Chamberlain v. Mathis, 18414-PR

• Decision Date: 24 November 1986
• Docket Number: No. 18414-PR,18414-PR
• Citation: 729 P.2d 905,151 Ariz. 551
• Parties: William CHAMBERLAIN and Lois Ellen Chamberlain, his wife; Wilda Dearie, a single person; Sue Ann Gundy, a single person; Arthur Reeves and Ernie Reeves, husband and wife; Michael J. Savino and Patricia Savino, his wife, Plaintiffs-Appellants, v. Donald B. MATHIS and Jane Doe Mathis, husband and wife; the Arizona Department of Health Services, its Director, Donald B. Mathis, John Does I through XX inclusive; and ABC through XYZ corporations inclusive, Defendants-Appellees.
• Court: Arizona Supreme Court

Page 905

729 P.2d 905

151 Ariz. 551

William CHAMBERLAIN and Lois Ellen Chamberlain, his wife; Wilda Dearie, a single person; Sue Ann Gundy, a single person; Arthur Reeves and Ernie Reeves, husband and wife; Michael J. Savino and Patricia Savino, his wife, Plaintiffs-Appellants, v. Donald B. MATHIS and Jane Doe Mathis, husband and wife; the Arizona Department of Health Services, its Director, Donald B. Mathis, John Does I through XX inclusive; and ABC through XYZ corporations inclusive, Defendants-Appellees.

No. 18414-PR.

Supreme Court of Arizona.

Nov. 24, 1986.

Renaud, Cook, Videan, Geiger & Drury, P.A. by Steve T. Skivington, Phoenix, for plaintiffs-appellants.

Winston & Strawn by Jeffrey C. Brodin, Daniel D. Maynard, Phoenix, for defendants-appellees.

FELDMAN, Justice.

This defamation action was brought by William Chamberlain, Wilda Dearie, Sue Ann Gundy, Arthur Reeves, and Michael J. Savino (plaintiffs) against Donald Mathis (Mathis), Director of the Arizona Department of Health Services (ADHS). The trial court dismissed plaintiffs' complaint on the grounds that Mathis enjoyed an absolute privilege. The court of appeals reversed, holding that there was no absolute privilege and that whether Mathis was entitled to "high level executive" immunity was a question of fact for the jury. Chamberlain v. Mathis, No. 1 CA-CIV 7750 (Ariz.Ct.App. Aug. 27, 1985) (memorandum decision). We accepted review to clarify the law regarding immunity for executive government officials. Rule 23(c)(4), Ariz.R.Civ.App.P., 17A A.R.S. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and A.R.S. § 12-120.24.

FACTS

Plaintiffs, ADHS employees, comprised the internal audit staff of the Arizona Health Care Cost Containment System (AHCCCS). The AHCCCS was administered by McAuto Systems Group, Inc. (MSGI) pursuant to an administrator contract between the State of Arizona and MSGI. Plaintiffs audited the administrator contract and submitted a draft of that audit to Mathis on May 4, 1983. Plaintiffs allege that the audit was performed in accordance with generally accepted auditing standards and that the audit report's recommendations were made in good faith.

Mathis refused public access to the audit report. However, in the presence of several individuals, including a newspaper reporter, Mathis made several allegedly defamatory comments regarding the audit and ADHS employees:

The [audit] was prepared by Department of Health personnel who are incompetent and unqualified as auditors.

I've got a bunch of employees in this department, who, I think, have a rich fantasy life.

Charges of covering up failings in the AHCCCS were made by uninformed dissidents in my own department.

I am convinced that McAuto Systems Group, Inc. would sue me if I released the [audit] before the Attorney General reviewed it.

Mathis's comments were published in The Arizona Republic on Sunday, August 14, 1983. Plaintiffs contend that Mathis, acting in his capacity as ADHS director, made the above statements maliciously, knowing that they were false.

Mathis was appointed ADHS director by the governor. A.R.S. § 36-102(C). He served at the governor's pleasure, id., and was responsible for the "direction, operation and control of" ADHS. A.R.S. § 36-102(B). Mathis was to oversee "[p]rogram coordination, evaluation and development" and was charged with administering the department's accounting functions. A.R.S. §§ 36-104(1)(a), (d)(ii). He also was authorized to "[p]rovide information and advice on request by [public] agencies and by private citizens, business enterprises and community organizations on matters within the scope of [ADHS's] duties...." A.R.S. In considering the propriety of Mathis's motion to dismiss, see Rule 12(b)(6), Ariz.R.Civ.P., 16 A.R.S., we assume plaintiffs' allegations are true. Summerfield v. Superior Court, 144 Ariz. 467, 470, 698 P.2d 712, 715 (1985). Viewing the facts in this light, we examine the procedural propriety of Mathis's motion to dismiss and then the scope of immunity for executive officials.

§ 36-104(9). His position in state government is roughly comparable to that of a federal cabinet officer.

