Sims v. United States Fidelity & Guar. Co.

• Decision Date: 28 January 2003
• Docket Number: No. 49S02-0105-CV-229.,49S02-0105-CV-229.
• Citation: 782 N.E.2d 345
• Parties: John SIMS, Appellant (Plaintiff), v. UNITED STATES FIDELITY & GUARANTY COMPANY, Appellee (Defendant).
• Court: Indiana Supreme Court

782 N.E.2d 345

John SIMS, Appellant (Plaintiff), v. UNITED STATES FIDELITY & GUARANTY COMPANY, Appellee (Defendant).

No. 49S02-0105-CV-229.

Supreme Court of Indiana.

January 28, 2003.

W.F. Conour, Conour Doehrman, Indianapolis, IN, Attorney for Appellant.

Julia Blackwell Gelinas, David T. Kasper, Nelson D. Alexander, Locke Reynolds LLP, Indianapolis, IN, Attorneys for Appellee.

William R. Groth, Geoffrey S. Lohman, Fillenwarth Dennerline Groth & Towe, Indianapolis, IN, Attorneys for Amicus Curiae Indiana State AFL-CIO in Opposition to Transfer.

Nathan B. Maudlin, Ice Miller, Indianapolis, IN, Attorney for Amicus Curiae the Insurance Institute of Indiana, the Indiana Chamber of Commerce, the American Insurance Association, the National Association of Independent Insurers, and the Alliance of American Insurers in Support of Transfer. RUCKER, Justice.

Indiana Code section 22-3-4-12.1 grants exclusive jurisdiction to the Worker's Compensation Board to determine whether a worker's compensation insurance carrier committed an independent tort in adjusting or settling the injured worker's claim. Specifically subsection (a) of the statute provides:

The worker's compensation board, upon hearing a claim for benefits, has the exclusive jurisdiction to determine whether the employer, the employer's worker's compensation administrator, or the worker's compensation insurance carrier has acted with a lack of diligence, in bad faith, or has committed an independent tort in adjusting or settling the claim for compensation.

We decide today that the statute is not constitutionally infirm.

Facts and Procedural History

John Sims was employed as a laborer for Hagerman Construction Corporation. On September 9, 1998, he was injured while working at Conseco Fieldhouse in Indianapolis. More particularly, while walking down a flight of metal stairs, Sims tripped over a welding lead that had been draped across the stairway. Falling down the stairs, Sims sprained his left ankle and sustained a fracture to his left tibia.

Hagerman Construction filed a "First Report of Injury" notice with its worker's compensation carrier, United States Fidelity and Guaranty Company ("USF&G"). On October 20, 1998, USF&G sent Sims a letter requesting that he complete a "Statement of Claim" form. Sims did so and returned the form. On October 22, 1998, Sims contacted USF&G by letter seeking to schedule medical care and requesting payment of temporary total disability benefits under the Worker's Compensation Act ("Act"). USF&G did not respond. He followed up the request on November 11, 1998. Again the insurance carrier failed to respond. On November 23, 1998, Sims filed a complaint in the Marion Superior Court alleging USF&G was grossly negligent, intentionally inflicted emotional distress, and intentionally deprived him of certain statutory rights by refusing to provide worker's compensation benefits and by denying him access to timely medical care and physical therapy.

In response, USF&G filed a motion to dismiss under Indiana Trial Rule 12(B)(1) alleging lack of subject matter jurisdiction. Citing Indiana Code section 22-3-4-12.1, USF&G argued that the Worker's Compensation Board had the exclusive jurisdiction over the claims alleged in Sims' complaint. The trial court agreed and granted the motion to dismiss. Sims appealed making several Indiana constitutional challenges to the statute. Finding two of the challenges dispositive, a divided panel of the Court of Appeals reversed the trial court holding Indiana Code section 22-3-4-12.1 violated the "open courts" provision of Article I, Section 12 of the Indiana Constitution and the right to a trial by jury as expressed in Article I, Section 20 of the Indiana Constitution. See Sims v. U.S. Fid. & Guar. Co., 730 N.E.2d 232, 234 (Ind.Ct.App.2000). Having previously granted transfer, we conclude the statute violates neither section of the Indiana Constitution and thus affirm the trial court.

Standard of Review

When a statute is challenged as an alleged violation of the Indiana Constitution, our standard of review is well settled. A statute is presumed constitutional until the party challenging its constitutionality clearly overcomes the presumption by a contrary showing. Boehm v. Town of St. John, 675 N.E.2d 318, 321 (Ind.1996). If a statute has two reasonable interpretations, one constitutional and the other not, we will choose the interpretation that will uphold the constitutionality of the statute. Id. We do not presume that the General Assembly violated the constitution unless the unambiguous language of the statute so mandates. Id. This Court should "nullify a statute on constitutional grounds only where such result is clearly rational and necessary." Bd. of Comm'rs of the County of Howard v. Kokomo City Plan Comm'n, 263 Ind. 282, 330 N.E.2d 92, 95 (1975).

