Myers v. Maxwel

Annotate this Case

Download PDF

NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 DIVISION ONE FILED: 04/26/2012 RUTH A. WILLINGHAM, CLERK BY: sls IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE CASSANDRA MEYERS and CHAD PORTER, wife ) ) and husband, ) Plaintiffs/Appellants, ) ) ) v. ) DANA L. MAXWELL and JANE DOE MAXWELL, ) husband and wife; TAMRA VICTORIA GREMS ) and JOHN DOE GREMS, wife and husband, ) ) ) Defendants/Appellees. _______________________________________ ) 1 CA-CV 11-0038 DEPARTMENT C MEMORANDUM DECISION (Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV 2010-013102 The Honorable John Rea, Judge AFFIRMED Jeffrey I. Ostreicher, PC By Jeffrey I. Ostreicher Phoenix and Knapp & Roberts, P.C. By David L. Abney Co-Counsel for Plaintiffs/Appellants Carnahan Perry Hanlon & Hudson, PLC By Michael R. Perry Attorneys for Defendant/Appellee Maxwell Scottsdale Phoenix Thomas, Thomas & Markson, P.C. By Benjamin C. Thomas and Michael G. Kelley Attorneys for Defendant/Appellee Grems Phoenix N O R R I S, Judge ¶1 Chad Plaintiffs/Appellants Cassandra Meyers and her husband Porter timely appeal from the superior court s order denying their motion to set aside a judgment under Arizona Rule of Civil Procedure ( Rule ) 60(c)(3) and (6). Meyers argues the superior court should have vacated the judgment it entered after she served and Defendants/Appellees Dana Maxwell and Tamra Grems accepted a Rule 68 offer of judgment because Grems insurer fraudulently failed to disclose the existence of a $1,000,000 umbrella liability policy. We disagree, and affirm the order of the superior court. FACTS AND PROCEDURAL BACKGROUND ¶2 On September 19, 2008, Maxwell, while under the influence of a drug and alcohol, drove a car owned and insured by Grems and collided with a car driven by Meyers, seriously injuring her. On December 5, 2008, Meyers attorney, Jeffrey Ostreicher, wrote to an adjuster for Grems insurance company, American National Property and Casualty Company ( ANPAC ), requesting a copy of all information on policies of coverage for both the driver and the owner of the [car] involved in this 2 collision that apply or may apply to pay [Meyers ] damages. On January 19, 2009, the adjuster sent Ostreicher Grems automobile insurance policy, which had a per-person liability limit of $250,000 (the underlying policy ). ¶3 damages On from July 1, 2010, Maxwell, Meyers for his filed a negligence complaint in seeking causing the accident, and Grems, for negligently entrusting [her] vehicle to Maxwell. 1 At the same time, Meyers filed a Notice of Service of - but did not yet serve upon Maxwell or Grems - a Rule 68 offer of judgment for $250,000, the apparent policy limit of Grems liability insurance. On July 22, Ostreicher sent the adjuster copies of the complaint and the offer of judgment and told her he was in the process of having this documentation . . . served and would notify [her] once service [had] been effectuated. On September 24, Ostreicher sent the adjuster a demand letter offering to settle the case for the sum of [the] insured s policy limit of liability coverage, and asking the adjuster to notify him immediately if the liability limit was not $250,000. ¶4 On October 19, Ostreicher wrote to Benjamin Thomas, an attorney apparently conversation 1 . . . hired in by which ANPAC, [Thomas] to confirm told a telephone [Ostreicher] that The record reflects this was the first time Meyers had alleged Grems was independently liable for Meyers damages. 3 ANPAC [was] willing to pay $250,000 to settle this matter. Ostreicher also noted Thomas had advised that there may be a $1,000,000 policy on Tamra Grems that might apply and . . . [o]nce [Ostreicher had] received and reviewed that policy, [he would] be able to further discuss a possible settlement of this case. The $1,000,000 next day, umbrella Thomas sent liability Ostreicher policy, a copy which of a provided additional liability protection for [the underlying policy]. In an accompanying letter, Thomas asserted Maxwell did not meet the definition of insured [in the umbrella policy] as he [was] neither a named insured nor a relative of the named insured. ¶5 On October 26, a Minnesota process server hired by Ostreicher served Maxwell with the summons, complaint, and the $250,000 offer of judgment. the superior court his Ostreicher later acknowledged in service of these documents was a mistake and explained he had time to get a hold of [the] process server and say . . . yank that $250,000 offer of