ASARCO INC. v. INDUSTRIAL COM'N OF ARIZONA, 1 CA-IC 01-0108.

• Decision Date: 07 January 2003
• Docket Number: No. 1 CA-IC 01-0108.,1 CA-IC 01-0108.
• Citation: 60 P.3d 258,204 Ariz. 118
• Parties: ASARCO INC., Petitioner-Employer, State Compensation Fund, Petitioner-Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent. Roy D. Duke (Deceased), Respondent-Employee.
• Court: Arizona Court of Appeals

60 P.3d 258

204 Ariz. 118

ASARCO INC., Petitioner-Employer, State Compensation Fund, Petitioner-Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent.

Roy D. Duke (Deceased), Respondent-Employee.

No. -0108.

Court of Appeals of Arizona, Division 1, Department C.

January 7, 2003.

John W. Main, P.C. by John W. Main, Phoenix, for Petitioner-Employer.

James F. Crane, Vice President & General Counsel, State Compensation Fund by James B. Stabler, Teri A. Thomson-Taylor, Phoenix, for Petitioner-Carrier.

Laura L. McGrory, Chief Counsel, The Industrial Commission of Arizona, Phoenix, for Respondent.

Moeller, Gage, Treadwell-Rubin, P.C. by Pamela Treadwell-Rubin, M. Ted Moeller, Tucson, for Respondent-Employee.

OPINION

WEISBERG, Judge.

¶ 1 We review an Industrial Commission of Arizona ("Commission") award finding a Notice of Permanent Disability or Death Benefits to be final and res judicata notwithstanding its erroneous grant of excessive benefits. The issue is whether the notice is void ab initio or is final and res judicata. We affirm the award, concluding that it is final and res judicata.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 2 Roy D. Duke ("Duke") was injured on February 20, 1996. When Duke died on January 25, 1999, his widow, Karla Duke ("Claimant"), filed a claim for widow's and dependent's death benefits on her own behalf and as guardian ad litem of their minor daughter Stephanie Duke.¹

¶ 3 On November 30, 1999, the State Compensation Fund ("Fund") issued its notice awarding burial expenses and survivor benefits to Claimant ("November notice"). Although the amount of benefits are fixed by the statute in effect at the time of death, Kisco, Inc. v. Industrial Commission, 190 Ariz. 389, 390, 949 P.2d 49, 50 (App.1997), the Fund neglected to calculate them as mandated by the controlling statute on the date of Duke's death. Arizona Revised Statutes ("A.R.S.") § 23-1046(A)(1) through -1046(A)(3) (1995). Instead, it calculated them under a 1999 revision to § 23-1046(A)(1) and -1046(A)(2), which became effective about one month after Duke's death. 1999 Ariz. Sess. Laws, ch. 331, § 11; A.R.S. § 23-1046(A)(1) and -1046(A)(2) (Supp.1999). This was a significant error for the Fund because it incorrectly increased burial expenses by $2000 and increased Stephanie Duke's monthly entitlement from fifteen percent to thirty-one and two-thirds percent of Duke's average monthly wage, or from $315 to $665.07. Compare A.R.S. § 23-1046(A)(1) through -1046(A)(3) (1995) with A.R.S. § 23-1046(A)(1) and -1046(A)(2) (Supp.1999). The November notice was not challenged during its ninety-day review period. A.R.S. § 23-947(A) (1995).

¶ 4 On March 16, 2001, the Fund sent Claimant a letter informing her of its error. In the letter, the Fund waived reimbursement for the overpayment of $6,943.20, but gave notice that it intended to prospectively pay Stephanie Duke's benefit in accordance with the statute in effect at the time of Duke's death.

¶ 5 After Claimant sought an investigation pursuant to A.R.S. § 23-1061(J) (Supp. 2002), the Fund corrected its November notice by issuing its May 18, 2001, Notice of Permanent Disability or Death Benefits ("May notice"), and awarding benefits under the correct version of the statute. Claimant requested a hearing.

¶ 6 The facts were not disputed. The parties waived their hearing and submitted written legal arguments. The Administrative Law Judge ("ALJ") issued an award finding the November notice to be final and binding, and the March letter and May notice to be without effect. The decision was affirmed upon review and Petitioners brought this special action. We have jurisdiction under Arizona Rule of Procedure for Special Actions 10 (Supp.2000) and A.R.S. §§ 12-120.21(A)(2) (1992) and 23-951(A) (1995).

STANDARD OF REVIEW

¶ 7 In the absence of a factual dispute, we review a challenge to the finality of a Commission notice de novo. Special Fund. Div. v. Tabor, 201 Ariz. 89, 92, 32 P.3d 14, 17 (App.2001).

DISCUSSION

¶ 8 The Fund issued both its November and May notices pursuant to A.R.S. § 23-1061(F) (1995) and (Supp.1999), which authorizes a carrier's unilateral determination by notice in the administration of a worker's compensation claim subject to the claimant's right to request a hearing, and the carrier's right to rescind, correct or amend its notice, within ninety days. A.R.S. § 23-947(A) (1995); Church of Jesus Christ of Latter Day Saints v. Indus. Comm'n ("Church"), 150 Ariz. 495, 498, 724 P.2d 581, 584 (App.1986); Nelson v. Indus. Comm'n, 115 Ariz. 293, 295, 564 P.2d 1260, 1262 (App.1977). If no challenge is made within ninety days, the notice's determination becomes final and res judicata. A.R.S. § 23-947(B); see also Cajun Cable Co. v. Indus. Comm'n, 156 Ariz. 590, 595, 754 P.2d 317, 322 (App.1987)

(holding that an interested party is bound by the time limits in A.R.S. § 23-947).

