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Clark Equipment Co. v. Arizona Property and Casualty Insurance Guaranty Fund2/11/1997
orized by section 20-664(B)(2) because the Fund did not employ the attorneys who generated those costs. This means that Clark's claim for "unreimbursed defense costs" must be based on the theory that these costs are part of the Chavez "covered claim" within the meaning of A.R.S. section 20-661(3). I agree with that theory. The statute excludes "attorney's fees or adjustment expenses incurred prior to the determination of insolvency," which means that the statute impliedly allows a "covered claim" to include post-insolvency fees and costs incurred by privately-retained attorneys. See A.R.S. § 20-661(3). The "unreimbursed defense costs" awarded to Clark for the Chavez claim were post-insolvency.
Because Clark's "unreimbursed defense costs" are part of the Chavez "covered claim," those fees must count against the Fund's statutory limit of $99,900 per covered claim. See A.R.S. § 20-667(B) (providing that the fund is obligated for "only that amount of each covered claim which is in excess of one hundred dollars and is less than one hundred thousand dollars"). Therefore, assuming that Clark's Complaint was timely, Clark has been awarded $119,844 more (plus interest) on the Chavez claim than the statute allows.
I respectfully conclude that, if the judgment is not reversed on statute of limitations grounds, it should be remanded with directions to reduce the Chavez award to $99,900 (plus interest).
E. G. NOYES, JR., Presiding Judge
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