Carrier liable for prejudgment interest on death benefits

Stenz v. Industrial Commission, Court of Appeals, Division Two, Published Opinion, Filed 10/8/2014.

The issue addressed in this case is whether interest is owed on death benefits. Stenz sustained a compensable industrial injury and, years later, he passed away. Stenz’s wife filed a claim for death benefits, alleging that his death was related to his employment. After lengthy litigation, the administrative law judge (ALJ) found that Stenz’s death was industrially related and that his widow was entitled to death benefits dating back to her husband’s death four years prior. The ALJ denied the request for interest on those benefits, finding that the carrier timely paid compensation after the ALJ’s decision awarding death benefits. Stenz’s widow appealed.

The Court of Appeals found that the ALJ’s award created an obligation to pay benefits. Further, they found that death benefits were subject to exact computation, without reliance upon opinion or discretion, because death benefits are set by statute and based upon the worker’s average monthly wage. Finally, the court found that the carrier had notice of this obligation as of the date the claim for death benefits was filed. Accordingly, because the carrier knew the exact amount of the obligation and had notice of it, the court found that Stenz’s widow was entitled to interest from the date the claim for death benefits was filed.

This case is on appeal to the Arizona Supreme Court. CopperPoint has filed an amicus (“friend of the court”) brief urging the Supreme Court to reverse the Court of Appeals decision.

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