Kermmoade v. Quality Inn

• Decision Date: 21 June 2000
• Docket Number: No. 21146, No. 21178.
• Citation: 2000 SD 81,612 N.W.2d 583
• Court: South Dakota Supreme Court
• Parties: Debra L. KERMMOADE, Claimant and Appellee, v. QUALITY INN, Employer and Appellant, and Perkins Family Restaurant/Club Valotte, Employers and Appellees, and St. Paul Fire & Marine Ins. Co., Insurer and Appellant. and Wausau Insurance Company, Insurer and Appellee.

612 N.W.2d 583

2000 SD 81

Debra L. KERMMOADE, Claimant and Appellee, v. QUALITY INN, Employer and Appellant, and Perkins Family Restaurant/Club Valotte, Employers and Appellees, and St. Paul Fire & Marine Ins. Co., Insurer and Appellant. and Wausau Insurance Company, Insurer and Appellee.

Nos. 21146, 21178.

Supreme Court of South Dakota.

Argued February 16, 2000.

Decided June 21, 2000.

William Jason Groves, Margo Tschetter Julius of Groves, Julius & Simpson, Rapid City, South Dakota, Attorneys for appellee Kermmoade.

Gregory G. Strommen, Patricia A. Meyers of Costello, Porter, Hill, Heisterkamp, Bushnell and Carpenter, Rapid City, South Dakota, Attorneys for appellants.

Craig A. Pfeifle of Lynn, Jackson, Shultz and Lebrun, Rapid City, South Dakota, Attorneys for appellees Perkins/Club Valotte and Wausau Insurance Company.

AMUNDSON, Justice.

[¶ 1.] Quality Inn and its workers' compensation insurer, St. Paul Fire & Marine Insurance Company (St.Paul) appeal the circuit court's affirmance of the Department of Labor's (Department) granting of summary judgment in favor of Debra Kermmoade (Kermmoade). Perkins Family Restaurant (Perkins) and Wausau Insurance Company (Wausau) filed a notice of review as to whether the referee erred in refusing to grant summary judgment in their favor because the issue was moot. We affirm in part, reverse and remand in part.

FACTS

[¶ 2.] Kermmoade, a/k/a Debra Richter, became employed as a bartender at the Club Valotte in Rapid City, South Dakota in 1988. Club Valotte is a hotel bar/lounge located in the Ramada Inn hotel. In addition to the Club Valotte, Perkins restaurant, which was owned by Omega Foods, Inc., also adjoins the Ramada Inn. The Ramada Inn was owned and operated by the Retsel Corporation (Retsel). Retsel leased the Club Valotte lounge property to Don LaChapelle and the Perkins property to Omega Foods. Retsel also owned another hotel called the Quality Inn. Quality Inn was insured by St. Paul, Perkins was insured by Wausau, and LaChapelle¹ did not have insurance on Club Valotte.

[¶ 3.] On December 8, 1988, Kermmoade slipped and fell on ice while carrying out garbage during her employment with Club Valotte.² Kermmoade reported her injury to her direct supervisor Jackie VandenHoek (VandenHoek), who was the manager of both Club Valotte and Perkins. Kermmoade was told by VandenHoek to obtain an injury report from the front desk of the hotel. Kermmoade completed the injury form and returned it to VandenHoek. On January 10, 1989, Elizabeth Massa (Massa), the sales manager for Retsel, prepared an "Employer's First Report of Injury" and forwarded the report to St. Paul, the insurer of Quality Inn. Massa's report stated that Kermmoade's employer was "Club Valotte—Retsel Corporation." Neither VandenHoek nor Kermmoade reviewed Massa's report before she sent it to St. Paul.

[¶ 4.] On February 14, 1989, St. Paul claim representative Sheri Dowden (Dowden) and Kermmoade signed an "Agreement as to Compensation (agreement)," which had been drafted by St. Paul. In the agreement, St. Paul had listed Kermmoade's employer as "Quality Inn" not "Club Valotte." Neither Kermmoade nor Dowden caught the error prior to the signing.

[¶ 5.] A memorandum of the agreement was filed with the Department of Labor (Department) pursuant to SDCL 62-7-5.³ Department did not disapprove the agreement; therefore, after twenty days, it was approved by operation of law and was enforceable. St. Paul has made workers compensation benefit payments to Kermmoade under this agreement since its approval.

[¶ 6.] On January 31, 1995, six years after Kermmoade first began receiving benefits from St. Paul, she filed a petition for hearing with Department seeking odd lot benefits as a result of the worsening of her 1988 work-related accident. St. Paul and Quality Inn filed their answers admitting that Kermmoade was an employee of Quality Inn. Approximately one and one-half years later, Quality Inn and St. Paul filed an amended answer claiming that Club Valotte and Perkins were the actual employer and Perkins' insurer, Wausau, was the insurer liable for Kermmoade's workers' compensation benefits. Kermmoade subsequently opposed the amended answer claiming that the agreement was "res judiciata." Department allowed the amended answer and Perkins, Club Valotte and Wausau were added as parties in this action.

