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Thursday, January 29, 2004
Phelps v. Firebird Raceway, Inc.: Division One Holds That Release And Waiver Agreements May Justify The Entry Of Judgment As A Matter Of Law.
On January 29, 2004, Division One issued a decision affirming the appropriateness of granting summary judgment to a defendant on a negligence claim on the basis of signed release and waiver agreements. The plaintiff was a professional race-car driver who was burned after his car crashed into a wall at Firebird Raceway. He alleged that the Raceway's personnel were negligent in failing to rescue him more quickly. Before racing, he had signed agreements releasing any claims against the Raceway and covenanting not to sue it for negligence. The trial court granted summary judgment for the Raceway on the basis of the release and waiver agreements. The plaintiff argued that summary judgment on this basis was inappropriate because Article 18, section 5 of the Arizona Constitution provides that assumption of risk "shall, at all times, be left to the jury." The Court of Appeals, per Judge Erlich, disagreed. The Court held that contractual agreements releasing a party from liability and covenanting not to sue it for negligence are distinct from the common-law doctrine of assumption of risk referred to in Article 18, section 5. The Court noted that the history of the constitutional provision showed that it was intended to "protect laborers from the defense of implied assumption of risk in litigation arising from workplace injuries and deaths, and not from express contractual assumptions of the risk." Accordingly, the Court affirmed the grant of summary judgment.
Judges Irvine and David R. Cole (Superior Court, sitting Pro Tempore) joined the decision.
Practice Note: The plaintiff raised a new argument -- that there were reasons why summary judgment should have been denied apart from the effect of Article 18, section 5 -- in his reply brief. The Court refused to address this argument, noting that it "will not address an issue first raised in the reply."
On January 29, 2004, Division One issued a decision affirming the appropriateness of granting summary judgment to a defendant on a negligence claim on the basis of signed release and waiver agreements. The plaintiff was a professional race-car driver who was burned after his car crashed into a wall at Firebird Raceway. He alleged that the Raceway's personnel were negligent in failing to rescue him more quickly. Before racing, he had signed agreements releasing any claims against the Raceway and covenanting not to sue it for negligence. The trial court granted summary judgment for the Raceway on the basis of the release and waiver agreements. The plaintiff argued that summary judgment on this basis was inappropriate because Article 18, section 5 of the Arizona Constitution provides that assumption of risk "shall, at all times, be left to the jury." The Court of Appeals, per Judge Erlich, disagreed. The Court held that contractual agreements releasing a party from liability and covenanting not to sue it for negligence are distinct from the common-law doctrine of assumption of risk referred to in Article 18, section 5. The Court noted that the history of the constitutional provision showed that it was intended to "protect laborers from the defense of implied assumption of risk in litigation arising from workplace injuries and deaths, and not from express contractual assumptions of the risk." Accordingly, the Court affirmed the grant of summary judgment.
Judges Irvine and David R. Cole (Superior Court, sitting Pro Tempore) joined the decision.
Practice Note: The plaintiff raised a new argument -- that there were reasons why summary judgment should have been denied apart from the effect of Article 18, section 5 -- in his reply brief. The Court refused to address this argument, noting that it "will not address an issue first raised in the reply."
Posted by azapp @ Thu, Jan 29, 2004
Story On Phelps Dodge Decision
An article appearing in azcentral.com discusses Division One's recent decision dealing with the Arizona Corporation Commission's Retail Electric Competition Rules, discussed in a recent posting.
An article appearing in azcentral.com discusses Division One's recent decision dealing with the Arizona Corporation Commission's Retail Electric Competition Rules, discussed in a recent posting.
Posted by azapp @ Thu, Jan 29, 2004
Safeway Ins. Co. v. Guerrero, et al.: Division One Holds That an Attorney Who Negotiates a Damron/Morris Agreement Outside the Permitted Parameters May Be Held Liable for Intentional Interference With Contract
On January 27, 2004, Division One held that an attorney may be held liable for intentional interference with contract if the attorney pursues a Damron/Morris agreement outside the parameters permitted by the Damron/Morris line of cases. By way of example, the Court explained that if "reasonable people agreed that a case had a value of between $10,000 to $25,000, and the insured had a policy with limits of $300,000," an attorney that pursued a Damron/Morris agreement on the ground that the insurer had breached its obligation to give equal consideration to the insured's interests by refusing a policy-limits settlement offer would be stepping outside the permitted parameters of Damron/Morris.
In the case before the Court, Safeway Insurance alleged that the plaintiff's counsel in the underlying action had engaged in a scheme to set up a bad faith claim against Safeway so as to allow the attorney to collect a substantially larger fee than would be available under the $15,000 policy at issue. To carry out the scheme, the attorney allegedly made and withdrew a policy-limits settlement offer in a case in which the plaintiff's damages substantially exceeded the policy limits. Safeway contended that a settlement agreement had been reached before the withdrawal, but a jury ultimately decided that issue against Safeway. After the jury decided that no settlement agreement had been reached, the plaintiff, through her attorney, and the insured entered into a Damron agreement for $12 million on the theory that Safeway had breached its duty to give equal consideration to the insured's interest by not promptly accepting the policy-limits demand. The trial court granted the plaintiff's attorney's motion to dismiss/motion for summary judgment, which the Court of Appeals reversed. The Court of Appeals explained that a jury could conclude that the plaintiff's attorney advanced and then withdrew the settlement offer to pursue a Damron/Morris agreement in an attempt to generate a larger recovery even though Safeway had not breached its obligation to give equal consideration to its insured's interests because there was evidence that the insured had attempted and continued to attempt to settle for policy limits. Pursuing a Damron/Morris agreement on these grounds "is clearly outside the permissible scope of such agreements." Consequently, a jury could find that the plaintiff's attorney interfered with the insurance contract and acted improperly in so doing.
In justifying the holding, the Court relied on Plattner v. State Farm Mut. Ins. Co., 168 Ariz. 311, 812 P.2d 1129 (App. 1991), which held that an insurer that intentionally interferes with the attorney's relationship with his client (by setting up negotiations that force the attorney to withdraw) may be held liable for intentional interference with contract between counsel and client. The Court rejected the plaintiff attorney's arguments that: (1) the only claims that may be brought against adverse attorneys are malicious prosecution and abuse of process, (2) the privileges applicable to defamation claims barred the claim asserted, and (3) that the principles underlying Damron/Morris protected the alleged conduct.
Judge Barker authored the opinion; Judges Thompson and Lankford concurred.
On January 27, 2004, Division One held that an attorney may be held liable for intentional interference with contract if the attorney pursues a Damron/Morris agreement outside the parameters permitted by the Damron/Morris line of cases. By way of example, the Court explained that if "reasonable people agreed that a case had a value of between $10,000 to $25,000, and the insured had a policy with limits of $300,000," an attorney that pursued a Damron/Morris agreement on the ground that the insurer had breached its obligation to give equal consideration to the insured's interests by refusing a policy-limits settlement offer would be stepping outside the permitted parameters of Damron/Morris.
In the case before the Court, Safeway Insurance alleged that the plaintiff's counsel in the underlying action had engaged in a scheme to set up a bad faith claim against Safeway so as to allow the attorney to collect a substantially larger fee than would be available under the $15,000 policy at issue. To carry out the scheme, the attorney allegedly made and withdrew a policy-limits settlement offer in a case in which the plaintiff's damages substantially exceeded the policy limits. Safeway contended that a settlement agreement had been reached before the withdrawal, but a jury ultimately decided that issue against Safeway. After the jury decided that no settlement agreement had been reached, the plaintiff, through her attorney, and the insured entered into a Damron agreement for $12 million on the theory that Safeway had breached its duty to give equal consideration to the insured's interest by not promptly accepting the policy-limits demand. The trial court granted the plaintiff's attorney's motion to dismiss/motion for summary judgment, which the Court of Appeals reversed. The Court of Appeals explained that a jury could conclude that the plaintiff's attorney advanced and then withdrew the settlement offer to pursue a Damron/Morris agreement in an attempt to generate a larger recovery even though Safeway had not breached its obligation to give equal consideration to its insured's interests because there was evidence that the insured had attempted and continued to attempt to settle for policy limits. Pursuing a Damron/Morris agreement on these grounds "is clearly outside the permissible scope of such agreements." Consequently, a jury could find that the plaintiff's attorney interfered with the insurance contract and acted improperly in so doing.
In justifying the holding, the Court relied on Plattner v. State Farm Mut. Ins. Co., 168 Ariz. 311, 812 P.2d 1129 (App. 1991), which held that an insurer that intentionally interferes with the attorney's relationship with his client (by setting up negotiations that force the attorney to withdraw) may be held liable for intentional interference with contract between counsel and client. The Court rejected the plaintiff attorney's arguments that: (1) the only claims that may be brought against adverse attorneys are malicious prosecution and abuse of process, (2) the privileges applicable to defamation claims barred the claim asserted, and (3) that the principles underlying Damron/Morris protected the alleged conduct.
