                    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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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.




                                   IN THE
            ARIZONA COURT OF APPEALS
                               DIVISION ONE


               THOMAS KOPP, et al., Plaintiffs/Appellants,

                                       v.

PHYSICIAN GROUP OF ARIZONA, INC., et al., Defendants/Appellees.


                 MELISSA ORNELAS, Plaintiff/Appellant,

                                       v.

PHYSICIAN GROUP OF ARIZONA, INC., et al., Defendants/Appellees.


       MARIA JUDITH GONZALEZ, et al., Plaintiffs/Appellants,

                                       v.

PHYSICIAN GROUP OF ARIZONA, INC., et al., Defendants/Appellees.

                           Nos. 1 CA-CV 16-0227
                                1 CA-CV 16-0228
                                1 CA-CV 16-0232
                                 (Consolidated)
                             FILED 6-8-2017

         Appeal from the Superior Court in Maricopa County
         Nos. CV2012-092733, CV2012-092734, CV2011-098899
              The Honorable David M. Talamante, Judge

                                 AFFIRMED
                                  COUNSEL

Udall Shumway, PLC, Mesa
By H. Michael Wright, Lincoln M. Wright
Co-Counsel for Plaintiffs/Appellants

Tolman Law Firm, Tempe
By J. Robert Tolman
Co-Counsel for Plaintiffs/Appellants

The Checkett Law Firm, PLLC, Scottsdale
By John J. Checkett, James G. Bennett
Co-Counsel for Defendants/Appellees

Broening Oberg Woods & Wilson, Phoenix
By Kevin R. Myer
Co-Counsel for Defendants/Appellees


                       MEMORANDUM DECISION

Judge Lawrence F. Winthrop delivered the decision of the Court, in which
Presiding Judge Samuel A. Thumma and Judge James P. Beene joined.


W I N T H R O P, Judge:

¶1           Thomas and Angela Kopp, Melissa Ornelas, and Maria Judith
and Ralph Gonzalez (collectively, “Plaintiffs”), appeal the superior court’s
judgment entered pursuant to Rule 54(b), Ariz. R. Civ. P., dismissing
derivative negligence claims against Physician Group of Arizona, Inc.; Iasis
Healthcare Corp.; Iasis Healthcare Holdings, Inc.; Iasis Finance, Inc.; and St.
Luke’s Medical Center, LP d/b/a Tempe St. Luke’s Hospital, A Campus of
St. Luke’s Medical Center (collectively, “Defendants”). For the following
reasons, we affirm.

                 FACTS AND PROCEDURAL HISTORY

¶2           Thomas Kopp, Melissa Ornelas, and Maria Judith Gonzalez
each underwent bariatric surgery performed by Eric S. Schlesinger, M.D.,
at Tempe St. Luke’s Hospital.

¶3           In 2011 and 2012, Plaintiffs separately filed medical
malpractice complaints against Dr. Schlesinger and Defendants; these cases


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                        KOPP v. PHYSICIANS et al.
                          Decision of the Court

were later consolidated for discovery purposes. In these complaints,
Plaintiffs alleged Dr. Schlesinger was negligent in his surgical care, and the
remaining Defendants were not only vicariously liable for Dr. Schlesinger’s
negligence, but also independently negligent in the administrative
structure of the bariatric surgery program, including the failure to impose
reasonable controls for both physician and nursing care.

¶4              Plaintiffs entered a settlement agreement with Dr.
Schlesinger, which required Plaintiffs to dismiss their claims against him
with prejudice, and further provided: “This Agreement does not preclude
[Plaintiffs] from pursuing independent claims against the hospital entities
named as defendants in [Plaintiffs’ cases] but does preclude [Plaintiffs]
from pursuing claims against the hospital entities named as defendants . . .
based on a theory of vicarious liability or respondeat superior relating to
[Dr. Schlesinger’s] acts and/or omissions.” The agreement also provided
that the settlement was not an admission of any wrongdoing by Dr.
Schlesinger.

¶5             Thereafter, counsel for Plaintiffs and Dr. Schlesinger
stipulated to dismiss with prejudice all claims against Dr. Schlesinger and
“any claims against any co-defendants for vicarious liability.” Consistent
with the settlement agreement, the stipulation further provided: “Plaintiffs
specifically reserve and do not dismiss independent claims against the
remaining Defendants that do not relate to vicarious liability for Dr.
Schlesinger’s alleged actions.” The superior court then dismissed with
prejudice all claims against Dr. Schlesinger.

