#24505-aff in pt & rev in pt-PORTRA, Circuit Judge 

2007 SD 103 

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

JOAN M. SAUDER, Employee and Appellant, 

 v. 

PARKVIEW CARE CENTER, 

Bryant, South Dakota Employer, 

 and 

TRAVELERS INSURANCE COMPANIES 

and BERKLEY ADMINISTRATORS, Insurers and Appellees. 

* * * * 

APPEAL FROM THE CIRCUIT COURT 

OF THE SIXTH JUDICIAL CIRCUIT 

HUGHES COUNTY, SOUTH DAKOTA 

* * * * 

HONORABLE JAMES W. ANDERSON 

Judge 

* * * * 

N. DEAN NASSER, Jr. of 

Nasser Law Offices Attorneys for employee 

Sioux Falls, South Dakota and appellant. 

R. ALAN PETERSON of 

Lynn, Jackson, Shultz & Lebrun Attorneys for appellee 

Sioux Falls, South Dakota Travelers Insurance. 

TIMOTHY M. ENGEL of 

May, Adam, Gerdes & Thompson Attorneys for appellee 

Pierre, South Dakota Berkley Administrators. 

* * * * 

 CONSIDERED ON BRIEFS 

 ON AUGUST 27, 2007 

 OPINION FILED 10/17/07 
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PORTRA, Circuit Judge 

[¶1.] This case is an administrative appeal from the Sixth Judicial Circuit, 

Hughes County, the Honorable James W. Anderson, presiding. The plaintiff, Joan 

Sauder (Sauder), seeks an award of workers' compensation benefits. The circuit 

court dismissed Sauder's benefit claims against Parkview Care Center (Parkview or 

Employer), Travelers Insurance Companies (Travelers), and Berkley 

Administrators (Berkley) (collectively Respondents). We affirm in part and reverse 

in part. 

BACKGROUND 

[¶2.] Sauder worked for Parkview from 1983 to 2001 as the Social Service 

Director designee. Sauder did not have credentials as a social worker, but she was 

an advocate for the residents and was responsible for obtaining residents, admitting 

residents, and making sure that the needs of the residents were met. Sauder 

described her job as "a sedentary office and clerical worker with collateral 

administrative work duties." 

[¶3.] In September 1993 Sauder moved into a new office which had been 

created by partitioning off part of the chapel at Parkview. Prior to moving into this 

office, Sauder had no problems with asthma, seasonal allergies or breathing in 

general. About one month after Sauder moved into the office, she noticed the office 

started smelling musty and that the room was very warm. After some time in the 

office, Sauder began to complain of a stuffy head and headaches. In July 1994 

Sauder was diagnosed with a serious sinus infection. 

[¶4.] Sauder saw several health care providers for her respiratory problems, 

including the Mayo Clinic. In late 1994 or early 1995 Sauder noticed a black liquidy 
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substance running down the walls of her office. She also noticed that she felt worse 

when she was at work compared to when she was away from work and started to 

associate her respiratory problems with the condition of her office. By November 

1995 other staff members at Parkview were becoming ill, and Sauder was moved to 

a different work area. 

[¶5.] In November 1995 Sauder completed a first report of injury. Sauder 

indicated that her respiratory problems were the result of mold and other exposures 

at work, beginning in September 1993. Travelers provided workers' compensation 

insurance to Parkview from May 25, 1994, until May 25, 1995, while Berkley 

provided workers' compensation insurance to Parkview from May 25, 1995, until 

April 27, 19961. On January 19, 1996, Travelers sent a denial letter to Sauder, 

however, a copy of this letter was not sent to the Department of Labor 

(Department). On March 7, 1996, Berkley sent a denial letter to Sauder and the 

Department. 

[¶6.] Sauder continued to see various physicians for her respiratory 

problems, including physicians at the Mayo Clinic and Jewish Medical Center in 

Denver. She subsequently filed a notice of occupational disease on December 6, 

2001, and a petition for hearing with the Department on September 16, 2002. 

Sauder alleged both an occupational pulmonary disease and a work-related 

pulmonary injury which caused disablement as of October 10, 2001. Sauder later 

filed an amended petition for hearing with the Department on June 23, 2003. 

1. Berkley is not an insurer. Rather, it is the third party administrator for TriState Insurance Company of Minnesota. 
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[¶7.] On January 31, 2005, the Department issued a letter decision granting 

summary judgment in favor of Berkley on Sauder's claim for benefits based on an 

injury, holding that Sauder had failed to file her petition for hearing within two 

years of Berkley's letter denying compensability as required by SDCL 62-7-35. 

Travelers' motion for summary judgment was denied on the basis that Travelers' 

denial letter was ineffective to start the statute of limitations period because a copy 

was not provided to the Department. The overall result of the 2005 letter decision 

was that Sauder could continue to pursue benefits from Travelers based on an 

injury theory and from both Travelers and Berkley on an occupational disease 

theory. 

