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The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.

 

08/13/97 KENNETH SORENSEN and CON v. FARMERS INSURANCE COMPAN

BLUE BOOK CITATION FORM: 1997.AZ.174 (http://www.versuslaw.com)

[Editor's note: footnotes (if any) trail the opinion]

[1] IN THE COURT OF APPEALS

[2] STATE OF ARIZONA

[3] DIVISION ONE

[4] KENNETH SORENSEN and CONNIE SORENSEN, husband and wife, Plaintiffs-Appellants,

v.

[5] FARMERS INSURANCE COMPANY OF ARIZONA, an Arizona corporation, dba FARMERS
GROUP OF COMPANIES, Defendant-Appellee.

[6] 1 CA-CV 96-0382

[7] DEPARTMENT D

[8] OPINION

[9] Filed 7-31-97

[10] Appeal from the Superior Court of Maricopa County

[11] Cause No. CV 94-08726

[12] The Honorable William T. Moroney, Judge

[13] APPEAL DISMISSED; REMANDED

[14] Mecham & Holt by Timothy W. Holt Attorneys for Plaintiffs-Appellants Phoenix

[15] Broening, Oberg, Woods, Wilson & Cass by Neal B. Thomas Attorneys for Defendant-Appellee
Phoenix

[16] EHRLICH, Judge

[17] This is a contrived appeal from the trial court's denial of the motion of Farmers Insurance Company of
Arizona ("Farmers") for summary judgment, fashioned when the parties stipulated and the court agreed to
enter a final judgment in favor of Farmers for the purpose of creating an appealable order. For the following
reasons, we conclude that we do not have jurisdiction to review the court's decision and we remand this
matter for further proceedings consistent with the denial of summary judgment.

[18] FACTS AND PROCEDURAL HISTORY

[19] A fire substantially destroyed the home of Kenneth and Connie Sorensen ("Sorensens"). The
Sorensens immediately reported the loss to their insurance company, Farmers. They also hired an
independent adjuster to prepare a damage estimate. Farmers provided its own figure. The evaluations were
approximately $20,000 apart.

[20] Farmers subsequently sent a check to the Sorensens for $22,871.04, representing what it calculated
to be the actual cash value of the damages and miscellaneous losses; the check was accompanied by a
Proof-of-Loss form for the Sorensens' signatures. Farmers indicated that, after the effective date of this
proposed settlement, the policy would no longer cover unrepaired damages because Farmers had paid
cash in lieu of repairs.

[21] The parties continued to dispute the value of the damages beyond the date set by Farmers. In a later
letter, Farmers reiterated that its check represented the "actual cash value ... payment of what Farmers
Insurance believes to be the undisputed amount now owed. The Sorensens are free to cash that check
without prejudicing their rights to seek any additional sums to which they believe they are entitled." The
Sorensens responded by filing their Proof-of-Loss statement with Farmers, claiming their loss to be
approximately $54,000. Farmers then stopped payment of the check which it had issued and attempted to
exercise its option to repair under section 12 of the insurance policy entitled "Conditions," which provides
that, "[i]f we give you written notice within 30 days after we receive your signed, sworn statement of loss,
we may repair or replace any part of the property damaged with equivalent property." The dispute then
turned to whether Farmers had waived its option to repair by choosing to pay at least a portion of the
claim. The Sorensens filed suit, claiming breach of contract, breach of the covenant of good faith and fair
dealing, fraud and intentional infliction of emotional distress. Farmers moved for summary judgment,
claiming that it had properly exercised its option to repair and that the Sorensens' failure to comply with its
requests constituted breach of contract requiring dismissal of the lawsuit. The trial court denied Farmers'
motion on the basis that, although Farmers had not waived its option to repair, it had improperly canceled
the check and thereby breached the covenant of good faith and fair dealing.

[22] Thereafter, the parties requested that the trial court enter final judgment so that they could appeal the
following stipulated issues:

[23] 1. Under the admissible facts and circumstances as reflected in the record, Farmers had the right to
elect to repair the subject property; and

[24] 2. Under the admissible facts and circumstances as reflected in the record, Farmers waived its right to
elect repair [sic] the subject property which is the issue of this proceeding.

[25] The court entered judgment for Farmers and this appeal followed.

