douglas/asa v. Guajardo

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

DOUGLAS USD NO. 27, Petitioner Employer

THE ARIZONA SCHOOL ALLIANCE, Petitioner Carrier,

v.

THE INDUSTRIAL COMMISSION OF ARIZONA, Respondent,

BLANCA GUAJARDO, Respondent Employee.

No. 1 CA-IC 21-0027
FILED 2-17-2022

Special Action - Industrial Commission
ICA Claim No. 20201-010214
Carrier Claim No. 2019003120A
The Honorable Gary M. Israel, Administrative Law Judge

AWARD SET ASIDE

COUNSEL

Wright Welker & Pauole PLC, Phoenix
By Linnette R. Flanigan, Shannon Lindner
Counsel for Petitioner Employer and Petitioner Carrier

Industrial Commission of Arizona, Phoenix
By Gaetano J. Testini
Counsel for Respondent

Snow Carpio & Weekley PLC, Tucson
By Diane Ezrre Robles
Counsel for Respondent Employee
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MEMORANDUM DECISION

Presiding Judge David D. Weinzweig delivered the decision of the Court,
in which Judge Brian Y. Furuya and Judge Jennifer M. Perkins joined.

W E I N Z W E I G, Judge:

¶1 In this special action, we review an Industrial Commission of
Arizona (“ICA”) award. Petitioners Douglas Unified School District
(“District”) and The Arizona School Alliance (“Carrier”) challenge an
administrative law judge’s (“ALJ”) decision that Blanca Guajardo suffered
a compensable mental injury from unexpected, unusual or extraordinary
work-related stress. For the reasons that follow, we reverse and set aside
the award.

FACTS AND PROCEDURAL BACKGROUND

¶2 We view the evidence in the light most favorable to
upholding the ALJ’s award. Munoz v. Indus. Comm’n, 234 Ariz. 145, 147, ¶
2 (App. 2014).

¶3 Guajardo worked for the District in various roles for nearly
two decades. She was an athletic coordinator for the District in 2011 when
her supervisor committed suicide. She was later demoted to data clerk in
2019, and her new supervisor “made her work life very miserable.” In that
position, Guajardo worked at the New Student Center, where she helped
parents and students with registration and enrollment.

¶4 Guajardo had suffered from anxiety since at least 2008, when
she told her primary care doctor about the problem. She was briefly
prescribed anxiety medication after being hospitalized for an injury. Her
anxiety worsened, however, after her former supervisor’s suicide in 2011,
and she laments that she “never really recovered.” She was again
prescribed anxiety medication after her 2019 demotion.

The Incident

¶5 One morning in January 2020, a Douglas High School teacher
emailed the New Student Center (“Center”) to inquire about her daughter’s
earbuds. She explained that her daughter, a Douglas High School student,
had lost the earbuds and a tracking application on the teacher’s phone said

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the earbuds were at the Center. After learning the earbuds were not found,
the teacher said she would visit the Center after school to look for herself.

¶6 After school, the teacher dropped by the Center with her
teenage daughter and her daughter’s friend. Directing her question to the
entire office, the teacher asked whose white truck was parked in front.
Guajardo, who was meeting with a parent at the time, said the truck was
hers. The teacher then explained that a tracking application on her phone
showed the earbuds were in the truck. Guajardo offered to open her truck
for the teacher to look inside. Guajardo had known the teacher for ten years
and described her as “sarcastic.”

¶7 The teacher accepted this offer. Guajardo grabbed her keys
and walked to the truck, followed by the teacher, daughter and friend.
Guajardo opened the truck and the teacher searched, “repeating” that her
phone said the earbuds were in the truck. At one point, the teacher pointed
to a pair of children’s underwear and called them “undies.” At another
point, the teacher pointed to a pair of car seats used by Guajardo’s
granddaughters and speculated the grandkids might have taken the
earbuds. The earbuds were not found in the truck and everyone left. The
daughter later found the earbuds in her bedroom.

¶8 Guajardo returned to work and cried. She believed she had
been accused of theft and felt “very upset,” “frustrated,” distraught and
humiliated: “I was going through a lot when I was at the New Student
Center because I had been demoted of my position before, so I was going
through a lot of stress already. And that incident caused me to get out of
control.”

¶9 A week later, Guajardo asked for some time off work. About
five weeks after the incident, the District placed Guajardo on two-weeks’
paid leave and had her visit a psychologist, Dr. Elena Parra, for a
psychological evaluation. Guajardo “request[ed] medication for anxiety in
order to be able to stabilize her mood.” Dr. Parra diagnosed Guajardo with
post-traumatic stress disorder, depression and anxiety, but found she
exaggerated and embellished her symptoms. She also emphasized the
“devastating effect” of earlier events on Guajardo’s ability to cope,
concluding: “Her trauma appears to be associated with ongoing job
stressors which culminated” in the incident.

¶10 Almost three months after the incident, Guajardo filed for
worker’s compensation insurance, alleging she felt “betrayed[,]
humi[l]iated[,] embarrassed and frightened” after “[a] Teacher accused

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[her] of stealing” earbuds and searched her truck, and “these strong
emotions are affecting my healt[h].” The Carrier denied the claim and
Guajardo requested a hearing.

