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Phoenix Professional Hockey Club, Inc. v. Hirmer

Arizona Supreme Court
108 Ariz. 482, 502 P.2d 164, 1972 Ariz. LEXIS 371 (1972)
ELI5:

Rule of Law:

An employer does not have a cause of action to recover economic losses from a third party who negligently injures its employee.


Facts:

  • A professional hockey club employed Don Caley as its goalie under a contract.
  • Peter B. Hirmer was involved in an automobile accident.
  • Don Caley was injured in the accident, allegedly due to Hirmer's negligent conduct.
  • As a result of Caley's injuries, the hockey club was required to hire and employ a substitute goalie for the remainder of Caley's contract term.
  • The club incurred out-of-pocket expenses to hire the substitute.

Procedural Posture:

  • The appellant corporation (a professional hockey club) filed a complaint against Peter B. Hirmer in the trial court.
  • Hirmer, the appellee, filed a motion to dismiss the complaint for failure to state a claim upon which relief could be granted.
  • The trial court granted Hirmer's motion and dismissed the complaint.
  • The hockey club appealed the trial court's dismissal to the state's highest court.

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Issue:

Does an employer have a valid cause of action against a third party who negligently injures its employee, seeking recovery for the economic loss of hiring a substitute?


Opinions:

Majority - Hays, Chief Justice

No. An employer does not have a cause of action against a person who negligently injures its employee. The court rejects the historical common law rule that permitted a master to recover for the loss of a servant's services, reasoning that this rule was based on a quasi-familial relationship that no longer exists in the modern employer-employee context. The court holds that extending a tortfeasor's duty to protect an employer's purely contractual interest from negligent interference would impose an undue burden on freedom of action. Citing Snow v. West, the court concludes that for interference with a contractual relationship to be actionable, it must be knowing and intentional, not merely negligent or incidental.



Analysis:

This decision formally abolishes the archaic common law action for loss of a servant's services (per quod servitium amisit) in the context of a modern employment relationship in Arizona. It establishes a clear precedent that a third party's duty of care in negligence does not extend to protecting an employer's purely economic interests in the services of its employee. The ruling reinforces the critical distinction between intentional torts, such as intentional interference with contract, and negligence, thereby preventing a potential flood of litigation from employers seeking to recover business losses every time an employee is injured by a third party's carelessness.

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