Gamez v. Brush Wellman, Inc.

Decision Date27 September 2001
Docket NumberNo. 2 CA-CV 99-0208.,2 CA-CV 99-0208.
PartiesRudy GAMEZ and Alice Gamez, husband and wife, Plaintiffs/Appellants, v. BRUSH WELLMAN, INC., Defendant/Appellee.
CourtArizona Court of Appeals

Baron & Budd, P.C., By Frederick M. Baron, Steve Baughman Jensen, and Alicia D. Butler, Dallas, TX, Dickerson, Butler & Rodriguez, P.C., By J. Patrick Butler, Tucson, James Heckbert, Steamboat Springs, CO, for Plaintiffs/Appellants.

Rusing and Lopez, P.L.L.C., By Michael J. Rusing and Cynthia T. Kuhn, Tucson, Jones Day Reavis & Pogue, By Jeffrey D. Ubersax, Cleveland, OH, Downey & Knickrehm, By Thomas E. Downey, Jr., Denver, CO, for Defendant/Appellee.

OPINION

FLÓREZ, J.

¶ 1 Appellants Rudy and Alice Gamez challenge the trial court's grant of summary judgment in favor of appellee Brush Wellman, Inc., Rudy's former employer. The Gamezes argue that the trial court erred in rejecting their claims for wilful misconduct, breach of contract, and bad faith stemming from Rudy's employment-related exposure to beryllium. They also challenge the trial court's award of sanctions against them for refusing to accept an offer of judgment. We affirm the trial court's grant of summary judgment in favor of Brush Wellman, but vacate the court's award of sanctions against the Gamezes.

¶ 2 When reviewing the grant of a motion for summary judgment, we view the facts in the light most favorable to the nonmoving party. Southwest Auto Painting & Body Repair, Inc. v. Binsfeld, 183 Ariz. 444, 904 P.2d 1268 (App.1995). Rudy began working for Brush Wellman in a production facility in October 1991. After a drill bit punctured Rudy's finger, blood tests revealed that, although he had not developed chronic beryllium disease (CBD), Rudy had possibly been sensitized to beryllium. As a result, Rudy accepted Brush Wellman's offer that he transfer to a different job, but he subsequently decided to return to his production position. After Rudy was diagnosed with CBD in 1995, Brush Wellman offered to transfer him to an alternative position or pay him one year's wages and benefits if he would voluntarily leave his employment. Although Rudy never selected either option, he did not return to the work place after his CBD diagnosis. Brush Wellman continued to pay Rudy wages and benefits until March 1998.

¶ 3 The Gamezes sued Brush Wellman in June 1996 for wilful misconduct, contending that Brush Wellman had "engaged in [a] course of conduct knowing that such conduct was likely to cause extreme physical, financial and emotional hardship to Plaintiffs." They later amended their complaint to add claims for breach of contract and bad faith. The trial court granted summary judgment on all three claims and awarded costs in the amount of $65,121.58 to Brush Wellman as a sanction pursuant to Rule 68, Ariz. R. Civ. P., 16 A.R.S., Pt. 2.

¶ 4 Summary judgment should be granted if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Ariz. R. Civ. P. 56(c), 16 A. R.S., Pt. 2; Sanchez v. City of Tucson, 191 Ariz. 128, 953 P.2d 168 (1998). We review questions of law, including the interpretation of statutes and constitutional issues, and mixed questions of fact and law de novo. In re United States Currency in the Amount of $26,980.00, 193 Ariz. 427, 973 P.2d 1184 (App.1998); Birth Hope Adoption Agency, Inc. v. Doe, 190 Ariz. 285, 947 P.2d 859 (App.1997). We conclude that the trial court did not err in applying the law to the undisputed material facts.

¶ 5 The Gamezes first contend that Rudy's injury resulted from Brush Wellman's wilful misconduct and, thus, that the trial court erred in granting summary judgment in favor of Brush Wellman on this claim. It is well settled that work-related injury claims are generally redressed exclusively under Arizona's workers' compensation scheme. A.R.S. § 23-1022. Thus, such claims are controlled by A.R.S. § 23-1024(A), which provides that "[a]n employee ... who accepts [workers'] compensation waives the right to exercise any option to institute proceedings in court against his employer." See Anderson v. Industrial Comm'n, 147 Ariz. 456, 711 P.2d 595 (1985)

. However, article XVIII, § 8, of the Arizona Constitution allows an employee who would otherwise be barred by the workers' compensation exclusivity provision to sue his or her employer if the employee has suffered an injury caused by the employer's wilful misconduct or an injury that is "the result of an act done by the employer or a person employed by the employer knowingly and purposefully with the direct object of injuring another, and the act indicates a wilful disregard of the life, limb or bodily safety of employees." This constitutional guarantee is codified in § 23-1022(A), which allows an injured employee to "either claim compensation or maintain an action at law for damages against the person or entity alleged to have engaged in the wilful misconduct."

