Torts--Municipal Vicarious Liability

DBT Yuma, LLC v. Yuma County Airport Authority, 702 Ariz. Adv. Rep. 24 (App. Div. I, December 1, 2014) (J. Jones)


Plaintiff sued the Yuma County Airport Authority [YCAA] for breach of contract and alleged various tort theories after being evicted from the airport. Subsequently, plaintiff amended the complaint to name Yuma County as a defendant claiming the county exercised complete control of the airport and that YCAA was just a shell, rendering the county vicariously liable for  the acts of the YCAA. Plaintiff further argued that Arizona statutes prohibited the county from shielding itself from liability when leasing property to a nonprofit for an airport. Yuma County's motion for  summary judgment  was granted by the trial court and the Arizona Court of Appeals affirmed.

Addressing plaintiff's claim  that the YCAA was simply the alter ego of Yuma County, the court found all seven  indicia of alter ego to be lacking:

(1) Yuma County and YCAA have never shared common officers or directors; (2) Yuma County has provided no financing of or for YCAA; (3) Yuma County has paid no salaries to the officers or employees of YCAA; (4) Yuma County has paid none of the ordinary operating expenses of YCAA; (5) YCAA has maintained all legal formalities to continue its corporate existence; (6) the corporate logos of Yuma County and YCAA are dissimilar; and (7) Plaintiffs knew that YCAA maintained a separate corporate existence from Yuma County.

Regarding plaintiff's argument that Arizona statutes create such vicarious liability for counties leasing airports to nonprofit corporations like YCAA the court found that A.R.S. §28-8423 specifically categorizes nonprofit corporations leasing  airports from a county as "body politic and corporate" demonstrating the legislature's intent to shield lessor counties from liability for the acts of its airport lessees.

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