In 1991, an employee of Tommy Word was injured during the course of employment. Word did not carry workers' compensation, and his employee sought workers' compensation. In 1992, an administrative law judge issued an award for the employee, and accordingly, the Industrial Commission of Arizona (the “Commission”) made payments to the employee. The uninsured employer is liable for such payments. Pursuant to A.R.S. § 23-907(E), the Commission issued “continuing awards” in 1993, 1994, and 1998 notifying Word of the payments made to the employee. In 2000, the Commission issued a final award, and recorded it with the Maricopa County Superior Court Clerk in 2001. Word did not contest any of the awards. The Commission attempted to collect the amounts owed by filing writs of garnishment in 2007. The Superior Court denied Word's motion challenging the garnishment. Word's argument was that the eight year limitations period in A.R.S. § 23-907(E) had expired, thus barring the Commission from collecting any liabilities incurred under the 1992 award. The Court of Appeals reversed the superior court, holding that under A.R.S. § 23-907(E), the Commission was required to file the 1992 award with the clerk of the superior court before pursuing remedies, and that the Commission's ability to recover from Word thus expired 8 years after the 1992 award.
The Arizona Supreme Court vacated the appeals court decision, and reversed the superior court. The Supreme Court stated that the appeals court had reached the correct result, but had incorrectly interpreted the statute. The appeals court correctly rejected the Commission's argument that, under A.R.S. § 23-907(E), it had obtained an eight-year lien by filing the 2000 award. The Supreme Court explained that the award referred to in A.R.S. § 23-907(E) is the initial decision awarding benefits, which in this case was issued in 1992. The Supreme Court rejected, however, the appeals court's holding that the Commission was required to file the 1992 award to perfect its rights to reimbursement from Word for payments made under the award. Each payment made to the injured employee by the Commission qualified as a separate judgment, which could be executed upon just like any other judgment, and the Commission's failure to file the initial award did not affect the status of each payment as an independent judgment. The Supreme Court stated that the appeals court reached the correct result in this case, however, because the last payment, which was made in 1998, expired five years later, in 2003. Because the Commission did not argue that the payment had been renewed, it could not form the basis of the 2007 garnishments. The Supreme Court declined to decide whether the Commission could renew such judgments, and whether 8-year liens established under A.R.S. § 23-907(E) may be renewed.
Justice Hurwitz wrote the opinion for the unanimous Court.
Posted By: James K Rogers