AZAPP Blog

After a night of drinking, three co-workers became involved in a drag race.  Defendants Glasner and Cook each drove, while Plaintiff Mein was a passenger in Cook’s vehicle.  The vehicles weaved in and out of traffic at nearly 80 m.p.h. until Cook lost control of his vehicle and crashed, severely injuring Plaintiff.  Plaintiff brought suit for negligence against Defendants, claiming the men were jointly liable under A.R.S. § 12-2506(D)(1) because they were “acting in concert.”  Plaintiff moved for summary judgment on the issue of joint liability and Defendant Glassner filed a cross motion for summary judgment regarding the same issue.   The trial court granted summary judgment for the Defendants, finding the drivers were not acting in concert within the meaning of A.R.S. § 12-2506(D)(1) because they did not commit an intentional tort.  Following a trial on the remaining issues, the jury awarded Plaintiff $3,500,000 and apportioned 70% of the fault to Cook, 5% to Glassner, and 25% to Plaintiff.   Plaintiff appealed.

The Arizona Appeals Court affirmed the trial court’s entry of summary judgment for the Defendants, holding that because Defendants’ drag racing did not constitute an intentional tort, they were not acting in concert within the meaning of A.R.S. § 12-2506(D)(1) and therefore could not be held jointly liable for Plaintiff’s injuries.  Pursuant to A.R.S. § 12-2506(F)(1), “acting in concert” requires a conscious agreement to commit an intentional tort.  An act will only qualify as an intentional tort if the actor desired to cause the consequences that resulted, or was substantially certain that they would result from his or her actions.  

 Accordingly, the Court reasoned, because Plaintiff did not show that Glassner and Cook consciously agreed to commit an intentional tort or that they were substantially certain that serious injury would result from their action, they did not commit an intentional tort.  The Court acknowledged that drag racing after a night of drinking could “constitute gross negligence, recklessness, or even wanton misconduct,” but explained that it did not rise to the level of an intentional tort.

Turing to Plaintiff’s second argument, that the trial court abused its discretion by denying Plaintiff’s motion to amend its complaint to allege Glassner’s vicarious liability for Cook’s negligence based on aiding and abetting, joint venture and civil conspiracy, the Court addressed the issue in a separate memorandum decision where it held that no abuse of discretion occurred.                 

 Judge Gemmill authored the opinion, Judges Brown and Orozco concurred.  

Posted by azapp @ Tue, Apr 29, 2008

Lee v. State (4/25/2008):  Arizona Supreme Court Holds That the Mail Delivery Rule Applies to the Filing of Notices of Claim Under A.R.S. § 12-821.01.     

Plaintiff James Lee’s car crashed through a highway guardrail.  Mr. Lee filed claims against the State alleging negligent design, construction, and maintenance of the roadway and guardrail.  The State moved to dismiss the complaint, claiming it never received a notice of claim as required by A.R.S. § 12-821.01.  Mr. Lee responded by submitting a “proof of service” showing that a notice of claim had been sent to the attorney general via regular United States mail more than a week before the statutory deadline.  The Superior court granted the motion to dismiss and the Court of Appeals affirmed, reasoning that Mr. Lee was required to show that the notice actually arrived at the attorney general’s office and could not rely on the common law rule that a letter properly mailed is presumed to reach its destination.

 In a 3-2 decision, the Arizona Supreme Court vacated the Court of Appeals opinion and reversed the trial court’s judgment, holding that the “mail delivery rule” applies to the filing of notices of claim.  The majority explained that “proof of the fact of mailing will, absent any contrary evidence, establish that delivery occurred.”  If the addressee denies receipt, the presumption disappears and an issue of fact is created, but the fact of mailing retains evidentiary force.  The majority cited Andrews v. Blake, 205 Ariz. 236, 69 P.3d 7 (2003), to explain that even when a statute, rule, or private contract requires actual receipt by the addressee, the mail delivery rule applies.  The majority also explained that the Legislature could have specified the type of delivery required under the statute, but did not. 

The majority rejected the dissent’s argument that the Arizona Rules of Civil Procedure preclude Mr. Lee from relying on proof mailing, noting that that Rules do not specify how filing must occur.  The majority also rejected the dissent’s argument that the requirements for filing notices of claim are the same as filings with a court, noting the distinction between a court clerk and parties to litigation.  Finally, the majority rejected the State’s policy argument that the purpose of the statute is best served if the burden to ensure actual receipt is placed on the claimant.

