The judicial landscape of 2023 was marked by several pivotal decisions that significantly impacted the legal landscape on several fronts. From rulings on qualified immunity for healthcare professionals to underinsured motorists decisions, the courts played a significant role in interpreting and changing the application of significant laws in Arizona this past year. In this article, we will delve into some of the most influential court decisions and break them down.
Roebuck v. Mayo Clinic, et. al. 2023 WL, 6067118 (Ariz. Ct. App. 2023)- Arizona’s COVID Immunity Statute Ruled Unconstitutional
A.R.S. §12-516 was enacted amid the COVID pandemic and provided qualified immunity to healthcare professionals and institutions for acts and/or omissions that occurred when rendering their response to the state emergency caused by the pandemic. The only exception was if a claimant was able to prove clear and convincing evidence that the professional or institution acted with willful misconduct or gross negligence. Id. It was argued that the qualified immunity COVID statute bars a claimant from bringing an ordinary negligence claim because it effectively “denies relief to patients injured by negligence in the provision of COVID-related medical treatment who cannot make the additional showing required to establish gross negligence.” Consequently, the question presented was whether the statute, in creating a heightened evidentiary standard, violated the anti-abrogation clause, which prohibits the legislature from abrogating a common law action for negligence.
In Roebuck, the Arizona Court of Appeals acknowledged the legislature may regulate common tort actions, but determined that section 12-516 does more than simply raise the burden of proof. The Court clarified that a claim for gross negligence is a distinct theory of liability from ordinary negligence, and the statute would effectively deny recovery for ordinary negligence. Since the anti-abrogation claims does not permit the legislature to wholly extinguish a particular type of claim available at common law even if alternative causes of action remain available to injured claimants, it was, therefore, unconstitutional. Ultimately, the legislature may make it more difficult to obtain a recovery, but may not raise the burden of proof to the point where the right to recovery for ordinary negligence is extinguished.
State Farm v. Orlando, 2023 WL 5214931 (Ariz. Ct. App. 2023)- Underinsured Motorist statute does not Permit Off-Highway Vehicle Exclusions
In State Farm, it was argued that UIM coverage was not available because an ATV was not an "underinsured motor vehicle", as that term was defined under the policy. The policy excluded coverage for vehicles “designed for use primarily off public roads.” The Arizona Court of Appeals held that Arizona’s underinsured motorist (UIM) statute does not allow insurers to exclude off-highway vehicles from its policies. Citing A.R.S. §20-259.01(G), the Court held exceptions to UIM coverage not permitted by the statute are void. The Court further reasoned that the "legislature intended a broad application of UIM coverage to provide benefits up to the policy limit whenever the insured is not indemnified fully by the available limits." Of note, the Court's analysis indicated that courts would not be required to follow case interpreting the UM statute when evaluating similar issues pertaining to UIM claims.
Amick v. Banner Health, 2023 WL 5217704 (Ariz. Ct. App. Aug. 15, 2023) (mem. decision)- Hospital Did Not Owe Patient a Non-delegable Duty to Provide Neurosurgical Care
Amick v. Banner Health involved a medical malpractice action brought against the treating physician, the on-call neurosurgeon, the hospital, and others. The plaintiff claimed that she received inadequate care and was rendered quadriplegic as a result. The trial court granted partial summary judgment for the patient on the issue of vicarious liability after finding the neurosurgeon was the hospital’s "apparent agent." The Court reversed after finding conflicting evidence of apparent agency. Further, the court refused to affirm the grant of summary judgment on the basis that the hospital owed her a non-delegable duty to provide surgical care. The Court emphasized that non-delegable duties are few, typically limited to duties imposed by common law, statute, contract, franchise or charter. The Court reasoned that no Arizona court had previously found that a hospital owed a non-delegable duty to provide surgical care. The Court also found no contractual basis between the neurosurgeon and the hospital to impose such a duty. Therefore, the hospital was not variously liable for the tort of the neurosurgeon.
