Murray v. Farmers Ins. Co. of Ariz., 2 CA–CV 2014–0123.

• Decision Date: 19 January 2016
• Docket Number: No. 2 CA–CV 2014–0123.,2 CA–CV 2014–0123.
• Citation: 366 P.3d 117
• Parties: Jessyka MURRAY, an Incapacitated Person, Through her Guardians and Parents, Robert Murray and Marcia Murray, Formerly Husband and Wife; and Robert Murray and Marcia Murray, Formerly Husband and Wife, Plaintiffs/Appellants/Cross–Appellees, v. FARMERS INSURANCE COMPANY OF ARIZONA; Foremost Insurance Company Grand Rapids, Michigan; Randy Jones Insurance Agency, Inc., an Arizona Corporation; and Randy Jones and Deanna Jones, Husband and Wife, Defendants/Appellees/Cross–Appellants.
• Court: Arizona Court of Appeals

366 P.3d 117

Jessyka MURRAY, an Incapacitated Person, Through her Guardians and Parents, Robert Murray and Marcia Murray, Formerly Husband and Wife; and Robert Murray and Marcia Murray, Formerly Husband and Wife, Plaintiffs/Appellants/Cross–Appellees,
v.
FARMERS INSURANCE COMPANY OF ARIZONA; Foremost Insurance Company Grand Rapids, Michigan; Randy Jones Insurance Agency, Inc., an Arizona Corporation; and Randy Jones and Deanna Jones, Husband and Wife, Defendants/Appellees/Cross–Appellants.

No. 2 CA–CV 2014–0123.

Court of Appeals of Arizona, Division 2.

Jan. 19, 2016.

366 P.3d 119

Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., By Stanley G. Feldman and Thomas G. Cotter, Tucson, Counsel for Plaintiffs/Appellants/Cross–Appellees.

Lewis Brisbois Bisgaard & Smith, LLP, By Carl Mariano and Michael P. Obert, Jr., Phoenix, Counsel for Defendants/Appellees/Cross–Appellants.

Jeffry A. Miller, San Diego, California, Pro Hac Vice.

Judge ESPINOSA authored the opinion of the Court, in which Presiding Judge MILLER and Chief Judge ECKERSTROM concurred.

OPINION

ESPINOSA, Judge:

¶ 1 In this insurance agent malpractice action, appellants Jessyka Murray and her parents Robert and Marcia Murray (the Murrays) seek the reversal of the trial court's order granting a new trial on all issues and the remand of the matter for a new trial on damages only. They also petition this court to reverse certain partial summary judgments entered by the court and its ruling on their motion made pursuant to Rule 49(c), Ariz. R. Civ. P. The Murrays lastly request reversal of the trial court's interpretation of their umbrella policy. Appellees Randy Jones, the Randy Jones Insurance Agency, Farmers Insurance Company of Arizona (Farmers) and Foremost Insurance Company (Foremost) cross-appeal, contending Jones's compliance with the requirements of Arizona's Uninsured/Underinsured Motorist Act precludes the Murrays' claims. For the following reasons, we affirm in part and reverse in part.

Factual and Procedural Background

¶ 2 "We view the facts in the light most favorable to upholding the trial court's ruling." Hammoudeh v. Jada, 222 Ariz. 570, ¶ 2, 218 P.3d 1027, 1028 (App.2009). Jones and the Randy Jones Insurance Agency were authorized by Farmers to offer and sell insurance coverage to Jones's clients through Farmers. For twenty years, Robert and Marcia¹ purchased their automobile and homeowners insurance from Jones. Before

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he became their agent, the Murrays had purchased only minimum liability limits and matching minimum uninsured motorist (UM) and underinsured motorist (UIM) coverage. With Jones as their agent, over the years the Murrays added a one-million-dollar personal umbrella, increased each auto policy's liability limits to 250/500K and added a Foremost insurance policy for their off-road vehicle with liability limits of 250/500K.² Jones, however, did not recommend that they increase their UM/UIM coverage above the minimum limits of 30/60K for their auto policy or 25/50K for their off-road vehicle, or that they buy UM/UIM in limits corresponding to their liability coverage.

¶ 3 Robert and Marcia testified that when they discussed UM/UIM coverage with Jones, he advised them they did not need increased UM/UIM limits because their family had health insurance through Robert's employer. Jones, however, denied telling the Murrays "that if they had health insurance they d[id]n't need to buy any UM/UIM or as much UM/UIM insurance."

¶ 4 In November 2010, Jessyka, then seventeen, was a passenger in a two-vehicle accident that involved both an uninsured motorist and an underinsured motorist. She sustained a traumatic brain injury that permanently incapacitated her, and Robert and Marcia were appointed her guardians.

¶ 5 In August 2012, Robert and Marcia, individually, and as guardians of Jessyka, filed a complaint against Jones, the Randy Jones Insurance Agency, Farmers, and Foremost alleging professional negligence, consumer fraud under A.R.S. § 44–1522 and insurance fraud under A.R.S. § 20–443. Farmers and Foremost were included as defendants based on vicarious liability for Jones.³

¶ 6 In July 2013, Jones moved for summary judgment on all claims, pointing out that the Murrays had signed UM/UIM Selection Forms for each of their policies and arguing their selection was "valid for all insureds" under A.R.S. § 20–259.01. The trial court denied Jones's motion, finding that his compliance with the statute did not insulate him from liability.

