Zoss v. Dakota Truck Underwriters

• Decision Date: 04 March 1998
• Docket Number: No. 20019,20019
• Citation: 1998 SD 23,575 N.W.2d 258
• Parties: Kay ZOSS, as Special Administratrix of the Estate of Robert Rowland Zoss, Plaintiff and Appellee, v. DAKOTA TRUCK UNDERWRITERS, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 258

575 N.W.2d 258

1998 SD 23

Kay ZOSS, as Special Administratrix of the Estate of Robert Rowland Zoss, Plaintiff and Appellee, v. DAKOTA TRUCK UNDERWRITERS, Defendant and Appellant.

No. 20019.

Supreme Court of South Dakota.

Argued Jan. 13, 1998.

Decided March 4, 1998.

Rick Johnson of Johnson, Eklund, Nicholson Peterson & Fox, Gregory, for plaintiff and appellee.

Paul T. Barnett of Siegel, Barnett & Schutz, Sioux Falls, for defendant and appellant.

SABERS, Justice

¶1 Trial court granted summary judgment to employee's widow, ruling (1) workers' compensation insurer's statutory lien against third-party recovery in wrongful death action was limited to benefits paid as of the date the court entered an order apportioning the proceeds of the settlement. The court also ruled (2) it would apportion expenses and attorney's fees later. Insurer appeals. We reverse and remand.

FACTS

¶2 On July 13, 1995, Robert Zoss (Robert) was killed in a semi-truck accident. At the time of the accident, Robert was acting within the scope of his employment with Selland Livestock. His widow, Kay Zoss (Zoss) received workers' compensation benefits from Selland's workers' compensation insurer, Dakota Truck Underwriters (Insurer). As of January 27, 1997, Insurer paid $3,090 for burial expenses and $21,078 in death benefits. It continues to pay Zoss death benefits of approximately $1,113 per month. Those benefits will cease upon Zoss' death; her remarriage would trigger a lump-sum payment of two years' benefits. SDCL 62-4-12.

¶3 Zoss brought a wrongful death action against another driver involved in the accident, eventually settling for $215,000. She then brought a declaratory judgment action to determine the parties' interest in the settlement. The trial court granted summary judgment to Zoss, limiting Insurer's statutory lien to amounts paid as of the time the trial court apportions the wrongful death damages among the beneficiaries under SDCL 21-5-8. The court also ruled it would apportion expenses and attorney's fees at that time.

STANDARD OF REVIEW

¶4 The construction of the workers' compensation statutes and their application to these facts present questions of law, which we review de novo. Kern v. City of Sioux Falls, 1997 SD 19, p 4, 560 N.W.2d 236, 237 (citing Johnson v. Rapid City Softball Ass'n, 514 N.W.2d 693, 695 (S.D.1994)). The facts in this case are undisputed; therefore, we will affirm summary judgment if the trial court correctly applied the law. Weiss v. Van Norman, 1997 SD 40, p 9, 562 N.W.2d 113, 115 (citations omitted).

¶5 1. WHETHER INSURER'S STATUTORY LIEN ATTACHES TO THE ENTIRE SETTLEMENT.

¶6 There are two statutes at issue. SDCL 62-4-38, discussed later, and SDCL 62-4-39, which provides:

If compensation has been awarded and paid under this title and the employee has recovered damages from another person, the employer having paid the compensation may recover from the employee an amount equal to the amount of compensation paid by the employer to the employee, less the necessary and reasonable expense of collecting the same, which expenses may include an attorney's fee not in excess of thirty-five percent of compensation paid, subject to § 62-7-36.

The parties do not dispute that SDCL 62-4-39 creates a statutory lien to reimburse an employer or insurer for workers' compensation benefits already paid, less Insurer's share of the expenses and attorney's fee for collecting from the third party tortfeasor. See Liberty Mut. Ins. Co. v. Garry, 1998 SD 22, p 8, 574 N.W.2d 895, 897; Schipke v. Grad, 1997 SD 38, p 14, 562 N.W.2d 109, 113; National Farmers Union Property & Cas. Co. v. Bang, 516 N.W.2d 313, 321 (S.D.1994).

Future Benefits

¶7 This dispute centers on SDCL 62-4-38 and its effect on benefits owed but not yet paid:

If an injury for which compensation is payable under this title has been sustained under circumstances creating in some other person than the employer a legal liability to pay damages in respect thereto, the injured employee may, at the employee's option, either claim compensation or proceed at law against such other person to recover damages or proceed against both the employer and such other person. However, in the event the injured employee recovers any like damages from such other person, the recovered damages shall be an offset against any workers' compensation which the employee would otherwise have been entitled to receive.

