SD Subseq. Injury Fund v. Federated Mut.

• Decision Date: 26 January 2000
• Docket Number: No. 21005, No. 21017.
• Citation: 2000 SD 11,605 N.W.2d 166
• Parties: SOUTH DAKOTA SUBSEQUENT INJURY FUND, Plaintiff and Appellee, v. FEDERATED MUTUAL INSURANCE, INC., Defendant and Appellant.
• Court: South Dakota Supreme Court

605 N.W.2d 166

2000 SD 11

SOUTH DAKOTA SUBSEQUENT INJURY FUND, Plaintiff and Appellee, v. FEDERATED MUTUAL INSURANCE, INC., Defendant and Appellant.

Nos. 21005, 21017.

Supreme Court of South Dakota.

Argued December 1, 1999.

Decided January 26, 2000.

Richard A. Engels, Special Assistant Attorney General & Division Counsel, SD Division of Insurance, Pierre, for plaintiff and appellee.

J.G. Shultz of Woods, Fuller, Shultz & Smith, Sioux Falls, for defendant and appellant.

SABERS, Justice.

[¶ 1.] Federated Mutual Insurance Inc. (Federated) appeals (1) the trial court's interpretation of SDCL 62-4-34 and its reimbursement award of $22,200.36 as inadequate. By notice of review, the South Dakota Subsequent Injury Fund (Fund) appeals (2) the trial court's award of prejudgment interest to Federated. We affirm part 2 and reverse part 1.

FACTS

[¶ 2.] In early 1990, David Nelson injured his left arm while working as a mechanic for first employer. He was ultimately diagnosed with reflex sympathetic dystrophy and endured carpal tunnel surgery. His impairment rating was 46% for his left upper extremity, which amounted to 28% impairment of the whole person.

[¶ 3.] On September 6, 1993, Nelson sustained a subsequent work-related injury while working for second employer, which was insured by Federated. This injury was to his right upper extremity resulting in a 25% impairment rating, which amounted to 15% impairment of the whole person. This 15% whole body impairment resulted in 46.8 weeks of permanent partial disability. At that time, his weekly compensation was $225.00 per week so Nelson was compensated $10,530.00.

[¶ 4.] Nelson claimed that he was permanently totally disabled as a result of the two injuries. He left his job in November of 1994. Pursuant to a settlement agreement approved by the Department of Labor, Nelson was paid $143,777.44 by Federated for the subsequent injury to his right upper extremity: $126,370.00 for indemnity and $17,407.44 for medical and hospital expenses.

[¶ 5.] Federated notified Fund of Nelson's claim by letter dated January 9, 1995 and requested reimbursement from Fund.¹ Fund incorrectly calculated the reimbursement pursuant to SDCL 62-4-34, as amended in 1995, and reimbursed Federated $93,639.64.

[¶ 6.] Federated disagreed with this reimbursement amount and argued that the correct analysis, based on the 1984 version of SDCL 62-4-34, would use subtraction, rather than the multiplication provided for in the 1995 version. The parties and the trial court agreed that the statute required a subtraction function. This results in a net reimbursement of $133,247.44.²

[¶ 7.] Federated filed a petition for hearing with the South Dakota Department of Labor (DOL) requesting additional reimbursement. DOL concluded that Federated was entitled to a total reimbursement of $133,247.44. The Fund was ordered to pay Federated an additional $39,607.80.³ Fund appealed. DOL denied Federated's request for prejudgment interest on the unpaid reimbursement amount of $39,607.80.

[¶ 8.] Fund appealed to the trial court and Federated, by notice of review, appealed DOL's decision to deny prejudgment interest. The trial court agreed that the correct amount was $133,247.44, but found that the third reference to the term "compensation" in said paragraph included medical and hospital expenses and barred Federated's reimbursement from Fund for medical and hospital expenses for the subsequent injury. Consequently, Federated was entitled to additional reimbursement, but medical and hospital expenses had to be deducted therefrom resulting in $22,200.36.⁴ However, the trial court found that Federated was entitled to prejudgment interest on this amount beginning September 4, 1997 pursuant to SDCL 21-1-11.

[¶ 9.] Federated appeals (1) the trial court's interpretation of the statute and Fund, by notice of review appeals (2) the award of prejudgment interest.⁵

STANDARD OF REVIEW

[¶ 10.] The issues on appeal involve questions of statutory interpretation which are questions of law and are reviewed by this court de novo. South Dakota Subsequent Injury Fund v. Casualty Reciprocal Exchange, 1999 SD 2, ¶ 12, 589 N.W.2d 206, 208 (citing Dahn v. Trownsell, 1998 SD 36, ¶ 14, 576 N.W.2d 535, 539); Oesterreich, 511 N.W.2d at 826 (citing Dubbelde v. John Morrell & Co., 473 N.W.2d 500, 501 (S.D.1991)).

