Employers' Reinsurance Fund v. Industrial Com'n of Utah, 920141-CA

• Decision Date: 18 June 1993
• Docket Number: No. 920141-CA,920141-CA
• Citation: 856 P.2d 648
• Parties: EMPLOYERS' REINSURANCE FUND, Petitioner, v. INDUSTRIAL COMMISSION OF UTAH; and Robert L. Seitz, Respondents.
• Court: Utah Court of Appeals

Page 648

856 P.2d 648

EMPLOYERS' REINSURANCE FUND, Petitioner, v. INDUSTRIAL COMMISSION OF UTAH; and Robert L. Seitz, Respondents.

No. 920141-CA.

Court of Appeals of Utah.

June 18, 1993.

Erie V. Boorman, Salt Lake City, for petitioner.

Benjamin A. Sims, Salt Lake City, for respondent Indus. Com'n of Utah.

Virginius Dabney, Salt Lake City, for respondent Robert L. Seitz.

Before Judges BENCH, BILLINGS and RUSSON.

BENCH, Judge:

Employers' Reinsurance Fund petitions for review of the final order of the Industrial Commission granting lifetime permanent total disability benefits to Robert Seitz for an accident occurring in 1948. We affirm.

FACTS

On July 28, 1948, Mr. Seitz was injured in a tragic industrial accident where his legs were severed several inches above the knees. Mr. Seitz was off work for approximately eight months while undergoing extensive medical treatment.

On August 27, 1948, the Industrial Commission entered an order, finding that:

Robert Seitz ... was injured by accident arising out of or in the course of his employment by the Utah Fuel Company on July 28, 1948, in which he sustained the loss of both legs above the knees, thereby suffering permanent total disability; it further appearing that Robert Seitz is entitled to the maximum amount of $8,500.00 for permanent total disability covering the loss of both legs, as provided by Section 42-1-63, Utah Code Annotated 1943, as amended 1945.

The Commission then ordered that Mr. Seitz's employer pay him workers' compensation "until the amount of $8,500 has been paid." In the ensuing years, Mr. Seitz's employer paid the entire $8,500. Mr. Seitz returned to work as a dispatcher and retired in 1976.

In July 1990, Mr. Seitz submitted to the Industrial Commission an application wherein he sought additional workers' compensation benefits. Mr. Seitz alleged that he was owed additional benefits from the Employers' Reinsurance Fund (the Fund) due to amendments to the Workers' Compensation Act. An administrative law judge (ALJ), heard the application for additional benefits. The ALJ ruled that when the Workers' Compensation Act was amended in 1977, the legislature "specifically intended to include [Mr. Seitz] and others similarly situated on the Employers Reinsurance Fund ... permanent total disability payroll." The ALJ further stated that "to take the approach urged by the [Fund], the applicant would have only been entitled to receive $8,500.00 for the statutory permanent total disability sustained as the result of the industrial accident, and no other benefits." The ALJ pointed to the 1977 amendment as evidence of the legislature's intent to "correct an injustice and insure[ ] that all permanent total disability claimants would be treated equally, especially considering that workers compensation is [Mr. Seitz's] exclusive remedy for his tragic injury."

The Fund filed a motion for review with the Industrial Commission. The Commission upheld the ALJ's Order, ruling that the 1977 amendment of the Workers' Compensation Act evidenced the legislature's intent to "include [Mr. Seitz] and others similarly situated on the Employers' Reinsurance Fund/'special fund' permanent total disability payroll." The Commission's order then required the Fund to add Mr. Seitz to the permanent total disability payroll, effective as of May 10, 1977. The Commission further ordered that Mr. Seitz be paid the accrued amount in a lump sum, including interest at 8% per annum. This petition for review followed.

STANDARD OF REVIEW

At issue in this case is the Industrial Commission's interpretation of specific language in the Workers' Compensation Act and various amendments to the Act beginning in 1945. ¹ Under Utah Code Ann. § 63-46b-16(4)(d) (1989), we may grant relief from an agency action if the agency "has erroneously interpreted or applied the law." See Belnorth Petroleum v. State Tax Commission, 845 P.2d 266, 268 (Utah App.), cert. filed, No. 930068-SC (Utah Feb. 11, 1993). "We review statutory interpretations by agencies for correctness, giving no deference to the agency's interpretation, unless the statute grants to the agency the discretion to interpret the statute." Ferro v. Department of Commerce, 828 P.2d 507, 510 (Utah App.1992) (citing Morton Int'l, Inc. v. State Tax Comm'n, 814 P.2d 581, 588 (Utah 1991)). ²

A legislative grant of discretion to an agency to interpret a statute may be either explicit or implicit. Morton, 814 P.2d at 589; accord Chevron v. State Tax Comm'n, 847 P.2d 418, 419 (Utah App.1993); Belnorth, 845 P.2d at 268; Ferro, 828 P.2d at 510. An explicit statutory grant of discretion to an agency only occurs when the legislature directs the agency to interpret a given statutory term by rule. Chevron, 847 P.2d at 419-20; accord Belnorth, 845 P.2d at 268. ³ There is no explicit statutory grant of discretion to the Commission to interpret the statutory language in question.

