VICKI SCHMIDT, Kansas Insurance Commissioner v. TRADEMARK, INC. v. DOROTEO BALLIN and BALLIN COMPANY, LLC
No. 122,078
IN THE SUPREME COURT OF THE STATE OF KANSAS
March 18, 2022
60 Kan. App. 2d 206 | 493 P.3d 958
WILSON, J.
Appellee/Cross-appellant: VICKI SCHMIDT; Appellant/Cross-appellee: TRADEMARK, INC.; Appellees: DOROTEO BALLIN and BALLIN COMPANY,
SYLLABUS BY THE COURT
- When a statute is plain and unambiguous, the court must give effect to the legislative intention as expressed in the statutory language. But if a statute‘s language is ambiguous, we will consult our canons of construction to resolve the ambiguity.
- Even statutory language that appears clear may be ambiguous when considered in the context of particular facts or another applicable statute.
- Judicial dictum is an expression of opinion on a question directly involved in a particular case, argued by counsel, and deliberately ruled on by the court, although not necessary to a decision. While not binding as a decision, judicial dictum is entitled to greater weight than obiter dictum and should not be lightly disregarded.
- As with legislative acquiescence to judicial precedent under the doctrine of stare decisis, legislative acquiescence to persuasive judicial dictum may support the decision to follow that dictum in future cases.
- In a case where multiple potential employers are involved under
K.S.A. 44-503(a) —i.e., a principal and a subcontractor—the term “employer” inK.S.A. 2020 Supp. 44-532a is ambiguous. In such a situation, the term “employer” inK.S.A. 2020 Supp. 44-532a(a) does not necessarily refer to the same entity as the term “employer” inK.S.A. 2020 Supp. 44-532a(b) . - If the Kansas Workers Compensation Fund is liable as a result of an immediate employer‘s failure to pay under
K.S.A. 2020 Supp. 44-532a(a) , it may assert a cause of action against the principal in a separate action underK.S.A. 2020 Supp. 44-532a(b) . - A statute authorizing the recovery of attorney fees must be clear and specific. Statutes authorizing such recovery are construed strictly. Where the plain language of a statute makes no mention of attorney fees, the recovery of such fees is not authorized.
Review of the judgment of the Court of Appeals in 60 Kan. App. 2d 206, 493 P.3d 958 (2021). Appeal from Sedgwick District Court; JEFFREY E. GOERING, judge. Opinion filed March 18, 2022.
Judgment of the Court of Appeals affirming the district court is affirmed. Judgment of the district court is affirmed.
William L. Townsley III, of Fleeson, Gooing, Coulson & Kitch, LLC, of Wichita, argued the cause, and Brian E. Vanorsby, of the same firm, was with him on the briefs for appellant/cross-appellee.
John C. Nodgaard, of Arn, Mullins, Unruh, Kuhn & Wilson, LLP, of Wichita, argued the cause and was on the brief for appellee/cross-appellant.
The opinion of the court was delivered by
WILSON, J.: This appeal asks us to consider a question of statutory interpretation: specifically, what
The lengthy procedural journey that precipitated this question began when Juan Medina was injured on the job and sought compensation from his direct employer, Doroteo Ballin and Ballin Company, LLC (collectively, Ballin), under the Kansas Workers Compensation Act (KWCA),
A panel of the Kansas Court of Appeals first heard the appeal. The panel affirmed the district court on both issues, holding that the Fund could pursue an action against Trademark but that it could not recover attorney fees under
FACTS AND PROCEDURAL BACKGROUND
In December of 2016, Medina was injured in the course and scope of his employment with Ballin. Ballin was a subcontractor of Trademark, the general contractor on the project. Thus, Ballin was performing a part of the work Trademark was obligated under separate contract to perform. After his injury, Medina brought a workers compensation proceeding against Ballin for payment of medical treatment and other benefits; Trademark was not a party in this administrative proceeding.
Because Ballin lacked workers compensation insurance, the Fund was added as a party under
District Court Proceedings
The Fund filed the instant case for reimbursement against Trademark on December 27, 2018. The Fund filed a motion for summary judgment on March 7, 2019. Trademark responded to the Fund‘s motion and simultaneously moved for summary judgment on March 21, 2019.
