Opinion
CV-22-00540-PHX-JJT
11-02-2022
Kay Franklin, Plaintiff, v. CSAA General Insurance Company, Defendant.
ORDER
Honorable John J. Tuchi United States District Judge
At issue is Defendant CSAA General Insurance Company's Motion to Certify Questions to the Arizona Supreme Court (Doc. 27, Mot.), to which Plaintiff Kay Franklin filed a Response (Doc. 31, Resp.) and Defendant filed a Reply (Doc. 35, Reply).
Plaintiff's mother, Kathy Bernhardt, was killed in an auto accident with tortfeasor John Rowland, who held an insurance policy with a $25,000 per-person liability limit. After Plaintiff collected $25,000 on a liability claim under Rowland's policy, she made an underinsured motorist (UIM) claim to Defendant, which issued a policy to Plaintiff's mother providing $50,000 of UIM coverage per person. Defendant paid $50,000 under the policy. Plaintiff then sought an additional $50,000 under the theory at issue in this and numerous other lawsuits. In short, because Plaintiff's mother insured a second vehicle under the same policy with Defendant, Plaintiff argues the policy provides a separate, second UIM coverage for the second vehicle that Plaintiff may “stack,” thereby collecting both UIM coverages under A.R.S. § 20-259.01(H). Defendant disagreed and this lawsuit ensued.
This is the first-filed of eleven known, present actions-four in the District Court and seven in Maricopa County Superior Court-that turn on the resolution of the same question. (Doc. 46, CSAA's Fifth Notice of Supplementation of Reply in Support of Its Motion to Certify Questions to the Arizona Supreme Court.) In one prior case, a Judge in this District resolved the question in favor of the plaintiff, finding under A.R.S. § 20-259.01 that a policy involving multiple vehicles provides separate UIM coverages for each vehicle that may be stacked in a UIM coverage claim. Heaton v. Metro. Grp. Prop. & Cas. Ins. Co., No. CV-21-00442-PHX-SRB, 2021 WL 6805629 (D. Ariz. Oct. 19, 2021). No party in that case asked the District Court to seek resolution from the Arizona Supreme Court of the state law question of statutory interpretation at issue. Notwithstanding the prior decision, Defendant in this case now asks the Court to certify two questions to the Arizona Supreme Court, namely:
(1) Does A.R.S. § 20-259.01 mandate that a single policy insuring multiple vehicles provides different underinsured motorist (UIM) coverages for each vehicle, or a single UIM coverage that applies to multiple vehicles?
(2) Does A.R.S. § 20-259.01(B) bar an insured from receiving UIM coverage from the policy in an amount greater than the bodily injury liability limits of the policy?(Mot. at 1-2.)
The Ninth Circuit laid out the responsibility a federal court sitting in diversity has to interpret substantive state law, as follows:
[O]ur task here is to discern how the Supreme Court of Arizona would resolve the . . . questions before us. A federal court sitting in diversity applies the substantive law of the state. . . . In determining the law of the state for purposes of diversity, a federal court is bound by the decisions of the highest state court. If the state's highest court has not decided an issue, it is the responsibility of the federal courts sitting in diversity to predict “how the state high court would resolve it.” Air-Sea Forwarders, Inc. v. Air Asia Co., Ltd., 880 F.2d 176, 186 (9th Cir. 1989) (internal quotation marks omitted). There are times, however, when diversity cases in federal courts “‘present significant issues . . . with important public policy ramifications.'” Munson v. Del Taco, Inc.,
522 F.3d 997, 1003 (9th Cir. 2008) (quoting Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003)). In such circumstances, it may be appropriate, when permitted under state law, to certify those questions to the state court as a matter of “‘deference to the state court on significant state law matters.'” Id. (quoting Kremen, 325 F.3d at 1037).Albano v. Shea Homes Ltd. P'ship, 634 F.3d 524, 530 (9th Cir. 2011) (certain citations omitted).
Under A.R.S. § 12-1861, the Arizona Supreme Court may answer questions of law certified by this Court if: (1) there are questions of Arizona state law that may determine the case in this Court; and (2) this Court finds there is no controlling precedent from the Arizona Supreme Court or the Arizona Court of Appeals. In resolving a request to certify questions, this Court “looks to factors such as the complexity of the issue, the availability of precedent from lower courts or other jurisdictions, and the magnitude of disagreement on the issue.” Atl. Specialty Ins. Co. v. Teller, 224 F.Supp.3d 844, 848 (D. Ariz. 2016) (internal citation omitted).
To begin with, the parties do not dispute that questions of Arizona state law- namely interpretation of A.R.S. § 20-259.01 in the circumstances presented in this case- determine the case in this Court. The parties also do not dispute that no controlling precedent exists with regard to the questions this case turns on. The complexity in resolving the questions Defendant proposes for certification arises from interpreting the language of the various sections of A.R.S. § 20-259.01 as a coherent whole as well as determining the Legislature's intent in passing A.R.S. § 20-259.01 and the underlying public policy, to the extent required. The sole decision on the questions to date, in the District Court, is not controlling precedent. Most importantly, the parties disagree entirely on the state law questions proposed for certification, the resolution of which will be dispositive to the case, and the questions are of significant magnitude. Specifically, the magnitude of importance implicated in the resolution of the proposed questions arises from the sheer number of disputes already filed involving these questions, both in the District Court and Maricopa County Superior Court, as well as an untold number of cases yet to be filed, all leading to a risk of inconsistent lower court decisions. The Court thus finds that the proposed questions present significant issues with important public policy ramifications and that all the factors are met favoring certification of the proposed questions to the Arizona Supreme Court.
IT IS THEREFORE ORDERED granting Defendant CSAA General Insurance Company's Motion to Certify Questions to the Arizona Supreme Court (Doc. 27). The parties shall share in equal proportions the required filing fees in the Arizona Supreme Court.
IT IS FURTHER ORDERED certifying the following questions to the Arizona Supreme Court under A.R.S. § 12-1861 and Arizona Supreme Court Rule 27:
(1) Does A.R.S. § 20-259.01 mandate that a single policy insuring multiple vehicles provides different underinsured motorist (UIM) coverages for each vehicle, or a single UIM coverage that applies to multiple vehicles?
(2) Does A.R.S. § 20-259.01(B) bar an insured from receiving UIM coverage from the policy in an amount greater than the bodily injury liability limits of the policy?This Court respectfully requests that the Arizona Supreme Court exercise its discretionary authority under Arizona Supreme Court Rule 27 to accept and decide these questions. The Court further requests that the phrasing of the questions not limit the Arizona Supreme Court's consideration of the issues involved. If the Arizona Supreme Court declines certification, it should so state, and this Court will resolve the case based on its perception of Arizona law.
IT IS FURTHER ORDERED directing the Clerk of Court to file with the Arizona Supreme Court an original and six certified copies of this Order and a list of the counsel appearing in this matter together with their addresses and telephone numbers, as required by Arizona Supreme Court Rules 27(a)(3)(C) and (a)(4).
IT IS FURTHER ORDERED staying all further judicial proceedings in this Court in this matter pending the Arizona Supreme Court's decision on this Court's request to accept and decide the certified questions.