B & R/scf Az v. Carter ( 2014 )

NOTICE: NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
B & R REPAIR SERVICE, Petitioner Employer,
SCF ARIZONA, Petitioner Carrier,
v.
THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,
RALPH CARTER, Respondent Employee.
No. 1 CA-IC 14-0021
FILED 12-18-2014
Special Action - Industrial Commission
ICA Claim No. 97332-205642
Carrier Claim No. 9739047
Anthony F. Halas, Administrative Law Judge
AWARD AFFIRMED
COUNSEL
SCF Arizona, Phoenix
By Chiko F. Swiney
Counsel for Petitioner Employer and Petitioner Carrier
Industrial Commission of Arizona, Phoenix
By Andrew F. Wade
Counsel for Respondent
Cecil A. Edwards, Jr., Attorney at Law, Phoenix
By Cecil A. Edwards, Jr.
Counsel for Respondent Employee
MEMORANDUM DECISION
Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge Jon W. Thompson and Judge Donn Kessler joined.
C A T T A N I, Judge:
¶1 This is a special action review of an Industrial Commission of
Arizona (“ICA”) permanent disability award in favor of Ralph Carter and
against the respondent employer, B & R Repair Service (“B & R”), and the
respondent carrier, SCF Arizona (“SCF”). B & R and SCF challenge in
particular a discovery sanction that precluded testimony from an untimely-
disclosed witness. For reasons that follow, we uphold the ruling imposing
the discovery sanction and affirm the ICA award.
JURISDICTION AND STANDARD OF REVIEW
¶2 This court has jurisdiction under Arizona Revised Statutes
(“A.R.S.”) sections 12-120.21(A)(2) and 23-951(A), and Arizona Rules of
Procedure for Special Actions 10.1 In reviewing findings and awards of the
ICA, we defer to the factual findings of the Administrative Law Judge
(“ALJ”) but review questions of law de novo. Young v. Indus. Comm’n, 204
Ariz. 267, 270, ¶ 14, 63 P.3d 298, 301 (App. 2003). We consider the evidence
1 Absent material revisions after the relevant date, we cite a statute’s
current version.
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Decision of the Court
in the light most favorable to upholding the ALJ’s award. Lovitch v. Indus.
Comm’n, 202 Ariz. 102, 105, ¶ 16, 41 P.3d 640, 643 (App. 2002).
PROCEDURAL AND FACTUAL HISTORY
¶3 Carter worked for B & R as a pipe fitter until he sustained an
acute lumbar disc herniation. He filed a workers’ compensation claim,
which was accepted for benefits. Carter first received conservative and
then surgical medical treatment, and his claim eventually closed with an
unscheduled permanent partial impairment and an award of permanent
disability benefits. In the ensuing years, as Carter received additional
treatment, his claim was reopened and reclosed several times for additional
treatment. Following the last reclosure, the ICA entered its findings and
award for a permanent total loss of earning capacity.
¶4 SCF timely requested a hearing to dispute the loss-of-earning
capacity finding. Prior to the hearing, Carter served SCF with
interrogatories, which were due on April 24, 2013. SCF provided answers
stating that potential job information “will be provided in LMC [labor
market consultant] report.” SCF filed a LMC report, authored by Lisa
Klapp, on July 8, 2013, three days before the first hearing. That same date,
Carter filed a motion to preclude the LMC report or alternatively for
sanctions.
¶5 The ALJ considered the range of sanctions available for the
untimely disclosure, and ruled as follows:
I find that defendants have not shown sufficient cause to be
relieved from the sanctions provided for by the Rules of
Procedure Before the Industrial Commission. I conclude that
the sanction of dismissal of defendants’ Request for Hearing
is not appropriate in this instance. However, under all the
circumstances, I determine and conclude that, given
applicant’s appropriate use of interrogatories for discovery
through the Rules of Procedure Before the Industrial
Commission, with reasonable follow-up, the appropriate
sanction pursuant to A.A.C. R20-5-157(A) is that defendants
should be precluded from the introduction into evidence of
Ms. Clapp’s untimely report – the last-minute submission of
which was prejudicial to applicant Carter – or any testimony
referencing the report and its findings and conclusions.
SCF requested reconsideration, but the ALJ affirmed his ruling in a formal
written order.
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¶6 The ALJ subsequently issued a decision finding that Carter
could perform “quite light work, with a 40 pound maximum in lifting,
pushing, pulling and carrying, with frequent position changes at least every
30 minutes.”2 The ALJ further found, however, that the evidence presented
was “insufficient to determine that suitable and available work exists which
[] Carter could reasonably be expected to perform,” and awarded a
permanent disability benefit of $1,271.08.3 SCF brought this timely appeal.
DISCUSSION
¶7 SCF argues that the ALJ erred by entering an order precluding
Lisa Klapp’s report and her testimony, and urges that the preclusion of that
testimony was dispositive of the ALJ’s determination regarding whether
there was available work that Carter could reasonably be expected to
perform. We have jurisdiction to review the ALJ’s determination. See Meva
Corp. v. Indus. Comm’n, 15 Ariz. App. 20, 24, 485 P.2d 844, 848 (1971) (Court
of Appeals may review any formal document executed by the ICA, “which
contains a direct determination of some issue in relation to the claim of a
particular injured workman.”).
