Diane M. Johnsen

In D'Amico v. Structural I Co., a framing company fired its CEO, Irene D'Amico, before the end of her five-year contract, leading her to sue for breach of contract and unpaid wages and bonuses; the company countersued on claims including breach of fiduciary duty. After a jury largely favored D'Amico on the contract claims while finding her liable for $150,000 on the fiduciary-duty counterclaim, Structural I appealed, arguing that the trial court wrongly admitted testimony from the owners' counselor (protected by psychologist-patient privilege) and should have awarded treble damages on the wage claims. The Arizona Court of Appeals held that Structural I lacked standing to challenge the admission of the privileged testimony because the privilege belonged to the McLeods, not the company, and therefore only they could assert it on appeal. The court also ruled that the trial court has discretion under A.R.S. § 23-355(A) to decline treble damages even when wages were withheld without good faith, but vacated and remanded that portion of the judgment because the trial court's stated reasons did not reflect a proper exercise of discretion. The court otherwise affirmed the judgments, including reversal of the fiduciary-duty verdict against D'Amico.

labor & employmentbusiness & regulatoryproceduretorts & liability

The case arose after a motorist injured in a freeway construction accident settled claims against the general contractor (DBA) and ADOT for a $750,000 stipulated judgment, with DBA’s excess insurer (Colorado Casualty) paying part of the settlement and, together with DBA and ADOT, assigning rights to the claimant (Roman) to pursue the subcontractor (Safety Control) and its primary insurer (EMC), which had refused to defend DBA. The Arizona Court of Appeals held that the Damron agreement was enforceable, that EMC had breached its duty to defend and therefore could be bound by the stipulated judgment provided it was neither collusive nor fraudulent, and that Safety Control had breached its subcontract by failing to obtain the required completed-operations coverage. The court affirmed summary judgment on those points but remanded for a determination of whether the stipulated judgment fell within EMC’s policy coverage and for clarification of the circumstances and amount of any damages for which Safety Control could be liable, noting that such damages are not automatically measured by the full stipulated judgment.

torts & liabilitybusiness & regulatoryprocedure

This case arose from a 1992 warranty deed that, due to a scrivener’s error copying an earlier legal description, omitted a quarter-acre parcel (the “Corner”) from the conveyance of over a thousand acres at Baseline and Crismon Roads in Mesa. The omission went unnoticed through later sales, easements dedicated to the City, and a 2002 purchase from the City, until a 2003 title search revealed record title remained with the original partnership; this sparked competing claims among successors (including SWC/A.R. Development and Augusta Ranch) over ownership and related torts. The Arizona Court of Appeals addressed reformation of the deeds based on mutual mistake or unilateral mistake with knowledge, slander-of-title claims arising from recorded dedications and conveyances, trespass and conversion allegations tied to use of the parcel, and liability under the false-recording statute (A.R.S. § 33-420), while also reviewing attorney-fee allocations and the denial of certain amendments or punitive damages. The court resolved these issues by applying traditional property and tort principles to the chain of title and the parties’ knowledge and intent at each transaction.

propertytorts & liability

In State v. Vega, Jose Vicente Montano Vega was convicted by a jury of five sex offenses against his two young nieces. On appeal, he challenged the trial court's admission of testimony about an uncharged prior incident in which he allegedly touched the older victim at a beach in Mexico. The Arizona Court of Appeals held that the superior court erred by admitting this other-act evidence without first making the specific findings on proof, relevance, and prejudice required by Arizona Rule of Evidence 404(c), and without adequately limiting its use to the charges involving only the older victim. The court nonetheless affirmed the convictions, concluding that the error was harmless because the properly admitted evidence was overwhelming and the improper evidence did not affect the verdicts.

criminal lawprocedure

The case involved Allstate Utility Construction's attempt to foreclose a construction lien on property owned by ALC Builders for work performed starting in April 2007, with Towne Bank (holder of a later-recorded deed of trust) challenging the lien's validity on summary judgment. The superior court ruled the lien invalid due to defects in Allstate's preliminary 20-day notice and related service documents under Arizona statutes. The Court of Appeals reversed, holding the lien valid because the 20-day notice sufficiently manifested Allstate's intent to authenticate via its company name and "SIGNATURE AND TITLE ON FILE" notation (without requiring a handwritten signature), the service affidavit adequately identified the date, place, and manner of mailing (without needing the exact time of day or a separate acknowledgment form), and lien statutes require only substantial compliance to fulfill their dual purposes of protecting workers and providing notice to owners.

propertyprocedurebusiness & regulatory

In State v. Boehler, three defendants were convicted under Phoenix City Code § 23-7(B)(4) for vocally soliciting spare change from passersby after dark in downtown public areas following a baseball game. The Arizona Court of Appeals reversed the convictions, ruling that the ordinance's prohibition on oral requests for money or goods after sunset in public places violates the First Amendment. The court found the measure overbroad because it criminalized a substantial amount of protected speech—peaceful panhandling—without being narrowly tailored to the city's interests in public safety and preventing aggressive solicitation, as the defendants had not engaged in any threatening or obstructive behavior.

