Humphrey, et al. v. Arizona[i]

Factual and Procedural History

On May 14, 2008, Pamela Humphrey and her sister-in-law, Ann Quinn were traveling on Interstate 10 between Tucson and Phoenix in Arizona when Pamela lost control of the vehicle, crossed the median, and collided with a semi-truck traveling the other direction. Both women did not survive. The accident triggered a wrongful death action for their statutory beneficiaries, including their husbands, James Humphrey (“Humphrey”) and Lynn Quinn (“Quinn”).

On or around August 13, 2008, Quinn sent Humphrey an article he read titled, “Barriers Put Brake On Road Deaths,” which concludes the installation of cable barriers is an effective way to prevent fatalities. The note with the article told Humphrey to save and use the article later. Around the same time, Humphrey began investigating the use of cable barriers in Arizona because he wanted to prevent other fatalities.

In October or November of 2008, John O’Hare, a friend of Pamela, informed Humphrey he needed to file a government notice of claim to pursue an action against the State. Ultimately, Mr. O’Hare was retained as legal counsel and the notice of claim was filed on November 7, 2008. The notice of claim provided the following: (1) statutory basis of A.R.S. § 12-821.01; (2) factual basis; (3) made the allegation that “due to the State of Arizona’s negligent maintenance of the highway, median, and failure to provide a guard barrier to prevent vehicles from going into oncoming traffic.”; and (4) sought recovery for damages for wrongful death including “all proper dames associated with their deaths, that are due to their estates and surviving family members…we believe a fair value for these damages is in the range of Five to Ten million dollars for each of their deaths.”

On December 5, 2018, Humphrey sent a letter to former Arizona Governor Gabrielle Giffords requesting her assistance to make public highways safer by implementing cable barriers to prevent median crossovers, and fatalities.

On January 29, 2009, Humphrey rescinds his 2008 notice of claim against the State, informed the State Mr. O’Hare no longer represents him, and sought a public request for information seeking information related to cross median accidents and cost of cable barrier installation. Susan Olson responded with the requested information; however, she was unable to provide specific cross median accident data because the statistical data does not allow her to narrow the cause of the accident.

In August or September 2010 Humphrey was connected with attorney John Leader and ultimately ended up retaining him as legal counsel. On October 29, 2010, a “supplemental” notice of claim was filed on behalf of the statutory beneficiaries, which included Humphrey and Quinn (collectively “Plaintiffs”). Sine the State did not respond, the complaint was filed on February 3, 2011.

The State moved for summary judgment on the negligence claim contending the claim is time barred under A.R.S. § 12-821 and 821.01. Plaintiffs argued the accrual of a claim is an issue for the jury. In a separate response Quinn argued he had no knowledge of the claim against the State until October 2010. In July 2010, the Superior Court denied the State’s Motion for Summary Judgment and held the accrual of a claim is an issue for the jury.

After the Plaintiff rested its case at trial in 2015, the State moved for judgment as a matter of law contending the Plaintiffs failed to comply with A.R.S. § 12-821 and 821.01. The Superior Court denied the State’s motion and the State timely appealed.

Holding and Reasoning

The Arizona Court of Appeals held an inquiry of whether the Plaintiff had sufficient knowledge to trigger Arizona notice of claim statute is typically a factual inquiry for the jury; however, not all accrual questions must be submitted to a jury. Here, the Court found the Plaintiffs failed to file a valid notice of claim.

I. Statutory Prerequisites to Sue the State

Arizona law requires a government notice of claim to be filed within 180 days after the cause of action accrues. A.R.S. § 12-821. Not only does the notice of claim need to be filed within 180 days, but it must include specific claim information in order to be valid. A.R.S. § 12-821.01. The notice of claim must include 1) “facts sufficient to permit the public entity…to understand the basis on which liability is claimed,” 2) “a specific amount for which the claim can be settled,” and 3) facts supporting the requested settlement demand. A.R.S. § 12-821.01(A). The statute requires strict compliance. If the notice of claim complies then the lawsuit must be filed within one year per A.R.S. § 12-821 (All actions against any public entity or public employee shall be brought within one year after the cause of action accrues and not afterward).

Here, two notices of claims were filed. The first notice filed in 2018 satisfied the requirement for the claim to be filed within 180 days of knowledge of the claim; however, the notice was found insufficient for failure to assert the specific amount for which the claim would be settled as required by A.R.S. § 12-821.01(A); see Deer Valley Unified Sch. Dist. No. 97 v. Houser, 214 Ariz. 293, 296-97 (2007). The second notice of claim filed in 2010 complied with § 12-821.01 because in addition to asserting the legal basis for the claim in included a specific amount to settle the claim. However, the notice was filed more than two years after the date of the incident, and therefore invalid. A.R.S. § 12-821.01(A).

II. Claim Accrual

The Court interpreted Section 12-821.01(B) as a codification of the discovery rule for determining when causes of action against public entities accrue. Section 12-821.01(B) provides a claim accrues when the injured party learns he or she has been damaged and knows or should reasonably should know the cause, source, act, event, instrumentality, or condition which caused or contributed to the injury. The discovery rule applies when the “plaintiff knows or with reasonable diligence should now the facts underlying the cause.” Doe v. Roe, 191 Ariz. 313, 322 (1998)(emphasis added).

