*1 95OK MANAGEMENT SELF INSURERS’

GROUP, Plaintiff/Appellant, CITY, OF OKLAHOMA Cen YWCA Inc.,

tury Supply, E H Martial Arts & Inc., City Co.,

Transfer, Flip’s Glass Inc., Trattoria, Mangum Bar &

Wine Signs, Inc., Company

Brick Ronnie’s Enterprises Incorporated, Bar

Dalmarc Wire, Wilson, &

bara J. Oklahoma Steel Line, Hunt

C & H Power Chris Water Motors,

Hauling Defen Vance John

dants/Appellees.

No. 86718.

Supreme Court of Oklahoma. 1997.

Rehearing Denied March

employers employer than an individual self-insurer, By joining group employ- do. paying profit ers could avoid built into a company’s commercial insurance workers’ compensation premiums. employers Those however, joining group jointly in the and severally in- undertook the risk of loss that companies surance would otherwise have as- sumed.

In 1982 the Workers’ Court approved Management Group, Insurors’ Self City then known as Oklahoma Drillers Association, group to act as a association in accordance with 149.1. The Association, approval with the of the Work- Larry Derryberry, Dykeman, B. David Court, changed ers’ its name Derryberry, Quigley, Parrish & Solomon Management Group to Self Insurors’ City, Plaintiff/Appellant. Oklahoma for During the mid 1980s several hundred Brickell, Gore, Bradley Mahaffey D. & employers, including small the Defen- City, Defendants/Appellees. Oklahoma for dants/Appellees, joined the Association. In provide 1989 the Association ceased to new WATT, Justice. coverages heavy for its members because of appeal This is an from the losses, underwriting but was authorized County, District Court of Oklahoma Okla compensation the Administrator of workers’ homa, Jackson, Judge. Honorable Niles up to continue business order to wind its granted summary judgment trial court for affairs. the thirteen listed in long litigation began This and tortured on style appeal, against this of Plain 3, November 1989 when the Association filed tiff/Appellant, Management Insurors’ Self members, against this suit hundreds of its 21, 1996, Group. On October we withdrew including Defendants/Appellees. It sued for assignment this case from of Application Membership, breach of its Appeals important public Civil because of its Indemnity Agreement, and Power of Attor- policy implications. January On 1997 we ney that each of its members had executed jurisdiction ordered that retained in upon joining organization. agree- Such appeal and that it be made a case required ments were Rule of3 the Work- Employers Safety Group, Oklahoma gov- ers’ Court’s Homes, Inc., Nursing S.I.A. v. Colbert Agreement erned self-insurers. The (Okla.1997), OK 954 P.2d 120 decided this stated that day, important because it involves same public policy every jointly Each and issues. Member and sever- assume,

ally agrees pay discharge to any liability Compen-. AND under the [Workers’ FACTS PROCEDURAL HISTORY any sation] ACT and all members of the Legislature passed In 1981 the 85 O.S. agrees ASSOCIATION and éach Member 149.1, which directed that “The pay any may assessments as be re- adopt Court shall quired by the BOARD Directors of the [of permitting employers rules two or more ... Association]. pool together liabilities under this act for purpose qualifying original petition, as a in- self the Association surer_” sought require Section 149.1 allowed small payment unpaid em- ployers pool their risks of workers’ com- assessments that its members had failed to and, thereby, spread pay liabilities Agree- violation of the terms of the larger among their risk of loss a far of ment. The pe- Association filed an amended (d) claiming each “Common interest” means tition March severally types jointly engaged in the same similar defendant was named $2,500,000, aggre- recogniz- which was the or who otherwise have a business liable by its associating.... Association gate amount owed able common losses. cover Association’s *3 3, 1991, Earlier, District on December the ISSUES County, case while the Court of Oklahoma (1) Agreements unregistered the se- Were Black, Judge Virgil de- assigned was C. and therefore unenforceable curities Summary for nied the “Defendants Motion Defendants/Appellees? against Agree- Judgment” ground on the the (2) correctly the trial court rule that laws. Did ments did not violate the securities Agreements the violated Workers’ Com- identify not defen- The record does which to, pensation Court rules because there was those the 1991 order referred as dants summary no “common between the Associ- judgment for interest” defendants’ motion members? part appeal. of on ation’s was not made a the record Defendants/Appellees question. On 1995the no to each We answer summary in judgment filed motion for a (1) DISCUSSION Agreements they

