Travelers Cas. Ins. v. Karns
| Decision Date | 17 September 2021 |
| Docket Number | No. 121,344,121,344 |
| Citation | 499 P.3d 491 |
| Parties | TRAVELERS CASUALTY INSURANCE, Appellant, v. Larry G. KARNS and OneBeacon American Insurance Company, Appellees. |
| Court | Kansas Court of Appeals |
William L. Townsley and Lyndon W. Vix, of Fleeson, Gooing, Coulson & Kitch, L.L.C., of Wichita, for appellant Travelers Casualty Insurance.
Glenn H. Griffeth, special assistant attorney general, Kansas Department of Labor, for appellee Larry G. Karns.
Timothy A. Emerson, of Wallace Saunders, Chtd., of Wichita, for appellee Kansas Workers Compensation Fund.
Kip A. Kubin, of Martin Pringle, of Overland Park, for appellee OneBeacon American Insurance Company.
Before Arnold-Burger, C.J., Hill and Atcheson, JJ.
Sometimes even an appellate court can overlook the obvious and complicate a case beyond the recognition of the parties. That is what happened here. At one point, the parties presented this court with a straightforward question: Could the Director of the Workers Compensation Fund (Fund) deny a request for payment from the Fund that an administrative law judge (ALJ) ordered and instead impose payment on a third party? We then complicated that question beyond recognition by remanding the case that came to us from the Shawnee County District Court, with no involvement of the Workers Compensation Board (Board), to the Board for them to basically reconsider and clarify their ruling that was final months after any time to appeal had passed. This was a result neither party requested, and no party agrees with. But rather than appeal that decision, the parties accepted it, further complicating what we do next.
After carefully peeling back the layers, we agree with the parties that the Board never acquired jurisdiction over this case, and just as the parties cannot stipulate to jurisdiction, an intermediate appellate court cannot create it out of whole cloth. Therefore, the appeal is dismissed for lack of jurisdiction.
The facts of this case can be found in two prior opinions of this court— Barker v. Grace, Unruh & Pratt , No. 108,223, 2013 WL 5187413 (Kan. App. 2013) (unpublished opinion), and Travelers Cas. Insurance v. Karns , 56 Kan. App. 2d 388, 431 P.3d 301 (2018). Those facts are unimportant here. At this stage of the litigation suffice to say that Tamera Barker suffered two distinct accidents, one in 2005 and one in 2007. These occurred while she was working for two employers, each with different workers compensation insurance carriers, OneBeacon American Insurance Company (OneBeacon) and Travelers Casualty Insurance (Travelers) respectively for purposes of this appeal. Barker , 2013 WL 5187413, at *2.
This appeal arises from a dispute—not over the amount the worker should recover, but over who should pay for the roughly $152,000 in preliminary medical benefits paid—the Workers Compensation Fund (the Fund) or Travelers. Travelers , 56 Kan. App. 2d at 390, 431 P.3d 301. So we will examine how this particular dispute came to be.
OneBeacon paid preliminary medical benefits it was not required to pay.
Early in the history of Barker's workers compensation claim, OneBeacon paid about $152,000 in preliminary medical benefits to Barker. See Travelers , 56 Kan. App. 2d at 390, 431 P.3d 301. Later, Travelers was held responsible for much of Barker's workers compensation award as well as all future medical benefits. See Barker , 2013 WL 5187413, at *2. The ALJ and arguably the Board (through its affirmance of the ALJ order) found that if preliminary medical bills were ordered to be paid outside listed coverage dates, the orders were issued in error and the "expenses [were] recoverable by the respective carriers through the [Fund]." No one contested this order, although there would later be significant disagreement about its meaning and scope. The case bounced back and forth between the Board and this court. During that time, there was no further discussion about whether overpayments by OneBeacon should be paid by the Fund. Once the Board and this court resolved all disputes and the time to appeal had passed, OneBeacon went to the Fund to get reimbursement.
OneBeacon seeks reimbursement from the Fund.
OneBeacon wrote a letter to the chief administrative officer of the Division of Workers Compensation, Larry G. Karns (Director), explaining that based on the two distinct accidents, it should not have been responsible for the preliminary medical benefits and that it was entitled to reimbursement from the Fund in the amount of $151,782.59. It was OneBeacon's position that it was simply requesting reimbursement from the Fund as it believed the Board and ALJ had directed it to do.
