Banner University Medical Center v. Gordon, No. CV-20-0179-PR (January 20, 2022) (J. Montgomery) https://www.
There is no issue preclusion created by dismissal with prejudice where there is no final judgement on the merits.
Plaintiffs brought this medical negligence wrongful death action against the defendant hospital and certain treating physicians as a result of the death of their 14- month-old child. The doctors were dismissed with prejudice due to a failure of plaintiffs to serve them with a notice of claim under A .R.S. § 12-821.01(A). The hospital was sued based upon the vicarious liability of the doctors who were dismissed as well as direct breach of contract and fraud claims. The hospital then moved for summary judgment on the vicarious liability claims taking the position that the dismissal with prejudice of the doctors served as an adjudication on the merits thus precluding the vicarious liability claims against the hospital. Ariz. R. Civ. P. 41(b). The trial court denied the motion comparing the notice of claim statute to a statute of limitations and finding the dismissal was procedural and not an adjudication on the merits.
The defendant hospital brought this special action challenging the trial court ruling. The Arizona Court of Appeals accepted jurisdiction and denied relief finding no issue preclusion and finding the claim against the hospital for vicarious liability survived dismissal of the doctors. The defendant then took the matter to the Arizona Supreme Court which accepted jurisdiction, vacated the court of appeals decision and denied defendant hospital relief.
“For issue or claim preclusion to apply, there must be a final judgment on the merits . . . . For these reasons, the order dismissing the doctors is not a final judgement. “ Here, where the court's ruling was never reduced to a final judgment with Rule 54(b) language there is no adjudication on the merits and no issue preclusion.