Indus. Comm'n of Ariz. v. Brewer
| Decision Date | 23 November 2012 |
| Docket Number | No. 1 CA–CV 11–0119.,1 CA–CV 11–0119. |
| Parties | INDUSTRIAL COMMISSION OF ARIZONA, for itself and as Trustee for the Special Fund of the Industrial Commission of Arizona, Plaintiffs/Appellees, Arizona State Compensation Fund; Arizona Contractor's Association, Inc.; National Federation of Independent Businesses; American Insurance Association; Arizona Self–Insurers Association; Arizona Multihousing Association, Arizona Beef Council; Alliance of Construction Trades; Arizona Police Association; Professional Firefighters of Arizona; Arizona Building and Construction Trades Council; and Arizona Education Association, Plaintiffs–Intervenors/Appellees, v. Janice K. BREWER, Governor of the State of Arizona, in her official capacity; D. Clark Partridge, Comptroller of the State of Arizona, in his official capacity; and the State of Arizona, a governmental entity, Defendants/Appellants. |
| Court | Arizona Court of Appeals |
OPINION TEXT STARTS HERE
Thomas C. Horne, Attorney General by Mark P. Bookholder, Assistant Attorney General, Phoenix, Attorneys for Defendants/Appellants.
Mariscal, Weeks, McIntyre & Friedlander, P.A. by David J. Ouimette, Phoenix, Attorneys for Plaintiff/Appellee.
Kutak Rock LLP by Michael W. Sillyman, S. David Childers, Vanessa R. Brown, Scottsdale, and Charles E. Jones, Attorney at Law by Charles E. Jones and William D. Sheldon, General Counsel, State Compensation Fund, Phoenix, Attorneys for Plaintiffs–Intervenors/Appellees Arizona State Compensation Fund; Arizona Contractor's Association, Inc.; National Federation of Independent Businesses; American Insurance Association; Arizona Self–Insurers Association; Arizona Multihousing Association; Arizona Beef Council; and Alliance of Construction Trades.
Haralson, Miller, Pitt, Feldman & McAnally, P.L.C. by Stanley G. Feldman, Nathan J. Fidel, Tucson, Attorneys for Plaintiffs–Intervenors/Appellees Arizona Police Association; Professional Firefighters of Arizona; Arizona Building and Construction Trades Council; Arizona Education Association.
¶ 1 We are asked to decide whether the trial court erred when it ruled that the State of Arizona could not transfer funds from the Special Fund of the Industrial Commission of Arizona (“ICA”) to the State's general fund. Because the Special Fund's monies are public funds subject to appropriation, we reverse and remand for entry of judgment in favor of the State.
¶ 2 Governor Janice Brewer signed House Bill 2051 (“H.B. 2051”) on March 12, 2009. 2009 Ariz. Sess. Laws, ch. 1 (1st Reg. Sess.). The legislation moved money from various state funds into the general fund in an attempt to resolve an anticipated budget shortfall. Id. Sections four and five of the legislation authorized the transfer of $4,685,000 from the ICA's Special Fund into the general fund. Id.
¶ 3 After failing to get the governor and legislature to reconsider the transfer, the ICA filed this lawsuit. It sought to permanently enjoin the State from transferring any funds from the Special Fund.
¶ 4 The trial court granted a temporary restraining order to preclude the immediate transfer of Special Fund monies. After the court allowed several organizations to intervene,1 the ICA, the intervenors (collectively, the “ICA”) and the State filed cross-motions for summary judgment. The court subsequentlygranted summary judgment for the ICA. After its motion for new trial was denied, the State filed this appeal.2
¶ 5 With the passage of the Workmen's Compensation Act in 1925, see Red Rover Copper Co. v. Indus. Comm'n, 58 Ariz. 203, 211, 118 P.2d 1102, 1105 (1941), the State Compensation Fund was created to pay compensation benefits to injured workers under the new no-fault system. Not only was it designed to “insur[e] employers against liability for compensation under this act” but the fund ensured that workers were compensated. 1925 Ariz. Sess. Laws, ch. 83, § 30 . The legislation authorized the ICA to administer the compensation fund, id. § 31, loaned the ICA $100,000 to start using the fund, id. § 98, and provided that the fund would be funded subsequently by “all premiums and penalties received and paid into the fund, or property and securities acquired by and through the use of moneys belonging to the fund and deposited or invested.” Id. § 30.
