Kurtz v. SCI, No. 20153

CourtSupreme Court of South Dakota
Writing for the CourtSABERS
Citation1998 SD 37,576 N.W.2d 878
Docket NumberNo. 20153
Decision Date18 February 1998
PartiesJoyce F. KURTZ, Appellee, v. SCI, Appellant. . Considered on Briefs

Page 878

576 N.W.2d 878
1998 SD 37
Joyce F. KURTZ, Appellee,
v.
SCI, Appellant.
No. 20153.
Supreme Court of South Dakota.
Considered on Briefs Feb. 18, 1998.
Decided April 8, 1998.

Margo Tschetter Julius of Groves & Julius, LLP, Rapid City, for appellee.

Kenneth L. Chleborad of Costello, Porter, Hill, Heisterkamp & Bushnell, Rapid City, for appellant.

SABERS, Justice.

¶1 Workers' compensation self-insured employer appeals circuit court's ruling that claimant is entitled to permanent total disability benefits under the odd-lot doctrine. Employer claims the court erred in adopting the administrative law judge's findings of fact and conclusions of law because they were rejected by the Director of the Department of Labor. We affirm.

FACTS

¶2 Joyce Kurtz was employed as a computer board assembler by SCI (Employer) for approximately seven months. She worked in the same capacity for Employer's predecessor for about four years. On May 2, 1991, Kurtz experienced pain in her right hand after eight hours of consistent use of a torque wrench. She promptly reported her discomfort to her supervisor. Although she worked the following day without using the torque wrench, Kurtz reported continuing and increasing pain. She was referred to Dr. Preston, who diagnosed tenosynovitis of the right thumb. Dr. Preston referred her to a physical therapist, and she was eventually fitted with a wrist splint. On May 31, 1991, Kurtz and other employees were laid off.

¶3 Kurtz was referred to orthopedic surgeon Dr. Berkebile, who twice performed surgery on her. He first performed a release of the flexor tendon sheath in August of 1991 followed by a carpal tunnel release in early 1992. Kurtz was never re-hired by Employer and has not been employed since May, 1991. She was placed on temporary total disability status until sometime in late 1994.

¶4 Her efforts at re-employment, as well as her pain and self-reported limitations, were vigorously disputed by Employer when she petitioned for odd-lot disability. There was conflicting testimony, discussed later, regarding her ability to work. Mark Bratt, the administrative law judge (ALJ) granted Kurtz permanent and total disability benefits, ruling that she qualified for odd-lot status.

¶5 The Secretary (Secretary) of the Department of Labor (Department) granted Employer's petition for review brought under SDCL 62-7-16. 1 In a one-page order, Secretary reversed the ALJ's decision, stating that

Page 881

it was "clear error" without elaboration or explanation. He remanded "to the Division for such additional proceedings as it deems necessary to determine the extent of Claimant's disability." 2

¶6 On remand, the parties stipulated that since ALJ Bratt was no longer with Department, the Director of Department (Director) could determine the case based on the existing record. Director assessed the "clear error" found by Secretary as follows:

It is thought that the basis for this ruling was in the ALJ's finding of permanent total disability despite Claimant's acknowledged mental aptitude for retraining. Under the direction of Shepherd v. Moorman Manufacturing, 467 N.W.2d 916 (S.D.1991), and its progeny, however, Claimant can establish that she is permanently and totally disabled due to pain, and the burden then falls on Employer to show the availability of work. Claimant has done so, and the opinion proffered by [Employer's expert] that available work existed was rejected. It is therefore concluded that Claimant is indeed "obviously unemployable," and is entitled to permanent total disability benefits, based on the discussion presented in the Division's previous decision, findings of fact, and conclusions of law. Those documents are hereby adopted as the Division's findings, conclusions and order in this matter. [Kurtz] shall submit proposed Findings of Fact and Conclusions of Law, and an Order consistent with this Decision[.]

Despite this decision, Director later issued the following order:

I have reviewed employer's objections to Claimant's proposed findings of fact and conclusions of law, and am compelled once more to revisit my determinations. I am persuaded that I have misinterpreted the legal effect of Secretary Johnson's review order, and must revise my decision. "Clear error" should properly be taken to mean that the factual determinations made by [ALJ], not just his legal conclusions, were in error, and I am bound by that finding. To me, this means that I should not merely adopt [ALJ's] findings as my own, but to reevaluate them in light of all the information in the record.

