Opinion
2 CA-CV 2023-0096
03-29-2024
Progressive Preferred Insurance Company, and Progressive Advanced Insurance Company, Plaintiffs/Counterdefendants/Appellees, v. Rosana E. Troutman, Defendant/Counterclaimant/Appellant.
Richards Law Office P.C., Phoenix By Charles F. Richards Counsel for Plaintiffs/ Counterdefendants/Appellees Law Offices of Scott MacMillan Baker P.C., Tucson By Scott MacMillan Baker Counsel for Defendant/Counterclaimant/Appellant
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Pima County No. C20211806 The Honorable Kellie Johnson, Judge
Richards Law Office P.C., Phoenix By Charles F. Richards Counsel for Plaintiffs/ Counterdefendants/Appellees
Law Offices of Scott MacMillan Baker P.C., Tucson By Scott MacMillan Baker Counsel for Defendant/Counterclaimant/Appellant
Judge Sklar authored the decision of the Court, in which Vice Chief Judge Staring and Judge O'Neil concurred.
MEMORANDUM DECISION
SKLAR, Judge
¶1 This case concerns an insurer's obligations to wrongful-death beneficiaries in underinsured-motorist claims. The case arises out of the death of Cory Troutman, who was killed by a drunk driver. His wife, Rosana Troutman, argues that her insurer, Progressive, committed bad faith by refusing to pay her the policy limits. Progressive refused to do so because Cory's other wrongful-death beneficiaries had not consented.
¶2 Like the trial court, we conclude that Rosana has failed to create a genuine dispute of material fact as to whether Progressive committed bad faith. As authorized by A.R.S. § 20-259.03, the policy's definition of "insured person" did not include only Rosana and Cory. It also included all of Cory's wrongful-death beneficiaries. Progressive reasonably declined to pay Rosana before knowing the extent of the other insured beneficiaries' claims. It instead interpled the proceeds, which triggered a safe harbor against bad-faith claims. And contrary to Rosana's argument, we conclude that Progressive did not unreasonably delay by initiating the interpleader action or paying the policy proceeds to the court. We therefore affirm the court's grant of summary judgment and award of attorney fees to Progressive.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 We view the facts in the light most favorable to Rosana-the party against whom summary judgment was entered. See Acosta v. Phx. Indem. Ins. Co., 214 Ariz. 380, ¶ 2 (App. 2007). In May 2020, Cory Troutman died in a DUI-related automobile accident. He was survived by his wife, Rosana, as well as both his parents and two children. Under A.R.S. § 12-612(A), all five of them are wrongful-death beneficiaries.
¶4 The accident implicated two insurance coverages, which were contained in separate policies issued by two Progressive insurers. First was the auto-insurance policy of the other driver. That policy was issued by Progressive Advanced Insurance Company with a $15,000 policy limit. Second was the Troutmans' motorcycle-insurance policy, which included underinsured-motorist (UIM) coverage. That policy was issued by Progressive Preferred Insurance Company, also with a $15,000 policy limit. We refer to both insurers as "Progressive."
¶5 Rosana's bad-faith claim arises out of her negotiations with Progressive concerning payment on these policies. Less than a month after the accident, Progressive offered to pay Rosana the limit on the driver's liability policy to resolve the wrongful-death claims. It clarified the following month, however, that the offer was "extended to all statutory beneficiaries." That same day, it also offered the limit on the Troutmans' UIM policy, again to "any and all statutory beneficiaries." Over several months of subsequent correspondence, Rosana asked that Progressive pay the limits on both policies to her alone.
¶6 In that correspondence, Progressive also asked that Rosana provide names and contact information for those beneficiaries so it could "contact them directly in relation to the settlement offer being presented." Progressive stated it would not pay the limits until "appropriate waivers or consents are presented" from the remaining four statutory beneficiaries. Rosana's counsel indicated that he represented only Rosana, not the other beneficiaries. He initially did not provide information about those beneficiaries but subsequently confirmed their names.
¶7 With the dispute unresolved, Progressive filed an action in April 2021 to interplead the combined $30,000 policy limits. Rosana brought counterclaims of bad faith. She alleged that Progressive had acted unreasonably in not considering settlement with her individually. The trial court granted summary judgment to Progressive on the counterclaim. It also awarded Progressive $25,000 in attorney fees, which it reduced from Progressive's request for over $58,000.