Zoss argues that the reference to "like" damages disallows "any offset whatsoever where 'like damages' have not been recovered." (Emphasis in original). She asserts the $215,000 includes payment for claims not covered by workers' compensation, which, she contends, is limited to employees' earnings based on life expectancy. Therefore, according to Zoss, because the settlement is not broken down by category of damages, it is impossible to ascertain which damages are "like," thus rendering SDCL 62-4-38 inapplicable.

¶8 Insurer argues that determining its rights in the $215,000 by looking at the date the settlement proceeds are distributed is illogical and inconsistent. We agree. It is inconsistent to state that as to past benefits paid, Insurer is entitled to dollar-for-dollar reimbursement, but that future benefits are credited only to the extent they constitute "like" damages. Such a holding would encourage employees to rush to settlement with the third-party tortfeasor in order to reduce the insurer's lien.

¶9 Zoss places undue emphasis on the Legislature's insertion of the word "like" in the 1994 amendment to SDCL 62-4-38. We interpret statutes in accordance with legislative intent.

Intent must be determined from the statute as a whole, as well as enactments relating to the same subject. Where statutes appear to conflict, it is our responsibility to give reasonable construction to both, and if possible, to give effect to all provisions under consideration, construing them together to make them harmonious and workable.

In re Certif. of a Question of Law (Wiersma v. Maple Leaf Farms), 1996 SD 16, p 4, 543 N.W.2d 787, 789 (citations & internal quotations omitted).

¶10 SDCL 62-4-38 through -40 each address a different aspect of reimbursement. SDCL 62-4-38 deals with reimbursement of benefits owed but not yet paid when the employee brings the lawsuit against the third party. SDCL 62-4-39 also applies when the employee initiates the lawsuit and concerns reimbursement for benefits already paid. SDCL 62-4-40 allows the employer to sue the third party for compensation paid or payable:

If compensation is awarded under this title, the employer having paid the compensation, or having become liable therefor ¹ may collect in his own name or that of the injured employee, or his personal representative, if deceased, from any other person against whom legal liability for damage exists, the amount of such liability and shall hold for the benefit of the injured employee or his personal representative, if deceased, the amount of damages collected in excess of the amount of compensation paid such employee or his representative, less the proportionate necessary and reasonable expense of collecting the same, which expenses may include an attorney's fee not in excess of thirty-five per cent of damages so collected, and shall be subject finally to the approval of the department.

(Emphasis added). Neither SDCL 62-4-39 nor -40 provide that benefits already paid are treated differently than benefits payable and we do not accept Zoss' argument that the insertion of "like" in SDCL 62-4-38 implicates a different result under that statute. ² It would make no sense to limit the lien on future benefits when the employee sues the third party, but reimburse dollar-for-dollar when the employer brings the suit.

Pain and Suffering

¶11 Also without merit is Zoss' claim that damages representing Robert's pain and suffering should be segregated. See 6 Larsons's Workers' Compensation Law § 74.33 through .35, at 14-534 to -549 (1997):

The "compensation" expenditure for which the insurer is entitled to reimbursement includes not only wage benefits but hospital and medical payments as well; this is usually expressly stated, but is the correct result even if the reimbursement provision speaks only of "compensation" paid.

The term "compensation" also includes funeral expenses; but it has been held in New Jersey that, when the legislature named compensation and medical benefits but omitted mention of funeral expenses, the insurer could not be reimbursed for funeral expenses. The theory was that explicit mention of the two kinds of payment implied exclusion of the third. This seems a rather technical consideration, attributing too much weight to what was undoubtedly a mere oversight. The obvious intention of the legislature in all these statutes is to make the insurer whole, not to repay him certain selected and stipulated parts of his compensation cost.

...

[I]t is quite clear, as the cases now stand, that the prevailing rule in the United States refuses to place an employee's third-party recovery outside the reach of the employer's lien on the ground that some or all of it was accounted for by damages for pain and suffering.... Indeed, the same result has been reached even when the employee had taken the trouble to put his pain and suffering claim into a separate suit.

(Emphasis added) (citations & footnotes omitted); accord Dearing v. Perry, 499 N.E.2d 268, 270-71 (Ind.Ct.App.1986) (collecting cases).

Loss of Consortium

¶12 Zoss next argues that damages for her loss of consortium claim should be segregated, as that claim could not have been brought by either Robert or Insurer and therefore cannot constitute "like" damages. We agree that recovery for loss of consortium is not "like damages" because the action is not

brought by the spouse as the personal representative of the employee, but is an independent action to recover for injuries the spouse has suffered, such as loss of support and...