Chavis v. Industrial Com'n of Arizona, 1

• Decision Date: 12 April 1994
• Docket Number: No. 1,CA-IC,1
• Citation: 885 P.2d 112,180 Ariz. 424
• Parties: Frank CHAVIS, Petitioner, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Dimension Cable, Respondent Employer, CIGNA, Respondent Carrier. 93-0001.
• Court: Arizona Court of Appeals

Page 112

885 P.2d 112

180 Ariz. 424

Frank CHAVIS, Petitioner, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Dimension Cable, Respondent Employer, CIGNA, Respondent Carrier.

No. 1 CA-IC 93-0001.

Court of Appeals of Arizona,

Division 1, Department A.

April 12, 1994.

Review Denied Dec. 20, 1994.

[180 Ariz. 425] Taylor & Associates by Richard E. Taylor, Roger A. Schwartz, Phoenix, for petitioner.

Anita R. Valainis, Chief Counsel, The Indus. Com'n of Arizona, Phoenix, for respondent.

Long, Lundmark & Poppe by James B. Long, Phoenix, for respondents employer and carrier.

OPINION

VOSS, Judge.

Claimant Frank Chavis filed this special action for review of an Arizona Industrial Commission ("Commission") Decision Upon Hearing and Findings and Award ("Award") and Decision Upon Review affirming the Award. In his Award, the Administrative Law Judge ("ALJ") dismissed Claimant's hearing request for unexcused untimeliness. Claimant presents two issues:

(1) Whether the evidence supports the ALJ's finding that Claimant failed to make reasonably diligent efforts to verify representations made by Respondent Carrier ("Pacific") and therefore, by definition, did not justifiably rely on these representations notwithstanding any "nonfeasance" by Pacific; and

(2) Whether Roseberry ¹ applies to an average monthly wage calculation supported by the information Pacific obtained, but would be contradicted by information it should have obtained.

Because reasonable evidence supports the ALJ's Award, and Roseberry does not apply, we affirm the Award.

Claimant worked for Dimension Cable in Bullhead City. Payroll records for the Bullhead City operation were maintained by Dimension Cable's main office in Los Angeles. Claimant earned $7.40 an hour, and he always worked at least forty hours a week. His overtime included scheduled overtime on Saturdays and unscheduled overtime for exigent circumstances. Claimant's amount of overtime varied from pay period to pay period, and his gross wages varied accordingly. Claimant's average monthly income from date of hire to date of injury was approximately $1,600.00.

On May 5, 1990, Claimant injured his knee and back at work. On June 12, 1990, Pacific issued a Notice of Claim Status ("NCS") accepting the claim and indicating that compensation would be based on an average monthly wage of $1,290.45 which was subject to final determination by the Commission. Included with this NCS was a recommended average monthly wage calculation form ("Form 108"). This form indicated Claimant's average monthly earnings with Dimension Cable from April 5, 1990, through May 4, 1990, amounted to $1,272.80 and stated the average monthly wage recommended by Pacific was $1,290.45.

On July 12, 1990, the Commission issued its Notice of Average Monthly Wage ("Notice"), which approved Pacific's recommendation and established that Claimant's average monthly wage was $1,290.45. This Notice provided the standard warning that the Notice would become final after ninety days. ² Also included with this Notice was a form letter that informed Claimant that the Commission did not independently gather wage data; therefore it requested that Claimant verify the wage data provided by Pacific and apprised Claimant to "[p]ay particular attention to your hourly wage, your total earnings, the period since you most recently received an increase, whether overtime pay and tips were included in your hours worked as well as your earnings prior to your injury."

Claimant did not contact Dimension Cable, Pacific, or the Commission to inquire about his average monthly wage, and he allowed the ninety-day-protest period to expire without filing a Request for Hearing. In February 1992, Claimant retained his current counsel, who was the first to question the accuracy of the average monthly wage determination. On April 3, 1992, Claimant filed an untimely protest to the Commission's Notice. Prior to the scheduled hearing, Pacific raised the affirmative defense that Claimant's protest was untimely and requested the ALJ to limit the hearing to this defense. The ALJ rejected this request and allowed evidence regarding both the untimeliness of Claimant's protest and the merits of the average monthly wage determination.

At the initial hearing, Claimant admitted that he received the Commission's Notice, that he was of sound mind when he received it, and that he did not communicate with Dimension Cable, Pacific, or the Commission verifying their calculations. Claimant testified that he assumed Pacific obtained the correct wage information from the Los Angeles office and "never thought about whether [the Notice was right or wrong]. I mean, that's what they told me. I have no way of knowing how they [calculated it]--I just didn't think about it. I just accepted what they gave me." Claimant also explained that because his wages varied depending on the amount of overtime in each pay period, he would need his payroll records to know the exact amount he earned the thirty-day period prior to his injury. After retaining his present counsel, Claimant requested payroll records from Dimension Cable in Bullhead City, but the local office referred him to the main office in Los Angeles. Both parties ultimately agreed that the average monthly wage recommended by Pacific and accepted by the Commission reflected less wages than actually earned by Claimant.

At the close of the first hearing, Claimant conceded that Pacific did not intentionally mislead him; however Claimant asserted that Pacific was grossly negligent in acquiring the wage information included on the Form 108. The ALJ allowed Claimant a further hearing to question Pacific's claims representative who had processed Claimant's claim.

The claims representative could not recall the source of the information reported on the Form 108. Her computer notes indicated that she called Dimension Cable in Bullhead City and was referred to the Los Angeles office. She then called the Los Angeles office. She assumed that somebody in Los Angeles returned her call with the information included on the Form 108. She did not know the identity of the person providing the information, and she had no documentation verifying the accuracy of the wage information.

The claims representative admitted that "[n]obody can find out where that number [for the wages earned thirty days before the injury] came from"; however, she testified that at the time this claim was processed she had no reason to doubt the accuracy of the figure because it was substantially the same as the straight calculation based upon the hourly wage and a forty-hour week. She also explained that unless something looked "wrong," her usual practice was to rely on information that employers provided by phone because obtaining payroll records takes time and they are difficult to interpret.

The claims representative also testified that she generally requested employers to provide information about gross earnings, including overtime. If the gross earnings and the calculation based on the hourly wage for a forty-hour week differed significantly, she would request additional information from the employer to explain the difference; however, she admitted that she did not recall whether she directly asked Dimension Cable regarding Claimant's potential variable earnings or pay increase.

The parties submitted post-hearing memoranda. Claimant argued that the ALJ should excuse the untimely filed hearing request because Claimant had justifiably relied on Pacific's representation regarding his wages in the Form 108. He argued that his reliance was justified in light of his variable wages, the difficulty of getting payroll records from Los Angeles, and Pacific's grossly negligent manner of obtaining Claimant's wage information. Pacific argued that Arizona Revised Statutes Annotated ("A.R.S.") section 23-947(B)(1), as interpreted in Borquez v. Industrial Commission, 171 Ariz. 396, 831 P.2d 395 (App.1991), required the ALJ to dismiss the hearing request because it was untimely, and Claimant's reliance on representations by Pacific or the Commission was not justified because he did nothing to verify the accuracy of the Notice.

The ALJ then issued the Award. He concluded that notwithstanding Pacific's failure to exercise reasonable care in obtaining and verifying Claimant's wage information, and contrary to the general remedial intent of the Workers' Compensation Act, A.R.S. section 23-947(B)(1) places the ultimate burden of reasonable diligence on claimants to verify the accuracy of the average monthly wage determination. Claimant's passive acquiescence failed to meet the statutory standard;...