The dissent disagreed with the application of the mailbox rule to the filing of notices of claim in Arizona.  The dissent interpreted the filing requirement in A.R.S. § 12-821.01 to be analogous to the formal requirements of filing documents with a court.  The dissent also found the application of the mailbox rule antithetical to the purpose of the statute.  Finally, the dissent pointed to decisions from other jurisdictions at odds with the majority’s holding.   

Justice Bales authored the majority opinion.  Chief Justice McGregor authored the dissenting opinion, with Vice Chief Justice Berch concurring.

PRACTICE NOTE:  Citing Ariz. R. Civ. P. 12(b), the Court treated the State’s motion to dismiss as one for summary judgment because the parties presented material outside the pleadings.  The Court found that a reasonable factfinder could reject the State’s claim that it never received Mr. Lee’s notice of claim because Mr. Lee’s proof of mailing created a material issue of fact.  Therefore, the Court remanded the case to the trial court.

Posted by azapp @ Tue, Apr 29, 2008

City of Phoenix v. Fields (4/22/2008):  Arizona Court of Appeals Division One Holds that a Notice of Claim Setting Forth a Specific Amount for Which a Claim Can Be Settled Must Precede Any Legal Claim Against a Public Entity, Including Class Actions.

In April 2002, as representatives of a class, several individuals submitted a notice of claim to the City of Phoenix, alleging that the City failed to permit claimants, as City employees of the Head Start program, to receive the same benefits the City provides to all other City employees.  The notice of claim, however, failed to fix a specific amount for which the claimants’ claims could be settled.  After the City failed to act on the notice of claim (and it was therefore deemed denied), the claimants filed a class-action complaint against the City, seeking declaratory and monetary relief.  More than four years into the litigation, the Arizona Supreme Court held that a notice of claim not containing a specific amount for which the claim could be settled does not meet the requirements of A.R.S. § 12-821.01(A) and must be dismissed if the sixty-day notice of claim period has lapsed.  Deer Valley Unified Sch. Dist. No. 97 v. Houser, 214 Ariz. 293, 296-97, 152 P.3d 490, 493-94 (2007).  Shortly thereafter, the City filed a motion to dismiss based on the fact that the claimants had failed to set forth a specific settlement amount in their notice of claim.  The trial court denied the motion on the ground that class action claims need not set forth a specific settlement amount and the City sought special action relief. 

The Arizona Appeals Court accepted jurisdiction and held that class action claims, like individual claims, cannot be maintained unless the claimants first submit a notice of claim containing a specific settlement amount.  The plain language of A.R.S. § 12-821.01(A) dictates this result because the statute applies without exception to all “[p]ersons who have claims against a public entity.”  The Court explained that even assuming that requiring class-action claimants to include a specific settlement amount would render class actions against public entities impossible, there is no constitutional right to file a class action.  The Court also believed that class actions against public entities will remain viable because all that is required is the inclusion of an amount at which the claimants would be willing to settle their claims, not an amount at which settlement is guaranteed. 

Judge Hall authored the opinion, joined by Judges Brown and Barker.       

Posted by azapp @ Tue, Apr 29, 2008

Northeast Phoenix Holdings, Inc. v. Winkleman. (4/22/2008):  Arizona Court of Appeals Division One Reaffirms State Land Commissioner’s Appraisal Powers and Upholds Commissioner’s Appraisal Method In Connection with .

Northeast Phoenix Holdings, Inc. (“NPH”) petitioned for special action relief from State Land Commissioner Mark Winkelman’s denial of its protest of a proposed auction of state trust lands (the “Auction”). The Court of Appeals exercised mandatory jurisdiction over the special action under A.R.S. § 37-301(C).

In 2007, Jaren Associates #4 (“Jaren”) applied to the State Land Department (“ASLD”) for a 99-year lease of Parcel 3A, a previously undeveloped 112-acre tract of State land in Northeast Phoenix.  Also included in the leasehold to be auctioned were an additional 128 acres of rights-of-way (“ROWs”).  As required by statute, ASLD made preparations, including an independent appraisal of the Parcel, to auction the leasehold.  The appraisal valued the Parcel, including the appurtenant ROWs, at $29 to $32 million.  ASLD’s appraisal manager reviewed the appraisal report and recommended accepting it as written.  Also in preparation for the auction, delegates of the Commissioner prepared a “commercial recommendation sheet,” to submit to the Board of Appeals that valued the Parcel and ROWs at $32 million.

