DeLoach v. Alfred

• Decision Date: 09 June 1998
• Docket Number: No. CV-97-0484-PR,CV-97-0484-PR
• Parties: , 271 Ariz. Adv. Rep. 3 Kevin G. DeLOACH and Yvonne Deloach, husband and wife, Petitioners. v. Hon. Michael ALFRED, a Judge of the Superior Court of the State of Arizona, County of Pima, Respondent, Kevin E. Hamblin, Real Party in Interest.
• Court: Arizona Supreme Court

Page 628

960 P.2d 628

192 Ariz. 28, 271 Ariz. Adv. Rep. 3

Kevin G. DeLOACH and Yvonne Deloach, husband and wife, Petitioners. v. Hon. Michael ALFRED, a Judge of the Superior Court of the State of Arizona, County of Pima, Respondent, Kevin E. Hamblin, Real Party in Interest.

No. CV-97-0484-PR.

Supreme Court of Arizona,

En Banc.

June 9, 1998.

Chandler, Tullar, Udall & Redhair Tucson by D. Burr Udall, Christopher R. Pennison for Petitioners.

King Frisch & Allen, P.C. Tucson by Ronald N. Allen, for Real Party in Interest.

OPINION

FELDMAN, Justice.

¶1 We granted review to determine which state's statute of limitations applies to an Arizona case arising out of a Tennessee automobile accident. The plaintiff is a California resident; one defendant is an Arizona resident, and the other a Tennessee resident. We have jurisdiction pursuant to Ariz. Const. art. VI, § 5(3).

FACTS AND PROCEDURAL BACKGROUND

¶2 The facts are undisputed. Kevin Hamblin ("Plaintiff"), a California resident, was injured in a June 19, 1994, automobile accident in Tennessee. He was a passenger in a car operated by Kevin DeLoach that collided with a car owned by Budget Rent-A-Car and driven by William Moore. On June 19, 1996, Plaintiff filed the tort action in Arizona against Budget Rent-A-Car of Memphis, Moore and his wife, both Tennessee residents, and DeLoach and his wife ("Petitioners"), both Arizona residents. Budget has been dismissed from the action. The Moores have neither answered nor otherwise appeared.

¶3 Petitioners filed a motion for summary judgment based on Tennessee's one-year statute of limitations for tort actions. Tenn.Code Ann. § 28-3-104. They argued that the locus of the accident, rather than the forum, determines which statute of limitations applies. Plaintiff opposed the motion, urging the trial judge to apply this state's two-year statute of limitations to his claim against Petitioners. A.R.S. § 12-542. He argued that Arizona applies its own law to procedural matters such as limitations provisions. The judge agreed and denied the motion for summary judgment. The court of appeals thereafter accepted jurisdiction of Petitioners' request for special action relief.

¶4 The threshold question concerned the proper analysis for deciding which statute of limitations applied. There are at least three approaches to deciding choice of law questions involving conflicting statutes of limitations. Under the traditional approach, statutes of limitations are viewed as presumptively procedural, in which case the law of the forum applies. Arizona has historically applied this approach. See, e.g., Eschenhagen v. Zika, 144 Ariz. 213, 696 P.2d 1362 (App.1985). This approach was adopted in RESTATEMENT (SECOND) OF CONFLICT OF LAWS §§ 142 and 143 (1971) (hereafter RESTATEMENT). The RESTATEMENT was revised in 1988, however, to employ a type of interest analysis approach recognized by the drafters as the "emerging trend" among courts. ¹ Under that approach, a court must analyze conflicts between statutes of limitations, emphasizing the significance of the relationship between the forum and the claims. See RESTATEMENT § 142 (1988) (citing RESTATEMENT OF CONFLICT OF LAWS § 6 (1971)); New England Tel. & Tel. Co. v. Gourdeau Constr. Co., 419 Mass. 658, 647 N.E.2d 42 (1995). A third approach exists under Uniform Conflict of Laws-Limitations Act § 2. Under that act, not adopted in Arizona, if a claim is substantively based on the law of another state, the limitations period of that state applies. See, e.g., Ellis v. Barto, 82 Wash.App. 454, 918 P.2d 540, 542 (1996). The court of appeals followed the interest analysis approach of revised RESTATEMENT § 142. DeLoach v. Alfred, 191 Ariz. 82, 85-86, 952 P.2d 320, 323-24 (App.1997). The parties do not challenge the use of that section.

¶5 Applying revised section 142 to the facts in this case, the court of appeals concluded that Arizona has no substantial interest in the case, Tennessee's relationship to the accident is more significant, and application of Arizona's statute of limitations would frustrate Tennessee's policy. Id. at 86, 952 P.2d at 324. Plaintiff advanced three issues in his petition for review, but we granted review on the third issue only: whether "the court of appeals erred in its [application] of the Restatement."