¶6              The remaining Defendants then moved to dismiss most of the
remaining claims against them, arguing the claims were derivative of the
negligence claims against Dr. Schlesinger and should be dismissed
pursuant to Torres v. Kennecott Copper Corporation, 15 Ariz. App. 272, 488
P.2d 477 (1971). In response, Plaintiffs argued that all remaining claims
against Defendents were non-derivative; i.e., claims predicated only on the
independent negligence of Defendants. Defendants conceded that some
claims, such as a claim based on nurses’ alleged negligence in post-
operative wound care, could still stand as independent claims, but
Plaintiffs’ claims of negligent credentialing, hiring, and supervision of Dr.
Schlesinger were all predicated on his negligence and should be dismissed.

¶7            Following a hearing, the superior court dismissed with
prejudice Plaintiffs’ negligent credentialing, hiring, and supervision claims




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                       KOPP v. PHYSICIANS et al.
                         Decision of the Court

based on the settlement with Dr. Schlesinger.1 The court subsequently
issued orders extending discovery and disclosure deadlines to allow
Plaintiffs to do more discovery related to the remaining independent
claims.

¶8            The superior court later signed a proffered non-appealable
order consistent with its previous rulings:

             Plaintiffs’ settlement with Dr. Schlesinger prevents
      Plaintiffs from pursuing any negligence claims against
      Defendants [Physicians Group of Arizona, Inc. (“PGA”)] and
      [Tempe St. Luke’s Medical Center et al. (“TSL”)] that can be
      characterized as a vicarious liability cause of action or as a
      derivative claim. This includes the negligent credentialing
      claims, the negligent supervision and the negligent . . . hiring
      claims. Any independent negligence claims alleged against
      Defendants PGA and TSL which are not based on or derivative of
      the negligence of Dr. Schlesinger survive the settlement with Dr.
      Schlesinger, if any.

             ....

            IT IS [] ORDERED dismissing the negligent
      credentialing claims against Defendants PGA and TSL with
      prejudice;

            IT IS FURTHER ORDERED dismissing the negligent
      supervision claims against Defendants PGA and TSL with
      prejudice;

            IT IS FURTHER ORDERED dismissing the negligent
      hiring claims against Defendants PGA and TSL with
      prejudice[;]

             IT IS FURTHER ORDERED dismissing any negligence
      claims that are based on or derivative of the negligence of Dr.
      Schlesinger.

(Emphasis added.)



1     The superior court did not make clear whether it was treating the
motion to dismiss as a motion pursuant to Rule 12(b)(6), Ariz. R. Civ. P., or
as a motion for summary judgment.


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                        KOPP v. PHYSICIANS et al.
                          Decision of the Court

¶9           As noted, the order submitted to and signed by the court did
not contain Rule 54(b) language, and the parties continued to litigate
concerning the remaining claims. Nine months later, however, the parties
submitted a joint stipulation to convert the previous order to a judgment
with Rule 54(b) language.

¶10             The superior court issued a signed Rule 54(b) judgment
reflecting the dismissal of the vicarious and derivative liability claims.
Plaintiffs filed separate timely notices of appeal, and this court consolidated
the appeals, designating case no. 1 CA-CV 16-0227 (Kopp), as the primary
number. We have jurisdiction pursuant to Arizona Revised Statutes
(“A.R.S.”) section 12-2101(A)(1) (2016).

                                 ANALYSIS

¶11          Plaintiffs argue the superior court erred in dismissing their
claims of negligent credentialing, hiring, and supervision on the basis that
the claims were derivative of the alleged negligence of Dr. Schlesinger.

¶12           Defendants attached exhibits to their motion to dismiss, and
because matters outside the pleadings were presented to and not excluded
by the superior court, we review the motion to dismiss as a motion for
summary judgment. See Ariz. R. Civ. P. 12(d); Frey v. Stoneman, 150 Ariz.
106, 108-09, 722 P.2d 274, 276-77 (1986), cited in Drew v. Prescott Unified Sch.
Dist., 233 Ariz. 522, 524, ¶ 7, 314 P.3d 1277, 1279 (App. 2013).

