Baier v. Dean Kurtz Const., Inc.

• Decision Date: 04 February 2009
• Docket Number: No. 24958.,No. 24940.,24940.,24958.
• Parties: Kelly J. BAIER, Claimant and Appellee, v. DEAN KURTZ CONSTRUCTION, INC., Employer and Appellant, Bituminous Insurance Companies, Insurer and Appellant, and MID-Century Insurance COMPANY, Insurer and Appellee.
• Court: South Dakota Supreme Court

761 N.W.2d 601

2009 SD 7

Kelly J. BAIER, Claimant and Appellee, v. DEAN KURTZ CONSTRUCTION, INC., Employer and Appellant Bituminous Insurance Companies, Insurer and Appellant, and MID-Century Insurance COMPANY, Insurer and Appellee.

No. 24940.

No. 24958.

Supreme Court of South Dakota.

Considered On Briefs On January 12, 2009.

Decided February 4, 2009.

Jon J. Lafleur of LaFleur, LaFleur and LaFleur, P.C., Rapid City, SD, Eric C. Blomfelt of Blomfelt & Associates, P.C., Windsor, CO, Attorneys for appellee, Kelly J. Baier.

Jeremy D. Nauman, Rapid City, SD, Attorneys for appellee, Mid-Century.

Patricia A. Meyers, Stephen C. Hoffman of Costello, Porter, Hill, Heisterkamp, Bushnell & Carpenter, LLP, Rapid City, SD, Attorneys for appellant.

KONENKAMP, Justice.

[¶ 1.] Kelly Baier suffered from a degenerative arthritic hip disability. During the course of his employment, Baier's employer was insured by two separate workers' compensation insurers. The current insurer disputes its responsibility to pay Baier's workers' compensation benefits. The Department of Labor found the current insurer liable and awarded benefits. The insurer appeals and we affirm.

Background

[¶ 2.] Kelly Baier began working for Dean Kurtz Construction (Kurtz) in 1987 as a carpenter's helper and later as a lead man and job foreman. On September 24, 1999, Baier suffered an injury to his low back while at work. The injury was work related and Kurtz's insurer at the time, Mid-Century, paid Baier's workers' compensation benefits. After considerable treatment for his back, Baier was released to return to work in May 2000, with certain permanent restrictions: twenty pound lifting maximum; limited bending and twisting at the waist; work involving squatting reduced to occasional; and changing positions from standing, sitting, and walking every 45 minutes. Baier returned to work at Kurtz as a project superintendent. The work required physical labor, but was within his restrictions.

[¶ 3.] On May 12, 2004, Baier visited his doctor for a routine physical examination. During the exam, he told Dr. Allen Nord that he was experiencing chronic hip pain in both hips, but that the right was worse than the left. Baier explained that the pain had been slowly but steadily getting worse and that it caused him discomfort in his job. Dr. Nord ordered x-rays, which showed "[a]dvanced changes of degenerative joint disease affecting both hips." Baier was referred to an orthopedic surgeon. On May 26, 2004, Baier reported a first report of injury with Kurtz. Dr. Mark Harlow, an orthopedic surgeon, saw Baier in July 2004. He recommended that Baier undergo bilateral hip replacement. According to Dr. Harlow, Baier's x-rays showed "end stage degenerative arthritis, which shows bone-on-bone contact and entophyte formation involving both hips." Baier's right hip was replaced in August 2004, and his left in October 2004.

[¶ 4.] Baier did not return to work until January 2005. Dr. Harlow imposed the following restrictions: stand one hour per day with breaks; sit seven hours per day with breaks; drive one hour per day with breaks; walk one hour per day with breaks; limit work to sedentary or light duty classification; limit lifting to twenty-five pounds; no impact activity such as use of jackhammer or jumping off equipment. On August 25, 2005, Baier was laid off because Kurtz had no work within Baier's restrictions.

[¶ 5.] After Baier's first hip replacement, he petitioned the Department of Labor for a hearing to address his entitlement to workers' compensation benefits from Kurtz. Kurtz and its insurer at the time, Bituminous Insurance Companies, denied that Baier's hip disability was work related, alleged that Baier failed to timely give notice, and averred that the hip surgery was the result of Baier's previous back injury, at which time Kurtz was insured by Mid-Century. In March 2005, Bituminous and Kurtz moved to add Mid-Century as an additional insurer and the Department issued an order granting the motion.

