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Arizona Property and Casualty Insurance Guaranty Fund v. Martin6/17/2005
In this declaratory relief action (DRA) that involves a Morris agreement, appellants Bunny Martin and her husband appeal from the trial court's grant of summary judgment in favor of appellee Arizona Property and Casualty Insurance Fund (Fund). Martin contends the trial court erred in allowing the Fund to litigate alleged liability issues in the coverage phase of this case. Finding no error, we affirm the trial court's decision.
BACKGROUND
On appeal from a summary judgment, we view the facts "in the light most favorable to the party against whom judgment was entered." Bothell v. Two Point Acres, Inc., 192 Ariz. 313, 2, 965 P.2d 47, 49 (App. 1998). Here, the parties agree the material facts are undisputed. Martin was an employee of First Chiropractic, where Robin O'Neal and Paul Ries worked as chiropractic doctors. As one of the benefits of her employment, Martin received chiropractic "adjustments" free of charge. No records were kept for the twenty-five to forty treatments Martin received during the course of her employment with First Chiropractic. Martin filed a tort action against First Chiropractic, O'Neal, and Ries (First defendants), claiming two chiropractic adjustments they performed had caused permanent injury to her neck.
The First defendants were insured under a professional liability insurance policy issued by Reliance National Indemnity Company. Reliance assumed the defense of the tort action but reserved its rights to contest coverage. In their answer in that underlying case, the First defendants alleged as an affirmative defense that Martin's "claims may be barred by the worker's compensation laws of the state of Arizona." After Reliance became insolvent in 2001, the Fund took over the defense of the tort action pursuant to A.R.S. ยงยง 20-661 and 20-667.
In February 2003, the Fund filed this DRA, requesting a ruling that insurance coverage was excluded under the Reliance policy because Martin's alleged injuries had occurred in the course of her employment and because the chiropractors had violated their professional code of conduct. The Fund also requested a declaration that Martin's injuries constituted one incident under the policy. In March, O'Neal and First Chiropractic entered into a Morris agreement with Martin and, pursuant to their stipulation, the trial court entered a default against O'Neal and First Chiropractic in the underlying action.
The Fund moved for summary judgment in this DRA on the issue of coverage and Martin, standing in the shoes of O'Neal and First Chiropractic pursuant to the Morris agreement's assignment provision, cross-moved for summary judgment. The trial court granted the Fund's motion and denied Martin's. This appeal followed the trial court's entry of judgment pursuant to Rules 54(b) and 56, Ariz. R. Civ. P., 16 A.R.S., Pt. 2.
DISCUSSION
Martin contends " he trial court erred in granting summary judgment in favor of the Fund in that its ruling was based on an issue completely subsumed under the terms of . . . Morris agreement." "On appeal from a summary judgment, we must determine de novo whether there are any genuine issues of material fact and whether the trial court erred in applying the law." Bothell, 192 Ariz. 313, 8, 965 P.2d at 50. "We will affirm if the trial court's ruling is correct on any ground." Rowland v. Great States Ins. Co., 199 Ariz. 577, 6, 20 P.3d 1158, 1162 (App. 2001).
The Reliance policy contained various exclusions to coverage, including the following language:
This policy does not apply to any claim or suit arising directly or indirectly from:
1. bodily injury to you in the course o
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