¶8 The trial court later issued an order allowing Progressive to interplead the policy limits and be released from liability. It then entered judgment in favor of Progressive under Rule 54(b) of the Arizona Rules of Civil Procedure. Rosana appealed.
BAD FAITH
¶9 On appeal, Rosana argues that the trial court erred in granting summary judgment to Progressive. She argues that Progressive acted unreasonably by: (1) refusing to pay the UIM policy limits-or at least most of the limits-directly to her, without consents from the other statutory beneficiaries; (2) violating her reasonable expectations by defining "insured person" under the UIM policy to include not just Rosana and Cory, but all wrongful-death beneficiaries; (3) requiring her to identify the statutory beneficiaries during the negotiations; and (4) delaying in initiating the interpleader action and interpleading the policy proceeds. We review a trial court's grant of summary judgment de novo and will only affirm if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Acosta, 214 Ariz. 380, ¶ 2.
I. Background on bad faith
¶10 Every insurance contract contains an implied covenant of good faith and fair dealing. Lennar Corp. v. Transamerica Ins. Co., 227 Ariz. 238, ¶ 8 (App. 2011). Consistent with this covenant, when a claim is made, the insurer has "an obligation to immediately conduct an adequate investigation, act reasonably in evaluating the claim, and act promptly in paying a legitimate claim." Zilisch v. State Farm Mut. Auto. Ins. Co., 196 Ariz. 234, ¶ 21 (2000). "[I]f an insurer acts unreasonably in the manner in which it processes a claim, it will be held liable for bad faith 'without regard to its ultimate merits.'" Id. ¶ 20 (quoting Deese v. State Farm Mut. Auto. Ins. Co., 172 Ariz. 504, 509 (1992)). An insurer should not jeopardize an insured's security or force the insured to go through needless adversarial hoops. Id. ¶ 21.
¶11 An insurer breaches the covenant of good faith and fair dealing if it "intentionally denies [or] fails to process or pay a claim without a reasonable basis for such action." Cavallo v. Phx. Health Plans, Inc., 254 Ariz. 99, ¶ 19 (2022) (quoting Noble v. Nat'l Am. Life Ins. Co., 128 Ariz. 188, 190 (1981)). Thus, to establish a claim for bad faith, a plaintiff must show "the absence of a reasonable basis for denying benefits of the policy and the defendant's knowledge or reckless disregard of the lack of a reasonable basis for denying the claim." Id. (quoting Noble, 128 Ariz. at 190). "Mere negligence or inadvertence is not sufficient-the insurer must intend the act or omission and must form that intent without reasonable or fairly debatable grounds." Rawlings v. Apodaca, 151 Ariz. 149, 160 (1986).
II. Whether Progressive committed bad faith by failing to settle separately with Rosana on the UIM policy
¶12 We first address Rosana's argument that Progressive committed bad faith by unreasonably conditioning payment of the UIM policy limit on the consents of the other statutory beneficiaries. She argues that she was entitled to the vast majority of the insurance proceeds and that her claim to at least a portion of the proceeds was not fairly debatable. As Rosana's argument solely concerns the legal implication of undisputed facts, this issue is suitable for resolution on summary judgment. See Jones v. Cochise County, 218 Ariz. 372, ¶ 29 (App. 2008).
A. Application of Wrongful Death Act
¶13 The starting points for Rosana's argument are Arizona's Wrongful Death Act and our supreme court's holding in Wilmot v. Wilmot, 203 Ariz. 565 (2002). Under the Wrongful Death Act, wrongful-death actions must be brought by a statutory plaintiff "for and on behalf of" all statutory beneficiaries. § 12-612(A). The statutory plaintiff must be the "surviving husband or wife, child, parent or guardian, or personal representative of the deceased person." Id. The statutory beneficiaries are the "surviving husband or wife, children or parents, or if none of these survive . . . the decedent's estate." Id.
¶14 In Wilmot, our supreme court applied the act's "for and on behalf of" language to conclude that the statutory plaintiff owes fiduciary duties to the statutory beneficiaries. 203 Ariz. 565, ¶¶ 11-14. It therefore vacated a settlement reached by a statutory plaintiff on behalf of all beneficiaries, but without those beneficiaries' consent. Id. ¶¶ 33-35.
