Cravens v. Montano

IN THE

SUPREME COURT OF THE STATE OF ARIZONA
MICHAEL COREY CRAVENS,
SURVIVING SPOUSE OF SAMANTHA J. CRAVENS, DECEASED,
Plaintiff/Appellee,

v.

MARTIN A. MONTANO JR., A SINGLE MAN; AND CASAS CUSTOM FLOOR
CARE, LLC, AN ARIZONA LIMITED LIABILITY COMPANY,
Defendants.

CINCINNATI INDEMNITY COMPANY,
Plaintiff in Intervention/Appellant,

v.

MARTIN A. MONTANO JR.,
Defendant in Intervention.

No. CV-24-0143-PR
Filed April 29, 2025

Appeal from the Superior Court in Pima County
No. C20192093
The Honorable Kellie Johnson, Judge
The Honorable D. Douglas Metcalf, Judge
The Honorable Brenden J. Griffin, Judge
REVERSED AND REMANDED

Memorandum Decision of the Court of Appeals,
Division Two
No. 2 CA-CV-2023-0108
Filed June 3, 2024
AFFIRMED IN PART, VACATED IN PART
 CRAVENS V. MONTANO
Opinion of the Court

COUNSEL:

Patrick J. Lopez, Nathan S. Rothschild, Alexander Winkelman (argued),
Mesch Clark Rothschild, Tucson, Attorneys for Michael Corey Cravens

Michael J. Raymond (argued), Raymond Greer, P.C., Scottsdale, Attorneys
for Cincinnati Indemnity Company

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

VICE CHIEF JUSTICE LOPEZ, Opinion of the Court:

¶1 We consider the meaning of the phrase “in connection with
your business” as it relates to an employee’s use of a “nonowned” “covered
auto” as defined in Cincinnati Indemnity Company’s (“Cincinnati”)
automobile insurance policy. We hold that an employee operates a
non-owned auto “in connection with your business” when using the
vehicle while engaged in the employer’s business. To qualify, an
employee’s use of a vehicle must be directly involved with, or in
furtherance of, an employer’s business purpose but does not include a
routine commute to or from an employer’s office.

¶2 We also consider the enforceability of a contingent agreement
under United Services Automobile Ass’n v. Morris, 154 Ariz. 113 (1987). We
hold that a contingent Morris agreement is enforceable if it otherwise meets
the substantive requirements of such agreements to ensure against fraud,
collusion, unfairness, or unreasonableness.

* Pursuant to article 6, section 3 of the Arizona Constitution, the Honorable

James B. Morse Jr., Judge of the Arizona Court of Appeals, Division One,
was designated to sit in this matter.
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Opinion of the Court

BACKGROUND

¶3 On April 26, 2018, Martin Montano Jr., an employee of Casas
Custom Floor Care, LLC (“Casas”), was scheduled to arrive at the
company’s main yard at six in the morning, receive the day’s assignment,
and travel in a work vehicle to the assigned jobsite. That morning, Montano
woke up feeling ill and informed his supervisor he would be late and would
meet the team at the site. On his way to the site, Montano discovered a nail
in his tire and drove to his mother’s house to borrow her truck. Montano
finally arrived at the jobsite, at around 11 a.m., in his mother’s truck.

¶4 After completing the day’s remaining work, Montano drove
to Casas’s main yard to correct his timesheet because, earlier that week, he
had preemptively filled out the timesheet to reflect a full day’s work. On
his way to the yard, Montano ran a red light and collided with Samantha
Cravens’s vehicle, killing her.

¶5 Michael Cravens (“Cravens”), the surviving spouse, sued
Montano and Casas. Cravens alleged that Montano negligently caused the
wrongful death of his wife, and that Casas was vicariously liable for
Montano’s actions. At the time of the accident, Cincinnati insured Casas
under an automobile insurance policy (the “Policy”). The Policy extended
insurance coverage to Montano if he, in part, was using a “covered auto”
“in connection with” Casas’s business.

¶6 Cincinnati defended Casas in the lawsuit but issued Montano
a reservation of rights letter disputing its obligation to defend or insure him.
Cincinnati argued that, under the Policy, it was not required to provide
coverage for Montano unless at the time of the accident he was driving “in
connection with [Casas’s] business,” meaning that he was acting in the
course and scope of his employment. Cincinnati refused coverage absent a
court finding that Montano satisfied this condition.

