Scottsdale Insur. Co. v. Cendejas (3/3/2009)

March 27, 2009

Arizona Court of Appeals Division One Holds That a Rule 26(b)(5) Notice of Nonparty At Fault Must State Specific Facts Establishing Defendant’s Claim That the Designated Parties Were at Fault.

Plaintiff Scottsdale Insurance Company (“SIC”) brought suit against Anthony Cendejas for reimbursement of money SIC paid its insured for fire damage to his home allegedly caused by Cendejas.  Cendejas timely filed a Notice of Non-Party at Fault naming Oxley Construction Company, L.L.C. along with a general category of subcontractors:

“[a]ny subcontractor retained by Oxley Construction . . . who performed work on the subject property as part of the original construction of the subject property in such a way as to cause or contribute to the condition of the subject property, if any, which may have caused or contributed to the fire at the subject property.”

During a deposition after the deadline for noticing Non-Parties at Fault had passed, one of Defendant’s experts testified that attic insulation in the home had been installed backward, which contributed to the rapid acceleration of the fire’s development.  Plaintiff SIC then moved to strike Cendejas’ Notice of Non-Party at Fault as untimely.  The trial court granted SIC’s motion to strike, and ultimately granted summary judgment in favor of SIC for the full amount of its claim, including taxable costs, Rule 68 sanctions, expert witness fees, and prejudgment interest.  Cendejas timely appealed.

On appeal, Appellants argued that his Notice of Non-Party at Fault was timely and sufficient under Rule 26(b)(5) because the defense of improper insulation installation fit within the broad language of their disclosure.  Moreover, Appellants cited Rosner v. Denim & Diamonds, Inc., 188Ariz. 431, 937 P.2d 353 (App. 1996) for the proposition that a defendant need not specifically identify the non-party at fault in order to satisfy Rule 26(b)(5).  The Court of Appeals rejected this argument because Rule 26(b)(5) requires a party to “provide the identity, location, and the facts supporting the claimed liability” of the named nonparty.  Appellants’ notice did not do so.  Unlike in this case, in Rosner, Defendant went to great lengths to investigate and identify a non-party at fault, but could not do so.  The parties, in that case, stipulated that none of them could identify the other tortfeasors specifically.  Moreover, Defendant in Rosner specifically described the acts of the unidentified additional tortfeasors, although not able to provide their names.  In the present case, Cendejas did not provide any facts in their Notice establishing their claim that a subcontractor had improperly installed insulation that resulted in a more rapid spreading of the fire.  Moreover, because Appellants’ expert had completed his investigation more than a year before the SIC complaint had been filed, Appellants had sufficient information available to them to include specific facts within their Notice.  Thus, the Court of Appeals affirmed the trial court’s ruling striking Cendejas’ Notice of Non-Party at Fault and granting summary judgment to SIC.

Judge Weisberg authored the opinion; Presiding Judge Johnsen and Judge Orozco concurred.