Laurence v. Srp

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

JACOB LAURENCE, et al., Plaintiffs/Appellants,

v.

SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT & POWER
DISTRICT, et al., Defendants/Appellees.

No. 1 CA-CV 21-0100
FILED 11-9-2021

Appeal from the Superior Court in Maricopa County
No. CV2018-093037
The Honorable David J. Palmer, Judge

AFFIRMED

COUNSEL

Ahwatukee Legal Office, P.C., Phoenix
By David L. Abney
Co-Counsel for Plaintiffs/Appellants

Tobler Law, P.C., Mesa
By Maren Tobler Hanson, Nathan Tobler
Co-Counsel for Plaintiffs/Appellants

Jennings, Strouss & Salmon, P.L.C., Phoenix
By Eric D. Gere, Alex J. Egbert
Counsel for Defendants/Appellees
 LAURENCE, et al. v. SRP, et al.
Decision of the Court

MEMORANDUM DECISION

Judge Maria Elena Cruz delivered the decision of the Court, in which
Presiding Judge Cynthia J. Bailey and Judge Jennifer M. Perkins joined.

C R U Z, Judge:

¶1 Jacob Laurence appeals the superior court’s judgment in favor
of Salt River Project Agricultural Improvement & Power District (“SRP”).
For the following reasons, we affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 Laurence sued SRP and its employee, John Charles
Gabrielson, for damages suffered in a motor-vehicle crash. Laurence sued
Gabrielson for direct liability and SRP for vicarious liability. Laurence
timely served a notice of claim on SRP, but not on Gabrielson.

¶3 Gabrielson moved for summary judgment based on the
failure to timely serve the notice of claim, which the superior court granted.
SRP then filed a successful motion for summary judgment, arguing that it
could not be vicariously liable for Gabrielson’s conduct given that the court
granted judgment in favor of Gabrielson. The court dismissed all claims
with prejudice and entered final judgment. We have jurisdiction over
Laurence’s timely appeal under Arizona Revised Statutes (“A.R.S.”) § 12-
2101(A)(1).

DISCUSSION

¶4 We review the grant of summary judgment de novo, viewing
the facts most favorably to Laurence. See Andrews v. Blake, 205 Ariz. 236,
240, ¶ 12 (2003). We will affirm a grant of summary judgment when there
is no genuine issue of “material fact and the moving party is entitled to
judgment as a matter of law.” Ariz. R. Civ. P. 56(a); Thompson v. Pima Cnty., 226 Ariz. 42, 44, ¶ 5 (App. 2010).

¶5 Laurence argues the superior court erred in granting
summary judgment to SRP because Gabrielson’s liability was not litigated
on the merits and SRP remains potentially vicariously liable for
Gabrielson’s conduct. As a threshold matter, SRP argues Laurence waived
his arguments on appeal because he failed to raise them before the superior

2
 LAURENCE, et al. v. SRP, et al.
Decision of the Court

court. Having reviewed the record, we find that Laurence sufficiently
raised his arguments before the superior court.1

¶6 An employer is vicariously liable for negligence caused by its
employee in the course and scope of his employment. Engler v. Gulf
Interstate Eng’g, Inc., 230 Ariz. 55, 57, ¶ 9 (2012). However, as held in DeGraff
v. Smith, 62 Ariz. 261, 270 (1945), an employer cannot be held vicariously
liable when its employee has been adjudicated not guilty of any negligence.

¶7 Here, the involuntary dismissal with prejudice of Gabrielson
and summary judgment amounted to an adjudication on the merits in his
favor. See Ariz. R. Civ. P. 41(b) (with limited exceptions not applicable here,
involuntary dismissal operates as an adjudication on the merits); Union
Interchange, Inc. v. Van Aalsburg, 102 Ariz. 461, 464 (1967) (“The granting of
a motion for summary judgment is a judgment on the merits and a bar to a
later suit on the same cause of action . . . .”).

