City of Phoenix v. Glenayre Electronics, Inc.
242 Ariz. 139
| Ariz. | 2017Background
- Carlos Tarazon (later wrongful-death plaintiff) sued the City of Phoenix and others for asbestos-related injuries allegedly from work on water infrastructure projects completed between 1960–2000.
- The City filed third-party indemnity claims against eight contractors that had written contracts with the City and 82 developers who obtained City right-of-way permits.
- City’s claims against Contractors relied on contractual indemnity provisions in the Contractors’ written contracts with the City.
- City’s claims against Developers relied on Phoenix City Code § 31-40 (a permit-condition indemnity clause) and incorporated project specifications (MAGS) in the permits.
- Defendants moved to dismiss under Ariz. R. Civ. P. 12(b)(6), arguing the eight-year statute of repose in A.R.S. § 12-552(A) bars contract-based claims more than eight years after substantial completion; the trial court and court of appeals agreed and dismissed all third-party contract-based claims.
- The Arizona Supreme Court reviewed whether § 12-552(A) (the statute of repose) applies to governmental entities despite A.R.S. § 12-510/nullum tempus and whether the City’s Developer-based indemnity claims are "based in contract" under § 12-552(F).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 12-552(A) (eight-year statute of repose) applies to governmental entities despite A.R.S. § 12-510 and the common-law nullum tempus doctrine | City: nullum tempus/A.R.S. § 12-510 exempts government from limitations; § 12-552 does not expressly abrogate that | Defs: § 12-552's "notwithstanding any other statute" shows legislature intended it to control, including over § 12-510 | Held: § 12-552(A) applies to governmental entities; its "notwithstanding any other statute" language overrides § 12-510 and the common-law nullum tempus doctrine |
| Whether the Developers’ indemnity obligation (arising from permit condition/Phoenix Code § 31-40) is an action "based in contract" under § 12-552(F) | City: Developers’ permits (and incorporated MAGS) create contractual indemnity obligations; claims are "based in contract" and time-barred | Developers: indemnity arises from City Code/permit condition (regulatory), not the types of written transactional agreements § 12-552(F) covers | Held: The Code-based permit/indemnity does not fall within § 12-552(F)'s listed transactional agreements nor the catch-all "written agreement for the services" as interpreted; City’s Developer claims are not "based in contract" for § 12-552 |
| Whether the Contractors’ indemnity claims survive despite nullum tempus/A.R.S. § 12-510 | City: nullum tempus/A.R.S. § 12-510 protects City's contract claims | Contractors: their indemnity claims are contract-based and barred by § 12-552(A) because projects completed >8 years earlier | Held: Contractors’ indemnity claims are contract-based and time-barred by § 12-552(A); § 12-510/nullum tempus do not prevent application |
| Whether attorney-fee awards to Developers should stand after dismissal | City did not contest here beyond merits | Developers sought attorney fees after dismissal | Held: Fee awards to Developers vacated without prejudice (they may seek fees later if they ultimately prevail); Contractors awarded fees for this Supreme Court litigation under A.R.S. § 12-341.01 (subject to ARCAP 21) |
Key Cases Cited
- Kerby v. State ex rel. Frohmiller, 62 Ariz. 294 (1945) (recognizing common-law nullum tempus rule that statutes of limitations typically do not run against the state)
- City of Bisbee v. Cochise County, 52 Ariz. 1 (1938) (Bisbee III) (historically applying nullum tempus to municipalities unless legislature expressly provides otherwise)
- Albano v. Shea Homes Ltd. P’ship, 227 Ariz. 121 (2011) (explaining legislative purpose of § 12-552 to limit indeterminable liability for developers/builders)
- Marcello v. Bonds, 349 U.S. 302 (1955) (courts do not require "magical passwords"—a statute’s clear language can override other statutes without explicit cross-reference)
- Daou v. Harris, 139 Ariz. 353 (1984) (presumption legislature knew existing law when enacting new statute)