In the absence of an explicit grant of discretion, we look to see whether the statutory language implicitly grants the agency discretion to interpret the law. To determine whether there has been an implicit grant of discretion, we first must determine whether the statutory language in question is ambiguous. Ferro, 828 P.2d at 510 (if a statute is ambiguous, there may be an implicit grant of discretion). In Ferro, this court clarified the proper method of determining whether there is an implicit grant of discretion:

If a statute is ambiguous, ... we apply traditional rules of statutory construction under the assumption that the Legislature was operating under such rules. We also assume that the Legislature expected the agency to likewise apply the traditional rules of statutory interpretation. No deference is therefore given to the agency's interpretation if an otherwise ambiguous statute may be interpreted in accordance with traditional rules of interpretation. See Morton at 589.

If, however, a traditional analysis of the statute does not resolve the ambiguities and "there is no discernable legislative intent concerning a specific issue[,] the Legislature has, in effect, left the issue unresolved. In such a case, it is appropriate to conclude that the Legislature has delegated authority to the agency to decide the issue." Id. We assume that the Legislature expected the agency to use its expertise in choosing between the possible permissive interpretations. Id. The choice of interpretations in such cases is therefore viewed as a policy decision by the agency to which we give deference. Id.

Ferro, 828 P.2d at 510-11. ⁴

In the present case, the statutory language, when considered in light of the remainder of the Act and the legislative history, is ambiguous. See Stevensen v. Monson, 856 P.2d 355, 357 (Utah App.), cert. filed, No. 930211-SC (Utah May 5, 1993) (plain meaning governs unless the Act "considered in para materia with other acts, or with the legislative history of the subject matter, imports a different meaning.") (quoting Sutherland Statutory Construction § 46.01 (5th ed. 1992). Since we can resolve the ambiguity by applying traditional rules of statutory construction, there is no grant of implicit discretion to the agency. We therefore apply a correction-of-error standard to the Commission's interpretation. See Ferro, 828 P.2d at 510.

STATUTORY BACKGROUND

Since the Workers' Compensation Act and its various amendments since 1945 are critical to our analysis we briefly review its history relevant to the case before us.

Prior to 1945, individuals who were permanently and totally disabled on the job were entitled to lifetime benefits paid by their employer. See 1939 Utah Laws ch. 51, § 1. In 1945, the Act was amended and lifetime benefits were replaced with maximum benefits to be paid by the employer. The 1945 version of the Act, which was in force when Mr. Seitz was injured, expressly limited the employer's liability to $8,500. It provided, in pertinent part:

In cases of permanent total disability, the award shall be 60 per cent of the average weekly wages for five years from date of injury, and thereafter 45 per cent of such average weekly wages but not to exceed a maximum of $22.50 per week, plus 5 per cent of such award for each dependant minor child under the age of eighteen years, up to a maximum of five such dependant minor children and not less than $10.00 per week, provided, however, that in no case of permanent total disability shall more than $8,500.00 be required to be paid. The loss, or permanent and complete loss of use, of both hands or both arms, or both feet or both legs, or both eyes, or of any two thereof, shall constitute total and permanent disability, to be compensated according to the provisions of this section.

1945 Utah Laws ch. 65, § 1.

In 1949, the legislature amended the Act and restored lifetime benefits to permanently and totally disabled employees. See 1949 Utah Laws ch. 52, § 1. The amendment retained the limitation on the employers' liability and provided that the Fund (then called the "special fund") pay lifetime benefits once the employer or the employer's insurance company had paid the maximum amount the employer was required by law to pay.

In 1971, the legislature amended the Act to provide as follows:

Commencing July 1, 1971, all persons who are permanently and totally disabled and now receiving compensation benefits from the special fund provided for by Section 35-1-68 shall be paid compensation benefits at the rate of $44 per week. This section shall apply to all persons permanently and totally disabled who are now receiving or hereafter become entitled to receive compensation benefits from the special fund.

1971 Utah Laws ch. 76, § 6. The plain language of the amendment increased the dollar amount of the benefits for permanently and totally disabled persons who were receiving benefits from the special fund at the time of the amendment.

In 1974, the legislature again amended the Act to provide as follows:

Commencing...