Gradis v. Banner Health
1 CA-CV 16-0056
| Ariz. Ct. App. | Feb 28, 2017Background
- Marie Gradis, a certified nursing assistant, injured her back at work in April 2012 and filed a workers' compensation claim that Banner (her self-insured employer) initially denied; an ALJ later found the injury compensable.
- Prior to the injury, Gradis had filed an employment discrimination charge against Banner; on October 24, 2012, she and Banner executed a Settlement Agreement and General Release resolving the discrimination claim.
- The Agreement contained broad release language waiving "any and all" claims "arising out of or relating in any manner whatsoever" to Gradis’s employment, plus a separate clause stating the Agreement "does not impact Gradis' application for worker's compensation or disability benefits, either positively or negatively."
- Gradis later sued Banner for breach of the duty of good faith and fair dealing in its handling of her workers' compensation claim (a bad-faith claim). Banner moved for summary judgment, asserting the Agreement’s releases barred that claim.
- The superior court granted summary judgment for Banner; the Court of Appeals reviewed de novo and affirmed, holding the Agreement’s broad waiver covered Gradis’s bad-faith claim despite the narrow carve-out protecting her workers’ compensation application itself.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Agreement’s releases bar Gradis’s bad-faith claim against her self-insured employer for handling her workers' compensation claim | Gradis: an employer’s claims-handling (bad-faith) is distinct from the employment relationship and thus not waived | Banner: the bad-faith claim “arises out of or relates in any manner” to the employment and falls within the Agreement’s broad waiver | Held: The release language is broad enough to encompass Gradis’s bad-faith claim; summary judgment for Banner affirmed |
| Whether the Agreement’s statement that it does not impact Gradis’s workers' compensation application carved out a bad-faith damages claim as well | Gradis: the carve-out for her workers' compensation claim implies preservation of related bad-faith claims | Banner: the carve-out only preserved the workers' compensation application/process, not separate tort claims for damages | Held: The carve-out was narrow (preserving the compensation application only); it did not exclude a separate bad-faith tort claim from the Agreement’s broad waiver |
Key Cases Cited
- Franks v. United States Fidelity & Guaranty Co., 149 Ariz. 291 (App. 1985) (distinguishes compensable workplace injuries from separate bad-faith claims against insurers)
- Mendoza v. McDonald's Corp., 222 Ariz. 139 (App. 2009) (recognizes bad-faith tort by a self-insured employer in claims handling)
- Grosvenor Holdings, L.C. v. Figueroa, 222 Ariz. 588 (App. 2009) (contract interpretation focuses on parties' intent and contract context)
- Espinoza v. Schulenburg, 212 Ariz. 215 (App. 2006) (summary judgment reviewed de novo)