¶7 After Cincinnati reserved its rights, Montano and Cravens
entered into a Morris Agreement (the “Agreement”). In the Agreement, the
parties stipulated to Montano’s liability in the accident, agreed to enter a
$3.85 million judgment against Montano in favor of Cravens—only to be
collected against the insurance policy proceeds—and assigned Montano’s
rights under the Policy to Cravens. Before Montano and Cravens filed this
stipulated judgment with the court, Cincinnati intervened in the case to file

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a complaint against both Montano and Cravens contesting the Agreement.
Cravens counterclaimed, pursuant to his assigned rights, arguing that
Cincinnati breached its contractual obligation to indemnify Montano by
denying coverage.

¶8 Cravens moved for summary judgment on the coverage issue.
The superior court granted the motion, ruling that Montano was using his
mother’s truck “in connection with” Casas’s business at the time of the
accident. Consequently, Cincinnati was obligated to indemnify Montano
under the Policy.

¶9 Cincinnati moved for summary judgment on the
enforceability of the Agreement. The court denied the motion. The court
held a two-day reasonableness hearing and determined that the Agreement
was enforceable against Cincinnati. The court entered the $3.85 million
stipulated judgment in favor of Cravens against Montano and ordered
Cincinnati to pay Cravens. The court also awarded Cravens his reasonable
attorney fees. Cincinnati appealed the court’s rulings concerning coverage
and the Agreement.

¶10 The court of appeals affirmed the superior court’s rulings on
coverage and the Agreement. Cravens v. Montano, No. 2 CA-CV 2023-0108,
2024 WL 2823307, at *12 ¶ 58 (Ariz. App. June 3, 2024) (mem. decision). We
granted review because the meaning of a material term in an auto insurance
policy concerning the scope of coverage for an employee’s use of a vehicle
“in connection with [an employer’s] business” is an issue of statewide
concern that is likely to recur. We have jurisdiction pursuant to article 6,
section 5(3) of the Arizona Constitution and A.R.S. § 12-120.24.

DISCUSSION

¶11 We review de novo a grant of summary judgment. Rosenberg
v. Sanders, 256 Ariz. 359, 364 ¶ 24 (2023). Summary judgment is appropriate
if the material facts are not genuinely disputed, and the moving party is
entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(a); Neptune
Swimming Found. v. City of Scottsdale, 256 Ariz. 551, 559 ¶ 23 (2024). We
uphold the superior court’s factual findings as to the Morris Agreement
unless they are “clearly erroneous, but we review any legal conclusions de
novo.” Associated Aviation Underwriters v. Wood, 209 Ariz. 137, 171 ¶ 107
(App. 2004).

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I.

¶12 We begin with the coverage issue under the Policy. We
interpret insurance policies de novo. Fid. Nat’l Title Ins. Co. v. Osborn III
Partners LLC, 254 Ariz. 440, 443 ¶ 14 (2023). Because an insurance policy is
a contract, “the terms of the policy must govern.” Apollo Educ. Grp., Inc. v.
Nat’l Union Fire Ins. Co., 250 Ariz. 408, 411 ¶ 11 (2021) (quoting Dairyland
Mut. Ins. Co. v. Andersen, 102 Ariz. 515, 517 (1967)). We interpret the terms
“in the broader context of the overall contract,” id., and accord undefined
terms “their plain and ordinary meaning, examining the policy ‘from the
viewpoint of an individual untrained in law or business,’” Fid. Nat’l Title
Ins. Co., 254 Ariz. at 443 ¶ 14 (quoting Walker v. Auto-Owners Ins. Co., 254
Ariz. 17, 20 ¶ 10 (2022)). “If a policy is subject to ‘conflicting reasonable
interpretations,’ it is ambiguous, and we interpret it by examining, as
pertinent here, the ‘transaction as a whole.’” Walker, 254 Ariz. at 20 ¶ 10
(quoting Teufel v. Am. Fam. Mut. Ins. Co., 244 Ariz. 383, 385 ¶ 10 (2018)).

