Scottsdale Personal Injury Lawyer - Wrongful Death

No Personal Jurisdiction Over Across-the-Border Bar That Overserves Patron Killing Arizona Pedestrian

Geoff Trachtenberg — Fri, 29 Feb 2008 12:34:51 GMT

Interesting and disappointing personal jurisdiction memo opinion from Division One, Womack v. KC Arena. In short, KC operates a bar on the Nevada side of the Arizona-Nevada border, over served a patron who then drove across the state line and killed an Arizona pedestrian. Moreover, plaintiffs asserted that KC employees knew the patron lived in Bullhead City and that he would return there after he left the facility.

KC filed a motion to dismiss based upon a lack of personal jurisdiction. The plaintiffs opposed the motion, asserted general and specific personal jurisdiction, and (smartly) requested the opportunity to conduct discovery on the issue of personal jurisdiction. The trial court, however, granted KC's motion and Division One affirmed!

General personal jurisdiction over any claim against a defendant arises when the defendant has "substantial" or "continuous and systematic" contacts with the state. Though the record contained evidence that KC (1) advertises on television broadcasts in Arizona; (2) lists its establishment in various Arizona telephone directories; (3) employs Arizona residents; and (4) maintained an interactive website that has a "chat room" and solicits email, the Court of Appeals determined that these contacts were insufficient for general personal jurisdiction (they claimed to ignore the website since it was not, apparently, raised in the trial court).

Specific personal jurisdiction over a related claim against a defendant arises when (1) the defendant performed some act or consummated some transaction with the state by which it "purposefully availed" itself of the privilege of conducting activities in the forum state; (2) the claim "arises out of or relates to" the defendant's forum-related activities; and (3) the exercise of jurisdiction would be reasonable. KC argued that there was not a sufficient nexus between the plaintiffs' claim and KC's contacts with Arizona - namely, its local television advertising and telephone directory listings - to support the exercise of specific jurisdiction because those contacts are unrelated to the events giving rise to the plaintiffs' claims. The Court essentially agreed, focusing particularly on the fact that the events giving rise to the liability occurred in Nevada and that the location of the "injury causing event" in Arizona was irrelevant.

The Court also affirmed the trial court's exercise of discretion in denying the plaintiffs an opportunity to conduct discovery because, in essence, the Court concluded that the additional discovery would not have made a difference in the analysis. Don't you love that kind of logic - speculating on the outcome of the appeal based upon discovery that was not allowed?

Personally, Judge Barker's concurrence makes the most sense to me:

KC runs a bar that is immediately across the river from Arizona. Certainly, the business of the bar, and plaintiffs' claim, "relate[] to" the steady stream of patrons that come to the bar from Arizona and re-enter Arizona after frequenting the bar's premises. KC chose to locate its bar in that location. It initiated those contacts. It should not be jurisdictionally immune from the impact that it is having on Arizona residents when it sends intoxicated drivers onto Arizona highways.

But, alas, it is so immune.

Originally posted at InjuryBoard by Geoff Trachtenberg

Business Owners Now Owe Nondelegable Duties to Keep Premises Reasonably Safe

Geoff Trachtenberg — Wed, 26 Dec 2007 13:18:10 GMT

"Attention Safeway shoppers, business owners now owe nondelegable duties to their invitees to keep their premises reasonably safe."

Steven H. Simon sued Safeway after he was injured during a store altercation with a security guard who "physically and sexually" assaulted him. The guard was employed by a third-party company who had contracted with Safeway. He mistakenly concluded that Mr. Simon had stolen some items, Mr. Simon then asked to speak to the manager and the altercation began.

Mr. Simon sued Safeway in Simon v. Safeway, Inc. on the grounds that Safeway was vicariously liable under theories of respondeat superior and because it had a nondelegable duty to train, supervise and "employ properly licensed and trained security guards." Safeway filed a motion for summary judgment on the issue of whether they were vicariously liable for the intentional torts of the third-party security guard. Mr. Simon opposed the motion and requested the trial court continue the matter to allow for additional discovery under Rule 56(f). After initially denying Safeway's motion, the trial court granted Safeway's subsequent motion for reconsideration, denied Mr. Simon's request for Rule 56(f) relief and the Court of Appeals reversed.

