Zerr v. North Dakota Workforce Safety & Insurance
2017 ND 175
| N.D. | 2017Background
- In Sept. 2013 Zerr suffered severe work-related burns; WSI accepted the claim and paid temporary total disability and medical benefits.
- On May 5, 2015 WSI mailed a Notice of Intention to Discontinue/Reduce Benefits (NOID), stating Zerr failed to comply with vocational requirements and giving 30 days to request reconsideration.
- Zerr later acknowledged he received the NOID at his California residence but alleges he did not open or respond within 30 days due to PTSD and depression tied to his injury.
- WSI discontinued benefits effective May 26, 2015 and, after Zerr’s counsel sought reopening in Dec. 2015, denied relief as untimely under N.D.C.C. § 65-01-16.
- Zerr sued in district court (declaratory relief and due process claims); district court dismissed for lack of subject matter jurisdiction and failure to state a claim.
- Supreme Court affirmed: Zerr failed to exhaust statutory administrative remedies and receipt of the mailed NOID constituted actual notice; refusal/inability to open received mail did not negate notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff exhausted administrative remedies before seeking declaratory relief | Zerr argued counsel’s post-termination letter and WSI’s refusal to reopen left him without administrative remedies, so court jurisdiction was proper | WSI argued Zerr failed to file timely reconsideration or appeals as required by statute, so administrative remedies were available and unexhausted | Held: Zerr failed to exhaust statutorily mandated remedies; dismissal for lack of subject matter jurisdiction affirmed |
| Whether WSI’s mailed NOID satisfied due process (actual notice) | Zerr argued PTSD/depression prevented him from opening the NOID and rebutted presumption of receipt, so he lacked actual notice | WSI argued the NOID was mailed per statute and receipt (even if unread) satisfies actual notice requirements | Held: Receipt of the NOID conclusively established actual notice; not opening mail does not equal nonreceipt; due process claim fails |
| Whether WSI foreclosed Zerr’s ability to exhaust remedies by refusing to reopen | Zerr argued WSI’s denial of counsel’s reopening request left no administrative remedy | WSI argued it has limited continuing-jurisdiction power and its refusal to reopen a final order is not appealable but statutory appeal/reconsideration windows still applied | Held: Statutory procedures existed and were not exhausted; WSI’s refusal to reopen did not excuse exhaustion |
| Whether the court should permit judicial review without administrative fact-finding (futility/statutory interpretation exception) | Zerr contended administrative exhaustion would be futile given his disability and WSI’s position | WSI contended the agency’s expertise and statutory scheme require exhaustion before court intervention | Held: No futility or pure legal question that obviated exhaustion; administrative process must be used first |
Key Cases Cited
- Tooley v. Alm, 515 N.W.2d 137 (N.D. 1994) (declaratory relief generally requires exhaustion of administrative remedies)
- Rojas v. Workforce Safety & Ins., 703 N.W.2d 299 (N.D. 2005) (ongoing disability benefits are a property right; pretermination notice and opportunity to respond required)
- Vogel v. Marathon Oil Co., 879 N.W.2d 471 (N.D. 2016) (dismissal under Rule 12(b)(1) for failure to exhaust reviewed de novo)
- Brown v. State Bd. of Higher Educ., 711 N.W.2d 194 (N.D. 2006) (agency expertise and judicial efficiency support exhaustion requirement)
- Carlson v. Workforce Safety & Ins., 821 N.W.2d 760 (N.D. 2012) (WSI has statutory continuing jurisdiction to reopen claims but refusal to reopen a final order is not appealable)