¶13 Cravens and Cincinnati each argue that the scope of the
Policy’s coverage centers on the phrase “in connection with your business.”
The superior court and court of appeals’ rulings also turned on this phrase.
Cravens, 2024 WL 2823307, at *2–3 ¶¶ 12–14, *6 ¶¶ 28–29. This analysis,
however, is too narrow to determine coverage under the Policy. To
determine the scope of coverage under the Policy, we must reconcile two
related and seemingly competing phrases: (1) “in your business,” and
(2) “in connection with your business.” An accurate interpretation of the
Policy requires a reading that harmonizes both phrases. See Aztar Corp. v.
U.S. Fire Ins. Co., 223 Ariz. 463, 475 ¶ 41 (App. 2010) (“When interpreting an
insurance contract, we have a duty to ‘harmonize all parts of the
contract . . . by a reasonable interpretation in view of the entire
instrument.’” (alteration in original) (quoting Brisco v. Meritplan Ins. Co., 132
Ariz. 72, 75 (App. 1982))).

A.

¶14 Cincinnati contracted with Casas to provide automobile
liability insurance for injuries and damages resulting from the use of a
covered auto. The Policy provided that Cincinnati “will pay all sums an
‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property
damage’ to which this insurance applies, caused by an ‘accident’ and
resulting from the ownership, maintenance or use of a covered ‘auto.’”

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(Emphasis added.) Casas purchased an expanded coverage policy that
amended this coverage to include its employees as insureds. The first
relevant phrase—“in your business”—arises from the Expanded Coverage
Plus Endorsement:

Who is an insured is amended by adding the
following: . . . Any of your “employees” while using a covered
“auto” in your business or your personal affairs, provided you
do not own, hire or borrow that “auto.”

(Emphasis added.) Notably, this coverage expansion is conditional. To
trigger coverage, the Policy must cover the vehicle, and it must be used in
Casas’s business. In other words, an employee is an insured only while
using a covered auto and such use is “in your business.”

¶15 The second relevant phrase—“in connection with your
business”—comes from § 1(A)(9) of the Policy, which defines a
“nonowned” covered auto:

NONOWNED “AUTOS” ONLY. Only those “autos” you do
not own, lease, hire, rent or borrow that are used in connection
with your business. This includes “autos” owned by your
“employees,” partners (if you are a partnership), members (if
you are a limited liability company), or members of their
households but only while used in your business or your personal
affairs.

(Emphasis added.) Therefore, a “nonowned” covered auto contains both a
type and purpose requirement: the vehicle must be one Casas does not own,
lease, hire, rent, or borrow (type) and must be used “in connection with”
Casas’s business (purpose). We note that the second sentence of this
provision applies the phrase “in your business” to vehicles owned by
employees or members of the employee’s household. Although Montano
was driving his mother’s vehicle at the time of the accident, she apparently
was not a member of Montano’s household because he drove to her house
to borrow her truck. Accordingly, because Montano’s use of his mother’s
truck does not qualify under the second sentence of this provision, only the
first sentence applies, and we must determine whether Montano drove the
car “in connection with [Casas’s] business.” But see Bartolomucci v. Fed. Ins.

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Co., 770 S.E.2d 451, 457 (Va. 2015) (interpreting an identical non-owned auto
provision yet applying the second sentence).

¶16 Although the “in your business” term in the expanded
coverage provision applies in this case, the “in connection with your
business” term set forth in the first sentence of the non-owned auto
provision also applies because it defines the relevant “covered auto”
referenced in the expanded coverage provision. While the phrases are
similar, they are not identical, and we therefore must reconcile them.
Reading these two applicable requirements together—“in your business”
and “in connection with your business”—the expanded coverage provision
can be rephrased as follows:

Who is an insured is amended by adding the
following: . . . Any of your “employees” while using a
covered “auto” (i.e., a non-owned auto that is “used in
connection with your business”) in your business or your
personal affairs, provided you do not own, hire or borrow
that “auto”.

In other words, to trigger coverage, the employee must use the vehicle in
connection with your business and in your business.

