Opinion
No. 1 CA-CV 16-0046
09-21-2017
BARBARA A. SLOAN, a single woman, Plaintiff/Appellee, v. FARMERS INSURANCE COMPANY OF ARIZONA, an Arizona insurance company; FARMERS INSURANCE EXCHANGE, a California insurance company; and FARMERS GROUP, INC., a California corporation, Defendants/Appellants.
COUNSEL Miller Pitt Feldman & McAnally, PC, Tucson By Stanley G. Feldman Merlin Law Group, PA, Phoenix By Michael N. Poli, Jeffrey G. Zane Co-Counsel for Plaintiff/Appellee Jones Skelton & Hochuli, PLC, Phoenix By Donald L. Myles, Jr., Lori L. Voepel, Ashley V. Halvorson, Jennifer B. Anderson Counsel for Defendants/Appellants
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
No. CV2009-033244
The Honorable Arthur T. Anderson, Judge
REVERSED AND REMANDED
COUNSEL Miller Pitt Feldman & McAnally, PC, Tucson
By Stanley G. Feldman Merlin Law Group, PA, Phoenix
By Michael N. Poli, Jeffrey G. Zane
Co-Counsel for Plaintiff/Appellee Jones Skelton & Hochuli, PLC, Phoenix
By Donald L. Myles, Jr., Lori L. Voepel, Ashley V. Halvorson, Jennifer B. Anderson
Counsel for Defendants/Appellants
MEMORANDUM DECISION
Presiding Judge Kent E. Cattani delivered the decision of the Court, in which Judge Jon W. Thompson and Judge Paul J. McMurdie joined. CATTANI, Judge:
¶1 Farmers Insurance Company of Arizona, Farmers Insurance Exchange, and Farmers Group, Inc. (collectively, "Farmers") appeal the superior court's grant of Barbara Sloan's motion for relief from judgment under Arizona Rule of Civil Procedure 60(c)(6). For reasons that follow, we vacate the superior court's ruling and remand for further proceedings.
This rule has been renumbered as 60(b) in the newest version of the Arizona Rules of Civil Procedure. We cite the rules that were in effect at the time of the superior court's ruling. We otherwise cite the current version of statutes.
FACTS AND PROCEDURAL BACKGROUND
¶2 In May 2009, Sloan's Phoenix home caught fire. Sloan was indicted for arson in connection with the fire, but the charge was eventually dismissed on the State's motion. Farmers, who insured Sloan's home, delayed paying Sloan (over $1 million) for claims relating to the fire until after the arson charge was dismissed.
¶3 In October 2009, while the arson charge remained pending, Sloan filed a bad-faith action against Farmers asserting that Farmers had acted unreasonably in handling her claim. Sloan alleged that Farmers improperly withheld exculpatory information and had pressured their "cause and origin" investigator to change his conclusions regarding how the fire started. In June 2012, after a six-week trial, a jury returned a 7-2 verdict in favor of Farmers. Sloan appealed from the resulting judgment, but her appeal was stayed to permit her to file the motion for relief from judgment at issue here.
Sloan's complaint also alleged breach of contract and conversion. The superior court entered a directed verdict for Farmers on these claims.
¶4 Sloan's motion for relief from judgment (filed in January 2015) was based on a 2014 investigation by the Arizona Department of Public Safety ("DPS") into possible misconduct by three members of the Phoenix Fire Department ("PFD") during the Sloan home fire investigation. A report from the DPS investigation recommended that PFD Captain Sam Richardson be charged with false swearing under Arizona Revised Statutes ("A.R.S.") § 13-2703(A) because of several inconsistencies in his testimony before the grand jury that indicted Sloan for arson. The report also recommended charging PFD Captain Fred Andes with one count of false swearing, because, while being deposed, he allegedly misrepresented the reliability of alerts by his arson dog. Although Richards and Andes were not prosecuted for the alleged false swearing, the Maricopa County Attorney's Office ("MCAO") notified PFD that "MCAO will decline for prosecution any cases previously investigated by both Captain Richardson and Captain Andes . . . in the interest of justice and to prevent any further damage to the Phoenix Fire Department Arson Investigation program."
¶5 Sloan's motion for relief from judgment asserted that the DPS report and subsequent fallout created "extraordinary circumstances" justifying relief from the jury's verdict. The superior court granted the motion, concluding that although the issue at trial was whether Farmers (not PFD) had acted reasonably, Farmers had relied on a de facto defense that Sloan had actually committed arson, and "the jury likely gave the PFD investigation great weight." The court declined to make findings as to the DPS report's admissibility or relevance, but noted that "the DPS Report casts heavy shadows on the integrity of the PFD investigation that was the bedrock of Farmers' trial defense" and held that Sloan was entitled to relief from judgment based on "the totality of the circumstances."
¶6 Farmers timely appealed, and we have jurisdiction under A.R.S. § 12-2101(A)(2).
DISCUSSION
¶7 Rule 60(c) allows the superior court to relieve a party from a final judgment based on the following grounds:
(1) mistake, inadvertence, surprise or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(d); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment
has been satisfied, released or discharged, or a prior judgment on which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.
¶8 "While the precise scope of Rule 60(c) relief defies neat encapsulation . . . [the rule] is primarily intended to allow relief from judgments that, although perhaps legally faultless, are unjust because of extraordinary circumstances that cannot be remedied by legal review." Tippit v. Lahr, 132 Ariz. 406, 408-09 (App. 1982). A motion for Rule 60 relief should only be granted when equitable considerations outweigh the public policy in favor of finality of judgments. See Panzino v. City of Phoenix, 196 Ariz. 442, 448, ¶ 19 (2000). We review a court's decision to grant a motion under Rule 60(c) for an abuse of discretion. Johnson v. Elson, 192 Ariz. 486, 488, ¶ 9 (App. 1998).
