Rojas v. Workforce Safety and Ins.

• Citation: 2006 ND 221,723 N.W.2d 403
• Decision Date: 23 October 2006
• Docket Number: No. 20060087.,20060087.
• Parties: Mark A. ROJAS, Claimant and Appellant, v. WORKFORCE SAFETY AND INSURANCE, Appellee, and Holland Enterprises, Inc., Respondent.
• Court: United States State Supreme Court of North Dakota

723 N.W.2d 403

2006 ND 221

Mark A. ROJAS, Claimant and Appellant, v. WORKFORCE SAFETY AND INSURANCE, Appellee, and Holland Enterprises, Inc., Respondent.

No. 20060087.

Supreme Court of North Dakota.

October 23, 2006.

Stephen D. Little, Dietz & Little Lawyers, Bismarck, N.D., for claimant and appellant.

Jacqueline Sue Anderson, Special Assistant Attorney General, Fargo, N.D., for appellee.

MARING, Justice.

[¶ 1] Mark Rojas appeals from a district court judgment affirming a decision by Workforce Safety & Insurance ("WSI") to pay only a portion of Rojas's claimed attorney's fees, and denying his motion for further attorney's fees. We reverse and remand.

I

[¶ 2] In January 2000, while Rojas was working as an over-the-road truck driver, he injured his knee when he slipped on ice at a truck stop. Rojas filed a claim for workers compensation benefits, and WSI accepted the claim and paid medical and disability benefits. WSI claimed it mailed Rojas a Notice of Intention to Discontinue/Reduce Benefits ("NOID") in May 2000. Rojas claimed he never received the NOID. Rojas's benefits were terminated on May 31, 2000.

[¶ 3] After his benefits were terminated, Rojas contacted WSI and was told the decision to terminate his disability benefits was final and his only option was to reapply for benefits. In June 2001, Rojas reapplied for disability benefits, and in July 2001, WSI denied his reapplication. Rojas requested reconsideration and a formal hearing.

[¶ 4] A hearing before an administrative law judge ("ALJ") was held in August 2003. The ALJ found Rojas had never received the NOID, and also concluded Rojas was entitled to ongoing disability benefits from May 2001, because he had met the burden for reapplication of disability benefits.

[¶ 5] WSI adopted the ALJ's finding that Rojas did not receive the NOID, but rejected the ALJ's findings that Rojas met the burden for reapplication of disability benefits. WSI concluded Rojas failed to show he was entitled to any further disability benefits under the reapplication statute.

[¶ 6] Rojas appealed WSI's final order to the district court. The district court reversed the order and directed WSI to reinstate the ALJ's recommended decision. WSI appealed. In Rojas v. Workforce Safety and Ins., 2005 ND 147, ¶ 16, 703 N.W.2d 299, we held WSI's termination of Rojas's ongoing disability benefits, when Rojas had not received notice or had the opportunity to respond, violated due process. We also concluded that the reapplication statute is only applicable when a claimant's prior benefits have been validly terminated, and because Rojas's benefits were not validly terminated, the reapplication statute was not applicable and the ALJ should not have limited reinstatement of benefits to the period beginning May 2001. Id. at ¶ 18. We modified the district court's judgment to direct WSI to enter an order reinstating Rojas's disability benefits from May 31, 2000, and prospectively, and affirmed the judgment as modified. Id. at ¶ 22.

[¶ 7] After the appeal, Rojas submitted a request to WSI for payment of $19,679.83 in attorney's fees and costs. WSI paid Rojas $9,876.83 for costs and attorney's fees, which WSI determined was the maximum amount it could pay under the fee cap provided in N.D.C.C. §§ 65-02-08 and 65-10-03, the statutes providing the procedure for payment of attorney's fees in WSI cases.

[¶ 8] Rojas petitioned the district court for payment of attorney's fees under N.D.C.C. § 28-32-50, which governs payment of attorney's fees in civil judicial proceedings against administrative agencies. The district court affirmed WSI's decision and denied Rojas's motion, concluding N.D.C.C. §§ 65-02-08 and 65-10-03 conflict with and supersede N.D.C.C. § 28-32-50 for actions involving WSI.

II

[¶ 9] Section 65-02-08, N.D.C.C., authorizes an award of attorney's fees to a prevailing injured employee in WSI proceedings:

The organization shall establish, by administrative rule, costs payable, maximum costs, a reasonable maximum hourly rate, and a maximum fee to compensate an injured employee's attorney for legal services following issuance of an administrative order reducing or denying benefits.... Except for an initial determination of compensability, an attorney's fee may not exceed twenty percent of the amount awarded, subject to a maximum fee set by administrative rule. The organization shall pay an attorney's fees and costs when:

1. The employee has prevailed in binding dispute resolution under section 65-02-20.

2. The employee has prevailed after an administrative hearing under chapter 28-32.

An injured employee has prevailed only when an additional benefit, previously denied, is paid. An injured employee does not prevail on a remand for further action or proceedings unless that employee ultimately receives an additional benefit as a result of the remand. This section does not prevent an injured employee or an employer from hiring or paying an attorney; however, the employee's attorney may not seek or obtain costs or attorney's fees from both the organization and the employee relative to the same claim.

