Catherine E. Warner v. Southwest Desert Images, LLC ( 2008 )


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  •                                                                       FILED BY CLERK
    IN THE COURT OF APPEALS                     JAN 28 2008
    STATE OF ARIZONA
    COURT OF APPEALS
    DIVISION TWO                            DIVISION TWO
    CATHERINE E. WARNER,                          )
    )         2 CA-CV 2007-0041
    Plaintiff/Appellant,   )         DEPARTMENT A
    )
    v.                     )         OPINION
    )
    SOUTHWEST DESERT IMAGES, LLC,                 )
    BARBARA JEAN HOGGATT, DAVID J.                )
    HOGGATT, ROBERT A. WILSON,                    )
    DAWN WILSON, and SIERRA                       )
    PEST/TERMITE CONTROL, INC.,                   )
    )
    Defendants/Appellees.     )
    )
    APPEAL FROM THE SUPERIOR COURT OF COCHISE COUNTY
    Cause No. CV200400632
    Honorable Stephen M. Desens, Judge
    AFFIRMED IN PART; REVERSED IN PART;
    AND REMANDED WITH DIRECTIONS
    Law Offices of Shane L. Harward, P.L.C.
    By Shane L. Harward                                                           Scottsdale
    Attorney for Plaintiff/Appellant
    Holloway Odegard Forrest & Kelly, P.C.
    by Peter C. Kelly, II and Larry J. Wulkan                                     Phoenix
    Attorneys for Defendants/Appellees
    B R A M M E R, Judge.
    ¶1            Appellant Catherine Warner appeals from the trial court’s dismissal of her
    negligence claims against appellees David Hoggatt and Barbara Hoggatt (Hoggatt), Robert
    Wilson and Dawn Wilson (Wilson), and Sierra Pest/Termite Control, Inc. (Sierra Pest).1 She
    also asserts the trial court erred by refusing to give her requested jury instruction on punitive
    damages, by granting the appellees’ motion in limine concerning evidence of her workers’
    compensation benefits, by failing to answer jury questions asked during trial, and by
    awarding the appellees sanctions pursuant to Rule 68, Ariz. R. Civ. P. We affirm in part,
    reverse in part, and remand the case to the trial court for further proceedings.
    Factual and Procedural Background
    ¶2            Appellee Southwest Desert Images, LLC (SDI) was hired by Warner’s
    employer, Aegis Communications (Aegis), to perform landscaping and weed control. On
    September 29, 2003, SDI employee Hoggatt began spraying an herbicide on weeds on the
    property around Aegis’s building. The parties dispute whether other SDI employees had
    been present and engaged in spraying. After approximately an hour and a half of spraying,
    Hoggatt was informed that people inside Aegis’s building were complaining. The herbicide
    spray had entered the building through its air conditioning system and had circulated
    throughout the building. After being informed of the situation, Hoggatt stopped spraying.
    Emergency services arrived as the building was being evacuated. Employees in the building
    complained of respiratory problems and itching and burning eyes.
    1
    Although the spouses of David Hoggatt and Robert Wilson were named as parties,
    for convenience, we refer to David and Robert as individuals.
    2
    ¶3            Prior to and during the evacuation, Warner began having difficulty breathing,
    was coughing violently, and felt burning in her eyes, nose, and throat. As she exited the
    building, Warner began to feel faint and felt “extreme chest pain” and heart palpitations.
    Warner had had heart attacks in January 1998 and April 2003, and had undergone heart
    surgery in May 2003. Warner apparently had been instructed to carry nitroglycerine and take
    it if she felt angina, or heart pain, so she took some after she left the Aegis building. She was
    then transported by ambulance to the hospital, where she was treated and released after about
    four hours. She returned to Aegis and drove home.
    ¶4            Warner testified she continued to have angina and palpitations that night. She
    visited her doctor two days later. He concluded she had suffered a heart attack the day of the
    evacuation. Warner continued to have a “scratchy throat and watery eyes” for about ten days
    after the incident, continued to suffer from chest pain, balance problems, short-term memory
    loss and other neurological problems, nausea, muscle aches, and fatigue, and has not worked
    since the incident. Warner had heart surgery that October, and again in January 2004. She
    suffered another heart attack shortly after the latter surgery, which was followed by
    emergency surgery and further surgery in September 2004. Warner had a pacemaker
    implanted in June 2005.
    ¶5            Warner sued SDI for negligence in September 2004, later amending her
    complaint to include as defendants Hoggatt, Wilson, and Sierra Pest, Wilson’s employer.
    She alleged SDI was a “branch office” of Sierra Pest and operated under Wilson’s qualifying
    3
    party license,2 and thus that Wilson and Sierra Pest were liable for Hoggatt’s negligent
    herbicide spraying and “for the [negligent] supervision and training of . . . Hoggatt.” SDI
    admitted it operated under Wilson’s qualifying party license.
    ¶6            The trial court dismissed Wilson and Sierra Pest from the action prior to trial
    because Warner had not filed an expert opinion affidavit as required by A.R.S § 12-2602.
    The court granted Warner’s motion for summary judgment on Hoggatt’s negligence and
    SDI’s corresponding vicarious liability. Accordingly, those issues were not disputed at trial.
    Nonetheless, during trial, the court entered a directed verdict in favor of Hoggatt, leaving
    SDI as the only defendant.
    ¶7            The jury found SDI to be completely responsible for the injuries Warner
    suffered by inhaling the herbicide. The jury attributed no responsibility to Warner and her
    doctor, who had been designated as a nonparty at fault. It awarded Warner $3,825 in
    compensatory damages and costs against SDI. But, the court granted the appellees’ motions
    for offer-of-judgment sanctions pursuant to Rule 68, Ariz. R. Civ. P.3 The trial court
    2
    Sections 32-2301 through 32-2329, A.R.S., govern Arizona’s Structural Pest Control
    Commission (SPCC) and the certification, registration, licensure, and regulation of persons
    or businesses engaged in the business of structural pest control, including weed control. A
    person or business applying for a license to “engage in the business of structural pest control”
    must provide “the name and address of the qualifying party and written documentation of
    how the qualifying party will be active in the day-to-day management of the business
    licensee.” § 32-2313 (A), (B)(3). A qualifying party is “an individual who is licensed by the
    commission to ensure the supervision and training of all employees of a business licensee in
    the business of structural pest control.” § 32-2301(20).
    3
    SDI had offered to confess judgment in favor of Warner in the amount of $30,000;
    Sierra Pest had offered $1,501; and Hoggatt and Wilson had each offered Warner $1.
    4
    awarded the appellees $71,401.38 jointly after accounting for the Rule 68 sanctions,
    Hoggatt’s, Wilson’s, and Sierra Pest’s costs pursuant to A.R.S. § 12-341, and deducting
    Warner’s damage award and costs. This appeal followed.
    Discussion
    Hoggatt Dismissal
    ¶8            On the last day of trial, the court entered a directed verdict in favor of Hoggatt
    because “the evidence [wa]s undisputed that Mr. Hoggatt [had] acted within the scope of his
    employment for [SDI],” and, thus, that SDI was “clearly liable in this situation for whatever
    damages the jury does find in this matter.” 4 There was no dispute at trial that Hoggatt had
    been negligent; the court had previously granted Warner’s motion for partial summary
    judgment on that issue and on SDI’s liability under the doctrine of respondeat superior for
    Hoggatt’s negligence. See Smith v. Am. Express Travel Related Servs. Co., 
    179 Ariz. 131
    ,
    135, 
    876 P.2d 1166
    , 1170 (App. 1994) (“According to the doctrine of respondeat superior,
    ‘an employer is vicariously liable . . . for the behavior of an employee who was acting within
    the course and scope of his employment.’”), quoting Pruitt v. Pavelin, 
    141 Ariz. 195
    , 205,
    
    685 P.2d 1347
    , 1357 (App. 1984); see generally Restatement (Third) of Agency §§ 7.03,
    7.07 (2006). The jury was instructed that “[i]t is undisputed that the manner in which the
    herbicide was applied to the Aegis property caused it to be circulated through the building.”
