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Bills v. Arizona Property and Casualty Insurance Guaranty Fund2/2/1999
etter addressed to the legislature or the state department of insurance. Pursuant to the statutory scheme, and in accordance with the weight of authority on this topic, we conclude the Fund is not subject to common law tort claims in connection with its handling of covered claims. Accordingly, the trial court properly rejected plaintiff's statutory arguments. We therefore turn to her constitutional claims.
II. Constitutional Issues
Wells Fargo did not address any constitutional issues or, as plaintiff states, determine whether the immunity in § 20-675(A) "is valid and enforceable." Plaintiff has the burden of clearly demonstrating that the statutes are unconstitutional. Ramirez. We presume statutes are constitutional and, if possible, construe them so as to avoid rendering them unconstitutional, resolving any doubts in favor of their constitutionality. Id.
Relying on article 18, § 6, and article 2, § 31, of the Arizona Constitution, plaintiff contends "the legislature has [unconstitutionally] abrogated the recognized cause of action for breach of the duty of good faith." As she points out, Division One of this court has concluded that a common law cause of action for bad faith against a private insurance company, including a workers' compensation carrier, is constitutionally protected from legislative abrogation. See Franks v. United States Fidelity & Guar. Co., 149 Ariz. 291, 718 P.2d 193 (App. 1985); cf. Hayes v. Continental Ins. Co., 178 Ariz. 264, 872 P.2d 668 (1994) (holding that Arizona courts have jurisdiction over bad faith actions against workers' compensation carriers without reaching question of whether such actions are constitutionally protected). Assuming the proposition in Franks is correct, we disagree with plaintiff's contention that such an action against the statutorily created Fund is constitutionally protected.
The court in Franks noted that there is "a history in the common law for the tort of bad faith," which is an intentional tort that "arises from a well-recognized principle of the common law that an insurance contract has an implied obligation of good faith and fair dealing." 149 Ariz. at 299, 718 P.2d at 201. In contrast, no Arizona court has recognized a common law bad faith action against the Fund, and neither "a history in the common law" nor the statutory framework supports recognition of such a claim. Id. In Fernandez, the court concluded that the guaranty fund's immunity from bad faith claims did not violate the "access to courts" clause of Florida's constitution. 383 So. 2d at 976. As that court stated:
"This ["access to courts"] provision applies only to forbid the abolition of pre-existing common law or statutory rights. Since, absent [the statutes, the guaranty fund] would not exist and there would be no effective remedy to recover on any claims whatever against insolvent insurers, there can be no constitutional infirmity in the legislature's decision to limit those newly-created rights and, in effect, not to establish an additional one." Id. (citation omitted).
Similarly, " ince no cause of action has ever been recognized for [bad faith against the Fund] in a case like this one, the [trial] court's ruling did not violate the constitution." Miel v. State Farm Mut. Auto. Ins. Co., 185 Ariz. 104, 111, 912 P.2d 1333, 1340 (App. 1995). See also Boswell v. Phoenix Newspapers, Inc., 152 Ariz. 9, 17, 730 P.2d 186, 194 (1986) (article 18, § 6, was intended to "preserv the ability to invoke judicial remedies for those wrongs traditionally recognized at common law"); Ramirez, 272 Ariz. Adv. Rep. 27, (when statute "does not abrogate any viable 'right of action to recover damages,' it does not violate a
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