Swenson v. Cnty. of Pinal, an Ariz. Mun. Corp.

402 P.3d 1007

Sean SWENSON, a married man; and Brent Swenson, a single man, Plaintiffs/Appellants,

v.COUNTY OF PINAL, an Arizona municipal corporation and public entity, Defendant/Appellee.

No. 2 CA-CV 2017-0019.

Court of Appeals of Arizona, Division 2.

Filed August 22, 2017

Lewis Law Firm, PLC, Phoenix, By Robert K. Lewis and Christopher A. Treadway and Pokora Law, PLC, Phoenix, By Amy M. Pokora, Counsel for Plaintiffs/Appellants

Struck Wieneke & Love, P.L.C., Chandler, By Kathleen L. Wieneke and Kevin L. Nguyen, Counsel for Defendant/Appellee

Presiding Judge Vásquez authored the opinion of the Court, in which Chief Judge Eckerstrom and Judge Howard¹ concurred.

OPINION

VÁSQUEZ, Presiding Judge:

¶ 1 Sean and Brent Swenson (collectively, Swenson) appeal from the trial court's dismissal of their complaint against Pinal County. Swenson argues the court erred in concluding the County had not waived the notice-of-claim requirement and statute of limitations under A.R.S. §§ 12–821 and 12–821.01 by obtaining liability insurance and contractual indemnification. For the following reasons, we affirm.

Factual and Procedural Background

¶ 2 In reviewing a trial court's decision to grant a motion to dismiss, we assume the truth of the facts asserted in the complaint. Sw. Non–Profit Hous. Corp. v. Nowak , 234 Ariz. 387, ¶ 4, 322 P.3d 204, 206 (App. 2014). However, the relevant facts are undisputed. On November 18, 2013, Keith Swenson was driving on Ironwood Drive in Pinal County when he lost control. His vehicle spun and then rolled across the opposite lanes of traffic. Keith was ejected and died as a result of his injuries.

¶ 3 On November 13, 2015, Sean and Brent—Keith's sons—brought this wrongful-death action against Pinal County, alleging negligence.² The County moved to dismiss the complaint pursuant to Rule 12(b)(6), Ariz. R. Civ. P., arguing it was barred by the failure to file a notice of claim, see § 12–821.01(A), and the one-year statute of limitations, see § 12–821. In response, Swenson maintained the County had "waived its sovereign immunity protections provided in Title 12 ..., including the notice of claim requirements and one year statute of limitations," because the County had "secur[ed] liability insurance and contractual indemnity." Swenson thus reasoned the claim was not barred.

Contemporaneously with the response, Swenson also filed a motion for leave to amend the complaint, primarily seeking to add "factual allegations related to the County's securing of liability insurance and contractual indemnity rights to protect public funds."³

¶ 4 After hearing oral argument, the trial court granted the motion to dismiss because Swenson "did not file a notice of claim" and "did not file suit within the one-year statute of limitations." The court further explained that §§ 12–821 and 12–821.01 were procedural and not "some sort of implementation of sovereign immunity," as Swenson had urged. Consequently, the court also denied as moot Swenson's motion for leave to amend the complaint. This appeal followed.⁴ We have jurisdiction pursuant to A.R.S. §§ 12–120.21(A)(1) and 12–2101(A)(1).

Motion to Dismiss

¶ 5 Swenson argues the trial court erred by granting the motion to dismiss because a public entity, like Pinal County, "waives its sovereign immunity rights," including the notice-of-claim requirement and statute of limitations in §§ 12–821 and 12–821.01, "when it secures liability [insurance] and contractual indemnity to protect public funds." We review de novo the dismissal of a complaint under Rule 12(b)(6). Coleman v. City of Mesa , 230 Ariz. 352, ¶ 7, 284 P.3d 863, 866 (2012). Dismissal under that rule is appropriate "only if ‘as a matter of law ... plaintiffs would not be entitled to relief under any interpretation of the facts susceptible of proof.’ " Id. ¶ 8, quoting Fid. Sec. Life Ins. Co. v. Ariz. Dep't of Ins. , 191 Ariz. 222, ¶ 4, 954 P.2d 580, 582 (1998).

¶ 6 "The doctrine of sovereign immunity precludes bringing suit against the government without its consent." Clouse v. State , 199 Ariz. 196, ¶ 8, 16 P.3d 757, 759 (2001) ; see also City of Phoenix v. Fields , 219 Ariz. 568, ¶¶ 7–8, 201 P.3d 529, 532 (2009). After our supreme court abolished the common-law defense of sovereign immunity in 1963, our legislature codified the doctrine in 1984 by adopting the Actions Against Public Entities or Public Employees Act, A.R.S. §§ 12–820 to 12–826. Clouse , 199 Ariz. 196, ¶¶ 8–9, 13, 18, 16 P.3d at 759–60, 762. "The legislation provides for absolute immunity, qualified immunity, and affirmative defenses in favor of public entities and public employees." Id. ¶–13, quoting James L. Conlogue, Note, A Separation of Powers Analysis of the Absolute Immunity of Public Entities , 28 Ariz. L. Rev. 49, 49 (1986); see §§ 12–820.01 to 12–820.05.

