COURT OF APPEALS DECISION DATED AND RELEASED October 8, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-3011
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
FROEDTERT MEMORIAL
LUTHERAN HOSPITAL, INC.,
Plaintiff,
v.
PEDRO L. CRUZ,
Defendant-Third Party Plaintiff-Respondent,
EMPLOYERS INSURANCE OF
WAUSAU,
Third Party Defendant-Appellant.
APPEAL from an order of
the circuit court for Milwaukee County:
WILLIAM D. GARDNER, Judge. Reversed
and cause remanded with directions.
Before Fine, Schudson
and Curley, JJ.
PER
CURIAM. Employers Insurance of Wausau, the worker's compensation
insurer for Castalloy, Pedro Cruz's former employer, appeals from an order
denying its summary judgment motion and purporting to “reform” a compromise
agreement entered into earlier between Cruz and Employers. As a result, Employers was ordered to pay an
additional $21,234.75 to Cruz for hospital care and treatment provided by
Froedtert Memorial Lutheran Hospital.
Because the exclusive remedy provision of the Wisconsin Worker's
Compensation Act gives the trial court jurisdiction only to review decisions of
the Commission and then under very limited circumstances, we reverse.
I. Background.
In May 1989, Cruz was
injured while working for Castalloy. In
May 1991, he received care and treatment for his work-related injury at
Froedtert. For his approximate
eight-day stay in May of 1991 he was charged $21,234.75, and billed by
Froedtert in October of 1991.
In July 1993, after
having made application to Employers for the payment of a variety of bills
associated with his injury, Cruz, with the aid of legal counsel, and Employers
entered into a compromise agreement, as defined in § 102.16(1), Stats., requiring Employers to pay a
settlement of $85,699.54 to Cruz.
Pursuant to the worker's compensation law, the parties' compromise
agreement was presented to the Department of Industry, Labor, and Human
Relations, which approved the agreement.
No specific mention was made of the Froedtert bill in the compromise
agreement, but the Administrative Law Judge noted that the compromise agreement
was “a settlement of all issues, with the exception of future medical expenses
which shall be held open until July 1, 2001.”
Cruz failed to make any payment on the bill and Froedtert brought this
collection action.
Cruz, without requesting
any relief from either the Department of Industry, Labor, and Human Relations,
or the Labor and Industry Review Commission, brought Employers directly into
this circuit court case on a third-party complaint, claiming he was entitled to
payment from the insurance company.
Employers brought a summary judgment motion asserting that, among other
things, the suit should be dismissed because of the exclusivity provision of
the Worker's Compensation Act. Cruz,
while defending against both Froedtert's and Employers' summary judgment
motions, nonetheless adopted Froedtert's rationale in opposing Employers'
motion.
One of Froedtert's
arguments in opposition to Employers' summary judgment motion was the assertion
that there was a mutual mistake by Employers and Cruz when they entered the
compromise agreement and thus, the case was not ripe for summary judgment. Froedtert also argued that the circuit court
and DILHR had concurrent jurisdiction over the matter.
Following a hearing
where the trial court granted Froedtert's summary judgment motion, the trial
court rendered a written decision denying Employers' summary judgment motion
and determined that, as a matter of law, on equitable grounds, it was
appropriate for the trial court to reform the compromise agreement based upon
the equitable doctrine of mutual mistake.
The trial court then ordered Employers to pay an additional $21,234.75
to Cruz. This appeal follows.
II. Analysis.
When this court is
called upon to review the grant of a summary judgment motion, we are governed
by the standards articulated in § 802.08(2), Stats. Maynard
v. Port Publications, Inc., 98 Wis.2d 555, 558, 297 N.W.2d 500, 502
(1980). Further, we are required to apply
the standards set forth in the statute just as the trial court applied those
standards. Wright v. Hasley,
86 Wis.2d 572, 579, 273 N.W.2d 319, 322‑23 (1979). Our review is de novo. Green Spring Farms v. Kersten,
136 Wis.2d 304, 316, 401 N.W.2d 816, 820 (1987).
In denying Employers'
motion, the trial court stated that it would decline Employers' invitation to
enter summary judgment in its favor and that it would reform the compromise
agreement based upon the equitable doctrine of mutual mistake. The trial court's decision is devoid of any
findings concerning Employers' first argument that the court did not have
jurisdiction over the dispute because of the exclusivity provisions of the
Worker's Compensation Act. In fact, the
issue of jurisdiction was never mentioned in the trial court's written
decision. The trial court simply
proceeded to find that there was mutual mistake in the compromise agreement
entered into two years previously and “reformed” the contract.
