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Special Fund Division9/11/2001
This is a Rule 10 special action review of an Industrial Commission of Arizona (ICA) decision upon review awarding permanent partial disability compensation and awarding reimbursement under Arizona Revised Statutes Annotated (A.R.S.) § 23-1065(C)(1995). For the reasons that follow, we conclude that petitioner, the Special Fund Division of the ICA (the Special Fund), is not precluded from arguing that impairments to the ankle and knee of the same leg resulting from a single industrial injury constitute a leg impairment compensated as a scheduled disability that does not qualify for reimbursement. We also conclude that the award of compensation is severable from the award of reimbursement. Accordingly, we affirm the part of the decision upon review awarding compensation and set aside the part of the decision upon review awarding reimbursement.
BACKGROUND
Before his industrial injury, respondent employee (claimant) suffered a non-industrial injury requiring below-the-knee amputation of his right extremity. Claimant's 1994 industrial injury caused a 15% permanent impairment of his left ankle and a 5% permanent impairment of his left knee, which combined to rate a 20% impairment of the left lower extremity. Respondent employer and carrier (Cyprus) closed the claim with a 20% left lower extremity impairment compensated as a scheduled disability.
Claimant and Cyprus disputed whether the right extremity amputation is a "previous disability" that unscheduled the industrially-related impairment. See A.R.S. § 23-1044(E) (requiring assessment of "entire disability" in cases involving "previous disability"); e.g., Pullins v. Indus. Comm'n, 132 Ariz. 292, 295, 645 P.2d 807, 810 (1982) (recognizing conclusive presumption that impairment of great magnitude is "previous disability"); Alsbrooks v. Indus. Comm'n, 118 Ariz. 480, 484, 578 P.2d 159, 163 (1978) (defining "disability" to mean earning capacity disability). But during the hearings, the administrative law judge sua sponte queried whether the industrially-related ankle and knee impairments should actually be compensated as an unscheduled disability. The parties were asked to brief the issue. Cyprus asserted that both case law and logic compelled the conclusion that impairments to multiple parts of the same extremity related to a single industrial injury are scheduled (citing, e.g., Hoosava v. Indus. Comm'n, 1 Ariz. App. 6, 398 P.2d 683 (1965)). Claimant did not address the issue.
The administrative law judge ultimately issued an award for an unscheduled disability. He expressly found that all three bases for unscheduling applied, i.e., that the pre-existing amputation is an impairment of great magnitude, that this impairment resulted in an actual earning capacity disability, and that the multiple impairments to the same extremity are compensated as an unscheduled disability.
After this award became final the ICA awarded permanent total disability compensation. Cyprus timely requested a hearing and for the first time requested reimbursement under A.R.S. § 23-1065(C) "based on foundational information established" in the award for an unscheduled disability.
Another administrative law judge scheduled a hearing and served the Special Fund with the notice of hearing. The Special Fund then filed a notice of appearance. All of the parties subsequently stipulated that claimant had a specified permanent partial disability.
At the ensuing hearing, the parties submitted the disability stipulation to the administrative law judge. Cyprus and the Special Fund also stipulated that all elements for reimbursement were satisfied except the requirement of an "impairment not of the
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