#28255, #28266-a-DG
2018 S.D. 53

                           IN THE SUPREME COURT
                                   OF THE
                          STATE OF SOUTH DAKOTA


                                      ****
TAMMY LAGLER,                                Claimant and Appellee,

      v.

MENARD, INCORPORATED
and ZURICH AMERICAN
INSURANCE CO.,                               Defendants and Appellants.


                                      ****

                   APPEAL FROM THE CIRCUIT COURT OF
                      THE SIXTH JUDICIAL CIRCUIT
                     HUGHES COUNTY, SOUTH DAKOTA

                                      ****

                      THE HONORABLE MARK BARNETT
                                 Judge

                                      ****


SCOTT N. HEIDEPRIEM
KASEY L. OLIVIER of
Heidepriem, Purtell & Siegel LLP
Sioux Falls, South Dakota                    Attorneys for claimant and
                                             appellee.


J.G. SHULTZ of
Woods, Fuller, Shultz & Smith, P.C.
Sioux Falls, South Dakota                    Attorneys for defendants and
                                             appellants.


                                      ****
                                             CONSIDERED ON BRIEFS
                                             ON FEBRUARY 12, 2018
                                             OPINION FILED 07/03/18
#28255, #28266

GILBERTSON, Chief Justice

[¶1.]         Tammy Lagler suffered a workplace injury while employed by Menard

Inc. The South Dakota Department of Labor and Regulation awarded Lagler lump-

sum, permanent-total-disability compensation but denied her request for attorney’s

fees. On appeal, the circuit court affirmed the Department’s decision to award

compensation but reversed the decision to award it as a lump sum. The court also

reversed the Department’s denial of attorney’s fees. The parties each appeal

various aspects of the court’s decision. We affirm.

                          Facts and Procedural History

[¶2.]         On April 21, 2007, then-47-year-old Lagler injured her right ankle

while working in the garden center of the Sioux Falls Menards.1 While stepping off

a raised platform, Lagler lost her balance and landed on her right foot. She heard a

“pop” and felt a sharp pain on the inside of her right heel that extended up the back

of her leg to the inside of her knee. Lagler also suffered minor injuries to her knee

and elbow. Her ankle immediately swelled and was painful. Hours later, Lagler

sought medical care. A physician’s assistant (P.A.), Rodney Ridenour, examined

Lagler’s ankle and after ordering imaging, determined that the ankle was sprained

and not fractured. Several days later, Lagler was examined by Dr. Ronald Rossing,

who also diagnosed Lagler’s injury as a sprain. Dr. Rossing fit Lagler with a cast

shoe and advised several work restrictions: wear the cast shoe, limit stair climbing,

no lifting over 25 pounds, and no walking for longer than 45 minutes at a time.



1.      This opinion uses the name Menard to refer to the corporate entity Menard
        Inc., which is a party in this appeal. The name Menards is used to refer to
        the individual store where Lagler was employed.
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[¶3.]        Lagler continued to work at Menards. For its part, Menards

accommodated Lagler’s work restrictions. But Lagler continued to experience pain,

and on June 6, 2007, she consulted Dr. William Bell, a board-certified orthopedic

surgeon. Dr. Bell fit Lagler with a controlled-ankle-motion (CAM) boot and

requested approval for a bone scan, which was approved by Menard’s insurer,

Zurich American Insurance Co. On July 2, Dr. Bell reviewed the bone scan,

diagnosed Lagler with compression fractures in her right foot, and determined she

should continue wearing the CAM boot for another four weeks. By August 1, Lagler

was still experiencing significant pain even though new imaging showed “solid

union of her fractures.” Dr. Bell suspected the straps of the CAM boot were

responsible for Lagler’s continuing pain. Although Dr. Bell concluded Lagler could

safely transition out of wearing the boot, she continued to wear it.

[¶4.]        Lagler’s condition did not improve, but physical examination revealed

no objective reason for her pain. On September 5, 2007, writing in Lagler’s medical

records, Dr. Bell noted: “[Lagler] is in for follow-up on her foot pain. She’s really not

doing any better. She’s still complaining of a tremendous amount of kind of ankle,

hind foot, mid foot pain.” On September 24, after receiving Zurich’s approval, Dr.

Bell ordered magnetic resonance imaging (MRI) of Lagler’s right ankle and foot.

