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Newman v. Select Specialty Hospital-Arizona, Inc.

Court of Appeals of Arizona, First Division

April 7, 2016

ETHAN NEWMAN, Plaintiff/Appellee,
v.
SELECT SPECIALTY HOSPITAL-ARIZONA, INC., a Delaware corporation, dba SELECT SPECIALTY HOSPITAL ARIZONA (SCOTTSDALE CAMPUS); SELECT MEDICAL CORPORATION, a Delaware corporation, Defendants/Appellants. ETHAN NEWMAN, Plaintiff/Appellant,
v.
SELECT SPECIALTY HOSPITAL-ARIZONA, INC., a Delaware corporation, dba SELECT SPECIALTY HOSPITAL ARIZONA (SCOTTSDALE CAMPUS); SELECT MEDICAL CORPORATION, a Delaware corporation, Defendants/Appellees

          Appeal from the Superior Court in Maricopa County. No. CV2010-033589. The Honorable Arthur T. Anderson, Judge.

         Law Office of Scott E. Boehm, PC, Phoenix, By Scott E. Boehm, Co-Counsel for Plaintiff/Appellee, Plaintiff/Appellant.

         Law Office of Scott E. Boehm, PC, Phoenix, By Scott E. Boehm, Co-Counsel for Plaintiff/Appellee, Plaintiff/Appellant.

         Broening, Oberg, Woods & Wilson, PC, Phoenix, By James R. Broening, Megan E. Gailey, Counsel for Defendants/Appellants, Defendants/Appellees.

         Presiding Judge John C. Gemmill delivered the opinion of the Court, in which Judge Kenton D. Jones and Judge Maurice Portley joined.

          OPINION

         John C. Gemmill, Judge:

         [¶1] Plaintiff Ethan Newman brought this action for injuries he sustained while in the care of defendants Select Specialty Hospital-Arizona, Inc., dba Select Specialty Hospital Arizona (Scottsdale Campus) and Select Medical Corporation (collectively, " the Hospital" ). Newman appeals the superior court's ruling granting judgment as a matter of law for the Hospital on the issue of punitive damages and its award of costs and attorney fees. The Hospital also appeals the award of attorney fees. Because the issue of punitive damages should have been presented to the jury, we reverse the superior court's ruling and remand for further proceedings regarding punitive damages. We affirm the court's rulings on costs and attorney fees.

         BACKGROUND

         [¶2] We state the facts in the light most favorable to Newman, the prevailing party at trial. Hutcherson v. City of Phoenix, 192 Ariz. 51, 53, ¶ 13, 961 P.2d 449 (1998). In December 2008, a motor vehicle accident rendered eighteen-year-old Newman a quadriplegic. After seventeen days of treatment at a local hospital, Newman was transferred to the Hospital for ongoing care. Newman had a wound on his sacrum when he was admitted to the Hospital. During his stay at the Hospital, the wound progressed to a Stage III pressure sore. In January 2009, Newman was transferred from the Hospital, but despite proper treatment at another facility, the wound did not heal for approximately six months. The wound area remains painful and re-opens easily, requiring Newman to return to bed from his wheelchair every 4-6 hours to relieve pressure.

         [¶3] In December 2010, Newman filed this action alleging the Hospital's care violated Arizona's Adult Protective Services Act (" APSA" ) and Arizona Revised Statutes (" A.R.S." ) sections 46-451 through -459, and seeking compensatory and punitive damages. After the close of Newman's evidence at trial, the court granted the Hospital's motion for a directed verdict on punitive damages, ruling Newman had not offered sufficient evidence to clearly and convincingly establish that the Hospital acted with an evil mind. The jury found in favor of Newman and awarded him $250,000 in compensatory damages. The court denied Newman's motion for a new trial on the punitive damages issue.

         [¶4] Although, at the time of the verdict, A.R.S. § 46-455(H)(4) did not provide for an award of attorney fees to a prevailing claimant, Newman applied for an award of attorney fees under a prior version of the statute, arguing his right to fees accrued when his claim accrued. The Hospital opposed the request, arguing that any right to attorney fees did not accrue until the jury rendered its verdict, and the statute in effect at that time did not allow the court to award attorney fees to a successful claimant. The court ruled that the version of the statute in effect when Newman's claim accrued in January 2009 applied, but found the $388,400 in attorney fees he requested was not reasonable. The court ultimately awarded Newman $112,500 in attorney fees.

         [¶5] Newman also asked the court to award him " costs of suit," totaling $48,544.06, pursuant to A.R.S. § 46-455(H)(4). The Hospital opposed many of the claimed costs on the ground that they were not " taxable costs" under A.R.S. § 12-332. Newman maintained that § 46-455(H)(4) allows the court to award not just the " taxable costs" available under § 12-332, but all reasonable costs that Newman incurred to successfully obtain a verdict. The court rejected Newman's argument and awarded him only the costs he incurred that would be recoverable under § 12-332.