Judge Barker authored the opinion; Judges Thompson and Lankford concurred.
Posted by azapp @ Thu, Jan 29, 2004
Schwab v. Ames Construction, et. al.: Division One Holds That Trial Court Abused Its Discretion In Granting Summary Judgment Against Plaintiff Due Solely To Plaintiff’s Failure to Respond to Motion for Summary Judgment
Plaintiffs in the underlying consolidated negligence action were injured at a roadway construction site and filed lawsuits against many defendants, including a construction company, the State, Maricopa County, and a barricade corporation. Plaintiffs were represented by separate counsel. One year into the action, Plaintiff Schwab’s counsel filed a motion to withdraw, which the court granted. Schwab, now pro se, failed to appear at a pretrial scheduling conference roughly three months later. Eight months after Schwab’s counsel withdrew from the case, Defendants filed summary judgment motions against both plaintiffs, which motions were mailed to Schwab at his home addresses. The motions were identical for each plaintiff. Schwab failed to respond to the motion for summary judgment against him. The trial court granted the motion against Schwab solely because of his failure to respond. He denied the motion on its merits against Schwab’s co-plaintiff. Schwab hired new counsel who moved for reconsideration as to the summary judgment just four days later. The court denied the request.
Schwab filed a premature notice of appeal, which Division One accepted, quickly dismissing defendants’ hypertechnical challenges to jurisdiction. On appeal, the court of appeals noted the general rule that a party must file a written response whenever a motion is filed. It noted, however, that there are limitations on this rule, particularly when the motion is one for summary judgment. In that case, the trial court must consider the entire record before deciding the motion. If a non-moving party fails to respond, that simply means that the trial court will presume any uncontroverted evidence favorable to the movant as true. If that evidence would entitle the movant to judgment as a matter of law, the motion should be granted. If the motion fails to show an entitlement to judgment, however, the nonmoving party need not respond to controvert the motion. In this case, that the defendants were not entitled to summary judgment was evidenced by the trial court’s denial of the motion as to Schwab’s co-plaintiff. The court therefore held that the trial court abused its discretion in granting summary judgment against Schwab, and remanded for further proceedings.
Judge Withrop authored the Opinion; Judges Thompson and Gemmill concurred.
Plaintiffs in the underlying consolidated negligence action were injured at a roadway construction site and filed lawsuits against many defendants, including a construction company, the State, Maricopa County, and a barricade corporation. Plaintiffs were represented by separate counsel. One year into the action, Plaintiff Schwab’s counsel filed a motion to withdraw, which the court granted. Schwab, now pro se, failed to appear at a pretrial scheduling conference roughly three months later. Eight months after Schwab’s counsel withdrew from the case, Defendants filed summary judgment motions against both plaintiffs, which motions were mailed to Schwab at his home addresses. The motions were identical for each plaintiff. Schwab failed to respond to the motion for summary judgment against him. The trial court granted the motion against Schwab solely because of his failure to respond. He denied the motion on its merits against Schwab’s co-plaintiff. Schwab hired new counsel who moved for reconsideration as to the summary judgment just four days later. The court denied the request.
Schwab filed a premature notice of appeal, which Division One accepted, quickly dismissing defendants’ hypertechnical challenges to jurisdiction. On appeal, the court of appeals noted the general rule that a party must file a written response whenever a motion is filed. It noted, however, that there are limitations on this rule, particularly when the motion is one for summary judgment. In that case, the trial court must consider the entire record before deciding the motion. If a non-moving party fails to respond, that simply means that the trial court will presume any uncontroverted evidence favorable to the movant as true. If that evidence would entitle the movant to judgment as a matter of law, the motion should be granted. If the motion fails to show an entitlement to judgment, however, the nonmoving party need not respond to controvert the motion. In this case, that the defendants were not entitled to summary judgment was evidenced by the trial court’s denial of the motion as to Schwab’s co-plaintiff. The court therefore held that the trial court abused its discretion in granting summary judgment against Schwab, and remanded for further proceedings.
Judge Withrop authored the Opinion; Judges Thompson and Gemmill concurred.
Posted by azapp @ Thu, Jan 29, 2004
Wednesday, January 28, 2004
Phelps Dodge Corporation et al. v. Arizona Electric Power Cooperative, Inc. et al.: Division One Reverses In Part Superior Court Judgment Striking Down Arizona Corporation Commission's Retail Electric Competition Rules.
On January 27, 2004, a panel of Division One held that the Superior Court had erred in invalidating every component of the Arizona Corporation Commission's Retail Electric Competition Rules. The Commission adopted the rules in the pertinent form in 1999, in Commission Decision No. 61969. The Rules "change[d] the provision of electric generation and related services, such as metering, from a system of regulated monopolies to a competitive one." The Rules required electric service providers desiring to offer competitive electricity services to apply to the Commission for a certificate of convenience and necessity, and directed existing energy utilities to allow competitive electric service providers to have access to their transmission and distribution facilities. The Commission then granted certificates of convenience and necessity to fifteen competitive service providers to operate within the territories served by several existing utilities. Existing utilities challenged the rules and the certificates in the Superior Court, and numerous entities joined with the Commission in defending them. The Superior Court held that the Rules were inconsistent with the constitutional provisions governing the Commission's ratemaking power, and in some respects violated the statutory requirement that certain rules be submitted to the Attorney General for certification, and struck down both the rules and the certificates issued pursuant to them.
The Court of Appeals, per Judge Timmer, affirmed in part, reversed in part, and remanded.
* The Court held that the Commission had violated Article 15, Section 14, of the Arizona Constitution by issuing certificates of convenience and necessity to competitive electric service providers without first determing the fair value of their in-state property and considering that value as a factor bearing on the acceptability of the providers' rates. The Rule (R14-2-1611(A)) deeming rates for competitive services set by market competition to be "just and reasonable" violated both Article 15, Section 3 and Article 15, Section 14 of the Arizona Constitution because the Commission could not delegate to the market its duty to set "just and reasonable rates", and because doing so fails to take into consideration the fair value of providers' in-state property.
* The Court held certain of the Rules, R14-2-1609(C)-(J) and -1615(A) and (C), invalid because the Commission had no authority to promulgate them. These rules required existing utilities to use specified tactics in providing access to their transmission and distribution facilities and to divest themselves of competitive assets and services. The Court noted that the Commission's powers are plenary only with respect to ratemaking, and in other areas must be derived from a statutory grant of authority, and found that these rules did not pertain to ratemaking and could not be justified as exercises of any power granted by statute. The Court rejected a similar challenge to R14-2-1616, which required existing utilities planning to offer competitive service through affiliates to file codes of conduct with the Commission for approval, holding that this rule fell within the Commission's plenary ratemaking authority because it was designed to prevent cross-subsidization, and in turn to control rates.
* The Court held that some of the rules were invalid because they did not fall within the Commission's plenary ratemaking power, and therefore should have been submitted to the Attorney General for certification pursuant to A.R.S. 41-1044(B), but rejected this argument with respect to several rules deemed to fall within this power.
* The Court rejected claims that the Commission had violated the anti-discrimination mandate of Article 15, Sections 2 and 3 of the Arizona Constitution by treating existing utilities and competitive service providers differently with respect to the rules, noting that "[n]othing in the language of Article 15, Sections 2 and 3 limits the Commission's authority to differentiate among public service corporations in the manner in which they serve the public interest."
* The Court rejected claims that the rules impaired the existing providers' contract rights in violation of Article I, Section 10 of the U.S. Constitution and Article 2, Section 25 of the Arizona Constitution. The Court stressed that the issuance of a certificate of convenience and necessity does not give rise to a contract, and that with respect to other contracts, the rules would not alter the parties' obligations "in favor of one party against another."
* The Court rejected claims that the rules improperly supplanted the "takings" provision set forth in Article 2, Section 17 of the Arizona Constitution. The claim focused on the rules' alteration of the existing utilities' mechanisms for recovering their "stranded costs" -- i.e., fixed costs of providing electricity to the public. The Court held that the recovery of stranded costs is part of ratemaking rather than compensation for a taking.
* The Court rejected claims that the rules' restrictions on certain joint advertising violated the free speech guarantees set forth in the First Amendment to the U.S. Constitution and Article 2, Section 6 of the Arizona Constitution. The Court held that the regulations directly furthered the Commission's substantial interest in preventing cross-subsidization of affiliates by existing utilities, which would give affiliates a competitive edge and negatively affect rates.
