Soc'y Ins. v. Labor & Indus. Review Comm'n
| Citation | 326 Wis.2d 444,786 N.W.2d 385,2010 WI 68 |
| Decision Date | 08 July 2010 |
| Docket Number | No. 2008AP3135.,2008AP3135. |
| Parties | SOCIETY INSURANCE and James Meyer, Inc., Plaintiffs-Respondents,v.LABOR & INDUSTRY REVIEW COMMISSION and Gary Liska, Defendants,Work Injury Supplemental Benefit Fund, Defendant-Appellant. |
| Court | Wisconsin Supreme Court |
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For the defendant-appellant the cause was argued by David A. Hart III, assistant attorney general, with whom on the briefs was J.B. Van Hollen, attorney general.
For the plaintiffs-respondents there was a brief by James W. Goonan, Grace M. Kulkoski, and Peterson, Johnson & Murray, S.C., Madison, and oral argument by James W. Goonan.
An amicus curiae brief was filed by James A. Friedman, Eric J. Weiss, and Godfrey & Kahn, S.C., Madison, on behalf of the Wisconsin Insurance Alliance, and oral argument by James A. Friedman.
ON CERTIFICATION FROM THE COURT OF APPEALS
¶ 1 This case comes before us by certification from the court of appeals. The certified question is: “Whether retroactive application of Wis. Stat. §§ 102.17(4) and 102.66(1), as amended effective April 1, 2006, is unconstitutional.”
¶ 2 On June 25, 1982, Gary Liska (Liska) sustained a work-related injury to his right leg that required amputation below the knee. Society Insurance Co. (Society), the insurer for James Meyer, Inc. (Meyer), paid worker's compensation benefits to Liska. Society paid temporary total disability benefits intermittently from June 25, 1982 through June 12, 1990, and permanent partial disability benefits, which were paid in advance on February 18, 1983. On February 25, 2004, Liska filed a claim for additional medical expenses.
¶ 3 Under the law in effect at the time of Liska's injury, Society's liability to pay Liska's benefits or treatment expense expired on June 12, 2002, pursuant to the 12-year statute of limitations. See Wis. Stat. § 102.17(4) (2003-04).1 Therefore, any subsequent payments to Liska would have been paid from the Work Injury Supplemental Benefit Fund (the Fund). See Wis. Stat. § 102.66(1) (2003-04).2 Subsequently, the legislature amended §§ 102.17(4) (2005-06) 3 and 102.66(1) (2005-06),4 effective April 1, 2006, and in so doing, shifted the burden of payment of an employee's benefits or treatment expense for traumatic injuries becoming due after 12 years from the date of injury, death or last payment of compensation, from the Fund to the insurer or employer. 2005 Wis. Act 172, §§ 15, 62. The parties concede, for purposes of this appeal, that the legislature intended such changes to apply retroactively, thereby requiring Society to pay Liska's benefits or treatment expense becoming due after June 12, 2002.
¶ 4 The Fund appeals an order of the circuit court declaring the retroactive application of Wis. Stat. §§ 102.17(4) and 102.66(1) (2005-06),5 “unconstitutional as being violative of due process and the contract clause.”
¶ 5 We conclude that the retroactive application of Wis. Stat. §§ 102.17(4) and 102.66(1), as amended effective April 1, 2006, is unconstitutional as applied to Society for two reasons: (1) it violates Society's due process rights guaranteed by the Fourteenth Amendment to the United States Constitution and Article I, Section 1 of the Wisconsin Constitution; and (2) it substantially impairs Society's contractual obligation in violation of Article I, Section 10 of the United States Constitution and Article I, Section 12 of the Wisconsin Constitution.
¶ 6 On June 25, 1982, Liska, while employed by Meyer, sustained a work-related injury that required amputation of his right leg below the knee. For this traumatic injury, Society, Meyer's insurer, paid Liska worker's compensation benefits. Specifically, Society paid temporary total disability benefits to Liska intermittently from June 25, 1982 to June 12, 1990, totaling $6,873.08. Society also paid permanent partial disability benefits to Liska, which accrued each week temporary total disability benefits were not paid. Society admitted liability for 337.5 weeks (6.49 years) of permanent partial disability and paid such benefits in an advance lump sum February 18, 1983, which, less the interest credit of $5,537.99, totaled $24,837.01. It is undisputed that June 12, 1990 is the date of Society's last indemnity payment to Liska.
¶ 7 On February 25, 2004, Liska filed an additional worker's compensation claim for payment of treatment expenses totaling $14,364.94 plus transportation costs, along with an application for a hearing with the Department of Workforce Development Worker's Compensation Division (Department). Society answered alleging that Liska's claim was time-barred pursuant to the 12-year statute of limitations under Wis. Stat. § 102.17(4) (2003-04). Accordingly it denied Liska's claim, and directed Liska to submit his claim to the Fund pursuant to Wis. Stat. § 102.66(1) (2003-04). On September 16, 2004, an administrative law judge issued an order declaring Liska's claim as to Society barred by the statute of limitations and directed the Fund to pay $3,322.43 for various expenses incurred by Liska.
