Estate of Maudsley v. Meta Services (CA1 6/23/11)

The good part about the opinion in this psychiatric-malpractice case is that even though it’s from Division One the standard-of-review section takes up only a footnote. But then there’s the rest of it to deal with.

Defendants provide psychiatric care. Maudsley was taken to them for evaluation after acting strangely at ASU.  The examining psychiatrist recognized him as a psychotic but before admitting him allowed him to go across the street to a hospital emergency room to take care of a foot injury. Maudsley promised to come back but, naturally, he didn’t; that night he was hit while crossing a street and eventually died. Turned out he was already a patient of this psychiatric organization, apparently under its contract with the county to provide indigent care, and that it had on the same day filed a petition for court-ordered evaluation of him. The doctor who evaluated him on the ASU visit didn’t know that and purported to think that he was a “voluntary patient” (the evidence was in conflict; the person who brought Maudsley in filled out the proper forms and testified to being told that enough had been done to admit him).

His parents sued. Defendants moved for summary judgment, arguing that they had no doctor-patient relationship with Maudsley and thus no duty to him. The trial court granted it.

The Court of Appeals first deals briefly with a few niggling details, such as whether there was evidence of proximate cause (the court gets past that by taking an expansive view of an affidavit that doesn’t appear to have been written with the subject in mind) and the fact that it doesn’t really know the nature and relationship of the corporate defendants (it blames that on them and decides, essentially, to ignore the problem).

The court eventually concludes that there was a question of fact about a doctor-patient relationship.

But what it really wants to do, and so what it does first, is to hold that defendants owed Maudsley a duty of care as a matter of public policy resulting from certain mental-health statutes. The analysis isn’t particularly convincing, consisting of a recital of several statutes followed by a somewhat abrupt conclusion about their supposed public-policy implications. But the upshot seems to be that outfits authorized to conduct mental-health screening evaluations (as defendants were) owe a doctor-patient duty to everyone who comes through the door.

(link to opinion)

Duncan v. Progressive (CA1 6/9/11)

This one of those occasional cases in which the Court of Appeals uses its discretion to consider a matter not raised below.

Duncan sued Progressive’s insured for a car accident but he died before she could serve him. She got the probate registrar to appoint a special administrator solely to accept service, telling the court that defendant had no heirs. She served him but the defendant’s estate did not appear so she took default. Progressive intervened to contest the sufficiency of service. It moved to dismiss the negligence case, arguing that service was no good because the insured did have heirs (whom Duncan had never contacted) and that the appointment was improper for other reasons. The accident-case judge granted the motion.

The Court of Appeals holds that the motion to dismiss was an improper collateral attack on the probate order appointing the special administrator. Duncan hadn’t raised the issue in the trial court. The appellate court decided to review it anyway because an “issue involving orderly judicial administration is a matter of statewide public importance” and this was a pure issue of law on undisputed facts.

The court quotes a case to the effect that “a decree in the probate court has . . . the conclusiveness inherent in a judgment of a common law court and, therefore, may not be collaterally attacked.” This is interesting since the Marvin Johnson case later said essentially that the probate court is a common-law court (we’ve expressed our feelings about Johnson before.) In any event, even if there were some defect in the appointment the place to attack it was the probate court (as Progressive had started to do and then, for reasons not explained, switched tactics).

LATER EDIT: The court issued an amended version of this opinion on September 27, 2011. The amendment adds a new paragraph — now no. 18 — in which it concludes, addressing another Progressive argument, that the rule against collateral attack also applies to “orders that are not final judgments in the traditional sense,” citing some out-of-state probate cases. The court also took the opportunity to edit the opinion a bit, omitting a few words here and adding a citation there.

(link to opinion)

Continental Lighting v. Premier Grading (CA2 5/31/11)

This isn’t a fascinating opinion but it introduces law new to Arizona and also illustrates that it’s better late than never even if there’s really no excuse for late.

Lender financed the purchase of property and took a first deed of trust. Contractors then developed the property, noticing their mechanics’ liens appropriately. Lender then refinanced the loan twice (for the borrower’s LLC, to which he had by then transferred the property), taking new deeds of trust each time. Naturally, the L.L.C. then ran out of money to pay anybody. The question in this action to foreclose the mechanics’ liens is whether they have priority over the later deeds of trust.

Lender argued that they didn’t, under the doctrine of equitable subrogation. A perfectly good doctrine – except that it doesn’t apply here. You can’t be subrogated to yourself (the doctrine works when the refinancing comes from a new lender). Contractors presumably pointed that out in their responses to Lender’s motion for summary judgment, for its reply came up with a new argument: the doctrine of replacement. This is apparently not one Arizona appellate courts had dealt with yet. According to the Restatement, if lender and borrower modify or replace their agreement then the new mortgage/deed of trust can retain the priority of the old to the extent not materially prejudicial to junior lienholders. Why Lender hadn’t figured out what its case was before moving for summary judgment isn’t clear but the Court of Appeals accepted the reply as having raised the argument below. (It helped that Lender then moved for reconsideration, asking the trial court whether it had considered the replacement argument, and the court replied that it had considered everything.)

The opinion adopts the replacement doctrine. It holds that Lender has priority to the extent of the principal amount of the first loan (the refinancings were a little larger). Contractor’s argued that it couldn’t because the borrowers were technically different (borrower’s L.L.C. versus borrower himself); the court says that doesn’t make any difference, at least in this case.

(link to opinion)