Before getting into the opinion, as an important footnote, the Court's opinion assumes no independent negligence on the part of Safeway. The Court stated that, although Mr. Simon "clearly raised an independent negligence claim in his original complaint, and the parties discussed it in their initial summary judgment filings . . . we can find no record that the trial court considered or ruled on this claim when it reconsidered and ruled on Safeway's motion for summary judgment. Therefore, we decline to consider any argument about Safeway's independent negligence on appeal." This will be important later.

The Court first addressed the trial court's denial of Mr. Simon's Rule 56(f) motion to continue. Mr. Simon argued that he needed discovery to determine the precise nature of the relationship between Safeway and the security guard and requested time to depose three witnesses--the guard, the Safeway store manager and a Safeway employee who allegedly told the guard that Mr. Simon might be shoplifting.

I won't spend a lot of time talking about Rule 56(f) because it is so fact-specific, but it bears mentioning that Mr. Simon clearly did not adhere to the requirements of Rule 56(f), which requires an affidavit containing very specific information about "who, what, where and when" additional discovery would be completed. Typically, defects in Rule 56(f) affidavits are fatal, but not this time. Not only did fail to raise the issue of a missing affidavit in the trial court, but significantly the Court of Appeals concluded that failure to raise such a defect caused a waiver of the issue because "any technical deficiency in the form of the motion would have been easily remedied had Safeway done so."

So on that note, "good to know," I thought - "failure to file an affidavit in compliance with Rule 56(f) is a mere defect in 'form.'" Hallelujah, right? Wrong. In a footnote, buried at the end of the section, the Court deftly back-peddles, stating "[w]e do not suggest that courts should overlook a party's failure to follow the technical requirements of Rule 56(f). Our conclusion is limited to the specific facts of this case, where the motion substantially complied with the rule's requirements, the opposing party did not object on technical grounds, and the trial court addressed the motion on the merits despite the technical deficiency." So beware, Rul 56(f) requirements remain critical.

Anyway, before turning to the substance, the Court went on to make some important points about independent contractor law in Arizona - namely, whether someone is an independent contractor versus an employee. Although anyone reading our case law should come to the same conclusion as the Court, nothing I know of says it in as plain terms as the following:

We recognize many of the factors that suggest an independent contractor rather than master-servant relationship between Safeway and [the guard] are also present in this case. Safeway compensated [the guard's third-party employer] for its services every four weeks, and [that company] was responsible for hiring, training, and certifying its own employees, including [the guard], and for providing employee compensation and benefits. However, our case law distinguishes a servant from an independent contractor primarily based on the employer's right to control how the work is performed.
The right-to-control test requires an examination of whether the employer reserves the right to supervise or control the method of performing the contracted service or whether the employer's control is limited to the result, leaving the method to the other party.

So the Court concluded, that "even if the evidence in the record is not sufficient, standing alone, to raise a material question of fact, it provides a reasonable basis for Simon's request to conduct additional discovery on the existence of a master-servant relationship." "We therefore cannot say that granting Simon's timely request for additional disclosure could not have led to admissible evidence on this issue, and the trial court thus abused its discretion in denying Simon's motion for time to conduct additional discovery."

Remember, all this has to do with whether Mr. Simon could prove that the guard was, in fact, an employee. However, the balance of the opinion renders this issue moot, because the Court finds that, even if the guard was an employee, Safeway owed nondelegable duties to protect Mr. Simon from the guard and that "Safeway will be vicariously liable for [the guard's] actions if [the guard] is found liable in the first instance."

So next, turning to the meat and potatoes of the case, the Court addressed Mr. Simon's argument that "Safeway had a non-delegable duty to provide safe premises for its business invitees and is liable for the torts of independent contractors it retains to work on its premises." Although the trial court found Safeway could not be vicariously liable because "there was no evidence it had attempted to delegate a nondelegable duty," Division Two disagreed.