free speechcriminal law

In City of Peoria v. Brink's Home Security, Inc., Phoenix and Peoria assessed transaction privilege taxes on Brink's home alarm monitoring services under local codes that treated them as telecommunication services. The court addressed whether these taxes violated a state statute prohibiting municipal taxation of interstate telecommunications services. The Arizona Court of Appeals concluded that Brink's monitoring services involved interstate transmissions and constituted telecommunications services under state law, making the taxes impermissible. The decision reversed the tax court's judgment upholding the assessments, based on the interpretation that the state exemption applies broadly to such interstate services regardless of federal definitions.

taxesbusiness & regulatory

The case involved Andrew David Innes, who was convicted by a superior court judge of sexual abuse following a bench trial. The Arizona Court of Appeals reversed the conviction and remanded for a new trial. The court found that the record contained no evidence of Innes knowingly, voluntarily, and intelligently waiving his constitutional right to a jury trial, as required by Arizona Rules of Criminal Procedure 18.1, and that such an omission constitutes structural error necessitating reversal.

criminal lawprocedure

The case concerned Lennar, a homebuilder, and its claims against several insurers for breach of contract and bad faith in connection with coverage for construction defects in homes built in the 1990s. After the insurers obtained a declaratory judgment that there was no coverage because the defects did not constitute an "occurrence," which was later reversed on appeal, the trial court granted summary judgment to the insurers on the bad-faith claim. The appellate court reversed, holding that the initial coverage ruling did not establish as a matter of law that the insurers had a reasonable basis for denying the claims. The court further held that an insurer pursuing a declaratory judgment on coverage must continue to meet its claims-handling obligations during the litigation, and questions of material fact existed regarding the insurers' investigation and evaluation of the claims.

business & regulatorypropertytorts & liability

Donald Buehler filed workers' compensation claims and challenged an ALJ's decision to hold his hearing in Phoenix rather than Yavapai County due to budget constraints. He appealed that procedural ruling to superior court, asserting violations of statute and constitutional rights, but the court dismissed the complaint for lack of subject matter jurisdiction. The Court of Appeals affirmed, reasoning that under A.R.S. § 23-901(12) the ALJ's venue decision qualifies as a non-appealable procedural ruling relative to adjudicating a compensation matter, and the statutory scheme channels review of awards to the court of appeals after administrative proceedings, not to superior court at the interlocutory stage.

labor & employmentprocedure

In State v. Merolle, the defendant was indicted on theft and related charges; after an initial remand for failure to present exculpatory evidence, the State re-presented the case and used a statement Merolle made during a settlement conference, leading to reindictment. More than four months later, Merolle moved to dismiss the second indictment, arguing the use of the settlement statement violated various rules and constitutional protections against self-incrimination. The superior court granted the untimely motion based on its inherent authority to remedy prosecutorial misconduct. The appellate court reversed, holding that Arizona Rule of Criminal Procedure 12.9 provides the exclusive procedure for challenging grand jury proceedings and that the motion's untimeliness waived the objections, leaving the superior court without power to dismiss.

criminal lawprocedure

This case involved a dispute between homebuilder Lennar and its insurers over coverage for construction defects in homes built in the 1990s, after homeowners complained and sued. Lennar tendered claims under commercial general liability policies, but the insurers filed a declaratory judgment action denying coverage and later obtained an initial summary judgment ruling that defects did not constitute an 'occurrence.' After that ruling was reversed on appeal, the insurers again moved for summary judgment on Lennar's bad-faith claim, arguing the prior decision established a reasonable basis for denying coverage. The court reversed the summary judgment, holding that material factual questions remained and that an insurer seeking judicial clarification of policy terms cannot ignore its claims-handling duties during the declaratory judgment proceedings.

business & regulatorytorts & liabilityproperty

This case involved two consolidated appeals concerning the lien rights of Arizona's Medicaid agency, AHCCCS, against tort settlements obtained by Medicaid recipients whose medical expenses had been paid by the state. The recipients had settled their claims for less than their full estimated damages, and AHCCCS sought to recover the full amounts it had paid for their care from those settlements. The court held that AHCCCS could recover only the portion of each settlement attributable to past medical expenses paid by the agency, reduced by a share of the recipients' litigation costs. It reasoned that federal Medicaid law, as interpreted in Ahlborn, limits state recovery to the medical-expense component of a settlement and does not permit recovery of the full lien or application of a simple pro-rata formula based on the ratio of settlement to total damages.

healthcarefederal powertorts & liability

The case involved two consolidated appeals concerning the lien rights of Arizona's Medicaid agency, AHCCCS, after it paid medical expenses for accident victims who later settled tort claims for less than their full damages. The court held that AHCCCS may recover from a settlement only the portion representing compensation for the medical expenses it paid, reduced by a pro rata share of the victim's litigation expenses. This conclusion followed from the U.S. Supreme Court's decision in Ahlborn interpreting federal Medicaid statutes, combined with Arizona's healthcare lien statute, which together limit state recovery to the medical-expense component of an undifferentiated settlement rather than the full amount AHCCCS paid or the victim's total billed charges.

