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Worker's widow gets interest on unpaid death benefit

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An Arizona worker's widow is owed interest on unpaid death benefits from the time the insurer was notified of the claim until the award was paid, the state Supreme Court has ruled.

Charles Stenz was injured while working for the city of Tucson in 2005, according to court records. His employer's third-party administrator, Pinnacle Risk Management Services Inc., accepted his claim for workers compensation benefits.

Mr. Stenz died in 2009, records show. His wife, Elizabeth Stenz, filed a claim for death benefits on Sept. 21, 2009, alleging that her husband's death resulted partly from his 2005 occupational injury.

Pinnacle received notice of the claim on Oct. 21, 2009, and denied the claim one week later, according to records.

An administrative law judge for the Industrial Commission of Arizona upheld the denial of benefits, but Arizona's Division 2 Court of Appeals in Tucson set aside that ruling, records show. After a new hearing, the administrative law judge in 2013 entered a final order affirming an award, and Pinnacle paid the benefits dating back to Mr. Stenz's death.

Mrs. Stenz then argued that she was owed interest on unpaid death benefits from the time the claim was originally filed until the award was paid, according to records. The administrative law judge, however, ruled that no interest was owed before the award became final in 2013. The appellate court later set the ruling aside.

However, the Arizona Supreme Court on Monday vacated the opinion of the state's Division 2 Court of Appeals, ruling that a claim for death benefits is a liquidated claim and that interest is owed from the time an insurer receives notice of it.

“A contrary ruling would deprive a claimant of the full value of the benefit owed, while undesirably encouraging insurance carriers to protract litigation to delay paying benefits for as long as possible,” the ruling states.