    4
    Although the trial court referred to its ruling as a directed verdict, the 1996
    amendments to Rule 50, Ariz. R. Civ. P., replaced that term with “judgment as a matter of
    law” (JMOL). We use the terms interchangeably, as “[t]he tests for granting a directed
    verdict and a JMOL motion are the same.” Murcott v. Best Western Int’l, Inc., 
    198 Ariz. 349
    ,
    ¶ 36, 
    9 P.3d 1088
    , 1095 (App. 2000).
    5
    “We review the grant of a motion for directed verdict de novo and consider the evidence in
    the light most favorable to the non-moving party.” Johnson v. Pankratz, 
    196 Ariz. 621
    , ¶ 4,
    
    2 P.3d 1266
    , 1268 (App. 2000).
    ¶9            We agree with Warner that “[t]here [wa]s no legal basis for the court’s decision
    to dismiss Hoggatt from the action.” “It is well-established law that an agent will not be
    excused from responsibility for tortious conduct [merely] because he is acting for his
    principal.” Griffith v. Faltz, 
    162 Ariz. 599
    , 600-01, 
    785 P.2d 119
    , 120-21 (App. 1990); see
    also Restatement (Third) of Agency § 7.01 (2006) (“An agent is subject to liability to a third
    party harmed by the agent’s tortious conduct. Unless an applicable statute provides
    otherwise, an actor remains subject to liability although the actor acts . . . within the scope
    of employment.”).
    ¶10           Hoggatt cites no authority suggesting this rule should not apply in this case.
    He does, however, argue the error was harmless. “In order to justify reversal, . . . the trial
    error must be prejudicial to the substantial rights of the appealing party.” Walters v. First
    Fed. Sav. & Loan Ass’n of Phoenix, 
    131 Ariz. 321
    , 326, 
    641 P.2d 235
    , 240 (1982). Hoggatt
    asserts Warner was not prejudiced because “[t]he jury apportioned one hundred percent of
    the fault to SDI. Adding other possible parties to the jury verdict form would not have
    changed the outcome of this case.” We agree that including Hoggatt as a defendant
    throughout the trial could not have changed Warner’s damage award, and Warner does not
    argue otherwise. Nor is there a need for the jury to apportion fault between Hoggatt and
    SDI—the liability of those parties is joint and several. See A.R.S. § 12-2506(D)(2) (when
    6
    one party “was acting as an agent or servant” of another party, parties’ liability is joint and
    several).
    ¶11           That the error does not warrant a new trial, however, does not mean it was not
    prejudicial to Warner. She has a right to recover her damages from Hoggatt, and his
    improper dismissal has deprived her of that right.5 Accordingly, we reverse the trial court’s
    grant of a directed verdict in Hoggatt’s favor and amend the judgment in Warner’s favor to
    show it is against Hoggatt as well.
    Wilson and Sierra Pest Dismissals
    ¶12           Wilson and Sierra Pest filed a motion to dismiss Warner’s claims against them,
    asserting that, because Wilson is a licensed professional, expert testimony was required to
    establish Wilson had breached the relevant standard of care. Thus, Wilson and Sierra Pest
    argued, Warner was required by A.R.S. § 12-2602(B) to file a “preliminary expert opinion
    affidavit,” and her failure to do so required the trial court to dismiss without prejudice
    Warner’s claims pursuant to § 12-2602(F) against Wilson and Sierra Pest, as Wilson’s
    employer. The court denied the motion to dismiss, reasoning that § 12-2602
    only grants the Court the power . . . to dismiss the cause of
    action . . . against the licensed professional after the claimant
    has certified that a preliminary expert opinion affidavit is
    5
    Hoggatt’s reliance on Rager v. Superior Coach Sales & Service of Arizona, 
    110 Ariz. 188
    , 
    516 P.2d 324
    (1973), is misplaced. There, our supreme court stated: “While as between
    joint tort-feasors the recovery of a judgment against one does not bar an action against
    another, the satisfaction of the judgment obtained discharges the others from any liability.”
    
    Id. at 191,
    516 P.2d at 327. That case addressed the satisfaction of a judgment, not whether
    a plaintiff has a right to recover from a jointly-and-severally liable tortfeasor when the
    judgment has not been satisfied by another tortfeasor.
    7
    necessary and fails to timely file . . . the same or the Court has
    ordered the claimant to file . . . a[n affidavit] and that party has
    failed to timely [do so].
    ¶13           Wilson and Sierra Pest subsequently moved the trial court to order Warner to
    file a preliminary expert opinion affidavit. Although Warner had yet to respond to the
    motion, the court granted it. Eight days later the court entered that order and because Warner
    had not yet filed an expert affidavit, Wilson and Sierra Pest renewed their motion to dismiss
    based on § 12-2602. The court granted the motion and dismissed the complaint against
    Wilson and Sierra Pest.6
    ¶14           Warner argues on appeal that an expert opinion affidavit was not required
    under her theories of Wilson’s and Sierra Pest’s liability and, even if such an affidavit were
    required, the trial court lacked the authority to dismiss her claims because it had not, as
    required by § 12-2602(E), established either a date or terms for Warner’s compliance with
    its order that she file that affidavit. At trial, “the determination of areas where expert
    testimony is appropriate is within the trial court’s discretion.” State v. Mosley, 
    119 Ariz. 393
    ,
    400, 
    581 P.2d 238
    , 245 (1978). We see no reason the same standard should not apply to a
    trial court’s decision whether expert testimony is required under § 12-2602. But, to the
    extent Warner’s argument depends on the interpretation of § 12-2602 and related statutes,
    6
    In its initial ruling and minute entry, the trial court granted the motion to dismiss “as
    to vicarious liability,” without discussing the motion to dismiss as it pertained to Warner’s
    claim against Wilson and Sierra Pest for negligent supervision and training of Hoggatt.
    Later, however, the court stated it had dismissed Wilson and Sierra Pest from the lawsuit
    entirely.
    8
    we review the court’s determination de novo. See Gorney v. Meaney, 
    214 Ariz. 226
    , ¶ 4, 
    150 P.3d 799
    , 801 (App. 2007).
    ¶15           Before we begin our discussion of this issue, we note that the parties devote
    a considerable portion of their briefs to whether the evidence or the law support Warner’s
    theories of Wilson’s and Sierra Pest’s liability. Those issues are not before us, nor were they
    before the trial court; the court dismissed the claims solely because Warner had failed to file
    an expert witness affidavit when ordered to do so, not because she had failed to state a claim.
    Indeed, the court denied both Warner’s and Wilson and Sierra Pest’s motions for summary
    judgment on the issue of liability. Whether the evidence or the law supports Warner’s
    underlying claim is irrelevant to whether the court erred in dismissing the claim because
    Warner failed to file an expert opinion affidavit.
    ¶16           Warner asserts that no expert opinion affidavit is required for her claim that,
    because Hoggatt “was a de facto employee” of Wilson and Sierra Pest, they are liable for
    Hoggatt’s negligence under the doctrine of respondeat superior.            As we have noted,
    Hoggatt’s negligence had already been established, thus, no expert testimony was required
    to prove it. Section 12-2602 requires a plaintiff to file and serve the opposing party with an
    expert opinion affidavit for any “claim against a licensed professional” if “expert opinion
    testimony is necessary to prove the licensed professional’s standard of care or liability for the
    claim.” That affidavit must contain the expert’s qualifications, the factual basis for the claim,
    “[t]he licensed professional’s acts, errors or omissions that the expert considers to be a
    violation of the applicable standard of care resulting in liability,” and “[t]he manner in which
    9
    the licensed professional’s acts, errors or omissions caused or contributed to the damages or
    other relief sought by the claimant.” § 12-2602(B). Section 12-2601(1), A.R.S., defines a
    “[c]laim” as a legal cause of action asserted against a licensed professional, where “[e]xpert
    testimony is necessary to prove the licensed professional’s standard of care or liability for the
    claim,” and where the cause of action “is based on the licensed professional’s alleged breach
    of contract, negligence, misconduct, errors or omissions in rendering professional services.”
    ¶17            The parties do not dispute that Wilson is a licensed professional. That does not
    necessarily mean, however, that Warner was required to file an expert opinion affidavit here.
