ANDRESON v. BRINK ELEC. CONST. CO., 1997 SD 104

568 N.W.2d 290

Richard Troy ANDRESON, Claimant and Appellant, v. BRINK ELECTRIC CONSTRUCTION COMPANY, Employer and Appellee, and Transportation Insurance Company, and CNA Transcontinental Technical Services, Inc., Insurers and Appellees.

No. 19741.Supreme Court of South Dakota.Considered on Briefs March 24, 1997.
Decided August 13, 1997.

Appeal from the Circuit Court, Pennington County, John E. Fitzgerald, Jr., J.

Rick Johnson of Johnson, Eklund, Nicholson Peterson Fox, Gregory, for appellant.

Rick Orr of Davenport, Evans, Hurwitz and Smith, Sioux Falls, for appellees.

KONENKAMP, Justice.

[¶ 1.] Troy Andreson, a lineman for Brink Electric, was injured on the job when a Black Hills Power Light Company (BHPL) truck hit him. He received workers’ compensation benefits, but also won a $35,000 judgment in his tort action against BHPL. Rather than accepting the judgment amount, can he choose to seek continued workers’ compensation? The Department of Labor held in the negative, and we affirm, finding Andreson effectively “collected” under SDCL 62-4-38 in obtaining a judgment against the tortfeasor, barring further workers’ compensation recovery.

Facts
[¶ 2.] On March 11, 1993, Andreson was injured on duty when a BHPL employee, driving a company vehicle, crushed his legs between the bumpers of two trucks. On petition to the Department of Labor, he received approximately $36,000 in workers’ compensation benefits, which included his medical expenses, $7,000 in temporary total disability benefits, and about $13,000 for permanent partial disability. His tort action against BHPL sought recompense for pain and suffering, $14,582.31 in medical bills, and economic losses his expert testified exceeded $500,000. We affirmed the jury’s $35,000 award on appeal Andreson v. Black Hills

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Power Light Co., 1997 SD 12, 559 N.W.2d 886 (Andreson I).

[¶ 3.] Dissatisfied with the verdict, Andreson continued with his administrative proceeding against Brink, started in March of 1995, seeking workers’ compensation benefits for retraining and additional permanent partial disability. Brink’s summary judgment motion rested on the following statute:

Whenever an injury for which compensation is payable under this title shall have been sustained under circumstances creating in some other person than the employer a legal liability to pay damages in respect thereto, the injured employee may at his option either claim compensation or proceed at law against such other person to recover damages or proceed against both the employer and such other person, but he shall not collect from both.

SDCL 62-4-38 (1993). The ALJ determined Andreson was barred from seeking further workers’ compensation benefits. Additionally, as the injury occurred in 1993, the old SDCL 62-4-38, quoted above, was found to apply, not the amended 1994 version. On review, the circuit court affirmed, holding the statute in effect at the time of his injury prevented Andreson’s further pursuit of workers’ compensation benefits. Andreson appeals, questioning whether such a result is mandated under SDCL 62-4-38.

Standard of Review
[¶ 4.] We review administrative appeals under SDCL 1-26-36:

The court shall give great weight to the findings made and inferences drawn by an agency on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because of administrative findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Clearly erroneous in light of the entire evidence in record; or
(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. . . .

See Iversen v. Wall Bd. of Educ., 522 N.W.2d 188, 191 (S.D. 1994). Further, SDCL 1-26-37 provides that questions of law presented to an administrative agency are reviewed under a de novo standard. Tischler v. United Parcel Service, 1996 SD 98, ¶ 23, 552 N.W.2d 597, 602 (quoting Caldwell v. John Morrell Co., 489 N.W.2d 353, 357 (S.D. 1992)); In re Beaver Lake, 466 N.W.2d 163, 166 (S.D. 1991). Statutory construction and issues of retroactive application are questions of law. US West Comm. v. Public Utilities Comm’n., 505 N.W.2d 115, 122 (S.D. 1993); Hieb v. Opp, 458 N.W.2d 797, 800 (S.D. 1990); Appeal of Schramm, 414 N.W.2d 31, 33 (S.D. 1987).

