UNDERGROUND TECHNOLOGIES, INC. v. INDUST. COM'N

• Decision Date: 22 April 2003
• Docket Number: No. 2 CA-IC 2002-0023.,2 CA-IC 2002-0023.
• Citation: 66 P.3d 1257,205 Ariz. 80
• Parties: UNDERGROUND TECHNOLOGIES, INC., Petitioner Employer, Employers Insurance Of Wausau, Petitioner Insurer, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Peter Petroni, Respondent Employee.
• Court: Arizona Court of Appeals

66 P.3d 1257

205 Ariz. 80

UNDERGROUND TECHNOLOGIES, INC., Petitioner Employer, Employers Insurance Of Wausau, Petitioner Insurer, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Peter Petroni, Respondent Employee.

No. -0023.

Court of Appeals of Arizona, Division Two, Department A.

April 22, 2003.

Jones, Skelton & Hochuli, P.L.C., By K. Casey Kurth and Andrea L. Kravets, Phoenix, for Petitioners Employer and Insurer.

The Industrial Commission of Arizona, By Laura L. McGrory, Phoenix, for Respondent.

Tretschok & McNamara, P.C., By Dale D. Tretschok, Tucson, for Respondent Employee.

OPINION

FLOREZ, J.

¶ 1 In this statutory special action, we consider the legal question whether a claimant whose first award did not include a loss of earning capacity (LEC) is precluded from establishing an LEC related to that first injury in a subsequent injury claim so as to convert the subsequent scheduled injury to an unscheduled one. The employer here, Underground Technologies, Inc., (UGTI) and its carrier, Employers Insurance of Wausau, challenge an award in which the administrative law judge (ALJ) converted employee Peter Petroni's second industrial injury from a scheduled injury to an unscheduled injury. Scheduled injuries are those listed in A.R.S. § 23-1044(B) and result in a fixed amount of compensation pursuant to the schedule for each listed injury. Unscheduled injuries are other injuries not listed in § 23-1044(B). Vargas v. Industrial Comm'n, 187 Ariz. 66, 926 P.2d 533 (App.1996). Compensation for unscheduled injuries is calculated at a percentage of the employee's average monthly wage as set by the Commission and endures as long as the disability continues. See § 23-1044(C). We affirm the award.

¶ 2 Petroni suffered his first industrial injury in 1997 when, as a trainee for E-Z Messenger, he injured his back. He filed a claim for workers' compensation benefits, which his employer accepted. The claim was closed with a finding that Petroni had suffered an unscheduled industrial injury resulting in a five percent general physical functional disability and included a further finding that he had suffered no LEC and that he had no medical restrictions that would prevent him from returning to the same or similar work. Petroni did not contest the finding that he had no LEC and has never sought to reopen that award, as permitted by A.R.S. § 23-1061(H), to establish an LEC related to that injury.

¶ 3 In 2000, Petroni suffered a second industrial injury, injuring his knee while working for UGTI as an underground utility locator trainee. Petroni filed a claim for workers' compensation benefits, which UGTI accepted. After UGTI concluded that Petroni's condition was stationary, it moved to close the claim. Based on the parties' stipulation, the ALJ found Petroni had suffered a scheduled injury with a ten percent permanent partial disability. Petroni then requested a hearing to contest the determination that his injury was scheduled, arguing that his injury should be unscheduled because he had suffered a previous unscheduled industrial injury to his back in 1997 when he was a trainee for E-Z Messenger.

¶ 4 Following a hearing on Petroni's protest to closure, the ALJ issued an award, relying upon Adams Insulation Co. v. Industrial Commission, 163 Ariz. 555, 789 P.2d 1056 (1990), and medical and vocational evidence to find that Petroni had suffered an LEC from his first industrial injury at the time of the closure of the second injury. The ALJ then concluded that such a loss converted Petroni's second industrial injury from a scheduled injury to an unscheduled injury.

¶ 5 UGTI contends that the ALJ erred as a matter of law in converting Petroni's injury to unscheduled because the award in his first industrial injury claim was that he had no LEC and that that determination precluded his attempt to establish an LEC from that first injury in the hearing on his subsequent industrial injury. We review questions of law de novo. Benafield v. Industrial Comm'n, 193 Ariz. 531, 975 P.2d 121 (App.1998).

¶ 6 The law is well established that a claimant may convert an otherwise scheduled subsequent injury to an unscheduled one by establishing an actual LEC related to the first unscheduled industrial injury at the time of the subsequent industrial injury. Elmer Shelton Concrete Contractor, Inc. v. Industrial Comm'n, 123 Ariz. 200, 598 P.2d 1019 (App.1979). To do so, "[t]he claimant must ... prove at the time of the second injury a loss of earning capacity as a result of the prior disability." Fremont Indemnity v. Industrial Comm'n, 144 Ariz. 339, 342, 697 P.2d 1089, 1092 (1985).

