Circle K Corp. v. Industrial Com'n of Arizona
| Decision Date | 09 December 1993 |
| Docket Number | CA-IC,No. 1,1 |
| Citation | 880 P.2d 642,179 Ariz. 422 |
| Parties | CIRCLE K CORPORATION, Petitioner Employer, GAB Business Services, Petitioner Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, La Donna Sharp, Respondent Employee. 92-0159. |
| Court | Arizona Court of Appeals |
Jones, Skelton & Hochuli by Calvin Harris, Phoenix, for petitioners.
Anita R. Valainis, Chief Counsel, Industrial Com'n of Arizona, Phoenix, for respondent.
Ronald M. Meitz, Phoenix, for respondent employee.
*
Circle K Corporation ("Circle K") filed this special action to challenge the award of the Arizona Industrial Commission reopening a 1987 industrial injury claim brought by La Donna Sharp ("Sharp"), its employee. Circle K has argued that reopening the claim is precluded because Sharp allowed the denial of a prior petition to reopen to become final. We conclude that neither claim preclusion nor issue preclusion prevents the reopening of this claim and, therefore, affirm the award and decision of the Administrative Law Judge ("ALJ").
Sharp worked as a clerk and cashier for Circle K. She was privately insured through CIGNA health insurance. She first complained to her primary care physician, Barbara Porter, M.D., in April 1987, of right hip and leg pain. The pain was exacerbated by standing and walking at work. Dr. Porter diagnosed probable intermittent sciatica.
On July 2, 1987, Sharp fell from a ladder at work. Six days later she saw Dr. Porter, who diagnosed mild trapezius spasm secondary to the injury and sciatica. Sharp and Dr. Porter then completed a Worker's and Physician's Report.
Circle K, through its claims representative GAB Business Services ("GAB"), issued a notice of claim status, which accepted a no time lost claim and simultaneously closed the claim without permanent impairment, effective July 8, 1987. Sharp, who was unrepresented by counsel, apparently wrote GAB. 1 The Industrial Commission treated this letter as a protest of the termination notice and scheduled a hearing, but Sharp later withdrew her protest. On October 27, 1987, the ALJ entered an award dismissing the hearing request. The termination notice accordingly became final. See Ariz.Rev.Stat.Ann. ("A.R.S.") § 23-947 (Supp.1992).
Meanwhile, Sharp continued to see CIGNA physicians for her lower back, hip, and leg symptoms. Finally a CT scan revealed stenosis and a disc bulge at L4-5.
On June 1, 1988, Paul Williams, M.D., performed the first of two lower back surgeries on Sharp. He found a herniated disc at L4-5 and removed it piecemeal. The following week Dr. Williams reported that Sharp no longer had right leg pain and possibly could return to work within three weeks.
Nine days after her surgery, Sharp, who remained unrepresented, filed her first Petition to Reopen. 2 On June 28, 1988, Dr. Williams reported that Sharp's symptoms had recurred over the past two weeks, and he recommended a repeat CT scan. That scan revealed stenosis and a diffusely bulging disc at L4-5. 3 On July 27, 1988, GAB denied the Petition to Reopen without specifying the reason for the denial.
Dr. Williams again performed lower back surgery on September 9, 1988, which confirmed stenosis and a bulging disc at L4-5. GAB's termination notice became final on October 25, 1988, without protest from Sharp. A.R.S. § 23-947. Two days later Dr. Williams released Sharp back to work and reported that, although she had localized lower back and hip pain, she no longer had right leg pain.
Sharp returned to work and did not complain of symptoms again to her doctor for about two years. When the symptoms persisted she filed, again without the assistance of counsel, a second Petition to Reopen on June 21, 1991. GAB denied the petition. On September 4, 1991, Sharp, now represented by her current counsel, filed a hearing request to protest the denial.
At the ensuing hearings, testimony was given by Sharp, Dr. Porter, Sanford Fineman, M.D., Sharp's new neurologist, and Ronald M. Lampert, M.D., an orthopedic surgeon who independently examined Sharp for Circle K. Dr. Williams, who no longer resided in Arizona, did not testify.
Sharp testified that she continued to work after the July 1987 industrial injury until the first surgery in June 1988. She felt cured after the second surgery in September 1988, but, after returning to work, her symptoms gradually recurred. In her estimation, her symptoms in June 1991, when she filed her second Petition to Reopen, were much worse than her symptoms in October 1988, when she returned to work after the second surgery. Most, but not all, of her out-of-pocket expenses for the back surgeries and other treatment in 1988 were covered by CIGNA.
