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State v. Heinze

6/29/1999



REVERSED AND REMANDED


The facts are fully presented in State v. Schallock, 189 Ariz. 250, 941 P.2d 1275 (1997), and we need not restate them in detail. It suffices by way of summary to indicate that the underlying declaratory judgment action presents the question whether the State must indemnify Allen Heinze for personal liability for his multiple acts of sexual misconduct and harassment toward Appellees Schallock and Saunders during the time Heinze served as executive director of the Arizona Prosecuting Attorneys Advisory Council (AAPAC).


The evidence, when considered in a light most favorable to Schallock and Saunders, permits the Conclusion that Heinze made offensive comments to them, subjected them to offensive physical contact, made quid pro quo sexual demands and, in Schallock's case, committed rape. The evidence also permits the Conclusion that members of AAPAC knew of Heinze's aggressive sexual behavior toward females subject to his supervision and that, instead of firing or reprimanding Heinze or curtailing his behavior, they "looked the other way."


The underlying suit does not concern the State's susceptibility to direct liability for Heinze's acts on theories such as negligent hiring, supervision, or retention. It concerns only the question whether the State must indemnify Heinze for his personal liability on the vicarious liability theories that he acted within either the scope of his employment or the scope of his authorization by the State.


In State v. Schallock, our supreme court resolved certain issues and remanded others for decision by this court. The parties have stipulated that the following issues remain:


(1) Is the question whether Heinze acted within the scope of his authorization one of fact that must be remanded for determination in the trial court or one that, given the present record, should be resolved by summary judgment in favor of Appellees?


(2) Would the State's indemnification of Heinze be either unconstitutional or prohibited by Arizona public policy?


(3) Is indemnification prohibited under Arizona Revised Statutes Annotated ("A.R.S.") § 41-621(K) (1992)?


(4) Is indemnification prohibited under A.R.S. § 41-621(I) (1992)?


(5) Did Heinze forfeit indemnity by breaching his duty to cooperate under A.R.S. § 41-621(L) (1992)?


(6) Are Appellees entitled to an award of attorneys' fees?


By stipulation the parties filed supplemental briefs on the first issue and submitted the others upon their prior briefs. We granted oral argument on the remanded issues and now resolve them as follows.


I. Scope of Authorization


The supreme court held that statutory indemnity for acts by state officers within "the course and scope of . . . authorization" applies "to vicarious liability found outside course and scope of employment." Id. at 261, 941 P.2d at 1286 (emphasis omitted). Should this court determine by summary judgment that Heinze acted within the scope of his authorization? We answer this question in the negative for the following reasons.


First, the supreme court assessed the current evidence of record as permitting, not requiring, a factfinder to find that Heinze acted within the scope of his authorization, just as it assessed the evidence as permitting, not requiring, a finding that Heinze acted within the scope of employment. See, e.g., id. at 257, 941 P.2d at 1282 (taking Appellees' cases at their strongest, as the court must on summary judgment, "we do not believe it can be said as a matter of law that Heinze was outside the course and scope of authority with regard to many o

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