Opinion ID: 2615033
Heading Depth: 2
Heading Rank: 2

Heading: does the workers' compensation board have the authority to employ equitable principles to prevent an employer from asserting statutory rights?

Text: Wausau contends that the legislature did not confer on the Board the authority to employ equitable doctrines in order to modify statutory rights and obligations. More particularly, Wausau claims that in the instant case the Board, acting in its quasi-judicial capacity, modified the legislative scheme embodied in AS 23.30.225 and AS 23.30.155 by imposing a duty of diligent inquiry on employers and their compensation carriers. Wausau argues that the Board's powers are limited to fact finding. Van Biene argues that many states, including Alaska, have used equitable doctrines to prevent employers from asserting statutory rights. [11] Van Biene claims this case is a particularly appropriate one for the application of equitable principles, since Wausau sat on its rights for three years and, relying upon the assurances provided by Wausau that her compensation benefits were fixed, Van Biene purchased a house. The Alaska Workers' Compensation Board is a quasi-judicial entity. Hood v. State, Workmen's Comp. Bd., 574 P.2d 811, 813 (Alaska 1978). The Board is authorized to formulate policy, interpret statutes, adopt and enforce regulations. AS 23.30.005(h). In promulgating its regulations the Board determined that an answer to a compensation claim must state whether the claim is barred by law or equity. [12] In deciding this issue on appeal the superior court relied on our opinion in Smith by Smith v. Marchant Enterprises, 791 P.2d 354, 356-57 (Alaska 1990). In that case we discussed the application of quasi-estoppel to a workers' compensation appeal. We concluded that estoppel did not apply because one of the elements of estoppel was missing under the facts in the record. Here, the superior court on appeal found that implicit in Marchant was this court's recognition that if all the elements were present, quasi-estoppel and equitable doctrines would have been applicable to that workers' compensation proceeding. In 1988, the Colorado Supreme Court addressed a similar issue involving insurer offsets and equitable doctrines. Johnson v. Industrial Comm'n of Colorado, 761 P.2d 1140, 1144-1147 (Colo. 1988). The court determined that the insurer was not precluded from exercising its statutory right of offset, four years later, after the insurer learned of Johnson's simultaneous receipt of social security survivor's benefits and workers' compensation benefits. Id. The Colorado Supreme Court affirmed the Industrial Commission's rejection of Johnson's estoppel claim, noting that the statutes were silent concerning the point at which the right of offset must be exercised and that the purpose of the legislative enactments was to avoid duplicative benefits. [13] Id. The Colorado court did speak directly to the equitable principles issue. It acknowledged that the doctrines of estoppel and waiver might preclude the exercise of a statutory right. [14] Id. at 1146. The Colorado court characterized the setoff as in the nature of an affirmative defense to a claim for workers' compensation benefits, and concluded that once a prima facie case was established on the issue of setoff, the burden shifted to Johnson to prove by a preponderance of the evidence that he was entitled to relief from the claimed offset on the basis of an estoppel or waiver. Id. On the basis of Marchant and the preceding discussion we hold that the Board possesses the authority to invoke equitable principles to prevent an employer from asserting statutory rights.