Schirmer v. Avalon

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

HELEN SCHIRMER, Plaintiff/Appellant,

v.

AVALON CARE CENTER – SCOTTSDALE LLC, et al.,
Defendants/Appellees.

No. 1 CA-CV 19-0310
FILED 7-14-2020

Appeal from the Superior Court in Maricopa County
No. CV2017-055125
The Honorable Theodore Campagnolo, Judge

AFFIRMED IN PART; REVERSED AND REMANDED IN PART

COUNSEL

Jeffrey L. Victor, P.C., Scottsdale
By Jeffrey L. Victor
Counsel for Plaintiff/Appellant

Anderson & Karrenburg, Salt Lake City, UT
By Craig H. Howe, Blake D. Miller Pro Hac Vice
Counsel for Defendants/Appellees
 SCHIRMER v. AVALON, et al.
Decision of the Court

MEMORANDUM DECISION

Judge D. Steven Williams delivered the decision of the Court, in which
Presiding Judge Michael J. Brown and Judge Randall M. Howe1 joined.

W I L L I A M S, Judge:

¶1 Helen Schirmer (”Helen”) appeals the superior court’s order
granting summary judgment to all defendants. For reasons stated below,
we affirm the dismissal of the claims based upon the negligence of the
nursing staff but reverse the dismissal of the remaining claims and remand
for a jury to determine if the statute of limitations bars those claims.

FACTUAL AND PROCEDURAL HISTORY

¶2 In May 2014, Carl Schirmer (“Carl”), Helen’s husband, was
admitted to a nursing center, Avalon Care Center-Scottsdale, L.L.C., (“A
CC-Scottsdale”) dba Avalon Care Center-Shadow Mountain (“ACC-
Shadow Mountain”). Upon admission, Carl signed an agreement listing
ACC-Shadow Mountain as the “care center,” which we refer to as “the
Avalon facility.” While at the Avalon facility, Carl fell and fractured his hip.
As a result, he was hospitalized and later died on August 20, 2014, allegedly
from complications related to the hip fracture.

¶3 In January 2015, Helen’s attorney wrote to the Avalon
facility’s attorney asking to discuss Helen’s claim that the nursing staff’s
negligence caused Carl’s death. Helen’s attorney followed up with a second
letter that included an expert opinion from Wendy Thomason, R.N.,
supporting the negligence claim.

¶4 On July 8, 2015, Helen filed a complaint against Avalon
Health Care, Inc. (“AHCI”), dba ACC-Shadow Mountain and fictitious
defendants, asserting claims arising from Carl’s death. AHCI, a Utah
corporation, removed that action to federal court. The federal district court
granted AHCI summary judgment because it was not sufficiently involved
in providing care to Carl to impose liability for any of the alleged claims.

1 Judge Randall M. Howe replaces the Honorable Kenton D. Jones, who was

originally assigned to this panel. Judge Howe has read the briefs, reviewed
the record, and watched the recording of the March 18, 2020 oral argument.

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The Ninth Circuit Court of Appeals affirmed this decision. Schirmer v.
Avalon Health Care, Inc., 772 Fed. Appx. 546, 547 (9th Cir. 2019).

¶5 On July 14, 2017, after the federal court dismissed the first
action, Helen filed a complaint naming ACC-Scottsdale dba ACC-Shadow
Mountain; Avalon Health Care Centers, L.L.C. and Avalon Health Care
Management of Arizona, L.L.C. (“the corporate defendants”); and
individual defendants, Douglas Daudelin, the Avalon facility regional
director; Michael B. Morris, an Avalon facility administrator; Vanessa E.
Holmes, the director of nursing for the Avalon facility; nurses LaShun
McSwain and Kyle Mader; and certified nursing assistant Chad Pinkstaff.
As in the 2015 complaint, the 2017 complaint alleged negligence, wrongful
death, violation of the Adult Protective Services Act (“APSA”) A.R.S. § 46-
455(B), loss of consortium, and punitive damages. The 2017 complaint also
alleged negligent hiring and management in the Avalon facility.