[¶ 10] Section 65-10-03, N.D.C.C., authorizes an award of attorney's fees to an injured employee who prevails on a judicial appeal:

The organization shall pay the cost of the judicial appeal and the attorney's fee for an injured employee's attorney when the employee prevails. The employee has prevailed when any part of the decision of the organization is reversed and the employee receives an additional benefit as a result. An injured employee does not prevail on a remand for further action or proceedings unless the injured employee ultimately receives an additional benefit.... The amount of the attorney's fee must be determined in the same manner as prescribed by the organization for attorney's fees, and the amount of attorney's fee already allowed in administrative proceedings before the organization must be taken into consideration. The organization shall establish, pursuant to section 65-02-08, a maximum fee to be paid in an appeal. The maximum fee may be exceeded upon application of the injured employee to the organization, upon a finding that the claim had clear and substantial merit, and that the legal or factual issues involved in the appeal were unusually complex, but a court may not order that the maximum fee be exceeded.

[¶ 11] Section 28-32-50, N.D.C.C., authorizes an award of attorney's fees in any civil judicial proceeding against an administrative agency:

In any civil judicial proceeding involving as adverse parties an administrative agency and a party not an administrative agency or an agent of an administrative agency, the court must award the party not an administrative agency reasonable attorney's fees and costs if the court finds in favor of that party and, in the case of a final agency order, determines that the administrative agency acted without substantial justification.

[¶ 12] The district court concluded the provisions for attorney's fees in N.D.C.C. §§ 65-02-08 and 65-10-03 conflicted with N.D.C.C. § 28-32-50 and could not be harmonized, because § 28-32-50 leaves the amount of attorney's fees to the discretion of the court and §§ 65-02-08 and 65-10-03 provide for the creation of a specific schedule of fees to be followed and limit the amount the claimant may be awarded. The court concluded §§ 65-02-08 and 65-10-03 are special provisions that control in cases involving WSI, and could not be harmonized with the general provision of § 28-32-50, which applies to any civil judicial proceeding against an administrative agency.

[¶ 13] The application and interpretation of statutes are questions of law fully reviewable by this Court. Rydberg v. Rydberg, 2004 ND 73, ¶ 10, 678 N.W.2d 534. The primary objective in interpreting a statute is to determine the Legislature's intent. BASF Corp. v. Symington, 512 N.W.2d 692, 695 (N.D.1994). To determine the Legislature's intent we compare every section of the statute as a part of the whole, and give meaning, if possible, to every word, phrase, and sentence. Id. "[W]e interpret statutes in context and in relation to others on the same subject to give meaning to each without rendering one or the other useless." Id. at 696. Whenever possible, we harmonize statutes to avoid conflict between them. Id. Only when conflicting statutes cannot be harmonized and are irreconcilable will the special provision prevail and be construed as an exception to the general provision. N.D.C.C. § 1-02-07; In re K.G., 551 N.W.2d 554, 556 (N.D.1996). We follow the "cardinal rule" of statutory construction that, "our `interpretation must be consistent with legislative intent and done in a manner which will accomplish the policy goals and objectives of the statutes.'" In re K.G., at 556 (quoting O'Fallon v. Pollard, 427 N.W.2d 809, 811 (N.D. 1988)). We presume the Legislature did not intend an unreasonable result or unjust consequence. N.D.C.C. § 1-02-38(3).

[¶ 14] Sections 65-02-08 and 65-10-03, N.D.C.C., are very specific and apply only to actions against WSI when an injured employee's benefits have been reduced or denied. Section 28-32-50, N.D.C.C., generally applies to any civil judicial proceeding against an administrative agency. Although each of these statutes governs awards of attorney's fees, they apply in different situations. Sections 65-02-08 and 65-10-03, N.D.C.C., essentially guarantee an automatic award of attorney's fees when an injured employee prevails against WSI. Section 28-32-50, N.D.C.C., however, represents a middle ground between an automatic award of attorney's fees to a party who prevails in a judicial action against an administrative agency and an award of attorney's fees for claims that are essentially frivolous or meritless. Aggie Invs. GP v. Public Serv. Comm'n, 470 N.W.2d 805, 814 (N.D.1991). Sections 65-02-08 and 65-10-03, N.D.C.C., guarantee an automatic award of attorney's fees to the prevailing party, but ...