Special Fund Div. v. Industrial Com'n of Arizona

• Decision Date: 13 May 1997
• Docket Number: No. 1,CA-IC,1
• Citation: 189 Ariz. 162,939 P.2d 795
• Parties: , 243 Ariz. Adv. Rep. 6 SPECIAL FUND DIVISION, Petitioner, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, St. Charles Company, Respondent Employer, Liberty Mutual Insurance Group, Respondent Carrier, Wayne O. Burrell, Respondent Employee. 95-0133.
• Court: Arizona Court of Appeals

Page 795

939 P.2d 795

189 Ariz. 162, 243 Ariz. Adv. Rep. 6

SPECIAL FUND DIVISION, Petitioner, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, St. Charles Company, Respondent Employer, Liberty Mutual Insurance Group, Respondent Carrier, Wayne O. Burrell, Respondent Employee.

No. 1 CA-IC 95-0133.

Court of Appeals of Arizona,

Division 1, Department A.

May 13, 1997.

Reconsideration Denied June 24, 1997.

Special Fund Division by Paula R. Eaton, Phoenix, for Petitioner.

Anita R. Valainis, Chief Counsel, The Industrial Commission of Arizona, Phoenix, for Respondent.

Cross & Lieberman, P.A. by Lawrence H. Lieberman, Phoenix, for Respondents Employer and Carrier.

Taylor & Associates by Richard E. Taylor, Phoenix, for Respondent Employee.

OPINION

NOYES, Judge.

This is a special action review of an Arizona Industrial Commission award and decision upon review for apportionment under Ariz.Rev.Stat.Ann. ("A.R.S.") section 23-1065(C) (1995). The issue is whether a written record stating "wounded in combat Nam" established the employer's knowledge that the worker had a "psychoneurotic disability following treatment in a recognized medical or mental institution" within the meaning of section 23-1065(C)(3)(n). Because we conclude that the written record is insufficient to establish that knowledge, we set aside the award and decision upon review.

I.

Respondent Employer ("St. Charles") manufactures kitchen cabinets. In May 1988 Respondent Employee ("Claimant") applied to work at St. Charles as a serviceman. He completed two written forms; one was an employment application and the other was an information form. On the application, Claimant wrote "no" in answer to the question, "Do you have any physical, mental, or emotional limitations which would limit your ability to perform the position applied for?" He also checked the box indicating that the lifting he could do was "Heavy (over 50 lbs)." Claimant wrote on the information form that he was in the U.S. Army from 1969 to 1980 and that "yes" he did have a "service related disability." In explaining his "yes" answer, Claimant wrote four words: "wounded in combat Nam." St. Charles' human resources manager, Randal Dickason, interviewed Claimant and hired him.

Over four years later, in October 1992, Claimant had an industrial back injury followed by a workers' compensation claim and surgery. Respondent Carrier ("Liberty Mutual") closed the claim with permanent impairment and it then applied for relief from the Special Fund Division pursuant to the apportionment statute, A.R.S. section 23-1065(C). During the hearing process, Liberty Mutual submitted a 1986 Veteran's Administration ("VA") decision rating Claimant with a 30 percent disability for post-traumatic stress disorder ("PTSD"). This decision related that Claimant was in a helicopter crash in Vietnam in 1970 and was awarded the Purple Heart and other medals; that he had back surgery in 1983; that he was diagnosed with PTSD in 1984; and that his PTSD symptoms included sleep disturbance, withdrawal, and stinted social abilities. Although Claimant said he gave a copy of this decision to a supervisor at St. Charles, there was no copy of it in the St. Charles files.

The Special Fund Division stipulated that Claimant's PTSD was a preexisting psychoneurotic disability which equaled a ten percent permanent impairment and qualified for apportionment under A.R.S. section 23-1065(C)(3)(n). At the apportionment hearing, the only contested issue was whether Liberty Mutual could satisfy the "written records" requirement of A.R.S. section 23-1065(C)(2). This subsection adds the following essential element to an apportionment claim: "The employer establishes by written records that the employer had knowledge of the permanent impairment at the time the employee was hired, or that the employee continued in employment after the employer acquired such knowledge."

Liberty Mutual bases its apportionment claim solely on Claimant's PTSD and it does not claim that the VA decision satisfies the written records requirement. The relied-upon written record is the one containing the words "wounded in combat Nam." Liberty Mutual supplemented this written record with testimony. Claimant testified at the hearing that:

I just didn't want to do inside work. The type of work I did was outside. I was alone probably 95 percent of the time and didn't have to deal with people.

....

[I]f I get around four or five people, I start getting real nervous and edgy, and it's just--I'm better off out alone.

Claimant testified that he told his supervisors at St. Charles of his need to work outside and alone and they accommodated him.

