Home Ins. Co. v. Industrial Commission

• Decision Date: 23 January 1975
• Docket Number: CA-IC,No. 1,1
• Citation: 23 Ariz.App. 90,530 P.2d 1123
• Parties: HOME INSURANCE COMPANY, Petitioner Carrier, Henry C. Beck Company, Petitioner Employer, v. The INDUSTRIAL COMMISSION of Arizona, Respondent, James L. WAGES, Respondent Employee. 979.
• Court: Arizona Court of Appeals

Page 1123

530 P.2d 1123

23 Ariz.App. 90

HOME INSURANCE COMPANY, Petitioner Carrier Henry C. Beck Company, Petitioner Employer, v. The INDUSTRIAL COMMISSION of Arizona, Respondent James L. WAGES, Respondent Employee.

No. 1 CA-IC 979.

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

Jan. 23, 1975.

Rehearing Denied March 6, 1975.

Burch, Cracchiolo, Levie, Guyer & Weyl by Daniel Cracchiolo, Phoenix, for petitioner Carrier and petitioner Employer

Edward F. Cummerford, Phoenix, for respondent The Industrial Commission of Arizona.

Willis & Riggs by W. Blake Willis, Scottsdale, for respondent Employee.

OPINION

HAIRE, Chief Judge.

On this review of an award entered by the respondent Industrial Commission, the basic issue is whether the responsibility for the payment of the injured workman's continuing medical benefits is that of the petitioning insurance carrier or that of the respondent Commission's Special Fund. ¹

The workman was injured on February 22, 1972 when he slipped and fell from a scaffold. As a result of the fall, he sustained numerous severe injuries, including repture of the liver, rupture of the gastrohepatic ligament, subcapcula hematoma of the spleen, fractured wrist, lacerated scalp, lacerated forearm and traumatic myelopathy, complete, and compression fracture of and dislocation and cord contusion, C5--6. As a result of the foregoing injuries, the workman is classified as C5 quadriplegic, complete. On August 18, 1972, some six months after he was injured, he was discharged from the hospital. At that time the insurance carrier issued a notice of claim status terminating his medical benefits. A few days later, the carrier also issued a notice of permanent disability benefits which in effect found the workman permanently and totally disabled, and entitled to the maximum compensation benefits provided under the workmen's compensation law.

At the time of the issuance of the carrier's notice of claim status terminating medical benefits, the workman's need for continuing medical benefits was substantial. At that time, and at all times pertinent to this opinion, A.R.S. § 23--1065 A(2) required the Commission to pay from the Special Fund created pursuant to that section 'additional awards for injured employees in such amounts as may be necessary for continuing benefits or medical benefits after the period of temporary disability, or after the obligation of the carrier is extinguished under subsection A of section 23--1044 or subsection A of section 23--1045.' In contemplation of the possible liability of the Special Fund for the workman's continuing medical benefits, the Special Fund of the Commission timely filed a request for hearing concerning the carrier's notice of claim status which had terminated medical benefits. In its request for hearing the Special Fund contended that the workman's condition had not progressed to the point that it was 'stationary', and that therefore the carrier's notice of claim status terminating medical benefits was in error and that the carrier continued to have a responsibility to furnish medical benefits to the workman.

After a hearing at which medical testimony was taken, the Commission's hearing officer issued an award which required the carrier to continue paying the workman's medical benefits 'until his condition became stationary'. The carrier has duly sought review by this Court of that award.

Initially it must be emphasized that the issue in this review concerns only the question of whether the hearing officer's award requires the petitioning carrier to bear the responsibility for the injured workman's continuing medical benefits beyond a point in time which can be legally justified under the statutes. There is no question concerning the injured workman's Entitlement to continued medical benefits--the respondent Commission appropriately concedes that under the then existing statutes the Commission's Special Fund will become responsible for these medical benefits at the time the responsibility of the insuring carrier terminates.

