Brown v. John Morrell & Co.

• Decision Date: 19 January 1994
• Docket Number: No. 18210,18210
• Parties: William BROWN, Plaintiff and Appellee, v. JOHN MORRELL & COMPANY, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 277

511 N.W.2d 277

William BROWN, Plaintiff and Appellee, v. JOHN MORRELL & COMPANY, Defendant and Appellant.

No. 18210.

Supreme Court of South Dakota.

Argued Sept. 2, 1993.

Decided Jan. 19, 1994.

Bradley G. Bonynge, Sioux Falls, for plaintiff and appellee.

Michael S. McKnight of Boyce, Murphy, McDowell and Greenfield, Sioux Falls, for defendant and appellant.

TUCKER, Circuit Judge.

FACTS

There is no dispute as to the facts. Claimant William Brown (Brown) worked for John Morrell & Company (Morrell) in Sioux Falls, Minnehaha County, South Dakota. Morrell was a self-insurer for the purposes of worker's compensation. On July 10, 1987, while Brown was employed by Morrell, he suffered an injury arising out of and in the course of his employment. This injury consisted of tendonitis in the right and left hands and wrists. Brown's employment duties gradually aggravated his injury until August 8, 1988, when Brown developed bilateral carpal tunnel syndrome. Morrell had actual notice of the injury within thirty days of its occurrence.

Brown received an eight percent impairment rating of each hand from his authorized treating physician. Consistent with the Department of Labor's position concerning permanent partial disability benefits, ^* Morrell paid permanent partial disability benefits to Brown based upon the eight percent medical impairment ratings. Although the parties did not enter into a written agreement, Brown accepted the payment of those benefits.

Brown filed a petition for hearing on March 6, 1992. Between the time that Morrell paid the permanent partial disability benefits based upon the eight percent impairment ratings and the time that Brown filed his petition for hearing, this Court decided Cozine. In his petition Brown sought to recover additional permanent partial disability benefits based upon this Court's decision in Cozine. In other words, Brown sought to recover permanent partial disability benefits in excess of his impairment rating.

After this Court's decision in Cozine, and prior to the filing of Brown's petition for hearing, the Department ruled that Cozine would apply to pre-Cozine injuries only if a petition for hearing had been on file at the time of the Cozine decision. For injuries predating Cozine (April 18, 1990), if no petition for hearing was on file with the Department on that date, the Department's position has been that the Cozine decision does not apply. Hawkins v. John Morrell & Co., H.F. No. 51, 1989/90 slip op. (S.D.Dep't of Labor May 22, 1991).

Brown's injuries occurred prior to April 18, 1990, and no petition for hearing was on file with the Department as of that date. However, in Brown's case the file was not closed and no final settlement had been reached. Despite this crucial fact, based upon the Department's prior rulings, Morrell moved to dismiss Brown's petition for failure to state a claim upon which relief could be granted. The Department granted Morrell's motion and Brown appealed to the circuit court. The circuit court reversed the Department's decision holding that the Department had erroneously applied Cozine. The circuit court remanded the administrative proceeding to the South Dakota Department of Labor Division of Labor and Management for determination of whether benefits, in addition to the medical impairment rating, were recoverable by Brown under SDCL 62-4-6 as interpreted in Cozine. Morrell appeals, alleging the holding in Cozine should have no retrospective application. We affirm the circuit court.

DECISION

I.

Should the decision in Cozine be applied retroactively to

cases not closed or settled.

Standard of Review

In reviewing a decision of an administrative agency, our standard of review is the same as the circuit court. We determine whether the agency's findings of fact are clearly erroneous and whether the law has been correctly applied. Barkdull v. Homestake Mining Co., 317 N.W.2d 417 (S.D.1982) (Barkdull I ). Our review of the circuit court's decision is without any presumption that its decision was correct. Id.

DECISION

This Court previously adopted the factors announced by the U.S. Supreme Court when considering the retroactive application of a decision. Fisher v. Sears, Roebuck & Co., 88 S.D. 1, 214 N.W.2d 85 (S.D.1974) (quoting Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971)). Those criteria are:

"First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied or by deciding an issue of first impression whose resolution was not clearly foreshadowed. Second, it has been stressed that 'we must ... weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.' Finally, we have weighed the inequity imposed by retroactive application, for '[w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the "injustice or hardship" by a holding of nonretroactivity.' "

Fisher, 88 S.D. at 4-5, 214 N.W.2d at 87 (quoting Chevron Oil Co., 404 U.S. at 106, 92 S.Ct. at 355, 30 L.Ed.2d at 306) (citations omitted) (emphasis added).

This Court's decision in Cozine interpreted statutory law; it did not overrule South Dakota precedent. 454 N.W.2d at 552. The decision in Cozine interpreted SDCL 62-4-6 as it applies to the amount of compensation an employee shall receive for the loss of a part of the body or its loss of use, stating:

The clear language of this statute directs that compensation shall be paid for loss of use. Consequently, the hearing examiner must determine if, and to what extent, a claimant has suffered the loss of use of a part of the body. This determination requires more than a mere adoption of a medical evaluation of anatomical impairment.

Id. The hearing examiner in Cozine had ruled that this jurisdiction had not recognized factors other than the permanent physical impairment rating given by the physician in determining the amount of...