         [¶6] The Hospital and Newman both timely appealed the judgment. Newman argues the superior court erred by: (1) granting the Hospital's motion for judgment as a matter of law on his claim for punitive damages; (2) finding that he did not establish a prima facie case that the amount of his requested attorney fees was reasonable; and (3) limiting his recovery of costs under § 46-455(H)(4) to the taxable costs recoverable under § 12-332. The Hospital contends the superior court erred by awarding attorney fees to Newman because, at the time of the verdict, § 46-455(H)(4) did not allow a claimant to recover attorney fees.

         ANALYSIS

         I. Jurisdictional Challenge to Hospital's Appeal

         [¶7] We initially address Newman's claim that this court does not have jurisdiction to hear the Hospital's appeal. Newman contends the Hospital's notice of appeal was premature and, therefore, a nullity. See Craig v. Craig, 227 Ariz. 105, 107, ¶ 13, 253 P.3d 624 (2011). Before trial, the superior court granted the Hospital's motion to dismiss all claims against Sharon Anthony, the Hospital's Chief Executive Officer, in an unsigned minute entry. Thereafter, on September 10, 2013, the court entered a judgment on the jury verdict and disposed of Newman's applications for attorney fees and costs. Both parties appealed the judgment. The superior court later signed Newman's proposed form of order dismissing all claims against Anthony, and Newman filed an amended notice of appeal. Because Anthony had not been formally dismissed and the September 10 judgment did not contain an express determination pursuant to Arizona Rule of Civil Procedure 54(b), Newman argues this court lacks jurisdiction over the Hospital's appeal. Newman asserts the Hospital was required, and failed, to file an amended notice of appeal once the court signed the Anthony order.

         [¶8] Although we agree that the Hospital's notice of appeal was premature, we reject Newman's argument because the Barassi exception applies to these facts. See Barassi v. Matison, 130 Ariz. 418, 421-22, 636 P.2d 1200 (1981). Under Barassi, a premature notice of appeal is nevertheless effective if it is filed after the superior court has made a final decision, the decision is not likely to change, and the only tasks remaining are ministerial. Craig, 227 Ariz. at 107, ¶ 13; Baker v. Bradley, 231 Ariz. 475, 481, ¶ 19, 296 P.3d 1011 (App. 2013). When the Hospital filed its notice of appeal, all issues remaining in the case had been adjudicated. The signed order formally dismissed Anthony " as set forth in the Court's unsigned minute entry dated August 31, 2012 and filed on September 4, 2012," and did not purport to change or modify that minute entry. Because the order was fully consistent with the court's previous ruling, its entry was essentially a ministerial act. See Baker, 231 Ariz. at 482, ¶ 26 (" [T]he June 10 judgment is consistent with the April 22 minute entry, and entry of the judgment appears to have been a ministerial act." ). Finally, Newman is not prejudiced by either the Hospital's premature appeal or our exercise of appellate jurisdiction. Accordingly, the Barassi exception applies, and this court has jurisdiction over the Hospital's appeal (as well as Newman's appeal) under A.R.S. § 12-2101(A)(1).

         II. Judgment as a Matter of Law Regarding Punitive Damages

         [¶9] Newman argues that because he offered evidence from which a reasonable jury could conclude that the Hospital consciously disregarded a substantial risk of harm, the superior court erred by granting the Hospital's motion for a directed verdict on the issue of punitive damages. We review de novo the court's grant of judgment as a matter of law. Nardelli v. Metro. Grp. Prop. & Cas. Ins. Co., 230 Ariz. 592, 604-605, ¶ 62, 277 P.3d 789 (App. 2012); Hudgins v. Sw. Airlines, Co., 221 Ariz. 472, 486, ¶ 37, 212 P.3d 810 (App. 2009).

         [¶10] To support an award of punitive damages, the plaintiff need not present direct evidence; punitive damages may be awarded based on circumstantial evidence and the reasonable inferences drawn therefrom. Quintero v. Rogers, 221 Ariz. 536, 541, ¶ ¶ 17-18, 212 P.3d 874 (App. 2009) (a jury may " consider a punitive damages award if sufficient circumstantial evidence exists" (internal quotation omitted)). When considering whether the issue of punitive damages was properly withdrawn from the jury, we must construe " the evidence and all reasonable inferences that may be drawn from the evidence" in a light most favorable to party seeking such damages. See Thompson v. Better-Bilt Aluminum Prods. Co., Inc., 171 Ariz. 550, 558, 832 P.2d 203 (1992).

         [¶11] APSA authorizes a court or jury to award punitive damages under generally applicable common law principles. A.R.S. § 46-455(H)(4). Under Arizona common law, more than the " mere commission of a tort" is required to warrant recovery of punitive damages. Rawlings v. Apodaca, 151 Ariz. 149, 162, 726 P.2d 565 (1986) (quoting Keeton et al., Prosser and Keeton on Torts § 2, at 9-10 (5th ed. 1984)). A plaintiff must also establish that the defendant's wrongful conduct was coupled with an " evil ...


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