¶13            “In reviewing the grant of a motion for summary judgment,
we construe the facts and reasonable inferences in the light most favorable
to the opposing party and will affirm only if no genuine issues of material
fact exist and the moving party is entitled to judgment as a matter of law.”
Drew, 233 Ariz. at 524, ¶ 8, 314 P.3d at 1279 (citing Wells Fargo Bank v. Ariz.
Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201
Ariz. 474, 482, ¶¶ 13-14, 38 P.3d 12, 20 (2002); Orme Sch. v. Reeves, 166 Ariz.
301, 309, 802 P.2d 1000, 1008 (1990)). “We review de novo issues of statutory
interpretation and the court’s application of the law.” Id. (citing Dressler v.
Morrison, 212 Ariz. 279, 281, ¶ 11, 130 P.3d 978, 980 (2006); State Comp. Fund
v. Yellow Cab Co., 197 Ariz. 120, 122, ¶ 5, 3 P.3d 1040, 1042 (App. 1999)).

¶14           Here, Plaintiffs entered a settlement agreement and
stipulation dismissing their claims against Dr. Schlesinger. Further,
Plaintiffs agreed to the timing, structure, and terms of the settlement.
Moreover, they agreed that no wrongdoing on the part of Dr. Schlesinger
“is implied or should be inferred” by the agreement. Pursuant to both the
plain terms of the settlement agreement and Torres, the dismissal of


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                         KOPP v. PHYSICIANS et al.
                           Decision of the Court

Plaintiffs’ negligence claims against Dr. Schlesinger preclude Plaintiffs
from litigating Defendants’ alleged liability as vicariously derived from any
alleged negligence of Dr. Schlesinger. See Torres, 15 Ariz. App. at 274, 488
P.2d at 479; see also Jamerson v. Quintero, 233 Ariz. 389, 390, ¶ 6, 313 P.3d 532,
533 (App. 2013) (“When a plaintiff sues both the agent and the principal for
the negligence of the agent, a judgment in favor of the agent bars the
plaintiff’s vicarious liability claim against the principal, even when the
judgment is the product of a settlement.” (citing Chaney Bldg. Co. v. City of
Tucson, 148 Ariz. 571, 574, 716 P.2d 28, 31 (1986); Law v. Verde Valley Med.
Ctr., 217 Ariz. 92, 96, ¶ 13, 170 P.3d 701, 705 (App. 2007))). Plaintiffs’ claims
that Defendants negligently credentialed, hired, or supervised Dr.
Schlesinger were all predicated on—and therefore derivative of—the
negligence of Dr. Schlesinger. See Torres, 15 Ariz. App. at 274-75, 488 P.2d
at 479-80. Accordingly, the superior court did not err in dismissing those
claims.2

¶15           Plaintiffs devote much of their briefs to the argument that
their independent negligence claims against Defendants are not barred. To
the extent Plaintiffs argue the superior court dismissed these independent
negligence claims, their argument misapprehends the court’s judgment and
the procedural posture of this case. The superior court’s partial final
judgment dismissed with prejudice only the vicarious negligent
credentialing, hiring, and supervision claims against Defendants. That was
proper pursuant to both the explicit terms of the settlement agreement and
the well-established jurisprudence of DeGraff,3 Torres, Law, and Jamerson.
The court did not enter any sort of judgment under Rule 54(c), or otherwise
resolve that portion of the case involving independent liability claims
against Defendants. Accordingly, that portion of the case remains pending.




2       Moreover, we reject Plaintiffs’ implication that Arizona’s 1984
adoption of the Uniform Contribution Among Tortfeasors Act (“UCATA”),
see A.R.S. §§ 12-2501 to -2509 (2016), should be construed as having
abrogated Torres with respect to vicarious liability. See generally Law, 217
Ariz. at 94-96, ¶¶ 9-13, 170 P.3d at 703-05 (discussing UCATA and
concluding that “UCATA has not changed the law pertaining to vicarious
liability”). Further, Plaintiffs fail to provide support for their argument that
the application of Torres and Law has a “chilling effect” on settlements, and
we decline here to revisit those cases on that basis.

3      DeGraff v. Smith, 62 Ariz 261, 157 P.2d 342 (1945).


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                     KOPP v. PHYSICIANS et al.
                       Decision of the Court

                           CONCLUSION

¶16         For the foregoing reasons, we affirm the superior court’s
judgment. We award taxable costs to Defendants upon compliance with
Arizona Rule of Civil Appellate Procedure 21.




                        AMY M. WOOD • Clerk of the Court
                         FILED: AA




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