TRUCK UNDERWRITERS v. INJURY FUND

• Decision Date: 27 October 2004
• Docket Number: No. 22975.,22975.
• Citation: 689 N.W.2d 196,2004 SD 120
• Court: South Dakota Supreme Court
• Parties: DAKOTA TRUCK UNDERWRITERS, Petitioners and Appellants, and Travelers Insurance Company, Petitioners and Appellants, v. SOUTH DAKOTA SUBSEQUENT INJURY FUND, Respondent and Appellee.

689 N.W.2d 196

2004 SD 120

DAKOTA TRUCK UNDERWRITERS, Petitioners and Appellants, and Travelers Insurance Company, Petitioners and Appellants, v. SOUTH DAKOTA SUBSEQUENT INJURY FUND, Respondent and Appellee.

No. 22975.

Supreme Court of South Dakota.

Argued April 28, 2004.

Decided October 27, 2004.

Mark F. Marshall of Davenport, Evans, Hurwitz & Smith, Sioux Falls, South Dakota, Attorneys for petitioners and appellant.

Sara B. Harens, Special Assistant Attorney General, S.D. Department of Revenue & Regulation, Division of Insurance, Pierre, South Dakota, Attorneys for respondent and appellee.

ANDERSON, LEE D., Circuit Judge.

[¶ 1.] Dakota Truck Underwriters and Travelers Insurance Co. (Insurers) appeal from a circuit court order which dismissed Insurers' claims for reimbursement from the South Dakota Subsequent Injury Fund (SIF) because Insurers failed to file their claims within the applicable statute of limitations period. The court held that the doctrines of equitable estoppel and equitable tolling did not apply. Due to the unique history and circumstances of these subsequent injury claims, we hold that the doctrine of equitable tolling applied to extend the claims filing period. Insurers' claims against SIF were timely filed. We affirm, in part, reverse, in part and remand for consideration of the merits of Insurers' claims.

BACKGROUND

[¶ 2.] For many years prior to July 1, 1999, there was a South Dakota Subsequent Injury Fund. Employers/insurers that paid workers' compensation benefits to injured employees who had sustained prior injuries were entitled to file a claim for partial reimbursement against SIF. The fund was financed by employers paying an additional surcharge into the fund based upon their workers' compensation premiums.¹

[¶ 3.] The statutes dealing with SIF and claims procedures were set forth in SDCL 62-4-34 et seq. The 1992 version of SDCL 62-4-34.1, which was in effect prior to July 1, 1999, provided in pertinent part:

Any claim against the subsequent injury fund shall be filed with the division of insurance within ninety days from the date of the final decision by the department [of Labor] that a compensable injury exists resulting in additional permanent partial or permanent total disability, or approval by the department of settlement between the parties. No claim may be filed prior to a decision or approval of settlement from the department.

[¶ 4.] The South Dakota Legislature repealed SDCL 62-4-34.1 in 1999. 1999 SD Sess.L. ch. 262 § 3. SDCL 62-4-34.7 was enacted to provide a process for resolving outstanding claims. 1999 SD Sess.L. ch. 262, § 1. It required such claims to be filed by June 30, 1999. SDCL 62-4-34.7 provided:

Administration of the subsequent injury fund by the Division of Insurance and reimbursement of complete and valid claims shall continue until approved, denied, or settled. Any claim for reimbursement from the subsequent injury fund shall be filed by June 30, 1999. Only those claims timely filed with the division by June 30, 1999, pursuant to the requirements of § 62-4-34.1 in effect prior to July 1, 1999, and completed by October 1, 1999, pursuant to the requirements set forth in § 62-4-34.4 in effect prior to July 1, 1999, shall be eligible for reimbursement from the subsequent injury fund. Any claim timely filed by June 30, 1999, and completed by October 1, 1999, as set forth in this section, shall be approved or denied by the division pursuant to the requirements of §§ 62-4-34 to 62-4-36.3, inclusive, in effect prior to July 1, 1999. The division shall continue to make any necessary assessments pursuant to the requirements set forth in § 62-4-35 in effect prior to July 1, 1999, until all eligible claims completed as set forth in this section that are approved by the division or determined by the court to be eligible for reimbursement are paid, and until all matters in litigation concerning the subsequent injury fund are resolved. Any claim in matters being litigated concerning the subsequent injury fund is not eligible for interest or costs. Any remaining balance in the fund after all obligations of the fund have been satisfied shall be deposited in the general fund. Priority of payment shall be determined as of the date and time they are determined by the division to be complete and valid. No claim against the subsequent injury fund is vested until it is complete as set forth in this section. Any completed claim regardless of the date of injury or the date of notice of claim is subject to the two-thirds method of reimbursement pursuant to § 62-4-34 in effect prior to July 1, 1999.