NPH filed a protest of the Auction under A.R.S. § 37-301, alleging that ASLD had failed to appraise the ROWs as required by statute, Arizona’s Constitution and the Arizona-New Mexico Enabling Act.  In the alternative, NPH claimed that ASLD had not obtained an independent appraisal of the ROWs and that ASLD, by appraising the ROWs together with the 112-acres, had improperly given the ROWs a “zero value.”  The Commissioner denied the protest and NPH’s request for a hearing.  NPH then petitioned for special action and Jaren intervened.

Addressing NPH’s claim that the Commissioner had failed to appraise the ROW’s, the Arizona Appeals Court noted that although the Arizona-New Mexico Enabling Act requires that trust lands be appraised prior to auction, it does not mandate any specific appraisal procedures.  Relying on Campana v. Ariz. State Land Dept., 176 Ariz. 288, 292, 860 P.2d 1341, 1345 (App. 1993), which had recognized that the Commissioner “has both the power and the duty to appraise,” the Court held that the Commissioner’s appraisal on the commercial recommendation sheet satisfied the Enabling Act’s appraisal requirement.

Turning to NPH’s claim that the appraisal did not represent the “true value” of the Parcel and ROWs, the Court explained that the appraisal method used by ASLD, (whereby the ROWs and Parcel were valued together) recognized true value, and thus did not violate the Enabling Act’s requirements.  NPH did not suggest that the methodology used would harm the trust or that the Parcel, together with the ROWs, was actually worth more than the $32 million for which the Commissioner appraised it.

Finally, the Court rejected NPH’s argument that the Commissioner had abused his discretion in denying a hearing on the protest because nothing in the statute requires such a hearing, and he did not abuse his discretion here in denying one in this case.

Judge Brown authored the decision in which Judges Kessler and Portley joined.

Posted by azapp @ Fri, Apr 25, 2008

Warne Investments, Ltd. v. Higgins (4/15/2008):  Arizona Court of Appeals Division One Holds that Corporate Principal is Not Personally Liable For Aiding And Abetting Fraudulent Transfer from Defendant Corporation

Plaintiff held judgments resulting from a contract action against Bridge IT, Inc. ("IT"), a computer services company owned and operated by Defendant ("Higgins").  When Plaintiff garnished a bank account of IT to collect on the judgments, Higgins stopped operations as IT and opened a similar business under a new name, Bridge Info Tech, Inc. ("Info Tech").  Plaintiff then brought suit against Info Tech, Higgins and her spouse, seeking to enforce the judgments against Higgins and her new company under theories of successor corporate liability, breach of the of Uniform Fraudulent Transfer Act ("UFTA"), and the corporate trust fund doctrine. 

The trial court denied Defendants' motion for summary judgment.  The jury returned verdicts against Higgins under the trust fund doctrine and against Info Tech for the UFTA and successor liability claims.  After further briefing, the trial court ruled as a matter of law that Higgins also was personally liable under the theories of fraudulent transfer and successor corporate liability.  Defendants appealed.

The Court of Appeals upheld the imposition of successor corporate liability against Info Tech on the grounds that it was a "mere continuation" of IT.  A corporation is a “mere continuation”—and thus liable for the debts – of a predecessor corporation if there is (1) a “substantial similarity in the ownership and control of the two corporations” and (2) “insufficient consideration running from the new company to the old” for assets transferred to the new company.  The failure to provide any payment in exchange for the transfer of intangible assets (such as corporate goodwill) to the new company satisfied the second prong of the “mere continuation” test, even though Plaintiff failed to prove the value of the transferred, intangible assets.

Regarding Higgins’ personal liability, the appeals court affirmed the imposition of liability under the trust fund doctrine.  The doctrine requires proof that (1) corporate assets were transferred to the defendant; (2) at a time when the corporation was insolvent; and (3) the transfers preferred defendant to the disadvantage of other creditors of the same priority.  Liability is limited to the value of assets received.  The jury permissibly concluded that IT was insolvent from the time of the initial jury verdict against it in the contract action, despite that the final judgment had not been entered yet.

The trial court erred, however, in findings Higgins personally liable under a theory of successor corporate liability and under the UFTA.  Answering a question of first impression in Arizona, the appeals court concluded that UFTA does not provide for personal “aiding-abetting” liability for corporate officers or directors for their role in personally facilitating a fraudulent transfer.  Turning to the successor liability theory, the court found insufficient evidence that Higgins’ actions actually hindered Plaintiff’s collection efforts against IT, because Plaintiff did not show the value of intangible assets transferred to Info Tech.  The court therefore declined to resolve whether the doctrine imposing personal liability for certain corporate torts applies to a fraudulent transfer subject to the UFTA.

