Ream v. Wendt, 2

CourtCourt of Appeals of Arizona
Writing for the CourtMOLLOY; KRUCKER, C. J., and HATHAWAY
Citation2 Ariz.App. 497,410 P.2d 119
PartiesMarie E. REAM, Appellant, v. Marion WENDT, dba the Palm Grove, Appellee. 120.
Docket NumberNo. 2,CA-CIV,2
Decision Date25 January 1966

Ramon R. Alvarez, Douglas, for appellant.

The Industrial Commission of Arizona, by Glen D. Webster, Jr., and Robert K. Park, Phoenix, for appellee.

MOLLOY, Judge.

This is an appeal from a summary judgment rendered in a negligence action in favor of the defendant on the grounds that the plaintiff's exclusive remedy against the defendant-employer is a proceeding under the Workmen's Compensation Act.

The plaintiff, employed by the defendant as a waitress in a bar and restaurant in Douglas, Arizona, known as The Palm Grove, was injured during the course of her employment on January 29, 1964. Subsequent to her accident, the plaintiff applied to The Industrial Commission of Arizona for compensation. On April 9, 1964, The Industrial Commission made an award, finding that the plaintiff had sustained a personal injury by accident arising out of and in the course of her employment on January 29, 1964, that at the time of said accident the defendant-employer was insured against liability for the payment of accident benefits and compensation, that the plaintiff was entitled to temporary disability from January 30, 1964 through February 16, 1964, and that the plaintiff had suffered no physical disability resulting from said accident. On the basis of these findings, The Industrial Commission awarded accident benefits and the sum of $76.93 for temporary total disability.

Previous to this award, on approximately March 16, 1964, the plaintiff consulted with an attorney about the possibility of bringing legal action against the defendant. Subsequent to this conference, and previous to the award, the plaintiff submitted to The Industrial Commission a supplemental claim for compensation, and subsequent to the award of April 9, 1964, the plaintiff received and cashed a check for $8.55 from The Industrial Commission as final payment of the $76.93 allowed for temporary total disability.

The plaintiff's suit against the defendantemployer is based on three contentions: (1) that A.R.S. § 23-906, subsec. C providing, inter alia, that emplopyees who fail to reject the Workmen's Compensation Act prior to injury are '* * * conclusively presumed to have elected to take compensation * * *' is unconstitutional; (2) that the defendant-employer either did not post notices of the right to reject workmen's compensation as provided by A.R.S. § 23-906, subsec. D and/or that the employer failed to keep available forms for the rejection of workmen's compensation as provided by A.R.S. § 23-906, subsec. B; and (3) that the plaintiff did not, by making a claim for compensation, waive the option to bring an action against her employer because when she made such claim she did not know of her alternative remedies, and did not know that filing a claim for compensation would constitute a waiver of a right to bring a negligence action against her employer.

The monies received by the plaintiff for compensation and those paid out on her behalf as accident benefits have not been tendered back, but, on December 14, 1964, after this action had been pending since June 19, 1964, the plaintiff filed a document denominated 'Notice and Tender,' in which she requested that she be forthwith notified of the total of monies expended on her behalf and in which she stated that upon notification such sum would be forthwith remitted to The Industrial Commission. This information seems to have previously been provided, however, for in an affidavit of Glen D. Webster, Jr., defendant's attorney, filed November 16, 1964 in support of the defendant's motion for summary judgment, the amounts expended for medical benefits and paid for temporary total disability were set forth as being $411.00 and $76.93 respectively.

We first proceed to the attack upon the constitutionality of A.R.S. § 23-906. The contention is made that this section, insofar as it provides for a conclusive election to take workmen's compensation benefits by failure to reject the Act prior to injury, is in violation of art. 18, §§ 6 and 8 OF THE ARIZONA CONSTITUTION1, A.R.S. The plaintiff points out that it is the law of this jurisdiction that art. 18, § 6 solidifies in the Constitution the right to bring a negligence action for personal injury. Alabam's Freight Co. v. Hunt, 29 Ariz. 419, 242 P. 658 (1926).

