Fund's defense waived when brought after determination of compensability
Case name: Special Fund Division v. Industrial Commission of Arizona, No. 1 CA-IC 09-0084 (Ariz. Ct. App. 03/08/11).
The Arizona Court of Appeals held that the employer's election of remedies defense had been waived since it was not asserted before the determination of compensability became final.
What it means: In Arizona, the election of remedies defense is waived if it is raised after a determination of compensability becomes final.
Summary: A worker was injured while testing personal watercraft for his employer. The employer had not obtained workers' compensation insurance, so the worker had the option of suing the employer or filing a claim for workers' compensation benefits. The worker did both, but the worker and employer agreed to dismiss the suit. The Special Fund Division processed the workers' compensation claim since the employer was not insured. The fund accepted the claim for benefits. Later, the fund sought to dismiss the workers' compensation claim, arguing that the worker exercised his option to sue the employer, so he waived his right to bring a workers' compensation claim. The Arizona Court of Appeals held that the fund's election of remedies defense was waived because it was not raised until after the determination of compensability became final.
The court explained that the fund's notice accepting the claim became final because it was not timely contested by either party. The court explained that the fund's defense was waived because it was not timely asserted.
The fund argued that it should not have the burden and expense of searching court records to determine whether workers sued their employers. The fund contended that the law should require workers to disclose whether they filed lawsuits. The court said this policy argument would be better addressed to the legislature.
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April 18, 2011
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