Justia Arizona Supreme Court Opinion Summaries

In this case, a construction financer, Mortgages Ltd. (ML), collapsed, leading to numerous mechanics' liens on unfinished projects. ML had loaned $165 million to Tempe Land Company (TLC) for a condominium project, securing the loan with a deed of trust and purchasing a title insurance policy from Fidelity National Title Insurance Company. Contractors began recording mechanics' liens against the property, and ML entered involuntary bankruptcy. The Loan LLCs, created to hold ML's assets, foreclosed on the property but did not extinguish the liens. Universal and VRCP provided loans to ML Manager and the Loan LLCs, securing their loans with deeds of trust and obtaining title insurance policies from Commonwealth Land Title Insurance Co.The trial court granted summary judgment to Commonwealth on CMLC's breach of contract claim, finding that the loans were fully repaid, thus precluding coverage under the policy. The case proceeded to trial on CMLC's bad faith claim, where the jury awarded $5 million in damages. Both parties appealed. The court of appeals vacated the trial court's summary judgment on the breach of contract claim, directing the trial court to enter summary judgment for CMLC, and affirmed the denial of Commonwealth's motion for judgment as a matter of law on the bad faith claim.The Supreme Court of Arizona reviewed the case and held that Commonwealth could contest coverage based on policy provisions limiting liability to the unpaid indebtedness. The court found that the loans were fully repaid, thus no covered loss occurred. The court also held that the diminution in lien value did not constitute actual pecuniary damage to support a bad faith claim. Additionally, the court ruled that the collateral source rule did not preclude evidence of loan repayments. The court vacated the court of appeals' opinion, affirmed the trial court's summary judgment for Commonwealth on the breach of contract claim, and remanded to enter summary judgment for Commonwealth on the bad faith claim. View "CENTERPOINT v COMMONWEALTH" on Justia Law

Jacey Lee Orlando was a passenger in an all-terrain vehicle (ATV) that overturned in California’s Imperial Sand Dunes, causing serious injury to her leg. The driver’s insurer paid Orlando the liability policy limit, which was insufficient to cover her injuries. Orlando then filed a claim with her insurer, State Farm, under her underinsured motorist (UIM) policy. State Farm denied coverage, stating that the ATV was not an “underinsured motor vehicle” under the policy because it was designed for use primarily off public roads and the accident did not occur on a public road. State Farm subsequently filed for a declaratory judgment to confirm that the policy did not provide UIM coverage for the ATV accident. Orlando counterclaimed for breach of contract.The Superior Court in Maricopa County granted summary judgment in favor of State Farm, concluding that the ATV was not an “underinsured motor vehicle” under the policy and that the policy’s exclusion was valid. Orlando appealed, and the Court of Appeals reversed the decision, holding that the UIM provision of the Uninsured/Underinsured Motorist Act (UMA) did not permit excluding coverage for the ATV accident.The Supreme Court of the State of Arizona reviewed the case to determine whether the UMA requires insurers to provide UIM coverage for accidents involving vehicles designed primarily for off-road use and that do not occur on public roads. The court held that the UMA does not require coverage for ATVs not operated on public roads and that an insurer may preclude such coverage in a UIM policy. The court vacated the Court of Appeals' decision and affirmed the Superior Court’s summary judgment in favor of State Farm. View "STATE FARM AUTOMOBILE v ORLANDO" on Justia Law

In April 2021, David Browne visited Billy Jack’s Saloon and Grill in Dewey-Humboldt, Arizona. After leaving the bar, Browne, with a blood alcohol content nearly four times the legal limit, caused a multi-vehicle collision on State Route 69. Victor Sanchez-Ravuelta, Janette Dodge, and their two minor children, Elijah and Amelia, were injured in the crash. The plaintiffs alleged that the Arizona Department of Liquor Licenses and Control (the Department) was negligent in failing to prevent Billy Jack’s from overserving its patrons.The plaintiffs filed a lawsuit against the State of Arizona, the Town of Dewey-Humboldt, and Yavapai County. The Superior Court in Maricopa County dismissed the claims against all defendants. The court found that the plaintiffs’ notice of claim to the County and Town was insufficient and that the Department did not have a legal duty to protect the plaintiffs from the harm caused by Browne’s actions. The court dismissed the minor plaintiffs’ claims without prejudice and the adult plaintiffs’ claims with prejudice.The Arizona Court of Appeals held that the Department owed a statute-based duty of care to the plaintiffs. However, the Arizona Supreme Court reviewed the case and concluded that the Department did not owe a duty of care to the plaintiffs. The court found that the statutes cited by the plaintiffs did not impose a mandatory duty on the Department to prevent the overserving of patrons. The Supreme Court vacated parts of the Court of Appeals' opinion and affirmed the Superior Court’s dismissal of the adult plaintiffs’ claims against the State with prejudice. The case was remanded to the Court of Appeals to consider the Town’s cross-appeal. View "SANCHEZ-RAVUELTA v YAVAPAI" on Justia Law

