On January 16, 2019, the Supreme Court of South Dakota published its opinion in Skjonsberg v. Menard, Inc., 2019 S.D. 6. This decision, which provides favorable language for Employers and Insurers, has potential ramifications on the bad faith environment in South Dakota.

In Skjonsberg, Cassandra Skjonsberg (“Claimant”) injured her right foot while working for Menard, Inc. (“Employer”). Claimant’s workers’ compensation claim was eventually denied, causing her to file a Petition for Hearing with the Department of Labor. Claimant alleged to have incurred medical expenses related to her injury after the denial of her claim. During litigation, Claimant issued written discovery requests. After multiple attempts to have Employer and Insurer answer her discovery, Claimant moved for partial summary judgment.  In doing so, she asked the Department to find Employer and Insurer responsible for payment of her medical expenses. Employer and Insurer responded, arguing that the discovery requests were burdensome and excessive. The Department granted Claimant’s motion for partial summary judgment and ordered that Employer and Insurer pay Claimant’s medical expenses.

Despite the Department’s order, Claimant’s medical expenses went unpaid for two years. Claimant then filed a second motion for partial summary judgment, again seeking payment of unpaid medical expenses. Employer and Insurer responded by sending a letter to the Department claiming that they were taking care of the outstanding medical bills. Counsel for Employer and Insurer later submitted an affidavit, providing that Claimant’s medical bills had been resolved. Employer and Insurer also filed a two-line response to Claimant’s motion for partial summary judgment, arguing the motion should be denied because the issue was moot – in other words, that there was no controversy for the Department to decide because the bills had been paid.

Despite the Employer and Insurer’s argument, the Department granted the second motion for partial summary judgment. Employer and Insurer requested a reconsideration which the Department denied.  On appeal, Circuit Court Judge John Pekas affirmed the Department’s order, and the issue was appealed to the Supreme Court. The Supreme Court reversed and remanded, finding that the second motion for partial summary judgment was granted in error because the issue was moot at the time of adjudication.

The parties likely litigated this issue in anticipation of future bad faith litigation, hoping to collect a pile of orders finding against the employer and insurer. With increasing frequency, Claimants’ attorneys have filed actions where there is no dispute over benefits owed.  Instead, it appears that the goal is getting the Department to enter an Order that may assist a future potential bad faith claim. This decision is useful as the basis for a motion for summary judgment when claims of this nature are filed with the Department.

Reach out to one of us here at Boyce Law Firm to discuss more.

The South Dakota Department of Labor and Regulation will begin posting appellate decisions from the Circuit Court on its website. This is something the South Dakota Workers’ Compensation Committee has been working toward for some time. Currently you can access all Department of Labor decisions, but unless we are involved in the case or the decision was appealed to the SD Supreme Court, we often did not know the outcome of the appeal, or even if a Department decision was appealed in the first place.  Fortunately, this new feature will change that.

Boyce Law will continue to monitor all Department decisions and provide case law updates on this blog. We will also report any relevant appellate decisions from the Circuit Court. The appellate decisions can be accessed at http://dlr.sd.gov/workers_compensation/decisions_appeals.aspx.  You can navigate to that page by clicking “Case Decisions” from the home page and using the “Workers’ Compensation Appeals Decision” link found on the “Case Decisions” page.

At the end of 2016, the Department of Labor issued a decision denying summary judgment for Claimant in Eixenberger v. Rapid City Winair Company and Travelers Ins. Co., HF No. 128, 2014/15, citing that several factual issues still needed to be hashed out and summary judgment was not proper.

Eixenberger worked for Rapid City Winair Co. as a delivery driver and as warehouse personnel. He pulled products and loaded trucks, and also drove the delivery truck.  On July 8, 2013, Eixenberger was loading the truck on an 87-degree day, and earlier that day told a co-worker that he felt sick to his stomach. Later that afternoon, a co-worker found Eixenberger lying next to the truck, unresponsive. Emergency medical services were called and he was rushed to the hospital, but unfortunately passed away due to what was later determined to be a heart attack. The emergency room doctor, Dr. Newman, opined Eixenberger’s work activities on July 8, 2013, were a major contributing factor in his heart attack, stating that the physical exertion that day caused the heart attack.

Several facts that Dr. Newman relied upon in reaching that conclusion were determined by the Department to be disputed – including the amount of physical exertion, including how much lifting was going on and the pace at which Eixenberger was working, Eixenberger’s physical appearance prior to the collapse and statements he made to co-workers. Dr. Newman conceded that his opinion would change if Eixenberger’s physical exertion was less than he understood it to be at the time he gave his opinion.