Although the trial
court's decision is silent on the issue of jurisdiction, a review of the
transcript of the summary judgment motion does shed some light on the trial
court's thoughts. Evidence that the
trial court did not believe that the Worker's Compensation Act was all
encompassing can be read from the following exchange:
[EMPLOYERS'
ATTORNEY]: Mr. Cruz's suit against
[Employers] is barred by the exclusive remedy provision filed in Section 102.03
sub.1 of the Wisconsin Statutes. The
right to recovery under Chapter 102 of Wisconsin Statutes is the employee's
exclusive remedy for work injuries.
[THE COURT]: I would agree if we're talking about a
negligence case.
The submitted affidavits
and arguments of counsel at the summary judgment hearing revealed that neither
Cruz nor Employers was aware of the outstanding bill, although there is
evidence that Cruz's former attorney was notified of its existence. Also uncovered during the summary judgment
arguments was the fact that Cruz was not sued by Froedtert for the hospital
bill until after the Worker's Compensation Act's one-year period for modifying
compromise agreements had expired, pursuant to § 102.16, Stats.[1]
Cruz now argues that the
Worker's Compensation Act provides an exclusive remedy and method of obtaining
judicial review against employers for tort claims only and, since reformation
is an equitable action, the circuit court had jurisdiction to reform the
compromise agreement.
Unfortunately for Cruz,
however, it is only through the tort law principles that have been supplanted
by the Worker's Compensation Act that he has any legal right to seek medical
expenses from his former employer and its worker's compensation carrier. See, e.g., Anderson v. Miller
Scrap Iron Co., 169 Wis. 106, 110, 170 N.W. 275, 276 (1919). Prior to the passage of the Worker's
Compensation Act, an employee could recover payment of his work-related medical
bills only if he proved employer negligence.
“The purpose of Workers' Compensation Act is `to provide financial and medical
benefits to the victim of “work-connected” injuries and their families
regardless of fault, and to allocate financial burden to the most appropriate
source—the employer, and, ultimately, the consumer of the product.'” Klein Indus. Salvage v. DILHR,
80 Wis.2d 457, 462, 259 N.W.2d 124, 126 (1977) (emphasis added). Thus, the payment sought by Cruz has as its
origin tort law which has been transformed by the Worker's Compensation Act.
Having this analysis in
mind, it would appear the trial court determined that it now had jurisdiction
because Cruz was foreclosed from seeking relief under the Worker's Compensation
Act. Stated differently, the trial
judge took the position that trial courts could hear a cause of action grounded
in equity once there was no remedy available under Chapter 102.
Hence, in deciding this
case, we must determine whether the circuit court was jurisdictionally
foreclosed from modifying the compromise agreement after the one-year window
permitting modification had expired.
The standard of review when faced with a claim dealing with the
exclusive remedy provisions of the Worker's Compensation Act is a question of
law which we review de novo. See
Schenkoski v. LIRC, No. 96‑0051, slip op. at 3 (Wis.
Ct. App. June 18, 1996) (ordered published July 29, 1996).
Our analysis will start
with the Worker's Compensation Act, found in Chapter 102, Stats.
As was argued by Employers, in the absence of the compromise agreement,
the question of whether Cruz could seek redress in the circuit court would be a
simple one. Section 102.16(1), Stats., provides: “Any controversy concerning compensation ...
shall be submitted to the department in the manner and with the effect provided
in this chapter.” Had Cruz not entered
into a compromise agreement, he would have been obligated to first seek relief
from the department.
Here, Cruz availed
himself of the Worker's Compensation Act and entered into a compromise
agreement. What, then, is the statutory
scheme once the one-year modification period for compromise agreements expires?
We recently concluded
that DILHR and LIRC did not have jurisdiction to review a compromise agreement
outside the one-year time limit in § 102.16(1), Stats. See Schenkoski,
No. 96‑0051, slip op. at 7.
