Bird v. State Through Corbin, 1

• Decision Date: 21 November 1991
• Docket Number: No. 1,CA-CV,1
• Citation: 821 P.2d 287,170 Ariz. 20
• Parties: Larry BIRD and Suzanne Bird, husband and wife, Plaintiffs-Appellants, v. STATE of Arizona, through Attorney General Robert CORBIN, Defendant-Appellee. 90-322.
• Court: Arizona Court of Appeals

Page 287

821 P.2d 287

170 Ariz. 20

Larry BIRD and Suzanne Bird, husband and wife, Plaintiffs-Appellants, v. STATE of Arizona, through Attorney General Robert CORBIN, Defendant-Appellee.

No. 1 CA-CV 90-322.

Court of Appeals of Arizona,

Division 1,

Department C.

Nov. 21, 1991.

Van Baalen Law Offices by Lowell W. Finson, Phoenix, for plaintiffs-appellants.

Grant Woods, Atty. Gen. by Judith E. Abramsohn and Lisa K. Daniel, Asst. Attys. Gen., Phoenix, for defendant-appellee.

OPINION

EUBANK, Judge.

Larry Bird and Suzanne Bird ¹ (appellants) appeal from the trial court judgment dismissing their complaint against the State of Arizona (the State). The trial court granted the State's motion to dismiss on the ground that the State is absolutely immune under A.R.S. § 12-820.01 from appellants' claim because the claim relates to the licensing and regulation of structural pest control operators. We affirm the trial court's order dismissing appellants' complaint against the State.

I. FACTS AND PROCEDURE BELOW ²

When appellants filed their complaint on January 11, 1990, they owned a home that was built by Gillanders & Stark Development Company. They had purchased their home approximately two to three years before the complaint was filed. According to the complaint, Gillanders & Stark hired Steven Weber of SOS Exterminating Company ³ to apply termite prevention pretreatments to houses under construction. Although appellants alleged that core samplings showed that SOS did not adequately pretreat their houses, they did not allege that any of their homes suffered any termite damage.

In their claim against the State, appellants alleged that the State knew that SOS did substandard and improper pretreatments and had fined and/or censured SOS for such treatments, but, nevertheless, did not control the activities of SOS. Specifically, appellants contended that the State failed to (1) properly administer examinations given to persons who sought a license to engage in the structural pest control business; (2) disqualify Steven Weber, even though he failed the required examination and was the subject of repeated complaints of improper treatments; (3) carry out the spirit and intent of federal law regarding state regulation of the pesticide industry; (4) properly advise industry members of their responsibilities to the public; (5) act upon complaints verified by investigators of the State Structural Pest Control Commission; and (6) advise the construction industry and the public of improper pretreatment applications. They did not allege that they had filed a complaint with the Structural Pest Control Commission pursuant to A.R.S. § 32-2321.

The State moved for dismissal of the claim on four grounds. First, the State argued that appellants had not complied with A.R.S. § 12-821(A) because they had not filed their claim with the State within twelve months after their cause of action accrued. Although appellants had not pled when their cause of action accrued, the State believed that it was more than twelve months before October 2, 1989, the date on which appellants filed their claim. Second, the State contended that appellants did not have standing to maintain their action against the State because Arizona law does not give private parties the right to sue the State based on the regulation or licensing of professions or occupations. Third, the State argued that pursuant to A.R.S. § 12-820.01 it was absolutely immune from liability for acts done in connection with the licensing and regulation of any profession or occupation. Fourth, the State asserted that the claim against it did not set forth any known cause of action that would entitle appellants to relief because there is no cause of action for gross inefficiency and because the complaint did not state a claim for fraud.

The trial court granted the motion to dismiss on the ground that the State was absolutely immune under A.R.S. § 12-820.01 because the allegations of the complaint related to the licensing and regulation of a profession or occupation. Appellants timely appealed the dismissal of their claim.

II. DISCUSSION

On appeal, appellants argue that (1) their claim against the State was not untimely under A.R.S. § 12-821(A); (2) the State did not have absolute immunity pursuant to A.R.S. § 12-820.01, but at most had only the qualified immunity afforded by A.R.S. § 12-820.02; and (3) plaintiffs/appellants have standing to bring their cause of action. We first examine the issue of whether the State is absolutely immune from suit pursuant to A.R.S. § 12-820.01. If the State is immune, we must affirm the dismissal of the claim against the State and need not reach the other issues raised in the trial court and on appeal.

