South Dakota Medical Service, Inc. v. Minnesota Mut. Fire & Cas. Co., 13049

• Court: Supreme Court of South Dakota
• Writing for the Court: MORGAN; WOLLMAN; HENDERSON; WOLLMAN; DUNN; I am authorized to state that FOSHEIM
• Citation: 303 N.W.2d 358
• Decision Date: 18 March 1981
• Docket Number: No. 13049,13049
• Parties: SOUTH DAKOTA MEDICAL SERVICE, INC., a/k/a Blue Shield, Plaintiff and Appellee, v. MINNESOTA MUTUAL FIRE & CASUALTY CO., Defendant and Appellee, and Darnly Motter, as Guardian of Larry Motter, Incompetent, Defendant and Appellant, and Associated Hospitals Service, Inc., d/b/a Blue Cross of Western Iowa and South Dakota, Cross-Defendant and Appellee.

Page 358

303 N.W.2d 358 SOUTH DAKOTA MEDICAL SERVICE, INC., a/k/a Blue Shield,
Plaintiff and Appellee,
v.
MINNESOTA MUTUAL FIRE & CASUALTY CO., Defendant and Appellee,
and
Darnly Motter, as Guardian of Larry Motter, Incompetent,
Defendant and Appellant,
and
Associated Hospitals Service, Inc., d/b/a Blue Cross of
Western Iowa and South Dakota, Cross-Defendant and Appellee. No. 13049. Supreme Court of South Dakota. Argued Oct. 22, 1980.
Decided March 18, 1981.

Page 359

John H. Zimmer of Zimmer, Richter & Duncan, Parker, for plaintiff and appellee.

Rodney Freeman, Jr. of Churchill, Manolis, Wheeler & Freeman, Huron, for defendant and appellee Minnesota Mut. Fire & Cas. Co.

Herbert A. Heidepriem of Heidepriem, Widmayer & Campbell, Miller, for defendant and appellant Darnly Motter.

Gary P. Thimsen of Woods, Fuller, Shultz & Smith, Sioux Falls, for cross-defendant and appellee Associated Hospitals Service, Inc.

MORGAN, Justice (on reassignment).

Appellee Blue Shield originally brought a declaratory judgment action to determine its liability under a group coverage certificate, and appellee Minnesota Mutual Fire & Casualty Company's (Minnesota) liability for workmen's compensation benefits. Appellant Darnly Motter (Darnly), on behalf of Larry Motter (Motter), filed cross-complaints against appellees Blue Cross and Minnesota. The trial court entered summary judgment in favor of appellees Blue Cross and Blue Shield and dismissed Motter's cross-complaint action against Blue Cross on its merits. Motter appealed from this summary judgment, and on appeal he concedes he does not want to recover from Minnesota, and that that question is moot. We affirm.

The Miller School District 29-1 (district) of Miller, South Dakota, employed Motter as assistant instrumental music director. After school hours on February 10, 1977, Motter, accompanied by his wife Darnly and their two children, drove to his parents' home in Elkton, South Dakota, which is only eighteen miles from Brookings, South Dakota. Motter planned to attend the South Dakota Band and Music Instructors three-day music convention (the convention) in Brookings.

In 1977 and for many years prior thereto, the convention had been held during February in Brookings, and Motter had attended every year since the beginning of his employment with district, although district did not require his attendance at the convention. If a music instructor wanted to attend, however, district allowed him the required days off with pay, and even though district would pay travel expenses, Motter submitted no such travel voucher.

From 1969 through 1977 Motter and his family made numerous personal trips to Elkton for family reunions, birthdays, and so forth. While these annual family gatherings generally coincided with the dates of the convention, Motter had also attended the family gatherings for several years prior to his employment as a music instructor.

