Stephenson v. Mitchell ex rel. Workmen's Compensation Dept.

• Decision Date: 08 September 1977
• Docket Number: No. 4555,4555
• Parties: William E. STEPHENSON, Appellant (One of defendants below), v. Minnie A. MITCHELL, Wyoming State Treasurer, ex rel. WORKMEN'S COMPENSATION DEPARTMENT, Appellee (Plaintiff below).
• Court: Wyoming Supreme Court

Page 95

569 P.2d 95

William E. STEPHENSON, Appellant (One of defendants below), v. Minnie A. MITCHELL, Wyoming State Treasurer, ex rel. WORKMEN'S COMPENSATION DEPARTMENT, Appellee (Plaintiff below).

No. 4555.

Supreme Court of Wyoming.

Sept. 8, 1977.

Ernest Wilkerson, New York City, on the brief, and John Burk, Casper, argued, for appellant.

V. Frank Mendicino, Atty. Gen., Cheyenne, on the brief, and Lawrence A. Bobbitt, III, Sp. Asst. Atty. Gen., argued for appellee.

John E. Stanfield, Smith, Stanfield & Scott, Laramie, for amicus curiae.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

RAPER, Justice.

The ultimate question involved in the appeal of this case is whether the industrial accident fund, administered by the Workmen's The facts were stipulated. Early in 1966, William E. Stephenson, defendant-appellant, was injured in a collision with an automobile owned by Reed Roller-Bit Company. ¹ Defendant Stephenson was driving a pickup truck of his employer during the course of his employment and received workmen's compensation benefits in the amount of $2,011.11.

Compensation Department, State of Wyoming, can be charged attorney's fees by an employee coming under the provisions of the Worker's Compensation Act making a successful recovery in a third-party action under the provisions of § 27-54, W.S.1957, C.1967, in effect at the time the issue arose. The district court held that the industrial accident fund was entitled to reimbursement for the total amount of all awards received by the injured workman under the act and attorney's fees were not deductible as an expense of recovery. Relief is sought in this court on the grounds that § 27-54 violates the Fifth, Thirteenth and Fourteenth Amendments to the United States Constitution, and Article I, § 6, and Article X, § 4, of the Wyoming Constitution. It is further urged that § 27-54 preserved the attorney's lien created by § 29-2, W.S.1957, and that § 27-54 unfairly required the injured employee to pay for the State's share of the costs of recovery. All questions were raised in the district court. We will affirm.

Defendant Stephenson obtained a settlement of $12,500.00 in consideration of dismissal of his damage suit against Reed Roller-Bit. Stephenson offered to reimburse the Workmen's Compensation Department the sums called for in § 27-54, less one-third of the benefits for defendant Wilkerson, his counsel, which Stephenson contended should be retained as a part of his cost of collecting the State's money. The Workmen's Compensation Department disagreed and ex rel. State of Wyoming, as plaintiff, sued for the entire amount. The district court earlier in the ensuing proceedings certified two constitutional questions to this court, but the case was remanded with the questions unanswered. ²

When the matter came on again, both parties moved for summary judgment and the court entered judgment in favor of the plaintiff and against the defendants for the full sum of $2,011.11. ³ The judgment gives Stephenson no credit for attorney's fees he claims the State should help bear as its part of the cost of collection. The court further found that § 27-54, as amended by Session Laws of Wyoming, 1969, Chapter 191, repealed in 1975, and not its successor statute, § 27-313, W.S.1957, C.1967, 1975 Cum.Supp., ⁴ governed distribution of the proceeds With respect to the assertion that § 27-54 is unconstitutional, it is well settled that statutes are presumed to be constitutional unless affirmatively shown to be otherwise, and one who would deny the constitutionality of a statute has a heavy burden. The alleged unconstitutionality must be clearly and exactly shown beyond any reasonable doubt. Budd v. Bishop, Wyo.1975, 543 P.2d 368; State v. Stern, Wyo.1974, 526 P.2d 344; Johnson v. Schrader, Wyo.1973, 507 P.2d 814; Key Number 48(1), Constitutional Law, West's Wyoming Digest. The defendants fail on that score, particularly with respect to any federal violations and Article I, § 6, Wyoming Constitution. Persons contesting the constitutionality of a statute must do more than make bald assertions of what they think constitutes a failure to accord due process or any other constitutional infraction. Bell v. Gray, Wyo.1963, 377 P.2d 924, and cases there cited. Where an appellant makes only a perfunctory argument in support of a contention, this court need not consider it. First National Bank of Thermopolis v. Bonham, Wyo.1977, 559 P.2d 42. No authority at all is cited and it was acknowledged that no direct precedent related to workmen's compensation could be found. The principle theme of appellant's argument is that it is just not fair that the state industrial accident fund not share the expense of attorney's fees in the third-party recovery. In the concept of workmen's compensation, there are other views to the contrary, which we shall encompass in our discussion of the asserted transgression of the provisions of Article X, § 4, Wyoming Constitution, authorizing the creation of workmen's compensation for persons injured during the course of hazardous employment.

