Opposition Brief — Macaluso v. Anderson

In The

Supreme Court of the United States

October Term, 1995

+

ANTHONY MACALUSO,

Petitioner,

DERRICK ANDERSON, dba

ANDERSON STUDIOS,

Respondent,

INDUSTRIAL COMMISSION OF ARIZONA, SPECIAL

FUND DIVISION/NO INSURANCE SECTION,

Respondent Party in Interest.

7 ¢

Petition For A Writ Of Certiorari

To The Arizona Supreme Court

S

OBJECTION TO WRIT OF CERTIORARI

,

vy

RONALD M. ANDERSEN

800 West Washington Street

Phoenix, Arizona 85005-9070

(602) 542-5781

Attorney for Respondent

Party-in-Interest

| Supreme Court, U.S.

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a4 JUL 19 1996

No. 95-1897 CLERK

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QUESTION PRESENTED

WHETHER THE SUPREME COURT OF ARIZONA’S

WITHDRAWAL OF A STATE WRIT OF CERTIORARI

INDICATING ONLY THAT THE REVIEW HAD BEEN

IMPROVIDENTLY GRANTED ON A RECORD THAT

FAILED TO RAISE ANY FEDERAL OR UNITED STATES

CONSTITUTIONAL ISSUES UNTIL THE CASE WAS

PETITIONED TO THE UNITED STATES SUPREME

COURT, QUALIFIES FOR REVIEW UNDER 28 U.S.C.

1257(a)?

PARTIES TO THE PROCEEDING

The parties to the proceeding below were Anthony

Macaluso, Derrick Anderson, dba Anderson Studios,

Industrial Commission of Arizona, Special Fund Divi-

sion/No Insurance Section.

iii

TABLE OF CONTENTS

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TABLE OF AUTHORITIOS .........00ccccccccccccss iv

SUPPLEMENTAL STATEMENT OF THE CASE..... 1

OBJECTIONS TO GRANTING WRIT OF CER-

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I. THE DECISION OF THE ARIZONA SUPREME

COURT DID NOT INVOLVE A FEDERAL

QUESTION OR FEDERAL CONSTITUTIONAL

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AUTHORITIES CITED

Cases

Asarco Incorporated v. Kadish, 490 U.S. 605 (1989).

Bankers Life & Casualty Company v. Crenshaw, 486

UB. FE CAGED van cvecccteccsscavseecacsstvsses

Carrillo v. State of Arizona, 169 Ariz. 126, 817 P.2d

493 (App. Div. 1, 1991) .......... cece eee ees

Ferguson v. Georgia, 365 U.S. 570 (1961)..........

First English Lutheran Evangelical Church v. City of

Los Angeles, 482 U.S. 304 (1987)...............

Gold v. Killeen, 20 Ariz. 126, 69 P.2d 800 (1937). .

Gospel Army v. Los Angeles, 331 U.S. 543 (1947)..

Hornback v. Industrial Commission of Arizona, 106

Asia. 214, 476 P2d GOT CG7G}. coc ccceescvesecs

Michigan v. Long, 463 U.S. 1032 (1983)...........

New York Central & R.R. Company v. New York, 186

te Bs Be re ee or ra ee eer ey

Red Bluff Mines, Inc. v. Industrial Commission of

Arizona, 144 Ariz. 199, 696 P.2d 1248 (App. 1984)

Schad v. State of Arizona, 501 U.S. 624 (1991) ....

State of Arizona v. Evans, 115 S.Ct. 1185, 131 L.Ed.

Se De Ra sa dane niesd caekcuseniocereasyeos

TXO Production Corporation v. Alliance Resources

Corporation Constitutional Provisions, 509 U.S.

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AUTHORITIES CITED - Continued

Page

STATUTES

28 U.S.C. §1257(a) ........... Pore ey Pere rer ten ,

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SUPPLEMENTAL STATEMENT OF THE CASE

The Respondent Party-in-Interest, the No Insurance

Section of the Special Fund Division of the Industrial

Commission of Arizona is an entity created by the Ari-

zona Workers Compensation Act. A.R.S. §23-907(B) and

A.R.S. §23-1065. The Special Fund administers and pays

workers compensation claims where the employer is nei-

ther insured by approved workers compensation insur-

ance nor is an authorized self-insurer under the Arizona

Workers Compensation Act. A.R.S. §23-961. The Special

Fund is funded from workers’ compensation premium

taxes imposed on all workers’ compensation insurance

carriers, including the State Compensation Fund and all

self-insured employers. A.R.S. §23-961(G), A.R.S.