¶15 Rosana tacitly acknowledges that Wilmot is both distinguishable and unhelpful. It is distinguishable because unlike in Wilmot, Rosana never attempted to settle the other beneficiaries' claims. It is unhelpful because it says nothing about insurers' duties in wrongful-death cases. Rosana nevertheless points to post-Wilmot changes in the law. She notes that under the version of the Wrongful Death Act applicable in Wilmot, only the surviving spouse or personal representative was authorized to be a statutory plaintiff. See Wilmot, 203 Ariz. 565, ¶ 3 (citing former § 12-612(A) (1973)). The amendment allowing all wrongful-death beneficiaries to be statutory plaintiffs took effect after the underlying facts in Wilmot, but before the case was decided. Wilmot, 203 Ariz. 565, n.1.
¶16 Rosana argues that by expanding the list of potential statutory plaintiffs, the amendment "limited the fiduciary-type obligations" owed by those plaintiffs to beneficiaries. By implication, she argues, the amendment also imposed on insurers the obligation to "consider individual settlements with a spouse like [her], so long as [she] was not purporting to settle the claims of other potential claimants." She argues that by failing to do so, Progressive acted in bad faith.
¶17 Rosana is correct that there are limits to statutory plaintiffs' fiduciary duties. That duty extends to establishing liability, not to each beneficiary's individual claim for damages. See Estate of Brady v. Tempe Life Care Village, Inc., 254 Ariz. 122, ¶ 22 (App. 2022) ("The 'only aspect of the case that the statutory plaintiff necessarily establishes for represented statutory beneficiaries is liability, not their damages.'" (quoting Valder Law Offices v. Keenan Law Firm, 212 Ariz. 244, ¶ 23 (App. 2006))). However, contrary to Rosana's argument, the post-Wilmot statutory change did not bring about this rule. Even before that change, individual beneficiaries were entitled to bring their own damages claims. Nunez v. Nunez, 25 Ariz.App. 558, 563 (1976). We therefore reject Rosana's argument that the amendment to § 12-612 modified the fiduciary duties owed by statutory plaintiffs.
¶18 Rosana is also correct that statutory plaintiffs' fiduciary duties do not categorically preclude them from settling their individual claims. Estate of Brady illustrates this point. 254 Ariz. 122. There, a statutory plaintiff notified the other wrongful-death beneficiaries of the pending action. Id. ¶¶ 4-5. Several of those beneficiaries did nothing in response until after discovery closed, so they were precluded from participating. Id. ¶¶ 8-13. The statutory plaintiff later settled her individual claims against one of the defendants. Id. ¶ 13. The other beneficiaries argued that the statutory plaintiff had breached her fiduciary duties to them by settling without their consent. Id. ¶ 30. Our court disagreed, concluding that the statutory plaintiff had settled only her own claim. Id. ¶ 36. As the court explained, doing so did not violate Wilmot, which merely holds "that a plaintiff representing the interests of others cannot settle the claims of those others without their consent." Id. ¶ 35.
B. Applicability of Wrongful Death Act case law to insurance bad-faith cases
¶19 Attempting to apply Wilmot and Estate of Brady to this case, Rosana argues not only that she was free to settle her individual claim, but that Progressive committed bad faith by refusing to negotiate such a settlement. Nothing in Wilmot or Estate of Brady can be read to that effect. Those cases concern the duties of statutory plaintiffs to wrongful-death beneficiaries, not insurers' obligations to their insureds.
¶20 Rather, we must evaluate Progressive's conduct under the bad-faith standard, which first requires Rosana to show that Progressive lacked a reasonable basis for denying her the UIM policy's benefits until the other beneficiaries consented or their claims were otherwise resolved. See Cavallo, 254 Ariz. 99, ¶ 19. Progressive had such a basis. Rosana's UIM coverage defined "insured person" to include "any person who is entitled to recover damages" paid under that coverage. Thus, although Rosana purchased the policy, it provided UIM coverage to the other wrongful-death beneficiaries too.