[¶8.] On January 5, 2006, the Department issued another letter decision 

granting summary judgment dismissing Sauder's occupational disease claim in its 

entirety. The Department concluded that the mold exposure which Sauder claimed 

to have suffered and her resulting medical condition did not constitute an 

occupational disease under South Dakota law. 

[¶9.] Sauder filed an appeal to the circuit court from both the 2005 letter 

decision and the 2006 letter decision. On April 12, 2006, upon agreement of the 

parties, the court entered an order for partial remand directing the Department to 

clarify and address certain matters. On October 4, 2006, the Department entered 

its order on remand reaffirming its 2005 and 2006 letter decisions. 

[¶10.] Sauder then filed another appeal with the circuit court. This appeal 

was from the Department's 2005 letter decision, 2006 letter decision, and order on 

remand. On March 29, 2007, the circuit court entered its order and judgment on 
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appeal which reversed the Department's ruling that denied Travelers' motion for 

summary disposition on Sauder's injury claim and affirming all other decisions in 

their entirety. The result of the order and judgment on appeal is that all of 

Sauder's benefit claims have now been dismissed against Parkview, Travelers, and 

Berkley. 

STANDARD OF REVIEW 

[¶11.] In appeals from administrative agencies, "[o]ur standard of review is 

controlled by SDCL 1-26-37." Kuhle v. Lecy Chiropractic, 2006 SD 16, ¶ 15, 711 

NW2d 244, 247 (quoting Kassube v. Dakota Logging, 2005 SD 102, ¶ 25, 705 NW2d 

461, 465). "When a circuit court has reviewed an administrative agency's decision, 

we review the agency's decision unaided by any presumption that the circuit court's 

decision was correct." Meligan v. Dept. of Revenue and Regulation, 2006 SD 26, ¶ 

13, 712 NW2d 12, 17 (quoting Kassube, 2005 SD 102, ¶ 25, 705 NW2d at 465). "The 

Department's factual findings and credibility determinations are reviewed under a 

clearly erroneous standard." Kuhle, 2006 SD 16, ¶ 15, 711 NW2d at 247 (citations 

omitted). "Questions of law are reviewed de novo." Id. at ¶ 16. 

ISSUES AND ARGUMENTS 

ISSUE ONE 

[¶12.] Whether Sauder's claims against Berkley and Travelers are 

barred by the statute of limitations. 

[¶13.] Berkley and Travelers both contend that the statute of limitations has 

expired for Sauder's claim and, therefore, her claim should be barred. SDCL 62-7-

35 provides the applicable limitations period: 
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The right to compensation under this title shall be forever 

barred unless a written request for hearing pursuant to 

§ 62-7-12 is filed by the claimant with the department 

within two years after the self-insurer or insurer notifies 

the claimant and the department, in writing, that it 

intends to deny coverage in whole or in part under this 

title. If the denial is in part, the bar shall only apply to 

such part. 

Sauder argues, for a variety of reasons, that the denials by both Berkley and 

Travelers were ineffective to begin the running of the limitations period. We 

examine Sauder's arguments as to each insurer separately. 

A. Berkley 

[¶14.] Sauder first contends that Berkley's denial is ineffective because they 

were not the insurer on the risk, they did not have the legal ability to deny the 

claim for Travelers and they should have simply told Sauder that Travelers was the 

insurer on the risk and that she should seek compensation from them. We find 

these arguments to be without merit. Berkley never contended that they were 

acting for Travelers or denying the claim for Travelers. Berkley had the right to 

deny the claim for the time that they were on the risk. 

[¶15.] Sauder also contends that Berkley's denial was ineffective because it 

was filed outside the maximum number of days as allowed by SDCL 62-6-3. That 

statute provides: 

The insurer shall file a copy of the report required by § 62-

6-2 with the Department of Labor within ten days after 

receipt thereof.

The insurer or, if the employer is self-insured, the 

employer, shall make an investigation of the claim and 

shall notify the injured employee and the department, in 

writing, within twenty days from its receipt of the report, 

if it denies coverage in whole or in part. This period may 
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be extended not to exceed a total of thirty additional days 

by the department upon a proper showing that there is 

insufficient time to investigate the conditions surrounding 

the happening of the accident or the circumstances of 

coverage. If the insurer or self-insurer denies coverage in 

whole or in part, it shall state the reasons therefor and 

notify the claimant of the right to a hearing under § 62-7-

12. The director of the Division of Insurance, or the 

secretary of labor if the employer is self-insured, may 

suspend, revoke, or refuse to renew the certificate of 

authority, or may suspend or revoke all certificates of 

authority granted under Title 58 to any company or 

employer which fails, refuses, or neglects to comply with 

the provisions of this section. A company or employer 

which fails, refuses, or neglects to comply with the 

provisions of this section is also subject to an 

administrative fine of one hundred dollars payable to the 

Department of Labor for each act of noncompliance, 

unless the company or employer had good cause for 

noncompliance. 

