Opinion
No. 1 CA-CV 18-0597
12-10-2019
LEE HARDING, et al., Plaintiffs/Appellants, v. THE ARIZONA BOARD OF DENTAL EXAMINERS, et al., Defendants/Appellees.
COUNSEL Horne Slaton, PLLC, Scottsdale By Thomas C. Horne Counsel for Plaintiff/Appellant Lee Harding Chenal Law Firm, PLLC, Scottsdale By Carmen A. Chenal Counsel for Plaintiff/Appellant Julie Harding Arizona Attorney General's Office, Phoenix By Michael G. Gaughan, Cynthia D. Starkey Counsel for Defendants/Appellees Gust Rosenfeld, PLC, Phoenix By Charles W. Wirken, Barry M. Markson Counsel for Defendant/Appellee Palmer
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
No. CV2016-000369
The Honorable Teresa A. Sanders, Judge
AFFIRMED
COUNSEL Horne Slaton, PLLC, Scottsdale
By Thomas C. Horne
Counsel for Plaintiff/Appellant Lee Harding Chenal Law Firm, PLLC, Scottsdale
By Carmen A. Chenal
Counsel for Plaintiff/Appellant Julie Harding Arizona Attorney General's Office, Phoenix
By Michael G. Gaughan, Cynthia D. Starkey
Counsel for Defendants/Appellees Gust Rosenfeld, PLC, Phoenix
By Charles W. Wirken, Barry M. Markson
Counsel for Defendant/Appellee Palmer
MEMORANDUM DECISION
Judge Kent E. Cattani delivered the decision of the Court, in which Presiding Judge Maria Elena Cruz and Judge Jennifer B. Campbell joined. CATTANI, Judge:
¶1 Dr. Lee Harding appeals from the superior court's entry of summary judgment in favor of the Arizona State Board of Dental Examiners and its director (collectively, the "Board") and Dr. Samuel Palmer, the Board's investigator, on Harding's defamation claim. For reasons that follow, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 In July 2013, the Board began investigating Harding, a licensed dentist, after Harding's former partner filed a complaint alleging various acts of misconduct, including Medicaid fraud, overtreatment of patients, improper use of glass ionomer filling material, and improperly billing AHCCCS. The Board assigned Palmer to investigate these allegations.
¶3 In September 2013, Palmer issued his first investigative report substantiating the allegations in the initial complaint. The Board addressed the matter during its February 2014 open meeting, at which time the Board found Harding guilty of five counts of negligence and ordered him to pay $1,500 in fines and complete 19 hours of continuing education. Harding then petitioned the Board for rehearing, and Palmer issued a supplemental report in June 2014. A year later, in June 2015, Harding and the Board entered into a non-disciplinary consent agreement, concluding the matter.
¶4 In January 2016, Harding filed a complaint against Palmer and the Board alleging a defamation claim arising out of the Board's two- year investigation and disciplinary proceedings. The initial complaint, however, did not state when any alleged defamatory statements occurred. Harding first set out the relevant dates in his second supplemental disclosure statement, which he provided to the parties in November 2016. At that time, Harding alleged that the defamatory statements occurred in September 2013 when Palmer issued his first investigative report, in February 2014 when the Board held an open meeting, and in June 2014 when Palmer issued his supplemental report.
In his initial complaint, Harding brought abuse of process, defamation, and intentional infliction of emotional distress claims against the Board and Palmer. The individual members of the Board moved to dismiss, and the superior court dismissed all three claims with leave to amend only the defamation claim. Harding's amended complaint asserting a single defamation claim against Palmer and the Board is the operative pleading in this case.
¶5 More than two years after Harding filed his initial complaint, both Palmer and the Board moved for summary judgment, contending that Harding's defamation claim was barred by the one-year statute of limitations under A.R.S. § 12-541(1). The Board also alleged that the individual members were immune from suit, that Harding had failed to produce evidence of defamation, and that the non-disciplinary consent agreement prevented Harding from pursuing a civil claim. After briefing and oral argument, the superior court granted Palmer's and the Board's motions for summary judgment, ruling both that the defamation action was barred by the statute of limitations and that the Board was "statutorily and conditionally immune from liability." Harding timely appealed, and we have jurisdiction under A.R.S. § 12-2101(A)(1).
DISCUSSION
¶6 Harding challenges the superior court's ruling that his complaint was time barred, arguing that (1) the court should have found a delayed accrual date for his cause of action because he was required to exhaust all administrative remedies before suing the Board, (2) Palmer waived the statute of limitations defense by failing to specifically state it in his answer, and (3) both Palmer and the Board waived the statute of limitations defense by conduct.
