#26078-a-SLZ

2012 S.D. 13

                        IN THE SUPREME COURT
                                OF THE
                       STATE OF SOUTH DAKOTA

                               ****
PATRICK KENDALL, SR.,                      Appellant,

     v.

JOHN MORRELL & COMPANY,                    Appellee.


                               ****

                 APPEAL FROM THE CIRCUIT COURT OF
                    THE SECOND JUDICIAL CIRCUIT
                 MINNEHAHA COUNTY, SOUTH DAKOTA

                               ****

                  THE HONORABLE PATRICIA C. RIEPEL
                              Judge

                               ****

LEE C. “KIT” MCCAHREN of
Olinger, Lovald, McCahren
 & Reimers, PC
Pierre, South Dakota                       Attorneys for appellant.


MICHAEL S. MCKNIGHT
WILLIAM J. GASSEN III of
Boyce, Greenfield, Pashby
 & Welk, LLP
Sioux Falls, South Dakota                  Attorneys for appellee.

                               ****

                                           CONSIDERED ON BRIEFS
                                           ON JANUARY 9, 2012

                                           OPINION FILED 02/08/12
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ZINTER, Justice

[¶1.]        Patrick Kendall, Sr. suffered a work-related injury while working at

John Morrell & Co., a self-insured employer. Morrell initially accepted Kendall’s

workers’ compensation claim. Because Kendall later missed a number of physical

therapy and doctor’s appointments, Morrell sent him a certified letter denying all

further workers’ compensation benefits relating to the injury. Almost three years

later, Kendall filed a petition with the South Dakota Department of Labor

(Department) requesting additional benefits for the injury. The Department

granted summary judgment in favor of Morrell, concluding that the petition was

barred by the statute of limitations. The circuit court affirmed. Kendall appeals.

We affirm.

                            Facts and Procedural History

[¶2.]        On October 16, 2007, Kendall suffered a work-related injury at Morrell

when a cart rolled off a ledge and hit his right foot and ankle. Dr. Jerry J. Blow

diagnosed a type of complex regional pain syndrome (CRPS) called reflex

sympathetic dystrophy (RSD) involving the right leg. Morrell initially accepted

Kendall’s work-related injury as compensable and began paying benefits.

[¶3.]        However, on January 11, 2008, Morrell sent Kendall a certified letter

denying all further workers’ compensation benefits relating to the injury. Morrell

alleged misconduct and asserted that Kendall failed to follow his doctor’s

recommended course of treatment, which included physical therapy and continued

doctor’s appointments. The letter advised that if Kendall disagreed with Morrell’s

decision, he had a right to contest the decision before the Department – provided


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that he file a petition for hearing with the Department within two years.1 Morrell

also sent a copy of the letter to the Department.

[¶4.]         On September 22, 2009, almost two years after the injury, Dr. Blow

examined Kendall again. Dr. Blow indicated that Kendall’s RSD appeared to have

run its course and Kendall was at maximum medical improvement. Dr. Blow also

indicated that Kendall was then experiencing a new condition resulting from a

shortened plantar fascia. Dr. Blow opined that Kendall’s then-existing condition

was caused by noncompliance with the previously ordered medical treatment.




1.      The letter stated:

              South Dakota’s Workers[’] Compensation Law provides that an
              injury caused by an employee’s willful misconduct is not
              compensable (SDCL 62-4-37). Willful misconduct can include
              failure to follow the doctor’s recommended course of treatment.
              If an injury is aggravated or extended in time by the employee’s
              neglect or disobedience of his doctor’s instructions, it is not
              compensable as to that aggravation or additional time period. . . .

              We believe that your neglect here, with regard to attending
              doctor and therapy appointments, and following treatment
              recommendations, amounts to willful misconduct. You have
              missed several physical therapy appointments, and at least two
              doctor’s appointments, including your last appointment
              scheduled for 1/9/08. Under these circumstances we are denying
              all further claims for worker[s’] compensation benefits related to
              this injury.

