The Supreme Court rejected, however, the appeals court's holding that the Commission was required to file the 1992 award to perfect its rights to reimbursement from Word for payments made under the award. Each payment made to the injured employee by the Commission qualified as a separate judgment, which could be executed upon just like any other judgment, and the Commission's failure to file the initial award did not affect the status of each payment as an independent judgment. The Supreme Court stated that the appeals court reached the correct result in this case, however, because the last payment, which was made in 1998, expired five years later, in 2003. Because the Commission did not argue that the payment had been renewed, it could not form the basis of the 2007 garnishments. The Supreme Court declined to decide whether the Commission could renew such judgments, and whether 8-year liens established under A.R.S. § 23-907(E) may be renewed.

Justice Hurwitz wrote the opinion for the unanimous Court.

Posted By: James K Rogers

LetBennett v. Baxter Group, Inc. (2/10/2010): Arizona Court of Appeals Division Two Holds that the Unauthorized Recording of a Valid Real Estate Purchase/Sale Agreement Does Not Constitute Grounds For Slander of Title Under A.R.S. § 33-420.

Buyer and Seller entered an agreement (the “Agreement”) for the sale of real property conditioned on Buyer obtaining required financing.  Buyer failed to obtain financing and Seller eventually accepted an offer to sell the property to another party.  Seller refused to return Buyer’s security deposit.  To attempt to force repayment of the security deposit, Buyer had the Agreement recorded before Seller’s new sale agreement had closed. 

Buyer sued Seller for breach of contract for failing to return the security deposit and for fraud.  Seller counterclaimed for fraud and for tortious interference with contract.  The trial court granted summary judgment to Buyer on the majority of Seller’s counterclaims, but denied summary judgment on Seller’s claims for interference with contract and slander of title.  After a bench trial, the court awarded Buyer the security deposit, but denied Buyer’s fraud claim.  The court ruled against Seller on its counterclaims for interference with contract and slander of title, and awarded Buyer its attorneys’ fees as well as costs and sanctions.   

Seller appealed.  The Court of Appeals affirmed dismissal of the slander of title claim, affirmed the finding of a breach of contract from the failure to return Buyer’s security deposit, and affirmed the award of sanctions.  The Court vacated and remanded for reconsideration the awards of attorneys’ fees and taxable costs.   

Seller based its slander of title claim on A.R.S. § 33-420(A), which imposes liability against a person who, claiming an interest in real property, causes a document asserting the claim to be recorded while “knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid.”  In addition, A.R.S. § 33-420(D) provides: “A document purporting to create an interest in, or a lien or encumbrance against, real property not authorized by statute, judgment or other specific legal authority is presumed to be groundless and invalid.” 

Seller argued that the A.R.S. § 33-420(D) presumption applied because no statute, judgment or other legal authority provided for the recording of the real estate sales agreement.  The Court of Appeals held, however, that A.R.S. § 33-420(A) focuses solely on whether the document is invalid or groundless, not on whether the recording of the document was authorized.  Because the Agreement itself was valid, the trial court did not err in dismissing the slander of title claim. 

Chief Judge Howard authored the opinion; Judges Espinosa and Vásquez concurred.

Posted By: Mark P. Hummels

Flagstaff Affordable Housing Ltd. P’ship v. Design Alliance, Inc. (2/2/2010): Arizona Supreme Court Holds that the Economic Loss Doctrine Prohibits a Plaintiff From Recovering in Tort for Purely Economic Loss under a Construction Contract, Unless the Contract Otherwise Provides.

In 1995, Flagstaff Affordable Housing Limited Partnership contracted with Design Alliance, Inc. for the design of eight apartment buildings and a community center.  In 2004, the U.S. Department of Housing and Urban Development filed a complaint against Flagstaff Affordable Housing, alleging that the apartments violated the federal Fair Housing Act’s accessibility guidelines.  After settling the matter with the Department of Housing, Flagstaff Affordable Housing sued Design Alliance alleging that it had breached its contract and acted negligently.  Design Alliance moved to dismiss the complaint, arguing that the contract claim was barred by A.R.S. § 12-552 and that the negligence claim was barred by the economic loss doctrine.  Flagstaff Affordable Housing voluntarily dismissed the contract claim, but argued that the economic loss doctrine did not apply to its professional negligence claim.  The superior court disagreed and granted Design Alliance’s motion to dismiss.  The Court of Appeals reversed, holding that the economic loss doctrine does not bar negligence claims against design professionals.  Design Alliance appealed. 