In my favorite part of the opinion, the Court of Appeals explained that the analysis of the case was not limited to the traditional independent contractor rule and exceptions in the Restatement (Second) Torts Â§Â§ 409-429. The Court explained that, under those sections, the independent contractor was hired to perform "physical construction or maintenance on land or premises or the work to be performed is peculiarly or inherently dangerous." Those sections "do not directly address, much less resolve, the issue presented in this case, where [a third-party contractor] was hired to provide ongoing services for Safeway on Safeway's premises and where, in the performance of those services, [the third-party contractor's] employees are required to interact personally with business invitees of Safeway."

The Court concluded that "the facts of this case are more akin to premises liability under Restatement (Second) of Torts Â§ 344 (1965) than independent contractor liability under Â§Â§ 409-429." In relevant part, Restatement Â§ 344 provides that "[a] possessor of land who holds it open to the public for entry for his business purposes is subject to liability to members of the public while they are upon the land for such a purpose, for physical harm caused by the accidental, negligent, or intentionally harmful acts of third persons . . . and by the failure of the possessor to exercise reasonable care to (a) discover that such acts are being done or are likely to be done."

The Court then went on to address several opinions on this issue, concluding that while they were "distinguishable from the present case because they deal with a landowner's direct liability for its own tortious acts and not a landowner's vicarious liability for an independent contractor's torts . . . . they do stand for the limited proposition that a landowner's duty of care to business invitees encompasses activities on the land and is not limited to dangerous conditions, as Safeway suggests."

Most significantly, the Court noted that comment c to Â§ 344 expressly provides: "The rule stated applies to the acts of independent contractors . . . who are employed or permitted to carry on activities upon the land. The possessor is required to exercise reasonable care, for the protection of the public who enter, to supervise the activities of the contractor . . . ." "Therefore, a business owner may not escape liability for his failure to exercise reasonable care merely because the aggrieved party was injured by an independent contractor who was employed to provide services for the business owner on the business premises."

So the Court then "turn[ed] . . . to the question of vicarious liability and whether Safeway may be held liable in the absence of its own negligence."

Are you confused? I am, and I think they goofed a little.

Comment c to Â§ 344 does not say that a possessor is liable for independent contractors per se. It says the possessor is "required to exercise reasonable care . . . to supervise the activities of the contractor." That necessarily means that, for Safeway to be liable, Safeway must have been independently negligent in supervising the activities of its contractors. So it's not accurate to say that Safeway was being held liable "in the absence of its own negligence," and by addressing this issue, the Court is necessarily reviewing "argument about Safeway's independent negligence on appeal."

Anyway, it's about to get even more confusing because, instead of focusing on whether Safeway negligently supervised the activities of the security guards, the Court and parties went down the rabbit hole of nondelegable duty. As you'll see, this is good for plaintiffs, but may prove to be reversible error if the Supreme Court ever sees the case (Quarles & Brady handled the appeal, so watch for a petition for review).

Safeway relied primarily on Myers v. City of Tempe, 212 Ariz. 128, 128 P.3d 751 (2006), to support its argument that it cannot possess a nondelegable duty where no duty existed in the first place. Safeway argued that, "because it had no obligation to provide security services in the first instance, the fact it undertook to do so does not create a 'nondelegable duty.'" Specifically, Safeway argued that, since there was no inherent duty to provide security, "it could delegate any duty it assumed to an independent contractor without incurring vicarious liability."

The Court noted that a nondelegable duty is one "for which the employer must retain responsibility, despite proper delegation to another." The Court held that, "[s]uch duty arises in those 'special situations in which the law prescribes a duty requiring a higher degree of care,' such as the affirmative duty of a landowner'to protect those described as his invitees by making and keeping the premises safe.'" The Court went on to explain the well-known rule that, "[t]his exception to the general rule of nonliability for employers of independent contractors is 'premised on the principle that certain duties of an employer are of such importance that he may not escape liability merely by delegating performance to another.'"

Is this correct? Is the affirmative duty of a landowner to protect invitees a higher degree of care? It may have been so at one time, but as Judge Lankford notes in his negligence treatise, Arizona has really abandoned the old "status distinctions" in premises cases. Anyway, even if that is true, what does that have to do with whether Safeway properly supervised its contractors? Is the duty to supervise contractors providing security or the common law duty keep the premises safe to invitees of such importance that it cannot be delegated to another? The wheels feel like they're coming off this opinion.

