State Compensation Fund v. Superior Court

466 P.2d 802, 11 Ariz. App. 583, 1970 Ariz. App. LEXIS 555
CourtCourt of Appeals of Arizona
DecidedMarch 23, 1970
DocketNo. 2 CA-CIV 819
StatusPublished
Cited by1 cases

This text of 466 P.2d 802 (State Compensation Fund v. Superior Court) 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
State Compensation Fund v. Superior Court, 466 P.2d 802, 11 Ariz. App. 583, 1970 Ariz. App. LEXIS 555 (Ark. Ct. App. 1970).

Opinion

KRUCKER, Judge.

An order of the respondent court denying the State Compensation Fund’s [585]*585motion to dismiss a third party complaint is the subject of review in this special action. Since it is an interlocutory non-appealable order, A.R.S. § 12-2101, as amended; Bloch v. Bentfield, 1 Ariz.App. 412, 403 P.2d 559 (1965), appellate intervention is appropriate when a trial court’s refusal to dismiss constitutes an unauthorized assumption of judicial power. Industrial Commission v. Superior Court in and for County of Pima, 5 Ariz.App. 100, 423 P.2d 375 (1967); Rule 3, Rules of Procedure for Special Actions, 17 A.R.S. We therefore accept jurisdiction.

The chronology of events which gave rise to this proceeding is as follows. In 1967, respondent Greene was injured in an automobile accident while in the employ of an insured employer under the Workmen’s Compensation Act. He filed for Workmen’s Compensation benefits and his claim was accepted by the petitioner Fund. Greene thereafter filed an “election of remedies” pursuant to A.R.S. § 23-1023, subsec. C, as amended, and in 1968, filed suit, Cause No. 105791, against the third party tortfeasor, Mrs. Carlson and her husband. (Respondent Healy appeared as attorney for Greene.) Prior to this lawsuit, Greene had received benefits from the petitioner in the total amount of $2,290.34. (Medical expenses of $947.75 and compensation of $1,344.59.) The petitioner Fund was not a party to this lawsuit.

The personal injury litigation resulted in a judgment entered on March 7, 1969, in favor of Greene in the amount of $10,000, plus costs. He subsequently filed a satisfaction of judgment in said amount on April 8, 1969. On August 14, 1969, the superior court issued the following order to show cause in Cause No. 105791:

“Upon reading and filing of Notice of Attorney’s Lien, it is hereby
ORDERED that the Industrial Commission of Arizona now known as the State Compensation Fund show cause on * * * why WILLIAM T. HEALY, should not be compensated in the sum of 33J/3 per cent, being the sum of $763.33 as attorney’s fees for the recovery of funds for the State Compensation Fund of Arizona and why the Plaintiff should not be reimbursed 33yí per cent of the costs paid by the Plaintiff in this matter in the sum of $426.53 as -costs advanced and for sitch other and further relief as is just.”

The State Compensation Fund moved to quash the order to show cause and at the hearing on its motion obtained the requested relief. The minute entry of said hearing reflects the following additional order:

“IT IS FURTHER ORDERED that the Plaintiff have leave to file a third-party complaint against the State Compensation Fund of Arizona and serve said party in accordance with the statutes for the purpose of making an adjudication with respect to the Amended Notice of Attorney’s Lien and Petition for Order to Show Cause filed herein this date and the matters therein contained.”

A “Complaint in Interpleader” was subsequently filed in Cause No. 105791 by another attorney on behalf of the plaintiff. This pleading, in substance, alleged that: the court had jurisdiction over the controversy by virtue of the plaintiff depositing the sum of $2,290 with the clerk of the superior court; the plaintiff had accepted from the State Compensation Fund accident benefits and compensation in .the sum of $2,290; he had elected to bring an action against the tortfeasor and had obtained a judgment in the sum of $10,000; he had expended the sum of $1,279.60 as costs of litigation and attorneys’ fees in the amount of $3,333.33; and the State Compensation Fund had demanded reimbursement of the sum of $2,290, but had refused to share pro rata in the foregoing costs and attorneys’ fees. The prayer for relief requested judgment in favor of the plaintiff and against the State Compensation Fund in the sum of $1,279.60 for costs and the sum of $763.33, one-third of the actual attorneys’ fees expended in securing the recovery of $2,290 for the State Compensation Fund.

[586]*586The State Compensation Fund moved to dismiss the plaintiff’s complaint in inter-pleader on several grounds, including:

******
“3. That Plaintiff’s Complaint in Interpleader fails to state a claim upon which relief can be granted against this Defendant because Plaintiff is not subject to double or multiple liability as required by Rule 22(a), Rules of Civil Procedure.
4. That Plaintiff’s Complaint in Interpleader fails to state a claim upon which relief can be granted against this Defendant because Plaintiff is an improper party to bring such an action under the provisions of Rule 14, Rules of Civil Procedure.”

We believe these objections were well-taken and the trial court erred in denying the motion to dismiss. Rule 14(b), Arizona Rules of Civil Procedure, 16 A.R.S., provides:

“When plaintiff may bring in third party. When a counterclaim is asserted against a plaintiff, he may cause a third party to be brought in under circumstances which under this Rule would entitle a defendant to do so.” (Emphasis supplied)

As a third party complaint, we believe the plaintiff’s pleading is defective. Rule 14 may be used to implead one who is or may be “secondarily” liable to the third party plaintiff for all or part of a claim asserted against the latter. Ross v. Erie Railroad Company, 18 F.R.D. 9 (N.D.Pa. 1955). Rule 14(b) places a plaintiff in the same position as a defendant under Rule 14(a) when a counterclaim is filed and therefore a plaintiff must likewise allege that the third party defendant will be liable over to the plaintiff for all or part of the defendant’s claim against the plaintiff. Kaiser Aluminum & Chemical Sales, Inc. v. Ralston Steel Corporation, 25 F.R.D. 23 (N.D.Ill.1959). As stated in United States v. Joe Grasso & Son, Inc., 380 F.2d 749 (5th Cir. 1967) :

“The question whether a defendant’s demand presents an appropriate occasion for the use of impleader or else constitutes a separate claim has been resolved consistently by permitting impleader only in cases where the third party’s liability was in some way derivative of the outcome of the main claim. In most such cases it has been held that for impleader to be available the third party defendant must be ‘liable secondarily to the original defendant in the event that the latter is held liable to the plaintiff.’ [Emphasis added] Holtzoff, Entry of Additional Parties in a Civil Action, 31 F.R.D. 101, 106 (1962). Accord, Cass v. Brown, 41 F.R.D. 284, 286 (D.Colo.1966) ; National Fire Ins. Co. v. Daniel J. Keating Co., 35 F.R.D. 137, 139 (W.D.Pa.1964). Stating the same principle in different words, other authorities declare that the third party must necessarily be liable over to the defendant for all or part of the plaintiff’s recovery, 1A Barron & Holtzoff, Federal Practice and Proc. Sec. 426, at 664-669, or that the defendant must attempt to

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Bluebook (online)
466 P.2d 802, 11 Ariz. App. 583, 1970 Ariz. App. LEXIS 555, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-compensation-fund-v-superior-court-arizctapp-1970.