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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State, Dept. of Labor & Workforce Development, Division of Workers' Compensation, Second Injury Fund v. Tongass Business Center (5/18/2012) sp-6674

State, Dept. of Labor & Workforce Development, Division of Workers' Compensation, Second Injury Fund v. Tongass Business Center (5/18/2012) sp-6674

       Notice: This opinion is subject to correction before publication in the PACIFIC  REPORTER . 

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STATE OF ALASKA,                             ) 

DEPARTMENT OF LABOR &                        )      Supreme Court No. S-13888 

WORKFORCE DEVELOPMENT,                       ) 

DIVISION OF WORKERS'                         )      Alaska Workers' Compensation 

COMPENSATION, SECOND                         )      Appeals Commission No. 10-014 

INJURY FUND,                                 ) 

                                             )      O P I N I O N 

                 Appellant,                  ) 

                                             )      No. 6674 - May 18, 2012 

        v.                                   ) 


TONGASS BUSINESS CENTER,                     ) 

COMMERCE & INDUSTRY                          ) 

INSURANCE CO., CHARTIS/                      ) 

NORTHERN ADJUSTERS, INC.,                    ) 

and MICHAEL BANIE,                           ) 


                 Appellees.                  ) 


               Appeal   from   the   Alaska   Workers'   Compensation   Appeals 

               Commission, Laurence Keyes, Chair. 

               Appearances:     Ruth   Botstein,   Assistant   Attorney   General, 

               Anchorage, and John J. Burns, Attorney General, Juneau, for 

               Appellant.   Colby J. Smith and Aaron M. Sandone, Griffin & 

               Smith, Anchorage, for Appellees Tongass Business Center, 

               Commerce & Industry Insurance Co., and Chartis/Northern 

               Adjusters, Inc.    Notice of non-participation filed by Paul M. 

               Hoffman, Hoffman Silver Gilman & Blasco, P.C., Juneau, for 

               Appellee Banie. 

----------------------- Page 2-----------------------

                Before:     Carpeneti,     Chief    Justice,   Fabe,   Winfree,    and 

                Stowers, Justices.    [Christen, Justice, not participating.] 

                CARPENETI, Chief Justice. 


                An   employer   petitioned   the   Alaska   Workers'   Compensation   Board   for 

reimbursement from the Second Injury Fund for payments it made to a disabled worker; 

the Fund opposed the petition. After a hearing, the Board granted the petition. The Fund 

asked the Board to reconsider its decision in December 2009.              The hearing officer told 

the parties that he would inform them in writing by the end of January about what action 

the Board was taking on the reconsideration request.  Instead, in April 2010 the hearing 

officer sent a prehearing conference summary indicating that the reconsideration request 

had been denied by operation of statute.   The next day the Fund filed a notice of appeal 

and   a   motion   to   accept   a   late-filed   appeal   with   the   Alaska   Workers'   Compensation 

Appeals Commission.  The Commission denied the Fund's request to file its appeal late 

and dismissed the appeal.  Because we conclude that the Fund filed a timely appeal, we 

reverse the Commission's decision and remand for consideration of the Fund's appeal. 


                Michael Banie injured his back, leg, and hip while working for Tongass 

Business   Center   (Tongass)   in   2006.    Tongass   initially   paid   workers'   compensation 

benefits to Banie but then controverted benefits for the leg and hip injuries.              Tongass 

later withdrew the controversion and entered into a partial settlement of the claim with 

Banie.   Tongass petitioned the Board for reimbursement from the Second Injury Fund 

because Banie had preexisting arthritis. 