¶ 8 On July 27, 2006, the Fund began forwarding Liska's treatment expense invoices to Society for payment. Society filed an application for hearing. An administrative law judge for the Department held a hearing on the matter. On December 14, 2007, the Department issued an order concluding that pursuant to Wis. Stat. §§ 102.17(4) and 102.66(1) (2003-04) the 12-year statute of limitations ran on Liska's traumatic injury claim on June 12, 2002; however, 2005 Wis. Act 172, which amended §§ 102.17(4) and 102.66(1), suspended the 12-year statute of limitations for a certain category of traumatic injuries shifting the burden of payment back to the insurer. Concluding that the amendments applied retroactively to Liska's claim, but expressly declining to rule on the constitutionality of the amendments, the Department concluded that “Society Insurance has liability for [Liska's] claim and is ordered to make payment of ... medical expenses associated with this injury.”
¶ 9 Society petitioned the Labor and Industry Review Commission (Commission) for review of the Department's interlocutory order. On May 13, 2008, the Commission affirmed the findings and order of the Department. It expressly declined to decide the constitutionality of the retroactive application of Wis. Stat. §§ 102.17(4) and 102.66(1) noting that “the Commission ... has no authority to address the constitutionality of statutes it enforces.”
¶ 10 Society sought review of the Commission's decision in the circuit court. On September 29, 2008, the circuit court concluded that the legislature intended Wis. Stat. §§ 102.17(4) and 102.66(1), as amended effective April 1, 2006, to apply retroactively. The circuit court further concluded “that the retroactive application of [§§ ]102.17(4) and 102.66(1) as amended effective 4/01/06 is unconstitutional as being violative of the contract clause and due process rights of Society.” Accordingly, the circuit court directed the Fund to reimburse Society for any treatment expense Society paid to Liska after April 1, 2006, and declared “that the Fund shall be responsible for Mr. Liska's ... medical expenses regarding the June 25, 1982, injury from this point forward.”
¶ 11 In so concluding, the circuit court made several findings of fact. First, in determining that the impairment of Society's contractual obligation was substantial, the circuit court calculated the treatment expenses Liska had submitted since the 12-year statute of limitations ran. It found that in 2004, “Liska submitted over $14,000 worth of expenses for payment” of which the Fund was ordered to pay approximately $3,300. The circuit court further found that Liska submitted additional expenses in 2007 in the amount of $2,189.80 or $8,159.09, depending on whether Liska's health insurer was to be reimbursed. The circuit court concluded that these were substantial expenses to impose on Society. Second, the circuit court found that “there isn't any way for [Society] to address premiums to pay for currently existing expenses for claims where the statute of limitations has already run.”
¶ 12 The Fund appealed. The court of appeals certified the appeal, which we accepted pursuant to Wis. Stat. § 808.05(2).6 We now affirm the decision of the circuit court.
¶ 13 Whether the retroactive application of a statute is constitutional presents a question of law that we review de novo. See Barbara B. v. Dorian H., 2005 WI 6, ¶ 8, 277 Wis.2d 378, 690 N.W.2d 849 (citing Neiman v. Am. Nat'l Prop. & Cas. Co., 2000 WI 83, ¶ 8, 236 Wis.2d 411, 613 N.W.2d 160). Although “ ‘this court does defer to a certain extent’ to the interpretation and application of the statute by the enforcing agency,” we need not do so here because the enforcing agency expressly declined to rule on the constitutionality of the retroactive application of Wis. Stat. §§ 102.17(4) and 102.66(1), as amended. Chappy v. LIRC, 136 Wis.2d 172, 180, 401 N.W.2d 568 (1987) (quoting Pigeon v. DILHR, 109 Wis.2d 519, 525, 326 N.W.2d 752 (1982)). In determining whether §§ 102.17(4) and 102.66(1) are unconstitutional, we will uphold the circuit court's findings of historical fact unless they are clearly erroneous. See id. at 184, 401 N.W.2d 568.
¶ 14 To determine whether Society's constitutional rights have been violated by the retroactive application of Wis. Stat. §§ 102.17(4) and 102.66(1), some background on the Fund, including the changes implemented by 2005 Wis. Act 172, is necessary.
¶ 15 The Fund, established under Wis. Stat. § 102.65, creates a source of supplemental worker's compensation benefits for certain cases in addition to the benefits the Worker's Compensation Act (the Act) requires an insurer “to pay to an employee who is injured or who dies in the course...
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