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Midthun v. North Dakota Workforce Safety and Insurance

February 5, 2009

JUDITH MIDTHUN, CLAIMANT AND APPELLEE
v.
NORTH DAKOTA WORKFORCE SAFETY AND INSURANCE, APPELLANT AND MERCY HOSPITAL, RESPONDENT



Appeal from the District Court of Barnes County, Southeast Judicial District, the Honorable Mikal Simonson, Judge.

The opinion of the court was delivered by: VandeWalle, Chief Justice.

REVERSED.

[¶1] North Dakota Workforce Safety and Insurance ("WSI") appealed a district court judgment reversing WSI's decision to terminate Judith Midthun's partial disability benefits. We conclude the district court erred when it found WSI's discretion to waive the limitation on partial benefits was constrained by N.D.C.C. § 65-05-10(2). We therefore reverse the judgment of the district court and reinstate WSI's order discontinuing Midthun's partial disability benefits.

I.

[¶2] Judith Midthun began receiving temporary total disability benefits from WSI on April 24, 1999, in connection with a right shoulder injury she sustained while working as a CNA at Mercy Hospital in Valley City. During the summer of 2000, she returned to the workforce, obtaining a position as an optical technician for Duling Optical. She worked approximately 20-23 hours per week in this new position. Due to her return to employment, WSI reduced Midthun's benefits to partial disability benefits.

[¶3] Under N.D.C.C. § 65-05-10(2), the amount of time during which a claimant may receive partial disability benefits is limited to a period of five years. The statute states that WSI "may waive" the five-year limit if the claimant has experienced a catastrophic injury, or has long-term restrictions from the compensable work injury and is working less than twenty-eight hours per week. N.D.C.C. § 65-05-10(2). At an administrative hearing on Midthun's claim for benefits, Timothy Wahlin, WSI's staff counsel, testified as to the agency's prior and current procedures for awarding and discontinuing partial disability benefits. Wahlin stated that WSI had previously operated under the belief that, if a claimant was working less than 28 hours per week, the five-year cap on partial disability benefits did not apply. Wahlin classified this belief as a misinterpretation of the law. For most of the period that Midthun received partial disability benefits, WSI applied this interpretation to her claim; on several occasions claims analysts reviewed her claim and made notations reaching conclusions akin to: "5 year TPD cap does not apply to [Midthun] at this time as she is working under 28 hours."

[¶4] Wahlin testified that WSI later determined the five-year limitation did apply to claimants with long-term restrictions who worked less than 28 hours per week. In approximately 2004, WSI adopted a new procedure whereby the agency reviewed a claimant's benefits before the five-year period ended, and determined whether or not to award a waiver of the limitation. The review considered whether a claimant met one of the two descriptions laid out in the statute, i.e., catastrophic injury, or long-term restrictions and working under 28 hours per week, and then decided whether there was some form of "extraordinary circumstances" involved which would justify the waiver. Wahlin testified that WSI also began to review its files for those already receiving partial disability benefits to determine whether waivers on the five-year limitation should be granted.

[¶5] Among those whose files were reviewed was Midthun. On December 16, 2005, WSI sent her a letter informing her she had received partial disability benefits for a period exceeding the five-year limitation, and that WSI would discontinue her benefits the following month. Midthun requested reconsideration from WSI, and on February 8, 2006, WSI issued an order concluding she was not entitled to further partial disability benefits. Midthun demanded a formal hearing from the agency, which resulted in WSI's Final Order affirming its decision to deny further partial disability benefits. Midthun appealed the final order in district court, designating as her sole specification of error: "This appeal is taken upon the grounds that the decision by WSI in its July 20, 2007, Final Order is not in accordance with the law." The district court reversed WSI's order, finding Midthun met the requirements of N.D.C.C. § 65-05-10(2), and "WSI's discretion to waive the five-year cap on TPD benefits is constrained by the express terms" of the statute.

II.

