This is a supplement to an opinion issued in the same case on April 7. We didn’t review that one for reasons alluded to in our FAQ; this one we can comment on.

Diaz was tried for burglary. The jury that convicted him was polled; the transcript of the poll mentions only eleven jurors. Diaz appealed his conviction, arguing that he had a right to have twelve jurors consider his guilt but got only eleven. His counsel had not pointed this out at trial – because, the State argued, there really were twelve jurors and the reference to eleven was a mistake – but the court ruled that it was fundamental error. Because Diaz had a statutory right to twelve and the transcript showed that only eleven had deliberated, the court reversed the conviction.

After that opinion was issued, the State called the court reporter. She checked her notes and prepared a corrected transcript showing that there had been twelve jurors, after all. The State moved to correct the transcript and for reconsideration.

In this supplemental opinion, the court denied both motions. It cited a number of cases for the proposition that if you think that the record is wrong, you have to have it corrected before the appellate court rules.

That, after all, is basic common sense. If you can nip an opponent’s appeal in the bud by simply correcting the record, why put yourself and everybody else through an appeal? Isn’t calling the court reporter the first thing you do, not the last? The court asked the State’s counsel that sort of question; the answers were so dismal that the court quotes them in the supplemental opinion and signals a gentle but enormous displeasure.

But the real problem, of course, is that waiting until after you’ve lost to reveal a “corrected” transcript raises entirely too many questions about how that transcript came about. The sanctity of the record is essential to our legal system. Although neither this opinion nor the original talks much about that, we trust that the court had it in mind.

Judge Howard, who had dissented from the original ruling,  filed a brief dissent. “We now have conclusive proof that the legal principle on which the original opinion in this matter is based is erroneous and should be reconsidered,” says his new dissent. Actually, though, what the corrected transcript purported to show was that the facts were wrong, not that the law was. Its true that whether the error was fundamental is the key here. But whether it was or not, the idea that Diaz shouldn’t have been allowed to raise the argument because we now know he was wrong puts the cart before the horse.

NOTE: THIS OPINION HAS BEEN ORDERED DEPUBLISHED

This is a personal-jurisdiction case involving eBay.

Holland, an Arizona resident, bought a car on eBay from Hurley, a Michigan resident. When Holland got the car he was dissatisfied. He sued Hurley in Pima County. Hurley argued that Arizona had no personal jurisdiction over him; the trial court agreed.

So did the Court of Appeals. In a labored analysis, the court held that putting something up for sale on eBay does not itself constitute purposeful contact with Arizona.  This is consistent with earlier cases about interstate sales, of which – except for the eBay angle – this is a fairly typical example.

The court did have to distinguish Uberti v Leonardo, 181 Ariz. 565 (1995), which held that a foreign manufacturer’s extensive nationwide marketing justified jurisdiction in Arizona because the manufacturer otherwise wouldn’t be subject to American law (or so said our Supreme Court). That concern didn’t apply here because Holland could sue Hurley in Michigan.

That is enough to dispose of the case but the court also wanted to write about cases involving eBay and other web sites. There are cases (in other jurisdictions) that draw distinctions based on how much interactivity a site’s owners set it up to offer. They don’t apply here, even if they were the law of Arizona, because Hurley doesn’t own or control eBay.

The mere fact of selling on eBay, then, does not produce jurisdiction. The opinion makes allowances for other cases in which a seller does additional things that show purposeful contacts with Arizona.

In a very brief concurring opinion, Judge Espinoza suggests that Uberti could indeed apply to a domestic seller who uses eBay to sell to all States. “[T]hat would appear to be the whole point of utilizing the boundless eBay cyber marketplace.” He joins because, he says, that conclusion can’t be drawn from the “skeletal facts” available on this appeal. But if that’s the “whole point” of using eBay, what other facts need there be? If the concurrence doesn’t mean that it is basically a dissent, its hard to know what it does mean.

At the end of the opinion the court upheld the trial court’s ruling preventing Holland from doing discovery to supplement those “skeletal facts.” This is not publishable stuff, so it must be proof that the court reads us and agrees that it shouldn’t really be splitting one appeal into more than one opinion.

Having very recently addressed the economic loss rule, Division Two does so again here and manages to muddy the waters pretty completely.

Davey (“JDS”) did soil engineering for a subdivision in Globe. Hughes built some houses there. The houses had serious problems due, allegedly, to bad soil. As a result, Hughes dealt with lawsuits from homeowners, problems with the Registrar of Contractors, its own (unsuccessful) suit against the City of Globe, and substantial legal fees. It then sued JDS for negligence. JDS moved for summary judgment, which the trial court – a Graham County judge visiting Gila – granted. (For some reason, the trial judge then instructed JDS to prepare findings and conclusions; in a footnote, this opinion gently points out that they’re not appropriate on summary judgment and that the Court of Appeals would ignore them.) Hughes appealed.

JDS’s argument was that under the economic loss rule Hughes couldn’t sue for negligence. The economic loss rule, traditionally stated, is that a claim for economic loss that does not involve personal injury or damage to property other than that which was the subject of a contract lies only in tort, not in contract. For example, if you buy a widget that turns out to be broken then your claim is in contract unless the broken widget hurts you or causes damage to some other, “secondary” property.

What property is “secondary” can involve the sort of how-many-angels-fit-on-the-head-of-a-pin metaphysics that has not – as this opinion demonstrates – entirely passed out of the law. When Hughes built houses on the land JDS worked on, did they become part of the land – and therefore subject to the economic-loss doctrine – or were they still separate, and therefore “secondary,” property?

In March Division Two seemed to have simplified the problem in  Valley Forge Insurance v. Sam’s Plumbing, L.L.C. (CA2 3/19/09) (which we referred to briefly here). Under that case, the question turns not on whether the property is “other property” but instead on analysis of three factors: “the nature of the defect, how the loss occurred, and the type of loss for which the plaintiff seeks redress.” Under that analysis, there needn’t even be any “other property” to support a tort claim.

Hughes started with the last factor – the type of loss.  If the loss is economic, the remedy is in contract. But if personal injury or damage to other property is involved, tort liability is appropriate. Therefore, the court said, the question is whether the houses became part of the land or were “other property.”

Wait a minute. Haven’t we just circled back to the traditional economic loss rule? And how does that square with the indication in Valley Forge that the question is not whether there is other property?

In any event, after a page or two of studying metaphysics from other jurisdictions, the court concluded that the houses were separate from the lots. (At this point the opinion mentions that JDS had conceded that at oral argument; one wonders whether the court wanted to bolster its argument with the litigant’s admission or to justify the admission with its argument.) So, factor three justifies a tort claim.

The first factor – the nature of the defect – concerns whether there is an unreasonable danger to person or property or merely a construction defect. The court concluded that bad soil is a danger both to the houses and to their occupants. Factor two justifies a tort claim.

The second factor – how the loss occurred – has to do with whether it occurred suddenly or gradually. This factor, the court explained, might favor a contract claim but was outvoted here by the first two factors.

Therefore, Hughes was entitled to sue JDS for negligence. The court reversed and remanded on that issue. (It upheld the trial court on a couple of issues JDS argued below but didn’t discuss in its brief.)

Where this leaves the economic loss rule is anybody’s guess. The old rule has, apparently, been folded into one of the three Valley Forge factors, which are themselves so clearly and artfully drawn that they have to be addressed backwards, or at least sideways.

(Hughes also argued a “standing” issue but the argument was factually silly and so we won’t waste time on it.)