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Pounders v. Enserch E&C, Inc.

Supreme Court of Arizona

August 21, 2013

Vicki L. Pounders, Individually, and as Surviving Wife of Dudley W. Pounders, Deceased, Plaintiff/Appellant,
v.
Enserch E&C, Inc. nka EECI, Inc.; Riley Power, Inc. fna Riley Stoker Corporation; BW/IP, Inc., and its Wholly Owned Subsidiaries, Defendants/Appellees.

Appeal from the Superior Court in Maricopa County The Honorable Joseph B. Heilman, Judge No. CV2008014007

Opinion of the Court of Appeals, Division One 229 Ariz. 433, 276 P.3d 503 (App. 2012)

Steven I. Leshner, Steven I. Leshner, P.C., Phoenix and Charles S. Siegel, Mark A. Linder (argued), Waters & Kraus, L.L.P., Dallas, TX, for Vicki L. and Dudley W. Pounders.

Edward M. Slaughter, Robert Brooks Gilbreath (argued), Hawkins Parnell Thackston & Young LLP, Dallas, TX and Larry J. Wulkan, Stinson Morrison Hecker LLP, Phoenix, for Enserch E&C, Inc., nka EECI, Inc.

Larry J. Crown (argued), Hillary P. Gagnon, Jennings, Haug & Cunningham, L.L.P., Phoenix, for BW/IP, Inc.

David P. Herrick (argued), Herrick & Associates, P.C., Dallas, TX and Larry J. Crown, Travis A. Pacheco, Jennings, Haug & Cunningham, L.L.P., Phoenix, for Riley Power, Inc., fna Riley Stoker Corporation.

Stanley G. Feldman, Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., Tucson and David L. Abney, Knapp & Roberts, P.C., Scottsdale, for Amici Curiae Arizona Association for Justice and Arizona Trial Lawyers Association J. Michael Low, Low & Cohen, PLLC, Phoenix and Mark A. Behrens, Shook, Hardy & Bacon, L.L.P., Washington, D.C., for Amici Curiae Coalition for Litigation Justice, Inc., et al.

Charles M. Callahan, Christian Dichter & Sluga PC, Phoenix and Andrew J. Petersen, Humphrey & Petersen, P.C., Tucson, for Amicus Curiae Arizona Association of Defense Counsel.

JUSTICE BRUTINEL authored the opinion of the Court, in which CHIEF JUSTICE BERCH, VICE CHIEF JUSTICE BALES, JUSTICE PELANDER, and JUDGE ESPINOS A [*] joined.

OPINION

BRUTINEL JUSTICE

¶1 We consider whether a wrongful death claim based on exposure to asbestos in New Mexico, which resulted in mesothelioma diagnosed thirty years later in Arizona, is subject to the substantive law of New Mexico or Arizona. Because New Mexico has the more significant relationship to this claim, that state's law applies.

I.

¶2 Dudley Pounders, a New Mexico resident, worked as a welder for Arizona Public Service ("APS") at the Four Corners Power Plant in New Mexico from approximately 1969 to 1974 and again from 1979 to 1983. While performing repair and maintenance work on valves and other equipment at the Plant, he inhaled asbestos fibers.

¶3 Mr. Pounders moved to Arizona in the late 1980s. In May 2008, he was diagnosed with mesothelioma, a type of cancer associated with asbestos exposure. The following month, Mr. and Mrs. Pounders filed suit in Arizona against Enserch E&C, Inc., the successor-in-interest to the architect and construction manager for three units at the Plant; BW/IP, Inc., a parent company to the manufacturer, designer, and supplier of ten of the pumps used at the Plant; and Riley Power, Inc., the designer and manufacturer of industrial boilers used at the Plant (collectively "Enserch"). After Mr. Pounders died in August 2008, Mrs. Pounders amended the complaint to assert claims for wrongful death.

¶4 The trial court granted Enserch's motion to apply New Mexico substantive law to Mrs. Pounders' claims, including New Mexico's statute of repose. Based on that statute, which bars actions arising from improvements to real property filed more than ten years after their completion, N.M. Stat. Ann. § 37-1-27, the court granted summary judgment in favor of Enserch.

¶5 The court of appeals affirmed. Pounders v. Enserch E&C, Inc., 229 Ariz. 433, 444 33, 276 P.3d 502, 513 (App. 2012). Applying § 175 of the Restatement (Second) of Conflict of Laws (the "Second Restatement"), the court concluded that New Mexico was the place of injury, id. at 436-39 ¶¶ 9-17, 276 P.3d at 505-08, and had the "most significant relationship" to the litigation under the factors listed in the Second Restatement §§ 145 and 6, id. at 439–41 ¶¶ 18-24, 276 P.3d at 508-10. As a result, the court agreed with the trial court that New Mexico's statute of repose applied to Mrs. Pounders' wrongful death claim and affirmed summary judgment. Id. at 441 25, 444 34, 276 P.3d at 510, 513.

¶6 We granted review to consider issues of statewide importance regarding the choice of law in wrongful death actions involving long-latency diseases. We declined, however, to review the ruling that the New Mexico statute of repose, if applicable, bars the wrongful death claim. We have jurisdiction pursuant to Article 6, Section 5(3) of the Arizona Constitution and A.R.S. § 12-120.24. We review choice-of-law questions de novo. Swanson v. Image Bank, Inc., 206 Ariz. 264, 266 6, 77 P.3d 439, 441 (2003).

II.

¶7 The choice of law is dispositive because New Mexico and Arizona differ in their limitation periods for bringing certain personal injury claims. New Mexico's statute of repose, N.M. Stat. Ann. § 37-1-27, bars personal injury claims arising out of construction of improvements on real property when such claims are brought more than ten years after the completion of the improvement. This bar applies even if the injury has not yet been discovered. In contrast, Arizona does not have a similar statute of repose; instead it has a statute of limitations, which bars personal injury claims asserted more than two years after the claim is discoverable. See A.R.S. § 12-542(1); see also Doe v. Roe, 191 Ariz. 313, 322 29, 955 P.2d 951, 960 (1998).

¶8 Arizona is the forum state, and thus its law will govern both procedural issues and the choice of law regarding substantive issues. See Cardon v. Cotton Lane Holdings, Inc., 173 Ariz. 203, 206, 841 P.2d 198, 201 (1992). Statutes of repose are matters of substantive law. Albano v. Shea Homes Ltd. P'ship, 227 Ariz. 121, 127 24, 254 P.3d 360, 366 (2011). Hence, Arizona's choice-of-law rules will determine whether New Mexico's or Arizona's substantive law applies.

¶9 Arizona follows the Second Restatement. Jackson v. Chandler, 204 Ariz. 135, 136 ¶ 5, 61 P.3d 17, 18 (2003). Section 175, entitled "Right of Action for Death, " initially directs us to look to

the "local law of the state where the injury occurred . . . unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in ยง 6 to the occurrence and the parties, in ...

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