On Christmas night in 2007, firefighters in Kingman, Arizona, extinguished a fire in a pickup truck. Investigators found evidence of arson, including gasoline fumes and remnants of a gas can. The truck was registered to Anna Hammond, who was found injured in her home nearby, along with her deceased dog. Hammond later died from her injuries. A grand jury indicted Edward Serrato III for second-degree murder, first-degree burglary, arson of an occupied structure (the vehicle), theft of means of transportation, and attempted arson of an occupied structure (the house). Serrato was convicted on all charges and sentenced to 135 years in prison.Serrato appealed his convictions. The Arizona Court of Appeals affirmed his convictions and sentences for second-degree murder, first-degree burglary, theft of means of transportation, and attempted arson of an occupied structure. However, the court also affirmed his conviction for arson of an occupied structure, interpreting the statute to mean that Serrato's presence alone made the truck an occupied structure.The Arizona Supreme Court reviewed the case to determine whether an arsonist's presence alone is sufficient to support a conviction for arson of an occupied structure under A.R.S. § 13-1704. The court held that the term "occupied structure" unambiguously excludes the arsonist from being considered a "human being" under the statute. The court reasoned that including the arsonist would render other statutory provisions nearly superfluous and undermine the tiered arson statutory scheme. Therefore, the court vacated Serrato's conviction and sentence for arson of an occupied structure and remanded the case for further proceedings. The court's decision did not affect Serrato's other convictions and sentences. View "STATE OF ARIZONA v SERRATO" on Justia Law

In 2018, Lillian Hester was convicted by a jury of abusing and murdering her six-year-old nephew, Jack. Lenda Hester, Jack’s grandmother, and Jason Conlee, Lillian’s boyfriend, pleaded guilty to charges of child abuse and endangerment. Jack’s half-sister, Elise, sought over $3 million in restitution for Jack’s future lost wages from the defendants.The Superior Court of Coconino County allowed Elise to assert victims' rights on Jack’s behalf but denied her request for restitution for Jack’s future lost wages, ruling that such wages were consequential damages and not recoverable as restitution. The Arizona Court of Appeals affirmed this decision, agreeing that the future lost wages were too speculative and attenuated to be considered direct economic losses.The Supreme Court of the State of Arizona reviewed the case and reversed the lower courts' decisions. The court held that future lost wages of a murdered child are recoverable as restitution if they meet the criteria of being economic losses directly caused by the criminal conduct, as outlined in the Wilkinson test. The court emphasized that the loss of Jack’s future wages was a direct result of his murder and not consequential damages. The court remanded the case to the Superior Court to determine the amount of restitution for Jack’s future lost wages, ensuring that the amount is reasonably estimated and not based on speculation. View "E. H. v HON. SLAYTON" on Justia Law

Martin Montano Jr., an employee of Casas Custom Floor Care, LLC, was involved in a fatal car accident while driving his mother's truck to correct his timesheet at the company's main yard. Michael Cravens, the surviving spouse of the deceased, sued Montano and Casas, alleging negligence and vicarious liability. Cincinnati Indemnity Company, which insured Casas, issued a reservation of rights letter to Montano, disputing its obligation to defend or insure him under the policy.The Superior Court in Pima County granted summary judgment in favor of Cravens, ruling that Montano was using the vehicle "in connection with" Casas's business at the time of the accident, thus obligating Cincinnati to indemnify Montano. The court also upheld the enforceability of a Morris Agreement between Montano and Cravens, which stipulated Montano's liability and assigned his rights under the policy to Cravens. The court of appeals affirmed the superior court's rulings on both coverage and the agreement.The Supreme Court of Arizona reviewed the case and held that an employee operates a non-owned auto "in connection with your business" when using the vehicle while engaged in the employer's business. This does not include a routine commute. The court also held that a contingent Morris agreement is enforceable if it meets the substantive requirements to ensure against fraud, collusion, unfairness, or unreasonableness. The court vacated the court of appeals' coverage ruling, affirmed the ruling on the Morris Agreement, reversed the superior court's judgment, and remanded for further proceedings consistent with its opinion. View "CRAVENS v MONTANO" on Justia Law

