Arizona Court ofAppeals Division One Holds that Pursuant to A.R.S. § 23-907(E) An Award Against an Employer Who Lacked Worker’s Compensation Insurance Must Be Filed with Clerk and Executed on Within Eight Years.

In 1991, one of Tommy Word’s employees was injured while on the job.  Word did not have workers’ compensation insurance.  Therefore, pursuant to A.R.S. 23-907(B), in lieu of proceeding against Word in a civil action, the employee opted to apply for benefits through the statutorily established “Special Fund” administered by the Industrial Commission of Arizona.  In 1992, the Commission issued an award against Word and for the employee for medical and other benefits.  Periodically thereafter, the Commission would issue “continuing award[s]” as it made benefit payments to the employee.  In 2000, the Commission issued a document captioned “Final Award,” which listed the total amount that Word owed to the Commission.  The Commission filed this “Final Award” with the clerk of the superior court and recorded it with the county recorder in 2001.  Almost six years later, in 2007, the Commission obtained and served several writs of garnishment in an attempt to collect on the Final Award from Word.  In response, Word filed a motion for relief from judgment pursuant to Rule 60(c) of the Arizona Rules of Civil Procedure. He argued that the Commission had no valid judgment to enforce because the eight-year limitations period set forth in A.R.S. § 23-907(E) had lapsed.  The superior court denied Word’s motion, finding that the limitations period began to run when the “Final Award” was issued in 2000.  Word appealed.       

The ArizonaAppeals Court reversed and remanded with instructions to grant Word’s motion.  The Court noted that the resolution of the case turned solely on the language of A.R.S. § 23-907(E), which required the Commission to file “the award” with the superior court clerk.  The award, when entered in the civil order book and judgment docket, becomes “a lien for eight years from the date of the award upon the property of the employer.” Execution on that lien may issue “within eight years in the same manner and with like effect as if the award were a judgment of the superior court.”  The Commission conceded below that, “[a]n Original Award was issued . . . on April 10, 1992.”  Yet, the only document the Commission filed with the superior court clerk was the “Final Award” in 2000.  The Court concluded that notwithstanding its caption, this document was not an “award.”  A.R.S. §  23-901(1) defines “Award” as “the finding or decision of an administrative law judge or the commission as to the amount of compensation or benefit due to an injured employee.”  That occurred in 1992, but the Commission never filed the award.  Therefore, the Commission had no valid judgment against Word.  Pursuant to A.R.S. § 12-348, the Court also awarded Word its costs and attorneys’ fees on appeal.                          

Judge Downie authored the opinion; Judges Thompson and Kessler concurred.