Court Opinion

ID: 9880741
Source: CourtListenerOpinion
Date Created: 2023-09-28 15:12:20.741216+00
Date Added: 2024-06-11T13:56:54.401255
License: Public Domain

This opinion is subject to revision before final
                        publication in the Pacific Reporter
                                 2023 UT 21

                                    IN THE

       SUPREME COURT OF THE STATE OF UTAH

                      GRANITE SCHOOL DISTRICT,
                             Appellant,
                                       v.
                              ROBYN YOUNG,
                                Appellee.

                             No. 20220471
                          Heard May 15, 2023
                       Filed September 28, 2023

                            On Direct Appeal

                  Third District, Salt Lake County
                The Honorable Richard D. McKelvie
                          No. 210905514

                                 Attorneys:
  Brett N. Anderson, Bret A. Gardner, Salt Lake City, for appellant
     Gary E. Atkin, Lester A. Perry, Salt Lake City, for appellee

 ASSOCIATE CHIEF JUSTICE PEARCE authored the opinion of the Court,
        in which CHIEF JUSTICE DURRANT, JUSTICE PETERSEN,
           JUSTICE HAGEN, and JUSTICE POHLMAN joined.

   ASSOCIATE CHIEF JUSTICE PEARCE, opinion of the Court:
                           INTRODUCTION
    ¶1 The Utah Labor Commission awarded Robyn Young benefits
stemming from injuries she suffered when she worked for Granite
School District (Granite). Young later asked the Labor Commission to
grant her permanent total disability benefits. A Labor Commission
administrative law judge (ALJ) ruled that Young’s industrial injuries
qualified her for permanent total disability. Granite appealed that
ruling to the Labor Commission Appeals Board, which in turn sent
the matter to an expert medical panel to determine the extent to which
workplace injuries had caused Young’s conditions. That process
                 GRANITE SCHOOL DISTRICT v. YOUNG
                         Opinion of the Court

remains ongoing, and the matter persists before the Labor
Commission.
    ¶2 After the initial award of benefits, but before she sought
permanent total disability, Young filed a lawsuit against medical debt
collectors for violations of the Fair Debt Collection Practices Act
(FDCPA). Young alleged that the debt collectors violated the FDCPA
when they attempted to secure payment for the treatments she
received for her workplace injuries. Young eventually settled that suit
and received financial compensation from the debt collectors.
    ¶3 After it learned of the settlement, Granite filed this action in
district court, asserting that the Utah Workers’ Compensation Act
required Young to use the settlement proceeds to reimburse it for
amounts it had paid her for her injuries. Young moved to dismiss that
suit for, among other things, lack of subject matter jurisdiction. She
argued to the district court that the Workers’ Compensation Act gave
the Labor Commission exclusive jurisdiction to decide whether the
FDCPA settlement compensated her for injuries Granite had already
paid for. The district court granted Young’s motion to dismiss.
    ¶4 Granite accurately notes that district courts have jurisdiction to
adjudicate reimbursement disputes. But the district court in this case
correctly determined that it lacked jurisdiction to decide the factual
questions at the heart of this reimbursement dispute because our
precedent dictates that the Labor Commission has exclusive
jurisdiction over those questions. We affirm.
                           BACKGROUND
   ¶5 Granite employed Robyn Young as a special education teacher.
On two occasions, Young suffered injuries at the hands (and head) of
her students. Both incidents caused Young injuries, with the second
aggravating the symptoms of the first. The accidents left Young with
post-concussive syndrome, mental health issues, and debilitating
migraines.
   ¶6 Young sought workers’ compensation. A Utah Labor
Commission ALJ concluded that the workplace accidents had caused
Young’s injuries. The ALJ required Granite to pay for Young’s medical
care.
    ¶7 Over the next couple of years, the injuries continued to cause
Young personal and professional difficulties. Even after the workers’
compensation award, Young was unable to pay some of her medical
bills. Her creditors hired collection agencies to recover the debt.
Young later filed an action against the debt collectors alleging they

