AZAPP is a blog that provides a thorough, up-to-date, and efficient resource to stay abreast of significant developments concerning civil cases in Arizona's appellate courts - the two Divisions of the Arizona Court of Appeals and the Arizona Supreme Court.
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Monday, June 28, 2004
Schalkenbach Foundation v. Lincoln Foundation: Division One Adopts the “Special Interest” Test to Determine Whether a Party has Common-Law or Statutory Standing to Enforce a Charitable Trust
The Schalkenbach Foundation, et al. (the “Schalkenbach Appellants”) and the Henry George School of Social Science (the “New York School”) (collectively “Appellants”) sought to compel the Lincoln Foundation to honor the charitable trust under which it holds its assets. The Schalkenbach Appellants initially filed a complaint in superior court, which the court dismissed without prejudice. The court found that the Schalkenbach Appellants did not have a special interest in the charitable trust and, consequently, did not have common law standing to enforce the trust. Instead of appealing the judgment, the Schalkenbach Appellants filed an almost identical petition in probate court and claimed the probate court could proceed pursuant to ARS §§ 14-7201 and -1401. The probate court dismissed the petition without prejudice, holding that issue preclusion barred the Schalkenbach Appellants from raising the common law standing issue in the new suit. The probate court further held that the Schalkenbach Appellants lacked standing under ARS § 14-7201 because they were not “interested parties.”
Simultaneously, the New York School filed a separate—but almost identical—petition in probate court to enforce the charitable trust established through John C. Lincoln’s will. The New York School had previously received substantial assistance from the Foundation and it had been named as a beneficiary in the Foundation’s Articles of Incorporation from 1969 until 1992. The probate court dismissed the New York School’s petition without prejudice for failure to state a claim.
The appeals from the probate courts’ decisions were consolidated before the court of appeals. Judge Kessler, writing for a unanimous panel, upheld the probate courts’ decisions. First, the court affirmed that the Schalkenbach Appellants were barred by issue preclusion from relitigating whether they had common law standing to enforce the charitable trust.
Second, the court found that even if the probate courts had addressed the standing issue, none of the Appellants have common-law standing to enforce the charitable trust. The court held that to have common-law standing, a party must show it has a special interest in the trust, such as being a current beneficiary, and not merely being a potential or prior beneficiary of a large class of potential beneficiaries. The court adopted a five factor balancing test for determining who holds a “special interest.” The most important factors are the nature of the benefited class and its relationship to the trust, the nature of the remedy requested, and the effectiveness of the attorney general enforcement of the trust; less important are the nature of the acts complained of and whether there are any allegations of fraud or misconduct on the part of the defendants. Applying this test, the court determined that none of the Appellants have a “special interest” in the charitable trust and therefore lack common-law standing.
Third, the court held that the Appellants do not have standing to enforce the charitable trust under the probate code. The probate court has jurisdiction over “proceedings initiated by interested parties concerning the internal affairs of trusts.” ARS § 14-7201. The court looked to the language in the probate code which provides that common law principals may be used to determine standing as an “interested party” under the probate code. See ARS § 14-10106. The court applied the common-law special interest test outlined above and, accordingly, found that Appellants did not have standing to enforce a charitable trust under the probate code.
Finally, the court held that the Appellants did not have standing to obtain a writ of mandamus because (1) Appellants are not parties interested in the enforcement of the trust and (2) the Appellants lacked standing to compel the Attorney General to initiate a proceeding against the Foundation because the Attorney General had discretionary authority, which made a write of mandamus inappropriate.
Judges Lankford and Barker concurred in the opinion.
The Schalkenbach Foundation, et al. (the “Schalkenbach Appellants”) and the Henry George School of Social Science (the “New York School”) (collectively “Appellants”) sought to compel the Lincoln Foundation to honor the charitable trust under which it holds its assets. The Schalkenbach Appellants initially filed a complaint in superior court, which the court dismissed without prejudice. The court found that the Schalkenbach Appellants did not have a special interest in the charitable trust and, consequently, did not have common law standing to enforce the trust. Instead of appealing the judgment, the Schalkenbach Appellants filed an almost identical petition in probate court and claimed the probate court could proceed pursuant to ARS §§ 14-7201 and -1401. The probate court dismissed the petition without prejudice, holding that issue preclusion barred the Schalkenbach Appellants from raising the common law standing issue in the new suit. The probate court further held that the Schalkenbach Appellants lacked standing under ARS § 14-7201 because they were not “interested parties.”
Simultaneously, the New York School filed a separate—but almost identical—petition in probate court to enforce the charitable trust established through John C. Lincoln’s will. The New York School had previously received substantial assistance from the Foundation and it had been named as a beneficiary in the Foundation’s Articles of Incorporation from 1969 until 1992. The probate court dismissed the New York School’s petition without prejudice for failure to state a claim.
