American Nat. Fire Ins. Co. v. Esquire Labs of Arizona, Inc.

• Decision Date: 09 July 1984
• Docket Number: No. 2,CA-CIV,2
• Citation: American Nat. Fire Ins. Co. v. Esquire Labs of Arizona, Inc., 694 P.2d 800, 143 Ariz. 512 (Ariz. App. 1984)
• Parties: AMERICAN NATIONAL FIRE INSURANCE COMPANY, a foreign corporation, and Great American Insurance Company, a foreign corporation, Plaintiffs/Appellants, v. ESQUIRE LABS OF ARIZONA, INC., an Arizona corporation; Esquire For Men, Inc., an Arizona corporation; Esquire For Men of Phoenix, Inc., an Arizona corporation; Sol Behar and Elayne Behar, husband and wife; Daniel Singer and Paula Singer, husband and wife; Francisco Azcona Astiazaran; Otto Binder; Salvador Carrasco-Toriz; Fernando Esquer; Servando Gonzales Garcia; Rodolfo Gonzalez-Burgueno; George T. Gregory, Jr. and Nina Gregory; Rayburn Bryan Jones; Ramon R. Munoz; Amedo R. Pino; Tim Rollins; Francisco Mendoza Salvatierra; James L. Stonebreaker and Janice Stonebreaker; Granger L. Vinall; Kenneth F. Wagner and Barbara Wagner; and Walter J. Warren, Defendants/Appellees. 4935.
• Court: Arizona Court of Appeals

Page 800

694 P.2d 800

143 Ariz. 512

AMERICAN NATIONAL FIRE INSURANCE COMPANY, a foreign corporation, and Great American Insurance Company, a foreign corporation, Plaintiffs/Appellants, v. ESQUIRE LABS OF ARIZONA, INC., an Arizona corporation; Esquire For Men, Inc., an Arizona corporation; Esquire For Men of Phoenix, Inc., an Arizona corporation; Sol Behar and Elayne Behar, husband and wife; Daniel Singer and Paula Singer, husband and wife; Francisco Azcona Astiazaran; Otto Binder; Salvador Carrasco-Toriz; Fernando Esquer; Servando Gonzales Garcia; Rodolfo Gonzalez-Burgueno; George T. Gregory, Jr. and Nina Gregory; Rayburn Bryan Jones; Ramon R. Munoz; Amedo R. Pino; Tim Rollins; Francisco Mendoza Salvatierra; James L. Stonebreaker and Janice Stonebreaker; Granger L. Vinall; Kenneth F. Wagner and Barbara Wagner; and Walter J. Warren, Defendants/Appellees.

No. 2 CA-CIV 4935.

Court of Appeals of Arizona Division 2.

July 9, 1984.

Reconsideration Denied Sept. 25, 1984.

Review Denied Jan. 8, 1985.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, P.A. by George H. Mitchell, Redfield T. Baum and Larry L. Smith, Phoenix, for plaintiffs/appellants.

D'Antonio & D'Antonio, P.C. by Patricia A. Ihnat, Tucson, for defendants/appellees Esquire Labs of Arizona, Esquire for Men, Esquire for Men of Phoenix, Behar and Singer.

DeConcini, McDonald, Brammer, Yetwin & Lacy, P.C. by David C. Anson and Michael R. Urman, Tucson, for defendant/appellee Gonzalez-Burgueno.

Donald Estes, Tucson, for defendants/appellees Salvatierra, Garcia, Rollins, Warren, Pino and Carrasco-Toriz.

Haralson, Kinerk & Morey, P.C. by William H. Ricker, Tucson, for defendants/appellees Stonebreaker, Wagner and Gregory.

Richard D. Burris, Tucson, for defendants/appellees Binder, Esquer, Astiazaran and Vinall.

OPINION

BIRDSALL, Chief Judge.

Some of the facts giving rise to the litigation involved in this appeal are before this court for at least a third reported time. See Gonzalez-Burgueno v. National Indemnity Company, 134 Ariz. 383, 656 P.2d 1244 (App.1982) and Salvatierra v. National Indemnity Company, 133 Ariz. 16, 648 P.2d 131 (App.1982).

This appeal results from a declaratory judgment action commenced by appellants American National Fire Insurance Co. and Great American Insurance Co., foreign corporations, seeking to have the trial court determine that they afforded no coverage for sixteen judgments entered in Pima County Superior Court. The judgments were in favor of appellees Astiazaran, Binder, Carrasco-Toriz, Esquer, Garcia, Gonzalez-Burgueno, Gregory, Jones, Munoz, Pino, Rollins, Salvatierra, Stonebreaker, Vinall, Wagner, and Warren. The judgments were against the appellees Esquire Labs of Arizona, Inc. (Labs) and Esquire for Men, Inc. (Men), both Arizona corporations doing business in Tucson, and their principal officers, Sol Behar (and spouse) and Daniel Singer (and spouse). No judgments were entered against a third corporation, Esquire for Men of Phoenix, Inc. (Phoenix). That company is, however, an appellee here since the judgment in the declaratory judgment action included it. All of the other sixteen individual male appellees were customers of Labs and Men who sustained personal injury as a result of the negligence of the two companies.

Two other parties having claims against Labs, Men, Behar and Singer were named in the appellants' original complaint, Michael Clark and Norman Jones. Their cases were pending in Pima County. They did not have judgments and their cases were settled and dismissed during this litigation.

