Anderson v. Tri State Constr., 082521 SDSC, 29336-r-JMK

CourtSupreme Court of South Dakota
JudgeJENSEN, Chief Justice, and SALTER and DEVANEY, Justices, and GILBERTSON, Retired Chief Justice, concur. MYREN, Justice
Writing for the CourtKERN, Justice
PartiesSTELLA ANDERSON, Claimant and Appellant, v. TRI STATE CONSTRUCTION, LLC and CINCINNATI INDEMNITY COMPANY, Employer, Insurer, and Appellees.
Docket Number29336-r-JMK

2021 S.D. 50

STELLA ANDERSON, Claimant and Appellant,

v.

TRI STATE CONSTRUCTION, LLC and CINCINNATI INDEMNITY COMPANY, Employer, Insurer, and Appellees.

No. 29336-r-JMK

Supreme Court of South Dakota

August 25, 2021

Considered on Briefs November 16, 2020

APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT HUGHES COUNTY, SOUTH DAKOTA THE HONORABLE CHRISTINA L. KLINGER Judge

REXFORD A. HAGG of

Whiting, Hagg, Hagg, Dorsey & Hagg, LLP

Rapid City, South Dakota

Attorneys for claimant and appellant.

LAURA K. HENSLEY of

Boyce Law Firm, LLP

Sioux Falls, South Dakota

Attorneys for employer, insurer, and appellees.

KERN, Justice

[¶1.] Stella Anderson (Anderson) was injured in Wyoming while working at a job site for Tri State Construction, LLC (Tri State), a corporation formed and headquartered in South Dakota. Tri State carried a workers' compensation insurance policy, and Anderson applied for and received workers' compensation benefits in Wyoming. Anderson later sought benefits under South Dakota's more favorable workers' compensation statutes. The South Dakota Department of Labor and Regulation (Department) concluded that it lacked jurisdiction over Anderson's claim and dismissed her petition. The circuit court affirmed the Department's decision. Anderson appeals. We reverse and remand.

Factual and Procedural Background

[¶2.] The facts of this case are straightforward. On August 25, 2018, Anderson was hired to work for Tri State as a truck driver. Tri State specialized in the preparation of construction sites, trucking, and the sale and delivery of aggregate materials. Organized as a South Dakota limited liability company, Tri State placed its headquarters in Belle Fourche, South Dakota, and hired four office employees to operate its accounting, payroll, and human resources divisions from its Belle Fourche office. All of Tri State's other employees worked outside of South Dakota, including Anderson and her direct supervisor. Anderson, who resided in Spearfish, South Dakota, worked primarily in Wyoming.1

[¶3.] When applying for the position, Anderson was interviewed and offered employment in the Belle Fourche office. The parties do not dispute that the employment contract was executed in South Dakota. She was required to pass a pre-employment drug test, which she took in Spearfish. She picked up her first paycheck at the Belle Fourche office as well as her direct deposit paystubs every two weeks thereafter, although her paychecks after the first one were directly deposited.

[¶4.] On October 5, 2018, the day before her scheduled Mine Safety and Health Administration (MSHA) training[2] at the Belle Fourche office, Anderson was injured in a traffic accident in Colony, Wyoming, when the truck she was driving slid on a curve in the road and rolled into the ditch.[3] She sustained injuries to her neck, back, left shoulder, arm, and head in the accident and reported the injuries to Tri State that same day. The accident occurred close to the South Dakota border, and Anderson was first taken to the emergency room in Spearfish for treatment for her injuries, then transported to Rapid City, South Dakota, for further care.

[¶5.] Tri State was insured for workers' compensation in both South Dakota and Wyoming through the Cincinnati Indemnity Company (Insurer). After Anderson's injury, Tri State conducted a post-accident interview in the Belle Fourche office and, thereafter, filed a first report of injury under the Wyoming workers' compensation program, which is a state-administered system. Anderson began to receive benefits, including payment of her medical bills and temporary total disability payments, through Wyoming's workers' compensation system.

[¶6.] Eventually, Anderson consulted with an attorney and discovered that Wyoming law limited her eligibility to collect total disability benefits to 80 months, whereas in South Dakota, she could be eligible to receive permanent total disability benefits. Accordingly, Anderson, who has not been able to return to work, filed a petition with the Department on February 4, 2019, seeking to prove her entitlement to permanent total disability benefits.4 Because Anderson did not claim or receive permanent total disability benefits from the Wyoming Department of Labor, she claimed that there was no risk of duplication of benefits.

