Unisource Corp. v. Industrial Commission

909 P.2d 1088, 184 Ariz. 451, 206 Ariz. Adv. Rep. 32, 1995 Ariz. App. LEXIS 285
CourtCourt of Appeals of Arizona
DecidedDecember 28, 1995
DocketNo. 1 CA-IC 94-0115
StatusPublished
Cited by5 cases

This text of 909 P.2d 1088 (Unisource Corp. 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
Unisource Corp. v. Industrial Commission, 909 P.2d 1088, 184 Ariz. 451, 206 Ariz. Adv. Rep. 32, 1995 Ariz. App. LEXIS 285 (Ark. Ct. App. 1995).

Opinion

OPINION

FIDEL, Judge.

Our workers’ compensation statute provides in certain cases for payment by the Special Fund Division of the Industrial Commission of a portion of the disability compensation of an injured worker whose permanent disability and loss of earning capacity are attributable to the combined effects of present and preexisting permanently disabling injuries. This case concerns a compensation carrier’s untimely claim for such a contribution by the Special Fund.

Under Arizona Revised Statutes Annotated (“A.R.S.”) § 23-1065(D), a carrier who wishes to claim apportionment from the Special Fund shall notify the Commission of its claim at the time the carrier issues a notice of permanent partial disability pursuant to A.R.S. § 23-1047(A).1 The carrier did not meet this deadline. Under Commission rules, one party may seek to join an interested party in a pending proceeding by applica[453]*453tion to the presiding administrative law judge (“ALJ”) “at least 30 days prior to the date set for any hearing.” Arizona Administrative Code (“A.A.C.”) R20-5-150 (“Rule 150”).2 The carrier did not attempt to join the Special Fund as an interested party within this deadline either. Instead, the carrier waited until the date of a hearing concerning the Commission’s loss-of-earning-eapacity determination and then raised the subject of apportionment orally before the ALJ and by letter to the Chief Counsel of the Commission. The ALJ ruled that the carrier had forfeited its apportionment claim by failing to pursue it in a timely manner.

The first question presented is whether a carrier who has not notified the Commission of its apportionment claim pursuant to A.R.S. § 23-1065(D) is obliged to seek joinder of the Special Fund pursuant to Rule 150. We answer this question in the affirmative.

The second question presented is whether the carrier’s failure to seek timely joinder obliged the ALJ to dismiss the carrier’s claim. We answer this question in the negative. We conclude that the ALJ had discretion under A.A.C. R20-5-157 (“Rule 157”) to impose the sanction of dismissal, to impose a lesser sanction, or to relieve the carrier of any sanction. Because the ALJ in this case treated noncompliance as an absolute bar and did not recognize or exercise his discretion, we set aside the order denying apportionment. We make no suggestion, however, how such discretion should be exercised at the hearing de novo.

I.

In August 1991, Guy T. Campo, respondent employee, injured his right shoulder, neck, and right leg in an industrial accident. Campo’s treating physician discharged him in July 1993 with a 30% permanent impairment to the “right arm.”3 Before the present injury, Campo had undergone an industrial knee injury, for which he had required a knee replacement; Campo also suffered from degenerative arthritis of the hip and a significant leg length disparity dating back to a hip fracture he had sustained as a boy.

In July 1993, Liberty Mutual, the petitioner carrier, filed with the Commission a “notice of permanent disability and request for determination of benefits” pursuant to section 23-1047, but did not describe the disability as apportionable under section 23-1065. In November 1993, the Commission issued a permanent disability determination, attributing to Campo a 58.73% loss of earning capacity. Both Campo and Liberty Mutual filed timely requests for hearing.

At the scheduled hearing on March 28, 1994, Liberty Mutual first raised the issue of apportionment, attributing its failure to do so earlier to the claimant’s inadequate compliance with discovery.4 Only claimant’s testi[454]*454mony was scheduled on that date, and the ALJ deferred ruling on apportionment until the Special Fund had been notified and given an opportunity to respond.

The next day, Liberty Mutual notified the Chief Counsel of the Commission by letter of its intent to claim apportionment. On March 30, the Special Fund denied the request for apportionment and argued that “any request for joinder at this stage of the proceedings” was untimely under Rules 150 and 1325 and AR.S. § 23-1065(C). On March 31, Liberty Mutual replied that, because the claim was appropriate for apportionment and the Special Fund was not prejudiced by the late notice, the Special Fund “should be added as a party.” On April 1, the ALJ denied apportionment because it was not timely requested under A.R.S. § 23-1065(D) and Rules 150 and 132. Liberty Mutual’s request for administrative review was denied.

II.

The parties debate whether the carrier’s failure to comply with A.R.S. § 23-1065(D) and Rule 132 causes forfeiture of its statutory entitlement to apportionment. This court, however, settled that issue in Special Fund Division v. Industrial Comm’n, when we found that “a carrier’s failure to provide timely notice of its intent to claim apportionment would [not] necessarily bar the carrier from asserting [the] claim at a later time.” 182 Ariz. 341, 344, 897 P.2d 643, 646 (App. 1994) [hereinafter Morin ]. There is no need to revisit that issue in this case.

We turn instead to a question left open by Morin. How other than by notice under section 23-1065(D) may a carrier formally present the question of apportionment and provide the Special Fund an opportunity to respond? More specifically, must a carrier that fails to comply with section 23-1065(D) apply to join the Special Fund as an interested party under Rule 150? We hold that it must.

Liberty Mutual argues that it had no duty to seek joinder under Rule 150 because notice to the Commission under section § 23-1065(D) eliminates such a need. The flaw in this argument is that Liberty Mutual did not give notice under section 23-1065(D). Had it done so, it could indeed have dispensed with joinder; timely notice under section 23-1065(D) suffices by itself to make the Special Fund a party and requires the Industrial Commission to adjudicate both the claim for permanent disability compensation and the apportionment claim in the same award. When, however, as in this case, statutory notice is not provided, Morin necessarily contemplates some alternative means of raising the issue of apportionment and providing the Special Fund an opportunity to respond. And as the Special Fund unquestionably is an interested party, the sole and obvious means provided by Commission rule is to move for joinder under Rule 150.

We must therefore address the effect of Liberty Mutual’s untimely request for joinder of the Special Fund.

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Bluebook (online)
909 P.2d 1088, 184 Ariz. 451, 206 Ariz. Adv. Rep. 32, 1995 Ariz. App. LEXIS 285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/unisource-corp-v-industrial-commission-arizctapp-1995.