Anyway, the Court stated that, while "[w]e agree that . . . Safeway had no inherent duty to provide some of the security services performed by [the third-party contractor], . . . . [Safeway did have] a common law duty . . . '. . . to keep [its] premises reasonably safe for invitees." The Court thereby concluded that, "[w]hereas, in Myers, the city owed no special duty to provide emergency medical services, the nondelegable common law duties of business owners to their invitees are undoubtedly implicated in this case."

The Court explained itself as follows:

Here Safeway did not initially have a specific, nondelegable duty to provide security services. Instead, it voluntarily assumed that duty within the context of the heightened duty it already owed to its business invitees. Having [voluntarily] assumed the task of providing security services on its premises, Safeway thus created for itself a personal, nondelegable duty to protect its invitees from the intentionally tortious conduct of those with whom it had contracted to maintain a presence and provide security on its premises. Safeway cannot now disclaim liability merely because the individuals it permitted to interact so closely with its customers had been hired by an independent contractor. Were we to hold otherwise, the potential for abuse would be great. Therefore, we hold that when, as here, a business owner assumes a duty to provide security services, that duty is nondelegable, and the owner will not be insulated from liability for the tortious acts of security personnel hired as independent contractors.

So, according to Division Two, business owners now owe nondelegable duties to their invitees to keep the premises reasonably safe, which includes the conduct of third-party security. Significantly, and despite my snarky comments about the Court's reasoning, in a footnote the Court noted that this is the law in the majority of other jurisdictions considering the issue, so maybe our Supreme Court will agree.

[Ed: At least on appeal, anyway, Steven H. Simon represented himself. It's not often that a pro se litigant is successful on these types of issues, but it appears that Mr. Simon is not an attorney.]

Originally posted at InjuryBoard by Geoff Trachtenberg

Assignments vs. Liens In the Personal Injury Context

Geoff Trachtenberg — Sun, 09 Dec 2007 08:41:24 GMT

A large number of people, attorneys included, don't know the difference between "assignments" and "liens."

Why does it matter, you ask? For a number of reasons that will be more obvious when the difference is understood.

An assignment is the easier of the two to understand since, as the name implies, it is an transfer of all or some rights or property to a third-party. Although an assignor cannot ever assign more rights or property than it holds, it can assign less than all of the rights or property subject to the assignment.

An assignment is bears the hallmarks of ownership. That is, an assignee steps into the assignor's shoes and has the ability to control the rights or property subject to the assignment. This means that the assignee can further assign the rights or property, can sell them, donate them, pledge them as collateral or simply enjoy the rights or property as though they were his or her own; subject, of course, to restrictions in the assignment agreement.

Here is where it will get tricky: an assignment can, in effect, extinguish an obligation to one party by transferring the obligation to another party.

Take, for example, a debt. Assume you owe a friend $10,000 for a car that you bought from him, and you agree to pay it of at a rate of $1,000 a year for 10 years. After two years, however, your friend decides that he really needs money and so he assigns the remaining $8,000 debt to me for $5,000 immediate cash. The debt to your friend is now, in effect, extinguished and transferred to me - that is, you owe me the $8,000.

You may not realize it, but a personal injury claim is a bundle of property rights, and to make matters a little more confusing, some states prohibit assignment of personal injury claims. Now, understand, this is a seemingly narrow restriction and assignment of other rights (such as debts) and property (such as cars) are fully assignable in every state.

What this anti-assignment law in the personal injury context means is that you cannot assign to someone a claim for bodily injury to a third-party. Remember, you can still assign the part of the case that corresponds to property damage, such as damage to your vehicle or personal belongings, and you can still assign any non-bodily injury claims, such as breach of contract or bad-faith.

Now keep that all in mind. What is a lien?

