This opinion discusses alternative service.

Blair sued Burgener and his corporations for breach of contract. The process server made several trips to Burgener’s office and home to serve him (individually and as statutory agent for the corporations) but he wasn’t there. So Blair got the court to order that he could serve “any person in charge of” Burgener’s office and send copies to Burgener’s home. He served a woman at the front desk of Burgener’s office complex and sent the copies – to the business address, not the home address. Burgener didn’t appear; Blair took default judgment; seven months later, Burgener moved to set it aside. He couldn’t meet the standard for discretionary relief – he couldn’t show, for example, that he had moved promptly – so he argued that the judgment was void (in which case the trial court must set it aside) due to defective service. The trial court denied his motion.

The court first mentions that on appeal he raised ten different issues. If you don’t know what that means, please learn the lesson: it means that he’s going to lose. The fewer issues you present, the stronger – not the weaker – your appeal is. That ‘s not just our idea; that was known in your father’s and grandfather’s day, and probably has been ever since there have been appeals. One of the reasons we write this blog is that nowadays many lawyers have never been taught these basic things. Filing a brief with a long list of issues makes appellate judges think you a) a novice, b) an idiot, c) someone who just wants to maximize the fee, or d) a combination thereof. Because so many lawyers and firms are “c” the practice will never disappear. But for goodness’ sake don’t be fooled by that into thinking it the right way to do things.

Why else do you think this court specifically noted that Blair presented ten assignments of error but then, for purposes of analysis, condensed them into just three? It’s trying to say that he should have presented three in the first place.

The court also noted that the transcript of the hearing on the motion to set aside was not in the record on appeal and that in its absence “we presume the evidence and arguments presented at the hearing support the trial court‟s ruling.” That goes too far – it’s hard to see how the transcript could have been helpful and it certainly can’t mean that a ruling must be upheld without one – but is a symptom of the court’s annoyance with Burgener, caused by the ten-issue problem.

Anyway, the three issues were whether service was impractical (thereby permitting alternative service), whether the method of alternative service violated due process, and whether Blair sufficiently complied with the order.

On the first, Burgener argued that service on a corporation can never be impractical since you can serve the Corporation Commission ““[w]hen a domestic corporation does not have an officer or agent in this state upon whom legal service of process can be made”  (Rule 4.1(l)). The court says that the rule doesn’t apply because Burgener’s corporations did have an agent on whom “service could be made” (Burgener himself) – even though service could not, this opinion affirms, be practically made on him.  That, therefore, begs the question. Does the rule mean that there is no stat agent or that the stat agent can’t be served? If it means that there is no stat agent, how do you square that with the statute requiring that there be stat agent? Does the rule assume a violation of the statute? But aren’t we supposed to interpret things as being consistent with each other? And wouldn’t that support Burgener’s analysis? Whether it would or not, the issue deserves more analysis than the Court of Appeals gives it – which is none.

Burgener also argued, apparently, that service wasn’t shown to be impractical because the process server hadn’t tried hard enough. The court says that the “impractical” standard is less than the “due diligence” standard necessary for service by publication. “Impractical” means “extremely difficult or inconvenient.” Under these facts the trial court did not abuse its discretion in finding impracticability.

Burgener relied in part on a State Bar Committee note that “the best means of service practicable [sic] under the circumstances is required.” The court says that this doesn’t apply to alternative service (it applies to service by publication) and that if it does, it’s wrong. This reinforces what we have said elsewhere about State Bar Committee notes.

On the second issue the question is whether the alternative method of service included “reasonable efforts . . . to assure that actual notice of the commencement of the action is provided to the person to be served.” Blair argued that service with a receptionist who works for eight different offices wasn’t good enough. The court doesn’t really analyze that issue, either; instead, it punts: “[b]ecause Appellants have failed to provide a transcript of the hearing . . . we cannot say the court erred.” Well, it certainly could have, if the court had erred, which on this point it probably didn’t.

Finally, Burgener argued that service was invalid because Blair had sent copies of the process to Burgener’s business, not home, address. Here things get squirrely. The court says both that the order required sending them to the home address and that it required sending them to the home or business address. It therefore also  says, in the same paragraph, both that “Blair did not comply strictly with the trial court‟s order” and that “Blair thus strictly complied with this term of the court‟s order.”

This case is published, we assume, for the discussion of what “impractical” means (that’s what the court seems to have spent the most time on). But it isn’t as taut as we would normally expect from a published opinion.