[¶6] On appeal, WSI contends it properly applied the provisions of N.D.C.C. § 65-05-10(2) by denying Midthun's waiver, and further argues it had the discretion to decide whether or not to waive the limitation. Midthun argues WSI did not have the discretion to deny her further partial disability benefits, stressing the fact that she met the statutory requirement that she had long-term restrictions and worked less than 28 hours per week. Midthun also asserts on appeal that WSI actually waived the five-year cap in her case, pointing to the claims analysts' notations which concluded that the waiver did not apply to her claim.

[¶7] The Administrative Agencies Practice Act requires a party who appeals from an administrative hearing officer's decision to file a notice of appeal and specifications of error. N.D.C.C. § 28-32-42(4). A party appealing a hearing officer's decision must file "reasonably specific" specifications of error detailing which matters are at issue, so as to alert the agency, other parties, and the court of the particular errors claimed. Vetter v. North Dakota Workers Comp. Bureau, 554 N.W.2d 451, 454 (N.D. 1996). Boilerplate specifications of error which are general enough to apply to any administrative agency appeal are not tolerated by this Court, and are ripe for dismissal. Dettler v. Sprynczynatyk, 2004 ND 54, ¶ 15, 676 N.W.2d 799; see also Sonsthagen v. Sprynczynatyk, 2003 ND 90, ¶ 14, 663 N.W.2d 161 ("Sonsthagen's specifications of error were not sufficiently specific to identify the impartiality argument he now raises on appeal. Because Sonsthagen failed to satisfy the requirements of N.D.C.C. § 28-32-42(4), we will not consider this argument."). When a party does not enumerate an issue in their specifications of error, we will not consider that issue on appeal. See Bjerklie v. Workforce Safety and Ins., 2005 ND 178, ¶ 7, 704 N.W.2d 818 (refusing to review issues not enumerated in specifications of error).

[¶8] In this case, Midthun's specification of error reads simply that, "This appeal is taken upon the grounds that the decision by WSI in its July 20, 2007, Final Order is not in accordance with the law." We begin by noting that this language treads dangerously close to boilerplate, as it appears Midthun has adopted the phrase directly from the statute denoting occasions when a court will reverse the order of an agency. See N.D.C.C. § 28-32-46(1) ("The order is not in accordance with the law."). Furthermore, this language concerns only the legal question of WSI's interpretation of the statute. Although raised as an issue on appeal, whether WSI did waive the limitation in a particular circumstance is a factual issue not mentioned or hinted at in Midthun's specification of error. See Von Ruden v. North Dakota Workforce Safety and Ins. Fund, 2008 ND 166, ¶ 14, 755 N.W.2d 885 ("The existence of waiver is generally a question of fact."). Therefore, looking at the specifications of error in the light most favorable to Midthun and recognizing that WSI has not argued it was unaware of the legal issue, we consider the legal question of whether WSI can waive the limitation in cases where a claimant meets one of the exceptions under N.D.C.C. § 65-05-10(2), and not whether WSI did waive the limitation in Midthun's claim.

III.

[¶9] Questions of law, including the interpretation of a statute, are fully reviewable on appeal from an administrative decision. Grand Forks Prof'l Baseball, Inc. v. North Dakota Workers Comp. Bureau, 2002 ND 204, ¶ 8, 654 N.W.2d 426. On appeal, we review the decision of the administrative agency, and not the decision of the district court. Steele v. North Dakota Workmen's Comp. Bureau, 273 N.W.2d 692, 696 (N.D. 1978). We review the agency decision in the same manner as the district court reviews an administrative agency order. N.D.C.C. § 28-32-49. The Administrative Agencies Practice Act sets forth several factors, any of which must be present to warrant the reversal of an agency's final order. N.D.C.C. § 28-32-46. In the present case, we will affirm the decision of WSI unless the order is not in accordance with the law. N.D.C.C. § 28-32-46(1).

[¶10] When construing a statute we look first to the words used in the statute, giving them their plain, ordinary, and commonly understood meaning. N.D.C.C. § 1-02-02 ("Words used in any statute are to be understood in their ordinary sense, unless a contrary intention plainly appears."); Lee v. North Dakota Workers Comp. Bureau, 1998 ND 218, ¶ 11, 587 N.W.2d 423. This Court's primary objective is to ascertain the Legislature's intent. Lee, 1998 ND 218, ¶ 11, 587 N.W.2d 423.