Employer and Insurer offered the opinion of Dr. Del Core, a board-certified cardiologist from Creighton Medical School. Dr. Del Core ultimately testified that the heart attack was not necessarily related to Eixenberger’s work activities. The Department noted that Dr. Del Core assumed that Eixenberger was not performing extreme physical activity on the day that he died, and pointed out that the level of exertion was a disputed fact at that heart of the case. In denying Eixenberger’s motion for summary judgment, the Department stated that “whether…unusual activity occurred that day is disputed, and a hearing will be needed to resolve the matter.”

This decision highlights the importance of a factual investigation after an injury or death, including speaking to all the witnesses. It also highlights the importance of an employer keeping a pulse on their employees and the tasks that they are performing on any given day and to ensure proper documentation of those tasks where feasible. These cases can be won or lost based on the expert testimony, and the law provides that expert testimony is only as good as the facts upon which it is based – so make sure you have all the facts.

The South Dakota Department of Labor recently held that when a Petition for Hearing is not filed within two (2) years from the date of the denial letter, the claim cannot be reopened for a change in condition pursuant to SDCL 62-7-33. In Palmquist v. Luverne Truck Equipment, Inc. and Travelers Insurance, the Claimant’s medical benefits were denied via letter and no Petition for Hearing was submitted until after two years had passed from the denial. Claimant argued that a letter she filed with the Department prior to the denial letter should be considered a Petition for Hearing (the medical benefits were denied after benefits had been issued for a matter of years). The Department first analyzed the letter that Claimant sent to the Department in prior years to determine whether it included the necessary information to be considered a Petition for Hearing. In determining that the letter was not a Petition for Hearing, the Department relied on Administrative Rule 47:03:01:02 to hold that the letter did not contain the specific information required by the Rule. Since there was no prior Petition for Hearing on file, the Department then analyzed whether SDCL 62-7-33 applied to a claim where the two year statute of limitation applied.

It was undisputed that Claimant’s Petition for Hearing was filed after the two year statute of limitations had run. Claimant argued that her claim should be reopened under the change in condition statute found at SDCL 62-7-33 because she experienced a change in her physical condition after the two year statute of limitations had run. Claimant relied on language from Owens v. F.E.M. Electric Assn., Inc., 2005 SD 35, 694 N.W.2d 274, 280, when arguing that a change in condition after the expiration of the two year statute of limitations allows Claimant to continued workers’ compensation benefits. The Department denied Claimant’s request to reopen her claim and held that Claimant’s assertion flied in the face of the clear language of SDCL 62-7-35, which says all claims which have been denied in writing and for which no petition for hearing has been filed are “forever barred.” The Department also held that allowing a claim to be reopened under SDCL 62-7-33 would be contrary to the Legislature’s intent. Claimant also made equitable arguments to overcome summary judgment and the Department rejected them in their entirety.

This matter has been appealed and is currently set for oral arguments in Spring of 2017.

Two 5th Circuit rulings recently addressed damages in claim brought under the Age Discrimination and Employment Act (ADEA) and the Fair Labor Standards Act (FLSA).  In Vaughan v. Anderson Regional Medical Center, 5th U.S. Circuit Court of Appeals, No. 16-6-1-4, a three-judge panel found that the plaintiff was not entitled to any damages for pain and suffering as a result of her termination for alleged age discrimination.  The Court held that the 1977 amendments to the FLSA did not expand the damages available under the ADEA.  The damages provisions of the ADEA, which was adopted in 1967, were borrowed from the FLSA. The 1977 FLSA amendments said employers who violate the law’s retaliation provisions “shall be liable for such legal or equitable relief as may be appropriate.”

The 5th Circuit held that pain-and-suffering damages are not available under the ADEA in Dean v. Am. Sec. Insurance Co.  The only other circuit to rule on this issue has been the 7th Circuit, mirroring the 5th Circuit.  No other federal appeals court has considered the issue.

However, in Pineda v. JTCH Apartments, LLC, 5th U.S. Circuit Court of Appeals, No. 15-10932, a three-judge panel ruled that workers suing for retaliation under the federal wage-and-hour law may recoup emotional damages, and ordered a new trial for the plaintiff.  In doing so, the 5th Circuit upheld a jury verdict of over $5,000 awarded to the Plaintiff for his employer’s failure to pay overtime when he worked at the apartment complex in exchange for discounted rent.  The Plaintiff claimed that the incident led to marital issues and anxiety, and that the jury should be instructed on damages for emotional harm.  The Court agreed, following the 7th Circuit ruling in 1990 in Travis v. Gary Community Mental Health Center and the 2004 ruling by the 6th Circuit in Moore v. Freeman, which are the only two other appeals courts to address the issue.  Although the age bias law does closely track the FLSA, the court found that the age bias law includes additional language that the court said distinguishes the two laws regarding damages.