Arizona Southern Coach Lines, Inc. v. Industrial Commission

758 P.2d 656, 157 Ariz. 385, 12 Ariz. Adv. Rep. 8, 1988 Ariz. App. LEXIS 239
CourtCourt of Appeals of Arizona
DecidedJuly 5, 1988
DocketNo. 1 CA-IC 3711
StatusPublished

This text of 758 P.2d 656 (Arizona Southern Coach Lines, Inc. v. Industrial Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arizona Southern Coach Lines, Inc. v. Industrial Commission, 758 P.2d 656, 157 Ariz. 385, 12 Ariz. Adv. Rep. 8, 1988 Ariz. App. LEXIS 239 (Ark. Ct. App. 1988).

Opinion

OPINION

FIDEL, Judge.

The petitioner employer (ASCL), acting in the name of the respondent employee (Potter), alleged before the Arizona Industrial Commission that the respondent carrier (Fund) had improperly discontinued compensation payments to Potter. ASCL requested that the Commission investigate pursuant to A.R.S. § 23-1061(J), which provides in relevant part:

The commission shall investigate and review any claim in which it appears to the commission that the claimant has not been granted the benefits to which such claimant is entitled. If the commission determines that payment or denial of compensation is improper in any way, it shall hold a hearing ... after receiving notice of such, impropriety.

Potter himself did not seek continued benefits and, despite having accepted substantial compensation payments from the Fund, has not personally filed a written claim for benefits with the Commission. The administrative law judge dismissed ASCL’s request without a hearing because of procedural and jurisdictional defects. We affirm.

Facts:

ASCL provided bus transportation to workers employed at the Palo Verde nuclear project in Arizona. The Fund was its workers’ compensation carrier. In approximately 1981, ASCL began a similar operation in California at the Diablo Canyon nuclear project. ASCL disclosed this operation to the Fund and represented that the employees working in California were hired in Arizona.

Potter, a California resident with a California driver’s license, became familiar with ASCL’s Diablo Canyon operation and personnel while working at a nearby California truck stop. Potter submitted an employment application to ASCL’s on-site supervisor, who locally tested Potter’s driving skills. Potter was hired in late April or early May, 1983. ASCL and the Fund dispute the place of hiring, though Potter states that it was California. Except for one trip to Phoenix to deliver a bus, Potter worked exclusively in California.

In July 1984, the Fund sent ASCL a standard form “out-of-state” notice, advising of limits to its coverage. The Fund indicated (1) that it covered out-of-state injuries only for employees hired in Arizona and temporarily working out-of-state, see generally A.R.S. § 23-981(A) (effective January 1, 1984); and (2) that it covered employees hired out-of-state only for injuries occurring in Arizona and only upon the filing of a claim for benefits in Arizona. See generally DiMuro v. Industrial Comm’n, 142 Ariz. 57, 688 P.2d 703 (App.1984). The Fund recommended that ASCL obtain additional coverage both for employees hired out-of-state and for employees working out-of-state. ASCL did not obtain such coverage for its California operation.

On November 26, 1984, the Fund received an ASCL supervisor’s report, indicating that Potter claimed to have injured his back in a work-related incident in California on October 26, 1984. Both Potter and the supervisor signed this report. The next day, the Fund received a call from ASCL’s bookkeeper regarding a standard form employer’s report of injury that the bookkeeper had prepared based on the supervisor’s report. During this call, the bookkeeper allegedly represented that Potter had been hired in Arizona, was tempo[387]*387rarily working in California, and had not filed a California claim for compensation. On November 29, 1984, ASCL filed the employer’s report with the Commission. It also sent a copy to the Fund.

On December 7, 1984, though Potter had submitted no claim form of his own, the Fund issued a notice of claim status accepting the compensability of Potter’s “claim.” On December 10, 1984, the Commission responded to the employer’s report by soliciting a claim for benefits from Potter. See generally A.R.S. § 23-1061(C). Potter neither responded to this nor to a subsequent request. In the meanwhile, he had retained California counsel and filed a California compensation claim for the October 26, 1984, injury. On December 11, 1984, the Fund received a copy of this cláim.

After issuing the acceptance notice, the Fund supplied the Commission with wage information. Based on this information, the Commission issued a determination of average monthly wage. The Fund also paid Potter compensation benefits, including extensive medical benefits for back surgery purportedly related to the October 1984 injury. It initially maintained that these payments were for an Arizona claim under Arizona law, but it subsequently acknowledged that Potter had not filed for Arizona benefits and that both states might have jurisdiction.

On July 15, 1985, the Fund received a copy of Potter’s application for California penalty benefits for serious and willful employer misconduct. This triggered an investigation, which ultimately led the Fund to doubt that Potter had been hired in Arizona. It requested information from Potter, who responded that he had been hired in California for a temporary position and that, over a year later, ASCL had offered him work in Arizona if it discontinued the Diablo Canyon operation. The Fund’s chief counsel promptly ordered discontinuation of further compensation to Potter. By this time, the Fund had paid some $46,000 in disability and medical benefits. The Fund filed no notice of claim status. Instead, on August 8, 1985, the Fund’s chief counsel wrote ASCL demanding reimbursement of these payments, asserting that the Fund had erroneously paid benefits on ASCL’s behalf based on “misrepresentations” that Potter was hired in Arizona, temporarily working in California, and had not filed a California compensation claim.

Potter did not protest or otherwise respond to the Fund’s discontinuation of benefits. On December 13, 1985, however, ASCL requested a Commission investigation under A.R.S. § 23-1061(J). This request, which names Potter as the applicant and ASCL and the Fund as defendants, asserted that the Fund “has failed or refused to pay compensation to claimant on [ASCL’s] behalf as required by law____” To support this assertion, ASCL noted that the Fund’s acceptance notice had become final; “yet the ... Fund persists in refusing to pay benefits to claimant.”

The Commission sua sponte raised the fact that Potter had not filed a claim and initially recommended rejecting ASCL’s unorthodox request. However, it ultimately referred the matter for hearing. The presiding administrative law judge set a hearing and a pre-hearing conference. Potter and his California attorney were served with both notices, but they were excused from attending the pre-hearing conference. In a May 15, 1986, letter to the administrative law judge, the California attorney wrote that Potter “was hired in California, to work in California, and was injured in California.” The attorney included documents relating to Potter’s California claim and noted, “At the hearing in November of 1985, the attorney appearing on behalf of Arizona Southern Coach Lines made no assertion as to a lack of jurisdiction in California relative to this claim.”

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Related

Evertsen v. Industrial Commission
573 P.2d 69 (Court of Appeals of Arizona, 1977)
Evertsen v. Industrial Commission
572 P.2d 804 (Arizona Supreme Court, 1977)
DiMuro v. Industrial Commission
688 P.2d 703 (Court of Appeals of Arizona, 1984)

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Bluebook (online)
758 P.2d 656, 157 Ariz. 385, 12 Ariz. Adv. Rep. 8, 1988 Ariz. App. LEXIS 239, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arizona-southern-coach-lines-inc-v-industrial-commission-arizctapp-1988.