Berk & Moskowitz, P.C.

Most liability insurance policies include a provision whereby the insured is not insured for intentional acts – called the “intentional acts” or “criminal acts” exclusion.  Typically, such provisions only exclude insurance coverage where the insured policyholder acted intentionally (rather than negligently) and intended the conduct to cause injury.

In Wilshire Ins. Co. v. S.A., the Arizona Court of Appeals was faced with an insurance coverage dispute where the insured policyholder had sexually assaulted a 15 year old while locked in the company’s basement.  The insured pled guilty to sexual assault, among other things.

The insurance policy provided that there was no coverage for conduct “arising out of a criminal act committed by or at the direction of any insured.”  Based on that clause and the public policy that insurance should not protect those who intentionally cause injury, the Court affirmed the trial court’s determination that there was no coverage for the assault.  The Court noted that this was not a case where the insured acted intentionally, but unintentionally caused injury.

In July 2010, there were about 33% more pre-foreclosure notices (notices of trustee’s sales) issued in Maricopa County, Arizona than June.  In June, there were approximately 5,800 notices issues, compared with just over 7,800 in July. 

Notices of trustee’s sales give at least a 90 day notice of the date, time and place of the trustee’s sale, which is the foreclosure sale under a deed of trust.

If you want to learn about foreclosures under Arizona’s Anti-Deficiency Laws, watch our video powerpoint presentation.  The video covers all the basics, including terminology, what constitutes qualifying property and how the Anti-Deficiency Statutes apply in both types of foreclosures.

On April 22, 2010, a Maricopa County Superior Court jury unanimously awarded the firm’s clients $912,500 in a fraud case against the sellers of a Peoria, Arizona business.  Kent Berk tried the case on behalf of the clients, the buyers of the business.

After doing extensive investigation, the clients, John and Margaret Durma, signed a contract to buy The Curve on Peoria bar and restaurant for $375,000. The records provided by the seller appeared valid and confirmed that the business was making $160,000 in profit per year.  But, after taking over the operations of the business, it had losses each month. The Durmas suspected the seller of wrongdoing and investigated further. After filing their lawsuit, the Durmas discovered that the seller had created a second (false) set of financial records and that the business actually had losses each year that the seller owned it, all contrary to the seller’s repeated representations before the sale.

 At trial, Kent Berk, on behalf of the Durmas, presented claims for fraud, consumer fraud, bad faith, negligent misrepresentation and breach of contract.  Before the case went to the jury, the Judge granted the Durmas judgment as a matter of law on their breach of contract and negligent misrepresentation claims, and found that the seller was prohibited from pursuing any claims for the balance of the purchase price.

 The jury unanimously found in favor of the Durmas on their remaining claims – fraud, consumer fraud and bad faith, and unanimously awarded the Durmas $241,000 in economic damages, $196,500 in emotional distress damages and $475,000 in punitive damages.

Governor Brewer repealed the changes to the anti-deficiency statute that were set to go into effect on September 30, 2009.  The much debated changes would have required the borrower under a deed of trust whose property was sold at a trustee’s sale to have demonstrated, among other things, that the borrower “used” the property for six consecutive months in order to qualify for the protection of the anti-deficiency statute. 

At least for the time-being, the current anti-deficiency statutes will stay in effect.  We have drafted a simple summary of the current law.

In Horton v. Hartsook, et al., the Hortons brought suit to, among other things, stop Hartsook and several other owners from leasing their condominiums in Rainbow Cove, Pinetop Lakeside, Arizona on a short-term basis to vacationers.  Horton claimed that short-term vacation leases were prohibited by the covenants, conditions and restrictions for the development. 

Berk & Moskowitz defended the Hortons’ claims on behalf of the owners.  The Navajo County, Arizona Superior Court ruled in favor of the owners and found that short-term vacation leasing was allowed.  The Hortons appealed.  The Arizona Court of Appeals affirmed the trial court’s ruling.  The Court of Appeals concluded that the covenants were clear and unambiguous and that short-term vacation leasing was allowed in Rainbow Cove.

Read the Rainbow Cove Decision.

The Arizona Court of Appeals has ruled, for the first time in an Arizona published opinion, that an appraiser hired by a lender owes a duty to the buyer/borrower in that transaction.

In its Unanimous Decision issued April 30, 2009, the Court focused on the reality that the buyer would likely never hire a separate appraiser.  For that and several other reasons, the appraiser owes a legal duty of care to the buyer/borrower.  Daphne Reaume of Berk & Moskowitz, P.C. argued the appeal for the buyer/borrower.

The case opens the door for buyers to sue appraisers even when the appraiser was hired by the lender.  Visit our separate website, AppraiserNegligence.com for more information.

The Ninth Circuit upheld summary judgment in favor of our client on his claim to retirement benefits.  Click here for the Ninth Circuit Court of Appeals  Memorandum Decision. Click here for the District Court Order.

In its Memorandum Decision issued September 17, 2008, the Ninth Circuit Court of Appeals upheld the United States District Court, Arizona, award of employment benefits to the employee represented by Berk & Moskowitz, P.C.  The case involved whether the employee qualified for benefits under the applicable plans.  After applying ordinary principles of contract interpretation, the District Court and 9th Circuit Court of Appeals held that the firm’s client was entitled to benefits.

The issue on appeal involved an option to purchase under a residential lease and whether it had been timely exercised. The Arizona Court of Appeals affirmed the trial court’s decision in favor of Berk & Moskowitz’ client

Berk & Moskowitz, P.C. represented the seller of a home under an option to purchase given to the tenant/buyer. The trial court found in favor of the seller, finding that option contracts are strictly construed and that the buyer did not timely and properly exercise the option contract.  The buyer appealed. The Arizona Court of Appeals affirmed the trial court decision for the sellers. 

Read the Court’s Memorandum Decision.