judgment, but he didn t do that . . . [and] that was [his] mistake. On November 5, Ostreicher sent the complaint and offer of judgment to Thomas, who had agreed to accept service on behalf of Grems. Ostreicher later acknowledged this service was also [his] mistake which he took responsibility for. On November 19, Ostreicher told Thomas he had thoroughly reviewed 4 the umbrella policy and determined that it applied to both Grems and Maxwell. Accordingly, he insisted Maxwell and Grems file timely Answers to the Complaint. ¶6 In late November, answered the complaint. Maxwell and Grems separately Then, on December 7, Maxwell and Grems jointly accepted Meyers $250,000 offer of judgment. Ostreicher immediately wrote to Thomas - who was representing Grems - and Maxwell s attorney objecting to their acceptance of the offer of judgment and asserting the offer was based on the adjuster s representation liability coverage was $250,000 when in reality, it was $1,000,000. Nevertheless, on December 17, Maxwell and Grems lodged a form of judgment pursuant to the $250,000 Rule 68 offer, which the superior court entered on December 20. ¶7 On January 18, 2011, Meyers moved to set aside the judgment, arguing, among other things, ANPAC committed fraud, misrepresentation Judgment. or The other superior misconduct court denied in procuring Meyers the motion, emphasizing [w]hatever misconduct may be attributed to the insurance company for not disclosing the umbrella policy before mid October, that misconduct was not the cause of the entry of judgment. Plaintiffs counsel forwarded the Complaint and tendered the offer of judgment weeks after receiving a copy of the umbrella policy. 5 DISCUSSION ¶8 Meyers argues on appeal the superior court abused its discretion in denying her motion to set aside the judgment because it was based on an offer of judgment procured by ANPAC s fraud in failing to disclose the umbrella policy. and agree with the superior court s reasoning. misconduct regarding non-disclosure of the We disagree, Even assuming umbrella policy before mid-October, that misconduct did not lead to entering of the judgment. Accordingly, the superior court did not abuse its discretion in refusing to vacate the judgment. See Morris v. Giovan, 225 Ariz. 582, 583, ¶ 7, 242 P.3d 181, 182 (App. 2010) (citation omitted) (appellate court reviews whether there is sufficient basis to set aside a judgment under Rule 60(c) for an abuse of discretion ). ¶9 As discussed, Ostreicher initially filed notice of the $250,000 offer of judgment while under the impression this was the maximum liability limit of the applicable insurance policy. See supra ¶ 3. Nevertheless, even assuming ANPAC misled Ostreicher and thus Meyers by withholding information about the umbrella policy, the critical flaw in Meyers argument is that Thomas expressly informed Ostreicher about the umbrella policy before Ostreicher served the offer of judgment on Maxwell and Grems. Ostreicher s admitted negligence, see supra ¶ 5, not any 6 alleged fraud on the part of ANPAC, caused the judgment Meyers now seeks to have set aside. ¶10 Further, the fact that the umbrella policy could possibly apply to Meyers claims does not suggest ANPAC was, as Meyers argues, using its own wrong to gain an advantage by accepting the $250,000 offer. To the contrary, well before Maxwell and Grems accepted the offer of judgment, ANPAC notified Ostreicher it did not believe the umbrella policy provided any additional liability coverage for Maxwell, and, conversely, he notified ANPAC he believed the umbrella policy applied to both Grems and Maxwell. over liability Thus, the possibility of a prolonged dispute coverage created an incentive for ANPAC to settle, an incentive that fell squarely within the purposes of Rule 68. See Preuss v. Stevens, 150 Ariz. 6, 7, 721 P.2d 664, 665 (App. 1986) (citation omitted) ( The purpose of Rule 68 is to encourage settlements and avoid protracted litigation. ). ¶11 In short, under the circumstances presented here, the superior court did not abuse its discretion in denying Meyers motion to set aside the judgment. 7 CONCLUSION ¶12 For court s order. Grems are the foregoing reasons, we affirm the superior As the prevailing parties on appeal, Maxwell and entitled to recover their costs subject to their compliance with Arizona Rule of Civil Appellate Procedure 21. _/s/ PATRICIA K. NORRIS, Presiding Judge CONCURRING: _/s/ MARGARET H. DOWNIE, Judge _ _/s/ JON W. THOMPSON, Judge _ 8

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.