Court Opinion

ID: 4700306
Source: CourtListenerOpinion
Date Created: 2021-07-01 14:08:25.359173+00
Date Added: 2024-06-11T08:06:09.451456
License: Public Domain

FILED
                                                                     IN THE OFFICE OF THE
                                                                  CLERK OF SUPREME COURT
                                                                          JULY 1, 2021
                                                                   STATE OF NORTH DAKOTA

                 IN THE SUPREME COURT
                 STATE OF NORTH DAKOTA

                                2021 ND 117

Scot Decker,                                                       Appellant
  v.
Workforce Safety and Insurance,                                      Appellee

                               No. 20200289

Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable David E. Reich, Judge.

AFFIRMED.

Opinion of the Court by McEvers, Justice.

Jeffrey S. Weikum(argued), Scott A. Hager (on brief), and Rodney E. Pagel (on
brief), Bismarck, ND, for appellant.

Mitchell D. Armstrong, Special Assistant Attorney General, Bismarck, ND, for
appellee.
                               Decker v. WSI
                               No. 20200289

McEvers, Justice.

[¶1] Scot Decker appeals from a judgment entered after the district court
granted Workforce Safety and Insurance’s motion to dismiss Decker’s appeal
from the decision of an administrative law judge (“ALJ”). Decker argues the
district court erred in concluding it does not have jurisdiction and dismissing
his appeal. We affirm.

                                       I

[¶2] In June 2008, Decker sustained work related injuries while he was
working for Cyclone Drilling, Inc. in Mountrail County. WSI accepted liability
and Decker received more than $1,250,000 in benefits from WSI. Decker
currently resides in Nevada.

[¶3] In June 2014, Decker signed a third party notice of legal representation
advising WSI that he retained an attorney and planned to bring an action
against a third party for the work related injuries. The notice stated Decker
would act as a trustee for WSI’s subrogated interest. The notice also included
a lien notice, advising that WSI has a lien in the full amount it paid in all
benefits for Decker’s claim and that WSI may sue if Decker receives any money
related to the claim from a third party and WSI does not receive payment of its
lien within 30 days of the third party’s payment to Decker.

[¶4] Decker brought an action against I.E. Miller Services, Inc., received a
favorable verdict, and was awarded $2,045,972.60 in damages. Judgment was
entered. In May 2018, Decker filed a satisfaction of judgment stating the
judgment was fully paid with interest.

[¶5] In 2019, Decker filed an action against a different third party, alleging
medical malpractice for treatment Decker received for his work related
injuries. That action was still pending when the ALJ issued her decision in this
case.

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[¶6] WSI contacted Decker’s attorney multiple times requesting information
about when its lien would be satisfied. WSI informed Decker’s attorney that it
was to receive its interest within 30 days of receipt of recovery from the third-
party action.

[¶7] In December 2018, WSI issued a subrogation order. WSI found it had
paid Decker $1,257,178.71 in benefits for his work related injury and Decker
failed to pay WSI’s subrogation interest and lien within 30 days. WSI explained
that its subrogation interest is for the full amount of the damages recovered
up to the maximum amount it has paid or would pay in the future if a claimant
fails to pay WSI’s subrogation interest and lien within 30 days of receipt of
recovery in a third party action and that no costs or attorney’s fees will be paid
from WSI’s subrogation interest. WSI ordered its subrogation interest in the
judgment is $2,073,972.60, Decker and his attorney are liable to WSI for the
lien amount and must pay $1,257,178.71, and no attorney’s fees or costs would
be paid from WSI’s subrogation interest. WSI also ordered future benefits
awarded on the claim would be suspended until the benefits equal or exceed
the balance of WSI’s subrogation interest.

[¶8] Decker requested a hearing before an ALJ. Decker alleged WSI
incorrectly applied the law, it inappropriately included in the subrogation
order benefits paid related to medical negligence which is the subject of a
separate third-party action, and it did not properly determine the amount of
its lien. Decker also argued WSI does not have a right to recovery of its lien
before attorney’s fees and litigation expenses are paid.

