Allstate Indemnity Co. v. Ridgely – 3/15/2007
Arizona Court of Appeals Division Two Holds That The “Sham Affidavit” Rule Applies Where A Party/Witness’ Deposition Testimony Contradicts The Party/Witness’ Earlier Affidavit, But Declines To Apply The Rule In This Case.
Lisa Ridgley filed a wrongful death claim against Nicholas Perrow, who hosted a party during which Ridgley’s son was fatally shot. Perrow was hosting the party at the home of Donald and Garnett Sloane, Perrow’s grandparents. The Sloanes were the named insureds in Allstate homeowners and umbrella policies. Allstate suspected that Perrow might have been living with his uncle, not the Sloanes, at the time of the shooting, and eventually procured a sworn statement from Perrow during which he stated that he was no longer a permanent resident of the Sloans’ home. Allstate then filed a declaratory judgment action against Perrow and Ridgely seeking a determination that Perrow was not a “member of the household” for coverage purposes. Perrow did not answer and eventually was defaulted. Ridgley’s counsel deposed Perrow and, during his deposition, Perrow testified that during the time of the shooting, he considered the Sloans’ house his primary residence.
Ridgley filed a motion to exclude Perrow’s ex pate statement taken by Allstate and to dismiss the declaratory judgment action. Allstate cross-moved for summary judgment, arguing Perrow was not covered by the policy because he was not a resident of the Sloanes’ home. The trial court granted summary judgment to Allstate, relying on the “sham affidavit” rule in refusing to consider Perrow’s deposition testimony because it was given after the sworn statement.
The Court of Appeals, Division Two, reversed and remanded. The Court noted that the sham affidavit rule states that when a party’s affidavit is submitted to defeat summary judgment and contradicts the party’s own deposition testimony, it should be disregarded in deciding the motion, citing Wright v. Hills, 161 Ariz. 583, 780 P.2d 416 (App. 1989) (abrogated on other grounds). The Court did not find Wright dispositive, however, because it held that a party’s prior deposition testimony cannot be contradicted by the party’s subsequent affidavit submitted to defeat summary judgment. The present issue was “whether a former party’s/witnesses prior sworn statement or affidavit can be contradicted by subsequent deposition testimony to defeat summary judgment.” The Court, therefore, examined federal and out-of-state cases for guidance.
These persuasive authorities, when applying the sham affidavit rule, have given greater weight to deposition testimony than to affidavits, because deposition testimony is subject to cross-examination and is adversarial in nature. The Court also cited a Seventh Circuit case, involving witnesses’ affidavits contradicted by their subsequent deposition testimony, that held that “though the timing is reversed, the rule is the same” and that the witnesses’ “;[s]self-serving affidavits’ . . . [could] not defeat a motion for summary judgment.” Darnell v. Target Stores, Inc. 16 F.3d 174 (7th Cir. 1994). Finally, the court noted that whether an affidavit is a sham affidavit “must be dealt with on a case-by-case basis.”
In this case, the Court noted that Perrow’s deposition was not taken in response to a motion for summary judgment, and therefore was not “apparently directed at ‘thwarting the purposes of Rule 56.’” Ridgely did not have any part in procuring Perrow’s change in testimony, and the “increased reliability” of deposition testimony favored not excluding that testimony. Based on these facts, the Court concluded that “the purposes underlying the sham affidavit rule do not support applying the rule in this case.”
Judge Howard authored the opinion, with Judge Pelander, Chief Judge, and Judge Vasquez concurring.