Opinion ID: 1225963
Heading Depth: 2
Heading Rank: 1

Heading: issue/claim preclusion

Text: ¶ 6 In this case, both the trial court and the Court of Civil Appeals focused on the existence or non-existence of workers' compensation coverage. That question was indeed resolved in the earlier Hefley decision. Also discussed in the previous opinion was whether 85 O.S.1991 § 3(4) requires an agent writing workers' compensation coverage for a sole proprietorship to inform the sole proprietor of the election provision of that section. While decisions concerning both of those issues arguably represent law of the case, thus precluding Hefley from relitigating those disputes here, the issues presented in the instant case are significantly different. The issues here are whether, under the circumstances, Neely had a duty to inform Hefley that any injuries he sustained while on the job were not covered under his policy and, if so, whether that duty was breached. These claims sound in tort (negligence) and contract law, not Workers' Compensation law. ¶ 7 It is well settled that the [Workers' Compensation] Court is a statutory tribunal of limited jurisdiction and has only such jurisdiction as is conferred by law. Cities Serv. Gas Co. v. Witt, 1972 OK 100, ¶ 14, 500 P.2d 288, 291. The Workers' Compensation Court's jurisdiction is limited to those matters which are expressly or by necessary implication delegated to it by proper legislative enactment. Bryant-Hayward Drilling Co. v. Green, 1961 OK ___, 362 P.2d 676, 677. [T]he [Court] is vested with jurisdiction to administer the Act and the jurisdiction thus conferred is limited to the purposes of the Act. The jurisdiction so conferred is to be ascertained by reference to the Act. . . . Pine v. Davis, 1944 OK ___, 193 Okla. 517, 145 P.2d 378, 380 (citations omitted). ¶ 8 In the workers' compensation proceeding that preceded Hefley v. Hefley, supra, the trial court's jurisdiction was limited to determining whether Mr. Hefley suffered job-related injuries compensable under the Workers' Compensation Act. A preliminary question in that proceeding was whether Hefley was an employee within the meaning of the Act. Having determined that he was not, the trial court denied compensation. The Court of Civil Appeals affirmed, gratuitously adding that Neely owed no duty under the Workers' Compensation Act to inform Hefley of the election provision in § 3(4). Neither court passed upon Hefley's present theories of liability based on tort and contract law. ¶ 9 It is important to note here that the previous workers' compensation proceedings were initiated by Hefley in his capacity as an employee. There, he sought to recover benefits under a workers' compensation insurance policy for injuries he suffered while on the job. Named as respondents in that case were his employer  who under the circumstances happened to be himself  and the business' workers compensation insurance carrier. The present case is brought against the insurance carrier by Hefley in his capacity as an employer. Here, Hefley does not seek workers' compensation benefits under his insurance policy, but rather seeks damages in tort and contract against his business' insurer for the insurer's actions or inactions regarding the issuance of the policy. ¶ 10 Even if the two courts in the earlier proceeding had made rulings concerning Hefley's present claims, we would declare such rulings void. [4] This Court has held that the Workers' Compensation Court lacks authority to construe contract rights in a dispute purely between an employer and its insurance carrier, [5] to reform an insurance policy, [6] to consider fraud in the inducement of a contract as a defense to an award under the Act, [7] to determine whether an insurance contract is void ab initio for fraud in the execution where invalidity is not apparent on the face of the policy, [8] to decide an action to recover damages for an insurer's failure to defend a claim for workers' compensation benefits, [9] or to determine whether a compensation policy has been canceled under the provisions of the insurance contract. [10] ¶ 11 In Mid-Continent Casualty Co. v. Miller, supra, note 6, we stated: The [Workers' Compensation] Court does not have the power of courts of general jurisdiction to construe and determine liabilities under contracts, generally, but is vested with authority to determine the liability of an insured's injured employee and, when it becomes necessary as an incident to this determination, to also interpret or construe the policy. The power thus granted to the . . . Court to so interpret or construe an insurance policy, when necessary to properly exercise the authority vested in that body by the legislature, does not confer the equitable power possessed by courts of general jurisdiction to reform an insurance policy. Id., 1969 OK 2 at ¶ 13, 451 P.2d at 935 (citations omitted). The same can be said in the present case. The Workers' Compensation Court has authority to interpret and construe insurance policies when it is necessary to do so when determining the insured's liability to an injured employee. However, the court lacks the power possessed by courts of general jurisdiction to decide tort and general contract matters. The Court of Civil Appeals sitting in review of that tribunal's decision similarly lacks the authority to decide those issues. ¶ 12 Under the doctrine of issue preclusion. . ., once a court has decided an issue of fact or of law necessary to its judgment, the same parties or their privies may not relitigate that issue in a suit brought upon a different claim. . . . [However], the doctrine may not be invoked if the party against whom the earlier decision is interposed did not have a full and fair opportunity to litigate the critical issue in the previous case.       Under the principle [of claim preclusion], a final judgment on the merits of an action precludes the parties from relitigating not only the adjudicated claim but also any theories or issues that were actually decided, or could have been decided, in that action. National Diversified Business Services, Inc. v. Corporate Fin. Opportunities, Inc., 1997 OK 36, ¶¶ 11-12, 946 P.2d 662, 667-67 (citations and emphasis omitted). ¶ 13 In the present case, Hefley asserts claims which he did not and could not have been fully and fairly litigated in the earlier proceeding because the courts there were without jurisdiction to determine those issues. Thus, neither the doctrine of issue preclusion nor the doctrine of claim preclusion are applicable to the claims raised here. Accordingly, the lower courts erred in holding that Hefley's claims were barred by the earlier litigation.