Tucson Unified School District v. Owens-Corning Fiberglas Corp.
Docket: CV-92-0188-CQ
Court: Arizona Supreme Court; March 2, 1993; Arizona; State Supreme Court
Tucson Unified School District (TUSD) initiated a lawsuit against multiple defendants, including Owens-Corning Fiberglas Corporation and W.R. Grace Company, to recover costs associated with the removal of asbestos from 81 school buildings. The defendants contended that TUSD's claim was barred by the statute of limitations. TUSD argued that, under A.R.S. 12-510, statutes of limitation do not apply to school districts. The federal court agreed with TUSD and certified the question regarding the applicability of A.R.S. 12-510 to the Arizona Supreme Court. The court accepted jurisdiction and affirmed that A.R.S. 12-510 does apply to school districts, emphasizing that the statute aims to protect public rights to seek redress against negligence by public officials. The discussion referenced relevant case law, including City of Bisbee v. Cochise County and Grim v. Anheuser-Busch, to analyze whether TUSD's claim serves a public interest. The defendants argued that A.R.S. 12-510, modeled after Texas law, suggests that municipal corporations, unlike school districts, are subject to statutes of limitation, citing historical Texas case law.
Municipal corporations are not subject to statutes of limitation when suing to collect money owed to them, as established by precedent in Arizona case law (City of Bisbee and County of Maricopa v. Rodgers). School districts, regarded as political subdivisions of the state, share similarities with cities and counties, thus falling under the same legal rationale. Consequently, the argument that school districts are excluded from A.R.S. § 12-510 is rejected. Additionally, while A.R.S. § 12-529 indicates that statutes of limitation apply to political subdivisions in specific cases involving land claims, it does not exempt them from A.R.S. § 12-510, suggesting their inclusion under it. The common law asserts that statutes of limitation do not generally apply to the state, reinforcing that political subdivisions are covered under A.R.S. § 12-510 in other contexts.
The federal district court was particularly concerned with whether the school district's activities in a case involving asbestos removal affected its immunity under A.R.S. § 12-510. Owens contended that the school district's involvement in asbestos litigation does not align with its constitutional purpose of education, likening it to a private entity addressing a construction defect, thereby subjecting it to statutes of limitation. This argument reflects the public-private distinction, with some jurisdictions supporting Owens' view, asserting that school districts acting in a proprietary capacity in such cases are indeed subject to statutes of limitation.
Jurisdictions that apply the governmental-proprietary distinction have ruled that school districts suing for asbestos cleanup act in a governmental capacity, thus exempt from statutes of limitation, as seen in cases like District of Columbia v. Owens-Corning Fiberglas Corp. and others. However, differing court outcomes highlight challenges with this distinction. The court in question has not recognized the governmental-proprietary distinction for A.R.S. 12-510, suggesting it is outdated and speculative, as noted in State v. Versluis. The court asserts that the explicit language of A.R.S. 12-510 indicates the state is always exempt from statutes of limitation. Furthermore, the court refutes Owens' claim that earlier cases like Grim v. Anheuser-Busch and State ex rel. State Community College Bd. v. Sergent, Hauskins accepted this distinction, clarifying that those cases did not involve state claims. Grim dealt with a private party's claim, while Sergent, Hauskins did not address the distinction at all, focusing instead on the nature of the plaintiff. Thus, the court concludes that the governmental-proprietary test is irrelevant to A.R.S. 12-510's application.
A community college board initiated a lawsuit against a contractor for construction defects in dormitories built with bonds, which were to be repaid from dormitory revenues, not state taxes. The court of appeals found that the board was distinct from the state, primarily because it was not subject to the constitutional debt limitation that applies to state entities. Therefore, the board could not utilize A.R.S. 12-510 to extend the statute of limitations for filing its lawsuit. In contrast, the Tucson Unified School District (TUSD), as a political subdivision of Arizona, is the plaintiff in this case, and the nature of TUSD determines the applicability of A.R.S. 12-510, not the subject matter of the lawsuit. The court clarified that TUSD is exempt from the statute of limitations under Arizona law, preventing Owens from using it as a defense. No equitable defenses were considered in this decision. Chief Justice Feldman recused himself from the case, and Chief Judge Noel Fidel was designated to participate in the proceedings. Additionally, a note indicated that A.R.S. 12-529 had been deemed unconstitutional in a previous case, which is not relevant to the current matter.
