Title: Newton v. State ex rel. Wyoming Workers' Compensation Div

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Newton v. State ex rel. Wyoming Workers' Compensation Div1996 WY 112922 P.2d 863Case Number: 95-182Decided: 08/23/1996Supreme Court of Wyoming
David L. NEWTON,

 Appellant 
(Claimant/Appellant),

v.

STATE of Wyoming ex rel. 
WYOMING WORKERS' COMPENSATION DIVISION, 

Appellee 
(Objector/Appellee).

Appeal from The District 
Court, Washakie County, Gary P. Hartman, J.

Dick L. Kahl, 
Powell, for Appellant.

William U. Hill, 
Attorney General; John W. Renneisen, Deputy Attorney General; and Jennifer A. 
Evans, Assistant Attorney General, for Appellee.

Before 
TAYLOR, C.J., THOMAS, MACY and LEHMAN, JJ., and JERE RYCKMAN, District 
Judge.

MACY, Justice.

[¶1]      Appellant David 
Newton (the claimant) petitioned the district court to review the hearing 
examiner's denial of his claim for worker's compensation benefits. The district 
court affirmed the hearing examiner's decision, and the claimant appealed to 
this Court.

[¶2]      We 
affirm.

ISSUE

[¶3]      The claimant 
presents a single issue for our review:

The definition of 
"employee," as contained in W.S. § 27-14-102(a)(vii)(1993), was improperly 
interpreted and applied, under the facts as determined by the Hearing 
[Examiner], to deny coverage for [the claimant's] work related 
injury.

FACTS

[¶4]      The claimant was 
the president of Dave Newton Drilling, Inc. In January 1982, Newton Drilling 
secured corporate officer coverage for the claimant under the Wyoming Worker's 
Compensation Act. In February 1993, the Wyoming Workers' Compensation Division 
sent a form to Newton Drilling which was entitled "Affidavit Affirming Exposure 
to Hazards." The affidavit form stated that, if the Workers' Compensation 
Division did not receive the executed affidavit by April 1, 1993, Newton 
Drilling's corporate officer coverage would be canceled. Newton Drilling did not 
return the form, and the Workers' Compensation Division canceled the claimant's 
coverage in April 1993.

[¶5]      Newton Drilling 
continued to list the claimant as a covered corporate officer and to pay 
premiums for such coverage in its April and May 1993 reports which it submitted 
to the Workers' Compensation Division. The Workers' Compensation Division 
rejected coverage for the claimant and applied the premium payments as a credit 
to Newton Drilling's account. In its monthly reports for June through October 
1993, Newton Drilling did not list the claimant as a covered corporate officer 
and did not submit premium payments on his behalf.

[¶6]      On September 3, 
1993, the claimant suffered a work-related injury to his knee, and he applied 
for worker's compensation benefits. The Workers' Compensation Division denied 
the claimant's application, insisting that the claimant's corporate officer 
coverage had been canceled prior to the date of his injury.

[¶7]      A contested case 
hearing was held, and the hearing examiner denied the claimant's request for 
worker's compensation benefits. The claimant petitioned the district court to 
review that decision, and the district court affirmed the decision. The claimant 
subsequently perfected his appeal to this Court.

DISCUSSION

[¶8]      The claimant does 
not dispute the hearing examiner's findings of fact. He argues, instead, that 
the hearing examiner erred when he concluded that the claimant did not fall 
within the definition of an "employee" found in § 27-14-102(a)(vii) because his 
corporate officer coverage had been withdrawn. We are, therefore, presented with 
a question of law with regard to the proper interpretation and application of 
the statute.

[¶9]      We do not defer 
to an agency's conclusions of law. Amax Coal West, Inc. v. Wyoming State Board 
of Equalization, 896 P.2d 1329, 1331 (Wyo. 1995). "Instead, if the `correct rule 
of law has not been invoked and correctly applied, . . . the agency's errors are 
to be corrected.'" Thunder Basin Coal Company v. Study, 866 P.2d 1288, 1291 
(Wyo. 1994) (quoting Devous v. Wyoming State Board of Medical Examiners, 845 P.2d 408, 414 (Wyo. 1993)).