The appeals from the probate courts’ decisions were consolidated before the court of appeals. Judge Kessler, writing for a unanimous panel, upheld the probate courts’ decisions. First, the court affirmed that the Schalkenbach Appellants were barred by issue preclusion from relitigating whether they had common law standing to enforce the charitable trust.
Second, the court found that even if the probate courts had addressed the standing issue, none of the Appellants have common-law standing to enforce the charitable trust. The court held that to have common-law standing, a party must show it has a special interest in the trust, such as being a current beneficiary, and not merely being a potential or prior beneficiary of a large class of potential beneficiaries. The court adopted a five factor balancing test for determining who holds a “special interest.” The most important factors are the nature of the benefited class and its relationship to the trust, the nature of the remedy requested, and the effectiveness of the attorney general enforcement of the trust; less important are the nature of the acts complained of and whether there are any allegations of fraud or misconduct on the part of the defendants. Applying this test, the court determined that none of the Appellants have a “special interest” in the charitable trust and therefore lack common-law standing.
Third, the court held that the Appellants do not have standing to enforce the charitable trust under the probate code. The probate court has jurisdiction over “proceedings initiated by interested parties concerning the internal affairs of trusts.” ARS § 14-7201. The court looked to the language in the probate code which provides that common law principals may be used to determine standing as an “interested party” under the probate code. See ARS § 14-10106. The court applied the common-law special interest test outlined above and, accordingly, found that Appellants did not have standing to enforce a charitable trust under the probate code.
Finally, the court held that the Appellants did not have standing to obtain a writ of mandamus because (1) Appellants are not parties interested in the enforcement of the trust and (2) the Appellants lacked standing to compel the Attorney General to initiate a proceeding against the Foundation because the Attorney General had discretionary authority, which made a write of mandamus inappropriate.
Judges Lankford and Barker concurred in the opinion.
Posted by azapp @ Mon, Jun 28, 2004
Thursday, June 17, 2004
Arizona Water Co v. Arizona Dept. of Water Resources: Arizona Supreme Court Holds That the Arizona Groundwater Code Does Not Mandate Imposition of Conservation Requirements Directly on All “End Users”
Arizona Water Company (“AWC”) challenged the 1999-2000 management plan adopted by the Arizona Department of Water Resources (“Department”) for the Phoenix management area, contending that the plan violated the Arizona Groundwater Code (“the Code”) because the plan did not impose conservation requirements directly on AWC’s end users. The trial court and the court of appeals agreed with AWC and directed the Department to amend its plan. This appeal followed.
Justice Hurwitz, writing for a unanimous court, affirmed in part, vacated in part, and remanded. First, the Court affirmed that the Code provides authority for the Department to implement conservation requirements through “Total Gallons Per Capita Per Day” (“GPCD”) programs, which limit the total quantity of water a provider may deliver to its customers each year. The Court rejected, however, the court of appeals’ conclusion that the plan must include mandatory conservation requirements imposed directly on end users. The Court held that while the Code authorizes the Department to impose conservation requirements directly on end users, it does not require that the Department Director always do so, or that the Director must impose requirements directly on all end users. Although the statutory language was not dispositive on this point, the Court deferred to the Director’s expert interpretation of which conservations measures are “appropriate” to impose directly on individual users. Finally, the Court affirmed the court of appeals’ conclusion that the Department may, under its “stacking” method, consider use of CAP water in determining a municipal provider’s compliance with its GCPD requirements.
Arizona Water Company (“AWC”) challenged the 1999-2000 management plan adopted by the Arizona Department of Water Resources (“Department”) for the Phoenix management area, contending that the plan violated the Arizona Groundwater Code (“the Code”) because the plan did not impose conservation requirements directly on AWC’s end users. The trial court and the court of appeals agreed with AWC and directed the Department to amend its plan. This appeal followed.
Justice Hurwitz, writing for a unanimous court, affirmed in part, vacated in part, and remanded. First, the Court affirmed that the Code provides authority for the Department to implement conservation requirements through “Total Gallons Per Capita Per Day” (“GPCD”) programs, which limit the total quantity of water a provider may deliver to its customers each year. The Court rejected, however, the court of appeals’ conclusion that the plan must include mandatory conservation requirements imposed directly on end users. The Court held that while the Code authorizes the Department to impose conservation requirements directly on end users, it does not require that the Department Director always do so, or that the Director must impose requirements directly on all end users. Although the statutory language was not dispositive on this point, the Court deferred to the Director’s expert interpretation of which conservations measures are “appropriate” to impose directly on individual users. Finally, the Court affirmed the court of appeals’ conclusion that the Department may, under its “stacking” method, consider use of CAP water in determining a municipal provider’s compliance with its GCPD requirements.
