Filed 10/03/19 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2019 ND 240
Huey Brock, Plaintiff, Appellant, and
Cross-Appellee
v.
Richard Price and KS Industries, LLC, Defendants, Appellees and
Cross-Appellants
No. 20190092
Appeal from the District Court of Mountrail County, North Central Judicial
District, the Honorable Douglas L. Mattson, Judge.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Opinion of the Court by Tufte, Justice.
Duane A. Lillehaug (argued), Fargo, North Dakota, and Michael D. Ainbinder
(appeared) and Colleen M. Pratt (appeared), Long Beach, California, for
plaintiff, appellant, and cross-appellee.
Seth A. Thompson (argued), Brenda L. Blazer (appeared), and Briana L.
Rummel (appeared), Bismarck, North Dakota, for defendants, appellees, and
cross-appellants.
Brock v. Price
No. 20190092
Tufte, Justice.
[¶1] Huey Brock appeals from judgments dismissing his negligence action
against Richard Price and KS Industries, LLC (“LLC”) and awarding Price and
LLC costs and disbursements in the amount of $181,467. Price and LLC cross-appeal from the judgment awarding costs and disbursements. We affirm the
district court’s summary judgment dismissal of the negligence action because
it is barred by the Workforce Safety and Insurance Act’s exclusive remedy
provisions. We reverse the award of costs and disbursements and remand for
the court to hold a hearing on Brock’s objections required by N.D.R.Civ.P.
54(e)(2).
I
[¶2] LLC is based in Tioga and at all relevant times has obtained Workforce
Safety and Insurance (“WSI”) coverage for its employees in North Dakota.
Brock, a California resident, was hired by LLC and began working as a
pipefitter on December 6, 2010. On March 31, 2011, Brock was severely injured
in a traffic accident while traveling in a company-owned vehicle with Price and
another LLC employee, resulting in Brock becoming quadriplegic. On April 6,
2011, WSI issued a notice of decision accepting Brock’s claim and awarding
him benefits, which noted “[o]n the above injury date, the injured worker was
employed by [LLC]” and “[t]he evidence shows the injured worker sustained an
injury by accident arising out of and in the course of employment.” Brock began
receiving benefits under LLC’s WSI account.
[¶3] In June 2012, Brock, WSI, and LLC entered into a stipulation that Brock
would continue to receive WSI benefits while seeking workers’ compensation
benefits in California from KS Industries, LP (“LP”). The stipulation further
provided that WSI would cease paying benefits if his claim against LP’s
insurance carrier were accepted and his attorney would act in trust for WSI in
pursuing reimbursement of funds paid in connection with Brock’s claim. Brock
then filed an application for California workers’ compensation benefits
1
claiming he was employed by LP at the time of the accident. In May 2013,
following a trial, a judge of the California Workers’ Compensation Appeals
Board found:
1. HUEY BROCK born on 09/02/1970 while employed on
03/31/2011 as a pipefitter while working in the State of North
Dakota, by, KS INDUSTRIES LP, whose workers’ compensation
insurance carrier was ACIG Insurance Company, sustained injury
arising out of and occurring in the course of employment rendering
him a quadriplegic as well as injury to his psyche.
2. As to issue of employment, applicant is found to be an
employee of KS INDUSTRIES LP at the time of the injury.
3. As to the issue of jurisdiction, it is found that there is
jurisdiction with the California Workers’ Compensation Appeals
Board over the industrial injuries the applicant sustained herein,
and the applicant may proceed to collect such workers’
compensation benefits within this State with credit to the
defendants for workers’ compensation benefits which the applicant
may have received from the workers’ compensation claim in North
Dakota.
[¶4] In an opinion on his decision, the judge explained:
Based upon applicant’s credible testimony which establishes
that he was offered and accepted employment from KS Industries
LP via the telephone at his residence in Long Beach, California, as
well []as the fact that all other entities/campuses listed by
defendant are merely alter egos of KS Industries LP (as evidenced
by “Exhibit 16” for which applicant was required to submit forms
for employment including reading the KS Industries LP safety
manual as a requisite of employment and adhering the KS
Industries LP “Cell Phone Policy”. Also, all payroll was reviewed
and approved at the KS Industries LP facility in Bakersfield,
California with paychecks and W-2s being issued from KS
Industries LP and all employee records, no matter which
location/campus the employee worked at, were housed at the KS
Industries LP facility in California. Also, all employee[s], once
hired, maintained the same “Employee ID” number no matter
which location/campus they may perform work. Additionally,
applicant credibly testified that for the work in North Dakota, he
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accepted the employment via the telephone from his residence in
Long Beach, California and took a 2 to 3 day bus ride from Long
Beach, California to the site in North Dakota based on the belief
and reliance that he had been offered and accepted the
employment over the telephone.
