Washington Elementary School District v. Industrial Commission

993 P.2d 468, 196 Ariz. 67, 312 Ariz. Adv. Rep. 16, 2000 Ariz. App. LEXIS 3
CourtCourt of Appeals of Arizona
DecidedJanuary 13, 2000
DocketNo. 1CA-IC98-0191
StatusPublished
Cited by3 cases

This text of 993 P.2d 468 (Washington Elementary School District 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
Washington Elementary School District v. Industrial Commission, 993 P.2d 468, 196 Ariz. 67, 312 Ariz. Adv. Rep. 16, 2000 Ariz. App. LEXIS 3 (Ark. Ct. App. 2000).

Opinion

OPINION

BERCH, Judge.

¶ 1 In this statutory special action we review an award granting a workers’ compensation claimant additional disability compensation. The question presented is whether, once the claimant’s injury is determined to be work-related and therefore compensa-ble by workers’ compensation, an employer is entitled to reimbursement from the claimant’s workers’ compensation benefits for all short-term disability payments made to her or only for those payments that could be deducted from her workers’ compensation benefits during each month in which she received such benefits. Because we conclude that Arizona law requires reimbursement from workers’ compensation benefits received of all disability benefits paid, see Ariz. Rev.Stat. Ann. (“A.R.S.”) § 23-1068(B) (1995), we set aside the award and decision upon review.

FACTUAL AND PROCEDURAL HISTORY

¶ 2 Respondent Employee Kathleen Whitney (“Claimant”), a physical education teacher, injured her back while working for Petitioner Employer, Washington Elementary School District. In December of 1996, Claimant suffered a flare-up of a back injury for which she requested workers’ compensation benefits in January 1997. The claim was denied and Claimant timely protested.

¶ 3 Because her claim for workers’ compensation benefits had been denied, Claimant requested short-term disability benefits under the District’s short-term disability (“STD”) insurance plan for its employees. That plan provided insurance benefits for “nonoceupational injuries]” and made the receipt of short-term disability benefits and workers’ compensation benefits mutually exclusive — that is, one could not receive both.

¶ 4 Claimant received STD benefits from March 4, 1997, through June 6, 1997, when the school term ended, and from September 17, 1997, when the new term began, until October 17, 1997, when her back condition was determined to be a compensable work-related injury and her short-term disability [69]*69benefits were terminated. From March through October, 1997, Claimant received STD payments totalling $10,229.18. The workers’ compensation award entitled Claimant to temporary total disability payments of $1200.00 per month for the period from January 21,1997 until October 17,1997, for a total of $11,033.98; but she was notified that she would receive only $804.80 and the District would receive $10,229.18 as reimbursement for the STD payments it had made to Claimant,1 pursuant to the authority in A.R.S. section 23-1068(B).

¶ 5 Claimant requested that the Commission investigate whether the ordered reimbursement was excessive. See A.R.S. §§ 23-1061(J) (1995) (authority to investigate), 23-1068(B) (reimbursement of STD payments). Following hearings and the submission of post-hearing memoranda, the administrative law judge (“ALJ”) issued an award granting Claimant $4724.54 additional temporary disability compensation.

¶ 6 The award was affirmed on administrative review. The District then timely filed a special action petition. This Court has jurisdiction pursuant to A.R.S. sections 12-120.21(A)(2) (1992) and 23-951(A) (1995), and Rule 10 of the Arizona Rules of Procedure for Special Actions.

DISCUSSION

¶ 7 The District’s short-term disability insurance policy provides temporary payments for injuries or illnesses that are not work related.2 It specifically excludes from coverage those claims that result from work-related injury or illness because those claims are compensable by workers’ compensation. See A.R.S. §§ 23-901 (1996) (workers’ compensation scope and definitions), 23-1021 (Supp. 1997-1998) (right of employee to compensation). Thus, when Claimant’s injuries were found, at her request, to be compensable work-related claims, she became ineligible for disability benefits under the District’s insurance policy and responsible to repay any amounts she received as STD payments or allow the District to retain those amounts from the workers’ compensation benefits to which she was entitled. To effectuate the reimbursement, the District withheld funds from Claimant’s workers’ compensation benefits, relying for its authority to do so on A.R.S. section 23-1068(B), which provides as follows:

[I]f ... disability benefits are paid or otherwise provided by an employer to ... an employee for an injury ... for which medical or compensation benefits payable pursuant to this article have been denied ..., and such injury ... is subsequently determined to be compensable under this article, such employer ... shall be entitled to a direct payment out of, or a direct credit against, the medical or compensation benefits payable under this article in the amount of the benefits previously paid or provided....

¶ 8 Section 23-1068(B) applies whenever disability benefits have been paid for disabilities for which workers’ compensation benefits were initially denied but later granted, a situation that occurred in this case. The question before us is whether the statute requires reimbursement of disability payments to the employer from an employee’s workers’ compensation benefits even in those months during which the employee did not receive STD payments, if such payments are necessary to fully reimburse the employer for STD benefits paid. The ALJ determined that the answer was “no.” We disagree.

¶ 9 Claimant contends that once her claim was initially determined not to be work related, she became eligible for STD benefits. She interprets A.R.S. section 23-1068 and the District’s insurance plan as requiring reimbursement only of the $1200.00 per month in workers’ compensation benefits for which she was later determined to be eligible, for the months in which she also received an STD payment. Thus, according to Claimant, for the months in which [70]*70she did not receive disability benefits but received workers’ compensation benefits, the District could offset nothing; and for the months in which Claimant received disability benefits less than $1200.00, the District could offset only the actual amount of disability benefits paid in that particular month. Claimant maintains that the District’s insurance plan authorizes her to keep the additional STD benefits paid. Because the District had offset the total amount of disability benefits paid to Claimant, regardless of the month in which the payment was received, the ALJ awarded Claimant $4724.54. We conclude that the statute and public policy compels a different result.3

¶ 10 .Claimant advances two arguments in support of her position. The first is that this Court’s opinion in Moreno v. Industrial Comm’n, 164 Ariz. 374, 793 P.2d 131 (App. 1990), which interprets A.R.S. section 23-1068(B) and involves a claimant who received both workers’ compensation benefits and long-term disability (“LTD”) payments, compels the result she seeks. There, we held that those who pay workers’ compensation benefits are entitled to direct reimbursement for amounts previously paid as long-term disability benefits. See id. at 377, 793 P.2d at 134.

¶ 11 As relevant to this ease, in Moreno a worker received disability benefits for an injury that left him with a permanent partial impairment.

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Bluebook (online)
993 P.2d 468, 196 Ariz. 67, 312 Ariz. Adv. Rep. 16, 2000 Ariz. App. LEXIS 3, Counsel Stack Legal Research, https://law.counselstack.com/opinion/washington-elementary-school-district-v-industrial-commission-arizctapp-2000.