¶17 This coverage requirement appears discordant because these
phrases are not synonymous; “in connection with your business” is a
broader term than “in your business.” An example illustrates this conflict.
A pizza delivery driver, while making a delivery in his own vehicle that he
uses to deliver pizzas, notices an oil pressure warning indicator on his
dashboard. After he delivers the pizza, but before he returns to the pizza
shop to receive instructions for his next delivery, he drives to see a nearby
mechanic to check his oil pressure. On his way to the mechanic, he is
involved in an auto accident. The mechanic did not order pizza, so the
detour was not technically in the pizza business. But the diversion was
likely in connection with the pizza business because the oil pressure
warning light occurred during a pizza delivery and future deliveries
necessitated a functioning vehicle. Under “in your business,” insurance
coverage for the driver seems dubious. But under “in connection with your
business,” coverage for the driver is probable. Therefore, the Policy’s
coverage standard for employees using non-owned autos—which uses
both phrases—is incongruous.

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¶18 However, because the expanded coverage provision—“in
your business”—is the operative authority for Cravens’s coverage claim
against Montano as a Casas employee, we cannot interpret “in connection
with your business” in a way that renders the “in your business” condition
superfluous. See Terrell v. Torres, 248 Ariz. 47, 50 ¶ 14 (2020) (“[W]e attempt
to reconcile and give effect to all terms of the contract to avoid any term
being rendered superfluous.”). We must interpret “in connection with your
business” in a way that reconciles the two competing phrases.

¶19 We asked the parties at oral argument about the interplay
between these two provisions and whether one informed the other. Both
parties asserted that “in your business” and “in connection with your
business” were synonymous and, thus, their respective interpretations of
“in connection with your business” controlled.

B.

¶20 Cincinnati and Cravens stake out irreconcilable
interpretations of “in connection with your business.” Cincinnati argues
that “in connection with your business” means an employee must use a
vehicle in the course and scope of employment at the time of the accident.
This interpretation requires the employer’s right to control the employee’s
use of the vehicle at the time of the accident to implicate coverage. See
Engler v. Gulf Interstate Eng’g, Inc., 230 Ariz. 55, 59 ¶ 15 (2012) (“The concept
of ‘scope of employment,’ when used in the tort context, is tied to the
employer’s right to control the employee’s activity at the time of the tortious
conduct.”). Other jurisdictions interpreting nearly identical non-owned
auto provisions affirm this interpretation. See, e.g., Bamber v. Lumbermens
Mut. Cas. Co., 680 A.2d 901, 903 (Pa. Super. Ct. 1996) (holding that a vehicle
is a non-owned covered auto when the employee uses it “in the course of
his employment”).

¶21 Cravens contends that the court of appeals correctly
interpreted “in connection with your business” to mean “an association,
link, or relationship” between the vehicle’s use and the business at the time
of the accident. See Cravens, 2024 WL 2823307, at *2–3 ¶¶ 12–14, *6 ¶ 28
(citing Cal. Cas. Ins. Co. v. Am. Fam. Mut. Ins. Co., 208 Ariz. 416 (App. 2004)).
The court concluded that its definition of the phrase required coverage for
Montano’s use of his mother’s vehicle even if its relationship with Casas’s

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business “fell short of the showing necessary to establish Casas’s liability
under respondeat superior.” Id. at *6 ¶ 28. Other jurisdictions interpreting
nearly identical provisions also adopt this interpretation. See, e.g., RPM
Freight Sys., LLC v. Wesco Ins. Co., 656 F. Supp. 3d 721, 730–31 (E.D. Mich.
2023) (holding that the phrase “in connection with” means “related to”).

¶22 We conclude that both parties’ interpretations of the phrase
“in connection with your business” are reasonable given the Policy’s
inconsistent use of both broad and narrow language to describe the
requisite vehicle-business relationship. Therefore, the phrase is ambiguous.
See Teufel, 244 Ariz. at 386 ¶¶ 15–17. Other jurisdictions’ differing
interpretations of a nearly identical insurance provision bolster this
conclusion. See Thompson v. Gov’t Emps. Ins. Co., 122 Ariz. 18, 21 (App. 1979)
(“[W]here various jurisdictions reach different conclusions as to the
coverage under a similar insurance policy, such fact is a strong indication
that the policy provisions are ambiguous.”). However, we reject both
parties’ interpretations.

