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Gibbons v. Industrial Commission of Arizona11/26/1999
CARRIER NO. 98-00067
Administrative Law Judge Joseph L. Moore
AWARD AFFIRMED
This matter is a statutory special action review of an Arizona Industrial Commission ("ICA") award and decision upon review denying relief requested under Arizona Revised Statutes Annotated ("A.R.S.") sections 23-1061(J) (1995) and 23- 1068(B) against a disability insurer ("Standard") that paid petitioner Dorothy Gibbons ("Gibbons") short-term disability benefits while her workers' compensation claim was denied. The administrative law Judge ("ALJ") found in part that the ICA could never assert jurisdiction over a disability insurer. Without deciding that the ICA can never assert jurisdiction, we conclude more narrowly that jurisdiction requires a disability insurer to have claimed a direct payment from or a direct credit against a claimant's workers' compensation benefits. Because Standard never claimed such a direct payment or credit, the ICA could not assert jurisdiction over it. We explain the following reasons for affirming the award.
The essential facts are undisputed. Gibbons was a State of Arizona ("State") employee. The State held group short-term disability insurance for its employees with Standard, under whose policy short-term disability benefits and workers' compensation benefits were mutually exclusive.
Gibbons filed a workers' compensation claim which was initially denied and later accepted. The State then paid her retroactive workers' compensation temporary disability benefits of $15,481.55. While the workers' compensation claim was denied, she applied to Standard for short-term disability benefits. After notifying her that short-term disability benefits and workers' compensation benefits were mutually exclusive and having her sign an agreement to repay all short-term disability benefits if her workers' compensation claim were accepted, Standard paid Gibbons monthly benefits totaling $7,765.68. When the workers' compensation claim subsequently was accepted, Standard relied on the mutually exclusive terms of the disability policy and the repayment agreement to demand that Gibbons repay all her short-term disability benefits. She refused and Standard threatened legal action. Standard never claimed a direct payment from or a direct credit against her workers' compensation benefits.
Gibbons then requested an ICA investigation under A.R.S. section 23- 1061(J) and section 23-1068(B). Relying on "common principles of equity, quantum meruit, unjust enrichment, and common fund principles," she asserted that the amount she must repay Standard should be reduced by "at least an amount proportionate to the legal costs and attorneys fees the applicant is obligated to pay for pursuing this matter." The ICA Claims Division declined to investigate, stating that it could not assert jurisdiction over Standard . Gibbons timely requested a hearing and moved to join Standard, who declined to appear. The ALJ refused to join Standard. Gibbons and the State then agreed to waive a hearing and the ALJ requested memoranda. The State notified the ALJ that it had no interest to defend, and Gibbons alone submitted a memorandum.
The ALJ then issued an award denying relief against Standard. The ALJ found in part that the ICA could never assert jurisdiction over a disability insurer such as Standard:
6. The Commission's jurisdiction to adjudicate claims for compensation, as provided by A.R.S. ยง 23-921(A) confers upon the Commission exclusive jurisdiction to determine all issues of law and fact relating to a workers' compensation claimant's entitlement to compensation benefits. Rios v. Industrial Commission, 120 Ariz. 374, 586 P.2d 2
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