Gradis v. Banner Health

• Decision Date: 28 February 2017
• Docket Number: No. 1 CA-CV 16-0056,1 CA-CV 16-0056
• Parties: MARIE GRADIS, Plaintiff/Appellant, v. BANNER HEALTH; BANNER PLAN ADMINISTRATION, INC.; CAROL WARD, Defendants/Appellees.
• Court: Arizona Court of Appeals

MARIE GRADIS, Plaintiff/Appellant, v. BANNER HEALTH; BANNER PLAN ADMINISTRATION, INC.;CAROL WARD, Defendants/Appellees.

No. 1 CA-CV 16-0056

ARIZONA COURT OF APPEALS DIVISION ONE

February 28, 2017

NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

Appeal from the Superior Court in Maricopa County

No. CV2014-006089

The Honorable Christopher T. Whitten, Judge

AFFIRMED

COUNSEL

Mandel Young, PLC, Phoenix

By Taylor C. Young, Peter A. Silverman, Erin Ford Faulhaber

Co-Counsel for Plaintiff/Appellant

Doyle, LLP, Phoenix

By Michael P. Doyle, Patrick M. Dennis

Co-Counsel for Plaintiff/Appellant

Quarles & Brady, LLP, Phoenix

By Stephanie J. Quincy, Robert G. Vaught, Brian A. Howie

Counsel for Defendants/Appellees

MEMORANDUM DECISION

Presiding Judge Diane M. Johnsen delivered the decision of the Court, in which Judge Margaret H. Downie and Judge James P. Beene joined.

JOHNSEN, Judge:

¶1 Marie Gradis appeals the superior court's entry of summary judgment dismissing her complaint against her former employer, Banner Health; its worker's compensation administration company, Banner Plan Administration, Inc.; and the latter company's claims worker, Carol Ward (collectively "Banner"). For the reasons explained below, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 Gradis, a certified nursing assistant, hurt her back while working at a Banner Health facility in April 2012. She filed a claim for worker's compensation; Banner, which is self-insured for purposes of worker's compensation coverage, denied the claim. After Gradis appealed, an Administrative Law Judge ("ALJ") issued a decision in May 2013 finding Gradis had established a compensable injury and awarded her benefits.

¶3 Several months before her on-the-job injury, Gradis had filed a charge of employment discrimination against Banner Health. On October 24, 2012, while her appeal of Banner's denial of her worker's compensation claim was pending, Gradis and Banner Health executed a "Settlement Agreement and General Release" ("Agreement") that resolved the discrimination claim.

¶4 The Agreement's recitals addressed Gradis's claim for discrimination and recounted a mutual "desire to settle and finally resolve any and all outstanding matters and disputes between them related to any claims GRADIS may have in relation to [her] employment or with the ending of her employment with BANNER." The Agreement's "Payment" section stated that the designated payment by Banner to Gradis

is full compensation for any and all past, present, or future claims of emotional distress, anxiety, depression, trauma, any physical, psychiatric, or psychological manifestations thereof, any claims of temporary or permanent disability, loss of consortium, bodily injury, defamation, personal injury, impairment of his [sic] ability to compete in the open labormarket, pain and suffering, lost income, damage to reputation or character, attorneys fees, if any exist, or any other claims, ASSERTED OR UNASSERTED, KNOWN OR UNKNOWN, rights, damages, costs, loss of services, expenses and compensation of any nature whatsoever, arising from or associated with GRADIS' employment relationship and/or the termination of her employment with BANNER or arising out of any of the events described in the Recitals above. This Agreement does not impact Gradis' application for worker's compensation or disability benefits, either positively or negatively.

(Emphasis added.) In the Agreement's "Release of Claims" section were the following three paragraphs:

[2]a. . . . GRADIS . . . further agrees not to institute any claims, charges or lawsuits in relation to any aspect of GRADIS' employment relationship and/or the ending of her employment with BANNER. GRADIS does hereby waive, release and forever discharge [Banner] . . . from any and all rights, claims, demands, causes of action . . . and liability of any nature whatsoever that GRADIS has had in the past or may hereafter have against . . . any of them, arising out of, or by reason of any cause, matter, or thing whatsoever existing as of the date of execution of this Agreement, WHETHER OR NOT KNOWN TO THE PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT.

[2]b. This FULL WAIVER AND RELEASE OF ALL CLAIMS includes, without limitation, any attorney's fees, any claims, demands or causes of action arising out of or relating in any manner whatsoever, to the employment relationship of GRADIS by BANNER and to the events described in the Recitals Section above. This FULL WAIVER AND RELEASE OF ALL CLAIMS INCLUDES, BUT IS NOT LIMITED TO, any and all complaints, claims, charges, claims for relief, demands, suits, actions and causes of action, whether in law or in equity, which GRADIS asserts or could assert, at common law or under any statute, rule, regulation, order or law, whether federal, state, or local, or on any ground whatsoever . . . .