¶11 After the denial, Guajardo visited Dr. James Reed on Dr.
Parra’s referral, along with a mental health counselor. Dr. Reed concluded
that the earbud incident exacerbated Guajardo’s pre-existing chronic
anxiety and depression, although he recognized other stressful events in
Guajardo’s life and later testified “it’s impossible to determine if those
symptoms were exacerbated” by the incident. Dr. Reed found that
Guajardo was “predisposed to anxiety.” He described Guajardo as “a
somewhat fearful woman” whose “defense mechanism aren’t very strong.”

¶12 The Carrier referred Guajardo to Dr. John Beck for a forensic
independent psychological examination. Dr. Beck reviewed the medical
records and interviewed Guajardo, performing three objective
psychological tests. Guajardo relayed her history and prior treatment of
anxiety. She recognized the earbud incident was not unusual for the
workplace. Dr. Beck concluded that other factors caused Guajardo’s
anxiety, including her supervisor’s suicide, her demotion, her new
supervisor and COVID-19 diagnoses. And like Dr. Parra, Dr. Beck found
“strong signs” of “exaggeration and embellishment of her symptoms.”

¶13 The hearing was held over two days in October and
December 2020. The ALJ heard testimony from Guajardo, Dr. Beck and Dr.
Reed. Guajardo explained she “had been demoted” and “was going
through a lot” when the incident occurred, which “caused [her] to get out
of control.” Dr. Beck testified that Guajardo “showed no evidence” of a
mental injury from the incident, and her anxiety was instead caused by her
and her husband’s COVID-19 diagnoses. Dr. Reed testified that “it is
probable” the incident exacerbated Guajardo’s pre-existing chronic anxiety
and depression but it was “impossible to determine” for sure or even how
much. He was unaware, however, that Guajardo had been prescribed
anxiety medication before the incident. Drs. Beck and Reed agreed that
Guajardo did not suffer from post-traumatic stress disorder.

¶14 The ALJ determined that Guajardo had shown a compensable
mental injury, concluding that she “credibly described” an incident causing
“unusual, unexpected, and extraordinary stress,” and the mental injury
exacerbated her “pre-existing depression and anxiety disorder.” The ALJ
“adopt[ed] the testimony and opinions of Dr. Reed as being most probably
correct and well-founded.” The District and the Carrier petitioned for

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review. We have jurisdiction. See A.R.S. §§ 12-120.21(A)(2), 23-951(A); Ariz.
R.P. Spec. Act 10.

DISCUSSION

¶15 On review of an ICA award, we defer to the ALJ’s factual
findings but review de novo the legal question of whether work-related
stress is unexpected, unusual or extraordinary under A.R.S. § 23-1043.01(B).
Landon v. Indus. Comm’n, 240 Ariz. 21, 24, ¶ 9 (App. 2016); Barnes v. Indus.
Comm’n, 156 Ariz. 179, 181-82 (App. 1988).

¶16 An employee who is injured in the course of employment is
generally entitled to compensation for loss sustained on account of the
injury. A.R.S. § 23-1021. A mental injury that arises from a gradual build-
up of work-related stress over time is generally not compensable. France v.
Indus. Comm’n, 250 Ariz. 487, 490, ¶ 16 (2021). By contrast, a mental injury
arising from a single work-related event that is “sudden and unanticipated”
is generally compensable. Id. at 491, ¶ 18.

¶17 To prove a compensable mental injury, the employee must
show: (1) work-related stress was a “substantial contributing cause” of the
injury, and (2) the work-related stress was objectively unexpected, unusual
or extraordinary. A.R.S. § 23-1043.01(B); France, 250 Ariz. at 490, ¶ 14. This
objective standard measures whether a work-related stress is unexpected,
unusual or extraordinary “from the standpoint of a reasonable employee
with the same or similar job duties and training as the claimant.” France,
250 Ariz. at 488, 491, ¶¶ 1, 19. “[T]he inquiry focuses on the stress imposed
on the worker rather than how the worker experienced it.” Id. at 491, ¶ 19.

¶18 Because Guajardo did not prove the second factor on this
record, we start and end there. Guajardo did not prove a reasonable
employee with her job duties and training would process the earbud
incident as “unexpected, unusual, or extraordinary stress.” See A.R.S. § 23-
1043.01(B). She was never accused of theft. Rather than accusations, the
teacher “kept repeating” that her phone showed the earbuds were in the
truck. She was not forced to open the truck, but instead offered to open the
vehicle so the teacher could look around. The teacher’s offhand comments
about underwear and grandchildren were not unusual or extraordinary.
And Guajardo described the teacher as sarcastic and called the “undies”
observation a “fun comment.”

¶19 At most, a technological gaff precipitated an awkward
encounter, something that all testifying witnesses characterized as
foreseeable and not unexpected. A reasonable person would not process

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that incident as extreme stress. Guajardo did not establish a compensable
mental injury claim under A.R.S. § 23-1043.01(B).

CONCLUSION

¶20 The award is set aside.

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

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