Posted by azapp @ Thu, Jun 17, 2004
Wednesday, June 16, 2004
Amparano v. ASARCO, Inc.: Division Two Holds that Venue in Pollution Case is Governed by Statutory Provision Governing Real Property Actions.
Plaintiffs brought a class action against ASARCO, alleging that ASARCO's mining and smelting operations had released pollutants and heavy metals into the environment that had caused personal injury and property damage. ASCARCO moved to dismiss for improper venue. The trial court found that venue was proper only in the county where the affected real property was located, and that no such county existed because the lawsuit involved property located in multiple counties, and accordingly dismissed the suit. The Court of Appeals affirmed, after parsing the language of A.R.S. 12-401, the venue statute. Subsection 12 of Section 12-401 specifies that actions for damages to real property should be brought in the county where the property it located. Focusing on Subsection 12's broad and mandatory language, the Court held that this provision governed, and thus affirmed the trial court's dismissal. The Court also affirmed the trial court's refusal to disqualify counsel for the plaintiffs in light of his previous representaion of the defendant.
The opinion was authored by Judge Howard and joined by Judges Brammer and Florez.
Plaintiffs brought a class action against ASARCO, alleging that ASARCO's mining and smelting operations had released pollutants and heavy metals into the environment that had caused personal injury and property damage. ASCARCO moved to dismiss for improper venue. The trial court found that venue was proper only in the county where the affected real property was located, and that no such county existed because the lawsuit involved property located in multiple counties, and accordingly dismissed the suit. The Court of Appeals affirmed, after parsing the language of A.R.S. 12-401, the venue statute. Subsection 12 of Section 12-401 specifies that actions for damages to real property should be brought in the county where the property it located. Focusing on Subsection 12's broad and mandatory language, the Court held that this provision governed, and thus affirmed the trial court's dismissal. The Court also affirmed the trial court's refusal to disqualify counsel for the plaintiffs in light of his previous representaion of the defendant.
The opinion was authored by Judge Howard and joined by Judges Brammer and Florez.
Posted by azapp @ Wed, Jun 16, 2004
Articles on Hibbs v. Winn and Arizona Water Company Decisions
An article on azcentral.com discusses the U.S. Supreme Court's recent decision in Hibbs v. Winn, which was the subject of previous postings. Another article discusses the Arizona Supreme Court's Decision in Arizona Water Company v. Arizona Department of Water Resources.
An article on azcentral.com discusses the U.S. Supreme Court's recent decision in Hibbs v. Winn, which was the subject of previous postings. Another article discusses the Arizona Supreme Court's Decision in Arizona Water Company v. Arizona Department of Water Resources.
Posted by azapp @ Wed, Jun 16, 2004
Monday, June 14, 2004
U.S. Supreme Court Issues Opinion in Hibbs Case
The U.S. Supreme Court has ruled 5-4, in a case out of Arizona, that taxpayers may challenge state tax laws in federal court. The case, Hibbs v. Winn, which is covered in previous postings, involved an Establishment Clause challenge to Arizona's school tuition tax credit progam.
Click here for an Associated Press story on the case at KVOA's website.
The U.S. Supreme Court has ruled 5-4, in a case out of Arizona, that taxpayers may challenge state tax laws in federal court. The case, Hibbs v. Winn, which is covered in previous postings, involved an Establishment Clause challenge to Arizona's school tuition tax credit progam.
Click here for an Associated Press story on the case at KVOA's website.
Posted by azapp @ Mon, Jun 14, 2004
Friday, June 11, 2004
State ex rel. Dep't of Econ. Sec. v. Hayden: Division One Rules That the Running of the Statute of Limitations on a Judgment for Child Support Arrearages Does not Preclude the State From Collecting Arrearages by Any Administrative Remedies Available.
Jack Hayden agreed to pay child support to Linda Dann beginning in 1981. Dann assigned the child support rights to the Arizona Department of Economic Security (ADES) in 1984, because ADES was providing public assistance to her and her child in the form of Aid to Families of Dependent Children. Since the child reached the age of majority in 1995, Hayden sought to terminate the State's efforts to collect child support arrearages in 2002, pursuant to A.R.S. § 25-503(I) which has since been re-designated as A.R.S. § 25-503(H).
A.R.S. § 25-503(I) provides that, "[u]nless it is reduced to a written money judgment, an unpaid child support judgment that became a judgment by operation of law expires three years after the emancipation of the last remaining unemancipated child who was included in the court order." Thus, written money judgments not filed within the limitations period expire by operation of law. Because the State was not pursuing entry of a written money judgment for the recovery of child support arrearages from Hayden, the trial court ruled that the statute of limitations did not apply to the State's administrative debt collection efforts.