Although, as a general rule, accrual is a factual question usually for the jury to determine and cannot be decided as a matter of law; the Court acknowledged the rule does not apply when there is no genuine dispute as to the facts showing the plaintiff knew or should have known the basis for the claim, such as here.

Here, the Court found the period of tolling ended on November 7, 2008 when Humphrey filed the notice of claim which established, he knew the injury arose from the State’s negligence by failing to install a median barrier. Alternatively, Humphrey had reasonable notice to investigate whether the State was negligent on November 7, 2008. Therefore, the claim began to accrue on November 7, 2008 at the latest, therefore, the second notice filed in 2010 was not timely and invalid.

Quinn’s argument he did not learn of the facts regarding a potential claim against the State until mid-October of 2010 was not convincing to the Court. The Court found he knew or should have known to investigate the potential liability against the state when he sent Humphrey the article regarding cable barriers in medians to prevent fatalities. Quinn’s knowledge of his injury and its connection to the State was sufficient to trigger his duty to investigate whether the State was at fault.

Takeaway

Similar to the discovery rule, the statute is triggered and begins to accrue when the plaintiff has knowledge of facts or with reasonable diligence could learn the facts for the basis of the claim. If the notice of claim is not filed within 180 days of the claim accrual and includes the required elements, then the claim is invalid. Moreover, if a plaintiff does not strictly comply with A.R.S. § 12-821.01(A), then compliance with the one-year statute of limitations in §12-821 is irrelevant and the defendant should move for summary judgment to dismiss the action for failure to state a claim. Attorneys representing government entities in Arizona should double check statute of limitations defenses in light of this case.

Banner University Medical Center Tucson Campus, LLC., et al. v. Gordon[ii]

Factual and Procedural History

In October 2015, while in the care of doctors employed by Banner University Medical Care Center Tucson Campus LLC and the University of Arizona (“Banner”), a fourteen-month-old child died from complications caused by an improperly treated bowel obstruction. His parents, Jeremy and Kimberly (“Plaintiffs”), filed a lawsuit against the individual doctors alleging medical malpractice, and Banner alleging vicarious liability for medical malpractice. The defendant doctors were residents and physicians under the purview of The University of Arizona, which is a public entity. As explained above, A.R.S. § 12-821.01 requires a plaintiff to first serve a public employee or entity with a notice of claim within 180 days. The Plaintiffs did not serve any such notices on Banner or the defendant doctors.

Pima County Superior Court Judge Richard Gordon granted summary judgment in favor of the doctors due to Plaintiffs’ failure to serve them with notices of claim. Judge Gordon dismissed the doctor defendants with prejudice because he concluded “it would be impossible for a jury to find the doctors in this case …were providing (1) care and (2) supervision of that care as well as (3) …conducted those services on behalf of [their] employer…to be outside the course and scope of their employment for the university.” However, Judge Gordon did not dismiss the vicarious liability claim against Banner for claims grounded in negligence. Banner seeks special action relief from the ruling because dismissal with prejudice of the defendant doctors requires dismissal of the claim of vicarious liability against Banner.

Holding and Reasoning

The Court held Judge Gordon did not err, and under the circumstances, the vicarious liability claim against Banner survived the dismissal of the claims of the doctor defendants for failure to timely service the doctors with a notice of claim as required by A.R.S.§ 12-821.01.

The question the Court addressed is whether an employer should be permitted to escape liability by using a defense available only to the employee. Banner asserted the defense of claim preclusion. Since Banner asserted the defense of claim preclusion, it had the burden to establish all three elements; however, Banner did not meet its burden on element three—privity. Nonetheless, the Court found claim preclusion did not apply in this matter because claim preclusion only applies when the policies justifying preclusion are furthered. Claim preclusion should not be applied when it would be against public policy or result in injustice and Banner did not address why the policies weigh in its favor. Moreover, the litigation is on-going and negligence of some doctor defendants will be further litigated regardless if claim preclusion is applied.

A.R.S. § 12-821.01, notice of claim statute is essentially a codification of sovereign immunity. Similarly, Arizona has adopted Restatement (Second) of Agency § 217(b) which states an employer cannot assert immunities personal to its employee. The Arizona notice of claim statute does not apply to Banner because Banner is not a public entity. The defendant doctors, on the other hand, were resident physicians under the University of Arizona thus the Arizona notice of claim statute applies to them. Banner did not assert any cases where an employer was permitted to benefit from its employees’ immunity. Therefore, the Court upheld Judge Gordon’s ruling finding Banner cannot benefit from its employees’ statutory or sovereign immunity.

Takeaway

This decision clarifies an employer cannot assert a defense which is solely the defense or immunity of its employee. For this reason, a private employer can be held liable for its employees with dual employment, even if the claims against the employee have been dismissed with prejudice.

[i] Humphrey, et al. v. State of Arizona, (Ariz. Ct. App., April 30, 2020, No. 1 CA-CV 16-0570) 2020 WL 2071935.

[ii] Banner University Medical Center Tucson Campus, LLC., et al. v. Gordon, (Ariz. Ct. App., May 29, 2020, No. 2 CA-SA 2019-0051) 2020 WL 2786898.

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