Date Street v. Farmers
1 CA-CV 24-0534
Ariz. Ct. App.May 6, 2025Background
- Jason Kentzel purchased a vehicle financed by Date Street Capital, LLC, agreeing to obtain insurance listing Date Street as a lienholder.
- Kentzel obtained insurance from Farmers Insurance Company of Arizona; the policy's declarations page identified Date Street as a lienholder.
- The policy had a “simple” loss-payable clause, allowing insurance payments to either the insured or the lienholder at Farmers’ option.
- After the vehicle was damaged, Farmers paid only Kentzel, not Date Street.
- Date Street sued for declaratory relief and breach of contract, seeking payment allegedly owed as lienholder under the insurance policy.
- The superior court dismissed the complaint under Rule 12(b)(6), finding Date Street had no independent right to enforce the policy; Date Street appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Date Street have standing to seek declaratory relief? | It suffered a distinct injury as lienholder | Lacks injury sufficient for standing | Date Street has standing as it alleges distinct injury. |
| Can Date Street enforce the Farmers policy directly? | Policy loss-payable clause permits this | Only a simple clause; rights derivative | Date Street’s rights are only derivative, not independent. |
| Is Date Street a third-party beneficiary of the policy? | Named as lienholder, so is a beneficiary | Simple clause does not create third-party status | Not a third-party beneficiary; no direct enforcement right |
| Did Farmers fail to comply with the policy terms? | Payment not made as required by policy | Payment method was permitted under clause | Farmers didn’t comply, but Date Street still can’t enforce |
Key Cases Cited
- Coleman v. City of Mesa, 230 Ariz. 352 (Arizona standard for reviewing Rule 12(b)(6) dismissals)
- Advanced Prop. Tax Liens, Inc. v. Othon, 255 Ariz. 60 (Arizona standing requirements)
- Clearcover Ins. Co., 256 Ariz. 430 (distinction between simple and standard loss-payable clauses)
- Valley Nat. Bank of Ariz. v. Ins. Co. of N. Am., 172 Ariz. 212 (nature of simple loss-payable clauses)
- Sherman v. First Am. Title Ins. Co., 201 Ariz. 564 (third-party beneficiary requirements)