Lead Opinion
[111.3 Standard Fire Insurance Co. appeals from a circuit court order dismissing its case against Continental Resources Inc, Standard Fire sued Continental Resources for reimbursement or in the alternative subrogation of workers’ compensation benefits paid to an employee between -2009 and 2013. The circuit cоurt dismissed the case pursuant to SDCL 15—6—12(b)(5), finding that the terms of a settlement agreement barred further litigation and that res judicata applied. We reverse and remand.
Facts and Procedural History
[¶2.] Dale Denzin sustained a work-related injury while employed at one of Koch Industries’ oilfields. The accident occurred on March 23, 1983, and crushed Denzin’s pelvis. Stаndard Fire, a subsidiary of Travelers Insurance, provided Koch Industries workers’, compensation insurance and paid Denzin temporary total disability and permanent partial disability (PPD) benefits. Denzin resumed work in January 1984. In 1995, Continental Resources acquired Koch Industries’ interest in the oilfield and became Denzin’s employer. Denzin under
[¶3.] In May 2012, Denzin filed a workers’ compensation petition against Continental Resources with the Department of Labor and Regulation. Denzin sought PPD benefits related to his hip-replacement surgeries. Under SDCL 62-4-6, Denzin qualified for the maximum weekly benefit of $620 per week and was entitled to 160 weeks of compensation, totaling $99,200 in permanent partial impairment payments.
[¶4.] On June 22, 2012, Continental Resources filed а third-party petition against Koch Industries and Standard Fire. Continental Resources claimed that Koch Industries—as Denzin’s employer at the time of the accident—was responsible for any benefits that were then due and owing. Standard Fire answered and denied any obligation to pay Denzin additional workers’ compensation benefits, claiming that Continental Resources was responsible for payment of any such benefits.
[¶5.] In December 2013, Denzin, Standard Fire, and Continental Resources entered into a settlement agreement. The agreement, entitled “Settlement Agreement and Dismissal of Petition for Hearing,” reprised the foregoing fаcts and stipulated that Continental Resources would accept Denzin’s claim, pay a lump sum of $99,200, and dismiss its third-party action against Koch Industries and Standard Fire. The agreement further provided that “the parties agree to settle this matter without further litigation[.]” The Department of Labor and Regulation approvеd the agreement, dismissed Continental Resources’ claim against Koch Industries and Denzin’s workers’ compensation petition for hearing, and ordered Continental Resources to pay Denzin within ten days.
[¶6.] On November 10, 2014, Standard Fire commenced a civil action against Continental Resources seeking reimbursement or subrоgation for workers’ compensation benefits paid to Denzin between 2009 and 2013. Standard Fire claimed that it paid $82,276.26 in medical bills on Denzin’s behalf and $4,676.20 in indemnity benefits directly to Denzin. Standard Fire sought reimbursement pursuant to SDCL 62-7-38 for these amounts, which totaled $86,952.46. Standard Fire alleged that Continental Resources stipulated in the settlement agreement that Denzin’s work duties after Continental Resources’ acquisition of the oilfield in 1995 contributed independently to Denzin’s need for medical treatment in 2009 and beyond. Standard Fire also asserted an alternative claim for equitable subrogation. Continental Resources answered, denying these claims and assеrting various affirmative defenses. Continental Resources filed a motion to dismiss pursuant to SDCL 15—6—12(b)(5) on October 9, 2014, arguing that res judi-cata barred Standard Fire’s claims and that any equitable claims were “barred by the Settlement Agreement of the parties, Plaintiffs available remedies at law, and Plaintiffs voluntary payment of workers’ сompensation benefits to Dale Denzin.”
[117.] On January 19, 2016, the circuit court set the matter for hearing. Because Continental Resources moved to dismiss under SDCL 15-6-12(b)(5), the parties asked the court to consider the complaint and attached pleadings and documents from the administrative proceeding. The parties did not ask the circuit court to take judicial notice of the administrative record and agreed that there were no material facts in dispute.
[¶8.] After oral argument, the circuit court observed that both the identity of
[¶9.] Standard Fire appeals, raising the following issue for our review:
Whether the circuit court erred when it determined that the workers’ compensаtion settlement agreement fully resolved all claims between Standard Fire and Continental Resources.
Decision
[¶10.] We review de novo whether the circuit court properly dismissed Standard Fire’s complaint under SDCL 15-6-12(b)(5). Total Auctions & Real Estate, LLC v. S.D. Dep’t of Revenue & Regulation,
[¶11.] In its complaint, Standard Fire asserted claims for statutory reimbursement or equitable subrogation. In particular, Standard Fire alleged that it paid Denzin $86,952.46 in medical and indemnity benefits between 2009 and 2013. Standard Fire cited to the parties’ settlement agreement аnd claimed that Continental Resources stipulated that “Denzin’s work duties after 1995 contributed independently to his need for medical treatment in 2009 and beyond and that payment for such treatment (and subsequent impairment rating) is Continental’s responsibility instead of Standard Fire’s (via Travelers Insurance) responsibility.” In its answer, Continental Resources did not dispute that it entered into a settlement agreement with Standard Fire. It, however, alleged in its motion to dismiss that the settlement agreement barred Standard Fire’s right to recover under any theory advanced by Standard Fire.
