SUPREME COURT OF ARIZONA
En Banc
STATE OF ARIZONA ex rel. ) Arizona Supreme Court
INDUSTRIAL COMMISSION OF ARIZONA, ) No. CV-09-0174-PR
)
Plaintiff/Judgment Creditor/ ) Court of Appeals
Appellee, ) Division One
) No. 1 CA-CV 08-0218
v. )
) Maricopa County
TOMMY WORD dba PACIFIC ) Superior Court
MECHANICAL SERVICE, ) No. TJ2001-002093
)
Defendant/Judgment Debtor/ )
Appellant. )
)
) O P I N I O N
__________________________________)
Appeal from the Superior Court in Maricopa County
The Honorable Richard L. Nothwehr, Commissioner
REVERSED AND REMANDED WITH INSTRUCTIONS
Opinion of the Court of Appeals, Division One
221 Ariz. 283, 211 P.3d 1267 (App. 2009)
VACATED
INDUSTRIAL COMMISSION OF ARIZONA Phoenix
By Michael P. Primiano
Attorney for State of Arizona and
Industrial Commission of Arizona
PHILIP R. WOOTEN, P.C. Phoenix
By Philip R. Wooten
Attorney for Tommy Word and Pacific Mechanical Service
________________________________________________________________
H U R W I T Z, Vice Chief Justice
This case requires us to interpret A.R.S. § 23-907(E) (Supp. 2009), which
governs recovery of payments made by the Industrial Commission to injured
workers whose employers fail to maintain workers’ compensation insurance.
I.
A.
On August 2, 1991, Robert Ruehrmund was injured while employed by Tommy
Word. Because Word did not carry workers’ compensation insurance,
Ruehrmund had the option of either pursuing tort remedies or seeking
benefits from the Commission’s Special Fund. A.R.S. § 23-907(A)-(B) (Supp.
1990). The Special Fund is financed by assessments against workers’
compensation insurance premiums and self-insured employers. A.R.S. § 23-
1065(A) (Supp. 2009).
Ruehrmund sought workers’ compensation. After a hearing, an administrative
law judge issued an award on April 10, 1992 (the “1992 Award”), granting
Ruehrmund continuing hospital, surgical, medical, and compensation
benefits. After the administrative law judge denied his request for
review, Word filed a special action in the court of appeals, which upheld
the award. Word v. Indus. Comm’n, 175 Ariz. 474, 477, 857 P.2d 1328, 1331
(App. 1993).
B.
The Commission made payments to Ruehrmund pursuant to the 1992 Award from
the Special Fund through November 18, 1998. When an injured worker
receives such payments, the uninsured employer is liable to the Special
Fund under § 23-907(E) for the payments, statutory penalties, and interest.
Section 23-907(E) requires the Commission to notify the employer
periodically of his liability to the Special Fund. On December 3, 1993,
the Commission issued a “Continuing Award,” listing payments made from the
Special Fund to Ruehrmund between August 2, 1991, and November 29, 1993.
On May 20, 1994, and March 9, 1998, the Commission issued two “Supplemental
Continuing Awards.” Each of these documents identified payments to
Ruehrmund from the Special Fund during a specified period and a “balance
forward,” accumulating payments, penalties, and interest to date.
On October 11, 2000, the Commission issued a “Final Award” (the “2000 Final
Award”), which covered payments from December 20, 1997, through November
18, 1998. The 2000 Final Award listed a total “balance forward” of
$84,325.28. Word did not contest the 1993 Continuing Award, the two
Supplemental Continuing Awards, or the 2000 Final Award.
C.
The Commission filed the 2000 Final Award with the Maricopa County Superior
Court Clerk on July 11, 2001, and with the Maricopa County Recorder on July
25, 2001. In 2007, the Commission attempted to collect amounts owed to the
Special Fund through writs of garnishment. In response, Word filed a
motion pursuant to Arizona Rule of Civil Procedure 60(c), arguing that the
Commission was barred from seeking recovery for any liabilities incurred
under the 1992 Award because the eight-year limitations period in § 23-
907(E) had expired. The superior court denied the motion.
The court of appeals reversed, holding that § 23-907(E) required the
Commission to file the 1992 Award with the superior court clerk before
pursuing its remedies against Word. State ex rel. Indus. Comm’n v. Word,
221 Ariz. 283, 286-87 ¶¶ 14, 19, 211 P.3d 1267, 1270-71 (App. 2009). The
court held that the Commission’s ability to recover payments from Word had
expired eight years from the date of the 1992 award. Id. at 288 ¶ 22, 211
P.3d at 1272.