Based on the MRI, Dr. Bell determined that there were no abnormalities and that

Lagler’s ligaments and tendons were “intact without significant degenerative

change.” Unable to identify a cause of Lagler’s continuing pain, Dr. Bell referred

Lagler to another physician, with Zurich’s approval.




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[¶5.]        Lagler began seeing Dr. David Watts, another board-certified

orthopedic surgeon. On October 2, 2007, Lagler reported pain along her right

instep. Dr. Watts injected lidocaine, a local anesthetic, into Lagler’s posterior

tibialis tendon, and she experienced nearly total relief. But when Dr. Watts asked

Lagler to perform a single heel raise, she was not able to do so. Dr. Watts

diagnosed Lagler with posterior tibialis tendinitis and concluded it was related to

work. After conservative treatments were unsuccessful, Dr. Watts performed

surgery on Lagler to repair the tendon. During surgery, Dr. Watts discovered that

Lagler’s tendon was frayed. Dr. Watts concluded that because Lagler had

continuous pain in the same area since the April 2007 accident, her tendinitis and

subsequent surgery resulted from a work-related injury.

[¶6.]        Following surgery, Lagler was fitted with a progressive-weight-bearing

CAM boot for rehabilitation. But on April 30, 2008, only three months after

surgery, Lagler reported to P.A. Angela Majeres, who worked with Dr. Watts, that

she had a resurgence of pain and new tenderness along her Achilles tendon. On

June 2, Lagler returned to Dr. Watts and reported that while she no longer had

pain in her posterior tibialis tendon, she was experiencing new pain along her

Achilles tendon. Dr. Watts diagnosed her with Achilles tendinitis. He restricted

her to sedentary work only.

[¶7.]        Lagler continued to experience worsening and new pain. On July 30,

2008, Dr. Watts diagnosed Lagler with “Achilles tendinitis with retrocalcaneal

bursitis.” Retrocalcaneal bursitis is an inflammation of the bursa, which is a fluid-

filled sac located between the tendon and bone. Dr. Watts opined that the


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immediate cause of the inflammation was a congenital deformity in Lagler’s foot

known as “Haglund’s deformity,” which is a condition where the back of the heel

pokes into the soft tissue near the Achilles tendon. In Dr. Watts’s opinion, wearing

a CAM boot after the April 2007 injury caused Lagler to change her gait, which in

turn caused her congenital condition to become symptomatic. Thus, Dr. Watts

concluded that Lagler’s pain ultimately stemmed from her work-related injury. On

August 6, 2008, Dr. Watts sought approval from Zurich to perform a second surgery

on Lagler.

[¶8.]         Zurich assigned claims specialist Mary Lemieux to Lagler’s case.2

Lemieux’s notes indicate she contacted Dr. Watts’s office on August 6, 2008, to

request information on the proposed procedure. Viewing the delay as a refusal to

cover the second surgery, Lagler filed a petition for a hearing with the Department

on August 28. Lemieux’s notes during this time indicate she made several attempts

to obtain information from Dr. Watts’s office. On September 15, records indicate a

5.8-minute-long telephone call occurred between Lemieux and one of more than fifty

extensions at Dr. Watts’s office. Lemieux’s notes describe the September 15 call:

“Angie Roberts, Dr. Watts’ nurse, called me. We discussed the etiology of this. Can

be due to heels, i.e., pump bump but really it’s more of an idiopathic condition. Not

related to ankle injury. Is she then disabled due to the Haglund’s? Yes, not due to

the original injury.” Testimony would later establish, however, that not only was

this conversation not noted in Lagler’s records, nobody in Dr. Watts’s office is




2.      Lemieux had not been formally trained as a claims adjustor, nor did she have
        a background in medical diagnoses.
                                         -4-
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named “Angie Roberts.” On September 17, without completing either an

independent medical examination or an independent examination of Lagler’s

medical records, Zurich sent a fax to Dr. Watts’s office that officially denied

payment for Lagler’s second surgery. And on September 22, Zurich stopped all

disability payments to Lagler.