The Arizona Supreme Court vacated the Court of Appeal’s opinion.  The Court first held that the economic loss doctrine applies to construction defect cases involving a contract.  The economic loss doctrine refers to “a common law rule limiting a contracting party to contractual remedies for the recovery of economic losses unaccompanied by physical injury to persons or other party.”  In Arizona, application of the doctrine varies depending on context-specific policy considerations.  In cases involving construction defects, such as this, the Court concluded that “the policies of the law generally will best be served by leaving the parties to their commercial remedies when a contracting party has incurred only economic loss, in the form of repair costs, diminished value, or lost profits.”  Because, however, the concerns upon which the economic loss doctrine is based are not implicated if the plaintiff cannot pursue contractual remedies, the Court noted that the doctrine should not apply when the plaintiff lacks privity.  The focus in those cases should remain whether the applicable substantive law allows liability in the particular case. 

The Court then addressed the Court of Appeals’ holding that the economic loss doctrine does not apply to claims for professional negligence, regardless of the type of case, because claims for professional negligence are based upon a common-law duty of care that exists independent of any contract.  The Supreme Court rejected this “formalistic” approach, concluding that “the fact that an architect, as a professional, has legally imposed duties of care does not displace the general policy concerns that parties to construction-related contracts should structure their relationships by prospectively allocating the risks of loss and identifying remedies.”  The Court also rejected Flagstaff Affordable Housing’s contentions that applying the economic loss doctrine to professional negligence claims against architects would be contrary to public policy. 

In this case, the superior court did not apply the version of the economic loss doctrine set forth in the Court’s opinion.  Therefore, the Court reversed the judgment for Design Alliance and remanded the case to the superior court for further proceedings. 

Justice Bales authored the Court’s unanimous opinion.

Posted By: Brandon A. Hale

Arizona Tile, LLC v. Berger (2/2/2010): Arizona Court of Appeals Division One Holds that A.R.S § 33-1005 Creates a Trust Obligation and that Directors of a Corporation May be Held Personally Liable if they Cause a Corporation to Breach that Trust Obligation.

Howard Berger and John McCarthy were the sole directors of Designer Surfaces, Inc., which fabricated and installed countertops.  Designer Surfaces purchased many of the materials it used from Arizona Tile on an open account.  After Designer Surface became insolvent, it failed to pay Arizona Tile for materials Arizona Tile had supplied.  Arizona Tile sued Designer Surfaces for breach of a credit agreement and unjust enrichment, and also sued Berger and McCarthy personally for breaching trust obligations they allegedly owed Arizona Tile under A.R.S. § 33-1005.  Mr. Berger moved to dismiss the complaint against him for lack of personal jurisdiction on grounds that he was a resident of California and did not have minimum contact with Arizona, which the trial court denied.  Arizona Tile then moved for summary judgment against Berger and McCarthy for diverting the funds Designer Surfaces allegedly held in trust.  Arizona Tile also sought its attorneys’ fees on the grounds that case against Berger and McCarthy arose out of contract.  The superior court granted summary judgment in favor of Arizona Tile, concluding that A.R.S. § 33-1005 applied to the facts of the case and that Arizona Tile was entitled to attorneys’ fees because the case arose out of contract.  Berger and McCarthy appealed.

The Arizona Court of Appeals affirmed in part and reversed in part.  It first held that the superior court had personal jurisdiction over Berger.  Arizona courts have personal general jurisdiction over any nonresident who has substantial or continuous and systematic contacts with Arizona.  In this case, the Court found that the exercise of general jurisdiction by the superior court was “reasonable and just” because Berger was regularly physically present in Arizona, had offices and property in Arizona, and systematically transacted business in Arizona. 

As for the statutory issue, the Court of Appeals then held that A.R.S. § 33-1005, by its plain language, created a trust obligation upon Designer Surfaces.  A.R.S § 33-1005 provides that “monies paid by or for an owner-occupant . . . to a contractor, as defined in § 32-1101, as payment for labor, professional services, materials, machinery, fixtures or tools for which a lien is not provided . . . shall be deemed for all purposes to be paid in trust and shall be held by the contractor for the benefit of the persons or persons furnishing such labor, professional services, materials, machinery, fixtures or tools.”  In this case, the Court of Appeals found that Designer Surfaces was subject to the provisions of A.R.S § 33-1005 because Designer Surfaces qualified as a “contractor” under A.R.S. § 32-1101.  Therefore, applying the plain language of the statute, the Court of Appeals concluded that A.R.S. § 33-1005 created a trust obligation upon Designer Surfaces in favor of Arizona Tile for the money Designer Surfaces received from the materials Arizona Tile had supplied. 

