Ballesteros v. American Standard Insurance Company (1/20/11)

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This is the review of a Court of Appeals decision we reported here.

20-259.01 requires automobile insurers to offer uninsured and underinsured coverage. Cases had said that the offer must be reasonably calculated to come to the insured’s attention. Ballesteros claimed that American Standard’s offer wasn’t because its UM/UIM offer form was in English and his “primary language” is Spanish. American Standard argued that the English form is required and approved by the Department of Insurance so using it should be a “safe harbor.” The trial court granted Ballesteros summary judgment; American Standard appealed. The Court of Appeals reversed, holding that the form wasn’t a safe harbor and that there questions of fact about whether American Standard had done enough to make Ballesteros aware of the offer.

The Supreme Court holds that using the State-approved form satisfies the statute.

The statute says that the insurer “shall make available” UM/UIM coverage and “by written notice offer” it. The Court notes that the “make available” language in the statute’s predecessors had been interpreted as not requiring action by the insurer to instruct the insured about the coverage. To make the coverage available therefore does not mean to explain it. The “offer” is measured by contract law, under which an effective offer depends not on the offeree’s actual understanding of its terms but on his reasonable understanding that an offer of some sort has been made that would bind the offeror. The Plaintiff did not dispute than an offer had been made; he therefore didn’t need something in Spanish to explain that.

The Court further notes that the statute does not require a Spanish form even though other statutes do. Moreover, it once did require a Spanish form but that requirement was dropped.

Finally, the Court reviews legislative history to conclude that by certain amendments to the statute the legislature intended that obtaining a signature on the DOI-approved form be in itself sufficient compliance with the statute. (The Court avoids using the problematic term “safe harbor.”)

The Court is careful to say, though, that “we express no opinion whether tort law may impose [the requirement of a Spanish form] . . .  in certain circumstances” (Ballesteros is also making the usual claims of negligence, bad faith, etc.)

The Court vacates the Court of Appeals’ decision and remands for entry of summary judgment for American Standard on the statutory claim.

 

(link to opinion)

Estate of DeSela v. Prescott Unified School District (1/18/10)

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We blogged the Court of Appeals opinion in this case here (and its slightly revised version here). The Supreme Court vacates that opinion; it reaches the same result but for a different reason.

DeSela was injured at school in November 2004. Her mother assigned to her the mother’s claim for her medical expenses. In December 2007 she filed suit for personal injury, having turned 18 the year before. The District argued that the claim for medical expenses was barred by the statute of limitations. The trial court agreed and dismissed it. The Court of Appeals reversed, concluding that although she had received the cause of action by assignment from her mother the statute of limitations applies as though it were her own, i.e., it abated until her majority.

The Supreme Court outflanks the assignment issue, holding that DeSela herself owned the cause of action. The assignment was therefore irrelevant. This overturns earlier cases to the contrary; the Court feels the old rule – that the parents own the claim for medical expenses –  outmoded and inconsistent with a child’s rights nowadays to make various other sorts of claims. The right to recover medical expenses, says the Court, belongs to both parent and child, although no double recovery may occur. The Court reverses the trial court and remands.

This has the advantage of not running roughshod over the law of assignments, as the Court of Appeals did. Instead, it runs roughshod over the idea that you’re supposed to raise issues in the courts below. The argument it adopts was not raised until the case was before the Supreme Court. It was raised by DeSela, not by the Petition for Review. The Court considers it for two reasons. First, the issue is “of great public importance or likely to recur.” How that is true here isn’t entirely clear since the precedent being overturned is from the 1940’s; that’s about how often it comes up. Second, the Court of Appeals would have been bound by the precedent anyway. But isn’t that always true? Doesn’t this create a rule de facto that an argument for change of Supreme Court precedent needn’t be made until the case is before that court? And why is it a good idea to decree that granting review, instead of limiting the issues to those on which it is granted, expands them?

No doubt the Court thinks it has changed the law in a good way. But the impulse for immediate gratification – either of the law or of a particular claimant – should rarely be indulged. The traditional and proper solution is to signal an argument’s future acceptance by discussing it, briefly but favorably, before announcing that it was untimely. That gets the law changed. permits (when someone eventually bothers to fight the issue) full review all the way along – which, when you’re  changing seventy-year-old precedent (just to posit a random example) is not a bad idea – and respects important procedural principles. The failure to do so suggests arbitrariness, if not whimsy.