§23-1065(A). The monies contained in the Special Fund

are used for a variety of valuable and indispensable

purposes. These purposes include, but are not limited to,

supportive care claims, uninsured employer/employee

claims and payment of vocational rehabilitation benefits.

Petitioner seeks constitutional review of Arizona stat-

ute A.R.S. §23-1023(C). This statute has been construed

by the Arizona Supreme Court to forfeit an injured

worker’s rights to benefits under the Arizona Workers

Compensation Act, Hornback v. Industrial Commission of

Arizona, 106 Ariz. 216, 474 P.2d 807 (1970). Forfeiture is

permitted when an injured worker settles a third-party

claim without notice to the Special Fund or other quali-

fied entity, and the third-party accident was the cause of

the industrial injury for which the injured worker seeks

compensation benefits. The Petitioner challenged the Ari-

zona Supreme Court's longstanding forfeiture construc-

tion of A.R.S. §23-1023(C) on state law grounds only in

a

the Arizona Court of Appeals and the Arizona Supreme

Court. Even in briefing before the Arizona Supreme

Court, the Petitioner did not raise any federal issue or

United States constitutional claim. Predicated on the state

of the record, the Respondent Party-in-Interest submits

this supplemental statement of the case going to the issue

of jurisdiction to grant certiorari.

+

OBJECTIONS TO GRANTING WRIT OF CERTIORARI

I.

THE DECISION OF THE ARIZONA SUPREME COURT

DID NOT INVOLVE A FEDERAL QUESTION OR FED-

ERAL CONSTITUTIONAL ISSUE.

Review of a state court decision is evoked under 28

U.S.C. §1257(a). Both the judgment and opinion of the

state’s highest court will be examined to determine

whether review should be granted. Gospel Army v. Los

Angeles, 331 U.S. 543, 548 (1947). The only dispositive

order submitted from the Arizona Supreme Court is an

order indicating the Arizona Supreme Court had

“improvidently granted” review of an Arizona Court of

Appeals decision. Petitioner’s App. No. 1 Petition for

Certiorari._.

Pursuant to Supreme Court Rule 14(g)(i), it is incum-

bent upon the Petitioner to specify the stage of the state

proceedings where the federal question or constitutional

issue was raised. Sup. Ct. R. 14(g)(i). The materials

appended to the Petition for a Writ of Certiorari reveal

not a single instance that at any stage of the state pro-

ceedings a federal issue or constitutional question was

raised or ruled upon. Petitioner’s App. Nos. 1-47,

Respondent’s App. Nos. R1-R4. Indeed, a review of the

issues presented for review by the Petitioner to the Ari-

zona Court of Appeals is equally bereft of any federal

constitutional issue. App. R2, R4.

Arizona appellate law requires a party to raise issues

at an intermediate appellate level before those issues may

be raised in a subsequent appeal to the Arizona Supreme

Court. Gold v. Killeen, 20 Ariz. 126, 69 P.2d 800 (1937), Red

Bluff Mines, Inc. v. Industrial Commission of Arizona, 144

Ariz. 199, 696 P.2d 1348 (App. 1984). Issues not raised at

the first level of appeal are deemed waived. Carrillo v.

State of Arizona, 169 Ariz. 126, 132, 817 P.2d 493, 499 (App.