¶7 Summary judgment is proper if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(a); Orme Sch. v. Reeves, 166 Ariz. 301, 305 (1990). We review the grant of summary judgment de novo, viewing the facts in the light most favorable to the non-prevailing party. Wells Fargo Bank, N.A. v. Allen, 231 Ariz. 209, 213, ¶ 14 (App. 2012).
¶8 We also review de novo questions of law related to the statute of limitations, including when a cause of action accrues. Cook v. Town of Pinetop-Lakeside, 232 Ariz. 173, 175, ¶ 10 (App. 2013). Additionally, although waiver by conduct is generally a question of fact, it may be resolved on summary judgment if undisputed facts show that the parties have (or have not) waived the right to assert an affirmative defense through conduct. See City of Phoenix v. Fields, 219 Ariz. 568, 575, ¶ 32 (2009); Jones v. Cochise County, 218 Ariz. 372, 379, 381, ¶¶ 23, 29 (App. 2008).
I. Statute of Limitations.
¶9 Generally, the statute of limitations for a defamation action begins to run once the defamatory statement is published. Boatman v. Samaritan Health Servs., Inc., 168 Ariz. 207, 213 (App. 1990). A plaintiff must commence and prosecute a defamation claim within one year of publication. A.R.S. § 12-541(1); see also A.R.S. § 12-821 (establishing a one-year limitations period for "[a]ll actions against any public entity or public employee"). A second publication of the same statement does not give rise to a new cause of action or trigger a new limitations period. Larue v. Brown, 235 Ariz. 440, 444, ¶ 19 (App. 2014).
A. Accrual Date and Exhaustion of Administrative Remedies.
¶10 Harding relies on A.R.S. § 12-821.01(C), which provides that any claim required to undergo administrative review does not accrue until such administrative proceedings are completed. He argues that he was required to exhaust all administrative remedies (that is, reach a final resolution of the disciplinary proceedings) before suing the Board in superior court. He characterizes this as "a catch-22 situation; [i]f he filed a libel action prior to the Board's final administrative decision, it would inflame an already highly inflammatory situation, against a Board whose action against him could be ruinous to [his] profession." Because the Board issued its final decision in June 2015, Harding argues that his January 2016 complaint was timely filed.
¶11 But Harding's argument is based on a faulty premise. Although A.R.S. § 12-821.01(C) delays the accrual date for certain causes of action, it does so only for "any claim that must be submitted to . . . an administrative claims process or review process pursuant to a statute, ordinance, resolution, administrative or governmental rule or regulation, or contractual term." (Emphasis added.) Harding's argument conflates two distinct matters: his disciplinary proceeding and his defamation claim. No statute, rule, or other law required administrative review of Harding's defamation claim; to the contrary, the Board has neither special expertise to rule on the merits of Harding's defamation claim nor the statutory authority to do so. See A.R.S. §§ 32-1201 to -1299.26; A.A.C. R4-11-101 to -1802; see also Univar Corp. v. City of Phoenix, 122 Ariz. 220, 224 (1979). Harding's disciplinary proceeding required exhaustion of administrative remedies before seeking judicial review. But his defamation claim, which he did not attempt to adjudicate before the Board, did not. Thus, § 12-821.01(C) does not apply.
¶12 Accordingly, as the superior court found, Harding's cause of action accrued no later than June 27, 2014, the date Palmer issued his supplemental report. Because Harding did not file his complaint until January 2016, his claim is time barred.
B. Waiver.
¶13 Harding next asserts that both Palmer and the Board waived the statute of limitations defense—Palmer by not affirmatively asserting it in his answer, and both Palmer and the Board by conduct.
1. Preservation in Answer.
¶14 Given the early stage of proceedings, Palmer's answer alleged generally "all available affirmative defenses identified at Rules 8(c) and 12(b) of the Arizona Rules of Civil Procedure" but did not specifically list the statute of limitations as a defense. Harding contends that this general allegation is insufficient to assert an affirmative defense and that because Palmer did not specifically state "statute of limitations" in his answer, he waived his right to later assert it.
¶15 Each party is required to definitively state any affirmative defense in a responsive pleading. Ariz. R. Civ. P. 8(c). Failure to plead an affirmative defense generally results in waiver, although the superior court has discretion to allow the party to amend its answer to raise it. Sirek v. Fairfield Snowbowl, Inc., 166 Ariz. 183, 185-86 (App. 1990).
The subsection of Rule 8 pertaining to affirmative defenses was renumbered from (c) to (d), with no substantive change, effective July 1, 2018. To remain consistent with the record and briefing, we refer to the prior numbering throughout this decision.
