Kessen v. Stewart
Decision Date | 26 August 1999 |
Docket Number | No. 1 CA-IC 98-0040.,1 CA-IC 98-0040. |
Citation | 195 Ariz. 488,990 P.2d 689 |
Parties | David KESSEN & Carolyn Kessen, husband and wife, dba Kessen & Kessen, Petitioner Employer, v. Lynn STEWART, Respondent Employee, The Industrial Commission of Arizona, Respondent, No Insurance Section/Special Fund Division, Respondent Party in Interest. |
Court | Arizona Court of Appeals |
Dennis R. Kurth, P.C. by Dennis R. Kurth, Phoenix, Attorneys for Petitioner Employer.
Day, Kavanaugh & Blommel, P.C. by Sandra A. Day, Mesa, Attorneys for Respondent Employee/Cross-Petitioner Employee. The Industrial Commission Of Arizona, Anita R. Valainis, Chief Counsel, Phoenix, Attorney for Respondent.
The Industrial Commission Of Arizona No Insurance Section/Special Fund Division by Paula R. Eaton, Phoenix, Attorney for Respondent Party in Interest.
¶ 1 The Kessens, Claimant Lynn Stewart's uninsured employer, seek special action review of the Industrial Commission of Arizona's ("ICA") affirmance of the lump-sum commutation of Claimant's workers' compensation award. The Kessens assert that, as Claimant's employer, their consent was required before the ICA could commute Claimant's award of unscheduled permanent partial disability benefits to a lump sum. We hold that it was not. On cross-petition, Claimant challenges the ICA's reduction of the lump-sum award by subtracting the monthly disability payments made to him after he submitted his lump-sum request. We hold that Claimant failed to preserve this issue for review. Accordingly, we affirm the ICA's award approving the lump-sum commutation.
¶ 2 On August 6, 1993, Claimant injured his back while working for the Kessens' rock-crushing business in Globe, Arizona. Because the Kessens did not have workers' compensation insurance for the period in which Claimant's injury occurred, the claim was handled by the ICA's No Insurance Section/Special Fund Division ("Special Fund"). The claim was eventually closed with a five percent unscheduled permanent impairment, entitling Claimant to $404.29 per month in unscheduled disability payments.
¶ 3 On October 3, 1997, Claimant requested a "lump-sum commutation" of his unscheduled award—that is, he requested a lump-sum payment in lieu of further monthly payments. The ICA granted the request and, because the $79,000 present value of Claimant's future disability payments exceeded the statutory cap, awarded Claimant the statutory maximum of $50,000, less any payments received after the request was made. See Ariz.Rev.Stat. Ann. ("A.R.S.") § 23-1067(B) (1995). The Kessens timely protested. After considering the parties' legal memoranda, the ICA affirmed the lump-sum commutation. The Kessens then brought this special action. Claimant cross-petitioned, claiming that the ICA was erroneously deducting his monthly payments from his $50,000 award.
¶ 4 The Kessens argue that the ICA erred by failing to obtain their consent to the Claimant's request for a lump-sum commutation. By statute, the consent of the "carrier liable to pay the claim" must be obtained before a lump-sum commutation may be awarded:
The [ICA] may allow commutation of compensation pursuant to § 23-1044, subsection C, and 23-1045, subsections B, C, and D, to a lump sum of not to exceed ... fifty thousand dollars for commutation requests made from and after June 30, 1987, with the consent of the carrier liable to pay the claim, under such rules, regulations and system of computation as it devises for obtaining the present value of the compensation.
A.R.S. § 23-1067(B) (emphasis added).
¶ 5 The Kessens assert that section 23-1067(B) requires the consent even of an uninsured employer before the ICA may approve a request for a lump-sum commutation because, by statute, an uninsured employer is liable to reimburse the Special Fund for benefit payments made on the employers behalf. See A.R.S. § 23-907(C) (Supp.1998). They argue that a contrary interpretation would frustrate the legislature's intent and would violate due process and equal protection principles. We disagree.
