Arizona landlords ask high court to invalidate eviction ban

Supreme Court News

Landlord advocacy groups filed a special action with the Arizona State Supreme Court Wednesday seeking to invalidate as unconstitutional Gov. Doug Ducey's moratorium on evictions of people who have missed rent payments because they became ill or lost their income due to the coronavirus.

The Arizona Multihousing Association, the Manufactured Housing Communities of Arizona and several individual property owners filed the action directly with the high court. It argues the moratorium violates the state constitution's separation of powers and its contract clause.

The multihousing association's president and CEO Courtney Gilstrap LeVinus says owners have waived fees, worked with renters to make payments, and helped them fill out government relief applications.

But five months after the moratorium was first imposed “we are at a breaking point,” she said, noting that property owners also have mortgages, taxes and other bills to pay.

She said rental housing is the only area of the state economy that has been compelled to provide a product or service free of charge during the pandemic. Ducey signed the moratorium order on March 24 and recently extended it until Oct. 31.
 
There was no immediate reaction from the governor's office to the court filing, which named the state and several justices of the peace and constables from around Arizona who are charged with serving eviction notices.

Arizona’s initial 120-day moratorium ending July 22 was supposed to ensure people wouldn’t lose their homes if they got COVID-19 or lost their jobs during pandemic restrictions. But advocates argued it was too early to end the ban because most of the government money set aside to help pay rents and mortgages still hasn’t been doled out.

The Arizona Housing Department still has a backlog of people trying to get rental assistance. Gregory Real Estate Management of Phoenix in July sued Ducey over the moratorium and asked that it be allowed to evict a family in a rental home in the city of Surprise over unpaid rent, which the firm says has passed $8,000.

But a Maricopa County Superior Court judge upheld the moratorium and disagreed with the company's argument that the governor’s action exceeded his authority or was unconstitutional. For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death. Pandemic restrictions, such as reducing capacity or closing businesses, are intended to limit crowds that can spread the virus.

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Workers’ Compensation Subrogation of Administrative Fees and Costs

When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.

In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.

In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.