Epstein v. Industrial Com'n of Arizona, 1

• Decision Date: 30 June 1987
• Docket Number: No. 1,CA-IC,1
• Citation: 741 P.2d 322,154 Ariz. 189
• Parties: Albert EPSTEIN, Petitioner Employee, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Steve Demenge, Respondent Employer, State Compensation Fund, Respondent Carrier. 3589.
• Court: Arizona Court of Appeals

Page 322

741 P.2d 322

154 Ariz. 189

Albert EPSTEIN, PetitionerEmployee, v.The INDUSTRIAL COMMISSION OF ARIZONA, RespondentSteve Demenge, RespondentEmployerState Compensation Fund, RespondentCarrier.

No. 1 CA-IC 3589.

Court of Appeals of Arizona Division 1, Department A.

June 30, 1987.

[154 Ariz. 190] Rabinovitz & Associates, P.C. by Bernard I. Rabinovitz and Gary M. Israel, Tucson, for petitioner employee.

Dennis P. Kavanaugh, Chief Counsel The Indus. Com'n of Arizona, Phoenix, for respondent.

Robert K. Park, Chief Counsel State Compensation Fund by Fred R. Sands, Tucson, for respondent carrier.

OPINION

CONTRERAS, Judge.

In this special action review of an Industrial Commission award, we must determine whether the administrative law judge erred in dismissing the petitioner employee's (claimant's) untimely request for hearing.The evidence demonstrated and the administrative law judge found that neither claimant nor his attorney received a copy of the notice of claim status denying a petition to reopen.The administrative law judge therefore found that claimant met the requirements of A.R.S. § 23-947(B)(3), which excuses a late filing.However, the administrative law judge further found that the late filing was not excused under section (B) of this statute because the standard of "reasonable care and due diligence" contained in A.R.S. § 23-947(C) had not been met.We conclude that the administrative law judge erred in refusing to excuse claimant's untimely request for hearing.The award is set aside.

On October 25, 1965, the claimant sustained an industrial injury while employed by the respondent employer, Steve Demenge.The claim was accepted for benefits by the respondent insurance carrier (Fund) and was eventually closed with a 25% scheduled permanent partial disability.

On February 20, 1985, the claimant filed a petition to reopen his claim (petition).On February 28, 1985, the claimant's attorney, Bernard I. Rabinovitz, wrote a letter of representation to the Fund, enclosed a copy of the petition, and requested that it "please forward all future correspondence, notices, checks, etc. to this office," and "a complete copy of each and every claims file ... pertaining to my client."

On April 1, 1985, the Fund issued a notice of claim status (notice) denying the claimant's petition to reopen.The notice was addressed to the claimant, in care of his attorney, and supposedly bore the correct address.¹Both the claimant and his attorney denied ever receiving the notice.In early October 1985, while reviewing the Fund claims file, attorney Rabinovitz first became aware of the notice.On October 9, 1985, the claimant filed an untimely hearing request.

On March 24, 1986, a formal hearing was held.The only issue heard was the affirmative defense of untimely request for hearing.The claimant testified that he never received the notice and first became aware of it at his deposition on February 11, 1986.He testified that all of his industrial claim correspondence was to be sent in care of his attorney.

Attorney Rabinovitz' secretary of three and a half years also testified.She discussed the processing and calendaring of incoming mail at his office.She testified that she personally receives all of attorney Rabinovitz' mail and does his calendaring.She had no record of this notice.She is also the designated person in his office to receive all unidentifiable mail for final distribution.

An envelope contained in the Fund claims file was introduced into evidence as an exhibit at the hearing.It was a window envelope and was located immediately adjacent to the notice in the file.The envelope was postmarked April 1, 1985, and had been returned to the Fund as undeliverable on April 16, 1985.

On March 27, 1986, the administrative law judge entered an award dismissing claimant's request for hearing.He found:

3. ...Circumstantial evidence suggests that this April 1, 1985 notice was returned to the State Compensation Fund by the United States Postal Service as undeliverable.There is insufficient evidence to conclude, using a 'clear and convincing' standard, that this April 1, 1985 notice was mailed to the applicant's correct address; that is, by his own direction, Bernard Rabinovitz, 741 [sic] North Fourth Avenue, Tucson, Arizona 85705.SeeAssociated Grocers v. Industrial Commission, 133 Ariz. 421(App.), 652 P2 [sic] 160 (1982).The credible, clear and convincing evidence establishes that neither the applicant nor his attorney received this NOTICE OF CLAIM STATUS dated April 1, 1985 prior to October 1, 1985, when that attorney reviewed the State Compensation Fund's claim file regarding this injury.The applicant has met the requirements of A.R.S. Section 23-1047(B)(3)[sic].That does not mean he has necessarily established a cognizable excuse for his late REQUEST FOR HEARING.

