State Farm v. Balzan

IN THE

SUPREME COURT OF THE STATE OF ARIZONA

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Plaintiff/Appellee,

v.

CONNOR BALZAN,
Defendant/Appellant.

No. CV-24-0140-PR
Filed July 6, 2026

Appeal from the Superior Court in Maricopa County
The Honorable Frank W. Moskowitz, Judge
No. CV2022-007634
AFFIRMED

Memorandum Decision of the Court of Appeals, Division One
No. 1 CA-CV 23-0564
Filed May 30, 2024
VACATED IN PART

COUNSEL:

Mick Levin (argued), Mick Levin, P.L.C., Phoenix, Attorney for Connor
Balzan

Joel DeCiancio (argued), Christopher Robbins, Hill, Hall, Stark & Ferraro,
PLC, Scottsdale, Attorneys for State Farm Mutual Automobile Insurance
Company

David L. Abney, Ahwatukee Legal Office, P.C., Phoenix, Attorney for
Amicus Curiae Arizona Association for Justice/Arizona Trial Lawyers
Association
 STATE FARM MUTUAL AUTOMOBILE V. BALZAN
Opinion of the Court

JUSTICE CRUZ authored the Opinion of the Court, in which CHIEF
JUSTICE TIMMER, VICE CHIEF JUSTICE LOPEZ, and JUSTICES BOLICK,
BEENE, MONTGOMERY, and KING joined.

JUSTICE CRUZ, Opinion of the Court:

¶1 Arizona’s Uninsured/Underinsured Motorist (“UM/UIM”) Act
permits a person who is covered by more than one automobile insurance
policy to collect benefits from multiple policies for loss flowing from a
single car accident or claim. A.R.S. § 20-259.01. In the insurance realm, this
practice is commonly referred to as “stacking.” Stacking is permitted unless
the insurer includes clear and unambiguous policy language expressly
prohibiting it. See Franklin v. CSAA Gen. Ins. Co., 255 Ariz. 409, 412 ¶ 11
(2023). Today, we are asked to decide whether multiple insured individuals
who jointly purchase multiple insurance policies from the same insurer
constitute “one insured” under A.R.S. § 20-259.01(H). For the following
reasons, we hold that they do.

BACKGROUND

¶2 Connor Balzan and his family are insured under various
automobile policies sold by State Farm. 1 Connor is part of his parents’
household. A 2013 Hyundai Elantra policy (“Hyundai Policy”) insures
Connor and his father, Russell, for up to $250,000 in UIM coverage.
Another four policies insure Russell and Connor’s mother, Kimberly, and
each policy provides underinsured motorist (“UIM”) insurance coverage in
the amount of $250,000 per person. These four additional policies cover a
2001 Jeep Wrangler, a 2007 Mercedes S550, a 2016 Infiniti QX80, and a 2015
Kia Soul (“Household Policies”). The parties agree that the Hyundai policy
was purchased by Connor, and the Household Policies were paid with
Russell and Kimberly’s community funds.

¶3 On April 5, 2019, Connor was the passenger in a motor vehicle
accident. Connor sustained injuries with expenses exceeding the insurance
coverage of the responsible party. The parties agree that Connor is entitled
to coverage under his State Farm UIM policy for the Hyundai. And State
Farm paid the policy limits to Connor for that vehicle’s coverage.

1 To differentiate between the Balzans, we refer to them by their first names.

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Additionally, because it deemed the Household Policies to have been
purchased by an insured other than Connor, State Farm paid the policy
limits under one of the Household Policies but denied Connor’s demand to
stack coverage for the remaining three Household Policies. In declining to
pay UIM benefits for coverage related to the remaining three Household
Policies, State Farm cited the anti-stacking provision included in all five
policies:

If multiple policies or coverages purchased from the State
Farm Companies by one insured on different vehicles provide
Underinsured Motor Vehicle Coverage which applies to the
same accident or claim, the insured shall select one of these
policies or coverages to apply to the accident. Only the one
policy selected by the insured shall apply and no coverage
will be provided by any of the other policies.