The State argues that A.R.S. § 12-820.01 renders it immune from the liability alleged in this action. Before the Arizona Legislature enacted this statute and other immunity statutes in 1984, the State's immunity was determined by common law. In Ryan v. State, 134 Ariz. 308, 656 P.2d 597 (1982), the Arizona Supreme Court reaffirmed the rule that government is subject to tort liability and immunity is the exception, citing Stone v. Arizona Highway Commission, 93 Ariz. 384, 392, 381 P.2d 107, 112 (1963). The Ryan court invited the legislature to intervene in developing the law concerning state liability for negligent acts. Id. at 310, 656 P.2d at 599. The legislature accepted this invitation and in 1984 enacted the Actions Against Public Entities or Public Employees Act, codified at A.R.S. §§ 12-820 to 12-823. For a discussion of the legislative history of this act, see City of Tucson v. Fahringer, 164 Ariz. 599, 600, 795 P.2d, 819, 820 (1990), and Note, A Separation of Powers Analysis of the Absolute Immunity of Public Entities, 28 Ariz.L.Rev. 49, 50 (1986).

Section 12-820.01, entitled "Absolute immunity," provides in relevant part:

A. A public entity shall not be liable for acts and omissions of its employees constituting:

1. The exercise of a judicial or legislative function; or

2. The exercise of an administrative function involving the determination of fundamental governmental policy.

B. The determination of a fundamental governmental policy involves the exercise of discretion and shall include, but is not limited to:

. . . . .

3. The licensing and regulation of any profession or occupation.

A.R.S. § 12-820 lists the definitions that are relevant to § 12-820.01 as follows:

1. "Employee" includes an officer, employee or servant, whether or not compensated or part time, who is authorized to perform any act or service, except that employee does not include an independent contractor. Employee includes noncompensated members of advisory boards appointed as provided by law.

. . . . .

6. "Public entity" includes this state and any political subdivision of this state.

A.R.S. § 12-820 (Supp.1990).

Based on these statutes, the State argues that it is absolutely immune from liability for the acts of the Structural Pest Control Commission (the Commission) because in licensing structural pest control operators, the Commission licenses an occupation within the meaning of A.R.S. § 12-820.01(B)(3). Consequently, the State contends that the trial court properly granted its motion to dismiss.

Appellants respond that A.R.S. § 12-820.01 gives absolute immunity only to discretionary functions. They assert that the Commission's issuance of licenses was nondiscretionary and that if any immunity applies in this case, it is only the qualified immunity of § 12-820.02. Section 12-820.02, entitled "Qualified immunity," provides in relevant part:

Unless a public employee acting within the scope of his employment intended to cause injury or was grossly negligent, neither a public entity nor a public employee is liable for:

. . . . .

5. The issuance of or failure to revoke or suspend any permit, license, certificate, approval, order or similar authorization for which absolute immunity is not provided pursuant to § 12-820.01.

In reading § 12-820.01 with § 12-820.02, appellants conclude that the Arizona Legislature has set up two categories of immunities pertaining to licensing: (1) absolute immunity, which is available for discretionary acts, and (2) qualified immunity, which is available for nondiscretionary acts. Thus, they contend that some licensing functions are discretionary, while others are nondiscretionary. They also contend that the licensing of structural pest control operators is nondiscretionary because A.R.S. § 32-2314(C)(1) specifies that to be licensed an applicant must score at least seventy percent on the licensing examination. The State's response to these arguments is that the distinction between absolute immunity and qualified immunity lies in the activity being regulated: absolute immunity applies to the licensing and regulation of professions and occupations, while qualified immunity applies to the licensing and regulation of activities other than professions and occupations.

To bolster their argument, appellants cite Attorney General Opinion I84-123, which states that "[t]he determination of whether the actions of [the Medical Advisory] Board and its members are subject to the absolute immunity granted by A.R.S. § 12-820.01 or the qualified immunity granted by A.R.S. § 12-820.02 depends upon the specific fact situations giving rise to potential liability." The opinion also states:

[Medical Advisory] Board decisions regarding the standards for issuance or revocation of licenses would also be protected at a minimum by a qualified immunity pursuant to A.R.S. § 12-820.02(5). Moreover, insofar as those decisions may be considered part of quasi[-] legislative function, the board could be protected by the absolute immunity afforded by A.R.S. § 12-820.01.

From this opinion, appellants conclude that the issuance of licenses may be subject to either A.R.S. § 12-820.01 or A.R.S. § 12-820.02, depending on the circumstances.

In statutory...