    Respondeat superior liability is vicarious liability; the negligence of the principal is not
    relevant, only the principal’s relationship with the tortfeasor. See 2 Dan B. Dobbs, The Law
    of Torts, § 333, at 906 (2001) (“Vicarious liability is not based upon the defendant’s own
    fault. Rather, it is based upon the principle that he must stand good for the wrong of another
    person.”); Wiggs v. City of Phoenix, 198 Ariz 367, ¶ 13, 
    10 P.3d 625
    , 629 (2000) (“[T]hose
    whose liability is only vicarious are fault free—someone else’s fault is imputed to them by
    operation of law.”). The definition of a “claim” under § 12-2601 does not include one based
    on vicarious liability. Rather, it refers to the “licensed professional’s alleged . . . negligence.”
    § 12-2601(1)(b). Thus, a claim grounded on respondeat superior liability is not a “claim” as
    contemplated by § 12-2602, and an expert affidavit is only required if expert testimony is
    necessary to prove the tortfeasor’s liability based on his or her own conduct.
    ¶18            Moreover, in a case involving a licensed professional’s vicarious liability, there
    is no standard of care applicable to the professional because liability is based only on the
    10
    professional’s relationship with the party who committed the underlying tort. Therefore, in
    a vicarious liability claim against a licensed professional, there is no need for an expert
    opinion affidavit, and the trial court erred by requiring Warner to provide one for her claims
    resting on vicarious liability.7
    ¶19            Relevant to both her direct and vicarious liability claims against Wilson and
    Sierra Pest, Warner next argues that, even if the trial court had not erred by ordering Warner
    to submit expert opinion affidavits, erred in dismissing her claims against Wilson and Sierra
    Pest for the reason it cited. We agree. Section 12-2602(E) provides that when a trial court
    determines an affidavit is required, it must “set a date and terms for compliance.” The court
    did not do so here.8 Accordingly, although § 12-2602(F) permits a trial court to dismiss a
    claim if a plaintiff fails to comply with an order to file and serve an expert witness affidavit,
    the court here did not enter a proper order under § 12-2602(E). Therefore, the court abused
    its discretion in dismissing Warner’s claims against Wilson and Sierra Pest based on
    Warner’s failure to submit an affidavit.9
    7
    Warner also asserts that Arizona’s statutory and regulatory scheme governing the
    business of structural pest control makes Wilson and Sierra Pest vicariously liable for
    Hoggatt’s negligence by operation of law. See A.R.S. §§ 32-2301 through 32-2329.
    Assuming, without deciding, that this liability theory is valid, it too rests on vicarious liability
    and would not require an expert opinion affidavit under § 12-2602.
    8
    Moreover, the trial court granted Wilson’s and Sierra Pest’s “Motion for Order
    Requiring Expert Testimony” without awaiting Warner’s response to that motion. The court
    also never addressed Warner’s request for “a reasonable amount of time to provide an
    [expert opinion] affidavit.”
    9
    Warner also argues Wilson is liable for his own negligence in the training and
    supervision of Hoggatt. She asserts that no expert opinion affidavit was required because the
    11
    ¶20           For the reasons stated above, we reverse the trial court’s order dismissing
    Wilson and Sierra Pest. Again, like the dismissal of Hoggatt, the dismissal of Wilson and
    Sierra Pest does not warrant a new trial on the issue of Warner’s compensatory damages.
    Wilson’s and Sierra Pest’s liability, however, must be determined at a new trial, and, if
    necessary, the trier of fact must apportion the fault, if any, of the various defendants. See
    A.R.S. § 12-2506.
    Punitive Damages
    ¶21           On March 30, 2006, the appellees collectively moved for summary judgment
    on the issue of punitive damages.10 In her response, Warner argued that not only were there
    genuine issues of material fact preventing summary judgment, but the evidence
    “demonstrate[d] that Defendant David Hoggatt, and Defendant SDI, consciously elevated
    their own economic interests above the safety of the Aegis employees and the public.” The
    trial court granted the motion. Warner later filed a motion for reconsideration, arguing that,
    based on the testimony of two new witnesses, she “ha[d] produced significant evidence that
    Defendants utilized unlicensed, non-professional applicators . . . show[ing] complete
    indifference to or conscious disregard for the safety of others.” Warner asked the court to
    controlling statutes and Wilson’s own deposition testimony established the standard of care
    applicable to him. The trial court did not discuss this argument in its ruling granting the
    motion to dismiss. Because we conclude the trial court erred when it granted the motion, we
    need not reach this argument.
    10
    The court did not dismiss Wilson and Sierra Pest until August 7, and did not dismiss
    Hoggatt until August 29.
    12
    deny the motion for summary judgment, or “[at] a minimum, . . . delay ruling on th[e] issue
    until after all the evidence ha[d] been submitted.”
    ¶22           Granting Warner’s motion in part, the trial court agreed to reconsider its
    decision, and granted Warner leave to later request a punitive damages jury instruction. After
    the evidence relevant to punitive damages had been presented at trial, and in the context of
    discussing jury instructions with counsel, the court reconsidered the issue. Determining that
    punitive damages would not be appropriate, the court stated,
    it’s going to be the order of the Court . . . denying the motion for
    reconsideration on the grounds and for the reason that the Court,
    at this stage, does not believe that the evidence has met the
    required burden or level for a punitive damages instruction, in
    that the Court cannot find that there is any extraordinary
    circumstances of conscious disregard for evil mind purposes by
    the Defendants, on the grounds and for the reason that the
    testimony does indicate that Mr. Hoggatt was the only one who
    was involved with the chemicals and there were no other
    discussions.
    Accordingly, the court denied Warner’s request for a jury instruction on punitive damages.
    See Timmons v. City of Tucson, 
    171 Ariz. 350
    , 355, 
    830 P.2d 871
    , 876 (App. 1991) (trial
    court instructs jury on legal theories supported by evidence).
    ¶23           Warner argues that, in making its decision, the trial court improperly “took it
    upon itself to weigh the evidence” by finding that no unlicensed workers were involved
    despite four witnesses’ testimony to the contrary. She also contends that “[t]he use of
    untrained, unlicensed, non-professionals to provide services . . . appropriate only for a
    licensed applicator” would be sufficient grounds to justify punitive damages. Warner further
    argues that evidence presented at trial also showed that Hoggatt and/or SDI intentionally had
    13
    acted “outside the scope of authority, and contrary to the express directions, of their licensed
    qualifying party,” justifying punitive damages. Warner asserts that because the court erred
    in its decision, a new trial is warranted. See Ariz. R. Civ. P. 50(d).
    ¶24           Punitive damages are only appropriate “‘in the most egregious of cases, where
    [a plaintiff proves by clear and convincing evidence that the defendant engaged in]
    reprehensible conduct’ and acted ‘with an evil mind.’” Medasys Acquisition Corp. v. SDMS,
    P.C., 
    203 Ariz. 420
    , ¶ 17, 
    55 P.3d 763
    , 767 (2002), quoting Linthicum v. Nationwide Life Ins.
    Co., 
    150 Ariz. 326
    , 331-32, 
    723 P.2d 675
    , 680-81 (1986) (alteration in Medasys). Showing
    the requisite evil mind does not require evidence of a defendant’s subjective intent to injure;
    it can be shown by evidence of the defendant’s conscious disregard of “‘a substantial risk of
    significant harm to others.’” Tritschler v. Allstate Ins. Co., 
    213 Ariz. 505
    , ¶ 38, 
    144 P.3d 519
    ,
    531 (App. 2006), quoting Rawlings v. Apodaca, 
    151 Ariz. 149
    , 162, 
    726 P.2d 565
    , 578
    (1986).
    ¶25           Because the trial court reconsidered its grant of the motion for summary
    judgment on the issue of punitive damages, delaying a final decision until after all relevant
    evidence had been presented at trial, we view the court’s ruling as a judgment as a matter of
    law (JMOL).11 See Ariz. R. Civ. P. 50(a). We therefore review the court’s decision de novo.
