Fry's Food Stores of Arizona, Inc. v. Mather & Associates, Inc.
Docket: 1 CA-CV 92-0335, 1 CA-CV 93-0505
Court: Court of Appeals of Arizona; August 3, 1995; Arizona; State Appellate Court
Fry's Food Stores of Arizona, Inc. and Vine Court Assurance Company filed a lawsuit against various defendants, including Mather and Associates, Inc. and Joseph A. Gervasio, following extensive damage caused by a windstorm that dislodged a canopy from a Fry's warehouse. The plaintiffs alleged negligence in the design and installation of the canopy's connectors. The trial court dismissed the complaint, ruling that the claims were barred by Arizona's eight-year construction statute of repose (A.R.S. 12-552), which applies to actions "based in contract." The court interpreted the statute as applicable to any action arising from a contractual relationship, even if the plaintiffs only asserted negligence claims. The plaintiffs appealed the dismissal and the subsequent denial of their motion for reconsideration, which included a request for attorneys' fees awarded to the defendants. The case highlights the legal interpretation of the statute of repose in relation to tort claims linked to construction contracts.
Plaintiffs' action, while rooted in tort, raises the issue of whether it is "based in contract" under the statute. The trial court ruled in favor of the statute's applicability, asserting that the defendants' duty of care arose from contractual relationships. However, this conclusion was found to be erroneous. Two key principles from Hayes v. Continental Insurance Co. were cited: 1) statutory language should not be interpreted in a manner that could render it unconstitutional; and 2) statutes should not be construed to abrogate common-law actions unless explicitly stated by the legislature. Applying the trial court's interpretation would violate both principles by potentially rendering the statute unconstitutional and abrogating common-law negligence actions without clear legislative intent.
The statute of repose specifically addresses actions "based in contract," defined as those arising from written agreements related to real estate, sales, or construction. This definition does not reasonably apply to negligence claims among contracting parties. The court referenced prior rulings indicating that professional malpractice actions, although arising from contracts, do not qualify for attorney's fees under the relevant statute. Consequently, the dismissal of the plaintiffs' negligence claims was deemed improper.
Regarding attorneys' fees, the trial court's award to defendants was reversed since they were no longer the successful party. Although the statute permits fees in contested actions arising from contracts, it does not extend to negligence claims, and the legislative intent does not support awarding fees in this scenario.
The trial court's judgment is reversed, and the case is remanded for further proceedings in accordance with the court's opinion. Judges Noyes and Garbarino concur with this decision. In 1992, a legislative amendment added subsection 12-552(G), stating that for improvements to real property substantially completed by September 15, 1989, the time limits for claims would begin on that date. This amendment is relevant to the plaintiffs' Rule 60(c)(6) motion for relief from judgment. In appeal 1 CA-CV 93-0505, there was a debate over whether applying this amendment would infringe on the defendants' vested rights. However, this issue became moot due to the court's ruling in the plaintiffs' initial appeal, determining that A.R.S. 12-552 does not pertain to negligence claims, regardless of the new subsection. The trial court did not have the opportunity to consider precedents Hazine or Hayes, which were issued during the appeal process.
