Brannon v. Pike

• Decision Date: 09 April 1987
• Docket Number: No. 16396,16396
• Citation: 737 P.2d 459,112 Idaho 938
• Parties: Charles BRANNON, Plaintiff-Appellant, v. Emil F. PIKE, Jr., Defendant-Respondent, and Idaho Special Indemnity Fund, Defendant.
• Court: Idaho Supreme Court

Page 459

737 P.2d 459

112 Idaho 938

Charles BRANNON, Plaintiff-Appellant, v. Emil F. PIKE, Jr., Defendant-Respondent, and Idaho Special Indemnity Fund, Defendant.

No. 16396.

Supreme Court of Idaho.

April 9, 1987.

Patricia D. Gaw, Wendell, for plaintiff-appellant.

John W. Barrett and Thomas V. Munson, Boise, for defendant-respondent.

HUNTLEY, Justice.

This appeal presents the issue of whether the Idaho Industrial Commission or the district court has jurisdiction to hear a claim by a client against his attorney for alleged breach of contract of representation in a workers' compensation claim.

Subsequent to the disposition of his workers' compensation claim before the Industrial Commission, Charles Brannon filed a complaint in district court against Emil Pike, his former attorney, alleging breach of contract and fraudulent alteration of the attorney employment contract. Brannon had hired Pike to represent him in a workers' compensation action against Brannon's employer. Brannon alleges that he and Pike had orally agreed that Pike would take 10% of Brannon's recovery as his fee, and that Pike, without authorization from Brannon to do so, made alterations in the written attorney employment contract to provide that Pike would be paid 33 1/3% of the Brannon recovery claiming that a lesser percentage had been agreed upon when he signed the contract.

Pike filed a motion to dismiss for lack of jurisdiction over the subject matter, urging that the Industrial Commission has exclusive jurisdiction to decide this claim. The district court granted the motion to dismiss, holding that the Industrial Commission was vested with exclusive jurisdiction pursuant to I.C. §§ 72-803, -804, -201, -210, -733 and -735. Brannon appeals.

At the outset, we note that no statute or case law is specifically on point or controlling in this matter. Instead, we have for guidance only the general statutory scheme embodied in the workers' compensation law.

The Idaho Industrial Commission is vested with original and exclusive jurisdiction over the entire field of personal injury claims against employers arising out of employment by virtue of I.C. § 72-201. ¹ (See also, Johnson v. Falen, 65 Idaho 542, 149 P.2d 228 (1944).) Admittedly, the resolution of this claim by a client against his attorney for breach of contract arising out of a workers' compensation claim is a matter ancillary to the general field of compensation claims against employers. However, portions of the workers' compensation statutes indicate legislative intent that it is the Industrial Commission, and not the district court, which has jurisdiction where a dispute arises between the client-claimant and his attorney. I.C. § 72-803 reads: "Claims of attorneys and claims for medical services and for medicine and related benefits shall be subject to approval by the commission." Brannon argues that I.C. § 72-803, while granting the commission exclusive jurisdiction over claims of attorneys arising out of workers' compensation claims, does not grant jurisdiction over disputed claims of clients against the attorneys representing them in the particular context here involved. However, such a narrow reading of I.C. § 72-803 would lead to the multifarious treatment of substantially similar claims. We cannot conclude that such was the intent of the legislature.

Additionally, I.C. § 72-804 provides that, under certain circumstances, an employee claimant is to be awarded attorney fees from an employer not dealing in good faith with the claim. Such an award is determined by the Industrial Commission. I.C. § 72-210 further provides for attorney fees when an employer has failed to secure insurance as mandated by law. These code sections evince a general legislative scheme whereby attorney fee issues closely related to the substance of the workers' compensation claims are to be resolved by the Industrial Commission.

It is also well-established that the Industrial Commission is vested with jurisdiction over general claims of fraud occurring in the workers' compensation context. I.C. § 72-719(1)(b); Fountain v. T.Y. and Jim Hom, 92 Idaho 928, 453 P.2d 577 (1969). ²

Moreover, the workers' compensation law grants to the district courts only very limited powers to enforce the collection of Industrial Commission awards. I.C. § 72-735. Further, I.C. § 72-733 indicates that the district courts have no authority to disturb the decisions of the Industrial Commission and further admonishes the district courts not to "restrain or interfere with ... the [Industrial Commission's] performance of its duties."