After the hearing, the ALJ accepted Dr. Fineman's opinion that Sharp's industrial injury was causally connected to her worsened current condition. He issued an award reopening the 1987 claim. He also found that Sharp was precluded from receiving benefits for the 1988 surgeries but not for her new or additional disability. The award was summarily affirmed on administrative review and Circle K brought this special action.
Circle K has argued that the "issue" of causation was "necessarily decided" against Sharp when the denial of the first Petition to Reopen was not contested and became final. Circle K contends that Sharp is unable to prove the "issue" of causation in the second Petition to Reopen because of res judicata and issue preclusion or claim preclusion. 4
Res judicata and collateral estoppel are traditional legal terms describing the effect of a prior decided case upon a later pending case. Allan D. Vestal, Res Judicata/Preclusion 6-7 (1969).
The terms "claim preclusion" and "issue preclusion" were popularized by the late Professor Allan Vestal of the University of Iowa College of Law. Ruth Bader Ginsburg, The Work of Professor Allan Delker Vestal, 70 Iowa L.Rev. 13, 15-16 (1984). Professor Vestal advocated the use of the descriptive terms "claim preclusion" and "issue preclusion" instead of the archaic phrases "res judicata" and "collateral estoppel." Vestal at 6-7. Professor Vestal hoped that the descriptive terms would make the doctrines of res judicata and collateral estoppel more understandable. See Ginsburg at 16. The confusion over which doctrine applies in this case demonstrates the wisdom of Professor Vestal's simplified nomenclature.
"Claim preclusion" occurs when a party has brought an action and a final, valid judgment is entered after adjudication or default. The party is foreclosed from further litigation on the claim only when the policies justifying preclusion are furthered. 5 See Vestal at 43. "Issue preclusion" occurs when the issue to be litigated was actually litigated in a prior proceeding. In the prior litigation a final judgment was entered, the party against whom the doctrine is to be invoked had a full opportunity to litigate the issue, the party actually did litigate the issue, and the issue was essential to a final judgment. Chaney Bldg. Co. v. City of Tucson, 148 Ariz. 571, 573, 716 P.2d 28, 30 (1986). In a second proceeding a party should not be able to relitigate the issue that has already been decided. However, in the case of a judgment entered by default, issue preclusion is not applied, because none of the issues is litigated. Id. Issue preclusion requires actual litigation. Claim preclusion does not. 6
The clear line between the descriptive terms became murky because of an ambiguous use of claim preclusion. 7 The problem began when res judicata was applied to two different types of cases. Res judicata was used to mean an adjudication that bars any further litigation on a claim. This is classic claim preclusion. However, res judicata also was used to refer to the resolution of an issue, a facet of a claim, which bars further litigation of that issue. 8 This use is similar to issue preclusion without the requirement of litigation.
Both uses of res judicata have crept into claim preclusion cases because res judicata is often equated with claim preclusion. 9 Vestal at 118. This blurred the distinction between issue and claim preclusion when, as here, preclusion is sought on an issue essential to a prior claim which was resolved by default, not litigation.
Circle K's difficulty in articulating exactly what form of preclusion it is seeking is understandable because the cases have used issue preclusion, claim preclusion, and res judicata to describe the preclusive relief sought by Circle K. 10
Professor Vestal identified a number of purposes served by issue and claim preclusion to help courts decide whether to apply either concept. Preclusion in either form promotes: (1) finality in litigation; (2) the prevention of harassment; (3) efficiency in the use of the courts; and (4) enhancement of the prestige of the courts. Vestal at 7-12. However, he cautioned against the rigid application of preclusion. He approved the use of preclusion "so long as litigants are given their day in court and the rights of individuals are not infringed." See id. at 16.
Because of these policies, courts hesitate to apply preclusion when, for example, the party against whom preclusion is sought had no incentive to litigate. See Red Bluff Mines, Inc. v. Industrial Comm'n, 144 Ariz. 199, 205, 696 P.2d 1348, 1354 (App.1984). In Red Bluff the first litigation involved a total liability of one thousand dollars. That potential liability was considered to be so small in relation to a potential exposure of twenty-four thousand dollars in the second litigation that the imposition of preclusion in the second case was found to be plainly unfair. Id. at 205, 696 P.2d at 1354. 11
In addition to the policies that must be considered in determining whether to...
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