¶21 This point is crucial. Because those beneficiaries are insureds and therefore had the right to make UIM claims, Progressive owed them a duty to equally consider any settlement demands from them. See McReynolds v. Am. Comm. Ins. Co., 225 Ariz. 125, ¶ 18 (App. 2010) (citing Safeway Ins. Co. v. Guerrero, 210 Ariz. 5, ¶ 11 (2005)). And importantly, two such beneficiaries also raised claims. Progressive was thus faced with the situation this court confronted in McReynolds-multiple claims in excess of the policy limits. Id. ¶ 1.
¶22 In McReynolds, both the injured party and medical lienholder held rights to payment on a third-party liability claim. Id. ¶¶ 3-4. The injured party argued that the insurer had committed bad faith by declining to pay him the policy limits. Id. ¶ 6. This court concluded that the insurer was entitled to summary judgment because it interpled the policy limits. Id. ¶ 27. The court declared that-subject to three procedural requirements discussed later in this decision-where insurers must "manag[e] multiple claims in excess of the policy limits," interpleader is a "safe harbor." Id. ¶¶ 26, 30. Consistent with McReynolds, Progressive interpled the policy limits and availed itself of the safe harbor. Doing so was not bad faith. This is true even though McReynolds arose in a third-party context, while this case involves a first-party policy. That difference is immaterial in light of the coverage's definition of "insured person," which includes multiple parties who may raise competing claims.
¶23 Perhaps seeking to avoid McReynolds, Rosana presents the alternative argument that Progressive acted in bad faith by failing to offer "some partial portion of the UIM proceeds." Under that theory, at least some amount would have been left for the other beneficiaries. But the record does not suggest that Rosana ever demanded anything less than the policy limits. Nor did she make this argument in the trial court. We therefore do not consider it. Trantor v. Fredrikson, 179 Ariz. 299, 300 (1994) ("[A]bsent extraordinary circumstances, errors not raised in the trial court cannot be raised on appeal.").
¶24 Relatedly, Rosana argues that Progressive improperly conditioned payment on the UIM policy on a release of the driver's liability. But the record does not suggest that Progressive ever imposed such a condition. Rather, its offer to pay the UIM policy limit was conditioned on a "full and final U[IM] settlement release from all statutory beneficiaries in relation to this claim." At most, a letter from Progressive offered the policy limits on both policies if "appropriate waivers or consents are presented to ensure the Progressive insured . . . is actually released from all claims."
III. Whether Progressive's asserted violation of Rosana's reasonable expectations constituted bad faith
¶25 Rosana's next bad-faith argument arises out of the UIM coverage's definition of "insured person." She argues that this definition violated her reasonable expectations because Progressive never explained that she and Cory were not the only beneficiaries entitled to recover under that coverage or that those other beneficiaries' consent would be required for a settlement.
¶26 The reasonable-expectations doctrine provides that "[c]ourts construe the written terms of insurance contracts to effectuate the parties' intent . . . and to 'protect the reasonable expectations of the insured.'" Liberty Ins. Underwriters, Inc. v. Weitz Co., LLC, 215 Ariz. 80, ¶ 8 (App. 2007) (quoting Phx. Control Sys., Inc. v. Ins. Co. of N. Am., 165 Ariz. 31, 34 (1990)). It is primarily a doctrine of contract interpretation, not one that addresses the tort of bad faith. See Gordinier v. Aetna Cas. &Sur. Co., 154 Ariz. 266, 272 (1987) (explaining that reasonable-expectations doctrine concerns enforcement of contract terms); but see Clearwater v. State Farm Mut. Auto. Ins. Co., 164 Ariz. 256, 259 (1990) (providing that in first-party claims, "insurer must not thwart in bad faith the insured's reasonable expectations under the policy").
¶27 Here, Progressive did not commit bad faith by enforcing the coverage's definition of "insured person." Rather, that definition mirrors a statutory provision concerning who may recover on a UIM policy following a wrongful death. § 20-259.03. That statute reads:
Notwithstanding any other law, in the case of the death of an insured who is covered under the uninsured and underinsured motorist coverages of a motor vehicle liability policy, recovery for wrongful death is limited to any party who is qualified to bring a wrongful death action pursuant to § 12-612 and who is also a surviving insured under the same coverages of the policy.
