Court Opinion

ID: 4220123
Source: CourtListenerOpinion
Date Created: 2017-11-14 15:02:27.084081+00
Date Added: 2024-06-11T14:42:08.334729
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

                              MABLE M. HALL,
                                 Petitioner,

                                        v.

            THE INDUSTRIAL COMMISSION OF ARIZONA,
                           Respondent,

                         WALMART STORES, INC.,
                           Respondent Employer,

                      WALMART ASSOCIATES, INC.,
                       C/O CLAIMS MGMT, INC.,
                           Respondent Carrier.

                             No. 1 CA-IC 17-0004
                               FILED 11-14-2017

               Special Action - Industrial Commission
                    ICA Claim No. 20143-030719
                       INS. Claim No. 7320463
       The Honorable Aryka S. Radke, Administrative Law Judge

                    AWARD SET ASIDE; REMANDED

                                   COUNSEL

Mable M. Hall, Maricopa
Petitioner
Industrial Commission of Arizona, Phoenix
By Jason M. Porter
Counsel for Respondent ICA

Lester, Norton & Brozina, PC, Phoenix
By Christopher S. Norton
Counsel for Respondent Employer/Carrier

                      MEMORANDUM DECISION

Judge Diane M. Johnsen delivered the decision of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Maria Elena Cruz joined.

J O H N S E N, Judge:

¶1           This is a special action review of an Industrial Commission of
Arizona ("ICA") Decision Upon Review that reversed an award of
temporary benefits. For the following reasons, we set aside the award and
remand for further proceedings.

             FACTS AND PROCEDURAL BACKGROUND

¶2            Mable Hall, a manager of the men's department in a retail
store, began to feel pain in her right hip and lower back in late July 2014.
Hall filed for workers' compensation benefits on October 16, 2014. Her
employer's insurance carrier denied the claim on November 13, 2014. Hall
testified at a hearing on her claim, as did her treating physician. The
Administrative Law Judge ("ALJ") also received the opinion of a physician
who conducted an independent medical examination of Hall. That
physician concluded that any pain Hall was suffering was not caused by
her work activities and opined that Hall's medical condition was stationary
as of April 15, 2015, the date of the independent medical examination. The
ALJ found the opinion of Hall's treating physician to be more probably
correct and concluded that Hall had met her burden to show a compensable
claim. The ALJ awarded Hall temporary benefits "from August 6, 2014,
until her condition is deemed to be medically stationary." Upon review, the
ALJ affirmed the award on December 7, 2015.

¶3          On March 7, 2016, Hall submitted a letter to the ICA, which
the ICA construed as a request for hearing pursuant to Arizona Revised

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Statutes ("A.R.S.") section 23-1061(J) (2017).1 In the letter, Hall complained
that the insurance carrier had failed to pay the benefits due her. The ALJ
set a hearing on Hall's request for May 2016. In the meantime, the insurer
sent Hall a check on March 24, 2016, for benefits covering the period from
August 12, 2014, to April 15, 2015.

¶4               At the beginning of the May 2016 hearing, counsel for the
insurer commented that he thought Hall "also protested the closure" of her
claim, which he said had occurred as of the date of the independent medical
examination on April 15, 2015. The ALJ noted in response that she did not
have a "closure notice" and "didn't have that down" for the hearing.
Nevertheless, the ALJ said to Hall, who was unrepresented, "How about to
be safe because with your request for hearing you did say see attached, and
. . . in order just to protect your rights particularly since Mr. Norton is of the
belief that you are protesting closure as well, let's keep that on the record as
your protest." Hall related the facts of her injury, then, on cross-
examination, testified that she did not receive any notice of closure issued
in the case. She also testified that when the insurer had sent her the check
with payment for the August 2014-April 2015 period, she received no
accompanying notice, letter or correspondence. At the conclusion of Hall's
testimony, the ALJ said:

       And as far as the closure of the claim, you know, I can't advise
       you what you, you know, need to do. You might want to talk
       to the ombudsman out there, but you need to get your hands
       on a notice of claim status and decide if you want to pursue
       that or not, whether you want – if you feel your claim should
       be open or not because it is not in front of me.

