AZAPP Blog

Chalpin v Snyder.  (10/21/2008):  Arizona Court of Appeals Division One Reverses Summary Judgment and Dismissal Against Attorney on Malicious Prosecution and Aiding and Abetting Complaint.

Hi Health Supermarket (the “Company”) and its President and CEO (“Chalpin”), had liability insurance on the company’s vehicles through Reliance Insurance Company.  In 1996, the Company added Chalpin’s daughter Debra and her car to the Company’s policy.  A few years later, Debra was at-fault in an accident where the driver of the other car was left in a vegetative state.  Debra tendered the claim to Reliance, which initially confirmed that the claim was covered. 

At a mediation following its assurance to Debra and Chalpin that the claim was covered, Reliance refused to settle for the $5 million demanded by the injured woman’s family.  Instead, Reliance hired Snyder, a California lawyer, to investigate “with an eye toward disavowing coverage” for the accident.  Snyder wrote a coverage opinion stating that Reliance could not disavow coverage.  He also, however, recommended that Reliance file a suit against Debra and Chalpin, raising defenses to coverage, to pressure them into a settlement.  Reliance then filed the suit urged by Snyder, and named Chalpin and his daughter personally.  Chalpin, the Company, and Debra counterclaimed for declaratory relief confirming coverage.  Reliance lost and the jury awarded nearly $500,000 in attorneys’ fees against it.

Chalpin, having won the first suit, then sued Snyder, the lawyer (Reliance had declared bankruptcy), for abuse of process, malicious prosecution, and aiding and abetting.  The superior court dismissed the aiding and abetting claim for failure to state a claim.  The superior court granted Snyder summary judgment on Chalpin’s remaining claims; Chalpin appealed.

The Arizona appeals court first confirmed that, among five elements in the tort of malicious prosecution, the requirement that the defendant lacked probable cause to institute the underlying action is to be judged objectively.  The Court further explained that the trial court’s ruling on Rule 50 motions in the case brought by Snyder is not dispositive of whether Snyder had probable cause to bring the initial suit.  The superior court, in this case, erred in holding otherwise.

The court went on to discuss, though, whether the record of the underlying litigation otherwise supported the superior court’s ruling here that probable cause existed.  Rejecting Snyder’s argument that probable cause was lacking only if “there was no chance for success,” the Court of Appeals held that probable cause is lacking unless the initiator believes he has a “good chance” of success.  See Bradshaw v. State Farm Mut. Auto Ins. Co., 157 Ariz. 411, 416-17 (1988).

Turning to the aiding and abetting claim, the Court of Appeals, citing the Restatment, rejected the superior court’s conclusion that Arizona law limits actions against lawyers to only two causes of action – abuse of process and malicious prosecution.  The Court of Appeals also rejected Snyder’s claim that the Constitution and the Noerr-Pennington doctrine barred an aiding and abetting claim against him.

The Court of Appeals reversed the grant of summary judgment and the grant of the motion to dismiss and remanded the case to superior court.  Judge Irvine wrote the opinion in which Judges Thompson and Winthrop concurred.

Prince & Princess Enter., LLC v. State ( 9/30/2008): Arizona Court of Appeals Division One Holds that a Business that Meets the Definition of a “Retail Tobacco Store” Under A.R.S. § 36-601.01 Is Excepted from the Smoke-Free Arizona Act, Even if the Business Also Holds a Liquor License and Sells Alcohol on the Premises. 

Prince and Princess Enterprises, LLC owns Magnum’s Cigar, Wine & Liquor Emporium, which sells both tobacco and alcohol for consumption on and off its premises.  The Smoke-Free Arizona Act bans smoking “in all public places and places of employment within the state of Arizona.”  A.R.S. 36-601.01.  The Act excepts from its broad ban “retail tobacco stores.”  See A.R.S. § 36-601.01(A)(10), (B)(3).  Magnum’s sought declaratory and injunctive relief against the Arizona Department of Health Services to prevent enforcement of the Act on the ground that Magnum’s qualified as an exempt “retail tobacco store.”  The trial court denied relief, ruling that Magnum’s was a “liquor bar” not a retail tobacco store.  Magnum’s appealed.     

The Arizona Appeals Court reversed and remanded for further proceedings.  The Court concluded that in order for a business to qualify for the retail tobacco store exception to the smoking ban, it “must: (1) be a retail store that derives the majority of its sales from tobacco products and accessories, and (2) be physically separated so that smoke does not infiltrate into areas where smoking is prohibited.”  See A.R.S. § 36-601.01(A)(10), (B)(3).  As Magnum’s complaint alleged that it satisfied both of the preceding elements, Magnum’s seemingly qualified for the exception.  The court found nothing in the plain language of the Act militating in favor of the state’s argument that even though a business falls within the retail tobacco store exception, its simultaneous status as a bar somehow renders the exception inapplicable. 