¶8 We will uphold an ALJ’s enforcement of the rules of
procedure “absent a clear showing of abuse of discretion.” Nolden v. Indus.
Comm’n, 127 Ariz. 501, 504, 622 P.2d 60, 63 (App. 1980).
¶9 Arizona’s workers’ compensation rules require parties to
comply with reasonable discovery requests. See Arizona Administrative
Code (“A.A.C.”) R20-5-131, -144, -145, and -157. Compliance includes
answering interrogatories and producing medical and nonmedical records.
See A.A.C. R20-5-131(D), -144(A), -144(B), -155(A). After a hearing request
is filed, interrogatories may be propounded and must be answered within
ten days. See A.A.C. R20-5-144(A), (C). All nonmedical documents and
reports must be filed with the presiding ALJ at least fifteen days prior to the
first scheduled hearing. See A.A.C. R20-5-155(B).
2 The parties presented conflicting expert testimony regarding
whether Carter was able to work. The ALJ rejected Carter’s assertion that
he was totally disabled and unable to work.
3 The Award noted that the ICA retains jurisdiction for the purpose of
altering, amending, or rescinding its Findings and Award upon, among
other factors, “a showing that the applicant’s earning capacity has increased
subsequent to the Findings and Award.”
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¶10 If a party fails to comply with an opposing party’s discovery
requests, the presiding ALJ may impose sanctions, including preventing the
party from presenting evidence at the ICA hearing, forfeiting an award,
awarding the opposing party reasonable costs and attorneys’ fees, or
dismissing the party’s hearing request. See A.A.C. R20-5-145, -157. The
presiding ALJ may also relieve a party of sanctions imposed for good cause
shown. A.A.C. R20-5-157(B).
¶11 Before applying the ultimate sanction of dismissal, an ALJ
must consider a variety of factors including: (1) whether there has been a
pattern of failure to cooperate with discovery; (2) whether counsel has acted
with due diligence; (3) whether evidence has been presented to support the
party’s case; (4) whether there is a reasonable explanation for the failure to
comply with discovery requests; (5) whether the opposing party has
suffered prejudice; and (6) the procedural context of the hearings. See
Brown v. Indus. Comm’n, 154 Ariz. 252, 254, 741 P.2d 1230, 1232 (App. 1987);
King v. Indus. Comm’n, 160 Ariz. 161, 163, 771 P.2d 891, 893 (App. 1989).
¶12 Here, Carter propounded six interrogatories focused on
learning what type of jobs SCF alleged to be suitable for and reasonably
available to him. SCF’s interrogatory answers were due on April 24, 2013,
but were not provided until July 5, 2013. And those untimely answers did
not contain the information requested, but rather stated only that potential
job information would “be provided in LMC report.” The LMC report in
turn was not filed until July 8, 2013, only three days before the hearing,
rather than 15 days prior to the hearing, as required by the rules. See A.A.C.
R20-5-155(B). Moreover, the LMC report was central to the loss of earning
capacity issue, the ultimate issue in the case. In refusing to consider the
untimely report, the ALJ properly considered the Brown factors, as well as
the full range of sanctions available. In these circumstances, the ALJ did
not abuse his discretion by excluding the untimely disclosed evidence.
¶13 SCF cites several cases in which an appellate court has found
an ALJ abused his discretion regarding evidentiary rulings or discovery
sanctions. But those cases are factually distinguishable. In the first case,
the ALJ abused his discretion by denying a late subpoena request and
motion for continued hearing when the claimant’s counsel’s illness was a
“meritorious reason[] for his delay in producing [the witness].” Rosovich v.
Indus. Comm’n, 133 Ariz. 374, 375–76, 651 P.2d 1199, 1200–01 (1982). Here,
in contrast, SCF did not establish a meritorious reason for its untimely
disclosure. In the second, the ALJ erroneously excused a witness from
testifying when the witness improperly asserted a non-existent privilege.
Gordon v. Indus. Comm’n, 23 Ariz. App. 457, 459–60, 533 P.2d 1194, 1196–97
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(1975). Here, SCF has not established a comparable error of law underlying
the ALJ’s ruling. In the third case, the ALJ abused his discretion by refusing
a late subpoena request when the relevant regulation allowed refusal only
if the witness’s expected testimony would not be material and necessary,
but not based on timeliness; even assuming the ALJ had discretion to
impose reasonable time limits on subpoena requests, the ALJ’s actions
exceeded this authority because the subpoena could have issued for a
continued hearing when that became necessary on behalf of the opposing
party. K-Mart Corp. v. Indus. Comm’n, 139 Ariz. 536, 538–39, 679 P.2d 559,
561–62 (App. 1984). Here, however, the regulations expressly authorized
exclusion as a sanction for discovery violations, and the ALJ properly
considered the circumstances and the law in rendering his decision. See
A.A.C. R20-5-157(A)(2).
CONCLUSION
¶14 SCF has not established that the ALJ abused his discretion by
excluding the untimely revealed evidence, which was central to the
ultimate issue in this case, and we thus affirm the discovery sanction, as
well as the award of disability benefits.
:gsh
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