¶8 The adjudication of Gabrielson’s liability in turn bars a
vicarious liability claim against SRP. See DeGraff, 62 Ariz. at 270; see also
Chaney Bldg. Co. v. City of Tucson, 148 Ariz. 571, 574 (1986) (stating that “a
judgment or dismissal in favor of the servant relieves the master of
liability”); Law v. Verde Valley Med. Ctr., 217 Ariz. 92, 96, ¶ 13 (App. 2007)
(“When a judgment on the merits—including a dismissal with prejudice—
is entered in favor of [the agent], there is no fault to impute and the party
potentially vicariously liable . . . is not responsible for the fault of the other
person.”) (citation and internal quotation marks omitted).

¶9 Laurence argues that Kopp v. Physician Group of Arizona, Inc.,
244 Ariz. 439 (2018) abrogated DeGraff and that Gabrielson’s dismissal does
not bar litigation of the vicarious liability claim against SRP. Kopp held that
a stipulated dismissal with prejudice of an agent did not preclude direct
negligent hiring and supervision claims against the principal, claims which
turned on proof of the issue of the agent’s liability that had not been
adjudicated by the stipulated dismissal. 244 Ariz. at 440, ¶ 1. In so doing,
Kopp disavowed DeGraff to the extent it concluded that a stipulated
dismissal with prejudice operates as an adjudication of non-liability. Id.
Kopp also recognized that Chaney Building Company v. City of Tucson, 148
Ariz. 571 (1986) abrogated DeGraff “to the extent [it] suggested that a

1 We deny SRP’s motion to strike new arguments made in Laurence’s
recently filed notice of errata.

3
 LAURENCE, et al. v. SRP, et al.
Decision of the Court

stipulated dismissal with prejudice is a judgment on the merits for purposes
of issue preclusion.” 244 Ariz. at 442, ¶ 14.

¶10 But Kopp’s limited abrogation of DeGraff does not affect our
decision. Kopp specifically differentiated between a judgment on the merits
for purposes of issue preclusion and a judgment on the merits for purposes
of claim preclusion. Id. Issue preclusion does not apply here because the
subject litigation involves a pure vicarious liability claim unlike Kopp,
which involved direct claims against the principal that turned on proof of
the issue of the agent’s liability. Id. at 440, ¶ 1. Although the issue of
Gabrielson’s negligence was not determined here, the direct claim against
him was. The adjudication of the direct negligence claim against
Gabrielson means that no fault can be imputed to SRP by operation of law.
See Chaney, 148 Ariz. at 573-74 (recognizing that, in respondeat superior
cases, dismissal of the servant would prohibit an action against the master
because “an act of a servant done in the course of his employment is legally
the act of the master”); Wiggs v. City of Phoenix, 198 Ariz. 367, 371, ¶ 13 (2000)
(stating that in vicarious liability cases, fault is only imputed by operation
of law). Kopp does not stand for the proposition that a vicarious liability
claim can proceed against an employer when the employee has been
dismissed with prejudice.

¶11 Laurence also contends that Division Two’s decision in
Banner University Medical Center Tucson Campus, LLC v. Gordon, 249 Ariz.
132 (App. 2020) (review granted Nov. 3, 2020) is controlling and mandates
the outcome here that the vicarious liability claim against SRP is not barred.
Banner held that the vicarious liability claim against a private employer
survives the dismissal with prejudice of employees for the failure to serve
a notice of claim required due to joint employment by a public entity. 249
Ariz. at 134, ¶ 1. To the extent the status of the parties matters, Banner is
inapposite because that case involved a private employer not subject to the
notice of claim statute, whereas here SRP is a public employer subject to the
statute just like its public employee. Id. at 137-38, ¶ 15. Banner explicitly
stated that its holding is inapplicable in cases that “[deal] only with the
straightforward situation of a public entity and its employee, rather than a
private employer.” Id.

4
 LAURENCE, et al. v. SRP, et al.
Decision of the Court

CONCLUSION

¶12 For the foregoing reasons, we affirm the superior court’s
ruling. We award costs to SRP upon compliance with ARCAP 21.

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

5