* The Court held that the Superior Court had erred in concluding that, although only some of the rules were invalid, it was required to vacate them in their entirety. Examing the language of A.R.S. 40-254, the Court held that the Superior Court has the authority to affirm a Commission decision in part, reverse it in part, and/or remand to the Commission, regardless of which form of relief a party has requested. The Court accordingly reversed and affirmed the appropriate portions of the Superior Court's judgment, and remanded the rules that should have been submitted to the Attorney General for certification to the Commission with instructions to submit them for review pursuant to A.R.S. 41-1044(B). The Court also ruled that the parties challenging the rules were entitled to a partial award of attorney's fees.
Judges Gemmill and Erlich concurred.
On January 27, 2004, a panel of Division One held that the Superior Court had erred in invalidating every component of the Arizona Corporation Commission's Retail Electric Competition Rules. The Commission adopted the rules in the pertinent form in 1999, in Commission Decision No. 61969. The Rules "change[d] the provision of electric generation and related services, such as metering, from a system of regulated monopolies to a competitive one." The Rules required electric service providers desiring to offer competitive electricity services to apply to the Commission for a certificate of convenience and necessity, and directed existing energy utilities to allow competitive electric service providers to have access to their transmission and distribution facilities. The Commission then granted certificates of convenience and necessity to fifteen competitive service providers to operate within the territories served by several existing utilities. Existing utilities challenged the rules and the certificates in the Superior Court, and numerous entities joined with the Commission in defending them. The Superior Court held that the Rules were inconsistent with the constitutional provisions governing the Commission's ratemaking power, and in some respects violated the statutory requirement that certain rules be submitted to the Attorney General for certification, and struck down both the rules and the certificates issued pursuant to them.
The Court of Appeals, per Judge Timmer, affirmed in part, reversed in part, and remanded.
* The Court held that the Commission had violated Article 15, Section 14, of the Arizona Constitution by issuing certificates of convenience and necessity to competitive electric service providers without first determing the fair value of their in-state property and considering that value as a factor bearing on the acceptability of the providers' rates. The Rule (R14-2-1611(A)) deeming rates for competitive services set by market competition to be "just and reasonable" violated both Article 15, Section 3 and Article 15, Section 14 of the Arizona Constitution because the Commission could not delegate to the market its duty to set "just and reasonable rates", and because doing so fails to take into consideration the fair value of providers' in-state property.
* The Court held certain of the Rules, R14-2-1609(C)-(J) and -1615(A) and (C), invalid because the Commission had no authority to promulgate them. These rules required existing utilities to use specified tactics in providing access to their transmission and distribution facilities and to divest themselves of competitive assets and services. The Court noted that the Commission's powers are plenary only with respect to ratemaking, and in other areas must be derived from a statutory grant of authority, and found that these rules did not pertain to ratemaking and could not be justified as exercises of any power granted by statute. The Court rejected a similar challenge to R14-2-1616, which required existing utilities planning to offer competitive service through affiliates to file codes of conduct with the Commission for approval, holding that this rule fell within the Commission's plenary ratemaking authority because it was designed to prevent cross-subsidization, and in turn to control rates.
* The Court held that some of the rules were invalid because they did not fall within the Commission's plenary ratemaking power, and therefore should have been submitted to the Attorney General for certification pursuant to A.R.S. 41-1044(B), but rejected this argument with respect to several rules deemed to fall within this power.
* The Court rejected claims that the Commission had violated the anti-discrimination mandate of Article 15, Sections 2 and 3 of the Arizona Constitution by treating existing utilities and competitive service providers differently with respect to the rules, noting that "[n]othing in the language of Article 15, Sections 2 and 3 limits the Commission's authority to differentiate among public service corporations in the manner in which they serve the public interest."
* The Court rejected claims that the rules impaired the existing providers' contract rights in violation of Article I, Section 10 of the U.S. Constitution and Article 2, Section 25 of the Arizona Constitution. The Court stressed that the issuance of a certificate of convenience and necessity does not give rise to a contract, and that with respect to other contracts, the rules would not alter the parties' obligations "in favor of one party against another."
* The Court rejected claims that the rules improperly supplanted the "takings" provision set forth in Article 2, Section 17 of the Arizona Constitution. The claim focused on the rules' alteration of the existing utilities' mechanisms for recovering their "stranded costs" -- i.e., fixed costs of providing electricity to the public. The Court held that the recovery of stranded costs is part of ratemaking rather than compensation for a taking.
* The Court rejected claims that the rules' restrictions on certain joint advertising violated the free speech guarantees set forth in the First Amendment to the U.S. Constitution and Article 2, Section 6 of the Arizona Constitution. The Court held that the regulations directly furthered the Commission's substantial interest in preventing cross-subsidization of affiliates by existing utilities, which would give affiliates a competitive edge and negatively affect rates.
* The Court held that the Superior Court had erred in concluding that, although only some of the rules were invalid, it was required to vacate them in their entirety. Examing the language of A.R.S. 40-254, the Court held that the Superior Court has the authority to affirm a Commission decision in part, reverse it in part, and/or remand to the Commission, regardless of which form of relief a party has requested. The Court accordingly reversed and affirmed the appropriate portions of the Superior Court's judgment, and remanded the rules that should have been submitted to the Attorney General for certification to the Commission with instructions to submit them for review pursuant to A.R.S. 41-1044(B). The Court also ruled that the parties challenging the rules were entitled to a partial award of attorney's fees.
Judges Gemmill and Erlich concurred.
Posted by azapp @ Wed, Jan 28, 2004
Petersen v. City of Mesa: Arizona Supreme Court Holds That Random, Suspicionless Drug Testing of Firefighters Violates the Fourth Amendment
On January 27, 2004, the Arizona Supreme Court held that the random, suspicionless drug testing portion of the City of Mesa’s substance abuse program for the city fire department violates the Fourth Amendment of the United States Constitution. The City’s substance abuse program required, among other things, testing of firefighters “on an unannounced an random basis spread reasonably throughout the calendar year.” Given that the procedures used to perform the drug tests qualify as “searches” under the Fourth Amendment, the Court performed a “special needs” balancing test, weighing the City’s interests in performing the search against the invasion of the firefighters’ privacy. The Court found that the City failed to define any real and substantial risk that would be addressed by random, suspicionless drug testing. The Court further found that although firefighters have a diminished expectation of privacy and the procedures used for the tests were relatively unobtrusive, the random, suspicionless nature of the tests increased privacy concerns. The Court concluded that “the City’s generalized and unsubstantiated interest in deterring and detecting alcohol and drug use among the City’s firefighters by conducting random drug tests was insufficient to overcome even the lessened privacy interest of firefighters.” The Court vacated the court of appeals’ opinion and affirmed the trial court’s judgment enjoining the City from enforcing the random, suspicionless component of its substance abuse program.
Vice Chief Justice McGregor authored the opinion; Justices Jones, Berch, Ryan, and Hurwitz concurred.
On January 27, 2004, the Arizona Supreme Court held that the random, suspicionless drug testing portion of the City of Mesa’s substance abuse program for the city fire department violates the Fourth Amendment of the United States Constitution. The City’s substance abuse program required, among other things, testing of firefighters “on an unannounced an random basis spread reasonably throughout the calendar year.” Given that the procedures used to perform the drug tests qualify as “searches” under the Fourth Amendment, the Court performed a “special needs” balancing test, weighing the City’s interests in performing the search against the invasion of the firefighters’ privacy. The Court found that the City failed to define any real and substantial risk that would be addressed by random, suspicionless drug testing. The Court further found that although firefighters have a diminished expectation of privacy and the procedures used for the tests were relatively unobtrusive, the random, suspicionless nature of the tests increased privacy concerns. The Court concluded that “the City’s generalized and unsubstantiated interest in deterring and detecting alcohol and drug use among the City’s firefighters by conducting random drug tests was insufficient to overcome even the lessened privacy interest of firefighters.” The Court vacated the court of appeals’ opinion and affirmed the trial court’s judgment enjoining the City from enforcing the random, suspicionless component of its substance abuse program.
Vice Chief Justice McGregor authored the opinion; Justices Jones, Berch, Ryan, and Hurwitz concurred.
Posted by azapp @ Wed, Jan 28, 2004
Monday, January 26, 2004
Appeal From Redistricting Ruling Planned
Another article appearing on azcentral.com discusses the planned appeal from the redistricting ruling discussed in a previous posting.
Another article appearing on azcentral.com discusses the planned appeal from the redistricting ruling discussed in a previous posting.
Posted by azapp @ Mon, Jan 26, 2004
Certiorari Denied In Gravano Case
An article appearing on azcentral.com reports that the U.S. Supreme Court has denied the petition for certiorari filed in Gravano v. Arizona. As discussed in a previous posting, the petition argued that Arizona had violated the First Amendment's Free Speech Clause by forfeiting the royalties from Gravano's book Underboss.
