Dignity Health v. Farmers (CA1 6/11/19)

The question here is whether med pay is subject to a hospital lien. (The court, following what it says is the usage of  the parties, says “medpay.” This may be a trendy new way to put it. So we won’t.)

Farmers’ insured incurred substantial medical expense at a Dignity hospital following a motor vehicle accident. Dignity filed a lien pursuant to 33-931. Farmers nevertheless paid the med pay to its insured rather than to Dignity. Dignity sued it. Farmers moved to dismiss, arguing that the lien statute doesn’t cover med pay. The trial court granted the motion.

The Court of Appeals reverses. The statute allows the provider a lien on its patient’s claims “other than health insurance and underinsured and uninsured motorist coverage as defined in 20-259.01.” That is the UM/UIM statute, part of which (now subsection J) provides for a med pay lien against the insured’s recovery in UM/UIM cases. So Farmers argued that “health insurance” in 22-931 means “health insurance motorist coverage,” i.e., med pay. But the court indicates that the reference to “health insurance” is separate from the “as defined in 20-259.01” language. The UM/UIM statute doesn’t use the phrase “health insurance”; it defines neither that nor “med pay.” 33-931 didn’t originally contain any exclusions to the hospital lien. Then, in 1988, health insurance was excluded. The exclusion for “underinsured and uninsured motorist coverage as defined in 20-259.01” wasn’t added until 2004; the legislative history from that time doesn’t suggest that this was intended to alter the “health insurance” exclusion.

Farmers also argued that “health insurance” and “med pay” basically mean the same thing anyway. (We trust that the argument was rather more nuanced than this but the court does not describe it in detail.) The opinion says that Farmers waived this argument on appeal, then addresses it. The contention is not consistent with the way the phrases have been used in the statutes and the cases.

So “health insurance” in 33-931 doesn’t mean “med pay,” Dignity had a valid lien.

A couple of style points:

“Had the Legislature wanted to exempt medpay coverage from the . . . lien, it could have done so.” Indeed so, but whether it did so was the point, and conclusion, of the opinion. That it could have done so is a truism. The court’s point, both rhetorically and logically in the context of its analysis, is that the Legislature, if that’s what it wanted to do, could have said so. A court that goes out of its way (¶5) to chide the parties about the sloppiness of their arguments needs to be punctilious about its own.

The court’s historical analysis of the statute gives us the opportunity to point out that its method of citing statutes is a bit of a mess. When first citing it the court, as has become its wont, uses the style “33-391 (2019),” including the date as if citing a case. And it adds its now-standard footnote: “Absent material revisions after the relevant dates, statutes and rules cited refer to the current version unless otherwise indicated.” We’ve all read that sentence, or its close equivalent, enough times by now that we think we know what the court is trying to say. And yet a statement with open-ended qualifiers at both ends doesn’t actually say anything. The court actually means: “We’re going to go with the version our research service puts on our screen without trying to correlate that with what was in effect at the time unless you tell us that we need to.” But if the parties don’t tell it that — if the question of revisions and version and dates is irrelevant — then why bother mentioning it? And if the court does — as here — mention them at length then why include a catch-all footnote up front suggesting that it might not? Court opinions are not manuals for the restatement of bureaucratic rules. If the issue is relevant to the case then it should be addressed but not otherwise. Even a relatively few years ago the court didn’t use this date/footnote form and yet we still managed to keep things straight.

(Opinion: Dignity Health v. Farmers)






Terrell v. Torres (CA1 6/6/19)

We skipped this one when it originally came down in March. Although a petition for review is now pending the Court of Appeals has issued an amended opinion. The purpose of the amendment is uninteresting but the rest of the opinion turns out not to be. One one hand both the majority and the dissent want this to be a contract case. On the other they want it to be an exciting case of first impression in which they can make new law about unwanted embryos. The clerk of the court thinks its a divorce case.

