Red Rover Copper Co. v. Industrial Commission of Arizona

• Decision Date: 10 November 1941
• Docket Number: Civil 4438
• Citation: 58 Ariz. 203,118 P.2d 1102
• Parties: RED ROVER COPPER COMPANY, a Corporation, Petitioner, v. INDUSTRIAL COMMISSION OF ARIZONA, and L. L. MOODY, Respondents
• Court: Arizona Supreme Court

118 P.2d 1102

58 Ariz. 203

RED ROVER COPPER COMPANY, a Corporation, Petitioner, v. INDUSTRIAL COMMISSION OF ARIZONA, and L. L. MOODY, Respondents

Civil No. 4438

Supreme Court of Arizona

November 10, 1941

APPEAL by Certiorari from an award of The Industrial Commission of Arizona. Award affirmed.

Messrs Perry, Silverthorne & Johnson, for Petitioner.

Mr. Wm H. Chester, Mr. Rouland W. Hill, and Mr. Howard A. Twitty for Respondents.

OPINION

LOCKWOOD C.J.

This matter is before us on certiorari from an award of the Industrial Commission, in favor of L. L. Moody, petitioner, and against Red Rover Copper Company, a corporation, called the company.

The record before us shows the following facts: In early November, 1940, petitioner applied to the company for employment at its mine. On November 13 he was told by the foreman that if he would sign a rejection of benefits under the Workmen's Compensation Act he would be employed, but not otherwise. He was also told that he would be insured by Lloyd's of London, and that such insurance was better than state compensation, as it insured him twenty-four hours a day, off and on the job. He signed the rejection and went to work on the following morning, continuing in his employment until November 25, when he was injured by an accident which admittedly arose out of and in the course of the employment. He was given medical attention and was paid compensation, on the basis of the Lloyd's policy, from the date of his injury, until March 28, 1941. On March 20, 1941, he filed a claim for compensation under the Act with the commission, setting forth his injuries and an affidavit to the effect that he had rejected the Compensation Act because he was told that he could not go to work unless he did so, and that the industrial insurance carried by Lloyd's was better than the state industrial insurance. Due notice of the hearing was given to the company and it was represented thereat. A copy of the Lloyd's policy covering the petitioner was introduced and it clearly appeared therefrom that the benefits thereunder were much less than that provided by the Act for injuries such as the evidence shows petitioner received. The evidence also shows that at the time of the hearing petitioner was still suffering from temporary total disability and his condition had not reached a stationary stage.

The matter was submitted to the commission for decision, and thereafter, and on June 18, 1941, petitioner executed a release, which reads are follows:

"For and in Consideration Of the sum of Two Hundred Fifty and no/100 dollars ($250.00) to me in hand paid and the further sum of Five Hundred Sixteen and 12/100 dollars ($516.12) heretofore paid to me, I hereby release and forever discharge Red Rover Copper Company at Cave Creek, Arizona and/or Underwriters at Lloyd's London, of and from any and all claims which I might have or may hereafter have against either the Red Rover Copper Company or Underwriters at Lloyd's, London, on account of loss or damage sustained by me on account of accident which occurred on or about November 21, 1940 while in the employ of the Red Rover Copper Company.

"It is the intent and purpose of this release to fully discharge from any liability or further responsibility on account of said accident not only the Red Rover Copper Company on account of any obligations which they might have on account of occurrence of said accident but also to fully release Underwriters at Lloyd's, London from any further liability under the terms of its contract of insurance #18135-6 as issued to the Red Rover Copper Company and providing for the payment of said benefits to the undersigned in the event of injury.

"Dated at Medford, Ore., this 18 day of June, 1941."

This release was never approved by the commission nor did it know that it had been executed until July 21, when the company filed a petition for rehearing.

On July 12 the commission made an award, which contained, among other things, the following findings:

"4. At the time applicant was employed by defendant, to-wit, November 13, 1940, defendant required applicant, as a condition of said employment, to sign an instrument purporting to reject the terms of the Workmen's Compensation Law of the State of Arizona.