Brannon cites several non-persuasive authorities in an effort to bolster his assertion that jurisdiction must lie with the district court. Without exception, each case cited by Brannon has no application to the case at hand. Brannon cites Whitney v. Randall, 58 Idaho 49, 70 P.2d 384 (1937), as authority for the proposition that the district court has jurisdiction over this matter. Whitney, supra, involved an action to quiet title, with the issue being whether the district court or the probate court had jurisdiction to decide the competency of the seller. Like the trial court before us, we can discern no relevance of Whitney to the instant case. Brannon next cites to State v. Finch, 79 Idaho 275, 315 P.2d 529 (1957). As with Whitney, Finch casts no light upon the resolution of the instant matter. In Finch, we held that where the Dredge Mining Protection Act contained no valid provision for appeal from an order of the Board of Land Commissioners regarding a defendant's property rights, defendant's due process rights were violated. As neither the method nor the availability of appeal is at issue in the instant case, the holding in Finch is not on point.

Next, Brannon cites a trio of cases which, arguably, have some relevance: Martin v. Argonaut Insurance Co., 90 Idaho 107, 408 P.2d 475 (1965); Thompson v. Liberty National Insurance Co., 78 Idaho 381, 304 P.2d 910 (1956); Hancock v. Halliday, 65 Idaho 645, 150 P.2d 137 (1944). In Martin, supra, and Thompson, supra, we held that the Industrial Commission had no jurisdiction to decide whether there existed valid insurance coverage as between the employer and the putative insurance carrier. In Hancock, supra, the employee was allowed to pursue in district court a claim of negligence against doctors who had treated him subsequent to an industrial accident. While the employee's claim against his employer was subject to the exclusive jurisdiction of the Industrial Commission, we noted that "[t]he condition complained of is not the proximate result of the accident, but it is the proximate result of the negligent act of the physicians who treated the injury." 65 Idaho at 652, 150 P.2d at 144. We further noted that an opposite conclusion "... would permit the wrongdoer to go practically unscathed for grievous damage to another, and would likewise sentence the workman to a lifetime of drear and hopeless existence through inability to work and live a normal life, because of a maimed body, with his only compensation limited to a sum totally inadequate to cover his sustained losses." 65 Idaho at 652, 150 P.2d at 144.

The instant case does not implicate the policy concerns found in Hancock. Here, Brannon's ability to gain meaningful relief will not be jeopardized in Industrial Commission proceedings. Additionally, we note that each of the claims litigated in Martin, Thompson and Hancock were unrelated claims as between the client-claimant and his attorney in a true sense, requiring adjudication of claims involving third parties. Also, the district court was available as an appropriate forum for determination of insurance coverage at least in a declaratory judgment context. Critical here is the factor that Brannon's attorney, Pike, is not unrelated to the claimant as is the employer's surety. Both the employee and his attorney are from the outset subjected to the jurisdiction of the commission.

We also note that Heese v. A & T Trucking, 102 Idaho 598, 635 P.2d 962 (1981), cited by both Brannon and Pike, is of little help in resolving this matter. In Heese, we held that the Industrial Commission did not, and did not need to, resolve the issue of whether a valid insurance contract existed, holding only that the Industrial Commission did not exceed its jurisdiction by finding that the employer had failed to file a notice of security justifying the imposition of a penalty.

In view of the uniquely broad grant of original and exclusive jurisdiction over workers' compensation matters given to the Industrial Commission, and the fact that I.C. § 72-803 confers upon the commission the jurisdiction to resolve claims for attorney fees, we conclude that there exists a legislative intent that jurisdiction over claims by a client against his attorney arising out of their fee agreement in a workers' compensation case is properly with the Industrial Commission, and not the district court. Accordingly, the trial court's order granting Pike's motion to dismiss for lack of jurisdiction over the subject matter is affirmed. Costs to respondent. No attorney fees on appeal.

SHEPARD, C.J., and DONALDSON, J., concur.

BAKES, J., concurs in the result.

BISTLINE, Justice, not joining the Court's opinion, but concurring in the Court's judgment affirming the district court.

I.

The reason for not joining the Court's opinion is not based on any disagreement with the conclusion that it is the Industrial Commission which should decide the issue. Note may be taken that that has been my view of the law long before this appeal. Almost all of that found in the Court's opinion finds me in agreement.

Now, let it be understood at the outset that if the opinion did not mention Martin and Thompson as standing for the proposition that the Industrial Commission is without jurisdiction to decide an insurance coverage issue as between the employer and the (alleged) surety, Maj. op., 112 Idaho...