Hoesli v. Triplett, Inc.

• Citation: 361 P.3d 504
• Decision Date: 20 November 2015
• Docket Number: No. 109,448.,109,448.
• Parties: Douglas K. HOESLI, Appellant/Cross-appellee, v. TRIPLETT, INC. and Federated Mutual Insurance Company, Appellees/Cross-appellants.
• Court: United States State Supreme Court of Kansas

361 P.3d 504

Douglas K. HOESLI, Appellant/Cross-appellee,

v.TRIPLETT, INC. and Federated Mutual Insurance Company, Appellees/Cross-appellants.

No. 109,448.

Supreme Court of Kansas.

Nov. 20, 2015.

Jan L. Fisher, of McCullough, Wareheim & LaBunker, of Topeka, argued the cause and was on the briefs for appellant/cross-appellee.

Dallas L. Rakestraw, of McDonald, Tinker, Skaer, Quinn & Herrington, P.A., of Wichita, argued the cause, and Vincent A. Burnett, of the same firm, was with him on the briefs for appellees/cross-appellants.

Opinion

The opinion of the court was delivered by BILES, J.:

Under the Kansas Workers Compensation Act, K.S.A. 44–501 et seq.,an injured worker's compensation must be reduced by any social security retirement benefits received by that worker, subject to certain limitations. K.S.A.2010 Supp. 44–501(h). But Kansas courts have limited this statutory offset and permitted already-retired claimants, who were working simply to supplement their social security at the time of injury, full workers compensation. See Dickens v. Pizza Co., Inc.,266 Kan. 1066, 1071, 974 P.2d 601 (1999). These prior cases adopting the exception relied upon a belief that the offset's purpose was to prevent duplicative wage-loss benefits and that workers compensation was not duplicative when an injured worker's wages were in addition to social security benefits already being received. 266 Kan. at 1071, 974 P.2d 601. The question in this case is whether that reasoning is valid given the statute's actual text.

As explained below, we hold that Dickensmust be overruled because its foundation rests on what was viewed as the legislature's subjective intent rather than conforming to the statutory language and correctly applying our longstanding caselaw for statutory interpretation. We reverse the Court of Appeal because it followed Dickensand its progeny. See Hoesli v. Triplett, Inc.,49 Kan.App.2d 1011, 1023, 321 P.3d 18 (2014); see also Snider v. American Family Mut. Ins. Co.,297 Kan. 157, 168, 298 P.3d 1120 (2013)(Court of Appeals duty bound to follow Kansas Supreme Court precedent, absent some indication the Kansas Supreme Court is departing from its previous position).

Factual and Procedural Background

Douglas K. Hoesli, a full-time maintenance worker with Triplett, Inc., was injured in a workplace accident for which he is entitled to workers compensation. Prior to his injury, Hoesli was receiving social security retirement benefits and earning additional employment income without a reduction in his social security because he had reached full retirement age. See 42 U.S.C. § 403(f)(8)(E) (2012). As a result of his work-related injury, Hoesli's workers compensation was determined to be $341.08 a week. The weekly equivalent of his social security retirement benefits was $420.

At the administrative level, controversy ensued over whether state law required Hoesli's workers compensation to be reduced by his social security retirement benefits because of the offset statute, K.S.A.2010 Supp. 44–501(h). It provides:

“If the employee is receiving retirement benefits under the federal social security act or retirement benefits from any other retirement system, program or plan which is provided by the employer against which the claim is being made, any compensation benefit payments which the employee is eligible to receive under the workers compensation act for such claim shall be reduced by the weekly equivalent amount of the total amount of all such retirement benefits,less any portion of any such retirement benefit, other than retirement benefits under the federal social security act, that is attributable to payments or contributions made by the employee, but in no event shall the workers compensation benefit be less than the workers compensation benefit payable for the employee's percentage of functional impairment.” (Emphasis added.) K.S.A.2010 Supp. 44–501(h).

Based on the italicized language, the administrative law judge (ALJ) ruled the employer could use Hoesli's social security benefits to offset its workers compensation obligation. The ALJ awarded Hoesli payment for his permanent partial general disability only to the extent of his 13% functional impairment, or 53.95 weeks of benefits, because the weekly equivalent amount of Hoesli's social security benefits exceeded his weekly workers compensation. This adjustment was based on the statutory limitation that the offset must not be less than the benefits payable for the percentage of functional impairment resulting from the injury. See K.S.A.2010 Supp. 44–501(h). The ALJ also awarded Hoesli 12 weeks of benefits for his temporary total disability. The Workers Compensation Board affirmed the ALJ's award, and both parties appealed to the Court of Appeals.