¶4 State Farm’s rationale for denying additional UIM benefits was
premised on the fact that Russell and Kimberly were joint purchasers of the
four Household Policies and deemed to be “the insured” to whom the
anti-stacking provision applied. State Farm determined the anti-stacking
provision dictated that “[o]nly the one policy selected by the insured shall
apply and no coverage will be provided by any of the other policies.”

¶5 State Farm sued for declaratory relief and later moved for
summary judgment. Connor filed a cross-motion for summary judgment
alleging that four different insureds (Russell, Kimberly, Connor, and his
sister, Madison) each purchased the various Household Policies and, thus,
the anti-stacking provision did not apply. Connor contended that Russell
and Kimberly are two insureds, not one, and that Madison purchased the
Kia policy because she had arranged to reimburse Kimberly for the Kia
policy payments. 2 The superior court granted State Farm’s motion for
summary judgment and denied Connor’s cross-motion.

2 The court of appeals held that the term “purchased” does not include
reimbursements for premium payments and that Connor cannot establish
a reasonable expectation that Madison was a purchaser of the policy. State
Farm Mut. Auto. Ins. Co. v. Balzan, No. 1 CA-CV 23-0564, 2024 WL 2783789,
at *4 ¶ 17 (Ariz. App. May 30, 2024) (mem. decision). We denied review of
this issue and do not address it.
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¶6 The court of appeals affirmed the grant of summary judgment
in favor of State Farm. Balzan, 2024 WL 2783789, at *4 ¶ 21. However, the
court disagreed with the determination that Russell and Kimberly
constitute “one insured” for purposes of A.R.S. § 20-259.01(H). Id. at *3
¶ 14. Given that if Russell or Kimberly were injured by an underinsured
motorist either would be entitled to UIM benefits and § 20-259.01(B)’s
provision and UIM coverage “extends to and covers all persons insured
under the policy,” the court reasoned that Russell and Kimberly are two
insureds and not one. Id. (quoting § 20-259.01(B)). The court also concluded
that “if the [L]egislature wanted to treat married couples as one insured for
purposes of § 20-259.01(H), it would have expressly done so.” Id.

¶7 Even though it decided that Russell and Kimberly are not “one
insured,” the court of appeals held that, because they jointly purchased the
Household Policies, they are jointly subject to the limitations of the
anti-stacking provision. Id. ¶¶ 15–16. Consequently, the court concluded
that Connor was ineligible to stack the Household Policies and recover
additional UIM benefits. Id. ¶ 16.

¶8 We granted review because the interpretation of statutory
language in insurance matters is a recurring issue of statewide importance.
We have jurisdiction pursuant to article 6, section 5(3) of the Arizona
Constitution.
DISCUSSION

¶9 Summary judgment may be granted only if there are no genuine
issues of material fact, and one party is entitled to judgment as a matter of
law. Ariz. R. Civ. P. 56(a). We review questions of law de novo when
determining the merits of summary judgment and view the facts “in a light
most favorable to the party against whom summary judgment was
granted.” In re Estate of Podgorski, 249 Ariz. 482, 484 ¶ 8 (App. 2020).

¶10 “We review issues construing statutes and rules de novo.” Ariz.
Pub. Integrity All. v. Fontes, 250 Ariz. 58, 61 ¶ 8 (2020). And “we begin with
the text” when construing statutes. Franklin, 255 Ariz. at 411 ¶ 8. We also
interpret statutes “according to the plain meaning of the words in their
broader statutory context, unless the [L]egislature directs us to do
otherwise.” In re Drummond, 257 Ariz. 15, 21 ¶ 19 (2024) (quoting S. Ariz.
Home Builders Ass’n v. Town of Marana, 254 Ariz. 281, 286 ¶ 31 (2023)). If a
statute’s text is clear and unambiguous, it controls unless it results in an
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absurdity or a constitutional violation. 4QTKIDZ, LLC v. HNT Holdings,
LLC, 253 Ariz. 382, 385 ¶ 5 (2022).