Doe v. Roman Catholic Church, et. al. 533 P.3d 214 (Ariz. Ct. App. 2023)- Catholic Church Not Held Vicariously Liable for Acts of Priest
In Doe, the Arizona Court of Appeals affirmed the trial court’s dismissal of plaintiff’s direct and vicarious liability claims. The case involved alleged abuse by a priest who had served the parish for nearly 40 years. The Court found that the church could not be held directly liable for the priest’s acts since there were no evidence establishing that they knew or should have known that he posed a specific threat to children. The Court rejected claims that alleged involvement in a homosexual relationship, romantic pursuit of another adult male that resulted in an arguably non-consensual touching and/or his qualification for being ordained could not be considered in determining whether the church acted with due diligence. The court also found that the church could not be held vicariously liable for the priest’s acts since he was not working “within the course and scope of his employment at the time” of his wrongdoing.
The Court distinguished the case of State v. Schallock, 189 Ariz. 250, 941 P.2d 1275 (1997), which held an employer liable for pervasive abuse and harassment in the workplace by a manager. The Court noted in the absence of pervasive and long-standing abuse, a jury could not find that the employer knew or should have known of the abuse. By distinguishing Shallock, claimants may be required to meet a higher evidentiary threshold before an employer may be liable for the torts of its employees.
Estate of Brady v. Tempe Life Care Village, Inc. 254 Ariz. 122, 519 P.3d 707 (Ariz. Ct. App. 2022)- Wrongful Death Beneficiaries Who Fail to Comply With Court Deadlines Will be Excluded From Recovery
The Arizona Court of Appeals affirmed the trial court’s exclusion of wrongful beneficiaries' damages claims due to untimely disclosure. The case involved the death of a father at a nursing facility and subsequent wrongful death action brought by his eight children. Two of the siblings initiated the action via counsel and timely disclosed their claimed losses. However, five of the siblings were not represented and did not disclose their claimed losses until three months after discovery had closed. The siblings argued that the statutory beneficiaries who had initiated the claims breached fiduciary duties by failing to disclose their damages. The Court disagreed, stating that the statutory beneficiary had the duty to represent all beneficiaries for liability, but that they each have their own duty to properly pursue their own individual damages claim.
The disclosure statement did include generic disclosures, stating that such witnesses would be expected to testify regarding his or her relationship with the father and how his death affected him or her. The court found this generic disclosure for a contingent claim did not constitute proper disclosure. The court also rejected the contention that a claim for wrongful death excuses the need for Rule 26.1 damage disclosure, as such testimony is subjective. This decision provides significant support for exclusion of beneficiaries that have not participated in litigation, such as an absentee or unknown parent, or estranged family member.
Avitia v. Crisis Preparation, 2023 WL 6800334 (Ariz. Oct. 16, 2023)- Duty to Report is not Triggered Where Healthcare Provider Unaware of Past or Present Abuse
A.R.S. § 13-360(A) states, “a healthcare provider who reasonably believes that a minor is or has been the victim of physical injury, abuse, child abuse, a reportable offense, or neglect, who forms this belief in the course of treating a patient, shall immediately report this information to a peace officer.” The Arizona Supreme Court found that a healthcare professional does not have a duty to report when they had reason to suspect "future abuse," but no knowledge of past or present abuse. Further, it held that there is no common law duty to report potential abuse based only on the foreseeability of harm. Rather, it is premised on the parties' special relationship and expectations imposed by public policy.
Franklin v. CSAA Gen. Ins. Co., 532 P.3d 1145 (Ariz. 2023)- Underinsured Motorist Coverage Required for Each Vehicle Even if All Listed on Single Policy
Arizona Supreme Court held ARS section 20-259.01 requires a single policy insuring multiple vehicles to provide different underinsured motorists (UIM) coverage for each vehicle. The court also held that an insured may receive UIM coverage from the policy in an amount greater than the policy’s bodily injury or death liability limits. The case involved a plaintiff’s attempt to stack multiple UIM coverages under her mother’s policy after the mother died in an automobile accident. The court determined ARS 20-259.01(H) required the policy to unambiguously prevent stacking. Finding the policy failed to do so, the Court held plaintiff was permitted to stack multiple UIM coverages.
