Opinion
1 CA-CV 22-0375
02-28-2023
GARBIS SATAMIAN, Plaintiff/Appellant, v. GREAT DIVIDE INSURANCE CO., et al., Defendants/Appellees.
Claggett & Sykes Law Firm, Las Vegas, Nevada By Joseph N. Mott, Stephen K. Lewis Co-Counsel for Plaintiff/Appellant Poli Moon & Zane PLLC, Phoenix By Lawrence R. Moon Co-Counsel for Plaintiff/Appellant Copper Canyon Law LLC, Mesa By Ryan P. Sandstrom, Taylor J. Barlow Counsel for Defendant/Appellee Risk Placement Bryan Cave Leighton Paisner LLP, Phoenix By Gregory B. Iannelli Counsel for Defendant/Appellee Farm Bureau
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Maricopa County No. CV2021-010306 The Honorable Katherine Cooper, Judge.
COUNSEL
Claggett & Sykes Law Firm, Las Vegas, Nevada By Joseph N. Mott, Stephen K. Lewis Co-Counsel for Plaintiff/Appellant
Poli Moon & Zane PLLC, Phoenix By Lawrence R. Moon Co-Counsel for Plaintiff/Appellant
Copper Canyon Law LLC, Mesa By Ryan P. Sandstrom, Taylor J. Barlow Counsel for Defendant/Appellee Risk Placement
Bryan Cave Leighton Paisner LLP, Phoenix By Gregory B. Iannelli Counsel for Defendant/Appellee Farm Bureau
Judge James B. Morse Jr. delivered the decision of the Court, in which Presiding Judge Maria Elena Cruz and Judge Daniel J. Kiley joined.
MEMORANDUM DECISION
MORSE, Judge:
¶1 Garbis Satamian appeals from the superior court order dismissing his lawsuit against Risk Placement Services, Inc. ("RPS"). For the following reasons, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 Satamian brings suit under an assignment of rights from A.C. Watercraft Rental, LLC ("A.C. Watercraft") and its owner Sayed Mohammed.
¶3 In March 2015, Mohammed contacted Farm Bureau Property and Casualty Insurance Company ("Farm Bureau") to purchase insurance for his watercraft rental business, A.C. Watercraft. As part of the coverage, Mohammed sought to purchase liability insurance on all watercrafts owned by the business.
¶4 Working with Farm Bureau, Mohammed purchased an insurance policy ("the Policy") from Great Divide Insurance Company ("Great Divide"). Policy documents listed RPS as agent of record and included a schedule listing the specific watercraft covered under the Policy.
¶5 Three months after the Policy went into effect, a personal watercraft owned by A.C. Watercraft and operated by a non-party struck and killed Satamian's daughter. Following the accident, A.C. Watercraft sought indemnification under the Policy, and, on January 26, 2016, Great Divide denied coverage. In its denial of coverage letter, Great Divide stated that the watercraft involved in the incident was not listed on the schedule of covered watercraft in the Policy.
¶6 Satamian filed suit against A.C. Watercraft in May 2017. A.C. Watercraft again tendered the claim to Great Divide, and Great Divide again denied coverage. This denial of coverage forced A.C. Watercraft to spend its own money funding its defense.
¶7 In the course of the litigation, A.C. Watercraft obtained a portion of Great Divide's claims file in February 2020. The claims file included evidence that Farm Bureau and RPS knew of the watercraft in question but failed to include it in the schedule of covered watercraft.
¶8 Satamian and A.C. Watercraft settled their lawsuit in December 2020. The settlement agreement included a stipulated judgment in favor of Satamian and the assignment of A.C. Watercraft's claims against Great Divide, RPS, Farm Bureau, and others.
¶9 Under this assignment of rights, Satamian filed the present suit against RPS and other defendants on June 28, 2021. RPS moved to dismiss Satamian's claims as untimely. The superior court granted the motion, finding that the statute of limitations had expired on Satamian's claims against RPS by May 2020.
¶ 10 Satamian timely appealed, and we have jurisdiction under A.R.S. § 12-2101(A)(1).
DISCUSSION
¶ 11 We review the dismissal of a complaint under Rule 12(b)(6) de novo. Coleman v. City of Mesa, 230 Ariz. 352, 355, ¶ 7 (2012). We will "assume the truth of all well-pleaded factual allegations and indulge all reasonable inferences from those facts, but mere conclusory statements are insufficient." Id. at 356, ¶ 9. We review questions of law concerning the statute of limitations de novo. Cook v. Town of Pinetop-Lakeside, 232 Ariz. 173, 175, ¶ 10 (App. 2013).
¶12 Satamian does not challenge the superior court's determination that his claims against RPS for negligence and promissory estoppel are governed by the limitations periods set forth in A.R.S. § 12-542 (two years) and A.R.S. § 12-543 (three years), respectively. Instead, he claims the superior court erred in finding that the limitations periods began running in May 2017.