A petition for reconsideration and a petition for writ of review to the California
Court of Appeals were both denied.
[¶5] Based on the California administrative decision, LP’s workers’
compensation carrier commenced paying benefits to Brock and reimbursed
WSI all funds expended on Brock. On January 24, 2014, WSI issued a notice
of decision reversing its prior decision accepting Brock’s claim. Although it is
not in the record on appeal, the district court referenced it in its February 8,
2019, order. Prior to oral argument, Brock requested that we take judicial
notice of the January 24, 2014, notice of decision, and we do so under N.D.R.Ev.
201(b)(2). The notice of decision reads:
Please read this notice as it may require action within 30 days.
This notice is to inform you of Workforce Safety & Insurance’s
(WSI) decision to reverse the Notice of Decision Accepting Claim
dates 04/06/2011.
WSI denies liability for your injury sustained on 03/31/2011 and
no workers’ compensation benefits are payable on this claim. This
decision is based on North Dakota Century Code Section 65-05-05,
which states: If an employee applies for benefits from another
state for the same injury, WSI will suspend all future benefits
pending resolution of the application. If an employee is determined
to be eligible for benefits through some other state act, no further
compensation shall be allowed under this title and the employee
must reimburse the organization for the entire amount of benefits
paid.
WSI received information that your claim for benefits for the same
injury has been accepted by the California Workers’ Compensation
system and you are eligible for benefits through the California
Workers’ Compensation system.
3
[¶6] In February 2015, Brock brought this negligence action against Price
and LLC. Brock moved for summary judgment arguing collateral estoppel
based on the California administrative proceedings precluded Price and LLC
from arguing LLC was Brock’s employer rather than LP, and therefore his
action was not barred by the exclusive remedy provisions of North Dakota law.
The district court granted Brock’s motion and approved a stipulated scheduling
order requiring dispositive motions be served by August 31, 2016.
[¶7] In November 2018, Price and LLC filed a motion for summary judgment
arguing collateral estoppel did not apply and the exclusive remedy provisions
applied to bar Brock’s action against LLC and his co-worker, Price. The district
court agreed and dismissed the action. After concluding collateral estoppel did
not apply, the court noted collateral estoppel was “secondary” to its analysis
and concluded:
Even though, under California law, Brock was found to be
an employee of KS Industries, LP, at the time he was injured,
Brock was nevertheless doing work for KSI, LLC, in North Dakota,
KSI, LLC, was paying premiums to WSI, and Brock applied for and
received benefits through WSI. Under N.D.C.C. § 65-01-08; § 65-
04-28; and § 65-05-06, KSI, LLC, and Price are immune from
Brock’s claim of negligence. The later termination of Brock’s
benefits and the reimbursement to WSI do not alter the fact that,
following his injury, Brock opted to apply for and received WSI
benefits. Notwithstanding California’s later acceptance of Brock’s
cla[i]m for workers’ compensation benefits in California, the Court
finds, as a matter of law, that KSI, LLC, as a contributing
employer, and Price, as an employee of KSI, LLC, were/are entitled
to immunity under North Dakota law.
[¶8] Price and LLC filed a statement of costs and disbursements seeking
$319,895.36 and Brock objected. Without holding a hearing, the district court
reduced the expert witness fees by one-half and allowed costs and
disbursements in the amount of $181,467.
4
II
[¶9] Brock argues the district court erred in granting summary judgment
dismissing his action.
[¶10] Our standard for reviewing summary judgments is well established:
Summary judgment is a procedural device under
N.D.R.Civ.P. 56(c) for promptly resolving a controversy on the
merits without a trial if there are no genuine issues of material
fact or inferences that can reasonably be drawn from undisputed
facts, or if the only issues to be resolved are questions of law. The
party seeking summary judgment must demonstrate there are no
genuine issues of material fact and the case is appropriate for
judgment as a matter of law. In deciding whether the district court
appropriately granted summary judgment, we view the evidence
in the light most favorable to the opposing party, giving that party
the benefit of all favorable inferences which can reasonably be
drawn from the record. A party opposing a motion for summary
judgment cannot simply rely on the pleadings or on unsupported
conclusory allegations. Rather, a party opposing a summary
judgment motion must present competent admissible evidence by
affidavit or other comparable means that raises an issue of
material fact and must, if appropriate, draw the court’s attention
to relevant evidence in the record raising an issue of material fact.