An article appearing on azcentral.com reports that the U.S. Supreme Court has denied the petition for certiorari filed in Gravano v. Arizona. As discussed in a previous posting, the petition argued that Arizona had violated the First Amendment's Free Speech Clause by forfeiting the royalties from Gravano's book Underboss.
Posted by azapp @ Mon, Jan 26, 2004
Friday, January 23, 2004
Smith v. Arizona Long Term Care System: Non-Liquid Insurance Proceeds Cannot be Included in Determining Exempt Funds for ALTCS Eligibility
A panel of Division One of the Court of Appeals has ruled that the Director of the Arizona Long Term Care System (ALTCS) was correct in deciding that insurance proceeds that are not available to be liquidated as of the date of an accident should not be counted as exempt funds under the formula for determining eligibility for the ALTCS benefit system. The case involved a victim of a motor cycle accident who was institutionalized due to his injuries. Two insurance carriers eventually paid the victim $125,000. Because ALTCS requires applicants to pay down their non-exempt existing funds before they become eligible for the program, the victim's spouse argued on his behalf that the insurance proceeds should have been included in the calculation of the victim's exempt funds. The appellate court disagreed, reversing the trial court. The amount of exempt funds is calculated by reference to resources available to be liquidated as of the time of the accident. Despite that the victim may have had a legal right to insurance proceeds as of that date, the proceeds were not available to be liquidated in accordance with the statutory requirement. The trial court abused its discretion when it found that the Director had acted arbitrarily and capriciously in excluding the insurance proceeds.
Judge Lankford wrote the opinion of the court which judges Barker and Kessler joined.
A panel of Division One of the Court of Appeals has ruled that the Director of the Arizona Long Term Care System (ALTCS) was correct in deciding that insurance proceeds that are not available to be liquidated as of the date of an accident should not be counted as exempt funds under the formula for determining eligibility for the ALTCS benefit system. The case involved a victim of a motor cycle accident who was institutionalized due to his injuries. Two insurance carriers eventually paid the victim $125,000. Because ALTCS requires applicants to pay down their non-exempt existing funds before they become eligible for the program, the victim's spouse argued on his behalf that the insurance proceeds should have been included in the calculation of the victim's exempt funds. The appellate court disagreed, reversing the trial court. The amount of exempt funds is calculated by reference to resources available to be liquidated as of the time of the accident. Despite that the victim may have had a legal right to insurance proceeds as of that date, the proceeds were not available to be liquidated in accordance with the statutory requirement. The trial court abused its discretion when it found that the Director had acted arbitrarily and capriciously in excluding the insurance proceeds.
Judge Lankford wrote the opinion of the court which judges Barker and Kessler joined.
Posted by azapp @ Fri, Jan 23, 2004
Thursday, January 22, 2004
Ladewig Tax Refund Case
The Arizona Capitol Times reports that an appeal has been filed in a case challenging the settlement between the State of Arizona and an estimated 650,000 Arizona taxpayers. The underlying lawsuit, Ladewig v. Arizona Dept. of Revenue, was brought as a class action by Helen Ladewig challenging on constitutional grounds Arizona's differing treatment of corporate dividends for companies that earned most of their income outside of the state--a practice that occurred between 1986 and 1989. The current challenge was brought by a member of the class who alleges that the formula for refunds approved by the Tax Court will result in overpayment to some taxpayers. The settlement amount is capped by the court at $350 million.
Oral argument in the case, 1 CA-TX 030003, is scheduled for February 25th.
The Arizona Capitol Times reports that an appeal has been filed in a case challenging the settlement between the State of Arizona and an estimated 650,000 Arizona taxpayers. The underlying lawsuit, Ladewig v. Arizona Dept. of Revenue, was brought as a class action by Helen Ladewig challenging on constitutional grounds Arizona's differing treatment of corporate dividends for companies that earned most of their income outside of the state--a practice that occurred between 1986 and 1989. The current challenge was brought by a member of the class who alleges that the formula for refunds approved by the Tax Court will result in overpayment to some taxpayers. The settlement amount is capped by the court at $350 million.
Oral argument in the case, 1 CA-TX 030003, is scheduled for February 25th.
Posted by azapp @ Thu, Jan 22, 2004
An article appearing on azcentral.com discusses the U.S. Supreme Court's denial of certiorari in the case involving the Scottsdale Unified School district's policy regarding the distribution of religious fliers, which was discussed in previous postings. Another article discusses the argument before the U.S. Supreme Court in the case involving Arizona and the Tax Injunction Act, which was discussed in previous postings.
Posted by azapp @ Thu, Jan 22, 2004
Tuesday, January 20, 2004
In an order list issued yesterday, the U.S. Supreme Court declined to review the Ninth Circuit's ruling in the Scottsdale Unified School District case involving the distribution of religious materials, which was the subject of previous postings.
Posted by azapp @ Tue, Jan 20, 2004
Friday, January 16, 2004
Parking Concepts, Inc. v. Tenney et. al.: Arizona Supreme Court Clarifies Standards Applicable to Evaluating Reasonableness of Morris Settlement Agreements.
The underlying facts of this Morris settlement dispute concern a failed real estate transaction. The potential buyer of an airport parking lot sued its broker and the brokerage firm for negligent misrepresentation, breach of contract, and fraud, alleging that the broker misrepresented the tax liability relating to the property. The firm and its employees were insured under an errors and omissions policy with $1 million limits, which excluded coverage for fraudulent acts. Because the suit against the broker defendants alleged fraud, the insurer defended under a reservation of rights. After two years, the broker defendants insisted that the insurer either settle the case or defend unconditionally. When the insurer declined to do either, the buyer and broker defendants entered into a Morris agreement, under which the defendants stipulated to judgment for $430,000 and assigned their rights under the policy to the buyer. In return, the buyer covenanted to not execute a judgment against the insureds, and dismissed its fraud claims. The buyer then instituted garnishment proceedings against the insurer, seeking to collect the stipulated judgment. In response, the insurer argued, among other things, that the Morris agreement was invalid because the amount of the stipulated judgment was unreasonable. The superior court rejected this argument and granted judgment to the buyer, holding that the amount was reasonable and that the policy covered the conduct. In doing so, the court relied on testimony of the buyer’s expert that the fee was reasonable in part because the broker defendants faced the potential loss of their real estate licenses from an adverse judgment.
The insurer appealed. The court of appeals affirmed the superior court’s finding regarding policy coverage. In a separate opinion, it vacated the superior court’s determination that the stipulated judgment was reasonable in amount, reasoning that, because the insured only risked losing its license if the buyer proved fraud, and the insurance contract did not cover fraudulent conduct, the consequence of a fraud judgment could not be considered as bearing on the reasonableness of the Morris settlement. The buyer petitioned for review in the Arizona Supreme Court, which granted review of the single issue of whether the practical affect of an adverse judgment may be considered in evaluating the reasonableness of a Morris agreement settlement.
The Arizona Supreme Court vacated the judgment of the court of appeals. First, the Court disagreed with the court of appeals’ premise that the broker defendants risked losing their licenses only in the event that the buyer proved fraud, noting that under A.R.S. §32-2153(A)(1), the license could be revoked as a result of negligent conduct. Because the superior court had found that the broker was at least negligent, which ruling was affirmed by the court of appeals and was not before the Supreme Court, the court of appeals’ reasoning did not dispose of the issue. The Court therefore reached the issue unaddressed by the court of appeals: whether it is proper to consider collateral consequences flowing from insureds' conduct in evaluating Morris agreements for reasonableness.
In answering the question, the Court noted that, when an insurer defends under a reservation of rights, Morris allows an insured to act as a surrogate for the insurer, permitting him to engage in settlement discussion that the insurer would have had to have undertaken in the absence of the reservation of rights. Morris only affects insurance contracts by preventing the insurer from invoking the cooperation clause to prevent the insured from entering into a settlement without the insurer’s consent. Thus, when evaluating a Morris agreement, the superior court should apply the same criteria that must be applied by the insurer under its implied covenant of good faith and fair dealing in evaluating a settlement proposal in the absence of a reservation of rights, which include the facts bearing on the liability and damages aspects of the claimant’s case, as well as the risks of going to trial. This also includes a consideration of the financial risk that an adverse judgment in excess of policy limits may have on the insured. But the court rejected the notion that an insurer would be required to consider whether judgment or trial would have an adverse effect on the insured other than the imposition of monetary liability. The policy insures against only money damages. Because the insured would not have been required to consider the possible effects on the brokers’ licenses in evaluating a settlement offer, the superior court should not have considered that factor in determining the reasonableness of the Morris Agreement. The Court vacated the opinion of the court of appeals and remanded to the superior court.
