DBT Yuma, LLC v. Yuma County Airport Authority – 12/16/2014

December 29, 2014

Arizona Court of Appeals Division One holds that Yuma County may not be held vicariously liable for the actions of the Yuma County Airport Authority.

Since 1966, Yuma County has leased land to the Yuma County Airport Authority to operate an airport.  Several businesses that did business at the airport sued both the Airport Authority and the County for breach of contract and various torts.  The plaintiffs’ based their claims against the County on the theory of vicarious liability.  They argued that the Airport Authority was a political subdivision or an alter ego of the County.  The superior court granted summary judgment in favor of Yuma County, holding that the County could not be held vicariously liable for the actions of the Airport Authority.

The Court of Appeals affirmed, rejecting the plaintiffs’ theory of vicarious liability.  It applied the factors for analyzing alter-ego claims from Gatecliff v. Great Republic Life Ins. Co., 170 Ariz. 34 (1991), and held that the plaintiffs had presented no evidence that the Airport Authority was an alter ego of the County. 

The court then rejected the plaintiffs’ arguments that A.R.S. § 28-8424 imposes vicarious liability on Yuma County.  That statute describes the nonprofit corporations, such as the Yuma County Airport Authority, that may lease land to operate airports.  Although that statute states that such an entity “[p]erforms an essential governmental function as an agency or instrumentality of the city, town, county or state,” it also states that the entity is a “body politic and corporate.”  The latter subsection indicates a legislative intent to shield the lessor county from liability.

The Court of Appeals quoted several portions of the plaintiffs’ briefs in which the plaintiffs made sweeping allegations concerning the relationships between the Airport Authority and the County.  The plaintiffs, however, failed to support those allegations with facts in the record.  The opinion serves as a reminder to appellate counsel that allegations must be supported by citations to the record.  See ARCAP 13(d) (2015 revisions).

Judge Jones authored the opinion, in which Judges Swann and Brown joined.