1.

¶23 We do not interpret “in connection with your business” to
mean course and scope of employment. In separate Policy provisions,
Cincinnati uses scope of employment language to exclude coverage.
Section 2(B)(5) of the Policy excludes: “‘Bodily injury’ to any fellow
‘employee’ of the ‘insured’ arising out of and in the course of the fellow
‘employee’s’ employment or while performing duties related to the conduct of
your business.” (Emphasis added.) Additionally, § 2(B)(4)(b) excludes
bodily injury to “an ‘employee’ of the ‘insured’ arising out of the
performance of duties related to the conduct of the ‘insured’s’ business.”
We read each section of an insurance policy “in light of the others so as to
give effect to all” of the provisions. Equity Income Partners, LP v. Chi. Title
Ins. Co., 241 Ariz. 334, 338 ¶ 11 (2017). In construing “in connection with
your business,” we assume Cincinnati intended a meaning other than
acting within the course and scope of employment because it explicitly used
that language in other parts of the Policy. See Bartolomucci, 770 S.E.2d at 457
n.3; cf. Comm. for Pres. of Established Neighborhoods v. Riffel, 213 Ariz. 247,
249–50 ¶ 8 (App. 2006) (“[W]e assume that when the legislature uses
different language within a statutory scheme, it does so with the intent of
ascribing different meanings and consequences to that language.”).
Moreover, course and scope of employment requires a level of direct

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control that is inconsistent with the indirect relationship “in connection
with” entails. See Engler, 230 Ariz. at 59 ¶ 15. Therefore, “in connection
with your business,” as used in the Policy, means something other than
course and scope of employment.

2.

¶24 We also decline to interpret “in connection with your
business” to mean association, link, or relationship. As noted, an employee
operating a non-owned covered auto must use the vehicle in connection with
your business and in your business—both standards are preconditions to
expanded coverage. The superior court and court of appeals’ conclusion
that “in connection with your business” merely requires an association,
link, or relationship between an employee’s use of a covered vehicle and
Casas’s business expands the relational threshold for coverage. For
example, this expanded scope would likely require insurance coverage for
employees while they drive to work, or while they are driving to pick up a
work uniform. To be sure, if the Policy did not require the employee to also
use the vehicle “in your business,” we may have embraced this
interpretation as the plain meaning of “in connection with your business.”
But “in your business,” reasonably construed in context, does not carry the
same broad implications. See Bartolomucci, 770 S.E.2d at 457–58 (noting that
“in your business” is narrower than the general scope of “in connection
with your business”).

¶25 We may not interpret “in connection with your business” so
broadly that it renders the narrower “in your business” threshold
meaningless. See First Credit Union v. Courtney, 233 Ariz. 105, 110–11 ¶ 23
(App. 2013) (“We construe the contract as a whole and do not render any
portion of it meaningless.”). To do so would alter the meaning of the Policy
to broaden coverage and effectively override the expanded coverage
provision, which establishes “in your business” as the operative term for
Cravens’s coverage claim against Montano as an employee of Casas.

C.

¶26 In sum, we conclude that the phrase “in connection with your
business” (1) does not mean course and scope of employment because the
Policy uses similar language in other provisions and “in connection with”
connotes an indirect relationship to the business that is inconsistent with

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the requisite direct control in course and scope; and (2) in context, requires
a closer connection to the business than a mere association, link, or
relationship. Stated differently, “in connection with your business” as used
in the Policy means less than course and scope of employment and more
than association, link, or relationship.

¶27 We find two cases from other jurisdictions illuminative in
interpreting “in connection with your business.” In Bartolomucci, the
Virginia Supreme Court interpreted a non-owned auto provision identical
to the one before us. 770 S.E.2d at 457–58. The court determined that the
first sentence of the non-owned auto provision (“in connection with your
business”) is general while the second sentence (“in your business”) is
specific, and that the second sentence narrows the first sentence when
applicable. Id. at 457. The court held that the second sentence governed
that case because the claimant was a partner of the law firm, and he owned
the vehicle at issue. Id. The insurer argued that “in your business” required
a scope of employment test, but the court rejected this interpretation. Id.
at 457 n.3. The court explained that it is bound by what contracts “actually
say, not on what may have been intended. As the instruments before us do
not include those phrases, the [policy] does not utilize such tests.” Id.
(internal citation omitted).