The parties were boyfriend and girlfriend. She got cancer and needed treatment that might prevent her from having children, so they donated sperm and egg at a fertility clinic and the resulting embryos were frozen. Their contract with the clinic covered what would happen to the embryos in various eventualities. They married but then decided to divorce. It turned out that indeed she probably couldn’t have children except by in-vitro fertilization. She wanted to use the embryos for that, he didn’t want her to. On this issue the decree of dissolution ruled against her (though not entirely for him, either, a complication not essential to an understanding of the holding so we’ll overlook it). She appealed.

The Court of Appeals rules that she can use them.

First, it reviews facts, including (to summarize details the court gives in order to create such an impression, there being no purpose for them otherwise) that Torres is admirable but Terrell is shifty and selfish. Even if you believe that assessment you may wonder what it has to do with the interpretation of their contract. But under the rules of modern opinion-writing it is at least as important that a result be emotionally satisfying as that it be legally correct. With that in mind — and it is quite evidently what the court had in mind — you know by the end of ¶3 where this one is going.

Then, this being a “matter of first impression,” the court reviews the law of other jurisdictions. There are three approaches to embryo contracts: apply the contract (the majority approach, says the court), balance the interest of the parties, or require “contemporaneous mutual consent.” After spending six pages explaining the alternatives the court chooses one — the contract approach — for reasons it explains as follows: “we agree with the majority.”

(We now have a statute on this, 25-218.03, but it was adopted only recently and applies in dissolution cases. The court acknowledges in a footnote that the statute rejects the contract approach. But the statute wasn’t in effect at the time so “we are not bound by it in reaching a decision” and the court says it won’t affect unmarried couples in future cases. The court does not discuss how the policy implied by the statute might or might not affect the matter. Its approach to policy is in any event less than enlightening. In a footnote it refuses to apply the policy announced in 25-103 (“promote strong families and strong family values”) because it thinks that would result in Terrell winning: “to apply it to these circumstances, in which one party wants to use embryos to procreate and the other party objects, would always necessarily tip the balance in favor of the objecting party.” How the court reached that conclusion isn’t obvious but that it wants to avoid that result is. As a fall-back it asserts, in a footnote, that to consider this policy would be “speculative.” It also says — in, you guessed it, a footnote — that “neither party in this matter argues that the contract approach violates Arizona public policy.” Then why discuss it? Is it perhaps because someone realizes that when deciding what the law is public policy isn’t something a court can ignore even if the parties do?)

Having adopted the contract approach the court looks at the contract. The contract discussed in detail what would be done with the embryos if the couple didn’t use them or had a dispute. It said at least twice that the embryos couldn’t be used to create a pregnancy without the express, written consent of both Torres and Terrell. It also said (subsection H) that if the couple breaks up then the clinic would need a court order or settlement decree before using or disposing of the embryos. To Terrell and the dissent subsection H is basically a CYA provision for the clinic of the type common with medical facilities. But for the majority the reference to a court order, and also a sentence elsewhere to the effect that embryos could be covered by court orders, authorizes the court to resolve the dispute as it sees fit despite the terms of the agreement.

So the court uses a “contract analysis” to conclude that it is not bound by the contract. How, then, does it decide the dispute? By balancing the interests of the parties. Why? Because that “provides the proper framework.” Where does this balancing test come from? From the balancing cases the opinion rejected in favor of the contract rule. Apparently the unmarried-couple-embryo balancing test is so specialized that all Arizona precedent on how to analyze interests is inadequate. “In applying the balancing approach, we agree with other jurisdictions that the party who does not wish to become a parent should prevail if the other party has a ‘reasonable possibility’ of becoming a parent without the use of the embryos.” Since the court has already said that Torres doesn’t, that decides the case. (What about adoption, you might wonder? The majority dismisses it on the facts, the dissent on the law.) But the majority nevertheless spends several more pages “balancing” the parties’ interests.