Thus, to recover under a UIM policy, a party must meet two requirements. First, it must qualify to bring the wrongful-death action-which as we have explained, all beneficiaries do. Second, the party must be a "surviving insured" under the UIM coverage. Our court has explained that insurers are free to define "surviving insured" as including other wrongful-death beneficiaries beyond the named insured. State Farm Mut. Auto. Ins. Co. v. White, 231 Ariz. 337, ¶ 14 (App. 2013) ("The statute instead allows an insurer to pay wrongful-death UIM benefits to any eligible claimant that the insurer has chosen to define as 'a surviving insured under the same coverage.'").
¶28 We see no basis for concluding that Progressive acted in bad faith by adopting a policy provision expressly contemplated by statute and approved by our case law. We therefore reject Rosana's argument under the reasonable-expectations doctrine.
IV. Whether Progressive acted in bad faith by requiring her to identify the other wrongful-death beneficiaries
¶29 Next, Rosana argues that Progressive acted in bad faith by attempting to "impose a non-existent obligation on [her] to identify other potential claimants." At oral argument, Rosana characterized Progressive's conduct as "shifting the burden" to Rosana to investigate the claims of the other beneficiaries. Unlike Rosana's prior arguments, this argument concerns both the liability and the UIM policies. We again look to whether Rosana created a genuine dispute of material fact that Progressive acted unreasonably. See Acosta, 214 Ariz. 380, ¶¶ 2, 13. An insurer is entitled to summary judgment on bad-faith claims where the insured fails to demonstrate that an insurer lacked "a reasonable basis" for denying the claim. Aetna Cas. &Sur. Co. v. Superior Court, 161 Ariz. 437, 440 (App. 1989).
¶30 Importantly, the record does not support Rosana's position that Progressive required her to identify the other beneficiaries or shifted any burden to her. Rather, it asked Rosana "to confirm all the statutory beneficiaries in reference to the wrongful death claim of Cory Troutman." In that same letter, it stated, "Should you represent all the statutory beneficiaries in relation to this claim please provide us with letters of representation for each" and "Should you not represent all the statutory beneficiaries in relation to this claim please provide us with their names and contact information so that we may contact them directly in relation to the settlement offer being presented."
¶31 Nothing about this correspondence obligated Rosana to identify the beneficiaries, much less conduct an investigation. Progressive simply requested the information. Rather than shifting the burden of investigation to Rosana, Progressive's request was a reasonable means for Progressive to satisfy its own responsibility to investigate. Progressive could reasonably have assumed that the deceased's surviving spouse might know the statutory beneficiaries and have their contact information available.
¶32 After Rosana did not provide that information, Progressive searched for it. Progressive ultimately located the remaining beneficiaries, two of whom are still asserting claims and two of whom have waived them. That two claimants other than Rosana remain illustrates that Progressive acted reasonably by seeking other claimants rather than paying the policy limits to Rosana. Rosana has failed to create a material dispute of fact on this issue.
V. Whether Progressive acted promptly in interpleading the policy proceeds
¶33 Rosana's final bad-faith argument is that Progressive failed to act promptly in connection with the proceedings. It did so, she argues, by: (1) waiting too long to file the interpleader action; and (2) delaying in depositing the policy proceeds until after seeking and obtaining an order releasing it from liability. Rosana contends that those delays preclude Progressive from benefitting from McReynolds's "safe harbor" against bad-faith claims. As alluded to above, that safe harbor contains three procedural requirements for insurers faced with competing claims that exceed policy limits. Specifically, an insurer must: (1) promptly file an interpleader in good faith as to all known claimants; (2) enter payment of the policy limits into court; and (3) continually provide a defense for the insured on each pending claim. McReynolds, 225 Ariz. 125, ¶ 26.
A. Promptness in initiating the interpleader action
¶34 In arguing that Progressive waited too long to file the interpleader action, Rosana's argument focuses on the first element of the safe harbor-whether Progressive "promptly" filed that action. Progressive filed the complaint in April 2021, about eleven months after the accident. Both in her briefing and at oral argument, Rosana argued that this 11-month delay was excessive.
¶35 We can affirm summary judgment only if the facts presented by Rosana "have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion advanced" by Rosana. Orme School v. Reeves, 166 Ariz. 301, 309 (1990). However, summary judgment is appropriate if the evidence presents only a "scintilla" of support for Rosana's position or creates the "slightest doubt." Id.