Analysis and Decision
[¶ 5.] Double recoveries are barred under SDCL 62-4-38, but Andreson insists “collect,” as used in this statute, means to “actually receive money from” both a tortfeasor and a workers’ compensation employer.[1]

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Even though he has an enforceable legal judgment against BHPL, Andreson believes he has not yet “collected,” and offers the following: “To collect a debt or claim is to obtain payment or liquidation of it, either by personal solicitation or legal proceedings.” Black’s Law Dictionary 263 (6th ed 1990). This definition supports Brink’s argument, however, and our determination that a judgment from a legal proceeding is indeed liquidation of a claim, therefore falling within the definition of “collect.” See id. at 931 (“Liquidation” is “[t]he act or process of settling or making clear, fixed, and determinate that which before was uncertain or unascertained.”); see also In re Hastie, 2 F.3d 1042, 1045 (10th Cir. 1993) (“collect” is payment or liquidation of a debt); Durland v. Durland, 62 Neb. 813, 87 N.W. 1048, 1049 (1901) (“collect” means recovery).

[¶ 6.] While a claimant may “proceed against both the employer and such other [third party tortfeasor],” this phrase must be read with “but he shall not collect from both.” SDCL 62-4-38
(emphasis added). Ellis v. City of Yankton, 526 N.W.2d 124, 126 (S.D. 1995) (we construe related words in a statute together and derive its intent from reading it as a whole); Kelley v. Duling Enters., Inc., 84 S.D. 427, 433, 172 N.W.2d 727, 730 (1969) (“In construing a particular word or term in a statute reference will be had to the meaning of the words with which it is associated.”). See infra note 2. Andreson acknowledges BHPL’s readiness to pay, but notes in his brief that although BHPL “has expressed a willingness and ability to pay the judgment, one must interpret the statute from a hypothetical claimant’s perspective. Thus, one can easily imagine a situation wherein a third party tortfeasor declares bankruptcy. . . .” We will leave that quandary for the day it becomes an actuality. Nothing in the record discloses BHPL’s inability or disinclination to pay the judgment which was affirmed in Andreson I. Keegan v. First Bank, 470 N.W.2d 621, 624 (S.D. 1991); Gottschalk v. Hegg, 89 S.D. 89, 95, 228 N.W.2d 640, 643-44 (1975) (“[J]udicial machinery should be conserved for problems which are real and present or imminent, not squandered on problems which are abstract or hypothetical or remote.”) (citation omitted).

[¶ 7.] We have suggested in the past that SDCL 62-4-38 is indicative of “South Dakota’s public policy of avoiding duplicate recovery for the same injury.” National Farmers Union Property Cas. Co. v. Bang, 516 N.W.2d 313, 321 (S.D. 1994); St. Paul Fire Marine Ins. v. Farmer, 648 F.2d 489, 491 (8th Cir. 1981) (noting South Dakota’s policy of avoiding duplicate recovery in a workers’ compensation action). By amending SDCL 62-4-38 in 1994, our Legislature may have sought to soften the rigid aftereffect workers suffer when obtaining inadequate recoveries against tortfeasors. See 6 Larson, Larson’s Workmen’s Compensation § 73.00, at 14-354 (1997) (movement toward abolishing these types of rules). Yet we cannot bypass the former statute applicable to Andreson’s claim which precludes further workers’ compensation benefits after taking judgment against a third party.[2] See generally Benson v. Sioux

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Falls Med. Surgical Clinic, 62 S.D. 324, 252 N.W. 864 (1934) Stratton v. Sioux Falls Traction Sys., 49 S.D. 113, 206 N.W. 466 (1925). He effectively “collected” when he obtained an enforceable judgment against BHPL for civil damages. If the jury verdict was not enough in his view, we nonetheless cannot reinterpret the statute to allow a prohibited double recovery. As we noted in Anderson I, the jury evaluated not only Andreson’s half-million dollar claim for damages, but also his credibility, and determined $35,000 was appropriate. 1997 SD 12, 559 N.W.2d 886. This decision was supported by the evidence, Id. at ¶ 14, 559 N.W.2d at 889-90, and, because a general verdict form was used, we will never know if the jury meant for its verdict to cover only part of his loss.[3] Though he is dissatisfied with the jury’s damage award, he may not collect from both his employer and the tortfeasor.

[¶ 8.] We affirm the Department’s decision in all respects.

[¶ 9.] MILLER, C.J., and AMUNDSON and GILBERTSON, JJ., concur.

[¶ 10.] SABERS, J., dissents.

