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Glazer v. State

Supreme Court of Arizona

August 21, 2018

Diana Glazer, Plaintiff/Appellant,
v.
State of Arizona, Defendant/Appellee.

          Appeal from the Superior Court in Maricopa County The Honorable Jo Lynn Gentry, Judge No. CV 2009-001261

         Opinion of the Court of Appeals, Division One 241 Ariz. 572 (App. 2017)

          Mark Brnovich, Arizona Attorney General, Dominic Draye, Solicitor General, Daniel P. Schaack (argued) and Fred M. Zeder, Assistant Attorneys General, Phoenix, Attorneys for State of Arizona

          John P. Leader (argued), The Leader Law Firm, Tucson; and Christopher J. Zachar, Zachar Law Firm, P.C., Phoenix, Attorneys for Diana Glazer

          JUSTICE BRUTINEL authored the opinion of the Court, in which CHIEF JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, and JUSTICES TIMMER, BOLICK, LOPEZ, and BERCH (Retired) [*] joined.

          JUSTICE BRUTINEL, JUDGE

         ¶1 In 2012, Diana Glazer obtained a $7.8 million judgment against the State. The State appealed, and we affirmed. See Glazer v. State (Glazer I), 237 Ariz. 160 (2015). Here, we are asked to decide the rate at which interest on that judgment accrued pending appeal. We hold that the interest rate prescribed by A.R.S. § 41-622(F) applies to the entire judgment against the State, including any portion for which the State may be reimbursed by its excess insurance coverage.

         I. BACKGROUND

         ¶2 In 2007, a car accident badly injured Glazer and took the lives of her husband and daughter. Glazer sued the State for negligently failing to install a freeway median barrier or warn of its absence, see Glazer I, 237 Ariz. at 162 ¶ 3, and, in June 2012, a jury awarded her $7.8 million, see id. at 163 ¶ 7.

         ¶3 Following the State's unsuccessful appeal, the Arizona Department of Administration's risk management section directed that the judgment should be paid from the State's Risk Management Revolving Fund ("Revolving Fund"). An accounting technician, however, erroneously paid the judgment from the Construction Insurance Fund ("CIF"). When the mistake was discovered, the Department reimbursed the CIF from the Revolving Fund.[1]

         ¶4 The legislature created the Revolving Fund to pay claims against the State and to buy insurance, among other things. See § 41-622(A). It is funded by premiums paid by State agencies, insurance reimbursements, and other sources. The State self-insures for claims up to $7 million and purchases an umbrella policy to reimburse it for payments that exceed that amount.

         ¶5 In 2015, the parties filed cross-motions for summary judgment to resolve the calculation of post-judgment interest accrued during the pendency of the appeal. Glazer argued that, because the judgment had initially been paid from the CIF, it was subject to the rate of interest prescribed by A.R.S. § 44-1201(B) instead of the lower rate prescribed by § 41-622(F) for judgments paid from the Revolving Fund. The State maintained that the lower rate applied because the Revolving Fund had reimbursed the CIF. At the time, the § 44-1201(B) rate was 4.25% per year, and the § 41-622(F) rate was less than 1 %. The superior court granted judgment for the State.

         ¶6 The court of appeals affirmed in part, agreeing that the mistaken payment from the CIF had no bearing on the interest rate. Glazer II, 242 Ariz. at 394-95 ¶¶ 13-14, 17. The court noted that because the Revolving Fund and not the CIF ultimately paid the judgment against the State, the lower rate applied. Id. at 394 ¶ 14. The court, however, took this analysis one step further, finding that because the State's excess insurer would reimburse the State for any portion of the judgment that exceeded its self-insured retention, the State would ultimately pay only $7 million. Id. at 395 ¶ 16. The court held that "[t]he remaining $800, 000 of the judgment will be paid by the State's insurer and does not qualify for the reduced interest rate." Id. at 395 ¶ 17.

         ¶7 We granted the State's petition for review because the calculation of interest on judgments against the State is a recurring legal question with statewide significance. We have jurisdiction under article 6, ...


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