"5. Defendant represented to applicant at the said time it employed applicant that it carried insurance on all its employees with Lloyd's of London, and that employees injured by accidents arising out of and in the course of their employment had received benefits paid under such insurance coverage which were more and larger than the benefits provided by the Workmen's Compensation Law of Arizona for employees injured by accident arising out of and in the course of their employment.

"6. Said representation made by defendant to applicant was made for the purpose of inducing the applicant to reject the terms and benefits of the Workmen's Compensation Law of Arizona.

"7. Said applicant relied on the truth of said representation and did on November 13, 1940, sign an instrument purporting to reject the benefits and terms of the Workmen's Compensation Law of Arizona which said instrument was in words and figures as follows, to-wit:

"Employee's Notice to Reject Temrs of Workmen's Compensation Law.

"Date November 13, 1940

"To Red Rover Copper Company, (full name of employer)

Cave Creek, Arizona (address of employer in full)

"You are hereby notified that the undersigned elects to reject the terms conditions and provisions of an act for the payment of compensation as provided by the Industrial Commission Act of the State of Arizona, and Acts amendatory thereto.

(Signed) Les L. Moody

Les L. Moody

"Date Nov. 13, 1940. Address Cave Creek, Ariz.

"...

"8. Said representation made by defendant to applicant aforesaid was false in that the benefits paid to injured employees under said Lloyd's insurance coverage to employees injured by accident arising out of and in the course of their employment were not at said time more or greater than the benefits provided by the Workmen's Compensation Law of Arizona for employees injure by accident arising out of and in the course of their employment, and were in fact less than the said benefits provided by said Workmen's Compensation Law.

"9. At said time applicant was ignorant of the falsity of said representation and had a right to rely upon the truth thereof.

"10. At said time defendant either knew that said representation was false or was ignorant of the truth of said representation, but should have known said representation was false.

"...

"17. It is therefore the conclusion of this Commission that the said instrument signed by applicant purporting to reject the terms and conditions of the Workmen's Compensation Law of Arizona was null and void and of no force and effect whatsoever and that both said applicant and said defendant were at said time subject to the terms and conditions of the Workmen's Compensation Law of Arizona."

and the usual other findings in regard to injury, wages, etc., which would support the following award in favor of petitioner and against the company:

"1. The sum of $720.75 payable forthwith for compensation from November 22, 1940 to date hereof.

"It Is Further Ordered that the said defendant pay all medical, surgical and hospital expenses necessary to cure and relieve the said applicant from the effects of the said injury.

"It Is Further Ordered that liability on the part of the defendant for temporary total disability compensation and permanent partial disability compensation, and additional medical, surgical and hospital services does not cease at this time and that said liability for the said compensation and medical benefits shall run concurrent with the disability of applicant and final liability of the said employer shall be determined by this Commission at such time as the condition of the said applicant has become stationary by reason of his recovery from the effects of the said injury.

"It Is Further Ordered that this award be paid within ten days from the date of service hereof.

"It Is Further Ordered that all payments heretofore made by the defendant or which defendant has caused to be made shall be allowed as a credit upon this award upon satisfactory proof of the payment thereof."

The petition for rehearing having been denied, the matter is before us. There are three questions arising for our consideration. The first, and most important, is whether the commission acted in excess of its jurisdiction in finding that the rejection of the Compensation Act above referred to was void and not binding upon petitioner. It is urged that such finding and the award necessarily involved the cancellation of a written instrument executed by petitioner, and that the commission, not being a court of equity, had no jurisdiction to take such action. This involves a somewhat extended consideration of our constitutional and statutory provisions covering the Compensation Act. Code 1939, § 56-901 et seq.

Before Arizona became a state the common law rule governed almost entirely the relation between employer and employee, so far as accidents arising out of and in the course of the employment were concerned. Any liability of the employer for such an accident was based on his proven negligence, and he might raise the common law defenses of fellow servant assumption of risk, and contributory negligence as matters of law for the consideration of the court. Our Constitution, following the modern rule which is now in effect in practically every part of the United States, adopted the policy of placing the burden of injuries of this nature upon the industry, and took away the fellow servant defense, and left those of contributory negligence and...