Gray v. Industrial Commission

• Decision Date: 11 September 1975
• Docket Number: CA-IC,No. 1,1
• Citation: 539 P.2d 973,24 Ariz.App. 499
• Parties: Thomas F. GRAY, Petitioner, v. The INDUSTRIAL COMMISSION of Arizona, Respondent, Fluor-Utah Construction Co., Inc., Respondent Employer, Hartford Accident and Indemnity Co., Respondent Carrier. 1189.
• Court: Arizona Court of Appeals

Page 973

539 P.2d 973

24 Ariz.App. 499

Thomas F. GRAY, Petitioner, v. The INDUSTRIAL COMMISSION of Arizona, Respondent Fluor-Utah Construction Co., Inc., Respondent Employer Hartford Accident and Indemnity Co., Respondent Carrier.

No. 1 CA-IC 1189.

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

Sept. 11, 1975.

Rehearing Denied Oct. 17, 1975.

Alston & Edwards by Cecil A. Edwards, Jr., Phoenix, for petitioner.

Greg L. Folger, Chief Counsel, Industrial Comm. of Ariz., Phoenix, for respondent.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, P.C. by Donald L. Cross, Phoenix, for respondent employer and respondent carrier.

OPINION

NELSON, Presiding Judge.

There is but one issue which the Court must decide in this case: does the Industrial Commission of Arizona (Commission) have jurisdiction to approve or disapprove compromise and settlement of workmen's compensation claims prior to the determination that the claim is compensable in cases where there is a legitimate controversy regarding the issue of compensability? We hold that the Commission does have such authority and therefore must set aside the award in this case.

The petitioner herein, Thomas F. Gray (Gray), filed a claim for benefits alleging that on August 14, 1972, while working for the respondent employer, Fluor-Utah Construction Company (Fluor-Utah), he suffered an injury arising out of and in the course of his employment, namely, a heart attack. The Commission duly notified Hartford Accident and Indemnity Company, respondent carrier (Carrier), of the claim. On October 18, 1972, the Carrier denied the claim.

On April 6, 1973, Gray, Fluor-Utah and the Carrier filed with the Commission a document denominated 'Stipulation and Petition for Approval of Settlement'. The stipulation advised the Commission that there was a legitimate dispute as to whether petitioner had a compensable claim under the Workmen's Compensation Statutes of Arizona and sought approval of a $7,500.00 settlement. On May 9, 1973, the Commission held, by an award entitled 'Findings and Award and Order Denying Stipulation for Approval of Settlement (No Jurisdiction)', that they had no jurisdiction to approve or disapprove such a compromise and settlement. Gray sought relief, by way of special action both in this Court, Gray v. The Industrial Commission of Arizona, 1 CA-CIV 2432, July 3, 1973, and in the Supreme Court of Arizona, Gray v. The Industrial Commission of Arizona, No. 11285, September 18, 1973. Both courts declined to take jurisdiction of the cause at that time.

The Commission thereafter set down the matter for hearing on the issue of compensability and on March 28, 1974, entered a 'Decision Upon Hearing and Findings and Award for Non Compensable Claim'. Review of that decision was sought and on June 14, 1974, the Commission entered its 'Decision Upon Review Affirming Decision Upon Hearing and Findings and Award for Non-Compensable Claim.' Although both Gray and the Carrier sought additional rulings upon the proposed settlement, except for its ruling on May 9, 1973, supra, the Commission made no additional findings regarding the proposal. This appeal followed the Commission's decision of June 14, 1974.

JURISDICTION

The award of May 9, 1973, supra, did not carry the standard clause, contained in virtually all awards of the Commission, advising the parties of the right to seek relief in this Court is dissatisfied with the result. In addition, the Order specifically directed that the matter be set for a hearing on compensability within ninety (90) days. There was therefore no plain, speedy or adequate remedy by appeal. Gray sought relief by way of special action, supra, but was unsuccessful in his efforts to have the appellate courts take jurisdiction at that time. Both Gray and the Carrier thereafter continued their efforts, to no avail, to have the Commission rule further on their proposed settlement. We deem the issue to have been fully urged below and ruled upon, and incorporated into the final award of the Commission now here for review. Since our decision on this issue requires that the award be set aside, we do not reach the issue of compensability which the Commission determined adversely to Gray.

COMPROMISE AND SETTLEMENT WHERE COMPENSABILITY IS IN ISSUE

The precise question here for determination has not been finally resolved by previous decisions of this Court or the Supreme Court of Arizona. Three decisions, however, clearly point the way to the holding we have arrived at.

The most recent decision touching on this subject was authored by the then Judge Cameron (now Chief Justice of the Arizona Supreme Court) in Goodrich v. The Industrial Commission of Arizona, 13 Ariz.App. 402, 477 P.2d 276 (1970). This decision involved the resolution of two consolidated cases wherein there was no question of a compensable injury but only the issue of the conversion of admittedly entitled compensation to a lump sum payment. Both cases arose out of a situation where the injured workman and the insurance carrier of the employer had agreed to lump sum settlements in excess of those permitted by statute. A.R.S. § 23--1067. The Court held that the specific statute regarding the conversion to a lump sum payment after compensability governed over the general statute, A.R.S. § 23--107A(3) authorizing the Commission to: '3. Promote the voluntary arbitration, mediation and conciliation of disputes between employers and employees.', and no sum in excess of the statutory maximum could be paid.

In arriving at this holding, Judge Cameron reviewed the older decisions touching on the issues of this case and made these guiding observations:

'It would appear from these cases that the Commission does have the authority to approve a compromise settlement of a claim where the claim has not been accepted as compensable under the Arizona Workmen's Compensation Act. According to Doyle and Doby, supra, such a settlement is void unless acted upon and approved by the Commission. Once a claim has been accepted as compensable, however, as in the instant cases, then we believe the Commission is without jurisdiction to compromise or to approve a compromise settlement.

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'We feel that the Commission then may approve a compromise or lump sum settlement prior to the time that the Commission has taken any action accepting the claim. Once the Commission has determined that the claim is compensable it must then determine, according to the facts and the law, the amount of compensation to which the applicant is entitled.' 13 Ariz.App. at 404, 477 P.2d at 278.

Judge Cameron's language is clear and unequivocal. Had the facts of the claims in Goodrich required that language for purposes of the specific holding, we would need go no further. Unfortunately, at least for this case, they did not so require and the statements must be considered as only highly persuasive dicta.

Likewise the older Supreme Court cases referred to by Judge Cameron, supra, are more persuasive than controlling. In Doyle v. Old Dominion Company, 44 Ariz. 123, 34 P.2d 401 (1934), the holding actually went to the issue of whether or not certain conduct of the Commission resulted in its approval of a settlement, rather than any authority of the Commission to approve the settlement. Although the case appears in the first instance to have been one where compensability was an issue between the parties, the Court does not allude to this fact at all in its holding.

The decision in Doby v. Miami Trust Company, 39 Ariz. 228, 5 P.2d 187 (1931), actually involved a resolution of a claim where the Commission had originally made a finding of non-compensability, then granted a rehearing, took testimony, made no finding on the rehearing testimony, but participated in a settlement whereby the Commission itself actually paid a lump sum award. All of the language regarding any compromise between employer and employee, or carrier, as here, is purely dictum. The Commission was at that time both the adjudicator of claims and the administrator of the state fund (see...