¶11 We resolve the question before us by determining the meaning
of “purchased by one insured” in § 20-259.01(H). That provision states:

Uninsured and underinsured motorist coverages are separate
and distinct and apply to different accident situations.
Underinsured motorist coverage shall not provide coverage
for a claim against an uninsured motorist in addition to any
applicable uninsured motorist coverage. If multiple policies
or coverages purchased by one insured on different vehicles
apply to an accident or claim, the insurer may limit the
coverage so that only one policy or coverage, selected by the
insured, shall be applicable to any one accident. If the policy
does not contain a statement that informs the insured of the
insured’s right to select one policy or coverage as required by
this subsection, within thirty days after the insurer receives
notice of an accident, the insurer shall notify the insured in
writing of the insured’s right to select one policy or coverage.
For the purposes of this subsection, “insurer” includes every
insurer within a group of insurers under a common
management.

§ 20-259.01(H) (emphasis added). Here, when the statutory language is
read in accordance with ordinary grammar and usage, the “one insured”
referenced as the purchaser of multiple policies or coverages is the same
“insured” later mentioned in the same section authorized to select the one
policy or coverage that applies to the accident.

¶12 In addition, we read statutory language in context, not in
isolation. See Columbus Life Ins. Co. v. Wilmington Tr., N.A., 255 Ariz. 382,
385 ¶ 11 (2023). Therefore, we must consider subsection (B) of the statute,
which refers to a “named insured”:

Every insurer writing automobile liability or motor vehicle
liability policies shall also make available to the named
insured thereunder and shall by written notice offer the
named insured and at the request of the named insured shall
include within the policy underinsured motorist coverage
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that extends to and covers all persons insured under the
policy, in limits not less than the liability limits for bodily
injury or death contained within the policy. . . . The policy
declarations page must be sent to the named insured,
constitutes the final expression of the named insured’s
decision to purchase or reject underinsured motorist coverage
and is valid for, extends to and covers all persons insured
under the policy. . . . At the request of the named insured, the
named insured may purchase and the insurer shall then
include within the policy underinsured motorist coverage
that extends to and covers all persons insured under the
policy in any amount authorized by the insured up to the
liability limits for bodily injury or death contained within the
policy.

§ 20-259.01(B) (emphasis added).

¶13 Although subsection (H) appears to contemplate the named
insured, the phrase “purchased by one insured” creates an ambiguity in the
statute. The statute does not define “insured,” and the phrase is reasonably
susceptible to more than one interpretation. On one hand, “insured” could
refer to any person who contributed funds toward the premium payment.
On the other, it could refer to the person who purchased the policy or
coverage by accepting the insurer’s offer of coverage and entering into the
insurance contract. Because both readings are plausible, the text alone does
not resolve the phrase’s meaning.

¶14 This case resembles Franklin, where we confronted a similar
ambiguity in subsection (H). See 255 Ariz. at 414 ¶ 20. There, the dispute
centered on the phrase “coverages purchased.” Id. at 415 ¶ 24. The insured
sought to stack UIM coverages within a single policy—a practice commonly
known as intra-policy stacking, as opposed to inter-policy stacking, which
involves stacking coverages from separate policies covering different
vehicles. Id. at 411 ¶ 4. The insurer argued that the policy provided only
one UIM coverage and therefore offered nothing additional to stack. Id. ¶ 6.
We concluded that the phrase “coverages purchased” did not
unambiguously answer that question. Id. at 414 ¶ 20. Rather, “the statute’s
text [was] ambiguous,” requiring a resort to secondary interpretive tools.
Id. at 412 ¶ 9. After examining the statute’s history and purpose, we
determined that subsection (H) treats a multi-vehicle policy as providing
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separate UIM coverage for each covered vehicle. Id.