                                                 -2-                                            6674

----------------------- Page 3-----------------------

                "The Second Injury Fund was created to encourage employers to hire and 

retain partially disabled employees."1        The Fund reimburses employers who have paid 

compensation for at least 104 weeks to an injured worker with a qualifying preexisting 

condition.2    To be reimbursed from the Fund, the employer must show, among other 

things,   that   the   preexisting   condition,   in   combination   with   the   worker's   subsequent 

injury, "results in compensation liability substantially greater than [what] would have 

resulted had the preexisting condition not existed."3  Alaska Statute 23.30.205(f) sets out 

a list of qualifying conditions, which includes arthritis.4 

                The Board held a hearing on the petition, and on December 21, 2009, it 

ordered   the   Fund   to   reimburse   Tongass   for   benefits   Tongass   had   paid   Banie   after 

October 24, 2008.       On December 30, 2009, the Fund asked the Board to reconsider its 

decision, arguing that the Board had failed to analyze whether the employer's liability 

was   "substantially   greater"   because   of   the   preexisting    arthritis.  Tongass   opposed 

reconsideration on January 19, 2010. 

                The hearing officer held a prehearing conference on January 20, 2010.  All 

of the parties were present. Multiple issues were discussed, including the Fund's petition 

for reconsideration.  Apparently the hearing officer was unaware, before the prehearing 

        1       VECO Alaska v. State, Dep't of Labor, Div. of Workers' Comp., Second 

Injury Fund , 189 P.3d 983, 987 (Alaska 2008) (quoting Sea-Land Servs., Inc. v. State, 

Second   Injury   Fund,   737   P.2d   793,   795   (Alaska   1987))   (internal   quotation   marks 


        2       Id. 

        3       Id. (quoting Alaska Int'l Constructors v. State, Second Injury Fund , 755 

P.2d 1090, 1092 (Alaska 1988)) (internal quotation marks omitted; alteration in original). 

        4       AS 23.30.205(f)(1)(D). 

                                                  -3-                                            6674

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conference, that a reconsideration petition had been filed.5           The Fund administrator gave 

the hearing officer a copy of the petition during the prehearing conference.  The hearing 

officer asked the parties whether "oral argument was sought on reconsideration, should 

the board panel decide to take it up."           The assistant attorney general representing the 

Fund had not yet seen Tongass's opposition and thus was unable to say whether oral 

argument was necessary.  The hearing officer stated that the parties would be informed 

"by    letter  by   the  end    of  January    as  to   board   panel    action   on   the  petition   for 

reconsideration, which would then trigger communication from the parties as to whether 

[a] request for oral argument would be necessary."                 The hearing officer discussed a 

hearing about other issues, scheduled for May 12, 2010, and noted that "if oral argument 

[were]     entertained    on  the   [Fund]'s    petition   for  reconsideration,     it  would    also  be 

calendared for hearing at the same time as the hearing on the other three issues set for 


                The next communication from the Board was a Prehearing Conference 

Summary of the January 20, 2010 prehearing conference; the summary was served on 

April 7, 2010.      In the section about pending claims and petitions, the hearing officer 

crossed   out   the   petition   for   reconsideration   and   wrote   next   to   it   "moot;   denied   by 

operation of statute due to board inaction on petition."  The summary's "Review" section 


                After the [prehearing conference], [the hearing officer] noted 

                on    review    of  the  file  that  board   panel   has   not  acted   to 

                reconsider D&O 09-200, and therefore by operation of statute 

                the    time   for  reconsideration      of   the  D&O      has   expired. 

        5       A summary of the hearing noted that the hearing officer "stated that he had 

not noted the [Fund]'s petition for reconsideration."  The hearing officer "requested the 

petition for reconsideration be faxed to the board, to [his] attention." 

                                                   -4-                                                6674 

----------------------- Page 5-----------------------

                Therefore, reconsideration is deemed denied by operation of 

                law, and oral argument for reconsideration is now moot. 

Nothing in the record indicates how soon after the prehearing conference the hearing 

officer noticed that the time for granting reconsideration had expired. 

                On April 8, 2010, the Fund filed an appeal with the Commission; it also 

filed a motion to accept a late-filed appeal. Tongass opposed the motion on the basis that 

"[r]econsideration   was   statutorily   denied   by   lack   of   action   on   January   20,   2010." 

Tongass argued that the Fund's appeal was not timely and so should be dismissed. 

