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Inwards v. North Dakota Workforce Safety & Insurance

Supreme Court of North Dakota

July 31, 2014

Kathy Inwards, Appellant
North Dakota Workforce Safety & Insurance, Appellee

Page 694

Appeal from the District Court of Sargent County, Southeast Judicial District, the Honorable Bradley Allen Cruff, Judge.

Stephen D. Little, Bismarck, N.D., for appellant.

Shanon M. Gregor, Special Assistant Attorney General, Fargo, N.D., for appellee.

Carol Ronning Kapsner, Lisa Fair McEvers, Daniel J. Crothers, Dale V. Sandstrom, Gerald W. VandeWalle, C.J. Opinion of the Court by Kapsner, Justice.


Kapsner, Justice.

Page 695

[¶1] Kathy Inwards appeals from a judgment reversing an administrative law judge's (" ALJ" ) decision requiring Workforce Safety & Insurance (" WSI" ) to continue providing her disability and rehabilitation benefits. We conclude the ALJ erred as a matter of law in ruling Inwards had good cause for failing to comply with a retraining program because WSI's previous order requiring Inwards to participate in the retraining program had been appealed and had not been finally resolved at the time she withdrew from the retraining program. We affirm the district court judgment reversing the ALJ's decision and reinstating WSI's order of noncompliance.


[¶2] In 2004, Inwards was injured while employed as an assembler by Bobcat. WSI accepted liability for her claim and awarded Inwards vocational rehabilitation benefits to assist her in returning to work. In early June 2011, WSI issued a notice of intention to discontinue benefits (" NOID" ) stating Inwards' temporary total disability benefits would end on July 4, 2011, and would convert to retraining benefits, and she had 30 days to request reconsideration of the decision. WSI issued a formal order on June 27, 2011, requiring Inwards to " enter into training at Hutchinson Community College, Hutchinson, Kansas, in the Business Management & Entrepreneurship AAS program." On June 28, 2011, Inwards requested reconsideration of the vocational rehabilitation plan, but attended two college courses during the summer of 2011 in accordance with the plan.

[¶3] Inwards complained to her physician that she was having increased pain as a result of her course work. Although Inwards registered for fall courses at the college, she withdrew from them on August 18, 2011. On October 21, 2011, WSI issued a NOID to Inwards stating " [t]here is no medical evidence that supports your professed inability to attend the classes as outlined in the administrative order dated June 27, 2011. You are now considered to be in non-compliance with vocational rehab." Inwards timely requested reconsideration of this NOID, and on January 13, 2012, WSI issued a formal order suspending Inwards' rehabilitation benefits based on her noncompliance with the rehabilitation plan. Inwards timely requested a hearing to challenge WSI's finding of noncompliance and suspension of benefits.

[¶4] On February 25, 2012, the ALJ affirmed WSI's June 27, 2011 order awarding retraining benefits, ruling WSI " demonstrated by a preponderance of the evidence that retraining is the first appropriate rehabilitation option" for Inwards. Inwards requested reconsideration, but the ALJ denied the request in an order dated May 11, 2012. Inwards did not appeal to the district court from the denied reconsideration.

[¶5] The hearing on Inwards' challenge to WSI's January 13, 2012 order denying her further rehabilitation benefits was held on December 12, 2012. The issue was whether Inwards had good cause for terminating her college training program. At the conclusion of the hearing, the ALJ requested the parties to submit briefs addressing whether WSI had authority to issue an order of noncompliance with vocational rehabilitation when the rehabilitation plan itself has been appealed and a final decision affirming or reversing the plan has not been issued. After receiving the briefs, the ALJ reversed WSI's January 13, 2012 order suspending benefits for noncompliance with the vocational rehabilitation plan. The ALJ reasoned:

3. Here the evidence shows that Ms. Inwards' physician told her she should

Page 696

not pursue a career in computers and should not be going to school for that kind of career. Normally that would be good cause to stop attending classes. However, the record also shows that Ms. Inwards' physicians were misled by information provided by Ms. Inwards. Ms. Inwards should have been aware that her physicians did not have all of the pertinent information when they concluded she should not attend school because it was she who gave them the information. Because the basis of the physician's determination was created by faulty or incomplete information provided by Ms. Inwards, she does not have good cause to rely upon the physicians' decisions to refuse to attend the training.
. . . .
6. Ms. Inwards' appeal of the order was a timely, and statutorily allowed challenge to the June 27, 2011, order. That order did not become final until the administrative law judge denied Ms. Inwards' request for reconsideration on May 11, 2012.
7. WSI has pointed to no statute or case law that required Ms. Inwards to comply with a non-final order during the pendency of an appeal. A reasonably prudent person would refuse to attend vocational training while their appeal was being resolved. Here the law does not permit WSI to enforce an order that is not final, Ms. Inwards had a statutory right to appeal the order and WSI's January 13, 2012, order to enforce its June 27, 2011, order was premature. These circumstances constitute good cause not to comply with the order. Ms. Inwards behaved as a reasonably prudent person when she stopped attending the VCR [vocational consultant's report] she was appealing.
8. Although she did not have good cause in the form of a medical reason not to pursue the training, Ms. Inwards has demonstrated that because she had appealed the order and it was not final or enforceable, she did have good cause not to attend the training while her appeal was pending. Therefore WSI's January 13, 2012, order suspending benefits for non-compliance must be reversed.

[¶6] WSI appealed to district court and Inwards moved to dismiss the appeal, claiming the court lacked subject matter jurisdiction because WSI failed to serve the notice of appeal and specification of errors on Inwards and her employer. The court denied the motion to dismiss, concluding Inwards had no standing to object to defective service on her employer and there was good cause to excuse WSI's mistake about recently mandated court electronic filing requirements. The court reversed the ALJ's decision, concluding the ...

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