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Thiele v. City of Phoenix - 4/2/2013

Arizona Court of Appeals Division One Holds That Arizona Rule of Civil Procedure 67(d), Which Requires a Trial Court to Order a Plaintiff to Provide Security for Costs on a Showing That He Does Not Own Property Within the State That Could Satisfy the Defendant’s Claim for Costs in the Litigation, Is Facially Constitutional Because the Requirement May Be Waived Based on the Plaintiff’s Inability to Post Bond.

Thiele sued the City of Phoenix based on allegations that a Neighborhood Services Inspector struck him in the face.  The City filed a motion for security of costs under Arizona Rule of Civil Procedure 67(d), which requires the court to order a plaintiff to provide security to cover the defendant’s costs, if the plaintiff does not have property in the state that would be sufficient to cover the costs.  The City asked the court to require Thiele to post a $30,000 bond, pointing to another suit Thiele had filed based on the same alleged incident, which was dismissed without prejudice because Thiele did not post the $15,000 bond ordered in that case.  The City’s motion did not include an estimate of taxable costs.  The court granted the City’s motion and ordered Thiele to post a $30,000 bond.

Thiele then moved under Rule 67(e) to vacate the order requiring a bond, claiming he was financially unable to post the bond.  The court held a hearing on Thiele’s inability to post the bond, at which Thiele was the only witness.  After the hearing, the court reduced the bond amount to $15,000.  Thiele failed to post bond, and the City filed a motion to dismiss the suit.  Thiele argued that requiring him to post a bond when he could not afford to do so unconstitutionally denied him access to the courts.  After oral argument, the court dismissed the case with prejudice.

On appeal, the Court of Appeals concluded that Rule 67(d) was facially constitutional.  Arizona’s Equal Privileges and Immunities Clause requires that citizens of the state have equal access to the courts, regardless of financial status.  Earlier cases have held cost provisions unconstitutional because the provisions at issue in those cases made the bonds mandatory.  In contrast, Rule 67(e) requires a court to vacate the ordered bond if the plaintiff shows a financial inability to provide security.

The Court concluded, however, that the trial court erred in dismissing Thiele’s suit because there was no evidence in the record that the City’s taxable costs could reach $15,000.  Arizona’s taxable-costs statute includes only limited allowable expenses, and some of those expenses would be waived for the City.  Only the estimated costs under the statute are relevant to the amount of bond to be set by the court.  The court had not considered such estimated costs when it set the bond in this case.  The Court of Appeals remanded the case to the trial court to consider information regarding the City’s anticipated taxable costs.

Judge Gemmill authored the opinion; Judges Johnsen and Thompson concurred.

Posted by: Kathy O'Meara

Posted On: 4/30/2013