¶36 We conclude that Rosana, who bears the burden of proof, has failed to point to "evidence creating a genuine issue of fact." Id. at 310. The record reflects that for most of the eleven months-from May 2020 to April 2021-Progressive and Rosana's counsel were corresponding to resolve the dispute. The record reflects extensive correspondence in June and July, followed by a two-month delay while Progressive awaited a response from Rosana's counsel. Upon receiving that response, Progressive began searching for other beneficiaries the next day and replied within two weeks. It then waited another month for Rosana to respond-when she first confirmed the beneficiaries' names-then replied again within eleven days. Another two months passed before Rosana's counsel responded again and suggested a follow-up call. Progressive initiated this lawsuit approximately two months later. Thus, much of the 11-month delay resulted from delays by Rosana. By contrast, Progressive consistently responded promptly and investigated the claim while the negotiations were ongoing.
¶37 This procedural history contrasts with Zilisch, which pre-dates McReynolds but illustrates the type of insurer delay that can overcome a summary-judgment motion on a bad-faith claim. There, the UIM insurer waited nearly ten months after receiving a demand before offering to settle. Zilisch, 196 Ariz. 234, ¶ 23. It did so despite having "all available medical and employment records" when it received the demand. Id. Although the parties corresponded over those ten months, the insurer engaged in no formal evaluation. Id. ¶¶ 3-10. Our supreme court concluded that under these circumstances, a reasonable jury could conclude that the insurer intentionally delayed in handling the claim. Id. ¶ 25.
¶38 This case differs markedly from Zilisch. Here, Progressive engaged in both negotiations and investigation during the 11-month period. It made an offer within a month of the accident. In its correspondence, it took a position-which we have already explained was reasonable-that it could not pay Rosana the policy limits until the other beneficiaries consented or their claims were resolved. And even as late as nine months after the accident, Rosana left open the possibility of resolving the matter before "proceed[ing] with the litigation." Progressive filed the interpleader action around two months later, when it had apparently become clear that such a resolution was no longer possible. We conclude that as a matter of law, acting within this timeframe was reasonable under the circumstances. Cf. Lennar Corp., 227 Ariz. 238, ¶ 19 ("Whether the reasonableness of an insurer's coverage position may be determined as a matter of law depends on the nature of the dispute and other factors."). No reasonable jury could conclude that Progressive was required to file an interpleader while Rosana was still inviting negotiation. Especially given that the last communication from Rosana suggested the parties "talk one more time" before pursuing litigation, the two-month delay after the correspondence concluded is insufficient to create a genuine dispute of material fact.
B. Promptness in paying the policy limits into the court
¶39 Rosana next focuses on the safe harbor's second element-the requirement that the insurer pay the policy limits into the court. Progressive did so in December 2022, after it sought and obtained an order from the trial court discharging it from liability. Rosana contends that Progressive should have done so when it filed the interpleader action. We disagree. Progressive followed the procedure set forth in Rule 22(b) of the Arizona Rules of Civil Procedure. That rule allows for a party requesting interpleader to move for an order discharging it from liability and allows the court to discharge the party upon "the party's deposit in court of the money claimed." Ariz. R. Civ. P. 22(b)(1). Nothing in McReynolds precludes insurers from following this procedure to obtain the safe harbor.
¶40 Nor did Progressive unreasonably delay in seeking the discharge order. The interpleader action was filed in April 2021. During the ensuing months, Progressive undertook various efforts to notify the other wrongful-death beneficiaries of the interpleader action, such as moving for service by publication. It apparently sent a detailed, personalized questionnaire to each known beneficiary in hopes of tracking down information about the others. Each beneficiary was a proper party to the interpleader. See Ariz. R. Civ. P. 22(a)(2) ("A plaintiff may join as a defendant anyone who asserts or may assert a claim to the money or property."). Rosana has pointed to no unreasonable delay by Progressive in seeking to identify the beneficiaries or bring them into the litigation. The matter was further delayed by litigation over Rosana's counterclaim. We therefore conclude that Rosana failed to create a genuine dispute of material fact concerning Progressive's purported delays.