4.The first sentence of subparagraph (C) of A.R.S. Section 23-947 precludes excusal of a late protest of a NOTICE OF CLAIMS [sic] STATUS not received by the applicant if the applicant or his attorney, in the exercise of reasonable care and diligence, should have known of the notice at any time during the ninety day protest period.In this case, the applicant retained his present attorney, a Board Certified specialist in Worker's [sic] Compensation, on February 18, 1985.He then filed his Petition to Reopen through that attorney on February 20, 1985.A.R.S. Section 23-1061(M) provides for penalty benefits against the insurance carrier if the carrier does not accept or deny the Petition to Reopen within 21 days of notification of that petition by the Industrial Commission ....On April 1, 1985 the State Compensation Fund issued the subject Notice and filed that Notice with the Industrial Commission.The applicant is charged with knowledge of the contents of the Industrial Commission file.SeeDavis v. Industrial Commission, 103 Ariz. 114, 159, 437 P2 [sic] 647 (1968).There is no record of any inspection of the file by the applicant or his counsel in this case.There is no record of any inquiry to the Industrial Commission by the applicant or his counsel regarding the status of his Petition to Reopen filed February 20, 1986[sic].The applicant has access to the carrier's file upon request.SeeRule 31(b), R.Proc.I.C.A., R-4-13-131 B. There is no record of any inspection of the State Compensation Fund's file by the applicant or his counsel in this case until October 1, 1985, over seven months after this Petition to Reopen was filed.Satisfaction of the standard of 'reasonable care and due diligence' contained in Section 23-947(C) would certainly involve inquiries to the Industrial Commission and/or the State Compensation Fund within ninety days when no response to a Petition to Reopen was received.That standard has not been met in this case.Excusal of this untimely REQUEST FOR HEARING is barred by the first sentence of A.R.S. Section 23-947(C).SeeBlack v. Industrial Commission, Ariz.(App)P2d [1018](1 CA-IC 3277, Dept C, July 18, 1985).

On May 30, 1986, the administrative law judge entered his decision upon review amending, supplementing and affirming his award.The only changes in the award were in finding number 4.The administrative law judge dropped his reference to Davis v. Industrial Comm'n and added the following language:

It should be noted that another Petition to Reopen this claim was filed on January 27, 1986 and that on March 11, 1986 the applicant's attorney, in the exercise of 'reasonable care and due diligence' did file an inquiry as to the processing of that Petition to Reopen.The applicant's attorney took this reasonably careful and duly diligent action before the undersigned held him to such a standard of care by the March27, 1986 DECISION UPON HEARING AND FINDINGS AND AWARD.

The claimant then filed this petition for special action arguing that the administrative law judge misinterpreted the standard of "reasonable care and diligence" required by A.R.S. § 23-947(C).

The Workers' Compensation Act originally adopted by the Arizona legislature did not contain a provision for requesting a hearing to protest an award.SeeHouse BillNo. 227, Laws 1925, ch. 83.The Industrial Commission Rules of Procedure provided an administrative rehearing procedure, but only if the application was filed within twenty days.See, e.g., Hale's Estate v. Industrial Comm'n, 78 Ariz. 202, 277 P.2d 1014(1954)(citingRule 37,Arizona Rules of Procedure of the Industrial Commission).An award became final unless the application for rehearing was timely filed and no exceptions were recognized.Id.

In 1968, the legislature adopted a statutory hearing provision for the first time, contemporaneously with the introduction of "notices of claim status."SeeLaws 1968, 4th SS, ch. 6, § 20. A.R.S. § 23-947 required that a request for hearing be filed within sixty days ² and contained no exceptions to that limitation period.Initially, the case law in Arizona treated the sixty-day period as final and the Industrial Commission was held to have no authority to waive or excuse a late filing of a hearing request.

A judicially created exception was first recognized by the Arizona Supreme Court in Parsons v. Bekins Freight, 108 Ariz. 130, 493 P.2d 913(1972)(the Industrial Commission could excuse an untimely hearing request if there was a meritorious excuse, the delay was not excessive, and the effect was nonprejudicial to the carrier).Following Parsons, two additional judicially created exceptions were recognized.See, e.g., Industrial Indemnity Co. v. Industrial Comm'n, 27 Ariz.App. 296, 554 P.2d 892(1976)(clerical errors);Van Horn v. Industrial Comm'n, 111 Ariz. 237, 527 P.2d 282(1974)(estoppel based on employer or carrier representations).

In 1980, the legislature amended A.R.S. § 23-947, adding language which specifically prohibited the Industrial Commission or any court from excusing a late filing of a...