Harris, Wilson, Angel Team Home Care v. Cochise Health Systems

CourtCourt of Appeals of Arizona
DecidedJune 19, 2007
Docket2 CA-CV 2006-0193
StatusPublished

This text of Harris, Wilson, Angel Team Home Care v. Cochise Health Systems (Harris, Wilson, Angel Team Home Care v. Cochise Health Systems) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harris, Wilson, Angel Team Home Care v. Cochise Health Systems, (Ark. Ct. App. 2007).

Opinion

FILED BY CLERK JUN 19 2007 IN THE COURT OF APPEALS COURT OF APPEALS STATE OF ARIZONA DIVISION TWO DIVISION TWO

CAROLYN HARRIS and MARY ) WILSON, dba ANGEL TEAM HOME ) CARE, L.L.C., ) ) 2 CA-CV 2006-0193 Plaintiffs/Appellants, ) DEPARTMENT B ) v. ) OPINION ) 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. ) )

APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY

Cause No. C20045172

Honorable Carmine Cornelio, Judge Honorable Michael O. Miller, Judge

AFFIRMED

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

E C K E R S T R O M, 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 BACKGROUND

¶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,

3 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 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

4 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.

APPELLATE JURISDICTION

¶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

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