PREJUDGMENT INTEREST
¶41 Rosana also argues that the trial court erred by failing to require Progressive to pay prejudgment interest on the interpled policy proceeds. A party is entitled to prejudgment interest on a liquidated claim, but not on an unliquidated claim. Canal Ins. Co. v. Pizer, 183 Ariz. 162, 164-65 (App. 1995). A claim is liquidated when "the evidence makes it possible to calculate the amount with exactness, without reliance on opinion or discretion." Id. at 164. Generally, tort claims involving personal injuries and wrongful death are unliquidated because a factfinder has to exercise discretion to determine the damages. See id.
¶42 Rosana argues that the $30,000 in policy proceeds were liquidated because there was no dispute regarding liability or the available policy limits. Canal contradicts this view. It provides that an insurer who interpleads insurance proceeds owes no prejudgment interest to individual claimants who later receive distributions. Id. at 164-65. Although the amount of available insurance proceeds may be fixed, whether a claim is liquidated turns on the value of the claim itself, not the amount available to pay it. Id. We therefore reject Rosana's argument.
¶43 Nor do we agree with Rosana that Progressive is liable for prejudgment interest because it delayed in interpleading the policy limits. Rosana points to language in Canal stating that a "stakeholder is not liable for interest if it properly files an interpleader action together with either payment of the stake into the court or with an unconditional offer to deposit the funds in court." Canal, 183 Ariz. at 165. But as we have already explained, Progressive followed appropriate procedures in its interpleader action. We interpret its complaint as the "unconditional offer" required by Canal, given that the prayer for relief sought an order "[d]irecting" Progressive to deposit the policy limits with the court or a third-party designated by the court.
TRIAL COURT ATTORNEY FEES
¶44 Next, Rosana argues the trial court abused its discretion in awarding Progressive $25,000 in attorney fees. The court awarded fees under A.R.S. § 12-341.01(A), which allows courts to award reasonable attorney fees to a "successful party" in a "contested action arising out of a contract." Rosana does not challenge the court's conclusion that Progressive was the successful party or that the action arises out of contract. She challenges only the court's decision to award fees, as well as the amount it awarded.
¶45 Trial courts have wide discretion in awarding fees under Section 12-341.01, and we review a trial court's award of fees for abuse of discretion. See Associated Indem. Corp. v. Warner, 143 Ariz. 567, 570 (1985) (listing factors to be considered in deciding whether to award attorney fees); Schweiger v. China Doll Rest., Inc., 138 Ariz. 183, 187-89 (App. 1983) (describing process for determining reasonable fee). While courts may consider various factors in awarding fees, they need not weigh those factors explicitly in written findings. See Warner, 143 Ariz. at 571.
¶46 Here, Progressive initially sought a fee award of over $58,000, to which Rosana objected. The trial court found that the fees should be awarded only for Progressive opposing the bad-faith claim and litigating the summary-judgment motion. It therefore reduced the fee award to $25,000.
¶47 Although the award was very substantial, we cannot conclude that the trial court abused its discretion in awarding this amount. See Warner, 143 Ariz. at 571 (inquiry is whether trial court exceeded "bounds of reason," not whether appellate court would have made same decision). We reject Rosana's argument that the award amounts to an "essentially punitive fee award" against an individual consumer who litigated with a large financial institution. To the contrary, the court explained its decision and awarded a substantially lower amount than Progressive requested. It concluded that while a fee award might cause some hardship, "there is no evidence before the court that any hardship would be extreme." Id. at 570 (listing "extreme hardship" as one factor to consider). Given the trial court's "superior understanding of the litigation," and the essentially factual nature of the inquiry, we find no basis for second-guessing the court's exercise of its discretion. See id. We therefore affirm the fee award.
ATTORNEY FEES ON APPEAL
¶48 As the prevailing party on appeal, Progressive seeks an award of attorney fees under Section 12-341.01(A). In our discretion, we deny Progressive's request. We likewise reject Progressive's argument that it is entitled to fees as a sanction under A.R.S. § 12-349-an argument that borders on being frivolous. Rosana's arguments on appeal are not frivolous and do not satisfy Section 12-349's standard. However, Progressive is entitled to recover its taxable costs upon compliance with Rule 21 of the Arizona Rules of Civil Appellate Procedure.
DISPOSITION
¶49 We affirm the trial court's grant of summary judgment in favor of Progressive and uphold its fee award.