Allstate Indemnity Company v. Lisa Ridgely ( 2007 )


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  •                                                                      FILED BY CLERK
    MAR 15 2007
    IN THE COURT OF APPEALS                      COURT OF APPEALS
    STATE OF ARIZONA                           DIVISION TWO
    DIVISION TWO
    ALLSTATE INDEMNITY COMPANY                     )       2 CA-CV 2006-0164
    and ALLSTATE INSURANCE                         )       DEPARTMENT A
    COMPANY,                                       )
    )       OPINION
    Plaintiffs/Appellees,     )
    )
    v.                          )
    )
    LISA RIDGELY, a single person,                 )
    )
    Defendant/Appellant.        )
    )
    APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY
    Cause No. C20054583
    Honorable Deborah Bernini, Judge
    REVERSED AND REMANDED
    Herman, Goldstein & Forsyth, P.C.
    By Keith B. Forsyth                                                            Phoenix
    Attorneys for Plaintiffs/Appellees
    Haralson, Miller, Pitt, Feldman & McAnally, P.L.C.
    By Thomas G. Cotter                                                            Tucson
    The Law Office of Elliot Glicksman, P.L.L.C.
    By Elliot Glicksman                                                           Tucson
    Attorneys for Defendant/Appellant
    H O W A R D, Presiding Judge.
    ¶1            Appellant Lisa Ridgely challenges the trial court’s grant of summary judgment
    in favor of appellees Allstate Insurance Company and Allstate Indemnity Company in
    Allstate’s declaratory judgment action against her. Ridgely argues that Allstate should have
    been estopped from asserting the “not a resident of the household” coverage defense.
    Ridgely also argues the trial court erred by ruling that an ex parte sworn statement could not
    be contradicted by deposition testimony. Because we agree the trial court erred when it
    disregarded the deposition testimony, we reverse.
    ¶2            When reviewing a grant of summary judgment, we view the evidence and
    reasonable inferences from it in the light most favorable to the nonmoving party. Link v.
    Pima County, 
    193 Ariz. 336
    , ¶ 12, 
    972 P.2d 669
    , 673 (App. 1998). On March 20, 2004,
    Nicholas Perrow hosted a party at the home of Donald and Garnett Sloane, Perrow’s
    grandparents. One of the partygoers was fatally shot at the home. Lisa Ridgely, the
    decedent’s mother, filed a wrongful death claim against Perrow.
    ¶3            The Sloanes were the named insureds in Allstate homeowners and umbrella
    policies. Allstate suspected that Perrow might have been living with his uncle, not the
    Sloanes, at the time of the shooting and began investigating Perrow’s coverage under the
    Sloanes’ policy. Allstate asked Perrow to give a sworn statement, and although Perrow
    initially requested the presence of his attorney, he eventually gave the statement without his
    counsel being present. During the statement, Allstate questioned Perrow regarding his
    2
    Tucson residence. But Allstate never informed Perrow that the purpose of the examination
    was to dispute coverage under the Sloanes’ policy.
    ¶4                While under oath, Perrow stated that, at the time of the shooting, he did not
    have a specific place in Tucson where he lived. He also stated that although he lived with
    the Sloanes when he was in elementary school and again when he was in his late teens, he
    was no longer a permanent resident of the Sloanes’ home once he stopped working for them
    at their store.
    ¶5                Allstate then filed this declaratory judgment action against Perrow and Ridgely
    seeking a determination that Perrow was not a member of the Sloanes’ household for
    coverage purposes. Perrow did not answer or otherwise defend against the action and was
    eventually defaulted. Ridgely’s counsel deposed Perrow and, during his deposition, Perrow
    testified that at the time of the shooting, he considered the Sloanes’ house his primary
    residence.
    ¶6                Ridgely filed a motion to exclude Perrow’s ex parte statement taken by
    Allstate and to dismiss the declaratory judgment action. Allstate cross-moved for summary
    judgment, arguing Perrow was not covered by the policy because he was not a resident of
    the Sloanes’ home. Prior to ruling on the summary judgment motion and the motion to
    dismiss, the trial court entered a default judgment against Perrow. The trial court then
    granted summary judgment in favor of Allstate, and Ridgely now appeals.
    3
    ¶7            Ridgely first argues that Allstate should have been estopped from asserting
    Perrow was not a resident of the Sloanes’ household because Allstate had a fiduciary duty
    to notify its insureds that coverage issues existed prior to questioning the insured about
    coverage. But Ridgely did not make this argument below, and we will not consider it on
    appeal.1 See Napier v. Bertram, 
    191 Ariz. 238
    , ¶ 6, 
    954 P.2d 1389
    , 1390 (1998) (supreme
    court refused to consider contract theory of recovery when only negligence theory alleged
    and argued in trial court); Kuehn v. Stanley, 
    208 Ariz. 124
    , ¶ 19, 
    91 P.3d 346
    , 352 (App.
    2004) (new factual theories waived on appeal from summary judgment if not first raised in
    trial court); see also Crowe v. Hickman’s Egg Ranch, Inc., 
    202 Ariz. 113
    , ¶ 16, 
    41 P.3d 651
    , 654 (App. 2002) (“Issues not properly raised below are waived.”).
    ¶8            Ridgely next argues the trial court erred when it held “as a matter of law that
    [Perrow’s] ex parte statement could not be contradicted by deposition.” In its minute entry
    granting summary judgment, the trial court stated that Perrow’s “two statements [were]
    contradictory and [could not] both be true.” Relying on Wright v. Hills, 
    161 Ariz. 583
    , 
    780 P.2d 416
    (App. 1989), abrogated on other grounds by James, Cooke & Hobson, Inc. v.
    Lake Havasu Plumbing & Fire Protection, 
    177 Ariz. 316
    , 
    868 P.2d 329
    (App. 1993), and
    MacLean v. State (Department of Education), 
    195 Ariz. 235
    , 
    986 P.2d 903
    (App. 1999),
    the trial court then refused to consider Perrow’s deposition testimony because it was given
    1
    Because we reverse the summary judgment on other grounds, the waiver of this issue
    on appeal does not foreclose Ridgely from arguing it on remand, if it still can properly be
    raised. See Andrews v. Blake, 
    205 Ariz. 236
    , n.2, 
    69 P.3d 7
    , 13 n.2 (2003).
    4
    after the sworn statement. We review de novo the propriety of summary judgment, Link,
    
