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In re The Matter of the Jury Selection Process (CA1 03/26/09)

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This one is hard to believe.

In 2002, the (then) Presiding Judge of the Maricopa County Superior Court changed the jury selection process. The court, according to the opinion, didn’t bother to give the public or the Bar any notice.  (Sound incredible and ridiculous? Then you don’t understand the degree to which the courts are bureaucracies unto themselves and you haven’t known many Presiding Judges.) People didn’t find out about it until 2006. Then they began to object that the new system violates the jury statues. (Their argument is good enough to make it doubly astonishing that the court slipped this in without telling anyone. Although not ruling on whether the new system violated the statutes, the opinion describes the system [albeit briefly] and quotes the statutes in full. Whether these deliberate dicta are intended to signal something remains to be seen.)

In April 2006 the (current) Presiding Judge ordered, in three of the cases in which the issue had been raised, that that issue alone be heard by an out-county judge. In August a Pinal County judge ordered that the issue, which had by then been brought up in thirty-seven cases, be given its own cause number, that objectors to the new system would be Petitioners, and that those defending it would be Respondents. Yes, he turned thirty-seven motions into their own lawsuit. (How could thirty-seven lawyers – or even a few, assuming some consolidation of representation – sit in a courtroom and not see the problems with that? We’re charitably going to assume that all, or at least a few, or at least one of the “Respondents’” lawyers saw the problem and realized that it could be to their advantage not to mention it.)

Over a year later, the judge from Pinal ruled in favor of the new system. (One assumes that the thirty-seven cases were on hold in the mean time. Civil lawyers are used to waiting but eleven of the cases were criminal.  Did they all just wait a year for a ruling on some motions in a combined civil/criminal “proceeding” of some sort?) The “Respondents” appealed.

At that point, good sense began to break out: the First Division dismissed the appeal for lack of jurisdiction.

There was neither a final judgment nor a judgment with Rule 54(b) language. You can’t have an appeal without one of those, as all involved should have learned in about their fourteenth minute of law school. All that had happened was a ruling on some motions. Couldn’t anyone have seen that this would be a problem for an appeal? Shouldn’t they at least have filed a special action instead? That wouldn’t have succeeded, either, but would have made more sense than most of what had happened so far.

The court recognized but declined to use its discretion to rule on the matter as a special action. No action had ever been created in the court below in any manner recognized by the Rules. The situation was more like a certified question than than a special action; the appellate courts have no authority to take certified questions from the Superior Court. And if its ruling were against the new jury procedure, that would still leave for resolution the question of whether litigants in any of the individual cases had been prejudiced.

The court dismissed without prejudice, pointing out that the thing to do would be to seek relief in the individual cases.

The opinion is written in an eyebrows-mildly-raised sort of way. Maybe getting something so out of the ordinary put the judges in a good mood. But they had to be wondering “What were they thinking down there? Was anybody thinking down there?”

In fairness, there may well be some extenuating circumstances that don’t appear in the opinion. It surely can’t be true that so many people could make so many mistakes that were just plain dumb.

Flagstaff Affordable Housing v. Design Alliance (CA1 3/24/09)

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[THIS OPINION WAS REVERSED AND REMANDED BY THE ARIZONA SUPREME COURT ON 2/12/10. That opinion is here.]

In the last few days, both divisions of the Court of Appeals have issued opinions discussing the economic loss rule.

We will not comment on Valley Forge Insurance v. Sam’s Plumbing, L.L.C. (CA2 3/19/09) since an AzAppBlog writer was among the many lawyers involved, in one way or another, in the six or eight or more pieces of litigation that arose out of that accident (see our FAQ).

Design Alliance designed apartments that Flagstaff Affordable Housing built. The design violated federal handicap-accessibility  requirements. FAH was required to remedy the problem at considerable expense so it sued for, among other things, negligence.

Design Alliance moved to dismiss, arguing that the economic loss rule barred the claim. That rule, established in Arizona by the First Division in  Carstens v. City of Phoenix, 206 Ariz. 123, says that there can be no recovery for economic loss absent personal injury or property damage. The trial court granted the motion.

On appeal, the court reversed.

The relationship between architect and owner is one between professional and client. Professionals owe special duties to their clients. Therefore, the owner’s claim against the architect is based in tort, not contract.

If that reasoning seems a bit sketchy to you, it apparently did to the court, too, which may explain why the opinion states it in a few sentences then spends most of the remaining thirteen pages of the opinion trying to justify it. In ruling, apparently, that the economic loss rule does not apply to claims against professionals, all the court really says is that it knows a tort when it sees one and it sees one in that situation.

The plaintiff also sued in contract but that claim had lapsed under the statute of repose. The defendant argued that to allow a negligence claim would “eviscerate” the statute. The court’s response was, basically, “So what?”

The real problem is that the economic-loss rule has sat uneasily in Arizona law. Carstens dealt with a government entity, which courts almost never look at the same way they look at you and me. Since then, though, other types of defendants have tried to use it to escape what would previously have been accepted as negligence claims.

Valley Forge contains a more extensive analysis – and criticism – of Carstens, an analysis the Flagstaff Affordable Housing court did not need or care to make. But both cases rule in favor of claimants, reversing trial court decisions, and together they should considerably dampen defendants’ enthusiasm for the economic loss rule.

