Bills v. Arizona Property and Casualty Insurance Guaranty Fund2/2/1999
rticle 18, § 6"); cf. Clouse v. State of Arizona, 284 Ariz. Adv. Rep. 16, , 22 (Ct. App. December 15, 1998) (holding that "the anti-abrogation clause does not apply to negligence actions against the government in Arizona" because the state was immune from negligence actions until 1963 and that A.R.S. § 12-820.02(A)(1) "is a constitutional grant of governmental immunity"); Evenstad v. State of Arizona, 178 Ariz. 578, 586, 875 P.2d 811, 819 (App. 1993) (holding that, "because neither the Arizona courts nor the legislature has ever recognized a right of action against public entities for conduct shielded by A.R.S. section 12-820.01, the Arizona Constitution does not guarantee a cause of action for such conduct against those public entities").
But for the Fund, both tort victims and insureds of insolvent carriers would have no source of liability insurance proceeds to compensate the victim for damages caused by the insured tortfeasor's wrongdoing. Having created a statutory remedy to alleviate that situation and to help fill the gap, the legislature was constitutionally entitled to prescribe and limit the remedy. Cf. Diaz v. Magma Copper Co., 190 Ariz. 544, 549, 950 P.2d 1165, 1170 (App. 1997), quoting Halenar v. Superior Court, 109 Ariz. 27, 29, 504 P.2d 928, 930 (1972) (" he right to recover damages for wrongful death 'is not placed beyond the power of the legislature to abrogate by § 6 of Article 18 of the Arizona Constitution' and 'can be granted or withheld at the pleasure of the legislature.'"). As "a creature of statute" whose "rights and obligations . . . are limited by the statute," A.H., 190 Ariz. at 530, 950 P.2d at 1151, the Fund is not subject to bad faith liability, and that statutory limitation does not violate the anti-abrogation or no-damage limitation provisions of the Arizona Constitution.
Nor does the Fund's non-liability for alleged bad faith acts or omissions violate equal protection principles. Plaintiff does not claim membership in any "suspect class," but correctly observes that "claimants have a fundamental right to bring and pursue an action for damages." Lerma v. Keck, 186 Ariz. 228, 232, 921 P.2d 28, 32 (App. 1996). See also Kenyon v. Hammer, 142 Ariz. 69, 688 P.2d 961 (1984). Just as a claimant has no fundamental right to sue the state, its political subdivisions, or other public entities, however, see Hendel v. Salt River Project Agricultural Improvement & Power District, 274 Ariz. Adv. Rep. 26 (Ct. App. July 21, 1998); Pike v. Arizona Department of Transportation, 261 Ariz. Adv. Rep. 29 (Ct. App. January 29, 1998); Evenstad, we believe that plaintiff has no fundamental right to sue the Fund for bad faith.
In our view, that is so even though the Fund is not strictly a public entity or financed by public monies, but rather, is a conglomeration of private insurers, albeit created and mandated by statute. See §§ 20-661(6), 20-662, 20-663, and 20-666; Helme. Accordingly, the rational basis test, rather than a strict scrutiny analysis, applies to plaintiff's equal protection challenge. See Ramirez. Under that test, legislation must serve a legitimate state interest, and the statutory scheme must rationally further that interest. Id. In applying the test, we presume that the legislation is rational, and the plaintiff must clearly show arbitrariness or irrationality in order to overcome that presumption. Id.; Lerma. Plaintiff has failed to overcome the presumption here.
Kenyon, on which plaintiff primarily relies, involved a statute that effectively precluded certain medical malpractice claimants from ever suing health care providers. In contrast, this case involves an entity created, mandated, and circumscribed by statute. All persons wi
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