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Tapia v. The Industrial Commission of Arizona

Court of Appeals of Arizona, Second Division

August 16, 2018

Arcadia L. Tapia, Petitioner Employee,
The Industrial Commission of Arizona, Respondent, Banner University Medical Center Tucson, Respondent Employer, Banner Health Workers Compensation, Respondent Insurer.

          Special Action - Industrial Commission ICA Claim No. 20152330156 Insurer No. ST15003230 Gary M. Israel, Administrative Law Judge

          Brian Clymer Attorney at Law, Tucson By Laura Clymer Counsel for Petitioner Employee

          The Industrial Commission of Arizona, Phoenix By Jason M. Porter Counsel for Respondent

          Jardine, Baker, Hickman & Houston, PLLC, Phoenix By Charles G. Rehling and Janet S. Weinstein, P.C., Phoenix By Janet S. Weinstein Counsel for Respondents Employer and Insurer

          Chief Judge Eckerstrom authored the opinion of the Court, in which Presiding Judge Staring and Judge Eppich concurred.



         ¶1 In this statutory special action, Arcadia Tapia petitions this court to set aside the Industrial Commission's award denying her complaint for unfair claim processing practices against Banner University Medical Center Tucson and Banner Health Workers Compensation (collectively, "Banner"). For the reasons that follow, we set the award aside.

         Factual and Procedural History

         ¶2 "We consider the evidence in a light most favorable to upholding the administrative law judge's award." Aguayo v. Indus. Comm'n, 235 Ariz. 413, ¶ 2 (App. 2014). On July 31, 2015, while Tapia was working as a housekeeper for Banner's environmental services department, she bent down to clean the floor and felt a tearing sensation in her right knee. Tapia's supervisor helped her fill out an incident form and walked her to the emergency room. Banner's medical staff examined her and, pursuant to doctor's orders, Tapia did not return to work for four days.

         ¶3 Tapia filed a claim for workers' compensation benefits with the Industrial Commission and, on August 25, Banner, a self-insured employer, received notification thereof. On September 11, Banner issued a notice of claim status denying Tapia's claim on the ground the incident had not been reported to the organization. Tapia sought review from the Industrial Commission and obtained an award in her favor.

         ¶4 Tapia then filed a "complaint of bad faith and/or unfair claim processing practice" alleging that when Banner initially denied her claim, it had done so without a "reasonable basis and [had] failed to conduct an adequate investigation," among other allegations. After a hearing, the administrative law judge (ALJ) found that Banner had acted reasonably when it initially denied Tapia's claim.[1] Tapia requested review, and the ALJ affirmed its award. Tapia petitioned this court for special action; we have jurisdiction. A.R.S. §§ 12-120.21(A)(2), 23-951(A).

         Bad Faith and Unfair Claim Processing

         ¶5 Tapia argues the ALJ erroneously considered the twenty-one-day deadline specified in § 23-1061(M), A.R.S., in a manner that lessened Banner's obligation to properly investigate her claim. Our review is limited to "determining whether or not the commission acted without or in excess of its power" and whether the findings of fact support the award. A.R.S. § 23-483(B); see Special Events Serv. Inc. v. Indus. Comm'n, 228 Ariz. 332, ¶ 6 (App. 2011). Whether Banner reasonably denied Tapia's claim is a mixed question of fact and law; accordingly, we defer to the ALJ's determination of disputed facts but review questions of law de novo. See Miller v. Indus. Comm'n, 240 Ariz. 257, ¶ 9 (App. 2016).

         ¶6 Section 23-930(B), A.R.S., states that if an ALJ "finds that unfair claim processing . . . has occurred in the handling of a particular claim, it shall award the claimant . . . a benefit penalty." A self-insured employer commits unfair claim processing when it "[unreasonably issues a notice of claim status without adequate supporting information in its possession or available to it." Ariz. Admin. Code R20-5-163(B)(1); see Hayes v. Cont'l Ins. Co.,178 Ariz. 264, 268 (1994) (§ 23-930(E) directs Industrial Commission to adopt definition of unfair claim processing). Although this language suggests self-insured employers generally should not issue a notice of claim status "without adequate supporting information," see Ariz. Admin. Code R20-5-163(B)(1), a self-insured employer may reasonably deny a claim when a lack of adequate supporting information results ...

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