¶ 7 After a four-day trial, the jury returned a seven to one verdict of $180,000 in favor of the Murrays. Before the jury was discharged, the Murrays orally moved to have the jury deliberate further on grounds the verdict was non-responsive to the submitted issues, citing Rule 49(c), Ariz. R. Civ. P. After briefing and argument, the trial court concluded that Rule 49(c) did not apply, accepted the verdict and discharged the jury.

¶ 8 The Murrays later filed a motion for additur or new trial on damages that the trial court denied. It ultimately, however, vacated the judgment and ordered a new trial on all issues. The Murrays appealed and Jones cross-appealed from the denial of his motion for summary judgment. This court has jurisdiction pursuant to A.R.S. §§ 12–120.21(A) and 12–2101(A)(1), (5)(a).

Rule 49(c), Ariz. R. Civ. P.

¶ 9 The Murrays first argue the trial court abused its discretion by denying their motion filed pursuant to Rule 49(c). That rule provides that if a "verdict is not responsive to the issue submitted to the jury, the court shall call the jurors' attention thereto, and send them back for further deliberation." We review the application of court rules de novo. Haroutunian v. Valueoptions, Inc., 218 Ariz. 541, ¶ 22, 189 P.3d 1114, 1122 (App.2008).

¶ 10 A party who believes a jury verdict is inconsistent, defective, or nonresponsive, must move, before the jury is excused, for resubmission of the case to the jury pursuant to Rule 49(c). See Trustmark Ins. Co. v. Bank One, Ariz., NA, 202 Ariz. 535, ¶ 39, 48 P.3d 485, 493 (App.2002). An objection based on Rule 49(c) provides an opportunity to correct error with "minimal effort and expense." Id. ¶ 40. A court will

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resubmit a case to the jury where its verdict is clearly inconsistent, defective, or nonresponsive. See, e.g., Gray v. Gardiner, 92 Ariz. 208, 210, 375 P.2d 562, 563 (1962) ("patent inconsistency" where "impossible" to find issues in favor of either plaintiffs or defendant and not make award in some amount); Fornara v. Wolpe, 26 Ariz. 383, 389–91, 226 P. 203, 204–05 (1924) (defective verdict where recovery amount less than instructed); Piper v. Bear Med. Sys., Inc., 180 Ariz. 170, 179, 883 P.2d 407, 416 (App.1993) (verdict awarding punitive damages but zero compensatory damages rendered it unresponsive), superseded by statute, Uniform Contribution Among Tortfeasors Act, 1984 Ariz. Sess. Laws, ch. 237, as recognized in Watts v. Medicis Pharm. Corp., 236 Ariz. 511, ¶¶ 31, 38, 41, 342 P.3d 847, 854–56 (App.2015) ; Farmers Ins. Co. v. Tallsalt, 191 Ariz. 177, 180, 953 P.2d 921, 924 (App.1997) (verdict nonresponsive where counterclaim not addressed), vacated in part on other grounds, 192 Ariz. 129, 962 P.2d 203 (1998) ; cf. Walsh v. Advanced Cardiac Specialists Chartered, 229 Ariz. 193, ¶ 14, n. 1, 273 P.3d 645, 649, 650 n. 1 (2012) (verdict neither defective nor unresponsive where award of zero damages was not impermissible as matter of law).

¶ 11 Here, the trial court had instructed the jury that if it found Jones was at fault, it "must then determine how much additional UM/UIM coverage the Murrays would have purchased up to $1,890,000."⁴ Evidence at trial showed that the Murrays had the option of purchasing UM/UIM coverage in limits of 50/100K, 100/300K or 250/500K. The jury's verdict of $180,000, however, did not reflect any option available to the Murrays and, as they assert and Farmers does not contest, the verdict "cannot be mathematically reconciled with any UM/UIM limit that [they] could have bought under the undisputed evidence."

¶ 12 After the Murrays requested that the jury deliberate further pursuant to Rule 49(c), the trial court noted that the parties had agreed to "le[ave] the verdict form open" as to the amount of additional UM/UIM coverage that might have been purchased. It posed the question of how it would instruct the jury post-verdict, noting the difficulty of resubmitting the instruction without telling the jury, in essence, "pay attention to the evidence and redecide the case."⁵ The court concluded that a verdict could be "flawed" but responsive, and was in this case. It further noted that it "c [ould]n't imagine ... an instruction that wouldn't, to some degree or another, comment on the evidence and direct [the jury's] decision." Finally, it agreed with Jones that Rule 49(c) involved "more of a ... failure to follow the legal issues in the case than the evidentiary decision making."

¶ 13 The jury's verdict was within the instructed range, the error was not one of law, and we agree with the trial court's assessment that any attempt to direct the jury to

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