Columbus Life Ins. v. Wilmington Trust, N.A., 532 P.3d 757 (Ariz. 2023)- Insurer Cannot Challenge the Validity of a Life Insurance Policy Based on Lack of Insurable Interest Under Arizona’s Incontestability Statute
The Arizona Supreme Court found that an insurer cannot challenge the validity of a life insurance policy based on lack of insurable interest under Arizona’s incontestability statute. The case involved a second to die life insurance policy that was issued by Columbia Life Insurance for a married couple and later sold to Wilmington Trust, an entity that had no insurable interest in the policy holders' lives. A.R.S. § 20-1104(A) renders it illegal and against public policy for anyone to procure an insurance contract on the life of another individual unless the proceeds are paid to the individual or his personal representatives. Nevertheless, Wilmington Trust submitted a claim for death benefits and Columbus refused to pay, filing suit seeking a declaratory judgment that the policy was void ab initio as a STOLI scheme or illegal wagering contract. Wilmington Trust filed a Motion for Judgment on the Pleadings arguing the challenge was prohibited under ARS 12-1204 which prohibits an insurer from contesting a life insurance policy after two years from issuance. The court agreed and held that Columbus could not contest the validity of the policy claiming Wilmington lacked an insurable interest after the two-year contestability period had run. The Court noted the "loophole that unscrupulous death wagers can exploit to the detriment of insurance companies", but stated that "once the legislature displaces common law, we shed our policy role and confine ourselves to the statutory interpretation."
Laurence v. Salt River Project, et. al., 528 P.3d 139 (Ariz. 2023)- Respondeat Superior Claim Against an Employer May Remain Viable Even if the Underlying Claim Against the Employee is Dismissed
Arizona Supreme Court held a respondeat superior claim against an employer may remain viable even if the underlying claim against the employee is dismissed. In effect, this decision overruled the Degraff v. Smith, 62 Ariz. 261, 157 P.2d 342 (1945), a decision which held that courts must dismiss claims against employers based on respondeat superior when the employee’s claim is dismissed with prejudice. The case involved a motorist’s negligence claim brought against a public employee and their employer. The trial court dismissed the plaintiff’s claims against the employee, with prejudice, for failing to file a timely complaint under ARS section 12-821.01, which requires claims against public entities or public employees to be filed within 180 days of the cause of action that gave rise to he claim. The plaintiff was able to file a timely claim against the employer, but did not bring the claim against the employee until nearly 15 months after the accident. The trial court held the dismissal of the employee claim necessitated the dismissal of the respondeat superior claim as well. The court reversed and held that since summary judgment on the employee claim was granted for reasons unrelated to the merits of the claim, dismissal of the respondeat superior was not required.
Zambrano v. M&RC II LLC, et al. 254 Ariz. 53, 517 P.3d 1168- Implied Warranty in Sale of New Homes May Not be Waived
Arizona Supreme Court held a disclaimer of implied warranty of workmanship and habitability was void as contrary to public policy. The case involved a purchase agreement between a home builder and home buyer where they agreed to disclaim and waive the implied warranty of habitability and replace it with an express warranty. The homebuyer brought a construction defect action against the home builder for breach of the implied warranty of workmanship and habitability. After weighing the public policy underlying the implied warranty of workmanship and habitability against enforcement of the disclaimer and waiver provision, the court found the public policy outweighed enforcement of the disclaimer and waiver of the express warranties. The Court further explained that allowing such a waiver would effectively negate implied warranties entirely, as builders would undoubtedly include such a waiver in their agreements and buyers would lack the power and/or knowledge to contest such a waiver. Importantly, a failure to update purchase contracts to remove unlawful waiver of implied warranty rights may be considered a deceptive or unfair act intended to mislead or harm consumers, resulting in exposure under Arizona's Consumer Fraud Act.
The attorneys at WSHB are constantly monitoring developments in the courts and legislature. Please feel free to reach out to a member of our team should you have any questions about these latest decisions in the Arizona courts.