Div. 1, 1991). Where state procedures govern the manner

by which issues are raised, failure to comply with those

state procedures is generally fatal to United States

Supreme Court review. Ferguaan v. Georgia, 365 U.S. 570,

572 n.1 (1961). - ‘

This Court has coauied a Petitioner to demonstrate

that the federal or constitutional issues be “pressed” and

“passed upon” by the state court. Bankers Life and Casu-

alty Company v. Crenshaw, 486 U.S. 71, 77-80 (1988); TXO

Production Corporation v. Alliance Resources Corporation,

509 U.S. 443, 464 (1993). Unlike two Arizona cases which

were granted certiorari where the federal issues were not

arguably raised at the trial or appellate level, in this case

the Arizona Supreme Court did not mention or reference

any federal or United States constitutional law in its

dispositive order. Schad v. State of Arizona, 501 U.S. 624,

630 n.2 (1991), Asarco Inc. v. Kadish, 490 U.S. 605, 625

(1989). Thus, the Petitioner has failed to establish that the

federal or constitutional issues for which he seeks review

were “pressed” or “passed upon” by either the Arizona

Supreme Court, the Arizona Court of Appeals or admin-

istrative law judge. First English Lutheran Evangelical

Church v. City of Los Angeles, 482 U.S. 304, 313 n.8 (1987).

If the Petitioner were viewed as having “pressed” the

federal issues, further inquiry is required to establish

whether an independent and adequate reason grounded

in state law supports the state decision. Michigan v. Long,

463 U.S. 1032 (1983), State of Arizona v. Evans, 115 S.Ct.

1185, 1189-90, 131 L.Ed.2d 34, 41-43 (1995). The issues

presented to the Arizona Court of Appeals and the result-

ing intermediate appellate decision from which Petitioner

sought review from the Arizona Supreme Court rested

solely on Arizona state law. Petitioner’s App. No. 15-19.

The Petitioner’s Statement of Issues to the Arizona

Court of Appeals read:

ISSUES PRESENTED FOR REVIEW

I. ARE THE AWARDS BELOW REASON-

ABLY SUPPORTED BY THE LAW AND

THE EVIDENCE WHEREIN THE PETI-

TIONER WAS DENIED BENEFITS NOT-

WITHSTANDING A COMPENSABLE

CLAIM BECAUSE HIS THIRD PARTY

CLAIM WAS SETTLED FOR POLICY

LIMITS WITHOUT THE APPROVAL OF

THE UNINSURED EMPLOYER BEFORE

THE CLAIM WAS HELD COMPENS-

ABLE?

I. IS RESPONDENT UNINSURED

EMPLOYER/NO INSURANCE FUND

ENTITLED TO A LIEN IN THE AMOUNT

OF THE THIRD PARTY RECOVERY

WHERE PETITIONER HAS RECEIVED

NO WORKERS’ COMPENSATION BENE-

FITS IN VIOLATION OF A.R.S.

23-1023(C)?

Ill. ARE THE AWARDS BELOW REASON-

ABLY SUPPORTED BY THE LAW AND

THE EVIDENCE WHEREIN THE DENIAL

OF COMPENSATION TO THE PETI-

TIONER REWARDS AND UNJUSTLY

ENRICHES THE EMPLOYER WHO HAD

ILLEGALLY FAILED TO PROVIDE

WORKER’S COMPENSATION INSUR-

ANCE AS REQUIRED BY THE ARIZONA

CONSTITUTION?

IV. DO THE AWARDS BELOW DENY PETI-

TIONER WORKER’S COMPENSATION

BENEFITS IN VIOLATION OF ARTICLE

XVIII, SECTION VIII OF THE ARIZONA

CONSTITUTION?

App. No. R4 (emphasis added).

When the Petitioner filed his Petition for Review to

the Arizona Supreme Court, he failed to raise one federal

or United States constitutional issue. App. No. R2. The

issues presented to the Arizona Supreme Court by the

Petitioner were as recited in his Petition for Review:

B. ISSUE PRESENTED

Are the awards reasonably supported by the

law and the evidence wherein the Petitioner was

denied benefits notwithstanding a compensable

claim because his third-party claim was settled

for policy limits without the approval of the

Uninsured Employer before the claim was held

compensable?

C. ISSUES NOT DECIDED BY THE COURT OF

APPEALS

1. Should not benefits have been paid to Peti-

tioner subject to a credit on behalf of the Special

Fund to the extent of the Petitioner’s new third-

party recovery?