Justice Hurwitz authored the Opinion; Chief Justice Jones, Vice Chief Justice McGregor, and Justices Berch and Ryan concurred.
The underlying facts of this Morris settlement dispute concern a failed real estate transaction. The potential buyer of an airport parking lot sued its broker and the brokerage firm for negligent misrepresentation, breach of contract, and fraud, alleging that the broker misrepresented the tax liability relating to the property. The firm and its employees were insured under an errors and omissions policy with $1 million limits, which excluded coverage for fraudulent acts. Because the suit against the broker defendants alleged fraud, the insurer defended under a reservation of rights. After two years, the broker defendants insisted that the insurer either settle the case or defend unconditionally. When the insurer declined to do either, the buyer and broker defendants entered into a Morris agreement, under which the defendants stipulated to judgment for $430,000 and assigned their rights under the policy to the buyer. In return, the buyer covenanted to not execute a judgment against the insureds, and dismissed its fraud claims. The buyer then instituted garnishment proceedings against the insurer, seeking to collect the stipulated judgment. In response, the insurer argued, among other things, that the Morris agreement was invalid because the amount of the stipulated judgment was unreasonable. The superior court rejected this argument and granted judgment to the buyer, holding that the amount was reasonable and that the policy covered the conduct. In doing so, the court relied on testimony of the buyer’s expert that the fee was reasonable in part because the broker defendants faced the potential loss of their real estate licenses from an adverse judgment.
The insurer appealed. The court of appeals affirmed the superior court’s finding regarding policy coverage. In a separate opinion, it vacated the superior court’s determination that the stipulated judgment was reasonable in amount, reasoning that, because the insured only risked losing its license if the buyer proved fraud, and the insurance contract did not cover fraudulent conduct, the consequence of a fraud judgment could not be considered as bearing on the reasonableness of the Morris settlement. The buyer petitioned for review in the Arizona Supreme Court, which granted review of the single issue of whether the practical affect of an adverse judgment may be considered in evaluating the reasonableness of a Morris agreement settlement.
The Arizona Supreme Court vacated the judgment of the court of appeals. First, the Court disagreed with the court of appeals’ premise that the broker defendants risked losing their licenses only in the event that the buyer proved fraud, noting that under A.R.S. §32-2153(A)(1), the license could be revoked as a result of negligent conduct. Because the superior court had found that the broker was at least negligent, which ruling was affirmed by the court of appeals and was not before the Supreme Court, the court of appeals’ reasoning did not dispose of the issue. The Court therefore reached the issue unaddressed by the court of appeals: whether it is proper to consider collateral consequences flowing from insureds' conduct in evaluating Morris agreements for reasonableness.
In answering the question, the Court noted that, when an insurer defends under a reservation of rights, Morris allows an insured to act as a surrogate for the insurer, permitting him to engage in settlement discussion that the insurer would have had to have undertaken in the absence of the reservation of rights. Morris only affects insurance contracts by preventing the insurer from invoking the cooperation clause to prevent the insured from entering into a settlement without the insurer’s consent. Thus, when evaluating a Morris agreement, the superior court should apply the same criteria that must be applied by the insurer under its implied covenant of good faith and fair dealing in evaluating a settlement proposal in the absence of a reservation of rights, which include the facts bearing on the liability and damages aspects of the claimant’s case, as well as the risks of going to trial. This also includes a consideration of the financial risk that an adverse judgment in excess of policy limits may have on the insured. But the court rejected the notion that an insurer would be required to consider whether judgment or trial would have an adverse effect on the insured other than the imposition of monetary liability. The policy insures against only money damages. Because the insured would not have been required to consider the possible effects on the brokers’ licenses in evaluating a settlement offer, the superior court should not have considered that factor in determining the reasonableness of the Morris Agreement. The Court vacated the opinion of the court of appeals and remanded to the superior court.
Justice Hurwitz authored the Opinion; Chief Justice Jones, Vice Chief Justice McGregor, and Justices Berch and Ryan concurred.
Posted by azapp @ Fri, Jan 16, 2004
Independent Redistricting Decision
A story appearing on azcentral.com reports that Judge Kenneth Fields of the Maricopa County Superior Court has ruled that Arizona's legislative redistricting map is unconstitutional. The story does not mention whether an appeal will be taken.
A story appearing on azcentral.com reports that Judge Kenneth Fields of the Maricopa County Superior Court has ruled that Arizona's legislative redistricting map is unconstitutional. The story does not mention whether an appeal will be taken.
Posted by azapp @ Fri, Jan 16, 2004
Column on Los Arcos Ballot; Attorney General to Argue Before U.S. Supreme Court; Vice-Mayor Kavanaugh's Term Limit Appeal Rejected.
A column appearing on azcentral.com discusses the Los Arcos ballot matter recently decided by the Arizona Court of Appeals, which was the subject of a number of recent postings. Another article notes that Arizona Attorney General Terry Goddard will on Tuesday argue before the United States Supreme Court in a case involving the federal Tax Injunction Act. To view the case docket, click here, and to view the petitioner's brief, click here. Another article reports that the Arizona Supreme Court has declined to review the injunction preventing Mesa Vice-Mayor Dennis Kavanaugh's name from appearing on the ballot in Mesa's March election, which was discussed in a previous posting.
A column appearing on azcentral.com discusses the Los Arcos ballot matter recently decided by the Arizona Court of Appeals, which was the subject of a number of recent postings. Another article notes that Arizona Attorney General Terry Goddard will on Tuesday argue before the United States Supreme Court in a case involving the federal Tax Injunction Act. To view the case docket, click here, and to view the petitioner's brief, click here. Another article reports that the Arizona Supreme Court has declined to review the injunction preventing Mesa Vice-Mayor Dennis Kavanaugh's name from appearing on the ballot in Mesa's March election, which was discussed in a previous posting.
Posted by azapp @ Fri, Jan 16, 2004
Thursday, January 15, 2004
Glaze v. Larsen: Arizona Supreme Court Holds That Cause Of Action For Legal Malpractice In Criminal Litigation Accrues When Proceedings In Criminal Matter Are Terminated Favorably To Criminal Defendant.
On January 14, 2004, the Arizona Supreme Court issued its decision in Glaze v. Larsen, dealing with the application of the two-year tort statute of limitations set forth in A.R.S. 12-542 to claims for legal malpractice relating to the litigation of a criminal matter. The malpractice plaintiff had been convicted of sexual abuse, but subsequently obtained dismissal of the charges with prejudice in a post-conviction relief proceeding brought under Arizona Rule of Criminal Procedure 32, on the ground that his attorney had been ineffective in failing to request a jury instruction regarding "lack of sexual motivation." Less than a year later, he filed a malpractice suit against his attorney, alleging that the attorney's negligence had caused his conviction. The superior court granted the attorney's motion to dismiss the lawsuit on the ground that the plaintiff's malpractice claim had accrued at an intermediate stage of the post-conviction proceedings, more than two years before the malpractice claim was filed. The Court of Appeals reversed, holding that the malpractice cause of action had not accrued until the criminal proceedings against the plaintiff were finally concluded by the order of dismissal.
The Arizona Supreme Court granted review of the Court of Appeals decision because the issue involved was one of first impression and had statewide importance. The Court, per Justice Hurwitz, first noted that its precedent governing the accrual of malpractice causes of action relating to civil litigation held that the cause of action did not accrue until the appellate process is completed or waived by a failure to appeal. The Court noted that this rule enables the prospective malpractice plaintiff to wait until it is clear that he has been injured by the alleged malpractice, and serves the goal of judicial efficiency by preventing the filing of simultaneous proceedings involving overlapping issues and evidence. Turning to the criminal context, the Court noted that it differs from the civil context in that a criminal defendant can obtain post-conviction relief because of the inexcusable neglect of counsel. The Court found that this difference did not justify departing from the civil rule, however, because criminal post-conviction proceedings often can provide "definitive guidance" as to whether there was malpractice and, if so, whether it was the cause of the criminal defendant's conviction. Moreover, the Court reasoned, a rule requiring a criminal defendant to file a malpractice claim while his criminal trial is ongoing would likely cause his defense attorney either to withdraw or to be "distracted from the job before him." The Court therefore held that "a claim that an attorney's malpractice resulted in the conviction of a criminal client does not accrue until the complete termination of the criminal proceedings," including "not only the direct appeal, but also any proceedings involving petitions under Rule 32 and any retrials, appeals from judgments in retrials, or post-conviction proceedings following retrials." (The Court also made plain that Arizona, unlike California, does not require criminal-defendant malpractice plaintiffs to allege and prove "actual innocence," because "[e]ven a party unable to prove actual innocence may be injured by attorney malpractice.") Because the plaintiff in this case had filed his malpractice claim less than two years after he secured the dismissal of the charges against him with prejudice, his claim was timely. All of the Justices concurred in the decision.