Dickason testified that, before hiring Claimant, he asked him about "wounded in combat Nam" and learned about his helicopter crash and his bad back. Dickason said he accepted Claimant's statement that he could do the lifting required of a serviceman. When asked whether Claimant had said he could not work indoors because he had PTSD, Dickason ambiguously replied, "Yes. Well, I don't recall the exact words. I remember that he did not want to work in the high volume production environment in the kinds of deadlines that were required in the manufacturing plant."

The Administrative Law Judge ("ALJ") issued a decision which awarded apportionment on grounds that:

Although the applicant's written records were not a model of clarity, the answers alerted the employer to the existence of the mental impairment. In spite of the impairment, the employer hired and retained the applicant and accommodated the post traumatic stress disorder.

The ALJ affirmed the award on administrative review. The Special Fund Division then brought this special action.

II.

The Special Fund Division is jointly liable for cases of unscheduled disability compensation which meet all requirements specified in A.R.S. section 23-1065(C). See A.R.S. § 23-1065(C). The only issue in this case is whether Liberty Mutual met the "written records" requirement of subsection (C)(2). This subsection has generated six recent opinions from this Court. Three opinions address the sufficiency of written records to meet the statutory requirement. See Country Wide Truck Serv. v. Industrial Comm'n, 181 Ariz. 410, 412-13, 891 P.2d 877, 879-80 (App.1994); Special Fund Div. v. Industrial Comm'n (Morin), 182 Ariz. 341, 346-47, 897 P.2d 643, 648-49 (App.1994); Schuff Steel v. Industrial Comm'n, 181 Ariz. 435, 445-46, 891 P.2d 902, 912-13 (App.1994). Two opinions interpret the statute's "continued in employment" language. See Special Fund Div. v. Industrial Comm'n (Pete King), 184 Ariz. 363, 365-68, 909 P.2d 430, 432-35 (App.1995); Fremont Indem. Co. v. Industrial Comm'n, 182 Ariz. 405, 408-09, 897 P.2d 707, 710-11 (App.1995). One opinion allowed the Special Fund Division to waive the written-records requirement by stipulating to the employer's knowledge of the employee's partially-amputated left leg. Transporting Renewable Resources, Inc. v. Industrial Comm'n, 185 Ariz. 543, 544-45, 917 P.2d 272, 273-74 (App.1996).

In Country Wide, the employer had a written record in which a doctor reported that the worker had a lumbar laminectomy and a posterior cervical fusion. The court concluded that this established the employer's knowledge that the worker had a "preexisting disabling condition" regarding his back and neck. 181 Ariz. at 412-13, 891 P.2d at 879-80. The court set aside an award denying apportionment. Id. at 413, 891 P.2d at 880.

In Special Fund Div. (Morin), the employer had a written record in which the worker reported that she had "knee problems," "knee surgery" and a "laminectomy." 182 Ariz. at 347, 897 P.2d at 649. The ALJ found that this established the employer's knowledge that the worker had a ruptured disc and degenerative joint disease. Id. This Court affirmed, stating "We believe that these are the type of injuries that permit an inference that [employer] knew of applicant's preexisting permanent impairment and decided to hire her despite the fact that she might have difficulty performing her tasks." Id.

We now come to cases which are more like the present one. In Schuff Steel, the ALJ found that written records referring to "cervical arthritis" did not establish the employer's knowledge of the worker's bilateral hand arthritis. 181 Ariz. at 445, 891 P.2d at 912. This Court affirmed an award denying apportionment and agreed with the ALJ that "the records establishing that Schuff Steel knew of Claimant's impairment from cervical arthritis do not establish that it knew of his impairment from bilateral hand arthritis." Id. The court also rejected an argument that the hearing transcript satisfied the written records requirement; the court found that such an argument "totally eviscerates the written records requirement." Id. at 446, 891 P.2d at 913.

In Special Fund Div. (Pete King), the employer obtained written records after the employee suffered an industrial injury. 184 Ariz. at 364, 909 P.2d at 431. This Court interpreted the "continued in employment" language in subsection 23-1065(C)(2) to refer to the period between the date of hire and the date of injury. Id. at 365-68, 909 P.2d at 432-35. The court in part reasoned that interpreting the requirement to apply to records obtained after the industrial injury "would render the statutory requirements pointless." Id. at 367, 909 P.2d at 434 (citing Schuff Steel ).

In Fremont, the employer had a written record establishing knowledge of the worker's hearing impairment but not her diabetes. 182 Ariz. at 407, 897 P.2d at 709. The carrier contended that the statute was satisfied by a written record of continued employment coupled with oral evidence that the employer knew of the diabetes. Id. at 407-08, 897 P.2d at 709-10. This Court rejected that argument, finding that it "trivializes the statutory written records requirement." Id. at 408-09, 897 P.2d at 710-11.

We publish this seventh opinion on the written records...