    Crackel v. Allstate Ins. Co., 
    208 Ariz. 252
    , ¶ 20, 
    92 P.3d 882
    , 890 (App. 2004). Like
    summary judgment, JMOL should only be granted if the evidence in support of a claim would
    11
    Warner refers to the court’s ruling as a directed verdict. As we have noted, this term
    is interchangeable with JMOL.
    14
    not allow reasonable people to agree with the conclusions of the claim’s proponent. 
    Id. ¶ 20;
    Ariz. R. Civ. P. 50(a). “In reviewing a ruling on a motion for JMOL, we view the facts” and
    all reasonable inferences therefrom “in the light most favorable to the party opposing it.”
    Crackel, 
    208 Ariz. 252
    , ¶ 
    20, 92 P.3d at 889
    .
    ¶26            Although in deciding whether to grant JMOL a trial court may consider “‘the
    quantum of evidence required’” by the applicable standard of proof, 
    id., quoting Orme
    School
    v. Reeves, 
    166 Ariz. 301
    , 309, 
    802 P.2d 1000
    , 1008 (1990), the court should not grant JMOL
    “simply because [it] believes the moving party should win or will win the jury’s verdict.”
    Potter v. H. Kern Wisner, M.D., P.C., 
    170 Ariz. 331
    , 333, 
    823 P.2d 1339
    , 1341 (App. 1991).
    Nonetheless, we need not address whether, as Warner asserts, the trial court improperly acted
    as a fact-finder regarding the presence of unlicensed applicators, because SDI’s use of
    unlicensed applicators could not, as a matter of law, form the basis for a punitive damages
    claim against it. See State v. Oakley, 
    180 Ariz. 34
    , 36, 
    881 P.2d 366
    , 368 (App. 1994) (“We
    will affirm the trial court when it reaches the correct result even though it does so for the
    wrong reasons.”).
    ¶27            First, in order for an employer to be liable for punitive damages, the alleged
    basis for punitive damages must spring from either (1) the employer’s independent actions for
    which it is liable, or (2) the actions of its employee for which it is liable under the doctrine of
    respondeat superior. See Haralson v. Fisher Surveying, Inc., 
    201 Ariz. 1
    , ¶¶ 22-23, 
    31 P.3d 114
    , 119 (2001). Thus, for SDI’s own actions, such as possibly having used unlicensed
    applicators, to form the basis for a punitive damages award, SDI must be independently liable
    15
    for negligence. See 
    id. ¶ 23.
    However, it is unclear from Warner’s complaint that she even
    alleged SDI was independently liable. Indeed, after the court granted summary judgment,
    finding Hoggatt had been negligent and that SDI was liable based on respondeat superior,
    Warner never claimed that SDI was independently liable as well. Because Warner had not
    alleged an independent basis for SDI’s liability, SDI’s own actions could not, as a matter of
    law, be grounds for punitive damages; rather, Warner’s only avenue for punitive damages
    against SDI was by virtue of its respondeat superior liability, and thus must have been based
    on Hoggatt’s actions. See 
    id. ¶28 Furthermore,
    even if Warner had alleged SDI was independently liable, mere
    usage of unlicensed herbicide applicators cannot, as a matter of law, justify an award of
    punitive damages. Warner argues the use of unlicensed applicators can, without more, show
    the “conscious disregard” necessary to justify a punitive damages instruction. See Tritschler,
    
    213 Ariz. 505
    , ¶ 
    38, 144 P.3d at 531
    . To support her assertion, Warner relies on several cases
    from other jurisdictions in which the defendant’s use of unlicensed employees or entrustment
    of vehicles to unlicensed drivers, who later commit a tort, justifies an award of punitive
    damages against the defendant. E.g. Snyder v. Enter. Rent-A-Car Co., 
    392 F. Supp. 2d 1116
    ,
    1129-30 (N.D. Cal. 2005) (denying defendant’s motion for summary judgment on punitive
    damages claim because evidence defendant rented car to unlicensed driver sufficient to show
    conscious disregard of safety of others); Menaugh v. Resler Optometry, Inc., 
    799 S.W.2d 71
    ,
    73-75 (Mo. 1990) (remanding for proper instructions on punitive damages award against
    optometry practice where unlicensed employee gave patient improper advice about contact
    16
    lens care), overruled on other grounds by Rodriguez v. Suzuki Motor Corp., 
    936 S.W.2d 104
    (Mo. 1996); Deerings W. Nursing Ctr. v. Scott, 
    787 S.W.2d 494
    , 496 (Tex. App. 1990)
    (defendant nursing home liable for punitive damages where it had hired unlicensed nurse who
    assaulted elderly visitor to nursing home).
    ¶29           We agree with Warner that the likely purpose of the licenses in those cases was,
    like here, public safety. In those cases, however, it was illegal for an unlicensed person to
    perform the underlying activity. See 
    Snyder, 392 F. Supp. 2d at 1120
    (driving); 
    Menaugh, 799 S.W.2d at 73
    (optometry); Deerings W. Nursing 
    Ctr., 787 S.W.2d at 496
    (nursing). Despite
    Warner’s assumption that the use of unlicensed herbicide applicators would be illegal, A.R.S.
    § 32-2312(F) allows companies to use unlicensed applicators so long as they “work under the
    direct supervision of a licensed applicator at all times.” “Direct supervision” merely requires
    that the unlicensed applicators work “under the instruction, control and responsibility of a
    licensed applicator who is available if needed for consultation or assistance even though the
    licensed applicator is not physically present at the time and place the [herb]icide is used.” 12
    A.R.S. § 32-2301(7). Warner presented no evidence suggesting Hoggatt, SDI’s licensed
    applicator, was unavailable, nor that any unlicensed workers SDI may have used were
    otherwise not under Hoggatt’s “instruction, control and responsibility.” 13 
    Id. Without more,
    12
    At oral argument, Warner asserted SDI’s use of unlicenced applicators violated
    Arizona Administrative Code Title 4, Chapter 29, Article 5. The version of Article 5 to
    which Warner refers, however, was not in effect at the time of the incident, and we find
    nothing in the administrative rules effective at that time that support Warner’s position.
    13
    Warner did present evidence suggesting that Hoggatt did not arrive at the Aegis
    building until after the herbicides had been applied and people had been evacuated; however,
    17
    the legal use of unlicensed herbicide applicators is not the type of “outrageous, oppressive or
    intolerable” conduct that would support an award of punitive damages. 
    Linthicum, 150 Ariz. at 330
    , 723 P.2d at 679.
    ¶30           Warner next contends the court erred by denying her requested punitive
    damages instructions, and that she should have been able to pursue them against SDI, by
    virtue of its respondeat superior liability for Hoggatt’s negligence, and against Hoggatt
    individually, because, she asserts, she presented facts tending to show that:
    Defendants’ application at Aegis took place without any
    supervision or training from the qualifying party[,] . . . Defendant
    SDI’s applicators blatantly ignored the scope of their
    authorization and instructions from the qualifying party, Robert
    Wilson, to only apply chemicals to right-of-ways and vacant
    lots[,] Defendants sprayed toxic chemicals around an occupied,
    commercial building although Defendants’ applicators had only
    been provided simple training with respect to applications at
    vacant lots and right-of-ways, and . . . Defendants sprayed toxic
    chemicals without forewarning Aegis or the Aegis employees.
    Indeed, viewed in the light most favorable to Warner, see Crackel, 
    208 Ariz. 252
    , ¶ 
    20, 92 P.3d at 889
    , the evidence establishes Hoggatt had no experience spraying around air
    conditioning units, Hoggatt was unaware of the air intakes at the Aegis building, Hoggatt
    knew some of the chemicals he used were “dangerous to inhale,” Hoggatt’s qualifying party
    never observed him spraying around buildings, Hoggatt agreed with his qualifying party that
    this alone does not permit the inference that there was no “direct supervision,” as its
    definition does not require the physical presence of the licensed applicator. A.R.S.
    § 32-2301(7). Furthermore, Hoggatt’s liability, based on his admission that he negligently
    applied the herbicide at the Aegis building, had already been determined.
    18
    he would only spray vacant lots and rights of way, and Hoggatt sprayed the Aegis building
    without informing his qualifying party.