[¶ 6.] In October 2005, a telephonic prehearing conference was held, after which the Department issued a prehearing order indicating that the issues scheduled to be presented at the hearing would be: medical expenses, causation, temporary total disability, which insurer is responsible, and apportionment. The order also listed the intended witnesses from all parties, and the intended deposition testimony. However, another telephonic conference was held in November 2005. As a result of this conference, for which there is no record, the Department issued a letter indicating that the hearing that was previously set to address the issues of medical expenses, causation, and temporary total disability was cancelled. The letter further indicated that the parties agreed to submit all outstanding issues to the Department on the record, including the issues of apportionment and which insurer is responsible.

[¶ 7.] On December 13, 2005, counsel for Baier wrote the Department requesting that a status hearing be held to set a scheduling order for the hearing on the issues of which insurer is responsible and apportionment. The Department issued a notice of hearing for January 9, 2006. On December 27, 2005, Bituminous moved the Department for summary judgment on the issues of coverage and apportionment. A telephonic conference was held on January 9, 2006. There is no record of the conference, but the Department issued a letter on January 10, stating that "[t]he parties have agreed to submit the outstanding issues on the record. The two issues to be addressed are the application of the last injurious exposure rule and apportionment." The letter further indicated what the record was to consist of and a briefing schedule for the parties.

[¶ 8.] On June 7, 2006, the Department issued its written decision declaring Bituminous the responsible insurer. Applying the last injurious exposure rule, the Department concluded that because Bituminous was the insurance carrier covering the risk at the time of Baier's most recent exposure bearing a causal relation to the disability, Bituminous was responsible for Baier's workers' compensation benefits. The Department directed the parties to submit proposed findings of fact, conclusions of law, and objections. Kurtz and Mid-Century submitted proposed findings of fact and conclusions of law, as did Baier. Bituminous, however, did not, and informed the Department, after inquiry, that it did not intend to submit any proposed findings of fact or conclusions of law.

[¶ 9.] On August 2, 2006, the Department issued findings of fact, conclusions of law, and an order declaring Bituminous liable for Baier's workers' compensation benefits. The order further declared that "[t]he Department shall retain jurisdiction over the issue of extent and degree of Claimant's disability, if any." No appeal to the circuit court followed this order. On September 28, 2006, under a stipulation of the parties, the Department entered an order dismissing Mid-Century from the action. No appeal was taken from the order dismissing Mid-Century.

[¶ 10.] On November 20, 2006, after a telephonic conference, the Department issued a prehearing order to address the issue of Baier's benefits. The order further listed the intended live witnesses, deposition testimony, and medical records. A hearing on Baier's benefits was held on January 4, 2007. On November 14, 2007, the Department issued a letter decision, which set forth Baier's weekly workers' compensation rate, found Baier permanently and totally disabled, and determined that Baier had been unable to secure continuous and suitable employment. The parties were directed to submit proposed findings of fact, conclusions of law, and objections. All parties submitted proposed findings and conclusions, and on December 7, 2007, the Department issued its findings of fact, conclusions of law, and an order in accord with its letter decision.

[¶ 11.] Bituminous appealed to the circuit court. It challenged the Department's August 2, 2006 order, findings of fact and conclusions of law, the June 7, 2006 letter decision finding Bituminous liable for Baier's benefits, the December 7, 2007 order, findings of fact and conclusions of law, and the November 14, 2007 letter decision, finding Baier permanently and totally disabled. In response, Baier asserted that the circuit court did not have jurisdiction to consider the appeal because Bituminous failed to timely appeal from the Department's August 2, 2006 order and its June 7, 2006 letter decision. Mid-Century moved to be dismissed from the appeal based on the Department's order dismissing Mid-Century from the action.

[¶ 12.] Following oral arguments, the circuit court issued a letter decision affirming the Department's ruling that Bituminous is responsible for Baier's workers' compensation benefits, and finding that Baier is permanently and totally disabled. The court further ruled that Bituminous had timely appealed from the Department's June 7, 2006 decision and August 2, 2006 order. The court denied Mid-Century's motion to dismiss. Bituminous now appeals to this Court asserting that Baier did not meet his burden to show that Bituminous was liable under the last injurious exposure rule, and Baier failed to prove that he is permanently and totally disabled. Baier submitted one issue on notice of review: whether Bituminous's appeal on compensability was timely.¹

Analysis and Decision

I.

[¶ 13.] Before we address the substantive issues, we must first resolve certain jurisdictional and procedural questions. Baier and Mid-Century contend that Bituminous's appeal to the circuit court, from the Department's June 7, 2006 decision and August 2, 2006 order, was untimely. Mid-Century further asserts that because Bituminous did not appeal the Department's September 28, 2006 order dismissing Mid-Century as a party, Bituminous is prohibited from claiming that Mid-Century is liable for Baier's benefits....