Arizona Court of Appeals Division One holds that testimony that an employee told his employer about his pre-existing conditions is sufficient evidence to support allocation of expenses for disability benefits.

A custodian applied for and obtained a job with a school district.  Four years later, he was injured on the job and obtained worker’s compensation.  He later obtained disability benefits.  The school district sought a partial apportionment of the disability benefits before an ALJ from the special fund division of the state industrial commission.  Disability benefits may be apportioned in part to the special fund division if an employer knowingly hired an employee with significant physical impairments.  This provision promotes hiring workers who have pre-existing conditions. 

The custodian testified to the ALJ that when he was hired at the school district, he told the school district that he had a heart condition and diabetes.  Relying on the custodian’s testimony, the ALJ apportioned a part of his disability expenses to the special fund division.  The special division fund appealed, arguing that employee testimony, standing alone, was insufficient to establish that the employer knew of the employee’s disability at the time of the hiring.  The Court rejected the special fund division’s argument and affirmed the decision of the ALJ.  It reasoned that a valid inference from the custodian’s testimony was that the employer knew about his preexisting conditions at the time of the hiring decision. 

Judge Howe authored the opinion for the Court; Judges Furuya and Brown concurred.