IN THE

SUPREME COURT OF THE STATE OF ARIZONA

JACOB BENSON, AN INDIVIDUAL; JOSEPH BENSON; DEBORAH BENSON,

HUSBAND AND WIFE; K.B., A MINOR, BY AND THROUGH JACOB BENSON,

GUARDIAN AD LITEM,

Plaintiffs/Appellants, 

v.

CASA DE CAPRI ENTERPRISES, LLC, AN ARIZONA LIMITED LIABILITY 

COMPANY; UNKNOWN PARTIES, NAMED AS JOHN DOES 1–20; ABC

CORPORATIONS I–X; XYZ PARTNERSHIPS I–X, 

Defendants/Appellees,

CONTINUING CARE RISK RETENTION GROUP, INC., GARNISHEE,

Real Party in Interest/Appellee. 

 

No. CV-20-0331-CQ

Filed January 20, 2022 

Appeal from the United States District Court for the District of Arizona

No. 2:18-cv-00006-DWL

Certified Questions from

the United States Court of Appeals for the Ninth Circuit

Benson, et al. v. Casa de Capri Enters., LLC, Continuing Care Risk Retention 

Grp., Inc., 980 F.3d 1328 (9th Cir. 2020) 

QUESTIONS ANSWERED

COUNSEL:

H. Micheal Wright, David R. Schwartz (argued), Udall Shumway, PLC, 

Mesa; Steven S. Guy, The Guy Law Firm, PLLC, Scottsdale, Attorneys for 

Jacob Benson, Joseph Benson, Deborah Benson, and K.B.

Steven G. Mesaros, Brian E. Cieniawski, Renaud Cook Drury Mesaros, PA, 

Phoenix; Terri A. Sutton (argued), Cozen O’Connor, Seattle, WA, Attorneys 

for Continuing Care Risk Retention Group, Inc.
BENSON, et al. v. CASA DE CAPRI ENTERS., et al. 

Opinion of the Court

2 

JUSTICE BEENE authored the Opinion of the Court, in which CHIEF 

JUSTICE BRUTINEL, VICE CHIEF JUSTICE TIMMER, and JUSTICES 

BOLICK, LOPEZ, and MONTGOMERY joined.*

JUSTICE BEENE, Opinion of the Court:

¶1 The United States Court of Appeals for the Ninth Circuit 

certified the following questions to this Court: (1) In a garnishment action 

by a judgment creditor against the judgment debtor’s insurer claiming that 

coverage is owed under an insurance policy, where the judgment creditor 

is not proceeding on an assignment of rights, can the insurer invoke the 

doctrine of direct benefits estoppel to bind the judgment creditor to the 

terms of the insurance contract?; and (2) If yes, does direct benefits estoppel 

also bind the judgment creditor to the arbitration clause contained in the 

insurance policy?

¶2 We answer the first question “no” and therefore do not reach 

the second question. The common law doctrine of direct benefits estoppel 

cannot be invoked in a garnishment action to bind the judgment creditor to 

the terms of the contract because applying the doctrine in this context 

would contravene Arizona’s statutory garnishment scheme. 

BACKGROUND

¶3 From January 2012 to August 2013, Continuing Care Risk 

Retention Group (“CCRRG”) insured Casa de Capri Enterprises (“Capri”), 

a skilled nursing facility. The insurance policy provided up to $1 million in 

liability coverage and contained an arbitration clause, which stated:

Any dispute or controversy arising under, out of, in 

connection with or in relation to this Policy shall be submitted 

to, and determined and settled by, arbitration in Sonoma 

County, California . . . . Any demand for arbitration by a 

CCRRG Member under this Policy must be made within 

twelve (12) months of any dispute arising out of this “Policy”, 

* Although Justice Andrew W. Gould (Ret.) participated in the 

oral argument in this case, he retired before issuance of this Opinion and 

did not take part in its drafting.
BENSON, et al. v. CASA DE CAPRI ENTERS., et al. 

Opinion of the Court

3 

including, but not limited to any denial by CCRRG of defense 

or reimbursement, whether in whole or in part, of any 

“Claim” dispute or controversy that arises. . . . The parties 

agree that any such award shall also be final and binding in a 

direct action against CCRRG by any judgment creditor of a 

CCRRG Member.

¶4 Jacob Benson was a resident at Capri and is a “vulnerable 

adult.” See A.R.S. § 46-451(A)(11). In December 2012, Jacob and his family 

(“the Bensons”) sued Capri in Maricopa County Superior Court alleging 

negligence and abuse of Jacob. Capri sent the claim to CCRRG, which 

provided a defense. In August 2013, Capri filed a Chapter 11 bankruptcy 

petition, triggering an automatic stay of all litigation. Capri retroactively 

cancelled its insurance policy with CCRRG, effective August 1, 2013. 

CCRRG then discontinued defending Capri and disclaimed any further 

coverage.

¶5 Three years later, the Bensons obtained an order partially 

lifting the bankruptcy stay so they could pursue their action against Capri. 