[¶9.]          On October 27, 2008, Lagler was examined by another orthopedic

surgeon, Dr. Eric Watson. Dr. Watson agreed with Dr. Watts’s diagnosis regarding

Haglund’s deformity and retrocalcaneal bursitis. Dr. Watson also concluded that

the surgery proposed by Dr. Watts would relieve Lagler’s pain, but Dr. Watson did

not express an opinion as to whether Lagler’s April 2007 injury caused her current

symptoms. Believing that Lagler was running out of nonsurgical options, Dr.

Watson recommended Lagler undergo a second surgery to correct her Haglund’s

deformity and to remove the inflamed bursa.

[¶10.]         After first denying coverage for a second surgery and terminating

compensation, Zurich then engaged Dr. Richard Farnham to conduct an

independent examination of Lagler’s medical records.3 Dr. Farnham did not

physically examine Lagler; instead, he reviewed the treatment records of P.A.

Ridenour and Drs. Rossing, Bell, Watts, and Watson. Dr. Farnham concluded that

Lagler’s April 2007 injury did not cause either her posterior tibialis tendinitis or her




3.       Dr. Farnham bills himself as a specialist in occupational medicine. Dr.
         Farnham is not board certified in occupational medicine, although he
         attempted to become so three times. He also started but failed to complete
         residency programs in both surgery and orthopedics.
                                           -5-
#28255, #28266

Haglund’s deformity. He also concluded that not even Lagler’s first ankle surgery

was causally related to the April 2007 injury.

[¶11.]       On February 11, 2009, Lagler accepted Dr. Watson’s recommendation,

and Dr. Watson performed the surgery on February 19. Following her second

surgery, Lagler initially reported that her condition was improving. But by the end

of April 2009, she complained of swelling in her foot. Dr. Watson directed Lagler to

engage in only sedentary work until July 15 and to work no more than 35 hours per

week as tolerable. Eventually, Lagler could not tolerate even 35 hours per week, so

on June 11, 2010, Dr. Watson changed the restriction to a maximum of 30 hours per

week. Dr. Watson also referred Lagler to Dr. Jerry Blow, another board-certified

physician. Dr. Blow evaluated Lagler on August 19 and reviewed her medical

records and Dr. Watts’s deposition. Dr. Blow agreed with Dr. Watts that Lagler’s

April 2007 injury was responsible for her posterior tibialis tendinitis and

retrocalcaneal bursitis.

[¶12.]       The financial and emotional impact of the foregoing on Lagler was

severe. While she continued to work throughout 2007, she had no income between

September 2008 and April 2009. And after returning to work, her physical

limitations reduced the number of hours she could work in a week and, therefore,

her income. Lagler did not have medical insurance, so when Zurich denied coverage

for the second surgery, she had to borrow money from family members and cash in

part of her retirement to make the down payment for the surgery. Zurich’s

termination of all workers’-compensation payments further reduced her ability to

meet her financial obligations. In February 2011, Lagler’s mortgagee foreclosed on


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her home. Lagler’s daughter offered her a home in Winner, South Dakota, and

Lagler accepted because of both her need for a home and the emotional support her

daughter could provide. Lagler terminated her employment with Menards on

April 11, 2011. After moving to Winner, Lagler begin seeing Dr. Teresa Marts, who

changed Lagler’s work restrictions to sedentary only.

[¶13.]       Lagler’s workers’-compensation claim came before the Department for

the first time on May 10, 2011. The parties agreed to bifurcate the proceedings. At

the May 10 hearing, the Department considered whether Lagler’s April 2007 injury

was a major contributing cause of her need for two ankle surgeries. The

Department issued a decision favorable to Lagler on September 9, 2011, concluding

that both surgeries were compensable. The Department entered factual findings

and legal conclusions on October 24. On February 3, 2012, the Department issued

an order awarding Lagler $22,096 in unpaid medical bills and prejudgment interest.

[¶14.]       On September 20, 2012, the Department held a second hearing. At the

second hearing, the Department considered whether Lagler was entitled to

permanent-total-disability (PTD) compensation. The Department issued a decision

favorable to Lagler on January 11, 2013. The Department admitted evidence that

the Social Security Administration found Lagler to be “disabled as of April 10,

2011.” The Department also found that Lagler did not purposefully leave the Sioux

Falls job market and that given her physical impairment, age, training, and

experience, she would not be able to find suitable, regular employment in Winner.

Also finding that Lagler is not a candidate for retraining, the Department concluded




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she is permanently and totally disabled under the odd-lot doctrine.4 The

Department entered factual findings and legal conclusions on February 11, 2013.