DISCUSSION

A. Procedural Issues

Plaintiffs argue that Mathis's motion to dismiss should have been denied because absolute immunity is an affirmative defense that should have been raised in Mathis's answer, rather than in a motion to dismiss for failure to state a claim. In general, Rule 8(d), Ariz.R.Civ.P., 16 A.R.S., requires defendants to plead affirmative defenses in their answer. However, we have previously held that the defense of immunity "may be properly raised in a motion to dismiss, if the facts establishing the occasion for the privilege ¹ appear in the pleadings." Green Acres Trust v. London, 141 Ariz. 609, 613, 688 P.2d 617, 621 (1984) (footnote added); see also Sierra Madre Dev., Inc. v. Via Entrada Townhouses Ass'n, 20 Ariz.App. 550, 552, 514 P.2d 503, 505 (1973); 2A J. MOORE, MOORE'S FEDERAL PRACTICE p 8.28, at 8-209 (1986) ("The affirmative defense raised by a motion to dismiss may be handled entirely under Rule 12(b)(6) ... where the defense appears on the face of the complaint itself."). We adhere to this exception to Rule 8(d) because it "is more in keeping with the general purpose" of our rules of civil procedure "to avoid decisions based on pleading technicalities rather than the merits of a case." 2A J. MOORE, supra p 8.28, at 8-207 to 208.

Defendant properly raised the immunity defense in his motion to dismiss because its factual framework was established in plaintiffs' complaint. Plaintiffs had alleged that Mathis was acting in his capacity as ADHS director. Because immunity protects official conduct, the allegation that Mathis was acting in his capacity as director of ADHS is sufficient to support an immunity defense.

Once an immunity defense has been raised properly, the court determines whether defendants are entitled to immunity. Green Acres, 141 Ariz. at 613, 688 P.2d at 621; Restatement (Second) of Torts § 619 (1977). If the existence of immunity turns on disputed factual issues, the jury determines the facts and the court then determines whether those facts are sufficient to establish immunity. If the court finds that Mathis is entitled only to qualified immunity, then the jury generally determines whether he abused his immunity by acting for an improper purpose or in an improper manner. Restatement (Second) of Torts § 619, comment b (1977).

Having determined that Mathis properly raised the defense of immunity in this case and that defining the scope of immunity is a legal question for the court, we turn to the question whether he is entitled to absolute or qualified immunity. The primary distinction between qualified and absolute immunity is that the former protects only those acts done in good faith, while the latter shields all acts, no matter how malicious. Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959).

B. Absolute or Qualified Immunity

1. Competing Interests

The rationale for granting executive government officials immunity for conduct within the scope of their employment is that government must be allowed to govern. If executive officials are denied immunity, they may elevate personal interest The arguments favoring official immunity are countered by the legitimate complaints of those injured by government officials. Grimm, 115 Ariz. at 265, 564 P.2d at 1231. One's reputation is a significant, intensely personal possession that the law strives to protect. The entire common law of defamation attests to the importance we attach to an individual's right to seek compensation for damage to his reputation. Dombey v. Phoenix Newspapers, Inc., 150 Ariz. 476, 479-80, 724 P.2d 562, 565-66 (1986). Not even the critical need for open and robust public debate on issues of public concern is sufficient to completely shield malicious defamations. New York Times v. Sullivan, 376 U.S. 254, 280, 84 S.Ct. 710, 726, 11 L.Ed.2d 686 (1964).

[151 Ariz. 555] above official duty. Public servants would be obligated to spend their time in court justifying their past actions, instead of performing their official duties. Ultimately, government, including good government, may be hampered and qualified individuals may be hesitant to serve in positions that require great responsibility. See generally Grimm v. Arizona Bd. of Pardons and Paroles, 115 Ariz. 260, 264-65, 564 P.2d 1227, 1231-32 (1977) (discussing various rationales for judicial and official immunity); Schuck, Suing Our Servants: The Court, Congress, and the Liability of Public Officials for Damages, 1980 SUP.CT.REV. 281.

The interests furthered by absolute official immunity are also countered by basic principles of equal justice. "Our system of jurisprudence rests on the assumption that all individuals, whatever their position in government, are subject to [the] law." Butz v. Economou, 438 U.S. 478, 506, 98 S.Ct. 2894, 2910, 57 L.Ed.2d 895 (1978) (federal executive officials entitled only to qualified immunity when "constitutional tort" is alleged). As we stated in Grimm, "[t]he more power bureaucrats exercise over our lives, the more ... some sort of ultimate responsibility [should] lie for their most outrageous conduct." 115 Ariz. at 266, 564 P.2d at 1233. Grimm recognized that imposing liability for wrongful acts serves two important goals: compensating victims and deterring wrongdoers. Id.

This case requires us to reconcile the competing interests furthered by immunity and responsibility. In Arizona, as elsewhere, courts generally have reconciled these interests by granting public officials either absolute or qualified immunity. E.g., Green Acres, 141 Ariz. at 613, 688 P.2d at 621 (absolute immunity from defamation action for statements made in connection with judicial proceedings); Portonova v. Wilkinson, 128 Ariz. 501, 503, 627 P.2d 232, 234 (1981) (qualified immunity for police officer accused of defamation); Grimm, ...