¶ 7 Workers' compensation law recognizes "that successive permanent injuries may produce a total disability greater than the sum of its parts." PFS v. Industrial Comm'n, 191 Ariz. 274, 277, 955 P.2d 30, 33 (App.1997). The case law in this area acknowledges this fact in cases involving workers who have a nonindustrially caused condition or injury which, when coupled with a later industrial injury that would otherwise be scheduled, may result in the industrial injury being unscheduled. For example, in Adams, the case upon which the ALJ relied here, the claimant had low intelligence which, when combined with his otherwise scheduled injury, resulted in an unscheduled injury award. See also Alva v. Industrial Comm'n, 156 Ariz. 85, 750 P.2d 28 (1988) (childhood accident resulting in loss of two phalanges of left little finger sufficient to create rebuttable presumption of LEC affecting subsequent industrial injury to right wrist); Pullins v. Industrial Comm'n, 132 Ariz. 292, 645 P.2d 807 (1982) (childhood nonindustrial injury to claimant's eye resulting in blindness of sufficient magnitude to unschedule subsequent industrial accident to other eye, which resulted in seventy-five percent functional impairment); Borsh v. Industrial Comm'n, 127 Ariz. 303, 620 P.2d 218 (1980) (nonindustrially related degenerative joint disease developed during military service followed by scheduled industrial injury to knee sufficient to unschedule the knee injury); Alsbrooks v. Industrial Comm'n, 118 Ariz. 480, 578 P.2d 159 (1978) (first injury military related and used to unschedule subsequent industrial injury); Vargas v. Industrial Comm'n, 187 Ariz. 66, 926 P.2d 533 (App.1996) (original nonindustrial football injury to right knee; later industrial injury to right knee created rebuttable presumption of LEC); Yanez v. Industrial Comm'n, 21 Ariz.App. 367, 519 P.2d 220 (1974) (prior military injury to abdomen enjoyed no presumption of LEC, leaving claimant with burden to establish LEC from prior injury to unschedule subsequent industrial injury to knee); Camacho v. Industrial Comm'n, 20 Ariz.App. 225, 511 P.2d 669 (1973) (rebuttable presumption that prior injury resulted in LEC at time of subsequent scheduled industrial injury where claimant had initial nonindustrial injury, which would have been scheduled if industrial; presumption rebutted so industrial injury remained scheduled); Sutton v. Industrial Comm'n, 16 Ariz.App. 334, 493 P.2d 501 (1972) (nonindustrial military loss of hearing can unschedule subsequent industrial injury to arm, an otherwise scheduled injury).

¶ 8 The worker can also convert a subsequent scheduled injury into an unscheduled injury when both injuries are industrially related, only if he or she can establish an actual LEC from the first unscheduled industrial injury at the time of the subsequent injury. We emphasize that the relevant LEC from the first industrial injury is "as it existed at the time of the subsequent injury," not at the time the prior award was made. A.R.S. § 23-1044(E). The problem arises when a worker, such as Petroni, has received an award with no LEC as to the first injury but who, following a subsequent industrial injury, has a cumulative LEC greater than that resulting from the second industrial injury alone. Can the employee present vocational and medical evidence in proceedings related to the second scheduled industrial injury on the issue of the LEC resulting from the initial unscheduled industrial injury and the effect of both of the injuries together on the cumulative resulting LEC if the employee has not reopened the award as to the first injury?

¶ 9 Relying on Modern Industries, Inc. v. Industrial Commission, 125 Ariz. 283, 609 P.2d 98 (App.1980), UGTI contends that because Petroni's first claim was closed with an award of no LEC, he was not only precluded from establishing an LEC as to that first claim at the hearing on his second claim because he had failed to reopen the first claim to establish an LEC, but that the Commission lacked jurisdiction to consider the issue. In Modern Industries, the claimant suffered an unscheduled industrial injury to his back, resulting in an initial award finding the claimant had sustained an LEC. After fifteen years, the carrier obtained a rearrangement of the initial award to establish that the claimant no longer had an LEC. Following a second industrial accident, which resulted in a scheduled injury, the claimant sought to have the scheduled injury converted to an unscheduled injury. He did not file a petition to reopen the first award. The court there found that the hearing officer had "properly refused to consider evidence of loss of earning capacity attributable to the [prior industrial injury], in absence of the jurisdiction of the Commission being properly invoked to consider the propriety of its previous awards by a filing of a petition to reopen in that first injury claim." Id. at 286-87, 609 P.2d at 101-02.

¶ 10 To the extent Modern Industries suggests that an ALJ lacks subject matter jurisdiction to hear such a claim absent the filing of a petition to reopen, we disagree with it. The Industrial Commission derives its powers from article XVIII, § 8 of the Arizona Constitution, and A.R.S. § 23-101. The Commission has "exclusive jurisdiction to determine all issues of law and...