[¶15.]         On December 2, 2014, the Department held a third hearing. This

hearing addressed the questions whether Lagler was entitled to a lump-sum award

and attorney’s fees. At the hearing, P.A. Majeres—the only person named “Angie”

in Dr. Watts’s office who was also involved in Lagler’s care—testified but denied

even knowing who Lemieux was, let alone having told her that Lagler’s condition

was unrelated to the April 2007 injury. Lemieux did not testify at the hearing.

Even so, finding that Lemieux exercised “some diligence,” the Department

concluded that although Zurich’s decision to deny further compensation was

incorrect, it was not vexatious or without reasonable cause. The Department issued

a decision on April 29, 2015, granting Lagler’s request for a lump-sum award but

denying her request for attorney’s fees. The Department issued factual findings

and legal conclusions reflecting its decision on June 4. And on June 29, the

Department entered a final order, incorporating the June 4 factual findings and

legal conclusions. The Department awarded Lagler $526,768 in total.5

[¶16.]         On July 13, 2015, Menard and Zurich filed a notice of appeal to the

circuit court. They appealed the following: (1) the Department’s October 24, 2011




4.       The odd-lot doctrine “permits a finding of total disability for an injured
         claimant who, though able to work sporadically, cannot obtain regular
         employment and steady income and is thus considered an ‘odd lot’ in the
         labor market.” Odd-lot doctrine, Black’s Law Dictionary (10th ed. 2014).

5.       This amount included $111,158, with $90,038 interest, for temporary-total-
         disability compensation; $259,936 for permanent-total-disability
         compensation; and $40,160, with $25,476 interest, for unpaid medical bills.
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factual findings and legal conclusions; (2) the Department’s February 3, 2012 order;

(3) the Department’s February 11, 2013 factual findings and legal conclusions;

(4) the Department’s June 4, 2015 factual findings and legal conclusions; and (5) the

Department’s June 29, 2015 order. In a statement of issues filed the same day,

Menard and Zurich challenged both the award of compensation and the decision to

award it as a lump sum. Lagler did not file a notice of review, but on July 15, she

did file a statement of issues that challenged the Department’s denial of her request

for attorney’s fees.

[¶17.]        The circuit court heard the appeal on December 21, 2015. On

February 17, 2016, the court issued a decision affirming the Department’s decision

regarding causation and Lagler’s entitlement to compensation. However, the court

reversed the Department’s decision to award compensation as a lump sum. The

court also reversed the Department’s denial of attorney’s fees. The court remanded

the case back to the Department with instructions to recalculate the prejudgment

interest due and to award Lagler reasonable attorney’s fees under SDCL 58-12-3.

[¶18.]        On remand, additional problems arose on both issues. The parties

reached an agreement regarding the amount of prejudgment interest due. Despite

the parties’ agreement, the Department deviated from the stipulated amount of

$171,919 and instead awarded $156,691. And in the circuit court’s decision, the

court noted that Lagler “produced evidence of reasonableness of her attorney’s

fees[,]” which totaled $103,632. The court ordered those fees be reimbursed under

SDCL 58-12-3, but on remand, the Department instead awarded attorney’s fees




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under SDCL 62-7-36 in the amount of “30% of disputed amounts ($66,327.32) plus

costs and sales tax.” The Department issued a final order on June 6, 2016.

[¶19.]         On June 17, 2016, Lagler filed a notice of appeal to the circuit court.6

She appealed the following: (1) the Department’s April 29, 2015 decision; (2) the

Department’s June 4, 2015 factual findings, legal conclusions, and order; (3) the

Department’s June 29, 2015 order; and (4) the Department’s June 6, 2016 order. In

a statement of issues filed on June 21, 2016, Lagler challenged the Department’s

calculation of prejudgment interest and attorney’s fees. And although the court had

already rejected Lagler’s request for a lump-sum award in the first appeal, Lagler

challenged the Department’s denial of her request for a lump-sum award. Finally,

Lagler requested taxation of disbursements in the amount of $7,443. Menard and

Zurich filed a notice of review and statement of issues on July 6 addressing the

issue of attorney’s fees. For the first time in the history of this workers’-

compensation case, Menard and Zurich argued that because Lagler failed to file a

notice of review in the first appeal regarding the Department’s initial denial of her

request for attorney’s fees, neither the Department nor the circuit court had

jurisdiction over that matter after the Department’s initial decision.