¶ 7 In addition, § 12–821.01(A) requires a claimant who wishes to bring an action against a public entity or employee to file a notice of claim with the entity or employee "within one hundred eighty days after the cause of action accrues." Section 12–821 further provides: "All actions against any public entity or public employee shall be brought within one year after the cause of action accrues and not afterward." Strict compliance with §§ 12–821 and 12–821.01(A) is generally required. Martineau v. Maricopa County , 207 Ariz. 332, ¶¶ 15, 17, 86 P.3d 912, 915 (App. 2004) ; see also Democratic Party of Pima Cty. v. Ford , 228 Ariz. 545, ¶ 9, 269 P.3d 721, 724 (App. 2012) ("shall" denotes mandatory provision). Those statutes, however, are procedural in nature and therefore "subject to waiver." Pritchard v. State , 163 Ariz. 427, 432, 788 P.2d 1178, 1183 (1990) ; see also Albano v. Shea Homes Ltd. P'ship , 227 Ariz. 121, ¶ 24, 254 P.3d 360, 366 (2011) (describing statutes of limitations as procedural).

¶ 8 Relying on Clouse , Swenson argues that §§ 12–820 to 12–826"work together to provide a public entity with substantive and procedural defenses to exercise its sovereign immunity protection." Swenson specifically characterizes §§ 12–821 and 12–821.01 as a form of "immunity not enjoyed by others." Citing Smith Plumbing Co. v. Aetna Casualty & Surety Co. , 149 Ariz. 524, 720 P.2d 499 (1986), Swenson then reasons that a public entity waives all of its sovereign immunity rights, including the notice requirement and time limitations under §§ 12–821 and 12–821.01, when it secures liability insurance and contractual indemnity.

¶ 9 In Smith Plumbing , the issue was whether the trial court's exercise of jurisdiction over Smith Plumbing's claim against Aetna and the White Mountain Apache Tribe violated the Tribe's right of sovereign immunity. 149 Ariz. at 525, 720 P.2d at 500. In a footnote, the court observed: "Although charities and municipalities may waive their immunity from suit by purchasing liability insurance and be subject to damages to the extent of the insurance coverage, the purchase of insurance has not been held to waive tribal immunity." Id. at 532 n.4, 720 P.2d at 507 n.4, quoting Note, In Defense of Tribal Sovereign Immunity , 95 Harv. L. Rev. 1058, 1073 (1982). Swenson relies on this statement to support the argument. In response, the County maintains the statement is "merely dict[um]."

¶ 10 "A court's statement on a question not necessarily involved in the case before it is dictum." Creach v. Angulo , 186 Ariz. 548, 552, 925 P.2d 689, 693 (App. 1996). "Dictum is not binding precedent because, inter alia, it is without the force of adjudication and the court may not have been fully advised on the question." Id. ; see also Harper v. Canyon Land Dev., LLC , 219 Ariz. 535, 537 n.3, 200 P.3d 1032, 1034 n.3 (App. 2008). Because Smith Plumbing involved tribal immunity, which our supreme court expressly distinguished from municipality immunity, its statement about a municipality purchasing liability insurance is dictum. It is therefore not binding precedent on which this court will base a waiver of sovereign immunity.

¶ 11 Swenson nevertheless contends that, even if the statement is dictum, "it is consistent with [the] law of other jurisdictions." See, e.g. , Thomas v. Broadlands Cmty. Consol. Sch. Dist. No. 201 , 348 Ill.App. 567, 109 N.E.2d 636, 641 (1952) ("[W]hen liability insurance is available to so protect the public funds, the reason for the rule of immunity vanishes to the extent of the available insurance."), disapproved of on other grounds by Molitor v. Kaneland Cmty. Unit Dist. No. 302 , 18 Ill.2d 11, 163 N.E.2d 89 (1959) ; Jackson v. Belcher , 232 W.Va. 513, 753 S.E.2d 11, 18 (2013) (when recovery sought against state's liability insurance, doctrine of constitutional immunity inapplicable); Collins v. Mem'l Hosp. of Sheridan Cty. , 521 P.2d 1339, 1344 (Wyo. 1974) (purchase of liability insurance constitutes waiver of immunity, at least up to amount of coverage). We are unconvinced.

¶ 12 First, while the laws of other jurisdictions are sometimes instructive, they are not binding upon this court. Bunker's Glass Co. v. Pilkington PLC , 202 Ariz. 481, ¶ 40, 47 P.3d 1119, 1129 (App. 2002). Second, we find Swenson's reliance on these cases misplaced because none of them extended the waiver of sovereign immunity, based on the procurement of liability insurance, to the related notice-of-claim requirements or statutes of limitations.

¶ 13 Indeed, even were the footnote from Smith Plumbing not dictum, we conclude it would not apply to §§ 12–821 and 12–821.01. In that footnote, the supreme court suggested that certain public entities "may" waive their sovereign immunity by purchasing liability insurance and "be subject to damages to the extent of the insurance coverage." Smith Plumbing , 149 Ariz. at 532 n.4, 720 P.2d at 507 n.4, quoting Note, supra at 1073. This plain language suggests that what is waived in those circumstances is the substantive right to immunity, such that a plaintiff could recover from the public entity the amount of its liability insurance policy limits. The language does...