    ¶31           Even if a jury were to find these facts, however, they do not alone permit the
    inference that Hoggatt knew his actions posed “‘a substantial risk of significant harm to
    others.’” Tritschler, 
    213 Ariz. 505
    , ¶ 
    38, 144 P.3d at 531
    , quoting 
    Rawlings, 151 Ariz. at 162
    ,
    726 P.2d at 578. “[A] damage award, punitive or otherwise, must be based on more than mere
    speculation or conjecture.” Hawkins v. Allstate Ins. Co., 
    152 Ariz. 490
    , 501, 
    733 P.2d 1073
    ,
    1084 (1987). Although these facts may show Hoggatt was negligent, they do not permit the
    jury to infer the evil mind necessary for a punitive damages award. See 
    Rawlings, 151 Ariz. at 162
    , 726 P.2d at 578 (punitive damages require more than the “‘mere commission of a
    tort’”), quoting W. Prosser & W. Keeton, Law of Torts § 2 at 9 (5th ed. 1984).
    ¶32           For all the aforementioned reasons, we affirm the trial court’s JMOL on the
    issue of punitive damages against SDI and Hoggatt.
    Evidence of Workers’ Compensation Benefits and Lien
    ¶33           Warner next asserts the trial court erred by granting SDI’s motion in limine
    seeking to prohibit Warner from presenting evidence of workers’ compensation benefits she
    had received and of the lien held by her workers’ compensation carrier against any recovery
    she might obtain. See A.R.S. § 23-1023(D).14 We review a trial court’s decision on a motion
    14
    At the time this case was filed, this provision was in § 23-1023(C). See 2007 Ariz.
    Sess. Laws ch. 116, § 1.
    19
    in limine for an abuse of discretion. See Lewis v. N.J. Riebe Enters., Inc., 
    170 Ariz. 384
    , 396,
    
    825 P.2d 5
    , 17 (1992).
    ¶34           Warner asserts that either the collateral source rule does not apply to workers’
    compensation benefits or, alternatively, she should have been permitted to waive the collateral
    source rule. “[T]he collateral source rule requires that[] ‘[p]ayments made to or benefits
    conferred on the injured party from other sources are not credited against the tortfeasor’s
    liability, although they cover all or a part of the harm for which the tortfeasor is liable.’”
    Taylor v. S. Pac. Transp. Co., 
    130 Ariz. 516
    , 519, 
    637 P.2d 726
    , 729 (1981), quoting
    Restatement (Second) of Torts § 920A(2) (1979). Thus, Warner reasons, if she waives the
    rule or it does not apply, she should have been permitted to present evidence of her receipt of
    workers’ compensation benefits and the carrier’s corresponding lien.
    ¶35           We find no support in Arizona law for Warner’s position that the collateral
    source rule “has been abolished with respect to work[ers’] compensation benefit payments and
    liens.” She relies on Anderson v. Muniz, 
    21 Ariz. App. 25
    , 28-29, 
    515 P.2d 52
    , 55-56 (1973),
    but that case did not analyze the collateral source rule; it held that a plaintiff’s damages for
    medical expenses are calculated according to the rates actually charged by his doctor, not the
    higher rates the doctor would have charged absent a contract with the insurer. She also relies
    on Eastin v. Broomfield, 
    116 Ariz. 576
    , 584, 
    570 P.2d 744
    , 752 (1977), in which our supreme
    court stated: “We believe that the legislature has the right to abolish the collateral source rule
    as it affects medical malpractice cases just as it has done in the work[ers’] compensation
    field.” The supreme court in Eastin relied on Ruth v. Industrial Commission, 
    107 Ariz. 572
    ,
    20
    
    490 P.2d 828
    (1971). That case, however, upheld the constitutionality of the workers’
    compensation carrier lien provision of § 12-1023. 
    Ruth, 107 Ariz. at 576
    , 490 P.2d at 832.
    It does not address whether presenting evidence in a tort action of the plaintiff’s receipt of
    workers’ compensation benefits would violate the collateral source rule.
    ¶36            Moreover, even if the collateral source rule does not apply or can be waived,
    the evidence Warner seeks to admit must otherwise be admissible. The trial court here
    determined the evidence was irrelevant and could “prejudice . . . both parties.” The court also
    expressed concern that evidence of the amount of the carrier’s lien might inappropriately set
    a floor for the jury’s calculation of damages. See Ariz. R. Evid. 402 (“Evidence which is not
    relevant is not admissible.”); Ariz. R. Evid. 403 (“[Relevant] evidence may be excluded if its
    probative value is substantially outweighed by the danger of unfair prejudice, confusion of
    the issues, or misleading the jury . . . .”).
    ¶37            Evidence that a plaintiff received workers’ compensation benefits is generally
    inadmissible because it is irrelevant to the issue of the plaintiff’s damages. See Miller v.
    Schafer, 
    102 Ariz. 457
    , 458, 
    432 P.2d 585
    , 586 (1967) (“[I]t would seem to be clear that [the
    existence of workers’ compensation coverage] is irrelevant and that it is improper to introduce
    it with no apparent purpose other than to influence the jury.”). It follows that evidence of a
    workers’ compensation carrier’s statutory lien against a plaintiff’s recovery is similarly
    irrelevant. Moreover, juries are frequently instructed not to consider the possible existence
    of insurance in reaching its verdict.           See State Bar of Arizona Revised Arizona Jury
    Instructions (Civil) Std. 9 (2005) (“In reaching your verdict, you should not consider (or
    21
    discuss) whether a party was or was not covered by insurance. Insurance or the lack of
    insurance has no bearing on whether or not a party was at fault, or the damages, if any, a party
    has suffered.”). Further, evidence that a party is insured is typically inadmissible. See Ariz.
    R. Evid. 411. And, although the jury instructions the trial court gave here are not included in
    the record on appeal, both Warner and SDI requested the standard instruction, which the court
    stated it would give.
    ¶38           Warner also asserts that our supreme court’s decision in Manhattan-Dickman
    Construction Co. v. Shawler, 
    113 Ariz. 549
    , 
    558 P.2d 894
    (1976), “dictates that an instruction
    and evidence regarding a worker[s’] compensation lien are mandatory when the jury is led to
    believe that worker[s’] compensation has been provided to a plaintiff.” In that case, the
    attorneys for the defendants in a negligence action “inject[ed] and continuously emphasiz[ed]
    work[ers’] compensation” during jury selection and the examination of witnesses. 
    Id. at 556-
    57, 558 P.2d at 901-02
    . The trial court declined to give an instruction regarding the workers’
    compensation carrier’s statutory lien on the plaintiff’s recovery. 
    Id. at 557,
    558 P.2d at 902.
    Relying on Miller, the supreme court determined the court’s failure to instruct the jury was
    error and directed the court to enter additurs for the plaintiffs. Manhattan-Dickman, 113 Ariz.
    at 
    557, 558 P.2d at 902
    .
    ¶39           Manhattan-Dickman does not support Warner’s position.                 Indeed, it
    reemphasizes that evidence of workers’ compensation benefits and liens are generally
    irrelevant and prejudicial. It suggests that if such evidence is heard by the jury, the jury
    should then be specifically instructed to disregard it. Warner does not claim the trial court
    22
    erred by failing to specifically instruct the jury that her carrier had a lien on her recovery or
    to ignore the possibility Warner had received workers’ compensation benefits. And, as we
    have noted, the jury likely was instructed to ignore the possibility of any insurance.
    Accordingly, for all these reasons, we conclude the court did not abuse its discretion in
    granting SDI’s motion in limine.
    Jury Questions
    ¶40           Warner next asserts the trial court erred by declining to answer questions the
    jury posed during the trial. Rule 39(b)(10), Ariz. R. Civ. P., states:
    Jurors shall be permitted to submit to the court written questions
    directed to witnesses or to the court. Opportunity shall be given
    to counsel to object to such questions out of the presence of the
    jury. Notwithstanding the foregoing, for good cause the court
    may prohibit or limit the submission of questions to witnesses.
    We review for an abuse of discretion a trial court’s decision whether to submit a juror’s
    question for answer. See Harrington v. Beauchamp Enters., 
    158 Ariz. 118
    , 121, 
    761 P.2d 1022
    , 1025 (1988).
