Anabasis, Inc. v. LABOR COM'N
| Decision Date | 09 August 2001 |
| Docket Number | No. 20000832.,20000832. |
| Citation | 2001 UT App 239,30 P.3d 1236 |
| Parties | ANABASIS, INC., Petitioner, v. LABOR COMMISSION, Respondent. |
| Court | Utah Court of Appeals |
Larrie A. Carmichael, Layton, for Petitioner.
Sherry Hayashi and Alan Hennebold, Salt Lake City, for Respondent.
Before Judges JACKSON, BENCH, and BILLINGS.
¶ 1 Anabasis, Inc. (Anabasis) seeks judicial review of the Utah Labor Commission Appeals Board (Appeals Board) decision affirming the penalty imposed on Anabasis for failure to provide workers' compensation insurance in violation of Utah Code Ann. § 34A-2-201 (Supp.2000) (the Insurance Statute)1 Anabasis asserts that the outcome of this case, as succinctly stated by a former President in another proceeding, "depends upon what the meaning of the word `is' is." Utah Code Ann. § 34A-2-211 (2)(a)(ii) (Supp. 2000) allows the Labor Commission (the Commission) to impose a penalty on employers if the employer "is conducting business without securing the payment of benefits in one of the three ways provided in [the Insurance Statute]." Anabasis argues that the word "is" in the statute relieves Anabasis of liability because "is" requires a present state of noncompliance at the time a penalty is imposed, and Anabasis had purchased workers' compensation insurance by the time the Commission imposed the penalty. We affirm.
¶ 2 Anabasis began doing business in Utah as "John's Salon" in 1994. Since then, Anabasis has continually employed two to six employees at the salon. In October 1998, the Utah Labor Commission (the Commission) received information that Anabasis did not have workers' compensation insurance. Subsequent investigation confirmed that this information was correct.
¶ 3 On January 6, 1999, the Commission sent a Notice of Noncompliance in Providing Workers' Compensation Insurance to Anabasis. This notice asked Anabasis to "provide proof of workers' compensation insurance," and warned that "[f]ailure to maintain workers' compensation insurance for ... employees could result in a penalty." Anabasis did not respond to the notice. On February 12, 1999, the Commission sent a Notice of Noncompliance and Intent to Assess Penalty (Notice) to Anabasis, stating that it intended to impose a $1,000 penalty on Anabasis for its failure to maintain coverage for the period of November 2, 1998 to January 12, 1999. Anabasis then obtained a policy for workers' compensation insurance with retroactive coverage to February 1, 1999. On March 3, 1999, and again on March 30, 1999, the Commission notified Anabasis that it was liable for the $1,000 penalty imposed pursuant to Utah Code Ann. § 34A-2-211 (2) (Supp. 2000).
¶ 4 Anabasis contested the penalty, but an administrative law judge from the Commission upheld the penalty, and the Appeals Board affirmed. Anabasis now petitions us to review the Appeals Board decision. We have jurisdiction pursuant to Utah Code Ann. §§ 34A-1-303 (6) (1997) and 78-2a-3 (2)(a) (1996).
¶ 5 Anabasis asserts that the word "is," as it is used in Utah Code Ann. § 34A-2-211(2)(a)(ii) (Supp.2000), relieves Anabasis of liability. The parties do not dispute which statute controls this central issue, they only disagree on its interpretation. Thus, the central issue presents us with a question of statutory construction, which we review for correctness. See Esquivel v. Labor Comm'n, 2000 UT 66, ¶ 13, 7 P.3d 777 () (quoting Platts v. Parents Helping Parents, 947 P.2d 658, 661 (Utah 1997)).
¶ 6 Anabasis next alleges that the Commission has a policy of imposing a penalty when an employer fails to comply with the Insurance Statute. Thus, alleges Anabasis, the Commission abused its discretion by "not exercising discretion at all" when it imposed the penalty on Anabasis. "When the Legislature has granted an agency discretion to determine an issue, we review the agency's action for reasonableness." Caporoz v. Labor Comm'n, 945 P.2d 141, 143 (Utah Ct.App. 1997).
¶ 7 Finally, Anabasis argues that it is entitled to attorney fees under the Small Business Access to Justice Act. See Utah Code Ann. §§ 78-27a-1 to -6 (1996). We may award attorney fees at our discretion if a small business prevails on appeal from an agency action. See id. § 78-27a-5(1).
