Brandler v. Manuel Trevizo Hay Co., 1

• Decision Date: 25 June 1987
• Docket Number: CA-CIV,No. 1,1
• Citation: 154 Ariz. 96,740 P.2d 958
• Parties: Walter S. BRANDLER, Liberty Mutual Insurance Company, Plaintiffs-Appellants, v. MANUEL TREVIZO HAY COMPANY, Manuel Trevizo, dba Trevizo Hay Company, upon belief a married man, Defendants-Appellees. 8919.
• Court: Arizona Court of Appeals

Page 958

740 P.2d 958

154 Ariz. 96

Walter S. BRANDLER, Liberty Mutual Insurance Company, Plaintiffs-Appellants, v. MANUEL TREVIZO HAY COMPANY, Manuel Trevizo, dba Trevizo Hay Company, upon belief a married man, Defendants-Appellees.

No. 1 CA-CIV 8919.

Court of Appeals of Arizona Division 1, Department C.

June 25, 1987.

Robin W. Allen, Mesa, for plaintiffs-appellants.

Gallagher & Kennedy by E. Calvin Fuchs and Chris J. Scheldrup, Phoenix, for defendants-appellees.

OPINION

EUBANK, Judge.

Walter S. Brandler and Liberty Mutual Insurance Company, plaintiffs-appellants, appeal from a summary judgment granted appellees dismissing their complaint in negligence for personal injuries on the basis that California's statute of limitation for personal injury requires all third-party tort actions to be filed within one year after such rights accrue.

We conclude that the superior court should have applied Arizona's two-year statute of limitation, instead of California's one-year statute of limitation, to an employee's third-party claim for his work-related injuries and reverse the dismissal.

I. BACKGROUND

On November 5, 1982, an accident occurred in Arizona: Jose Ramos drove a tractor-trailer into Walter Brandler's car, permanently disabling Brandler. Each was driving within the scope of his employment. Jose Ramos, an Arizona resident, was employed by Manuel Trevizo Hay Company, an Arizona corporation. Brandler, a California resident, was employed by MICA Corporation, a California corporation. Liberty Mutual Insurance Company, a California insurer, paid benefits to Walter Brandler as a result of the accident, pursuant to the California Worker's Compensation Act.

On June 14, 1984, 19 months after the date of the accident, Liberty Mutual Insurance Company sued Jose Ramos and Manuel Trevizo Hay Company in Arizona for the benefits it paid Brandler in California. On November 5, 1984, two years after the date of the accident, Brandler also sued Manuel Trevizo, dba Trevizo Hay Company, and Ramos (collectively, "Trevizo") in Arizona. Plaintiffs alleged that Trevizo negligently caused Brandler's injuries. These suits were consolidated. Ramos has not been served and is not a party to this appeal.

The superior court applied California's one-year, instead of Arizona's two-year, statute of limitation and granted summary judgment for Trevizo dismissing the complaint. The court reasoned that "[i]n this particular situation the holding in Quiles [Quiles v. Heflin Steel Supply Co., 145 Ariz. 73, 699 P.2d 1304 (App.1985) ] dictates that the California Statute of Limitations applies and thus this suit is untimely." Brandler and Liberty Mutual appeal from the summary judgment of dismissal.

At oral argument we granted appellant's motion that Liberty Mutual be added as a party to this appeal.

II. DISCUSSION

Brandler did not dispute in the superior court that California worker's compensation law governed other aspects of his claim, because he received benefits under California's Worker's Compensation Act. ¹ The question in this appeal is whether Arizona's two-year statute of limitation or California's one-year statute of limitation governs his personal injury claim. In Arizona, the general two-year statute of limitation for personal injury, A.R.S. § 12-542(1), governs a claim based on an employee's workrelated injuries. Stephens v. Textron, Inc., 127 Ariz. 227, 229, 619 P.2d 736, 738 (1980). In California, the general one-year statute of limitation for personal injury, Cal.Civ.Proc. Code § 340(3), governs such a claim. County of San Diego v. Sanfax Corp., 19 Cal.3d 862, 878, 568 P.2d 363, 370, 140 Cal.Rptr. 638, 645 (1977).

Two forms of analysis are used to resolve conflicts among statutes of limitation: the traditional substance/procedure analysis and the modern interest analysis. Using either analysis, we conclude that the superior court should have applied the Arizona two-year statute of limitation.

1. Traditional Substance/Procedure Analysis

Arizona courts have applied the traditional substance/procedure analysis, as set forth in §§ 142 and 143 of the Restatement (Second) of Conflict of Laws (1971), to resolve conflicts among statutes of limitation. Santana v. Holiday Inns, Inc., 686 F.2d 736, 738 (9th Cir.1982); State of Michigan v. First National Bank, 17 Ariz.App. 45, 49, 495 P.2d 485, 489 (1972). As a general rule, the limitation is determined by the law of the forum:

An action will be maintained if it is not barred by the statute of limitations of the forum, even though it would be barred by the statute of limitations of another state, except as stated in § 143.

