Major v. Coleman (D2 5.5.21)

The parties entered into a settlement agreement under which the defendant agreed to make settlement payments over time. If the payments were not made, the parties agreed plaintiff could file a stipulation for entry of judgment. The parties then filed a stipulation to dismiss the case with prejudice stating, “in the event of a default in payment of the settlement amount, [plaintiff] shall have the right to file, and the Court shall have jurisdiction to immediately enter, and shall enter, a Stipulated Judgment held by [plaintiff’s’ counsel].” The trial court denied the request stating that the dismissal with prejudice is an adjudication on the merits and such language was inconsistent with the dismissal.

The court of appeals could not find anything in the rules or statutes “allowing or forbidding” courts from retaining jurisdiction; the United States Supreme Court has given some direction to federal courts allowing such under Fed.R.Civ.P. 41 (in dicta); and, several other states allow courts to retain jurisdiction to enforce settlements. After citing what other jurisdictions have done, the court determined cases allowing such were persuasive and consistent with Arizona law by encouraging settlement and providing an easy mechanism to enforce an agreement. Retaining jurisdiction will enable “a trial court to clear the case from its docket until the time arises, if ever, to enforce the terms of the agreement.” Thus, the trial court abused its discretion by stating it could not retain jurisdiction when a case is dismissed with prejudice. But what if the trial court refuses to retain jurisdiction not because it cannot retain jurisdiction but because it does not want to do so? What then? The court of appeals does not give any bounds to this discretion. A trial court may decide a case is better cleared from it docket and better reflective of the rule of law by not retaining jurisdiction instead of giving an open-ended opportunity for litigants to come back.

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Town of Florence v. Florence Copper Inc. (D1 3.23.2021)

In 2003, the Town of Florence annexed a large piece of property and entered a development agreement with its property owner allowing the owner to develop the property as residential and also to operate a copper mine. The owner’s plan was to mine the copper and then build houses over the mine. Years later the Town changed its mind and decided it no longer wanted a copper mine within the Town’s limits. Owner’s successor (through a bankruptcy) later moved forward with developing the mine and not the homes. And, although owner did not feel it was necessary and later withdrew the request, the owner applied for rezoning and a special use permit for the mining operation.

The Town filed suit arguing a zoning ordinance adopted years after the agreement barred mining on the property. The court of appeals held the owner had a vested right, and the Town could not unilaterally rescind the prior agreement. Using alliterative words of flout, foist, fully and formally, the court holds the Town to its agreement: “We do not discount the tension between yesterday’s binding promises and today’s public opinion, but having agreed to the Development Agreement in 2003, the Town must comply with its terms.” The court also rejected the Town’s argument that the owner abandoned the mining rights.

The court of appeals concludes with affirming a $1.7 million award of attorney fees to the owner. The court approves of the superior court judge who had “used high-stakes or bet-the-company litigation as a barometer to determine the amount of fees. . . ” But how is this barometer a standard? Should there not be more analysis of a large statutory award of fees intended “to mitigate the burden of the expense of litigation.” A.R.S. § 12-341.01. No China Doll or lodestar calculation? We cannot tell whether it is reasonable to make such fee award to a copper company in a case that appears to be neither complex nor novel.

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Cavallo v. Phoenix Health Plans, Inc. (D2 2.23.21)

Bad faith claims have recurring themes and evidence on both sides. This appeal is from a jury verdict in favor of a health insurer. The insured suffered from multiple sclerosis and purchased a health care plan in 2015. Before and after he purchased the plan, he received infusion treatments with a “controversial” drug. His medical provider submitted an authorization request and the insurer incorrectly stated that the provider was out-of-network and denied the request. After several weeks of back-and-forth exchanges between the insured, his provider, and the insurer, the infusion treatment was later approved. The insured argued the delay caused a significant relapse, and sued the insurer for bad faith. The defense argued the initial denial was a good-faith mistake; the medical provider cancelled the prior authorization and failed to provide information necessary to initiate and timely process the claim; and, the insured could have accepted a low-cost dose directly from his provider that would have cost approximately $150. Jury agreed and found for the insurer. The insured challenged several jury instructions and evidentiary rulings. The court of appeals held the jury may be instructed on contract defenses including waiver (the waiver defense was focused on the provider cancelling the authorization request). Although there is no “comparative bad faith,” whether the insured breached the contract or there are other contract defenses, such defenses may be considered by the jury when deciding whether the insurer’s conduct was reasonable. A closely related issue follows. The insured challenged a mitigation of damages instruction, but because the jury returned a defense verdict, the court did not consider it. It did, however, consider the insured’s negligent conduct in a footnote stating “UCATA may permit a defendant’s intentional conduct (bad faith) to be compared to a plaintiff’s negligence.” Thus, while there is no “comparative bad faith” because an insured cannot commit bad faith, the court’s footnote suggests comparative fault may still be in play. Less interesting are evidentiary challenges. One involving call logs without foundation, and the second, the inadmissibility of coverage guides from another plan for a different year. All of which were properly excluded.

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