A case about the “criminal acts” exclusion.

Wilshire’s insured went to prison for sexually assaulting S.A. in his basement. She sued him for false imprisonment. Wilshire denied coverage because its policy, while covering false imprisonment, excluded criminal acts. Wilshire filed this action for declaratory judgment that it had no coverage. Wilshire won; S.A. appealed.

The policy said that it applied to injury caused by an “offense.” S.A. argued that that meant a crime and since the policy explicitly covered false imprisonment the criminal-act exclusion couldn’t deny coverage for the crime of false imprisonment.

But Arizona Supreme Court precedent requires that contracts be construed against “indemnifying a person against loss resulting from his own willful wrongdoing.”  That construction does not render illusory coverage for the false imprisonment or other intentional acts. Intentional acts that unintentionally result in “wrongful conduct” remain covered (e.g., the security guard who detains a customer without proper cause or for too long).

S.A. argued that the precedent preceded the Arizona Victims’ Bill of Rights. The court agreed that that established a public policy to compensate victims but said that it can’t change the precedent “even where the crimes are as horrific” as in this case; that’s up to the Supreme Court. It would perhaps have been better to point out that the Bill of Rights doesn’t talk about insurance, that the insured and victim ends of things are governed by different – and to some extent opposite – principles, and that allowing people to buy insurance against committing crimes – especially “horrific” ones – is  a rotten idea. But its easier to pass the buck to the Supreme Court, especially if you want it to change the precedent.

Is that what this court wanted? Maybe not, since it ruled on only one of Wilshire’s two arguments, which means that if the Supreme Court reverses it will probably kick the case back to let the Court of Appeals rule on the other one. On the other hand, maybe the court wanted that, too.

A case about Rule 12 and Rule 56 that makes sense until the end.

Defendant is a landlord; Plaintiff is a contractor who did work for Defendant’s tenant. The tenant didn’t pay for it; Plaintiff sued.

Defendant moved to dismiss. Plaintiff didn’t respond, so the motion was granted for that reason. Plaintiff moved to reconsider, arguing that the motion to dismiss was a Rule 56 motion since it presented matters outside the pleadings. Plaintiff did not address the merits but asked for additional time to do so, even though it filed the motion after a response to a summary-judgment motion would have been due. The trial court denied reconsideration.

Plaintiff then filed a Rule 60 motion based on mistake or excusable neglect because “it appears that Plaintiff’s counsel and the Court have differing views on  . . . when  . . . a Motion to Dismiss becomes a Motion for Summary Judgment.” The trial court denied the motion.

A 12(b)(6) motion must be treated as a Rule 56 motion if it presents “matters outside the pleading” that are not excluded by the trial court. The part about excluding them has been addressed elsewhere; this case deals with other aspects of that rule. First, a contract  attached to a Complaint is not “outside the pleading.” Second, public records mentioned in a motion to dismiss (here, some liens) don’t require it to be treated as a motion for summary judgment. Third, documents “central to the complaint” don’t require it, on the theory that they’re not a surprise to the other party. (On this issue the court cites federal precedent but not, for some reason, the Arizona precedent – the CA2 Cullen/Koty-Leavitt opinion; it was partially vacated on other grounds but is still perfectly good on these issues.)

Because the motion to dismiss did not have to be treated as a Rule 56 motion, the trial court did not abuse its discretion in granting it simply because Plaintiff did not respond. (You can’t do that with a summary judgment.)

The opinion says that when it is “plain” that a Rule 12 motion should be converted to Rule 56  then Plaintiff has thirty days to respond, otherwise the 10-day time for Rule 12 applies; when it isn’t clear, Plaintiff should respond within 10 days or “confer” with Defendant about a briefing schedule, or they can contact the court for “guidance.” Although the point is that a plaintiff can’t, as this one did, do nothing, this passage will cause more problems than it cures. Look for the usual suspects to respond to every Rule 12 motion with a letter insisting that they should have 30 days and if you don’t like that you can contact the judge. In any event, the trial court did not abuse its discretion in denying the motion to reconsider.

(As we try to do, we have left out a couple of Plaintiff’s more laughable arguments. We mentioned the “differing views” theory because it is, amazingly, one of the least so of the bunch.)

So the trial court is affirmed, right? You know by now that when we ask that the answer is “wrong.” Remember Plaintiff’s request for additional time to respond? The opinion says that, “in an apparent oversight,” the trial court didn’t rule on this, so it reverses and remands “to permit the court the opportunity to consider the request.”

Say, what?? In the first place, ten bucks says there was no oversight; the court effectively disposed of the motion and gave the request all the consideration it deserved.  In the second place, even if it hadn’t, the law says how to treat motions not expressly ruled on below and it isn’t to remand for loose-end repair. In the third place, what does the appellate court think the trial court is going to do? Reverse its position 180 degrees, throw out its own, multiple prior rulings and the whole appeal, and decide that Plaintiff should have had more time after all? And if that’s a possibility, why call for it after you’ve written the opinion that that ruling would make a waste of time?  And in the fourth place, does the court really mean to imply that letting a party move for more time to respond, for a legally invalid reason, after the time for a response has expired even under the movant’s legal theory, and absent some strange circumstance that isn’t present here, would not be an abuse of discretion?

We suspect that this wasn’t the most well-briefed case ever but we can’t blame this disposition on the lawyers.

(link to opinion)

If you have read this then here is the other side of the coin: why was it published?

This was a medical malpractice case. Both sides played disclosure close to the vest. At trial, Defendant used that against Plaintiff, objecting several times to undisclosed evidence. Then came Defendant’s turn; his testimony basically blew Plaintiff’s case out of the water. So, Plaintiff objected that his opinions hadn’t been disclosed. The trial court agreed, declared a mistrial, and awarded Plaintiff substantial fees.

On appeal, the majority explains why it agrees that Defendant hadn’t made proper disclosure and why the sanction was appropriate. The dissent, after a couple of pages of thoroughly commonplace observations (except the part about how disclosure is unfair to the poor, put-upon trial judges) about the disclosure rules, points out that Plaintiff’s counsel took Defendant’s deposition and chose not to ask about matters clearly at issue but agrees that there was one point about which Defendant should have made disclosure anyway. The dissent wouldn’t have declared a mistrial for this but Defendant hadn’t appealed that issue so the sanctions should be affirmed.

And what does one learn from reading the details? A few things about pulmonary embolism – but hardly enough to make much of a dent toward your M.D. degree. That discovery and trial were probably uncomfortable, unfriendly, and combative – but reading some of the names of counsel could have told you that. That disclosing that your defendant doctor will testify, “consistent” with his records, that he “complied with the applicable standard of care” can be dangerous – but if you don’t know that then what in the world are you doing handling professional-liability cases?

Apparently, the court feels that its contribution to the law is to say that the doctor-defendant is held to the same disclosure standard as an expert witness. If that’s a surprise, please see the last question above. It may be that too many have forgotten – or never knew about – the days when we had to fight about whether the doctor could even give opinion testimony on his own behalf.

These thirty pages say nothing, and teach nothing, to anyone outside this case.