Court Opinion

ID: 9880780
Source: CourtListenerOpinion
Date Created: 2023-09-28 17:03:21.376688+00
Date Added: 2024-06-11T13:57:31.474128
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                 AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE

               PATRICK MCDERMOTT, Petitioner Employee,

                                        v.

     THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,

     BALFOUR BEATTY COMMUNITIES LLC, Respondent Employer,

  STARR INDEMNITY & LIABILITY CO, Respondent Insurance Carrier.

                             No. 1 CA-IC 22-0017
                               FILED 9-28-2023

               Special Action - Industrial Commission
                     ICA Claim No. 20210890379
               Carrier Claim No. 005094-001373-WC-01
        The Honorable Michelle Bodi, Administrative Law Judge

                            AWARD SET ASIDE

                                   COUNSEL

Thomas C. Wilmer PC, Phoenix
By Thomas C. Wilmer
Counsel for Petitioner Employee

Industrial Commission of Arizona, Phoenix
By Gaetano J. Testini
Counsel for Respondent ICA
Jardine Baker Hickman & Houston PLLC, Phoenix
By K. Casey Kurth
Counsel for Respondent Employer and Insurance Carrier

                      MEMORANDUM DECISION

Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge Brian Y. Furuya and Judge Paul J. McMurdie joined.

C A T T A N I, Judge:

¶1             Patrick McDermott challenges the Industrial Commission of
Arizona (“ICA”)’s dismissal of his workers’ compensation claim premised
on his alleged failure to report his injury “forthwith” as required by A.R.S.
§ 23-908. We reverse, holding that McDermott satisfied the reporting
requirement by advising his employer of a possible work injury a day or
two after it happened and filing a formal Worker’s Report of Injury just 13
days after that. We also conclude that, although the ICA properly allowed
a replacement presiding Administrative Law Judge (“ALJ”) to conduct an
administrative review after the original presiding ALJ resigned, the
replacement ALJ erred by deferring to the factual findings made by the first
ALJ rather than reviewing de novo the original proceedings.

                FACTS AND PROCEDURAL HISTORY

¶2             McDermott began working as a maintenance technician for
Balfour Beatty Communities, LLC, on March 15, 2021. Balfour provides
maintenance for housing on Luke Air Force Base. On his first day of work,
McDermott helped remove and replace a refrigerator and carried heavy
boxes of ripped-out flooring planks to a truck for hauling away.
McDermott twisted his right knee while carrying the planks. Although he
felt minor pain, he continued working without telling co-workers. The next
day, McDermott spent the morning completing new-hire paperwork. That
afternoon, he was assigned a cargo van for use on the job, and he spent time
on his knees cleaning out the back of the van. Upon getting out of the van
as his shift ended, he felt pain when his right knee buckled, but he did not
mention the injury to anyone as he left work.

¶3           The next day (March 17), McDermott’s knee was swollen and
painful. He called his supervisor, Albert Williams, and told him he could
not go to work because he needed a doctor to examine his knee. Williams

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asked him if he knew what had caused the knee problem, and McDermott
replied that he was unsure if it was “work or personal.” When McDermott
went to urgent care, he explained that he had hurt his knee at work on
March 15 and 16. He was preliminarily diagnosed with a suspected injury
to the meniscus, given a knee brace, told not to work, and told to return in
three days.

¶4             Also on March 17, Anthony Farrell, the Facility Manager who
had hired McDermott, called him to see how he was doing. Farrell had
heard from Williams that McDermott hurt his knee and was going to urgent
care. Farrell asked McDermott how he had injured his knee, and
McDermott replied that he did not know. When Farrell asked him if the
injury happened at work, McDermott replied that “he was not 100 percent
sure how it happened” but that it may have happened at work. The next
day, Farrell completed a Worker Injury Report reflecting that “[McDermott]
went to doctor for knee pain on the morning of 3/17/2021. He was unsure
if he strained knee at work or elsewhere. No accident was reported by him
in the workplace.” Farrell’s report also stated: “[McDermott] cannot tell
manager when and where he was injured, does not state it was work
related. **Reporting for notice purposes in the event [McDermott] seeks
[workers’ compensation], if yes, we would like this investigated.**”

¶5            On March 30, McDermott filed a Worker’s Report of Injury
with the ICA, stating that the injury happened two weeks earlier while he
was working on March 15. The knee injury diagnosis was later confirmed,
and in April 2021, McDermott had surgery to repair a torn medial meniscus
in the knee.