¶6 Defendants moved for summary judgment, arguing the
statute of limitations barred the action because the complaint was filed
more than two years after Helen’s claims accrued. According to
Defendants, Helen was aware of the wrongful death and loss of consortium
claims by January 2015, when her expert opined the nursing staff was
negligent, and the statute of limitations began to run on the negligence
claims, at the latest, on June 4, 2015, when Helen was appointed personal
representative of Carl’s estate. In response, Helen argued the statute of
limitations did not begin to run until early 2016, when she learned the
correct name of the legal entity responsible for Carl’s injuries, the names of
the individual nurses, and the facts giving rise to her claims for
administrative negligence.

¶7 The superior court granted Defendants judgment on all
claims, finding Helen knew the estate had a cause of action against the
nursing home and its staff no later than December 31, 2014, when Helen’s
expert provided her opinion. The court concluded Helen had a duty to
investigate and determine the correct legal entity, and name that party in
the federal case. The court also found that even if Helen did not know the
names of the administrators until the discovery in the federal action, she
had a duty to amend the 2015 complaint. Helen timely appealed, and we
have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).

DISCUSSION

¶8 Summary judgment is appropriate if “there is no genuine
dispute as to any material fact and the moving party is entitled to judgment

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as a matter of law.” Ariz. R. Civ. P. 56(a); see also Orme Sch. v. Reeves, 166
Ariz. 301, 309 (1990). We review the superior court’s grant of summary
judgment de novo, considering the facts and any inferences drawn from
those facts in the light most favorable to the party opposing summary
judgment. Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 199,
¶ 15 (App. 2007).

¶9 The parties do not dispute that Helen had two years after her
claims accrued to file an action. See A.R.S. §§ 12-542 and 46-455(K). Helen
did not file the second complaint within two years of Carl’s death or her
appointment as personal representative of his estate, but contends it was,
nevertheless, timely because her claims did not accrue until early 2016
under the discovery rule. To that end, Helen first argues the corporate
defendants concealed and misrepresented the true identity of the legal
entity that provided Carl’s care and other relevant facts, thereby tolling the
accrual date of her claims; and second, the 2017 complaint states
independent claims for negligent hiring and management of the Avalon
facility, and she did not discover the facts giving rise to those claims until
March 2016.

¶10 The statute of limitations “protect[s] defendants and courts
from stale claims where plaintiffs have slept on their rights.” Gust, Rosenfeld
& Henderson v. Prudential Ins. Co. of Am., 182 Ariz. 586, 590 (1995). Because
a party is not allowed to “sleep on [their] rights” regarding an unknown
claim, Doe v. Roe, 191 Ariz. 313, 322, ¶ 29 (1998), the discovery rule provides
that “a cause of action does not ‘accrue’ until a plaintiff discovers or by the
exercise of reasonable diligence should have discovered that he or she has
been injured by the defendant’s negligent conduct,” Anson v. Am. Motors
Corp., 155 Ariz. 420, 423 (App. 1987). Thus, “[a] cause of action does not
accrue until the plaintiff knows or should have known of both the what and
the who elements of causation.” Lawhon v. L.B.J. Institutional Supply, Inc., 159
Ariz. 179, 183 (App. 1988) (first emphasis added). A plaintiff must also have
a “reason to connect the ‘what’ to a particular ‘who’ in such a way that a
reasonable person would be on notice to investigate whether the injury
might result from fault.” Walk v. Ring, 202 Ariz. 310, 316, ¶ 22 (2002).
Determining when a plaintiff should have known the who and what
elements of a claim is usually a question of fact for the jury, and “summary
judgment is warranted only if the failure to go forward and investigate is
not reasonably justified.” Id. at ¶ 23 (citing Doe, 191 Ariz. at 323, ¶ 32). A
plaintiff has the burden of convincing the jury the discovery rule applies to
delay the accrual of her claims. Ulibarri v. Gerstenberger, 178 Ariz. 151, 155
(App. 1993).