[2]c. In addition, in exchange for the promises contained in this Agreement and as a condition to receiving the above consideration in Paragraph 1, GRADIS agrees not to institute,nor cause to be instituted, any further legal proceeding, including filing any charge, claim or complaint with any state or federal governmental agency alleging any violation of law or public policy, against BANNER and/or any other RELEASEE or any of their current, former or future affiliates, subsidiaries, divisions, corporate parents, partners, joint venturers, associates, agents (actual, apparent, ostensible or otherwise), board members, officers, directors, employees, medical staff members, physicians, (employed or unemployed), attorneys, employee benefit plans, predecessors and successors in interest and assigns, premised upon any legal theory or claim whatsoever arising out of events occurring prior to the date of this Agreement.

(Emphases added.)

¶5 In April 2014, Gradis sued Banner, alleging Banner breached its duty of good faith and fair dealing in handling her worker's compensation claim. Banner moved for summary judgment, arguing the releases Gradis gave in the Agreement applied to her bad-faith claim. The superior court granted the motion and dismissed the complaint.

¶6 We have jurisdiction of Gradis's timely appeal pursuant to Arizona Revised Statutes ("A.R.S.") sections 12-120.21(A)(1) (2017) and -2101(A)(1) (2017).¹

DISCUSSION

¶7 We review de novo the grant of a motion for summary judgment. Espinoza v. Schulenburg, 212 Ariz. 215, 216, ¶ 6 (2006). "The court shall grant summary judgment if the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Ariz. R. Civ. P. 56(a). We view the evidence and reasonable inferences in the light most favorable to the party opposing the motion. Wells Fargo Bank v. Arizona Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 482, ¶ 13 (2002).

¶8 Settlement agreements are governed by general contract-law principles. Emmons v. Superior Court, 192 Ariz. 509, 512, ¶ 14 (App. 1998). Courts attempt to enforce a contract according to the parties' intent. Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 152 (1993). To determine theparties' intent, we consider the meaning of the words and the "context of the contract as a whole." Grosvenor Holdings, L.C. v. Figueroa, 222 Ariz. 588, 593, ¶ 9 (App. 2009).

¶9 The Agreement contains two broad releases, one described in paragraph 2(b) and the other described in 2(c). In paragraph 2(c), Gradis waived claims "premised upon any legal theory or claim whatsoever arising out of events occurring prior" to October 24, 2012, the date of the Agreement. The superior court reasoned the complaint was barred by this provision, but, as Gradis argues, some of the events that underlie her bad-faith claim against Banner (e.g., its allegedly bad-faith choice of a physician to perform an independent medical examination) occurred after execution of the Agreement.

¶10 In paragraph 2(b), the Agreement described a "FULL WAIVER AND RELEASE OF ALL CLAIMS" that encompassed any claim "arising out of or relating in any manner whatsoever, to the employment relationship of GRADIS" with Banner.² Banner argues that its handling of Gradis's worker's compensation claim arose out of or related "in any manner whatsoever" to the employment relationship, and therefore is encompassed by the waiver. Gradis contends that, to the contrary, an employer's handling of a worker's compensation claim is distinct from the employment relationship.

¶11 Arizona law requires all employers to secure worker's compensation insurance for their employees, but allows employers to self-insure if they can show "satisfactory proof of financial ability to pay." A.R.S. § 23-961(A)(1), (2) (2017). A self-insured employer may be liable for breach of the duty of good faith and fair dealing in its handling of an employee's worker's compensation claim. Mendoza v. McDonald's Corp., 222 Ariz. 139 (App. 2009).

¶12 Gradis argues that Franks v. United States Fidelity & Guaranty Co., 149 Ariz. 291 (App. 1985), supports her contention that acts by a self-insured employer in handling a worker's compensation claim do not arise out of the employment relationship. In Franks, we held for the first time that an employee's bad-faith claim against a worker's compensation insurer is not subject to the exclusivity provision of the Worker's Compensation Act. 149 Ariz. at 296; see A.R.S. § 23-1022(A) (2017). We contrasted theinjury an employee suffers from an insurer's breach of the duty of good faith with the original injury suffered from a workplace injury, and, using the words of the compensation statute, concluded that the former injury "does not arise out of and in the course of employment." 149 Ariz. at 296; see A.R.S. § 23-1021 (2017).

¶13 Franks does not dictate the meaning of the language the parties here chose to use in the Agreement. The statutory language we recited and...