Next, the Court of Appeal held that Berger and McCarthy could be held personally liable for causing Designer Surfaces to breach its trust obligations.  Although corporate officers and directors are not personally liable for a corporation’s misconduct merely by virtue of their positions, they may be held liable if they direct the corporation to commit a breach of trust.  In this case, because Arizona Tile had provided evidence that Berger and McCarthy decided what accounts to pay and failed to pay Arizona Tile at a time that Designer Surfaces should have been holding funds in trust for Arizona Tile’s benefit, the Court of Appeals concluded that Berger and McCarthy could be liable for the loss resulting from that breach of trust.

Finally, the Court of Appeals held that Arizona Tile was not entitled to recover its attorneys’ fees under A.R.S. § 12-341.01.  The Arizona Supreme Court has acknowledged that, under § 12-341.01(A), attorneys’ fees may be awarded in a cause of action in tort if the cause of action could not exist but for the breach of a contract.  In this case, the Court of Appeals concluded that Arizona Tile was not entitled to attorneys’ fees because the cause of action against Berger and McCarthy for breaching the trust obligations was not “entwined” with the breach of contract between Designer Surfaces and Arizona Tile.

Judge Weisberg authored the opinion; Judges Norris and Downie concurred.

Posted By: Brandon A. Hale

Gamboa v. Metzler (2/2/2010):  Arizona Court of Appeals Division One Holds That Time Limitations Imposed by a Trial Court on a Party’s Examination of a Witness Are Not Unreasonable if the Time Constraints Encountered Are “Solely Attributable” to the Party.   

Plaintiff Jaime Gamboa sued Defendant Dorothy Metzler in connection with a car accident.  Plaintiff called eight witnesses at trial.  Five of his witnesses testified on the second day of trial, but part of that day was not used because of witness scheduling problems.  The parties and trial court agreed that Plaintiff’s remaining three witnesses and Defendant’s lone witness would testify the third day on a specific schedule.  Plaintiff’s counsel, however, failed to alert one of his remaining witnesses to the schedule for the third day, and the witness arrived late, forcing Plaintiff to rest late.  Nonetheless, the parties agreed that Defendant’s lone witness would still complete his testimony by the end of the third day.  Plaintiff’s counsel cross-examined that witness for forty-three minutes before being stopped by the trial court at the end of the day.  Plaintiff’s counsel objected to “limiting [his] cross-examination,” but did not ask to resume cross-examination the following day or attempt to determine whether the witness was even available then.  The next day, the trial court stated that the scheduling problems were “solely attributable” to Plaintiff, and did not allow further examination.  Plaintiff timely appealed.

The Arizona Appeals Court affirmed, holding that the trial court did not violate Plaintiff’s due process rights when it limited his cross-examination of Defendant’s witness.  The Court explained that Arizona Rule of Evidence 611(a) requires trial courts to “exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence,” and Rule 611(h) permits them to impose “reasonable time limits on [] trial proceedings or portions thereof.”  Under these rules, trial courts have broad discretion to manage trials, but time limitations must be reasonable.  The Court explained that in this case, the trial court did not act unreasonably because: (1) the court allotted sufficient time for cross-examination; (2) Plaintiff repeatedly agreed that the witness would testify by the end of the third day; (3) the time constraints Plaintiff encountered were “solely attributable” to him; (4) Plaintiff had ample time to cross-examine the witness; and (5) Plaintiff did not request additional time when the court stopped his examination. 

The Court also held that Plaintiff failed to show that the limitation on his cross-examination caused him any harm because he did not make an offer of proof below.

Judge Portley authored the opinion; Presiding Judge Johnsen and Judge Barker concurred.

Posted By: Sharad H Desai

Federico v. Maric (1/28/2010): Arizona Court of Appeals Division One Rules That an Aiding and Abetting Bad Faith Claim Made Against a Doctor Performing an Independent Medical Exam for an Insurer Must Include Evidence That the Physician Knew of the Insurer’s Tort and Substantially Assisted or Encouraged the Insurer.