¶16 Here, although the superior court incorrectly found that Palmer specifically raised the statute of limitations defense in his answer, such error does not warrant reversal. Palmer's general allegation asserting all affirmative defenses as listed in Arizona Rule of Civil Procedure 8(c) provided Harding with at least some notice that an affirmative defense—including the statute of limitations—might be asserted, preventing unfair surprise. Cf. City of Phoenix v. Linsenmeyer, 86 Ariz. 328, 333 (1959). Given the absence of any cognizable prejudice, because the superior court had authority to allow Palmer to amend his answer, and absent any indication the court would have declined to do so, remand would be an empty exercise. See Uyleman v. D.S. Rentco, 194 Ariz. 300, 302-03, ¶¶ 10-11 (App. 1999) ("Denial of leave to amend is generally an abuse of discretion where the amendment merely advances a new legal theory," and "[d]elay alone is not usually cause to deny a request to amend."); see also Walls v. Ariz. Dep't of Pub. Safety, 170 Ariz. 591, 597 (App. 1991). Thus, Palmer's failure to specifically raise the statute of limitations in his answer as an affirmative defense was not fatal to his subsequent motion for summary judgment.
2. Waiver by Conduct.
¶17 Notwithstanding the preservation of an affirmative defense in an answer, a party "may waive that defense by its subsequent conduct in the litigation." Fields, 219 Ariz. at 574, ¶ 29. Waiver by conduct occurs when a party takes substantial steps to litigate the merits of a claim that would not have been necessary had the defense promptly been raised. Id. at 575, ¶ 30. A litigant asserting waiver by conduct must demonstrate actions that are clearly inconsistent with the assertion of the defense. See Russo v. Barger, 239 Ariz. 100, 103, ¶ 12 (App. 2016).
¶18 Palmer and the Board both moved for summary judgment based on their statute of limitations defenses in April 2018, more than two years after Harding filed his initial complaint. Although the Board continued to reference the statute of limitations in its disclosure statements, Harding argues that the parties waived the statute of limitations defense by participating in extensive written discovery and ten depositions. Harding, however, was the primary driver of this discovery.
¶19 Moreover, although a substantial amount of time passed between Harding's initial complaint and the statute-of-limitations-based summary judgment motions, waiver by conduct requires "acts inconsistent with an intent to assert" the defense, not just the passage of time alone. See Jones, 218 Ariz. at 379, 23-24. And here, other considerations explain the delay. First, Harding's initial complaint did not specify the dates on which allegedly defamatory comments were published; the Board and Palmer first became aware of the facts and relevant dates giving rise to the limitations defense when Harding provided a signed declaration ten months later in November 2016.
¶20 Harding contends that his declaration clearly alerted the parties to the particular dates of each of the alleged defamatory statements. But the declaration lists some dates from which the complaint would have been timely. And at the superior court level, Harding claimed that the statements had been republished within the limitations period and incorrectly argued that this would have extended the statute of limitations. Harding only abandoned this argument after the superior court ruled—as part of the summary judgment ruling—that republication did not create a new cause of action or trigger a new limitations period. The parties, therefore, had valid reasons to engage in discovery to determine the operative dates. And Harding's exhaustion argument—in which he asserted that the claim did not accrue until the Board issued its final decision—further muddied the timeline. Under the circumstances, the Board and Palmer did not waive reliance on the statute of limitations by engaging in discovery and investigating Harding's ultimately unavailing assertions of later accrual dates.
¶21 Accordingly, we affirm summary judgment based on the statute of limitations. And because we affirm on this basis, we need not address Harding's arguments challenging the court's rulings regarding malice and immunity, which were alternative bases for summary judgment.
II. Attorney's Fees on Appeal.
¶22 Palmer requests an award of attorney's fees under ARCAP 25, asserting that Harding's appeal is frivolous. In turn, Harding requests attorney's fees on the same basis, asserting that Palmer's response to his appeal is frivolous. Rule 25 grants us discretion to award fees as a sanction if the appeal "is frivolous, or was filed solely for the purpose of delay." ARCAP 25; see also Ariz. Dep't of Revenue v. Gen. Motors Accept. Corp., 188 Ariz. 441, 446 (App. 1996). We exercise this discretion "with 'great reservation.'" Ariz. Tax Research Ass'n v. Dep't of Revenue, 163 Ariz. 255, 258 (1989) (citation omitted).
¶23 Having considered the arguments presented by both sides, and in an exercise of our discretion, we deny both ARCAP 25 requests. As the prevailing parties on appeal, Palmer and the Board are entitled to an award of costs upon compliance with ARCAP 21.
CONCLUSION
¶24 The superior court's judgment is affirmed.