of the third-party settlement of $12,500.00. It held that, under § 27-54, the plaintiff is not obligated to compensate the employee from the industrial accident fund for attorney's fees expended in pursuit of a third-party damage recovery, out of which the State must be reimbursed. The district court further held that § 27-54 was constitutional and not violative of the Fifth (due process), Thirteenth (involuntary servitude) or Fourteenth (due process) Amendments to the United States Constitution, or of Article I, § 6 (due process), and Article X, § 4, of the Wyoming Constitution.

Article X, § 4, Wyoming Constitution provides:

"No law shall be enacted limiting the amount of damages to be recovered for Early in the life of the workmen's compensation laws passed pursuant to that constitutional authority, their provisions were attacked by employers as wrong, unfair, arbitrary, oppressive and a travesty on justice in that they required employers without fault to contribute to a fund to pay for injuries to their employees. In Zancanelli v. Central Coal & Coke Co., 1918, 25 Wyo. 511, 173 P. 981, the general constitutionality of such laws was sustained and it was pointed out that the legislature was substituting one entirely new system for another that it deemed unwise and not meeting justly and equitably the circumstances of present-day employments, in providing certain and speedy relief without the difficulty, expense and delays of litigation.

causing the injury or death of any person. Any contract or agreement with any employee waiving any right to recover damages for causing the death or injury of any employee shall be void. As to all extra hazardous employments the legislature shall provide by law for the accumulation and maintenance of a fund or funds out of which shall be paid compensation as may be fixed by law according to proper classifications to each person injured in such employment or to the dependent families of such as die as the result of such injuries, except in case of injuries due solely to the culpable negligence of the injured employee. Such fund or funds shall be accumulated, paid into the state treasury and maintained in such manner as may be provided by law. The right of each employee to compensation from such fund shall be in lieu of and shall take the place of any and all rights of action against any employer contributing as required by law to such fund in favor of any person or persons by reason of any such injuries or death." ⁵

It was claimed to be unfair that the careful employer must contribute to a fund and suffer for the acts of the negligent employer, and; that the right of the employee to be fully protected from the negligence of his employer was taken away. Upon this latter point, the court was pointing out what we see to be a divorce between the first sentence of Article X, § 4, protecting an individual from being limited in his recovery by reason of injury or death through the wrongful acts of another, and the right of the legislature for the public welfare to limit those recoveries in the interest of the greater number of employers and employees alike. As said by this court in Zancanelli, 53 Wyo. at 542, 173 P. at 989:

"* * * In adopting the new system both employes and employers gave up something that they each might gain something else, and it was in the nature of a compromise; * * *." ⁶ As pointed out in Zancanelli, the matter of the schedule is one for the legislature, not the courts. It is a part of the schedule provided that if the workman recovers what he has immediately received when greatest in need from the real party at fault, then his benefits must be restored to the fund from whence they came. If the legislature wishes to enlarge his benefit by charging the fund for collection from the third-party person, then that is its business, not ours.

In Brown v. State ex rel. Morgan, 1959, 79 Wyo. 355, 334 P.2d 502, this court saw an element of unfairness when in its construction of an older version of § 27-54, ⁷ it discerned an inequity to the industrial accident fund, when under its terms, the more the worker got in his third-party recovery, the less was restored to the fund and observed, "Whether or not this results in inequities and is undesirable are matters within the province of the legislature." This court's basic holding in Brown was that the legislature is the one that has the power to attach conditions to the payments made under workmen's compensation statutes, even though a condition affects an amount recovered from a third party, and, of course, that right had its roots in Article X, § 4, Wyoming Constitution.

If we were to open up Pandora's box to a consideration of unfairness in the workmen's compensation act, we would hear arguments from every side the employer, the employee and even the legislature. If we were to say that attorney's...