¶ 9 Once final, the determination is treated the same as a final Commission award. County of Maricopa v. Indus. Comm'n, 134 Ariz. 159, 162, 654 P.2d 307, 310 (App.1982).² Thus, A.R.S. § 23-947 is a statute of limitations. Wilson v. Indus. Comm'n, 147 Ariz. 261, 264, 709 P.2d 895, 898 (App. 1985).

¶ 10 A statute of limitations, however, does not bar an attack on a void judgment, Brandt v. Brandt, 76 Ariz. 154, 159, 261 P.2d 978, 983 (1953), and it is the Fund's position that its November notice is void. The Fund presents three arguments in support of its position, which we address in turn.

I. Clerical Error

¶ 11 The Fund initially argues that its May notice is a permissible nunc pro tunc correction of a "clerical calculation error" in its November notice, citing for support Hamer v. Industrial Commission, 43 Ariz. 349, 31 P.2d 103 (1934). In Hamer, the court affirmed a Commission award that untimely amended a prior award, changing the phrase "total dependents" to "partial dependents" to make the record "speak the truth." Id. at 350, 31 P.2d at 104. The court thought the error to be merely "stenographic." Id. Hamer has been cited since for granting the Commission authority to make nunc pro tunc changes to correct clerical or stenographic errors in awards. Martin v. Indus. Comm'n, 63 Ariz. 273, 277, 161 P.2d 921, 923 (1945); State Comp. Fund v. McComb, 16 Ariz.App. 303, 304, 492 P.2d 1241, 1242 (1972).

¶ 12 Claimant responds, and we agree, that the Fund's mistake was not clerical, stenographic or transcriptional, but was instead a misapplication of the law. The May notice states that the November notice was issued "contrary to the provisions of A.R.S. § 23-1046 applicable to this claim and [is] therefore void," adding that benefits "were calculated incorrectly ... based on a statutory amendment not in effect as of Roy Duke's death...." Thus, misapplication of the law was the basis for granting excessive benefits, not clerical error. ¶ 13 We have previously held that a mistake of law resulting in the Commission's utilizing a wrong method for the computation of benefits is not a clerical error that will justify setting aside a final award. See Page v. Indus. Comm'n, 12 Ariz.App. 250, 251, 469 P.2d 484, 485 (1970)

; Jacobsen v. Indus. Comm'n, 11 Ariz.App. 105, 106, 462 P.2d 402, 403 (1969). We therefore do not set aside the award set forth in the November notice on the basis of clerical error.

II. Res Judicata

¶ 14 The Fund's second argument relies on Roseberry v. Industrial Commission, 113 Ariz. 66, 546 P.2d 802 (1976). Roseberry directs that, even when a notice is final, the Commission retains jurisdiction over the notice if it is void on its face. See id. at 68, 546 P.2d at 804 (notice of claim status which is void on its face has no res judicata effect and cannot operate to deprive the Commission of jurisdiction over an otherwise valid claim). In Roseberry, which involved a reopening issue, our supreme court determined sua sponte that the Commission retained jurisdiction over Roseberry's claim, even after the carrier's notice of claim status terminating Roseberry's temporary benefits became final, because the notice was "void on its face." Id. The court did not specifically explain why it found the notice void, but Roseberry's facts reflect that the void notice was accompanied by a medical report that directly contradicted the notice's determination. Subsequently, Roseberry has been cited for the proposition that a notice is void if it directly contradicts the supporting information upon which it is based. Velez v. Indus. Comm'n, 174 Ariz. 307, 312, 848 P.2d 886, 891 (App.1993). The Fund now contends that its November notice is likewise void on its face because it determined benefits in an amount contrary to that allowed by the applicable 1995 statute.

¶ 15 Claimant responds that Roseberry does not control here because this case involves neither a notice of claim status nor a supporting medical report. She argues that Roseberry applies only when a notice of claim status is contradicted directly by the very medical report upon which it is based. Chavis v. Indus. Comm'n, 180 Ariz. 424, 429, 885 P.2d 112, 117 (App.1994); Borquez v. Indus. Comm'n, 171 Ariz. 396, 399, 831 P.2d 395, 398 (App.1991); Church, 150 Ariz. at 497, 724 P.2d at 583.

¶ 16 However, the cases interpreting Roseberry have not all been decided on such a narrow basis. For example, this court found a notice terminating benefits without permanent impairment for claim abandonment to be void under Roseberry, even though no report of any type had been submitted in support of the notice, for the reason that the notice contradicted an uncontroverted six-month-old medical report located in the carrier's file. NCR v. Indus. Comm'n, 142 Ariz. 167, 168-70, 688 P.2d 1059, 1060-62 (App. 1984); compare with Minghelli v. Indus. Comm'n, 129 Ariz. 222, 225, 630 P.2d 45, 48 (App.1981)

(sustaining validity of final notice based on twenty-day letter without supporting medical documentation where claimant's inactivity supported the inference...