Arizona Court Upholds Dismissal of Asbestos Action, Finds Claims Barred by New Mexico’s Statute of Repose

August 21, 2013 – Media Coverage

PHOENIX –– The Arizona Supreme Court has upheld the dismissal of an asbestos action, ruling that the place of injury held “little weight” in conducting the underlying choice-of-law analysis.

In the Aug. 21 ruling, the high court opined that New Mexico –– where the plaintiff was allegedly exposed to asbestos –– had a greater interest in the wrongful death claims.

While living in New Mexico, plaintiff Dudley W. Pounders worked as a welder at the Four Corners Power Plant. During the course of his employment, Pounders says that he was exposed to asbestos. Pounders later moved to Arizona, where he was diagnosed with mesothelioma.

The plaintiffs filed the lawsuit in Arizona against a number of defendants, including the successor-in-interest to the construction manager of the plant and the companies involved with the manufacture of pumps and boilers used at the plant. Pounders passed away after the filing of the suit and his widow amended the complaint to a wrongful death lawsuit.

After determining that New Mexico law applied to the claims, the trial court subsequently found that the lawsuit was barred under New Mexico's statute of repose since the allegations arose from improvements made on real property and were filed more than 10 years after completion of the improvements.

In April 2012, the Arizona Court of Appeals upheld that decision, saying that New Mexico had the most significant relationship to the event causing Pounders’ alleged injury. For more on the intermediate appellate court’s decision, please see the April 2012 issue of COLUMNS-Asbestos.

The plaintiffs sought appellate review from the Arizona Supreme Court. In accepting the plaintiffs’ petition, the high court said it would review the case in order to consider “issues of statewide importance regarding the choice of law in wrongful death actions involving long-latency diseases.”

The high court declined to review the portion of the intermediate appellate court’s decision regarding whether New Mexico’s 10-year statute of repose applied.

In addressing the appeal, the Supreme Court noted that New Mexico’s statute of repose bars personal injury claims grounds in construction of improvements on real property after 10 years of the completion of improvement, “even if the injury has not yet been discovered,” while Arizona has no statute of repose. Instead, the state has a statute of limitations, which bars claims filed more than two years after it is discoverable.

While the defendants argued that Pounders was harmed in New Mexico, since that is where the alleged exposure occurred, the plaintiffs countered that the injury occurred in Arizona, where Pounders developed mesothelioma.

Citing the Restatement (2nd) of Torts, the high court differed from the Court of Appeals slightly, instead opining that the place of injury is the location where the last event necessary for liability occurred.

“Here, the ‘last event necessary’ –– the manifestation of mesothelioma –– occurred in Arizona,” the court said. “Accordingly, we find that Arizona is where the ‘force set in motion by the actor first [took] effect’ and for purposes of the Second Restatement is thus the place of injury.”

The Supreme Court then turned its attention to the choice-of-law analysis, noting that the law of the place of injury did not necessarily hold more weight than another state that may have a more significant relationship to the case.

“Consequently, the place-of-injury factor suggests that the law of that place will apply, but it is only one factor to consider in determining which state has the most significant relationship to the case,” the court said, saying it had to consider whether Arizona or New Mexico had a more significant relationship to the parties.

While Arizona has an interest in obtaining rightful compensation for one of its residents, the Supreme Court ultimately found that New Mexico had a more significant relationship with the claims since it has an interest in protecting businesses engaged in improvement of real property.

“Applying New Mexico’s statute of repose also furthers New Mexico’s other interests,” the court concluded, echoing the Court of Appeals’ statement that purpose of the statute of repose would be diminished if plaintiffs could bypass it by simply moving to another state.

Pounders, et al. v. Enserch E&C Inc.,et al., No. CV-12-0173-PR (Ariz. Sup. Ct.).

Document is Available Call (800) 496-4319 or Search Opinion Ref# ASB-1309-09

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