I. The Discovery Rule.
¶ 13 "As a general matter, a cause of action accrues, and the statute of limitations commences, when one party is able to sue another." Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of Am., 182 Ariz. 586, 588 (1995). Under the discovery rule, this does not occur "until the plaintiff knows or with reasonable diligence should know the facts underlying the cause [of action]." Doe v. Roe, 191 Ariz. 313, 322, ¶ 29 (1998). Accordingly, "a claim accrues when the plaintiff has reason to connect her injury with a 'causative agent' such that 'a reasonable person would be on notice to investigate whether the injury might result from fault.'" Kopacz v. Banner Health, 245 Ariz. 97, 100, ¶ 9 (App. 2018) (quoting Walk v. Ring, 202 Ariz. 310, 316, ¶¶ 22, 23 (2002).
¶ 14 Satamian claims the superior court engaged in improper fact-finding when it determined that his causes of action accrued in May 2017. He is correct that "[w]hen discovery occurs and a cause of action accrues are usually and necessarily questions of fact for the jury." Doe, 191 Ariz. at 323, ¶ 32. But plaintiffs bear the burden of showing the discovery rule should delay the statute of limitations. Logerquist v. Danforth, 188 Ariz. 16, 19 (App. 1996). And it is not enough for the plaintiff to allege that discovery had not yet occurred; they must raise "a material factual dispute as to when [they] knew or should have known" of the alleged wrong. Anson v. Am. Motors Corp., 155 Ariz. 420, 425 (App. 1987) (emphasis added). In some cases, "an unexpected poor result immediately puts a plaintiff on notice that [fault] might have occurred; in these cases, the court may determine the date of accrual as a matter of law." Kopacz, 245 Ariz. at 100, ¶ 11.
¶ 15 In reaching its decision, the superior court properly relied on the facts pled in the complaint. The complaint alleges that when Mohammed purchased the Policy, he "understood [it] would cover all watercraft owned by his business in the event of any loss." The complaint further alleges that, after Mohammed sought indemnification under the Policy, Great Divide denied his claim in January 2016 and informed him that the watercraft involved in the accident was not covered under the Policy. The complaint also alleges that Satamian sued A.C. Watercraft on May 3, 2017, and that Great Divide's denial of coverage forced A.C. Watercraft to use its own funds to defend itself.
¶ 16 At that point, Mohammed and A.C. Watercraft knew or should have known of the alleged wrong, i.e., the denial of expected insurance coverage. The superior court correctly reasoned that these facts, coupled with policy documents identifying RPS as agent of record, were enough to put a reasonable person on notice to investigate. See Kopacz, 245 Ariz. at 100, ¶ 9. In light of the complaint's allegations, Satamian's conclusory statement that "Mohammed and A.C. Watercraft did not know RPS' conduct caused any harm until February 2020" is insufficient to raise a material factual dispute. See Coleman, 230 Ariz. at 356, ¶ 9 (stating that "conclusory statements [in a complaint] are insufficient" to defeat a motion to dismiss).
II. The Final Judgment Accrual Rule.
¶ 17 In the alternative, Satamian claims that, as a matter of law, "third-party bad faith claims do not begin to accrue until the underlying judgment against the insured becomes final or non-appealable and the insured's rights are assigned over to the injured party." We disagree.
¶ 18 The "final judgment accrual rule" recognizes that a final judgment, in excess of the policy limits, is an "essential element" of a claim for an insurer's bad faith refusal to settle. Taylor v. State Farm Mut. Auto. Ins. Co., 185 Ariz. 174, 178-79 (1996). Accordingly, "a third-party bad faith failure-to-settle claim accrues at the time the underlying action becomes final and non-appealable." Id. at 179. But Taylor's final judgment accrual rule only applies to claims for bad faith refusal-to-settle, and not to bad faith denial-of-coverage claims. France v. Ariz. Counties Ins. Pool, 519 P.3d 1029, 1033-34, ¶ 19-20 (App. 2022). Instead, a bad faith denial-of-coverage claim "accrues when the insurer denies coverage." Id. at ¶ 20.
¶ 19 Satamian relies on Manterola v. Farmers Insurance Exchange, 200 Ariz. 572 (App. 2001) to argue that the "final judgment accrual rule" should nonetheless apply in this case. His reliance is misplaced.
¶ 20 In Manterola, the court affirmed the dismissal of a complaint filed three years after the plaintiffs entered into a Morris agreement. Id. at 577-78, 582, ¶¶ 15, 34. In doing so, the court reasoned that the plaintiffs "clearly knew or should have known of the facts underlying [their] bad faith claim, at the latest, when the stipulated judgment in the PI case became final . . . ." Id. at 578, ¶ 15 (emphasis added). But Manterola does not disrupt the traditional rule that a cause of action accrues when a plaintiff suffers "appreciable, non-speculative harm . . . ." Id. at 576, ¶ 10. To the contrary, "Manterola noted the Taylor rule does not apply to denial-of-coverage bad faith claims," France, 519 P.3d at 1034, ¶ 19, and simply holds that the stipulated judgment is the latest point at which such harm could have happened, Manterola, 200 Ariz. at 578, ¶ 15.
¶ 21 Mohammed and A.C. Watercraft suffered an appreciable, non-speculative harm when Great Divide denied coverage. France, 519 P.3d at 1034, ¶ 20. Accordingly, the cause of action accrued, at the latest, in May 2017. Accordingly, A.R.S. §§ 12-542 and -543 barred the claims filed against RPS in June of 2021.
CONCLUSION
¶ 22 For the reasons stated above, we affirm the superior court's ruling dismissing Satamian's complaint as untimely.