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Banner Univ. Med. Ctr. Tucson Campus, LLC v. Gordon - 1/20/2022

Arizona Supreme Court holds that an order dismissing claims against employees under A.R.S § 12-821.01 is not a final judgment on the merits such that it would preclude claims of vicarious liability against its employer for the same conduct.


Parents of a deceased child sued individual doctors jointly employed by a private hospital and the University of Arizona for medical malpractice.  The parents also sued the hospital and related entities for vicarious liability.  Because the doctors were public employees, the parents were required to individually serve the doctors with a notice of claim under A.R.S § 12-821.01.  The parents failed to do so.  The trial court granted the doctors’ motion for summary judgment based on the notice of claim statute.  The ruling granting the summary judgment motion was an unsigned minute entry and was not certified under Rule 54(b) as final and appealable.  The hospital then moved for summary judgment, arguing that the dismissal of the doctors’ claim served as an “adjudication on the merits,” which precluded a claim of vicarious liability against the hospital and related entities.  The trial court denied the motion, holding that claims against an employer may proceed for the acts of its employees, even when claims against the individual employees are barred under A.R.S. § 12-821.01.

In a special action, the court of appeals affirmed the trial court’s holding.

The Arizona Supreme Court accepted review and vacated the decision from the court of appeals.  The Supreme Court began by noting that a “final judgment on the merits” is a prerequisite for issue and claim preclusion.  It then proceeded to analyze the language of Rule 54(b) and (c), noting that an order without the Rule’s necessary language cannot be final if it does not resolve all the claims as to all parties.  The Court thus held that the dismissal of the doctors was not a “final judgment on the merits” and therefore the claim of vicarious liability against the hospital and related entities could proceed.  The Court finally noted that a judge’s unsigned order is not a judgment.

The Court vacated the decision below.

Justice Montgomery authored the opinion for the Court.

Posted by: Annabel Barraza

Posted On: 2/2/2022