    ¶41           On the third day of trial, the trial court informed the parties a juror had asked:
    “[D]id the defendant violate any pesticide or herbicide regulation in their treatment at Aegis
    on September 29th, 2003?” It is not clear from the record whether the question was directed
    to a particular witness or to the court, although the discussion of the question followed
    Hoggatt’s testimony. Warner argued Hoggatt could answer the question, and SDI argued the
    question was irrelevant and unfairly prejudicial because SDI and Hoggatt had admitted
    negligence. The court ultimately determined the question would not be answered “because
    23
    of the fact that [Hoggatt’s citation from the Structural Pest Control Commission (SPCC)] was
    a settlement” between Hoggatt and the SPCC.15 The court then instructed the jury that “the
    rules of evidence or other rules of law may prevent some questions from being asked or fully
    answered” and advised the jury “that to the extent possible, we have attempted to answer that
    question.”
    ¶42           Warner argues that, because the question demonstrates the jury was
    “confus[ed]” and “need[ed] more information to render a verdict,” the trial court erred by
    declining to answer the question. She relies on Harrington, in which our supreme court
    stated: “‘[A] number of courts have held that if the jurors . . . express confusion or lack of
    understanding of a significant element of the applicable law, it is the court’s duty to give
    additional instructions on the law to adequately clarify the jury’s doubt or 
    confusion.’” 158 Ariz. at 121
    , 761 P.2d at 1025, quoting Ott v. Samaritan Health Serv., 
    127 Ariz. 485
    , 491, 
    622 P.2d 44
    , 50 (App. 1980) (alterations in Harrington).
    ¶43           In Harrington, a negligence and products liability case, 
    id. at 119,
    761 P.2d at
    1023, the jury asked a question during deliberations concerning the statute of limitations, 
    id. at 120,
    761 P.2d at 1024. Apparently, a contract entered into evidence contained a one-year
    workmanship warranty. 
    Id. The jury
    asked the trial court: “How many years [is] a contractor
    15
    Hoggatt signed a consent agreement with SPCC agreeing to pay a $600 fine. That
    consent agreement stated: “The disciplinary action in this matter constitutes a prior violation
    and may be used for the purpose of determining sanctions in any further disciplinary matter,
    however it shall not act as conclusive evidence of a violation in any other proceeding.” The
    trial court had previously granted SDI’s and Hoggatt’s motion in limine to exclude evidence
    of the consent agreement.
    24
    liable for defects in workmanship and materials . . . [?] Contract reads one year. We want to
    know if another law forgoes [the] contract.” 
    Id. The trial
    court provided no clarifying
    instruction, and the jury returned a verdict for the defense. 
    Id. Noting that
    “[n]o limitations
    period, statutory or contractual, was at issue in the trial,” 
    id., our supreme
    court determined
    the trial court had erred by failing to respond to the jury’s question, id. at 
    121, 761 P.2d at 1025
    .
    ¶44            The juror’s question here does not evidence a similar lack of understanding of
    any portion of this case. Evidence of Hoggatt’s citation from the SPCC, even if otherwise
    admissible, would be relevant only to the issue of Hoggatt’s negligence—which was not
    contested at trial.16 Moreover, the court in Harrington addressed a question asked by the jury
    during deliberations. Id. at 
    120, 761 P.2d at 1024
    . Here, in contrast, the trial court declined
    to answer a question asked by an individual juror before deliberations. A question by a single
    juror during the course of trial is substantially less indicative of jury confusion than a question
    asked by the jury panel during deliberations. Cf. Cannon v. State, 
    496 S.E.2d 330
    , 332 (Ga.
    Ct. App. 1998) (question by single juror “[might] not denote ‘confusion’ of the entire jury”).
    Thus, we conclude the court did not abuse its discretion in declining to answer the juror’s
    question.
    ¶45            On the fourth day of trial, the court informed the parties it had received three
    additional jury questions, which apparently were intended for Warner. One question asked
    16
    Warner asserts the question was “obviously relevant,” but cites no authority in
    support of her position. Nor does she explain how the evidence would be relevant to any
    issue save Hoggatt’s negligence.
    25
    whether Warner had made a claim for workers’ compensation benefits or qualified for
    disability social security insurance. The second question asked whether Warner had medical
    insurance while employed with Aegis and whether that insurance covered prescription drugs.
    The final question the jury asked was whether any other lawsuits had been filed. The next day
    of trial, the court informed the parties it would explain to the jury that “all the questions the
    Court deemed it could legally answer” had been answered, and that it would not address any
    of those questions.
    ¶46           Although we do not find any indication in the record the trial court actually gave
    that explanation to the jury, Warner nevertheless did not ask the court to answer the questions
    or order they be answered. Nor did she suggest any additional jury instructions were required.
    Accordingly, she has waived this issue on appeal, and we do not address it further. See
    Trantor v. Fredrikson, 
    179 Ariz. 299
    , 300, 
    878 P.2d 657
    , 658 (1994) (“[E]rrors not raised in
    the trial court cannot be raised on appeal.”).
    Rule 68 Sanctions
    ¶47           The trial court granted Hoggatt’s, Wilson’s, and Sierra Pest’s motions for
    sanctions pursuant to Rule 68, Ariz. R. Civ. P., because they had been dismissed from the
    lawsuit and had made offers of judgment to Warner.17 See footnote 
    3, supra
    . And, because
    the jury’s $3,825 damage award to Warner’s was less than SDI’s $30,000 offer of judgment,
    the court also granted SDI’s motion for Rule 68 sanctions. Because the court erred by
    17
    Effective January 1, 2008, Rule 68(g), Ariz. R. Civ. P., provides for offer-of-
    judgment sanctions. At the time relevant here, however, these provisions were contained in
    Rule 68(d).
    26
    dismissing Hoggatt, Wilson, and Sierra Pest, we vacate the award of Rule 68 sanctions to
    those parties. Therefore, we need not address Warner’s argument those offers were not made
    in good faith.
    ¶48              Warner argues we should vacate the Rule 68 sanctions awarded to SDI because
    she lacked the authority to accept the offer in light of the fact that she had received workers’
    compensation benefits and the carrier had a lien to that extent against any recovery pursuant
    to A.R.S. § 23-1023. At the time relevant here, § 23-1023(C) provided that “[c]ompromise
    of any claim by the employee . . . at an amount less than the compensation and medical,
    surgical and hospital benefits provided for shall be made only with written approval of . . . the
    person liable to pay the claim.” 18 1981 Ariz. Sess. Laws, ch. 226, § 1. The carrier’s lien of
    approximately $60,000 clearly exceeded SDI’s $30,000 offer of judgment and thus required
    Warner to seek the carrier’s approval before she could accept that offer.
    ¶49              “Interpretation of rules and statutes is a legal matter, which we review de novo.”
    Pima County v. Pima County Law Enforcement Merit Sys. Council, 
    211 Ariz. 224
    , ¶ 13, 
    119 P.3d 1027
    , 1030 (2005).         And we “subject court rules to the principles of statutory
    construction.” State ex rel. Romley v. Superior Court, 
    168 Ariz. 167
    , 168, 
    812 P.2d 985
    , 986
    (1991). The primary goal of construing a court rule “is to discern and give effect” to the
    intent of the rule. Bridgestone/Firestone N. Am. Tire, L.L.C. v. A.P.S. Rent-A-Car & Leasing
    Inc., 
    207 Ariz. 502
    , ¶ 15, 
    88 P.3d 572
    , 576 (App. 2004), quoting State v. Kearney, 
    206 Ariz. 547
    , ¶ 5, 
    81 P.3d 338
    , 340 (App. 2003). We begin with the language of the rule.
    18
    These provisions are now in § 23-1023(D).
    27
    ¶50           At the time relevant here, Rule 68(d) provided that, if an offer of judgment is
    made and not accepted and “[i]f the judgment finally obtained is equal to, or more favorable
    to the offeror than[] the offer, the offeree must pay, as a sanction, those reasonable expert
    witness fees and double the taxable costs of the offeror . . . .” SDI asserts we must uphold the
    sanction here because “[t]here is no exception to Rule 68 awards of sanctions for offerees who
    reject offers of judgment when there is a lien subject to A.R.S. § 23-1023(C).”