How does it go about doing this? Using what “must be” a “fact-intensive inquiry,” examining the evidence and explaining why the trial court assessed it wrongly.  The majority concludes that the facts actually favor Torres. But don’t think for a moment that it finds its own facts. It tells us explicitly that it isn’t re-weighing the evidence, that it just applies law and accepts the trial court’s findings — except when it doesn’t, as for example when the trial court “overstated” something or considered a fact the majority thinks “unlikely” or thought the significance of the evidence the opposite of what the Court of Appeals thinks it is.  (Even if the court is acting properly, why do this? Why not use the careful and traditional disposition: remand for findings and conclusions in light of the legal standards announced by the opinion? The dissent suggests doing so, though only after four pages of its own “balancing” analysis, which ends up balanced in Terrell’s direction.)

Along the way the majority says that it can examine parole evidence, citing a Tennessee case that doesn’t actually use the words “parole” or “evidence,” which is perhaps why the citation says “see generally.”  But this mention of a traditional rule of contract law — even to say that it won’t be followed here — is at least a reference to that law, one of very few employed in what the court insists is a contract case. There may also be a couple of passing allusions to objective intent of the parties at the time of the contract, though the majority doesn’t seem to think of them as such. That the parties “sought to jointly preserve Torres’ fertility, and not simply to have a child within a marriage, or even within a relationship” isn’t called a finding or presented as having been made by the trial court; the dissent’s discussion suggests that the family court essentially found to the contrary. And that Terrell faced the same potential financial obligation then that he does now is mentioned as if it were somehow an argument against him.

The court also reverses the trial court’s denial of Torres’ fee request, again because the lower court found weighed balanced dealt with the facts improperly. But those facts involved a mundane divorce squabble, not embryos. (This is the reason for the amended opinion. The original granted Torres fees on appeal — accidentally, it now seems, by confusing them with trial-court fees. The amendment, besides correcting a typo or two, denies the appeal request and remands the other.)

As you may have noticed, this is a footnote-rich opinion. As usual, few if any belong; they are either useless or express thoughts that should have been incorporated into the main text. Footnote disease has been largely quiescent in CA1 for several years but the court occasionally relapses.

Is it pedantic nowadays to criticize split infinitives? Yes, when done deliberately to aid clarity or meter or done inadvertently but rarely. But the majority commits them needlessly and frequently.

The dissent is itself several pages long (but only two footnotes). For purposes of brevity and clarity, though, we have distilled it into the few comments made above.

(Opinion: Terrell v. Torres)

Heritage Village v. Weinberg (CA1 5/21/19)

The main point here is to decide whether you can intervene as a plaintiff in someone else’s lawsuit if you have the ability to file your own, separate suit instead.

Plaintiff, a homeowners’ association, sued Defendants in 2014 for alleged violation of the CC&Rs. In 2017 the association’s Board decided to settle the case without requiring full compliance with those CC&Rs. To try to block that the Intervenors — individual members of the association who wish to require full compliance — moved to intervene and also filed a separate suit against Defendants. The trial court denied the motion as untimely and, since Intervenors had filed their own lawsuit, unnecessary. And so the case was settled and dismissed. Intervenors appealed.

The Court of Appeals reverses.

As to timeliness, time is measured “not from the inception of the case, but from when the movant has notice that its interests are no longer being adequately represented.” Rule 24 does not allow intervention as of right until then. Intervenors filed their motion three years after the case began but only five days after the Board voted to settle it, at which time it no longer adequately represented Intervenors.

As to necessity, the rule allows intervention if, among other things, the existing action “may as a practical matter impair or impede” the intervenors’ ability to protect their interests. Arizona hasn’t addressed how the ability to file a separate action affects that. So the court looks to federal precedent, where there is a split of authority.  Because the rule says “may” and should be liberally construed the court adopts the broad approach: intervention is allowed if impairment of a substantial legal interest is “possible” without it. “This burden is minimal.”

The court finds that denying the motion could affect Intervenor’s interests, if only by denying them a say in the settlement. It vacates the judgment and remands for further proceedings.

(Opinion: Heritage Village v. Weinberg)