Federico injured his back in a work-related accident.  He made a claim for worker’s compensation benefits and, after receiving some treatment from M.B.I. Industrial Medicine (“MBI”), his employer’s workers’ compensation insurer denied Federico’s claim.  A year later, Federico told MBI that he had re-aggravated his injury.  A month after that, Federico sustained another work-related injury.  After the new injury, the insurer requested that MBI retain Dr. Maric to perform an independent medical examination (“IME”) of Federico.  Maric concluded in the IME that Federico did not need further medical treatment, and noted that there was no objective evidence of physical pain or injury.  He also noted that Federico may be a malingerer.  As a result, the insurer denied Federico’s worker’s compensation claim.

Federico sued for bad faith and asserted that MBI and Maric aided and abetted the insurer’s bad faith.  The trial court granted Maric’s motion for summary judgment on the aiding and abetting claim and Federico appealed.

The Court of Appeals affirmed in a unanimous opinion.  The Court first reviewed Arizona’s aiding and abetting tort, explaining that Federico had to prove, among other things, (1) that Maric had knowledge of the primary tort – the insurer’s bad faith denial of Federico’s claim – and, (2), that Maric “substantially assist[ed] or encourag[ed]” the insurer.  The Court held that Federico had not raised a contested issue of material fact on either point. 

As to Maric’s knowledge, Federico argued that the trial court could have inferred that Maric knew about the insurer’s bad intent based on various alleged facts, including allegations that Maric improperly examined Federico and that Maric knew his report would negatively impact Federico’s claim.  The Court reasoned that such allegations referred only to Maric’s actions and were irrelevant to Maric’s knowledge of the insurer’s actions.  As to substantial assistance, the Court noted that Federico had not provided any evidence that Maric assisted the insurer’s actions.  Although the insurer may have requested the IME for improper purposes, nothing suggested that the insurer needed the IME to act in bad faith.

Finally, the Court rejected Federico’s argument that the trial court applied the wrong summary judgment standard.  Although the judge may have viewed some evidence from Maric’s perspective, that was necessary to assess Maric’s knowledge or implied knowledge of the insurer’s tortious actions.

Judge Irvine authored the opinion; Judges Gemmill and Thompson concurred.

Posted By: Joseph N. Roth

State v. Taylor (2/2/2010):  Division One of the Arizona Court of Appeals Holds That an Administrative Penalty Does Not Accrue Prejudgment Interest in the Absence of an Explicit Statutory Mandate.

In 1994, the Arizona Structural Pest Control Commission (now the Office of Pest Management) imposed a civil penalty against the Taylors for performing pest control without a license.  The Taylors never paid the penalty.  In 2004, the Commission filed civil suit to convert the penalty order to a judgment and asked the Superior Court also to impose prejudgment interest.  The Court entered the order, but refused to order interest, and the Commission appealed.

The Court of Appeals affirmed.  A.R.S. § 44-1201(A), which the Commission cited as authority for awarding interest, applies only to “any loan, indebtedness, judgment or other obligation,” which language the Court concluded did not encompass an administrative penalty.  Nor had the legislature provided for prejudgment interest in the specific statute that authorized the penalty against the Taylors, as it had in a number of other administrative penalty statutes.

PRACTICE NOTE:  The Taylors claimed that the Court of Appeals did not have jurisdiction over this case because the Commission failed to file a notice of appeal within 30 days of judgment as required by ARCAP 9.  The Court rejected this argument.  The judgment was entered against the Taylors on April 21, 2008.  The Commission also had a claim against a third party, which was resolved by default judgment on August 21, 2008.  The April judgment against the Taylors was not a final, appealable judgment because it did not dispose of all claims against all defendants.  Because the Commission filed its notice of appeal within 30 days of the August judgment, the Court had jurisdiction.

 Judge Johnsen authored the opinion; Judges Orozco and Thompson concurred.

Posted By Kathleen Brody O'Meara

Aztar Corporation v. U.S. Fire Insurance Co. et al. (1/28/2010):  Division One Holds That Hotel and Casino Cannot Recover Under Business Interruption Insurance Policy When an Expansion Building Collapses During Construction.