[¶ 11.] 1. WHETHER THE TERM "COMPENSATION" IN SDCL 62-4-34 INCLUDES MEDICAL AND HOSPITAL EXPENSES.

[¶ 12.] Federated claims that the trial court misinterpreted SDCL 62-4-34. It argues that the plain meaning of the term "compensation" as used alone in SDCL 62-4-34 does not include medical and hospital expenses. In support of its argument, Federated points to the legislative history of this statute. Based on the preceding version, Federated argues that the 1984 legislature intended to broaden the scope of recovery to include not only "all compensation," but also "medical and hospital expenses."

[¶ 13.] The purpose of rules of statutory construction is:

The purpose of rules regarding the construction of statutes is to discover the true intention of the law, and said intention is to be ascertained by the court primarily from the language expressed in the statute. In applying legislative enactments, we must accept them as written. The legislative intent is determined from what the legislature said, rather than from what we or others think it should have said.

Casualty, 1999 SD 2, ¶ 17, 589 N.W.2d at 209 (quoting Delano v. Petteys, 520 N.W.2d 606, 608 (S.D.1994) (quoting In re Famous Brands, Inc., 347 N.W.2d 882, 884-85 (S.D.1984))).

[¶ 14.] The 1984 version of SDCL 62-4-34 provided, in part:

[I]f the employee is entitled to receive compensation on the basis of the combined disabilities, the employer shall pay all medical and hospital expenses and compensation provided by this title. The employer shall be reimbursed from the `subsequent injury fund' for all compensation, medical and hospital expenses, paid in excess of the compensation paid for the degree or percentage of disability which would have resulted from the last injury had there been no preexisting disability....

The 1984 Legislative Act requires that employers pay "all medical and hospital expenses and compensation...." This is the first reference to "compensation" and it is clear that the legislature did not intend the term "compensation" to include medical and hospital expenses because they refer to them all in the same sentence.

[¶ 15.] The sentence next following in the statute also addresses the terms separately: "the employer shall be reimbursed... for all compensation, medical and hospital expenses,...." The last portion of this sentence provides "paid in excess of the compensation paid for the degree or percentage of disability which would have resulted from the last injury had there been no preexisting disability." Here, in this portion of the sentence, the term "compensation" is not accompanied by the words "medical and hospital expenses" as it was in the first two references in said statute.

[¶ 16.] Fund claims we should put these words in or interpret the word "compensation" as if it refers back to "all compensation" and "medical and hospital expenses." We decline the invitation. Obviously, if the legislature intended the term "compensation" to include medical and hospital expenses, it could have easily done so.

[¶ 17.] We have often stated:

One of the primary rules of statutory... construction is to give words and phrases their plain meaning and effect. This court assumes that statutes mean what they say and that legislators have said what they meant. When the language of a statute is clear, certain and unambiguous, there is no occasion for construction, and the court's only function is to declare the meaning of the statute as clearly expressed in the statute.

Casualty, 1999 SD 2, ¶ 17,589 N.W.2d at 209 (quoting Delano, 520 N.W.2d at 608 (quoting In re Famous Brands, Inc., 347 N.W.2d at 884-85)). Based on the structure of the language itself, the use of the term "compensation" as used alone in this reference in the statute, does not include medical and hospital expenses. We are bound by the unambiguous language of the statute. Therefore, extrinsic evidence is not needed. However, even the extrinsic evidence supports our decision.

[¶ 18.] The 1978 version of this statute further assists in ascertaining the legislative intent:

It is a cardinal principle of statutory construction to give effect to the legislative intent where possible. It is further an established principle of statutory construction that, where the wording of an act is changed by amendment, it is evidential of an intent that the words shall have a different construction.

Id. ¶ 18 (quoting In re Dwyer, 49 S.D. 350, 207 N.W. 210, 212 (1926)). "When an amendment is passed, it is presumed the legislature intended to change existing law." Id. (citations omitted).

[¶ 19.] As indicated, the 1978 version of SDCL 62-4-34 was amended in 1984. Prior to the amendment in 1984, the statute provided in part as follows:

[I]f the employee is entitled to receive compensation on the basis of the combined disabilities, the employer shall pay all medical and hospital expenses and compensation provided by this title but he shall be reimbursed from the `subsequent injury fund' for all compensation paid in excess of the compensation paid for the degree or percentage of disability which would have resulted from the last injury had there been no preexisting disability.

Act effective July 1, 1978, ch. 370, 1978 SD Laws 580 (emphasis added). Under this version, medical and hospital expenses were not included in the terms "all compensation." It is obvious when reviewing this source statute, that the employer was entitled to reimbursement of "all compensation" but not "all compensation" and "medical and hospital expenses."

[¶ 20.] In 1984, the legislature specifically added the words "medical and hospital...