Discussion

I.

Article I, Section 12 of the Indiana Constitution provides: "All courts shall be open; and every person, for injury done to him in his person, property, or reputation, shall have remedy by due course of law. Justice shall be administered freely, and without purchase; completely, and without denial; speedily, and without delay." Ind. Const. art I, § 12 (emphasis added). Sims contends, and the Court of Appeals agreed, that granting the Worker's Compensation Board the exclusive jurisdiction to adjudicate independent tort claims "effectively closes the courthouse doors to workers seeking to pursue redress against errant employers or worker's compensation insurance carriers in attempting to settle their worker's compensation claims." Sims, 730 N.E.2d at 235.

The Worker's Compensation Act contains an exclusivity provision that provides:

The rights and remedies granted to an employee ... on account of personal injury or death by accident shall exclude all other rights and remedies of such employee, the employee's personal representatives, dependents, or next of kin, at common law or otherwise, on account of such injury or death, except for remedies available under IC 5-2-6.1.

Ind.Code § 22-3-2-6 (West Supp.2002). This statute limits an employee whose injury meets the jurisdictional requirements of the Act to the rights and remedies provided therein. Perry v. Stitzer Buick GMC, Inc., 637 N.E.2d 1282, 1285 (Ind. 1994); Campbell v. Eckman/Freeman & Assocs., 670 N.E.2d 925, 930 (Ind.Ct.App. 1996),trans. denied. Accordingly, if an employee's injury occurred by accident arising out of and in the course of employment, then the employee is entitled to worker's compensation benefits. The exclusivity provision bars a court from hearing any common law action brought by the employee for the same injuries. Campbell, 670 N.E.2d at 930; see Wine-Settergren v. Lamey, 716 N.E.2d 381, 384 (Ind.1999). However, the Act permits an action against third party tortfeasors, so long as the third party is neither the plaintiff's employer nor his fellow employee. I.C. § 22-3-2-13 (West Supp.2002); see Wine-Settergren, 716 N.E.2d at 384; Campbell, 670 N.E.2d at 930. Under the Act, the term "employer" includes the worker's compensation carrier. See I.C. § 22-3-6-1(a) (West Supp.2002).

In Stump v. Commercial Union, 601 N.E.2d 327 (Ind.1992) this Court was called upon to respond to a certified question from the United States District Court, Northern District of Indiana, Fort Wayne Division. We were asked whether Indiana law permitted a cause of action by an injured employee against a worker's compensation insurance carrier for injuries proximately caused by the insurance carrier's tortious conduct such as gross negligence, intentional infliction of emotional distress, and constructive fraud. Id. at 329. This Court held that the exclusive remedy provision of the Act does not preclude an employee from filing a complaint in court against a worker's compensation insurance for such claims. Id. at 333. We reasoned that the exclusive remedy provision precludes an employee's action outside the Act only when the injury occurs by accident and in the course of employment. Id. at 331. However an additional harm caused by a carrier's mishandling of a claim was not the type of harm the Act was intended to compensate. Id. Although not expressly analyzing the point, we also noted that this interpretation was consistent with the "open courts" provision of Article I, Section 12. Id.

Relying on the reasoning in Stump, the Court of Appeals majority in this case held that the portion of Indiana Code section 22-3-4-12.1 which declares that the Worker's Compensation Board "`has the exclusive jurisdiction to determine whether the... employer's worker's compensation insurance carrier has ... committed an independent tort in adjusting or settling the claim for compensation'" violates Article I, Section 12 of the Indiana Constitution. Sims, 730 N.E.2d at 235 (quoting I.C. § 22-3-4-12.1(a)). However, Indiana Code section 22-3-4-12.1 was enacted after Stump and likely represented a legislative response to it. The Court of Appeals majority acknowledged as much but nonetheless found that the statute violated the "open courts" clause of the Indiana Constitution by unreasonably denying Sims access to the courts and denying him a complete remedy for the insurance carrier's alleged independent tort. Id. However, because of the legislative enactment, Stump is no longer controlling.

In Martin v. Richey, 711 N.E.2d 1273 (Ind.1999), this Court examined Article I, Section 12 in the context of considering the constitutionality of the medical malpractice statute of limitations. In so doing, we noted that this Court has never held that there is a "fundamental right" to access to the courts. Id. at 1283. Rather, the legislature "has the authority to modify or abrogate common law rights provided that such change does not interfere with constitutional rights." Id. We reiterated "there is a right of access to the courts, and ... the legislature cannot unreasonably deny citizens the right to exercise...