APPELLATEOPINIONS
015
CASES OF NOTE
APPELLATE
OPINIONS
Yanni v. Tucker Plumbing
November 20, 2013
AZ Court of Appeals, Review denied April 22, 2014
www.appeals2.az.gov/Decisions/CV20130024%20Opinion.pdf
Mike Ludwig, Chris Pierce and Jon Barnes obtained a win at the
Arizona Court of Appeals. Plaintiffs, who were Arizona homeowners, sought statewide class certification and sued under an
implied warranty theory for damages sustained to their homes
due to the installation of allegedly defective brass plumbing
fittings by the defendant plumbing subcontractors.
In lieu of suing the homebuilders directly, Plaintiffs chose to
sue the Defendant subcontractors, Tucker Plumbing. Defendants moved for summary judgment arguing that because
Plaintiff lacked privity of contract with Defendants, such a
claim could not stand. The trial court agreed and granted the
motion. The Arizona Court of Appeals affirmed. In a published
decision, the court concluded that Plaintiffs could sue the
developer, general contractor, or vendor, but refused to expand
the privity exception to include suits against subcontractors.
This decision finally settles the long-running dispute whether
homeowners can sue subcontractors directly for breach of an
implied warranty, absent a contract. The answer is no.
Read the complete article on pages 10-11.
Munoz v. Indus. Commission of AZ
February 10, 2014
AZ Court of Appeals
www.apltwo.ct.state.az.us/Decisions/IC20130001%20
Opinion.pdf
JSH lawyers Greg Folger, Lori Voepel, and Jennifer Anderson
recently scored an important workers’ compensation law victory for employers and insurance carriers. In Munoz v. Industrial
Commission of Arizona, Division Two of the Arizona Court of
Appeals reaffirmed the rule that earnings for services performed as an independent contractor are not included in the
average monthly wage (AMW) calculation.
Munoz injured her shoulder while working part time for Sonic
Restaurants. Her AMW was set at $1,570.68, which included
wages from Sonic and concurrent earnings from a home
improvement store. Munoz challenged the AMW calculation,
claiming that prospective earnings from her horse training
business should have been included. At the time of her injury,
Munoz had signed contracts with horse owners to train and
rehabilitate their horses, but she had not yet performed or been
paid under the contracts. The Administrative Law Judge (ALJ)
concluded that (1) the horse training contracts represented
prospective income that could not properly be calculated as
AMW; and (2) because the horse training contracts described
an independent contractor relationship, any earnings under the
contracts were not subject to the Workers’ Compensation Act
and thus not properly calculated as AMW. On these grounds,
the ALJ excluded the prospective horse training earnings form
Munoz’s AMW calculation.
On Munoz’s petition for administrative review, the court of
appeals first reaffirmed the rule that because independent
contractors are not subject to the Act, it would be improper to
include a claimant’s concurrent self-employment earnings in
the AMW calculation. See Wheeler v. Industrial Commission,
22 Ariz. App. 488, 490, 528 P.2d 874, 876 (1974). The court next
analyzed the relationship between Munoz and the horse owners. It concluded that Munoz was an independent contractor
rather than an employee based on the various indicia of control
outlined in Home Ins. Co. v. Industrial Comm’n, 123 Ariz. 348,
350, 599 P.2d 801, 803 (1979). Therefore, the court concluded
Munoz’s horse training earnings could not be included in the
AMW.
Munoz argued for the first time on appeal that she was a “sole
proprietor” and sole proprietors potentially are eligible for benefits under the Act. The court noted that a sole proprietor may
be entitled to benefits at the discretion of an insurance carrier
with whom the sole proprietor applies for workers’ compensation coverage. Munoz, however, produced no evidence that
she applied for or obtained coverage for her horse training
business. Because the court concluded that Munoz was an
independent contractor, it never reached the issue of whether
her prospective earnings were properly excluded from the
AMW calculation.
Munoz filed a Petition for Review with the Arizona Supreme
Court, which the Court denied on May 28, 2014.