Stoecker v. Brush Wellman, Inc.

• Decision Date: 01 July 1999
• Docket Number: No. CV-98-0361-PR.,CV-98-0361-PR.
• Citation: 984 P.2d 534,194 Ariz. 448
• Parties: Fred STOECKER and Hildegard E. Stoecker, husband and wife, Plaintiffs/Appellants, v. BRUSH WELLMAN, INC., a foreign corporation; Jordan Frazier and Jane Doe Frazier, husband and wife; Snowden A. Moyer and Jane Doe Moyer, husband and wife; Derrick Schull and Jane Doe Schull, husband and wife; Bud Foster and Jane Doe Foster, husband and wife, Defendants/Appellees. Armando C. Cruz and Ursula Cruz, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation, Defendant/Appellee. Albert Flores and Norma P. Flores, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation, Defendant/Appellee. Luis C. Maldonado and Rosa O. Maldonado, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation, Defendant/Appellee. Robert Kofira and Leanne Kofira, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation, Defendant/Appellee. Javier Fimbres and Sylvia Fimbres, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation; Jordan Frazier and Jane Doe Frazier, husband and wife; Snowden A. Moyer and Jane Doe Moyer, husband and wife; Derrick Schull and Jane Doe Schull, husband and wife; Bud Foster and Jane Doe Foster, husband and wife, Defendants/Appellees. Michael D. Matulin and Shelly Matulin, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation; Jordan Frazier and Jane Doe Frazier, husband and wife; Snowden A. Moyer and Jane Doe Moyer, husband and wife; Derrick Schull and Jane Doe Schull, husband and wife, Defendants/Appellees. Lee Ann Haynes-Kern and Ronald Kern, wife and husband, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation; Snowden A. Moyer and Jane Doe Moyer, husband and wife, Defendant/Appellees.
• Court: Arizona Supreme Court

984 P.2d 534

194 Ariz. 448

Fred STOECKER and Hildegard E. Stoecker, husband and wife, Plaintiffs/Appellants, v. BRUSH WELLMAN, INC., a foreign corporation; Jordan Frazier and Jane Doe Frazier, husband and wife; Snowden A. Moyer and Jane Doe Moyer, husband and wife; Derrick Schull and Jane Doe Schull, husband and wife; Bud Foster and Jane Doe Foster, husband and wife, Defendants/Appellees.

Armando C. Cruz and Ursula Cruz, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation, Defendant/Appellee.

Albert Flores and Norma P. Flores, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation, Defendant/Appellee.

Luis C. Maldonado and Rosa O. Maldonado, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation, Defendant/Appellee.

Robert Kofira and Leanne Kofira, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation, Defendant/Appellee.

Javier Fimbres and Sylvia Fimbres, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation; Jordan Frazier and Jane Doe Frazier, husband and wife; Snowden A. Moyer and Jane Doe Moyer, husband and wife; Derrick Schull and Jane Doe Schull, husband and wife; Bud Foster and Jane Doe Foster, husband and wife, Defendants/Appellees.

Michael D. Matulin and Shelly Matulin, husband and wife, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation; Jordan Frazier and Jane Doe Frazier, husband and wife; Snowden A. Moyer and Jane Doe Moyer, husband and wife; Derrick Schull and Jane Doe Schull, husband and wife, Defendants/Appellees.

Lee Ann Haynes-Kern and Ronald Kern, wife and husband, Plaintiffs/Appellants, v. Brush Wellman, Inc., a foreign corporation; Snowden A. Moyer and Jane Doe Moyer, husband and wife, Defendant/Appellees.

No. CV-98-0361-PR.

Supreme Court of Arizona, En Banc.

July 1, 1999.

James G. Heckbert, Steamboat Springs, Colorado, Winton Woods, Jr. and Dickerson, Butler & Rodriguez, P.C. By: J. Patrick Butler, Tucson, Attorneys for Plaintiffs/Appellants.

Rusing & Lopez, P.L.L.C. By: Michael J. Rusing, Cynthia J. Kuhn, Tucson, and Downey & Knickrehm By: Thomas E. Downey, Jr., Kate E. Knickrehm, Denver, Colorado, Attorneys for Defendant/Appellee Brush Wellman, Inc. and Jones, Day, Reavis & Pogue By: Jeffery D. Ubersax, Janet L. Miller, Cleveland, Ohio, of Counsel for Defendant/Appellee Brush Wellman, Inc.

Chandler, Tullar, Udall & Redhair By: Dwight M. Whitley, Jr., Tucson, Attorneys for Defendants/Appellees Frazier, Moyer, Schull, and Foster.

OPINION

FELDMAN, Justice.

¶ 1 We granted review to determine whether the exclusivity provision of the workers' compensation law bars employees' claims that their employer breached a contract to supplement workers' compensation benefits. We have jurisdiction pursuant to Ariz. Const. art. VI, § 5(3).

FACTS AND PROCEDURAL HISTORY

¶ 2 Nine former and present employees (Plaintiffs) of Brush Wellman, Inc., contracted chronic beryllium disease (CBD), a severe, progressive, and permanent lung condition, as a result of their exposure to toxic levels of airborne beryllium dust while working at Brush Wellman's Tucson plant. Although only a small fraction of the population develops CBD as a result of beryllium exposure, no available testing method exists to determine whether a particular individual may be susceptible. A Brush Wellman executive testified at deposition that approximately five percent of Brush Wellman employees exposed to beryllium develop CBD. Plaintiffs allege that Brush Wellman knew its employees would be exposed and that some would contract CBD and therefore promised its employees that it would take care of them by supplementing their workers' compensation benefits to keep their salaries at the level earned before they contracted CBD. Thus, when one of Brush Wellman's employees was diagnosed as having CBD, a corporate representative and the diagnosed employee signed a form that specifically detailed what Brush Wellman would pay the employee as an income supplement:

The Company recognizes a medical determination that (employee with CBD) has contracted a beryllium-related disease as a result of his employment with the Company. Our policy is that this employee shall be guaranteed an income at least equal to the highest rate of pay at the time or subsequent to, the diagnosis of [CBD]. This guarantee shall remain in effect until the employee reaches normal retirement age, or recovers from [CBD].