This case involves a dispute over the ownership of a vacant lot. Renee Dominguez holds a recorded deed to the lot, but Magdalena Rios De Dominguez claims the deed is a forgery and asserts ownership through a previously recorded deed. The primary issue is the applicability of A.R.S. § 12-524, which sets a five-year statute of limitations for quiet title actions against a party with a recorded deed who has paid property taxes for the preceding five years.The Superior Court in Maricopa County granted summary judgment in favor of Renee, ruling that even if the deed was forged, the five-year statute of limitations barred Magdalena's claim, thus conferring full title to Renee. The court also ruled that quieting title for Renee barred Magdalena’s claim for damages under A.R.S. § 33-420. The Court of Appeals affirmed the Superior Court's decision.The Supreme Court of the State of Arizona reviewed the case and held that a "recorded deed" under § 12-524 includes any deed that is facially valid, even if it is forged. Since Renee's deed was facially valid and she met the other requirements of § 12-524, the five-year statute of limitations applied. However, the court also held that Magdalena had sufficiently preserved her arguments for equitable tolling and the discovery rule, which, if successful, could make her complaint timely under § 12-524. The court vacated parts of the Court of Appeals' opinion and remanded the case for consideration of these arguments.The Supreme Court affirmed the remainder of the Court of Appeals' opinion and denied both parties' requests for attorney fees, allowing them to re-urge their requests before the appropriate court after the remand. View "DOMINGUEZ v DOMINGUEZ" on Justia Law

April Sponsel, a prosecutor at the Maricopa County Attorney’s Office (MCAO), was disciplined for her conduct in several cases. She was found to have violated multiple Arizona Rules of Professional Conduct, including competence, diligence, good faith, and conduct prejudicial to the administration of justice. The violations stemmed from her handling of cases related to an October 2020 protest, as well as other cases involving defendants Charles Walker and Richard Villa. Sponsel was accused of filing charges without sufficient evidence, failing to review available evidence, and making unsupported allegations.The disciplinary panel concluded that Sponsel violated ethical rules by not thoroughly investigating the cases before filing charges and by pursuing charges that were not supported by the evidence. The panel found that her actions caused significant harm to the defendants, including wrongful incarceration and damage to their reputations. The panel also noted that her conduct negatively impacted the integrity and morale of the MCAO.The Arizona Supreme Court reviewed the case and affirmed the panel’s findings and the two-year suspension from the practice of law. The Court agreed that Sponsel’s conduct violated the ethical rules and caused harm to the defendants and the justice system. The Court emphasized the importance of a prosecutor’s duty to seek justice rather than merely secure convictions. The Court also noted that the suspension was necessary to protect the public, deter similar misconduct, and maintain confidence in the integrity of the legal system. View "In re Sponsel" on Justia Law

The case involves the Arizona Abortion Access Act Initiative I-05-2024, which appeared on the November 5, 2024, general election ballot. The Legislative Council prepared an analysis of the initiative, which included a description of existing state law prohibiting abortions after 15 weeks of gestation, except in medical emergencies. The analysis used the term "unborn human being" to describe the existing law, which the initiative's proponents argued was not impartial and requested the term "fetus" be used instead.The Superior Court in Maricopa County ruled in favor of the initiative's proponents, finding that the term "unborn human being" was emotionally and partisanly charged, and ordered the Council to replace it with a neutral term. The Council members appealed the decision, arguing that the analysis was impartial and complied with statutory requirements.The Arizona Supreme Court reviewed the case and reversed the Superior Court's ruling. The Court held that the analysis substantially complied with the statutory requirement for impartiality by accurately describing existing law using the precise terminology found in the statute. The Court emphasized that the term "unborn human being" is used in the existing law and that the analysis provided necessary background information to voters. The Court concluded that the analysis was impartial and did not advocate for or against the initiative. The request for attorney fees and costs by the initiative's proponents was denied. View "ARIZONA FOR ABORTION ACCESS v MONTENEGRO" on Justia Law

Jose and Kirstin Aroca executed a "Note Secured by Deed of Trust" in 2007, agreeing to pay Tang Investment Company $40,000, secured by real property in Pinal County. They made interest-only payments for one year and then stopped. Tang did not initiate foreclosure or any action to enforce the debt, which remains unpaid. In 2022, the Arocas filed a suit to quiet title, claiming the Deed of Trust was invalid as the statute of limitations on the Note had expired.The Superior Court in Pinal County dismissed the Arocas' complaint, agreeing with Tang that under A.R.S. § 33-714, the Deed of Trust lien was valid until 2057. The court of appeals reversed, holding that A.R.S. § 33-714 did not extend the statute of limitations for foreclosure, which was governed by A.R.S. § 33-816 and A.R.S. § 12-548(A)(1), setting a six-year limit. The court concluded that Tang could not foreclose or initiate a trustee’s sale after 2018 and that the Arocas were entitled to quiet title under A.R.S. § 12-1104(B).The Supreme Court of Arizona reviewed the case and held that the equitable principles from Provident Mut. Bldg.-Loan Ass’n v. Schwertner do not override the statutory rights established in A.R.S. § 12-1104(B). The court determined that an action to quiet title can proceed even if the underlying debt remains unpaid, provided the statute of limitations for enforcing the debt has expired. The court reversed the Superior Court's judgment and remanded for entry of judgment in favor of the Arocas, affirming their right to quiet title. The court also vacated parts of the court of appeals' opinion but left the attorney fees award intact. Tang's request for attorney fees and costs was denied. View "AROCA v TANG INVESTMENT" on Justia Law