DISCUSSION

¶6 We note as a very important preliminary matter that the Tennessee defendants are not involved in this litigation. The Moores were named as defendants and were served with process in Tennessee but have neither answered nor otherwise appeared in the action. Although this action was pending in the trial court for seven months or more, the Moores did nothing to manifest consent to Arizona jurisdiction. On the record before us, the Moores have either settled or are most certainly not subject to personal jurisdiction in Arizona. ² They did not object to and have not challenged the trial court's application of the Arizona statute of limitations. The Moores were not parties to the special action brought by Petitioners in the court of appeals; nor are they parties to this petition for review. Given their nonappearance and the apparent lack of personal jurisdiction over them, we believe the Moores' interests are not affected by and are not relevant to our decision on choice of law. The persons affected are Plaintiff, the California resident who chose this forum, and Petitioners, Arizona residents. ³

¶7 Revised RESTATEMENT § 142 provides:

Whether a claim will be maintained against the defense of the statute of limitations is determined under the principles stated in § 6. In general, unless the exceptional circumstances of the case make such a result unreasonable:

(1) The forum will apply its own statute of limitations barring the claim.

(2) The forum will apply its own statute of limitations permitting the claim unless:

(a) maintenance of the claim would serve no substantial interest of the forum; and

(b) the claim would be barred under the statute of limitations of a state having a more significant relationship to the parties and the occurrence.

(Emphasis added.) The general rule stated by section 142 is very clear: as a starting point, the forum's statute of limitations applies.

¶8 As the court of appeals explained, the revised RESTATEMENT displaced the traditional substantive/procedural analysis concerning statutes of limitations with the choice of law interest factor analysis stated in section 6. ⁴ DeLoach, 191 Ariz. at 86, 952 P.2d at 324. However, the court failed to recognize that section 142 does not simply import the pure interest analysis of section 6. Rather, revised section 142 begins with the general rule that the limitations period of the forum will apply, unless exceptional circumstances make such a result unreasonable and, in cases in which the claim will not be barred under the forum's statute, either of the conjunctive factors stated in section 142(2) is not satisfied. See New England Tel., 647 N.E.2d at 45. Rather than conducting a pure "significant relationship" analysis, the Massachusetts Supreme Judicial Court held that under RESTATEMENT § 142(2)(a), "Massachusetts should apply its own statute of limitations permitting a claim to be asserted unless 'maintenance of the claim would serve no substantial interest of [Massachusetts].' " Id.

¶9 With this understanding, we turn to applying the current RESTATEMENT rule to the facts in this case. We must determine whether the general rule applying the forum's statute of limitations obtains, whether there exist exceptional circumstances, or whether the two factors mentioned in section 142(2) would require application of Tennessee's shorter statute. Comment g to revised section 142 is instructive:

The forum will entertain a claim that is not barred by its statute of limitations, but is barred by the statute of limitations of one or more other states, in situations where allowing the claim would advance a substantial forum interest and would not seriously impinge upon the interests of other states.... There are also situations where the forum will entertain an action that is not barred by its statute of limitations even though the forum is not the state of most significant relationship to other issues. Suppose, for example, that two domiciliaries of state X are involved in an automobile accident in state Y. In this case, the local law of state Y may govern substantive issues in the case under the rule stated in § 146. Yet it would be appropriate for an X court to entertain the claim if it was not barred by the X statute of limitations even though it would be barred by the Y statute. Entertainment of the claim under such circumstances would not violate any Y policy and might further the policy of X. The same would be true if the accident in state Y [Tennessee] had involved domiciliaries of states X and Z [California and Arizona] and, although the statute of limitations had run in Y, it had not done so in either X or Z. In such a case, it would be appropriate for a court of either X or Z to entertain the claim.

(Emphasis added.)

¶10 The operative facts of our case are nearly indistinguishable from the emphasized example provided in the comment. The court of appeals, however, believed that naming the Moores as defendants was determinative. Applying RESTATEMENT § 142(2)(b), the court held:

We can see no substantial interest of this state that would be served by allowing a case involving a foreign plaintiff and a foreign defendant to proceed here against a state resident. The accident occurred in Tennessee, the plaintiff is a California resident, and the remaining defendants, other than the DeLoaches, are residents of Tennessee. On these facts alone, Arizona's relationship to the parties and the occurrence is not nearly as significant as Tennessee's. That state's one-year statute of limitations reflects its policy decision that personal injury claims can quickly become stale and should, therefore, be...