SABERS, Justice (dissenting).

[¶ 11.] The majority opinion is inconsistent with precedent, workers’ compensation treatises, and settled principles of statutory construction.

Each statute must be construed according to its manifest intent as derived from the statute as a whole, as well as other enactments relating to the same subject. Words used by the legislature are presumed to convey their ordinary, popular meaning, unless the context or the legislature’s apparent intention justifies departure. When conflicting statutes appear, it is the responsibility of the court to give reasonable construction to both, and to give effect, if possible, to all provisions under consideration, construing them together to make them harmonious and workable. However, terms of a statute relating to a particular subject will prevail over general terms of another statute. Finally, we must assume that the legislature, in enacting a provision, had in mind previously enacted statutes relating to the same subject.

Weger v. Pennington County, 534 N.W.2d 854, 856 (S.D. 1995) (citations omitted).

[¶ 12.] By equating “collect” with “judgment” and “liquidation of a claim”, the Department of Labor, the circuit court, and the majority all reach the type of conclusion we strive to avoid See, e.g., In re Gossman, 1996 SD 124, ¶ 6, 555 N.W.2d 102, 104 (“When a statute does not define a term, it should be construed according to its accepted usage, and a strained, unpractical or absurd result should be avoided.”) (citing Nelson v.

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South Dakota State Bd. of Dentistry, 464 N.W.2d 621, 624 (S.D. 1991)).

[¶ 13.] SDCL 62-4-38, prior to amendment, read as follows:

Whenever an injury for which compensation is payable under this title shall have been sustained under circumstances creating in some other person than the employer a legal liability to pay damages in respect thereto, the injured employee may at his option either claim compensation or proceed at law against such other person to recover damages or proceed against both the employer and such other person, but he shall not collect from both.

(Emphasis added). The majority’s construction of this one word, “collect,” renders the italicized section of the statute meaningless.

[¶ 14.] The majority opinion claims that a claimant such as Andreson is precluded from “further workers’ compensation benefits after taking judgment against a third party.” See supra
¶ 7.[4] This conclusion is inconsistent with the statutes. How could a claimant ever “proceed against both” as permitted under the statutes according to the majority opinion? He could not, and that is why the majority decision is wrong.

[¶ 15.] The majority is essentially treating SDCL 62-4-38 as an “election of remedies”[5] statute. The fact that the employer is subrogated to the claimant’s rights in the judgment against the third party tortfeasor precludes a claim of election of remedies. See Benson v. Sioux Falls Med. Surgical Clinic, 62 S.D. 324, 252 N.W. 864 (1934) (construing the forerunner to SDCL 62-4-38).[6] The Benson court reversed a directed verdict for the defendant tortfeasor, holding that the circuit court incorrectly concluded that when the claimant settled with and released his employer from further liability, any cause of action against the tortfeasor was also thereafter barred:

We are not concerned with an election of remedies as that term is ordinarily used; no election between proceedings is required. Under the express terms of the statute an injured employee may proceed both against the employer under the compensation act and the third person in an action at law.

Id. at 334, 252 N.W. at 869 (emphasis added); accord Stratton v. Sioux Falls Traction Sys., 49 S.D. 113, 119, 206 N.W. 466, 468 (1925) (noting that the employer’s right to reimbursement “precludes an election of remedies”).

[¶ 16.] In fact, in National Farmers Union Property Casualty Co. v. Bang, 516 N.W.2d 313, 321 (S.D. 1994), we stated that SDCL 62-4-39 creates, for the employer’s benefit, a statutory workers’ compensation lien on the judgment as a setoff of workers’ compensation benefits paid to the employee. See also Schipke v. Grad, 1997 SD 38, ¶ 14, 562 N.W.2d 109, 113 (“The employee may claim workers’ compensation from the employer

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or pursue a legal action against the third party, but may not collect from both. If the employee has collected from both, the employer is reimbursed for the amount of the workers’ compensation paid less the reasonable expense of collecting same. SDCL 62-4-39.”) (emphasis added);[7] cf. Wilson v. Hasvold, 86 S.D. 286, 194 N.W.2d 251 (1972) (after claimant received the maximum allowable workers’ compensation benefits, he was allowed to continue a separate common-law action for damages from tortfeasor). This issue was also settled by Bang, 516 N.W.2d at 321:

Defendant Bang’s argument that allowing a lien will result in procedural complications requiring a plaintiff to choose between proceeding against either a tortfeasor or his workers’ compensation carrier has no merit. A plaintiff is not required to determine the extent of workers’ compensation before proceeding with a tort claim.