healthcaretorts & liability

The case concerned whether a document dictated by Gloria Waterloo shortly before her death, which referenced an attached 'list of final instructions' that never existed, could be admitted to probate as her will. The superior court granted summary judgment against probate, concluding that the missing list rendered the instrument incomplete and prevented determination of Waterloo's full testamentary intent. The Court of Appeals reversed, holding that the failure to create the referenced list did not invalidate the document because it expressed Waterloo's wishes regarding guardianship of her health and finances, burial, and a bequest, and the list had never existed. The court remanded for further proceedings to interpret the will's terms after admitting it to probate.

family lawprocedure

In Turner v. City of Flagstaff, Paul Turner sued the city under Arizona's Private Property Rights Protection Act, alleging that a 2007 land-use ordinance reduced the value of property at 528 West Aspen Avenue by $40,000 and seeking just compensation. The superior court dismissed the suit because Turner's pre-litigation notice of claim incorrectly stated that he personally owned the property, when a recorded deed showed it was owned by Aspen 528, L.L.C., and the statutes require the actual fee-title owner to file the claim. The Court of Appeals agreed that the notice was defective under A.R.S. §§ 12-821.01 and 12-1134 because it was not filed by the owner and did not indicate it was made on the owner's behalf. The court vacated the judgment and remanded for the trial court to decide whether Turner could amend the notice to cure the defect within the statutory time limits.

propertyprocedure

This case involved the Arizona Department of Economic Security's petition to terminate the parental rights of Brenda O., an enrolled Navajo Nation member, on grounds of chronic alcohol abuse that rendered her unable to care for her two young children after repeated incidents of intoxication during visits and failed treatment attempts. The superior court granted the termination, finding beyond a reasonable doubt that returning the children to Brenda would likely cause them serious emotional or physical damage, as supported by the testimony of a qualified expert witness as required by the Indian Child Welfare Act (ICWA), 25 U.S.C. § 1912(f). Brenda appealed solely on the ground that the expert testimony was insufficient to meet ICWA standards, without challenging the state-law grounds or best-interests findings. The Arizona Court of Appeals affirmed, holding that the licensed psychologist's evaluation—detailing her denial of her alcohol problem, uncontrolled drinking, and resulting risks—along with corroborating evidence from counselors and supervisors, satisfied the federal expert-witness requirement.

family lawcivil rights

This case involved a petition by Kenneth and Kelly to terminate Tina's parental rights to her two children on grounds of abandonment under Arizona Revised Statutes section 8-533(B)(1), after the children had lived with Kenneth and Kelly for over six years pursuant to a divorce decree that granted Tina and the father joint legal custody but physical custody to Kenneth and Kelly. The superior court denied the petition, finding that Tina had not intentionally relinquished the children and had not maintained only minimal contact. On appeal, the court vacated that portion of the judgment and remanded, holding that the superior court misapplied the legal standard for abandonment by failing to properly assess whether Tina had failed to promptly and persistently grasp the opportunity to develop a relationship with the children or assert her legal rights. The appellate court clarified that the burden rests with the parent to assert legal rights and that evidence of limited visitation, lack of financial support, and minimal involvement in decision-making could support a finding of abandonment depending on the facts.

family law

This case involved a petition by a child's uncle and aunt to terminate the parental rights of the mother, Tina B., on grounds of abandonment under Arizona law, after the children had lived with the petitioners for over six years pursuant to a divorce decree that granted them physical custody while the parents retained joint legal custody. The superior court denied the petition, finding that Tina had not intentionally relinquished the children, had maintained more than minimal contact through visits (despite inconsistencies), and had not abandoned them. The Court of Appeals vacated the denial and remanded, holding that the lower court misapplied the abandonment standard by requiring proof of intentional relinquishment rather than focusing on whether the parent had failed to maintain a normal parental relationship through regular contact, support, or other involvement. The appellate court emphasized that the burden rests on the parent to assert legal rights and develop a relationship, and that the superior court's findings did not properly evaluate the statutory factors in light of the unusual custody arrangement and the mother's intermittent efforts, including periods of no contact and a restraining order following a custodial interference incident.

family law

The case involved a homebuyer, Elm Retirement Center, suing the sellers of a Scottsdale property for breach of contract, breach of the implied covenant of good faith, fraud, and negligence after discovering the home had fewer square feet than advertised. The superior court dismissed the claims, and the Court of Appeals affirmed. The contract included a boldface provision stating that square footage references were approximate and requiring the buyer to verify the size during the inspection period if material, which barred any breach claim based on the advertisement. The tort claims were dismissed as time-barred under two- or three-year statutes of limitations, as the suit was filed nearly four years after the 2005 transaction. The court also upheld denial of leave to amend the complaint, finding the proposed changes would not cure the defects.

propertyproceduretorts & liability