Schipke v. Grad

• Citation: 1997 SD 38,562 N.W.2d 109
• Decision Date: 04 December 1996
• Docket Number: No. 19632,19632
• Parties: Stewart SCHIPKE and Lafay Schipke, d/b/a Fay's Refrigeration, Plaintiffs and Appellants, v. Patty GRAD, Defendant and Appellee. . Considered on Briefs on
• Court: Supreme Court of South Dakota

Page 109

562 N.W.2d 109

1997 SD 38

Stewart SCHIPKE and Lafay Schipke, d/b/a Fay's

Refrigeration, Plaintiffs and Appellants, v. Patty GRAD, Defendant and Appellee.

No. 19632.

Supreme Court of South Dakota.

Considered on Briefs on Dec. 4, 1996.

Decided April 9, 1997.

Kent Hyde of Hyde & Allred Law Office, Aberdeen, for Plaintiffs and Appellants.

Mark J. Welter of Woods, Fuller, Shultz & Smith, Sioux Falls, for Defendant and Appellee.

GILBERTSON, Justice.

¶1 LaFay and Stewart Schipke, d/b/a/ Fay's Refrigeration (Schipke), appeal from a summary judgment granted to Patty Grad (Grad). We affirm.

FACTS AND PROCEDURE

¶2 Schipke is Jon Grad's employer. Jon is married to Patty Grad, the defendant and appellee in this action. On November 25, 1991, Grad dropped her husband, Jon, at his work site. While Jon was removing tools from the back of their vehicle, Grad's foot slipped off the clutch and the vehicle started to roll backwards. Jon slipped while attempting to move out of harm's way. The vehicle's left rear tire rolled over Jon's left foot, causing injury. Employer Schipke paid workers' compensation benefits to Jon in the amount of $11,429 as a result of the accident.

¶3 In 1994 and 1995, Schipke experienced increases in his workers' compensation insurance premium. Schipke alleges Jon's injury is the sole proximate cause of his increased insurance premiums. Schipke paid an additional $6,967.62 in premiums in 1994, and an additional $5,168.00 in premiums in 1995. At the time of filing this action, the amount of Schipke's premium for 1996 was unknown, but it, too, was expected to increase as a result of Jon's accident, according to Schipke. The increase in premiums exceeds the amount of workers' compensation benefits paid to Jon.

¶4 Schipke brought suit against Grad, as third-party tortfeasor, to recover the increase in workers' compensation insurance premiums. Grad moved for summary judgment on grounds that SDCL 62-4-40 precluded such an action and that there is no genuine issue of material fact. The circuit court granted summary judgment in favor of Grad and against Schipke. Schipke appeals raising the following issues:

1. Whether the subrogation remedy of SDCL 62-4-40 precludes a cause of action by an employer against a third-party tortfeasor to recover increases in employer's workers' compensation insurance premiums?

2. Whether the third-party tortfeasor, having knowledge of the employment relationship and the potential availability of workers' compensation benefits, is liable to employer for the increase in employer's workers' compensation insurance premiums?

STANDARD OF REVIEW

¶5 Our standard of review of a trial court's grant or denial of a motion for summary judgment is well-settled. In reviewing the trial court's decision:

"we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the non-moving party and reasonable doubts should be resolved against the moving party. The non-moving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper."

Petersen v. Dacy, 1996 SD 72, p 5, 550 N.W.2d 91, 92 (1996) (quoting Trippet Special Trust v. Blevins, 1996 SD 29, p 6, 545 N.W.2d 216, 221 (1996)); Waddell v. Dewey County Bank, 471 N.W.2d 591, 593 (S.D.1991); see also, Wilson v. Great N. Ry. Co., 83 S.D. 207, 157 N.W.2d 19 (1968).

¶6 However, this appeal also raises issues involving statutory interpretation, which present a question of law and are reviewed de novo. Moss v. Guttormson, 1996 SD 76, p 10, 551 N.W.2d 14, 17 (1996).

"The purpose of statutory construction is to discover the true intention of the law which is to be ascertained primarily from the language expressed in the statute. The intent of a statute is determined from what the legislature said, rather than what the courts think it should have said, and the court must confine itself to the language used. Words and phrases in a statute must be given their plain meaning and effect. When the language in a statute is clear, certain and unambiguous, there is no reason for construction, and the Court's only function is to declare the meaning of the statute as clearly expressed. Since statutes must be construed according to their intent, the intent must be determined from the statute as a whole, as well as enactments relating to the same subject."

Id. (quoting U.S. West Communications, Inc. v. Public Utilities Comm'n, 505 N.W.2d 115, 122-23 (S.D.1993)).

