Opinion
1 CA-IC 11-0010
04-12-2012
ADVANTAGE LOGISTICS, Petitioner, RISK ENTERPRISE MANAGEMENT, Petitioner Carrier, v. THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent, ESPERANZA PEREZ, Respondent Employee.
Cross & Lieberman, P.A. By Donald L. Cross Attorneys for Petitioners Employer and Carrier Andrew Wade, Chief Counsel The Industrial Commission of Arizona Attorney for Respondent Snow & Carpio, P.L.C. By Chad T. Snow Attorneys for Respondent Employee
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)
Special Action - Industrial Commission
ICA Claim No. 20051-110001
Carrier Claim No. 719-0198476
Administrative Law Judge Joann C. Gaffaney
AWARD SET ASIDE
Cross & Lieberman, P.A.
By Donald L. Cross
Attorneys for Petitioners Employer and Carrier
Phoenix
Andrew Wade, Chief Counsel
The Industrial Commission of Arizona
Attorney for Respondent
Phoenix
Snow & Carpio, P.L.C.
By Chad T. Snow
Attorneys for Respondent Employee
Phoenix PORTLEY, Judge
¶1 The sole issue in this special action review is whether the administrative law judge ("ALJ") erroneously granted rearrangement. For the following reasons, we set aside the award.
FACTUAL AND PROCEDURAL HISTORY
We review the evidence in a light most favorable to upholding the award. Lovitch v. Indus. Comm'n, 202 Ariz. 102, 105, ¶ 16, 41 P.3d 640, 643 (App. 2002) (citation omitted).
¶2 Esperanza Perez ("claimant") worked in the sanitation department for Advantage Logistics ("Advantage") , the petitioner-employer. She fell at work on March 22, 2005. She filed a workers' compensation claim, which was accepted for benefits. She had surgery on her left shoulder, and her claim was closed after rehabilitation with a 5% unscheduled permanent partial impairment.
¶3 The Industrial Commission of Arizona ("ICA") found that she had an unscheduled permanent partial disability, that she had sustained a 41.43% reduction in her monthly earning capacity and that she was entitled to receive $546.90 per month in permanent disability benefits. Advantage timely protested the award. After hearings on the issue, the ALJ entered an award for an unscheduled permanent partial impairment with no loss of earning capacity ("LEC"). The claimant appealed, but we affirmed the decision. Perez v. Indus. Comm'n, 1 CA-IC 08-0039, 2009 WL 3464563 (Ariz. App. Oct. 27, 2009) (mem. decision).
¶4 While the appeal was pending, claimant petitioned the ICA for rearrangement. She asserted that her "industrial injury and restrictions are now causing a reduction in [her] earning capacity." The petition was denied, and she requested a hearing. The ALJ, after considering the testimony of the claimant, two coworkers, and two labor market experts, entered an award granting rearrangement. Advantage filed this appeal after the award was affirmed on administrative review.
DISCUSSION
¶5 Advantage first argues that rearrangement was erroneously granted. Rearrangement is governed by Arizona Revised Statutes ("A.R.S.") section 23-1044 (West 2012), which provides in relevant part:
We cite the current version of the applicable statute because no revisions material to this decision have since occurred.
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F. For the purposes of subsection C of this section, the commission, in accordance with the provisions of § 23-1047 when the physical condition of the injured employee becomes stationary, shall determine theThe subsection permits rearrangement when there is "a reduction in earning capacity causally related to" the industrial injury that results "from some external change in circumstances occurring after the commission issued its final award." Gallegos v. Indus. Comm'n, 144 Ariz. 1, 2, 695 P.2d 250, 251 (1985).
amount which represents the reduced monthly earning capacity and upon such determination make an award of compensation which shall be subject to change in any of the following events:
. . . .
2. Upon a showing of a reduction in the earning capacity of the employee arising out of such injury where there is no change in the employee's physical condition, subsequent to the findings and award.
¶6 The party seeking rearrangement has the burden of proof. See Pima Cnty. Bd. of Supervisors v. Indus. Comm'n, 149 Ariz. 38, 44-45, 716 P.2d 407, 413-14 (1986). A reduction in earning capacity is "measured by comparing the facts determined by the final findings and award with those existing at the time of the rearrangement petition." Gallegos, 144 Ariz. at 5, 695 P.2d at 254.
¶7 Advantage argues that there is no change in circumstances to support rearrangement because "it is res judicata that sanitation work is reasonably available to . . .
[claimant] in the open labor market." The application of res judicata in workers' compensation cases requires the balancing of the remedial purpose of Arizona's Workers' Compensation Act against the purposes furthered by finality, which assist with effective administration of the workers' compensation system. See Stainless Specialty Mfg. Co. v. Indus. Comm'n, 144 Ariz. 12, 17, 695 P.2d 261, 266 (1985). In striking that balance the legislature has provided two statutory exceptions to finality: reopening, A.R.S. § 23-1061(H) (West 2012), and rearrangement, A.R.S. § 23-1044(F). See Epstein's Custom Carpentry v. Indus. Comm'n, 155 Ariz. 284, 287, 746 P.2d 25, 28 (App. 1987). Thus, although the claimant's petition for rearrangement is not barred by the doctrine of res judicata, the "claimant may not relitigate issues already decided" by the earlier award because "[r]ight or wrong, the facts determined by the final order are binding." Gallegos, 144 Ariz. at 4, 695 P.2d at 253.