The Director denies OneBeacon's request and orders Travelers to reimburse OneBeacon.
As the gatekeeper of the Fund, the Director requested additional written submissions from the two insurance carriers in the case "[b]efore certifying [$151,782.59] to be reimbursed and paid to [OneBeacon] by [Travelers]." Travelers, who had not been part of any request to the Director, responded, arguing that the Fund was responsible for any reimbursement, stating that K.S.A. 2017 Supp. 44-534a(b) controlled. See Travelers , 56 Kan. App. 2d at 391, 431 P.3d 301. Travelers did not dispute the amount OneBeacon had paid in excess of the amount for which it was legally responsible based on the Board ruling. Instead, it argued that the Fund was responsible for payment. This was based on the one statement from the ALJ—that bills that were ordered to be paid outside listed coverage dates should be paid by the Fund—and not on the final decision of the Board finding Travelers responsible for expenses incurred during its coverage period.
After considering the arguments from both parties, the Director ultimately directed Travelers to reimburse OneBeacon for the full amount of the preliminary medical benefits, citing K.S.A. 2017 Supp. 44-556(e) as the controlling statute. 56 Kan. App. 2d at 392, 431 P.3d 301.
Travelers appeals the decision of the Director under the Kansas Judicial Review Act and adds two equitable claims.
Travelers faced a conundrum—how to obtain judicial review of an order from the Director denying payment from the Fund and ordering it to reimburse OneBeacon for overpayment.
So in July 2015, Travelers filed an action titled "Petition for Judicial Review or for Writ of Prohibition and an Injunction" with the Shawnee County District Court. Through the petition, Travelers sought "review by the Court of the order entered by the Workers Compensation Director." Travelers identified the parties to the action as OneBeacon and itself. It asserted that it was a party that had standing to seek judicial review because it was a person to which the agency action was specifically directed.
Travelers asserted that a petition for judicial review was the proper avenue to obtain relief because the order Although it argued that review under the Kansas Judicial Review Act (KJRA) was appropriate, Travelers—as was its duty of candor to the court—discussed and attached to its petition a copy of a memorandum decision filed by District Judge Franklin Theis that was issued a few months before this action was filed in the same judicial district. His opinion held that the KJRA was not the statutory basis for a review of the Director's order based mainly on the Supreme Court decision in Schmidtlien Electric, Inc. v. Greathouse , 278 Kan. 810, 104 P.3d 378 (2005). Thus, as an alternative basis for relief, Travelers included a writ of prohibition against the Director and an injunction against OneBeacon.
We pause to explain those terms. A writ of prohibition is "[a]n extraordinary writ issued by an appellate court to prevent a lower court from exceeding its jurisdiction or to prevent a nonjudicial officer or entity from exercising a power." Black's Law Dictionary 1465 (11th ed. 2019). Similarly, an injunction is a "court order commanding or preventing an action." Black's Law Dictionary 937 (11th ed. 2019). To obtain an injunction a party must show that there is no adequate remedy at law and "irreparable injury will result unless the relief is granted." Black's Law Dictionary 937 (11th ed. 2019); see also Hodes & Nauser, MDs v. Schmidt , 309 Kan. 610, 619, 440 P.3d 461 (2019). While injunctive relief is defined by statute in Kansas, writs of prohibition are solely a common-law remedy. See K.S.A. 60-901 (nature of injunction). They are both equitable remedies and we review a judge's decision to grant or deny them for an abuse of discretion. See State ex rel. Stovall v. Meneley , 271 Kan. 355, 379, 22 P.3d 124 (2001). So Travelers was asking that we prevent the Director from exercising his power in a way to require Travelers to pay on the claim, and an injunction to prevent OneBeacon or the Fund from trying to collect on the Director's order.
The district court relied on stipulated facts to reach its decision. The district court, in an extremely well written and thorough opinion, held Travelers could not obtain judicial review of the reimbursement ruling through the KJRA. It also held that Travelers' request for a writ of prohibition was more properly characterized as a writ of mandamus and if Travelers could establish that the Director's decision was wrong based on the facts and law he had before him, then Travelers could prevail on this theory. But based on the facts and law, the district court found that Travelers could not establish the Director was wrong or that his decision was arbitrary or unreasonable; therefore, its claim failed on the merits.
The district court noted the following in support of its conclusion that the Director did not err.
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