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had violated the FDCPA. That case eventually resulted in a settlement
for Young.
   ¶8 Young meanwhile returned to the Labor Commission claiming
that she was permanently and totally disabled. The ALJ agreed and
awarded Young benefits based upon a permanent total disability. The
ALJ also concluded that Granite had not completely complied with its
prior order and ordered Granite to reimburse Young for certain
medical expenses Young had paid.
    ¶9 Granite filed a motion with the Labor Commission Appeals
Board to review the ALJ’s finding that Young was permanently and
totally disabled. Upon review, the Appeals Board referred the matter
to an independent medical panel to determine whether the workplace
injuries left Young eligible for an award of permanent total disability.
As of the date of oral argument in Young’s appeal to this court, that
question had not been resolved.
    ¶10 Granite also argued to the Appeals Board that the ALJ erred
when it concluded that Young did not have to reimburse Granite with
funds she received from the legal settlement she had obtained from
the debt collectors. The ALJ had concluded that the FDCPA settlement
reflected compensation for Young’s pain and suffering from the debt
collection practices not because of her workplace injuries. The ALJ
also determined that reimbursement claims were affirmative defenses
that Granite had waived. The Appeals Board did not opine on those
holdings because Young’s “entitlement to permanent total disability
compensation is still undecided.” As such, the resolution of those
questions remains alive before the Labor Commission.
   ¶11 Rather than await the conclusion of the Labor Commission
proceedings, Granite initiated suit in district court for reimbursement
from Young under the Utah Workers’ Compensation Act (Act).
Granite asserted that it was entitled to reimbursement out of the
FDCPA settlement proceeds because the harms the creditors caused
were the same for which Granite had paid Young benefits.
   ¶12 Young moved to dismiss that suit for, among other things,
lack of subject matter jurisdiction. Young argued that the Act creates
Granite’s alleged right to reimbursement. Young further reasoned
that the Act vests the ability to administer the Act in the Labor
Commission, such that the district court did not have jurisdiction to
decide reimbursement claims.
    ¶13 Granite argued that the Labor Commission has exclusive
jurisdiction only over issues of “compensation” and that
reimbursement claims could be heard in the district court. Granite

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pointed to several cases in which this court has upheld district courts’
awards of reimbursement under the Act without ever raising a
potential jurisdictional concern.
   ¶14 The district court agreed with Young. At the hearing on the
motion to dismiss, the court stated that the question of jurisdiction
over the Act “begins and ends” with Utah Code section 34A-2-112
which vests administration of the Act in the Labor Commission. In its
order, the district court wrote: “It is clear from the statute that the Utah
Legislature granted exclusive jurisdiction to the Utah Labor
Commission over this matter and this Court is devoid of jurisdiction
over this action.” The district court dismissed Granite’s complaint.
Granite appeals.
                       STANDARD OF REVIEW
    ¶15 Granite argues that the district court erred when it granted
Young’s motion to dismiss for lack of jurisdiction. “[A] district court’s
dismissal of . . . claims under rule[] 12(b)(1) . . . of the Utah Rules of
Civil Procedure . . . presents a question of law that we review for
correctness.” Salt Lake Cnty. v. State, 2020 UT 27, ¶ 14, 466 P.3d 158
(cleaned up).
                               ANALYSIS
    ¶16 Granite asserts that the district court erred when it concluded
it lacked jurisdiction to decide this case. Specifically, Granite argues
that the Act gives the Labor Commission exclusive jurisdiction only
over awards of compensation and not over all disputes that might
arise in connection with that compensation. Granite points out that
the Act alludes or refers to the possibility of civil action in multiple
sections. Granite also relies on a series of cases it argues demonstrate
that district courts have adjudicated reimbursement claims over the
past six decades.
   ¶17 Granite’s argument that the Labor Commission only has
exclusive jurisdiction for awards of compensation rests in part on the
plain language of Utah Code section 34A-2-112. Granite quotes
section 34A-2-112 and argues that section vests the Labor Commission
with the “[a]dministration” of the Act. Granite contends that in
common usage, “administration” means organizing or managing, not
adjudicating claims. Granite also asserts that subsection 34A-2-
112(2)(a) is the only mention of jurisdiction in that statutory section,
and that it grants the Labor Commission purview over all workplaces
in order to “ensure that every employee in this state has a safe
workplace in which employers have secured the payment of workers’
compensation benefits.” (Quoting id. § 34A-2-112(2)(a).) Granite

