Special Fund Div. v. Indus. Comm'n of Ariz.

57 Arizona Cases Digest 17

502 P.3d 33

SPECIAL FUND DIVISION, Petitioner,

v.The INDUSTRIAL COMMISSION OF ARIZONA, Respondent,Johnny Haner, Respondent Employee,Valley School Workers Compensation Pool d/b/a Deer Valley Unified School District, Respondent Employer,Valley Schools Workers Compensation Group, Respondent Carrier.

No. 1 CA-IC 20-0052

Court of Appeals of Arizona, Division 1.

FILED November 9, 2021

Industrial Commission of Arizona, Phoenix, By Stephen D. Ball, Counsel for Petitioner

Industrial Commission of Arizona, Phoenix, By Gaetano J. Testini, Counsel for Respondent

Arizona Injury Law Group PLLC, Phoenix, By Weston S. Montrose, Counsel for Respondent Employee

Jardine, Baker, Hickman & Houston, PLLC, Phoenix, By K. Casey Kurth, Counsel for Respondent Employer and Carrier

Presiding Judge Randall M. Howe delivered the opinion of the court, in which Judge Brian Y. Furuya and Judge Michael J. Brown joined.

HOWE, Judge:

¶1 The Special Fund Division ("Fund") of the Industrial Commission of Arizona ("ICA") challenges an award that made it responsible for a portion of the expenses of Johnny Haner's disability benefits under A.R.S. § 23–1065(C) because Deer Valley Unified School District knew about Haner's pre-existing medical conditions while he worked for Deer Valley. The Fund argues that an employee's credible testimony that he informed his supervisor of his pre-existing medical conditions is insufficient evidence to establish knowledge for apportionment of expenses under the statute without evidence that the respondent employer acknowledged that the employee had pre-existing conditions. We affirm. Credible testimony that an employee told his employer about his pre-existing conditions is sufficient to support apportioning expenses of disability benefits under A.R.S. § 23–1065(C).

FACTS AND HISTORY

¶2 In 2015, Haner applied for a job as a custodian with Deer Valley. Paul Florek hired him and became his direct supervisor. Haner was injured on the job in April 2019, and his worker's compensation claim was accepted. After he was treated and his claim was closed with an unscheduled permanent partial disability in July 2019, the ICA Claims Division determined that Haner had suffered no loss of earning capacity. Haner disagreed and requested a hearing. He also requested reimbursement for expenses that he incurred in traveling for treatment.

¶3 Before the hearing on those issues, Deer Valley and its carrier, Valley Schools Workers Compensation Group, notified the administrative law judge ("ALJ") that, due to Haner's pre-existing diabetes and 2013 heart surgery, they were seeking apportionment of the expenses of his disability benefits under A.R.S. § 23–1065(C), which generally provides that the Fund may reimburse employers that knowingly employ persons with qualifying pre-existing conditions who later suffer a work injury. The Fund joined the proceeding as a party in interest.

¶4 The ALJ heard testimony from Haner and others over several days. Haner testified that when he was hired, he told Florek that he had diabetes and had undergone heart bypass surgery. The ALJ found that Haner was a credible witness and, relying solely on Haner's testimony, determined that Deer Valley knew about those pre-existing conditions before he was injured. The resulting award, therefore, apportioned responsibility for payment of disability benefits between the Valley Group and the Fund.

¶5 The Fund requested administrative review of the award, arguing that the Valley Group did not meet its burden of proving that Deer Valley knew about Haner's pre-existing conditions because it failed "to provide any testimony or writing from the employer evidencing knowledge of applicant's heart condition and diabetes." The Fund argued that without direct evidence that Florek or another Deer Valley representative acknowledged Haner's pre-existing conditions, the record was insufficient to find that Deer Valley knew about them. The ALJ summarily denied the review request, and this special action review followed.

DISCUSSION

¶6 When this court reviews the ICA's findings and conclusions, we defer to the ALJ's factual findings but review questions of law de novo. Young v. Indus. Comm'n , 204 Ariz. 267, 270 ¶ 14, 63 P.3d 298, 301 (App. 2003). We consider the evidence in the light most favorable to upholding the award. Lovitch v. Indus. Comm'n , 202 Ariz. 102, 105 ¶ 16, 41 P.3d 640, 643 (App. 2002). Here, the Fund does not dispute Haner's testimony, but argues that his testimony, which the ALJ found credible, is insufficient by itself to support the ALJ's finding that Deer Valley knew about his pre-existing conditions.

¶7 The expense of disability benefits may be apportioned between the Fund and the employer or its carrier when the employer knowingly hires an employee with a significant non-work-related physical impairment that "is of such seriousness as to constitute a hindrance or obstacle to employment," and the employee later suffers a work-related impairment. A.R.S. § 23–1065...