[¶10]   In 1993, the definition of 
"employee" found in WYO. STAT. § 27-14-102(a)(vii) (Supp. 1994) (amended 1995) 
contained the statutory language which prescribed the procedures for securing 
and withdrawing corporate officer coverage. That definition provided in 
pertinent part:

"Employee" also includes 
the officers of a corporation, the business of which is classed as 
extrahazardous, if the officers are actually subject to the hazards of the 
business in the regular performance of their duties, and the employer elects to 
come under the provisions of this act by notifying the division by registered or 
certified mail, return receipt requested, at least thirty (30) days prior to the 
effective date of the coverage. Coverage remains effective until withdrawn by 
written notice to the division.

Section 
27-14-102(a)(vii). The hearing examiner concluded that Newton Drilling's failure 
to execute the affidavit did not result in a withdrawal of the claimant's 
corporate officer coverage because such failure did not constitute a written 
notice to the Workers' Compensation Division. The hearing examiner determined, 
however:

[T]he corporation did 
withdraw its officer coverage of [the claimant] by written notice to the 
Division when it stopped listing [the claimant] as a corporate officer on its 
monthly reports, beginning with the June 1993 report, which was received by the 
Division in July, and when it stopped submitting a premium for his coverage at 
the same time.

[¶11]   In order to resolve this case, we 
must apply our well established rules of statutory interpretation to determine 
what constituted "written notice" for withdrawing corporate officer coverage 
under § 27-14-102(a)(vii).

We endeavor to interpret 
statutes in accordance with the Legislature's intent. We begin by making an 
"`inquiry respecting the ordinary and obvious meaning of the words employed 
according to their arrangement and connection.'" Parker Land and Cattle Company 
v. Wyoming Game and Fish Commission, 845 P.2d 1040, 1042 (Wyo. 1993) (quoting 
Rasmussen v. Baker, 7 Wyo. 117, 133, 50 P. 819, 823 (1897)). We construe the 
statute as a whole, giving effect to every word, clause, and sentence, and we 
construe together all parts of the statute in pari materia.

State Department 
of Revenue and Taxation v. Pacificorp, 872 P.2d 1163, 1166 (Wyo. 1994). "When 
the Court determines, as a matter of law, that a statute is clear and 
unambiguous, it must give effect to the plain language of the statute and should 
not resort to the rules of statutory construction." Lancto v. City of Rawlins, 
892 P.2d 800, 802-03 (Wyo. 1995). If, on the other hand, the Court determines 
that a statute is ambiguous, it may use extrinsic aids of statutory 
interpretation to help it determine the Legislature's intent. Christensen v. 
Oedekoven, 888 P.2d 228, 230 (Wyo. 1995).

[¶12]   In the context of this case, the 
statute is clear and unambiguous. In contrast to the statutory requirement for 
securing corporate officer coverage which demanded that a notice be sent by 
registered or certified mail, the statute did not dictate that a particular type 
of written notice was required to effectively withdraw a corporate officer's 
coverage. A common definition of the term "notice" is found in BLACK'S LAW 
DICTIONARY 957 (5th ed. 1979): "A person has notice of a fact if he knows the 
fact, has reason to know it, should know it, or has been given notification of 
it." Under this definition, any writing which imputed the Workers' Compensation 
Division with knowledge that the claimant was no longer a covered corporate 
officer was sufficient to satisfy the "written notice" requirement.

[¶13]   We agree with the hearing examiner 
that the claimant's corporate officer coverage was not withdrawn by Newton 
Drilling's failure to return the affidavit because Newton Drilling did not send 
any writing to the Workers' Compensation Division at that time. Newton 
Drilling's monthly reports to the Workers' Compensation Division in which the 
claimant was not listed as a covered corporate officer are, however, another 
matter. WYO. STAT. § 27-14-202(a) (Supp. 1994) (amended 1995)1 required employers to file those 
monthly reports. The claimant had previously been listed in Newton Drilling's 
monthly reports as a covered corporate officer; therefore, the conspicuous 
absence of his name from the list of Newton Drilling's covered employees in its 
June through October 1993 monthly reports constituted a written notice to the 
Workers' Compensation Division that the claimant's coverage was being withdrawn. 
Newton Drilling's intent to withdraw the claimant's coverage was further 
evidenced by its failure to pay premiums on the claimant's behalf.

CONCLUSION

[¶14]   The hearing examiner did not err in 
determining that the claimant's corporate officer coverage under the worker's 
compensation laws had been withdrawn prior to the date of his injury and that 
the claimant, therefore, was not entitled to receive worker's compensation 
benefits.

[¶15]   Affirmed.

TAYLOR, Chief Justice, 
dissenting, with whom THOMAS, Justice, joins.

