ARIZONA – November Case Law Update

Author: J.P. Harrington

Municipal Liability/Defamation

Pinal County v. Cooper, No. 1-CA-SA 15-0171, 2015 WL 6157397 (October 20, 2015)

Facts and Procedural History

Timothy Gaffney, Director of Communication for the Pinal County Sheriff’s Office brought an action against Fritz Behring and Pinal County based on Behring’s actions as Pinal County Manager. Gaffney alleged Behring deliberately attempted to injure him by, among other things, disseminating false information about him. Specifically, Gaffney alleged that Behring published to the Sheriff and the Deputy Sheriff the following statements:

  • Why do you have a felon working for you?
  • He’s hidden email. He’s deleted email. He’s made a false claim on a travel invoice.
  • Gaffney was a minion, spear thrower, operative who drops bombs on people, and a felon.
  • Gaffney was crazy, out of control, and a felon.
  • Gaffney needed to be controlled and fired.

Holding

The Court held the statements Behring made about Gaffney were not actionable as a matter of law. Gaffney was a public official. A defendant is only liable for defamation of a public official if he, with actual malice, publishes to a third party a false and defamatory communication concerning the plaintiff. To be defamatory, a publication must be false and must bring the defamed person into disrepute, contempt, or ridicule, or must impeach plaintiff’s honesty, integrity, virtue, or reputation. A substantially true communication is not actionable. A communication is not actionable if it is comprised of loose, figurative, or hyperbolic language that cannot reasonably be interpreted as stating or implying facts susceptible of being proven true or false.

Behring’s disparaging characterizations of Gaffney as a “minion,” “spear thrower,” “operative who drops bombs on people,” and a “crazy” person who was “out of control” did not assert or imply statements of fact capable of being proven true or false. They could reasonably be construed as nothing more than hyperbolic invective. Behring’s statements that Gaffney should be controlled or fired were not susceptible to proof of objective falsity. The statements that Gaffney was a “felon,” had “hidden [and] deleted email,” and had “made a false claim on a travel invoice” were capable of being proved true or false. However, the evidence showed that the statements were not made with actual malice. Gaffney admitted he deleted official emails after receiving public records requests, and admitted that destroying public records is a felony under Arizona law. The agency that investigated the travel-reimbursement issue concluded that while criminal charges ultimately were not warranted, Gaffney’s conduct raised “clear concerns”. Therefore, none of the statements provided grounds for a defamation claim.

Policy Exclusion Interpretation

Kirkland v. Old United Casualty Company, No. CV-2012-011997, 2015 WL 6391761 (Memorandum Decision – October 22, 2015)

Facts and Procedural History

On March 30, 2012, Kirkland was involved in an accident while piloting a Focke-Wulf FW-190 airplane. The owner of the plane had purchased ground and flight insurance from Old United. Old United denied coverage for damages arising from the accident taking the position Kirkland was not an “approved pilot” under the policy. The policy at issue limited coverage to flights flown by “approved pilots” and imposes conditions that must be satisfied before coverage applies. Specifically:

ITEM 7. APPROVED PILOTS – During each “Approved Use” as defined in Item 6, the aircraft must be operated in-flight only by the “Approved Pilots” shown below who must have a current and proper (1) medical certificate and (2) pilot certificate with necessary ratings as required by the FAA for each flight. There is no coverage under the policy if the pilot does not meet these requirements.

Lee Lauderback and Stewart Dawson and Bill Muzala

Dan Kirkland is required to receive a check ride and sign off by Lee Lauderback in the same make and model aircraft insured herein and 25 hours solo in the same make and model aircraft insured herein prior to . . . completing a check ride with Stewart Dawson.

Under “General Provisions and Conditions” the policy states, “When the aircraft is in-flight, you must make certain that the pilots are ‘approved pilots’ in Item 7 of the PSP [policy summary page]. There is no coverage if this requirement is not met.” Absent compliance with the approved pilot conditions, the insurance policy made clear that no coverage existed.

Holding

The Court held Kirkland failed to satisfy the conditions required to be an “approved pilot” under the terms of the policy. He never completed a check ride with either Lee Lauderback or Stewart Dawson in a FW-190. Kirkland failed to complete the twenty-five hours of solo flight in a FW-190 that was expressly required by policy Item 7. The policy required each approved pilot to have a “pilot certificate with necessary ratings as required by the FAA for each flight.” On the day of the accident, Kirkland was piloting the aircraft on an expired FAA Letter of Authorization. The Focke-Wulf FW-190 is an experimental aircraft, and the FAA issued Kirkland a temporary letter of authorization, authorizing him to receive pilot training and practice on the aircraft. It expired six days before the accident. As such, he was piloting the FW-190 without FAA authorization. Kirkland failed to meet several conditions necessary to become an approved pilot under the policy justifying Old United’s denial of coverage.

