AZAPP Blog

Progressive Classic Ins. Co. v. Blaud: Division One Holds That Plaintiff’s Claim Complies With Arizona’s Uninsured Motorist Act, A.R.S. § 20-259.01(M), By Alleging That He Collided With A Tire From An Unidentified Vehicle On An Interstate Freeway, But The Superior Court Erred By Ruling That, As A Matter Of Law, Plaintiff’s Uninsured Motorist Policy Covered His Claim.

While driving his motorcycle on Interstate 10 in Phoenix, Peter Blaud collided with a piece of tire from an unknown vehicle. The collision caused him to lose control of his motorcycle, resulting in an injury to his shoulder. He claimed that the piece of tire was airborne when it hit him. Blaud filed a claim with his uninsured motorist insurer, Progressive. Progressive insisted that Blaud merely ran into a piece of tire that had been resting on the freeway for an unknown period of time. Progressive denied his claim and filed a declaratory judgment action in superior court to obtain a judgment that Blaud’s uninsured motorist policy did not cover the collision with the tire. Blaud counterclaimed that the policy did cover the claim and moved for summary judgment.

The superior court granted Blaud’s motion for summary judgment. It concluded that Blaud’s claim complied with Arizona’s Uninsured Motorist Act, A.R.S. § 20-259.01(M), which precluded uninsured motorist claims unless the insured showed that the unidentified vehicle made “physical contact” with the insured’s vehicle or the insured submitted corroboration that the unidentified vehicle caused the collision. See Scruggs v. State Farm Mut. Auto. Ins. Co., 204 Ariz. 244, 245, 62 P.3d 989, 990 (Ct. App. 2003). It also concluded that the policy’s terms covered Blaud’s collision because his “injuries arose ‘out of the ownership, maintenance or use’ of an unidentified motor vehicle.”

The Arizona Court of Appeals affirmed in part and reversed in part. It agreed with the superior court that Blaud’s claim complied with A.R.S. § 20-259.01(M). Blaud’s scenario—that the tire was expelled from another vehicle and hit him midair—would meet the “physical contact” requirement. See Anderson v. State Farm Mut. Auto. Ins. Co., 133 Ariz. 464, 467, 652 P.2d 537, 540 (1982) (noting that it may constitute “physical contact” if an unidentified motor vehicle collides with an intermediate object, causing the object to make physical contact with the insured’s vehicle). Even if Progressive correctly argued that the tire had been resting on the interstate, the scenario permitted an inference that the tire had come from the operation of an unidentified motor vehicle. The tire was an “integral part” of the motor vehicle; it was not, for example, a “‘bale of wire that had fallen from an unidentified flat bed truck.’” See Gardner v. Aetna Cas. & Sur. Co., 114 Ariz. 123, 559 P.2d 679 (Ct. App. 1976). Therefore, the physical contact requirement was met.

The court further concluded that, even if there was no physical contact, Blaud had submitted independent corroboration that an unidentified motorist caused his injuries. See A.R.S. § 20-259.01(M). Blaud presented expert testimony that a piece of airborne tire collided with Blaud’s motorcycle. Furthermore, a fact witness saw Blaud collide with a piece of tire on an interstate freeway. From this corroboration, it could have been concluded that an unidentified motorist caused Blaud’s injuries.

The court reversed the superior court’s summary judgment that, as a matter of law, the collision fell within the terms of Blaud’s insurance policy. To the contrary, a fact finder could have concluded that, for example, the tire fell from the back of a garbage truck. The court noted that compliance with A.R.S. § 20-259.01(M) merely allows the claim; it “does not establish coverage under the policy.”

Judge Snow authored the unanimous opinion.

Carlisle v. Petrosky: Division One Holds That a Party Who Appeals a Compulsory Arbitration Award For Trial De Novo in Superior Court May Dismiss Appeal Where Other Party Did Not Appeal Arbitration Award and Was Not Prejudiced

Plaintiff sued for damages from a car accident and entered compulsory arbitration with the Defendants. The arbitrator awarded damages to the Plaintiff. The Plaintiff appealed the arbitration award for a trial de novo in Superior Court; the Defendant did not. Two weeks later, the Plaintiff filed a notice of dismissal of her appeal from the arbitration award. The Defendants moved to strike the notice. The Superior Court, however, dismissed the appeal, and the Defendants appealed that dismissal to the Court of Appeals, claiming a right to a trial de novo in Superior Court.