In that court, Hoesli argued the Board's permanent partial disability award was wrong because the offset statute did not apply and he should receive both streams of income, i.e.,workers compensation and the social security retirement benefits in full, based on the reasoning underlying Dickens.Alternatively, Hoesli argued offsetting his workers compensation payments would violate the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution because the offset was not rationally related to the statute's purpose of preventing duplicative recovery of wage-loss benefits. In a cross-appeal, Triplett challenged the Board's refusal to address its claim that the ALJ erred by failing to apply the offset to Hoesli's temporary total disability benefits.

The Court of Appeals reversed the Board's offset, holding K.S.A.2010 Supp. 44–501(h)does not apply when the claimant has reached full retirement age under the Social Security Act and was already receiving social security retirement benefits at the time of injury. Hoesli,49 Kan.App.2d at 1023, 321 P.3d 18. The panel declined to address Hoesli's alternative constitutional claim because it had reversed the Board's offset. 49 Kan.App.2d at 1023, 321 P.3d 18. The panel further held that Triplett failed to preserve for appeal its challenge to Hoesli's temporary total disability award. 49 Kan.App.2d at 1027, 321 P.3d 18.

Triplett petitioned this court for review of the panel's interpretation of the offset statute, which we granted. Hoesli did not cross-petition for review of the panel's decision declining to reach the merits of his constitutional claim. Jurisdiction is proper under K.S.A. 60–2101(b)(review of Court of Appeals decisions).

Offset Is Required by K.S.A.2010 Supp. 44–501(h)

Triplett argues K.S.A.2010 Supp. 44–501(h)'s plain language requires an offset without exception and urges us to overrule the prior caselaw creating an exception. Hoesli argues we must continue to follow this court's precedent and interpret that statute to include an exception in circumstances like his based on the principles underlying federal Social Security law. See Senior Citizens' Freedom to Work Act of 2000, Pul. L. 106–182; 42 U.S.C. §§ 402–403 (2012). He also argues this interpretation is necessary to avoid an unconstitutional result.

Standard of Review

The Workers Compensation Board's decision is subject to appellate review under the Kansas Judicial Review Act, K.S.A. 77–601 et seq.K.S.A.2014 Supp. 44–556(a). Relief may be granted if the Board erroneously interpreted or applied the law. K.S.A.2014 Supp. 77–621(c)(4). Whether the Board properly interpreted and applied K.S.A.2010 Supp. 44–501(h)is a question of law subject to de novo review. See Whaley v. Sharp,301 Kan. 192, 196, 343 P.3d 63 (2014).

Discussion

When a statute is plain and unambiguous, a court must give effect to its express language, rather than determine what the law should or should not be. Graham v. Dokter Trucking Group,284 Kan. 547, 554, 161 P.3d 695 (2007). We determine legislative intent by first applying the meaning of the statute's text to the specific situation in controversy. See State v. Phillips,299 Kan. 479, 495, 325 P.3d 1095 (2014)(first task in construing statute is to ascertain legislative intent through analysis of language employed, giving ordinary words their ordinary meanings). A court does not read into the statute words not readily found there. Whaley,301 Kan. at 196, 343 P.3d 63; Graham,284 Kan. at 554, 161 P.3d 695; see Casco v. Armour Swift–Eckrich,283 Kan. 508, 525, 154 P.3d 494 (2007). When the language is unclear or ambiguous, the court employs the canons of statutory construction, consults legislative history, or considers other background information to ascertain the statute's meaning. Whaley,301 Kan. at 196, 343 P.3d 63.

In this case, we must also consider the doctrine of stare decisis because our prior caselaw interpreting the statutory provision is at issue. This doctrine instructs that points of law established by a court are generally followed by the same court and courts of lower rank in later cases in which the same legal issue is raised. Rhoten v. Dickson,290 Kan. 92, 112, 223 P.3d 786 (2010). But the doctrine is not unyielding. A court is not “inexorably bound by its own precedent.” It can overrule prior caselaw when: (1) it is clearly convinced a rule of law established in its earlier cases was originally erroneous or is no longer sound because of changing conditions and (2) more good than harm will come by departing from precedent. 290 Kan. at 112, 223 P.3d 786.

In this instance, Triplett argues the Dickenscourt erroneously interpreted the statute and that subsequent caselaw has carried the error forward. This argument has been made to the Court of Appeals before. See Jones v. Securitas Sec. Services,No. 105,414, ––– Kan.App.2d ––––, 2011 WL 6311105, at *3 (Kan.App.2011)(unpublished opinion) (rejecting argument that Dickensshould be reconsidered in light of trend of plain language statutory interpretation applied to Workers Compensation Act by Kansas Supreme Court).

In Hoesli's case, the panel acknowledged the plain language of K.S.A.2010 Supp. 44–501(h)provides that its setoff provision applies...