Glazer v. Arizona (5/16/2017)

May 25, 2017

Arizona Court of Appeals Division One holds that the reduced interest rate described in A.R.S. § 41-622(F) applies only to that part of a judgment that is ultimately paid from the Risk Management Revolving Fund.

A plaintiff received a $7.8 million judgement against the State.  The payments were to come from the Risk Management Revolving Fund, except for the last $800,000, which was to be paid by the State’s excess insurance carrier (the State is self-insured up to $7 million).  However, a technician misinterpreted the payment request, causing the checks to be issued from the Construction Insurance Fund.  Two months later, the State realized the error and, to rectify it, reimbursed the Construction Insurance Fund with funds from the Risk Management Revolving Fund. 

Arizona Revised Statutes § 41-622(F) allows interest to accrue at a lower rate than normal during appeal for judgments “against this state paid for out of the risk management revolving fund.”  The superior court held that, despite the technician’s error and the insurance payment, A.R.S. § 41-622(F) applied to the entire judgment.

The Court of Appeals affirmed in part and reversed in part.  The court concluded that the reduced rate of A.R.S. § 41-622(F) applies when a judgment is ultimately “paid for out of the risk management fund.”  Thus, the reduced rate applied to the first $7 million, which was ultimately paid for by the risk management fund, but not to the remaining $800,000, which was paid for by insurance.

Presiding Judge Howe authored the opinion; Judges Winthrop and Thompson concurred.