    193 Ariz. 336
    , ¶ 
    12, 972 P.2d at 673
    , and questions involving the interpretation of court
    rules, Vega v. Sullivan, 
    199 Ariz. 504
    , ¶ 8, 
    19 P.3d 645
    , 648 (App. 2001).
    ¶9            In Wright, this court held that the “sham affidavit” rule applies in Arizona
    because “parties cannot thwart the purposes of Rule 56, [Ariz. R. Civ. P., 16 A.R.S., Pt. 2,]
    by creating issues of fact through affidavits that contradict their own 
    depositions.” 161 Ariz. at 588
    , 780 P.2d at 421; see also Tippens v. Celotex Corp., 
    805 F.2d 949
    , 953 (11th Cir.
    1986) (referring to the rule as the “[s]ham [a]ffidavit [c]oncept”). The rule states that when
    a party’s affidavit is submitted to defeat summary judgment and contradicts the party’s own
    deposition testimony, it should be disregarded in deciding the motion. 
    Wright, 161 Ariz. at 587
    , 780 P.2d at 420. “[G]iv[ing] great weight to the federal interpretations of rules of civil
    procedure,” the court reasoned that “[a]llowing a party to submit a contradictory affidavit
    after giving a deposition would greatly diminish the utility of summary judgment as a
    procedure for screening out genuine issues of fact.” 
    Id. at 587-88,
    780 P.2d at 420-21.
    ¶10           Wright also held that certain exceptions exist to the sham affidavit rule, for
    instance, “if the affiant was confused at the deposition and the affidavit explains those aspects
    of the deposition testimony or if the affiant lacked access to material facts and the affidavit
    sets forth the newly discovered evidence.” Id. at 
    588, 780 P.2d at 421
    . This court, in
    MacLean, recognized the rule it adopted in Wright. 
    195 Ariz. 235
    , ¶ 
    20, 986 P.2d at 909
    .
    5
    But in that case, the court did not apply it because it found the affidavit and the deposition
    did “not clearly conflict.” 
    Id. ¶11 While
    Wright and MacLean provide guidance on this issue, they are not
    dispositive. Wright and MacLean held that a party’s prior deposition testimony cannot be
    contradicted by the party’s subsequent affidavit submitted to defeat summary judgment and
    did not address the issue presented here: whether a former party/witness’s prior sworn
    statement or affidavit can be contradicted by subsequent deposition testimony to defeat
    summary judgment. Because we have found no Arizona cases addressing the issue presented
    here, we look to the federal and out-of-state cases for guidance.
    ¶12            In Darnell v. Target Stores, Inc., 
    16 F.3d 174
    (7th Cir. 1994), the Seventh
    Circuit considered a case in which a party’s deposition testimony was contradicted by his
    subsequent affidavit and two witnesses’ prior affidavits were contradicted by their subsequent
    deposition testimony. After applying the sham affidavit rule to the party’s affidavit, the
    Seventh Circuit extended the rule to the prior affidavits of two witnesses who had been
    deposed after they had submitted their affidavits. 
    Id. at 177.
    The witnesses’ affidavits would
    have prevented summary judgment, but the later deposition testimony supported the entry
    of summary judgment. See 
    id. at 176-77.
    The Seventh Circuit stated that “though the timing
    is reversed, the rule is the same” and held that witnesses’ “‘[s]elf-serving affidavits,’ . . . that
    . . . [we]re contradicted by their own [subsequent] deposition testimony . . . [could] not
    defeat a motion for summary judgment.” 
    Id. at 177,
    quoting Slowiak v. Land O’Lakes, Inc.,
    6
    