¶9 Here, the superior court granted Sloan's motion under subsection (c)(6), which contemplates relief at any time for "any other reason justifying relief." Jepson v. New, 164 Ariz. 265, 273 (1990). A party requesting relief under this provision must show "1) extraordinary circumstances of hardship or injustice justifying relief and 2) a reason for setting aside the judgment other than one of the reasons set forth in the preceding five clauses of rule 60(c)." Davis v. Davis, 143 Ariz. 54, 57 (1984).
¶10 Farmers argues that Sloan's motion was in effect a Rule 60(c)(2) motion premised on newly discovered evidence, and thus was time-barred. See Ariz. R. Civ. P. 60(c) ("The motion shall be filed within a reasonable time, and for reasons (1), (2), and (3) not more than six months after the judgment or order was entered."). A party cannot escape the six-month limitations period applicable to Rule 60(c)(2) claims just by re-couching an assertion of newly discovered evidence in terms of "extraordinary relief" under subsection (c)(6). Webb v. Erickson, 134 Ariz. 182, 186 (1982). But Rule 60(c)(6) may provide relief—even if another subsection might also have been applicable had the motion been filed earlier—"if the motion also raises exceptional additional circumstances." Amanti Elec., Inc. v. Engineered Structures, Inc., 229 Ariz. 430, 433, ¶ 10 (App. 2012).
¶11 Newly discovered evidence within the meaning of Rule 60(c)(2) is evidence that existed at the time of trial. Birt v. Birt, 208 Ariz. 546, 547, ¶ 11 (App. 2004). And here, although Farmers correctly notes that many of the inconsistencies between Richardson's grand jury and deposition testimony were known at the time of trial, Sloan's motion was based on the DPS investigation and its fallout, which occurred after trial. Although the DPS report incorporated information that was available to the parties at the time of trial, it also included a government agency's official findings and conclusions that were not available at the time of trial. Sloan's motion thus alleges injustice going beyond simply "newly discovered evidence" as contemplated under Rule 60(c)(2). See Amanti Elec., 229 Ariz. at 433, ¶ 10.
¶12 Farmers further asserts that Sloan's motion did not establish "extraordinary circumstances" justifying relief under Rule 60(c)(6). This provision "has been described as a grand reservoir of equitable power to do justice in a particular case . . . [,] which is addressed to the sound discretion of the trial court." Roll v. Janca, 22 Ariz. App. 335, 337 (App. 1974) (citations omitted). Although the term "extraordinary circumstances" has not been precisely defined, the Arizona Supreme Court has stated that to prevail on a motion under this provision, a party must make at least a colorable showing that the alleged information or evidence would change the outcome of the action if the case were re-tried. See United Imps. & Exps., Inc. v. Superior Court, 134 Ariz. 43, 45-46 (1982) (noting well-established rule that relief from a default judgment under Rule 60(c)(6) requires an adequate showing of "a meritorious defense"); cf. Ruesga v. Kindred Nursing Ctrs., L.L.C., 215 Ariz. 589 (App. 2007) (noting that re-opening a case under Rule 60(c)(2) requires the newly discovered evidence be more than merely cumulative). In short, "[i]t is the invariable rule . . . that a litigant, as a precondition to relief under Rule 60[(c)], must give the trial court reason to believe that vacating the judgment will not be an empty exercise." Teamsters Union, Local No. 59 v. Superline Transp. Co., 953 F.2d 17, 20 (1st Cir. 1992); see also Cmty. Dental Servs. v. Tani, 282 F.3d 1164, 1168 (9th Cir. 2002) (noting that a party seeking relief under Rule 60(c)(6) "must demonstrate both injury and circumstances beyond his control that prevented him from proceeding with . . . the action in a proper fashion") (emphasis added).
In interpreting Arizona's rules of civil procedure, we may consider federal courts' interpretations of federal rules (such as the federal counterpart to Rule 60) that mirror Arizona rules. Haroutunian v. Valueoptions, Inc, 218 Ariz. 541, 548 n.8, ¶ 18 (App. 2008). --------
¶13 Here, the superior court's minute entry does not specify with sufficient clarity why reopening this case would not be an "empty exercise." Teamsters, 953 F.2d at 20. Although the court found that "the DPS Report casts heavy shadows on the integrity of the PFD investigation that was the bedrock of Farmers' trial defense," the court made no findings regarding the admissibility or relevance of the report. Moreover, the court did not explain which facts detailed in the report—other than the fact of an opinion by DPS—were not known by or available to the parties at the time of trial, and the court did not explain how the report would have changed the presentation of other evidence or other aspects of the first trial. Thus, although the court noted its belief that the jury in the first trial had given "great weight" to the PFD investigation, the minute entry does not explain what would be different in a second trial and why a second jury might reach a different conclusion.
¶14 Because the superior court's minute entry does not specify an adequate basis for Rule 60(c) relief, we reverse the superior court's ruling and remand, without prejudice to the court revisiting the issues of (1) how the new information would change the presentation of evidence or other aspects of a retrial and (2) whether any such change establishes a colorable showing that Sloan is likely to succeed on retrial.
CONCLUSION
¶15 For the foregoing reasons, we remand to the superior court for further proceedings consistent with this decision.