Sirrah Enterprises v. Wunderlich (8/9/17)

We had decided that this case was too boring to blog and even tweeted that. But there are aspects of the opinion we couldn’t stop thinking about. We’ll skip the boring parts.

The issue here is “whether the successful party on a claim for breach of the [implied] warranty [of habitability in a residential construction contract] qualifies for an attorney-fee award under either a contractual fee provision or A.R.S. § 12-341.01.” The court answers yes, under both, “because the warranty is imputed into the construction contract, it is a term of the contract. Any claim for breach of that term arises from the contract.”

That’s what the trial court said and that’s what the Court of Appeals said. So why take review?

To make a distinction. The implied warranty of habitability does not create an implied contract; instead, the warranty “is a term imputed by law into express contracts.”

And why is that important? Because under Woodward (1984) the warranty can be enforced by subsequent purchasers, which therefore now means that they can enforce “the express contract”, which means that subsequent purchasers can get attorneys fees. The court disapproves a line of Court of Appeals cases to the effect that claimants not in privity under the original contract were suing under something that was merely implied by law, not the original contract, and therefore couldn’t get fees.

Problem 1: These plaintiffs were the original purchasers, in privity. It seems the court has taken a case and published an opinion for the purpose of addressing an issue the case does not present.

So what? Why shouldn’t the court clarify the law when it has a chance? The reason why not goes to the heart of its function. Ever since the Court of Appeals was created the theory has been that, for several reasons, the Supreme Court doesn’t reach for issues; it doesn’t rule on them unless they’re squarely presented. That’s why its refusal to accept review cannot technically be seen as approval of a Court of Appeals opinion. But this case suggests the opposite; taking review because the court disagrees with dicta means that when the court doesn’t take review it does agree with it. The court isn’t supposed to be in the business of doing either, shouldn’t be signaling that it is, and shouldn’t want to.

If the proper legal analysis necessary to resolve this dispute – whether by affirmance or reversal – were different that what the Court of Appeals employed then of course it would be appropriate to say so. But the lower courts resolved this case correctly and, as to the parties before them, for the correct reasons. Issues about people not in privity were not presented at all, much less squarely. (These parties mentioned them in the course of their arguments but the bright folks at the Supreme Court know that that’s an entirely different thing.)

(But what if you’re a conscientious Supreme Court Justice and you just can’t sleep at night knowing that some people might not be recouping their fees because you haven’t yet had a chance to announce that you disagree with the people downstairs? Then you take the case for the purpose of more-or-less ostentatiously not ruling on the issue: you specifically say that you’re not ruling on it because the case doesn’t raise it, for example, or make some other noticeable remark, or even vacate only certain portions of the Court of Appeals’ opinion. Give we mere lawyers a little credit, we ain’t that dumb; we’ll take the hint and the next time the issue comes up bring you a case.)

Problem 2: The court then doubles down on looking after the interests of parties not before it.

So far it has explained why parties not in privity can recover under the contract’s fee provision. But can they use 12-341.01? Yep, Its simple: the statute “does not have a privity requirement for claims ‘arising out of’’ a contract” so “just as a claim asserted by an original homeowner in privity with a builder can arise from contract, so too can a claim asserted by a subsequent homeowner.” (Citing only one case, and that as a “cf”, suggesting that that the authority for this is slim-to-none or that no one bothered to look very hard.) How this airy conclusion fits with the substantial body of jurisprudence on the statute, and whether the legislature really intended to allow contract fees to people who were never parties to the contract, would make for an interesting analysis. It might even produce the same result. And the court might have gotten good briefing on that had it waited for a case in which the answer mattered to the litigants.

(Opinion: Sirrah v. Wunderlich)

Soto v. Sacco (7/13/17)

The case holds that an order granting a remittitur or an additur (and conditional new trial) under Rule 59(f) must, as required by Rule 59(i), “specify with particularity the ground or grounds.” (The court uses the subdivision letters from the 2016 version of the rule but the 2017 rule flips them around; we’re using the new ones. When you read the opinion keep in mind – the court does explain it it a footnote – that old (m) is the new (i), while the old (i) is now (f).)