A lien is "[a] charge or encumbrance upon property to secure the payment or performance of a debt, duty or other obligation," and it "is distinct from the obligation which it secures." Matlow v. Matlow, 89 Ariz. 293, 297-98, 361 P.2d 648, 651 (1961) (citing 53 C.J.S. Liens Â§ 1, at 826). In Arizona, a lien can be created by statute, but an equitable lien may also arise from an express contract if the parties indicate an attempt to charge particular property as security for an obligation. Kalmanoff v. Weitz, 8 Ariz.App. 171, 172, 444 P.2d 728 (1968).

Unlike assignments, there is no prohibition on liens against personal injury cases, but this subject matter creates a great deal of confusion. Admittedly, what has contributed to the confusion is that the law has undergone centuries of perversion and that it is sometimes hard to tell the difference between an assignment versus a lien on a personal injury claim.

The courts examining this issue have often overlooked the distinction and, typically, have incorrectly deemed simple liens to be prohibited assignments without examining the real character of the transaction. To be sure, there are decisions that uphold standard (non-statutory) medical liens between a doctor and patient for services, and opinions which preclude insurance companies from recouping payment made to those same doctors as being impermissible assignments. These decisions are irreconcilable and fail to appreciate the difference between an assignment versus a lien on a personal injury claim.

Simply put, such arrangements - e.g., where someone is due money for services rendered - are permissible liens on a personal injury claims. That is, where an injured person owes money to a third-party and agrees to secure the debt with an encumbrance upon proceeds in a personal injury claim, the third-party does not own or control the personal injury claim (as they would had there been an assignment) and the personal injury claim remains "distinct from the obligation which it secures." The third-party has no say in how the claim is handled, does not need to assent to the settlement of the claim and will not be a party to signing a release of such a claim, which would be hallmarks of an assignment. To the contrary, if the injured party loses the personal injury suit, the "distinct . . . obligation" remains and must still be satisfied (absent an agreement making the debt or obligation contingent upon an event, such as prevailing in a personal injury action). In contrast, assignment of a losing claim would always result in an assignee receiving nothing (with the obligation having been extinguished upon the assignment).

Due to the anti-assignment case law, which is inconsistently applied, this causes confusion in personal injury cases. Although we are not going to ever resolve the issue here, it helps to remember the reason for anti-assignment law in the personal injury context is to prevent "trafficking in personal injury claims." That is, the courts long ago decided that it was not acceptable for people to market in buying and selling personal injury actions, ostensibly because of the unsavory possibilities of having injured people victimized by those wishing to purchase such rights. In reality, it has more to do with the image of justice and the likelihood that it would encourage fraudulent personal injury claims.

Ironically, the quiet exception to the rule prohibiting assignment of personal injury claims is that attorneys are permitted to take contingency fees on personal injury claims, which (if you believe what you read about other so-called impermissible assignment arrangements) is nothing more than an assignment of a personal injury claim. It used to be that such arrangements were considered impermissible, but after many years the courts relented an allowed contingency fee arrangements in all but criminal and divorce proceedings. In those cases, courts still felt that there was too must risk to allowing contingency fees -- that contingency fees would encourage unethical or unsavory conduct in criminal and divorce cases.

The reason contingency fees are allowed to attorneys, however, is to open the door to parties who would not otherwise be able to afford paying for attorneys on an hourly basis. And, most often, the same reason underlies lien arrangements for injured persons, whether it be health insurance liens, contractual doctors liens, liens for pharmaceutical expenses, liens for rental cars or liens for cash advanced to pay bills. Accordingly, although courts have long misunderstood and confused the difference between impermissible assignments and permissible liens, the simple fact is that such liens are a necessary element in modern personal injury practice to provide immediate care and compensation to impecunious injured parties who cannot afford to battle for years with an insurer for a tortfeasor. Such arrangements to not give rise to the concerns underlying the old anti-assignment laws and, in fact, do not reveal ownership characteristics of assignments.

Originally posted at InjuryBoard by Geoff Trachtenberg

Supreme Scrooge: Arizona's Supreme Court Delivers a Serious Blow to Products Liability

Geoff Trachtenberg — Sun, 09 Dec 2007 06:32:12 GMT

Worried about lead in your toys this Christmas? You now have something else to worry about - if those toys harm or kill your children, your rights and remedies in the state of Arizona are under serious attack.