[¶9] After a hearing, the ALJ found WSI paid $1,257,178.71 in total
compensation to Decker since his 2008 work related injury. The ALJ concluded
WSI’s subrogation rights are statutory under N.D.C.C. § 65-01-09, its
subrogation interest is limited to fifty percent of the damages recovered if the
injured employee pays WSI’s subrogation interest and lien within 30 days of
receipt of recovery in a third-party action, but WSI’s subrogation interest is the
full amount of the damages recovered up to the total amount WSI has paid or
would pay in future compensation and benefits if the injured employee fails to
pay WSI’s interest and lien within 30 days. The ALJ found Decker failed to pay

                                        2
WSI’s subrogation interest and lien within 30 days of receipt of his recovery in
the third-party action, and therefore WSI’s interest is the full amount of the
damages recovered up to the total amount of compensation paid or will be paid
in the future. The ALJ ordered WSI’s subrogation interest in the third party
recovery is $2,045,972.60 and no attorney’s fees or costs would be paid from
WSI’s subrogation interest, WSI’s lien amount is the full amount of the
damages recovered up to $1,257,178.71, Decker and his attorney are liable for
the lien amount, and future benefits on the claim are suspended until they
equal or exceed $788,793.89.

[¶10] Decker requested reconsideration. The ALJ denied Decker’s request.

[¶11] Decker appealed to the district court in Burleigh County. WSI moved to
dismiss Decker’s appeal, arguing the district court lacked subject matter
jurisdiction because the appeal was not filed in the proper county under
N.D.C.C. § 65-10-01.

[¶12] The district court granted WSI’s motion and dismissed Decker’s appeal.
The court concluded the requirements for an appeal under N.D.C.C. § 65-10-
01 apply, Decker was required to file the appeal in the county in which the
injury occurred or the county in which he resides, Decker did not meet the
statutory requirements, and therefore the court did not have subject matter
jurisdiction.

                                      II

[¶13] Decker argues the district court erred in concluding it does not have
jurisdiction and dismissing his appeal. Decker contends he did not appeal
under N.D.C.C. § 65-10-01, none of the provisions of that statute apply in this
case, and his appeal was proper under N.D.C.C. § 28-32-42. He claims a plain
reading of N.D.C.C. § 65-10-01 indicates the statute only applies in cases where
the claimant’s right to compensation for the injury is at issue, his right to
compensation was not at issue, and the statute does not govern an appeal
involving WSI’s subrogation rights for employees that have fully participated
in the fund and then successfully recover damages from a third party.

                                       3
[¶14] The issue of subject matter jurisdiction is a question of law when
jurisdictional facts are not in dispute. Ellis v. N.D. Workforce Safety & Ins.,
2020 ND 14, ¶ 7, 937 N.W.2d 513. Whether the district court had jurisdiction
is reviewed de novo on appeal. Id.

[¶15] Appeals from WSI’s decisions “are statutory in nature and are not
matters of original jurisdiction for the district courts but rather involve
exercise of appellate jurisdiction of the district courts conferred by statute.”
Transystems Servs. v. N.D. Workers Comp. Bureau, 550 N.W.2d 66, 67 (N.D.
1996). The statutory requirements for filing a notice of appeal from a WSI
decision are jurisdictional, and the appellant must satisfy the statutory
requirements for the district court to acquire subject matter jurisdiction. Boyko
v. N.D. Workmen’s Comp. Bureau, 409 N.W.2d 638, 641 (N.D. 1987). If a party
appeals to a district court other than the one specified by statute the court will
be without subject matter jurisdiction. Id.

[¶16] Section 65-10-01, N.D.C.C., authorizes appeals from certain WSI
decisions, stating:

      If the final action of the organization denies the right of the
      claimant to participate at all in the fund on the ground that the
      injury was self-inflicted, or on the ground that the accident did not
      arise in the course of employment, or upon any other ground going
      to the basis of the claim, or if the organization allows the claimant
      to participate in the fund to a lesser degree than that claimed by the
      claimant, if such allowance is less than the maximum allowance
      provided by this title, the claimant may appeal to the district court
      of the county wherein the injury was inflicted or of the county in
      which the claimant resides. . . . Any appeal under this section shall
      be taken in the manner provided in chapter 28-32. Any appeal to
      the district court shall be heard on the record, transmitted from
      the organization, and, in the discretion of the court, additional
      evidence may be presented pertaining to the questions of law
      involved in the appeal.