¶ 8 The Insurance Statute requires that all Utah employers "secure the payment of workers' compensation benefits for [their] employees by: (1) insuring, and keeping insured, [with workers' compensation insurance]."2 Utah Code Ann. § 34A-2-201 (Supp.2000). If an employer fails to insure and keep insured for workers' compensation, the employer faces many adverse consequences. The employer loses certain defenses in employee-initiated law suits, is guilty of a class B misdemeanor for each day it is not in compliance, can be enjoined from further business operations, can be ordered by a court to comply with the Insurance Statute, and can have penalties imposed on it by the Commission. See Utah Code Ann. §§ 34A-2-207, -209 to -211 (1997 & Supp.2000). None of these remedies is exclusive. See id. Here, we examine the language of section 34A-2-211.
¶ 9 Anabasis and the Commission dispute the meaning of section 34A-2-211(2)(a), which states the following:
Utah Code Ann. § 34A-2-211(2) (Supp.2000). "`When we interpret statutes, our primary goal is to give effect to the [L]egislature's intent in light of the purpose the statute was meant to achieve.'" State v. Cruz Perez, 2000 UT App 65, ¶ 6, 999 P.2d 579 (citation omitted). The "`statute should not be construed in a piecemeal fashion but as a comprehensive whole.'" V-1 Oil Co. v. Dep't of Envtl. Quality, 904 P.2d 214, 217 (Utah Ct. App.1995) (citation omitted). Further, "if there is doubt or uncertainty as to the meaning or application of the provisions of an act, it is appropriate to analyze the act in its entirety, in light of its objective, and to harmonize its provisions in accordance with its intent and purpose." Id. (internal quotations and citations omitted).
¶ 10 The Commission argues that the word "is" in section 34A-2-211(2)(a)(ii) does not affect the Commission's ability to impose a penalty for failure to comply with the Insurance Statute, even though an employer has obtained workers' compensation insurance after a period of noncompliance. Anabasis argues that the word "is" in section 34A-2-211(2)(a)(ii) allows the Commission to impose a penalty only if an employer does not have workers' compensation insurance on the date the Commission imposes the penalty. Belnorth Petroleum Corp. v. State Tax Comm'n, 845 P.2d 266, 270 n. 8 (Utah Ct. App.1993); cf. Hercules, Inc. v. State Tax Comm'n, 2000 UT App 372, ¶ 12 n. 6, 21 P.3d 231 ().
¶ 11 We see a third possible interpretation. Here, the verb "is" is "used with the present participle of a verb to express a continuing action." The American Heritage Dictionary 163 (2d ed.1985); see also State v. Redd, 1999 UT 108, ¶ 11, 992 P.2d 986 (). The word "is" may appear connected to "conducting business without [workers' compensation insurance]," which would require a continuing action of conducting business without workers' compensation insurance at the time of notice. Utah Code Ann. § 34A-2-211(2)(a)(ii) (Supp.2000). However, the phrase, "is conducting business," is connected in time to the Commission's belief. Section 34A-2-211(2)(a) allows the Commission to impose the penalty when the Commission "believes that an employer ... is conducting business without securing [workers' compensation insurance]." Id. (emphasis added). Under this third interpretation, the Commission's ability to impose the penalty would attach once the Commission forms a belief that an employer is not complying with the Insurance Statute.3
¶ 12 In view of these three plausible interpretations, we conclude that the statute is ambiguous. Accordingly, we must analyze the statute in accordance with the rules of statutory construction to determine the intent of the Legislature.
¶ 13 Section 34A-2-211 allows the Commission to impose a penalty "if the [Commission] believes that an employer of one or more employees is conducting business without securing the payment of benefits in one of the three ways provided in [the Insurance Statute]." Id. Thus, an employer must be in full compliance with the Insurance Statute to avoid a penalty from the Commission. Accordingly, we must evaluate the requirements of the Insurance Statute to determine whether Anabasis was in full compliance.
¶ 14 The Insurance Statute requires that an employer "secure the payment of workers' compensation" by "insuring, and keeping insured."4 Id. § 34A-2-201(1). The requirement to insure and keep insured is mandatory for all employers in Utah. See Industrial Comm'n v. Daly Mining Co., 51 Utah 602, 172 P. 301, 303-06 ...
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