Commission can't recoup $84K in special fund payments

In Arizona, when a worker is paid compensation benefits from the special fund, the Arizona Industrial Commission must file the award with the clerk of the superior court if it decides to execute a lien on the employer's property.

Case name: State ex rel. Industrial Commission of Arizona v. Word, No. CV-09-0714-PR (Ariz. 02/08/10).

Ruling: The Arizona Supreme Court ruled that the Arizona Industrial Commission could not collect reimbursement of payments made by the special fund under a 1992 workers' compensation award. An eight-year limitations period applied to the award.

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What it means: In Arizona, when a worker is paid compensation benefits from the special fund, the Arizona Industrial Commission must file the award with the clerk of the superior court if it decides to execute a lien on the employer's property. The lien lasts for eight years from the date of the award, not the date of the last payment.

Summary: An injured worker was awarded workers' compensation benefits from the state special fund. His benefits began pursuant to a 1992 award. Pursuant to Arizona law, the Industrial Commission periodically notified the employer of his liability to the special fund. In 2000, the commission issued a final award that listed a "balance forward" of $84,325 and filed the award with the superior court. In 2007, the commission attempted to impose a writ of garnishment on the employer to collect the amounts owed through the special fund. The employer argued that the commission was barred from seeking recovery under the 1992 award because the eight-year limitations period had expired. The Arizona Supreme Court determined that the 1992 award embodied the commission's findings as to compensation and benefits even though there was no monetary figure. Under the eight-year statute of limitations, the commission was barred from imposing a lien on the employer.

The commission argued that the 2000 final award was the appropriate document to be filed, and thus it had a valid judgment lien in 2007. It argued that the 2000 award gave a monetary amount due, whereas the 1992 award did not place a dollar amount on the benefits awarded. The court rejected the commission's arguments.

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March 25, 2010

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