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I. When Helen Should Have Discovered the Correct Name of the Legal Entity
Responsible for Carl’s Care Is a Question of Fact

¶11 The 2015 complaint named the entities listed in the medical
records: AHCI and ACC-Shadow Mountain. Helen argues she did not learn
ACC-Scottsdale was the correct legal entity responsible for her claims until
Defendants provided discovery in the federal litigation. Defendants
concede they did not identify the legal name of ACC-Scottsdale until
January 21, 2016, during discovery in the course of the federal litigation.
However, Defendants argue Helen was aware of her claim and had a duty
to investigate the correct legal entity when her attorney sent a letter and an
expert opinion asserting negligence by “ACC-Shadow Mountain.”

¶12 The admission documents and the medical records available
to Helen state the care provider was ACC-Shadow Mountain or AHCI.
Helen contends that by using these corporate names, the documents
actively misled her as to the correct legal entity. Defendants deny the forms
actively concealed or affirmatively misrepresented information because the
correct legal name was available on the Arizona Corporation Commission’s
public website, and Helen should be deemed to know the contents of public
records. See Transamerica Ins. Co. v. Trout, 145 Ariz. 355, 358 (App. 1985);
Ruth v. Unifund CCR Partners, 604 F. 3d 908 (6th Cir. 2010).

¶13 Defendants also argue Helen was on notice to investigate
AHCI’s true identity because AHCI had denied it provided care to Carl as
a defense in the federal litigation. Helen counters that Defendants’ federal
pleadings were misleading and insufficient to put her on actual notice that
she had named the incorrect legal entity. Helen alleged Defendants had
failed to disclose the name of the entity that had discoverable information
in its initial disclosures, as required by Federal Rule of Civil Procedure
26(a). This obligation existed even if Helen did not specifically request it,
Fed. R. Civ. P. 26(a)(1)(A)(i), and an evasive disclosure constitutes a failure
to disclose, Fed. R. Civ. P. 37(a)(4). 2

¶14 Helen argues that Defendants conduct constitutes fraudulent
concealment, which relieved her of the duty to investigate until she
discovered or was put on notice of facts giving rise to the concealment.
Walk, 202 Ariz. at 319, ¶ 35 (“actual knowledge standard applies to

2 We recently noted the difficulty that can exist in determining the correct

legal entity to name in a lawsuit given “[t]he complicated structuring [of
care facilities] consisting of limited liability companies and limited
partnerships . . . .” Scott v. Kemp, 248 Ariz. 380, ¶ 2 (App. 2020).

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triggering the statute of limitations” when concealment has occurred).
Therefore, Helen asserts her late discovery was reasonable because she had
no reason to suspect she had named the incorrect legal entity in the federal
litigation. Whether fraudulent concealment occurred is an issue of fact for
the jury. Anson, 155 Ariz. at 429. Even if Defendants’ federal pleadings
should have put Helen on notice to investigate the existence of a different
corporate entity than was named, Helen filed the 2017 complaint within
two years of Defendant’s August 2015 answer; that answer contained
AHCI’s denial of responsibility, which Defendants contend should have
put Helen on notice.

¶15 The question then becomes whether Helen reasonably relied
upon the medical records available to her in determining who to sue, or if
she had an obligation to further investigate the name of the entity before
Defendants may have put her on notice she had sued the wrong entity. As
discussed, supra, ¶ 10, “whether a reasonable person would have been on
notice to investigate” is usually a question of fact for the jury, Walk, 202
Ariz. at 316, ¶ 24.

