due to severe all sort of collide us after that she went to work for honeywell and they made her promise if you become disabled we will provide you with income protection for up to twenty six weeks of your disability and once she became disabled under the plan that was an irrevocable promise they couldn't take it back and was there a contract well my basic question here is whether there was a contract between honeywell and your client because i know that the plan itself says i am not a contract right the plan does say that but it also says as in paragraphs nine point one and ten point two and this is at the supplemental excerpts of record twenty three and twenty four that while the plan can be amended or withdrawn no amendment shall diminish or limit and a claim for any benefit to which the correct but the contract is administered by line which is you know cigna group insurance is parent company and they administer this like any other disability policy and the other disability plan miss factor when she became disabled due to severe abdominal pain arising from her prior surgeries filed a claim with cigna a disability claim no different and any other disability claim and then cigna reviewed her claim and denied it  bad faith she then filed an appeal and they reviewed that and again denied it in bad faith and these are the facts for this court because this is a rule twelve c twelve b six motion to dismiss and you know this policy was there to protect her it's the net that's supposed to catch her when she falls the branch she grabs before she hits the ground you and i had an argument about just looking in my notes here and my in my notes the argument about whether the plan is a contract the argument that i have in my notes is that you were relying on the admissions that leo made in the it's a good answer did you make the this argument that sections nine point one in ten point two of the plan indicate that it is a contract out withstanding its disclaimer i did in the oral argument i didn't  i don't believe so it is in the record and i don't recall i recall that the district court said can't they withdraw the plan and i said they can but the plan says that once somebody files a claim they can no longer withdraw the plan as to that contract because that was well pleaded allegation just part of her employment contract correct is a part of her employment contract or is a contract in other words is there an employment contract between her and honeywell and you're saying that the plan is a term of saying is that argument is not actually made in your briefs and it wasn't made at the district court either now they argue that they did honeywell argue that it was not a player in the contract and there in their answer they denied that the plant was a contract l that correct was there or was there any place where they went back to their original state you know in one of the in their their answering brief they say we prevailed on the tortious interference contract or for administering because we were the agent for hire to administer this contract but they've never said this is a contract but that that wasn't an issue at the district court so it's an issue that that's not properly before this court because they admitted it really looking at that the plan as a as a separate and distinct contract is the plan part of the overall employment it's part of the overall employment benefits package  and it's a it's a salary continuation element but it has a disclaimer in it so i also didn't see any briefing about what is the effect of this disclaimer whether it's part of  i guess implied in fact employment contract since it's out well you know so help me with that understand that yes so if whether a contract or an agreement modifies at will employment is a question of fact it's not an argument that's been developed and so if the court has questions about that i think the price is a question of fact the arizona case is look at a so that legal standards for when  that wasn't an issue that was raised that you're saying that it's isn't a mosque that's yeah yeah and i can you point me to the place and that opinion that yeah it's ninety four piece econd at eleven forty one to forty two and this is what it says whether an implied in fact contract covering layoffs seniority rights had been created remain the question of fact precluding summary judgment on that issue and then the like fault case which is six eighty eight p second at one seventy four whether any particular personal manual modifies any particular employment at will relationship becomes part of the employer particular employment contract is a question of fact no we're only in the complaint to this effect because this was a the in the complaint your honor because we alleged it's a contract you know everybody operated on the notion that it was a drug right and it could be withdrawn at any point is that  at the motion to the motion for judgment on the pleadings was it argued in the in line is motion for judgment on the pleadings that there was no contract here no they said for the how do you think if their their motion their argument they made one argument to the district court this is not an insurance contract there can be no bad faith that was their argument and the district court agreed holding arizona's not recognized bad faith quote outside the insurance contract context and that's the issue that's on appeal is whether arizona because that was the basis for the district court's holding is whether arizona recognizes bad faith quote outside so for purposes of the motion for judgment on the pleading it was assumed that there was a contract of some sort correct your honor and it's in line as motion several times that you know for purposes of not was not an issue i mean it doesn't insurance i wasn't sure it's right they say this is not insurance in the classical sense and you know their argument was outside of an insurance contract no bad faith and that's not what arizona l comp insurance is right right right so are you saying that this is the same as worker's comp insurance when i'm sure it's not identical but the policy the purpose the function of the plan is essentially the same it's that safety net when arizona law is this something that we should certify the question we should certify there is the court certainly may i think under rawlings and mendoza and then the more recent arizona case gratis the answer is pretty  clear gratis was the case followed mendoza and helped injury caused by self insured employers bad faith does not occur in the course of employment it arises in the course of the employer's handling of the claim was that a worker medical equipment so the district court singular holding that arizona does not recognize insurance outside recognized by faith outside the insurance contract context is not consistent with arizona law and rawlings makes it clear when you palm promised somebody my name's christina holmstrom and i'm here to argue on behalf of life insurance company of north america essentially there is no way to find an ms that has favor on this appeal without abandoning the payroll practices exemption from arista and finding a duty under arizona law that arizona courts have refused to imposed for thirty three years and i can take those issues in order and unless the court has questions i'll be done it's a pretty simple argument i mean our question is whether if we if we say that there is a it's because if this plan which we sort of assumed for the twelve c motion constituted a contract that's an open issue if this plan is in fact insurance then the plan itself would not fall under the payable practices court explained that the reason congress exempted i think was actually the department of labor exempted payroll practices from rissa