After an expansion to the Atlantic City Tropicana Casino collapsed during construction, the New Jersey government temporarily shut down various impacted structures, including the main entry street to the Tropicana, a pedestrian bridge, the bus terminal, an existing parking structure, and the west hotel tower.  The Tropicana otherwise remained fully operational, but experienced a decrease in patronage of the hotel and casino.  The hotel owner and operator, Aztar, filed claims for loss with its various insurance carriers, including the “Excess Carriers.”  All of the carriers denied business interruption coverage and contingent business interruption coverage.  One of the carriers accepted the civil authority and ingress/egress coverage claims, and the others denied these claims as well. Aztar sued the carriers, and Aztar and the Excess Carriers filed cross-motions for partial summary judgment. The trial court ruled in favor of the Excess Carriers, determining that “interruption of business, whether total or partial” did not include a loss from decreased patronage at the Tropicana because the Tropicana remained fully operational and was not damaged by the collapse.  The trial court also ruled that contingent business interruption coverage was not available because the expansion was not a “contributing property” and the loss from the decreased patronage was not a business interruption.  The trial court permitted the Excess Carriers to file an application for attorneys’ fees, even though the applications were not timely filed, and granted those applications. Aztar appealed, arguing that the trial court erred in denying its cross-motions for summary judgment and in granting summary judgment to the Excess Insurers, and in granting attorneys’ fees to the Excess Carriers.  

The Arizona Appeals Court affirmed, but did so on alternative grounds.  The Court held that the trial court erred in determining as a matter of law that Aztar’s claims could not fall within the business interruption coverage provision of the policies because the hotel and casino still had the same operational capacity because the term “interruption of business, whether total or partial” could include a decreased patronage in some circumstances. The Court found that the trial court did not err in granting summary judgment to the Excess Carriers on the issue of contingent business interruption coverage because the expansion was not yet a contributing property to the Tropicana. The Court found that the trial court erred in finding a factual issue regarding whether the expansion was a covered property on the date of collapse, but agreed with the trial court’s implicit ruling that the damaged property must be a covered property to trigger the coverage provisions.  Reasoning that the language of the policy was clear that the expansion would become a covered property on April 1, 2004 (after the collapse occurred), the trial court reversed the trial court’s ruling on the issue. On the attorneys’ fees issue, the Appeals Court ruled that under ARCP 54(g), the trial court had the discretion to extend the time for filing claims for attorneys’ fees, thus it was not improper to allow the Excess Carrier’s untimely applications.       

Judge Barker authored the opinion, Judges Portley and Swann concurred.

Posted By: Kristin L. Windtberg

In re MH 2008-002659 (1/21/2010): Arizona Court of Appeal Division One Holds That a Mental Health Patient’s Right to a Hearing to Challenge Involuntary Hospitalization During a Mental Health Evaluation Does Not Include the Right to Challenge the Evaluation Itself

In response to threats of suicide and other troubling behavior by the appellant, the appellant’s son applied for a court order that his mother undergo emergency admission for evaluation under A.R.S. § 36-524 or for mental health evaluation under A.R.S. § 36-524. Pursuant to A.R.S. § 36-529(A), the superior court issued a detention order for evaluation which stated that in conformity with A.R.S. § 36-529(D), the appellant had a right to “a hearing to determine whether [s]he should be hospitalized for the seventy-two hour evaluation period.” Three days after she had already undergone the evaluation, the order was served on the appellant at a psychiatric facility where she was being detained for the evaluation period. Following the evaluation, the superior court found that she was disabled because of a mental disorder, and ordered that she undergo inpatient and outpatient treatment. She appealed this civil commitment treatment order on due process grounds, arguing that because she was not served until after the evaluation, she was deprived of her statutory right to a hearing, and that because the evaluation took place before she was served, she was denied the right to contest the detention order. The appellant argued that if she had been able to request a hearing to contest the detention order, she could have prevented her involuntary hospitalization, and thus prevented the evaluation which led to her civil confinement.

The Arizona Appeals Court agreed that the appellant was entitled to be informed about her right to a hearing to contest her involuntary hospitalization. The Appeals Court held that the appellant was not entitled to have her treatment order dismissed, however, explaining that while A.R.S. § 36-529(D) allows patient to contest their involuntary hospitalization for the evaluation, it does not give them a right to contest the actual evaluation. At such a hearing, patients may contest the hospitalization by showing that they are not likely to deteriorate further, suffer harm to themselves, or cause harm to others if not hospitalized during the evaluation, but the patient may not contest the evaluation itself.

Judge Hall authored the opinion; Judges Kessler and Orozco concurred.