When reasonable persons can reach only one conclusion from the
evidence, a question of fact may become a matter of law for the
court to decide. A district court’s decision on summary judgment is
a question of law that we review de novo on the record.
Smithberg v. Smithberg, 2019 ND 195, ¶ 6,
931 N.W.2d 211 (quoting Cuozzo
v. State,
2019 ND 95, ¶ 7,
925 N.W.2d 752).
A
[¶11] Brock argues the district court erred in allowing Price and LLC to violate
its stipulated scheduling order requiring dispositive motions be served by
August 31, 2016, by moving for summary judgment in November 2018.
[¶12] A district court may revise any non-final order before entry of a final
judgment and has discretion to extend deadlines in a scheduling order before
5
trial. See State v. Stegall, 2013 ND 49, ¶ 13,
828 N.W.2d 526. A court abuses
its discretion when it acts in an arbitrary, unreasonable, or unconscionable
matter, it misinterprets or misapplies the law, or its decision is not the product
of a rational mental process leading to a reasoned determination. N.D. Private
Investigative and Sec. Bd. v. TigerSwan, LLC,
2019 ND 219, ¶ 13. The district
court had scheduled a three-week trial on a claim seeking more than sixty
million dollars in damages. When presented with a summary judgment motion
that might resolve the matter without a trial, the court may consider the
motion even if it has previously rejected the argument. We conclude the court
did not abuse its discretion in extending the scheduling order deadline on its
own motion and entertaining the November 2018 motion for summary
judgment.
B
[¶13] We need not address the parties’ arguments concerning any collateral
estoppel effect of the California administrative proceedings because the
dispositive issue is whether the district court correctly concluded the
Workforce Safety and Insurance Act’s exclusive remedy provisions apply in
this case.
[¶14] In Plains Trucking, LLC v. Cresap, 2019 ND 226, ¶¶ 9, 10, 12, we
recently explained:
Title 65, N.D.C.C., is a legislatively created compromise for
claims between injured workers and their employers. See Richard
v. Washburn Pub. Sch., 2011 ND 240, ¶ 11,
809 N.W.2d 288;
Trinity Hosps. v. Mattson, 2006 ND 231, ¶ 11,
723 N.W.2d 684.
Section 65-01-01, N.D.C.C., declares that “for workers injured in
hazardous employments, . . . sure and certain relief is hereby
provided regardless of questions of fault and to the exclusion of
every other remedy, proceeding, or compensation, except as
otherwise provided in this title, and to that end, all civil actions
and civil claims for relief for those personal injuries and all
jurisdiction of the courts of the state over those causes are
abolished except as is otherwise provided in this title.”
Under the Act, an employee “gives up the right to sue the
employer in exchange for sure and certain benefits for all
6
workplace injuries, regardless of fault.” Trinity Hosps., 2006 ND
231, ¶ 11,
723 N.W.2d 684. When a worker is an employee, the Act
generally provides the exclusive remedy for the employee who
suffers a compensable injury. See N.D.C.C. § 65-01-01.1 (“The sole
exception to an employer’s immunity from civil liability under this
title, except as provided in [N.D.C.C. ch. 65-09], is an action for an
injury to an employee caused by an employer’s intentional act done
with the conscious purpose of inflicting the injury.”); N.D.C.C.
§ 65-01-08 (An injured employee does not have a claim for relief
against the “contributing employer or against any agent, servant,
or other employee of the employer for damages for personal
injuries, but shall look solely to the fund for compensation.”);
N.D.C.C. § 65-04-28 (“Employers who comply with the provisions
of [N.D.C.C. ch. 65-04] shall not be liable to respond in damages at
common law or by statute for injury to or death of any employee.”);
N.D.C.C. § 65-05-06 (“The payment of compensation or other
benefits by the organization to an injured employee, or to the
injured employee’s dependents in case death has ensued, are in
lieu of any and all claims for relief whatsoever against the
employer of the injured or deceased employee.”).
....
The district court in which a tort action is filed has authority
to decide whether the workers’ compensation act’s exclusive
remedy provisions bar the action. See Vail [v. S/L Servs., Inc.],
2017 ND 202, ¶ 18,
900 N.W.2d 271; Carlson v. GMR Transp., Inc.,
2015 ND 121, ¶ 15,
863 N.W.2d 514. “In an employee’s tort action
[against an employer] to recover damages for a work-related
injury, the employer has the burden of establishing by a
preponderance of the evidence the defense that the employer is
immune from suit under the exclusive remedy provisions of the
workers’ compensation act.” Carlson, at ¶ 15; see also Vail, at ¶ 18;
Richard, 2011 ND 240, ¶ 12,
809 N.W.2d 288.
[¶15] The California administrative proceedings resulted in a determination
that at the time of the accident Brock was an employee of LP for purposes of
California law. The administrative judge did not conclude that Brock was not
employed by LLC at the time of the accident for purposes of North Dakota law.