[¶16]   It was statutorily unauthorized 
administrative mischief, rather than written notice from Newton Drilling, which 
motivated the Wyoming Workers' Compensation Division's (the Division) unilateral 
decision to cancel David Newton's coverage as a corporate officer. Therefore, I 
respectfully dissent.

[¶17]   Administrative actions beyond the 
scope of statutory authority are contrary to law and cannot stand. Tri County 
Telephone Ass'n, Inc. v. Wyoming Public Service Com'n, 910 P.2d 1359, 1361 (Wyo. 
1996). Just as the courts may not alter or amend worker's compensation 
legislation, neither may the agency charged with administration of that 
legislation toy with the law. In re Sikora, 57 Wyo. 57, 74, 112 P.2d 557, 562-63 
(1941).

[¶18]   Newton Drilling requested corporate 
officer coverage for David Newton in January of 1982, and faithfully submitted 
monthly premiums for the next eleven years. Newton Drilling never decided to 
cancel that coverage nor undertook written notice to the Division of such a 
decision.

[¶19]   Rather, in 1993, the Division 
"implement[ed] new regulations for firms who have * * * corporate officer 
coverage" superimposing an extra-statutorial burden upon employers who had long 
before requested and received coverage. By administrative fiat, the mandate to 
Newton Drilling and similarly situated employers was clear: submit a new request 
for the coverage, in a prolix form of the Division's invention, or else 
face the arbitrary cancellation of coverage. The legislature, however, had 
directed no change in the means of bringing a corporate officer within coverage 
of the Wyoming Workers' Compensation Act or canceling such 
coverage:

"[An] employer elects to 
come under the provisions of this act by notifying the division by registered 
mail at least thirty (30) days prior to the effective date of the coverage. 
Coverage remains effective until withdrawn by written notice to the 
division."

Hays v. State ex 
rel. Wyoming Workers' Compensation Div., 768 P.2d 11, 14 (Wyo. 1989) (quoting 
former Wyo. Stat. § 27-12-102(a)(viii)) (emphasis added).

[¶20]   Absent legislative directive, the 
Division was without authority to amend Wyo. Stat. § 27-14-102(a)(vii) 
(Cum.Supp. 1995) so as to cancel Newton Drilling's coverage. However, the 
hearing officer determined that it was Newton Drilling's failure to return the 
unauthorized affidavit which was the factual cause for the Division's 
cancellation of corporate officer coverage.

[¶21]   Only after several months of 
confusion, precipitated by the Division's unlawful cancellation of corporate 
officer coverage, did Newton Drilling give up in frustration and cease sending 
premiums to the Division. It is a non-sequitur to hold that cessation of premium 
payments constituted "written notice" to the Division, myopically viewing the 
effect of the Division's cancellation of coverage as the cause thereof. 
However, even accepting such convoluted logic, the majority's liberal 
construction of "written notice to the division," as used in Wyo. Stat. § 
27-14-102(a)(vii), remains suspect.

[¶22]   I cannot believe that "written 
notice to the division," sufficient to cancel corporate officer coverage, 
contemplates anything less than a clear and plain declaration of the employer's 
decision to cancel coverage. "Reasonable notice" is defined by the Wyoming 
Administrative Procedure Act so as to embrace "[a] short and plain statement of 
the matters asserted." Wyo. Stat. § 16-3-107(b)(iv) (Cum.Supp. 1996). A similar 
reading of "written notice," in the context of Wyo. Stat. § 27-14-102(a)(vii), 
strikes me as neither burdensome to the Division nor violative of clear 
legislative intent. To the contrary, it is the liberal construction granted in 
favor of the Division by the majority which amounts to precisely that sort of 
broad liberal construction in favor of any party which the legislature has 
recently declared to be an anathema. Wyo. Stat. § 27-14-101(b) (Cum. Supp. 
1995).

[¶23]   I depart from the majority in the 
firm belief that cancellation of pre-existing coverage, like election of such 
coverage ab initio, is a decision which the legislature has left to the 
sound discretion of the employer rather than to the caprice of the Division. 

 FOOTNOTE

1           
Section 27-14-202(a) stated in pertinent part:

(a) . . . [E]ach employer 
shall forward to the division on forms provided by the division, a true copy of 
the payroll of his employees engaged in extrahazardous employment during the 
current calendar month or quarterly reporting period, certified and affirmed by 
himself or a person having knowledge of the payrolls under penalty of 
perjury.