An opinion that the court is careful to tell us does not deal with the unauthorized practice of law nor the circumstances in which a California attorney can represent clients at arbitration in Arizona.

The parties mediated their dispute. Plaintiffs won and, pursuant to statute, moved for an order confirming the award. Defendants opposed it because the plaintiffs’ attorney at arbitration was a California lawyer, not a member of the Arizona Bar. Defendants didn’t know or ask about that at the time but somehow found out later. The trial court confirmed the award; this opinion affirms.

The reasons for refusing to confirm an award are set by statute, among them that the award was procured by “corruption, fraud or other undue means.” Defendants argued that using an out-of-state lawyer was “undue means.”  But “undue means” involves bad faith and intentional misconduct “equivalent in gravity to corruption or fraud.” Using a California lawyer didn’t, the court tells us, because the lawyer “took no steps to conceal his lack of Arizona bar membership.”

In addition, the undue means have to be undiscoverable and “materially related to the issue.” The court turns discoverability into a policy question, presumably because the cases it relies on are federal rather than from Arizona. Arizona cases say that mediation is speedy and inexpensive (which is also what lawyers tell their clients, who are routinely shocked and disappointed to learn the truth), thwarting awards for things that could have been discovered wouldn’t be, so you can’t.

(A footnote suggests that some sort of waiver may also be involved but doesn’t explain why and doesn’t seem to fit the sentence it foots, so it’s hard to know what the court had in mind.)

“Materially related” means that something “had an impact on or influenced the arbitrator’s decision itself.” The court decides that the Nolan’s lawyer didn’t – which it apparently doesn’t mean as an insult, as we’ll see when we get to the attorney-fee part at the end.

What about UPL? The court says that the opinion doesn’t affect that since the Bar could still sanction the attorney. And it doesn’t prevent refusing to confirm an award “if the attorney procuring it misrepresented or actively concealed his or her nonmembership in the Arizona bar.” That conclusion isn’t necessarily supported by the rest of the opinion, though, since it deals with “undue means” but not “materially related.” In any event, the court points out in a footnote that an advisory opinion allows foreign lawyers to arbitrate here under circumstances the court quotes at length and then tells us it hasn’t considered because it doesn’t matter whether this was UPL or not. But since it may be a bit hard to square this opinion with some of the more expansive UPL language that our courts and lawyers have thrown around it’s easy to feel that the court thought this probably wasn’t UPL anyway.

Finally, Defendants argued that the award should at least not be confirmed to the extent that it awarded fees to the California attorney. But the statute says that the court can’t modify the award (except, basically, for evident mistakes that can be corrected without otherwise affecting the award). Striking the fee award would modify the arbitrator’s findings and conclusions that the attorney was entitled to them. So, the court affirms the fees as well.

(link to opinion)

(LATER NOTE: This is opinion was amended by another issued on July 28, 2011. The only difference appears to be the deletion of a couple of sentences (from paragraphs 22 and 25) regarding the use and effect of DOI forms, about which one of the parties presumably raised some quibble. For purposes of our analysis the changes are inconsequential.)

A.R.S. 20-259.01(B) requires a written offer of UIM coverage. The issue here is whether it also requires a written denial. The answer is “no.”

When Blevins bought his car insurance from GEICO it gave him a written offer. He refused the coverage but didn’t sign the form saying so. After being in an accident he claimed UIM; GEICO denied it; he sued. The trial court gave him summary judgment; this opinion reverses.

An earlier case (State Farm v. Ash) had decided this issue for the insurer. But since then the statute has added two sentences.

Since 1992 the statute has said “The selection of limits or rejection of coverage by a named insured or applicant on a form approved by the director shall be valid for all insureds under the policy.” The trial court apparently focused on this, interpreting it as requiring a written denial on the written form. But the Court of Appeals points out that the sentence does not explicitly require a written denial nor even that a form be used. The Legislature could have done so had it wished, as it has with other insurance statutes, e.g., 20-259.01. The legislative history and a Supreme Court case indicate that use of the written form – including a written denial – is one method of demonstrating compliance, not the only way to comply with the UIM requirement. The sentence relates to an effect of using the form, namely, that the policyholder’s UIM choice applies to all insureds.

Since 2003 the next sentence of the statute has said “The completion of such form is not required where the insured purchases such coverage in an amount equal to the limits for bodily injury or death contained in the policy.”  This, Blevins argued, means that the form is required otherwise. But the court says that the 2003 sentence relates only to the 1992 sentence, under the last antecedent rule (“a qualifying phrase [is] applied to the word or phrase immediately preceding as long as there is no contrary intent indicated”). In other words, the sentence means that the purchase of maximum UIM coverage is valid for all insureds whether or nor a state-approved form is used.

The Department of Insurance has taken the position that it must approve the forms used to offer UM/UIM coverage. But an agency’s interpretations are advisory only; “to the extent it conflicts with our interpretation, we do not find [the Department’s] interpretation controlling.

(This will cause some consternation since there are efforts already underway to attack some companies’ UM/UIM selection forms based on the Department’s interpretation.)

The rule in Ash therefore still applies. The denial of UIM need not be in writing.

The Court remands with instructions to enter judgment for GEICO.

(link to opinion)

Rule 55 requires that notice of default be given to the attorney of a represented party. This plaintiff tried to base a $750,000 default judgment on not doing that, with predictable results.

Spectrum (in Utah) and Neeme (in Arizona) had a falling-out over a contract. Spectrum sued Neeme in Utah; Neeme sued Spectrum in Arizona. Spectrum didn’t appear in Arizona and Neeme took default judgment. Neeme sent copies of the application for default to Spectrum itself but not to Spectrum’s lawyer in Utah. On Spectrum’s motion, the trial court set the default aside. Neeme appealed. The Court of Appeals affirms.

Neeme argued that the Utah attorney wasn’t going to appear in the Arizona case. But the rule says “attorney,” not “attorney who is going to appear in the case.” The court emphasizes the facts that Neeme knew of the the Utah lawyer and that he represented Spectrum in the same dispute out of which Neeme’s case arose. And it limits its holding to that set of facts, declining to rule on various scenarios that Neeme apparently proposed – whether, for example, the rule means all of multiple lawyers, or in-house counsel, or lawyers working on matters unrelated to the subject of the dispute.

Neeme also argued that Spectrum had unclean hands because Neeme had announced that it would sue Spectrum on a particular day and Spectrum filed its suit the day before. Spectrum thereby, you see, “force[d] Neeme to litigate in a foreign forum.”  We don’t know whether the increasing ability of lawyers to make outrageous and even simple-minded arguments with a straight face arises out of an increase in attitude or an increase in ignorance, or both. In any event, the court treats the argument with at least as much respect as it deserves, making some comments about the meaning and effect of equitable defenses and also that the unclean hands have to arise out of the same transaction.

(link to opinion)