Division One affirmed. In interpreting A.R.S. § 25-503(I), the court noted the legal distinction between the terms "judgment" and "debt." Whereas debt is "simply an amount owed," a judgment is "an act of court which fixes clearly the rights and liabilities of the respective parties to litigation and determines the controversy at hand." The court concluded that, although a statute of limitations period regarding a judgment can expire, the underlying debt continues. The court supported this determination with both substantive law and public policy. The court held that A.R.S. § 25-503(I) can preclude untimely judicial recovery, but it does not preclude the State from implementing its own administrative remedies to recoup the underlying debt. Hayden's request to terminate the State's collection efforts was denied.
Judge Thompson authored the opinion; Judges Winthrop and Gemmill concurred.
Jack Hayden agreed to pay child support to Linda Dann beginning in 1981. Dann assigned the child support rights to the Arizona Department of Economic Security (ADES) in 1984, because ADES was providing public assistance to her and her child in the form of Aid to Families of Dependent Children. Since the child reached the age of majority in 1995, Hayden sought to terminate the State's efforts to collect child support arrearages in 2002, pursuant to A.R.S. § 25-503(I) which has since been re-designated as A.R.S. § 25-503(H).
A.R.S. § 25-503(I) provides that, "[u]nless it is reduced to a written money judgment, an unpaid child support judgment that became a judgment by operation of law expires three years after the emancipation of the last remaining unemancipated child who was included in the court order." Thus, written money judgments not filed within the limitations period expire by operation of law. Because the State was not pursuing entry of a written money judgment for the recovery of child support arrearages from Hayden, the trial court ruled that the statute of limitations did not apply to the State's administrative debt collection efforts.
Division One affirmed. In interpreting A.R.S. § 25-503(I), the court noted the legal distinction between the terms "judgment" and "debt." Whereas debt is "simply an amount owed," a judgment is "an act of court which fixes clearly the rights and liabilities of the respective parties to litigation and determines the controversy at hand." The court concluded that, although a statute of limitations period regarding a judgment can expire, the underlying debt continues. The court supported this determination with both substantive law and public policy. The court held that A.R.S. § 25-503(I) can preclude untimely judicial recovery, but it does not preclude the State from implementing its own administrative remedies to recoup the underlying debt. Hayden's request to terminate the State's collection efforts was denied.
Judge Thompson authored the opinion; Judges Winthrop and Gemmill concurred.
Posted by azapp @ Fri, Jun 11, 2004
Thursday, June 10, 2004
Article on Bennett v. Brownlow Decision
An article on azcentral.com discusses Division One's Bennett v. Brownlow decision, the subject of a recent posting.
An article on azcentral.com discusses Division One's Bennett v. Brownlow decision, the subject of a recent posting.
Posted by azapp @ Thu, Jun 10, 2004
Wednesday, June 9, 2004
Case Corp. v. Gehrke: Division One Holds That a Security Interest in Sale Proceeds Can Give Rise to a Viable Conversion Claim, Even When the Debtor Commingles the Sale Proceeds With Other Funds.
Case Corp (“Case”) entered into a security and finance agreement with Duane Gehrke (“Gehrke”), president of UEC. Pursuant to the agreement, Case financed equipment UEC purchased for resale to retail consumers. The agreement gave Case a security interest in UEC’s inventory and proceeds of inventory, and required UEC to remit payment within seven days after selling the equipment. The agreement did not require UEC to maintain the proceeds of inventory in express trust or in an account separate from UEC’s other funds. UEC failed to remit timely payment for ten pieces of equipment and subsequently filed bankruptcy. Case sued the Gehrkes for conversion, alleging that they had converted funds from UEC’s sale of Case equipment by not transferring the sale proceeds to Case despite its security interest in the equipment and sale proceeds. The Gehrkes’ moved for partial summary judgment on the conversion claim. The trial court granted the motion, holding that non-specified and unsegregated funds could not be the subject of a conversion claim.
Judge Snow, writing for a unanimous panel, reversed and remanded. The court rejected Gehrkes’ argument that secured proceeds must be placed in a separate account or subject to an express trust before a conversion claim can be brought to recover them. The court held that Case could bring a conversion claim because it had a security interest in the equipment and the proceeds from any sale of the equipment, which allowed the proceeds to be identified even when commingled with other funds. The court further rejected Gehrkes’ argument that a security interest in proceeds is necessarily destroyed when the debtor commingles them with other funds because such a rule would allow the debtor to unilaterally cancel a creditor’s security interest.
Judge Snow authored the opinion; Judges Sult and Portley concurred.