              If you disagree with this decision you have a right to a hearing
              before the South Dakota Department of Labor, provided a
              written request is submitted to the Department within two
              years of this date, in accordance with SDCL 62-7-12. . . .


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[¶5.]         On October 28, 2009, Morrell notified Kendall of Dr. Blow’s medical

opinion. Morrell also notified Kendall that Morrell was standing by its January 11,

2008 letter denying additional benefits for the October 2007 injury.

[¶6.]         On November 3, 2010, Kendall filed a petition with the Department for

permanent or total disability benefits relating to the October 2007 injury. He

contended that he continued to suffer RSD as a result of the injury. Morrell moved

for summary judgment because Kendall’s petition was filed more than two years

after Morrell’s January 11, 2008 written denial. The Department granted summary

judgment, concluding that SDCL 62-7-35, a two-year statute of limitations, barred

Kendall’s claim.2 The circuit court affirmed.

                                        Decision

[¶7.]         The facts in this case are not in dispute. We review the Department’s

conclusions of law de novo. Jewett v. Real Tuff, Inc., 2011 S.D. 33, ¶ 22, 800 N.W.2d

345, 350. We also review statutory construction de novo. Nine, Inc. v. City of

Brookings, 2011 S.D. 16, ¶ 8, 797 N.W.2d 73, 75.

[¶8.]         A claimant’s right to workers’ compensation is barred if the claimant

does not file a written petition for hearing within two years of the date the “self-

insurer or insurer notifies the claimant and the [D]epartment, in writing, that it



2.      The Department also ruled that a longer three-year statute of limitations in
        SDCL 62-7-35.1 was not applicable because “the triggering event under
        SDCL 62-7-35.1 is simply a cessation of benefits without notice of a dispute.”
        (quoting Faircloth v. Raven Indus., Inc., 2000 S.D. 158, ¶ 8, 620 N.W.2d 198,
        201). The Department correctly concluded that, because Morrell issued a
        formal written notice stating its intention to deny further benefits rather
        than ceasing benefits without notice, the three-year statute of limitations did
        not apply. See id.

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#26078

intends to deny coverage in whole or in part.” SDCL 62-7-35.3 Kendall, however,

argues that his claim was not barred under this statute because the January 11,

2008 letter was too ambiguous to notify him that Morrell was denying his claim

that he suffered RSD as a result of the work-related injury. Kendall further

contends that Morrell’s letter was insufficient to start the running of the statute of

limitations because the letter was not based upon a doctor’s medical opinion that

missing appointments and physical therapy caused or aggravated his RSD. Cf.

Faircloth v. Raven Indus., Inc., 2000 S.D. 158, ¶¶ 2, 8, 620 N.W.2d 198, 200-01

(holding employer’s denial notice, which was based upon a doctor’s medical opinion

disputing causation of the employee’s medical condition, triggered the statute of

limitations in SDCL 62-7-35).

[¶9.]         We conclude that the letter of January 2008 was not ambiguous. The

letter unequivocally stated that Morrell was “denying all further claims for

worker[s’] compensation benefits related to th[e] injury.” The letter left no doubt

that Morrell was denying coverage for any additional benefits related to the October

2007 injury unless Kendall filed a petition with the Department. We also conclude

that a doctor’s medical opinion is not necessary to start the running of the statute of

limitations. Although there was a medical opinion supporting the termination of


3.      SDCL 62-7-35 provides:

              The right to compensation under this title shall be forever
              barred unless a written petition for hearing pursuant to § 62-7-
              12 is filed by the claimant with the department within two years
              after the self-insurer or insurer notifies the claimant and the
              department, in writing, that it intends to deny coverage in whole
              or in part under this title. If the denial is in part, the bar shall
              only apply to such part.

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benefits in Faircloth, that case does not require that a letter giving notice of intent

to terminate benefits must be supported by a doctor’s medical opinion before the

statute of limitations begins to run. There is no language in SDCL 62-7-35 or

Faircloth supporting Kendall’s argument.