In a Memorandum Decision filed June 17, 2019, the district court concluded that, because Medina was an employee of Ballin, and Ballin was a subcontractor of Trademark, the Fund was permitted to seek recovery from Trademark under
Appellate Proceedings
Trademark appealed the district court‘s entry of summary judgment, while the Fund cross-appealed the district court‘s conclusion that it could not recover attorney fees. On appeal, the panel phrased the core question of Trademark‘s appeal this way: “Can the Fund only sue the employers mentioned in
Trademark petitioned this court for review, while the Fund conditionally cross-petitioned. This court granted review of both petitions on August 27, 2021. We have jurisdiction under
ANALYSIS
The lower courts correctly interpreted
Trademark raises a bifurcated challenge to the panel‘s determination that
Standard of Review
Trademark‘s challenge involves questions of statutory interpretation, which are subject to unlimited appellate review. Redd v. Kansas Truck Ctr., 291 Kan. 176, 199, 239 P.3d 66 (2010).
“The most fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained. The legislature is presumed to have expressed its intent through the language of the statutory scheme, and when a statute is plain and unambiguous, the court must give effect to the legislative intention as expressed in the statutory language.
“When a workers compensation statute is plain and unambiguous, this court must give effect to its express language rather than determine what the law should or should not be. The court will not speculate on legislative intent and will not read the statute to add something not readily found in it. If the statutory language is clear, no need exists to resort to statutory construction. [Citations omitted.]” Bergstrom v. Spears Mfg. Co., 289 Kan. 605, 607-08, 214 P.3d 676 (2009).
If, on the other hand, “a statute‘s language is ambiguous, we will consult our canons of construction to resolve the ambiguity.” Johnson v. U.S. Food Serv., 312 Kan. 597, 601, 478 P.3d 776 (2021). Even statutory language that appears clear may be ambiguous when considered in the context of particular facts or another applicable statute. E.g., State v. Scheuerman, 314 Kan. 583, 587, 502 P.3d 502 (2022); McCullough v. Wilson, 308 Kan. 1025, 1035, 426 P.3d 494 (2018).
Finally, the Legislature has also expressed its intent “that the workers compensation act shall be liberally construed only for the purpose of bringing employers and employees within the provisions of the act.”
Discussion
Trademark argues
We begin with the language of both statutes.
“(a) Where any person (in this section referred to as principal) undertakes to execute any work which is a part of the principal‘s trade or business or which the principal has contracted to perform and contracts with any other person (in this section referred to as the contractor) for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal shall be liable to pay to any worker employed in the execution of the work any compensation under the workers compensation act which the principal would have been liable to pay if that worker had been immediately employed by the principal; and where compensation is claimed from or proceedings are taken against the principal, then in the application of the workers compensation act, references to the principal shall be substituted for references to the
employer, except that the amount of compensation shall be calculated with reference to the earnings of the worker under the employer by whom the worker is immediately employed. For the purposes of this subsection, a worker shall not include an individual who is a self-employed subcontractor.
. . . .
“(c) Nothing in this section shall be construed as preventing a worker from recovering compensation under the workers compensation act from the contractor instead of the principal.
. . . .
“(e) A principal contractor, when sued by a worker of a subcontractor, shall have the right to implead the subcontractor.
“(f) The principal contractor who pays compensation to a worker of a subcontractor shall have the right to recover over against the subcontractor in the action under the workers compensation act if the subcontractor has been impleaded.” (Emphasis added.)
“(a) If an employer has no insurance or has an insufficient self-insurance bond or letter of credit to secure the payment of compensation, as provided in subsection (b)(1) and (2) of
K.S.A. 44-532 , and amendments thereto, and such employer is financially unable to pay compensation to an injured worker as required by the workers compensation act, or such employer cannot be located and required to pay such compensation, the injured worker may apply to the director for an award of the compensation benefits, including medical compensation, to which such injured worker is
entitled, to be paid from the workers compensation fund. Whenever a worker files an application under this section, the matter shall be assigned to an administrative law judge for hearing. If the administrative law judge is satisfied as to the existence of the conditions prescribed by this section, the administrative law judge may make an award, or modify an existing award, and prescribe the payments to be made from the workers compensation fund as provided in
K.S.A. 44-569 , and amendments thereto. The award shall be certified to the commissioner of insurance, and upon receipt thereof, the commissioner of insurance shall cause payment to be made to the worker in accordance therewith.“(b) The commissioner of insurance, acting as administrator of the workers compensation fund, shall have a cause of action against the employer for recovery of any amounts paid from the workers compensation fund pursuant to this section. Such action shall be filed in the district court of the county in which the accident occurred or where the contract of employment was entered into.”
