Inwards v. N. Dakota Workforce Safety & Ins.

• Decision Date: 31 July 2014
• Docket Number: No. 20140015.,20140015.
• Citation: 2014 ND 163,851 N.W.2d 693
• Court: North Dakota Supreme Court
• Parties: Kathy INWARDS, Appellant v. NORTH DAKOTA WORKFORCE SAFETY & INSURANCE, Appellee.

851 N.W.2d 693

2014 ND 163

Kathy INWARDS, Appellant

v.NORTH DAKOTA WORKFORCE SAFETY & INSURANCE, Appellee.

No. 20140015.

Supreme Court of North Dakota.

July 31, 2014.

Stephen D. Little, Bismarck, N.D., for appellant.

Shanon M. Gregor, Special Assistant Attorney General, Fargo, N.D. for appellee.

KAPSNER, Justice.

[¶ 1] Kathy Inwards appeals from a judgment reversing an administrative law judge's (“ALJ”) decision requiring Workforce Safety & Insurance (“WSI”) to continue providing her disability and rehabilitation benefits. We conclude the ALJ erred as a matter of law in ruling Inwards had good cause for failing to comply with a retraining program because WSI's previous order requiring Inwards to participate in the retraining program had been appealed and had not been finally resolved at the time she withdrew from the retraining program. We affirm the district court judgment reversing the ALJ's decision and reinstating WSI's order of noncompliance.

I

[¶ 2] In 2004, Inwards was injured while employed as an assembler by Bobcat. WSI accepted liability for her claim and awarded Inwards vocational rehabilitation benefits to assist her in returning to work. In early June 2011, WSI issued a notice of intention to discontinue benefits (“NOID”) stating Inwards' temporary total disability benefits would end on July 4, 2011, and would convert to retraining benefits, and she had 30 days to request reconsideration of the decision. WSI issued a formal order on June 27, 2011, requiring Inwards to “enter into training at Hutchinson Community College, Hutchinson, Kansas, in the Business Management & Entrepreneurship AAS program.” On June 28, 2011, Inwards requested reconsideration of the vocational rehabilitation plan, but attended two college courses during the summer of 2011 in accordance with the plan.

[¶ 3] Inwards complained to her physician that she was having increased pain as a result of her course work. Although Inwards registered for fall courses at the college, she withdrew from them on August 18, 2011. On October 21, 2011, WSI issued a NOID to Inwards stating “[t]here is no medical evidence that supports your professed inability to attend the classes as outlined in the administrative order dated June 27, 2011. You are now considered to be in non-compliance with vocational rehab.” Inwards timely requested reconsideration of this NOID, and on January 13, 2012, WSI issued a formal order suspending Inwards' rehabilitation benefits based on her noncompliance with the rehabilitation plan. Inwards timely requested a hearing to challenge WSI's finding of noncompliance and suspension of benefits.

[¶ 4] On February 25, 2012, the ALJ affirmed WSI's June 27, 2011 order awarding retraining benefits, ruling WSI “demonstrated by a preponderance of the evidence that retraining is the first appropriate rehabilitation option” for Inwards. Inwards requested reconsideration, but the ALJ denied the request in an order dated May 11, 2012. Inwards did not appeal to the district court from the denied reconsideration.

[¶ 5] The hearing on Inwards' challenge to WSI's January 13, 2012 order denying her further rehabilitation benefits was held on December 12, 2012. The issue was whether Inwards had good cause for terminating her college training program. At the conclusion of the hearing, the ALJ requested the parties to submit briefs addressing whether WSI had authority to issue an order of noncompliance with vocational rehabilitation when the rehabilitation plan itself has been appealed and a final decision affirming or reversing the plan has not been issued. After receiving the briefs, the ALJ reversed WSI's January 13, 2012 order suspending benefits for noncompliance with the vocational rehabilitation plan. The ALJ reasoned:

3. Here the evidence shows that Ms. Inwards' physician told her she should not pursue a career in computers and should not be going to school for that kind of career. Normally that would be good cause to stop attending classes. However, the record also shows that Ms. Inwards' physicians were misled by information provided by Ms. Inwards. Ms. Inwards should have been aware that her physicians did not have all of the pertinent information when they concluded she should not attend school because it was she who gave them the information. Because the basis of the physician's determination was created by faulty or incomplete information provided by Ms. Inwards, she does not have good cause to rely upon the physicians' decisions to refuse to attend the training.

....

6. Ms. Inwards' appeal of the order was a timely, and statutorily allowed challenge to the June 27, 2011, order. That order did not become final until the administrative law judge denied Ms. Inwards' request for reconsideration on May 11, 2012.

