Legal Trends

Legal Trends

Personal Injury

Strict Liability of Dog “Owners”

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In Spirlong v. Browne, the Arizona Court of Appeals examined whether a defendant homeowner and landlord qualified as the statutory owner of a renter’s dog as defined under Arizona Revised Statute (“A.R.S.”) section 11-1001(10).  In its holding, the court declined to extend liability to an individual who did not exercise care, custody, or control over an animal.

In August 2007, Charles Browne rented two rooms in his home to Mr. and Mrs. Mayes and their two dogs.  On December 11, 2007, Browne’s live-in girlfriend Shasta Russell and Mr. Mayes were alone with the dogs when one escaped from the backyard and bit Mr. and Mrs. Spirlong’s son.  The Spirlongs filed suit alleging that Browne, Mayes, and Russell were strictly liable for their son’s injuries under A.R.S. sections 11-1020 and 11-1025 (collectively “dog bite statutes”).  Browne answered the complaint alleging the fault of others as an affirmative defense.  Neither Mayes nor Russell responded to the complaint, and the court entered default judgments against them.

Browne and the Spirlongs cross-moved for summary judgment, contesting whether Browne was the dog’s statutory owner under the dog bite statutes.  The superior court concluded that Browne was the dog’s statutory owner and granted the Spirlongs’ cross-motion, holding Browne strictly liable for the Spirlongs’ son’s injuries. The case proceeded to trial where the court instructed the jury that it had already determined Browne was the dog’s statutory owner.  However, over the Spirlongs’ objections, the court also instructed the jury on comparative fault. The jury subsequently returned a verdict in favor of Browne. 

Despite numerous arguments related to the applicability of comparative fault to the dog bite statutes, the appellate court narrowed its inquiry to determining whether Browne was properly classified as a statutory owner of Mayes’s dog. Generally, the dog bite statutes impose strict liability on dog owners for injuries and bites caused by their dogs.  However, under A.R.S. section 11-1001(10), an individual is a statutory owner only if he is “[a] person keeping an animal other than livestock for more than six consecutive days.”  Browne argued that “keeping” required a person to have care, custody, or control over the dog.  The Spirlongs argued that “keeping” only required a person to “house” a dog in their home for a minimum of six consecutive days.

After noting the word “keeping” was not defined in the dog bite statutes, the court concluded that “keeping” required a person to exercise care, custody, or control over the dog to be considered a statutory owner.  Whether or not an individual has met these requirements will be an issue of fact, dependent on the facts and circumstances of a particular case.  By adopting this definition, the court distinguished “keeping” an animal from merely “harboring” or “maintaining” one.  Thus, to be a statutory owner, and strictly liable under the dog bite statutes, an individual must generally do more than “house” a dog.  For example, an individual who provides food and healthcare in addition to shelter for a dog would almost surely qualify as the dog’s statutory owner.

Because the Spirlongs failed to produce any evidence that Browne exercised care, custody, or control over the dog, the court determined that the Spirlongs’ statutory dog bite claims against Browne should have been dismissed as a matter of law and affirmed the judgment entered by the superior court in Browne’s favor.

To read the full opinion, visit azcourts.gov.

The Preclusive Effect of Damron Agreements on Subsequent Litigation

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On a certified question from the Ninth Circuit Court of Appeals, the Arizona Supreme Court recently held that a default judgment entered pursuant to a Damron agreement does not preclude litigation of whether coverage exists under the policy. Quihuis v. State Farm Mutual Automobile Insurance Company, CV-14-0093-CQ, Oct. 1, 2014.

The Coxes owned a vehicle insured under a State Farm policy. They sold the vehicle to Bojorquez but retained the title and maintained the State Farm policy pending full payment. Bojorquez’s daughter was involved in a collision with Quihuis, who subsequently sued her for negligence and the Coxes for negligent entrustment. State Farm refused to defend the Coxes, arguing that there was no coverage because the Coxes did not own the vehicle at the time of the collision. The Coxes, Quihuis, and Bojorquez entered into a Damron agreement, in which the Coxes acknowledged ownership of the vehicle at the time of the collision and assigned to Quihuis their rights against State Farm. Once judgment was entered, Quihuis sued State Farm. The court entered summary judgment in favor of State Farm, finding that the Coxes did not own the vehicle at the time of the collision. Quihuis appealed, resulting in the certified question, “Whether a default judgment against insured-defendants that was entered pursuant to a Damron agreement that stipulated facts determinative of both liability and coverage has (1) collateral estoppel effect and precludes litigation of that issue in a subsequent coverage action against the insurer . . . or (2) no preclusive or binding effect…”

The Court concluded that while a Damron agreement precludes litigation of liability issues, it does not preclude litigation of whether coverage exists. It clarified, however, that “an insurer in a coverage action may not, in the guise of a coverage defense, litigate what are essentially and solely liability issues resolved by the default judgment.” In reaching this conclusion, the Court analyzed Restatement (Second) of Judgments § 58, which precludes an indemnitor from disputing “the existence and extent of the indemnitee’s liability” and from relitigating any issues determined in the previous action. It noted that neither the Restatement nor Arizona case law precluded litigation of pure coverage issues. In Quihuis, State Farm was not seeking to litigate the “existence and extent” of the Coxes’ liability or argue that coverage did not exist because the Coxes were not liable. Instead, State Farm was seeking to litigate the issue of ownership, which had not been “actually litigated in the underlying tort case.” Although the ownership issue was directly related to liability and determinative of coverage, neither § 58 nor Arizona case law necessarily precluded State Farm from litigating it.

In reaching its conclusion, the Court rejected Quihuis’s argument that State Farm was precluded from litigating the ownership issue because it had breached its duty to defend the Coxes. Without deciding whether State Farm had breached any duty to the Coxes, the Court remarked that Arizona does not impose an absolute duty on an insurer to defend its insured, particularly when facts not alleged in the complaint take the case outside the scope of coverage under the policy. Ultimately, citing Arizona case law, it held that applying issue preclusion under the factual scenario presented in Quihuis would undermine any “meaningful distinction” between an insurer’s duty to defend and its duty to indemnify.

Because coverage under the State Farm policy ceased to exist before the accident occurred, there could be no coverage regardless of the Coxes’ liability. Accordingly, State Farm was not bound by the Damron agreement in this case. Nevertheless, the Court emphasized the dangers of an insurer’s refusal to defend, stating that it does so “at its peril,” and advised that insurers should, instead, defend their insureds under a reservation of rights and obtain a prompt determination of coverage.

As a result of this holding, plaintiffs should be cautious in entering into Damron agreements when the existence of coverage (separate from coverage based on liability) is likely to be an issue. Further, in litigation following a Damron agreement, plaintiffs must carefully consider the defenses raised to ensure that the insurer is not attempting to “litigate what are essentially and solely liability issues resolved by the default judgment.”  

To read the full opinion, visit azcourts.gov