[¶ 7.] Quality Inn and St. Paul moved for summary judgment claiming that Kermmoade was not an employee of Quality Inn. Kermmoade filed a cross-motion for partial summary judgment on the employment status. Perkins and Wausau also filed a motion for summary judgment. Department denied Quality Inn's and St. Paul's motion, but granted Kermmoade's on the basis that the agreement was "res judicata" as to compensability and employee status. Department also denied Perkins' and Wausau's motion on the grounds that based upon its disposition of the employment status issue, it was moot. The decision was appealed to the circuit court, Seventh Judicial Circuit, Pennington County, South Dakota, and was affirmed.

[¶ 8.] Quality Inn and St. Paul appeal, raising the following issues:

1. Whether Department's Form 110 Agreement as to Compensation is res judicata as to Kermmoade's status as an employee even though an insurer's consent was given under an undisputed mistake of fact.

2. Does Department have jurisdiction to determine insurance coverage issues in this matter.

[¶ 9.] Perkins, Wausau and Club Valotte filed a notice of review, raising the following issue:

3. Whether Department erred in refusing to grant summary judgment to Perkins and Wausau, when all parties agree that Perkins and Wausau are not appropriate parties in this action.

STANDARD OF REVIEW

[¶ 10.] It is well settled that "[o]ur standard of review from decisions of administrative agencies is governed by SDCL 1-26-37." Helms v. Lynn's, Inc., 1996 SD 8, ¶ 9, 542 N.W.2d 764, 766. This statute provides:

An aggrieved party or the agency may obtain a review of any final judgment of the circuit court under this chapter by appeal to the Supreme Court. The appeal shall be taken as in other civil cases. The Supreme Court shall give the same deference to the findings of fact, conclusions of law and final judgment of the circuit court as it does to other appeals from the circuit court. Such appeal may not be considered de novo.

SDCL 1-26-37 (1992). Under this standard, "[t]his Court `makes the same review of the administrative agency's decision as did the circuit court, unaided by any presumption that the circuit court's decision was correct.'" Cheyenne River Sioux Tribe Tel. Auth. v. Public Util. Comm. of South Dakota, 1999 SD 60, ¶ 12, 595 N.W.2d 604, 608 (quoting Zoss v. United Bldg. Ctrs., Inc., 1997 SD 93, ¶ 6, 566 N.W.2d 840, 843 (citations omitted)). When the issue is a question of fact, we review the agency's actions under the clearly erroneous standard. Id. (quoting Zoss, 1997 SD 93, ¶ 6, 566 N.W.2d at 843 (citing Application of Northwestern Bell Tel. Co., 382 N.W.2d 413 (S.D.1986))). Issues involving questions of law are fully reviewable by this Court. Id. (quoting Zoss, 1997 SD 93, ¶ 6, 566 N.W.2d at 843 (citing Matter of State & City Sales Tax Liab., 437 N.W.2d 209 (S.D.1989))). Further, "`[m]ixed questions of law and fact are also fully reviewable.'" Id. (quoting Zoss, 1997 SD 93, ¶ 6, 566 N.W.2d at 843 (citing Permann v. Department of Labor, Unemp. Ins. Div., 411 N.W.2d 113 (S.D. 1987))).

[¶ 11.] Our standard of review for summary judgments is also well settled:

"Summary judgment shall be granted `if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.' We will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided. All reasonable inferences drawn from the facts must be viewed in favor of the nonmoving party. The burden is on the moving party to clearly show an absence of any genuine issue of material fact and an entitlement to judgment as a matter of law. On the other hand, `[t]he party opposing a motion for summary judgment must be diligent in resisting the motion, and mere general allegations and denials which do not set forth specific facts will not prevent issuance of a judgment.'"

Zuke v. Presentation Sisters, Inc., 1999 SD 31, ¶ 14, 589 N.W.2d 925, 928 (quoting Greene v. Morgan, Theeler, Cogley & Petersen, 1998 SD 16, ¶ 6, 575 N.W.2d 457, 459 (citations omitted)). Further, "[i]f there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper." Id. (citing Mack v. Kranz Farms, Inc., 1996 SD 63, ¶ 8, 548 N.W.2d 812, 814).

DECISION

[¶ 12.] 1. Whether Department's Form 110 Agreement as to Compensation is res judicata as to Kermmoade's status as an employee even though an insurer's consent was given under an undisputed mistake of fact.

[¶ 13.] In Department's decision, the administrative law judge (ALJ) found that the 1989 agreement between Kermmoade and St. Paul was "just that — an agreement." The ALJ relied on Whitney v. AGSCO Dakota, 453 N.W.2d 847 (S.D. 1990) and found "`[a]n agreed stipulation entered into between employer and employee, which is filed and approved by Department, may have the effect of a final determination.'" Under Whitney, therefore, the ALJ found "that the matters agreed in such agreements are res judicata." (Emphasis in original.) The ALJ noted that while Perkins/Club Valotte and Wausau may have been legally responsible for paying benefits to Kermmoade, the 1989 Agreement placed the responsibility towards Kermmoade on Quality Inn and St. Paul.

[¶ 14.] On appeal, the circuit court found that "the Agreement as to Compensation entered into between the parties Quality Inn, [St. Paul] and [Kermmoade], ... is res judicata as to...