Lawson v. North Dakota Workmen's Compensation Bureau
| Decision Date | 30 June 1987 |
| Docket Number | No. 11415,11415 |
| Citation | 409 N.W.2d 344 |
| Parties | Richard D. LAWSON, Appellee, v. NORTH DAKOTA WORKMEN'S COMPENSATION BUREAU, Appellant. Civ. |
| Court | North Dakota Supreme Court |
Pringle & Herigstad, Minot, for appellee; argued by Lynn M. Boughey.
Clare R. Hochhalter, Asst. Atty. Gen., Workmen's Compensation Bureau, Russel Building, Bismarck, for appellant.
The North Dakota Workmen's Compensation Bureau (Bureau) appeals from a decision by the Northwest Judicial District Court, finding that the Bureau's determination of its obligation for costs under Sec. 65-01-09, N.D.C.C., is unlawful. We affirm.
In August 1984, Richard D. Lawson (Lawson) was injured while employed as a roughneck for Kent Drilling Company, Williston, North Dakota. Shortly thereafter, Lawson filed a claim with the Bureau which was accepted and received benefits totalling $53,662.73.
Lawson then initiated a lawsuit against a third party for his injury, which he settled for $200,000.00. Lawson incurred a bill of $3,433.07 for costs expended in the prosecution of his third-party claim. Lawson informed the Bureau of the settlement and total costs and, in response to this notice, the Bureau computed its subrogation interest and requested reimbursement pursuant to Sec. 65-01-09, N.D.C.C. The Bureau's computation revealed:
"Total Third Party Recovery ..... $200,000.00
"Costs in Third Party Recovery .. $ 3,433.07
"Bureau's Subrogated Interest in Third Party Recovery
Suspended Benefits .................. $ 46,337.27
Expended Benefits ................... $ 53,662.73
Bureau's Total Subrogated Interest .. $100,000.00
"Net Amount Suspended Benefits
Total Suspended Benefits ....... $ 46,337.27
Less Bureau's attorney's fees .. $ 11,584.32
Less Bureau's costs ............ $ 795.44
Net suspended Benefits ......... $ 33,957.51
"Net Reimbursement to Bureau for Expended Benefits
Total Expended Benefits ........ $ 53,662.73
Less Bureau's attorney's fees .. $ 13,415.68
Less Bureau's costs ............ $ 921.10
Reimbursement to Bureau ........ $ 39,325.95"
After Lawson received the Bureau's computation, a dispute arose over the Bureau's authority to prorate and apportion its obligation, under Sec. 65-01-09, N.D.C.C., to pay fifty percent of the costs that Lawson had incurred in prosecuting his third-party claim.
Lawson contested the Bureau's apportionment and proration of costs, asserting that the Bureau is required, under Sec. 65-01-09, N.D.C.C., to pay fifty percent of the costs incurred in prosecuting a third-party lawsuit. Therefore, Lawson reduced its reimbursement to the Bureau by $795.44. The Worker's Compensation Commissioners issued an administrative order rejecting Lawson's contention that he was entitled to the full compensation of fifty percent of the litigation costs and ordered that the disputed $795.44 be remitted to the Bureau. Lawson appealed the Commissioners' order to the district court. The district court reversed the administrative order and held that Lawson was entitled to the balance of the costs. This appeal followed.
In the instant action, we are asked, once again, to review the validity of the Bureau's formula in computing its subrogation interest under Sec. 65-01-09, N.D.C.C. See, Blaskowski v. North Dakota Workmen's Compensation Bureau, 380 N.W.2d 333 (N.D.1986); Kelsh v. North Dakota Workmen's Compensation Bureau, 388 N.W.2d 870 (N.D.1986); and State by Workmen's Compensation Bureau v. Clary, 389 N.W.2d 347 (N.D.1986). The issue on appeal is whether Sec. 65-01-09, N.D.C.C., grants the Bureau authority to apportion and prorate its obligation to pay costs incurred by an employee in prosecuting a claim against a third party. The pertinent language contained in Sec. 65-01-09, N.D.C.C., states:
Pursuant to the Administrative Agencies Practice Act, Chapter 28-32, N.D.C.C., we must affirm an administrative agency's decision unless presented with an issue encompassed in Sec. 28-32-19, N.D.C.C. See, Sections 28-32-21 and 28-32-19, N.D.C.C. Accordingly, pursuant to Sec. 28-32-19(1), N.D.C.C., we review the Worker's Compensation Commissioners' decision to determine whether it is in accordance with the law. In reviewing the determination of an administrative agency, we look to the decision of the agency and not the district court in our adjudication of the matter. Schadler v. Job Service North Dakota, 361 N.W.2d 254, 256 (N.D.1985).
Lawson contends that the formula utilized by the Bureau, separating costs as suspended benefits and expended benefits instead of listing the total amount of costs as expended benefits, violates the plain language of Sec. 65-01-09, N.D.C.C. In the instant action, Lawson argues that the Bureau should consider fifty percent of the costs that he incurred in pursuing his third-party claim, or $1,716.54, as expended benefits in the Bureau's computation of its subrogated interest since this amount represents half of his actual costs. In other words, Lawson contends that because the statutory formula is not ambiguous ("the bureau shall pay fifty percent of the costs of the action, ... when such costs are incurred) (Section 65-01-09, N.D.C.C., emphasis added), he is entitled to receive reimbursement for the entire fifty percent of his costs. Accordingly, when costs are determined to be $3,433.07, the Bureau's obligation is easily computed at fifty percent thereof, or $1,716.54.
Under the Bureau's complicated computation formula for reimbursement of costs, costs are limited to the percentage of total expended benefits ($53,662.73) divided by Lawson's total recovery ($200,000.00) or 26.83%. This amount totals $921.10. The remaining 23.17%, or $795.44, which the Bureau is statutorily required to reimburse Lawson under Sec. 65-01-09, N.D.C.C., is "suspended" and the Bureau credits this amount to its suspended subrogation interest.
The Bureau argues that its apportionment of costs is lawful under its subrogation formula and has been tacitly approved by this Court. See, Blaskowski, supra; Clary, supra. However, the Bureau misconstrues our approval of the formula utilized by the Bureau in determining its subrogation interest under Sec. 65-01-09, N.D.C.C., with the present formula,...
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