                The    Commission       denied    the  motion    and  dismissed     the  appeal.    The 

Commission   found   that   the   Fund   had   filed   a   timely   reconsideration   request,   which 

extended the deadline for filing an appeal.         According to the Commission, if the Board 

had taken no action on the reconsideration request, the Fund's appeal would have been 

due on March 1, 2010, 30 days from January 29, 2010.6                But the Commission decided 

that the Board had taken action on the reconsideration request because of the hearing 

officer's statement at the January 20, 2010, prehearing conference that the parties "would 

be notified in writing by the end of January whether the [B]oard would take action on 

the request for reconsideration."         The Commission found that "this representation . . . 

extended the deadline for the [B]oard to act on the petition for reconsideration from 

January 29, 2010 to January 31, 2010"; this in turn extended the appeal deadline by two 

days,   to   March   3,   2010.  Acknowledging   that   the   hearing   officer's   statement   was 

"unfortunate" and "introduced some confusion regarding the deadlines for . . . filing an 

appeal," the Commission nonetheless decided that the Fund had not acted   with due 

diligence in contacting the Board to see why no reconsideration decision had been issued 

        6       The Commission did not explain how it arrived at that date, but January 29, 

2010, was 30 days from December 30, 2009, the date the Fund filed its petition for 


                                                  -5-                                               6674 

----------------------- Page 6-----------------------

by the end of January. The Commission did not explicitly say that the Fund did not have 

good cause to file an untimely appeal, but it denied the motion to accept a late-filed 


                The Fund appeals the Commission's denial of its motion to accept a late- 

filed appeal and its dismissal of the appeal. 


                In a workers' compensation administrative appeal, we directly review the 

Commission's decision.7        Interpretation of a statute is a question of law to which we 

apply    our   independent     judgment.8     We    interpret   a  statute  "according     to  reason, 

practicality, and common sense," considering the meaning of its language, the legislative 

history, and the law's purpose.9 


        The Fund's Appeal Was Timely. 

                Alaska     Statute  23.30.127(e),     which    governs    appeal   deadlines    to  the 

Commission when a party has requested reconsideration of a Board decision, provides: 

                If a request for reconsideration of a board decision was timely 

                filed with the office of the board, the notice of appeal must be 

                filed   within   30   days   after   the   reconsideration   decision   is 

                mailed     to   the   parties    or  the    date   the   request    for 

                reconsideration is considered denied in the absence of any 

                action on the request, whichever is earlier. 

        7       Shehata v. Salvation Army, 225 P.3d 1106, 1113 (Alaska 2010) (citing 

Barrington v. Alaska Commc'ns Sys. Grp., Inc. , 198 P.3d 1122, 1125 (Alaska 2008)). 

        8       Grimm v. Wagoner, 77 P.3d 423, 427 (Alaska 2003) (citing Todd v. State, 

917 P.2d 674, 677 (Alaska 1996)). 

        9       Id. (citing Native Vill. of Elim v. State , 990 P.2d 1, 5 (Alaska 1999)). 

                                                 -6-	                                           6674

----------------------- Page 7-----------------------

                 Because the Alaska Workers' Compensation Act has no express provision 

about   reconsideration   of   Board   decisions,   the   Alaska   Administrative   Procedure   Act 

governs reconsideration requests.           Alaska Statute 44.62.540(a) provides: 

                 The agency may order a reconsideration of all or part of the 

                 case   on   its   own   motion   or   on   petition   of   a   party.  To   be 

                 considered by the agency, a petition for reconsideration must 

                 be   filed   with   the   agency   within   15   days   after   delivery   or 

                 mailing of the decision. The power to order a reconsideration 

                 expires 30 days after the delivery or mailing of a decision to 

                 the respondent.   If no action is taken on a petition within the 

                 time   allowed   for   ordering   reconsideration,   the   petition   is 

                 considered denied. 

