Harris v. Cochise Health Systems, 2 CA-CV 2006-0193.

CourtCourt of Appeals of Arizona
Citation215 Ariz. 344,160 P.3d 223
Docket NumberNo. 2 CA-CV 2006-0193.,2 CA-CV 2006-0193.
PartiesCarolyn HARRIS and Mary Wilson, dba Angel Team Home Care, L.L.C., Plaintiffs/Appellants, v. COCHISE HEALTH SYSTEMS, an administrative agency of Cochise County, Arizona and a division of Cochise County Health and Social Services; Cochise County, State of Arizona; Cochise County Board of Supervisors; and Denise Pederson, Defendants/Appellees.
Decision Date19 June 2007
160 P.3d 223
215 Ariz. 344
Carolyn HARRIS and Mary Wilson, dba Angel Team Home Care, L.L.C., Plaintiffs/Appellants,
COCHISE HEALTH SYSTEMS, an administrative agency of Cochise County, Arizona and a division of Cochise County Health and Social Services; Cochise County, State of Arizona; Cochise County Board of Supervisors; and Denise Pederson, Defendants/Appellees.
No. 2 CA-CV 2006-0193.
Court of Appeals of Arizona, Division 2, Department B.
June 19, 2007.

[160 P.3d 225]

Snell & Wilmer L.L.P. By Gerald F. Giordano, Jr., Tucson, Attorneys for Plaintiffs/Appellants.

Jellison Law Offices, PLLC By James M. Jellison, Phoenix, Attorneys for Defendants/Appellees.


ECKERSTROM, Presiding Judge.

¶ 1 Plaintiffs/appellants Carolyn Harris and Mary Wilson, doing business as Angel Team Home Care, L.L.C. (Angel Team), appeal from the dismissal of its complaint and subsequent amended complaint against Cochise Health Systems, Cochise County, Cochise County Board of Supervisors, and Denise Pederson (CHS). The trial court dismissed Angel Team's contract and tort claims on the ground that Angel Team had failed to exhaust administrative remedies. The trial court also dismissed Angel Team's complaint against defendant Denise Pederson on the ground that Angel Care had failed to provide Ms. Pederson sufficient notice of its claim against her. Although the court had allowed Angel Team to amend its complaint after each dismissal and the court had denied CHS's motion to dismiss Angel Team's second amended complaint on all but one tort claim, ultimately Angel Team voluntarily dismissed the remaining claims with prejudice, seeking appellate relief from the trial court's earlier rulings. Angel Team now challenges the dismissals of its original complaint and first amended complaint, arguing the trial court erred in finding that Angel Team had failed to exhaust its claims administratively with CHS before seeking judicial review. It also argues that the trial court erred in dismissing Pederson as a defendant because, inter alia, it provided sufficient notice to her. For the following reasons, we affirm.


¶ 2 In reviewing a trial court's decision to dismiss a claim, we accept as true all facts asserted in the complaint. See Baker v. Rolnick, 210 Ariz. 321, ¶ 14, 110 P.3d 1284, 1287 (App.2005). Angel Team contracted with Cochise Health Systems, a division of Cochise County Health and Social Services, directed by Denise Pederson, to provide home health care for the elderly in Cochise County. In return, Angel Team received Arizona Health Care Cost Containment System (AHCCCS) funds.

¶ 3 Beginning in December 2002 and continuing through to the filing of this lawsuit, CHS refused to pay Angel Team for its services, claiming that Angel Team was billing the agency incorrectly and its billing exceeded the authorized amount. Without payment from CHS, Angel Team was forced to use its reserve monies to pay over 120 employees. Angel Team addressed its concerns to an AHCCCS administrator, who recommended that CHS pay Angel Team, but CHS continued to withhold payment. CHS threatened to sue Angel Team for defamation after Angel Team told its employees that it was having financial difficulties because of CHS's failure to pay. CHS then began telling Angel Team's employees to leave the company and work for competitors and published false information that Angel Team was bankrupt. On March 3, 2003, CHS notified Angel Team that it was terminating its contract. In response, Angel Team filed this action against CHS in Cochise County Superior Court on October 9, 2003, alleging breach of contract, defamation, and tortious interference with contract. On March 23, 2004, the action was transferred to Pima County Superior Court.

¶ 4 CHS moved to dismiss the complaint, arguing that Angel Team had failed to pursue the grievance procedure mandated by the relevant statute, regulations and its contract with CHS. CHS also argued that the court should dismiss Pederson as a defendant because Angel Team had failed to serve her with an individualized notice of claim, as required by A.R.S. § 12-821.01(A). Angel Team countered that it "repeatedly [had] met the requirements of the grievance procedure by notifying Defendant CHS of its complaints," and that the tort claims were not an "adverse action, decision or policy" the grievance policy was designed to handle. It also maintained that it had properly served Pederson because her name was listed as the

160 P.3d 226

statutory agent on the notice of claim served upon CHS, and "she undoubtedly knows who she is."