Judge Irvine authored the opinion for the panel; Judges Portley and Kessler concurred.

Posted by azapp @ Tue, Apr 22, 2008

The Arizona Supreme Court issued its minutes and granted review in 4 cases:

1. M CULLEN/J CORONADO v KOTY-LEAVITT INS et al

2. THE LOFTS AT FILLMORE v RELIANCE COMMERCIAL

3. STATE v HUBERT AUGUST STUMMER/DENNIS ALLEN LUMM

4. STEVEN H./TAMMY H. v ADES/MATTHEW H./SAVANNAH H.

Posted by azapp @ Tue, Apr 22, 2008

A recent article in the Arizona Business Gazette discusses the Arizona Court of Appeals decision that Billboard companies are not entitled to keep illegally constructed signs up just because city officials did not discover them promptly.

Posted by azapp @ Wed, Apr 16, 2008

The Arizona Department of Revenue v. Action Marine, Inc. (4/9/2008):  Arizona Supreme Court Holds That Corporate Officers Can be Held Personally Liable for Failure to Remit Additional Charges Made to Cover Transaction Privilege Tax Under A.R.S. § 42-5028.

The trial court held that the Randalls, corporate officers of Action Marine, Inc., were personally liable for unpaid transaction privilege taxes under A.R.S. § 42-5028.  The Court of Appeals reversed, holding corporate officers could not be personally liable because they do not fall within the scope of the statute.  The Supreme Court of Arizona granted the Arizona Department of Revenue’s petition for review.  In a 3-2 decision, the Supreme Court agreed with the trial court that § 42-5028 provides for the personal liability of corporate officers and directors.

Under § 42-5028, “[a] person who fails to remit any additional charge made to cover the [TPT] or truthfully account for and pay over any such amount is, in addition to other penalties provided by law, personally liable for the total amount of the additional charge so made and not accounted for or paid over.”  (Emphases added.)  The parties’ dispute turned on the meanings of “person” and “additional charge” under the statute.  The Randalls argued that only the tax-paying entity, not corporate officers qualify as “persons” under § 42-5028.  The Supreme Court disagreed, reasoning that the statutory definition of “person,” which included “an individual” or a “corporation,” was broad enough to include corporate officers.  The legislature has also expressly restricted tax liability to the tax-paying entity on other occasions, suggesting they did not intend to do so here.  Action Marine’s interpretation of § 42-5028 also rendered the statute duplicative, because the tax-paying entity is already liable for unpaid transaction privilege taxes under §§ 42-5002(A) and 42-5024.  In addition, § 43-435, enacted in the same bill as § 42-5028, creates liability for persons other than the tax-paying entity, suggesting the legislature intended § 42-5028 to operate similarly.  The Supreme Court also reasoned that allowing corporate officers to be liable for the transaction privilege tax would deter them from abusing the tax process for their personal gain.  Finally, the Supreme Court noted that a supermajority of other states with a transaction privilege tax (or similar tax) statutorily impose personal liability on corporate officers.

As for the meaning of “additional charges,” the Randalls argued that they were required to remit only included charges collected that exceeded their total tax obligation.  The Supreme Court disagreed, holding that, under § 42-5028’s language, the additional charges include any charge “made to cover the tax.”  The Supreme Court reasoned this interpretation prevented corporations from adding extra profit to their sales “under the guise of a compulsory tax.”

The Supreme Court vacated the decision of the Court of Appeals and remanded the case to the trial court.

The dissent recognized the majority’s interpretation of § 42-5028 as plausible, but agreed with the Court of Appeals.  The dissent relied on A.R.S. § 42-5002(A)(1), which creates the duty to remit additional charges only on those that “impose” the charges.  Because only the corporate entity can impose the additional charge, the dissent argued that only the entity can be liable.

Vice Chief Justice Berch authored the majority opinion, with Chief Justice McGregor and Justice Ryan concurring.  Justice Hurwitz authored the dissent, with Justice Bales concurring.

Posted by azapp @ Tue, Apr 15, 2008

City of Tucson v. Clear Channel Outdoor, Inc. ( 4/2/2008):  Arizona Court of Appeals Division Two Exercises Both Special Action and Appellate Jurisdiction to Resolve Zoning and Use Issues for Billboards in Tuscon.