This week, in State Farm Ins. Co. v. Premier Mfg. Sys. Inc., the Arizona Supreme Court held that, despite centuries-old common law "strict liability" in product liability cases, Arizona's Legislature eliminated such protections (in 1984) when they enacted the Arizona Uniform Contribution Among Tortfeasors Act, commonly referred to as UCATA.

Historically, courts have afforded protection to the public in extraordinary situations by imposing "strict liability" on parties engaged in certain activities. Although strict liability has always been the exception in civil cases rather than the rule, it has long been the rule in certain types of cases, such as products liability or "ultra-hazardous" activities. This is due to the balance of harms to the public and the fact that, in the products liability context, manufacturers and distributors were typically in much better positions to take steps to prevent harm if they were all held strictly liable.

In Premier, the Supreme Court concluded that UCATA's adoption, more than 20 years ago, changed this landscape. The Court held that, under UCATA, manufacturers, distributors and all others involved in putting dangerous and defective products into the stream of commerce, are to be held responsible under traditional comparative fault laws.

What does this mean to you? Assume Hasbro imports a toy from China with lead paint, and better yet, assume Hasbro absolutely knows that the toys have lead paint. Assume there is a memorandum to the Board of Directors saying, "Dear Board, we have found that we can make an additional profit of .10 per toy if we use Lead Masters Production Company in Hong Kong because Lead Masters coats all their toys in lead that will probably cause permanent brain damage to the children that play with the toys."

What used to happen before Premier? Hasbro and Lead Masters Production Company were strictly liable for damages caused by the product, so a Board of Directors receiving such a memo would have an incentive to avoid such situations (and fire the morons who came up with such a scheme) because they would be just as liable as the Chinese company for any harm that resulted from their product.

What happens now, after Premier? Hasbro has little or no exposure. In a lawsuit over who is responsible for little Jimmy's permanent brain damage due to the hypothetical Hasbro toy above, the jury will be asked to apportion fault to the various parties bringing the toy to market. That means everyone from Lead Masters Production Company in Hong Kong, to the importing company, the shipping company, any middle-man merchants, Hasbro and the store, such as Wal-Mart, who sold the product that injured little Jimmy.

What will happen? Most of the time there will not be a memo, such as the one described above, but even if there was one, the party that actually produced the harmful product will be the one with all or most of the fault. And in those situations where the toy companies, such as Hasbro above, claim ignorance of the fact that lead was used and claim that they had no reason to know lead would be used in the product, what then? If the jury believes them, they will get away free of any responsibility.

Maybe you think, "well, that's not the end of the world." But imagine that Lead Masters Production Company in Hong Kong is no longer in business, has no insurance, is bankrupt or is nothing more than a couple of part-time rickshaw drivers who make toys on the weekend. Yes, it will be found responsible, but that won't matter to little Jimmy or his parents because they will have nothing more than a worthless pyrrhic victory and no way to pay for the special care that little Jimmy will need for the rest of his life.

This decision is devastating to those people harmed by products and must be addressed by the Legislature. And frankly, one cannot fault the courts for reaching the conclusion. The simple fact is that the courts must interpret the law and, due to the poor drafting of UCATA in 1984, the result handed down by the Supreme Court was, while dramatic and disappointing, probably inevitable.

One last point bears mentioning, UCATA needs to be amended to avoid the result in Premier in the products liability arena, but it also needs to be amended to apply only to negligence matters. UCATA is as inapplicable to intentional torts as it is to products liability, yet it is applied to intentional torts all the time. UCATA is a fine idea, but it should be limited to negligence cases so that, in those case, only parties who are at fault have to pay for the damages they cause in proportion to their fault.

For more information on this subject, please refer to the section on Defective and Dangerous Products.

Originally posted at InjuryBoard by Geoff Trachtenberg

Failure to Plead Sufficient Facts - The New Legal Malpractice?

