The case that started this line of thinking is Roman v. Carroll, 621 P.2d 307 (Ariz.Ct.App. 1980). Though the whole opinion is only two paragraphs long, it was treated as though it were a lengthy and thoughtful analysis of companion animal damages. It was not. Simply put, Roman v. Carroll stated that a companion animal's owner is not allowed to recover emotional distress damages for witnessing the negligent death of her companion animal. It did not establish a "fair market value only" rule.
Next in the saga came Jeter v. Mayo Clinic Arizona, 121 P.3d 1256 (Ariz.Ct.App. 2005). Though this case had nothing to do with non-human animals (it dealt with the loss of cryogenically preserved embryos), it did address the issue of emotional distress damages for the loss of property, and addressing Roman in a footnote, essentially limited Roman to its facts.
For a little while, it seemed that Jeter would be the undoing of the Roman rule. In 2009, though, the Court of Appeals decided Kaufman v. Langhofer, 222 P.3d 272 (Ariz.Ct.App. 2009). In this case, the court determined that a person cannot claim emotional distress damages for the death of a companion animal, whether the person witnessed the death or not. I represented several amicus curiae at the Court of Appeals on this case, and as I have so often seen, the judges were sympathetic to my position -- and then ruled unanimously against it.
Kaufman is often used by my opposing counsel. Sometimes, they point out that I actually argued the case, and therefore I should know better than to seek anything more than "fair market value." A careful reading of Kaufman, though, reveals that although the court recognized that "fair market value" is often the measure of such damages, the court also did not establish that it is always the rule. (I think it important to note that the only case cited by the court in Kaufman in support of this proposition involved bees, and not a companion animal.)
Thus, we are left with common law cases not involving animals to determine how much they should be worth. The good news is that Arizona has recognized the "actual value to owner" test for property having little or no fair market value since 1925. See Jones v. Stanley, 233 P. 598 (1925). This rule applies to the valuation of companion animals at least as much as the rule in Kaufman -- in fact, the court in Kaufman specifically declined to address the "actual value to owner" rule (see paragraphs 20-21), while noting that Jones v. Stanley is still good law.
Thus, contrary to the general attitude of most lawyers and judges in Arizona, the law in this state DOES allow a companion animal owner to recover more than "fair market value" for his or her lost friend. Do not be persuaded otherwise.