    ¶51           Our decision, however, does not hinge on whether there is an explicit exception
    to Rule 68 sanctions for parties whose recovery is subject to a § 23-1023 lien. “[W]hat a
    [court rule] necessarily implies is as much a part of the [rule] as what is explicitly stated.”
    Long v. Napolitano, 
    203 Ariz. 247
    , ¶ 44, 
    53 P.3d 172
    , 185 (App. 2002). Rule 68 necessarily
    implies that an offeree must have the legal ability to accept an offer before sanctions may be
    imposed. Unlike other fee-shifting and cost-shifting rules and statutes, Rule 68 is a sanction.
    See generally A.R.S. §§ 12-341, 12-341.01, 12-343; Ariz. R. Civ. P. 54(f), (g). A sanction
    is by definition punitive or coercive in nature. See Black’s Law Dictionary 1368 (8th ed.
    2004) (a sanction is “[a] penalty or coercive measure that results from failure to comply with
    a law, rule, or order”). Therefore, due process demands that, before a party may properly be
    sanctioned, it must have had the ability to avoid that sanction. Cf. Shillitani v. United States,
    
    384 U.S. 364
    , 371 (1966) (“[T]he justification for coercive imprisonment as applied to civil
    contempt depends upon the ability of the contemnor to comply with the court’s order.”);
    Korman v. Strick, 
    133 Ariz. 471
    , 474, 
    652 P.2d 544
    , 547 (1982) (“If the means of the coercion
    28
    [to comply with a court order] . . . cannot be removed by compliance with the court’s order,
    the coercive effect of a civil contempt finding will be weakened.”).
    ¶52           SDI suggests Warner could have avoided the sanction by not filing a lawsuit.
    The purpose of Rule 68 sanctions, however, is not to prevent a party from filing a meritorious
    lawsuit, but rather to promote its settlement. See Wersch v. Radnor/Landgrant-a Phoenix
    P’ship, 
    192 Ariz. 99
    , 102, 
    961 P.2d 1047
    , 1050 (App. 1997). That purpose is not met by
    preventing a party from seeking a remedy at all or by punishing it for failing to accept an offer
    of settlement it had no ability to accept.
    ¶53           In Duke v. Cochise County, 
    189 Ariz. 35
    , 40-41, 
    938 P.2d 84
    , 89-90 (App.
    1996), we held that imposition of Rule 68 sanctions cannot be based on an unapportioned
    joint offer of settlement from multiple parties. Although we relied primarily on the rule’s
    language specifying only a single “party” and “offer,” we also stated:
    An offeree presented with an unapportioned joint offer cannot
    make a meaningful choice between accepting the offer on any
    single claim or continuing the litigation to judgment on all
    claims. Imposing sanctions for failing to accept what is in effect
    an unspecified and unapportioned offer of judgment deprives the
    offeree of the opportunity to assess his or her chances of doing
    better at trial against one or more of the parties covered by the
    joint offer.
    
    Id. at 41,
    938 P.2d at 90. Albeit on different facts, in Duke we recognized that it is not proper
    to sanction a party when that party has no meaningful opportunity to avoid the sanction.
    When a party is unable, due to a § 23-1023 lien, to accept an offer of judgment that it would
    29
    have otherwise accepted, that party cannot make a meaningful choice—it has been forced to
    proceed with litigation it intended to end by accepting the defendant’s offer of judgment.19
    ¶54           In order to avoid Rule 68 sanctions, however, it is not enough for a plaintiff to
    have merely notified the lien holder of a defendant’s offer to confess judgment.
    Section 23-1023 does not discuss a notice requirement, but rather requires the plaintiff to
    obtain written approval from the lien holder before compromising his or her claim in an
    amount less than the lien. It is therefore necessary for the plaintiff seeking protection from
    Rule 68 sanctions to demonstrate that it timely sought approval for an offer of judgment that
    it intended to accept. Otherwise, a plaintiff could avoid Rule 68 sanctions when it had no
    intention of accepting an offer of judgment and, consequently, was not actually denied a
    meaningful choice between accepting the offer or proceeding with the action. See Duke, 189
    Ariz. at 
    41, 938 P.2d at 90
    . Accordingly, if Warner intended to accept SDI’s offer of
    judgment, requested permission from the lien holder to do so, and the lien holder refused, the
    trial court’s Rule 68 sanctions against Warner were not proper.20
    19
    SDI argues this reading of Rule 68 creates a conflict between the rule and § 23-1023,
    and, thus, the rule should control. See Pima County v. Hogan, 
    197 Ariz. 138
    , ¶ 8, 
    3 P.3d 1058
    , 1060 (App. 1999) (“When a statute conflicts with a procedural rule on a procedural
    matter, the rule controls.”). It does not explain, however, how the rule and statute conflict.
    As we have explained, a party may not be sanctioned under Rule 68 when a party lacks the
    ability to accept an offer of judgment. That § 23-1023 may prevent a party from accepting
    an offer of judgment does not create a conflict, it merely means sanctions may be
    unavailable.
    20
    At oral argument before this court, SDI argued for the first time that acceptance of
    an offer of judgment under Rule 68 was not a “compromise” as contemplated by § 23-1023.
    It reasons that a settlement, unlike acceptance of a Rule 68 offer, need not result in a
    judgment and involves contract law principles to govern its effect. See, e.g., Emmons v.
    30
    ¶55           Were we to conclude that a workers’ compensation lien holder’s refusal of the
    worker-plaintiff’s request to accept an offer of judgment did not insulate a plaintiff from
    Rule 68 sanctions, a plaintiff in a third-party action whose recovery was subject to a
    § 23-1023 lien would have but two options, both inconsistent with public policy. As we
    explain below, a plaintiff could continue to litigate the case, and, in the event Rule 68
    sanctions were imposed, he or she might have a cause of action against the lien holder based
    on a bad faith refusal to permit acceptance of the offer of judgment. Or the plaintiff could
    accept the offer of judgment without the lien holder’s approval, in violation of § 23-1023,
    thereby subjecting him or her to potential penalties if the amount of the lien exceeds the
    judgment.
    ¶56           In Arizona, a plaintiff may bring an action against a workers’ compensation lien
    holder for violating the duty of good faith and fair dealing by unreasonably withholding
    Superior Court, 
    192 Ariz. 509
    , ¶ 14, 
    968 P.2d 582
    , 585 (App. 1998) (“Construction and
    enforcement of settlement agreements . . . are governed by general contract principles.”);
    Haberkorn v. Chrysler Corp., 
    533 N.W.2d 373
    , 385 (Mich. Ct. App. 1995) (“An offer of
    judgment is not the same as an offer to settle. An agreement to settle does not necessarily
    result in a judgment. Although it usually results in a stipulated order of dismissal with
    prejudice, such an order does not constitute an adjudication on the merits.”). Although
    settlement offers and Rule 68 offers of judgment are distinguishable, that fact does not
    support SDI’s contention that an offer of judgment is not a “compromise.” Our supreme
    court has defined a compromise under § 23-1023 as an “‘agreement between two or more
    persons who, for the purpose of preventing or putting an end to a lawsuit, adjust their
    differences by mutual consent in the manner which they agree on.’” Hendrickson v. Indus.
    Comm’n, 
    202 Ariz. 442
    , ¶ 17, 
    46 P.3d 1063
    , 1066 (2002), quoting Brecht v. Hammons, 
    35 Ariz. 383
    , 389, 
    278 P. 381
    , 383 (1929). A Rule 68 judgment squarely fits this
    definition—the parties ultimately compromise by agreeing on the value of the plaintiff’s
    claim by one party’s accepting the other’s offer to confess judgment.
    31
    approval of a settlement between an employee and a third-party defendant. See, e.g., Stout
    v. State Comp. Fund, 
    197 Ariz. 238
    , 242-43, 
    3 P.3d 1158
    , 1162-63 (App. 2000); Boy v.