¶15 A similar interpretive problem exists here. Just as the phrase
“coverages purchased” did not clearly identify the unit of coverage in
Franklin, the phrase “purchased by one insured” does not clearly identify
who qualifies as the relevant insured. The phrase “one insured” is
susceptible to more than one reasonable interpretation. Dictionary
definitions suggest that “insured” may mean a person or entity that obtains
insurance or is otherwise covered by an insurance policy. See Insured,
Black’s Law Dictionary (6th ed. 1990). Under that reading, “one insured”
could reasonably be understood to mean a single insured person, as Connor
argues. Alternatively, “one insured” could reasonably be understood to
refer to the principal or primary insured under the policy. That
interpretation would support State Farm’s position that the phrase may
encompass coverage extending to more than one person.

¶16 When statutory language is ambiguous, we employ secondary
methods of statutory construction, including considering the statute’s
“spirit and purpose” and the “consequences of competing interpretations.”
State v. Serrato, 259 Ariz. 493, 496 ¶ 9 (2025) (quoting Planned Parenthood
Ariz., Inc. v. Mayes, 257 Ariz. 137, 142 ¶ 17 (2024)); State v. Luviano, 255 Ariz.
225, 229 ¶ 12 (2023) (holding that because the statutory language was
susceptible to two reasonable interpretations and therefore ambiguous, the
court “must turn to secondary methods of statutory construction to
ascertain its meaning”).

¶17 Section 20-259.01 must be construed as a whole. Subsection (H)
does not regulate automobile insurance generally; it governs only
UM/UIM coverage. See Am. Fam. Mut. Ins. Co. v. Sharp, 229 Ariz. 487, 491
¶¶ 13–14 (2012). The meaning of “purchased by one insured” therefore
must be informed by the remainder of the statute, which establishes who
may obtain, reject, and select UM/UIM coverage. Reading subsection (H)
in isolation would sever that phrase from the statutory framework that
gives it meaning and effect.

¶18 That statutory framework identifies the named insured as the
purchaser of UM/UIM coverage. Section 20-259.01 requires insurers to
offer coverage only to the named insured, who alone possesses the
statutory authority to accept or reject the offer. See § 20-259.01(B); Beaver v.
Am. Fam. Mut. Ins. Co., 234 Ariz. 584, 586 ¶ 7 (App. 2014). Once made, that
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election governs the policy and determines the coverage available to all
persons insured under it. The statute does not contemplate separate
coverage elections by resident relatives, permissive users, passengers, or
other insureds. See Lawrence v. State Farm Mut. Auto. Ins. Co., 184 Ariz. 145,
148 (App. 1995). Thus, the named insured functions as the statutory
purchaser of UM/UIM coverage on behalf of all insureds covered by the
policy.

¶19 Connor’s contrary interpretation would undermine that
statutory framework. If every insured who contributed toward a premium
qualified as a purchaser, subsection (B)’s assignment of a single coverage
election to the named insured would lose much of its force. Purchaser
status would depend on tracing financial contributions rather than
identifying who exercised the statutory authority to procure coverage,
potentially creating multiple statutory purchasers for a single policy and
leaving insurers unable to determine the scope of subsection (H) from the
policy itself. The better reading is that purchaser status turns on who
procured the coverage, not on who contributed funds toward its cost.

¶20 Reading “one insured” to refer to the named insured who
exercised the statutory authority to obtain UM/UIM coverage harmonizes
subsection (H) with the remainder of § 20-259.01 and gives effect to the
Legislature’s allocation of decision-making authority.