Judge Barker filed a special concurrence in which he agreed with the majority’s result, but not all of its reasoning.  In particular, Judge Barker concluded that the majority’s two-part test omitted a crucial element that must be examined on remand: Whether the establishment comports with the common understanding of a “retail store.”  The operable test should be whether the “principal or primary use” of the premises is as a “retail store,” not a bar or other establishment.               

Judge Gemmill authored the opinion; Judge Brown concurred.  Judge Barker specially concurred. 

Vasquez v. State (9/29/2008):  Arizona Court of Appeals Division Two Holds That:  (1) a Notice of Claim for Wrongful Death Is Sufficient if It Sets Forth Any Facts Supporting the Amount Demanded; and (2) Government Entities Do Not Have a Duty to Identify Individuals Killed During High-Speed Pursuits.     

In November 2004, a suspect was killed during a high-speed pursuit involving State and Cochise County officers.  The officers were unable to identify the suspect and after an autopsy, the body was buried at county expense.  Two months later, the suspect was identified as 15 year-old Angel Romo.  Romo’s mother, Plaintiff Gloria Vasquez, subsequently brought a wrongful death suit against the State and Department of Public Safety (“State”), as well as separate claims against the State and Cochise County (“County”) for wrongful handling of a dead body and negligent infliction of emotional distress.  Before suing, she filed a notice of claim with the State for wrongful death in which she demanded $750,000, supporting that amount only with the fact that Romo was her “15-year old son.”  The County moved for summary judgment arguing that it had no duty to identify Romo or to notify Vasquez of his death.  The State joined the motion, and additionally moved to dismiss based on Vasquez’s failure to strictly comply with the notice of claim statute, A.R.S. § 12-821.01.  The trial court granted both motions, and Vasquez appealed. 

The Arizona Appeals Court affirmed in part and reversed in part.  The Court first addressed whether Vasquez’s notice of claim contained “facts supporting” the amount she demanded, as required under A.R.S. § 12-821.01(A).  Citing Backus v. State, 534 Ariz. Adv. Rep. 26 (Ct. App. July 17, 2008) and Yollin v. City of Glendale, 536 Ariz. Adv. Rep. 20 (Ct. App. Aug. 5, 2008), the Court explained that a notice of claim for wrongful death is sufficient if it provides any facts, no matter how meager, to support the amount claimed.  Applying that standard, and noting that it is appropriate to consider the type of action when determining what facts must be provided, the Court held that the fact that Romo was Vasquez’s son and died prematurely was sufficient to satisfy the notice of claim statute.  The Court therefore reversed on the wrongful death claim.    

The Court then held that the State and County’s did not have a duty to identify Romo or notify Vasquez of his death.  The Court first rejected Vasquez’s argument that such a duty arises from A.R.S. § 28-624(D), which imposes on drivers of emergency vehicles a “duty to drive with due regard for the safety of all persons,” because that statute does not impose any duty related to post-pursuit identification of a suspect or notification of family members.  The Court next rejected the argument, based on Restatement (Second) of Torts § 314A(4), that a duty arose as a result of the “apprehension” of Romo.  No special relationship, and thus no duty, arose because Romo died before being apprehended or taken into custody, and nothing in § 314A(4) suggests that a special relationship is created when custody is taken of a dead body.  Next, the Court rejected the argument that a special relationship, and therefore a duty, arose by virtue of the State and County’s investigation following Romo’s death.  Citing Morton v. Maricopa County, 177 Ariz. 147, 865 P.2d 808 (App. 1993), the Court held that a special relationship does not arise merely when an investigation is undertaken.  Finally, the Court rejected Vasquez’s argument that her claims were independently actionable under Restatement § 868, which prohibits the improper treatment of bodies.  Regardless of the theory of her claims, Vasquez failed to demonstrate that the State or County had a duty to identify Romo’s body.  Moreover, the County acted properly in disposing of Romo’s body under A.R.S. § 11-600(A), which applies to unidentified bodies.  The Court therefore upheld the trial court’s grant of summary judgment on the wrongful handling of a dead body and negligent infliction of emotional distress claims.

Judge Eckerstrom concurred in part and dissented in part.  He disagreed with the majority’s holding that the State and County had no duty to identify Romo, and argued that such a duty existed by virtue of the State and County’s conduct in pursuing Romo, taking sole responsibility and custody of his body, and undertaking some effort to identify his body.

Chief Judge Pelander authored the opinion; Judge Vasquez concurred; Judge Eckerstrom concurred in part and dissented in part.