[¶7.] On August 29, 2019, the Department issued a letter decision denying Anderson's claim, concluding that there were "insufficient contacts with South Dakota to give the Department statutory jurisdiction in this matter." On September 20, 2019, Anderson appealed the Department's determination to the circuit court. Anderson claimed the Department erred by failing to: (1) assume jurisdiction under the plain language of SDCL 62-3-3; and (2) find a substantial connection between the employment relationship and the State of South Dakota sufficient to confer jurisdiction to the Department.

[¶8.] In a memorandum decision entered May 6, 2020, the circuit court affirmed the Department's dismissal, concluding that Anderson's "relationship with South Dakota for purposes of workers' compensation was minimal, at best, and did not provide a reasonable relationship that would support a substantial relationship between employment and the state of South Dakota." The court observed that Anderson worked outside of South Dakota and that collecting her pay in South Dakota was incidental to her employment duties. The court concluded that Anderson's decision to live in South Dakota was a personal choice and that, despite her training schedule, Anderson had never participated in training in South Dakota. The court further discounted the contacts Anderson's employment created with South Dakota by prioritizing where Anderson actually worked versus the place where she "was interviewed and hired." Thus, the court affirmed the Department's decision, holding that South Dakota did not have a reasonable relationship to the occurrence, the parties and the employment that could confer jurisdiction to the Department.

[¶9.] Anderson appeals, arguing the circuit court erred when it held the Department lacked jurisdiction to hear Anderson's claim for workers' compensation benefits.

Standard of Review

[¶10.] "[A]ctions of the agency are fully reviewable when the issue is a question of law." Knapp v. Hamm & Phillips Serv. Co., 2012 S.D. 82, ¶ 11, 824 N.W.2d 785, 788. "The jurisdictional question in this case-the agency's scope of authority under a statute-is a question of law reviewed de novo. Similarly, we review questions of statutory interpretation de novo." Winslow v. Fall River Cnty., 2018 S.D. 25, ¶ 12, 909 N.W.2d 713, 717 (citations omitted).

Analysis and Decision

[¶11.] "An administrative agency has jurisdiction over a matter when the agency is given power 'by law to hear and decide controversies.'" Knapp, 2012 S.D. 82, ¶ 12, 824 N.W.2d at 788 (quoting Martin v. Am. Colloid Co., 2011 S.D. 57, ¶ 10, 804 N.W.2d 65, 67). As this Court has previously explained, the concept of jurisdiction differs in administrative law settings from that used in a traditional court setting. Id.;

Winslow v. Fall River Cnty., 2018 S.D. 25, ¶ 8, 909 N.W.2d at 716. The determination of jurisdiction in administrative law involves three components: (1) personal jurisdiction, referring to the agency's authority over the parties and intervenors involved in the proceedings; (2) subject matter jurisdiction, referring to the agency's power to hear and determine the causes of a general class of cases to which a particular case belongs; and (3) the agency's scope of authority under statute.

Knapp, 2012 S.D. 82, ¶ 12, 824 N.W.2d at 788-89. At issue here is the third element-the scope of the Department's authority to apply South Dakota workers' compensation statutes to an accident that occurred outside the state.5

[¶12.] South Dakota's statutory scheme for workers' compensation is set forth in Title 62 of the South Dakota Codified Laws, and under SDCL 62-3-3: "Every employer and employee shall be presumed to have accepted the provisions of this title, and shall be thereby bound, whether injury or death resulting from such injury occurs within this state or elsewhere, except as provided by §§ 62-3-4 to 62-3-5.1, inclusive."6 (Emphasis added.)

Whether SDCL 62-3-3 applies

[¶13.] Anderson maintains that a plain reading of SDCL 62-3-3 unambiguously places South Dakota employers, such as Tri State, squarely within the jurisdiction of the statute. She notes that the statute uses the term every before employer and thus, in her view, every South Dakota employer falls within the Department's scope of authority. We disagree.

[¶14.] When analyzing the text of a statute, "we adhere to two primary rules of statutory construction. The first rule is that the language expressed in the statute is the paramount consideration. The second rule is that if the words and phrases in the statute have plain meaning and effect, we should simply declare their meaning and not resort to statutory construction." Winslow, 2018 S.D. 25, ¶ 12, 909 N.W.2d at 717 (citation omitted). The Legislature did not use the words "South Dakota" in the statute or in the definitions in Title 62.[7] Additionally, the plain language of SDCL 62-3-3, though it refers to every employer, does not set forth the scope of the Department's authority to hear a workers' compensation claim.8

[¶15.] However, Anderson further submits that SDCL 62-3-3 creates a presumption that the Department has jurisdiction over her employment relationship with Tri State because Tri State is headquartered in South Dakota and is organized as a South Dakota business. According to Anderson, because of this presumption, Tri State carries the burden...

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