Case Corp (“Case”) entered into a security and finance agreement with Duane Gehrke (“Gehrke”), president of UEC. Pursuant to the agreement, Case financed equipment UEC purchased for resale to retail consumers. The agreement gave Case a security interest in UEC’s inventory and proceeds of inventory, and required UEC to remit payment within seven days after selling the equipment. The agreement did not require UEC to maintain the proceeds of inventory in express trust or in an account separate from UEC’s other funds. UEC failed to remit timely payment for ten pieces of equipment and subsequently filed bankruptcy. Case sued the Gehrkes for conversion, alleging that they had converted funds from UEC’s sale of Case equipment by not transferring the sale proceeds to Case despite its security interest in the equipment and sale proceeds. The Gehrkes’ moved for partial summary judgment on the conversion claim. The trial court granted the motion, holding that non-specified and unsegregated funds could not be the subject of a conversion claim.
Judge Snow, writing for a unanimous panel, reversed and remanded. The court rejected Gehrkes’ argument that secured proceeds must be placed in a separate account or subject to an express trust before a conversion claim can be brought to recover them. The court held that Case could bring a conversion claim because it had a security interest in the equipment and the proceeds from any sale of the equipment, which allowed the proceeds to be identified even when commingled with other funds. The court further rejected Gehrkes’ argument that a security interest in proceeds is necessarily destroyed when the debtor commingles them with other funds because such a rule would allow the debtor to unilaterally cancel a creditor’s security interest.
Judge Snow authored the opinion; Judges Sult and Portley concurred.
Posted by azapp @ Wed, Jun 9, 2004
Kuehn v. Stanley: Division Two Affirms Summary Judgment in Favor of Lender and Appraiser on Claims for Tort and Breach of Contract for Allegedly Faulty Real Estate Appraisal.
Appellants Kuehns entered into a contract to purchase real property, contingent on them qualifying for sufficient financing for a portion of the purchase price. They applied for a mortgage from First Magnus Financial Corporation. As part of its loan-approval process, First Magnus had an employee, Stanley, perform an appraisal. Stanley appraised the property at the purchase price and First Magnus approved loan. After purchasing the property, Kuehns had a second appraisal performed, which resulted in a value of $37,000 less than the First Magnus appraisal. Kuehns sued First Magnus and Stanley, alleging claims of negligence, gross negligence, negligent supervision, fraud, consumer fraud, and breach of contract. The trial court granted First Magnus’ motions for summary judgment on the tort and breach of contract claims and awarded First Magnus its attorney’s fees. This appeal followed.
Judge Howard, writing for a unanimous panel, affirmed the trial court’s ruling on the partial motion for summary judgment on the tort claims. The court affirmed that a negligence claim against a provider of professional information should be analyzed as one for negligent misrepresentation pursuant to Restatement (Second) of Torts § 522. Kuehns failed to prove the elements of negligent misrepresentation, including justifiable reliance and duty. The court also rejected the consumer fraud claim for failure to raise a fact issue as to whether the Kuehns had relied on the original appraisal. Finally, the court rejected the negligent supervision claim against First Magnus on the grounds that Stanley did not commit any tortious acts against the Kuehns.
The court of appeals also affirmed the trial court’s grant of summary judgment dismissing the contract claim. The court affirmed that First Magnus was not obligated to provide a fair accurate appraisal pursuant to the purchase contract because the purchase contract created no rights between Kuehns and First Magnus. Furthermore, the loan application contained a clause disclaiming any warranty of value. The court found that this boiler-plate language was conscionable under the Restatement (Second) of Contracts § 211 and did not violate the covenant of good faith and fair dealing. The court affirmed the award of attorney’s fees under A.R.S. § 12-341.01(A), which permits a trial court to award reasonable attorney’s fees to the successful party in a contested contract action.
Judges Howard authored the opinion; Judges Florez and Soto concurred.
Appellants Kuehns entered into a contract to purchase real property, contingent on them qualifying for sufficient financing for a portion of the purchase price. They applied for a mortgage from First Magnus Financial Corporation. As part of its loan-approval process, First Magnus had an employee, Stanley, perform an appraisal. Stanley appraised the property at the purchase price and First Magnus approved loan. After purchasing the property, Kuehns had a second appraisal performed, which resulted in a value of $37,000 less than the First Magnus appraisal. Kuehns sued First Magnus and Stanley, alleging claims of negligence, gross negligence, negligent supervision, fraud, consumer fraud, and breach of contract. The trial court granted First Magnus’ motions for summary judgment on the tort and breach of contract claims and awarded First Magnus its attorney’s fees. This appeal followed.
