D'Angelo v. Indus. Comm'n of Ariz.

• Decision Date: 18 March 2019
• Docket Number: No. 2 CA-IC 2018-0004,2 CA-IC 2018-0004
• Parties: ERNEST D'ANGELO, Petitioner Employee, v. THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent, BHP COPPER, INC., Respondent Employer, CONTINENTAL CASUALTY COMPANY, Respondent Insurer.
• Court: Arizona Court of Appeals

ERNEST D'ANGELO, Petitioner Employee, v. THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,BHP COPPER, INC., Respondent Employer,CONTINENTAL CASUALTY COMPANY, Respondent Insurer.

No. 2 CA-IC 2018-0004

ARIZONA COURT OF APPEALS DIVISION TWO

March 18, 2019

THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.

NOT FOR PUBLICATION

See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f); Ariz. R. P. Spec. Act. 10(k).

Special Action - Industrial Commission

ICA Claim No. 0000F061065

Insurer No. 3J436632B2

Jacqueline Wohl, Administrative Law Judge

AWARD SET ASIDE

COUNSEL

Brian Clymer, Attorney at Law, Tucson

By Brian Clymer

Counsel for Petitioner Employee Lundmark, Barberich, LaMont & Slavin P.C., Phoenix

By R. Todd Lundmark

and

Janet S. Weinstein P.C., Phoenix

By Janet S. Weinstein

Counsel for Respondent

Jones, Skelton & Hochuli P.L.C., Phoenix

By Gregory L. Folger and Sean M. Moore

Counsel for Respondents Employer and Insurer

MEMORANDUM DECISION

Judge Vásquez authored the decision of the Court, in which Presiding Judge Staring and Judge Brearcliffe concurred.

VÁSQUEZ, Judge:

¶1 In this statutory special action, Ernest D'Angelo challenges the award of the administrative law judge (ALJ) requiring him to reimburse BHP Copper, Inc. and Continental Casualty Company (collectively, "Continental") for a missed medical examination. D'Angelo argues Continental waived its right to reimbursement by not timely submitting the legal authority supporting its position or documentation of the cost of the exam. Alternatively, he contends the ALJ erred in ordering reimbursement because the record contains no evidence of the cost of the exam or its reasonableness. For the following reasons, we set aside the award.

Factual and Procedural Background

¶2 We view the facts in the light most favorable to upholding the award. Hackworth v. Indus. Comm'n, 229 Ariz. 339, ¶ 2 (App. 2012). However, the relevant facts are undisputed. In March 1982, D'Angelo suffered an industrial injury when an elevator door closed on his right hand. The claim was accepted for benefits, and D'Angelo has been receiving supportive medical maintenance benefits and permanent disability benefits since 1993.

¶3 In March 2017, D'Angelo's physician prescribed a treatment plan including oxycodone for pain, but Continental denied authorization of the drug as part of his supportive care and recommended a weaning program. After D'Angelo requested a hearing to challenge that determination, Continental scheduled an independent medical examination (IME) with Dr. Randall Prust in July 2017.

¶4 On August 8, 2017, the day before the first hearing, Continental filed a motion for reimbursement of expenses related to the IME, arguing D'Angelo had failed to appear for the appointment and did not call to cancel or reschedule. The next day, before D'Angelo testified, he requested that Continental be required to cite the legal authority supporting its request and to state the amount for which it sought reimbursement. Continental explained it had filed the motion "just to be on record, showing that . . . D'Angelo did miss the IME," but it did not yet have an amount because it had not received a bill from Dr. Prust. With regard to authority, Continental stated it "didn't think there was really a need for [it] to cite case law" but it would do so at the ALJ's request. Continental's attorney added, "I would like to know why . . . D'Angelo missed the IME. And if appropriate, we would like to reset the exam."

¶5 The ALJ first noted, "[I]t was my understanding that there was a regulation which addressed [reimbursement]." However, because D'Angelo planned to testify about the missed IME, the ALJ recommended moving forward with the hearing, explaining to Continental: "[I]f [this] continues to be an issue after you hear the reason for the missed appointment, then . . . you can provide us with . . . your authority for requesting it and the amount."

¶6 During direct examination, D'Angelo testified that he knew about the IME but had "completely forgot." He explained that missing the appointment was "[a]bsolutely not" intentional and that he had "[n]ever" missed an exam related to his industrial injury before. Continental did not ask any questions about the missed IME during cross-examination. At the end of the hearing, Continental stated it was in the process of scheduling another IME.

¶7 Shortly after the hearing, D'Angelo sent a letter, relaying his understanding that Continental would provide the legal authority supporting its motion for reimbursement before he needed to respond. After completion of the rescheduled IME in September 2017, the ALJ held two additional hearings, receiving testimony from both Dr. Prust andD'Angelo's physician. During those subsequent hearings, the motion for reimbursement was not discussed.