As part of the order, the Bensons obtained an assignment of Capri’s bad 

faith insurance claim against CCRRG. In December 2017, the trial court 

entered a $1.5 million uncontested judgment in favor of the Bensons and 

against Capri.

¶6 After the court entered judgment, the Bensons filed a writ of 

garnishment against CCRRG to collect the judgment. CCRRG removed the 

garnishment action to federal court and moved to compel arbitration under 

the policy’s arbitration clause. CCRRG also disputed that it would owe any 

coverage to Capri because Capri cancelled the policy.

¶7 The United States District Court for the District of Arizona 

granted CCRRG’s motion to compel arbitration and dismissed the action. 

The Bensons appealed to the Ninth Circuit, which certified the questions to 

this Court.

¶8 We have jurisdiction pursuant to article 6, section 5(6) of the 

Arizona Constitution and A.R.S. § 12-1861. 
BENSON, et al. v. CASA DE CAPRI ENTERS., et al. 

Opinion of the Court

4 

DISCUSSION

¶9 The district court ruled that even though the Bensons were 

nonsignatories to the policy, they were bound to its arbitration clause under 

Arizona’s doctrine of direct benefits estoppel. The Bensons argue that 

because their garnishment action is not premised on an assignment of 

Capri’s coverage claims under the CCRRG policy but is instead based on 

an assignment of Capri’s bad-faith claim, they should not be bound by the 

arbitration clause in the contract that they did not sign. They also argue 

that garnishment is a statutory remedy and is therefore not subject to 

private arbitration. CCRRG contends that because the Bensons sought to 

avail themselves of the benefits of the CCRRG policy, they should be bound 

by the arbitration clause. We review issues of law arising out of a contract

and the interpretation of statutes de novo. JTF Aviation Holdings Inc. v. 

CliftonLarsonAllen LLP, 249 Ariz. 510, 513 ¶ 14 (2020); Premier Physicians 

Grp., PLLC v. Navarro, 240 Ariz. 193, 194 ¶ 6 (2016). 

I. 

¶10 Before addressing the questions certified to us by the Ninth 

Circuit, we examine the relationship between contractual arbitration 

clauses and the doctrine of direct benefits estoppel.

¶11 The Federal Arbitration Act, 9 U.S.C. § 1, et seq., governs the 

arbitration clause here, and makes “written arbitration agreements ‘valid, 

irrevocable, and enforceable, save upon such grounds as exist at law or in 

equity for the revocation of a contract.’” Arthur Andersen LLP v. Carlisle, 556 

U.S. 624, 629–30 (2009) (quoting 9 U.S.C. § 2). Nonparties to a contract are 

generally not bound by an arbitration agreement. See Dueñas v. Life Care 

Ctrs. of Am., Inc., 236 Ariz. 130, 139 ¶ 26 (App. 2014). There are common 

law exceptions to this general rule, however, including direct benefits 

estoppel, which is at issue here. Id. (citing Bridas S.A.P.I.C. v. Gov’t of 

Turkmenistan, 345 F.3d 347, 356 (5th Cir. 2003)); Austin v. Austin, 237 Ariz. 

201, 208–09 ¶ 23 (App. 2015).

¶12 Direct benefits estoppel specifies that “a nonsignatory may be 

compelled to arbitrate only when the nonsignatory (1) knowingly exploits 

the benefits of an agreement containing an arbitration clause, or (2) seeks to 

enforce terms of that agreement or asserts claims that must be determined 
BENSON, et al. v. CASA DE CAPRI ENTERS., et al. 

Opinion of the Court

5 

by reference to the agreement.” Austin, 237 Ariz. at 210 ¶ 29 (citing Reid v. 

Doe Run Res. Corp., 701 F.3d 840, 846 (8th Cir. 2012)); see also Schoneberger v. 

Oelze, 208 Ariz. 591, 594 ¶ 14 (App. 2004) (“In the arbitration context, a 

nonsignatory to an agreement requiring arbitration may be estopped, that 

is, barred, from avoiding arbitration if that party is claiming or has received 

direct benefits from the contract.”). 

II. 

¶13 Next, we consider Arizona’s garnishment statutes. 

Garnishment did not exist at the common law; it is not itself a cause of 

action or claim but is entirely a statutory remedy. Kellin v. Lynch, 247 Ariz. 

393, 398 ¶ 18 (App. 2019); see also A.R.S. §§ 12-1570 to -1597. “Since 

garnishment is a creature of statute, garnishment proceedings are 

necessarily governed by the terms of those statutes . . . [and] courts may not 

allow garnishment proceedings to follow any course other than that charted 

by the legislature.” Bennett Blum, M.D., Inc. v. Cowan, 235 Ariz. 204, 208 ¶ 16 

(App. 2014) (quoting Patrick v. Associated Drygoods Corp. (Goldwater’s Div.), 

20 Ariz. App. 6, 9 (1973)) (holding that because garnishment is a statutory 

cause of action, “a trial court must follow the manner in which the 

legislature has chosen for making [a] determination”); see also Carey v. 