¶16 Defendants contend that Helen’s duty to investigate the
correct legal name is not, at its core, a factual question because Defendants
did not make affirmative assurances as in Walk or Anson. While the
statements in the medical records and Defendant’s answer were not direct
misrepresentations, the question is whether Helen had reason to know she
should be looking for an alternative legal entity based upon the medical
records available to her and Defendants’ conduct during the federal
litigation. Walk, 202 Ariz. at 316, ¶ 24. On this record, a jury must resolve
this material issue.

¶17 Finally, Helen’s knowledge of the correct legal entity before
the federal litigation was dismissed does not render the 2017 complaint
untimely. As Defendants acknowledged, Helen could have sought to
amend the complaint in the federal court or filed a timely separate action
against the correct entity. By filing the 2017 complaint, Helen chose the
latter. It is for a jury to decide if that complaint was timely.

II. As a Matter of Law, Helen Should Have Known or Discovered the Names
of the Individual Nursing Staff Members

¶18 Helen contends the 2015 complaint alleged nursing
negligence without knowing which particular nurses were involved.
According to Helen, the individual nurses’ names were not available until
the discovery phase of the federal litigation because the patient medical

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records did not reveal which nurses, if any, committed a negligent act, and
Defendants concealed the Incident Fall Reports that would have provided
that information.

¶19 Even if Helen did not know the individual nurses’ names
until March 2016, she was aware of alleged negligence by nursing “staff” in
January 2015 based upon her expert’s opinion. Thus, by January 2015,
Helen was on notice to investigate and determine the names of the
individual nurses she alleged were negligent. The discovery rule does not
allow a party “to hide behind its ignorance when reasonable investigation
would have alerted it to the claim.” ELM Ret. Ctr., LP v. Callaway, 226 Ariz.
287, 290, ¶ 12 (App. 2010). A plaintiff has an affirmative duty of due
diligence to investigate her potential claims. Id. (citing Doe, 191 Ariz. at 324,
¶ 37).

¶20 In response to Defendants’ summary judgment motion,
Helen needed to show that in the exercise of reasonable diligence, she was
unable to discover the nurses’ identities within the limitations period. See,
e.g., Doe, 191 Ariz. at 323, ¶¶ 32-33. Helen had Carl’s “medical records,” but
she did not learn that separate “Fall Incident Reports” existed until the
discovery phase of the federal litigation. Helen contends Defendants
concealed the Fall Incident Reports which prevented her from obtaining
this information. However, these reports have never been disclosed.

¶21 Knowledge of the existence of a claim does not necessarily
require knowledge of the specific Defendants’ identities. Lawhon, 159 Ariz.
at 181. Yet Helen knew of negligent conduct by at least a single nurse, and
therefore, had a duty to investigate the identity of that person. Even without
the Fall Incident Reports, Helen discovered which witnesses to depose
within the federal litigation, including two of the nurses named in the 2017
complaint. Having done so, Helen provided no reason why she could not
have determined the names of the individual nurses before the limitations
period expired. And although information contained within the Fall
Incident Reports was relevant, it was clearly not the only way Helen could
have determined the nurses’ names. Therefore, any concealment of these
reports did not preclude Helen from otherwise investigating or asserting
her claims. As a matter of law, Helen had sufficient knowledge to determine
the identity of the individual nurses before the statute of limitations
expired, but failed to do so. Helen’s window for a negligence claim against
those nurses has closed.

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III. When Helen Discovered She Had a Claim for the Independent Negligence
of the Corporate Defendants and Administrators Is a Question of Fact

¶22 The superior court found Helen learned of the administrators’
alleged negligence during the federal litigation and, therefore, should have
raised this claim within that case. Defendants contend Helen was aware, or
should have been aware, of these claims in January 2015 when her expert
provided an opinion that the nursing staff was negligent.