Restatement (Second) of Conflict of Laws § 142(2) (1971). The exception arises when the other state's limitation bars the right, not merely the remedy:

An action will not be entertained in another state if it is barred in the state of the otherwise applicable law by a statute of limitations which bars the right and not merely the remedy.

Restatement (Second) of Conflict of Laws § 143 (1971); see Santana, supra, 686 F.2d at 738. As explained in comment c to § 143, "[t]he almost invariable prerequisite [to the exception] is that the liability sought to be enforced must have been created by statute." Thus, the question before this court is whether an employee's negligence claim was created by statute or existed at common law, within the meaning of comment c to § 143.

The court considered a similar question in Hodge v. Southern Railway Co., 415 A.2d 543 (D.C.App.1980). Thomas Hodge, a Tennessee resident, was injured in Tennessee and collected benefits under the Tennessee Workmen's Compensation Act. However, he sued Southern Railroad Company in the District of Columbia one and one-half years after the injury, alleging that Southern Railroad Company negligently caused his injury. His suit was dismissed based on Tennessee's one-year statute of limitation. The court of appeals reasoned that an employee's negligence claim existed at common law, and was not created by statute:

Since an injured workman's common law action against a third party both preceded and survived the 1919 enactment of the Tennessee Workmen's Compensation Act, it would be illogical to conclude, as appellee does, that the legislature performed the redundant act of 'creating,' or recreating, that right of action in 1949.

415 A.2d at 545. Thus, the court concluded that the three-year statute of limitation of the District of Columbia governed Mr. Hodge's claim. See also Baron Tube Co. v. Transport Insurance Co., 365 F.2d 858, 860 (5th Cir.1966) (applying Georgia's, instead of Texas', statute of limitation); State Compensation Insurance Fund v. Proctor & Schwartz, 102 F.Supp. 451, 453-54 (E.D.Penn.1952) (applying Pennsylvania's, instead of California's, statute of limitation); Hartford Accident & Indemnity Co. v. Procter & Gamble Co., 91 Ohio App. 573, 109 N.E.2d 287, 289 (1952) (applying Ohio's, instead of New York's, statute of limitation). But see Hartford Accident & Indemnity Co. v. Eastern Air Lines, Inc., 155 F.Supp. 263, 264-65 (S.D.N.Y.1957) (applying the statute of limitation of the District of Columbia, instead of New York, and reasoning that a wrongful death claim was created by statute).

We conclude that Brandler's negligence claim existed at common law and was not created by statute. Section 3852 of the California Labor Code plainly states that "[t]he claim of an employee ... for compensation does not affect his or her claim or right of action for all damages proximately resulting from the injury or death against any person other than the employer." Interpreting § 3852, the California Court of Appeals stated that "[t]his creates no new right of action but recognizes the continuance of a right which had been long established...." Limited Mutual Compensation Insurance Co. v. Billings, 74 Cal.App.2d 881, 169 P.2d 673, 675 (1946).

Trevizo asserted that "[w]ithout question, the California workers' compensation scheme created new legal rights unknown at common law, including the employer's right to sue the third-party tortfeasor," citing Sanfax Corp. and Chase Chemical Co. v. Hartford Accident & Indemnity Co., 159 Cal.App.3d 229, 205 Cal.Rptr. 469 (1984). We question the accuracy of Trevizo's citations. The California Supreme Court stated in Sanfax Corp. that the employer's claim existed at common law and was not a statutory claim:

[W]e have indicated that, in granting employers the right to sue third parties, the Legislature simply gave statutory recognition to principles of equitable subrogation. (Citations omitted). Courts in other jurisdictions have reached a similar conclusion. (Citations omitted). Apparently, even if the Legislature had not acted, an employer would have been able to recover from a third party who was responsible for the employer having to pay workers compensation. In the sense in which the County uses the term, therefore, the employer's right of action may not be 'statutory.'

19 Cal.3d at 876, 568 P.2d at 369, 140 Cal.Rptr. at 644. In Chase Chemical Co., the California Court of Appeals stated that "[b]y virtue of section 3852, an industrially injured employee retains his right to sue 'any person other than the employer' for damages proximately resulting from the injury sustained in the course of employment." 159 Cal.App.3d at 237, 205 Cal.Rptr. at 472 (emphasis added).

2. Modern Interest Analysis

Legal scholars have urged the use of, and other courts have used, modern interest analysis to resolve conflicts among statutes of limitation. E.g., Grossman, Statutes of Limitations and the Conflict of Laws: Modern Analysis, 1980 Ariz.St.L.J. 1; Leflar, The New Conflicts-Limitations Act, 35 Mercer L.Rev. 461 (1984); Milhollin, Interest Analysis and Conflicts between Statutes of Limitation, 27 Hastings L.J. 1 (1976). Compare R. Leflar, American Conflicts Law, 256 (3rd ed. 1977) ("There is no inherent reason why the choice between statutes of limitations should be...