The question here is whether Arizona has jurisdiction over a defendant’s foreign spouse when there is no marital community.

Plaintiffs sued three Missouri men for a business transaction gone bad, also naming their wives as defendants on community-property grounds. The wives moved to dismiss as to them; they personally do not have minimum contacts with Arizona (Plaintiffs agree with that) and Missouri does not have community property so there is no community which the husbands’ acts might have bound. The trial court denied the motion, reasoning that tenancy by the entirety – by which spouses hold property in Missouri – is essentially the same thing for jurisdiction purposes.

The Court of Appeals accepted the wives’ special action and granted relief.

The actions of one spouse can establish jurisdiction over the community (Rollins 1985). But there has to be a community, or at least something like it. This opinion concludes that tenancy by the entirety under Missouri’s statutes is “wholly different” from community property, not the same thing – mostly, it seems, because in Missouri a judgment or debt incurred by one spouse alone cannot reach the marital property.

The court notes in a long paragraph of dicta that the tenancy-in-common law of some states is closer to community property and that it isn’t trying to “draw a bright line” between Arizona and all tenancy-in-common states. The court doesn’t specifically point out that you have to check the statues and cases of the state at issue. The implementation and interpretation of tenancy by the entirety varies; it’s easy, in fact, to find authority for the proposition that it is indeed just like community property.

The court also says, in more dicta, that concepts of agency “might justify the exercise of jurisdiction in appropriate cases” but doesn’t here because no facts or law support an agency argument. One wonders why the court advances an argument that “might” work in other cases but has no application whatever to the one before it. As always, we’ll give the court the benefit of the doubt and assume that somebody mentioned it in a brief.

The court started out by saying that it took this special action because “we have never addressed the [jurisdiction]  question when the spouses reside in a state that does not recognize the concept of the marital community. We therefore accept jurisdiction to clarify the reach of Rollins.” What it ends up holding, though, is merely that Rollins doesn’t reach Missouri.

(link to opinion)

(LATER NOTE: McBride filed a motion for reconsideration of this opinion because the court did not address one of the issues, equitable estoppel. The court granted it and issued an Amended Opinion on November 3, 2011. The new one does not change the result but adds a section on the estoppel issue. Although pages long, all it amounts to is that there was evidence in the record to support the trial court’s findings that the facts weren’t as McBride said they were. Much of the time is spent regurgitating equitable estoppel law, none of which is new or unusual and very little of which is even notable in the context of this opinion. We said below that this was a nice opinion; the new section is an unfortunate blemish. This does teach, though, that with a little effort and luck you can at least hang up your case in the Court of Appeals for ten extra months.)

This discusses the standards for granting and reviewing JMOL and new trial.

McBride sued Kieckhefer for damages; Kieckhefer asserted the statute of limitations; a jury trial was held on that issue; McBride won. But the court then granted Kieckhefer’s renewed JMOL. It also granted a new trial – on the basis, among others, that the evidence did not justify the verdict – conditionally, i.e., a new trial if the Court of Appeals reverses the JMOL ruling.

Which, by this opinion, it does. The appellate court rules on JMOLs de novo. The evidence – a he-said-she-said about whether the lawyers had an agreement to toll the statute – was conflicting. On JMOL “a trial court may not weigh the credibility of witnesses or resolve conflicts of evidence and reasonable inferences drawn therefrom.”

On a new-trial motion, though, the trial court can weigh the evidence. Its ruling is considered not de novo but for abuse of discretion. The appellate court applies “a more liberal standard when reviewing an order granting a new trial than an order denying one.” And when the basis for the new trial is that the verdict was contrary to the evidence the court will “resolve every conflict in the evidence in support of the order.” “Our supreme court has emphasized that granting a new trial because the verdict is against the weight of the evidence and does not achieve substantial justice is the “least susceptible to appellate scrutiny” (Bradshaw 1977).

The court therefore reverses the JMOL but affirms the new trial and remands.

This is a nice opinion. Division One often discusses the standard of review uselessly and at great length. Here, where the standard is actually at issue, the discussion is clear and relatively brief. And, remarkably, there are less than 1/3rd as many footnotes as pages.

As for the newfangled gobbledygook of “JMOL” rather than the self-explanatory “directed verdict,” that is probably something we’ll just have to get used to and isn’t, as far as we know, Division One’s fault.

(link to opinion)

This is about a Morris agreement to which an insurance company is a party and about fee awards in a class action.

Homeowners sued their subdivision’s developer for construction defects. The case proceeded as a typical construction-defect case: the developer named several subcontractors as third-party defendants and tendered its defense to them and their insurers, whose policies covered the developer for claims arising from the scope of the subs’ work. But when those insurers accepted under a reservation, the developer and its own insurers entered into a Morris agreement with a judgment less than their policy limits, assigning to plaintiffs all claims against the subs and their insurers. The subs’ insurers intervened to challenge the propriety of this; the trial court granted them summary judgment and fees.

Substantively, the Court of Appeals affirms. It holds, for one thing, that the agreement failed because the subs’ insurers were not given proper notice of it.

But the opinion is concerned mostly to say that the agreement failed not merely for lack of notice but because it was fundamentally defective. A Morris agreement “that avoids the primary insurer’s obligation to pay policy limits and passes liability in excess of those limits on to other insurers” is invalid. Such an agreement is “outside the permitted parameters” of Morris. The agreement favored some of the carriers (the developer’s, with which their interests in the agreement were consistent) over others (the subs’) even though the subs’ carriers were responsible only for the scope of their subs’ work. There is also no precedent for a Morris agreement “shrinking [an insurer’s] liability to less than policy limits.” “Because Morris agreements are fraught with risk of abuse, a settlement that mimics Morris in form but does not find support in the legal and economic realities that gave rise to that decision is both unenforceable and offensive to the policy’s cooperation clause.” Because the developer breached their contracts– viz., the cooperation clauses – the subs’ insurers don’t have to pay anything.

Well, yeah, probably. Unfortunately, the opinion is not closely-reasoned, concentrating more on the effects of such an agreement than on its theoretical defects (or else confusing the two).

The last several pages of the opinion concern the fee issue. The trial court had certified this as a class action. Plaintiffs argued that you can’t award fees under 341.01 (action arising out of contract) against a class-action plaintiff. The opinion holds that although the statute doesn’t exempt class plaintiffs, “special considerations nevertheless apply” to fee awards against them. This is because the court thinks that class plaintiffs’ management of the litigation is more “attenuated” than in normal cases. What the class intended to do was to sue the developer; it didn’t know that the method of settlement was legally iffy. And in this case (though we don’t know what this has to do with class actions) the plaintiffs didn’t sue the subs’ insurers; the insurers intervened. So the trial court abused its discretion in awarding fees against the class members jointly and severally.

The opinion affirms the judgment for the subs’ insurers, vacates the fee award, and remands.

(link to opinion)