Berrey v. Plaintiff Investment Funding LLC et al

Filing 94

ORDER the 92 Motion for Reconsideration is DENIED. Signed by Magistrate Judge Bridget S Bade on 4/14/2015.(LFIG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Andrew Berrey,

No. CV-14-00847-PHX-BSB
Plaintiff,

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v.

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ORDER

Plaintiff Investment Funding LLC, et al.,

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Defendants.

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Injury Assistance LLC (Injury Assistance) has filed a timely motion for

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reconsideration (Doc. 92) of the Court’s March 30, 2015 Order. (Doc. 89.) The Court

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does not require briefing on the motion. See LRCiv 7.2(g)(2). As set forth below, the

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Court denies the motion because Injury Assistance has not shown “manifest error” or

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“new facts or legal authority that could not have been brought to [the Court’s] attention

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earlier with reasonable diligence.” See LRCiv 7.2(g)(1).

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Injury Assistance seeks reconsideration of the portion of the Court’s March 30,

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2015 Order granting summary judgment for Plaintiff Andrew Berrey on Injury

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Assistance’s “right to assert a contractual claim against settlement proceeds of Berrey’s

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personal injury claim.” (Doc. 92 at 2.) In its order, the Court distinguished between

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Injury Assistance’s “counter claim that its contract with Berrey created [] lien rights” and

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its contract claim for payment of medical expenses. (Doc. 89 at 2, 13-19.) The Court

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concluded that the “lien” provisions in the contract were unenforceable as an assignment

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of the proceeds of Berrey’s personal injury claim and granted summary judgment for

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Berrey on Injury Assistance’s counter claim asserting contractual lien rights. (Id. at 2,

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13-16.) However, the Court also concluded that Injury Assistance may have a contract

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claim for payment of medical expenses and denied both parties’ motions for summary

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judgment on Injury Assistance’s counter claim for breach of contract. (Id. at 2, 17-19.)

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Injury Assistance asserts that the Court should reconsider its March 30, 2015

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Order for three reasons. First, it argues that the Court incorrectly applied Allstate Ins. Co.

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v. Druke, 576 P.2d 489 (Ariz. 1978). (Doc. 92 at 3-4.) Injury Assistance argues that

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“[i]n every ruling that relies on Druke and its progeny, the anti-subrogation rule is

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applied to [an insurance] carrier” and “the analysis used in Druke does not apply here.”

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(Id. at 3.) Thus, it appears that Injury Assistance is arguing that the Arizona Supreme

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Court’s analysis of the prohibition on assignments of personal injury claims, as explained

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in Druke, only applies to insurance carriers’ contract claims. (See id. at 3-4.)

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As an initial matter, this argument fails because it is not based on new facts or law.

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The Druke decision and the Arizona law prohibiting assignment of personal injury claims

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were argued in the parties’ cross motions for summary judgment. (Doc. 66 at 7-8;

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Doc. 72 at 7-8.) In addition, Injury Assistance has not shown “manifest error” in the

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Court’s order because the Arizona courts have explicitly rejected the argument that the

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analysis of Druke only applies in insurance cases. See Karp v. Speizer, 647 P.2d 1197,

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1200 (Ariz. Ct. App. 1982) (rejecting argument that public policy reasons underlying

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general rule prohibiting assignment of personal injury claims are supported solely by

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insurance considerations and finding that these policy reasons were “equally applicable”

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to contract to assign proceeds of personal injury claim to pay debt); see also Lingel v.

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Olbin, 8 P.3d 1163, 1169 (Ariz. Ct. App. 2000) (following Karp and stating that “the

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public policy reasons and legal principles underlying the prohibition against assignments

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are not supported solely by insurance considerations” and finding that contract to share

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proceeds of wrongful death action was unenforceable as assignment of personal injury

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claim); Piano v. Hunter, 840 P.2d 1037, 1041 (Ariz. Ct. App. 1992) (quoting Karp and

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rejecting argument that Druke does not apply to self-insured trust fund because it is not a

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profit-making insurance company).1

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To support its argument that the Court incorrectly applied Druke, Injury

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Assistance quotes from a footnote in a 1998 ethics opinion from the State Bar of Arizona.

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(Doc. 92 at 4 (quoting Ethics Op. 98-06, n.8).) Again, Injury Assistance has not shown

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that this is “new legal authority” that could not have been brought to the Court’s

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attention.2 See LRCiv 7.2(g)(1). In addition, Injury Assistance has not shown “manifest

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error” because Ethics Opinion 98-06 addresses “the ethical duties of an attorney in a

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personal injury case who holds settlement funds in which a medical provider claims an

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interest.” (Ethics Op. 98-06 (emphasis added).) The footnote that Injury Assistance

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relies upon states that “[w]hether an assignment in favor of a medical provider against

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personal injury settlement funds in the hands of an attorney is enforceable in Arizona is

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an unsettled question.” (Id. at n.8 (emphasis added).) As set forth in the Court’s March

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30, 2015 Order, Injury Assistance is not a medical provider and does not have a health

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care provider lien. (Doc. 89 at 8.) The ethics opinion does not address the issues decided

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in the Court’s order and does not provide a basis for the Court to reconsider its order.