No rule or decision controlled whether to allow the dismissal. The Court of Appeals majority held that the Superior Court had the inherent authority to dismiss the appeal because the Defendants did not rely to their detriment on the Plaintiff’s filing of her appeal. Having failed to appeal the arbitration award, the Defendants were not entitled to insist on proceeding to a trial de novo. The dissent, on the other hand, stated that the trial court should not be allowed to dismiss the trial de novo without consent from the other party. The dissent reasoned that the majority opinion created a risk for parties relying on an opposing party’s appeal from the arbitration award to secure their right to proceed to a trial de novo—a right that would then be lost if the appealing party unilaterally dismissed the appeal of the arbitration award.

Judge Ehrlich wrote the opinion for the panel and was joined by Judge Timmer. Judge Orozco wrote the dissent.

Article: United States Supreme Court Votes to Allow Citation to Unpublished Opinions in Federal Courts.

State v. Schneider/Hanna Division One, on Special Action Review, Affirms the Trial Court’s Finding That Grand Jury Must Redetermine Probable Cause In Case Against City Council Members and City Clerk Because Former City Attorney Had Disclosed Attorney-Client Privileged Communications in His Grand Jury Testimony About His Communications with These City Officials

Glendale City Attorney Richard Flaaen resigned his position after being informed that he would likely be terminated if he did not resign because an investigation apparently disclosed he had misused his City computer and internet access. After resigning, Flaaen initiated contact with the Maricopa County Attorney’s office. He alleged that four city council members and the city clerk had committed criminal acts related to their filing of 2002 financial disclosures, including backdating the disclosures. He appeared before the grand jury and testified to the content of communications he had shared with the city officials, while employed as the city attorney, in both private communications and executive sessions of the Glendale City Council. The grand jury indicted the four council members for presentment of false instruments, and indicted the city clerk on counts of tampering with public records and destroying public records.

The council members and city clerk filed a motion to remand to the grand jury, asserting, among other objections, that Flaaen’s testimony before the grand jury disclosed communications protected by the attorney-client privilege and therefore a redetermination of probable cause was necessary. The trial court agreed and remanded to the grand jury. The State brought a special action, and Division One accepted jurisdiction.

Division One affirmed the trial court’s determination, describing Arizona’s “functional approach” to determine whether the privilege exists, which focuses on “the relationship between the communicator and the need for legal services,” as well as whether the communication “concerns the employee’s own conduct within the scope of his or her employment and is made to assist the lawyer in assessing or responding to the legal consequences of that conduct.” Samaritan v. Goodfarb, 176 Ariz. 497, 862 P.2d 870 (1993). In determining Flaaen’s communications with the city officials were privileged, the court considered not only this common law definition of the privilege but also: (1) a Glendale ordinance requiring the city attorney to be “the chief legal adviser of all officers, departments, and agencies and of all officers and employees in matters relating to their official powers and duties, and (2) A.R.S. § 13-4062(2), specifying that “a person shall not be examined as a witness in the following cases . . . an attorney, without consent of the attorney’s client, as to any communication made by the client to the attorney, or the attorney’s advice given in the course of professional employment.”

The court rejected the State’s argument that the attorney-client privilege does not apply to any communications between a government official and a government attorney in a grand jury proceedings against the government official. The court reasoned that Flaaen’s communications fell within Samaritan’s definition of privilege as well as within the plain meaning of Section 13-4062, which does not purport to exclude communications made to government attorneys that would otherwise fit within the privilege. Although the State had cited two federal appellate decisions finding such an exception, the court was more persuaded by the competing policies articulated in a Second Circuit case holding otherwise. In re Grand Jury Investigation United States v. Doe, 399 F.3d 527, 534 (2d Cir. 2005). In that case, the Second Circuit explicitly rejected the approach adopted by other circuits, observing that government representatives need recourse to attorneys with whom they may have confidence in order to promote the full disclosure necessary to obtain accurate legal advice that leads to good government. A government entity is no less in need of informed legal advice than its private counterpart, and the privilege is intended to encourage the client in need of such advice to tell the lawyer the truth.

The court also rejected the State’s argument that even if the privilege does extend to communications between government officials an their government lawyers, Flaeen’s testimony did not disclose privileged information because it did not meet the other requirements of Samaritan; in particular, the communications at issue were not made for the purpose of seeking legal advice or were not treated as confidential. The court disagreed, noting that the existence of the attorney-client privilege is evaluated from the perspective of the communicant. In this case, the city officials were discussing the circumstances surrounding, and ramifications of, backdating the financial disclosures. These discussions were held either one-on-one with Flaaen, or with Flaaen along with other city officials in executive sessions. The court found the former to be “at the core of those covered by the attorney-client privilege” and the latter to be confidential because the statutes governing executive sessions specify that the disclosure of information during such a session does not constitute “a waiver of any privilege, including the attorney-client privilege.” A.R.S. § 38-431.03(F).