[¶16.] Sauder's position is that because Berkley's denial was filed outside the 

maximum limit of fifty days allowed by the statute, the denial was ineffective to 

start the running of the two year statute of limitations period. However, Berkley 

argues that the penalties provided for in SDCL 62-6-3 are the exclusive remedies for 

a violation of that statute, without effect on the statute of limitations, and therefore 

Sauder's claim is time barred. 

[¶17.] "If the words and phrases in the statute have plain meaning and effect, 

[the court] should simply declare their meaning and not resort to statutory 

construction." In re West River Electric Assn., 2004 SD 11, ¶ 15, 675 NW2d 222, 

226. From a plain reading of the statute, it is clear that the only penalties provided 

for an untimely denial are revocation of certificates of authority and/or a one 

hundred dollar fine. There is nothing in the statute indicating that tolling the 

statute of limitations is one of the penalties for filing outside of the allowable time 
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frame. If Berkley failed to comply with the statute, then it is up to the director of 

the Division of Insurance to penalize them in a manner provided for by the 

legislature. Furthermore, following Sauder's logic, if an insurer failed to file a 

timely denial, the statute of limitations would never begin to run thereby allowing a 

potential claim to drag on indefinitely. This is an absurd result and would be 

contrary to SDCL 62-7-35 wherein the legislature set forth the limitations period for 

a workers' compensation claim and the events that trigger the running of that 

period. 

[¶18.] Sauder's final contention regarding Berkley's denial is that it is 

ineffective as it was not sent by registered or certified mail as provided by SDCL 62-

7-30, which states: 

All notices or orders provided for in this chapter may be 

served personally or by registered or certified mail. When 

served by registered or certified mail, proof by affidavit 

thereof must be accompanied by post office return receipt. 

When, however, any party is represented by an attorney, 

such service must be made on such attorney, and may be 

made either in the manner provided in this section, or in 

the manner provided by § 15-6-5. 

[¶19.] However, Berkley contends that it substantially complied with the 

requirements of SDCL 62-7-30 and, therefore, the notice was effective. 

'Substantial compliance' with a statute means actual 

compliance in respect to the substance essential to every 

reasonable objective of the statute. It means that a court 

should determine whether the statute has been followed 

sufficiently so as to carry out the intent for which it was 

adopted. Substantial compliance with a statute is not 

shown unless it is made to appear that the purpose of the 

statute is shown to have been served. What constitutes 

substantial compliance with a statute is a matter 

depending on the facts of each particular case.
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Olson v. Equitable Life Assur. Co., 2004 SD 71, ¶ 30, 681 NW2d 471, 477 (quoting 

Myears v. Charles Mix Co., 1997 SD 89, ¶ 13, 566 NW2d 470, 474). 

[¶20.] We first note that SDCL 62-7-30 provides that notices "may" be served 

personally or by registered or certified mail, not that they "shall" be served in such 

a manner. Clearly, it would have been just as easy for the legislature to use the 

latter word, but they chose not to. We presume the legislature means what it says. 

See Crescent Electric Supply Co. v. Nerison, 89 SD 203, 210, 232 NW2d 76, 80 

(1975)(declaring our assumption "that statutes mean what they say and that 

legislators have said what they meant."). 

[¶21.] We also recognize that the primary purpose of SDCL 62-7-30, read in 

conjunction with SDCL 62-7-35, is to ensure that the employee, and to a lesser 

extent the Department, receive notice of an insurer's denial. In this case, Sauder 

and the Department received Berkley's denial letter, thus fulfilling that purpose. 

The employer that proceeds without using registered or certified mail does so at its 

own risk in that it may not be able to show service of the denial. However, Sauder 

admits receiving notice by regular mail and has suffered no prejudice thereby. 

Therefore, we find that Berkley substantially complied with SDCL 62-7-30. We 

affirm the circuit court's decision on this issue as to Berkley. 

B. Travelers 

[¶22.] In addition to the arguments set out above with regard to Berkley, 

Sauder also contends that Travelers' denial did not start the statute of limitations 

running because the denial was not filed with the Department. Travelers argues 
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that it has substantially complied with the statute because Sauder actually received 

notice. 

[¶23.] SDCL 62-7-35, as set out above, constitutes the statute of limitations 

for worker's compensation claims. Clearly, the statute provides that the limitations 

period does not begin to run until the claimant and the Department have been 

notified in writing of the denial. The statute is unambiguous regarding who needs 

to receive notice to begin the running of the limitations period. 