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(Doc. 94 at 4.)

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To further support its argument that the Court incorrectly applied Druke, Injury

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Assistance also argues that the Court’s order granted summary judgment on an “unsettled

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issue” and this is plain error that must be reversed. (Doc. 92 at 4.) Apparently, Injury

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Assistance is arguing that the Court cannot resolve unsettled legal issues on summary

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judgment. This argument fails because it is the Court’s duty to resolve issues of law. See

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Fed. R. Civ. P. 56(a); City & Cnty. of San Francisco v. United States, 130 F.3d 873,

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877 (9th Cir. 1997) (summary judgment is an appropriate mechanism for deciding legal

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The Court cited Karp, Lingel, and Piano in its March 30, 2015 Order. (Doc. 89
at 13-14.)
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Ethics Opinion 98-06 notes that “Formal Opinions of the Committee on the
Rules of Professional Conduct are advisory in nature only and are not binding in any
disciplinary or other legal proceedings.” (Ethics Op. 98-06, n.1.)
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questions); Asuncion v. District Dir. of U.S. Immigration and Naturalization Serv.,

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427 F.2d 523, 524 (9th Cir. 1970) (when question of law presented, the court’s resolution

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of the matter by summary judgment was procedurally proper).

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Second, Injury Assistance argues that the Court should reconsider its order

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because “there is an honest difference of opinion on the interpretation of [State Farm

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Mut. Ins. Co. v. St. Joseph’s Hosp., 489 P.2d 837 (Ariz. 1971)] which precludes summary

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judgment as a matter of law.” (Doc. 92 at 4-5.) Thus, it appears that Injury Assistance is

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arguing that because it disagrees with the Court on an issue of law, summary judgment is

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precluded.

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This argument fails because Injury Assistance has not shown “manifest error” in

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the Court’s order, but instead argues a “difference of opinion” in the interpretation of a

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case, and because this argument is not based on “new facts or legal authority.” See

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LRCiv 7.2(g)(1). In addition, as set forth above, disputed issues of law do not preclude

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summary judgment. See Fed. R. Civ. P. 56(a); City & Cnty. of San Francisco, 130 F.3d

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at 877; Asuncion, 427 F.2d at 524. Therefore, “an honest difference of opinion on the

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interpretation” of a case does not preclude summary judgment and does not provide a

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basis for the Court to reconsider its order.

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Third, Injury Assistance argues that the contract provisions cited in the Court’s

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March 30, 2015 Order are “controverted” and that a trier of fact could interpret these

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provisions to find that the contract is not an assignment.3 (Doc. 92 at 5.) Again, this

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argument fails because Injury Assistance has not shown that this argument is based on

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new facts or legal authority that could not have been brought to the Court’s attention. See

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LRCiv 7.2(g)(1).

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provisions are “controverted.” Both Injury Assistance and Berrey attached identical

In addition, Injury Assistance does not explain how the contract

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Injury Assistance also asserts that Berrey did not argue the contract provisions
cited in the Court’s order. (Doc. 92 at 5.) This argument fails because Berrey presented
arguments based on the contract provisions and quoted several of these provisions in his
motion for summary judgment, including the provision that allowed Injury Assistance to
sell or reassign its “lien,” (Doc. 66 at 8), which the Court described as perhaps the most
significant provision in its analysis. (Doc. 89 at 16.)
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copies of the contract with their cross motions for summary judgment. (Doc. 67, Ex. 3;

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Doc. 72, Ex. 1.) The parties did not dispute the authenticity of the copies of the contract

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provided to the Court and did not dispute the plain meaning of the contract provisions.

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Under Arizona law, if a contract provision is ambiguous, the interpretation of the

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contract presents an issue of fact. See State v. Mabery Ranch, Co., LLC., 165 P.3d 211,

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224 (Ariz. Ct. App. 2007) (interpretation of a contract should be submitted to a jury when

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the contract terms are reasonably susceptible to different meanings). However, Injury

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Assistance does not provide any explanation of how the terms of the contract could be

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considered ambiguous. When the terms of a contract are plain and unambiguous, its

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interpretation is a question of law for the court. ELM Ret. Ctr., LP v. Callaway, 246 P.2d

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938, 942 (Ariz. Ct. App. 2010). Furthermore, whether a contract is ambiguous is a

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question of law. Hartford v. Indus. Comm’n of Ariz., 870 P.2d 1202, 1207 (Ariz. Ct.

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App. 1994). Injury Assistance did not argue that the contract provisions are ambiguous

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in its response to Berrey’s motion for summary judgment or in its cross motion for

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summary judgment. Furthermore, in its motion for reconsideration, Injury Assistance

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does not argue that any particular provision of the contract is ambiguous. The Court

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entered summary judgment based on the plain meaning of the contract provisions. Injury

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Assistance has not established any basis for the Court to reconsider its order.

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Accordingly,

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The motion for reconsideration (Doc. 92) is DENIED.

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Dated this 14th day of April, 2015.

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