[¶20.]         The circuit court considered the second appeal on October 4, 2016. The

court rejected Menard and Zurich’s jurisdictional argument and reaffirmed its

February 17, 2016 decision. The court affirmed the Department’s denial of Lagler’s

request for a lump-sum award. The court reversed the Department’s calculation of



6.       Due to a clerical error, this second appeal spawned a separate case number.
         The original case was filed as Civ. 15-153. The second appeal was filed as
         Civ. 16-134. The circuit court consolidated the two files.
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prejudgment interest and attorney’s fees. The court also denied Lagler’s request for

taxable disbursements. Instead of remanding, the court ordered Menard and Zurich

to pay Lagler the amount stipulated by the parties in regard to prejudgment

interest. The court also instructed the parties that it would resolve the attorney’s-

fees issue either by agreement of the parties or after further proceedings. On

January 20, 2017, Lagler submitted a motion to the circuit court that requested

attorney’s fees. After a hearing on March 20, the court issued an order on April 4

that awarded Lagler $144,824 in attorney’s fees.7

[¶21.]         Now before this Court, Menard and Zurich appeal the circuit court’s

April 4, 2017 order. By notice of review, Lagler appeals the court’s February 17,

2016 decision, its January 11, 2017 decision, and its April 4, 2017 order. The

parties raise the following issues:

               1.    Whether the circuit court erred by affirming the
                     Department’s decision to award Lagler permanent-total-
                     disability compensation.
               2.    Whether the circuit court erred by reversing the
                     Department’s decision to deny Lagler’s request for
                     attorney’s fees.
               3.    Whether the circuit court erred by reversing the
                     Department’s decision to award compensation to Lagler in
                     a lump sum.
               4.    Whether the circuit court erred by declining to tax
                     additional expenditures of Lagler’s.




7.       The circuit court awarded Lagler the $103,632 she requested before the first
         appeal. The court awarded an additional $41,192 as reasonable attorney’s
         fees for appellate and remand proceedings.
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                               Standard of Review

[¶22.]       The central issue in this appeal is the adjudication of Lagler’s right to

workers’ compensation, which occurred in a formal setting. Therefore, this appeal

is governed by South Dakota’s Administrative Procedures Act, SDCL chapter 1-26.

Questions of law are reviewed de novo. Dakota Trailer Mfg., Inc. v. United Fire &

Cas. Co., 2015 S.D. 55, ¶ 11, 866 N.W.2d 545, 548. Matters of reviewable discretion

are reviewed for abuse. SDCL 1-26-36(6). The agency’s factual findings are

reviewed under the clearly erroneous standard. SDCL 1-26-36(5). The agency’s

decision may be affirmed or remanded but cannot be reversed or modified absent a

showing of prejudice. SDCL 1-26-36. The same rules apply on appeal to this Court.

See Dakota Trailer Mfg., 2015 S.D. 55, ¶ 11, 866 N.W.2d at 548.

                              Analysis and Decision

[¶23.]       1.    Whether the circuit court erred by affirming the
                   Department’s decision to award Lagler permanent-
                   total-disability compensation.

[¶24.]       Menard and Zurich first argue Lagler is not entitled to PTD

compensation. They contend that Lagler failed to establish a causal connection

between her April 2007 injury and the need for her second ankle surgery. They also

contend that Lagler purposefully left the Sioux Falls job market and that

consequently, PTD compensation is precluded. Finally, they contend Lagler’s claim

was not supported by reliable expert testimony.

[¶25.]       In South Dakota, workers’ compensation for injury or death is

governed by SDCL chapter 62-4. A burden-shifting framework is used to establish

permanent, total disability. “An employee has the burden of proof to make a prima

facie showing of permanent total disability”—i.e., that “the employee’s physical
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condition, in combination with the employee’s age, training, and experience and the

type of work available in the employee’s community, cause the employee to be

unable to secure anything more than sporadic employment resulting in an

insubstantial income.” SDCL 62-4-53. If the employee makes this prima facie

showing, “[t]he burden then shifts to the employer to show that some form of

suitable work is regularly and continuously available to the employee in the

community. The employer may meet this burden by showing that a position is

available which is not sporadic employment resulting in an insubstantial

income . . . .” Id. “Even though the burden of production may shift to the

employer, . . . the ultimate burden of persuasion remains with the claimant.”