Posted By: James K. Rogers

Special Fund Division v. Industrial Commission of Arizona (1/21/2010):  Division One Holds That When a Worker Suffers Two Injuries in a Single Industrial Accident, His Employer May Be Entitled to Reimbursement from the Industrial Commission Special Fund, Even If Either of the Injuries Alone Would Not Entitle the Employer to Reimbursement

If an employer hires an impaired worker who later suffers a permanent injury on the job the employer is, in certain circumstances, entitled to reimbursement from the Industrial Commission Special Fund for the disability compensation paid to the employee.  In this case, the employer, McCarthy Building Companies, hired Michael Sordia, knowing he had Type II diabetes.  In an accident at work, Sordia broke his left arm and right leg and, as a result, received extensive medical, surgical, and psychological treatment. 

The Industrial Commission found that Sordia was permanently partially disabled.  Both Sordia and McCarthy appealed the decision, Sordia claiming he was entitled to greater disability benefits and McCarthy claiming it was entitled to reimbursement from the Special Fund under A.R.S. § 23-1065(C).  The administrative law judge hearing the appeal found that Sordia was permanently and totally disabled and that McCarthy was entitled to reimbursement.  After an unsuccessful request for administrative review, the Special Fund appealed.

The Court of Appeals affirmed the ALJ’s decision.  The statutory scheme, enacted to encourage employers to hire impaired employees, allows for partial reimbursement of disability benefits if the industrial injury is “not of the type specified in [A.R.S.] § 23-1044, subsection B.”  A.R.S. § 23-1065(C).  Although both of Sordia’s injuries – a broken arm and a broken leg – are specified in A.R.S. § 23-1044(B), the Court of Appeals concluded that, because the two injuries were part of the same accident, Sordia’s overall injury was “not of the type specified” in the statute.  Therefore, McCarthy was entitled to reimbursement from the Special Fund.

Judge Gemmill authored the opinion; Judges Swann and Johnsen concurred.

Ritchie v. Salvatore Gatto Partners, L.P. (1/05/2010): Arizona Court of Appeals Division One Holds That a Party Who Redeems a Tax Lien Before Completion of Service of Process by Publication in a Foreclosure Action Is Not Liable for Plaintiff’s Costs and Fees.

Plaintiff, who owned a tax lien certificate of purchase for property in Mohave County, initiated an action for judicial foreclosure of the right of redemption pursuant to A.R.S. § 42-18201.  Plaintiff initiated service of process for the action by publication, once per week for four weeks, in a local newspaper.  See Rule 4.1(n), Ariz. R. Civ. P. (service of process by publication).  Before the four weeks of publication were complete, a property owner redeemed the tax lien pursuant to A.R.S. § 42-18151.

Plaintiff sought an award of attorneys fees and costs under A.R.S. § 42-18206.  The property owner disputed whether the statute applied.  Following cross motions for summary judgment and oral argument, the trial court ruled in Plaintiff’s favor, awarding costs and fees.  The property owner appealed.

The Court of Appeals reversed.  Under A.R.S. § 42-18206, a person who is entitled to redeem a tax lien may do so at any time before judgment is entered on a foreclosure action.  If, however, the redemption occurs after service of process, either personally or by publication, then the party redeeming the tax lien shall be required to pay the plaintiff’s costs, including a reasonable attorney fee.  Here, however, because the statutory prerequisite of service of process was not complete under Rule 4.1(n) when the tax lien was redeemed, the trial court erred by awarding costs and fees.         

Judge Winthrop authored the opinion; Judges Swann and Brown concurred.

Posted By: Mark Hummels

 

Kaufman v. Langhofer (12/22/2009):  Arizona Court of Appeals Division One Holds That Pet Owners Are Not Entitled to Recover Emotional Distress Damages for the Death of a Pet in Negligence Actions.   

In May 2005, Plaintiff David Kaufman took his pet scarlet macaw, Salty, to Dr. William Langhofer and Scottsdale Veterinary Clinic (“Defendants”), for treatment.  Salty died on June 21, 2005 after Dr. Langhofer performed two operations.  Kaufman sued Defendants on multiple theories, including professional negligence, and sought special damages, including emotional distress, pain and suffering, and loss of companionship.  Defendants moved to dismiss these emotional distress damage claims.  The Court granted the motion, but allowed Kaufman to seek special damages for Salty’s fair market value.  A jury found Defendants 30% at fault for Salty’s death, but awarded Kaufman no damages because Salty had no market value due to an unrelated cardiac disease.  Kaufman timely appealed.  

The Arizona Appeals Court affirmed.  The Court held that Arizona, like the majority of jurisdictions in the United States, classifies pets as personal property and limits recovery for negligent injury to or death of a pet to the animal’s fair market value.  The Court explained that although some Arizona cases allow property owners to recover emotional distress damages when their property is negligently damaged, those cases involve tortious conduct directly harming the plaintiff and affecting or burdening a personal, as opposed to an economic or other interest belonging to the plaintiff.  In this case, Defendants’ negligence did not directly harm Kaufman because it did not affect or burden a personal right or interest belonging to him. 