¶8 In January 2018, the ALJ issued its decision upon hearing, ordering that D'Angelo be weaned from oxycodone, as recommended by Dr. Prust. The ALJ also found that D'Angelo had "missed his medical examination without an adequate reason" and, therefore, ordered him to reimburse Continental "for the costs associated with the missed medical examination."

¶9 D'Angelo filed a request for review, arguing, in part, that the ALJ had erred in finding him responsible for the costs of the missed IME. He reasoned that (1) the request for reimbursement had been waived because Continental failed to present supporting legal authority or the amount of the request or (2) the award could not stand because the ALJ had received no evidence showing the amount of the request and whether that amount was reasonable, thereby infringing on his due process rights. D'Angelo also asserted that the award effectively reduced his "benefits without a vote of the people" in contravention of the Arizona Constitution.¹ Attached to its response, Continental, for the first time, provided an invoice from Dr. Prust, showing $2,575 due for the missed IME. In a subsequent letter, D'Angelo urged the ALJ not to consider the invoice as evidence because Continental had not followed the appropriate evidentiary rules or provided an adequate explanation for the tardy disclosure. The ALJ affirmed the award. This petition for special action followed. We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(2), 23-951(A), and Rule 10, Ariz. R. P. Spec. Act.

Discussion

¶10 The sole issue on appeal is the propriety of the award ordering D'Angelo to reimburse Continental for the cost of the missed IME. D'Angelo argues Continental waived its right to claim reimbursement by failing to submit "evidence of the exam's cost and the legal authority for itsposition prior to the close of the record." Alternatively, he contends the ALJ erred in ordering the reimbursement because "at the time of the . . . [a]ward [Continental] had submitted no evidence of the exam's cost and whether it was reasonable."²

¶11 On appeal, the parties agree that the ALJ's order for reimbursement was based on Arizona Administrative Code R20-5-114(B) (hereinafter, "Rule 114(B)"). That rule provides:

If a claimant unreasonably fails to attend or promptly advise of the claimant's inability to attend an examination under this Section, the party requesting the examination may charge the claimant or deduct from the claimant's entitlement to present or future temporary or permanent disability compensation, any reasonable expense of the missed appointment.

A.A.C. R20-5-114(B).

¶12 Turning to D'Angelo's first argument, he relies on two cases—Estate of Wesolowski v. Industrial Commission, 192 Ariz. 326 (App. 1998), and A.J. Bayless Markets, Inc. v. Industrial Commission, 134 Ariz. 243 (App. 1982)—to contend that Continental waived its claim for reimbursement by failing to provide legal support for its position and the cost of the missed IME "in a timely fashion." We find those cases distinguishable. In Estate of Wesolowski, the special fund waived its right to present an affirmative defense by not raising it before the ALJ during the hearing process. 192 Ariz. 326, ¶¶ 7-11. In A.J. Bayless, the petitioners waived their right to cross-examine the authors of a medical report by failing to timely notify the ALJ of their desire to do so after receiving thereport. 134 Ariz. at 245. By contrast, the overarching issue here—Continental's request for reimbursement—was raised before the ALJ, both in a motion and at the first hearing.

¶13 D'Angelo is correct that the failure to raise an issue below generally waives it on appeal. See Stephens v. Indus. Comm'n, 114 Ariz. 92, 94 (App. 1977) ("This court will not consider on review an issue not raised before the Industrial Commission where the petitioner has had an opportunity to do so."). However, the decision to find waiver is discretionary. See Noriega v. Town of Miami, 243 Ariz. 320, ¶ 27 (App. 2017); see also City of Tucson v. Clear Channel Outdoor, Inc., 209 Ariz. 544, n.9 (2005) (describing rule of waiver as "rule of prudence, not of jurisdiction"). The reason underlying the waiver rule is to allow the ALJ an opportunity to address all of the issues on their merits. See T.W.M. Custom Framing v. Indus. Comm'n, 198 Ariz. 41, ¶ 4 (App. 2000); see also Cont'l Lighting & Contracting, Inc. v. Premier Grading & Utils., LLC, 227 Ariz. 382, ¶ 12 (App. 2011).

¶14 Although Continental failed to provide the legal authority supporting its motion for reimbursement below, which could support a finding of waiver, cf. State v. Lopez, 217 Ariz. 433, ¶ 4 (App. 2008) (objection on one ground does not preserve issue on another), the ALJ nonetheless addressed the issue, apparently relying on Rule 114(B), see Cont'l Lighting & Contracting, 227 Ariz. 382, ¶ 12. The Industrial Commission (IC) rules, including Rule 114(B), are contained in the Arizona Administrative Code. See A.R.S. § 23-921(B) (IC may make all rules "reasonably required in the performance of its duties"); see also Martinez v. Indus. Comm'n, 175 Ariz. 319, 322 (App. 1993...