2. Are the awards reasonably supported by the

law and the evidence wherein the denial of com-

pensation to the Petitioner rewards and unjustly

enriches the employer who had illegally failed

to provide Workers’ Compensation insurance as

required by the law?

3. Do the awards deny Petitioner Worker’s

Compensation benefits in violation Article XVIII,

Section VIII of the Arizona Constitutivn?

App. No. R2. Petitioner’s briefing to the Arizona Court of

Appeals did not make any reference to any federal or

United States constitutional law. App. Nos. R2 & R4.

The decision by the Arizona Supreme Court not to

review the intermediate appellate court decision reason-

ably stands on the Arizona law cited in the Arizona Court

of Appeal’s Opinion, said decision being totally adequate

to dispose of the issues raised by the Petitioner to that

appellate court. Petitioner’s App. No. 15. This Court long

ago wrote:

It is well settled in this Court that it must be

made to appear that some provision of the Fed-

eral as distinguished from the state Constitution

was relied upon, and that such provision must

be set forth.

New York Central & R.R. Company v. New York, 186 U.S.

269, 273 (1902). Absent any reference to federal or United

States constitutional provisions, a decision to reject

review initially granted is a record devoid of ~ federal

issue.

II.

CONCLUSION

The Respondent Party-in-Interest objects to the issu-

ance of a Writ of Certiorari in this case where no federal

or United States constitutional issue was either presented

or ruled upon by the Arizona Supreme Court. The

Respondent Party-in-Interest has not responded directly

to the constitutional issues set forth in the Petition for

Certiorari as it believes the threshold issue of establishing

jurisdiction under 28 U.S.C. §1257(a) has not been met by

the Petitioner.

Respectfully submitted,

Industrial Commission of Arizona

RONALD M. ANDERSEN

Attorney for Respondent

Party-in-Interest

Rl

IN THE COURT OF APPEALS

STATE OF ARIZONA

DIVISION TWO

ANTHONY MACALUSO, ) No. 2CA-IC 94-0017

ICA NO.: 91336-027124

S.S. NO.: 336-48-7905

CARRIER NO.:

UNASSIGNED

D/ INJURY: 06/18/91

Petitioner Employee,

V.

DERRICK ANDERSON,

dba, ANDERSON

STUDIOS,

Defendant Employer,

INDUSTRIAL

COMMISSION OF

ARIZONA, SPECIAL

FUND DIVISION/NO

INSURANCE SECTION,

Defendant Party In

Interest.

PETITION FOR REVIEW

mee me ee ee ee ee ee eee ee ee”

APPELLANT, Anthony Macaluso, by and through his

counsel, undersigned, hereby respetfully petitions the

Supreme Court of Arizona, pursuant to Arizona Rule of

Appellate Procedure 23, to review the Decision of the

Court of Appeals in this matter entered on the 30th day of

August, 1994.

A. SYNOPSIS OF COURT OF APPEALS DECISION

The Opinion Decision of the Court of Appeals, a copy

of which is attached hereto and by this reference made a

part hereof for all purposes as Appendix “A”, affirmed

R2

the Administrative Law Judge’s (ALJ) Decision finding

that Petitioner was not entitled to workers’ compensation

benefits under Hornback v. Industrial Commission of Ari- |

zona, 106 Ariz. 216, 474 P.2d 807 (1970) because he failed

to obtain permission from his uninsured employer or the

No Insurance Fund of the I.C.A. to settle his third party

lawsuit for the policy limits prior to the time that his

previously denied warkers’ compensation claim was

accepted. The Court of Appeals rejected Petitioner’s

argument that the No Insurance Fund did not acquire a

lien under A.R.S. § 23-1023(C) until it paid compensation

or medical benefits. The Court of Appeals stated:

“This argument overlooks the fact that once Mac-

aluso filed a claim for workers’ compensation benefits

that claim came under the jurisdiction of the Industrial

Commission and he was bound by the provisions of the

Workers’ Compensation Act as well as the Rules of Pro-

cedure for Hearings before the Industrial Commis-

”

GOR. 6 4:5 |

The Court of Appeals affirmed the ALJ’s Decision as

follows:

“Because Macaluso violated the provisions of

§ 23-1023(C), we are bound by the decision in

Hornback to affirm the award of December 29, i

1993, by which he is barred from receiving

workers’ compensation benefits. His invitation

to overturn the ruling in Hornback is best

addressed to the supreme court.

