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Special Fund Division v. Industrial Commission of Arizona - 1/21/2010

Arizona Court of Appeals Division One Holds That When A When a Worker Suffers Two Injuries in a Single Industrial Accident, His Employer May Be Entitled to Reimbursement from the Industrial Commission Special Fund, Even If Either of the Injuries Alone Would Not Entitle the Employer to Reimbursement.


If an employer hires an impaired worker who later suffers a permanent injury on the job the employer is, in certain circumstances, entitled to reimbursement from the Industrial Commission Special Fund for the disability compensation paid to the employee.  In this case, the employer, McCarthy Building Companies, hired Michael Sordia, knowing he had Type II diabetes.  In an accident at work, Sordia broke his left arm and right leg and, as a result, received extensive medical, surgical, and psychological treatment. 

The Industrial Commission found that Sordia was permanently partially disabled.  Both Sordia and McCarthy appealed the decision, Sordia claiming he was entitled to greater disability benefits and McCarthy claiming it was entitled to reimbursement from the Special Fund under A.R.S. § 23-1065(C).  The administrative law judge hearing the appeal found that Sordia was permanently and totally disabled and that McCarthy was entitled to reimbursement.  After an unsuccessful request for administrative review, the Special Fund appealed.

The Court of Appeals affirmed the ALJ’s decision.  The statutory scheme, enacted to encourage employers to hire impaired employees, allows for partial reimbursement of disability benefits if the industrial injury is “not of the type specified in [A.R.S.] § 23-1044, subsection B.”  A.R.S. § 23-1065(C).  Although both of Sordia’s injuries – a broken arm and a broken leg – are specified in A.R.S. § 23-1044(B), the Court of Appeals concluded that, because the two injuries were part of the same accident, Sordia’s overall injury was “not of the type specified” in the statute.  Therefore, McCarthy was entitled to reimbursement from the Special Fund.

Judge Gemmill authored the opinion; Judges Swann and Johnsen concurred.

Posted On: 1/28/2010