In Industrial Commission of Arizona v. Crisman, 22 Ariz. 579, 199 P. 390 (1921), our Supreme Court held the then existing Workmen's Compensation Act unconstitutional because of a similar provision to that challenged now in the present Act. At that time, art. 18, § 8 of our Constitution ended with the proviso: '* * * that it shall be optional with said employee to settle for such compensation, or retain the right to sue said employer as provided by this Constitution.' Provision for a conclusive election by failing to reject prior to injury, as contained in § 60 of the old Act, was held to be a violation of this proviso, and the entire Workmen's Compensation Act was struck down.

Thereafter, in 1925, the subject provision in the Constitution was amended by adding thereto the following language:

'* * * provided further, in order to assure and make certain a just and humane compensation law in the State of Arizona, for the relief and protection of such workmen, their widows, children or dependents, as defined by law, from the burdensome, expensive and litigious remedies for injuries to or death of such workmen, now existing in the State of Arizona, and producing uncertain and unequal compensation therefor, such employee, engaged in such private employment, may exercise the option to settle for compensation by failing to reject the provisions of such Workmen's Compensation Law prior to the injury.' (Emphasis added.)

In the Alabam's Freight Company case, supra, the new Act was challenged as to its constitutionality and upheld, against a many-pronged attack, with one exception. The court found that that portion of the Act granting an election to reject the Act only to those employee engaged in hazardous employment was in violation of art. 18, § 8 in that it did not grant the election to all employees, and the court held that the election provision under the mandate of this constitutional provision must apply to all employees. As thus construed, the new Act was held to be valid.

It is the plaintiff's contention, however, that the specific attack as to constitutionality now made was not before the court in the Alabam's Freight Company case nor did the court then have the doctrine pertaining to election of remedies established by the three Pressley decisions. Pressley v. Industrial Commission, 72 Ariz. 299, 233 P.2d 1082 (1951); Pressley v. Industrial Commission, 73 Ariz. 22, 236 P.2d 1011 (1951); State ex rel. Industrial Commission v. Pressley, 74 Ariz. 412, 250 P.2d 992 (1952).

The gist of the plaintiff's argument is that the additional language added to art. 18, § 8 in 1925 provides only that the employee 'may' exercise an option to settle for compensation by failing to reject and that this permissive word gives a right to the employee without granting to the legislature the right to provide that a failure to reject prior to injury is conclusively deemed to be a waiver of the right to bring a negligence action.

The plaintiff's argument that the three Pressley decisions in some way affects the basic constitutional law as to an employee's options to either take compensation or bring suit verges into the next contention of the plaintiff which is that there can be no waiver of the right to sue the employer by filing a claim for compensation unless the employee knows of the existence of alternative remedies and the fact that such a claim will constitute a waiver.

In the Pressley decisions our Supreme Court determined that knowledge of alternative remedies and an intention to elect is necessary in order for A.R.S. § 23-1024 2 to be enforced insofar as an election to sue a third party tort-feasor is concerned.

The plaintiff points out that in the Alabam's Freight Company case our Supreme Court said:

'The common-law action of negligence, as modified by the Constitution, is now as much 'provided' by that instrument for the benefit of all, be they employees or others, as are the Employers' Liability Law or the Compensation Act, for certain classes of employees, and no statute can take away the right to pursue it without granting a reasonable election to all who, on the facts, are entitled to it.' (Emphasis added) 29 Ariz. 419, 444, 242 P. 658, 666 (1926)

Plaintiff contends that A.R.S. § 23-906 does not provide a reasonable election in that it does not require that the employee have any knowledge of alternative remedies and that unless A.R.S. § 23-1024 is construed as in the Pressley decisions to require knowledge, it too would be unconstitutional as applied to employers.

An examination of the notice required to be posted by A.R.S. § 23-906 lends support to the plaintiff's contention that knowledge of alternative remedies is not necessarily brought home to the employee. The notice required to be posted reads as follows:

'All employees are hereby notified that in the event they do not specifically reject the provisions of the compulsory compensation law they are deemed by the laws of Arizona to have accepted the provisions of such law, and to have elected to accept compensation under the terms of such law, and that under the terms thereof employees have the right to reject the same by written notice thereof prior to any injury sustained, and that blanks and forms for such notice are available to all employees at the office of this company.' A.R.S. § 23-906, subsec. D

It is significant that this notice in no way mentions any possible alternative remedy against an employer and is worded in such a way that by failing to reject the Act...

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