Opinion ID: 874381
Heading Depth: 1
Heading Rank: 4

Heading: The District Court Erred in Finding the Statute Ambiguous

Text: The district court found that the statute was ambiguous because, in the court's view, the statute could reasonably be interpreted three ways. In addition to the interpretation advanced by the Plaintiffs, the district court posited two alternate interpretations. First, the district court stated that the statute could be interpreted to mean that the Manager could distribute dividends only to the larger policyholders because they are the only ones properly entitled to receive a dividend. However, a careful reading of the statute does not support this conclusion. The statute reads [the Manager] may in his discretion, credit to each individual member [a dividend]. I.C. § 72-915 (emphasis added). This language indicates that all members who meet the longevity requirement are entitled to receive a dividend. The district court's emphasis on the language properly entitled is misplaced, as that language relates to the requirement that the dividend be distributed pro rata having regard to [the policyholder's] prior paid premiums. See id. Second, the district court asserted that the statute could be interpreted to mean that each policyholder is entitled to a dividend, but that the dividend need not be in direct proportion to the amount of premium the [policyholder] paid relative to the whole. Again, this interpretation is not supported by the plain language of the statute. Should a dividend be declared, the statute provides that each policyholder who has been a subscriber for at least six months prior shall be credited such proportion of such balance as he is properly entitled to, having regard to his prior paid premiums. I.C. § 72-915. The inclusion of the words proportion of the balance, and having regard to the policyholder's prior paid premiums can only mean that the distribution of dividends must be done on a pro rata basis. Id. The language is not ambiguous as to this requirement, and the district court erred in finding it ambiguous on these grounds. Instead, the plain language of I.C. § 72-915 demonstrates that the statute grants the Manager discretion to distribute a dividend when there is an aggregate balance remaining to the credit of any class of employment or industry and the Manager deems that the aggregate balance may be safely and properly divided. The Manager's discretion is therefore limited to the decision of whether or not to distribute a dividend in the first place. The remainder of the sentence sets forth the method by which dividends are to be distributed, requiring the Manager to credit to each individual member of such class who has been a policyholder for at least six months such proportion of such balance as he is properly entitled to, having regard to his prior paid premiums since the last readjustment of rates. Id. The phrase any class of employment or industry, when read with other statutes related to worker's compensation insurance, refers to the class to which each policyholder belongs for purposes of determining the rate paid for worker's compensation coverage. [5] The statute contemplates dividing the aggregate balance proportionately according to the policyholder's prior paid premiums relative to all paid premiums. To argue that this language could be construed to somehow grant discretion regarding how to calculate the distribution makes no sense, and would require this Court to stretch the plain language beyond its obvious meaning. Finally, in 2002 the Idaho Legislature passed House Bill No. 511, an appropriations bill, which casts further doubt on the Fund's proposed interpretation of I.C. § 72-915. H.R. 511, 56th Leg., 2d Reg. Sess. (Idaho 2002). The bill provided that the Fund would distribute a specified amount to state agencies as policyholders, and that [t]he balance of the dividends shall be credited to each individual agency proportionally in accordance with Section 72-915, Idaho Code. Id. This language demonstrates that in 2002, the Legislature viewed section 72-915 as requiring a pro rata distribution of dividends.