ANALYSIS AND DECISION

¶7.Whether the subrogation remedy of SDCL 62-4-40 precludes a cause of action by an employer against a third-party tortfeasor to recover increases in employer's workers' compensation insurance premiums?

¶8 SDCL 62-4-40 provides the rule for employer's recovery from a third-party tortfeasor:

If compensation is awarded under this title, the employer having paid the compensation, or having become liable therefor may collect in his own name or that of the injured employee, or his personal representative, if deceased, from any other person against whom legal liability for damage exists, the amount of such liability and shall hold for the benefit of the injured employee or his personal representative, if deceased, the amount of damages collected in excess of the amount of compensation paid such employee or his representative, less the proportionate necessary and reasonable expense of collecting the same, which expenses may include an attorney's fee not in excess of thirty-five per cent of damages so collected, and shall be subject finally to the approval of the department.

Schipke argues this statute does not provide the only remedy available to him and claims support for his position in SDCL 62-3-2 which limits the rights and remedies of an employee to those provided by the workers' compensation statutes, but does not so limit employers' rights and remedies. ¹ Schipke claims that if an employer chooses to bring suit under SDCL 62-4-40, that statute controls; if the employer chooses not to do so, SDCL 1-1-24 provides that a common law remedy is available to the employer. ²

¶9 Schipke brought a common law action in tort against Grad to collect his increase in workers' compensation insurance premiums. He did not seek to recover compensation benefits paid to Grad. The question before this Court is not whether Schipke could prevail in such an action, but whether such a cause of action is available to him. This presents a question of first impression.

¶10 Workers' compensation laws are purely statutory and " 'the rights of the parties and the manner of procedure under the law must be determined by its provisions.' " Nilson v. Clay County, 534 N.W.2d 598, 601 (S.D.1995) (quoting Caldwell v. John Morrell & Co., 489 N.W.2d 353, 364 (S.D.1992)). The rule that ambiguities in workers' compensation statutes be construed liberally in favor of the injured employees, id., does not apply here where the underlying action involves an employer's suit against a third party to recover damages personal to the employer. Schipke urges the workers' compensation statute does not provide his exclusive remedy and that he has a cause of action available to him under the common law. We disagree.

¶11 The South Dakota Legislature enacted the Workers' Compensation Act in 1917. The Act supplanted tort law as a means of providing employees injured in the course of their employment with reimbursement for medical care and wage benefits. The Act provides the employees' exclusive remedy and eliminates the necessity of proving negligence and, for the most part, fault. From the employer's perspective, she or he is spared the unpredictability of a jury's award of tort damages and is granted total immunity from suit for its own negligence in exchange for payment of workers' compensation insurance. The cost of providing workers' compensation insurance is generally written into the cost of doing business and, in that sense, is passed along to the public. See Oviatt v. Oviatt Dairy, Inc., 80 S.D. 83, 85, 119 N.W.2d 649, 650 (1963) ("A recognized purpose of the Workmen's Compensation Law is to transfer from the worker to the employer, and ultimately to the public, a greater portion of the economic loss due to industrial accidents and injuries....").

¶12 Many courts who have addressed the question of the employer's right to recover increased insurance premiums caused by the negligent act of a third party, and have answered this question in the negative, holding the economic harm too remote to be recoverable. See Crab Orchard Improvement Co. v. Chesapeake & O. Ry. Co., 115 F.2d 277, 282-83 (4thCir.1940); Fischl v. Paller & Goldstein, 231 Cal.App.3d 1299, 282 Cal.Rptr. 802, 804 (1991); RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381, 650 A.2d 153, 156-57 (1994); Unique Paint Co., Inc. v. Wm. F. Newman Co., Inc., 201 Ga.App. 463, 411 S.E.2d 352, 353 (1991); Northern States Contracting Co. v. Oakes, 191 Minn. 88, 253 N.W. 371 (1934); Fischer Constr. Co. v. Stroud, 175 Ohio St. 31, 191 N.E.2d 164 (1963); Whirley Industries, Inc. v. Segel, 316 Pa.Super. 75, 462 A.2d 800, 804 (1983). Cf. Continental Casualty Co. v. P.D.C., Inc., 931 F.2d 1429 (10thCir.1991); Zawadzki v. Checker Taxi Co., 539 F.Supp. 207 (N.D.Ill.1982); Steele v. J & S Metals, Inc., 32 Conn.Supp. 17, 335 A.2d 629 (1974) (denying recovery for employers' loss of profits due to negligent injury of employee...