Soucy, 245 Ariz. 547, 551 ¶ 15 (App. 2018) (explaining that courts narrowly 

construe the garnishment statutes and apply them exactly as the legislature 

prescribed).

¶14 A garnishment proceeding is limited and moves on a

statutorily expedited timeline and pursuant to prescribed detailed 

procedures. See Davis v. Chilson, 48 Ariz. 366, 369–70 (1936); A.R.S. 

§§ 12-1578.01, -1580. Importantly, the legislature provided that the “court, 

sitting without a jury, shall decide all issues of fact and law.” § 12-1584(E); 

see also § 12-1584(A) (“[O]n application by the judgment creditor the court 

shall enter judgment on the writ . . . .”), § 12-1584(B) (“[T]he court, after 

hearing evidence and argument, shall determine whether the writ is valid 

against the judgment debtor, what amount is presently due and owing on 

the underlying judgment . . . and the court shall enter judgment . . . .”).

III. 

¶15 With these principles in mind, we now turn to the question 

before us. It is undisputed that insurance loss obligations can be garnished. 
BENSON, et al. v. CASA DE CAPRI ENTERS., et al. 

Opinion of the Court

6 

See Sandoval v. Chenoweth, 102 Ariz. 241, 245 (1967) (“It seems to be settled 

that after recovering a judgment against an insured under a liability policy, 

the injured third person may collect such judgment by instituting 

garnishment proceedings against the liability insurer.”); see also Kepner v. 

W. Fire Ins. Co., 109 Ariz. 329, 332 (1973) (“Such a testing of the insurer’s 

liability may take the form of . . . proceedings on garnishment following the 

trial of the third party’s action as in the instant case.”); Webster v. USLife Title 

Co., 123 Ariz. 130, 132 (App. 1979) (“These derivative rights, in essence, 

place the garnishor-creditor in the shoes of the debtor and if the debtor has 

no right to the funds sought to be garnished, then neither does the 

garnishor-creditor.”). 

¶16 The Ninth Circuit asks whether the doctrine of direct benefits 

estoppel can be applied in an Arizona garnishment proceeding as an 

exception to the general rule that nonparties are not bound by the terms of 

a contract. We hold it cannot.

¶17 Permitting the application of direct benefits estoppel in 

garnishment proceedings would contravene the legislature’s directive that 

garnishment proceedings adhere to prescribed statutory procedures. This 

includes the statutory requirement that the trial court—not an arbitrator—

resolve all factual and legal issues. The common law doctrine of direct 

benefits estoppel cannot be applied to supplant the legislative scheme for 

garnishment. Allowing the arbitration clause to control in a garnishment 

proceeding would undermine the legislature’s intent that the trial court 

decide the issues of law and fact. Courts narrowly construe the 

garnishment statutes and apply them as prescribed by the legislature. See 

Carey, 245 Ariz. at 551 ¶ 15. A common law equitable doctrine cannot 

supersede the legislature’s clear mandate regarding garnishment

proceedings. 

¶18 Additionally, courts in other jurisdictions have found that

similarly worded garnishment provisions preclude arbitration entirely. 

See, e.g., Penford Prods. Co. v. C.J. Schneider Eng’g Co., 808 N.W.2d 443, 448

(Iowa Ct. App. 2011) (“While the garnishor ‘stands in the shoes’ of the 

judgment debtors, this is in the context of the issue presented in the 

garnishment proceedings. It does not extend to the arbitration clause in the 

agreement between [the two companies]. Further, the garnishment statute 

provides that this issue shall be decided by trial.”); see also United States v. 
BENSON, et al. v. CASA DE CAPRI ENTERS., et al. 

Opinion of the Court

7 

Harkins Builders, Inc., 45 F.3d 830, 833 (4th Cir. 1995) (“Under Virginia law, 

a garnishment proceeding is a separate proceeding in which the judgment

creditor enforces the ‘lien of his execution’ against property or contractual 

rights of the judgment debtor which are in the hands of a third person . . . . 

[T]he judgment creditor does not ‘step into the shoes’ of the judgment 

debtor and become a party to the contract, but merely has the right to hold 

the garnishee liable for the value of that contract right.”).

¶19 However, if the debt is contested, as is the case here, the 

judgment creditor must prove that the insurer was obligated to insure the 

loss under the insurance agreement. This does not mean that the Bensons 

are bound by or effectively parties to the insurance contract, but rather they

have standing to access the funds to the extent the original insured could 

have. The parties must necessarily refer to the insurance policy to 

determine the existence of a debt, but these issues must be resolved by a 

court. See Kepner, 109 Ariz. at 332 (“Such a testing of the insurer’s liability 

may take the form of a declaratory judgment brought in advance of the 

third party’s action or proceedings on garnishment following the trial of the 

third party’s action as in the instant case.”).

CONCLUSION

¶20 For the foregoing reasons, we answer the Ninth Circuit’s first 

certified question as follows: In a garnishment proceeding, an insurer 

cannot invoke the doctrine of direct benefits estoppel to bind a judgment 

creditor to the terms of the insurance contract. Because the answer to the 

first question is no, we do not reach the second question.