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Industrial Commission of Arizona v. Nevelle

Supreme Court of Arizona

December 8, 1941

THE INDUSTRIAL COMMISSION OF ARIZONA, Appellant,
v.
JOHN D. NEVELLE and LILLIAN NEVELLE, Husband and Wife, Appellees

APPEAL from a judgment of the Superior Court of the County of Pima. Wm. G. Hall, Judge. Judgment affirmed.

Mr. Rouland W. Hill and Mr. Howard A. Twitty, for Appellant.

Mr. Frederic G. Nave, for Appellees.

OPINION

Page 935

[58 Ariz. 326] LOCKWOOD, C.J.

On December 7, 1939, Estelle C. Napier, called the employee, was driving a motor vehicle for the Rollings-Dawson Motor Company, in the course of his employment. An automobile driven by Lillian Nevelle, called defendant, collided with his car, as a result of which he was severely injured. He applied to the Industrial Commission of Arizona, called the commission, for compensation, and an award was made finding that he was injured by an accident caused by the negligence of defendant and arising out of and in the course of his employment, and awarding him $1,101.35, which was duly paid from the state compensation fund. The commission thereafter brought this suit under the provisions of section 56-949, Arizona Code 1939, which reads so far as material as follows:

"Liability of third person to injured employee. -- If an employee entitled to compensation hereunder is injured or killed by the negligence or wrong of another [58 Ariz. 327] not in the same employ, such injured employee, or in case of death, his dependents, shall elect whether to take compensation under this title or to pursue his remedy against such other. If he elect to take compensation, the cause of action against such other shall be assigned to the state for the benefit of the compensation fund, or to the person liable for the payment thereof, and if he elect to proceed against such other, the compensation fund or person, shall contribute only the deficiency between the amount actually collected and the compensation provided or estimated herein for such case...."

alleging that the accident above referred to was caused by the negligent conduct of defendant, setting up the injuries to Napier, his claim for compensation, and the award and payment made thereon, and asking (a) for damages against defendant and her husband, John D. Nevelle, for the sum of $5,000, and (b) that the court decree that from any judgment rendered the commission should retain the amount which it had paid to Napier, plus its costs, and the balance should be paid to the latter. Defendant appeared, admitting the accident, but denying any negligence on her part, and alleging that it was caused by the sole negligence of Napier. She further moved to strike those portions of the complaint praying for damages in the sum of $5,000, and that the commission might retain the amount which it had paid to Napier under its award and pay the balance to the latter. This motion was granted by the court, and the commission refusing to comply with such order, the action was dismissed, whereupon this appeal was taken.

The questions before us for consideration on the appeal are (a) whether under section 56-949, supra, when a party who is injured in the course of his employment by the negligent conduct of a third person elects to take compensation under the Act rather than to sue the third person in negligence, the commission to [58 Ariz. 328] whom his claim against the third party is assigned by operation of law is limited in its recovery to the amount of compensation awarded, or whether it may recover any amount which the jury may desire to give it, in the same manner as though the action were by the injured party, and (b) whether if it may make such recovery, and the amount of the judgment is greater than the compensation paid, it may pay the excess to the injured party.

Both parties appeal to the case of Moseley v. Lily Ice Cream Co., 38 Ariz. 417, 300 P. 958, 960, as, in effect, determining the rule in their favor. In that case the factual situation was as follows: Moseley, while in the employ of Maricopa County and in the course of his employment, was injured by a truck owned by the Lily Ice Cream Co., a corporation. He made application

Page 936

to the Industrial Commission of Arizona for compensation under the Act, and was awarded a certain amount which was paid to him. The commission then collected from the Lily Ice Cream Co., the amount which it had paid to Moseley and for medical services rendered him as a result of the accident. Subsequently Moseley brought this action against the Lily Ice Cream Co., asking for $5,000 damages. The latter answered, setting up the facts and urging that Moseley's right of action had been finally terminated under section 1435, Revised Code 1928, which is identical with section 56-949, supra. We said:

"... We are of the opinion both on authority and on a logical interpretation of the language of our statute that, under its provisions, when payment under the Compensation Act is chosen by the injured employee, his rights of every nature against the third person pass as a matter of law to the state or other insurer, and no right of action, either direct or indirect, remains in him as against such third person."

[58 Ariz. 329] The question of the amount which might be recovered by the commission was not discussed, as that was not an issue in the case, but we did explicitly and expressly hold that any right which the injured employee might have had against a third person no longer belonged to him, but was vested in the commission. This being true, we think there can be no question that no matter how much the commission may recover in its action, the injured employee may have no part nor parcel therein. Further, the statute expressly says that the recovery is to be by "the state for the benefit of the compensation fund." Payments out of the compensation fund may be made only when it is expressly so provided by the statute. The condition precedent to the vesting of the cause of action in the state was the election by the injured employee to take payment from the compensation fund, and having received his award therefrom the commission is without jurisdiction to pay him any further or additional sum from the fund except as he may show he is entitled to an additional award under the Act. The trial court, therefore, properly struck from the complaint that ...


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