Backus v. State of Arizona (3/19/09)

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For several years now, Arizona government entities have been actively trying to use the notice-of-claim statute to defeat claims. Having pushed this issue to the court, they now get the result they deserve – but that doesn’t mean that the court should have given it to them.

This action consolidates two wrongful-death claims against the Department of Corrections. The State had claimed that the notice-of-claim letters for both were insufficient. The Supreme Court accepted the matter to “address the standard that applies to determine whether a claim adequately states the ‘facts supporting’ the amount claimed.”

The statute in question (which, perhaps tellingly, the opinion quotes only in a footnote) says:

The claim shall contain facts sufficient to permit the public entity or public employee to understand the basis upon which liability is claimed. The claim shall also contain a specific amount for which the claim can be settled and the facts supporting that amount.

The State argued that this requires facts that, viewed objectively, allow the government to evaluate the claim and the amount demanded. The Court of Appeals, though, ruled in favor of both plaintiffs, concluding that any supporting facts, “regardless of how meager,” satisfy the statute.

The Supreme Court began its analysis by insisting that its goal was to fulfill the intent of the Legislature. But, it said, the statutory language is not “clear and unequivocal,” requiring the courts to construe it. As it happens, the Supreme Court had already done that, in Deer Valley Unified School District v. Hauser, 214 Ariz. 293, 152 P.3d 490 (2007). It said then that a claimant must “[provide] the government entity with a factual foundation to permit the entity to evaluate the amount claimed.” The holding of that case, though, had arguably been on a slightly different issue. Moreover, the court said, Deer Valley didn’t address what to do when a claimant and a public entity disagree about whether the facts are sufficient.

Normally, of course, when parties disagree on whether a statute has been obeyed a court resolves the disagreement. Naively, we thought that that’s what courts were for. But the Chief Justice, writing for a unanimous court, decided that that wouldn’t do in this situation.

Why not? Well, for one thing, the opinion worried that a claimant only has 180 days after an incident to present the demand letter and “by the time a trial judge could decide whether a particular claim satisfied the supporting-facts requirement, the time to file a claim letter will have expired.”

Can you figure that out? By the time the court rules on whether the demand served by a claimant was sufficient, the time for serving the demand will have expired. Does the court mean to imply that a claimant could serve a second demand if the first were found insufficient? Where does the statute say that? And if it did, why couldn’t the claimant serve the new/amended demand within the 180 days, whether the trial court had ruled yet or not, making the whole issue moot?

The court said that if the 180 days had expired, “the trial judge would have no option but to dismiss the civil action if the judge found the factual statement insufficient.” But how can that be a reason not to do it? Dismissing cases for insufficient factual statements is what this whole issue is about. This paragraph (no. 20) gives the game away: the court considers the notice-of-claims statute a “significant and unpredictable obstacle” to claims and doesn’t want them dismissed on that basis.

The other reason given by the opinion not to allow the trial court to judge the sufficiency of the notice is that it would cost too much. Frankly, we’re tired of hearing time and expense used as an excuse whenever it fits a litigant’s or court’s position and ignored when it doesn’t.

The court decided that “The approach that best furthers legislative intent is to allow a claimant to decide what facts support the amount claimed and to disclose those facts as part of the notice of claim.” “(C)ourts should not scrutinize the claimant’s description of facts to determine the ‘sufficiency’ of the factual disclosure.” In other words, claimants can say as much or as little as they like so long as they make at least a slight show of abiding by the statute. This is, of course, not what Deer Valley said but it is consistent with the Court of Appeals’ “however meager” approach – except that the trial court can’t even rule on meagerness.

Given this “standard” – which is of course no standard at all — what, the court more-or-less asked, is to prevent claimants from hiding facts?

First, claimants must want to settle their cases and they therefore have “no valid reason to withhold facts.” Before we read that sentence we would have bet that at least one of the Justices had at least a little experience defending state agencies. Apparently, we would have been wrong.

Second, “the professional obligations of claimants’ lawyers will deter them from submitting incomplete or inaccurate information in claim letters. Any deliberate attempt to misrepresent facts supporting a claimed amount could violate a lawyer’s obligation of truthfulness under the Arizona Rules of Professional Conduct.” But the issue isn’t about misrepresentation. And since when is “incompleteness” in making a claim an ethical violation? 

It is nice to know, though, that the court trusts us all of a sudden. “We  . . .  expect . . .  lawyers to act honorably.” So why do we need to prove by paperwork – time-consuming and therefore expensive paperwork – that we’re meeting our ethical obligations to counsel clients about ADR?  Why are there CLE audits?

Well, what the court actually said was “We . . . expect claimant’s lawyers to act honorably” [emphasis added]. Perhaps the lawyers the courts are to trust are only those representing plaintiffs.

The notice of claim still has to include an amount for which the case can be settled; that’s Deer Valley. Otherwise, the lesson of Backus is that in enacting the statute the Legislature intended that the people it regulates be the sole judges of whether they had satisfied its regulation. In the guise of construing the statute, the opinion largely nullifies it.

Government agencies had been overreaching on this issue, using hypertechnical interpretations of the statute to try to dismiss claims regardless of their merit. They deserved to get their hands slapped. But the answer was to set reasonable guidelines, not to throw out the Legislature’s baby with the bathwater just because the Supreme Court didn’t like the looks of the poor thing.