Having done this, I am convinced that Claimant is not entitled to permanent total disability benefits, but to permanent partial disability benefits as Employer has outlined. Making my own judgment as to her reports of pain, I find that she is not suffering such continuous, intense pain that she cannot work; that work is available within her restrictions that is regular and continuous; and that she is not totally unemployable. I hereby enclose a signed copy of Employer/Self-Insurer's proposed findings of fact, conclusions of law, and order, which will be entered as the Department's official stance in this matter.

¶7 Kurtz appealed to the circuit court. Based upon its review of the entire record, the circuit court reversed Director and adopted the ALJ's decision as its own, thus reinstating the award of odd-lot disability benefits. Employer appeals, claiming that the ALJ's decision was not the "final agency determination" and therefore the circuit court erred by reviewing the "wrong" decision. Employer also claims that Director's decision denying odd-lot benefits is not clearly erroneous.

¶8 1. STANDARD OF REVIEW

¶9 We review administrative appeals according to SDCL 1-26-36:

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The court shall give great weight to the findings made and inferences drawn by an agency on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional or statutory provisions;

(2) In excess of the statutory authority of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Clearly erroneous in light of the entire evidence in the record; or

(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

We will overrule an agency's findings of fact only when they are clearly erroneous. "The test is whether after reviewing all the evidence we are left with a definite and firm conviction that a mistake has been made." Truck Ins. Exch. v. Kubal, 1997 SD 37, p 9, 561 N.W.2d 674, 676 (citation omitted). Conclusions of law are given no deference and are freely reviewable. Id.

¶10 Employer argues that the circuit court reviewed and affirmed the wrong decision by adopting the ALJ's conclusions. However, we are not bound by the circuit court's decision. "The Supreme Court [reviews] the administrative agency's decision ... unaided by any presumption that the circuit court's decision was correct." Zoss v. United Bldg. Ctrs., Inc., 1997 SD 93, p 6, 566 N.W.2d 840, 843 (citations omitted). Similarly, we give no deference to Director's decision since it is based entirely upon his review of the same record which we have before us. We are as capable of reading the record as the Director. Cf. First Nat'l Bank of Biwabik, Minn. v. Bank of Lemmon, 535 N.W.2d 866, 871-72 (S.D.1995):

For purposes of appellate review, we have repeatedly distinguished between "live" testimony and evidence presented in document form. Under our long-standing rule, when reviewing findings based on documentary evidence we do not apply the clearly erroneous rule ... but review the matter de novo.

...

A trial judge's superior fact-finding abilities relate to his opportunity to observe and evaluate live testimony; when physical or documentary evidence is offered, the trial court is in no better position to intelligently weigh the evidence than the appellate court.

(Citations omitted).

¶11 Employer correctly asserts that the ALJ's award of odd-lot benefits does not constitute a "final order or decision" in light of the subsequent decision from Director. See Wendel v. Domestic Seed & Supply, 446 N.W.2d 265, 269 (S.D.1989) ("[N]o appeal may be had until [Department] enters a final order or decision and no decision may be considered final while a petition for review is pending.") (relying on SDCL 62-7-18). However, we cannot disregard the ALJ's opinion, which is part of the record by statute. SDCL 1-26-33; see also In re Johnson, 337 N.W.2d 442, 445 (S.D.1983) (discussing scope of review when Secretary has modified or set aside appeal referee's decision in an unemployment insurance dispute):

Secretary, however, does not have unbridled discretion. Appeal referee's decision is part of the record and the record must be considered as a whole to see whether the result comports with the judicial standard of review upon appeal.

...

Secretary's departures from the appeal referee's findings are vulnerable if they fail to reflect attentive consideration to the examiner's decision.

(Emphasis in original) (citations omitted); cf. Universal Camera Corp. v. National Labor

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Relations Bd., 340 U.S. 474, 493, 71 S.Ct. 456, 467, 95 L.Ed. 456, 470 (1951) ("Surely an examiner's report is as much a part of the record as the complaint or the testimony.") (construing Federal Administrative Procedure Act).

¶12 Therefore, we review the entire record, including the ALJ's decision, Secretary's grant of review, and...

