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C. Croft v. Pan AK Trucking, & AK Natural Ins. (11/15/91), 820 P 2d 1064
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Notice: This is subject to formal correction
before publication in the Pacific Reporter.
Readers are requested to bring typographical
or other formal errors to the attention of
the Clerk of the Appellate Courts, 303 K
Street, Anchorage, Alaska 99501, in order
that corrections may be made prior to
permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
CHANCY CROFT, )
) Supreme Court File
Appellant, ) No. S-3681
) Superior Court File
v. ) No. 3AN 86-14320 Civil
)
PAN ALASKA TRUCKING, INC., and ) O P I N I O N
ALASKA NATIONAL INSURANCE CO., )
)
Appellees. ) [No. 3773 - November 15, 1991]
)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Victor D. Carlson, Judge.
Appearances: Chancy Croft, pro se,
Anchorage. Richard L. Waller, Alex K.
Vasauskas, Stone, Waller & Jenicek,
Anchorage, for Appellees.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore, Justices.
COMPTON, Justice.
MOORE, Justice, dissenting.
This appeal presents the issue of whether an employer
is entitled to be reimbursed for attorney's fees paid
to the employee's attorney during pendency of a
workers' compensation appeal which was ultimately
resolved in favor of the employer. We hold that the
Alaska Workers' Compensation Act (Act) does not permit
an employer to recoup payments made to claimants or
their attorneys except by withholding future payments
under AS 23.30.155(j).
I. FACTUAL AND PROCEDURAL BACKGROUND
The facts of this case are not in dispute. The
controversy arises from our decision barring Damon
Crouch's claim for adjustment of workers' compensation
benefits following his work-related injury. Pan Alaska
Trucking, Inc. v. Crouch, 773 P.2d 947 (Alaska 1989).
Crouch was injured while driving a truck for Pan Alaska
Trucking in February 1981. He filed an Application for
Adjustment of Claim with the Alaska Workers'
Compensation Board (board) in January 1983, which Pan
Alaska controverted two days later. Crouch filed a
second claim and requested a hearing in August 1985.
The board awarded Crouch permanent total disability
benefits, costs, and attorney's fees. The superior
court affirmed. Id. at 947-48. Pan Alaska appealed to
this court.
Crouch received interim payments while Pan Alaska's
appeal was pending, while his attorney, Chancy Croft,
received attorney's fees. In May 1989, we held that
Crouch's claim was barred by AS 23.30.110(c), which
requires a claimant to request a hearing within two
years of the date of controversion. Crouch, 773 P.2d
at 949. On remand from this court, the superior court
ordered Crouch and his counsel to reimburse Alaska
National, and remanded the case to the board with
orders to dismiss Crouch's claim. Pan Alaska Trucking,
Inc. v. Crouch, No. 3AN-86-14320 CI.
Following our remand two other superior court cases
arose. Alaska National Insurance Company (Alaska
National), Pan Alaska's workers' compensation insurance
carrier, filed a complaint seeking reimbursement of the
funds paid to Crouch and Croft. Alaska Nat'l Ins. Co.
v. Croft, No. 3AN-89-5100 CI. In addition, Alaska
National sought an order from the board against Crouch
and Croft for reimbursement of the same funds. The
board concluded it lacked jurisdiction to order
reimbursement, a conclusion from which Pan Alaska and
Alaska National took an intermediate appeal. Pan
Alaska Trucking, Inc. v. Crouch, No. 3AN-89-7213 CI.
All three cases were consolidated by the superior
court. The superior court entered an Amended Judgment
ordering Crouch and Croft to reimburse Alaska National
in the amount of $333,761.48 and $41,032.28
respectively.1
II. DISCUSSION
We apply our independent judgment in reviewing the
superior court's order because the facts are not in
dispute and the issue to be resolved is one of
statutory interpretation. Crouch, 773 P.2d at 948.
The issue we resolve is whether AS 23.30.155(j)
provides the exclusive means by which an employer or
its workers' compensation carrier may be reimbursed for
overpayment of a workers' compensation claim. Alaska
Statute 23.30.155(j) provides:
If an employer has made advance payments
or overpayments of compensation, the employer
is entitled to be reimbursed by withholding
up to 20 percent out of each unpaid
installment or installments of compensation
due. More than 20 percent of unpaid
installments of compensation due may be
withheld from an employee only on approval of
the board.
This provision allows reimbursement only when unpaid installments
of compensation are due. No other provision of the Act
allows reimbursement of payments already made. Croft
argues that since the Act was adopted by legislation
which provides the exclusive remedy for all parties
involved in work-related injuries, any recovery of
overpayments is limited by the statutory procedures.
Alaska National argues that the Act must be interpreted
so as to be fair to both employers and employees, and
that powers not specifically granted may be implied
from the general policy and purposes of the
legislation.
