Opinion ID: 901325
Heading Depth: 1
Heading Rank: 7

Heading: issues

Text: [¶41.] Which theory applies for the assigning of the liability for payments of the total disability benefits  the apportionment statute or the last injurious exposure rule? [¶42.] Department applied the apportionment statute found at SDCL 62-4-29 and determined that Estes Brothers should be responsible for two-thirds of Kassube's permanent total disability benefits and Triple R for one-third. SDCL 62-4-29 provides: As to an employee who before the accident for which he claims compensation was disabled and drawing compensation under the terms of this title, the compensation for each subsequent injury shall be apportioned according to the proportion of incapacity and disability caused by the respective injuries which he may have suffered. Estes Brothers contends that because Kassube was not receiving compensation at the time of his subsequent injury with Triple R, the apportionment statute is inapplicable and, therefore, the last injurious exposure rule should govern the matter. We find merit in this contention. [¶43.] This Court has previously adopted the last injurious exposure rule. Under that rule, [w]hen a disability develops gradually, or when it comes as the result of a succession of accidents, the insurance carrier covering the risk at the time of the most recent injury or exposure bearing a causal relation to the disability is usually liable for the entire compensation. Enger, 1997 SD 70 at ¶ 12, 565 NW2d at 83. In 1999 that rule was codified at SDCL 62-1-18. The statute provides: If an employee who has previously sustained an injury, or suffers from a preexisting condition, receives a subsequent compensable injury, the current employer shall pay all medical and hospital expenses and compensation provided by this title. The statute requires that there be a subsequent compensable injury in order for liability for expenses and compensation to transfer to a subsequent employer. Whether a subsequent injury is compensable is determined by SDCL 62-1-1(7). [7] We have interpreted the last injurious exposure rule to exclude a mere recurrence of a previous injury but to include an aggravation of a previous injury. See Titus v. Sioux Valley Hosp., 2003 SD 22, ¶ 13, 658 NW2d 388, 390-91. [¶44.] Our prior cases considering an aggravation, however, did not involve a situation where the injured employee had already been drawing disability compensation at the time of the subsequent injury. See generally Titus, 2003 SD 22 at ¶¶ 2-8, 658 NW2d at 389-390; Paulson v. Black Hills Packing Co., 1996 SD 118, ¶¶ 2-5, 554 NW2d 194, 195. Therefore, we have never considered and applied the apportionment statute in a subsequent injury case. In fact, a review of our past cases reveals only one successive injury case where the apportionment statute has been made an issue. See Truck Ins. Exchange, 1997 SD 37, 561 NW2d 674. In that case, the employee's injury was found to be a single continuing injury without any subsequent injury having ever occurred. This Court then rejected apportionment because a continuing injury to the employee's hands did not qualify as a subsequent injury under the apportionment statute. Id. at ¶ 16, 561 NW2d at 677 (quotations and citation omitted). We also noted that according to the plain language of the apportionment statute, it applies only in cases where the employee is drawing compensation before the subsequent injury. Id. [¶45.] As acknowledged in Truck Ins. Exchange, SDCL 62-4-29 provides specific criteria for when apportionment in subsequent injury cases should occur. It requires that the injured employee must be disabled and drawing benefits before the subsequent accident in order for apportionment to apply. We interpret the statute to mean that an employee must be drawing disability benefits before the subsequent injury occurs. This interpretation is natural, and supports the logical purpose of the statute's express prerequisites to apportionment. By requiring the worker to be drawing disability benefits prior to the subsequent injury, the prior percentage of disability will have been determined. Because the prior percentage of disability has already been determined, apportioning liability is a relatively simple task and would not require further litigation over the issue. Any increase to the prior disability is apportioned to the subsequent employer. [¶46.] Therefore, based on the language of the apportionment statute itself, in addition to our prior treatment of subsequent injury cases, we hold that apportionment only applies in situations where there is a subsequent injury, as opposed to a continuing or recurring injury, and the subsequent injury must have occurred while disability benefits were being drawn. In effect, the apportionment statute is an exception to the last injurious exposure rule that is codified at SDCL 62-1-18, and apportionment should only apply if the injured employee was already drawing disability benefits at the time of the subsequent accident. [¶47.] In the present case, Kassube incurred two separate and distinct injuries, each occurring while Kassube was working for different employers with different insurers. In order to determine if apportionment should occur under the circumstances of this subsequent injury, we must determine whether the requirements of SDCL 62-4-29 have been met. The determinative question in this case thus becomes: Was Kassube disabled and drawing compensation before the last accident; i.e. was he drawing disability benefits? A review of the record reveals the answer is no. [¶48.] Kassube had never been deemed disabled at any time prior to the final accident. Likewise, he had never drawn disability compensation at any time prior to the date of the last accident. At the proceedings which occurred after the last accident, Kassube was awarded back medical expenses, but was not awarded disability compensation for any periods prior to the last accident. Thus, Kassube was not actually drawing benefits or adjudicated disabled at the time of the last accident. Further, he has never been adjudicated disabled or awarded disability benefits for any periods prior to the last accident. Although Kassube had filed a petition for hearing to receive payments and benefits for disability from Estes Brother before the final accident, he was never awarded any disability compensation for any time prior to that final injury. [¶49.] For this same reason, the Iowa case cited to by Triple R is distinguishable. See Excel Corp. v. Smithart, 654 NW2d 891 (Iowa 2002). In that case, it was determined that the employee was entitled to disability benefits for the period of time after the first injury but before the second injury. Id. at 895. The court found that even though this determination was made after the second injury had occurred, and thus the employee was not technically drawing benefits at the time of the second injury, the benefits would be applied retroactively; therefore, the court would apply the apportionment statute in the same retroactive manner. Id. at 899. There was not a similar application or award of disability benefits in this case. Since there was no disability compensation awarded retroactively to the time prior to the final injury, the retroactivity principle espoused in Excel is inapplicable. [¶50.] Because Kassube was not disabled and drawing compensation at the time of his final injury, the last injurious exposure rule codified in SDCL 62-1-18 should have been applied in this case. Apportionment is only appropriate where the employee is drawing disability compensation before the time of the subsequent injury. Thus, Department's application of apportionment was an error of law. In this case, Department should have applied the last injurious exposure rule. Department, however, did not even consider the last injurious exposure rule. Therefore, we cannot construe its findings so as to determine how that rule applies under the facts of this case. We reverse the trial court on this issue and remand for an application of the last injurious exposure rule. [¶51.] GILBERTSON, Chief Justice, and ZINTER, Justice, and MILLER, Retired Justice, concur. [¶52.] SRSTKA, Circuit Judge dissenting on Issue Three, infra at ¶ 63. [¶53.] MEIERHENRY, Justice, writing for the majority on Issue Four.