    987 F.2d 1293
    , 1295 (7th Cir. 1993) (first alteration in Darnell). But, because the
    deposition in Darnell was presented in support of summary judgment, see 
    id. at 175-76,
    and
    here the deposition was presented to defeat summary judgment, further analysis into the
    purpose—to prevent parties from thwarting Rule 56—and application of the sham affidavit
    rule is necessary to determine whether it applies in this case.
    ¶13           The federal courts, when applying the sham affidavit rule, have given greater
    weight to deposition testimony than affidavits. They conclude that because deposition
    testimony is subject to cross-examination, it is inherently more reliable than an affidavit. See
    Perma Research & Dev. Co. v. Singer Co., 
    410 F.2d 572
    , 577-78 (2d Cir. 1969); 
    Darnell, 16 F.3d at 176
    . When the court in Darnell applied the sham affidavit rule to the party’s
    affidavit that contradicted his prior deposition testimony, it reasoned “[i]nherently[,]
    depositions carry an increased level of reliability . . . [because they] are adversarial in nature
    and provide the opportunity for direct and cross-examination.” 
    Id. at 176.
    State courts have
    also found that deposition testimony is inherently more reliable than an affidavit. See
    Hancock v. Bureau of Nat’l Affairs, Inc., 
    645 A.2d 588
    , 590-91 (D.C. 1994); Lipsteuer v.
    CSX Transp., Inc., 
    37 S.W.3d 732
    , 736 (Ky. 2000); Webster v. Sill, 
    675 P.2d 1170
    , 1172
    (Utah 1983); Best v. Daimler Chrysler Corp., 
    141 P.3d 624
    , 627 (Utah Ct. App. 2006).
    ¶14           Additionally, the federal cases indicate that the sham affidavit rule is properly
    applied when a nonparty affiant has some motive, emotional or financial, to fabricate sham
    issues of fact. A federal district court, in Martin v. City of New York, 
    627 F. Supp. 892
    , 896
    7
    (E.D.N.Y. 1985), applied the rule to a witness’s subsequent contradictory affidavit. But, in
    that case, the plaintiff sued the City of New York based on the circumstances surrounding his
    arrest on charges of rape and sodomy. 
    Id. at 894.
    He alleged, inter alia, that the officers
    assaulted him and were racially biased. 
    Id. at 894-95.
    The City moved for summary
    judgment and the plaintiff produced his mother’s affidavit, which contradicted her prior
    deposition testimony. 
    Id. at 895-96.
    The court held that the sham affidavit rule prohibited
    the plaintiff “from coming forward with the . . . [a]ffidavit for the purpose of attempting to
    defeat the City’s motion for summary judgment.” 
    Id. ¶15 The
    Seventh Circuit has also applied the sham affidavit rule to a witness’s
    affidavit. In Adelman-Tremblay v. Jewel Cos., 
    859 F.2d 517
    (7th Cir. 1988), the plaintiff
    submitted an affidavit by her only expert witness that contradicted the expert’s prior
    deposition testimony. 
    Id. at 519-20.
    The court held that the sham affidavit rule applied to
    a “case involving the testimony and affidavit of [a] plaintiff’s sole expert witness” and that
    the submission of the affidavit in that case was “little more than a desperate attempt to
    resuscitate her claim.” 
    Id. at 521.
    In both Martin and Adelman-Tremblay, the courts were
    faced with subsequent contradictory affidavits of witnesses who had interests in defeating
    summary judgment in the cases, which lent further support to the courts’ conclusions that the
    affidavits were shams and should not have been considered.
    ¶16           Finally, none of the cases has adopted a bright-line test to determine when an
    affidavit is a sham. Rather, the consensus is that the issue must be dealt with on a case-by-
    8
    case basis. See Adler v. Fed. Republic of Nigeria, 
    107 F.3d 720
    , 728 (9th Cir. 1997) (prior
    to disregarding contradictory affidavits, a trial court “‘must make a factual determination that
    the contradiction was actually a sham’”), quoting Kennedy v. Allied Mut. Ins. Co., 
    952 F.2d 262
    , 267 (9th Cir. 1991) (trial court required to “actually examin[e] [plaintiff]’s actions and
    ma[k]e a finding of fact that they were a ‘sham’”); Sch. Dist. No. 1J, Multnomah County v.
    ACandS, Inc., 
    5 F.3d 1255
    , 1264 (9th Cir. 1993) (contradictory affidavit not automatically
    disregarded); Durtsche v. Am. Colloid Co., 
    958 F.2d 1007
    , 1010 n.2 (10th Cir. 1992)
    (same); see also MacLean, 
    195 Ariz. 335
    , ¶ 
    20, 986 P.2d at 409
    (court did not apply sham
    affidavit rule because deposition and affidavit “not clearly [in] conflict”); Gatson v. The Rest.
    Co., 
    260 F. Supp. 2d 742
    , 760-61 (N.D. Iowa 2003) (court found statements “not directly
    contradictory” and did not apply sham affidavit rule); Treadwell v. Dow-United Techs., 
    970 F. Supp. 962
    , 967 (M.D. Ala. 1997) (court refused to apply rule because affidavit and
    testimony could be read consistently).
    ¶17           Here, Perrow’s deposition was not taken in response to a motion for summary
    judgment; therefore, it was not apparently directed at “thwart[ing] the purposes of Rule 56.”
    MacLean, 
    195 Ariz. 235
    , ¶ 
    20, 986 P.2d at 909
    ; Wright, 161 Ariz. at 
    588, 780 P.2d at 421