¶ 6 The question, then, is whether a material issue of fact exists that Brush Wellman engaged in wilful misconduct so as to allow the Gamezes to overcome the presumption of waiver in § 23-1024(A). A wilful misconduct action includes four elements: (1) the employer's wilful misconduct must have been the cause of the employee's injury, (2) the wilful misconduct must have been "an act done ... knowingly and purposely with the direct object of injuring another," (3) the act that caused the injury must have been the personal act of the employer, and (4) the act must have reflected "a wilful disregard of the life, limb or bodily safety of employees." Ariz. Const. art. XVIII, § 8; see Serna v. Statewide Contractors, Inc., 6 Ariz.App. 12, 429 P.2d 504 (1967)

.

¶ 7 Gross negligence is not sufficient to establish wilful misconduct under § 23-1022. Serna. The "direct object" of the employer's actions must have been to "injur[e] another." § 23-1022(B); see Allen v. Southwest Salt Co., 149 Ariz. 368, 718 P.2d 1021 (App.1986)

. Generally, this means that the employer's liability

cannot ... be stretched to include accidental injuries caused by the gross, wanton, wilful, deliberate, intentional, reckless, culpable, or malicious negligence, breach of statute, or other misconduct of the employer short of a conscious and deliberate intent directed to the purpose of inflicting an injury.
Even if the alleged conduct goes beyond aggravated negligence, and includes such elements as knowingly permitting a hazardous work condition to exist, knowingly ordering employees to perform an extremely dangerous job, wilfully failing to furnish a safe place to work, wilfully violating a safety statute, ... or withholding information about worksite hazards, the conduct still falls short of the kind of actual intention to injure that robs the injury of accidental character.

6 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 103.03 at 103-7 (2001) (footnotes omitted). ¶ 8 In Serna, two employees were killed after a ditch collapsed. The workers' families sued the employer for wrongful death, alleging that the deaths were the result of the employer's wilful misconduct under § 23-1022 and, therefore, that workers' compensation was not the exclusive remedy for their claims. The trial court granted summary judgment in favor of the employer, and Division One of this court affirmed, even though the facts showed that the ditch was twenty-five feet deep and insufficiently sloped or shored to prevent a cave-in. Indeed, a previous cave-in had buried one of the decedents to his waist. And, there was no safety ladder near the men at the place in the ditch where they had been digging. Moreover, before the accident, state industrial commission inspectors had warned the employer of the very conditions that caused the deaths and had recommended corrective measures. And although Division One stated that it had "no difficulty in finding that the cave-in causing the deaths of the decedents was the direct result of the refusal to follow the safety recommendations of the Commission's inspectors," the court concluded:

It would appear that our statute as well as the principles governing the interpretation of the workmen's compensation statutes which provide for suit at common law for the employer's willful misconduct require that there be deliberate intention as distinguished from some kind of intention presumed from gross negligence. 2 Larson, Workmen's Compensation Law, Sec. 69.20 (1961). The Arizona statute is most restrictive in this regard. It is the opinion of this Court that the facts presented on review, viewed in the light most favorable to the plaintiff-employees, clearly establish the negligence of the defendant-employer but fail to establish that the employer, through its elected officer, acted with the intent required by our statute. A.R.S. § 23-1022.... We must regretfully state that under our statutes the facts do not bring appellants within the exception of A.R.S. § 23-1022.

Serna, 6 Ariz.App. at 16, 429 P.2d at 508.

¶ 9 Our courts have reached similar conclusions in Diaz v. Magma Copper Co., 190 Ariz. 544, 950 P.2d 1165 (App.1997); Johnson v. Kerr-McGee Oil Industries, Inc., 129 Ariz. 393, 631 P.2d 548 (App.1981); and Lowery v. Universal Match Corp., 6 Ariz.App. 98, 430 P.2d 444 (1967). The courts found that the workers' lawsuits against the employers in those cases were foreclosed by the exclusivity provision in the workers' compensation statutes, concluding that, although there might have been intentional failures to warn by the employers and/or negligent disregard for safety warnings, the wilful misconduct claims were not well taken. In Diaz, the court stated that, "while there may be evidence here that Magma was negligent in ignoring safety hazards and delaying the entry of paramedics until Diaz had been extricated..., there is no evidence that Magma's objective was to injure Diaz." 190...

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