ESTATE OF DESELA v. PRESCOTT UNIFIED SCHOOL DIST., NO. 1

• Decision Date: 20 April 2010
• Docket Number: No. 1 CA-CV 09-0244.,1 CA-CV 09-0244.
• Citation: 228 P.3d 938
• Parties: ESTATE OF Maddison Alexis DESELA, a protected person, Plaintiff/Appellant, v. PRESCOTT UNIFIED SCHOOL DISTRICT NO. 1, a public entity of the State of Arizona; Louisa Nelson, an employee of Prescott Unified School District; Tracey Mason Johnston, an employee of Prescott Unified School District, Defendants/Appellees.
• Court: Arizona Court of Appeals

228 P.3d 938

ESTATE OF Maddison Alexis DESELA, a protected person, Plaintiff/Appellant, v. PRESCOTT UNIFIED SCHOOL DISTRICT NO. 1, a public entity of the State of Arizona; Louisa Nelson, an employee of Prescott Unified School District; Tracey Mason Johnston, an employee of Prescott Unified School District, Defendants/Appellees.

No. 1 CA-CV 09-0244.

Court of Appeals of Arizona, Division 1, Department C.

April 20, 2010.

Jensen Law Firm, P.C. By Christopher W. Jensen, Sean Phelan, Prescott, Law Offices of Charles M. Brewer Ltd. By David L. Abney, Phoenix, Co-Counsel for Plaintiff/Appellant.

Holm Wright Hyde & Hays PLC By Matthew W. Wright, David K. Pauole, Phoenix, Attorneys for Defendants/Appellees.

OPINION

KESSLER, Judge.

¶ 1 The estate ("Estate") of Maddison Alexis DeSela ("Maddison") appeals from the superior court's dismissal of its claim for medical expenses for Maddison's personal injuries. Even though Maddison's mother had assigned that claim to Maddison or the Estate before the statute of limitations had run on the claim and Maddison had filed a timely notice of claim, the court held the Estate's claim for those expenses was time-barred. We hold that because the claim was assigned before the statute of limitations had run, the limitations period was tolled under Arizona Revised Statutes ("A.R.S.") section 12-502 (2003) until Maddison reached the age of majority. Thus, that portion of the Estate's suit for those expenses was timely filed. Accordingly, we reverse and remand for further proceedings consistent with this decision.

FACTUAL AND PROCEDURAL HISTORY

¶ 2 On November 10, 2004, Maddison, then a sixteen-year-old student at Prescott High School, attended a rehearsal for the school's production of "Bye Bye Birdie." During an unsupervised break from the rehearsal, Maddison rode on the top of another student's car, lost her grip, and struck her head on the asphalt parking lot. She sustained a life-threatening closed-head injury.

¶ 3 On January 31, 2005, Maddison's mother, Aissa DeSela ("DeSela"), assigned her potential claim against the school district or its employees for Maddison's medical expenses to Maddison or her Estate.¹ The assignment provided:

Assignor hereby assigns any and all claims (s)he has or will have as natural parent of Maddison DeSela for the past and/or future medical expenses of Maddison DeSela, a minor, directly to Maddison DeSela, a minor (or, in the event that the Superior Court of Arizona appoints a Conservator for Maddison DeSela in the future, as Assignor plans to request, then this assignment shall be to the conservatorship Estate of Maddison DeSela as a minor protected person).

¶ 4 On March 22, 2005, Maddison filed a timely notice of claim with the Prescott Unified School District No. 1 ("District"), and two of its employees, Louisa Nelson ("Nelson"), and Tracey Mason Johnston ("Johnston") (collectively the "Defendants").² Meanwhile, the Estate was opened in the Yavapai County Superior Court, Case No. GC 2005-0023.

¶ 5 Maddison turned 18 on December 29, 2006. A year later, on December 31, 2007, the Estate filed suit against the Defendants for past and future medical expenses, as well as other damages.³ The Defendants moved to dismiss the claim for medical expenses based upon the failure to file the suit within the one-year limitations period of A.R.S. § 12-821.

¶ 6 The superior court granted the Defendant's motion to dismiss and entered a judgment under Arizona Rule of Civil Procedure 54(b). This appeal followed.

DISCUSSION

I. As a Matter of Law, A.R.S. § 12-502 Applies and Tolls the Limitations Period for the Assigned Claim.

¶ 7 Although couched as a motion to dismiss, we treat the motion at issue as one for summary judgment in light of the documents submitted outside the pleadings during the briefing before the superior court. Jones v. Cochise County, 218 Ariz. 372, 375, ¶ 7, 187 P.3d 97, 100 (App.2008). We review the grant of summary judgment de novo and view the evidence and reasonable inferences in the light most favorable to the nonmoving party. Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12, 69 P.3d 7, 11 (2003) (citation omitted). We also review de novo the superior court's construction of the applicable statutes. N. Valley Emergency Specialists, L.L.C. v. Santana, 208 Ariz. 301, 303, ¶ 8, 93 P.3d 501, 503 (2004) (citation omitted).