On February 11 Motter and Darnly drove from Elkton to Brookings. Darnly dropped Motter off at the ongoing convention, then proceeded on to Sioux Falls to visit friends. When she returned from Sioux Falls later that day, she left their car in Brookings for Motter and returned to Elkton with her mother-in-law. Motter drove back to his parents' home in Elkton that night after attending the convention, and he attended no other portion of the convention. On February 12 and 13 Motter took care of personal matters, none of which related to his employment as a music instructor.

On February 13 the Motter family started home to Miller, driving on U.S. Highway 14. At a point two miles west of Iroquois, South Dakota, the Motters' vehicle crashed head-on with another vehicle. Motter received severe head injuries, and as a result, he is now completely and totally disabled.

Motter has at no time made application for benefits from Minnesota, the worker's compensation carrier for district. Minnesota nevertheless denied coverage in writing on June 16, 1977, on the grounds that his "injuries did not occur in the course of employment."

Motter proceeded against the third-party joint tort-feasor and her liability insurance carrier, eventually being paid the policy

Page 360

limit of $100,000. Motter also made requests of Blue Cross and Blue Shield for payment of his medical expenses of approximately $36,000. These insurers denied liability claiming that Motter's injuries were covered by workmen's compensation, and therefore were not covered under a clause excluding items covered by workmen's compensation.

The trial court granted Blue Cross' and Blue Shield's motions for summary judgment. Prior to granting the motions, the trial court issued a memorandum opinion which, in pertinent part, stated:

In conclusion, the Court feels that the determination of a meritorious claim or eligibility under workmen's compensation is for the Department of Labor. Further, that this determination could only have been initiated by Motter within the time allowed by law. Motter failed to do this within the two year statute of limitations, and did so knowingly and voluntarily.

The first issue to be decided on this appeal is whether the trial court is precluded from determining Motter's workmen's compensation status in a separate action to collect under a private health insurance policy containing an exclusion for items covered by workmen's compensation.

Generally, issues concerning employee injuries and whether they grew out of and in the course of the employment relationship are held to be within the purview and exclusive jurisdiction of the administrative agency charged with hearing such claims. See Steffens v. Proehl, 171 N.W.2d 297 (Iowa 1969); Jansen v. Harmon, 164 N.W.2d 323 (Iowa 1969); Herman v. Theis, 10 Mich.App. 684, 160 N.W.2d 365 (1968). But these authorities deal with claims by an employee against the employer.

In the present cross-complaint action, the employee brought an action against a third party who is neither the employer nor the perpetrator of the injury. In Bjerke v. Heartso, 183 N.W.2d 496 (N.D.1971), the Supreme Court of North Dakota dealt with a similar situation. In Bjerke the decedent was killed in an automobile accident. Decedent's spouse brought a wrongful death action against the estates of both drivers and against decedent's employer. As here, the issue of whether decedent was acting within the scope of his employment was raised. The defendants claimed that the question of workmen's compensation coverage was within the exclusive jurisdiction of the Workmen's Compensation Bureau, and because the statute of limitations had run, such a claim was forever barred. The trial court made a finding that Bjerke was acting outside the scope of his employment, so it held that the questions of workmen's compensation were eliminated from the case. The North Dakota Supreme Court, refusing to relinquish jurisdiction of Bjerke's claim, stated:

A wrongful-death action certainly is cognizable, in the first instance, in the district court .... Merely because the case incidentally has a Workmen's Compensation question in it does not oust the courts of jurisdiction.

Id. at 500.

We agree with Bjerke and hold that the trial court had jurisdiction to try the issue of scope of employment in this action for recovery on the insurance policies.

Both of the group insurers, Blue Cross and Blue Shield, had sought summary judgment on the grounds that the undisputed facts established the eligibility of Motter for workmen's compensation coverage. Motter had sought summary judgment on alternative grounds: first, that he had opted to go against the third-party tort-feasor rather than the workmen's compensation carrier, the workmen's compensation carrier had denied coverage anyway, and therefore the exclusions did not apply; or in the alternative, that he, the employee, was...