Judge Howard, writing for a unanimous panel, affirmed the trial court’s ruling on the partial motion for summary judgment on the tort claims. The court affirmed that a negligence claim against a provider of professional information should be analyzed as one for negligent misrepresentation pursuant to Restatement (Second) of Torts § 522. Kuehns failed to prove the elements of negligent misrepresentation, including justifiable reliance and duty. The court also rejected the consumer fraud claim for failure to raise a fact issue as to whether the Kuehns had relied on the original appraisal. Finally, the court rejected the negligent supervision claim against First Magnus on the grounds that Stanley did not commit any tortious acts against the Kuehns.
The court of appeals also affirmed the trial court’s grant of summary judgment dismissing the contract claim. The court affirmed that First Magnus was not obligated to provide a fair accurate appraisal pursuant to the purchase contract because the purchase contract created no rights between Kuehns and First Magnus. Furthermore, the loan application contained a clause disclaiming any warranty of value. The court found that this boiler-plate language was conscionable under the Restatement (Second) of Contracts § 211 and did not violate the covenant of good faith and fair dealing. The court affirmed the award of attorney’s fees under A.R.S. § 12-341.01(A), which permits a trial court to award reasonable attorney’s fees to the successful party in a contested contract action.
Judges Howard authored the opinion; Judges Florez and Soto concurred.
Posted by azapp @ Wed, Jun 9, 2004
J.L.F. v. AHCCCS: Division One Rules Women's Health and Cancer Rights Act Does Not Require AHCCCS to Cover Additional Breast Reconstruction Surgery When Results Not Subjectively Satisfactory to the Patient.
The Women's Health and Cancer Rights Act of 1998 (the "Act") requires group health plans with respect to a mastectomy to provide coverage for breast reconstruction including "surgery and reconstruction of the other breast to produce a symmetrical appearance." 29 U.S.C. § 1185b. J.L.F. had two reconstructive surgeries after a bilateral mastectomy. After the second procedure, J.L.F. complained that her breasts had an asymmetrical appearance and requested additional surgery. Her doctor recommended against it, concluding that her breasts were "fairly symmetric" with "maybe about half a centimeter difference between the two sides." J.L.F. got a second opinion, which concluded that there was a slight asymmetry. That doctor expressed reservations that he could satisfy J.L.F.'s request to make the breasts absolutely symmetrical. Mercy Healthcare denied coverage and AHCCCS ultimately upheld that decision despite an administrative law judge's (ALJ) recommendation to the contrary.
J.L.F. appealed the superior court's decision upholding the AHCCCS ruling and argued that the court gave undue deference to the Director instead of the ALJ. The Court of Appeals rejected this contention, noting that the Director and the ALJ had the same record before them and that the ultimate decision that is subject to review is the Director's, not the ALJ's. The court further held that sufficient evidence supported the trial court's decision. It reviewed the legislative history of the Act and concluded that the Act "does not [require] the unrestricted provision of coverage for a subjective, autonomous decision by the patient without objective support."
Judge Ehrlich wrote the opinion; Judges Kessler and Hall concurred.
Practice note: J.L.R. argued in her Reply that statements by one of her doctors were hearsay. The court noted that an issue raised for the first time in the reply brief will be disregarded, citing Ariz. R. Civ. App. P. 13(c).
The Women's Health and Cancer Rights Act of 1998 (the "Act") requires group health plans with respect to a mastectomy to provide coverage for breast reconstruction including "surgery and reconstruction of the other breast to produce a symmetrical appearance." 29 U.S.C. § 1185b. J.L.F. had two reconstructive surgeries after a bilateral mastectomy. After the second procedure, J.L.F. complained that her breasts had an asymmetrical appearance and requested additional surgery. Her doctor recommended against it, concluding that her breasts were "fairly symmetric" with "maybe about half a centimeter difference between the two sides." J.L.F. got a second opinion, which concluded that there was a slight asymmetry. That doctor expressed reservations that he could satisfy J.L.F.'s request to make the breasts absolutely symmetrical. Mercy Healthcare denied coverage and AHCCCS ultimately upheld that decision despite an administrative law judge's (ALJ) recommendation to the contrary.
J.L.F. appealed the superior court's decision upholding the AHCCCS ruling and argued that the court gave undue deference to the Director instead of the ALJ. The Court of Appeals rejected this contention, noting that the Director and the ALJ had the same record before them and that the ultimate decision that is subject to review is the Director's, not the ALJ's. The court further held that sufficient evidence supported the trial court's decision. It reviewed the legislative history of the Act and concluded that the Act "does not [require] the unrestricted provision of coverage for a subjective, autonomous decision by the patient without objective support."
Judge Ehrlich wrote the opinion; Judges Kessler and Hall concurred.
Practice note: J.L.R. argued in her Reply that statements by one of her doctors were hearsay. The court noted that an issue raised for the first time in the reply brief will be disregarded, citing Ariz. R. Civ. App. P. 13(c).