Trademark contends that the plain language of these statutes makes the meaning of “employer” unambiguous. It reasons that
Certainly, that may be the case. But, in this context, must it be the case? Only if we can answer in the affirmative is the statute unambiguous. When we look to the definition of “employer,” as defined elsewhere in the KWCA and in caselaw, it becomes apparent that “employer” might refer to more than one entity when viewed within the context of a contractor/subcontractor relationship.
The KWCA partially defines “employer” in
“the application of the workers compensation act” can mean either the immediate employer or the contractor/principal that hired the employee‘s immediate employer. Some cases involving similar disputes refer to a general contractor as the “statutory employer” and the subcontractor as the “immediate employer.” See Robinett v. Haskell, Co., 270 Kan. 95, 98, 12 P.3d 411 (2000) (“The statute extends the application of the [KWCA] to certain individuals or entities who are not the immediate employers of the injured workers, but rather are ‘statutory employers.‘“). Another case refers to the contractor and subcontractors as “dual employers.” Duarte v. Debruce Grain, Inc., 276 Kan. 598, 607-08, 78 P.3d 428 (2003) (“Under 44-503[a], the principal and subcontractor are dual employers for purposes of the Workers Compensation Act.“). To summarize, Trademark could be called an “employer,” a “statutory employer,” one of “dual employers,” a contractor, or a principal. Ballin could be called an “employer,” an “immediate employer,” one of “dual employers,” or a subcontractor.
Consequently, the KWCA‘s references to “employer” may be ambiguous where multiple potential “employers” are involved, as is the case here. Cf. State v. Walker, 280 Kan. 513, 523, 124 P.3d 39 (2005) (“Under these circumstances, we conclude that the construction of the statutory language is uncertain or ambiguous as applied to the facts of this case, where the severity level of the crime of conviction does not match the sentence to be imposed.“); Duarte, 276 Kan. at 605 (despite the “maxim that the same word used repeatedly in a statutory provision or scheme must be given the same meaning throughout,” not all references to “employer” in
previously recognized the ambiguity of
We have little difficulty concluding that
“Liberty asserts that the substitution of the principal for the employer pursuant to
K.S.A. 44-503(a) is to occur only when workers compensation claims and proceedings are taken against the principal. . . . The plain language of the statute [K.S.A. 44-503(a) ] provides for the substitution to be made ‘in the application of the workers compensation act,’ but does not limit proceedings taken against the principal to proceedings pursuant to the Act. A statute should not be read so as to add that which is not readily found in it. [Citation omitted.]” Duarte, 276 Kan. at 609.
While Duarte dealt with ancillary litigation “proceedings” regarding the subrogation of claims for compensation paid as part of the KWCA‘s “statutory web of reciprocal responsibilities,” we see no reason its logic should not also apply to the Fund‘s attempt to recover benefits paid under
Thus, we find the term “employer” in
Supp. 44-532a(a) necessarily carries the same meaning as in subsection (b), as Trademark argues.
We begin by observing that, generally “[i]t is presumed that identical words used in different parts of the same statute are intended to have the same meaning throughout the act.” Berndt v. City of Ottawa, 179 Kan. 749, 752, 298 P.2d 262 (1956). But in Duarte, the court construed multiple instances of the word “employer” in a different KWCA statute—
The Silicone court also “questioned” the argument that “‘employer’ in
at 553. On review, the Director concluded the Fund was liable for the benefits to the worker under
On appeal, the court noted that the case “requires us to construe the statutes concerning liability of the Fund when an employer is either uninsured and insolvent or cannot be located and required to pay compensation.” Silicone, 248 Kan. at 556. It then concluded that
“The burden of exhausting remedies against all potential employers is not to be carried by the claimant alone. The claimant need only elect to assert a compensation claim against either the immediate or the statutory employer, as was done by [the worker]. If the employer from which compensation is sought is insolvent or cannot be located, the Fund may be impleaded. If the Fund pays on a claim, it may assert a
K.S.A. 44-532a(b) cause of action against either the insolvent or unlocated employer, or the solvent statutory employer (principal), or both.” (Emphasis added.) Silicone, 248 Kan. at 560.