[1112.] Before the circuit court and on appeal, the parties contend that thе settle
8. ' That based upon Claimant’s earnings at the time of his hip replacements in 2009, he qualified for the maximum weekly benefit under South Dakota law which was $620.00 per week and he would thereby be entitled to a total permanent partial impairment payment of Ninety Nine Thousand Two Hundred Dollars and no cents ($99,200.00).
9. That this cаse has been in litigation where there has been a genuine dispute existing as between Continental Resources and Koch Industries as to the responsibility for payment of this impairment benefit.
10. That the parties agree that based upon the applicable medical testimony and opinions Claimant’s work duties after 1995 contributed independently to his need for. the hip replacements and thus the permanent partial impairments as spelled out above.
11. That the parties agree to settle this matter without further litigation as follows:
A. Continental Resources will agree to accept Claimant’s claim and pay a lump sum рayment to him and his counsel of Ninety Nine Thousand Two Hundred Dollars and no cents ($99,-200.00).
B. Continental Resources will dismiss its Third Party action against Koch Industries upon approval of this settlement agreement by the South Dakota Department of Labor and Regulation.
C. Claimant agrees to dismiss the current Petition for Hearing and to waive any claim for interest or penalties in exchange for payment of the impairment benefits in a lump sum, all of which will take place within ten (10) days after approval of this agreement by the South Dakota Department of Labor and Regulation.
The parties dispute whether “this matter” should be read broadly, so as to resolve all workers’ compensation benefit matters related to Denzin’s hip surgeries, or narrowly, such that it refers only to the PPD payments referenced in the foregoing paragraphs. Because we find that the settlement agreement “is capable of more than one meaning when viewed objeсtively by a reasonably intelligent person who has examined the context of the entire integrated agreement,” Dowling Family P’ship v. Midland Farms,
[¶13.] Settlement agreements are subject to the same rules of construction as contracts. In re Estate of Neiswender,
[¶14.] In Standard Fire’s view, the terms of the settlement agreement did not bar its claim for reimbursement or subrogation. Standard Fire argues that paragraph 9 of the sеttlement agreement narrows the
[¶16.] While the circuit court described the task of “dissecting out disability from medicals” as unwieldly and requiring “a mighty fine scalpel,” this distinction is well established in workers’ compensation law. Impairment benefits and medical benefits are separate scheduled benefits governed by different statutes. PPD benefits are provided under SDCL 62-4-6, whereas medical benefits are governed by SDCL 62-4-1. Compare Streeter v. Canton Sch. Dist.,
[¶16.] Nevertheless, Continental Resources provides a competing view, interpreting “this matter” broadly to encompass medical and indemnity benefits. According to Continental Resources, paragraph 9 does not define “this matter.” In Continental Resources’ view, paragraph 9 refers to but one component of a larger dispute between Denzin, Standard Fire, and Continental Resources. Continental Resources highlights the language used in paragraph 9, “[t]hat this case has been in litigation where there has been a genuine dispute existing as between Continental Resources and Koch Industries as to the responsibility for payment of this impairment benefit.” (Emphasis added.) The settlement agreement could be interpreted as resolving “this case.” The language “where thеre has been” could be read to mean that “this case” involved a disagreement over responsibility for Denzin’s PPD payments. However, it does not necessarily limit the scope of “this case” and in turn, “this matter” exclusively to the contents of that particular dispute.
[¶17.] As “this matter” could be read broadly or narrowly, the circuit court erred when it determined that the plain language of the settlement agreement barred Standard Fire’s claim. We reverse and remand for further proceedings.
Dissenting Opinion
(dissenting).
[¶20.] The resolution of this case should not turn on the interpretation of only one рhrase within the agreement: “whether ‘this matted should be read broadly, so as to resolve all workers’ compensation benefit matters related to Denzin’s hip surgeries, or narrowly, such that it refers only to
[¶21.] It is well established that we review contracts as a whole and “ ‘give effect to the language of the entire contract,’ and ‘particular words and phrases are not interpreted in isolation.’ ” Jones v. Siouxland Surgery Ctr. Ltd. P’ship,
[¶22.] We often say that an ambiguity does not arise merely because the parties offer different interpretations of the contract. See, e.g., Roden,
[¶23.] SEVERSON, Justice, joins this dissent.