    .
    Nor does the record reflect that Ridgely had any part in procuring Perrow’s change in his
    testimony. Cf. 
    Adelman-Tremblay, 859 F.2d at 521
    ; 
    Martin, 627 F. Supp. at 896
    . In fact,
    Ridgely and Perrow were adverse parties in the underlying personal injury action.
    9
    ¶18           Furthermore, the “increased level of reliability” of deposition testimony
    suggests that Perrow’s deposition, which was subject to direct and cross-examination and
    defeats summary judgment, must be considered. 
    Darnell, 16 F.3d at 176
    . And, in his
    deposition, Perrow at least attempted to explain why some of his answers there differed from
    his prior statement. Finally, Perrow did not file an answer in this action and had been
    defaulted. His default, at a minimum, creates a factual issue as to whether he has any motive
    to testify in a way supporting a determination of coverage. Cf. 
    Adelman-Tremblay, 859 F.2d at 521
    ; 
    Martin, 677 F. Supp. at 896
    .
    ¶19           Based on these facts, we conclude that the purposes underlying the sham
    affidavit rule do not support applying the rule in this case. Ridgely is merely in the position
    of any party when a witness changes his or her testimony and the issue becomes the witness’s,
    i.e., Perrow’s, credibility. See 
    Tippens, 805 F.2d at 954
    (“Variations in a witness’s testimony
    and any failure of memory throughout the course of discovery create an issue of credibility
    as to which part of the testimony should be given the greatest weight if credited at all.”); see
    also 10A Charles Alan Wright et al., Federal Practice and Procedure § 2726, at 448 (3d
    ed. 1998) (“[S]ome courts have ruled that conflicts between depositions and later-filed
    affidavits present questions of credibility.”); Kennett-Murray Corp. v. Bone, 
    622 F.2d 887
    ,
    893 (5th Cir. 1980); Price v. Worldvision Enters., Inc., 
    455 F. Supp. 252
    , 265 (S.D.N.Y.
    1978), aff’d, 
    603 F.2d 214
    (2d Cir. 1979). When deciding a motion for summary judgment,
    “‘[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate
    10
    inferences from the facts are jury functions, not those of a judge.’” Thompson v. Better-Bilt
    Aluminum Prods. Co., 
    171 Ariz. 550
    , 558, 
    832 P.2d 203
    , 211 (1992), quoting Anderson
    v. Liberty Lobby, Inc., 
    477 U.S. 242
    , 255, 
    106 S. Ct. 2505
    , 2513 (1986), quoted with
    approval in Orme Sch. v. Reeves, 
    166 Ariz. 301
    , 309-10, 
    802 P.2d 1000
    , 1008-09 (1990)
    (alteration in Thompson). We agree with the trial court that both of Perrow’s statements
    cannot be correct, but neither that court nor this court is in a position to decide which
    statement to believe.
    ¶20           Nevertheless, at oral argument, Allstate contended that we should find as a
    matter of law that Perrow’s deposition testimony was a sham based on his financial interest
    in avoiding liability for the wrongful death and the obvious change in his testimony which
    was not explained in the record. But these contentions merely raise issues of fact which a
    jury must address. They do not demonstrate as a matter of law that the deposition testimony
    was procured by Ridgely for the sole purpose of thwarting Rule 56, which would render the
    deposition a sham.
    ¶21           Allstate also claims the trial court properly found as a matter of law that Perrow
    was not a resident of the Sloanes’ home. Summary judgment is appropriate where the facts
    would not allow reasonable minds to differ. Orme 
    Sch., 166 Ariz. at 309
    , 802 P.2d at 1008;
    Shaw v. Peterson, 
    169 Ariz. 559
    , 560, 563, 
    821 P.2d 220
    , 221, 224 (App. 1991). The trial
    court did not consider Perrow’s deposition testimony in making that determination, as we
    conclude it was required to do. Nor is this a case in which, considering all the evidence,
    11
    reasonable minds could not differ regarding Perrow’s residency. See id.; see also Mid-
    Century Ins. Co. v. Duzykowski, 
    131 Ariz. 428
    , 430, 
    641 P.2d 1272
    , 1274 (1982) (“Factors
    to consider in determining whether an individual is a ‘resident of the same household’
    include, but are not limited to, the individual’s presence in, or absence from, the named
    insured’s home on the date of the occurrence; the reasons or circumstances relating to the
    absence or presence; the relationship of the individual to the named insured; living
    arrangements of the individual in earlier time periods; the individual’s subjective or declared
    intent with respect to the place of residence; the existence of a second place of lodging.”).
    Consequently, the trial court erred when it found “as a matter of law that . . . Perrow was not
    a resident of the Sloane household at the time of the shooting incident.”
    ¶22           For the foregoing reasons, we reverse the trial court’s order granting summary
    judgment and remand the case for further proceedings consistent with this opinion.
    ____________________________________
    JOSEPH W. HOWARD, Presiding Judge
    CONCURRING:
    ____________________________________
    JOHN PELANDER, Chief Judge
    ____________________________________
    12
    GARYE L. VÁSQUEZ, Judge
    13
    

