St. Luke's Hosp., cna/insurance v. Indus. Com'n

559 P.2d 674, 114 Ariz. 118, 1976 Ariz. App. LEXIS 728
CourtCourt of Appeals of Arizona
DecidedNovember 18, 1976
Docket1 CA-IC 1507
StatusPublished
Cited by5 cases

This text of 559 P.2d 674 (St. Luke's Hosp., cna/insurance v. Indus. Com'n) 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
St. Luke's Hosp., cna/insurance v. Indus. Com'n, 559 P.2d 674, 114 Ariz. 118, 1976 Ariz. App. LEXIS 728 (Ark. Ct. App. 1976).

Opinions

OPINION

JACOBSON, Judge.

On review of this workmen’s compensation award, two distinct issues are raised: (1) Whether the hearing officer’s determination that the settlement agreement submitted to the Industrial Commission was “void”, was contrary to law and (2) whether the hearing officer erred in determining that the carrier was estopped to raise the issue of an untimely Request for Hearing on a Notice of Claim Status which denied the claim.

On November 13, 1970, respondent Shirley E. Ritchey filed a claim with the Industrial Commission alleging that she had suffered a lower back injury on October 13, 1970, while in the employ of petitioner employer, St. Luke’s Hospital.

On November 25, 1970 the carrier, CNA/Insurance, issued its Notice of Claim Status denying the claim for benefits. Subsequently, the carrier and claimant Ritchey entered into negotiations regarding the claim. On February 4, 1971, both the claimant and her husband entered into a settlement agreement with the carrier.

This settlement agreement was submitted to the Industrial Commission for approval; however, the agreement was returned to the carrier with the explanation that the Commission lacked jurisdiction with regard to the claim because the claimant had not filed a protest to the denial issued on November 25, 1970. Shortly thereafter, the carrier paid to the claimant and her husband the sums set forth in the agreement.

On September 16, 1971 the claimant had a laminectomy performed on her back, and filed a Petition to Reopen. The carrier denied this Petition to Reopen on September 25, 1971 and thereafter no Request for Hearing was made regarding this denial.

On April 11, 1975 the claimant filed a Petition to Reopen and had a hemilaminectomy performed on her back on April 22, 1975. The carrier issued a denial of this Petition to Reopen on June 27, 1975. A Request for Hearing directed to this denial was filed on July 2, 1975.

Because the carrier contended that its Notice of Claim Status denial of the original claim filed in 1970 became res judicata for lack of a Request for Hearing, and thus there was nothing to “reopen”, the hearing was directed solely to the issue of the Commission’s jurisdiction in the matter.

On December 31, 1975, the hearing officer rendered his decision, which held that the Commission had jurisdiction over the matter. In doing so, he held that the settlement agreement entered into in 1970 was void by reason of A.R.S. § 23—1025. He further treated the Petition to Reopen as a Request for Hearing on the original denial of claimant’s 1970 claim. He then held that the carrier was estopped to raise the issue of the untimeliness of the Request for Hearing.

The carrier timely petitioned for review, coupled with a request that the settlement agreement be approved by the Commission. The hearing officer then issued a supplemental decision which, in essence, approved the prior decision but held the settlement was void “as not having been approved by the Industrial Commission and the agreement cannot block further consideration by the Commission of the applicant’s claim for benefits.” This Special Action—Industrial Commission followed.

[120]*120It is first apparent that the hearing officer has misconstrued the law concerning the effect of A.R.S. § 23-1025 1 on settlement agreements and the effect of the failure of the Commission to approve such agreements.

This court construed A.R.S. § 23-1025 and settlement agreements in Gray v. Industrial Commission, 24 Ariz.App. 499, 539 P.2d 973 (1975) and Vigil v. Industrial Commission, 24 Ariz.App. 496, 539 P.2d 970 (1975) and held that where compensability is in issue, settlement agreements, submitted to the Commission for consideration are “voidable” because of non-approval and not “void”. The mode of analysis presented by reading Gray and Vigil in tandem when applied to the instant facts, is dispositive of the settlement agreement issue presented by the hearing officer’s decision.

In considering the jurisdiction of the Industrial Commission to approve or disapprove settlement of a workmen’s compensation claim when there is a legitimate controversy regarding compensability, the Gray court relied on the scope and criteria set forth in Brigham Young University v. Industrial Commission, 74 Utah 349, 279 P. 889 (1929), which delineated the «issue of genuineness and bona fides of the parties regarding the issue of compensability.

In construing a statute prohibiting an agreement by an employee to waive his rights to compensation almost identical to A.R.S. § 23-1025 the Brigham Young court stated as follows:

“We have examined the record, not for the purpose of determining whether the award should be affirmed or annulled, but to ascertain whether the claim of the parties is well founded, and whether on the record the right of recovery is uncertain, and for the purpose of ascertaining the bona fides of the parties, and whether there were good grounds justifying a settlement. We find such to be the case. Indeed, on the record it may well be said that the right to recover is quite doubtful. The making of a settlement under such circumstances is not detrimental to the interests of the state or of the public. It rather subserves such interest. The right of parties sui juris to settle their own controversy and avoid litigation is a valuable and absolute right and may be exercised by them under all circumstances, unless the state, under a proper exercise of police power, has circumscribed, restricted, or prohibited it. Holding as we do that no such inhibition or restriction either expressly or by necessary implication is manifested by the act, we think the parties had the undoubted right to make the settlement which was made by them.” 279 P. at 893.

Moreover, the Gray court, supra, 539 P.2d at 977, found no prohibition of settlement in our statutes when compensability is in dispute.

We are faced here with the first difficulty presented by the hearing officer’s decision. At the time the hearing was held in this matter, it was not directed to a determination of whether the Commission should approve or disapprove the settlement agreement, rather it was directed to the jurisdiction of the Commission to hear the matter at all. As a consequence, the evidentiary foundation dealing with whether the compensability of claimant’s claim was legitimately in dispute was simply not gone into by the parties. The evidence surrounding the settlement agreement was whether its existence had an effect on the claimant’s failure to request a hearing on the carrier’s denial of the initial claim.

Only after the hearing officer by his decision had held the settlement void was the approval of the settlement placed in issue [121]*121by the carrier’s Petition for Review.

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St. Luke's Hosp., cna/insurance v. Indus. Com'n
559 P.2d 674 (Court of Appeals of Arizona, 1976)

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Bluebook (online)
559 P.2d 674, 114 Ariz. 118, 1976 Ariz. App. LEXIS 728, Counsel Stack Legal Research, https://law.counselstack.com/opinion/st-lukes-hosp-cnainsurance-v-indus-comn-arizctapp-1976.