(Emphasis added) (citing Helmbolt v. LeMars Mut. Ins. Co., 404 N.W.2d 55, 59 (S.D. 1987)).

[¶ 17.] Reimbursement to the employer is, and always was, an inherent provision of the statutory framework for compensating the employee injured by a third party. See SDCL 62-4-39:

If compensation has been awarded and paid under this title and the employee has recovered damages from another person, the employer having paid the compensation may recover from the employee such an amount equal to the amount of compensation paid by the employer to the employee, less the necessary and reasonable expense of collecting the same.

See also 6 Larson’s Workmen’s Compensation Law § 71.20, at 14-5 to 14-13:

The obvious disposition of the matter is to give the employer so much of the negligence recovery as is necessary to reimburse him for his compensation outlay, and to give the employee the excess. This is fair to everyone concerned: the employer, who, in a fault sense, is neutral, comes out even; the third person pays exactly the damages he would normally pay, which is correct, since to reduce his burden because of the relation between the employer and the employee would be a windfall to him which he has done nothing to deserve; and the employee gets a fuller reimbursement for actual damages sustained than is possible under the compensation system alone.
. . .
As for the employee, he gets no windfall; what he gets is nothing more than actual restoration to himself of what he has lost because of the third person’s wrongful act. . . . The right of the claimant to keep a double recovery must not be confused with the right to collect the double recovery subject to the obligation to pay over to the employee or carrier the amount of the latter’s compensation outlay.

(Emphasis in original).

[¶ 18.] A plain reading of SDCL 62-4-39 shows that Brink, as employer, could recover funds paid by BHPL to Andreson if Andreson pursued his compensation remedy before pursuing BHPL.[8] However, under the majority opinion’s note 2, Andreson can not seek recovery from BHPL if he already elected his remedy by seeking workers’ compensation benefits from Brink. This is nonsensical. There is no reason a claimant cannot pursue the tort claim prior to seeking further workers’ compensation benefits, as Andreson did in this case. This court clearly stated in Bang that a “plaintiff is not required to determine the extent of workers’ compensation before proceeding with a tort claim.” 516 N.W.2d at 321 (emphasis added). If a claimant is forced to wait to sue the third party until he has pursued all potential workers’ compensation benefits, the statute of limitation

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on that suit will inevitably expire in the meantime.[9]
Furthermore, the majority opinion overlooks SDCL 62-7-33, which provides for reopening and modification in the event of a change in the claimant’s condition.[10] If, as the majority claims, judgment against the tortfeasor cuts off any further workers’ compensation benefits, that statute becomes meaningless. “[T]here is a presumption against a construction which would render a statute ineffective or meaningless.” In re Real Estate Tax Exemp. for Black Hills Legal Serv., Inc., 1997 SD 64, ¶ 12, 563 N.W.2d 429, 432 (citations omitted).

[¶ 19.] The fear of double recovery is unfounded in light of the reimbursement provisions of SDCL 62-4-39 -40.[11] “It is elementary that the claimant should not be allowed to keep the entire amount both of his compensation award and of his common-law damage recovery.” 6 Larson’s, § 71.20, at 14-5; see also id. § 73.10, at 14-354:

An injured employee who believes that his injury arose out of and in the course of his employment, and who also believes that it was caused by the tort of a third party, is confronted with the possibility of claiming compensation and of suing the third party at common law. The statutes of many jurisdictions allow him to proceed with both, always, of course, subject to the condition that he cannot retain both recoveries.

(Emphasis added); see also St. Paul Fire Marine Ins. Co., v. Farner, 648 F.2d 489 (8th Cir. 1981) (construing SDCL 62-4-39
-40 and allowing workers’ compensation insurer to recoup the benefits it paid to its employee’s widow, who recovered $125,000 in a wrongful death action against the third party tortfeasor).

[¶ 20.] The majority’s decision to dismiss this lawsuit and deny these benefits to Andreson based on fear of double recovery finds no support in the statutes. It is inconsistent with precedent, workers’ compensation treatises, and settled principles of statutory construction.[12] We should reverse and remand for hearing.

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