The
reasoned that, “[i]f the Fund is liable as a result of an immediate employer‘s failure to pay, it may assert a cause of action against the principal in a separate action under
Trademark suggests that Silicone‘s commentary is dicta and should be disregarded on the basis of more recent caselaw that places greater focus on the plain language of the KWCA. As we have discussed, an appeal to the plain language of the statute provides no help here, as Silicone itself also concluded. Silicone, 248 Kan. at 560. Consequently, Silicone‘s decision to apply the canons of construction—along with its actual application of those canons—remains sound. Moreover, while we agree that Silicone‘s comments regarding
“Judicial dictum is an expression of opinion on a question directly involved in a particular case, argued by counsel, and deliberately ruled on by the court, although not necessary to a decision. While not binding as a decision, judicial dictum is entitled to greater weight than obiter dictum and should not be lightly disregarded.” Jamerson v. Heimgartner, 304 Kan. 678, 686, 372 P.3d 1236 (2016).
The liability of the principal—or the Fund‘s ability to pursue an action to recover workers compensation payments from it—was not directly at issue in Silicone. But the Fund clearly argued about the interpretation of “employer” in
or both” (and similar comments) was not binding precedent, we consider these remarks to be persuasive judicial dicta. Silicone, 248 Kan. at 560.
While adherence to judicial dictum is not squarely within the boundaries of the doctrine of stare decisis, it is at least adjacent to it. Cf. In re Estate of Lentz, 312 Kan. 490, 506, 476 P.3d 1151 (2020) (Luckert, C.J., concurring) (“The concept that a court consider jurisdiction as an antecedent to a merits determination has a practical impact in a system driven by stare decisis principles because even dicta or obiter dictum ‘should not be lightly disregarded’ by lower courts.“). And as with stare decisis, we cannot ignore the Legislature‘s apparent acquiescence to the Silicone court‘s pronouncement over the past 30 years: despite several amendments to
We further conclude that Silicone‘s construction of
the principal, the principal shall be liable to pay to any worker employed in the execution of the work any compensation under the workers compensation act which the principal would have been liable to pay if that worker had been immediately employed by the principal[.]“). The interpretation of the statute promoted by Trademark, thus, appears to open the door to the “danger of an employer evading liability under the Act” by disincentivizing principals to ensure that their subcontractors are insured in the first place. Duarte, 276 Kan. at 608-09.
Consequently, we choose to affirm Silicone‘s dicta concluding that “employer” in
The lower courts correctly concluded that
The Fund raises a single issue for our consideration: under the plain language of
Standard of Review
“Generally, a Kansas court may not award attorney fees unless authorized by statute or party agreement. Whether a court may award attorney fees is a question of law subject to an appellate court‘s unlimited review. If a court lawfully awards fees, the amount awarded is reviewed for abuse of discretion. [Citations omitted.]” Rinehart v. Morton Bldgs., Inc., 297 Kan. 926, 942, 305 P.3d 622 (2013).
A statute authorizing the recovery of attorney fees must be “clear and specific.” Idbeis v. Wichita Surgical Specialists, P.A., 285 Kan. 485, 488, 173 P.3d 642 (2007). On the basis of this rule, “statutory provisions allowing fees are typically construed strictly.” Idbeis, 285 Kan. at 489.
Discussion
The Fund claims that the plain language of the phrase “any amounts paid from the workers compensation fund pursuant to this section” includes attorney fees because the need for the Fund to hire counsel and incur such costs “is a direct and foreseeable consequence of the employer‘s failure to follow the law.” Both the panel and the district court rejected this argument on the basis “that no statute or contractual provision allowed the recovery of attorney fees in this case.” See Schmidt, 60 Kan. App. 2d at 219-21. We agree.
The plain language of
44-532a(b) are explicitly limited to those paid “pursuant to this section“—i.e., “an award of the compensation benefits, including medical compensation, to which such injured worker is entitled” as set forth in subsection (a). Schmidt, 60 Kan. App. 2d at 220. The Fund‘s only rejoinder is that
CONCLUSION
We affirm the decisions of the Court of Appeals panel and the district court on both questions presented.
* * *
STEGALL, J., concurring: This is a simple case resolved by the plain language of
The purpose of this statutory substitution scheme is clear and straightforward. The Legislature intended that a principal “be liable to pay to any worker employed in the
execution of the work any compensation under the workers compensation act which the principal would have been liable to pay if that worker had been immediately employed by the principal.”
Indeed, this is what we previously held in Silicone: “If the Workers Compensation Fund is liable for payment of an award under
In light of the plain language of the statutory scheme and our prior precedent on this very point, I concur with the outcome reached by the majority. Though I do not take such a circuitous path to arrive at this result.