[¶10.]         Kendall also raises a number of arguments on the merits, asserting

that the underlying statutory basis for the January 11, 2008 termination of benefits

was not satisfied. More specifically, Kendall points out that the employer has the

burden of proof regarding misconduct. See SDCL 62-4-37.4 Kendall argues that

absent Morrell’s proof of misconduct under SDCL 62-4-37, the statute of limitations

in SDCL 62-7-35 does not apply. We disagree. Proof of misconduct is a

requirement of SDCL 62-4-37 that need be established only if a worker asserts a

timely claim. Because all of Kendall’s claims for benefits were procedurally barred

by the statute of limitations in SDCL 62-7-35, Morrell was not required to prove

misconduct under SDCL 62-4-37.




4.       SDCL 62-4-37 (2007) provided in part:

               No compensation shall be allowed for any injury or death due to the
               employee’s willful misconduct . . . . The burden of proof under this
               section shall be on the defendant employer.

         Under SDCL 62-4-37, no compensation is allowed for an injury caused by a
         claimant’s willful misconduct, including a claimant’s willful disregard of his
         physician’s advice. Fenner v. Trimac Transp., Inc., 1996 S.D. 121, 554
         N.W.2d 485, overruled on other grounds by Holscher v. Valley Queen Cheese
         Factory, 2006 S.D. 35, ¶ 48 n.2, 713 N.W.2d 555, 568 n.2.


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[¶11.]         Kendall also raises merits arguments under SDCL 62-4-43.5 Kendall

points out that SDCL 62-4-43 only authorizes benefit modifications for aggravations

of work injuries if the aggravation was caused by the employee’s failure to follow

reasonable medical treatment. Therefore, Kendall argues that even though Morrell

alleged that he failed to follow reasonable medical treatment, his benefits could be

modified but not terminated. Kendall further argues any alleged failure to follow

medical treatment did not cause an aggravation of his work injury. Kendall

contends that his RSD was caused by the original injury. Kendall finally argues

that SDCL 62-4-43 only gives “the Department” the authority to suspend, reduce, or

limit compensation. Kendall contends that SDCL 62-4-43 does not give an

employer or insurer the right to unilaterally modify benefits.

[¶12.]         We find no merit in Kendall’s arguments. We first observe SDCL 62-7-

35 does not require “the Department” to make a modification decision under SDCL

62-4-43 before SDCL 62-7-35 (the statute of limitations) applies. On the contrary,

SDCL 62-7-35 provides that all claims are barred unless a petition for hearing is

filed within two years of the time the “self-insurer or insurer notifies the claimant

and the [D]epartment, in writing, that it intends to deny coverage in whole or in

part under this title.” Therefore, the statute of limitations runs from the self-


5.       SDCL 62-4-43 (2007) provided in part:

               If the injured employee unreasonably refuses or neglects to avail
               himself of medical or surgical treatment, the employer is not
               liable for an aggravation of such injury due to such refusal and
               neglect and the Department of Labor may suspend, reduce or
               limit the compensation otherwise payable.

         (Emphasis added.)

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#26078

insurer’s or insurer’s written notice of intent to deny benefits, rather than from the

Department’s determination after hearing.

[¶13.]       We finally conclude that because Kendall did not file a timely petition

for hearing with the Department, he is barred from arguing that his current

condition is not an aggravation of his work injury caused by the failure to follow

medical treatment and that SDCL 62-4-43 allows modifications but not

terminations of benefits. Again, these are merits arguments relating to compliance

with SDCL 62-4-43. Such arguments may only be asserted by a claimant who files

a timely claim. Because Kendall did not file a timely claim for additional

compensation, he was procedurally barred from raising any merits arguments

under SDCL 62-4-43.

[¶14.]       We affirm the Department and circuit court’s conclusion that Kendall’s

petition for benefits was barred by the statute of limitations.

[¶15.]       GILBERTSON, Chief Justice, KONENKAMP, SEVERSON, and

WILBUR, Justices, concur.




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