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Worthington v. Industrial Commission of Ariz.

Supreme Court of Arizona

April 15, 1959

Carrie L. WORTHINGTON, Widow of James Monroe Worthington, Jr., Petitioner,
v.
INDUSTRIAL COMMISSION OF ARIZONA, and Will H. Minor, et al., Respondents.

Page 364

[85 Ariz. 312] Westover, Mansfield, Westover & Copple, Yuma, and Lawrence Ollason, Tucson, for petitioner.

Robert K. Park, Phoenix, for respondent Industrial Commission of Arizona, John R. Franks, Donald J. Morgan, James D. Lester, Frances M. Long, and Edward E. Davis, Phoenix, of counsel.

BERNSTEIN, Justice.

On the petition for rehearing, as to which extensive briefs were filed and a second oral argument had, we have reconsidered[85 Ariz. 313] the matter in the light of the record and facts newly called to our attention. We conclude that a result different from that previously ordered is required.

First, the appeal was prosecuted from the final order of the Industrial Commission, on rehearing, denying compensation to the claimant, the dependent widow of James Monroe Worthington, on the ground that the decedent 'was not in the employ of the respondent-employer Little Horn Mining Company, at the time of [the] fatal accident.' In our view, the probative facts presented to the Industrial Commission, uncontradicted in any particular, do not permit of that conclusion.

The Company was engaged in mining assessment work. Mr. Worthington and the managing partner of the Company, Paul J. Lipscomb, deceased, were returning from a trip to the Company's mine on January 5, 1956, when the accident killing them both occurred. Worthington had been foreman at the mine from about June 1, 1955 to about September 12, 1955, on a monthly salary basis and with an understanding that a bonus would be paid if the mine went on a production basis (which it never did during Worthington's life). Several times thereafter, as in the case of

Page 365

the January 5, 1956 trip, Lipscomb asked Worthington to accompany him to the mine. It seems apparent that on each such occasion the company paid Worthington for his services and reported such payments to the Industrial Commission on regular payroll reports. Although payroll deductions were not always made from such payments (the Company's accountant testified he did not always know the work period for which payment was made), there is no suggestion that on such occasions Worthington was not an employee of the Company. On the January 5, 1956 trip, a check was sent to 'Carrie Worthington, Administratrix of Estate of Jim Worthington, Deceased', signed 'Little Horn Mining Co., Mrs. Paul Lipscomb', and marked for 'one days wages, Jim Worthington, on January 5, 1956', and that payment, like other preceding payments, was reported to the Commission on a payroll report.

Although the evidence was not as full as might be desired, on what was presented, we do not see how the Commission could find that Worthington was not employed by the Company. See Hunter v Industrial Commission, 73 Ariz. 84, 237 P.2d 813; Hobson v. Twentieth Century Fox Film Corp., 71 Ariz. 41, 223 P.2d 399; Matlock v. Industrial Commission, 70 Ariz. 25, 215 P.2d 612.

It is in view of the foregoing facts and the reasonable inferences therefrom that the second and principal question of the case may be approached. It seems evident that the true basis of the Commission's final order was the same as that put forward in its first order, namely, that [85 Ariz. 314] 'applicant has elected another remedy and waived the provisions of the Workmen's Compensation Act.' It will be recalled that the facts relied upon to support that conclusion are that: (1) the claimant, acting as administratrix of the estate of Mr. Worthington, filed an unverified complaint against the estate of Mr. Lipscomb seeking recovery under our Constitution, Article 2, Section 31 and Article 18, Section 6, A.R.S., and wrongful death statute, A.R.S. Section 12, Chapter 6, Article 2, alleging that Mr. Worthington was a 'guest and passenger' in an automobile owned and operated by Mr. Lipscomb at the time of the fatal accident, which resulted from the negligence of Mr. Lipscomb; and (2) after the filing of an answer asserting as one defense that plaintiff's 'exclusive remedy' was under the Workmen's Compensation Act, the suit was voluntarily dismissed upon payment to the estate of $7,000. [1] Thus, the [85 Ariz. 315]

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argument of the Commission and the prior holding of the court, in effect, is that 'the bringing of the wrongful death action amounts to an assertion and representation that decedent was not an employee at the time of the accident', an assertion which the settlement of the action converted into a binding 'election' estopping claimant from contending to the contrary and blinding the Commission to the true facts. In our view the Commission cannot so evade its liability as insurer.