The City of Tucson and Clear Channel Outdoor, Inc. (“CCO”) appealed and cross-appealed from a judgment of the superior court resolving the City’s complaints regarding 10 billboards owned by CCO.  The superior court had ordered trials on these 10 billboards, selected as representative of problems raised by over 100 other CCO billboards, to provide the parties a roadmap from which to reach a settlement about the remaining billboards.

Division Two first agreed to address a statute of limitations question not presented by the judgment below but raised by the parties because it pertained to many other disputed billboards.  The Arizona appeals court agreed to reach this issue through its special action jurisdiction.  CCO argued that A.R.S. § 9-462.02(C) imposed a two year limitations period from the date Tucson knew or should have known of alleged city code violations relating to certain billboards.  Rejecting this argument based on the plain language of the statute, the Court held that the limitations period runs only from the date of actual discovery of the violation by the City.

Under its traditional appellate jurisdiction, the Court then addressed CCO’s argument that the trial court erred in permitting the City to use repealed ordinances, which contained no savings clauses, as the basis for its allegations regarding certain billboards.  The Court first noted that the current ordinances prohibit, among other things, maintaining a sign in violation of City code and provide that such signs are a public nuisance.  Division Two also acknowledged that a nonconforming land use, in other words a lawful use maintained after the date of a zoning ordinance prohibiting that use, is a vested property right, which may not be subsequently impaired.  Here, however, CCO conceded that the billboards in question violated the zoning codes when they were erected.  Thus, the billboards were never legal and the City could enforce the new restrictions, which the billboards violated.

The Court then considered whether 4 billboards lost their status of a legal, nonconforming use, when CCO added a second face to them, allowing more advertising to be displayed.  As to one such billboard, the Court found CCO’s argument to be unfounded in fact and thus waived.  As to the remaining billboards, the Court ruled that adding a second face resulted in losing nonconforming use status under both the 1980 and 1987 versions of the City code.

The Court next considered the City’s argument that the superior court erred in ordering any remedy other than removal as sanction for the unlawful billboards.  Rejecting that argument, the Court held that because unlawful billboards are public nuisances, and proceedings to enforce the zoning ordinance are proceedings in equity, the superior court has discretion to fashion a remedy other than removal.

Reviewing each of the billboards in question, the Court found that the superior court erred as to the first one (count 11) because it wrongly concluded that the billboard had achieved lawful nonconforming use status.  After then holding that the City’s “laxity of enforcement” could not justify equitable estoppel to save the superior court’s judgment on this count, the appeals court remanded it to the lower court.  As to the second billboard, the Court also remanded, this time for the lower court to determine whether estoppel applied in light of the City’s erroneous issuance of a permit allowing the billboard to be constructed.  As to the third billboard, the Court affirmed the superior court’s decision that the billboard had achieved legal, noncomforming use status because it was lawful when built.  The Court also ruled that the superior court did not err in holding that City was estopped from challenging the fourth billboard (count 97), because a sign inspector and a city board had approved the billboard, even though erroneously.  Finally, the Court ruled that the billboard challenged in count 114 of the complaint could remain because its violations of the zoning ordinance were unintentional and de minimis.

In closing, the Court of Appeals addressed CCO’s argument that the superior court erred in ordering removal of four billboards, rather than remediation.  These billboards lost their nonconforming use status when a second face was added to them without a permit.  Thus, the Court explained, they violate the zoning ordinance, can support no relief based on nonconforming use, and were properly ordered removed. 

Judge Howard authored the decision in which Judges Pelander and Brammer joined.

Posted by azapp @ Tue, Apr 15, 2008

In re MH 2007-001275 (4/8/2008):  Arizona Court of Appeals Division One Holds That a Court Must Ensure That a Patient has Voluntarily, Knowingly and Intelligently Waived His Statutory Right to a Hearing to Contest Court-Ordered Mental Health Treatment     

In July 2007, G.M. was taken into custody for an involuntary mental health evaluation and a petition for court-ordered treatment was subsequently filed.  Pursuant to A.R.S. § 36-539, a hearing (“539 Hearing”) was scheduled in order to allow G.M. to contest the petition.  At the scheduled time, counsel for G.M. informed the Court that G.M. waived his right to a hearing.  Without conducting a colloquy with G.M. or ensuring from the record that the waiver was voluntary, knowing, and intelligent, the Court ordered treatment based on his review of the record.  G.M. appealed.