McClaflin v. John Morrell & Co., 2001 S.D. 86, ¶ 9, 631 N.W.2d 180, 183-84.

[¶26.]       The Department concluded that Lagler “made a prima facie showing

that she is obviously unemployable because of her physical condition, coupled with

her education, training, and age.” But Menard and Zurich contend Lagler cannot be

permanently, totally disabled because she had regular, suitable work available.

They claim that “in South Dakota, the absence of a medical opinion supporting a

complete release from work vitiates the right to disability benefits.” In their view,

“unless a doctor established reliable work restrictions that Menards could not

accommodate, Menard[] should have no exposure to additional disability benefits.”

Thus, because Menards accommodated the work restrictions established by Lagler’s

physicians, Menard and Zurich conclude there was a position available to Lagler:

her job at Menards in Sioux Falls.




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[¶27.]       Menard and Zurich’s argument fails to consider an important part of

SDCL 62-4-53. As noted above, permanent, total disability is determined by

examining the work available in the “employee’s community.” SDCL 62-4-53. The

word community is statutorily defined as “the area within sixty road miles of the

employee’s residence[.]” SDCL 62-4-52(1) (emphasis added). Lagler’s residence is in

Winner, which is more than 60 miles away from Sioux Falls. Therefore, the

availability of regular, suitable work in Sioux Falls is not relevant to the question

whether Lagler is permanently, totally disabled.

[¶28.]       Even so, an employee may not relocate simply to avoid available work.

An employee who “purposefully leaves the labor market” is not entitled to

permanent-total-disability compensation. See SDCL 62-4-53. The word purposeful

is defined as “[h]aving a purpose; intentional.” The American Heritage College

Dictionary 1111 (3d ed. 1997). The word purpose means “[t]he object toward which

one strives or for which something exists; an aim or a goal.” Id. The record makes

clear that Lagler did not move to Winner for the purpose of leaving the Sioux Falls

labor market; rather, leaving the Sioux Falls labor market was an incidental effect

of Lagler’s decision to avoid homelessness by accepting her daughter’s offer of a

replacement home. Lagler testified that at the time, she did not have enough

money to pay the deposit on an apartment, and so she thought her options were

limited to living in her car or moving into the home owned by her daughter. As the

Department noted, Zurich’s decision to terminate workers’ compensation “was at

least partially responsible for [Lagler’s] financial problems and her need to move.”




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[¶29.]       Menard and Zurich also contend that Lagler is required to produce

expert-opinion evidence to establish that she is “obviously unemployable” and that

she would not benefit from vocational rehabilitation. At the September 20, 2012

hearing, Lagler called Richard Ostrander, a vocational-rehabilitation counselor, to

testify. Ostrander testified that Lagler is “obviously unemployable” and that she is

not a candidate for vocational rehabilitation. During the appeal to the circuit court,

Menard and Zurich challenged the basis of Ostrander’s opinion that Lagler is

obviously unemployable. The court agreed, noting that Ostrander “admitted that he

did not review all of [Lagler’s] medical records, and those records that he did have,

were outdated.” The court further found that Ostrander was not aware of Dr.

Watson’s most recent work restriction nor the later restriction advised by Dr.

Marts. Thus, the court concluded that the Department’s reliance on Ostrander’s

opinion was erroneous.

[¶30.]       Regardless, the circuit court’s view of Ostrander’s opinion on Lagler’s

employability does not support Menard and Zurich’s argument. SDCL 62-4-53

requires an employee to make a prima facie showing of unemployability and to

“introduce evidence of a reasonable, good faith work search effort unless the medical

or vocational findings show such efforts would be futile.” (Emphasis added.) This

statute says nothing about requiring an expert opinion to meet this burden. The

record indicates that Dr. Marts advised Lagler to stay off her feet. The Department

found that Lagler “made a thorough search for work without success.” Lagler’s own

testimony during the September 20, 2012 hearing before the Department confirms

this. Lagler testified that she inquired about employment with upward of


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30 potential employers after moving to Winner. She also testified that for a time,

she worked 15–16 hours per week with Winner School District and another

12 hours per week at a real-estate agency. At the time of the hearing, Lagler was

employed by the hospital in Winner, but contrary to her physician’s

recommendation, the position required her to be on her feet most of the time.