¶ 8 Defendants do not dispute the assignment of the medical expenses. See Pearson & Dickerson Contractors v. Harrington, 60 Ariz. 354, 364, 137 P.2d 381, 385 (1943) (permitting such an assignment by a parent to a child).⁴ Rather, the issue is whether the assignment of the claim to Maddison/Estate before the statute of limitations had run under A.R.S. § 12-821 tolled the running of the statute under A.R.S. § 12-502. Section 12-821 provides that "all actions against any public entity or public employee shall be brought within one year after the cause of action accrues and not afterward."⁵ Section 12-502 provides:

If a person entitled to bring an action other than those set forth in article 2 of this chapter is at the time the cause of action accrues either under eighteen years of age or of unsound mind, the period of such disability shall not be deemed a portion of the period limited for commencement of the action. Such person shall have the same time after removal of the disability which is allowed to others.

¶ 9 The superior court held that the cause of action accrued on November 10, 2004, and as to any claims against the governmental entity and its employees, expired one year after that date. According to the Estate, DeSela's assignment of the claim to Maddison (now held by the Estate) activated the tolling provision of A.R.S. § 12-502 and prevented the limitations period from expiring until Maddison reached eighteen on Saturday, December 29, 2006. Therefore the Estate argues its suit, filed on Monday, December 31, 2007, was timely.⁶ Defendants argue the tolling provisions of § 12-502 cannot apply because the Estate, as the assignee, stands in assignor DeSela's shoes and can receive no more than what the assignor possessed. Because DeSela's claim is barred after one year, they reason, the Estate's claim is also barred.⁷ We agree with the Estate.

¶ 10 We find several cases to be analogous to the situation presented here. In Villa v. Roberts, 80 F.Supp.2d 1229 (D.Kan.2000), the court applied a tolling statute to a claim brought for two children's medical expenses. The two minors were injured in 1990, but the parent did not bring suit as conservators until 1998. Id. at 1230-31. The mother had earlier established conservatorships for the children and had previously sued another defendant tortfeasor as their next friend. Id. at 1231. The district court held that the mother had waived her right to recover in her own name and the tolling statute applicable to minors, KSA 60-515(a),⁸ controlled, not the general two-year limitations statute. Id. at 1230, 1232. Accordingly, the claim for the children's medical expenses was "properly and timely brought." Id. at 1234.

¶ 11 In United States ex rel. Small Bus. Admin. v. Kurtz, Guardian Life Insurance Company of America ("Guardian") lent money to Arnold's Cleaners, Inc. ("Arnold's"), and Arnold's owner Morris I. Kurtz ("Kurtz") provided a personal guaranty of the full loan amount under a Small Business Administration ("SBA") program. 525 F.Supp. 734, 736-37 (E.D.Pa.1981), aff'd without opin., 688 F.2d 827 (3rd Cir.1982). The SBA honored Guardian's demand for payment after default, and Guardian assigned the SBA the right to collect on Arnold's note or on the guaranty. Id. at 737. The SBA subsequently sought to collect from Kurtz, who in turn argued that any claim was barred by a four-year state statute of limitations. Id. at 739. The SBA claimed that a federal six-year statute of limitations applied, id., while Kurtz argued that the SBA, as assignee, stood in Guardian's shoes and its action was barred by the state statute of limitations. Id. at 741.

¶ 12 The district court acknowledged that the assignment of a claim to the United States "cannot give such claim any greater validity than it had in the hands of the assignor." Id. at 741. The court explained that if the government had acquired the claim after the limitations period had run against the assignor, it would be barred as worthless at the time of assignment. Id. "However, it is well established that if the Government is assigned a claim before the statute of limitations has expired against the assignor, the Government is thereafter subject only to the federal statute of limitations." Id. (citing United States v. Summerlin, 310 U.S. 414, 60 S.Ct. 1019, 84 L.Ed. 1283 (1940); United States v. Cardinal, 452 F.Supp. 542, 543 n. 1 (D.Vt.1978); United States v. Taylor, 144 F.Supp. 15, 17 n. 8 (E.D.Pa.1956)). Because Guardian had assigned the claim to the SBA before the state limitations period had expired, the separate six-year federal statute governed and the assigned claim was not barred. Id.

¶ 13 Here, DeSela assigned her claim to Maddison (now the Estate) before the A.R.S. § 12-821 limitations period had expired.⁹ At that point, the claim was governed by A.R.S. § 12-502, which applies to Maddison based upon her minority, just as the conservatorship's claim in Villa and the federal government's claim in Kurtz were governed by a different statute of limitations because the assignment occurred before the limitations period for the assignor had expired. Accordingly, the medical expenses claim survives in the hands of the Estate and was timely filed upon the first court filing day after Maddison's eighteenth birthday.¹⁰

¶ 14 Defendants' argument also ignores A.R.S. § 44-144 (2003), which provides:

An assignment of a chose in action shall not prejudice any set-off or other defense existing at the time of the notice of the assignment.

(emphasis added). See also Little v. Brown, 40 Ariz. 206, 211, 11 P.2d 610, 612 (1932) (explain...