The Arizona Appeals Court remanded, holding that due process requires a court to determine either through a colloquy with a patient or by review of the record whether a patient’s waiver of a 539 Hearing is voluntary, knowing and intelligent before giving effect to that waiver.  The Court explained that “[t]he general rule is that a waiver is not effective unless it is given voluntarily and intentionally” and looked to standards in criminal cases to examine whether a waiver can occur.  The Court also relied on its previous holdings that a patient’s waiver of the right to be present at a hearing or right to be represented by counsel is ineffective absent an express finding that the waiver is voluntary, knowing and intelligent.

The Court rejected the State’s argument that G.M. did not waive his right to a hearing, and instead “stipulated” to submit the matter on the record, explaining that regardless of the characterization the voluntariness issue remains.  Similarly, the Court rejected the State’s “invited error” argument because there was no evidence that G.M. knowingly, voluntarily, and intelligently agreed to his counsel’s actions.  Finally, the Court rejected the State’s argument that its holding would require a voluntariness inquiry in other types of civil cases.  It explained that its decision was limited to mental health cases in which a patient’s ability to voluntarily, knowingly and intelligently waive his rights was already suspect, and noted that there had been no untoward consequences resulting from the prior decisions requiring a voluntariness inquiry for waivers of the right to appear or right to counsel.

Presiding Judge Kessler authored the opinion; Judges Orozco and Portley concurred.

Posted by azapp @ Tue, Apr 15, 2008

Highland Village Partners, L.L.C. v. Bradbury & Stamm Construction Co. (4/8/2008): Arizona Court Of Appeals Division One Holds That “A Subsequent Purchaser Of Commercial Property Can Sue For Breach Of The Implied Warranty Of Workmanship And Habitability Pursuant To An Express Assignment Of That Warranty By The Original Owner.”

Bradbury & Stamm Construction Company built an apartment complex in Flagstaff for College Partners Limited Partnership.  Several years later, College Partners sold the apartment complex to Highland Village.  College Partners expressly assigned to Highland all warranties relating to contractors of the complex.  Highland then filed suit against Bradbury & Stamm “for breach of the implied warranty of workmanship and habitability, alleging various defects, including improper flashing and improper installation of siding.”  The trial court granted summary judgment for Bradbury & Stamm, concluding that, because Highland lacked privity of contract with Bradbury & Stamm, “any claim for breach of the implied warranty belonged exclusively to College Partners.”  Highland appealed. 

The Arizona appeals court reversed.  In rejecting the trial court’s reasoning, the court noted that the trial court had relied primarily on Hayden Business Center Condominiums Association v. Pegasus Development Corp., 209 Ariz. 511, 105 P.3d 157 (App. 2005), which held that the privity requirement applied to commercial property (although it does not apply to residential property).  Hayden, however, did not involve an express assignment of warranties by the original owner of the commercial property.  Because warranties generally can be assigned, like most other contractual rights, the court concluded that there was no reason precluding commercial sellers from expressly assigning their implied warranties of workmanship and habitability. 

Judge Timmer authored the opinion; Judges Norris and Brown concurred. 

Posted by azapp @ Tue, Apr 15, 2008

Arizona Minority Coalition for Fair Redistricting v. Arizona Independent Redistricting Commission (4/10/2008):Arizona Court of Appeals Division One Holds That Redistricting Commission’s Congressional and Legislative Plan Does Not Violate the Arizona Constitution.

The Arizona Independent Redistricting Commission (the “Commission”) established final congressional and legislative plans for the 2002 elections (the “Plan”).  The Arizona Minority Coalition for Fair Redistricting (the “Coalition”) sued the Commission in March 2002 and challenged the constitutionality of the Plan.  After an initial decision by the trial court, the Court of Appeals remanded and instructed the trial court to decide whether the Commission violated the Equal Protection Clause and/or Article 4, Part 2, Sections 1(14) and (15) of the Arizona Constitution.  On remand, the Coalition abandoned the Equal Protection challenge.  The trial court found that the Commission’s plan was in violation of Sections 1(14) – (16).  The Commission appealed. 

The Arizona Appeals Court reversed in part and vacated in part the trial court’s decision. In creating legislative districts, the Commission must follow a four-part constitutional plan.  Pursuant to Section 1(14), in the second phase of the plan the Commission must make adjustments to its map to accommodate six goals, including the goal of favoring competitive districts “to the extent practicable.”  The Commission argued that the trial court failed properly to apply the rational basis standard required by the Court’s prior mandate.  The Court explained, however, that because the Coalition abandoned its Equal Protection, the issue turned only on whether the Commission, as a constitutional administrative agency, had substantial facts to support its findings.  Under that standard of review, the Court found that the Commission’s findings regarding competitiveness were supported by substantial evidence and reversed the trial court’s decision that the Plan violated Section 1(14).  The Court vacated the trial court’s decision on Sections 1(15) and (16).  The Court noted also that the Coalition had abandoned its claim under Section 1(15) on remand.  The Court further found that the trial court exceeded its authority by considering Section 1(16) when that section was not included in the mandate on remand.