(Emphasis added.)

                                        4
[¶17] Under the plain language of N.D.C.C. § 65-10-01, the statute applies and
governs the appeal when a claimant appeals from a decision in which WSI
allows the claimant to participate in the fund to a lesser degree than that
claimed by the claimant and the allowance is less than the maximum
allowance provided by Title 65. Decker claims he was fully compensated for his
injuries and he participated fully in the fund, and therefore this provision does
not apply.

[¶18] Decker’s argument requires us to consider the issues he raised on appeal
about the ALJ’s decision and determine whether the ALJ’s subrogation
decision resulted in Decker participating in the fund to a lesser degree than he
claims he should be allowed to participate. Decker contends his appeal of the
ALJ’s decision is about whether WSI complied with N.D.C.C. § 65-01-09,
whether WSI’s subrogation interest is less than was ordered, whether the ALJ
erred in deciding that WSI has the right to not reduce its subrogation interest
by its proportionate share of the costs and attorney’s fees for the action against
the third party, and other issues.

[¶19] Under N.D.C.C. § 65-01-09, WSI has a subrogation interest and a lien on
the damages an injured employee recovers in an action against a third party
related to the work injury. The statute provides WSI is subrogated to the rights
of the injured employee to the extent of fifty percent of the damages recovered
up to a maximum of the total amount WSI has paid or would otherwise pay in
the future in compensation and benefits. N.D.C.C. § 65-01-09(1). WSI has a
lien to the extent of fifty percent of the damages recovered up to a maximum
total amount WSI paid in compensation and benefits. Id. The statute further
states WSI shall pay a portion of the costs of the action brought by the injured
employee, exclusive of attorney’s fees, and shall also pay from the general fund
a percentage of the subrogation interest recovered for the organization as
attorney’s fees. N.D.C.C. § 65-01-09(3). However, N.D.C.C. § 65-01-09(4),
provides:

      If an injured employee fails to pay the organization’s subrogation
      interest and lien within thirty days of receipt of a recovery in a
      third-party action, the organization’s subrogation interest is the
      full amount of the damages recovered, up to a maximum of the

                                        5
      total amount it has paid or would otherwise pay in the future in
      compensation and benefits to the injured employee . . . , no costs or
      attorney’s fees will be paid from the organization’s subrogation
      interest and the organization’s lien is the full amount of the
      damages recovered up to a maximum of the total amount it has
      paid.

[¶20] Decker received over $1,250,000 in benefits from WSI, and he received a
judgment against a third party for over $2,000,000 for claims related to the
work injury. In May 2018, Decker filed a satisfaction of judgment stating the
amount of the judgment with interest and costs had been paid. WSI had a
statutory lien on Decker’s third party recovery but Decker did not pay any of
the sums secured by the lien as required under N.D.C.C. § 65-01-09(3). As a
result, the ALJ ordered WSI’s subrogation interest in the third-party recovery
is $2,045,972.60; WSI’s lien amount is the full amount of damages recovered
up to $1,257,178.71, which was the full amount of benefits Decker had received
at that point; any future benefits for the claim shall be suspended until the
benefits equal or exceed $788,793.89; and no attorney’s fees or costs will be
paid from WSI’s subrogation interest. This portion of the ALJ’s order reflects
an order which “allows the claimant to participate in the fund to a lesser degree
than that claimed by the claimant.” See N.D.C.C. § 65-10-01.

[¶21] When there is a compensable injury, a lien is created upon payment of
benefits in favor of WSI which attaches to any claims for proceeds from a
legally liable third person. N.D.C.C. § 65-01-09(5). A claimant’s maximum
participation allowed under Title 65, reduces WSI’s subrogation interest and
lien on damages recovered from an action against a third party to a limited
portion of the damages and at least a portion of the costs and attorney’s fees
for the action are paid from the general fund under certain conditions. See
N.D.C.C. § 65-01-09(3), (4). The ALJ ordered WSI’s subrogation interest is the
full amount of the damages Decker recovered, the lien amount is the full
amount of the damages recovered up to the full amount of the benefits already
paid, and suspended future benefits until they exceed the amount of the
subrogation interest remaining after the lien is fulfilled. The ALJ also ordered
no attorney’s fees or costs would be paid from WSI’s subrogation interest. WSI’s
subrogation interest and lien amount could have been reduced by a lesser

                                       6
percentage and a greater percentage of attorney’s fees could have been paid
from WSI’s subrogation interest. The ALJ’s decision lessens or reduces
Decker’s participation in the fund. The result of WSI’s decision allows Decker
to participate in the fund to a lesser degree than he claims and the allowed
participation is less than the maximum allowed by Title 65. Therefore,
N.D.C.C. § 65-10-01 applies to this appeal.