7. WSI has pointed to no statute or case law that required Ms. Inwards to comply with a non-final order during the pendency of an appeal. A reasonably prudent person would refuse to attend vocational training while their appeal was being resolved. Here the law does not permit WSI to enforce an order that is not final, Ms. Inwards had a statutory right to appeal the order and WSI's January 13, 2012, order to enforce its June 27, 2011, order was premature. These circumstances constitute good cause not to comply with the order. Ms. Inwards behaved as a reasonably prudent person when she stopped attending the VCR [vocational consultant's report] she was appealing.

8. Although she did not have good cause in the form of a medical reason not to pursue the training, Ms. Inwards has demonstrated that because she had appealed the order and it was not final or enforceable, she did have good cause not to attend the training while her appeal was pending. Therefore WSI's January 13, 2012, order suspending benefits for non-compliance must be reversed.

[¶ 6] WSI appealed to district court and Inwards moved to dismiss the appeal, claiming the court lacked subject matter jurisdiction because WSI failed to serve the notice of appeal and specification of errors on Inwards and her employer. The court denied the motion to dismiss, concluding Inwards had no standing to object to defective service on her employer and there was good cause to excuse WSI's mistake about recently mandated court electronic filing requirements. The court reversed the ALJ's decision, concluding the finding of good cause was “not supported by law,” and reinstated WSI's January 13, 2012 order of noncompliance.

II

[¶ 7] Inwards argues the district court erred in refusing to dismiss WSI's appeal because the court lacked subject matter jurisdiction.

A

[¶ 8] Inwards argues the district court should have dismissed the appeal because WSI failed to properly serve her with the notice of appeal and specification of errors.

[¶ 9] Appeals to the district court from decisions in administrative proceedings are statutory in nature and are not matters of original jurisdiction, but involve the exercise of appellate jurisdiction conferred by statute. See Benson v. Workforce Safety and Ins., 2003 ND 193, ¶ 5, 672 N.W.2d 640. For the court to have subject matter jurisdiction over an appeal, the appellant must satisfy the statutory requirements for perfecting the appeal. See Carroll v. North Dakota Workforce Safety & Ins., 2008 ND 139, ¶ 11, 752 N.W.2d 188. One of those requirements under N.D.C.C. § 28–32–42(4) is that the appellant must timely serve the notice of appeal upon all parties to the proceeding. Benson, at ¶ 6. This Court has approved the use of service under N.D.R.Civ.P. 5 for service of a notice of appeal from an administrative agency's decision upon a party or a party's attorney. See Reliance Ins. Co. v. Public Serv. Comm'n, 250 N.W.2d 918, 921 (N.D.1977); see also City of Casselton v. North Dakota Pub. Serv. Comm'n, 307 N.W.2d 849, 852 (N.D.1981). While N.D.R.Civ.P. 4 controls service of process, which generally involves a summons and complaint, N.D.R.Civ.P. 5 governs service of papers other than process. See Mid–Dakota Clinic, P.C. v. Kolsrud, 1999 ND 244, ¶ 18, 603 N.W.2d 475.

[¶ 10] On April 15, 2013, this Court's amendments to N.D.R.Ct. 3.1 and 3.5 mandating electronic filing and service became effective. See Order of Adoption, No. 20130104 (April 11, 2013). Rule 3.5(e)(1), N.D.R.Ct., provides that “[a]ll documents filed electronically after the initiating pleadings must be served electronically through the Odyssey® system,” and N.D.R.Ct. 3.5(e)(3) provides that “[a]ll attorneys must provide at least one e-mail address to the State Board of Law Examiners for accepting electronic service.” Rule 3.5(f), N.D.R.Ct., further provides that “[o]n a showing of good cause, the court may grant appropriate relief if electronic filing or electronic service was not completed due to technical problems.”

[¶ 11] On April 23, 2013, WSI's counsel filed a notice of appeal and specification of errors with the district court and attempted to electronically serve the documents on Inwards' counsel. The certificate of electronic service indicated the notice of appeal and specification of errors had been served electronically on Inwards' counsel, and the clerk of court's emailed notice of assignment and case number were sent to counsel on April 23, 2013. However, none of these documents were electronically served on Inwards' counsel. Inwards' counsel first learned of the appeal on May 20, 2013, when he was served with the certified record. WSI's counsel first learned of the lack of actual service when Inwards moved to dismiss the appeal on June 12, 2013. WSI's counsel then electronically served the notice of appeal and specification of errors on Inwards' counsel on June 13, 2013.

[¶ 12] WSI's counsel argues it is unclear whether the notice of appeal and specification of errors could have been served through Odyssey on April 23, 2013, or whether she selected the wrong filing event, “Efile” rather than “Efile and Serve.” WSI's counsel argues the failure of the clerk of court's...