¶ 6 The ICA used the State Compensation Fund to pay compensation awards as well as conducting its business, see, e.g., Indus. Comm'n v. Sch. Dist. No. 48, 56 Ariz. 476, 480, 108 P.2d 1004, 1005–06 (1941) (), until the Special Fund was created in 1953. 1953 Ariz. Sess. Laws, ch. 12, § 1 (1st Reg. Sess.) (). The Special Fund was designed to: (1) allow the ICA to “provide such additional awards as may be necessary to enable injured employees to accept the benefits” of any state or federal vocational rehabilitation program for disabled employees; (2) “provide additional awards for injured employees ... where the employees' compensable permanent disabilities are of such a nature as to prevent them from caring” for themselves or “their bodily functions” because their resources are insufficient to provide for “such unusual expenses of care and attendance”; and (3) pay statutory compensation for a second injury after an employee had a prior serious injury, such as the loss of a limb or a “permanent and complete loss of the use of a hand, an arm, a foot, a leg or an eye,” which leaves the employee “totally and permanently disabled.” Id. The legislation also provided that the Special Fund would be funded by “payment[s] into [the] state treasury of not to exceed one (1%) percent of all premiums received by [the] state compensation fund during any year.” Id.
¶ 7 Sixteen years later, the Administrative Fund was created “to provide for all expenses of the industrial commission in carrying out its powers and duties” and “shall be subject to budgetary review and legislative approval as expenditures from other state funds.” 1968 Ariz. Sess. Laws, ch. 6, § 58 (4th Spec. Sess.) (). The Administrative Fund, which is the ICA's operating fund, is also structured to be self-supporting. A.R.S. § 23–1081(B).
¶ 8 The Special Fund was subsequently placed within the Administrative Fund, A.R.S. § 23–1065(A) (), and it continues to be an integral part of the workers' compensation system. The Special Fund currently pays claims to: injured workers if their employers did not obtain workers' compensation insurance, A.R.S. § 23–907(B)–(D); employers who hired previously injured workers who incur new job-related injuries; 3 and, as originally created, provides awards to promotevocational rehabilitation for injured employees. A.R.S. § 23–1065(A)–(C). The Special Fund also reimburses claims of injured workers when insurance carriers, self-insured employers, “or other employer[s] authorized by the [ICA] to process or pay claims directly” fail to fully comply and pay compensation, medical benefits, or final ICA orders. A.R.S. § 23–966(A).
¶ 9 The Special Fund receives no general tax revenue. “The [ICA] may direct the payment into the state treasury of not to exceed one and one-half per cent of all premiums received by the state compensation fund and private insurance carriers during the immediate calendar year.” A.R.S. § 23–1065(A). 4 The Fund also receives assessments on self-insured employers, as well as other additional assessments as determined by the director of the ICA. A.R.S. § 23–1065(A), (F), (J). The Special Fund also receives funding from “property and securities acquired by the use of monies in the fund, interest earned on monies in the fund and other monies derived from the sale, use or lease of properties belonging to the fund.” A.R.S. § 23–1065(J). And, if the ICA determines that there is a revenue surplus under § 23–961 that is greater than the expenses of the ICA and other expenditures from the Administrative Fund, and the Special Fund is not actuarially sound, the ICA can give notice to the treasurer to transfer the surplus to the Special Fund. A.R.S. § 23–1081(B).
¶ 10 In granting summary judgment, the trial court ruled that the monies in the Special Fund were “insurance proceeds held in trust for the benefit of employees and employers covered by [the] Workers' Compensation Act,” and that those employees and employers had vested rights in the Special Fund monies. As a result, the court found that the Special Fund proceeds were not public revenues or public funds and were not subject to appropriation by the legislature.
¶ 11 “We review issues of law involving statutory interpretation and a trial court's grant of summary judgment de novo.” Bentley v. Bldg. Our Future, 217 Ariz. 265, 270, ¶ 11, 172 P.3d 860, 865 (App.2007). Further, “[w]e presume statutes are constitutional and must construe them, if possible, to give them a constitutional meaning.” Arpaio v. Maricopa Cnty. Bd. of Supervisors, 225 Ariz. 358, 364, ¶ 23, 238 P.3d 626, 632 (App.2010) (citing Jackson v. Tangreen, 199 Ariz. 306, 309, ¶ 5, 18 P.3d 100, 103 (App.2000)). When statutory language is plain and unambiguous, we will follow the text as it is written, and “need not resort to other methods of statutory construction.” Indus. Comm'n v. Old Republic Ins. Co., 223 Ariz. 75, 77, ¶ 7, 219 P.3d 285, 287 (App.2009). “We will give effect to each word or phrase and apply the usual and commonly understood meaning unless the legislature clearly intended a different meaning.” Id. (internal quotation marks omitted). Absent evidence of a contrary legislative intent, “we will not construe the words of a statute to mean something other than what they plainly state.” Id. at 78, ¶ 7, 219...
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