WSI’s January 24, 2014, decision reversing its previous decision accepting
Brock’s claim for benefits was not based on any determination that Brock was
7
not employed by LLC at the time of the accident. Rather, WSI’s decision was
based on N.D.C.C. § 65-05-05, which provides:
1. The organization shall disburse the fund for the payment of
compensation and other benefits as provided in this chapter to
employees, or to their dependents in case death has ensued,
who:
a. Are subject to the provisions of this title;
b. Are employed by employers who are subject to this title;
and
c. Have been injured in the course of their employment.
2. If an employee, or any person seeking benefits because of the
death of an employee, applies for benefits from another state
for the same injury, the organization will suspend all future
benefits pending resolution of the application. If an employee,
or any person seeking benefits because of the death of an
employee, is determined to be eligible for benefits through
some other state act or enters an agreement to resolve a claim
through some other state act, no further compensation may be
allowed under this title and the employee, or any person
seeking benefits because of the death of an employee, must
reimburse the organization for the entire amount of benefits
paid.
“The legislative intent of this provision was to compel the claimant to seek
workers compensation benefits in just one jurisdiction in order to avoid
duplication of benefits.” Griffin v. N.D. Workers Comp. Bureau, 466 N.W.2d
148, 151 (N.D. 1991); see also Plante v. N.D. Workers Comp. Bureau,
455
N.W.2d 195, 198 (N.D. 1990); U.S. Fid. & Guar. Co. v. N.D. Workmen’s Comp.
Bureau,
275 N.W.2d 618, 622 (N.D. 1979). Section 65-05-05, N.D.C.C.,
contemplates the possibility that there may be two employers liable for a
claimant’s work-related injury under the laws of their respective states. See
generally Annot., Workmen’s compensation: one employed concurrently or
jointly by several,
58 A.L.R. 1395 (1929); 2 Modern Workers Compensation
§ 205:21 (2019); 82 Am. Jur. 2d Workers’ Compensation § 182 (2019); 99 C.J.S.
Workers’ Compensation § 143 (2019).
8
[¶16] “Under N.D.C.C. § 65-01-08, injured employees do not have a claim for
relief against a ‘contributing employer or against any agent, servant, or other
employee of the employer for damages for personal injuries, but shall look
solely to the fund for compensation.” Mattson, 2006 ND 231, ¶ 11,
723 N.W.2d
684. It is undisputed that LLC paid WSI premiums to secure coverage on
Brock’s behalf. Brock applied for, was awarded, and received WSI benefits
throughout the pendency of the California administrative proceedings. “[O]nce
a claimant is allowed to participate in the fund, he or she may no longer elect
to bring a lawsuit against the employer.” Westman v. Dessellier,
459 N.W.2d
545, 548 (N.D. 1990); see also Lovelette v. Braun,
293 F. Supp. 41, 44 (D.N.D.
1968) (if employee’s status is conclusively settled by the Bureau’s award of
benefits, the employee has no right of action against employer or co-employee).
The determinations made in the California administrative proceedings were
irrelevant for purposes of deciding LLC and Price’s statutory immunity from
suit in North Dakota.
[¶17] We conclude the district court did not err in dismissing Brock’s
negligence action as a matter of law because LLC and Price are immune from
suit under North Dakota law.
III
[¶18] In their cross-appeal, Price and LLC argue the district court erred in
failing to hold a hearing after Brock objected to their costs and disbursements.
They also argue the court erred in reducing the amount of expenses claimed.
Brock argues he cannot afford to pay any costs and disbursements because he
is quadriplegic.
[¶19] Rule 54(e)(2), N.D.R.Civ.P., provides that if objections to costs are filed,
the “court by ex parte order must fix a time for hearing the objections.” The
word “must” in a statute normally indicates a mandatory duty. See James
Valley Grain, LLC v. David, 2011 ND 160, ¶ 12,
802 N.W.2d 158. After Brock
objected to the costs and disbursements, the district court was required to hold
a hearing on the objections.
9
[¶20] We reverse the award of costs and disbursements and remand for the
district court to hold a hearing on the objections.
IV
[¶21] It is unnecessary to address other arguments raised because they are
either unnecessary to the decision or are without merit. We affirm in part,
reverse in part, and remand for further proceedings.
[¶22] Jerod E. Tufte
Daniel J. Crothers
Lisa Fair McEvers
Jon J. Jensen
Gerald W. VandeWalle, C.J.
10