Document Info

Docket Number: 2 CA-CV 2006-0164

Filed Date: 3/15/2007

Precedential Status: Precedential

Modified Date: 10/30/2014

Authorities (28)

Gaston v. the Restaurant Co. , 260 F. Supp. 2d 742 ( 2003 )

Lipsteuer v. CSX Transportation, Inc. , 2000 Ky. LEXIS 197 ( 2000 )

Best v. DAIMLER CHRYSLER CORPORATION , 556 Utah Adv. Rep. 13 ( 2006 )

prod.liab.rep.(cch)p 11,951 Cathy Adelman-Tremblay v. Jewel ... , 859 F.2d 517 ( 1988 )

Vega v. Sullivan , 199 Ariz. 504 ( 2001 )

Napier v. Bertram , 191 Ariz. 238 ( 1998 )

Perma Research and Development Company v. The Singer Company , 410 F.2d 572 ( 1969 )

Anderson v. Liberty Lobby, Inc. , 106 S. Ct. 2505 ( 1986 )

Dennis Slowiak and Jane Slowiak v. Land O'lakes, Inc. , 987 F.2d 1293 ( 1993 )

Kennett-Murray Corporation v. John E. Bone , 622 F.2d 887 ( 1980 )

Wright v. Hills , 161 Ariz. 583 ( 1989 )

Orme School v. Reeves , 166 Ariz. 301 ( 1990 )

97-cal-daily-op-serv-1105-97-daily-journal-dar-1706-james-e-adler , 107 F.3d 720 ( 1997 )

Crowe v. Hickman's Egg Ranch, Inc. , 202 Ariz. 113 ( 2002 )

Kuehn v. Stanley , 208 Ariz. 124 ( 2004 )

drake-c-kennedy-brian-h-kennedy-co-trustees-of-the-regency-outdoor , 952 F.2d 262 ( 1991 )

Myron Durtsche, Jr. v. American Colloid Company , 958 F.2d 1007 ( 1992 )

James, Cooke & Hobson, Inc. v. Lake Havasu Plumbing & Fire ... , 177 Ariz. 316 ( 1993 )

Mid-Century Insurance v. Duzykowski , 131 Ariz. 428 ( 1982 )

school-district-no-1j-multnomah-county-oregon-v-acands-inc-a , 5 F.3d 1255 ( 1993 )

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