which claimed that the and, therefore, unregistered securities were I. (2) void; unenforceable, illegal, and and Agree- materially breached the Plaintiff part opinion of our we will In this summary granted ments. trial court Agree consider whether the Association’s judgment Defendants/Appellees for and as violated the ments with its members Okla an immediate part its order allowed for of Act. For the reasons set homa Securities appeal. part This of order made the was part opin in forth the balance necessary other were because defendants Agreements we that the did not ion believe for parties motion violate Securities Act. the Oklahoma summary judgment. Legislature the amended 85 order, Entry In its entitled “Final Journal by adding O.S.Supp.1996 149.1 subsection Judgment Limited as to Certain Parties of C, which states: Defendants,” the trial court confirmed pursuant A group self-insurer created granting Defendants/Appellees its order either to or after the this section judgment summary and overruled Plaintiffs of act not be sub- effective date shall new trial court based motion for trial. The ject provisions of the Oklahoma in its favor of Act. Securities (1) Agree- following the conclusions: the §to 149.1 makes abundant- This amendment unregistered ments were securities and Legislature’s ly clear intention that the the against Defendants/Appel- not be enforced agreements of all of all associations (2) lees, materially the Plaintiff breached 149.1,including the of created under terms recogniz- “no Agreements because there was here, are not cov- at issue associating” among Associa- able Securities Act. We ered the Oklahoma members, in violation Workers’ tion’s trial that the note that the court ruled Secu- re- The Rules Compensation Court Rules. rities Act was violated without benefit court, by the trial Sections lied on Legislature’s clear mandate to con- 3(b) (d), provide: § 149.1. trary in 1996 amendment to (b) “Group association” orga- an means association Defendants/Appellees rely “association” on the rule having two or more nized judgment be measured validity must into rendered, which have common interest entered it when was the law force Evans, (Okla. agreements Oklahoma Workers’ Evans citing 852 P.2d 1993). Act. apply The Evans rule does not here First, judgment at is- two reasons. Here, pro- §B judgment. a final ture added Subsection sue Evans was however, vides: Defendants/Appellees’ judg- final, upon

ment was not as Association filed employer application An to become Second, timely appeal. at is- a member of a self-insurance associ- shall property ation file the Administrator sue Evans was a division decree and, the Workers’ Court notice in a divorce under 43 O.S.1991 employer by acknowledging ... 134.A, property provisions division di- entering into the self-insurance as- vorce decrees are “irrevocable and not sub- sociation, accepts joint liability. Evans, ject subsequent modification.” Such notice shall be submitted to the P.2d at 148. The issue Evans was wheth- ap- with the subsequent legislation making military er re- plication membership. tirement benefits reachable in divorce actions *4 changed by the rule established 43 O.S. 3, every applicant Under Section 6 of Rule § property 134.A. held that the division We membership in group a self-insurance decree remained effective under 43 O.S. association must file with the Workers’ Com- Evans, By express § form, 134.A. contrast to no application Court an group Oklahoma law made self-insurance ap- the Workers’ Court must agreements subject prove applicant may to the Oklahoma Securi- an before become a group ties Act before the 1996 amendment to member of a self-insurance association. fact, application, applicant § In In each for member- 149.1. it seems clear to us that the ship must “include evidence of the execution Legislature clarify § amended 149.1 to what indemnity agreement power perceived it the law to have been since the attorney required by Section 12 § [of 3].” passage of 149.1in 1981. Thus, Defendants/Appellees are bound to Defendants/Appellees also contend that joint liability under the Workers’ they right have a vested in the trial court’s Compensation Court as well as under Agreements determination that were Agreement. purpose The clear being contrary void as to the Oklahoma Secu- requirement is to insure that there will be Law, § rities so that 149.1.C should not be pay compensation funds to workers’ awards applied retroactively, despite its clear lan- injured to workers. guage. disagree. Defendants/Appellees We they claim that were rely County on Texas Irr. and Re- Water entitled to assert Oklahoma Securities Act sources Ass’n v. Oklahoma Water Resources defenses before the 1996 amendment to Bd., (Okla.1990). 803 P.2d 1119 That § necessarily 149.1. But is not so. Sec- support Defendants/Appellees posi- does respect tion 149.1was silent with to whether prior tion. There we held that a where apply agreements the Securities Act would to ambiguous presump- enactment is there is a Thus, made under its terms. there was no legislation subsequent amending tion that statutory or case law indication designed clarify act “was to its text.” This is support Defendants/Ap- trial court’s to Defendants/Ap- the situation before us here. pellees claim that have pellees suggest gave do not what it is that having vested interest their them a vested interest in the trial court’s deemed securities. decision, nothing and we see that could have passing allowing employers 149.1 and done so. associations, join group to self-insurance Legislature The has established a clear Legislature provide security meant to public policy compensation employees that compensation payments employ- workers’ by covered the Workers Act carry ees of such associations. To out this O.S.Supp.1994 secured. Title 85 61 re- public policy, Legislature decided that quires compensation that secured group shall be members of self-insurance associations through through either insurance self- would not be covered the Oklahoma Secu- arrangement establishing policy insurance the em- rities Act. This was a decision with ability pay. Legisla- existing ployer’s In 1993 the retroactive effect on the Self Insu- Management Group regimes now the Association because the members’ busi- rors’ force, will defer. nesses were dissimilar. We find this conten- to which this Court unconvincing it ignores tion because the em- of our that the Securi- conclusion 3(d) phasized portion of Section set out here, apply deny the ties Act does not we above. The Workers’ Application for Leave to File Amicus Curie expressly authorized self-insurers to filed several former members Brief “recognizable who have members had com- pro- The group self-insurer associations. associating.” hold mon We exclusively with posed amicus brief deals 3(d) the broad standard of Section encom- agreements pre whether made passes joined who those members because § 149.1 securities under 1996 version of are willing they being take were the risk Legisla- Act. Oklahoma Securities in return for the possibility self insured ture, by its 149.1 es- 1996 amendment they pay would less for self-insurance public as matter tablished of Oklahoma private than for insurance. policy agreements that such are not covered Act, provides such 4 of Rule 3 the Securities thus whether Section agreements have securities had would been Court will review applied applications Act them irrele- of all Securities is an before associations “on annual basis to determine vant to issues us. *5 compliance with law and these continued until 149.1 was not amended therefore, Presumably, regulations.” matter, the after the trial court in this ruled Compensation was Workers’ Court aware must be assessed in the first instance matter that the Association had members whose As- the trial court. American Insurance dissimilar, businesses were but the record Commission, sociation. State Industrial Compen- not does reflect that Workers’ (Okla.1987). 737, 745 P.2d 740 We therefore earlier, objected sation to it. As noted Court trial and remand this matter reverse every requires 12 Rule that member of proceed in a man- court with instructions to association execute an self-insurance opinion, ner consistent with this and with our “subject indemnity agreement approv- opinion in the Oklahoma Court,” O.S.Supp.1994 al of the and 85 Employers Safety Group, Colbert S.I.A v. applicants membership in requires 61.B Inc., 94, Homes, P.2d Nursing 1997 OK 954 an association to file with Com- Workers’ (Okla.1997). acknowledging pensation Court notice conclude, acceptance liability. such We II. therefore, that the trial court erred hold- ing trial Court’s appeals The Association from the that Workers’ disputed prohibited no from that there was Rules dissimilar businesses court’s joining was association. of material fact as to whether there issue “recognizable purpose for As hold that the association Defen- [the common We associating.” dants/Appellees appropriate hold was members] We here sociation’s the statutes Workers’ that the trial court erred. Court Rules. 3(b), 3, Com-