Posted by azapp @ Wed, Jun 9, 2004
Tuesday, June 8, 2004
Articles: Discussion of Division One Riepe v. Riepe Opinion; Case Involving Arizona Republic
An article on azcentral.com discusses Division One's opinion in Riepe v. Riepe, in which the majority and dissent address the relationship between issues relating to visitation rights and the question of same-sex marriage. Another article discusses a case before Division One involving the Maricopa County Attorney's request that the Arizona Republic turn over a letter it received from prison hostage-taker Ricky Wassenaar.
An article on azcentral.com discusses Division One's opinion in Riepe v. Riepe, in which the majority and dissent address the relationship between issues relating to visitation rights and the question of same-sex marriage. Another article discusses a case before Division One involving the Maricopa County Attorney's request that the Arizona Republic turn over a letter it received from prison hostage-taker Ricky Wassenaar.
Posted by azapp @ Tue, Jun 8, 2004
Master Financial v. Hillman: Division One holds that service through publication is available to plaintiffs seeking money judgments under Rule 4.1(n).
Master Financial, Inc., (“MFI”), sought recovery of monetary damages from Hillman’s alleged promissory note breach and default. After unsuccessfully attempting to personally serve Hillman at his last known address in Phoenix, Arizona, MFI served him through publication. MFI moved for a default judgment against Hillman once his time for filing a responsive pleading expired. The trial court denied this motion holding that money damages are unavailable in cases where process was served by publication.
Division One of the Court of Appeals granted special action. The court held that Ariz. R. Civ. P. 4.1(n) allows a plaintiff pursuing a money judgment against a defendant (1) whose residence is unknown but whose last known address was within the state, or (2) who has avoided service, to serve the defendant by publication. The former Rule governing service by publication only applied “where by law personal service was not required.” The court explained that this language had been held to prevent service by publication in cases seeking a money judgment. The language was not included in the revised Rule.
The court further held that service by publication is sufficient to satisfy due process when a plaintiff exercises due diligence to personally serve a defendant at his last known Arizona address, and the plaintiff complies with the publication procedures of Rule 4.1(n). The court explained that public policy supported the publication rule, noting that any harsh effects were mitigated because a party against whom a default judgment has been entered may seek relief under Rule 59(j) within one year of the judgment, or Rule 60(c)(4) after one year has lapsed.
Practice Note: MFI originally filed this action as a civil appeal even though an order vacating entry of default is not appealable. However, the court sua sponte designated the case as a special action. The court published this opinion despite never receiving a response brief, apparently departing from its normal publishing practice, because it felt that this issue might never arise where a defendant responds.
Judge Garbarino authored the opinion; Judges Snow and Gemmill concurred.
Master Financial, Inc., (“MFI”), sought recovery of monetary damages from Hillman’s alleged promissory note breach and default. After unsuccessfully attempting to personally serve Hillman at his last known address in Phoenix, Arizona, MFI served him through publication. MFI moved for a default judgment against Hillman once his time for filing a responsive pleading expired. The trial court denied this motion holding that money damages are unavailable in cases where process was served by publication.
Division One of the Court of Appeals granted special action. The court held that Ariz. R. Civ. P. 4.1(n) allows a plaintiff pursuing a money judgment against a defendant (1) whose residence is unknown but whose last known address was within the state, or (2) who has avoided service, to serve the defendant by publication. The former Rule governing service by publication only applied “where by law personal service was not required.” The court explained that this language had been held to prevent service by publication in cases seeking a money judgment. The language was not included in the revised Rule.
The court further held that service by publication is sufficient to satisfy due process when a plaintiff exercises due diligence to personally serve a defendant at his last known Arizona address, and the plaintiff complies with the publication procedures of Rule 4.1(n). The court explained that public policy supported the publication rule, noting that any harsh effects were mitigated because a party against whom a default judgment has been entered may seek relief under Rule 59(j) within one year of the judgment, or Rule 60(c)(4) after one year has lapsed.
Practice Note: MFI originally filed this action as a civil appeal even though an order vacating entry of default is not appealable. However, the court sua sponte designated the case as a special action. The court published this opinion despite never receiving a response brief, apparently departing from its normal publishing practice, because it felt that this issue might never arise where a defendant responds.
Judge Garbarino authored the opinion; Judges Snow and Gemmill concurred.