Brush Wellman also issued a policy statement:

Special provision is made for employees who, in the course of employment with the company, contract [CBD], and consequently become partially or totally disabled. Continued performance in a job which they are able to perform will be encouraged. Such employees shall not suffer reduction in cash income or employee benefits as a result of their disability.... The company will supplement any income received through ... Workers' Compensation ... so that total income is equal to the employee's straight time income as of the last day worked. Pay will continue until the employee... becomes eligible for normal retirement benefits under the Company's Pension Plan.

¶ 3 Plaintiffs argue that this policy was part of their contract with Brush Wellman when each was diagnosed with CBD between 1991 and 1994. All received workers' compensation benefits but not the income supplement.

¶ 4 Plaintiffs' complaint contained a count for breach of employment contract and tort counts alleging intentional injury and breach of the covenant of good faith and fair dealing. Brush Wellman moved for summary judgment on all counts, arguing that the contract claims were barred by the exclusivity provision of the workers' compensation law, that Plaintiffs failed to state a claim for intentional injury, and that under the facts of the case, Arizona does not recognize a claim for breach of the covenant of good faith and fair dealing. Without explanation, the trial court granted Brush Wellman's motion on all counts.

¶ 5 The court of appeals affirmed on all but the intentional injury issue. (Stoecker v. Brush Wellman, Inc., No. 2 CA-CV 96-0293 (memorandum decision, March 31, 1998)). The court found that Plaintiffs alleged sufficient facts to state a claim that Brush Wellman acted knowingly and intentionally. Mem. dec. at ¶ 7. Despite Plaintiffs' contention that a two-year statute of limitations for common-law claims should apply, the court held that a one-year statute of limitations applies to the intentional injury doctrine, a statutory cause of action. Mem. dec. at ¶¶ 8-9. Because of factual questions pertaining to the discovery rule, the court remanded the statute of limitations issue to the trial court. Mem. dec. at ¶¶ 10-12.

¶ 6 The court also affirmed summary judgment on the contract claims, concluding the claims were barred by A.R.S. § 23-1024, which provides that workers' compensation benefits shall be the exclusive remedy for an employee injured in the course and scope of employment.¹ Mem. dec. at ¶ 5. Because Plaintiffs failed to reject workers' compensation prior to injury, as required by A.R.S. § 23-906, and in fact received compensation benefits, the court found their claim was barred by § 23-1024's exclusivity provisions. Plaintiffs sought and we granted review of the court of appeals' affirmance of summary judgment on the breach of contract count. Because of the procedural posture of the case, we take the facts in the light most favorable to Plaintiffs and assume the truth of Plaintiffs' allegations respecting their contracts with Brush Wellman. See Doe v. Roe, 191 Ariz. 313, 324, 955 P.2d 951, 962 (1998)

.

DISCUSSION

¶ 7 The Arizona Constitution requires the legislature to adopt a workers' compensation system designed to provide compensation for accidental injuries arising out of the course of employment. See Ariz. Const., art. XVIII, § 8. The legislature has created a statutory scheme implementing this constitutional mandate. See A.R.S. §§ 23-901 to 23-1091 (the Act). The Act includes an exclusivity provision that any employee "who accepts compensation waives the right to exercise any option to institute proceedings in court against his employer." A.R.S. § 23-1024(A).

¶ 8 Our constitution also prohibits the legislature from abrogating the right "to recover damages for injuries" or limiting the "amount recovered." Ariz. Const., art. XVIII, § 6. The two constitutional provisions are complementary. Kilpatrick v. Superior Court, 105 Ariz. 413, 419, 466 P.2d 18, 24 (1970). Thus, when an injury falls within the scope of the compensation law, the legislature may abrogate the right of action for tort recovery by a worker who elected to accept compensation. Id.; see also Anderson v. Industrial Comm'n, 147 Ariz. 456, 461, 711 P.2d 595, 600 (1985)

.

¶ 9 The court of appeals agreed with Plaintiffs that § 23-1024(A) does not "encompass [] all common law remedies against the employer" but held that an employee's "acceptance of workers' compensation benefits waives all remedies ... except for those remedies [such as the tort action for intentional injury] created or protected by the Arizona Constitution." Mem. dec. at ¶ 4 (citing Anderson, 147 Ariz. 456, 711 P.2d 595.) Consequently, Plaintiffs' contract claim was barred. We disagree, believing the court's characterization of the exclusivity rule is too broad. Anderson dealt with an employee's tort claim seeking recovery for an industrial injury. Claims that do not fall within the scope of the workers' compensation statute are not barred by its exclusivity provision. See Ford v. Revlon, Inc., 153 Ariz. 38, 734 P.2d 580 (1987)

.

¶ 10 Our courts have always recognized that various actions, including some tort actions, survive for workers whose claims are not within the scope of the compensation scheme. See, e.g., Ford, 153 Ariz. at 44,

734 P.2d at 586 (employee's action against employer for intentional infliction of...