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21 practice notes
  • Orth v. Stoebner & Permann Const., Inc., No. 23731.
    • United States
    • Supreme Court of South Dakota
    • November 15, 2006
    ...the administrative agency's decision ... unaided by any presumption that the circuit court's decision was correct.'" Kurtz v. SCI, 1998 SD 37, ¶ 10, 576 N.W.2d 878, 882 (quoting Zoss v. United Bldg. Ctrs., Inc., 1997 SD 93, ¶ 6, 566 N.W.2d 840, [¶ 76.] In this case the issue of notice was f......
  • Brown v. Douglas School Dist., No. 22050.
    • United States
    • Supreme Court of South Dakota
    • July 31, 2002
    ...weight to the agency or hearing officer on fact questions. Goebel v. Warner Transp., 2000 SD 79, ¶ 10, 612 N.W.2d 18, 21; Kurtz v. SCI, 1998 SD 37, ¶¶ 9-10, 576 N.W.2d 878, 881-82; Sopko, 1998 SD 8 at ¶ 6, 575 N.W.2d at 228. Findings of fact are clearly erroneous when the reviewing court ha......
  • Goebel v. Warner Transp., No. 21185.
    • United States
    • Supreme Court of South Dakota
    • June 14, 2000
    ...must be given to the Department which had an opportunity to observe both experts' demeanors and weigh their credibility. Kurtz v. SCI, 1998 SD 37, ¶ 12, 576 N.W.2d 878, 883 (citing Bonnett v. Custer Lumber Corp., 528 N.W.2d 393, 396 (S.D.1995)) ("Due regard shall be given to the opportunity......
  • Davidson v. Horton Industries, Inc., No. 21970.
    • United States
    • South Dakota Supreme Court
    • February 27, 2002
    ...773, 776; Belhassen, 2000 SD 82 at ¶ 17, 613 N.W.2d at 536; Hendricksen v. Harris, 1999 SD 130, ¶ 7, 600 N.W.2d 180, 181; Kurtz v. SCI, 1998 SD 37, 576 N.W.2d 878, 882; Petersen v. Hinky Dinky, 515 N.W.2d 226, 235 (S.D. 1994); Foltz, 516 N.W.2d at 347 (Amundson, J., dissenting), Wendel v. D......
  • Request a trial to view additional results
21 cases
  • Orth v. Stoebner & Permann Const., Inc., No. 23731.
    • United States
    • Supreme Court of South Dakota
    • November 15, 2006
    ...the administrative agency's decision ... unaided by any presumption that the circuit court's decision was correct.'" Kurtz v. SCI, 1998 SD 37, ¶ 10, 576 N.W.2d 878, 882 (quoting Zoss v. United Bldg. Ctrs., Inc., 1997 SD 93, ¶ 6, 566 N.W.2d 840, [¶ 76.] In this case the issue of notice was f......
  • Brown v. Douglas School Dist., No. 22050.
    • United States
    • Supreme Court of South Dakota
    • July 31, 2002
    ...weight to the agency or hearing officer on fact questions. Goebel v. Warner Transp., 2000 SD 79, ¶ 10, 612 N.W.2d 18, 21; Kurtz v. SCI, 1998 SD 37, ¶¶ 9-10, 576 N.W.2d 878, 881-82; Sopko, 1998 SD 8 at ¶ 6, 575 N.W.2d at 228. Findings of fact are clearly erroneous when the reviewing court ha......
  • Goebel v. Warner Transp., No. 21185.
    • United States
    • Supreme Court of South Dakota
    • June 14, 2000
    ...must be given to the Department which had an opportunity to observe both experts' demeanors and weigh their credibility. Kurtz v. SCI, 1998 SD 37, ¶ 12, 576 N.W.2d 878, 883 (citing Bonnett v. Custer Lumber Corp., 528 N.W.2d 393, 396 (S.D.1995)) ("Due regard shall be given to the opportunity......
  • Davidson v. Horton Industries, Inc., No. 21970.
    • United States
    • South Dakota Supreme Court
    • February 27, 2002
    ...773, 776; Belhassen, 2000 SD 82 at ¶ 17, 613 N.W.2d at 536; Hendricksen v. Harris, 1999 SD 130, ¶ 7, 600 N.W.2d 180, 181; Kurtz v. SCI, 1998 SD 37, 576 N.W.2d 878, 882; Petersen v. Hinky Dinky, 515 N.W.2d 226, 235 (S.D. 1994); Foltz, 516 N.W.2d at 347 (Amundson, J., dissenting), Wendel v. D......
  • Request a trial to view additional results

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