Posted by azapp @ Tue, Jun 8, 2004
Wednesday, June 2, 2004
Bennett v. Brownlow: Division One Holds That A Yavapai County Ordinance Requiring That Sponsors Of Events On The Yavapai County Courthouse Plaza Be Non-Profit Organizations Violated The First Amendment
For a number of years, Tammie C. Bennett (“Bennett”) organized an arts and crafts show at the Yavapai County Courthouse Plaza known as the Old Town Square Arts & Crafts Festival. The County designated the Festival as a County-reserved activity with certain days reserved for the event each year. In 2000, the County Board of Supervisors approved a new ordinance (the “Ordinance”) requiring commercial events on the Courthouse Plaza to be sponsored by a non-profit organization, which could designate an event coordinator to manage the event. Bennett had previously involved the non-profit Williamson Valley Volunteer Fire Department (“VFD”) as a co-sponsor of the Festival, but after the new requirement was imposed, the VFD applied for its own permit to hold an arts and crafts show on the dates reserved for the Festival. Bennett also submitted an application and listed a new non-profit organization as the event sponsor. The Board, through a representative, eventually awarded the permit to use the Courthouse Plaza on the reserved dates to VFD. Bennett sued, asserting a variety of claims against the County, including that the Ordinance violated the First Amendment of the United States Constitution by limiting event sponsors to non-profit organizations. The trial court entered summary judgment in favor of the County, and Bennett appealed.
The Court of Appeals held that it would apply a First Amendment analysis to Bennett’s claim because the case involved restrictions on access to public space. The Court found that the Courthouse Plaza is a public forum (rather than a limited public forum or non-public forum), and in connection with determining the level of scrutiny to apply, held that the Board’s requirement that the sponsor be a non-profit organization is not a content-based restriction because the Ordinance does not attempt to distinguish between types of organizations or their messages. The Court then explained that a public entity may impose narrow, content-neutral time, place and manner restrictions on public forums only if they serve a significant governmental interest and there remain adequate alternative channels of communication.
The County contended that it had a significant interest in protecting the character of the Courthouse Plaza by limiting the number of large events and ensuring that its property is not used by for-profit businesses to unfairly compete with local merchants. The Court rejected these justifications, noting that the requirement that an event sponsor must be a non-profit organization does nothing to restrict the number of large events, nor protects local merchants from unfair competition because a variety of for-profit merchants who are not “sponsors” participate in the Festival. Although the Ordinance violated the First Amendment, the Court held that Bennett did not have any vested right to be awarded the permit to conduct the Festival. The Court thus remanded for a trial to ascertain whether Bennett was damaged from the Ordinance’s unconstitutionality.
Judge Irvine authored the opinion; Judges Winthrop and Portley concurred.
For a number of years, Tammie C. Bennett (“Bennett”) organized an arts and crafts show at the Yavapai County Courthouse Plaza known as the Old Town Square Arts & Crafts Festival. The County designated the Festival as a County-reserved activity with certain days reserved for the event each year. In 2000, the County Board of Supervisors approved a new ordinance (the “Ordinance”) requiring commercial events on the Courthouse Plaza to be sponsored by a non-profit organization, which could designate an event coordinator to manage the event. Bennett had previously involved the non-profit Williamson Valley Volunteer Fire Department (“VFD”) as a co-sponsor of the Festival, but after the new requirement was imposed, the VFD applied for its own permit to hold an arts and crafts show on the dates reserved for the Festival. Bennett also submitted an application and listed a new non-profit organization as the event sponsor. The Board, through a representative, eventually awarded the permit to use the Courthouse Plaza on the reserved dates to VFD. Bennett sued, asserting a variety of claims against the County, including that the Ordinance violated the First Amendment of the United States Constitution by limiting event sponsors to non-profit organizations. The trial court entered summary judgment in favor of the County, and Bennett appealed.
The Court of Appeals held that it would apply a First Amendment analysis to Bennett’s claim because the case involved restrictions on access to public space. The Court found that the Courthouse Plaza is a public forum (rather than a limited public forum or non-public forum), and in connection with determining the level of scrutiny to apply, held that the Board’s requirement that the sponsor be a non-profit organization is not a content-based restriction because the Ordinance does not attempt to distinguish between types of organizations or their messages. The Court then explained that a public entity may impose narrow, content-neutral time, place and manner restrictions on public forums only if they serve a significant governmental interest and there remain adequate alternative channels of communication.
The County contended that it had a significant interest in protecting the character of the Courthouse Plaza by limiting the number of large events and ensuring that its property is not used by for-profit businesses to unfairly compete with local merchants. The Court rejected these justifications, noting that the requirement that an event sponsor must be a non-profit organization does nothing to restrict the number of large events, nor protects local merchants from unfair competition because a variety of for-profit merchants who are not “sponsors” participate in the Festival. Although the Ordinance violated the First Amendment, the Court held that Bennett did not have any vested right to be awarded the permit to conduct the Festival. The Court thus remanded for a trial to ascertain whether Bennett was damaged from the Ordinance’s unconstitutionality.
Judge Irvine authored the opinion; Judges Winthrop and Portley concurred.
Posted by azapp @ Wed, Jun 2, 2004