It is well to explain at the outset that the statute makes no provision for an 'election' by the claimant between suing her husband's employer and recovering workmen's compensation death benefits. Her rights were determined by her husband's decision to accept (conclusively presumed by his failure to reject) the provisions of the Workmen's Compensation Act and the benefits provided thereby for himself or his dependents. Thereafter, the Act defined the employer's only liability to her and fixed her only remedy against the employer. Coyner v. Industrial Commission, 77 Ariz. 210, 269 P.2d 712; Corral v. Ocean Accident & Guarantee Corp., Ltd., 42 Ariz. 213, 23 P.2d 934; cf. Jeune v. Industrial Commission, 77 Ariz. 410, 274 P.2d 85. (We need not, and therefore do not, decide whether the election of the employee also binds his non-dependent relatives and immunizes the employer from suit by them. See 2 Larson, The Law of Workmen's Compensation Section 66.20 and cases cited therein.)

Accordingly, on the assumption that Lipscomb was the employer, the wrongful death action, insofar as it sought recovery for the claimant, concededly was a mistake. But it does not follow that the claimant 'made the recovery of $7000 [in reality, $3000] on a false basis'. To the contrary, on oral argument, counsel for claimant explained that at the time the settlement was made the employer was fully apprised of the claimant's decision to apply for the workmen's compensation death benefits due her, and, indeed, suggested that course. Even without that statement, however, it would be unconscionable to apply any theory of 'election' or 'estoppel' to deny the claim unless, as Mr. Justice Struckmeyer pointed out in his prior dissenting opinion, the claimant knew that her participation in the wrongful death action precluded her from any workmen's compensation award. Cf. State ex rel., Industrial Commission v. Pressley, 74 Ariz. 412, 250 P.2d 992. That much she could not know. To refer to but one doubtful matter, this court has not previously ruled as to whether, under our statute, for any purpose, a partner is to be considered a fellow employee [cf. Trappey v. Lumbermen's Mutual Casualty Co., 229 La. 632, 86 So.2d 515; Ohio Drilling Co. v. State Industrial Comm., 86 Okl. 139, 207 P. 314, 25 A.L.R. 367; Carle v. Carle Tool & Engineering[85 Ariz. 316] Co., Ltd., 36 N.J.Super. 36, 114 A.2d 738]; a third person 'not in the same employ' [see Monson v. Arcand, 239 Minn. 336, 58 N.W.2d 753; Gleason v. Sing, 210 Minn. 253, 297 N.W. 720]; or merely an employer [see Parker v. Zanghi, 45 N.J.Super. 167, 131 A.2d 802; Williams v. Hartshorn, 296 N.Y. 49, 69 N.E.2d 557; cf. Brinkley Heavy Hauling Co. v. Youngman, 223 Ark. 74, 264 S.W.2d 409; Rasmussen v. Trico Feed Mills, 148 Neb. 855, 29 N.W.2d 641; Reed v. Industrial Accident Commission, 10 Cal.2d 191, 73 P.2d

Page 367

1212, 114 A.L.R. 720]. If we were to rule that Lipscomb, for the purpose of the wrongful death action, might be considered a fellow employee of the partnership 'entity', there is presented a further unresolved question as to whether our Workmen's Compensation Act, consistent with Article 18, Section 6 of our Constitution, immunizes a fellow employee from suit. Compare the cases cited in 2 Larson, supra, section 72.10 with White v. Ponozzo, 77 Idaho 276, 291 P.2d 843. If we were to rule that Lipscomb might be considered a third person 'not in the same employ', the claimant would be entitled to maintain the wrongful death action, and, in addition, claim any deficiency between the amount collected and the compensation provided by the statute (at least if the Commission approved a compromise of the action for an amount less than the statutory amount, as it should have been called upon to do). A.R.S. Section 23-1023. Thus, we think the case is not to be approached as though the claimant had acted so basely that the countenance of justice must be turned from her, or as though a judgment in the wrongful death action necessarily decided the employment issue so that the principle underlying the doctrine of res judicata might be invoked.

Instead, we think it proper to ask, not whether claimant should have recovered in the wrongful death action or why a settlement payment was made, but whether the workmen's compensation statute permits the denial of the instant claim in the circumstances here shown. Compare the case relied upon in the court's prior opinion, Williams v. Hartshorn,296 N.Y. 49, 69 N.E.2d 557, with the later decision of the same court in Bellini v. Great American Indemnity Co.,299 N.Y. 399, 403, 87 N.E.2d 426, 428 (third party suit brought (and voluntarily discontinued) against the company later found to be the employer said not to bar the employee's compensation claim) and with the statements made in Sackolwitz v. Charles Hamburg & Co., Inc.,295 N.Y. 264, 268, 67 N.E.2d 152, 153, 154 ('* * * Since the recovery is workmen's compensation and nothing else, the award cannot be made to depend on the equities of a particular case * * * nor can it be denied to a worker because of his fraud. * * * The equitable doctrine of estoppel thus has no place at all in the law of workmen's[85 Ariz. 317] compensation. * * *'). That, indeed, is the implicit mandate of A.R.S. Section 23-1025, providing that 'An agreement by an employee to waive his rights to ...


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