City of Phoenix v. Glenayre Electronics, Inc.

375 P.3d 1189, 240 Ariz. 80, 2016 WL 2912619, 2016 Ariz. App. LEXIS 88
CourtCourt of Appeals of Arizona
DecidedMay 19, 2016
Docket1 CA-CV 14-0739
StatusPublished
Cited by4 cases

This text of 375 P.3d 1189 (City of Phoenix v. Glenayre Electronics, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Phoenix v. Glenayre Electronics, Inc., 375 P.3d 1189, 240 Ariz. 80, 2016 WL 2912619, 2016 Ariz. App. LEXIS 88 (Ark. Ct. App. 2016).

Opinion

OPINION

JONES, Judge:

¶ 1 The City appeals the trial court’s orders: (1) dismissing its third-party complaint against Appellees because it was not brought within the eight-year period of repose set forth in Arizona Revised Statutes (A.R.S.) section 12-552(A), 1 and (2) awarding certain Appellees their attorneys’ fees as the successful parties in a contract action pursuant to A.R.S. § 12-341.01(A). We conclude A.R.S. § 12-552 applies to governmental entities and that the City’s claims are based in contract within the meaning of A.R.S. § 12-552(F); therefore, the City’s claims against Appellees are time-barred. We also find no error in the court’s grant of attorneys’ fees to those Appellees who properly asserted a *83 right to fees and conclude that the amounts awarded were within the court’s discretion. For these reasons, we affirm.

FACTS 2 AND PROCEDURAL HISTORY

¶ 2 In 2013, Carlos Tarazón filed a lawsuit alleging he had developed mesothelioma as a result of long-term exposure to asbestos while performing pipe installation and repair for the City and numerous other defendants not parties to this appeal. Tarazón further alleged the City knew of the inherent dangers of asbestos exposure and was negligent in failing to adequately warn and protect him from those risks. 3

¶3 The City immediately filed a third-party complaint seeking defense and indemnification from eighty-two developers (the Developers) 4 and eight contractors (the Contractors) 5 allegedly responsible for planning, designing, and constructing the projects on which Tarazón was exposed to asbestos between 1968 and 1993. Within its complaint, the City alleged the third-party defendants were solely responsible for the selection, installation, and disposal of any asbestos-laden products used in their respective projects, and therefore, the Contractors and Developers were required to indemnify the City against Tarazon’s claims—the Contractors by virtue of their construction contracts and right-of-way permits, and the Developers by virtue of City ordinances incorporated within development permits.

¶ 4 Each of the City’s contracts with the Contractors provided that “[t]he Contractor agrees to indemnify and save harmless the City of Phoenix ... from all suits, including attorneys’ fees and cost of litigation ... of any character or any nature aidsing out of the work done in fulfillment of the terms of th[e] contract.” The permits issued to the Developers do not contain any specific covenant to indemnify, but rather state the per-mittee “agrees to perform all work in accordance with” certain agreed-upon plans and specifications, and that the permit is issued “on the express conditions that every agreement and covenant contained in th[e] permit is faithfully performed.” As the City alleges, the agreed-upon plans incorporate specifications required by the Maricopa Association of Governments, which in turn require the per-mittees to “observe and comply with all such laws, ordinances, regulations, codes, orders and decrees.” Among those ordinances is the following indemnification provision:

The permittee agrees to indemnify and save harmless the City of Phoenix ... from all suits, including attorneys’ fees and costs of litigation ... of any character or any nature arising out of or in connection with any act or omission of the permittee, his agents and employees, and of any subcontractor.

Phx. City Code § 31-40.

¶ 5 The Appellees asserted through various motions and joinders that the City’s claims for indemnification were barred by the statute of repose contained in A.R.S. § 12-552(A), which provides:

Notwithstanding any other statute, no action or arbitration based in contract may be instituted or maintained against a person who develops or develops and sells real property, or performs or furnishes the design, specifications, surveying, planning, supervision, testing, construction or observation of construction of an improvement to real property more than eight years after substantial completion of the improvement to real property.

*84 In response, the City argued that, as a governmental entity, it is exempt from the statute of repose.

¶ 6 After briefing and oral argument, the trial court dismissed the City’s third-party complaint in its entirety. The City filed a motion for reconsideration, which was denied. The court later deemed Appellees the successful parties in a contract action and, after considering the relevant factors identified in Associated Indem. Corp. v. Warner, 143 Ariz. 567, 570, 694 P.2d 1181, 1184 (1985), awarded attorneys’ fees pursuant to A.R.S. § 12-341.01(A) to those parties who had properly requested them. The City timely appealed, and we have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).

DISCUSSION

I. The City Is Not Exempt from the Statute of Repose Contained in A.R.S. § 12-552.

¶ 7 It is undisputed that the City filed its third-party complaint more than eight years after completion of the construction projects on which Tarazón worked. The City argues, however, the trial court erred in dismissing the third-party complaint because, as a political subdivision of the State of Arizona, it is exempt from all limitations periods and the period of repose contained in A.R.S. § 12-552(A). Whether A.R.S. § 12-552(A) applies to a claim brought by a governmental entity is an issue of first impression.

¶ 8 The interpretation and application of a statute presents a question of law which we review de novo. First Fin. Bank, N.A. v. Claassen, 238 Ariz. 160, 162, ¶ 8, 357 P.3d 1216, 1218 (App.2015) (citing Schwarz v. City of Glendale, 190 Ariz. 508, 510, 950 P.2d 167, 169 (App.1997)). We also review de novo the court’s dismissal of a complaint as time-barred. See Shaw v. CTVT Motors, Inc., 232 Ariz. 30, 31, ¶ 8, 300 P.3d 907, 908 (App.2013) (motion for judgment on the pleadings) (citing Save Our Valley Ass’n v. Ariz. Corp.

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City of Phoenix v. Glenayre Electronics, Inc.
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Cite This Page — Counsel Stack

Bluebook (online)
375 P.3d 1189, 240 Ariz. 80, 2016 WL 2912619, 2016 Ariz. App. LEXIS 88, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-phoenix-v-glenayre-electronics-inc-arizctapp-2016.