Rule Section of the Workers’ Rule to the two issues before us governing Court’s addition associations, today, requires that the trial court considered denied group self-insurer summary Defendants/Appellees’ motion for the members of a self-insurance association 3(d) joint says judgment lia- issues whether have a “common interest.” Section “ bility imposed against Defen- interest’ means ‘Common types dants/Appellees and whether the Association engaged the same or similar failing to recognizable hold business or who have a common breached ” supervisory board. associating. [Emphasis added.] annual elections of its purpose for expressly have hold issues are not before us While those would today, of the had “com- us we observe for benefit Association’s members no parties on associating with trial court and the remand mon interest” in themselves LAVENDER, and ALMA the statutes and the Work- HARGRAVE matter that both WILSON, JJ., part, part. relating concur dissent Rules ers’ require self-insurance associations SIMMS, Justice, concurring only: in result joint accept members of such associations ¶ my opinion, summary judgment 1 In was liability as a condition of mem- granted in inappropriately favor of the defen- 61.C; bership. O.S.Supp.1994 controversy dants as substantial remained of the Section Rules of the Administrator concerning material factual issues and defen- Court. as a dants were entitled Defendants/Appellees’ contention that matter of law. breach of the failure to hold elections of the ¶ only I It is for that reason concur equally unpersuasive. Board is Association’s majority opinion revers- the result of the 11 of Rule Rules of the Adminis- Section summary judgment remanding ing the trator, explicitly requires the Association the matter to the trial court for further any may by, up make deficits it sustain proceedings. means, among other “assessment of membership.”

Finally, the relevance of the Association’s

failure to hold elections as an excuse for

Defendants/Appellees’ comply failure to requirements escapes

the clear of the Rules nothing

us. There is in the record to indi- any cate that 1997 OK 94 any expressed concern on this score OKLAHOMA EMPLOYERS SAFETY being sued the Association. GROUP, S.I.A., Plaintiff/Appellant. *6 v. CONCLUSION HOME, INC., COLBERT NURSING d/b/a/ Center, Living Southern Pointe an Okla 149.1 was not amended until Corporation, Defendant/Appellee, homa matter, after the trial court ruled Party Plaintiff, and Third matter must be assessed the first instance by the trial court. We therefore direct that on remand the trial court afford Defen- DANK, Party David Third Defendant. dants/Appellees opportunity litigate the issue in the trial court and thereafter No. 88818. opinion rule a manner consistent with this Supreme Court Oklahoma. opinion and our in the ease. The holding trial court erred that the Associa- 1997. Agreements by allowing tion breached the Rehearing Denied March join having dissimilar businesses the Association. We therefore reverse and matter to trial court with

remand this proceed in a manner consis-

instructions opinion, opinion our

tent with this and with companion case. RE-

JUDGMENT REVERSED AND

MANDED WITH INSTRUCTIONS C.J., SUMMERS,

KAUGER, V.C.J., and

HODGES, WATT, JJ., concur. OPALA

SIMMS, J., only. concurs in result