The Court rejected Kaufman’s request that it expand Arizona common law to allow recovery of emotional distress damages for pets, similar to a loss of consortium theory, explaining that such an expansion would inappropriately offer pet owners broader compensation for the loss of a pet than is currently available for the loss of human friends, siblings, and nonnuclear family members.  The Court also rejected Kaufman’s argument that he was entitled to “value to owner” damages because he waived this damage theory below by failing to pursue it at trial.

Presiding Judge Norris authored the opinion; Judges Weisberg and Downie concurred.

Posted By: Sharad Desai

Turken v. NPP CityNorth, L.L.C. (1/25/2010): Arizona Supreme Court Holds that Courts May Not Consider Indirect, Non-Contractual Public Benefits in Determining Whether the Public Benefit to be Obtained from a Private Entity Under a Public Contract Is So Far Exceeded by the Consideration Paid by the Public that the Agreement Violates the Arizona Constitution’s Gift Clause.

Taxpayers sued the City of Phoenix, seeking to enjoin payments to a developer under an agreement with the City (“the Parking Agreement”).  The Parking Agreement provided for the City’s use of certain parking spaces at a planned mixed-use commercial and residential development project, in exchange for payments of as much as $97.4 million over more than eleven years.  The superior court granted summary judgment for the defendants, finding that the Parking Agreement did not violate the Arizona Constitution’s Gift Clause because the payments to the developer (1) served a public purpose and (2) were not excessive in view of the expected public benefit, including anticipated tax revenues from the development.

The Court of Appeals reversed, finding the Parking Agreement violated a third prong of the required test for alleged Gift Clause violations because it unduly promoted private interests.  The City and developer petitioned for review, which the Arizona Supreme Court granted.

The Supreme Court vacated the Court of Appeals’ opinion, holding that the third prong of the Court of Appeals’ Gift Clause analysis was not appropriate under the applicable test, set forth by Wistuber v. Paradise Valley Unified Sch. Dist., 141 Ariz. 346, 687 P.2d 354 (1984).  The Court also held, however, that courts applying the Wistuber test should not factor in any indirect, non-contractual public benefits, such as anticipated increased tax revenues, in determining whether the consideration to be paid by the public is grossly disproportionate to the public benefit received in exchange.  When conducting this analysis, courts should instead consider the objective value of only the specific consideration promised by the developer under the agreement – in this case, the parking spaces.    

Although the Court did not overrule any of its prior decisions, it determined that its ruling should apply prospectively only because the Court’s Wistuber test had been subject to contrary interpretation and was widely misunderstood.  The Court affirmed the superior court’s dismissal of the Gift Clause claim and remanded to the Court of Appeals for consideration of other constitutional arguments not previously decided.

Justice Hurwitz wrote the opinion for the unanimous Court.

Posted By: Mark P. Hummels 

Beck v. Deem (1/14/2010): Arizona Court of Appeals Division One Holds That A.R.S. §§ 14-3910 and 14-3972(C) Protect a Third-Party Purchaser of a Beneficial Interest in a Deed of Trust Even When the Original Transferor Wrongly Obtained Title Through a Fraudulent Affidavit for Transfer of Real Property.

When Rodney Olson died in 2003, he left a home to his three children – Sherry, Beck, and Todd.  Sherry hoped to refinance the home’s mortgage through Landmarc Capital & Investment Company and executed a deed of trust in Landmarc’s favor.  Beck and Todd signed quitclaim deeds disclaiming their interest in the home.  In exchange, Sherry agreed to pay Beck $25,000.

To obtain title from the estate, Sherry executed an Affidavit for Transfer of Real Property Title under A.R.S. § 14-3971(E).  Among other things, the statute required that such an affidavit involve property not worth more than $50,000 and imposed penalties for false statements.  Sherry’s affidavit stated she was the only “living heir” and that the home’s value did not exceed $50,000, although the home had been appraised a month earlier for $244,000. After obtaining title, Sherry refinanced the mortgage with Landmarc for $155,000 and Landmarc later assigned its beneficial interest to Deem.