The complaint also named James J. Ponegalek as a defendant alleging that he had an action pending in Maricopa County. He was never served with summons and complaint and he never appeared in the declaratory judgment action. The only document filed on his behalf was a notice filed March 9, 1983 by his attorneys Langerman, Begam, Lewis and Marks, requesting copies of all minute entries and documents. This was long after the trial. The judgment giving rise to this appeal was entered November 18, 1982. Nevertheless the trial court made findings and conclusions concerning Ponegalek and the judgment in favor of "the defendants" on the complaint presumably includes him. We agree with the appellants that we cannot affirm the judgment as to Ponegalek. The trial court had no jurisdiction over his person. The judgment as to him is void. Cf. O'Leary v. Superior Court of Gila County, 104 Ariz. 308, 452 P.2d 101 (1969); McDonnell v. Southern Pacific Company, 79 Ariz. 10, 281 P.2d 792 (1955).

In the declaratory judgment action from which this appeal is taken, the trial court entered judgment declaring that the appellants' policies of insurance issued to Labs, Men and Phoenix provided coverage for the three companies, Behar and Singer. The trial court also awarded each of the appellees attorneys fees and costs for defending the action and awarded the three companies, Behar and Singer damages in the form of their attorney fees for breach of the insurance contracts. The trial court found the appellants were obligated to defend the various lawsuits.

Other facts necessary to an understanding of this controversy are contained in the following findings of the trial court ¹ which were entered pursuant to Rule 52(a), Rules of Civil Procedure, 16 A.R.S.:

"1. Beginning in 1978 and continuing throughout 1979, defendant, Esquire Labs of Arizona, Inc., conducted business at its premises located at 301 [sic] North Wilmot, Tucson, Arizona.

2. Esquire Labs advertised, offered for sale and performed a process known as Hairegenics.

3. The Hairegenics process consisted primarily of the surgical implantation of artificial hair-like fibers into the human scalp.

4. The surgical portion of the Hairegenics process was performed by employees and independent contractors of Esquire Labs on its premises at 301 [sic] North Wilmot, Tucson, Arizona.

5. Defendant, Esquire for Men, Inc., advertised the Hairegenics process and offered it for sale from the premises located at 1066 North Campbell, Tucson, Arizona.

* * *

7. Following the insertion of the fibers at the premises of Esquire Labs, the customers were sent to the Esquire for Men, Inc., ... where employees of the Esquire for Men, Inc., ... shampooed and trimmed both the fibers and the natural hair.

8. Defendant, Sol Behar, is the president of Esquire for Men, Inc., ... and is the president of Esquire Labs of Arizona, Inc.

9. Defendant, Daniel Singer, is the vice-president of Esquire for Men, Inc., ... and is the vice-president of Esquire Labs of Arizona, Inc.

10. Sol Behar and Daniel Singer were, at all times material to this action, employees of the Esquire for Men, Inc., ... and of Esquire Labs of Arizona, Inc.

11. The plaintiffs issued a policy of insurance, policy BP1320736, to Esquire Labs of Arizona, Inc., which was a premises/operations policy.

12. The plaintiffs issued an insurance policy, policy BP1314352, to the Esquire for Men, Inc., which is a premises/operation policy.

* * *

14. The defendants, Astiazaran, Binder, Carrasco-Torriz, [sic] ... Esquer, Garcia, Gonzalez-Burgueno, Gregory, ... Rayburn Bryan Jones, Munoz, Pino, Rollins, Salvatierra, Stonebreaker, Vinall, Wagner, and Warren each underwent the surgical portion of the Hairegenics process at the premises of Esquire Labs of Arizona, Inc., located at 301 [sic] North Wilmot, Tucson, Arizona, during 1979. (Each of these defendants above named shall hereinafter be referred to as "Judgment Creditors.")

* * *

20. Copies of the complaints filed by the Judgment Creditors ... were sent to the plaintiffs with a demand that the plaintiffs provide a defense and indemnify the insureds under the policies issued to Esquire Labs, Esquire for Men, Inc. ...

21. The plaintiffs reviewed the complaints and the policies of insurance and refused to defend and indemnify Esquire for Men, Inc., ... and Esquire Labs of Arizona, Inc. The plaintiffs refused to pay the costs of defending the actions, including the attorney's fees and the court costs incurred.

22. Each of the Judgment Creditors, excepting only Clark and Norm Jones, was awarded judgment against Esquire for Men, Inc., and Esquire Labs of Arizona, Inc., Behar and Singer.

* * *

24. The plaintiffs refused to pay those judgments and refused to indemnify their insureds based upon their denial of coverage under the respective policies.

* * *

26. The insurance policy BP1320736 issued by the plaintiffs to Esquire Labs of Arizona, Inc., is a fully integrated, unambiguous, and complete agreement between the parties thereto.

27. Policy BP1320736 issued to Esquire Labs states:

'1. The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies, caused by an occurrence, and arising out of the ownership, maintenance or use of the insured premises, and all operations necessary or incidental to the business of the named insured conducted at or from the insured premises, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false, or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim on the judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.'

28. Policy BP1320736 contains the following exclusion:

'It is agreed that with respect to any operations described below or designated in the policy as subject to this endorsement, the insurance does not apply to bodily injury or property damage due to rendering of or failure to render any cosmetic, tonsorial, massage, physiotherapy, chiropody, hearing...