We granted the Commission’s petition for review because interpretation of
§ 23-907(E) is an issue of statewide importance. We have jurisdiction
pursuant to Article 6, Section 5(3) of the Arizona Constitution and A.R.S.
§ 12-120.24 (2003).
II.
A.
Arizona law has provided for a workers’ compensation system since
statehood. Ariz. Const. art. 18, § 8; see also Grammatico v. Indus.
Comm’n, 211 Ariz. 67, 70-71 ¶¶ 10-17, 117 P.3d 786, 789-90 (2005)
(recounting history). The workers’ compensation system provides an
alternative to traditional tort law, assuring the injured worker of
compensation for employment-related injuries regardless of fault.
Grammatico, 211 Ariz. at 71 ¶ 17, 117 P.3d at 790.
To ensure the payment of benefits, Arizona law has long required that
employers either obtain workers’ compensation insurance or provide the
Commission with satisfactory evidence of their financial ability to self-
insure. See 1925 Ariz. Sess. Laws, ch. 83, § 48 (Reg. Sess.) (current
version at A.R.S. § 23-961(A) (Supp. 2009)). Since 1925, an injured worker
of an uninsured employer has had the option of either suing in tort or
obtaining a workers’ compensation award from the Commission. Id. The 1925
act required that the employer promptly pay benefits awarded by the
Commission directly to the worker, and provided that
[a]n abstract of the award may be filed in the office of the clerk of
the superior court in any county in the state and shall be docketed in
the judgment docket thereof, and when so filed and docketed shall be a
lien upon the property of the employer situated in the county for a
period of eight years from the date of the award; execution may be
issued thereon within eight years in the same manner and with like
effect as if said award were a judgment of the superior court.
Id. (as codified at Ariz. Rev. Code 1928, § 1433).
In 1968, the legislature gave the Commission the discretion to compensate
workers of non-insured employers directly from the Special Fund. 1968
Ariz. Sess. Laws, ch. 6, § 12 (4th Spec. Sess.); see also State Comp. Fund
v. Superior Court, 15 Ariz. App. 597, 599 n.2, 490 P.2d 426, 428 n.2 (1971)
(noting statutory change). If the Commission did so, it was assigned the
worker’s cause of action against the employer. 1968 Ariz. Sess. Laws, ch.
6, § 12 (codified as amended at A.R.S. § 23-907(B) (1970)). The 1968 act
retained, without material change, the filing and lien provisions of the
1925 act quoted above. Id.
In 1973, the legislature removed the Commission’s discretion and required
benefits awarded to injured workers of uninsured employers to be paid from
the Special Fund. 1973 Ariz. Sess. Laws, ch. 136, § 3 (1st Reg. Sess.)
(codified at A.R.S. § 23-907(C) (Supp. 1974)). Again, the 1973 act
retained, with no material change, the language providing that the
Commission “may” file the award with any superior court clerk to obtain an
eight-year lien on the employers’ property. Id. The 1973 act also added
language to § 23-907(C) providing that “[t]he award will act as a judgment
against the employer for the amount expended.” Id.
In 1977, § 23-907(C) was amended to its current form. 1977 Ariz. Sess.
Laws, ch. 109, § 2 (1st Reg. Sess.). As codified at § 23-907(E), the
statute now provides:
The employer shall be notified of the employer’s liability to the
special fund periodically and this notice shall include a ten per cent
penalty of the amount expended by the special fund or a penalty of one
thousand dollars, whichever is greater, plus interest on the amount
expended and the penalty pursuant to § 44-1201. The payments made
from the special fund pursuant to the award plus the penalty shall act
as a judgment against the employer. The commission shall file the
award in the office of the clerk of the superior court in any county
in the state and such award shall be entered in the civil order book
and judgment docket and when so filed and entered shall be a lien for
eight years from the date of the award upon the property of the
employer located in the county. Execution may issue thereon within
eight years in the same manner and with like effect as if the award
were a judgment of the superior court.
B.
The court of appeals focused on the third sentence of § 23-907(E). Noting
that the 1977 act had changed the third word in that sentence from “may” to
“shall,” the court held that filing the award with a superior court clerk
was a mandatory duty of the Commission. Word, 221 Ariz. at 287 ¶ 14 & n.3,
211 P.3d at 1270 & n.3. The court then concluded that the “award” referred
to in that sentence was the 1992 Award, not the 2000 Final Award. Id. at
288 ¶ 15, 211 P.3d at 1271. Because the 1992 Award was never filed with
the clerk of any superior court, the court of appeals held that the
Commission had not “perfect[ed] its judgment rights” and had “no valid
judgment.” Id. at 289 ¶ 22, 211 P.3d at 1272.