¶6             The employer’s insurance carrier, Starr Indemnity & Liability
Co., denied McDermott’s claim, and he requested a hearing. Balfour and
Starr raised the defense of failure to report the injury promptly per A.R.S. §
23-908(E), which requires an injured employee to report an injury
“forthwith” to the employer. McDermott, Williams, and Farrell testified at
the hearing.1 McDermott testified that he told Williams on March 17 about
his knee twisting on the first day he worked and buckling on the second
day. He also testified that he told Farrell on March 17 that he had injured
his knee at work. Both Williams and Farrell testified that McDermott told
them he was unsure where the injury occurred. Williams stated that
McDermott told him he did not know if the injury was work-related or

1       The surgeon who repaired the knee also testified, but his testimony
is not relevant to the issues raised on appeal.

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“personal,” and Farrell indicated that McDermott said he was unsure
where the injury had occurred but that it “may have happened at work.”

¶7            The ALJ issued a decision dismissing the claim for failure to
timely report the injury as mandated by A.R.S. § 23-908. After summarizing
the testimony of all three witnesses, the ALJ found that Farrell and Williams
were credible. The ALJ did not address McDermott’s credibility, the
significance of the worker injury reports, or the medical reports
documenting McDermott’s explanation of his injury for medical treatment.
Nor did the decision address McDermott’s March 30 Worker’s Report or
make any finding about whether the alleged failure to timely report
prejudiced Balfour.

¶8            McDermott requested administrative review, arguing that the
ALJ did not properly weigh the evidence and that any purported failure to
report timely should be excused. A different ALJ conducted the review
because the ALJ who had presided over the hearing and issued the award
had resigned. The new ALJ then concluded that she lacked authority to
make “a de novo review” of the record and was bound by the credibility
findings made by the first ALJ. The award was affirmed on review without
further discussion.

¶9            McDermott filed this special action review. We have
jurisdiction under A.R.S. §§ 12-120.21(A)(2) and 23-951(A), and Arizona
Rule of Procedure for Special Actions 10.

                               DISCUSSION

I.     “Forthwith” Report of Injury.

¶10            Under A.R.S. § 23-908(E), an injured worker seeking workers’
compensation must “forthwith” report an accidental injury. The Arizona
Supreme Court has observed that this requirement serves two purposes: to
allow the employer to provide immediate medical diagnosis and treatment
and to facilitate an investigation of the circumstances that caused the injury.
Thompson v. Indus. Comm’n, 160 Ariz. 263, 266 (1989). No compensation will
be paid if an injured worker does not expeditiously report the injury. A.R.S.
§ 23-908(F).

¶11           Here, the evidence (even accepting Balfour’s and Starr’s
version of events) establishes that McDermott timely reported his injury.
McDermott spoke to Williams and Farrell about his knee pain on March 17,
2021, when McDermott first felt significant pain and just a day or two after
his injury. Both Williams and Farrell acknowledged that McDermott told

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them he was unsure how he injured his knee but that it may have happened
at work. McDermott never offered a non-work cause for the injury, and his
reports to Williams and Farrell—at a minimum—put them on notice that
the knee injury could have happened at work. Farrell’s March 18 Worker
Injury Report acknowledged as much: “in the event [McDermott] seeks
[workers’ compensation], if yes, we would like this investigated.”

¶12            Less than two weeks after that (on March 30, 2021),
McDermott filed a Worker’s Report of Injury with the ICA, stating that the
injury happened at work on March 15, 2021. Given these facts, McDermott
satisfied the requirement to expeditiously report his work-related injury.
See Thompson, 160 Ariz. at 266–67 (noting that an employer was “put on
notice of the possibility that [the employee’s accident and heart attack] were
work related,” even though the employee “did not intend to notify his
employer forthwith”; a “reasonably conscientious” employer would have
known based on the facts presented that the employee’s heart attack after
collapsing at work “could involve a potential compensation claim”).

¶13           Furthermore, even if McDermott had not timely reported the
injury, there was no evidence that the relatively short delay in reporting
prejudiced Balfour (and Starr) and thus was not a valid basis for denying
the claim. See Douglas Auto & Equip. v. Indus. Comm’n, 202 Ariz. 345, 347
(2002) (noting that a failure to report forthwith may be excused if the delay
did not prejudice the employer or if the worker had no way of knowing that
an injury occurred or related to employment); see also S.H. Kress & Co. v.
Indus. Comm’n, 38 Ariz. 330, 337 (1931) (noting that workers’ compensation
law is remedial in character and to be construed liberally). Given the facts
described above putting the employer on notice of a possibly work-related
injury and the lack of any alleged prejudice resulting from the “delay” in
reporting the injury, the ALJ erred by denying McDermott’s claim as
untimely.

