                     NOTICE: NOT FOR OFFICIAL PUBLICATION.
 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                 AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.




                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE


           SUN VALLEY MASONRY, INC., Petitioner Employer,

          GALLAGHER BASSETT SERVICES, Petitioner Carrier,

                                        v.

     THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,

                 RAY A. BUNGARD, Respondent Employee.

                             No. 1 CA-IC 17-0046
                               FILED 5-1-2018


                  Special Action - Industrial Commission

                     ICA Claim No. 20140-430193
               Carrier Claim No. 003684-000344-WC-01
        The Honorable Gary M. Israel, Administrative Law Judge

                            AWARD AFFIRMED


                                   COUNSEL

Lundmark, Barberich, La Mont & Slavin, P.C., Tucson
By Eric W. Slavin
Counsel for Petitioners Employer and Carrier

Industrial Commission of Arizona, Phoenix
By Jason M. Porter
Counsel for Respondent
George V. Sarkisov, PLLC, Phoenix
By George V. Sarkisov
Counsel for Respondent Employee



                        MEMORANDUM DECISION

Judge Jennifer M. Perkins delivered the decision of the Court, in which
Presiding Judge Diane M. Johnsen and Judge Kent E. Cattani joined.


P E R K I N S, Judge:

¶1            This is a special action review of an Industrial Commission of
Arizona (“ICA”) award and decision upon review for unscheduled
permanent partial disability benefits. The respondent employee
(“Claimant”) prevailed before the administrative law judge (“ALJ”), who
awarded monthly benefits for a permanent partial disability. The employer
and carrier (“Petitioners”) object to the award and assert it is barred by a
prior award of no lost earning capacity.

¶2            One issue is presented on appeal: whether the ALJ erred by
allowing the ICA to rescind its June 2015 Findings and Award for
unscheduled permanent partial disability. Because the ICA prematurely
entered the June 2015 Findings and Award and claimant timely protested
the April 2015 notices of claim status by the petitioner carrier, Gallagher
Bassett Services (“Gallagher”), we affirm the ALJ’s award.

              PROCEDURAL AND FACTUAL HISTORY

¶3           At the time of his industrial injury, claimant worked as a
mason for the petitioner employer, Sun Valley Masonry, Inc. While
removing scaffolding planks, Claimant slipped and fell twelve to fifteen
feet and sustained a T12 compression fracture. He filed a workers’
compensation claim, which was accepted for benefits. Claimant received
conservative orthopedic treatment from Kurt A. Schroeder, M.D., until the
doctor found him medically stationary with a ten percent impairment.

¶4            Based on Dr. Schroeder’s report, Gallagher issued a notice of
claim status (“NCS”) on April 6, 2015, finding Claimant’s industrial injury
stationary with no permanent impairment. On April 27, 2015, Gallagher
issued a second NCS amending the first to conform to Dr. Schroeder’s
report that Claimant sustained a permanent impairment. A carrier may


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                    SUN/GALLAGHER v. BUNGARD
                        Decision of the Court

“unilaterally rescind or amend a previously issued Notice of Claim Status
within the 90 day statutory period … by simply issuing a new Notice.”
Church of Jesus Christ of Latter Day Saints v. Indus. Comm’n, 150 Ariz. 495, 498
(App. 1986).

¶5            On June 12, 2015, before the expiration of Claimant’s time to
appeal either NCS, the ICA entered its findings and award for an
unscheduled permanent partial disability, which stated in pertinent part
that Claimant “sustained a --- % general physical functional disability as a
result of … injury,” and suffered “no reduced monthly earning capacity.”
Notably, the June 2015 Findings and Award is inconsistent with Dr.
Schroeder’s medical report, cited in the accompanying memorandum,
which concludes that Claimant has a 10% impairment. On July 2, 2015,
Claimant timely protested the April 2015 NCS and requested an ICA
hearing.

¶6           Five months later, the ICA issued a decision rescinding its
June 2015 Findings and Award and then reissued a virtually identical
findings and award for unscheduled permanent partial disability the
following day. Claimant timely protested the reissued findings and award
and filed a petition for rearrangement pursuant to A.R.S. § 23-1044(F),
asserting he had sustained accident-related loss of earning capacity.
Gallagher timely protested the rescission of the June 2015 Findings and
Award.

