Sandoval v. Salt River Project Agricultural Improvement and Power Dist.
| Decision Date | 29 September 1977 |
| Docket Number | CA-CIV,No. 1,1 |
| Citation | 571 P.2d 706,117 Ariz. 209 |
| Parties | Ausbert S. SANDOVAL and Catherine Sandoval, Appellants, v. SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT & POWER DISTRICT, a Municipal Corporation, and Swett & Crawford, a corporation, Appellees. 3345. |
| Court | Arizona Court of Appeals |
On this appeal questions are raised concerning the Superior Court's jurisdiction to consider certain tort and contract claims urged by an injured workman (appellant) against his self-insured employer (Salt River Project) and its agent hired to administer Workmen's Compensation claims (Swett & Crawford).
This is the third time questions arising out of Mr. Sandoval's industrial injury have been presented to this Court. The two previous instances involved review by this Court, at Mr. Sandoval's request, of Industrial Commission awards entered in the processing of his claim in Workmen's Compensation proceedings. In both instances, the awards of the Industrial Commission were affirmed. A brief history of these Workmen's Compensation proceedings is essential to an understanding of the issues presented in this civil appeal.
On September 7, 1971, Mr. Sandoval sustained an injury by accident arising out of and in the course of his employment with the Salt River Project. At that time the Salt River Project was licensed as a self-insurer pursuant to A.R.S. § 23-961, and the administration of its Workmen's Compensation claims was handled by appellee, Swett & Crawford.
Mr. Sandoval's claim for Workmen's Compensation benefits was accepted, and, on November 15, 1971, the Industrial Commission entered its order approving the establishment of Sandoval's average monthly wage at $883.28. A short time prior to the occurrence of his industrial injury, Sandoval had been suspended from employment for a period of three days because of an alleged violation of the employer's grooming code. The fact that he was not paid for these three days was considered by the employer in the computation of his average monthly wage, resulting in a lower amount than otherwise would have been the case. Sandoval did not object nor file a timely request for hearing concerning the establishment of his average monthly wage.
In August of 1972, a discrimination action was filed in the federal district court on behalf of Sandoval and others concerning the employer's interpretation of its grooming code. On December 18, 1972, this federal action was settled. A term of the settlement provided that Sandoval, along with the other plaintiffs, would:
" . . . receive from the Salt River Project any and all wages and benefits lost as a result of suspension from the work force by reason of enforcement of the interpretations of the good grooming guidelines referred to hereinabove." (Emphasis added).
In accordance with the above, Sandoval was paid $114 as retroactive pay for his three-day period of suspension. Approximately one month after the settlement of the federal court action, counsel for Sandoval filed on January 24, 1973, in the workmen's compensation proceeding his objection to the Commission's average monthly wage determination which had been entered in November 1971, and requested a hearing. The Salt River Project objected on the basis of finality and res judicata. Mr. Sandoval contended that res judicata was not applicable because he had not been properly notified of the prior average monthly wage determination, and therefore the 60-day limitation for requesting a hearing should not apply. On the merits of the average monthly wage question, he urged, inter alia, that the $114 retroactive pay received as a result of the settlement of the federal action should be considered so as to increase the average monthly wage amount. The hearing officer apparently did not accept Mr. Sandoval's claim of lack of notice of the average monthly wage determination, and refused to grant the request for hearing. The hearing officer's refusal was later affirmed by this Court. See unpublished Memorandum Decision, Sandoval v. Industrial Commission, 1 CA-IC 1044, filed December 3, 1974. Prior to the filing of this Court's Memorandum Decision in 1 CA-IC 1044 relating to the average monthly wage question, the employer had issued a Notice of Claim Status in August 1973 terminating temporary compensation benefits and medical benefits, and finding Sandoval's condition to be stationary. Concurrently with that notice, the employer advised the Industrial Commission that Sandoval had suffered a permanent disability, and a request was directed to the Commission to determine permanent benefits pursuant to A.R.S. § 23-1047. This Notice of Claim Status was objected to by Sandoval, and a hearing was requested. Because of the fact that a review was then pending in this Court on the average monthly wage question, the Commission declined to take any action on the request for hearing or the request for the determination of permanent benefits, being of the opinion that because of the pending appeal it lacked jurisdiction to do so at that time. 1
After the issuance of the decision of this Court in IC 1044 affirming the average monthly wage determination, and before any action was taken by the Commission to resolve the above-mentioned pending request for hearing concerning the termination of Sandoval's temporary disability benefits, Sandoval filed the civil action which is the subject matter of this appeal in the Maricopa County Superior Court. At the same time, he continued to pursue his claims before the Industrial Commission relating to the termination of his temporary benefits. Thus, simultaneous proceedings were pending before the Industrial Commission and Superior Court concerning Sandoval's claims relating to deprivation of benefits to which he was allegedly entitled under the Workmen's Compensation law. In October 1975, after a hearing before the Commission, the Commission's hearing officer ruled that the employer had properly terminated temporary benefits in August of 1973, and that Sandoval's condition as a result of his industrial injury was then stationary. Review of this Industrial Commission decision was requested and review was pending in this Court (Sandoval v. Industrial Commission, 1 CA-IC 1498) at the time the trial court entered judgment in favor of the employer and its agent, Swett & Crawford, in this Superior Court action.
The Superior Court judgment from which this appeal was taken was granted as a result of the Salt River Project's motion to dismiss and Swett & Crawford's motion for summary judgment. The entry of judgment was based upon principles of res judicata and the theory that exclusive jurisdiction over the asserted claims was vested in the Industrial Commission under the Workmen's Compensation statutory scheme.
We now consider the specific claims asserted by Sandoval in the Superior Court action. The first claim for relief was directed solely against the employer, Salt River Project, and sounds in contract. In essence, Sandoval contended that the provision in the federal court settlement agreement which provided that he was to receive from Salt River Project "all wages and benefits lost" contractually bound Salt River Project to consent to an appropriate upward adjustment in his average monthly wage in the Workmen's Compensation proceedings, and that Salt River Project had breached that agreement. He sought compensatory damages for this alleged breach of contract.
In response to the first claim for relief, Salt River Project did not agree with the interpretation placed upon the settlement agreement by Sandoval, but, in any event, pointed to the extensive proceedings before the Commission concerning the determination of Sandoval's average monthly wage, specifically including the question of the effect of the $114 retroactive pay paid pursuant to the settlement for the three-day suspension period. Since these proceedings before the Industrial Commission occurred subsequent to the time the settlement agreement was entered into, Salt River Project contended that any further consideration of the effect of the settlement agreement on Sandoval's average monthly wage determination was barred by principles of finality and res judicata. 2
In response to Salt River Project's res judicata argument, Sandoval asserts that his alleged contract right for an adjustment of the average monthly wage as "benefits lost" was not adjudicated in the Workmen's Compensation proceedings because the Industrial Commission did not have jurisdiction over contract rights. We reject this contention. The sole and exclusive jurisdiction to determine all issues of law and fact relating to a claimant's entitlement to compensation benefits is vested in the Industrial Commission. S. H. Kress & Co. v. Superior Court, 66 Ariz. 67, 182 P.2d 931 (1947); Industrial Commission v. Superior Court, 5 Ariz.App. 100, 423 P.2d 375 (1967). Here, after the federal action settlement was entered, Sandoval specifically sought modification of the average monthly wage amount based upon the retroactive payment for the three-day suspension. If at that time he felt that he had a contract right which precluded Salt River Project from objecting, he should have brought that contract right to the attention of the Commission's hearing officer as one of the facts which "appear to warrant relief" from the...
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