1.
The Commission argues that the 2000 Final Award is the appropriate document
to be filed under § 23-907(E), and that it thus had a valid judgment lien
in 2007 when it began garnishment proceedings. The Commission relies upon
A.R.S. § 23-901(1) (Supp. 2009), which defines “award” as “the finding or
decision . . . as to the amount of compensation or benefit due an injured
employee,” and notes that the 1992 Award did not place a dollar amount on
the benefits awarded Ruehrmund. The Commission contends that the 2000
Final Award, which recounts the total amount of monetary benefits received
by the injured worker, is the “award” to which § 23-907(E) refers.
Contrary to the Commission’s argument, the 1992 Award meets the definition
of award in § 23-901(1). Although the 1992 Award contains no dollar
amount, it embodies the Commission’s finding or decision as to the
compensation and benefits due Ruehrmund. The 1992 Award is entitled
“Decision Upon Hearing and Findings and Award for Compensable Claim,” and
gave Ruerhmund “hospital, surgical and medical benefits as provided by law
from [the date of the accident] until his condition becomes medically
stationary,” and “compensation benefits” for the same period. In contrast,
as the court of appeals noted, the 2000 Final Award is not technically a
finding or decision as to the amount of compensation due Ruehrmund; rather
it reflects amounts already paid, and thus serves as the periodic notice
required by § 23-907(E) of Word’s liability to the Special Fund. Word, 221
Ariz. at 287 ¶ 16, 211 P.3d at 1271.
Moreover, the definitions in § 23-901 apply only “unless the context
otherwise requires.” The second sentence of § 23-907(E) provides that
“[t]he payments made from the special fund pursuant to the award shall act
as a judgment against the employer.” That sentence expressly distinguishes
the “award” granting benefits to the worker from the “payments” later made
thereunder. Thus, the reference in the very next sentence to the “award”
to be filed with the superior court clerk is to a decision awarding
benefits to the injured worker. See Obregon v. Indus. Comm’n, 217 Ariz.
612, 616 ¶ 21, 177 P.3d 873, 877 (App. 2008) (noting that a term in a
statutory subsection should be given the same meaning each time it is
used).
Similarly, the third sentence of § 23-907(E) provides for a lien lasting
for eight years from “the date of the award,” not from the last payment.
And, the fourth sentence of the statute provides that execution “may issue
thereon . . . as if the award were a judgment of the superior court.” The
legislature’s use of “thereon” in the fourth sentence plainly refers to the
filed award described in the preceding sentence. The fourth sentence thus
also distinguishes the award from payments made under it, because the
second sentence confers judgment status to the payments. See State v.
Superior Court, 113 Ariz. 248, 249, 550 P.2d 626, 627 (1976) (stating that
a statute should be read so that “no clause, sentence, or word is rendered
superfluous”).
The court of appeals thus correctly held in this case that the “award”
referred to in § 23-097(E) is the original 1992 Award, not the 2000 Final
Award. Word, 221 Ariz. at 287 ¶¶ 18-19, 211 P.3d at 1271. That court
therefore appropriately rejected the Commission’s argument that it obtained
an eight-year lien on Word’s property by filing the 2000 Final Award.[1]
The Commission’s contention that it could execute on that lien in 2007
consequently fails.[2]
2.
The court of appeals also held that filing of the 1992 Award was necessary
to “perfect [the Commission’s] judgment rights.” Word, 221 Ariz. at 288
¶ 22, 211 P.3d at 1272. We disagree.
The 1925 version of what is now § 23-907(E) provided that the award “may be
filed” with a superior court clerk, and
when so filed and docketed shall be a lien on property of the employer
situated in the county for a period of eight years from the date of
the award; execution may be issued thereon within eight years in the
same manner and with like effect as if said award were a judgment of
the superior court.
1925 Ariz. Sess. Laws, ch. 83, § 63 (as codified at Ariz. Rev. Code 1928,
§ 1433). Under this version of the statute and all iterations in effect
through 1973, which retained materially identical language, a judgment
could only be obtained through filing the award with a superior court
clerk.
The 1973 act, while retaining the language from the original 1925 version,
added a critical sentence just before that provision: “The award will act
as a judgment against the employer for the amount expended.” 1973 Ariz.
Sess. Laws, ch. 136, § 3. Because the statute provided that the award
“will” act as a judgment, but gave the Commission discretion to file it
(and thereby obtain a lien), the status of the award as a judgment under
the 1973 act no longer depended on filing. Rather, filing was necessary to
create an eight-year lien.