[¶24.] Unlike Berkley, Travelers has not shown substantial compliance with 

the notice provisions. Whereas Berkeley did not comply with the form of the 

statutory notice requirement, Travelers did not comply with the substance of the 

requirement since it failed to provide notice to the Department at all. One of the 

purposes of the notice statute is for the Department to stay abreast of claims and 

denials, and that purpose was not achieved. 

[¶25.] The circuit court minimized the importance of the notice to the 

Department, finding that the Department overestimated its own importance in the 

process because they would simply just file the notice away. However, in order to 

find substantial compliance, we must find compliance with every reasonable 

objective of the statute. It does not matter that notice to the claimant may be 

somewhat more important than notice to the Department because notice to the 

Department is one of the reasonable objectives of the statute. To hold otherwise 

would be to rewrite the statute for the legislature, which we will not do. See

Martinmaas v. Engelmann, 2000 SD 85, ¶ 49, 612 NW2d 600, 611. Therefore, we 

reverse the circuit court's decision as to Travelers. 
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ISSUE TWO 

[¶26.] Whether Respondents are estopped from asserting the statute 

of limitations because their combined actions lulled Sauder into a false 

sense of security. 

[¶27.] Sauder contends that acts of Parkview, Travelers, and Berkley 

combined to lull her into a false sense of security so that she did not file a petition 

for hearing until more than six years after her claim had been denied. Sauder 

contends that because of their actions, the Respondents should be estopped from 

asserting the statute of limitations as a defense to her claim. 

[¶28.] Sauder's contention is unsupported by the record. Sauder received 

denials from both Berkley and Travelers, and she testified at her deposition that 

she knew that she was on her own with her claim and that no one was going to help. 

There is no evidence to support her claim that anyone made intentional 

misrepresentations to her or in any way acted to mislead her. Accordingly, we 

affirm the circuit court on this issue. 

ISSUE THREE 

[¶29.] Whether Sauder's condition constituted an occupational 

disease under SDCL 62-8-1(6). 

[¶30.] Sauder contends that her fungal sinusitis is an occupational disease as 

it arose as the result of a distinctive feature of the kind of work performed by her 

and others similarly employed. Sauder claims that her occupation was unique and 

should be defined as an office worker confined to an unventilated, totally enclosed 

moist office room, rather than just an office worker. Respondents argue that 

Sauder's occupation was that of a social worker or social worker designee and that 
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her condition is not an occupational disease because her exposure to mold was not 

an ordinary and generally recognized risk of her occupation. 

[¶31.] SDCL 62-8-1(6) defines "occupational disease" as a "disease peculiar to 

the occupation in which the employee was engaged and due to causes in excess of 

the ordinary hazards of employment." To be an occupational disease the injury 

must be caused by a distinctive feature of the claimant's occupation, not by the 

environmental conditions of the claimant's workplace. See Zoss v. United Bldg. 

Centers, Inc., 1997 SD 93, ¶ 12, 566 NW2d 840, 844. (overruled on other grounds). 

"Unless the condition is 'intrinsic' to an occupation, one does not suffer from an 

occupational disease." Sauer v. Tiffany Laundry & Dry Cleaners, 2001 SD 24, ¶ 11, 

622 NW2d 741, 744 (citing Zoss, 1997 SD 93, ¶ 14, 566 NW2d at 845). 

[¶32.] Sauder's condition arose because of an environmental condition of her 

workplace, that being the presence of mold, not by a distinctive feature of her 

occupation. Be her occupation social worker, social worker designee, or sedentary 

office worker, exposure to mold was not a distinctive feature of her occupation. The 

fact that many staff members of Parkview, all of various occupations, became ill 

only highlights the fact that her health problems were caused by the condition of 

her workplace and not by a distinctive feature of her occupation. We affirm the 

circuit court on this issue. 

ISSUE FOUR 

[¶33.] Whether the Department had authority and jurisdiction to 

issue its rulings. 
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[¶34.] Sauder claims that the Department exceeded its authority in this case 

because, as Sauder sees it, the Department was resolving a dispute between 

insurers that had little to do with her substantive rights. 

[¶35.] The Department has statutory authority to hold hearings to decide 

whether claimants are entitled to workers' compensation benefits. See SDCL 62-7-

12, et. seq. In this case, they were doing exactly what they are given authority to do, 

which is deciding whether Sauder is entitled to workers' compensation benefits. 

We affirm the circuit court on this issue. 

CONCLUSION 

[¶36.] We reverse the circuit court on Sauder's injury claim against Travelers 

and remand to the Department for further proceedings consistent with this opinion. 

We affirm the circuit court on all other issues. 

[¶37.] Affirmed in part and reversed in part. 

[¶38.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER and 

MEIERHENRY, Justices, concur. 

[¶39.] PORTRA, Circuit Judge, for SABERS, Justice, disqualified.