¶23 Helen’s claims against the corporate defendants and
individual administrators were based upon conduct distinct from the
conduct giving rise to the nursing staff negligence claim. Helen’s nursing
expert addressed only nursing negligence and did not consider or suggest
any negligence by the administrators or corporate defendants. According
to Helen, she did not learn she also had a claim for the negligent
administration of the Avalon facility until she took depositions within the
federal litigation and retained an expert in nursing home administration.
Helen’s expert on nursing home administration stated that she learned facts
giving rise to the claims for the administrator’s negligence only after the
depositions in the federal litigation. Only then did Helen learn the Avalon
facility was understaffed, had insufficient equipment, and lacked an
assistant director of nursing.3

¶24 Defendants contend Helen knew of these claims at least by
September 2015, when she notified Defendants that she planned to depose
the “Director of Nursing” and an “Administrator” in the federal litigation.
The fact that Helen’s joint case management report listed the unnamed
Director of Nursing and an Administrator does not establish, as a matter of
law, that she knew or should have known sufficient facts giving rise to the
claims for negligent hiring and management. In any event, Helen filed the
2017 complaint within two years of that date.

¶25 Defendants also argue the 2017 complaint does not allege any
new facts supporting separate claims of “administrative negligence.”
However, the 2017 complaint contained new allegations that Defendants

3 Defendants contend Helen’s experts’ affidavits are deficient, and, in any

event, they fail to create a question of fact. As discussed above, the affidavit
of the expert on nursing home administration raised a question of fact
whether Helen, in the exercise of reasonable diligence, could have
discovered earlier the claim for negligent hiring and management. Thus, a
jury must decide this issue. Defendants can raise any objections to the
affidavits they deem appropriate in the course of trial.

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were liable for the hiring and management of their employees and agents,
exercised control and management over the facility, and failed to “manage,
control and/or administer” the facility as required by law, proximately
causing Carl’s death. The 2017 complaint also alleged that Daudelin and
Morris, as regional director and administrator respectively, breached
various duties owed to Carl. Count Three alleged a violation of the APSA
(A.R.S. § 46-455), and added specific allegations that Defendants
consciously decided to “promote profits instead of providing the legally
mandated care” and violated the APSA by breaching the “aforementioned
duties.” These allegations were not in the 2015 complaint.

¶26 Helen’s negligent hiring and management claims are based
upon the direct action or inaction of the corporate defendants and
administrators. As such, they are direct theories of liability and
independent from any vicarious liability resulting from the principal-agent
relationship between the nurses and the corporate defendants. See Kopp v.
Physician Grp. of Ariz., Inc., 244 Ariz. 439, 441-42, ¶¶ 11-12 (2018). Helen’s
evidence is sufficient to create a factual question when she first knew or
should have known of the facts giving rise to these claims. Therefore,
summary judgment was improper.

¶27 Defendants again argue that Helen could have amended the
2015 complaint or filed a separate timely action upon learning facts to
support the separate claims of negligent hiring and management. The 2017
complaint purports to do just that.

IV. Vicarious Liability

¶28 Because the negligence claims against the nurses are time-
barred, the corporate defendants cannot be found vicariously liable for
those claims. Chaney Bldg. Co. v. City of Tucson, 148 Ariz. 571, 574 (1986) (“In
cases of derivative liability, a judgment or dismissal in favor of the servant
relieves the master of liability.”). However, dismissal of the claims against
the nurses does not require dismissal of the independent claims against the
corporate defendants or administrators for direct liability for any negligent
hiring and management. Kopp, 244 Ariz. at 441-42, ¶¶ 11-12.

CONCLUSION

¶29 We affirm the dismissal of the claims against nurses McSwain,
Pinkstaff, and Mader and the dismissal of the claims against the corporate
defendants based upon the vicarious liability of those defendants. We
reverse the entry of summary judgment against administrators, Daudelin,
Morris, and Holmes and the corporate defendants for claims based upon

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their direct liability for negligent hiring and management. On remand, a
jury must determine when these claims accrued and whether Helen’s
complaint was filed within the statute of limitations.

AMY M. WOOD • Clerk of the Court
FILED: AA

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