Meanwhile, Sherry did not pay Beck the agreed $25,000, causing Beck to attempt to recover the home on behalf of Olson’s estate.  The trial court ordered Sherry to return the home to the estate, concluding that Sherry’s affidavit was based on false statements and was ineffective to transfer title to Sherry.  Beck also brought a claim against Landmarc, Deem, and others, asking the court to invalidate the deed of trust.  The trial court granted summary judgment for Beck, finding that the deed of trust was invalid.  Deem, Landmarc, and others appealed.

In a unanimous opinion, the Court of Appeals reversed, holding that Deem’s beneficial interest in the deed of trust was valid.  First, the Court explained that A.R.S. §§ 14-3910 and 14-3972(C) extend certain protections to purchasers or lenders who acquire interests in property through transfer affidavits – like Sherry’s affidavit – or through “deeds of distribution,” which involve an estate’s appointed “personal representative.”  The Court explained that the statutes protect purchasers who rely on improper transfer affidavits, so long as the purchaser is not implicated in any fraud.  Second, the Court held that the fact that Deem did not purchase or lend directly with Sherry did not affect Deem’s interest.  A narrow reading of A.R.S. § 14-3910 suggests that the statute would only protect an interest of a third-party like Deem only if it were acquired through a “deed of distribution.”  The Court reasoned, however, that it did not make sense to afford less protection to interests acquired through transfer affidavits, which are a “simplified means” of transfer not requiring an appointed personal representative.  Thus, read together, A.R.S. §§ 14-3972 and 14-3910 afforded Deem the same protections regardless of the form of transfer.  Finally, because no evidence suggested that Deem had any involvement in Sherry’s false affidavit, Arizona law protected Deem’s interest.

Judge Irvine authored the opinion; Judges Gemmill and Thompson concurred.

PRACTICE NOTE:  Although Appellants prevailed on appeal, the Court declined to grant their request for attorneys’ fees and costs.  First, the Court held that A.R.S. § 12-341.01 did not apply because the parties requested statutory relief, not relief “arising out of contract.”  Second, A.R.S. § 33-420 did not apply.  That statute allows an award of fees against a party who files a “wrongful document” against property, but Sherry was not a party to this suit.  Finally, A.R.S. § 33-806(B) did not apply.  Although that statute allows fees “to prevent . . . [i]mpairment of the security provided by the trust deed,” the “impairment of the security” means actual damage, waste, destruction, or improper maintenance of the secured property.

Posted By: Joseph N. Roth

Kadlec v. Dorsey (12/24/2009): Arizona Court of Appeals Division Two Holds that When Land is Sold Subject to a Roadway Easement, Courts are to Presume an Intent to Dedicate the Roadway to Public Use.

Between December 1994 and October 1995, Richard Turigliatto conveyed three parcels of real property to three different purchasers.  Each conveyance included an easement for a dirt road running through the parcels.  In 2006, the Dorseys, successors-in-interest to the purchaser of the central parcel, placed barriers on their property at each end of the roadway.  The Kadlecs and the Howells, owners of the neighboring parcels of land, filed separate actions to enforce the easement and recover damages.  At trial, the Kadlecs moved for partial summary judgment on the issue of the Dorseys’ property being subject to a recorded easement, and the Dorseys filed a cross-motion for partial summary judgment on the issue of the Kadlec’s claim of beneficial interest in any such easement.  The trial court granted the Kadlec’s motion and denied the Dorseys’, concluding that the language of the deed did not reflect that the grantor intended to limit the benefit of the easement to any particular parcel or person.  The Dorseys appealed. 

The Arizona Court of Appeals affirmed the trial court’s disposition, holding that the conveyance at issue resulted in a common law dedication of the roadway to public use.  Although no particular words are necessary to dedicate land to public use, Arizona courts ordinarily require clear and unequivocal evidence that a dedication was intended for a general public purpose.  However, because a street is “a public place which all segments of the general public are expected to be able to use,” the Court of Appeals concluded that when land is sold subject to a roadway easement, “the usual burden of proof is reversed and courts are to presume an intent to dedicate the roadway to public use.”  In this case, Turigliatto did nothing to indicate it was his intent to reserve the right to use the easement to only himself and his successors-in-interest.

Judge Vasquez authored the opinion; Judges Eckerstrom concurred.

Judge Brammer dissented, arguing that the caselaw the majority relied upon does not support the proposition that courts may presume a public dedication when land is sold subject to a roadway easement.   According to Judge Brammer, the Court should not have departed from Arizona’s general rule that a public dedication must be clearly shown. 

Posted By: Brandon A. Hale