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emphasizes that this definition does not include resolving
reimbursement claims.
    ¶18 Granite asserts that the Labor Commission’s exclusive
jurisdiction cannot be all that exclusive because the Act contemplates
various civil and criminal actions that the Labor Commission could
not adjudicate. By way of example, Granite points to section 34A-2-
108 which, Granite says, criminalizes “certain behaviors relating to the
payment of workers’ compensation premiums.” (Citing id. § 34A-2-
108.) Similarly, section 34A-2-207 creates a civil action against
employers who do not maintain workers’ compensation insurance
coverage. Id. § 34A-2-207. Granite contends that section 34A-2-112
cannot mean that the Labor Commission must make every decision
covered by the Act because the Act acknowledges situations in which
courts will be required to adjudicate disputes. See infra ¶ 32.
    ¶19 On top of that, Granite lists nine cases which it claims
demonstrate that this court has affirmed district courts’ exercise of
jurisdiction in reimbursement cases. These cases dealt with a variety
of reimbursement issues. In Oliveras v. Caribou-Four Corners, Inc., for
example, this court concluded that an insurer could not seek
reimbursement from heirs who had received wrongful death damages
but had not received workers’ compensation. 598 P.2d 1320, 1321–22,
1325 (Utah 1979). And in Ericksen v. Salt Lake City Corp., we affirmed a
grant of reimbursement to an employer after a third party had been
found liable for the employee’s injuries. 858 P.2d 995, 997, 999 (Utah
1993). In none of these cases did we question whether the district court
had jurisdiction over the matter. Granite also argues that the
Legislature must be aware that district courts are ruling in
reimbursement cases and has done nothing to clarify that the Labor
Commission should have exclusive jurisdiction.
   ¶20 Young, in turn, argues that the Act’s plain language grants
exclusive jurisdiction to the Labor Commission, citing both the
“[a]dministration” and the “jurisdiction over every workplace”
language from Utah Code subsections 34A-2-112(1) and (2)(a). Young
also highlights Utah Code section 34A-2-112(2)(c), which orders the
Labor Commission, “through the Division of Adjudication,
commissioner, and Appeals Board,” to “provide for the adjudication
and review of an administrative action, decision, or order of the
commission in accordance with this title.”
   ¶21 Young additionally contends that we have interpreted the
Act in a fashion that leaves district courts without jurisdiction to hear
certain reimbursement claims. In Sheppick v. Albertson’s, Inc., we
concluded that courts “have no jurisdiction whatsoever over cases

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that fall within the purview of the Workers’ Compensation Act.” 922
P.2d 769, 773 (Utah 1996). We explained that “the Commission has
exclusive jurisdiction not only to issue compensation awards
authorized by the Act, but also to make the necessary factual findings
upon which such awards may be made.” Id. at 775. Young argues that
the district court could not have erred given Sheppick’s definitive
statements.
   ¶22 Young moreover argues that the question of whether the
FDCPA recovery was a “third-party” recovery within the meaning of
the Act is still before the Labor Commission and that it would have
been improper for the district court to rule on the issue.
    ¶23 “The purpose of the Workers’ Compensation Act is to protect
employees who sustain injuries arising out of their employment by
affording financial security during the resulting period of disability.”
Utah State Tax Comm’n v. Indus. Comm’n of Utah, 685 P.2d 1051, 1053
(Utah 1984). However, the Act also provides that if a non-employer
third party causes the injury, the worker may sue that third party, and
in the event of recovery “[t]he person liable for compensation
payments shall be reimbursed, less the proportionate share of costs
and attorney fees.” UTAH CODE § 34A-2-106(5)(b). This is the section
of the Act under which Granite sought reimbursement from the
recovery Young received from her medical creditors.
    ¶24 As we outlined above, both parties can find support for their
respective positions in the Act’s text and in our cases interpreting the
Act. We have stated that the Labor Commission has exclusive
jurisdiction “over cases that fall within the purview of the Workers’
Compensation Act.” Sheppick, 922 P.2d at 773. But we have also
reviewed a district court’s resolution of Workers’ Compensation Act
reimbursement cases several times without batting an eye at a
potential jurisdictional issue. See, e.g., Oliveras, 598 P.2d 1320; Ericksen,
858 P.2d 995.
    ¶25 The disconnect may arise from the fact that we sometimes use
“subject matter jurisdiction” to mean different things. Subject matter
jurisdiction can mean “statutory limits on the class of cases assigned
to the authority of a certain court,” but it can also mean “other limits
that go to the concept of justiciability.” In re Adoption of B.B., 2017 UT
59, ¶ 129, 417 P.3d 1 (Lee, A.C.J., opinion of the court on this issue).
    ¶26 Stated differently, one category of subject matter jurisdiction
involves whether the court has statutory authority to hear a particular
class of cases. Id. A justice court, for example, lacks jurisdiction to hear
a felony case. See UTAH CODE § 78A-7-105.

