Apportionment of Compensation Injuries Resulting Disability
The interpretation of A.R.S. 23-1044(E) statute requires apportionment of compensation for successive injuries that result in permanent partial disability:
In case there is a previous disability, as the loss of one eye, one hand, one foot or otherwise, the percentage of disability for a subsequent injury shall be determined by computing the percentage of the entire disability and deducting therefrom the percentage of the previous disability as it existed at the time of the subsequent injury. A.R.S. 23-1044(E)
The apportionment statute applies when a claimant has suffered two or more distinct and separate disabilities. See Hoppin v. Industrial Comm'n, 143 Ariz. 118, 123, 692 P.2d 297, 302 (App. 1984). In contrast, the "successive injury rule" applies where successive injuries contribute to a single disabling condition. See Frito Lay v. Industrial Comm'n, 196 Ariz. 134, 136, 993 P.2d 1098, 1100, P 10 (App. 1999).
To trigger the apportionment statute, a claimant must be found to have a "previous disability." As used in this section, the word "disability" refers to "earnings capacity disability."
See R.G. Roth Constr. Co. v. Industrial Comm'n, 126 Ariz. 147, 149, 613 P.2d 307, 309 (App. 1980). the apportionment statute therefore applies only when a claimant has a prior condition that results in an "actual loss of earning capacity."
See W.F. Dunn, Sr. & Son v. Industrial Comm'n, 160 Ariz. 343, 349, 773 P.2d 241, 247 (App. 1989).
Some injuries are conclusively presumed to be disabling in this sense. See Pullins v. Industrial Comm'n, 132 Ariz. 292, 295, 645 P.2d 807, 810 (1982) (pre-existing impairment of great magnitude, such as the loss of an eye or leg, is conclusively presumed to be disabling); Ronquillo v. Industrial Comm'n, 107 Ariz. 542, 544, 490 P.2d 423, 425 (1971) (a scheduled industrial injury is conclusively presumed to be disabling).
A "previous disability" may be industrial or non-industrial, scheduled or unscheduled. See McKinney v. Industrial Comm'n, 78 Ariz. 264, 266, 278 P.2d 887, 888 (1955) (industrial or non-industrial).
To bring the apportionment statute into play, however, the disability must be permanent and must not merely aggravate a previous, non-disabling condition. See Morrison-Knudsen Co. v. Industrial Comm'n, 115 Ariz. 492, 495, 566 P.2d 293, 296 (1977) (no apportionment if injury aggravates a prior, non-disabling condition); Hester v. Industrial Comm'n, 178 Ariz. 587, 590, 875 P.2d 820, 823 (App. 1993) (prior disability must be permanent to trigger apportionment statute).
Here, it is undisputed that at the time of the third accident Claimant suffered from a previous disability that was permanent and had caused a loss of earning capacity.
If a previous disability brings a case within 23-1044(E), the ALJ must first determine the "entire disability" suffered by the claimant. See A.R.S. 23-1044(E); Hoppin v. Industrial Comm'n, 143 Ariz. 118, 123, 692 P.2d 297, 302 (App. 1984) ("the administrative law judge must first determine the percentage of the entire present loss of earning capacity").
To find the "entire disability," the ALJ must consider the effect of all the earning capacity disabling conditions, treating them all as unscheduled. See Ossic v. Verde Central Mines, 46 Ariz. 176, 189, 49 P.2d 396, 402 (1935) (ALJ should find the "complete effect" of the injuries); Ronquillo v. Industrial Comm'n, 107 Ariz. 542, 543, 490 P.2d 423, 424 (1971) (ALJ should determine the "entire disability as it exists after the second injury, removing them from the schedule").
The injuries are treated as "unscheduled" because the combined disability produced by successive scheduled injuries may be more than the sum of the individual disabilities alone. See Alsbrooks v. Industrial Comm'n, 118 Ariz. 480, 483, 578 P.2d 159, 162 (1978); Ossic, 46 Ariz. at 189, 49 P.2d at 402; Hoppin, 143 Ariz. at 122-23, 692 P.2d at 301-02.