Both parties agree that the carrier's legal responsibility for continuing medical benefits terminates when the injured workman's physical condition relating to the injury becomes 'stationary'. However they completely disagree as to whether the evidence supports the hearing officer's determination that this particular injured workman's condition was not stationary at the time the carrier terminated his medical benefits. Inasmuch as there is no controversy as to the facts relating to this workman's physical condition, and there was only one expert medical witness, the disagreement of the parties can be largely attributed to their differing concepts of what constitutes that point in the ongoing physical condition of an injured workman categorized by Arizona decisional law as a 'stationary condition'. The petitioning carrier contends that the term 'stationary' has consistently been defined in the context of the workman's earning capacity, and therefore, that when applied to a fact situation as in the present case, where it is immediately apparent that the workman's injuries will render him permanently and totally disabled (from an earning capacity standpoint), the condition is 'stationary' practically immediately after the initial emergency treatment, and the carrier's responsibility for further medical benefits terminates at that time. On the other hand, the respondent Special Fund disputes any earning capacity concept of the term 'stationary', and to the contrary presents a developmental physical condition concept tied closely to a continuing need for medical treatment, urging that the injured workman's 'condition is stationary when all bodily systems affected by an industrial injury are stable and not subject to active medical treatment.' As though the discrepancy between the concepts advanced by the carrier and the Special Fund were not enough to confuse the issue, the findings entered by the Commission's hearing officer inject a consideration entirely foreign to that espoused by either of the above, and that is that the concept of 'stationary' may in some manner be influenced by actuarial considerations relating to the future solvency of the Special Fund.

A determination of these conflicting concepts of the meaning of the term 'stationary' requires a review of the statutory and judicial considerations which have given rise to the decisional promulgation of the stationary concept. If a stranger to Arizona law were to thoroughly review our workmen's compensation laws in order to determine the obligations and responsibilities of the parties to this review, he would not find any reference to obligations commencing or terminating at such time as an injured 'workman's condition becomes 'stationary'. Instead he would find that the obligation for the payment of medical benefits by the carrier originates in the provisions of A.R.S. § 23--1062 A, which requires the payment of such benefits 'reasonably required at the time of the injury, and During the period of temporary disability.' ² In order to understand the limitation to 'the period of temporary disability' one must appreciate that under the Arizona statutory scheme an injured workman's entitlement to wage-type compensation is broken down into two major components based upon the physical condition of the workman: (1) that period involving temporary disability, whether total or partial, See A.R.S. §§ 23--1044 A and 23--1045 A; and (2) a subsequent period in which permanent disability might be involved, again either total or partial, See §§ 23--1044 B and C, and 23--1045 B and C.

The statutes do not define 'temporary' or 'permanent' as used in these disability provisions so as to provide a readily ascertainable line of demarcation for the purpose of differentiating between rights flowing from a temporary disability status and rights flowing from a permanent disability status. This statutory void has been filled by decisional law through the development of the 'stationary condition' concept. Under this concept when an injured workman's condition becomes stationary, his entitlement to temporary disability benefits terminate and his entitlement, if any, to permanent disability benefits commences. Ossic v. Verde Central Mines, 46 Ariz. 176, 49 P.2d 396 (1935); Minton v. Industrial Commission, 90 Ariz. 254, 367 P.2d 274 (1961); Employers Mutual Liability Insurance Company of Wisconsin v. Contreras, 109 Ariz. 383, 509 P.2d 1030 (1973); Continental Casualty Company v. Industrial Commission, Ariz., 528 P.2d 817 (1974); Hardware Mutual Casualty Company v. Industrial Commission, 17 Ariz.App. 7, 494 P.2d 1353 (1972); Aragon v. Industrial Commission, 14 Ariz.App. 175, 481 P.2d 545 (1971).

An early Supreme Court decision, Ossic v. Verde Central Mines, Supra, discussed this concept as follows:

'The compensation act (Rev.Code 1928, § 1391 et seq.) contemplates that when an employee is injured from an accident arising out of and in the due course of his employment he shall receive temporary disability compensation Until such time as his condition becomes static, at which time if there be any continuing disability, it shall be considered permanent and future compensation shall be awarded him on that basis.' (Emphasis added). 46 Ariz. at 181, 49 P.2d at 399 In Ossic the court recognized that the point at which temporary disability ends and permanent disability commences may come into existence even though there is a continuing need for medical treatment, stating:

'After some four years of treatment, most of his physicians concurred in a report that it was very unlikely medical and surgical treatment could improve his condition, Though his sinuses were apparently in such a condition that they needed continual irrigation and cleansing to prevent a spreading of an infection . . ..' (Emphasis added). 46 Ariz. at 180, 49 P.2d at 398

And later in the opinion:

'We consider first the...