[26] DISCUSSION

[27] Although neither party has raised the issue, this court has an independent duty to determine whether it
has jurisdiction to consider an appeal. Davis v. Cessna Aircraft Corp., 168 Ariz. 301, 304, 812 P.2d
1119, 1122 (App. 1991). "The general rule is that an appeal lies only from a final judgment." Id.; see Ariz.
Rev. Stat. Ann. Section(s) 12-2101. A denial of a motion for summary judgment is an intermediate order
deciding simply that the case should go to trial. Navajo Freight Lines v. Liberty Mutual Ins. Co., 12 Ariz.
App. 424, 428, 471 P.2d 309, 313 (1970). It is, therefore, well-settled that a denial of a motion for
summary judgment is not considered to be a final judgment and, consequently, it is unappealable. Id. at
428, 471 P.2d at 313. In an attempt to circumvent this axiom, the parties in this case have stipulated that
the trial court may enter a judgment for Farmers pursuant to Ariz. R. Civ. P. ("Rule") 54(b). *fn1

[28] The record is clear that the trial court did not change its mind about the substance of Farmers' motion
for summary judgment. Rather, it simply accepted the parties' stipulation that judgment be entered in favor
of Farmers, disposing of all claims against it so that the parties could have an appealable order. The
stipulation included a provision that, if we agreed with the denial of summary judgment, the matter would be
remanded for trial. If, however, we concluded that summary judgment should have been granted for
Farmers, the matter would be dismissed, in effect upholding the stipulated judgment disposing of the case.

[29] If we were to permit this type of judgment manipulation, we would effectively abrogate the rule against
appeals from denials of summary judgment. Parties could freely avail themselves of interlocutory appeals
merely by engaging in artful stipulations. "Summary judgment would [then] be transformed into a fertile field
of appellate practice, further complicating our system of civil adjudication," Ft. Lowell-NSS Ltd.
Partnership v. Kelly, 166 Ariz. 96, 99-100, 800 P.2d 962, 965-66 (1990), and adding to its delay and
expense.

[30] Additionally, this is not a matter which Farmers could have presented to us by special action. We
discourage the use of that procedure as a substitute for an interlocutory appeal from a denial of summary
judgment for the same reason that we view with disfavor appeals from denials of summary judgment.
Cardon v. Cotton Lane Holdings, 173 Ariz. 203, 209-10, 841 P.2d 198, 204-05 (1992); Ft. Lowell, 166
Ariz. at 99-100, 800 P.2d at 965-66. Summary judgment is a method of resolving meritless claims. This
goal would be hampered if the moving party could seek review by appeal or special action of every denial.
Consequently, only in exceptional cases will special action review be granted of a denial of summary
judgment. In Orme School v. Reeves, 166 Ariz. 301, 303, 802 P.2d 1000, 1002 (1990), the court
concluded that such an exceptional circumstance existed when the question presented is a:

[31] pure issue of law, requiring neither factual review nor interpretation. The issue presented is not peculiar
to this or any particular case. Rather, it involves the analytical framework or construct to be applied to all
cases and is therefore of general concern to litigants and the judicial system.

[32] In this case, the issue before the trial court did not involve strictly a point of law. The questions before
it were to what extent the contract permitted Farmers to elect to repair or rebuild the property and whether
Farmers did in fact elect to repair or rebuild by tendering a check to the Sorensens for at least a portion of
their loss. While these questions entail the legal interpretation of a contractual provision, they also involve
factual inquiries regarding Farmers' actions pursuant to that provision.

[33] We accordingly conclude that we lack jurisdiction to consider the merits of this appeal. To hold
otherwise would encourage litigants to circumvent the rules governing appeals by simply stipulating to
judgments below. We also could be placed in the inappropriate position of invading the province of trial
courts.

[34] CONCLUSION

[35] This appeal is dismissed and the matter is remanded to the trial court for further proceedings.

[36] Susan A. Ehrlich, Judge

[37] CONCURRING:

[38] Edward C. Voss, Judge

[39] James B. Sult, Presiding Judge

***** BEGIN FOOTNOTE(S) HERE *****

[40] *fn1 An additional twist to this appeal, but one which we need not unravel, appears in the form of the
judgment itself. The trial court crossed out Rule 54(b) language " ... that there is no just reason for delay
and that this court expressly directs entry of judgment in accordance with provisions of Rule 54(b) ... " and
left language "that this judgment is final ... ." See Arizona Bank v. Superior Court, 17 Ariz. App. 115, 119,
495 P.2d 1322, 1326 (1972); Davis, 168 Ariz. at 304, 812 P.2d at 1122.

***** END FOOTNOTE(S) HERE *****

 

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