is because it's its equivalent to the payment of wages and congress chose not to regulate the payment of wages when they acted a recital i mean that would be a good argument if the question was whether this was covered by arrests or not but i guess i'm i'm still missing why it makes a difference for our analysis of the arizona law because this case was as a people practices claim and accepted a settlement of a wage claim from honeywell the employer and to go back now and argue this isn't wages that it's something other than wages is inconsistent with the relief that you already obtained at the district court level nonetheless the allegations are in the complaint right the allegations are in the complaint that it was with this way the case started correct it is except that it was it was played as a peer will practice claim and it was put under state law theories only and in our motion to our motion to dismiss i think actually in the reply we pointed out that the theory of wages versus it is insurance that she was alleging or internally inconsistent it's the same argument we're making on appeal and at the oral argument what i told judge tucci was if we're going to really go down this road and call this insurance that and line and needs a chance to amend its answer to assert preemption because we're going to let me ask you this i mean for purposes of it does not have to be pure insurance in the sense of what you and i typically think of as insurance which is an insurance company writes you a policy because you've applied for insurance but in almost all of the cases that are cited what you have is a relationship where some party has agreed to step into the shoes of an insurance company a classic example is the line of workers compensation cases where employers will separately and apart from the employment relationship take on the duty to provide an insurance policy essentially to their injured workers there are also some cases in the briefs that dealt with vehicle warranties and in that situation the vehicle warranty company had agreed to provide insurance it was insurance like enough that it was stepping into the shoes of an insure so no it doesn't have to be a strict this is an insurance policy like you have homeowners but all the cases that talk about it really are insurance like enough and again to to avail herself of the payroll practices exemption mi term disability honeywell offered a salary continuation plan so she in her mind she had to say this is just nothing more than sour that which is in order for it to be a payroll practices claim exactly so so were we but it's sufficiently similar raises similar equitable concerns that to the extent that it's a contract will say that there can't be a tortious breach i mean they wouldn't be foreclosed from saying that with a i don't think that the arizona supreme court would be foreclosed from determining whether such a special relationship existed i do think that it would we would preserve the arguments for the federal court system as to whether that holding has any impact so so in your view if there is a supreme court this sort of agreement for paying for payroll continuation salary continuation creates a special not create a special relationship is there some rule of law as to that it's the very nature of the people practice exemption it is wages it's not the special relationship the united states supreme court has said that if the risk the claimant is suffering is something more than just the loss of wages which is what's necessary to get to that special relationship status then it's not a payroll practices claim it's not a p r practices play and is a short term disability plan subject recession because that was within the scope of what congress has chosen to regulate whereas wages are not and again i think that having settled a wages claim with her employer we're in a very procedurally awkward situation to send it back to the arizona supreme court at this point to determine whether whether there was a contract i guess which would go to the district court but to durham determine whether there is a contract with honeywell who's been settled out of the case and also potentially if  honor continues in a line of thinking you'd end up with a situation where she's potentially limited to a risk claims but has already received compensation for the low wage claim i mean the arizona supreme court could say we think that the employee employer relationship is a special relationship and that for a wrongful discharge claim you're entitled to torrent damages and there's no there's no federal law principle that would preempt that sort of ruling correct correct your honor but this you know the arizona supreme court has said that there is not a special relationship in the employer employee context that came from wagon seller which was thirty three years ago and no case since then and the appellate courts in arizona has gone back on that there simply is not a special relationship between the employer and of whether this was in fact a contract wasn't fully litigated at the district court level i think we've got strong strong argument that there is no contract there but again that be a really awkward argument to make without having won the case because they've already paid the wages and settled out so in conclusion i've got plenty of time left plaintiffs throughout the years an arizona have attempted to import the duty of good faith in the tort context on employers  and the courts have consistently declined to do that there is no reason to expand that law and recognize such a special relationship between ms that her and honeywell here there is no relationship at all between mr acker and line a in this case so that can't be the basis for a to interference claim and i want to address a couple of the points that most backer raised in her and her argument she began by arguing that honeywell made an irrevocable promise to provide her short term disability benefits it didn't as your honor has noted the plan says it's not a contract and in fact it does say that it can be terminated at any time while it does provide that once an employee is receiving th sorts or term disability benefits the benefits can be terminated as to that employee there is certainly no guarantee that the payroll practices point and will continue in perpetuity so it certainly was not in your ethical promise to pay or disability benefits  i think i've already covered this but a line i did not agree in honeywell did not agree that there was a contract i think that's an open question and if and again to stack or did concede that the short term disability plan was lie with arista and unless the court has any further questions i think i've covered all of the points i want to  you just briefly so there's no dispute that for the purposes of this this briefing there's a contract line and admitted that several times already that it was unchallenged and it i believe is quote an open question  not the one that chose to exempt this plan from a risk that was honeywell and if their court finds a special relationship under rawlings which it fits all the criteria for rawlings of a special relationship that doesn't make it a risk whether something is a risk that depends on whether there's a separate fund because the risk that was designed to protect separate funds for employee benefits morass also distinguishes between benefits payable in the normal course like vacation in those paid rationale of rawlings compensation for the harm she suffered when that protection was denied and deterrence against line it is overwhelming here and we think the district court's decision is contrary is on law and should be reversed thank you thank you can also appreciate your arguments this morning in the matter submitted