Stenz v. Industrial Commission of Arizona – 10/8/2014

October 14, 2014

Arizona Court of Appeals Division Two Holds That Workers’ Compensation Death Benefits Are Subject to Pre-Award Interest.

Charles Stenz, a Tucson city worker who had received compensation for a workplace injury in 2005, passed away in April 2009 and his widow filed for a claim for workers’ compensation death benefit under A.R.S. § 23-1046(A).  The carrier denied the claim, but the benefits were awarded after an administrative hearing and judicial appeal.  On remand, the administrative law judge awarded death benefits but not interest.  Ms. Stenz filed a special action seeking interest from the date the carrier received notice of the claim for death benefits.

The Arizona Court of Appeals accepted jurisdiction and granted relief.  Examining two prior cases, the Court noted that under A.R.S. § 44-1201 interest is due on benefits not timely paid.  The Court held that filing the claim for death benefits does not create an obligation to pay, because the carrier must acknowledge or the claimant must establish that the obligation exists, which occurred when the administrative law judge entered an award.  Nevertheless, because the death benefit was a calculable liquidated amount, and because the carrier could have chosen to pay the benefits upon filing of the claim pursuant to A.R.S. § 23-1061(G), the Court held that the benefit was “not timely paid” and therefore subject to interest.

In a special concurrence, Judge Howard disagreed with the majority’s conclusion that the carrier had no obligation to pay until the administrative law judge issued the award, but nevertheless awarded interest from the filing of the claim because the amount was liquidated at that time.  Judge Howard would have held that the carrier’s legal obligation to pay arose under § 23-1046(A) before an action to enforce that obligation was commenced.

Judge Vásquez authored the opinion; Judge Brammer concurred and Judge Howard specially concurred.