The 1977 revision of § 23-907 replaced the word “may” in the third sentence
with “shall.” But significantly, these revisions also replaced the 1973
language giving the “award” judgment status with the following sentence:
“The payments from the special fund pursuant to the award plus the penalty
shall act as a judgment against the employer.” 1977 Ariz. Sess. Laws, ch.
109, § 2 (now codified at § 23-907(E)) (emphasis added). This sentence
gave independent status to any payments made; they are judgments against
the employer and may be executed upon as any other judgment. The status of
the payments as judgments is not affected by the failure of the Commission
to file the award with the superior court clerk. Rather, the only
consequence of such a failure is that an eight-year lien is not created.
In this respect, § 23-907(E) is similar to A.R.S. § 25-503(I) (Supp. 2009),
which provides that each payment pursuant to a support order vests when it
is due and “is enforceable as a final judgment by operation of law.” A
party need not reduce subsequent support arrearages to a written judgment
to execute on them. Pflum v. Pflum, 135 Ariz. 304, 306, 660 P.2d 1231,
1233 (App. 1982).
Thus, we conclude that the court of appeals erred in holding that filing of
the 1992 Award with the superior court clerk was necessary to perfect the
Commission’s judgment rights with respect to payments made under that
Award. Under § 23-907(E), each payment, once made, was a judgment, and, as
is true of support orders, “can be enforced as any other civil judgment.”
Pflum, 135 Ariz. at 306, 660 P.2d at 1233.
3.
The court of appeals nonetheless reached the correct result in this case.
A civil judgment, unless renewed by action or affidavit under A.R.S. §§ 12-
1611 (2003) or 12-1612 (2003), can only be executed upon for five years
after its entry. A.R.S. § 12-1551 (Supp. 2009). In this case, the last
payment was made from the Special Fund to Ruehrmund on November 18, 1998.
This judgment expired five years later, in November 2003, and the
Commission does not contend that it was renewed.[3] The payments made
under the 1992 Award therefore could not have formed the basis for the 2007
garnishments.[4]
III.
For the reasons above, we vacate the opinion of the court of appeals,
reverse the judgment of the superior court, and remand with instructions to
grant Word’s Rule 60(c) motion. We award Word attorneys’ fees pursuant to
A.R.S. § 12-348(A)(1) (2003).[5]
______________________________________ Andrew D. Hurwitz, Vice Chief
Justice
CONCURRING:
_____________________________________
Rebecca White Berch, Chief Justice
_____________________________________
Michael D. Ryan, Justice
_____________________________________
W. Scott Bales, Justice
_____________________________________
A. John Pelander, Justice
-----------------------
[1] The final payments to Ruehrmund under the 1992 Award were made in
November 1998, but the 2000 Final Award was not issued until almost two
years later. The Commission’s reading of the statute would allow it to wait
for years before filing its “final award,” thereby placing the eight-year
lien period in § 23-907(E) entirely within its discretion. Word, 221 Ariz.
at 288 ¶ 21, 211 P.3d at 1272. The Commission counters that it cannot know
before a case is closed when the last payment to an injured worker will be
made. Our decision today does not require that the “final award” be issued
more promptly; rather, we hold that a lien under § 23-907(E) is triggered
by filing the original 1992 Award and extends for eight years from the date
of that award.
[2] On February 1, 2002, the Commission issued another “Continuing Award”
(the “2002 Continuing Award”) with a balance of $81,952.01, reflecting
certain credits to Word’s account. The Commission filed the 2002
Continuing Award with the Maricopa County Superior Court Clerk on January
17, 2008. Because the writs of garnishment were issued in this case in
2007, the 2008 filing of the 2002 Continuing Award could not have created a
judgment lien supporting the writs. In any event, for the reasons set
forth above, filing the 2002 Continuing Award did not create a judgment
lien under § 23-907(E).
[3] We therefore need not decide today whether and how the Commission can
renew such a judgment. Nor need we decide whether the last payment created
a judgment in the amount of the aggregate amounts paid. See A.R.S. § 23-
907(E) (providing that the “payments . . . shall act as a judgment”)
(emphasis added).
[4] The eight-year limitations period in § 23-907(E) applies only to the
judgment lien created by filing an award with the superior court clerk.
The statute does not expressly provide for the renewal of the eight-year
lien, and we need not today determine whether that lien is itself renewable
or whether the Commission is limited after the eight-year period to the
ordinary remedies of a judgment creditor.
[5] Although we vacate the opinion of the court of appeals, we affirm its
order awarding Word attorneys’ fees and costs because he correctly
prevailed in that court. See Word, 221 Ariz. at 288 ¶ 23, 211 P.3d at
1272.