(link to opinion)

The issue here is whether, having failed to plead in your Answer the affirmative defense that you have an agreement to arbitrate, and having actively litigated for a year, and having participated in a comprehensive pretrial conference without mentioning arbitration, and having demanded a jury trial, you can then force arbitration.

Cortez died in a nursing home. Her PR sued it for wrongful death. Having done all of the above the nursing home then moved to compel arbitration because an agreement requiring it had been part of her admission paperwork. The court granted the motion. The Court of Appeals reverses.

Basically, the court takes several pages to explain that by doing these things the nursing home had waived the defense. The trial-court argument apparently used the word “repudiate”; a footnote informs us that “waiver” and “repudiation” are interchangeable in this context. This portion of the analysis concludes by saying that “Once [the nursing home] had demonstrated conduct wholly inconsistent with arbitration, it “acquiesce[d] in the waiver thereby making the revocation complete and binding on both.” In the charitable spirit of the season we will pass over that Delphic pronouncement without further comment.

The nursing home’s argument was that it hadn’t found the file before filing its Answer, therefore didn’t know about the arbitration agreement, and therefore didn’t intentionally relinquish a known right. The court says that it had “constructive knowledge” since it always used the same forms and since its employee had signed the agreement. Actually, the lawyers had constructive knowledge of their client’s actual knowledge; unfortunately, it’s pretty clear that this isn’t what the court means.

The home also argued that the PR hadn’t shown prejudice. “But in Arizona a showing of prejudice has been required only when a party is attempting to prove waiver specifically on the ground of unreasonable delay.” In other words, the court now reveals that the basis of the decision was not delay but  “conduct inconsistent with an intent to arbitrate, such as the filing of a complaint or answer [sic].” In other words, repudiation, not waiver, and there is a difference between them after all. In any event, the court next says what it should have said to begin with: the PR was of course prejudiced, by having to fight a year’s worth (two, including this appeal) of litigation.

The home also argued the public policy favoring arbitration. The court points out that when you’ve squandered the advantages of arbitration – a cheaper and speedier resolution – there’s no point in requiring it.

Speaking of the spirit of the season, this whole opinion should be passed over. As a memorandum it is perfectly serviceable; as a published opinion it makes no contribution except confusion.

(link to opinion)

Another economic-loss-rule case.

Miidas bought some peat moss from Global. One batch of it was bad and ruined Miidas’ crops. Miidas sued for breach of contract, strict liability, and negligent misrepresentation. Global moved for summary judgment on the tort claims, arguing the economic-loss rule. The trial court granted it.

See Flagstaff Affordable Housing to brush up on the rule. This is a products case, so the Court of Appeals used the three-factor test. We said that Flagstaff “throws doubt on the three-factor test itself, apparently signaling a willingness to change it when an appropriate products case comes along.” Miidas argued “Flagstaff signals that Salt River‟s three-part test will soon no longer be the law in Arizona products cases.” The court says “Although we acknowledge the Flagstaff court‟s negative comments about the Salt River test, we agree with Global that despite these comments, Flagstaff did not overrule Salt River.” Which proves that you can lead a horse to water, etc.

So, the three-factor test. First, was the product unreasonably dangerous? Yes, it was unreasonably dangerous – to seeds. If that is how the phrase can be used then of course it means anything – and therefore nothing.

Next, the court demonstrates that the best argument against the three-factor test is its application. For what follows is among the most confused and confusing patches of gobbledygook that’ll you ever have to read in a judicial opinion. Flagstaff should have meant (and we’d bet it was intended to mean) never having to read something like this again. Among other things the court tells us that the second factor, which it never really explains, is not “helpful” here. Well, it’s not helpful because the test is largely nonsense – and you’d think that a case that has to try to say that the growing of a crop happened “suddenly” and “accidently,” or that whether it did or not has to be considered but doesn’t matter, would take up Flagstaff’s invitation to admit that. Instead the decision is largely an analysis of Salt River, almost as though Flagstaff didn’t exist.

The court ends up deciding that  Miidas’ seeds were “other property” and that “the third factor of the Salt River test, as well as the first two, supports [sic] a conclusion that the economic loss rule should not be applied in this case.” (What that odd formulation means we’ll leave as an exercise for the reader.)

If you decide to read this one, though, ask yourself afterward just exactly what doing so has added to your knowledge of the law.

(link to opinion)