¶28 In construing “in your business,” the Bartolomucci court held
that the claimant was not using his vehicle in the law firm’s business at the
time of the accident. Id. at 458. The claimant’s mere use of his vehicle for
“a typical commute from home to work” did not satisfy the “in your
business requirement”—the claimant did not use his company Blackberry
during the commute, did not bill for any activity, and did not “otherwise
perform[] any work during his commute.” Id. at 457–58. The court
explained that “merely thinking about work does not make a commute ‘in’
the business, as contemplated by the policy language.” Id. at 458.

¶29 Bartolomucci illustrates how “in your business” narrows “in
connection with your business” by requiring a correlation between an
employee’s vehicle use and a business purpose that falls short of scope of
employment but exceeds a mere association, link, or relationship. Distilled,
an employee’s use of a vehicle must constitute or facilitate work to advance
a business purpose. See id.

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¶30 Pham v. Hartford Fire Insurance Co., 419 F.3d 286, 290 (4th Cir.
2005), is also instructive. In Pham, the Fourth Circuit interpreted a nearly
identical expanded coverage provision. Id. That provision amended who
is an insured to include: “Any employee of yours while using a covered
‘auto’ you don’t own, hire or borrow in your business or your personal
affairs.” Id. The court concluded that the policy covers an employee “so
long as the employee is engaged in [the employer’s] business or [the
employer’s] personal affairs.” Id. (emphasis added). Accordingly, the court
held that the employee was not engaged in the company’s business because
he was operating his vehicle outside of work hours and admitted the
vehicle use was unrelated to his job. Id.

¶31 We hold that the Policy’s coverage for an employee’s use of a
covered auto “in connection with your business” is contingent upon the
employee’s engagement in an employer’s business at the time of the
coverage event. See Bartolomucci, 770 S.E.2d at 458; see also Pham, 419 F.3d
at 290. An employee’s use of a vehicle must be directly involved with or in
furtherance of an employer’s business purpose but does not include a
routine commute to or from an employer’s office. See Bartolomucci, 770
S.E.2d at 457–58; see also State v. Superior Court, 111 Ariz. 130, 132 (1974) (“It
is equally well settled that an employer is not liable for the tortious acts of
his employee while the employee is going to or returning from his place of
employment—the so-called ‘going and coming rule.’”).

II.

¶32 We now turn to Cincinnati’s argument that the Morris
Agreement between Montano and Cravens is unenforceable because it is
contingent. The Agreement is contingent because it is subject to rescission
if Cravens is unable to pursue his claim of respondeat superior liability
against Casas for specified reasons. We are unpersuaded that the
Agreement is unenforceable. A contingent Morris agreement is enforceable
if it otherwise meets the well-established requirements of such agreements.

A.

¶33 “The term ‘Morris agreement’ is generally used to describe a
settlement agreement in which an insured defendant admits to liability and
assigns to a plaintiff his or her rights against the liability insurer, including
any cause of action for bad faith, in exchange for a promise by the plaintiff

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not to execute the judgment against the insured.” Safeway Ins. Co. v.
Guerrero, 210 Ariz. 5, 7 ¶ 1 n.1 (2005). Morris agreements typically occur
when the insurer—as Cincinnati did here—has issued a reservation of
rights. See id.; see also Morris, 154 Ariz. at 119.

¶34 We have cautioned that in an attempt “[t]o relieve himself of
personal exposure, the insured may be persuaded to enter into almost any
type of arrangement or stipulation by which the claimant hopes to bind the
insurer by judgment and findings of fact.” Morris, 154 Ariz. at 119–20. “To
protect the insurer, [this Court] place[s] the burden on the insureds (or their
assignees) to show that any Morris agreement is free of ‘fraud or collusion,’
and reasonable in amount.” Safeway Ins. Co., 210 Ariz. at 9 ¶ 10 (internal
citations omitted). An insurer must be “given notice” and an opportunity
to “contest its liability.” Morris, 154 Ariz. at 120.