¶ 6 Our primary goal when interpreting a statute is to give effect to the legislature's intent. See State v. Korzep, 165 Ariz. 490, 493, 799 P.2d 831, 834 (1990); Martin v. Martin, 156 Ariz. 452, 457, 752 P.2d 1038, 1043 (1988). Statutory language is the best indicator of that intent and we will give terms "their ordinary meanings, unless the legislature has provided a specific definition or the context of the statute indicates a term carries a special meaning." Wells Fargo Credit Corp. v. Tolliver, 183 Ariz. 343, 345, 903 P.2d 1101, 1103 (App.1995). If uncertainty exists as to the meaning of a term, we will employ other means of statutory interpretation, such as "the context of the statute and its historical background, subject matter, effects, consequences and purpose." Alaface v. National Inv. Co., 181 Ariz. 586, 592, 892 P.2d 1375, 1381 (App.1994); see also Hayes v. Continental Ins. Co., 178 Ariz. 264, 268, 872 P.2d 668, 672 (1994); Korzep, 165 Ariz. at 493,799 P.2d at 834.
¶ 7 "Insurance carrier" is defined in the workers' compensation statutes as "the state compensation fund and every insurance carrier duly authorized by the director of insurance to write workers' compensation ... insurance in the state of Arizona." A.R.S. § 23-901(8) (1995). This definition does not encompass an uninsured employer such as the Kessens. Thus, as the Kessen's acknowledge in their opening brief, if we apply the statutory definition of "insurance carrier" to section 23-1067(B), our inquiry is finished; the legislature plainly excluded uninsured employers from the ambit of the statute.
¶ 8 Such an analysis is problematic, however, for as the Kessens observe the definition of "insurance carrier" in section 23-901(8) also does not include either the Special Fund or self-insured employers. See A.R.S. § 23-961(A)(2) (Supp.1998); see also Spear v. Industrial Comm'n, 114 Ariz. 601, 605-06 & n. 3, 562 P.2d 1099, 1103-04 & n. 3 (App.1977) ( ). An interpretation that excludes these entities from section 23-1067(B), however, would not comport with the intended goal of the statute: to grant a say to those entities immediately affected by a lump-sum commutation. We therefore agree with the Kessens that, for purposes of section 23-1067(B), the term "carrier" is subject to a broader interpretation than that presented by the statutory definition of "insurance carrier" in section 23-901(8).
¶ 9 Given the uncertain scope of the term "carrier" as used in section 23-1067(B), the Kessens assert that the key to interpreting to whom the legislature intended to grant a veto power lies in the phrase "liable to pay the claim." They argue that, because the uninsured employer is liable to reimburse the Special Fund for all benefits paid on the employer's behalf, plus a ten percent penalty, see A.R.S. § 23-907(C), the uninsured employer is "liable to pay the claim" within the meaning of section 23-1067(B).
¶ 10 We agree with the Kessens that an uninsured employer is "liable to pay"— that is, the uninsured employer is ultimately responsible for reimbursing the Special Fund for benefits it pays a claimant on the uninsured employer's behalf. See id. However, we think the Kessens have parsed the statute too finely. We cannot interpret "liable to pay" in a vacuum; instead, we must examine the phrase "carrier liable to pay the claim" as a whole. In doing so, we conclude that the sum of the entire phrase is greater than that of its parts, and the legislature intended to grant a veto power only to the entity directly liable for the claim, as opposed to an entity secondarily liable to the Special Fund.
¶ 11 This court recently addressed a similar argument. In Bohn v. Industrial Commission, 194 Ariz. 479, 984 P.2d 565 (App. 1999), we interpreted an Arizona workers' compensation statute that requires an employee to obtain approval from the "compensation fund, or ... the person liable to pay the claim" before settling a third-party civil claim for less than the benefits provided. A.R.S. § 23-1023(C) (1995) (emphasis added). The court rejected the claimant's argument that he satisfied section 23-1023(C) by obtaining the consent of his uninsured employer:
Although an uninsured employer is liable to the Special Fund, the Special Fund may never recover the workers' compensation it paid a claimant. Consequently, the Special Fund, not an uninsured employer, is the "other person liable to pay the [workers' compensation] claim" under A.R.S. section 23-1023(C).
Bohn, 194 Ariz. at 485 ¶ 32, 984 P.2d at 571 ¶ 32.
¶ 12 The same reasoning applies here. That the uninsured employer is ultimately responsible to reimburse the Special Fund for payments it has made on the employer's behalf does not grant the uninsured employer the veto power reserved for the entity presently liable to pay the claim. See A.R.S. § 23-1067(B).