On January 14, 2004, the Arizona Supreme Court issued its decision in Glaze v. Larsen, dealing with the application of the two-year tort statute of limitations set forth in A.R.S. 12-542 to claims for legal malpractice relating to the litigation of a criminal matter. The malpractice plaintiff had been convicted of sexual abuse, but subsequently obtained dismissal of the charges with prejudice in a post-conviction relief proceeding brought under Arizona Rule of Criminal Procedure 32, on the ground that his attorney had been ineffective in failing to request a jury instruction regarding "lack of sexual motivation." Less than a year later, he filed a malpractice suit against his attorney, alleging that the attorney's negligence had caused his conviction. The superior court granted the attorney's motion to dismiss the lawsuit on the ground that the plaintiff's malpractice claim had accrued at an intermediate stage of the post-conviction proceedings, more than two years before the malpractice claim was filed. The Court of Appeals reversed, holding that the malpractice cause of action had not accrued until the criminal proceedings against the plaintiff were finally concluded by the order of dismissal.
The Arizona Supreme Court granted review of the Court of Appeals decision because the issue involved was one of first impression and had statewide importance. The Court, per Justice Hurwitz, first noted that its precedent governing the accrual of malpractice causes of action relating to civil litigation held that the cause of action did not accrue until the appellate process is completed or waived by a failure to appeal. The Court noted that this rule enables the prospective malpractice plaintiff to wait until it is clear that he has been injured by the alleged malpractice, and serves the goal of judicial efficiency by preventing the filing of simultaneous proceedings involving overlapping issues and evidence. Turning to the criminal context, the Court noted that it differs from the civil context in that a criminal defendant can obtain post-conviction relief because of the inexcusable neglect of counsel. The Court found that this difference did not justify departing from the civil rule, however, because criminal post-conviction proceedings often can provide "definitive guidance" as to whether there was malpractice and, if so, whether it was the cause of the criminal defendant's conviction. Moreover, the Court reasoned, a rule requiring a criminal defendant to file a malpractice claim while his criminal trial is ongoing would likely cause his defense attorney either to withdraw or to be "distracted from the job before him." The Court therefore held that "a claim that an attorney's malpractice resulted in the conviction of a criminal client does not accrue until the complete termination of the criminal proceedings," including "not only the direct appeal, but also any proceedings involving petitions under Rule 32 and any retrials, appeals from judgments in retrials, or post-conviction proceedings following retrials." (The Court also made plain that Arizona, unlike California, does not require criminal-defendant malpractice plaintiffs to allege and prove "actual innocence," because "[e]ven a party unable to prove actual innocence may be injured by attorney malpractice.") Because the plaintiff in this case had filed his malpractice claim less than two years after he secured the dismissal of the charges against him with prejudice, his claim was timely. All of the Justices concurred in the decision.
Posted by azapp @ Thu, Jan 15, 2004
Tuesday, January 13, 2004
Scottsdale Los Arcos Referendum Decision
As discussed in a previous posting, Division One ruled on Thursday that a City of Scottsdale resolution adopting the Los Arcos Redevelopment Agreement was a legislative act subject to referendum. The Court's memorandum decision is available by clicking here.
As discussed in a previous posting, Division One ruled on Thursday that a City of Scottsdale resolution adopting the Los Arcos Redevelopment Agreement was a legislative act subject to referendum. The Court's memorandum decision is available by clicking here.
Posted by azapp @ Tue, Jan 13, 2004
Law.com Predicts Gravano Petition May Be Accepted by U.S. Supreme Court
An article appearing on law.com discusses the petition for certiorari seeking review of the Arizona Court of Appeals decision in Arizona v. Gravano and identifies it as one of the petitions currently before the United States Supreme Court in which there is a significant chance that certiorari will be granted. The petition was filed by Osborn Maledon attorneys Larry A. Hammond, Maureen Beyers, and Daniel L. Kaplan. Click on the appropriate links to view the Petition, the State's Brief in Opposition, and the Reply. The petition raises the question of whether the State violated the First Amendment's Free Speech Clause by seizing the royalties from the best-selling book Underboss. The article also lists other pending petitions in which certiorari may be granted, including the petition seeking review of the Ninth Circuit's decision regarding the constitutionality of the Scottsdale Unified School District's policy regarding the distribution of religious materials, which was the subject of a previous posting.
An article appearing on law.com discusses the petition for certiorari seeking review of the Arizona Court of Appeals decision in Arizona v. Gravano and identifies it as one of the petitions currently before the United States Supreme Court in which there is a significant chance that certiorari will be granted. The petition was filed by Osborn Maledon attorneys Larry A. Hammond, Maureen Beyers, and Daniel L. Kaplan. Click on the appropriate links to view the Petition, the State's Brief in Opposition, and the Reply. The petition raises the question of whether the State violated the First Amendment's Free Speech Clause by seizing the royalties from the best-selling book Underboss. The article also lists other pending petitions in which certiorari may be granted, including the petition seeking review of the Ninth Circuit's decision regarding the constitutionality of the Scottsdale Unified School District's policy regarding the distribution of religious materials, which was the subject of a previous posting.
Posted by azapp @ Tue, Jan 13, 2004
Proposed Legislation Regarding Arbitration Issue that has been Accepted for Review by Supreme Court
The statutory language of the Uniform Arbitration Act at issue in North Valley Emergency Specialists v. Santana, which the Arizona Supreme Court recently accepted for review (see previous posting), is the subject of HB2003. Among other things, the bill would repeal A.R.S. § 12-1517.
(Thanks to Shawn Aiken and Greg Harris for bringing this to our attention.)
The statutory language of the Uniform Arbitration Act at issue in North Valley Emergency Specialists v. Santana, which the Arizona Supreme Court recently accepted for review (see previous posting), is the subject of HB2003. Among other things, the bill would repeal A.R.S. § 12-1517.
(Thanks to Shawn Aiken and Greg Harris for bringing this to our attention.)
Posted by azapp @ Tue, Jan 13, 2004
Monday, January 12, 2004
The Arizona Supreme Court Staff Attorney's Office has issued its Case Summary describing the case to be argued on Thursday, January 15. (The Case Summaries are prepared solely for educational purposes and should not be considered official commentary by the court or any member thereof or part of any brief, memorandum or other pleading filed in the case.) The case, Arizona v. Capitol Castings, presents the question of whether the Court of Appeals erred in refusing to apply the Legislature's amendment of the use tax exemption (A.R.S. 42-5159(B)(1)) to certain non-metal materials purchased by Capitol Castings.
Posted by azapp @ Mon, Jan 12, 2004
Friday, January 9, 2004
Supreme Court Takes Special Action Review in Case Regarding the Applicability of Uniform Arbitration Act to Employment Agreements
On Tuesday, the Arizona Supreme Court granted review in a special action captioned North Valley Emergency Specialists v. Santana, 1 CA-SA 03-0137. The special action challenges a trial court order compelling arbitration under the Uniform Arbitration Act (A.R.S. § 12-1501 et seq.) in a case apparently involving an employment agreement. A.R.S. § 12-1517 says: "This article shall have no application to arbitration agreements between employers and employees or their respective representatives." The Court of Appeals denied jurisdiction without opinion.
Click here for a copy of the Petition for Review.
NOTE: The other Special Action review mentioned in a previous posting and granted on Tuesday was a criminal matter.
On Tuesday, the Arizona Supreme Court granted review in a special action captioned North Valley Emergency Specialists v. Santana, 1 CA-SA 03-0137. The special action challenges a trial court order compelling arbitration under the Uniform Arbitration Act (A.R.S. § 12-1501 et seq.) in a case apparently involving an employment agreement. A.R.S. § 12-1517 says: "This article shall have no application to arbitration agreements between employers and employees or their respective representatives." The Court of Appeals denied jurisdiction without opinion.
Click here for a copy of the Petition for Review.
NOTE: The other Special Action review mentioned in a previous posting and granted on Tuesday was a criminal matter.
Posted by azapp @ Fri, Jan 9, 2004
An article appearing on azcentral.com reports that one of the orders denying a petition for review in the recent Arizona Supreme Court Minutes (see previous posting) denied review of a Court of Appeals decision overturning a Superior Court order requiring the State to pay school districts approximately $90 million for the 2002-2003 school year. The Court of Appeals held that the school districts had failed to show that the funding shortfalls hurt academic achievement. Another article reports that, in a case discussed in several previous postings, the Arizona Court of Appeals has ruled unanimously that the Los Arcos redevelopment agreement passed by the Scottsdale City Council is subject to voter review.