Judge Portley authored the opinion; Judges Hall and Snow concurred. 

Posted by azapp @ Tue, Apr 15, 2008

Dowling v. Stapley (3/27/2008):  Arizona Court of Appeals Division One Holds That the Maricopa County Superintendent Has Sole Statutory Authority Under A.R.S. § 15-308 to Offer Educational Services to Maricopa County’s Homeless Children But Must Work Collaboratively With the County Board of Supervisors If County Monies Are Required.

Following a unanimous resolution by the Maricopa County Board of Supervisors (“Board”) declaring that no educational services to homeless children would be offered by the County, the Maricopa County Superintendent (“Superintendent”) filed a special action complaint alleging that the Board’s resolution should be declared null and void and the Board should be enjoined from enforcing its resolution because the Superintendent and not the Board is vested with sole statutory authority to determine whether to provide such services to the county’s homeless children.  The Superior Court accepted special action jurisdiction and granted the Superintendent’s declaratory relief, but denied her injunctive relief.  An appeal and cross-appeal followed.

The Arizona Appeals Court affirmed the superior court’s rulings with modification.  The Court recognized that A.R.S. § 15-308(A) grants the Superintendent the authority to “provide educational services of an accommodation school [for homeless children].”  Subsection (B) however, states broadly that a “County may offer educational services to homeless children . . . through an accommodation school.”  Finally, subsection (C) places the “county board of supervisors” in control of the purse strings for any such accommodation school.  Construing the statute as a whole, the Court held that the legislature intended to authorize a collaborative effort between the Superintendent and the Board in providing educational services to homeless children.  Thus, subsection (A) grants sole authority to the Superintendent to provide these services so long as no county funds are required.  However, where county funds are required, the Superintendent and the Board must work collaboratively such that the Board agrees to fund and the Superintendent agrees to provide or implement the proposed services.  The Court cautioned, however, that nothing in its holding requires the Board to provide any funding.  Thus, the Court held that the Board’s resolution was null and void in that it could not unilaterally prohibit the Superintendent from providing educational services to homeless children, so long as no county monies are being utilized.

Presiding Judge Barker authored the opinion; Judge Timmer and Judge Orozco concurred.

Posted by azapp @ Tue, Apr 1, 2008

Flores v. Cooper Tire and Rubber Co. (3/25/2008):  Arizona Court of Appeals Division One Holds That a News Organization Does Not Waive the Reporter-Informant Privilege by Seeking a Declaratory Judgment or Disclosing Some Information About an Informant and That a Trial Court Does Not Violate a Party’s Due Process Rights By Conducting an In Camera Review of a News Reporter’s Declaration Regarding the Identity of a Source.

Juan Flores sued Cooper Tire after his parents passed away as the result of an automobile accident.  Abbie Boudreau (“Boudreau”), a news reporter for KNXV-TV (“KNXV”), attended portions of the trial and agreed in writing to be bound by a confidentiality order.  Weeks after the case settled, a confidential source provided Boudreau with documents pertaining to the safety of Cooper’s tires.  On November 3, 2005, using two of the documents, KNXV aired a story discussing the safety of Cooper’s tires.  Shortly thereafter, Cooper’s counsel informed KNXV’s counsel that the confidentiality order applied to two of the documents shown in the broadcast.  Upon request, however, KNXV refused to reveal its source.  Five days later, KNXV sought to intervene in the lawsuit, seeking a declaration that it had complied with the confidentiality order and could continue to broadcast the story.  The trial court permitted KNXV to intervence but issued an order granting Cooper’s request to preclude further broadcasts.  KNXV filed a petition for special action.