Judge Snow authored the opinion; Judge Ehrlich and Judge Gemmill concurred.

Sobol v. Marsh: Division One Holds that Complaints to the Board of Legal Document Preparers are Absolutely Privileged.

In 2004, shortly after Jerry Marsh petitioned for divorce, he was contacted by Allan Sobol. Mr. Sobol offered to assist Marsh and his wife amicably settle their divorce. Unbeknownst to Marsh, Sobol had already been in contact with his wife, and had prepared his wife's response to his petition for dissolution. Marsh filed a complaint against Sobol with the Better Business Bureau and the board of Legal Document Preparers, alleging that Mr. Sobol had acted unethically in failing to disclose his conflict. Sobol then filed a complaint in superior court, alleging that Marsh's statements to the Board and the Bureau were false and defamatory. Marsh's motion to dismiss the complaint, which claimed immunity, was granted.

The Court of Appeals held that a complaint concerning the conduct of a legal document preparer is absolutely privileged. The Court found that the analysis and legal principles in cases like Drummond v. Stahl, 127 Ariz. 122, 618 P.2d 616 (App. 1980) and Ashton-Blair v. Merrill, 187 Ariz. 315, 928 P.2d 1244 (App. 1997), which established an absolute privilege for a person who files a complaint with the State Bar regarding attorney conduct, applied to complaints to the Board of Legal Document Preparers. Such a privilege "promotes public policy encouraging people to report ethical violations, and furthers [a complainant's] interest to freely and truthfully inform the Board" regarding alleged unethical conduct.

Judge Kessler authored the opinion in which Presiding Judge Barker and Judge Sult concurred.

Callan v. Hon. Deborah Bernini: Division Two Holds that Peace Officers Collaborating Pursuant to Intergovernmental Agreement are Co-Employees for Purposes of Workers’ Compensation Principles

Luis Pimber, an undercover narcotics officer, received workers’ compensation benefits after being injured on the job by a Tucson police officer in the course of a joint operation. He sued the officer for willful misconduct and sued the Tucson Police Department and its supervisor employees for negligence. The defendants moved for summary judgment, arguing that workers’ compensation benefits were Pimber’s sole remedy. The trial judge disagreed, granting partial summary judgment to Pimber. Relying on A.R.S. § 23-1022(D) and an intergovernmental agreement (IGA) between the City of Tucson and Pimber’s employer, the defendants petitioned for special action relief. The Court of Appeals accepted special action jurisdiction, noting that the question presented was a pure issue of law, the error made by the trial court was “patent,” acceptance of the petition and the granting of relief could prevent a needless trial, and the petition presented an issue of first impression. The Court noted that under Section 23-1022(A), an injured employee’s right to workers’ compensation benefits “is the exclusive remedy against the employer or any co-employee acting in the scope of his employment.” Acceptance of workers’ compensation benefits waives the right to file a lawsuit in connection with the same injury, and prevents the superior court from accepting jurisdiction over any such action. On the other hand, A.R.S. § 23-1023(A) provides that an employee entitled to compensation may sue when injured by another who is “not in the same employ.” And under Section 23-1022(D), an employee of a public agency who works under or within the jurisdiction of another public agency pursuant to an intergovernmental agreement is deemed to be an employee of both agencies. The relevant IGA contained a similar provision, and cited Section 23-1022(D). The Court found that the language of the statute and the IGA unambiguously provided that Pimber and the individual defendant were co-employees. The Court also noted that this interpretation was consistent with the statute’s history, insofar as the statute had been enacted in response to a Court of Appeals decision permitting an injured officer to sue for injuries caused by another officer engaged in a joint operation – a decision that plunged the defendant officer’s employer into “dire financial straits.” The Court rejected the trial judge’s finding that Pimber’s claim should be permitted to proceed nevertheless, because his employer failed to post a statutorily-required notice alerting employees to the fact that they may be deemed to be employees of multiple public agencies when an IGA is in effect. Stressing the plain language of the IGA, the Court also rejected the trial judge’s conclusion that, in light of the “totality of the circumstances,” Pimber and the defendant officer were not co-employees at the time of the injury.

The decision was authored by Judge Espinosa and joined by Judge Pelander and retired Judge Druke, sitting by designation.