¶ 13 We are further aided in our analysis by the legislature's express desire to exclude uninsured employers from the protections granted other interested parties under the workers' compensation statutes: "Employers who are subject to and who fail to comply with the provisions of § 23-961 or 23-962 shall not be entitled to the benefits of this chapter [A.R.S. §§ 23-901 to 23-1091]...." A.R.S. § 23-907(A) (Supp.1998). Accordingly, we conclude that section 23-1067(B) does not require the consent of an uninsured employer before the ICA may approve an employee's lump-sum commutation request.
¶ 14 The Kessens further argue that such a construction of section 23-1067(B) violates equal protection by unreasonably treating uninsured employers differently from self-insured employers for the purpose of approving or vetoing lump-sum commutations. We agree that the two classes are treated differently, but...
To continue reading
Request your trial-
State v. Smith
...submitted against him by the State. Id. at 549 ¶11, 390 P.3d at 789 (quoting Kessen v. Stewart , 195 Ariz. 488, 492 ¶ 16, 990 P.2d 689, 693 (App. 1999) ); State v. Hampton , 213 Ariz. 167, 179 ¶¶ 48–50, 140 P.3d 950, 962 (2006) (to same effect).¶36 Citing State v. Rosengren , 199 Ariz. 112,......
-
State v. Hidalgo
...argues that parties must be permitted to develop both the law and the facts, citing Kessen v. Stewart , 195 Ariz. 488, 492 ¶ 16, 990 P.2d 689, 693 (App. 1999). But "[p]rocedural due process ... requires nothing more than an adequate opportunity to fully present factual and legal claims." Id......
-
Dougall v. Dougall
...the legislature has provided a specific definition or the context of the statute indicates a term carries a special meaning.’ ” Kessen v. Stewart, 195 Ariz. 488, ¶ 6, 990 P.2d 689, 692 (App.1999), quoting Wells Fargo Credit Corp. v. Tolliver, 183 Ariz. 343, 345, 903 P.2d 1101, 1103 (App.199......
-
State v. Oaks
...the legislature has provided a specific definition or the context of the statute indicates a term carries a special meaning.'" Kessen v. Stewart, 195 Ariz. 488, ¶ 6, 990 P.2d 689, 691-92 (App.1999), quoting Wells Fargo Credit Corp. v. Tolliver, 183 Ariz. 343, 345, 903 P.2d 1101, 1103 ¶ 11 A......
-
§ 5.17 Outline of Procedural Steps and Time Limits.
...5-4, 20 Karber/Interstate Air v. Indus. Comm’n, 180 Ariz. 411, 885 P.2d 99 (App. 1994)..... 5-8 Kessen v. Stewart, 195 Ariz. 488, 990 P.2d 689 (App. 1999)............................. 5-11, 17 Kinnard v. Indus. Comm’n, 176 Ariz. 318, 861 P.2d 603 (1993).............................. 5-19 Ko......
-
9.6.1 The Commission's Claims Processing Functions
...Manual at 40.[154]Id. at 118.[155]Id. at 114.[156]Id. at 38, 150.[157]A.R.S. § 23-907 (B) (Supp. 1991); see also Kessen v. Stewart, 195 Ariz. 488, 990 P.2d 689 (1999) (holding that an uninsured employer’s consent is not required before the Industrial Commission may agree to commute an emplo......
-
§ 31.3.2.3.1 Exhaustion of Administrative Remedies.
...principle requires that the issues raised on judicial review have been raised in the agency proceedings. Kessen v. Indus. Comm’n, 195 Ariz. 488, 493, ¶¶ 18-19, 990 P.2d 689, 694 (App. 1999). Similarly, judicial review is precluded for an issue not raised in a request for administrative revi......
-
§ 5.5.4 Preservation of Issues For Review.
...or properly asserted in the request for review or supporting memorandum. See, e.g., id. at 44-45, 676 P.2d at 1102-03; Kessen v. Stewart, 195 Ariz. 488, 494, ¶ 21, 990 P.2d 689, 695 (App. 1999) (discussing general rule and its exceptions); Stephens v. Indus. Comm’n, 114 Ariz. 92, 94-95, 559......