The Arizona Court of Appeals accepted jurisdiction and issued a decision order, explaining that the constitutionality of the trial court’s order depended upon whether KNXV’s information came from a source outside the litigation and remanding the case so that the trial court could conduct an in camera review of the underlying facts.  The Court also required that KNXV provide additional information regarding its source.  On remand, KNXV contended that in camera review meant review in chambers with no counsel present.  The trial court, however, adopted a two-step process whereby it first would review, ex parte, a declaration submitted by Boudreau and then, if additional information were necessary, it would conduct an in camera evidentiary hearing.  After reviewing Boudreau’s declaration, the trial court concluded that it needed no additional information to conclude that KNXV’s information came from outside the litigation.  It, therefore, vacated its prior order restraining further broadcast. This appeal followed.

The parties presented the Arizona Appeals Court with two primary issues:  (1) whether KNXV had waived the reporter-informant privilege by seeking affirmative relief from the trial court, and (2) whether the trial court abridged Cooper’s procedural due process rights by conducting an ex parte review of Boudreau’s declaration.  The Court answered both questions in the negative.

The Court first assumed that the reporter-informant privilege is waivable and then explained that waiver occurs where the claimant’s conduct places it in such a position that it would be unfair to allow the privilege.  The Court noted that KNXV did not seek affirmative relief in the form of damages or an injunction and that its actions were primarily aimed at rebutting the presumption that it had violated the confidentiality agreement.  Finally, given the importance of the reporter-informant privilege to the free flow of information in our society, the Court rebuffed Cooper’s argument that the disclosure of partial information regarding a source waives the privilege as to all information regarding the source.  Thus, KNXV’s request for a declaratory judgment and its disclosure that the informant was a whistle-blower did not waive the reporter-informant privilege.

Moving on to the alleged violation of Cooper’s due process rights engendered by the trial court’s ex parte review of Boudreau’s declaration, the Arizona Appeals Court explained that a procedural due process challenge in the civil context requires the Court to balance the nature of the interest involved, the burdens of alternative processes, and the risk of an erroneous deprivation.  Here, Copper’s interest in reviewing Boudreau’s declaration, questioning her about it, and preventing further disclosure of trade secrets, while strong, did not outweigh the interest in protecting the informant’s confidentiality.  Thus, relying on a number of cases from outside Arizona approving a two-step process similar to that the trial court employed, the Court concluded that the trial court did not violate Cooper’s due process rights when it conducted an ex parte review of Boudreau’s declaration prior to deciding whether to hold an in camera evidentiary hearing.    

Judge Snow dissented, arguing that the trial court violated Cooper’s procedural due process rights when it deprived Cooper of any access to Boudreau’s declaration and the opportunity to challenge KNXV’s claim that the source of the documents was not the litigation.

Judge Portley authored the opinion, joined by Judge Hall; Judge Snow dissented.

Posted by azapp @ Tue, Apr 1, 2008

Lane v. City of Tucson (03/26/2008): Arizona Court of Appeals Division Two Holds That Gunshot Wounds Suffered By Off Duty Police Officer Acting to Save the Life of A Friend Are Compensable Under Worker’s Compensation Benefits.

After a nighttime bike ride with friends, off duty Tucson Police Officer, Kelly Lane, heard gunshots.  Shortly thereafter a car approached Lane and his friends and opened fire on the men.  Although initially taking cover and working on a plan to apprehend the suspects, when he realized his friend remained unprotected he ran to protect him, and was then shot in the back.  Lane later filed a claim for worker’s compensation benefits.  A hearing was held and the administrative law judge found Lane’s injuries did not arise out of and occur in the course of his employment and therefore ruled that they were not compensable injuries under his worker’s compensation benefits.  This ruling was affirmed on review and a special action followed.

The Arizona Appeals Court accepted jurisdiction and set aside the award. To be compensable under worker’s compensation benefits, an injury must arise out of and in the course of one’s employment.  An injury arises out of employment if it results from a risk of employment or is incidental to the discharge of duty.  Compensation is justified if the risk is either: peculiar to the employment, the employment causes an increased risk of exposure to injury, an actual risk of employment, or was created by the position that the employment placed the employee in.  Courts also examine whether the origin of the risk was directly related to work, wholly personal, mixed, or neutral. 

The Court found that as a police officer, Lane suffered an increased risk and a risk peculiar to his employment as a police officer because the Tucson Police Department code of conduct required him to “act in an official capacity,” even while off duty, if he observed an incident that required police action.  The Court further found that Lane’s motivations were mixed - he acted out of a desire to help his friends and based on his police training.  The Court further found that injury occurred in the course of employment because Lane was required by his code of conduct to prevent crime and protect life while off duty.    

Judge Eckerstrom authored the opinion, Judges Espinosa and Vásquez concurred.  

Posted by azapp @ Tue, Apr 1, 2008