Posted by azapp @ Fri, Jan 9, 2004
An article appearing on azcentral.com reports that the Superior Court has issued an injunction preventing Mesa Vice-Mayor Dennis Kavanaugh's name from appearing on the ballot in Mesa's March election. According to the report, the court ruled that Kavanaugh is term-limited under the Mesa Charter because he served one term as an at-large councilmember and one term as a councilmember for a district. Kavanaugh had apparently argued that his at-large service should not count for term limits.
Kavanaugh has indicated that he will seek review by the Supreme Court.
Kavanaugh has indicated that he will seek review by the Supreme Court.
Posted by azapp @ Fri, Jan 9, 2004
Thursday, January 8, 2004
Of the four petitions for review granted by the Arizona Supreme Court on Tuesday, one is a criminal case, two are unpublished special actions from Division One, and one is a review of the published decision Pleak v. Entrada Property Owners' Assoc. out of Division Two.
Information about the two unpublished special actions will be posted when we receive it.
Regarding the Pleak decision, the following comes out of AZAPP's unpublished archives:
---Friday, July 25, 2003---
Pleak v. Entrada Property Owners' Assoc.: Division Two Holds that Arizona Law Permits the Dedication of a Roadway Easement to the Public by Other than Statutory Means.
Plaintiffs in this case are real property owners of land adjacent to a roadway on Defendants' land in rural Pima county. Defendants are successors in interest to three parcels of land originally owned and surveyed by First American Title Insurance Company. Plaintiffs sued seeking a declaration that First American had dedicated the roadway to public use. The trial court granted Defendants' partial summary judgment ruling that the roadway had not met the statutory requirements for public dedication. The Court of Appeals reversed holding that, despite pronouncements from the Arizona Supreme Court that "in Arizona[,] 'public highways' are limited to those established in the manner provided by law and to no others," Herman v. Cardon, 112 Ariz. 548, 549 (1976), common law dedication of a roadway easement is permissible. The court held that it is unnecessary for a governing body to accept the public roadway, noting that there are three types of roadways: public, private, and those dedicated to the public, but not yet accepted by any governing body. Applying the common law, the court found that the dedication by First American was completed when Defendants purchased the land referring to the recorded survey and the delineated road easement.
Information about the two unpublished special actions will be posted when we receive it.
Regarding the Pleak decision, the following comes out of AZAPP's unpublished archives:
---Friday, July 25, 2003---
Pleak v. Entrada Property Owners' Assoc.: Division Two Holds that Arizona Law Permits the Dedication of a Roadway Easement to the Public by Other than Statutory Means.
Plaintiffs in this case are real property owners of land adjacent to a roadway on Defendants' land in rural Pima county. Defendants are successors in interest to three parcels of land originally owned and surveyed by First American Title Insurance Company. Plaintiffs sued seeking a declaration that First American had dedicated the roadway to public use. The trial court granted Defendants' partial summary judgment ruling that the roadway had not met the statutory requirements for public dedication. The Court of Appeals reversed holding that, despite pronouncements from the Arizona Supreme Court that "in Arizona[,] 'public highways' are limited to those established in the manner provided by law and to no others," Herman v. Cardon, 112 Ariz. 548, 549 (1976), common law dedication of a roadway easement is permissible. The court held that it is unnecessary for a governing body to accept the public roadway, noting that there are three types of roadways: public, private, and those dedicated to the public, but not yet accepted by any governing body. Applying the common law, the court found that the dedication by First American was completed when Defendants purchased the land referring to the recorded survey and the delineated road easement.
Posted by azapp @ Thu, Jan 8, 2004
The Arizona Supreme Court has issued a set of Minutes in two parts (A and B). The Minutes rule on petitions for review, requests for attorneys fees, and other matters. The Court granted review in four cases, denied review in fifty-four cases, and continued the pending petitions in five cases.
Posted by azapp @ Thu, Jan 8, 2004
The Arizona Supreme Court Staff Attorney's Office has issued its Case Summaries describing the cases to be argued on Tuesday, January 13. (The Case Summaries are prepared solely for educational purposes and should not be considered official commentary by the court or any member thereof or part of any brief, memorandum or other pleading filed in the case.) Two cases are set for argument. Arizona v. Torres involves the question of whether the Court of Appeals erred in holding that a trial court's summary denial of an indigent defendant's motion for new counsel, issued without an inquiry into the basis for the motion, violated the defendant's Sixth Amendment right to counsel and mandated reversal. In re Andre M. involves the question of whether denying a parent access to her child's interrogation deliberately and without cause violates the child's right against self-incrimination. The Andre M. case is the subject of an article appearing on azcentral.com, which reports that the argument will be heard at 10:30 a.m. Tuesday at Mesa High School. Another article addresses the Arizona Court of Appeals case involving the Los Arcos development, discussed in previous postings. The article reports that the panel is expected to rule within three days on the question of whether Scottsdale residents have the right to vote on the Los Arcos redevelopment agreement. Another article reports that Mesa Vice Mayor Dennis Kavanaugh plans to appeal to the Arizona Supreme Court from a Superior Court ruling prohibiting Kavanaugh's name from appearing on the ballot for another term as Vice Mayor. The Superior Court based its ruling on term limit language in the City's charter.
Posted by azapp @ Thu, Jan 8, 2004
Wednesday, January 7, 2004
Tuesday, January 6, 2004
Mullenaux v. Graham County: Division Two Affirms That Classified Employees Must Exhaust Administrative Procedures in Wrongful Discharge and Breach of Contract Claims
On January 6, 2004, Division Two of the Arizona Court of Appeals affirmed the trial court’s grant of summary judgment in favor of Graham County on an employee’s wrongful discharge, breach of contract, and defamation claims. Graham County terminated Mullenaux, a classified employee of the County, and Mullenaux brought a grievance in accordance with the first step of the County’s three-step grievance procedure. The County denied Mullenaux’s protest of discharge and, rather than pursue administrative channels, Mullenaux sued the County for wrongful discharge and breach of contract. Mullenaux subsequently amended his complaint to include a defamation claim based on the release of an investigative report. The trial court granted summary judgment on behalf of the County and this appeal followed.
Judge Brammer found that under Arizona law dealing with “county employee merit systems,” A.R.S. §§ 11-351 through 11-356, Mullenaux was required to fully exhaust the County’s grievance procedures before he could sue the County on his wrongful discharge and breach of contract claims. Judge Brammer found that the use of the word “may” in the second and third steps of the County’s administrative procedure did not render the procedure permissive. The court further found that a classified public employee must exhaust his or her administrative remedies available under A.R.S. §§ 11-351 through 11-356 before filing an action in superior court under the Arizona Employment Protection Act, A.R.S. § 23-1501(3), or Arizona’s whistleblower protection statute, A.R.S. § 38-532. The court harmonized the apparent inconsistency between §§ 23-1501(3) and 38-532, which both provide for direct causes action, and § 11-356, which requires following administrative grievance procedures, by pointing out that “the employee could still file an action in superior court asserting any claims under § 23-1501 and § 38-532 that were neither completely resolved nor precluded in the administrative process. And the employee retains the option of appealing the final agency action pursuant to § 12-902(B).”
The court summarily dismissed Mullenaux’s defamation claim because Mullenaux had consented to the release of the report that formed the basis for the claim.
Judges Flórez and Howard joined in the opinion.
On January 6, 2004, Division Two of the Arizona Court of Appeals affirmed the trial court’s grant of summary judgment in favor of Graham County on an employee’s wrongful discharge, breach of contract, and defamation claims. Graham County terminated Mullenaux, a classified employee of the County, and Mullenaux brought a grievance in accordance with the first step of the County’s three-step grievance procedure. The County denied Mullenaux’s protest of discharge and, rather than pursue administrative channels, Mullenaux sued the County for wrongful discharge and breach of contract. Mullenaux subsequently amended his complaint to include a defamation claim based on the release of an investigative report. The trial court granted summary judgment on behalf of the County and this appeal followed.
Judge Brammer found that under Arizona law dealing with “county employee merit systems,” A.R.S. §§ 11-351 through 11-356, Mullenaux was required to fully exhaust the County’s grievance procedures before he could sue the County on his wrongful discharge and breach of contract claims. Judge Brammer found that the use of the word “may” in the second and third steps of the County’s administrative procedure did not render the procedure permissive. The court further found that a classified public employee must exhaust his or her administrative remedies available under A.R.S. §§ 11-351 through 11-356 before filing an action in superior court under the Arizona Employment Protection Act, A.R.S. § 23-1501(3), or Arizona’s whistleblower protection statute, A.R.S. § 38-532. The court harmonized the apparent inconsistency between §§ 23-1501(3) and 38-532, which both provide for direct causes action, and § 11-356, which requires following administrative grievance procedures, by pointing out that “the employee could still file an action in superior court asserting any claims under § 23-1501 and § 38-532 that were neither completely resolved nor precluded in the administrative process. And the employee retains the option of appealing the final agency action pursuant to § 12-902(B).”