[¶22] Decker contends this Court in Westman v. North Dakota Workers
Compensation Bureau, 459 N.W.2d 540 (N.D. 1990), recognized the right to
appeal exists under both N.D.C.C. § 65-10-01 and Chapter 28-32. He claims he
properly appealed this matter under N.D.C.C. § 28-32-42, which allows an
appeal to the district court of the county in which the hearing was held.

[¶23] In Westman, 459 N.W.2d at 541, the employer moved to dismiss the
appeal, arguing the decision appealed was not one of the decisions specified in
N.D.C.C. § 65-10-01 and the appeal must be dismissed. We said the issue was
“whether [N.D.C.C.] § 65-10-01 is the exclusive source of a claimant’s right to
appeal or whether that section must be read in conjunction with [N.D.C.C.] §
28-32-15.” Id. We held the two sections must be read together and explained,
“Section 65-10-01, [N.D.C.C.], grants a claimant a right to appeal under the
specific circumstances it addresses. It does not, either explicitly or implicitly,
limit the broader appeal rights contained within [N.D.C.C.] § 28-32-15.” Id. We
rejected the argument that the decisions listed in N.D.C.C. § 65-10-01 are the
only WSI decisions that are appealable. Id. at 542. We held N.D.C.C. § 28-32-
15 authorizes an appeal from a WSI decision which grants benefits if that
decision substantially affects the rights of the claimant. Id. at 542-43. We
denied the motion to dismiss the appeal. Id. at 543.

[¶24] Unlike the appeal in Westman, N.D.C.C. § 65-10-01 specifically
authorizes an appeal from the decision in this case and therefore applies to this
appeal. Section 65-10-01, N.D.C.C., states the claimant may appeal “to the
district court of the county wherein the injury was inflicted or of the county in
which the claimant resides.” Section 28-32-42, N.D.C.C., provides rules for
appeals from a determination of an agency and states, “The appeal of an order
may be taken to the district court designated by law, and if none is designated,

                                        7
then to the district court of the county in which the hearing or a part thereof
was held.” Under N.D.C.C. § 28-32-42, an appeal may be taken in the county
in which the hearing was held only if no district court is designated by law.
Section 65-10-01, N.D.C.C., designates which district court the appeal may be
brought in. To the extent N.D.C.C. § 28-32-42 applies to this appeal, when
N.D.C.C. §§ 28-32-42 and 65-10-01 are construed together, Decker was
required to bring the appeal in the county where the injury was inflicted or the
county in which he resides. See also N.D.C.C. § 65-01-16 (stating the
procedures contained in N.D.C.C. § 65-01-16 must be followed in claims for
benefits, including that a party may appeal to a district court in accordance
with chapter 65-10, notwithstanding any provision to the contrary in chapter
28-32).

[¶25] Decker brought the appeal in Burleigh County District Court, and it is
undisputed that Decker does not reside in Burleigh County and that his
injuries did not occur in Burleigh County. Because N.D.C.C. § 65-10-01 applies
and required Decker to bring the appeal in the county where he resides or the
county where the injury was inflicted, the Burleigh County district court did
not have jurisdiction over the appeal. See Boyko, 409 N.W.2d at 641 (stating
the district court is without subject matter jurisdiction when a party appeals
to a district court other than the one specified by statute). We conclude the
district court did not have subject matter jurisdiction and did not err in
granting WSI’s motion to dismiss.

                                     III

[¶26] We affirm the district court’s judgment dismissing Decker’s appeal.

[¶27] Jon J. Jensen, C.J.
      Gerald W. VandeWalle
      Daniel J. Crothers
      Lisa Fair McEvers
      Jerod E. Tufte

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