We agree with Croft that AS 23.30.155(j) provides the
exclusive remedy for an employer to recover
overcompensation. Green v. Kake Tribal Corp., P.2d
, Op. No. 3748 at 7 n.10 (Alaska, August 30, 1991)
(Under the Act no provision is made for recovery of
employer's overpayments except withholding all or part
of future payments). In reaching this conclusion, we
employ the principle of statutory construction
expressio unius est exclusio alterius. "The maxim
establishes the inference that, where certain things
are designated in a statute, `all omissions should be
understood as exclusions.' The maxim is one of
longstanding application, and it is essentially an
application of common sense and logic." Puller v.
Municipality of Anchorage, 574 P.2d 1285, 1287 (Alaska
1978) (quoting 2A C. Sands, Sutherland Statutory
Construction 47.23 (4th ed. 1973)) (footnotes
omitted). Citing AS 23.30.155(j), we have noted that
the Act "provides limited protection to employers
against risks of overcompensation of employees'
claims." Morrison v. Afognak Logging, Inc., 768 P.2d
1139, 1143 (Alaska 1989). Alaska Statute 23.30.155(j)
specifically enumerates a remedy for overcompensation.
In the absence of any indication in the Act to the
contrary, the inference we draw is that the inclusion
of this specified remedy was intended to exclude other
remedies for overcompensation.2 See Sprague v. State,
590 P.2d 410, 415 (Alaska 1979). The case for
application of expressio unius est exclusio alterius is
particularly compelling where, as here, the scheme is
purely statutory and without a basis in the common law.
Where a statutory scheme provides comprehensive and
specific remedies, it "implies that the legislature did
not intend to allow further unenumerated remedies."
Gore v. Schlumberger Ltd., 703 P.2d 1165, 1166 (Alaska
1985). The remedy for overcompensation in AS
23.30.155(j) is sufficiently specific for us to
conclude that the legislature did not intend to allow
further remedies.3
The remaining question is whether attorney's fees are
"compensation" within the meaning of AS 23.30.155(j).
Croft equates attorney's fees to time loss benefits,
medical payments, vocational rehabilitation, and costs,
all of which are part of the compensation package.
Therefore, he argues, attorney's fees should be
considered "compensation"and subject to the limited
reimbursement procedures of AS 23.30.155(j). Alaska
National contends that attorney's fees do not fall
within the definition of "compensation"because they
are payable either "in addition to the compensation
awarded" or "out of the compensation awarded."
AS 23.30.145. We conclude that compensation includes
attorney's fees for purposes of AS 23.30.155(j).
"Compensation"is defined in the Act as "the money
allowance payable to an employee or the dependents of
the employee as provided for in this chapter, and
includes the funeral benefits provided for in this
chapter." AS 23.30.265(8). Alaska Statute
23.30.045(a) provides in part: "An employer is liable
for and shall secure the payment to employees of the
compensation payable under . . . [AS] 23.30.145 . . .
." Alaska Statute 23.30.145 is the attorney's fees
provision in the Act, thus it follows that attorney's
fees are compensation in the context of employer
liability. We conclude that the phrase "payable to an
employee" in AS 23.30.265(8) does not limit
"compensation" to payments made directly to the
employee, but includes attorney's fees paid on behalf
of the employee. Alaska Statute 23.30.155(j) limits
recovery of attorney's fees.
REVERSED.
MOORE, Justice, dissenting.
I agree with the majority that AS 23.30.155(j) provides
the exclusive remedy for overpayments of compensation
in a workers' compensation case.
I must dissent, however, from that portion of the
majority opinion which concludes that attorney's fees
are compensation within the meaning of AS 23.30.155(j).
That conclusion is directly contrary to the language
and policy of the Act.
"Compensation"is defined in the Act as "the money
allowance payable to an employee or the dependents of
the employee as provided for in this chapter, and
includes the funeral benefits provided for in this
chapter." AS 23.30.265(8). Alaska Statute
23.30.045(a) provides in part that an employer "is
liable for and shall secure the payment to employees of
the compensation payable under . . . [AS] 23.30.145."
(Emphasis added). Contrary to the opinion of the
majority, not all payments made pursuant to AS
23.30.145 constitute "compensation"for purposes of the
Act. Alaska Statute 23.30.145(a) expressly provides
that when attorney's fees are payable by the employer
or carrier, which the statute requires in controverted
cases like the one involved here, the fees are to be
paid "in addition to the compensation awarded." The
majority blatantly and without explanation ignores this
distinction between attorney's fees and compensation,
in effect creating a new definition of "compensation."