¶8 In the May 19, 2008 award, the ALJ found:
14. I agree with defendants that applicant was able to return to the essential functions of her date-of-injury employment even without taking into account the modifications that the employer made to accommodate applicant's subjective perception that certain aspects of that position were too difficult for her. I disagree with the applicant, therefore, that the position to which she returned for a period of time after her injury should be deemed "sheltered" employment in(Emphasis added.)
contemplation of Arizona law. Applicant suffered no loss of earnings upon a return to that position and, in fact, received hourly raises upon her return to work. I find that the warehouse janitorial position is the best measure of applicant's earning capacity and that, therefore, she has sustained no loss of earning capacity and is not entitled to permanent disability compensation benefits.
¶9 We specifically adopted the finding on appeal, and stated that "[b]ased on the medical testimony and the accepted labor market testimony, we conclude that the ALJ's finding that Perez could return to her regular work at Advantage with no LEC is reasonably supported by the record, and the employment is not sheltered, . . . ." Perez, 1 CA-IC 08-0039, 2009 WL 3464563 at *4, ¶ 17. We also specifically noted that the ALJ adopted the labor market testimony of Lawrence Mayer, who "testified that similar sanitation work is available in the open labor market." Id. at *4, ¶¶ 15-17.
¶10 Claimant, as a result, had to establish that her employment with Advantage was no longer available because of her injury and that she had made a reasonable effort to secure similar sanitation work. See, e.g., D'Amico v. Indus. Comm'n, 149 Ariz. 264, 266, 717 P.2d 943, 945 (App. 1986). The record demonstrates that her job with Advantage is no longer available, but it does not demonstrate that it is not available because of her injury. Instead, the record demonstrates that she quit her job at Advantage. Specifically, the record demonstrates that: claimant stopped coming to work between September 2006 and January 2007; after using personal leave she did not return on February 2, 2007; she did not respond to the overtures Advantage made to her in writing in March, April, May, and June 2007 to reclaim her job; and, whatever else Advantage may have suspected, it knew in August 2007 that she was not returning after receiving a notice from the Arizona Department of Economic Security that she had quit and was seeking unemployment benefits.
¶11 Although the claimant was not required to return to Advantage, there is no evidence that Advantage did not rehire her after the May 2008 award because of her industrial injury. Instead, the evidence demonstrates that there were no open positions when she sought to return and there have been no available sanitation warehouse positions since she filed a job application with Advantage. Consequently, her industrial injury did not play a role in her lack of employment with Advantage.
¶12 The claimant has, however, looked for other employment. She has used a temporary employment agency and found several short-term jobs, including work as a door-to-door census worker and filling orders for Amazon during the holiday season. Although the ALJ concluded that the claimant had made a good faith effort to find other suitable employment, there was no evidence that the industrial injury precluded her from taking comparable sanitation warehouse work.
¶13 This case is similar to Bryant v. Indus. Comm'n, where the physical injury was not the cause of the claimant's reduced earnings. 21 Ariz. App. 356, 519 P.2d 209 (1974). Bryant was injured in an industrially related accident and returned to his job. Id. at 356-57, 519 P.2d at 209-10. Two years later he quit for another job with equivalent compensation. Id. at 357, 519 P.2d at 210. Five years later, he quit that job and accepted a job in Colorado on a government contract that was supposed to last for seventeen years. Id. He was, however, laid off shortly after moving to Colorado when the project was terminated; he moved back to Tucson and was unable to find employment that paid an equivalent wage to his pre-injury position. Id.
¶14 Bryant sought rearrangement without success and the matter came to us. We held that because Bryant "voluntarily terminated a job [that] compensated him at a rate equal to or better than his pre-injury earnings[,] . . . he voluntarily took upon himself certain risks of the marketplace, one of those being that his expectations for his new employment would not be fulfilled." Id. at 357, 519 P.2d at 210. As a result, we held:
[W]here the predominant cause of an injured work[er]'s changed economic status is of his own making and is similar to the risks encountered by all members of society, the Industrial Commission will not subsidize the injured work[er] for his miscalculations to the exclusion of the uninjured members of the work force.Id. at 357-58, 519 P.2d at 210-11.
¶15 Here, claimant returned to work after her shoulder surgery and rehabilitation, then took some time off to help relatives, and her job was still available for some five months after her personal leave expired. Two months later, Advantage learned that claimant had quit and was not returning. Her job, however, was not available when she tried to return after the May 2008 award.
¶16 Although the ALJ correctly found that claimant did not have to return to her job and Advantage did not have to keep it open indefinitely, the ALJ did not consider the res judicata effect of the prior determination that she could find similar employment on the open market. Instead, the ALJ erroneously determined that she could only earn $8.70 per hour instead of her former hourly rate that exceeded $14 per hour.
¶17 The claimant was free to ignore the overtures from Advantage and quit her job. She, however, does not get to relitigate whether she could find comparable replacement employment because that decision was resolved in the prior decision when the ALJ found, and we adopted, the finding "that similar sanitation work [was] available in the open labor market." Perez, 1 CA-IC 08-0039, 2009 WL 3464563 at *4, ¶ 16.
¶18 Given the fact that she had not demonstrated that she applied for sanitation warehouse jobs on the open market, the only basis for the difference in what she was earning before she quit and what she can earn is based on the vagaries of the economy. It is undisputed that the Arizona economy has been dismal since 2007 — foreclosures and unemployment have been high, and the economy has been more than stagnant. Therefore, because the cause of the claimant's reduced earning capacity is the result of her decisions made during the sharp downturn in the economy, the economic malaise cannot be considered as the basis for adjusting her compensation. See Bryant, 21 Ariz. App. at 357-58, 519 P.2d at 210-11.
CONCLUSION
¶19 Because the ALJ erred when she did not consider the res judicata effect of the open market determination, we vacate the award.
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MAURICE PORTLEY, Presiding Judge
CONCURRING:
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ANN A. SCOTT TIMMER, Judge
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ANDREW W. GOULD, Judge