II.    Substitute ALJ and Scope of Administrative Review.

¶14          McDermott argues that the ICA violated its statutes by
authorizing administrative review by someone other than the ALJ who
presided over the hearing. Although our ruling above renders this
argument moot, we address it to guide the proceedings on remand.

¶15           Under A.R.S. §§ 23-108.02(A) and -941(C), the Commission
itself does not hear ICA claim disputes, but rather refers cases to an ALJ
Division for adjudication and decision. The Chief ALJ then assigns an ALJ
to preside over the case. A.A.C. R20-5-138. Once an award is issued, the

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parties may seek administrative review, and under A.R.S. § 23-943, that
administrative review is to be conducted as follows:

      E. The review shall be made by the presiding administrative
      law judge and shall be based on the record and the
      memoranda submitted under the provisions of subsection A
      of this section.

      F. The presiding administrative law judge may affirm,
      reverse, rescind, modify or supplement the award and make
      such disposition of the case as is determined to be
      appropriate. A decision on review shall be made within sixty
      days after the review has been requested, with preference
      being given to those cases not receiving compensation.

¶16           This court has interpreted the term “presiding” in § 23-943 to
mean the ALJ presiding over the hearing, not the division’s Chief ALJ.
Koval v. Indus. Comm’n, 23 Ariz. App. 277, 279 (App. 1975). Relying on
Koval, McDermott asserts that only the ALJ who presided over the original
hearing can conduct the administrative review. But Koval—which
interpreted a statutory change from administrative review by the
Commission itself to review by a “presiding” hearing officer—only
distinguished the role of a presiding, or assigned, hearing officer from that
of the chief of the division, who the claimant wished to have conduct
administrative review. Id. Koval does not address, and does not control,
whether a substitute ALJ may conduct administrative review if the original
“presiding” ALJ is no longer available.

¶17            Before an award is issued, A.R.S. § 23-942(B) permits a
substitute ALJ to render the award if the (previously) presiding ALJ dies,
resigns, retires, leaves employment, or becomes incapacitated. Although
the statute does not address substitution during the administrative review
stage after an initial award, ICA policy has similarly permitted a substitute
ALJ to conduct administrative review if the ALJ who conducted the hearing
is unavailable. We agree that nothing prevents such a substitution at the
administrative review level.       If a presiding ALJ dies or becomes
incapacitated, or if an ALJ retires and is no longer available to return to
conduct an administrative review, a substitute ALJ may be appointed and
essentially becomes the new presiding ALJ.

¶18         We note, however, that § 23-943(E) provides for a review
“based on the record,” and the statute does not require or otherwise
contemplate any deference to the original factfinder. Thus, a substituted

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ALJ can only conduct an administrative review based on a complete record
review and without deference to the original presiding ALJ. Cf. Coca-Cola
Bottling Co. of Tucson v. Indus. Comm’n, 23 Ariz. App. 496, 497 (App. 1975)
(noting that § 23-943(F) contemplates “broad powers” for administrative
review).

¶19           Here, relying on W.A. Krueger Co. v. Industrial Commission, 150
Ariz. 66 (1986), the substituted ALJ on review concluded that she had to
defer to factual findings by the original presiding judge. That was error.
The court in Krueger addressed a wholly different issue, an issue of law
regarding whether the American Medical Association Guides were binding
or merely guidelines in determining impairment ratings. Id. at 67–68. The
parties there did not raise, and the Arizona Supreme Court did not address,
whether § 23-943(F) permits administrative review by a new ALJ or
whether the new ALJ had to defer to factual findings by the original
presiding ALJ.

¶20           Because the statute authorizes the presiding ALJ on review to
reverse, rescind, modify, or supplement the award “as is determined to be
appropriate,” A.R.S. § 23-943(F), we conclude that the required review is a
de novo determination of whether the initial award was appropriate. Just
as it would be error for an ALJ who substituted in after the start of a hearing
but before the issuance of an award to render a decision without having
considered all the evidence, it is error for a substitute presiding ALJ on
administrative review to conduct such a review without considering all the
evidence. In both instances, the substituted ALJ owes no deference to the
original ALJ and can only complete the mandated proceedings or review
based on an independent assessment of the entire record.

                              CONCLUSION

¶21           McDermott gave sufficient notice of his injury to Balfour.
Accordingly, we set aside the award and remand for further proceedings
consistent with this decision.

                           AMY M. WOOD • Clerk of the Court
                           FILED:    JT

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