Title: Travelers Indemnity Co. v. Wallis

State: vermont

Issuer: Vermont Supreme Court

Document:

Travelers Indemnity Co. v. Wallis (2002-360); 176 Vt. 167; 845 A.2d 316

2003 VT 103

[Filed 31-Oct-2003]
[Motion for Reargument and/or Clarification Denied 12-Jan-2004]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 2003 VT 103

                                No. 2002-360

  Travelers Indemnity Co.	                 Supreme Court

                                                 On Appeal from
       v.	                                 Washington Superior Court

  R. Tasha Wallis, Commissioner and	         March Term, 2003
  Department of Labor and Industry

  Alan W. Cheever, J.
  	
  Andrew W. Goodger and Stephen D. Ellis of Kiel Ellis & Boxer, Springfield,
    for Plaintiff-Appellant.

  William H. Sorrell, Attorney General, and William H. Rice, Assistant
    Attorney General, Montpelier, for Defendant-Appellee.

  Craig A. Jarvis of Biggam, Fox & Skinner, Montpelier, for Amicus Curiae
    Vermont Labor Council, AFL-CIO.

  PRESENT:  Amestoy, C.J., Dooley, Johnson and Skoglund, JJ., and Allen, C.J.
            (Ret.), Specially Assigned

        
       ¶  1.  DOOLEY, J.   Plaintiff Travelers Indemnity Co. appeals from a
  decision of the Washington Superior Court dismissing its suit against the
  Department of Labor and Industry and its Commissioner for lack of subject
  matter jurisdiction.  In its suit, Travelers sought to challenge certain
  Department practices in issuing interim orders of benefits under 21 V.S.A.
  § 662(b), and asserted that the statute is constitutionally deficient on
  its face.  Construing the complaint as an appeal rather than a declaratory
  judgment action, the superior court dismissed the suit because Travelers
  did not obtain certified questions from the Commissioner as required by 21
  V.S.A. § 671.  On appeal, Travelers claims the court misconstrued its
  complaint and should have allowed the suit to go forward under V.R.C.P. 75,
  3 V.S.A. § 807, and 12 V.S.A. § 4711.  We accept Travelers's argument that
  its complaint was not an appeal, but we affirm the dismissal of the
  company's challenge to the Commissioner's actions on primary jurisdiction
  grounds.  As to the facial constitutional challenges to § 662(b) set forth
  in the complaint, we reverse and remand to the superior court for further
  proceedings.
        
       ¶  2.  Travelers issues workers' compensation policies to numerous
  employers and, thus, appears regularly before the Commissioner in
  connection with workers' compensation claims against it.  It is
  dissatisfied with the Commissioner's administration of interim payments,
  that is, compensation payments ordered by the Commissioner pursuant to 21
  V.S.A. § 662(b) after the insurance carrier has denied a claim, but before
  a hearing on the claim.  Section 662(b) authorizes such payments, pending a
  hearing and final determination, where the Commissioner finds that the
  evidence put forth by the employer or carrier "does not reasonably support
  the denial."
   
       ¶  3.  On September 15, 2000, Travelers filed a complaint with the
  Washington Superior Court seeking review of the Department's actions
  related to issuing interim orders under V.R.C.P. 75 and 3 V.S.A. § 807, and
  requesting declaratory and injunctive relief under 12 V.S.A. § 4711.  In
  its complaint, Travelers cited an interim order the Department issued on a
  claim that Travelers had twice denied as outside its workers' compensation
  coverage.  Travelers alleged that the Department's order violated 21 V.S.A.
  § 662(b) and denied Travelers due process.  Travelers requested that the
  court permanently enjoin the Department from enforcing the order cited in
  its complaint.  Travelers also asked the court to issue an order "declaring
  the appropriate legal standard for the issuance of interim orders pursuant
  to the provisions of 21 V.S.A. § 662(b) and the Vermont Workers'
  Compensation and Occupational Disease Rules."  The same day Travelers filed
  its suit in superior court, the Department rescinded the interim order
  cited in Travelers's complaint.

       ¶  4.  The Commissioner and Department moved to dismiss for lack of
  jurisdiction and because the case was moot.  This led to skirmishing in
  which Travelers attempted to keep the case alive, eventually culminating in
  the filing of an amended complaint in which Travelers described additional
  workers' compensation cases in which, it alleged, the Commissioner had
  violated its rights under § 622(b) and the state and federal constitutions. 
  As described in the complaint, the cases were in various stages of
  processing.  For example, in four of the cases, the interim payment order
  was still outstanding.  None had been appealed to the superior court.  In
  others, the interim order had been rescinded.  For three of these,
  Travelers had apparently taken no action to have the interim order
  reconsidered or stayed. (FN1)  For the other, a motion for a stay was
  pending.  Another case involved termination of compensation under 21 V.S.A.
  § 643a, a statute not otherwise involved in Travelers's complaint and for
  which Travelers sought no relief.    
   
       ¶  5.  To address the mootness issue defendants raised, Travelers's
  amended complaint contended that "this action implicates administrative
  conduct which is capable of repetition, yet evasive of judicial review." 
  Travelers also argued that the issues raised in the action would not become
  moot with the ultimate resolution of the specific cases, and requested that
  the court lay out "the appropriate legal standard" for the issuance of
  interim benefits orders.  The complaint alleged three improper actions
  taken in one or more of the cases described in the complaint: (1) ordering
  interim payments in cases in which the employer or carrier has submitted
  evidence, which if believed, would support denial of the compensation
  claim; (2) relying on ex parte information submitted by the employee in
  deciding whether to order interim payments; and (3) ordering interim
  payments even though the claimant has not requested a hearing on the denial
  and served a request on the employer or carrier.  Travelers has also
  alleged here that defendants' actions are unconstitutional because they
  grant interim benefits without articulated standards for determining
  whether the carrier/employer's evidence reasonably supports its denial, and
  because interim payments are ordered without any right of recoupment if the
  claimant is found not to be entitled to benefits.  Travelers claimed that
  defendants' practices violated § 662(b), and its rights to due process and
  equal protection of the laws.

       ¶  6.  On July 31, 2002, the superior court dismissed the case for
  lack of subject matter jurisdiction. (FN2)  The court ruled that Travelers
  had failed to properly exercise its statutory rights of appeal under 21
  V.S.A. § 671 of the Workers' Compensation Act, which requires "questions of
  fact or questions of fact and law" certified by the Commissioner in order
  to establish jurisdiction in the superior court.  Travelers subsequently
  brought this appeal.
                                              
       ¶  7.  We review a dismissal for lack of subject matter jurisdiction
  de novo, taking all uncontroverted factual allegations of the complaint as
  true and construing them in the light most favorable to the nonmoving
  party.  Jordan v. State, 166 Vt. 509, 511,