In 2008, Bombara was injured on the job and filed a negligence action against his employer seeking damages for the injuries he sustained. He then filed a workers’ compensation claim with the Industrial Commission of Arizona (“ICA”) in January 2009. Because his employer did not carry workers’ compensation insurance, the claim was processed by the Special Fund Division/No Insurance Section of the ICA (“Special Fund”). Later that same month, Bombara and his employer agreed to dismiss the negligence action without prejudice. The Special Fund issued a Notice of Determination accepting the claim for benefits in March 2009. No timely request for a hearing was filed. Five months later, Special Fund moved to dismiss the worker’s compensation claim for lack of jurisdiction based on the election of remedies defense in A.R.S. § 23-1024(B). The Administrative Law Judge (“ALJ”) confirmed the finality of the Notice of Determination and denied the motion to dismiss. She found that Special Fund and the employer had waived the defense provided by Section 23-1024(B) by not timely asserting the defense before the Notice of Determination became final. After administrative review, the ALJ affirmed the prior determination and Special Fund filed a special action.
The Arizona Appeals Court accepted jurisdiction and affirmed the ALJ’s determination that the election of remedies defense under Section 23-1024(B) had been waived because it was not timely filed before the Notice of Determination became final. Section 23-1024(B) provides that an employee “who exercises any option to institute a proceeding in court against his employer waives any right to compensation.” Referred to as the “election of remedies defense,” this defense has been recognized as a non-jurisdictional defense that can be waived. The Court explained that pursuant to A.R.S. § 23-947(A), an employee challenging a Notice of Determination must file a request for a hearing within 90 days of the issuance of the Notice and an employer challenging the Notice must file within 30 days. The carrier or Special Fund may also rescind the Notice within 90 days. Here, neither Bombara nor his employer contested the Notice of Determination within the permitted time period, and Special Fund did not rescind the notice within the allotted 90 days. Therefore the Notice of Determination became final and res judicata in June 2009, 90 days after it was issued. Because Special Fund did not raise the election of remedies defense until August 2009, this defense was waived.
Judge Gemmill authored the opinion, Judges Johnsen and Brown concurred.
Posted by: Kristin Windtberg