Geoff Trachtenberg — Sun, 21 Oct 2007 15:48:53 GMT

There's a new case out this week from Division Two, Cullen v. Koty-Leavitt Insurance, which deals with the reasonable expectations doctrine in the UIM setting. The case is not particularly fascinating from a substantive perspective, but it raises questions about potential legal malpractice exposure.

In sum, Cullen filed a UIM claim based upon the fact that his family was given the right to privately use a business vehicle. The vehicle was owned by the business, Sierrita Mining and Ranch Company, and had UIM coverage with Auto Owners. The named insured was the business, and there were no additional insureds.

Cullen was injured while riding in another vehicle and filed a UIM claim with Auto Owners. The insurer denied his UIM claim, he then filed suit and the trial court dismissed the action.

First, the Court of Appeals expressly adopted the Supreme Court's holding in Bell Atlantic Corp. v. Twombly, the case that overruled the familiar Conley v. Gibson standard for dismissal.

This is a significant move and one wonders how the Arizona Court of Appeals, which is bound to follow the Arizona Supreme Court on such matters, saw fit to disregard the Arizona Supreme Court and unilaterally adopt the United States Supreme Court's Twombly holding. In any event, doubt no further, the "notice pleading" landscape has changed in Arizona as follows:

"While a complaint attacked by a Rule 12(b)(6) . . . motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Instead, the complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level."

The Court stated "when a complaint fails to recite at least the basic facts supporting a claim for relief, we cannot see how a defendant would have fair notice of the nature and basis of the claim." The Court then, turning its attention back to Cullen's case, stated it was limiting its review to the facts alleged in the complaint and the terms of the insurance contract.

Second, the Court went on to state that "[i]t is clear that the UIM provision of the policy Auto Owners issued to Sierrita does not provide Cullen with UIM coverage." This is pretty straight-forward since the only named insured was the business and Cullen was not injured while in the insured vehicle.

Third, the Court addressed the reasonable expectations argument. The Court explained that "[t]he [reasonable expectations] doctrine necessarily applies to the reasonable expectations of the contracting parties, not to the reasonable expectations of a hopeful insured, such as Cullen, who is a stranger to the insurance contract." The Court concluded that "the reasonable expectations doctrine d[oes] not apply to an injured party who 'had nothing to do with the purchase of the policy in question [and] never had an insurable interest or expectancy under the policy.'"

Then the Court gets cheeky. The Court stated that, despite Cullen's status as a "stranger" to the insurance contract, "Cullen's complaint is sufficient if the facts he alleged permit the inference Sierrita had a reasonable expectation Cullen would have portable UIM coverage under the policy it purchased from Auto Owners."

Ho-hum, what could they be thinking? How about this: "In his briefs to this court, Cullen describes several factual scenarios that arguably could prove one of the above situations applies to his claim. His complaint, however, contains none of them. Although Cullen's complaint conclusorily asserts he had a reasonable expectation of coverage, as we have explained, his expectations are not relevant here." So, the Court affirmed the trial court and denied the insurers' request for attorneys' fees.

Message: if you want to avoid being sued, forget notice pleading, you better allege facts, facts, facts to support your legal claims.

Originally posted at InjuryBoard by Geoff Trachtenberg

$800,000 Wrongful Death Settlement for Motorcycle Collision in Arizona

Geoff Trachtenberg — Fri, 12 Oct 2007 17:31:07 GMT

Levenbaum & Cohen ("L&C") is pleased to report that the firm recently settled a motorcycle wrongful death case for $800,000.00. L&C, which also does business as The Law Tigers -- a group of attorneys concentrating in motorcycle injury -- obtained the settlement after two riders, one in his 70s and the other in her 50s, collided with a vehicle that was trying to pass a semi-truck.

If you or a family member has been injured in a motorcycle accident, please contact an attorney by filling out the form at right.

For more information on this subject, please refer to the section on Car and Motorcycle Accidents.

Originally posted at InjuryBoard by Geoff Trachtenberg

Experts Not Allowed to Testify to the Percentage of Fault

Geoff Trachtenberg — Thu, 06 Sep 2007 16:41:05 GMT

Division One just handed down Webb v. Omni Block, Inc., a clearly written opinion which decisively eliminates an expert's ability to testify as to the "percentage of fault" for any party or non-party.

