Harris v. Cochise Health Systems – 6/19/2007

June 28, 2007

Arizona Court of Appeals Division Two Holds That A Party Who Has Voluntarily Dismissed Its Amended Complaint with Prejudice Is Not an Aggrieved Party as to its Voluntarily Dismissed Claims For Purposes of Appeal.

The trial court twice dismissed Angel Team Home Care’s complaint against Cochise Health Systems and Denise Pederson because Angel Team had not exhausted its administrative remedies and because Angel Team had not provided Pederson sufficient notice of the claims against her. Eventually, Angel Team voluntarily dismissed its second amended complaint with prejudice and appealed the court’s pre-trial rulings.

Division Two affirmed and held that a party can contest only those portions of the trial court’s orders that were decided against them and not any claims that were voluntarily dismissed. The court reasoned that a party has two choices when it believes the trial court has unduly limited its claims: (1) continue to litigate the remaining claims and ultimately appeal all of the rulings; or (2) abandon the surviving claims and immediately appeal the trial court’s adverse rulings.

The Court then considered the appeal as to Angel Team’s involuntarily dismissed contract claims and claims against Pederson. Angel Team argued that it did not need to exhaust administrative remedies because the grievance procedure set forth in statute, regulation, and contract was permissive and not mandatory. The Court held that Angel Team waived this argument when it did not raise it below. The Court declined to exercise its discretion to address the argument despite the waiver because “appellees should not be exposed to the risk that they will revive arguments waived by appellants at the trial court level merely because they have answered those arguments on the merits.”

Lastly, the Court affirmed the dismissal of Angel Team’s complaint against Pederson because Angel Team did not provide her with individualized notice under A.R.S. § 12-821.01 when it served her as the statutory agent of Cochise Health Systems.

Judge Eckerstrom wrote for a unanimous panel that included Judges Cornelio and Miller.