The court summarily dismissed Mullenaux’s defamation claim because Mullenaux had consented to the release of the report that formed the basis for the claim.
Judges Flórez and Howard joined in the opinion.
Posted by azapp @ Tue, Jan 6, 2004
Washburn v. Pima County: Division Two Holds That Pima County Acted Within Its Statutory Authority When It Adopted An Ordinance Applicable to Single-Family Homebuilders Requiring Easier Access for People in Wheelchairs and that Such Ordinance Is Constitutional.
In February, 2002, the Pima County Board of Supervisors adopted the Inclusive Home Design Ordinance, which, among other things, promulgated building requirements applicable to the construction of new, single family homes in unincorporated areas of Pima County. The provisions required that newly constructed homes incorporate design features that allow people in wheelchairs to more easily enter and use the homes. The Washburns applied for a permit to build a single-family home, which was denied because the proposed design failed to comply with the ordinance. The Washburns filed a declaratory judgment and special action complaint, in which they asked the trial court to declare that the County lacked statutory authority to adopt the ordinance and that it violated both the Equal Protection and Privacy Clauses of the Arizona Constitution. On motion from the County, the trial court granted summary judgment in favor of Pima County. The Washburns appealed.
On appeal, Division Two affirmed the judgment of the lower court. Although the court found that the trial court had erroneously determined that the Washburns were precluded from bringing statutory claims by virtue of res judicata, it found that Pima County had statutory authority to adopt the ordinance. In doing so, it determined that the Accessible and Usable Buildings and Facilities (“ANSI”) standards, from which the ordinance was adopted, was a “code” as contemplated by A.R.S. § 11-861(A), and that the city was therefore statutorily permitted to adopt its provisions. With respect to the constitutional challenges, the court rejected the Washburns’ arguments that the county cannot constitutionally impose costly design requirements on all new private homeowners that have value to less than 1% of the population and that the ordinance deprives new homeowners and builders of the fundamental right to design private homes. Because building codes that effect the exercise of homeowners’ personal, private, and aesthetic choices are a proper exercise of police power, the ordinance does not infringe on a homeowners’ right to privacy. And because people constructing new homes are not a protected class, and the County addressed a legitimate governmental interest when it adopted a building code designed to increase the number of homes accessible to those in wheelchairs, the equal protection challenge also failed.
Judge Eckerstrom authored the Opinion; Judges Espinosa and Pelander concurred.
In February, 2002, the Pima County Board of Supervisors adopted the Inclusive Home Design Ordinance, which, among other things, promulgated building requirements applicable to the construction of new, single family homes in unincorporated areas of Pima County. The provisions required that newly constructed homes incorporate design features that allow people in wheelchairs to more easily enter and use the homes. The Washburns applied for a permit to build a single-family home, which was denied because the proposed design failed to comply with the ordinance. The Washburns filed a declaratory judgment and special action complaint, in which they asked the trial court to declare that the County lacked statutory authority to adopt the ordinance and that it violated both the Equal Protection and Privacy Clauses of the Arizona Constitution. On motion from the County, the trial court granted summary judgment in favor of Pima County. The Washburns appealed.
On appeal, Division Two affirmed the judgment of the lower court. Although the court found that the trial court had erroneously determined that the Washburns were precluded from bringing statutory claims by virtue of res judicata, it found that Pima County had statutory authority to adopt the ordinance. In doing so, it determined that the Accessible and Usable Buildings and Facilities (“ANSI”) standards, from which the ordinance was adopted, was a “code” as contemplated by A.R.S. § 11-861(A), and that the city was therefore statutorily permitted to adopt its provisions. With respect to the constitutional challenges, the court rejected the Washburns’ arguments that the county cannot constitutionally impose costly design requirements on all new private homeowners that have value to less than 1% of the population and that the ordinance deprives new homeowners and builders of the fundamental right to design private homes. Because building codes that effect the exercise of homeowners’ personal, private, and aesthetic choices are a proper exercise of police power, the ordinance does not infringe on a homeowners’ right to privacy. And because people constructing new homes are not a protected class, and the County addressed a legitimate governmental interest when it adopted a building code designed to increase the number of homes accessible to those in wheelchairs, the equal protection challenge also failed.
Judge Eckerstrom authored the Opinion; Judges Espinosa and Pelander concurred.
Posted by azapp @ Tue, Jan 6, 2004
Monday, January 5, 2004
An article appearing on azcentral profiles recent Division One appointee Patricia Norris, and discusses the tradition of public service work at her former firm, Lewis & Roca. Another article discusses a recent Arizona Court of Appeals decision rejecting home-builders' challenges to Pima County rules requiring that single-family homes be made accessible to the disabled.
Posted by azapp @ Mon, Jan 5, 2004
Bentivegna v. Powers Steel & Wire: Division One Panel Rules that Registrar of Contractors Complaint Process Does not Subject Litigants to the Exhaustion of Remedies Doctrine and that A.R.S. Section 32-1153 Does Not Support a Claim for Restitution
Plaintiffs sued unlicensed contractor Defendant for restitution and damages arising from the improper construction of a steel warehouse. The trial court denied the plaintiffs' claims because they had failed to appeal the decision of the Registrar of Contractors and because A.R.S. § 32-1153 (barring collection suits by unlicensed contractors) does not support a claim for restitution. Judge Irving, writing for the unanimous panel, reversed the trial court's exhaustion of remedies ruling, but affirmed the court's ruling on restitution. First, the Court of Appeals held that the Registrar of Contractors complaint procedure is permissive (not exclusive) and, thus, not subject to exhaustion of remedies. The court explained that the Registrar can order restitution as a condition of license restatement, but it cannot issue an enforceable order or judgment for money damages. Indeed, the complainant could be deprived of any remedy if the contractor decided not to have his license reinstated. Moreover, the court noted that the Registrar's website contains a pamphlet, which advises consumers that they "do not have to wait for the Registrar to complete its action before filing suit in court." Accordingly, the Court of Appeals deferred to the agency's interpretation of the statutes.
As for the Restitution claim, the court found that simply because A.R.S. § 32-1153 prevents an unlicensed contractor from suing to collect on an unpaid contract, it did not follow that the Plaintiffs were entitled to restitution of amounts already paid to an unlicensed contractor. The court characterized Plaintiffs argument as "superficially appealing," but found that it did not comport with the plain language of the statute, which applies when a contractor "commenc[es] or maintain[s]" an action to collect. Here the contractor had done neither. The court found that the Plaintiffs have an adequate remedy for the substandard performance without "torturing the plain language of § 32-1153 to create a new remedy."
Division One Judge Ehrlich joined the opinion along with Maricopa County Superior Court Judge Cole, sitting by designation.
Plaintiffs sued unlicensed contractor Defendant for restitution and damages arising from the improper construction of a steel warehouse. The trial court denied the plaintiffs' claims because they had failed to appeal the decision of the Registrar of Contractors and because A.R.S. § 32-1153 (barring collection suits by unlicensed contractors) does not support a claim for restitution. Judge Irving, writing for the unanimous panel, reversed the trial court's exhaustion of remedies ruling, but affirmed the court's ruling on restitution. First, the Court of Appeals held that the Registrar of Contractors complaint procedure is permissive (not exclusive) and, thus, not subject to exhaustion of remedies. The court explained that the Registrar can order restitution as a condition of license restatement, but it cannot issue an enforceable order or judgment for money damages. Indeed, the complainant could be deprived of any remedy if the contractor decided not to have his license reinstated. Moreover, the court noted that the Registrar's website contains a pamphlet, which advises consumers that they "do not have to wait for the Registrar to complete its action before filing suit in court." Accordingly, the Court of Appeals deferred to the agency's interpretation of the statutes.
As for the Restitution claim, the court found that simply because A.R.S. § 32-1153 prevents an unlicensed contractor from suing to collect on an unpaid contract, it did not follow that the Plaintiffs were entitled to restitution of amounts already paid to an unlicensed contractor. The court characterized Plaintiffs argument as "superficially appealing," but found that it did not comport with the plain language of the statute, which applies when a contractor "commenc[es] or maintain[s]" an action to collect. Here the contractor had done neither. The court found that the Plaintiffs have an adequate remedy for the substandard performance without "torturing the plain language of § 32-1153 to create a new remedy."
Division One Judge Ehrlich joined the opinion along with Maricopa County Superior Court Judge Cole, sitting by designation.
Posted by azapp @ Mon, Jan 5, 2004
