Arizona has a process where certain matters are assigned to compulsory arbitration. While this may seem like an added complexity to your litigation, it actually is a fast and efficient means for moving the litigation to completion. Matters where no party seeks affirmative relief other than a money judgment and no party seeks an award in excess of the jurisdictional limit set by applicable local rules of the Superior Court are subject to compulsory arbitration. In Maricopa and Pima County, the jurisdictional limit is $50,000. Please feel free to contact the author for information as to the jurisdictional limits in other counties.
Compulsory arbitration in Arizona is governed by A.R.S. §12-133 and Rules 72 through 77 of the Arizona Rules of Civil Procedure. Compulsory arbitration is not binding. Any party may appeal and all appeals are de novo on the law and facts. Put simply, the entire matter can be retried and re-evaluated by the court hearing the appeal. No aspect of the compulsory arbitration is binding or dictates the result of the appeal. It is for this reason parties involved in compulsory arbitration matters should meet and confer to determine the feasibility of resolving disputes through another form of dispute resolution, including but not limited to private mediation or binding arbitration. If the parties agree to another form of dispute resolution, the court will waive the compulsory arbitration requirement. If the other form of dispute resolution fails, the matter is no longer subject to compulsory arbitration, and would be litigated in the normal course of Rule 16 of the Arizona Rules of Civil Procedure (joint scheduling report and order setting forth discovery and disclosure deadlines and a timeline for the case before trial).
If the parties proceed with compulsory arbitration, they may stipulate to a proposed arbitrator. If no stipulation is in place, the court appoints an arbitrator from a list of: 1) all residents in the county where the court is located who have been residents of the county for the last four years; and 2) other active and inactive members of the State Bar of Arizona residing anywhere in Arizona who are members of any other federal court or state bar and who have agreed to serve as arbitrators in the county where the court is located. The clerk or the court administrator, supervised by the presiding judge or that judge’s designee, shall prepare a list of arbitrators who may be designated by their area of concentration, specialty or expertise. The clerk then randomly selects an arbitrator from that list. Appointment occurs no later than 120 days after the answer is filed. A written notice is sent to the parties who then have a right to preemptory strike within ten days of mailing of the notice of appointment of the arbitrator. Each side is entitled to one preemptory strike. Motions to strike for cause, or a motion for recusal can also be filed and do not affect each parties’ right to one preemptory strike.
The arbitration hearing is to be scheduled no sooner than 60 days and not more than 120 days after the appointment of the arbitrator.
The arbitrator shall have the power to administer oaths or affirmations to witnesses, to determine the admissibility of evidence, and to decide the law and facts of the case submitted. The arbitrator shall make all legal rulings on motions except: 1) motions to continue on the dismissal calendar; 2) motions to consolidate cases; 3) motions to dismiss; 4) motions to withdraw as attorney of record; 5) motions for summary judgment that if granted would dispose of the entire case as to any party; or 6) motions for sanctions. The arbitrator can hear discovery motions. The purpose of compulsory arbitration is to provide for the efficient and inexpensive handling of small claims. Discovery can be limited in accordance with this purpose. Parties may appeal to the trial court assigned to the matter discovery rulings requiring disclosure of matters the party deems privileged or otherwise protected from disclosure.
Offers of judgment can be served in compulsory arbitration cases.
Subpoenas can be issued to summon witnesses to the arbitration hearing. The parties are to prepare a pre-hearing statement to be provided to the arbitrator no less than ten days before a hearing setting forth the nature of the claims and defenses, lists of witnesses to be called with a brief description of their testimony, and an estimate of how long will be required for the hearing. The Arizona Rules of Evidence apply to arbitration hearings. Arbitrators are to admit into evidence without further proof, if relevant and listed in the pre-hearing statement the following: 1) hospital bills on the official letterhead or billhead of the hospital when dated and itemized; 2) bills of doctors and dentists when dated and showing the date of each visit and the charge for same; 3) bills of registered nurses, licensed practical nurses, or physical therapists when dated and itemized; 4) bills for medicine, eyeglasses, prosthetic devices, medical belts or similar items, when dated and itemized; 5) property repair bills or estimates when dated and itemized setting forth the charges for labor and material; 6) testimony of any witness given in a deposition taken whether or not such witness is available to testify in person; 7) sworn written statements by an expert other than a doctor’s medical report whether or not the expert is available to appear in person if the statement is signed and contains a summary of the expert’s qualifications, the opinions, and the grounds and facts upon which the opinion is based; 8) in personal injury actions, doctor’s medical reports which shall be given the weigh the arbitrator deems them entitled provided a copy of the report was previously disclosed at least 20 days prior to the hearing date; 9) records of regularly conducted business; and 10) a sworn statement of any witness, other than an expert, listed in the pre-hearing statement whether or not the witness is available to appear in person. The parties can arrange for a court reporter at their own expense. The arbitrator is not required to make a record of the proceedings.
Within ten days of the completion of the hearing, the arbitrator shall render a decision and notify the parties of their decision in writing and file a notice of decision with the court. Within ten days of the notice of decision, either party can submit to the arbitrator a proposed form of award. If no appeal is filed within 20 days of the notice of decision, judgment shall be entered on the award. The notice of appeal shall be entitled “Appeal from Arbitration and Motion to Set for Trial” and shall request the case be set for trial and whether a jury trial is requested and the estimated length of trial. The appellant is to deposit a sum equal to one hearing day’s compensation of the arbitrator not to exceed 10% of the amount in controversy. This will be refunded to the appellant if the judgment on the trial de novo is 23% more favorable than the arbitration award. If the appellant does not obtain a judgment from the trial de novo that is at least 23% more favorable than the arbitration award, the deposit shall be used to pay, or the appellant shall pay if the deposit is insufficient, the following costs and fees: 1) to the county, the compensation actually paid to the arbitrator; 2) to the appellee, those taxable costs in civil actions together with reasonable attorneys’ fees as determined by the trial judge for services necessitated by the appeal; and 3) reasonable expert witness fees incurred by the appellee in connection with the appeal.
This procedure is an efficient way to litigate cases with alleged monetary damages less than $50,000 as it takes at most 8 months from the time the answer is filed to the time of the hearing, and a decision would come within ten days of the hearing. If the result is inconsistent with Arizona law, or the facts, appeal can be made to the trial court to hear the case on its own. While somewhat different than the process in superior court, or other forms of alternative dispute resolution, this process can result in fast disposition of simple cases.
ABOUT THE AUTHOR
J.P. Harrington Bisceglia is senior counsel at Tyson & Mendes, LLP. She specializes in general liability defense, insurance coverage and bad faith litigation. Contact J.P. at 602.386.5644 or email@example.com.