¶5             With Hall's payment request still pending, the ALJ then set
another hearing for October 20, 2016. Before the ALJ at that time were
medical records from Hall's treating physician advising that Hall's injury
limited her ability to work through October 5, 2015. In addition, the
physician who had performed the independent medical examination in
April 2015 testified his opinion was that Hall required no further treatment
at the time of the examination.

¶6           At the hearing, counsel for the insurer made no reference to
the purported closure of the claim, but after the evidence was concluded,
Hall volunteered that she had followed the ALJ's earlier advice to "check

1       Absent material revision after the relevant date, we cite a statute or
rule's current version.

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                           Decision of the Court

with the ombudsman in regards to a full payment or final disposition, and
there was none." Hall continued:

       There was no final claim provided through [her employer] or
       their representative at any – that they had received a letter
       saying they were going to issue a check but that there was no
       approval or there had been no form or letter in the file stating
       that claim status was final. That's why I was requesting
       compensation from May through September [2015] when I
       was terminated.

In response to the ALJ's query, the insurer's counsel stated, "I really don't
know what she is talking about other than the claim was closed without
permanent impairment effective April 15th, 2015, and the carrier has paid
benefits up to that point." At that point, the ALJ asked Hall whether she
had received "the closure notice closing the claim," and Hall replied, "[T]hey
didn't – they had not received anything. . . . I didn't have a copy, and they
didn't have a copy."

¶7            Following the hearing, and while the ALJ's decision was
pending, counsel for the insurer sent a letter dated October 24, 2016, to the
ALJ, with a copy to Hall, enclosing a copy of a Notice of Claim Status, dated
March 24, 2016. The notice purported to enclose a check in the amount of
$12,263.38 for the period of August 12, 2014, through April 15, 2015, and
stated that "[t]emporary compensation and active medical treatment
terminated on 4/15/15 because claimant was discharged."

¶8             On November 7, 2016, the ALJ issued a Decision Upon
Hearing awarding Hall compensation for temporary partial benefits from
April 16, 2015, through October 5, 2015. The insurer sought review, arguing
that because Hall had not timely protested the March 24, 2016 Notice of
Claim Status, it became final and deprived the ALJ of jurisdiction to order
further benefits. In a Decision Upon Review, the ALJ reversed her prior
ruling, adopting the insurer's arguments and ruling the ICA "lacked
jurisdiction to award additional temporary disability benefits" because Hall
had failed to file a request for hearing within 90 days of the Notice of Claim
Status.

¶9           Hall timely sought review in this court. We have jurisdiction
pursuant to A.R.S. §§ 23-951 and 12-120.21(A)(2) (2017) and Rule 10 of the
Arizona Rules of Procedure for Special Actions.

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                               DISCUSSION

¶10            "In reviewing ICA findings and awards, we defer to the ALJ's
factual findings but review questions of law de novo." Landon v. Indus.
Comm'n of Ariz., 240 Ariz. 21, 24, ¶ 9 (App. 2016). "To prevent appellate
courts from having to assume a factfinder role, an administrative law judge
must find on all the case's material issues." Post v. Indus. Comm'n of Ariz.,
160 Ariz. 4, 7 (1989). Accordingly, we will set aside an award if, based on
the record before us, we cannot determine "whether it was legally sound."
Landon, 240 Ariz. at 24-25, ¶ 9.

