Aitken v. Industrial Com'n of Arizona
| Decision Date | 14 May 1992 |
| Docket Number | No. 2,CA-IC,2 |
| Citation | 842 P.2d 1313,173 Ariz. 300 |
| Parties | Faith AITKEN, Petitioner-Employee, v. INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Amphitheater Public Schools, Respondent-Employer, Unigard Insurance Company, Respondent-Carrier. 91-0042. |
| Court | Arizona Court of Appeals |
Faith Aitken was employed by Amphitheater School District when she fell after stepping out of a doorway into an area where the sidewalk had been removed by Maya Construction Company. She filed a claim for workers' compensation benefits and has to date received $28,929.70 in medical and compensation benefits from Unigard Insurance, Amphitheater's insurance carrier. She, and her husband asserting loss of consortium, then filed a third-party negligence claim against Maya Construction. Maya Construction in turn alleged comparative negligence and brought Amphitheater in as a non-party at fault. The jury awarded the plaintiffs $319,292 in damages and assessed the percentage of fault as 65% Maya's, 25% Amphitheater's, and 10% Aitken's. Reducing the judgment by $79,823 and $31,929 respectively for Amphitheater's and Aitken's comparative negligence, the court awarded Aitken and her husband "jointly and equally as husband and wife" the sum of $207,350. From this judgment Aitken reimbursed Unigard the $28,929.70 it had paid in benefits, but objected to Unigard's claim of credit in the amount of $74,466.54 1 against future benefits. She requested a hearing, arguing that the lien was too high given the employer's degree of fault, was unconstitutional, and should not attach to the husband's portion of the award for loss of consortium. The administrative law judge found in favor of Unigard, holding that the carrier's lien cannot be reduced by the employer's degree of fault and that it attaches to the husband's award for loss of consortium. The award was affirmed on review.
In this special action Aitken raises three issues for review: whether the carrier's lien is limited to the amount of benefits paid which exceed the employer's proportional share of damages, whether the lien provisions of A.R.S. § 23-1023 violate the non-abrogation and non-limitation clauses of Arizona's Constitution, and whether the lien extends to a spouse's loss of consortium award absent a claim of death benefits.
In Arizona, a worker who does not opt out of the workers' compensation scheme before being injured accepts workers' compensation as his or her sole remedy against the employer. Ariz. Const. art. 18, § 8; A.R.S. §§ 23-906(A) and 23-1022. By so doing, the worker gives up the right to sue the employer and the prospect of a large damage award in exchange for prompt, though limited, compensation. 2 The employee remains free to sue a third party for its negligent contribution to the injury, but the employer or its carrier has a lien on any damages recovered to the extent of the benefits paid, as well as a credit against future benefits to the extent of the recovery. A.R.S. § 23-1023. The lien, which is levied in part for the purpose of preventing double recovery by the injured worker, applies to "the amount actually collectable" from the third party recovery, defined by A.R.S. § 23-1023(C) as being "the total recovery less the reasonable and necessary expenses, including attorneys' fees, actually expended in securing such recovery."
The Uniform Contribution Among Tortfeasors Act (UCATA), A.R.S. §§ 12-2501 et seq., enacted in 1984, allowed a defendant to recoup damages it paid to a plaintiff from other joint tortfeasors, but specifically prevented joint tortfeasors from asserting contribution claims against employers, who were statutorily immune. A.R.S. § 12-2501(H). See also Dietz v. General Electric Co., 169 Ariz. 505, 821 P.2d 166 (1991). In 1987, however, our legislature enacted § 12-2506 abolishing joint liability and adopting instead a pure comparative fault system whereby the fault of all tortfeasors is considered "regardless of whether the person was, or could have been, named as a party to the suit." A.R.S. § 12-2506(B). Finding that this latter statute prevails over § 12-2501(H), prohibiting the assessment of non-party fault against immune employers, our supreme court in Dietz, supra, held that "[w]hen an employer negligently contributes to an employee's injury, the joint tortfeasors may require the employer's negligence to be considered for the assessment of fault under A.R.S. § 12-2506." Dietz, 169 Ariz. at 511, 821 P.2d at 172. The court specifically left for decision at a later time the issue of whether an employer or its carrier should be reimbursed from a third-party recovery "only in those instances where the employer or its insurer has paid more than its proportionate share of the employee's damages." Id., quoting Taylor v. Delgarno Transport, Inc., 100 N.M. 138, 142, 667 P.2d 445, 449 (1983) (Payne, C.J., and Sosa, Senior J., dissenting).
The first issue we are asked to decide, therefore, is one of first impression in Arizona: Should the lien of an employer or its insurance carrier against the injured employee's recovery in a third-party action be reduced by the degree of fault attributed to the employer in that action?
Workers' compensation arose to meet the dual problems of increasing industrial injuries due to the industrial revolution, and inadequate compensation for those injuries due to common law defenses that worked against the injured employee. Because most industrial injuries are attributable to the inherent risks of employment as opposed to anyone's fault, it developed as a no-fault system designed to shift the burden of economic loss from the individual and society as a whole onto industry. See generally 1 A. Larson, The Law of Workmen's Compensation § 4 (1990); Ossic v. Verde Central Mines, 46 Ariz. 176, 49 P.2d 396 (1935). One of the basic tenets of the workers' compensation system, therefore, is that fault not be interjected into its workings. To rule that a carrier's lien must be reduced by the employer's proportionate share of fault would do just that. Moreover, the language of § 23-1023(C) simply could not be more precise: The carrier's lien is "on the amount actually collectable" from the third party, in this case $207,350.
While we cannot help but question the equity of this outcome--that...
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Aitken v. Industrial Com'n of Arizona
...damages assessed in a third party action have been diminished by the employer's percentage of fault. Aitken v. Industrial Comm'n, 173 Ariz. 300, 302, 842 P.2d 1313, 1315 (Ct.App.1992). We granted review. A. Constitutionality of A.R.S. § 23-1023 We "usually will not determine the constitutio......
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Grijalva v. Arizona State Compensation Fund
...ruled that the Fund did not possess a lien. The court of appeals, relying in part on its earlier opinion in Aitken v. Industrial Comm'n, 173 Ariz. 300, 842 P.2d 1313 (App.1992), reversed and held in a memorandum decision that the Fund should receive its full lien. Grijalva argues that this ......