¶7            Both parties filed updated medical and labor market
evidence, and the ALJ held a hearing at which Claimant and an
independent medical examiner, Marjorie Eskay-Auerbach, M.D., testified.
After the parties filed post-hearing memoranda, the ALJ entered an award
for unscheduled permanent partial disability benefits. As to the rescission,
the ALJ found:

       After considering the parties’ post-hearing memoranda, the
       undersigned finds that the June 12, 2015 Findings and Award
       was prematurely issued before closure, which was protested,
       became final. That Findings and Award should have been
       rescinded sooner but, for reasons unknown, the Industrial
       Commission Claims Division delayed rescission until
       February 17, 2016. That rescission, however, was appropriate
       even though it should have been accomplished sooner.

Gallagher timely requested administrative review, and the ALJ summarily
affirmed the award. Gallagher next brought this appeal.



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                    SUN/GALLAGHER v. BUNGARD
                        Decision of the Court

                               DISCUSSION

¶8            This court has jurisdiction pursuant to Arizona Revised
Statutes (“A.R.S.”) sections 12-120.21(A)(2), 23-951(A), and Arizona Rule of
Procedure for Special Actions 10. In reviewing findings and awards of the
ICA, we defer to the ALJ’s factual findings but review questions of law de
novo. Young v. Indus. Comm’n, 204 Ariz. 267, 270, ¶ 14 (App. 2003) (citing
PFS v. Indus. Comm’n, 191 Ariz. 274, 277 (App. 1997)).

¶9           On appeal, Gallagher does not challenge the merits of the
award and findings of lost earning capacity, but argues the ALJ erred by
allowing the ICA to rescind its June 2015 Findings and Award, which
Gallagher contends became final and res judicata after ninety days. Claimant
responds that the ALJ correctly held that Claimant’s timely protest of the
April 2015 NCS prevented the ICA’s June 2015 Findings and Award from
becoming final.

¶10          When a claimant sustains a compensable industrial injury,
three sequential claim stages typically follow: temporary total disability,
during which Claimant is unable to work; temporary partial disability,
during which Claimant may engage in some work but continues to need
active medical treatment; and permanent disability, after Claimant’s
condition becomes medically stationary. See Hardware Mut. Cas. Co. v. Indus.
Comm'n, 17 Ariz. App. 7, 9–10 (1972).

¶11            A claimant becomes medically stationary when no additional
medical treatment will improve his industrially related condition. See Janis
v. Indus. Comm’n, 27 Ariz. App. 263, 265 (1976) (citing Home Ins. Co. v. Indus
Comm’n, 23 Ariz. App. 90, 94 (1975)). When a physician discharges a
claimant from active medical treatment, the physician is required to
determine whether Claimant sustained any permanent impairment of
function as a result of the industrial injury. See Ariz. Admin. Code R20-5-
113(B). If Claimant sustained a permanent impairment, the ICA then
determines whether the permanent impairment resulted in a loss of earning
capacity. See A.R.S. §§ 23-1044(F), -1047(A).

¶12            A party dissatisfied with a determination of the insurance
carrier or the ICA has ninety days to file a request for a hearing. See A.R.S.
§ 23-947(A). The failure to timely seek a hearing renders the notice or
determination final and res judicata as to all parties. See A.R.S. § 23-947(B).
But a timely hearing request opens for consideration all issues addressed
by the notice or determination. See, e.g., Parkway Mfg. v. Indus. Comm’n, 128




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                   SUN/GALLAGHER v. BUNGARD
                       Decision of the Court

Ariz. 448, 452 (App. 1981) (citing German v. Indus. Comm’n, 12 Ariz. App.
301, 307 (1970); Salmi v. Indus. Comm’n, 3 Ariz. App. 411, 413 (1966)).

¶13           Procedurally, the right to permanent disability benefits,
including compensation for loss of earning capacity, does not arise until
after Claimant’s medical condition becomes stationary. See, e.g., Home Ins.,
23 Ariz. App. at 93 (citations omitted). In this case, Claimant timely
protested the April 2015 NCS that found him medically stationary. His
protest prevented the NCS from becoming final and opened the issue of
whether he was medically stationary for an ICA hearing. For that reason,
the June 2015 Findings and Award concerning loss of earning capacity was
premature and the ALJ correctly ruled it “null and void.” See A.R.S. § 23-
944(C) (stating ICA orders may be altered or revoked if found not to be in
conformity with the law).

                              CONCLUSION

¶14          For the foregoing reasons, we affirm the ALJ’s findings and
award.




                            AMY M. WOOD • Clerk of the Court
                            FILED: AA




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