¶21 This interpretation also best advances the statute’s purposes.
Section 20-259.01 is remedial and generally favors coverage. Taylor v.
Travelers Indem. Co. of Am., 198 Ariz. 310, 314 ¶ 11 (2000). At the same time,
subsection (H) reflects the Legislature’s decision to permit insurers to limit
stacking under specified circumstances. See Franklin, 255 Ariz. at 412 ¶ 10.
Interpreting “one insured” to include every person who contributed funds
toward a premium would substantially narrow subsection (H)’s
application and upset the balance the Legislature struck between broad
compensation and reasonable limits on multiple recoveries.

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¶22 Arizona case law likewise reflects the understanding that the
purchaser of UM/UIM coverage is the named insured. Although courts
discussing subsection (H) have often referred to “the insured” or “an
insured,” those references necessarily concern the named insured who
obtained the coverage through the statutory offer-and-acceptance process.
See, e.g., Sharp, 229 Ariz. at 491 ¶ 13; Franklin, 255 Ariz. at 410 ¶ 1.
Subsection (H) operates only in the context of UM/UIM coverages and
authorizes the named insured to accept or reject those coverages under
§ 20-259.01. Consequently, when Arizona courts discuss an insured
purchasing UM/UIM coverage, they are necessarily referring to the named
insured who exercised the statutory right to accept the insurer’s offer.

¶23 Finally, we observe that State Farm’s policy language is
consistent with this interpretation. The policies define “insured” as “you,”
and “you” refers to the named insureds listed in the declarations. Thus, for
the policies at issue, both Russell and Kimberly qualify as insureds because
both are named insureds. Although that policy definition does not answer
the statutory question, it confirms that the relevant actors under the policy
are the named insureds identified in the declarations. Under the State Farm
policy, references to an insured purchasing UM/UIM coverage concern the
named insureds who procured the coverage, not every person who may
have contributed funds toward the premium or later benefited from the
coverage.

¶24 Community property principles do not alter the analysis.
Community property law generally governs the ownership of property
acquired during marriage and the spouses’ respective rights and
obligations with respect to that property and to third-party creditors. See
A.R.S. §§ 25-211, -214. It does not, however, merge spouses into a single
legal person or prevent either spouse from acting independently. Eng v.
Stein, 123 Ariz. 343, 346 (1979) (holding that a judgment for damages and
the foreclosure of a materialman’s lien against community property was
void insofar as it purported to bind the wife, who was neither named nor
served, and her community, but remained valid and enforceable against the
husband separately). Rather, Arizona law recognizes that either spouse
generally may manage and control community property and may bind the
marital community through his or her individual acts. See § 25-214(B); Selby
v. Savard, 134 Ariz. 222, 229 (1982).

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¶25 Arizona courts have likewise recognized that marriage does not
extinguish the spouses’ separate legal identities. See Lorenz-Auxier Fin. Grp.,
Inc. v. Bidewell, 160 Ariz. 218, 220–21 (App. 1989) (rejecting the notion that a
husband and wife constitute a single legal entity and recognizing that each
spouse retains a separate legal identity). And community property
principles concern ownership interests in property, not the authority of
spouses to act independently in contractual matters. See Hrudka v. Hrudka, 186 Ariz. 84, 91 (App. 1995). Thus, even assuming the premiums were paid
with community funds, that fact does not establish that both spouses
independently purchased the policy or coverage for purposes of
§ 20-259.01(H). The relevant question is not whose money funded the
premium payment, but who exercised the statutory authority to obtain
UM/UIM coverage. Section 20-259.01 assigns that authority to the named
insured who received and accepted the insurer’s offer of coverage. See
Beaver, 234 Ariz. at 586 ¶ 7.

