Justia Business Law Opinion Summaries

Articles Posted in Arizona Supreme Court
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Cal-Am, a developer and operator of RV and mobile-home parks leased the Yuma Sundance RV Resort from its owner, intending to construct a new banquet and concert hall on the property. The property owner provided the funding for the construction. Cal-Am managed the project. Cal-Am hired a contractor, Nickle, to design and construct the hall, who then hired Edais Engineering to survey the property and place construction stakes to mark the Hall’s permitted location. No contract existed between Edais and Cal-Am. Edais acknowledges that its placement of the stakes was defective. Cal-Am was forced to adjust its site plan, eliminating eight RV parking spaces. Cal-Am sued Edais for claims including negligence. The trial court granted Edais summary judgment on the negligence claim finding that Cal-Am could not recover its purely economic damages. The court of appeals affirmed.The Arizona Supreme Court affirmed, repudiating its 1984 Donnelly Construction holding that a design professional’s duty to use ordinary skill, care, and diligence in rendering professional services extends both to persons in privity with the professional and to persons foreseeably affected by a breach of that duty. Under Arizona’s current framework, which repudiated foreseeability as a basis for duty, design professionals lacking privity of contract with project owners do not owe a duty to those owners to reimburse purely economic damages. View "Cal-Am Properties, Inc. v. Edais Engineering, Inc." on Justia Law

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In these consolidated cases involving alleged breaches of fiduciary duties the Supreme Court answered questions certified to it by the United States Bankruptcy Court for the District of Arizona by applying common law agency principles to questions involving fiduciary duties between members and managers of a limited liability company (LLC).The Court answered the three certified questions as follows: (1) a manager of an Arizona LLC owes common law fiduciary duties to the company; (2) a member of an Arizona LLC owes common law fiduciary duties to the company, provided that the member is an agent of the LLC; and (3) an Arizona LLC's operating agreement may lawfully limit or eliminate those fiduciary duties, but the agreement may not eliminate the implied contractual duty of good faith and fair dealing. View "Sky Harbor Hotel Properties, LLC v. Patel Properties, LLC" on Justia Law

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Jacob Braden, an adult with developmental disabilities, died as a result of injuries suffered while residing at an Arizona Integrated Residential and Educational Services (AIRES) facility. AIRES is a licensed private corporation that contracts with the Arizona Department of Economic Security's Division of Developmental Disabilities. Jacob's estate sued the State, alleging a statutory claim under the Adult Protective Services Act (APSA) for abuse and neglect. The trial court granted summary judgment for the State, finding it was not a proper defendant under Ariz. Rev. Stat. 46-455, which permits an action under APSA against a "person" or an "enterprise." The court of appeals reversed, concluding that the State was not exempt from liability under section 46-455. The Supreme Court vacated the court of appeals and affirmed the superior court after applying the rules of statutory construction to section 46-455, concluding that the State was not liable under APSA because the legislature did not intend to include the State in its expressly enumerated list of potential APSA defendants.