Johnson v. Skelly Oil Co., s. 14440

CourtSupreme Court of South Dakota
Citation359 N.W.2d 130
Docket NumberNos. 14440,14446 and 14466,s. 14440
PartiesLuella Mae JOHNSON, Employee, Claimant and Appellant, v. SKELLY OIL COMPANY, A Corporation, Employer, Self-Insurer and Appellee. . Considered on Briefs
Decision Date10 September 1984

Page 130

359 N.W.2d 130
Luella Mae JOHNSON, Employee, Claimant and Appellant,
SKELLY OIL COMPANY, A Corporation, Employer, Self-Insurer
and Appellee.
Nos. 14440, 14446 and 14466.
Supreme Court of South Dakota.
Considered on Briefs Sept. 10, 1984.
Decided Dec. 5, 1984.

Page 131

Ronald L. Schulz of Oviatt, Green, Schulz & Roby, Watertown, for employee, claimant and appellant.

Laird Rasmussen of Moore, Rasmussen, Sabers & Kading, Sioux Falls, for employer, self-insurer and appellee; Douglas N. Papendick, Legal Intern, Sioux Falls, on brief.

WUEST, Acting Justice.

This case involves a claim for worker's compensation benefits. Appellant Luella Mae Johnson (employee) was severely injured in an automobile accident on October 9, 1972. As a result of that accident, she was totally disabled. The matter was previously before this court in Johnson v. Skelly Oil Co., 288 N.W.2d 493 (S.D.1980), wherein it was held that employee's injuries arose out of and in the course of her employment with Skelly Oil Company (employer), and are therefore compensable. Accordingly, the case was remanded to the circuit court with directions to remand it to the South Dakota Department of Labor (Department) for reinstatement of an award of compensation and for a determination of the amount of compensation due employee.

In an order dated March 26, 1980, Department directed employer and self-insurer to pay claimant all permanent disability compensation and medical expenses, pursuant to SDCL 62-4-3 and SDCL 62-4-1; said benefits to accrue as of the date of the accident. It was further ordered that Department retain jurisdiction to determine

Page 132

any dispute regarding the weekly compensation benefits due employee, based on her prior earnings and medical expenses.

An agreement was subsequently reached by employer and employee regarding weekly compensation, monthly home care, and reimbursement for future medical services and supplies. No agreement could be reached as to the rate of reimbursement for mileage or for the payment of outstanding medical and related expenses incurred prior to January 1, 1975. Consequently, on March 8, 1982, in Watertown, South Dakota, Department held a hearing to determine the responsibility for payment of medicals and other items incurred by employee. This hearing was continued to obtain additional testimony through deposition. Additional testimony was obtained and presented to Department and, on April 8, 1983, it entered its decision.

Department determined that employee was entitled to reimbursement for mileage at the rate of twenty-one cents per mile, and she was entitled to interest on those medical items which the supplier of medical services had charged interest upon, or, which were paid by employee or members of her family. Department denied her claim for reimbursement for lodging, meals, and travel expenses incurred by her mother during employee's hospitalization, in the sum of $6,020.80. Department further denied employee's claim for reimbursement for the purchase of a television and tape player, in the sum of $225.00, and for reimbursement for the purchase price of a van, in the sum of $7,281.45.

The decision entered by Department was appealed to circuit court and affirmed with the exception of Department's denial of reimbursement for the cost of the van, in the sum of $7,281.45, which was awarded to employee by the court. Employee appeals to this court from the judgment of the circuit court. Employer appeals from that portion of the judgment awarding employee the sum of $7,281.45 as reimbursement for the van.

Employee petitioned Department for a separate hearing for the allowance of attorney fees, pursuant to SDCL 58-12-3 and SDCL 58-12-3.1. Department denied the request for attorney fees, which denial was appealed to circuit court and judgment was entered affirming Department's denial of attorney fees. Employee also appeals the denial of attorney fees to this court.

The issues in dispute, except the claim for attorney fees, are based upon SDCL 62-4-1, which reads as follows:

The employer shall provide necessary first aid, medical, surgical, and hospital services, or other suitable and proper care including medical and surgical supplies, apparatus, artificial members and body aids during the disability or treatment of an employee within the provisions of this title. Repair or replacement of damaged prosthetic devices, hearing aids, prescription eyeglasses, eyeglass frames, contact lenses and dentures shall be considered a medical service, under this section, if such devices were damaged or destroyed in an accident which also causes other injury which is compensable under this law. The employee may elect to secure his own physician, surgeon, or hospital services at his own expense.


Before we address ourselves to the issues on appeal, we first address the proper scope of review on appeal. When the issue is a question of law, the decisions of the administrative agency and the circuit court are fully reviewable. Matter of Change of Bed Category of Tieszen, 343 N.W.2d 97 (S.D.1984); Nash Finch Co. v. South Dakota Dept. of Rev., 312 N.W.2d 470 (S.D.1981). When the issue is a question of fact, we ascertain whether the administrative agency was clearly erroneous. Matter of S.D. Water Mgmt. Bd., 351 N.W.2d 119 (S.D.1984); State, Div. of Human Rights v. Miller, 349 N.W.2d 42 (S.D.1984).


Appellant contends that the Department and the circuit court erred when they failed

Page 133

to grant employee's request for reimbursement of interest on all unpaid medical bills, as well as other expenditures from and after the date of their being incurred. We agree.

The empowering statute for prejudgment interest is SDCL 21-1-11, which provides:

Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor, from paying the debt.

Thus, under this statute, prejudgment interest may be allowed if (1) the damages are certain or capable of being made certain by calculation; and (2) the right to recover vested on a particular day. See Aetna Casualty and Surety Company v. United States, 365 F.2d 997 (8th Cir.1966); American Property Services v. Barringer, 256 N.W.2d 887 (S.D.1977); State v. Ed Cox and Son, 81 S.D. 165, 132 N.W.2d 282 (1965).

We interpreted SDCL 21-1-11 in Beka v. Lithium Corporation of America, 77 S.D. 370, 375, 92 N.W.2d 156, 159 (1958), and held:

The mere fact that the claim is disputed does not defeat the allowance of interest. Corcoran v. Halloran, 20 S.D. 384, 107 N.W. 210 [1916]. As applied to this case our statute was construed by this court in Gearhart v. Hyde, 39 S.D. 273, 164 N.W. 58 [1917]. The rule announced in that case is that interest is allowable on damages if there exists established or reasonably ascertainable market prices or values of the subject matter by reference to which the amount due may be determined by computation. This rule seems to be generally accepted.... The reason for denying interest on a claim is that where the person liable does not know what sum he owes, he cannot be in default for not paying. When the exact sum of the indebtedness is known or can be readily ascertained the reason for the denial of interest does not exist.

The trial court affirmed Department's decision and denied employee's request for prejudgment interest because no interest had been charged to employee nor had any account previously been paid by employee or her family. In Gearhart v. Hyde, 39 S.D. 273, 275, 164 N.W. 58, 59 (1917), however, this court quoted from Laycock v. Parker, 103 Wis. 161, 186, 79 N.W. 327, 335 (1899) as follows: " 'The true principle, which is based on the sense of justice in the business community and on our statute, is that he who retains money which he ought to pay to another should be charged interest upon it.' " See Clark County v. Howard, 58 S.D. 457, 237 N.W. 561 (1931).

In North River Ins. Co. v. Golden Rule Const., 296 N.W.2d 910 (S.D.1980), this court held that where the amount of damages suffered by builder due to fire was never in dispute and builders' risk insurer refused to pay the entire amount, builder was entitled to prejudgment interest from the date of refusal. In the...

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