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Associated Aviation Underwriters v. Wood9/29/2004
unt agreed upon." In addition, the trial court expressly refused to find the following facts proposed by AAU: "No Intervenor sustained any bodily injury within the meaning of the AAU policies"; "TCE did not cause any bodily injury to any Intervenor during the period of any AAU policy"; and "TCE which emanated from the Airport premises did not cause any bodily injury to any Intervenor during the period of any AAU policy." The trial court refused to find those facts because, according to the court, they were "foreclosed by Morris."
Sometime after issuing the foregoing phase I minute entry, Judge Velasco left the superior court and Judge Harrington replaced him as trial judge during this DRA's second phase. In April 2002, after an eight-day, phase II trial, the trial court issued additional findings of fact and conclusions of law on "the reasonableness of Morris Agreement." The court ultimately concluded that the global, $35 million settlement was reasonable in fact and amount.
In September 2002, the trial court entered a "Judgment for the Fourteen Intervenors Under Consideration in Phase Two." In that judgment, the trial court incorporated by reference all findings of fact and conclusions of law in Judge Velasco's September 2000, phase I ruling and its own April 2002 minute entry. The trial court then found that " nsurance coverage exists under one or more of the AAU 'Accident Policies[,'] which provided coverage to the Tucson Airport Authority and the City of Tucson from October 1, 1960 to August 1, 1969, for the claims asserted by the [fourteen] Intervenors," and that the "settlements entered into by the [fourteen] Intervenors were reasonable." The trial court, however, rejected Intervenors' proposed form of judgment that would have included a monetary award.
After entry of the September 2002 judgment, the case was transferred to Judge Cornelio. Intervenors filed a motion for supplemental relief, a motion for leave to amend their complaint-in-intervention to include a garnishment claim that would relate back to 1989, and a motion to amend the judgment. In denying all three motions, the trial court (J. Cornelio) concluded that (1) Intervenors could not receive supplemental, monetary relief in this DRA, which differs from a garnishment action, and (2) Intervenors could not amend their complaint to include a garnishment claim. The court later denied Intervenors' motion for reconsideration of that ruling. This appeal and cross-appeal followed.
DISCUSSION
APPEAL
I. Morris-related Issues
A. Effect of Morris Agreement on Liability and Damage Issues
AAU and Intervenors agree that the facts necessary to establish TAA/City's tort liability and those necessary to establish coverage under AAU's policy overlap to a large degree. The parties disagree, however, on the primary issue here: whether and to what extent a Morris agreement, related consent judgment between an insured and thirdparty claimant, and the doctrine of collateral estoppel can prevent an insurer from litigating facts essential to insurance coverage when those facts overlap with those necessary to establish its insured's underlying tort liability. That is a legal issue that we review de novo. See Garcia v. General Motors Corp., 195 Ariz. 510, 6, 990 P.2d 1069, 1072 (App. 1999) ("We review the availability of collateral estoppel de novo."). Likewise, to the extent this appeal involves interpretation of an insurance contract, our review also is de novo. Petrusek v. Farmers Ins. Co., 193 Ariz. 552, 8, 975 P.2d 142, 144 (App. 1998).
AAU asserts that, "even if the coverage facts in the are identical and inseparable from those in the
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