Scowden v. Industrial Commission

563 P.2d 336, 115 Ariz. 81, 1977 Ariz. App. LEXIS 558
CourtCourt of Appeals of Arizona
DecidedApril 19, 1977
Docket1 CA-IC 1517
StatusPublished
Cited by7 cases

This text of 563 P.2d 336 (Scowden 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
Scowden v. Industrial Commission, 563 P.2d 336, 115 Ariz. 81, 1977 Ariz. App. LEXIS 558 (Ark. Ct. App. 1977).

Opinions

OPINION

OGG, Judge.

This appeal presents two issues. Did the Industrial Commission abuse its discretion when it entered an order disapproving of petitioner Arthur N. Scowden’s petition for a lump sum commútation of his industrial award?

Did the Commission fail to exercise its affirmative statutory duty to either ap[82]*82prove or disapprove of petitioner’s request for a lump sum commutation?

On November 24, 1972, the Commission entered its original Findings and Award for Unscheduled Permanent Partial Disability, finding that petitioner has sustained a compensable industrial disability resulting in a 50-60% reduction in his monthly earning capacity, thereby entitling him to an award of $278.32 per month. Subsequently, in 1976, when petitioner was 66 years old, he filed a petition for lump sum commutation of this award. The petition, which had the approval of the respondent carrier, American Mutual Liability Insurance Company, requested a lump sum commutation in the amount of $25,000. All parties agree the petitioner met the requirements of ARS § 23-1067. After formal hearing the Commission disapproved of the petition and this appeal followed.

The evidence presented at the commutation hearing showed the petitioner had fixed assets of approximately $59,600, with a monthly income, excluding his partial disability benefits, in the sum of $792.05. It was petitioner’s proposal to invest the proceeds of the lump sum commutation of $24,-000 ($25,000 lump sum minus $1,000 attorney fees) into a 7%% ten year bank certificate of deposit. The present value of petitioner’s permanent partial disability award at the time of the hearing was determined to be $31,127.31. Petitioner calculated his current monthly income with his present award to be $1,070.37 and that his monthly income would be reduced to $1,012.05 if the lump sum award were approved.

The petitioner argues that he is now unable to work and that upon his death his wife will lose the benefits of his union pension ($275 per month), present Social Security benefits ($308.20) per month) and his permanent partial disability compensation ($278.32 per month). Upon his death his wife’s monthly income will be reduced to $208.85 per month, whereas if the lump sum commutation were approved she would realize a monthly income of $363.85 with an additional $24,000 payable to her upon the maturity of the certificate of deposit.

No one contends that the petitioner is a spendthrift or that his proposal to deposit the proceeds of the lump sum commutation with First Federal Savings in a ten year certificate of deposit represents an unwise course of business conduct. It appears a commutation of the award to a lump sum would be in the best interest of petitioner’s wife and that it would contribute to the peace of mind of the petitioner and his wife.

It is our opinion that the Commission, in the exercise of its broad discretion in a lump sum commutation, could either approve or disapprove of the commutation to a lump sum under the particular facts of this case. We, however, cannot substitute our judgment for that of the Commission and we must view the evidence in a light most favorable to sustaining the decision of the Commission. Mieucci v. Industrial Commission, 108 Ariz. 194, 494 P. 2d 1324 (1972). We must uphold the orders of the Commission if there is any reasonable evidence to support them. Rutledge v. Industrial Commission, 108 Ariz. 61, 492 P.2d 1168 (1972).

Under the facts of this case we find there is reasonable evidence to support the decision of the Commission. The monthly income to be generated from the lump sum commutation would amount to $58.32 less than the monthly income the petitioner is currently receiving from his award. Our decision in this case is controlled by the recent case of Prigosin v. Industrial Commission, 113 Ariz. 87, 546 P. 2d 823 (1976). In Prigosin the Arizona Supreme Court, under a similar fact situation, held that the Commission’s order denying commutation to a lump sum should be upheld where it is shown that petitioner’s use of the lump sum payment would not generate more income or enable the petitioner to become more self-sufficient. See also Rule 22(b), Rules of Procedure Before the Industrial Commission; Larson, Workmen’s Compensation Law § 82.70 (1976). In the case under consideration a lump sum commutation would generate less income and there is no allegation that the petitioner would become [83]*83more productive or self-sufficient. We therefore must affirm the order of the Commission denying the lump sum commutation.

The petitioner raises one additional matter for consideration in this appeal. Petitioner claims the Commission failed to exercise its affirmative statutory duty to either approve or disapprove of petitioner’s request for a lump sum commutation.

The authority of the Commission to convert an award into a lump sum payment is set out in ARS § 23-1067 (as amended Laws 1973, Ch. 133, § 33), which reads in part:

B. The commission may allow commutation of compensation . . . to a lump sum not to exceed twenty-five thousand dollars, with the consent of the carrier liable to pay the claim, under such rules, regulations and system of computation as it devises for obtaining the present value of the compensation. (Emphasis added)

The pertinent rule adopted by the Commission pertaining to lump sum commutations is Rule 22, Rules of Procedure Before the Industrial Commission, which reads:

(a) If a petition for lump sum commutation is filed in an unscheduled case, the Commission cannot grant such petition unless carrier approves of such petition.
(b) If the Commission has the carrier’s approval, then a primary consideration will be whether more net income per month will be generated after receipt of the lump sum than the applicant is presently receiving. The granting of a lump sum petition is the exception and will only be granted if the facts demonstrate a reasonable basis for financial betterment or rehabilitation of the claimant.
(c) The burden of proving that the commutation of compensation satisfies the criteria in (b) is on the applicant.

After a formal hearing on the petition to commute the award to a lump sum, an order was entered denying petitioner’s request to commute his award to a lump sum and this appeal followed. The relevant portions of the findings and order read:

“FINDINGS
1. That on November 24,1972, this Commission entered its Amended Decision Upon Hearing and Findings and Award for Unscheduled Permanent Partial Disability which entitled applicant to $278.32 monthly, to continue until further order of the Commission.
2. That the present value of said applicant’s award at the time of request was $31,127.31.
3. That at the conclusion of a Hearing for Lump Sum Commutation held on February 4, 1976, it was duly moved and seconded that the petition for commutation be approved. The four commission members present voted two for the motion and two against, accordingly the motion failed for want of a second.
ORDER

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Bluebook (online)
563 P.2d 336, 115 Ariz. 81, 1977 Ariz. App. LEXIS 558, Counsel Stack Legal Research, https://law.counselstack.com/opinion/scowden-v-industrial-commission-arizctapp-1977.