Case Name: STATE OF ARKANSAS, SECOND INJURY FUND v. MID-STATE CONSTRUCTION CO., et al.
Court: Arkansas Court of Appeals
Jurisdiction: Arkansas
Decision Date: 1985-11-13
Citations: 16 Ark. App. 169
Docket Number: CA 85-105
Parties: STATE OF ARKANSAS, SECOND INJURY FUND v. MID-STATE CONSTRUCTION CO., et al.
Judges: Corbin and Mayfield, JJ., concur.
Reporter: Arkansas Appellate Reports
Volume: 16
Pages: 169–175

Head Matter:
STATE OF ARKANSAS, SECOND INJURY FUND v. MID-STATE CONSTRUCTION CO., et al.
CA 85-105
698 S.W.2d 804
Court of Appeals of Arkansas En Banc
Opinion delivered November 13, 1985
Steve Clark, Att’y Gen., by: David S. Mitchell, Asst. Att’y Gen., for appellant.
Chester C. Lowe, Jr., for appellees.
Donald Frazier, for appellee Ray Davis, Jr.

Opinion:
James R. Cooper, Judge.
The issues on appeal in this workers' compensation case are whether the Commission erred in reinstating the appellant, Second Injury Fund, as a party to the proceedings before the administrative law judge and whether the Commission erred in directing the administrative law judge to allocate liability between the appellant and the appellee insurance carrier. We reverse and remand so that the appellant will be afforded the opportunity to present evidence to the administrative law judge on the threshold question of liability and the applicability of Ark. Stat. Ann. Section 81-1313(i) (Supp. 1983).
The appellee Ray Davis, the claimant, sustained a lumbar spine injury in June 1981, while employed by the appellee Mid-State Construction Company (hereinafter Mid-State). At a hearing before the administrative law judge, at which Davis, Mid-State, and Mid-State's insurance carrier were present, the administrative law judge joined the Second Injury Fund on his own motion (after all of the parties declined to do so). Since the appellant was not represented, the administrative law judge treated the proceeding as a preliminary hearing to obtain the testimony of the parties present; the law judge reserved final determination on the merits until the Second Injury Fund had an opportunity to read the transcript and depose any witnesses.
The administrative law judge issued an interim order in August, 1983, dismissing the appellant from the proceedings because of the parties' refusal to join the Second Injury Fund under Commission Rule 24. Counsel for Mid-State responded with a letter to the administrative law judge which objected to the dismissal and proposed several alternatives to the dismissal order. The administrative law judge subsequently issued his opinion and order finding, inter alia, that:
5. At the time of his June 4,1981 compensable injury, the claimant was not suffering from a disability in the compensation sense as . . . contemplated by Ark. Stat. Ann. Section 81-1313(i) (Supp. 1983).
6. Claimant's present degree of disability is solely attributable to his June 4, 1981 injury .
9. For reasons mentioned in this order and in the Interim Order of August 8, 1983, the second injury is not a party respondent here.
The administrative law judge concluded that "were the second injury fund a party to this claim, it would escape liability based upon the medical reports and claimant's insistence that neither his 1959 neck injury nor the loss of vision in his right eye affected his earning capacity as of the date of his June, 1981 compensable injury."
Mid-State and its insurer appealed to the full Commission, contending, inter alia, that the administrative law judge erred in making the findings quoted above. The Commission found that the claimant had a preexisting disability at the time of his lumbar spine injury, and said:
From our de novo review of the record in this case, we hold that these preexisting conditions together constitute a previous disability or impairment within the meaning of the statute.
The Commission then reinstated the Second Injury Fund as a party and remanded the case for further proceedings, directing the administrative law judge to "allocate the compensation liability among the parties hereto in accordance with Ark. Stat. Ann. Section 81-1313(i), giving the Second Injury Fund credit for the amount of claimant's disability or impairment which preexisted his compensable injury." [citation omitted] Then, finally, the Commission's order states:
The Second Injury Fund is hereby reinstated as a party and shall be given a reasonable time to adduce evidence going to any issue in this case affecting its liability before its liability is determined, [emphasis added]
On appeal to this Court, the Second Injury Fund contends that the Commission erred in reinstating the Fund as a party because the appellees waived their right to join the Fund by refusing to move to do so at the hearing before the administrative law judge. We disagree, but we note that the insurance carrier and the employer are the parties who benefit from Second Injury Fund involvement in appropriate cases and it should be their responsibility to join the Fund where their defense is based on the theory that an initial injury is contributing to the total amount of disability following the second injury. Although the Arkansas Rules of Civil Procedure are not binding in workers' compensation cases, Ark. Stat. Ann. Section 81-1327(a) (Supp. 1985), ARCP Rule 20 would seem to provide appropriate guidance in Second Injury Fund cases.
As to the case at bar, from a reading of the Commission's opinion, quoted above, we cannot tell what the Commission intended. Although the Commission seems to have finally decided that the appellant's preexisting conditions did constitute an impairment or disability under the statute, the Commission then remanded the case to the administrative law judge for a hearing which, according to the language of the order, left open the question of the Fund's liability. If the Commission did not intend to leave open the question of the Fund's liability, it was wrong; the Fund has not had the opportunity to appear and defend. If the Commission did not intend to foreclose arguments concerning the threshold issue of liability, it was right and, on remand, the Fund can adduce whatever evidence it deems necessary to litigate that issue before the administrative law judge.
The issue of whether the appellee is permanently and totally disabled must of necessity remain open. The appellee urges that this Court affirm the Commission's decision that he is permanently and totally disabled, and we understand his desire that we do so. We cannot, for the Second Injury Fund, a necessary party to this litigation, has not been afforded the opportunity to participate in the litigation of that issue. To affirm the Commission's finding of permanent and total disability would be to hold the Second Injury Fund liable in whatever percentage found to be appropriate by the Commission without due process.
We affirm the Commission's decision to reinstate the Second Injury Fund as a party, but we reverse and remand to the Commission so that the matter may be remanded to the administrative law judge for a hearing on the issues of liability, apportionment, and the claimant's degree of disability.
Affirmed in part, reversed and remanded in part.
Corbin and Mayfield, JJ., concur.
Glaze, J., dissents.