Such a construction effectively renders meaningless the
statute's distinction between "compensation" and
attorney's fees, in violation of the rule that a
"statute should be construed so that effect is given to
all its provisions, so that no part will be inoperative
or superfluous, void or insignificant." Libby v. City
of Dillingham, 612 P.2d 33, 43 (Alaska 1980)
(Rabinowitz, J., concurring), citing 2A Sands,
Sutherland Statutory Construction, 46.06, at 63 (4th
ed. 1973). The purpose of AS 23.30.155(j) is
to prevent a claimant from retaining funds he is not
entitled to, while providing a reimbursement mechanism
which softens the financial burden on claimants who
have been overpaid. This framework is inapplicable to
cases involving an employer's payment of attorney's
fees to the employee's attorney during the pendency of
a workers' compensation appeal which is ultimately
resolved in favor of the employer. The Act's generous
legal rate schedule was designed to account for the
contingent nature of recovery in workers' compensation
cases.4 The majority's desire to compensate Croft for
his efforts in this case is thus misplaced; Croft is
overcompensated for the workers' compensation cases
which he wins.
If the legislature had intended to provide a statutory
mechanism for repaying the overpayment of attorney's
fees, I am puzzled why it would have chosen the gradual
repayment mechanism provided by AS 23.30.155(j).
Unlike the injured claimants whom the repayment
mechanism is designed to protect, attorneys are not
often in such dire financial circumstances that policy
dictates gradual repayment of overpayments.
Instead of deviating from the mandates of the Act's
language and purpose, I would hold that the
overpayments received by an attorney in a workers'
compensation case are not "compensation" within the
meaning of the Act, and therefore that AS 23.30.155(j)
does not limit the recovery by an employer or insurance
carrier of overpaid attorney's fees. If this law is to
be changed, I believe it is the province of the
legislature to do so.
_______________________________
1. Croft appealed the amended judgment. Alaska National
settled its claim against Crouch. The settlement
agreement provided that Crouch would reimburse Alaska
National in the amount of $50,000, and that he would
prosecute legal malpractice actions against Croft and
another attorney. Alaska National was to receive
reimbursement up to what it had paid Crouch from the
proceeds of the malpractice suits. The malpractice
suit against Croft was settled before oral argument in
this case. Based on the Alaska National/Crouch
agreement, Croft filed a motion for relief from
judgment under Alaska Rule of Civil Procedure 60(b).
We granted Croft's motion to stay the appeal for 60
days pending the superior court's ruling on the Rule
60(b) motion. After the 60 days expired Croft moved
for remand to the superior court, which we denied.
Croft states in his reply brief that the superior court
granted the Rule 60(b) motion and vacated the judgment
requiring reimbursement, though we had not yet ruled on
his motion for remand. The superior court does not
have authority to grant a Rule 60(b) motion unless it
has obtained a remand from this court. Duriron Co. v.
Bakke, 431 P.2d 499, 500 (Alaska 1967). Therefore, the
order granting relief from judgment is of no effect.
2. We base our holding not on the exclusive remedy
provision of AS 23.30.055, but on AS 23.30.155(j)
itself. AS 23.30.055 by its own terms states that the
Act is the exclusive remedy an employee has against an
employer for a work-related injury. It says nothing
about employers' remedies.
3. Other states' workers' compensation schemes specifically
provide that payments which are paid but not due must
be recouped from a compensation fund. For example, in
Pennsylvania, the proper procedure when overpayments
have been made is to apply to the Supersedeas Fund.
Braun Baking Co. v. Workmen's Compensation Appeal Board
(Stevers), 583 A.2d 860 (Pa. Cmwlth. 1990); Rogers v.
Workmen's Compensation Appeal Board (Strouse/Greenberg
& Co.), 565 A.2d 209 (Pa. Cmwlth. 1989). Kansas has a
fund from which an employer may be reimbursed if
payments are later reduced or disallowed. Johnston v.
Tony's Pizza Serv., 658 P.2d 1047 (Kan. 1983). A
Michigan statute specifically provides that if benefits
paid during an appeal are later reduced or rescinded,
the employer is reimbursed from the second injury fund.
McAvoy v. H.B. Sherman Co., 258 N.W.2d 414 (Mich.
1977). Alaska also has a second injury fund, AS
23.30.040, but no similar provision for reimbursement
of payments made during a successful appeal. The
employer's interest may still be protected by seeking a
stay of the judgment. Wise Mechanical Contractors v.
Bignell, 626 P.2d 1085 (Alaska 1981) (In order to stay
an award in a worker's compensation case, the employer
must obtain a supersedeas bond and make a showing of
"irreparable damage.") (citing AS 23.30.125(c); Alaska
Const. art. IV., 15; Alaska Appellate Rule 603).
4. Wien Air Alaska v. Arant, 592 P.2d 352, 366 (Alaska
1979) ("high awards for successful claims may be
necessary for an adequate overall rate of compensation,
when counsel's work on unsuccessful claims is
considered").
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