Opinion ID: 901568
Heading Depth: 2
Heading Rank: 1

Heading: Berkley

Text: [¶ 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 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 N.W.2d 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 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. Olson v. Equitable Life Assur. Co., 2004 SD 71, ¶ 30, 681 N.W.2d 471, 477 (quoting Myears v. Charles Mix Co., 1997 SD 89, ¶ 13, 566 N.W.2d 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 S.D. 203, 210, 232 N.W.2d 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.