    Fremont Indem. Co., 
    154 Ariz. 334
    , 336-37, 
    742 P.2d 835
    , 837-38 (App. 1987). A plaintiff
    who requests and is refused permission to accept an offer of judgment and later is sanctioned
    under Rule 68 could file such an action against the lien holder. Therefore, he or she could
    potentially obtain some relief from the Rule 68 sanctions. This solution has some facial
    appeal—it would allow a defendant to recover costs that it would have been able to recover
    from a plaintiff who voluntarily rejected a Rule 68 offer of judgment. And it would place
    some potential burden on the insurance carrier which, perhaps unfairly, stands to benefit from
    the plaintiff’s lawsuit against a third party without shouldering any of the accompanying risks
    or costs of litigation. Cf. Colorado Counties, Inc. v. Davis, 
    801 P.2d 10
    , 12 (Colo. Ct. App.
    1990) (“It would be fundamentally unfair and unjustly enrich [a workers’ compensation
    carrier] for plaintiff to pay all of the expenses and bear the risk of the litigation [against a third
    party] but at the same time to absolve [the carrier] of all costs incurred.”).
    ¶57            Ultimately, however, that procedure is at odds with public policy. As we have
    noted, the purpose of Rule 68 is to encourage settlement and eliminate needless litigation. See
    
    Wersch, 192 Ariz. at 102
    , 961 P.2d at 1050. That purpose is not met by encouraging, and
    perhaps requiring, collateral litigation to determine whether a lien holder’s refusal to approve
    a desired settlement was in good faith. Nor is the lien holder’s lack of good faith the central
    concern—as we explained above, the issue under Rule 68 is instead whether the plaintiff had
    a meaningful opportunity to decide whether to accept the offer. See 
    Duke, 189 Ariz. at 41
    ,
    
    32 938 P.2d at 90
    . Moreover, public policy in the area of tort law generally favors the injured
    party, not the tortfeasor. See, e.g., Lopez v. Safeway Stores, Inc., 
    212 Ariz. 198
    , ¶ 26, 
    129 P.3d 487
    , 496 (App. 2006) (“[T]wo guiding principles of tort law [are] (1) the limitation of
    compensation to the injured party to the amount necessary to make him whole and (2) the
    avoidance of a windfall to the tortfeasor if a choice must be made between him and the injured
    party.”).
    ¶58           Nor would it be a satisfactory solution to require a plaintiff who desires to settle
    his or her claim to avoid potential Rule 68 sanctions by settling the claim without the lien
    holder’s approval. Although § 23-1023 does not describe a penalty for failing to obtain the
    lien holder’s approval before settling, our case law makes it clear that a plaintiff may suffer
    significant consequences if he or she does so. If a workers’ compensation claimant settles his
    or her third-party claim without the lien holder’s approval, the claimant must demonstrate that
    the settlement was reasonable. Hendrickson v. Indus. Comm’n, 
    202 Ariz. 442
    , ¶ 13, 
    46 P.3d 1063
    , 1066 (2002); Bohn v. Indus. Comm’n, 
    196 Ariz. 424
    , ¶ 17, 
    999 P.2d 180
    , 183 (2000).
    If he or she does so, the lien holder’s credit “shall be the amount of the actual settlement.”
    Bohn, 
    196 Ariz. 424
    , ¶ 
    17, 999 P.2d at 183
    . If the amount of the settlement is found to be
    unreasonable, however, the credit “shall be enlarged to a reasonable settlement amount.” 
    Id. Indeed, in
    some circumstances, the lien holder may be permitted to deny all future workers’
    compensation benefits to the claimant for accepting the settlement without the lien holder’s
    permission. See 
    id. (claimant who
    settles with third party after carrier “has accepted the
    claim, paid benefits, and acquired a lien” forfeits workers’ compensation benefits); see also
    33
    Hendrickson, 
    202 Ariz. 442
    , ¶ 
    15, 46 P.3d at 1066
    (declining to apply forfeiture rule where
    claimant settled claim after benefits paid because claimant “did not . . . attempt to reopen her
    compensation claim” after settling third-party action and received “minimal amount from her
    third-party action”). Additionally, our supreme court noted in Hendrickson that its
    holding . . . emphatically does not alter the duty of a workers’
    compensation claimant or his attorney to comply with section
    23-1023.C and seek written approval prior to compromising a
    third-party claim. The fact that a claimant may suffer no
    financial impact from disregarding the direction of the statute
    does not lessen his lawyer’s obligation to follow the law as set
    out in section 23-1023.C.
    
    202 Ariz. 442
    , ¶ 
    19, 46 P.3d at 1067
    .
    ¶59           The decision we reach today does not weaken the protection Rule 68 may afford
    a defendant. If not for a lien holder’s withholding approval, a plaintiff would be in a position
    to settle the claim. Moreover, to hold otherwise would subject a plaintiff with a meritorious
    claim to sanctions he or she had no ability to avoid and would protect the tortfeasor to the
    injured party’s detriment. And it would engender further litigation between the plaintiff and
    the lien holder on either the lien holder’s good faith in rejecting the settlement offer or the
    reasonableness of the claimant’s acceptance of that offer.
    ¶60           Our conclusion, however, does not end the inquiry. SDI contends that “there
    is absolutely no evidence in the record, or otherwise, that after receiving the appellee’s
    October of 2005 offers of judgment, . . . [Warner] even asked the compensation carrier
    whether she had approval to accept the offers.” In her response to the motions for Rule 68
    sanctions, however, Warner asserted to the trial court that the carrier “had indicated to [her]
    34
    that it was unwilling to compromise its lien in any way.” But she did not indicate whether,
    intending to accept the offer of judgment, she had requested from the carrier permission to
    accept SDI’s offer to confess judgment and, if so, whether and when the carrier had informed
    her it was unwilling to compromise its lien. Under the standard we describe, Warner has
    clearly not met her burden.
    ¶61           Because “this is a case of first impression,” however, and because it would be
    unfair to have expected the parties or the trial court to have anticipated the standard we adopt
    today, “we think justice will be best served by allowing the parties the opportunity of
    presenting any additional evidence relevant to [this] issue.” Phillips v. Anchor Hocking Glass
    Corp., 
    100 Ariz. 251
    , 261, 
    413 P.2d 732
    , 739 (1966), overruled on other grounds by N.
    Propane Gas Co. v. Kipps, 
    127 Ariz. 522
    , 527, 
    622 P.2d 469
    , 474 (1980); see also Swick v.
    Liautaud, 
    662 N.E.2d 1238
    , 1243 (Ill. 1996) (where supreme court “has clarified [the] burden
    of proof . . . and decided an issue of first impression whose resolution was not clearly
    foreshadowed,” fairness demands court remand case to provide plaintiff opportunity to present
    additional evidence). We therefore vacate the trial court’s award of Rule 68 sanctions to SDI
    and remand this matter to the trial court so it can determine whether Warner can demonstrate
    that she intended to accept the offer and had not been given permission to settle the claim
    before the time to accept the offer of judgment would have expired. See Ariz. R. Civ. P.
    68(h); cf. Fleitz v. Van Westrienen, 
    114 Ariz. 246
    , 252, 
    560 P.2d 430
    , 436 (App. 1977) (once
    defendant met “burden of coming forward with evidence” showing it “made an offer of
    35
    judgment greater than the verdict,” “the burden shifted to [plaintiff] to show the . . . offer was
    in fact for something less”).
    Disposition
    ¶62           We affirm the trial court’s denial of Warner’s punitive damage claim against
    Hoggatt and SDI. We reverse the court’s dismissal of Warner’s action as to Hoggatt, Wilson,
    and Sierra Pest, as well as its award of costs pursuant to § 12-341. And we reverse the court’s
    award of Rule 68 sanctions against Warner in favor of Hoggatt, Wilson, Sierra Pest, and SDI.
    We also remand the case to the trial court for further proceedings as to Warner’s liability to
    SDI for Rule 68 sanctions, and such other proceedings regarding Wilson and Sierra Pest as
    are consistent with this decision.
    _______________________________________
    J. WILLIAM BRAMMER, JR., Judge
    CONCURRING:
    ________________________________________
    JOHN PELANDER, Chief Judge
    ________________________________________
    JOSEPH W. HOWARD, Presiding Judge
    36