¶11            Pursuant to A.R.S. § 23-1061(F), with exceptions not relevant
here, the insurance carrier "shall promptly report to the commission and to
the employee . . . any denial of a claim, any change in the amount of
compensation and the termination thereof." The claimant may challenge
the denial, change or termination by seeking a hearing, but "[a] hearing on
any question relating to a claim shall not be granted unless . . . the request
for a hearing is filed within ninety days after the notice sent under § 23-
1061, subsection F . . . ." A.R.S. § 23-947(A). In the usual case, a claimant's
failure to request a hearing within the 90-day period renders the insurance
carrier's decision "final and res judicata to all parties." A.R.S. § 23-947(B).
An ALJ may hear an untimely protest, however, if the claimant failed to
seek a hearing "because of justifiable reliance on a representation by the
[ICA], employer or carrier" or if the claimant "shows by clear and
convincing evidence that the notice was not received." A.R.S. § 23-947(B)(1),
(3). Further, a claimant justifiably relies on a statement if she "has made
reasonably diligent efforts to verify the representation," regardless of
whether the statement carries legal authority behind it. A.R.S. § 23-
947(B)(1).2

¶12           As recounted above, the record before the ALJ contained
evidence that one or more of the statutory exceptions may apply in this case.
At the May 2016 hearing, the ALJ told Hall that the ALJ would keep Hall's
March 2016 letter "on the record as [Hall's] protest" of the Notice of Claim
Status. Further, Hall testified at the October hearing that she did not receive

2       Contrary to the argument the insurer made in its Request for Review,
a claimant's failure to timely file a request for hearing under A.R.S. § 23-947
does not necessarily divest the ICA of jurisdiction over the claim. Stange
Co. v. Indus. Comm'n of Ariz., 120 Ariz. 241, 243-44 (App. 1978). Instead,
failure to timely file is an affirmative defense that "may be waived if not
raised at the appropriate point in the proceedings." Frazier v. Indus. Comm'n
of Ariz., 145 Ariz. 488, 490 (App. 1985).

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any notice of closure. She also testified that after the May proceeding, she
asked her employer whether it had received a closure notice and also asked
the ICA ombudsman, all to no avail.

¶13            For its part, the insurer did not plainly raise the issue of the
notice of closure as a bar to Hall's benefits claim until its Request for Review
of the ALJ's decision granting benefits. In ruling on that request, the ALJ
did not acknowledge whether any of the exceptions in § 23-947(B) might
apply. Specifically, the ALJ did not address the assurance given to Hall that
Hall's March 2016 letter would be kept "on the record as [a] protest" of a
closure. Nor did the ALJ address the unchallenged evidence in the record,
recounted above, that Hall did not receive a copy of the notice of closure;
that when she inquired of her employer, it responded that it had received
no notice of closure; and that when she inquired of the ICA ombudsman,
that person did not identify any notice of closure in the file.

¶14            Given this evidence in the record, the ALJ erred by ruling that
the notice of closure barred Hall's claim without addressing whether any of
the exceptions in § 23-947(B) applied or whether the insurer waived the
argument by failing to raise it at the October 20, 2016 hearing.3 Without
findings by the ALJ as to whether Hall's failure to seek a hearing on the
notice was excused under § 23-947(B), we cannot say whether, as a matter
of law, the notice became final without a protest. Compare A.R.S. § 23-
947(A) with A.R.S. § 23-1061(F). Further, the ALJ should consider whether
the insurer waived the untimeliness defense by failing to raise it until after
the close of the October 20 hearing. See Frazier, 145 Ariz. at 491. If the ALJ
finds that an exception applies under § 23-947(B) or that the insurer waived
the defense by failing to raise it in a timely manner, the ALJ may reinstate
the Award.

3      The record contains some evidence of a representation by the ICA
during the May hearing on which Hall may have justifiably relied in failing
to seek a hearing on the notice of closure, and the ALJ heard evidence at the
October 20 hearing concerning whether Hall may have justifiably relied on
representations by her employer and/or the ombudsman in failing to seek
a hearing. The ALJ also heard evidence at the May and October 2016
hearings bearing on whether the insurer actually mailed the Notice of
Claim Status to Hall, whether Hall actually received the notice, and whether
she exercised reasonable care and diligence in pursuing the matter.

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                        HALL v. WALMART
                        Decision of the Court

                           CONCLUSION

¶15         For the foregoing reasons, we set aside the Decision Upon
Review and remand for proceedings consistent with this decision.

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

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