[¶11] WSI contends it correctly interpreted N.D.C.C. § 65-05-10(2) as providing the agency with discretion over whether or not to waive the five-year limitation on partial disability benefits, and argues the district court erred when it found the agency did not have such discretion. Section 65-05-10(2), N.D.C.C., provides:

Benefits must be paid during the continuance of partial disability, not to exceed a period of five years. The organization may waive the five-year limit on the duration of partial disability benefits in cases of catastrophic injury . . . or when the injured worker is working and has long-term restrictions verified by clear and convincing objective medical and vocational evidence that limits the injured worker to working less than twenty-eight hours per week because of the compensable work injury.

The issue in this matter, thus, turns on the meaning and effect of the phrase "may waive," and whether this language allows WSI discretion to waive the limitation, or whether they must waive when a claimant falls under one of the statutory exceptions.

[¶12] This Court has previously held that the use of the word "may" in a statutory scheme is ordinarily understood as "permissive rather than mandatory and operates to confer discretion." Matter of Adoption of K.S.H., 442 N.W.2d 417, 420 (N.D. 1989). This interpretation has been applied and acknowledged throughout a number of cases heard before this Court. See id. at 419-20 (holding statutory language that a court "may terminate the parental rights of a parent" if certain grounds exist gives the court discretion to terminate those rights, even if such grounds are found in a case); Bernhardt v. Bernhardt, 1997 ND 80, ¶ 9, 561 N.W.2d 656 (holding language that "gross income may be imputed at an amount less than required" by an Administrative Code section is permissive due to the word "may") (emphasis in original); Harding v. City of Dickinson, 76 N.D. 71, 80, 33 N.W.2d 626, 632 (1948) ("The word `may' is, when used in its ordinary meaning, permissive rather than compulsory.").

[¶13] We only construe the word "may" as "must" where the context or subject matter compels that construction. Basin Elec. Power Co-op. v. North Dakota Workers Comp. Bureau, 541 N.W.2d 685, 689 (N.D. 1996). In Basin Elec. Power, we did have occasion to consider this rare exception, and indicated the word "may" imposed a mandatory duty as it pertained to a workers compensation statute. In that case, we held that if certain statutory language regulating WSI appeals was ambiguous, we would interpret the language in favor of the purpose of the law. Id. We noted that, since the purpose of workers compensation law was to provide workers with sure and certain relief and interpreting "may" as permissive in that case would put claimants at a disadvantage, the language should be read as mandatory. Id. However, Basin Elec. Power is distinguishable from the present case, as we see no ambiguity in the statutory scheme before us. A statute is ambiguous if it is susceptible to meanings that are different, but rational. Public Service Comm'n v. Wimbledon Grain Co., 2003 ND 104, ¶ 20, 663 N.W.2d 186. Here, N.D.C.C. § 65-05-10(2) includes a five-year limitation on partial disability benefits, and clearly states that WSI "may waive" that limitation only in certain circumstances. The language of the statute does not indicate that WSI is required to waive the limitation upon the occurrence of those circumstances; rather, WSI cannot waive the limitation unless those circumstances are present.

[¶14] Furthermore, when N.D.C.C. § 65-05-10(2) was enacted, the legislature was aware of the distinction between using the terms "may" and "shall." Section 65-05-10(2), N.D.C.C., was enacted during the 1991 Legislative Session. See 1991 N.D. Laws 2115-16. In 1991, the North Dakota Legislative Drafting Manual stated that the word "shall" is used when a duty is imposed on a person or body; conversely, the Manual stated that "may" is used to "confer a power, privilege, or right." See North Dakota Legislative Drafting Manual, pp. 116-17, 1991 Edition. We have long held the purpose of statutory construction is to ascertain and effectuate legislative intent, and unless it appears that it was the legislative intent to enact a mandatory statute, we will not construe it as such. Novak v. Novak, 74 N.D. 572, 578, 24 N.W.2d 20, 23 (1946). ...


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