¶26 Community property law neither expands the class of statutory
purchasers nor transforms every spouse with a community property
interest in premium payments into a separate purchaser of the policy.
Indeed, making community funds dispositive would inject
domestic-relations principles into a statute that nowhere references
marriage, spouses, or community property and would cause
subsection (H)’s application to turn on the source of premium funds rather
than on the statutory election that created the coverage. State Farm has
argued that State Farm Mutual Automobile Insurance Co. v. Lindsey, 180 Ariz.
456 (App. 1994), vacated, 182 Ariz. 329 (1995), properly relied on community
property principles to determine who “purchased” the coverage. To the
extent Lindsey ever so relied, it answered a property-ownership question
rather than the statutory question presented by § 20-259.01(H): who
exercised the legal authority to obtain the coverage? See 180 Ariz. at 461.
Thus, Lindsey is inapposite.

¶27 Regardless of which factual characterization ultimately applies,
subsection (H) yields the same legal result. First, the evidence could
establish that one spouse acted to procure each policy and therefore
purchased the policy or coverage within the meaning of subsection (H).
Under that approach, the purchaser is the person who exercised the legal
authority to obtain the policy by applying for coverage, accepting the
insurer’s offer, and entering into the insurance contract. The source of the
funds used to pay the premium is immaterial. A person purchases
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insurance by procuring it, not merely by contributing money toward its
cost. If the evidence shows that, acting on behalf of both, Russell procured
some policies and Kimberly procured others, then the policies were
purchased by one insured within the meaning of subsection (H).

¶28 Alternatively, the evidence could establish that Russell and
Kimberly acted together to procure the policies. In that circumstance, they
jointly exercised the statutory authority to obtain UM/UIM coverage.
Because subsection (H) identifies the purchaser by reference to the exercise
of that statutory authority—not by the number of individuals participating
in the transaction—the two named insureds function collectively as the
single statutory purchaser and therefore constitute “one insured” for
purposes of subsection (H). Because Connor maintained his own policy
whereas his parents either jointly purchased the remaining policies or
procured coverage on behalf of each other, State Farm did not err in
invoking the anti-stacking provision and treating Connor’s policy as one
source of coverage and his parents’ policies as a second source, thereby
permitting recovery under Connor’s policy and one of his parents’ policies.

¶29 Any broader interpretation would create substantial practical
difficulties and undermine subsection (H)’s anti-stacking function. If
“purchased by one insured” includes every person who contributes funds
toward the premium, the number of purchasers would become effectively
limitless. A spouse who contributes community funds, a child who
contributes money toward household expenses, or any other person whose
funds indirectly help pay the premium could claim purchaser status.
Under that approach, the identity of the purchaser would turn on tracing
financial contributions rather than identifying who exercised the legal
authority to obtain coverage. A single policy could have multiple, perhaps
innumerable, purchasers, rendering subsection (H)’s reference to coverage
“purchased by one insured” largely meaningless. Such a construction
would vitiate subsection (H) by transforming virtually every jointly funded
policy into one purchased by multiple insureds and dramatically restricting
the statute’s intended limitation on stacking. The more coherent
interpretation is that purchaser status turns on the act of procuring
coverage, not on the source of the funds used to pay for it.

¶30 We, therefore, conclude that subsection (H)’s phrase “purchased
by one insured” refers to the named insured purchaser under § 20-259.01(B)
who exercised the legal authority to obtain UM/UIM coverage. Where
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multiple named insureds jointly procure coverage, they function as a single
purchasing unit and therefore constitute “one insured” for purposes of
subsection (H). Although ambiguous in isolation, the phrase becomes clear
when § 20-259.01 is read as a whole. The Legislature assigned the decision
to purchase UM/UIM coverage to the named insured purchaser and made
that decision binding on all insureds under the policy. The statute’s
purpose confirms that reading. Because Russell and Kimberly either
purchased the Household Policies jointly as named insureds or one acted
on behalf of both in procuring the coverage, the policies were purchased by
one insured within the meaning of subsection (H). State Farm, therefore,
properly limited recovery pursuant to the anti-stacking provision.

CONCLUSION

¶31 For the foregoing reasons, we vacate ¶¶ 12–16 of the court of
appeals’ memorandum decision and affirm the superior court’s grant of
summary judgment in favor of State Farm.

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