Finally, as to the issue of the extent of the No

Insurance Section’s lien, we agree with Mac-

aluso that because § 23-1023(C) provides that

the lien is on the amount “of such compensation

ee

R3

and medical, surgical, and hospital benefits

paid” and because no benefits have been paid,

any lien it has is on nothing. See EBI Companies

v. Industrial Commission of Arizona, __. Ariz. __,

875 P.2d 857 (App. 1994).

B. ISSUE PRESENTED

Are the awards reasonably supported by the law and

the evidence wherein the Petitioner was denied benefits

notwithstanding a compensable claim because his third

party claim was settled for policy limits without the

approval of the Uninsured Employer before the claim was

held compensable?

C. ISSUES NOT DECIDED BY THE COURT OF

APPEALS

1. Should not benefits have been paid to Petitioner sub-

ject to a credit on behalf of the Special Fund to the extent

of the Petitioner’s net third-party recovery?

2. Are the awards reasonably supported by the law and

the evidence wherein the denial of compensation to the

Petitioner rewards and unjustly enriches the employer

who had illegally failed to provide Workers’ Compensa-

tion Insurance as required by the law?

3. Do the awards deny Petitioner Workers’ Compensa-

tion benefits in violation of Article XVIII, Section VIII of

the Arizona Constitution?

* * *

R4

IN THE COURT OF APPEALS

STATE OF ARIZONA

DIVISION TWO

ANTHONY MACALUSO, ) No. 2CA-IC 94-0017

Petitioner, ICA NO.: 91336-027124

S.S. NO.: 336-48-7905

CARRIER NO.:

DERRICK ANDERSON, UNASSIGNED

dba, ANDERSON D/ INJURY:06/18/91

STUDIOS,

Defendant Employer,

INDUSTRIAL

COMMISSION OF

ARIZONA, SPECIAL

FUND DIVISION/NO

INSURANCE SECTION,

Defendant Party In

Interest.

ee ee ee ee ee ee ee

PETITIONER’S OPENING BRIEF

Gregory L. Cohen

RABINOVITZ & ASSOCIATES,

RC. |

Post Office Box 41600

Tucson, Arizona 85717

Attorneys for Petitioner

STATE BAR NUMBER: 015003

* * *

ISSUES PRESENTED FOR REVIEW

I. ARE THE AWARDS BELOW REASONABLY SUP-

PORTED BY THE LAW AND THE EVIDENCE

|

I.

Il.

IV.

R5

WHEREIN THE PETITIONER WAS DENIED BENE-

FITS NOTWITHSTANDING A COMPENSABLE

CLAIM BECAUSE HIS THIRD PARTY CLAIM WAS

SETTLED FOR POLICY LIMITS WITHOUT THE

APPROVAL OF THE UNINSURED EMPLOYER

BEFORE THE CLAIM WAS HELD COMPENSABLE?

IS RESPONDENT UNINSURED EMPLOYER/NO

INSURANCE FUND ENTITLED TO A LIEN IN THE

AMOUNT OF THE THIRD PARTY RECOVERY

WHERE PETITIONER HAS RECEIVED NO

WORKERS’ COMPENSATION BENEFITS IN VIO-

LATION OF A.R.S. § 23-1023(C)?

ARE THE AWARDS BELOW REASONABLY SUP-

PORTED BY THE LAW AND THE EVIDENCE

WHEREIN THE DENIAL OF COMPENSATION TO

THE PETITIONER REWARDS AND UNJUSTLY

ENRICHES THE EMPLOYER WHO HAD ILLE-

GALLY FAILED TO PROVIDE WORKER’S COM-

PENSATION INSURANCE AS REQUIRED BY THE

ARIZONA CONSTITUTION?

DO THE AWARDS BELOW DENY PETITIONER

WORKER’S COMPENSATION BENEFITS IN VIO-

LATION OF ARTICLE XVIII, SECTION VIII OF THE

ARIZONA CONSTITUTION?