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    ¶27 Another category of subject matter jurisdiction embodies
concepts of justiciability. In re Adoption of B.B., 2017 UT 59, ¶ 129.
Justiciability issues that affect whether a district court has jurisdiction
include “timing and other limits . . . of the proceeding before the court
(such as standing, ripeness, and mootness).” Id. ¶ 121. We raise the
specter of this type of jurisdiction when we say, for example, that a
district court lacks jurisdiction over an administrative claim if the
party seeking relief has not exhausted administrative remedies. See,
e.g., Ramsay v. Kane Cnty. Hum. Res. Special Serv. Dist., 2014 UT 5,¶¶ 8–
9, 322 P.3d 1163.
   ¶28 Granite appears to use subject matter jurisdiction in the sense
of a district court’s statutory authority to hear a certain type of case
when it contends that district courts possess jurisdiction to hear
reimbursement cases. Granite notes, correctly, that nothing in the Act
expressly limits a district court’s jurisdiction to prevent it from
hearing reimbursement claims. Granite also points to several cases in
which we have upheld a district court’s adjudication of a
reimbursement question as proof that district courts routinely hear
and resolve reimbursement claims. See supra ¶ 19.
    ¶29 Young, on the other hand, seems to use subject matter
jurisdiction in the justiciability/exhaustion of remedies sense. When
Young argues that the district court has no jurisdiction to hear
Granite’s claims, she appears to assert that the district court cannot
adjudicate the case because it requires resolution of factual questions
that the Act, and our interpretation of the Act, say only the Labor
Commission can decide.
    ¶30 We might be responsible for the confusion about what type
of jurisdiction district courts have with respect to claims under the
Act. We acknowledged in Sheppick that the Act “does not specifically
state that no court may award benefits provided by the Act.” 922 P.2d
at 773. But we nevertheless concluded that is the Act’s “clear import.”
Id. This caused us to determine that district courts “have no
jurisdiction whatsoever over cases that fall within the purview of the
Workers’ Compensation Act.” Id. We also said that “the Commission
has exclusive jurisdiction not only to issue compensation awards
authorized by the Act, but also to make the necessary factual findings
upon which such awards may be made.” Id. at 775.
    ¶31 In other words, some of Sheppick’s language suggests that we
were talking about subject matter jurisdiction in its “statutory
authority to hear cases” sense. But a more nuanced reading of Sheppick
reveals that we were referring to subject matter jurisdiction in its
justiciability/exhaustion of remedies sense. That is, while we talked

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about district courts lacking jurisdiction over “cases . . . fall[ing]
within the [Act’s] purview,” we weren’t really saying that district
courts lack jurisdiction over any case that somehow touches the Act.
Id. at 773.
    ¶32 Granite correctly posits that the Act refers to district court
action in multiple subsections, which illustrates that not every part of
the legislation is exclusively under the Labor Commission’s
jurisdiction. The Act criminalizes failure to pay workers’
compensation, protects reporters of possible fraud from liability,
holds noncompliant employers liable for certain damages experienced
by their employees, and authorizes suit by the Labor Commission
against employers who fail to provide benefits in certain ways. UTAH
CODE §§ 34A-2-108, -110(6), -207(1)(a), -210. The Act plainly grants
district courts authority to decide some matters. Our statements in
Sheppick cannot be as sweeping as they appear.
   ¶33 Properly read, Sheppick holds that the Act’s logic and
structure demand that only the Labor Commission can “issue
compensation awards” and “make the necessary factual findings
upon which” those awards are based. 922 P.2d at 775. We have
delineated this more clearly in other cases.
   ¶34 In Stokes v. Flanders, we recognized that enforcement “of the
various provisions of the Act is divided between administrative-type
remedies (in conjunction with insurance) and judicial remedies.” 970
P.2d 1260, 1262 (Utah 1998). We further explained that this means that
district courts “have no jurisdiction whatsoever over the
determination of the amount of a compensation award or an award of
medical benefits.” Id.
    ¶35 When we apply the properly interpreted Sheppick to Young’s
case, and we use subject matter jurisdiction in its
justiciability/exhaustion of remedies sense, it becomes clear that the
district court did not err when it dismissed the case for lack of
jurisdiction. The district court could not resolve Granite’s
reimbursement claim without answering questions that the Act
assigns exclusively to the Labor Commission. That is, reimbursement
in this case will turn on the resolution of factual disputes relating to
the industrial accidents for which Granite has paid benefits and the
injuries the debt collectors inflicted on Young for which they paid to
settle the FDCPA claims.
   ¶36 Not only are these questions that the Labor Commission
needs to resolve, they are questions that the Labor Commission is in
the process of resolving. For instance, the Labor Commission Appeals