¶ 5 The trial court granted the motion to dismiss the complaint as to Pederson, finding a lack of compliance with § 12-821.01. Then, following oral arguments and supplemental briefing, the court granted the motion to dismiss the complaint as to CHS, finding Angel Team had failed to exhaust its administrative remedies. Specifically, it found AHCCCS had primary jurisdiction over the breach of contract claim and any torts "inextricably intertwined" with contract claims and that Angel Team had not satisfied the grievance procedure set forth by statute and in AHCCCS Rules and Regulations before filing those claims. It granted Angel Team leave to amend its complaint to set forth "tort claims that are not related to the performance of the contract," or to clarify how those claims were not intertwined and dependent on the contract issues.

¶ 6 Angel Team amended its complaint, removing the breach of contract claim and inserting a new tort claim for intentional/negligent infliction of emotional distress. CHS again moved to dismiss, arguing the amended complaint made "clear that all allegations of tortious conduct arise out of [CHS's] alleged decisions to withhold contract payments and/or to terminate the contract." On July 11, 2005, the trial court again dismissed the claims with leave to amend, ordering Angel Team to "address with specificity, in separate counts, the claims of the individuals versus the claims of the entity." Angel Team amended its complaint for a second time and CHS filed yet another motion to dismiss. On September 27, 2005, the court granted the motion only as to the portion of the complaint alleging negligent infliction of emotional distress, denying the remainder of the motion. Almost a year later, the parties stipulated to the dismissal of the remaining claims with prejudice. This appeal followed.


¶ 7 Although neither party asserts that this court lacks jurisdiction to consider the appeal before us, we may examine our jurisdiction sua sponte. See Salerno v. Atlantic Mut. Ins. Co., 198 Ariz. 54, ¶ 9, 6 P.3d 758, 761 (App.2000). In fact, "[t]his court has the duty to review its jurisdiction and, if jurisdiction is lacking, to dismiss the appeal." Davis v. Cessna Aircraft Corp., 168 Ariz. 301, 304, 812 P.2d 1119, 1122 (App.1991); see also Musa v. Adrian, 130 Ariz. 311, 312, 636 P.2d 89, 90 (1981) ("Even though the parties do not raise the issue, the appellate court must determine that it has jurisdiction.").

¶ 8 Generally, appellate court jurisdiction is "limited to final judgments which dispose of all claims and all parties." Musa, 130 Ariz. at 312, 636 P.2d at 90; see also A.R.S. § 12-2101(B). Additionally, this court may only take an appeal from a "party aggrieved by the judgment." Ariz. R. Civ.App. P. 1,17B A.R.S. "For appellant to qualify as an aggrieved party, the judgment must operate to deny her some personal or property right or to impose a substantial burden upon her." In re Gubser, 126 Ariz. 303, 306, 614 P.2d 845, 848 (1980). And, "[a]ppellant can appeal from only that part of the judgment by which she is aggrieved." Id.

¶ 9 Pursuant to the parties' stipulation, the trial court dismissed with prejudice Angel Team's remaining tort claims in the second amended complaint. The judgment was final. See Meloy v. Saint Paul Mercury Indem. Co., 72 Ariz. 406, 408, 236 P.2d 732, 733 (1951) (judgment dismissing action is final and appealable). The question we must answer here is whether, by voluntarily dismissing its remaining claims and thereby acquiescing to the final judgment, Angel Team is an aggrieved party who may appeal the judgment. We are aware of no Arizona case directly addressing this question.1

160 P.3d 227

¶ 10 Other courts addressing the question have adopted a variety of approaches. Some analyze the question in terms of whether the dismissal was voluntary or involuntary, precluding appeal when the dismissal occurred at the appellant's request. See, e.g., Kelly v. Great Atl. & Pac. Tea Co., 86 F.2d 296, 297 (4th Cir.1936) ("[A]lthough a voluntary nonsuit is a final termination of the action, it has been entered at the request of plaintiff, and he may not, after causing the order to be entered, complain of it on appeal."); Francisco v. Chicago & A.R. Co., 149 F. 354, 355 (8th Cir.1906) (judgment of nonsuit with consent of plaintiff not reviewable because if court erred, it was at plaintiff's request); but cf., Marlboro Cotton Mills v. O'Neal, 114 S.C. 459, 103 S.E. 781, 782 (1920) (nonsuit requested by plaintiff "was the inevitable consequence of a ruling adverse to plaintiff's contention, and by that circumstance it was made involuntary").

¶ 11 In other jurisdictions, whether the dismissal was voluntary or involuntary is immaterial because either can be viewed as an appropriate means of obtaining expeditious appellate review of a dismissed complaint. See, e.g., Concha v. London, 62 F.3d 1493, 1507 (9th Cir.1995) (voluntary dismissal with prejudice permits appellate court to review action adverse to plaintiff's interests because "the plaintiff submits to a judgment that serves to bar his claims forever"); Studstill v. Borg Warner Leasing, 806 F.2d 1005, 1008 (11th Cir.1986) (recognizing appellate jurisdiction over voluntary dismissal "to expedite review of an order which had in effect dismissed appellant's complaint"); Raceway...

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