If appropriate, the ALJ may re-evaluate the earnings capacity effect of a prior injury at the time of the subsequent injury. See Morris v. Industrial Comm'n, 81 Ariz. 68, 73, 299 P.2d 652, 655 (1956) ("The language of the statute . . . plainly infers that the previous disability must be re-evaluated as of the time of the Commission award.").
Although the statute speaks of "percentage of disability," the ALJ may use dollar figures for earning capacity without the formality of converting those figures into percentages. See Roth, 126 Ariz. at 149 n.2, 613 P.2d at 309 n.2.
Once the "entire disability" has been determined, the ALJ must "deduct therefrom the percentage of the previous disability as it existed at the time of the subsequent injury." A.R.S. 23-1044(E);
see also Hoppin, 143 Ariz. at 123, 692 P.2d at 302 ("then deduct therefrom the percentage of the previous loss of earning capacity as it existed at the time of the industrial injury").
The balance of the disability is the responsibility of the current employer. See Bozman v. Industrial Comm'n, 20 Ariz. App. 390, 392, 513 P.2d 679, 681 (1973) ("resulting finally in the entry of an Unscheduled loss of earning capacity award for the difference").
Of course, a subsequent injury does not relieve any prior employer of its compensation responsibility for prior injuries
Hoppin provides an example of this statutory process:
For example, an initial serious impairment might well result in a 25% loss of earning capacity, and a subsequent impairment, considered separately and excluding the effect of the first impairment, might also result in only a 25% earning capacity disability.
Yet, the total loss of earning capacity resulting from the impairments when considered together might well be 100% . . . . An application of the apportionment procedure required by the previous disability provisions of A.R.S. 23-1044(E) would result in a loss of earning capacity award of 75%.
Hoppin, 143 Ariz. at 123, 692 P.2d at 302. In this example, the "entire disability" after the second injury is 100%. the statute, however, requires that the award against the second employer be computed by "deducting therefrom the percentage of previous disability" (25%).
Thus, the employer at the time of the second injury would be responsible for the 75% disability caused by the second injury. If the first injury were compensable on an ongoing basis, the first employer would remain responsible for that 25% disability compensation.
The procedure of 23-1044(E) determines what portion of the entire earning capacity disability is the responsibility of the current employer.
The unscheduling of the injuries and the determination of the "entire disability" ensure that the cumulative effect of all injuries on the claimant's earning capacity is properly considered. the deduction of prior disabilities prevents any double recovery and limits the responsibility of the current employer to that disability caused by the current injury.
Thus, unlike some states in which apportionment statutes reduce an injured workers' compensation, Arizona's statutes provide for full compensation and apportion responsibility among the respective employers. See 5 Arthur Larson and Lex K. Larson, Larson's Workers' Compensation Law 90.02, at 90-3 (2000) (discussing various types of apportionment statutes).
The Legislature, however, has lessened the burden on subsequent employers in Arizona by providing for contribution from the Special Fund in some cases. See A.R.S. 23-1065 (Supp. 1999).
Once the ALJ determines the amount of lost earning capacity to be attributed to the current employer under 23-1044(E), compensation for permanent partial disability is calculated pursuant to A.R.S. 23-1044(C). That section provides:
In cases not enumerated in subsection B of this section, where the injury causes permanent partial disability for work, the employee shall receive during such disability compensation equal to fifty-five percent of the difference between his average monthly wages before the accident and the amount which represents his reduced monthly earning capacity resulting from the disability, but the payment shall not continue after the disability ends, or the death of the injured person, and in case the partial disability begins after a period of total disability, the period of total disability shall be deducted from the total period of compensation.
Unlike the "entire disability" computation of 23-1044(E), the amount of compensation is based on the "average monthly wage before the accident." Normally, that average monthly wage will already reflect the earning capacity disability caused by the prior injury.
If the claimant's actual monthly wages at the time of the subsequent injury do not fairly reflect the claimant's earning capacity, the ALJ may determine the actual earning capacity. See Hoppin, 143 Ariz. at 122, 692 P.2d at 301. In the apportionment process, the ALJ may also re-evaluate the earning capacity effect of prior injuries to make a fair apportionment. See Morris, 81 Ariz. at 73, 299 P.2d at 655.