Similarly, in this case we conclude the trial court lacked jurisdiction
to reform the compromise agreement because the Wisconsin Worker's Compensation
Act only gives the trial court jurisdiction to review decisions of the
Commission.
Embodied in the LIRC's
own rules, found in the Wisconsin Administrative Code, is the provision that
compromise settlements of worker's compensation claims are solely within the
jurisdiction of the worker's compensation division. See Wis. Adm. Code
§ LIRC 305. Compromise agreements,
as utilized in Chapter 102, are subject to rules different from other claims
made under the Worker's Compensation Act.
See § 102.16(1), Stats. As a result, a compromise agreement used in
a worker's compensation setting is a creature of statute. The nature of these compromise agreements
has been oft discussed:
The public policy, as expressed in the
statute, is to permit compromise between employers and employees where
liability is disputed. No third-party
claimant against an employee should be permitted to interfere with a compromise
agreement between an employee and an employer.
Otherwise, the parties could be forced to litigate the matter before
DILHR when neither of them wants to risk an all-or-nothing contest.
La Crosse
Lutheran Hosp. v. Oldenburg, 73 Wis.2d 71, 74‑75,
241 N.W.2d 875, 877 (1976). Further,
“[a] compromise furthers the purpose of the statute by enabling an injured
employee to negotiate a settlement and bypass the costs and uncertainty of
litigation.” Pigeon v. DILHR,
109 Wis.2d 519, 525, 326 N.W.2d 752, 756 (1982).
Additionally, another
statute found in Chapter 102 is also illuminating in determining whether the
circuit court retains jurisdiction after the one-year modification period
lapses under § 102.16(1). Section
102.23(1)(a), Stats., provides
that:
The order or award granting or denying
compensation, either interlocutory or final, whether judgment has been rendered
on it or not, is subject to review only as provided in this section and not
under ch. 227 or s. 801.02. Within
30 days ... any party aggrieved thereby may by serving a complaint ...
commence, in circuit court, an action against the commission for the review of
the order or award, in which action the adverse party shall also be made a
defendant.
When determining the
effect of this statutory language, “[w]e are ... guided by [a] well-established
principle[] of statutory construction ... that the enumeration of specific
alternatives in a statute is evidence of legislative intent that any alternative
not specifically enumerated is to be excluded.” C.A.K. v. State, 154 Wis.2d 612, 621, 453 N.W.2d
897, 901 (1990). Thus, the clear
wording and intent of the statute permits judicial review of compromise
agreements under only very limited circumstances.
Finally, this court has
also discussed the inability of the circuit court to exercise its powers in
equity when an administrative agency's jurisdiction was in question:
[The Appellant's] contention is that
where full relief from the agency (DILHR) either cannot be obtained or is
questionable, then he may seek the desired relief from the circuit court, and
the circuit court, for reasons of equity, properly has jurisdiction....
We are not swayed by
[this] argument.
Bachand
v. Connecticut General Life Ins. Co., 101 Wis.2d 617, 628, 305
N.W.2d 149, 154 (Ct. App. 1981) (discussing Wisconsin Fair Employment
Act). The same principle applies here;
permitting the circuit court to maintain actions emanating out of compromise agreements
without an underlying determination by the agency is contrary to the wording of
the statutes and adverse to the legislative intent. Extrapolating from the language found in § 102.16, a claim
is barred if it is based on a compromise agreement and the one-year window has
expired.
In sum, all
controversies concerning compensation between employer and employee are subject
to the Worker's Compensation Act.
Judicial review is allowed under very limited circumstances and then
only by filing suit naming DILHR. Here,
the parties entered into an approved compromise agreement and the one-year
period had expired. The Worker's
Compensation Act provides a comprehensive statutory remedy which is
exclusive. The circuit court has no
jurisdiction over this matter.
Because we determine
that the trial court had no jurisdiction to reform the compromise agreement and
that it should have granted Employers' summary judgment motion, we need not
address the other issues. See Gross
v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663, 665 (1938) (only
dispositive issue need be addressed).
Accordingly, we reverse
and remand the matter to the trial court for entry of summary judgment
consistent with this opinion.
By the Court.—Order
reversed and cause remanded with directions.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.