Plaintiff husband broke his arm when the taxi he was riding in had an accident. He sued the driver and the taxi company. When the jury awarded $700+k the trial court found that “excessive and not supported by the evidence” and granted a remittitur. Plaintiffs rejected it and appealed.

The court begins with a long, vague discussion of new trials and remittiturs that it admits “break[s] no new ground.” Perhaps something in the briefing or argument signaled a need for three pages (counting one very long footnote) of hornbook law.

Plaintiffs argued that because of 59(i) a remittitur order has to be more specific. Hancock (App. 1971) said that (i) doesn’t apply to (f) because (f) states its own grounds (damages excessive or insufficient). This opinion rejects Hancock because (1) rules that don’t apply to other rules “circumvent” them and (2) if (i) didn’t apply then its “required” language wouldn’t be. (Think we’re kidding? Read paragraph 12. In fairness, toward the end of the paragraph the court says that the Hancock interpretation is “inconsistent with Rule 59 when read as a whole,” which maybe is right and at least comes closer to logic than anything else in the paragraph.)

How particular must the trial court be in specifying the grounds? It must “describe why the jury award is too high or low.” That helpful bit of information is found amid seven paragraphs of rambling, during which – in order to distinguish a case cited by Plaintiffs –  the court says interesting things about wrongful-death cases. “[W]e reject the notion that § 12-613’s “fair and just” damages provision mandates greater deference to juries in wrongful death cases than in personal injury actions.” There is “no relevant distinction between a jury’s duty to render a “fair and just” damages award in a wrongful death action and its charge to issue an award based upon its ‘good sense and unbiased judgment’ in a personal injury case.” (Though there is one difference, as the court points out in a footnote: an award of $0 is valid in wrongful death.) This will disappoint plaintiffs’ counsel in those cases, and some trial courts, and some Court of Appeals’ judges, who feel that “fair and just” means “carte blanche.” (Did the court do this deliberately? We would normally suspect so but that suggests more civil-law sophistication than the opinion exhibits.)

So Plaintiffs win? No. Reeves (1978; much of this opinion is just a riff on Reeves) says that if the order isn’t particular enough then the burden shifts to the appellee to prove that there were sufficient grounds for the order. The court quickly finds, in a couple of conclusory sentences, that under these facts new trial was not error. Not a great advertisement for its principal holding.

The court then mentions evidence of allegedly-comparable verdicts, which Defendants had presented. “[W]hile such comparable verdict information may be presented to and considered by the trial court, we emphasize that it is only marginally relevant . . .” This criticism is surely deliberate since it is pure dictum.

Remanded for new trial.

(Opinion: Soto v. Sacco)

Yahweh v. Phoenix (CA1 7/11/17)

The stream of notice-of-claims cases has slowed to a trickle but never quite stops. This one doesn’t announce new law and was brought by a pro se, which would normally mean a memorandum opinion (on the theory, among others, that laypersons rarely brief issues adequately, which is true but shows a touching confidence in the profession), so the court must think it high time for another reminder.

Plaintiff was a former Phoenix policeman who left on bad terms and wanted to sue it. His notice of claim announced damages of $1.5 million, which he explained was his loss of income; it concluded: “In order to obtain an agreeable resolution to this matter, contact [his lawyer] promptly.” The city did not respond. When he filed suit it moved to dismiss because of the notice’s failure to state, as required by the statute (12-821.01), “a specific amount for which the claim can be settled.” The trial court granted the motion; Plaintiff appealed.

The Court of Appeals affirms. “Simply reciting the amount a claimant will demand in a complaint is insufficient . . . because such a statement does not express a willingness to accept a specific sum in settlement.”  Contact-the-lawyer language isn’t enough because the burden is the claimant’s: “a claimant must strictly comply with [the statute]” and “public entities . . . are not duty-bound to assist claimants with statutory compliance.”

This has been the law since Deer Valley (2007), which this opinion cites. Among its Deer Valley quotes:”[c]ompliance with this statute is not difficult.” Whether you agree with that or not, courts have now said it twice. This ties in with our past advice that “ trying to cut corners on this statute is the sort of thing you could end up telling your carrier about some day.” We trust that it was the claimant himself, and not the lawyer his notice referred to, who did that this time.

(Opinion: Yahweh v. Phoenix)