                 In   this   case,   the   Board   noted   that   a   party   must   request   that   the   board 

reconsider a decision in accordance with AS 44.62.540 and 8 Alaska Administrative 

Code (AAC) 45.050.  8 AAC 45.050 provides that an answer to a petition must be filed 

within 20 days after the date of service of the petition.10            The parties here followed this 

regulation:    The Fund petitioned for reconsideration on December 30, 2009, nine days 

after the Board issued its decision, and Tongass filed its answer to the petition on January 

19, 2010, 20 days after the Fund filed its petition for reconsideration. 

                 On appeal, the Fund asserts that its "appeal period was triggered" on the 

day the hearing officer issued a written decision indicating that the petition had been 

denied.     It   argues   that   the   deadline   for   an   appeal   would   have   been   30   days   from 

whenever   the   Board   issued   its   promised   written   decision   on   the   petition.      Tongass 

responds that the appeal was due no later than February 19, 2010, because the petition 

was denied by operation of statute on January 20. 

                 The Commission decided that the appeal was originally due on March 1, 

2010, 30 days from January 29, 2010, which the Commission thought was the "deadline 

        10       8 AAC 45.050(c)(2) (2011). 

                                                     -7-                                                 6674 

----------------------- Page 8-----------------------

for board action on the Fund's petition [for reconsideration]."           Tongass asserts that the 

Commission erred in calculating the appeal deadline, but that the error was harmless 

because the Commission correctly found that the appeal was late. 

                We disagree with both the Commission and Tongass.                Because the Fund 

timely    requested    reconsideration,     its  appeal   was   due   "within    30  days   after  the 

reconsideration      decision   [was]   mailed    to  the  parties  or  the   date  the  request   for 

reconsideration [was] considered denied in the absence of any action on the request, 

whichever [was] earlier."11     Pursuant to AS 44.62.540(a), a petition is considered denied 

"[i]f   no   action   is  taken  on   a  petition   within   the   time   allowed    for  ordering    a 

reconsideration."  In its decision, the Commission found that, in promising a decision by 

the end of January, the Board "took action on the request for reconsideration within the 

30-day     timeframe     required    by   AS    44.62.540(a)     and   AS    23.30.127(e)."      This 

determination by the Commission that the Board took action   on   the reconsideration 

request - which has not been challenged on appeal by either party - is critical. 

                Alaska Statute 44.62.540(a) provides in part, "If no action is taken on a 

petition within the time allowed for ordering reconsideration, the petition is considered 

denied." If action was taken on the petition, as the Commission found,12 the Commission 

was not justified in concluding that the petition was denied by operation of statute. 

                Because the petition could not be denied by operation of statute after the 

Board took action on it, the Fund's appeal was due within 30 days of the date the Board's 

        11      AS 23.30.127(e). 

        12      Because   neither   party   has   challenged   this   finding,   we   assume   without 

deciding that it is correct. 

                                                 -8-                                              6674 

----------------------- Page 9-----------------------

decision   about   reconsideration   was   served   on   the   parties.13  In   this   case,   the   Board 

informed the parties on April 7, 2010, that it had not granted reconsideration, when it 

faxed    them   the  prehearing     conference    summary.14     The    Fund    filed  its  appeal  the 

following day, well within the 30 days permitted by statute, so its appeal was timely. 

Because the Fund's appeal was timely, the Commission erred in dismissing the appeal.15 


                Assuming that the Board took action on the Fund's petition by promising 

a written decision, as the Commission found in an unchallenged finding, the petition 

could not be denied by operation of statute.   Therefore, the Fund had 30 days to appeal 

from the date it received notice that reconsideration was denied.  Because the Fund filed 

a timely appeal after the Board gave it written notice that reconsideration was denied, we 

REVERSE the Commission's decision dismissing the appeal.  We REMAND the matter 

to the Commission to hear the appeal on the merits. 

        13      AS 23.30.127(e). 

        14      Although the Board said that the petition was denied by operation of statute, 

its April 7, 2010 prehearing conference summary was the first time it communicated with 

the parties about reconsideration, despite the hearing officer's promise that it would 

notify them by the end of January of its decision on the petition for reconsideration. 

        15      Because we determine that the appeal was timely filed, we do not address 

the other issues raised in this appeal. 

                                                  -9-                                              6674 

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