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Wagner v. State

Court of Appeals of Arizona, First Division

April 20, 2017

NANCY WAGNER, Plaintiff/Appellant,
STATE OF ARIZONA, Defendant/Appellee.

         Appeal from the Superior Court in Maricopa County No. CV2014-052143 The Honorable John R. Hannah, Judge

          Jones Raczkowski, PC, Phoenix By Mack T. Jones Counsel for Plaintiff/Appellant

          O'Connor & Campbell, PC, Tempe By Daniel J. O'Connor, J. Edward Doman, Jr. Counsel for Defendant/Appellee

          Judge Kent E. Cattani delivered the opinion of the Court, in which Presiding Judge Peter B. Swann and Judge Donn Kessler joined.


          CATTANI, Judge

         ¶1 In this appeal, we address whether an employee of a private contractor working in a state-owned prison is a statutory employee of the State such that workers' compensation, rather than a tort action against the State, is the exclusive remedy for injuries sustained at work. We hold that, because the State in this case retained the right to control or supervise the contractor's work, and because the services constitute a part or process in the usual and regular course of the State's business, the employee was a statutory employee of the State and could not pursue a tort action against the State for her work-related injuries. Accordingly, and for reasons that follow, we affirm the superior court's grant of summary judgment in favor of the State.


         ¶2 While working as a clinical social worker at a prison operated by the Arizona Department of Corrections ("ADC"), Nancy Wagner slipped and fell on an unmarked wet floor. Wagner was working at the time as an employee of Wexford Health Services, Inc., which had a contract with ADC to provide healthcare services at state-owned prisons.

         ¶3 Wagner filed a workers' compensation claim against Wexford and received benefits. She also sued the State, arguing that ADC negligently failed to maintain the prison where she fell.

         ¶4 After conducting discovery, the State moved for summary judgment, arguing that because ADC was Wagner's statutory employer under Arizona Revised Statutes ("A.R.S.") § 23-902(B), workers' compensation was her exclusive remedy under A.R.S. § 23-1022(A).[1] The court entered summary judgment for the State on that basis, and Wagner timely appealed.


         ¶5 Wagner argues that summary judgment was improper, alleging that ADC was not her statutory employer under A.R.S. § 23-902(B) because ADC did not have sufficient control or supervision over her work, and because the work provided by Wexford was not a part or process of ADC's trade or business. We review the court's summary judgment ruling de novo, and view the facts in the light most favorable to the non-moving party. Tilley v. Delci, 220 Ariz. 233, 236, ¶ 7 (App. 2009). Summary judgment is appropriate only if "the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Ariz. R. Civ. P. 56(a); see also Orme Sch. v. Reeves, 166 Ariz. 301, 309 (1990).

         ¶6 Unless an employee specifically rejects workers' compensation before injury, the workers' compensation system is the exclusive remedy for that employee to recover damages resulting from his or her employer's negligence. A.R.S. § 23-1022(A); Anderson v. Indus. Comm'n, 147 Ariz. 456, 457 (1985). Under A.R.S. § 23-902(B), an entity that hires a contractor may be the statutory employer of the contractor's employees for workers' compensation purposes if (1) the entity "retains supervision or control" over the contractor's work and (2) the contractor's "work is a part or process in the trade or business of the [entity]." See also Young v. Envtl. Air Prods., Inc., 136 Ariz. 158, 163-64 (1983). The statutory employer provision generally "covers all situations in which work is accomplished which th[e] employer, or employers in a similar business, would ordinarily do through employees." Basurto v. Utah Constr. & Mining Co., 15 Ariz.App. 35, 41 (App. 1971).

         ¶7 Wagner argues that a provision in the contract between Wexford and ADC, which provides that neither Wexford nor its employees should be considered employees of ADC "under any circumstances, " creates a fact question as to whether she was a statutory employee of ADC. But the label parties give to their relationship does not end our inquiry into whether one party is an employee of the other. Anton v. Indus. Comm'n,141 Ariz. 566, 568 (App. 1984). Rather, we look to the substance of the contract, id., recognizing that we should strictly construe ...

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