[¶ 5.] Insurers in this case had eight potential claims arising out of injuries that had occurred prior to July 1, 1999. However, these claims were neither decided nor were their settlements approved by Department until between November 1, 1999 and December 22, 2000. During this time period, Insurers were aware of the June 30, 1999 deadline for filing claims under SDCL 62-4-34.7. Therefore, Insurers believed it to be a useless act to file claims with SIF after June 30, 1999.

[¶ 6.] During 2000-2001 Homestake Mining v. Subsequent Injury Fund, 2002 SD 46, 644 N.W.2d 612 was making its way through the court system. The circuit court judge in that case ruled that the provisions of SDCL 62-4-34.7 and the former 62-4-34.1 worked to unconstitutionally deny Homestake of its right to receive a reimbursement from the fund. Id. 2002 SD 46 at ¶ 6, 644 N.W.2d at 614. Nevertheless, the circuit court ruled the Homestake claims were untimely filed and granted summary judgment upholding the dismissal of the claims. The judgment was affirmed. Id., 2002 SD 46 at ¶ 37, 644 N.W.2d at 622.

[¶ 7.] During the 2001 legislative session, while the Homestake claims were being litigated in the circuit court, House Bill 1208 was passed extending the deadline for filing a timely claim with SIF.2001 SD Sess.L. ch. 293 § 1. This legislation amended SDCL 62-4-34.7 and allowed claims to be filed for subsequent injuries that occurred before July 1, 2001. It removed the language from § 62-4-34.7 which allowed "only those claims timely filed with the division by June 30, 1999. . ." and stated in pertinent part:

Administration of the subsequent injury fund by the Division of Insurance and reimbursement of complete and valid claims shall continue until approved, denied, or settled. No claim for reimbursement from the subsequent injury fund may be filed based on a subsequent injury that occurs on or after July 1, 2001. Any claim for reimbursement filed as set forth in this section shall be approved or denied by the division pursuant to the requirements of §§ 62-4-34 to 62-4-36.3, inclusive, in effect prior to July 1, 1999 . . .

[¶ 8.] This amendment appeared to eliminate the quagmire which existed for claims that were vested, but non-ripe June 30, 1999. The 2001 legislative change became effective July 1, 2001.

[¶ 9.] Insurers filed claims for reimbursement from SIF during September 2001, within ninety days of July 1, 2001.

FACTS AND PROCEDURE

[¶ 10.] The facts and sequence of events concerning Insurers' claims are undisputed by either party. Insurers filed eight separate claims for reimbursement from SIF.²

[¶ 11.] This Court has consistently ruled that in workers' compensation cases the law in effect when the injury occurred governs the rights of the parties. S.D. S.I.F., 2002 SD 34, at ¶ 3, 641 N.W.2d at 657. Accordingly, following the filing of the claims, Department ruled that the governing law in effect at the time of the subsequent injury controlled. Thus, Department ruled that Insurers were required to file their claims within ninety days of the approval of settlement or determination of the employee's workers' compensation claims by Department. Department found that this did not occur and the claims were dismissed as being untimely.

[¶ 12.] Insurers appealed Department's dismissal of the eight claims to circuit court. Insurers questioned whether Department correctly concluded that Insurers' claims for reimbursement against SIF were untimely filed. Insurers argued that equitable estoppel, equitable tolling, or both, should apply to relieve them of the effects of the law and allow the presentation of Insurers' claims.

[¶ 13.] The circuit court held that the doctrine of equitable tolling did not apply to Insurers because the filing of their claims against SIF was not reasonable or in good faith. The court also held that the doctrine of equitable estoppel did not apply since there was neither false representation nor concealment of material facts. The circuit court held that Department properly dismissed Insurers' claims because they were untimely filed.

[¶ 14.] The issue on appeal is whether the doctrines of equitable tolling or equitable estoppel applied to extend the period within which Insurers could file their claims with SIF.

STANDARD OF REVIEW

[¶ 15.] This case turns on the application of the statute of limitations and interpretation of the effect of a statutory amendment, both questions of law. "Questions of law are reviewed de novo with no deference given to the conclusions of law of the circuit court." Homestake, 2002 SD 46 at ¶ 12, 644 N.W.2d at 616. "Questions of law are subject to de novo review; no deference is given to an agency's conclusion of law." Enger v. FMC, 2000 SD 48, ¶ 7, 609 N.W.2d 132, 134. Further, this Court's review of the administrative agency's decision is unaided by any presumption that the circuit court's review of the agency's decision was correct. Interstate Tel. Co-op., Inc. v. PUC, 518 N.W.2d 749, 751 (S.D.1994)

.

[¶ 16.] This Court has not determined its standard of review for equitable tolling. We have, however, recognized that in reviewing the application of the doctrine of equitable estoppel, we are presented with a fully reviewable mixed question of law and fact. See Crouse v. Crouse, 1996 SD 95, ¶ 14, 552 N.W.2d 413, 417

(equitable estoppel is...