 

(link to opinion)

Smith v. Beeseley (CA2 1/13/10)

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The issue here is whether a driveway could be built over a drainage easement. This is pretty dry stuff but illustrates the value of a particular statute and the lack of value of a particular rule.

A subdivision plat showed several drainage easements. Beeseley, an adjoining landowner, bought property burdened by one of them, located between two of the subdivision’s lots, where a ravine drained water from his property into a creek. He built a culvert and driveway over this property. Smith, who owned the subdivision lot next to this, sued for trespass, nuisance, and unlawful alteration of a watercourse (48-3613), requesting an injunction that Beeseley remove these improvements. His principal argument was apparently that the easement was only for drainage and couldn’t be used also for a driveway.

For reasons not made clear (probably because the Court of Appeals doesn’t understand them, either), preliminary proceedings were lengthy and confused. There were motions for summary judgment and an evidentiary hearing on a preliminary injunction. After the injunction hearing the trial judge indicated that he would rule for Smith and asked for a form of order; Smith’s  response, a year later, was to file another motion for summary judgment that the court denied. Before trial Smith finally got around to requesting an order on the preliminary injunction, which the court entered, ordering Beeseley to remove the improvements because they would change the drainage in the event of a 100-year flood. Along with this the court issued a Rule 56d order specifying undisputed facts.

At trial Beeseley presented a new design for the improvements that he said wouldn’t interfere with the watercourse. The trail judge agreed, affirmed the order to remove the old improvements, and permitted construction of the new ones. It found – contrary to the 56d order – that the developer hadn’t intended Beeseleys’ easement to be solely a drainageway. And it concluded that the old improvements didn’t, after all, violate 48-3613, ruling the statute inapplicable because the local flood control district doesn’t regulate watercourses that small. The court awarded Smith nominal damages (we’re not told the amount) on the nuisance claim because some rocks had slid onto his property during construction of the improvements. (It ordered Beeseley to try not to do that while building the new ones.) It also awarded Beeseley $55,000 in attorney fees.

The bulk of the opinion discusses the contention that the easement was for drainage only. On this issue Smith loses. As the trial court had ruled,  the language of the easement permitted compatible uses and the driveway was compatible. That the plat did not show roadways where the easements were didn’t prevent people from putting driveways on them as long as the driveway didn’t interfere with the function of the drainageway.

Smith argued that the trial court couldn’t depart from the 56d  order. But such orders are interlocutory and subject to revision. If, for example, a fact thought to be “without substantial controversy” under 56d is later found to be controverted then the ruling can be changed. (Any wonder why nobody bothers with Rule 56d anymore?)

Smith also contended that “because drainage is a public use, the plat‘s dedication of land for this purpose combined with the sale of lots within the subdivision vested title to the subject property in Gila County,” and that therefore Beeseley didn’t even own it. This was based on an old case and two statues from the 1939 Code (in effect when the property was platted). This is one of those clever, midnight-oil arguments that rarely fly. Dedication is a matter of intent, not something that happens automatically, and the trial court had found that the original developer didn’t intend to give the land to the County.

But as to 48-3613 the court concludes that the trial court was right the first time: Beeseley violated it. The statute requires government approval of any alteration of the flow of water in a watercourse. There are exceptions but even under the exceptions plans must be filed, which Beeseley hadn’t done. Though the County may limit the scope of its regulation (in Gila County’s case to drainage areas of more that 160 acres), it cannot change the statute: those who alter a watercourse without following it are liable. (It looks like the Gila County regulations made it difficult, if not impossible,  to comply fully with the statute but the court cuts Beeseley no break for that except to suggest that the trial court can consider his predicament in deciding whether to award damages or fees.)

The statute requires that the watercourse be returned to its original state, so the court remands for the entry of an order to that effect and a ruling as to fees (the court vacates the award to Beeseley).

48-3613, by the way, is often the most powerful tool in this sort of case. “Watercourse” turns out to be a surprisingly broad term and actual damage is not required. The statute is strict, more so than the common law. In this case the easement owner considered the problem (Beeseley had contacted the flood-control people). Many owners don’t, though, especially in areas where people just think they’re dealing with a dirt road in barren desert where nobody has even seen a drop of water.

(link to opinion)