Articles Posted in Arizona Supreme Court

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The United States Court of Appeals for the Ninth Circuit certified certain questions to the Supreme Court regarding what impact, if any, a lender’s full-credit bid made at an Arizona trustee’s sale has on an insurer’s liability under standard form title insurance policies. The policy provisions at issue were (1) Section 2, which provides that coverage continues in force when an insured acquires the property in a foreclosure sale but the amount of coverage is reduced by all payments made; (2) Section 9, which provides that payments of principal or the voluntary satisfaction or release of the mortgage reduce available insurance coverage, except as provided under Section 2(a); and (3) Section 7, which explains how the insurer’s liability is calculated. The Supreme Court answered the certified questions as follows: (1) Section 2 applies when a lender purchases property by full-credit bid at a trustee’s sale; (2) the full-credit bid does not constitute a “payment” under Sections 2 or 9 of the policy; and (3) accordingly, the full-credit bid neither terminates nor reduces coverage under Section 2 or Section 7. View "Equity Income Partners, LP v. Chicago Title Insurance Co." on Justia Law

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Arizona's Uninsured/Underinsured Motorist Act (UMA) requires all insurers writing motor vehicle liability policies to also offer underinsured motorist (UIM) coverage that covers all persons insured under the policy. Any exceptions to UIM coverage not permitted by the UMA are void. Insurer in this case sought a declaratory judgment that it had validly denied Insured's UIM claim. Insured was injured while a passenger on a motorcycle driven by her husband, the named insured on a separate motorcycle policy issued also by Insurer. The Supreme Court held (1) the UMA required Insurer to provide UIM coverage for Insured under the auto policy, where Insured's total damages exceeded the amount of her tort recovery from her husband under the husband's motorcycle policy; and (2) the UMA did not permit Insurer to refuse to provide Insured with UIM coverage under her auto policy because she was partially indemnified as a claimant under the liability coverage of the separate motorcycle policy issued by Insured to her husband, whose negligence contributed to her injuries. View "Am. Family Mut. Ins. Co. v. Sharp" on Justia Law

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In the underlying federal court action, an auto insurer (Insurer) sought a declaratory judgment that it had validly denied Insured's underinsured motorist (UIM) claim. Insured was injured while a passenger on a motorcycle driven by her husband, who had a motorcycle insurance policy with Insurer. Insured counterclaimed for breach of contract and bad faith. The U.S. district court certified several questions to the state Supreme Court. The Court held (1) Ariz. Rev. Stat. 20-259.01(G) required Insurer to provide UIM coverage for Insured under the auto policy, where Insured's total damages exceeded the amount of her tort recovery from her husband under the husband's motorcycle policy; and (2) Ariz. Rev. Stat. 20-259.01(H) did not permit Insurer to refuse to provide Insured with UIM coverage under her auto policy because she was partially indemnified as a claimant under the liability coverage of the separate motorcycle policy issued by Insurer to Insured's husband, whose negligence contributed to Insured's injuries.