Employment Law

Muriel v. SCI Arizona Funeral Services, Inc., 2015 WL 6591778 (D. Ariz.) (October 30, 2015)

Facts and Procedural History

Lorrie Muriel worked in the funeral home industry. While an employee at SCI, she worked as an embalmer earning $19 an hour, a location manager earning $52,000 a year initially then after raises earning $54,363 annually. She requested a demotion to funeral director earning $21 an hour. She resigned in May 2014. She subsequently filed suit alleging violation of the Equal Pay Act (“EPA”) and retaliation. The parties stipulated the retaliation claim could be dismissed. Ms. Muriel alleged SCI violated the EPA because it paid higher wages to two male employees that performed the same work.

Holding

The EPA prohibits employers from paying employees of one sex less than employees of the other sex “for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions” No intent to discriminate need be shown. A plaintiff must show the employees of the opposite sex were paid different wages for equal work. It involves a comparison of the jobs in question, and not a comparison of the individuals who hold the jobs. If plaintiff can so demonstrate, a defendant must show the difference in pay is justified under one of the Act’s exceptions: 1) a seniority system; 2) a merit system; 3) a system which measures earnings by quantity or quality of production; or 4) a differential based on any other factor other than sex.

Plaintiff showed two SCI employees received higher wages for the same jobs previously held by plaintiff. The court found SCI showed an exception applied  to the location manager position because the salary was based on a prior salary of the employee and negotiations. The funeral director position salary was also based on negotiations and prior salary. Accordingly, the discrepancy was based on factors other than sex. Plaintiff failed to cite any evidence SCI intended to discriminate against her on the basis of her gender or any other evidence to undermine SCI’s justifications for the differences in pay. Her claims fail and summary judgment was proper.

Smith v. City of Phoenix, 2015 WL 6811660 (D. Ariz.) (November 6, 2015)

Facts and Procedural History

Plaintiffs Joan Karen Smith and Roberta Tate worked as resident assistants (RAs) at Pine Tower, a senior housing facility owned and operated by the City of Phoenix. They signed a Tenant Resident Agreement (TRA) each year. The agreement provided each RA was to be an independent contractor and shall not be an employee of the City. Testimony showed plaintiffs could be a combination of volunteers and independent contractors and that they were a combination of both. The TRA agreement included an attachment that listed the RA job duties. After hours, the RAs were to respond to emergencies such as fire, flood, and medical emergencies. The RAs received a rent free apartment and a monthly stipend. Plaintiffs filed suit alleging two claims under the Fair Labor Standards Act (FLSA) for minimum wage violations and overtime violations.

Holding

The FLSA provides every employer shall pay to each of his employees, who in any workweek is engaged in commerce, or in the production of goods for commerce, or is employed in an enterprise engaged in commerce, or in the production of goods for commerce, a minimum wage. No employer shall employ any of its covered employees for a work week that is longer than 40 hours unless that employee receives as compensation for his employment at least one and a half times the regular rate for all overtime hours. Whether this provision applies to plaintiffs depends on whether they are considered employees.

The court found based on the totality of the circumstances, as a matter of law, plaintiffs were not independent contractors. Although defendant did not exert total control over the manner in which plaintiffs’ work was to be done, defendant provided a list of duties that plaintiffs were to perform and the Pine Tower manager at times assigned additional tasks to them such as helping to prepare and deliver the monthly rent statements. There was a high degree of permanence in the working relationship, even though plaintiffs signed a new contract each year. Smith was an RA for almost seven (7) years and Tate was an RA for over three (3) years. The fact that either party could terminate the RA contract also suggested an employee relationship.

Plaintiffs were not volunteers. Smith received $5,472 in free rent and Tate received $3,000 in free rent. With the $2,400 in stipends Smith received annual compensation of $7,872 and Tate received $5,400. These amounts represent compensation, not reasonable benefits or nominal fees. It is also significant that plaintiffs signed contracts each year; something a volunteer would not be required to do. Plaintiffs’ motion for summary judgment is granted, holding plaintiffs are neither independent contractors nor volunteers for purposes of FLSA.

ABOUT THE AUTHOR
J.P. Harrington Bisceglia is senior counsel at Tyson & Mendes, LLP. She specializes in general liability defense, insurance coverage and bad faith litigation. Contact J.P. at 602.386.5644 or jpharrington@tysonmendes.com.

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