In Webb, defendant, Omni Block, hired an expert who testified as to the specific percentage of fault (or lack thereof) for various parties and non-parties. Judge Jones allowed this testimony and the jury came back with an allocation that was very close to the allocation suggested by the defense expert. The Court of Appeals quickly dispatched the portion of the appeal challenging the expert's qualification and focused, instead, on the appropriateness of the testimony on the "ultimate issue" pursuant to Rule 704.

Rule 704 states that "[t]estimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact." The Court noted that a first-blush reading of Rule 704 "appears to support Omni's argument because it permits opinion testimony [about the percentages of fault] that encompasses an ultimate issue."

However, the Court observed, pursuant to "the comment to Rule 704, opinion testimony on an ultimate issue must still be helpful to the trier of fact and cannot be couched in legal conclusions that simply opine 'how juries should decide cases.'" Quoting McCormick on Evidence, the Court noted:

Undoubtedly some highly opinionated statements by the witness amount to nothing more than an expression of his general belief as to how the case should be decided or the amount of damages which would be just. All courts exclude such extreme, conclusory expressions. There is no necessity for this kind of evidence; its receipt would suggest that the judge and jury may shift responsibility for the decision to the witness. In any event, the opinion is worthless to the trier of fact.

"We therefore hold that [Omni's expert's] opinion apportioning of percentages of fault to the parties and non-parties constituted inadmissible legal conclusions under Rule 704 because he thereby told the jury how to decide the case. Once [Omni's expert] testified to the duties and responsibilities of the parties involved, the distribution of fault among the parties responsible was the jury's responsibility."

It's good to see the Court of Appeals finally adding teeth to the Comment to Rule 704. Many of us have used that Comment extensively to advocate for limitations to the substance for expert testimony, and so now that it was the basis of a published opinion, perhaps we will have greater success in getting judges to address the aggressive invasion of the jury's province by defense experts.

Originally posted at InjuryBoard by Geoff Trachtenberg

Bell Atlantic v. Twombly: The Day "Notice Pleading" Died (Sort Of)

Geoff Trachtenberg — Wed, 29 Aug 2007 14:20:02 GMT

On May 21, 2007, the U.S. Supreme Court handed down Bell Atlantic v. Twombly, 550 U.S. ___ (2007), announcing the "retirement" of the long-standing standard for dismissal of complaints articulated in Conley v. Gibson, 355 U.S. 41 (1957) - i.e., the standard that complaints should not be dismissed "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."

Bell Atlantic represents a sea change in "notice pleading" standards. As one law professor recently observed:

The question, though, is what that change will look like. What does Bell Atlantic really mean? Clearly, Conley's "no set of facts" language is dead, at least as to the meaning that was customarily ascribed to it. And, at least for the kinds of costly class action antitrust cases like the one initiated by Twombly, Bell Atlantic erects an additional "plausibility" requirement of fact pleading in its place, what I have called "notice-plus."

Originally posted at InjuryBoard by Geoff Trachtenberg

Arizona Courts Have General Personal Jurisdiction over Foreign Insurers

Geoff Trachtenberg — Mon, 27 Aug 2007 14:14:00 GMT

New decision from Division One, Bohreer v. Erie Ins. Exch.. Bohreer holds that an Arizona court has general personal jurisdiction over a foreign insurer which has appointed the Director of Insurance as an agent for service of process and has not withdrawn such qualification or appointment, but has ceased doing business in the state prior to the acts underlying the complaint. The Court held that exercising such jurisdiction did not violate due process.

Originally posted at InjuryBoard by Geoff Trachtenberg

Court Holds Offer of Judgment Sanctions Include All Reasonable Expert Fees

Geoff Trachtenberg — Tue, 19 Jun 2007 17:18:40 GMT

Division One handed down Levy v. Alfaro today which holds that Rule 68 sanctions include all reasonable expert witness fees after the offer, not just those fees for testifying at trial. The decision is no surprise to those of us who regulaly try cases, but I suppose it is good to have it "clarified."

Originally posted at InjuryBoard by Geoff Trachtenberg