¶35 Here, Cincinnati argues that contingent Morris agreements
subject an insured to abuse because they do not provide complete
immunity from personal exposure if the agreement is later rescinded.
Therefore, Cincinnati asks us to hold that contingent Morris agreements are
per se unenforceable. We decline to do so.

¶36 Contingent Morris agreements are unenforceable if they
deviate from the substantive principles enunciated in Morris due to fraud,
collusion, unfairness, or unreasonableness—not because they are
contingent. See id. at 121. We are unaware of any Arizona authority
supporting a categorical ban on contingent Morris agreements. Courts
review all Morris agreements on a case-by-case basis.

B.

¶37 The contingent Morris agreement here is enforceable. In the
Agreement, Montano and Cravens assented to the following contingency:

This Agreement shall be null and void and given the effect of
rescission if a court of law determines that this Agreement or
any provision of it precludes Plaintiff from pursuing his claim
of respondeat superior liability against Casas in the Superior
Court Action. But this Agreement shall not be null and void
nor given the effect of rescission if a court of law determines,

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on any other grounds independent of this Agreement, that
Casas is not vicariously liable for Defendant’s actions.

Therefore, if a court determined that the Agreement itself released Casas
from Cravens’s respondeat superior claim, the ruling would rescind the
Agreement. But if the claim should fail for any reason independent of the
Agreement, it would remain enforceable. Cravens explained that the
contingency provision was intended to protect against a court construing
the Agreement’s earlier promise not to execute against Casas’s personal
assets as a release of liability. Notably, at the time the Policy was executed,
a dismissal of an employee with prejudice precluded a claim for respondeat
superior against the employer. See Laurence v. Salt River Project Agric.
Improvement & Power Dist., 255 Ariz. 95, 106 ¶ 44 (2023).

¶38 Morris aims to protect insureds from “the sharp thrust of
personal liability” due to an insurer’s reservation of rights, and insurers
from fraudulent, collusive, and unreasonable agreements. See Parking
Concepts, Inc. v. Tenney, 207 Ariz. 19, 22 ¶¶ 13–15 (2004) (quoting Morris, 154
Ariz. at 118). An absence of apparent prejudice or unfairness generally
indicates a lack of fraud or collusion. See State Farm Mut. Auto. Ins. Co. v.
Paynter, 122 Ariz. 198, 201 (App. 1979); see also Leflet v. Redwood Fire & Cas.
Ins. Co., 226 Ariz. 297, 301 ¶ 15 (App. 2011) (“The overarching goal of Morris
is to permit the insured and the insurer to balance their competing interests
in an atmosphere of fairness and defined risk . . . .”). And allegations of
unreasonable settlements generally require a showing of excessive
pecuniary liability. See Fid. Nat’l Title Ins. Co. v. Centerpoint Mech. Lien
Claims, LLC, 238 Ariz. 135, 142 ¶¶ 34–36 (App. 2015). Here, the contingency
does not prejudice Cincinnati’s rights, nor does it leave Montano devoid of
protection because the triggering event is narrow in scope. Moreover, the
triggering event has not occurred. But if it should, it would result in the
exact relief Cincinnati requests—invalidation of the Agreement.
Consequently, the Morris Agreement is enforceable. However, if Cincinnati
establishes on remand that Montano was not engaged in Casas’s business
while using his mother’s truck, it will not be liable for “any part” of the
damages set forth in the Morris Agreement. See Safeway Ins. Co., 210 Ariz.
at 9 ¶ 10 (“If the insurer eventually succeeds in establishing that the claim
is not covered by the policy, the insurer is not liable for any part of the
settlement.”).

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 CRAVENS V. MONTANO
Opinion of the Court

CONCLUSION

¶39 For the foregoing reasons, we vacate the court of appeals’
coverage ruling and ¶¶ 18–29 of its decision, affirm its ruling concerning
the Morris Agreement, reverse the superior court’s judgment and remand
to it for further proceedings consistent with this Opinion.

¶40 We deny, without prejudice, the parties’ requested attorney
fees pursuant to A.R.S. § 12-341.01 because neither party is the successful
party at this stage of the proceedings.

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