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Cullen v. Auto-Owners Insurance Company - 7/25/2008

Arizona Supreme Court Declines to Adopt the More Fact-Specific Pleading Standard Adopted By The United States Supreme Court in Bell Atlantic Corp. v. Twombly.


Appellant Michael Cullen was injured in an automobile accident, and brought a bad faith suit against Appellee, Auto-Owners Insurance Company based on an Auto-Owners policy covering a Dodge Caravan owned by Cullen’s mother and listing a third party as the named insured.  Auto-Owners moved to dismiss the Complaint pursuant to Rule 12(b)(6) of the Arizona Rules of Civil Procedure for failure to state a claim upon which relief could be granted.  The trial court granted Auto-Owners’ motion to dismiss.

The Court of Appeals affirmed the trial court’s judgment.  In its opinion, the Court of Appeals relied onArizona case law setting forth the notice pleading standard governing Rule 8 of the Arizona Rules of Civil Procedure.  The court also then discussed in some detail the decision of the United States Supreme Court in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007), interpreting Rule 8 of the Federal Rules of Civil Procedure as establishing a more fact-specific pleading standard.  Cullen timely filed a petition for review alleging that the court of appeals erroneously relied on Twombly to revise Rule 8’s notice pleading requirements. 

The Supreme Court granted Cullen’s petition and held thatArizona has not revised the language or interpretation of Rule 8 in light of Twombly.  The Court held anArizona procedural rule may only be changed or re-interpreted in one of two ways.  First, because the Supreme Court is the only entity granted authority by the Arizona Constitution to make or reviseArizona’s procedural rules, any revisions or new interpretations of Rule 8 must be made by the Supreme Court.  Second, a member of the public may petition the Court pursuant to Arizona R. Sup. Ct. 28(A)(1) to adopt, amend or repeal a rule of procedure.  Because the Supreme Court has not changed its interpretation of Rule 8 and no Rule 28 petition has been filed, the notice pleading standard previously set forth by the Court continues to apply to Rule 8.

The Court declined, however, to reverse the Court of Appeals’ decision affirming dismissal in the case because it did not believe the lower court relied on the Twombly analysis in its holding.  Rather, the Court determined that the Twombly analysis below was dictum, and it vacated that portion of the Court of Appeals opinion citing to Twombly to “eliminate any confusion.” 

Chief Justice McGregor authored the majority opinion, joined by Vice Chief Justice Berch, Justice Ryan and Justice Bales. 

Justice Hurwitz concurred in part but dissented from that portion of the Court’s opinion affirming the Court of Appeals opinion.  Justice Hurwitz argued that the lower court’s analysis of Twombly was too thorough and extensive to easily be labeled dictum.  Justice Hurwitz would have remanded the case to the Court of Appeals to evaluate the complaint under the appropriateArizona legal standard.

 

Posted On: 8/1/2008