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Board has referred the question of the extent to which Young’s
workplace injuries caused her medical conditions to an independent
medical panel.
   ¶37 This is the very same determination the district court would
have had to make to conclude that Granite should be reimbursed for
payments covering Young’s medical expenses. It would contravene
the Labor Commission’s exclusive jurisdiction over the determination
of benefits and the “necessary factual findings” on which those
determinations are made for the district court to weigh in on this
question. Sheppick, 922 P.2d at 775. The district court correctly
recognized this and dismissed the suit for lack of jurisdiction.
    ¶38 Granite offers a workaround. It claims throughout its briefs
that, for the purposes of a motion to dismiss, we must assume that the
monies Young recovered from creditors are for the same injury for
which she has been compensated. Granite argues we must assume this
is true for the purposes of the motion to dismiss because it alleged as
much in its complaint.
    ¶39 Granite’s problem, however, is that it fails to distinguish
between different species of motions to dismiss. We assume the truth
of a complaint’s allegations for the purposes of a motion to dismiss for
failure to state a claim under rule 12(b)(6) of the Utah Rules of Civil
Procedure. But that is not necessarily true of a motion to dismiss for
lack of subject matter jurisdiction under rule 12(b)(1).
    ¶40 “Motions under rule 12(b)(1) fall into two different
categories: a facial or a factual attack on jurisdiction.” Salt Lake Cnty.
v. State, 2020 UT 27, ¶ 26, 466 P.3d 158 (cleaned up). When a party
mounts a facial challenge to subject matter jurisdiction, we assume the
allegations in the complaint are true and assess whether they assert a
valid basis for the court to exercise jurisdiction. Id.
    ¶41 “In a factual challenge to jurisdiction, the defendant attacks
the factual allegations underlying the assertion of jurisdiction, either
through the filing of an answer or otherwise presenting competing
facts.” Id. (cleaned up). When a factual challenge occurs, we do not
presume the truth of the complaint’s jurisdictional allegations. Id.
¶ 26. In that instance, a court “may receive competent evidence such
as affidavits, deposition testimony, and the like in order to determine
the factual dispute.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993)
(cited favorably by Salt Lake County, 2020 UT 27, ¶ 26 nn.25, 27).
    ¶42 Here, Young challenged the district court’s subject matter
jurisdiction by presenting facts to demonstrate that the court lacked
the ability to hear the matter. Young alerted the district court to the

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Labor Commission proceedings, where she was actively contesting
the veracity of Granite’s allegation that the FDCPA settlement covered
injuries for which Granite has compensated her. This was enough to
allow the district court to see that there was a disputed factual
question that the Act requires the Labor Commission to answer. The
district court was not obligated to assume the truth of Granite’s
allegations to resolve the rule 12(b)(1) motion.
                          CONCLUSION
    ¶43 Granite’s complaint asked the district court to rule it was
entitled to reimbursement from the funds Young received in the
settlement of her FDCPA claims against her creditors. This would
have required the court to decide questions about the cause of her
injuries. The Workers’ Compensation Act assigns the Labor
Commission exclusive jurisdiction to resolve such questions. The
district court did not err when it dismissed Granite’s complaint. We
affirm.

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