[¶31.]         As for evidence of vocational rehabilitation, SDCL 62-4-53 does require

an employee to “introduce expert opinion evidence that the employee is unable to

benefit from vocational rehabilitation or that the same is not feasible.” (Emphasis

added.) As noted above, Ostrander testified at the September 20, 2012 hearing that

Lagler was not a candidate for vocational rehabilitation. Although Menard and

Zurich suggested Lagler could attend a local university, Ostrander testified that the

placement rate “[i]n the office practices and clerical areas that [the university]

offer[s] . . . is zero.”8 Ostrander further opined that he had been unable to find an

online training course that would be feasible for Lagler. While the circuit court set

aside Ostrander’s opinion on Lagler’s employability, the court’s reason for doing so

(i.e., Ostrander’s failure to review all of Lagler’s medical records) has little to do

with Ostrander’s opinion regarding Lagler’s prospects for vocational rehabilitation.

[¶32.]         The circuit court did not err by affirming the Department’s decision to

award Lagler PTD compensation. Because Lagler’s residence is in Winner, the

availability of employment opportunities in Sioux Falls is not relevant. Lagler did

not purposefully leave the Sioux Falls job market; her departure was an incidental




8.       The institution referred to is a four-year, private college, located over
         40 miles away from Winner in Mission, South Dakota.
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effect of finding replacement housing—a decision necessitated in part by Zurich’s

denial of all workers’ compensation. SDCL 62-4-53 does not require expert-opinion

evidence to establish either a prima facie showing of permanent, total disability or a

showing of a reasonable, good-faith-work-search effort. And Lagler did provide

expert-opinion evidence establishing that she is not a candidate for vocational

rehabilitation.

[¶33.]       2.     Whether the circuit court erred by reversing the
                    Department’s decision to deny Lagler’s request for
                    attorney’s fees.

[¶34.]       Next, Menard and Zurich argue that Lagler is not entitled to attorney’s

fees. They contend that Lagler failed to file a notice of review from the

Department’s initial decision and that consequently, the circuit court never had

jurisdiction over this issue. They further contend that even if the court had

jurisdiction, it erroneously set aside the Department’s finding that Zurich’s denial of

workers’ compensation was not vexatious. Lagler responds that filing a statement

of issues suffices to preserve an issue for review and that her failure to label the

statement a notice of review is a mere technicality. She also responds that Zurich

failed to properly investigate her entitlement to workers’ compensation.

[¶35.]       a.     Jurisdiction to review denial of attorney’s fees

[¶36.]       The preliminary question to answer on this issue is whether the circuit

court had appellate jurisdiction to review the Department’s decision to deny

attorney’s fees as expressed in its April 29, 2015 decision, its June 4 factual findings

and legal conclusions, and its June 29 order. Menard and Zurich contend that the

statement of additional issues Lagler filed regarding the attorney’s-fees issue

should not be considered a notice of review. They further contend that under Brown
                                         -17-
#28255, #28266

v. Douglas School District, 2002 S.D. 92, 650 N.W.2d 264, the failure to file a notice

of review is fatal to the circuit court’s jurisdiction over this issue. Lagler responds

that her statement of issues should be liberally construed as a notice of review

under International Union of Operating Engineers Local No. 49 ex rel. Maack v.

Aberdeen School District No. 6-1, 463 N.W.2d 843 (S.D. 1990) (per curiam). As

explained more fully below, although Lagler failed to file a notice of review, that

failure did not deprive the court of jurisdiction to review the Department’s decision

regarding attorney’s fees.

[¶37.]       Resolving this issue requires a review of the statutes governing

administrative appeals. “[A]ny party in a contested case” may appeal “a final

decision, ruling, or action of an agency” to circuit court. SDCL 1-26-30.2. A notice

of appeal is required to contain only four things: (1) the names of the parties; (2) the

name of the county to which the appeal is taken; (3) identification of the order or

decision being appealed; and (4) the signature of the appellant or her attorney.

SDCL 1-26-31.2. Within 10 days of filing the notice of appeal, the appellant must

file “a statement of the issues the appellant intends to present on the appeal[.]”

SDCL 1-26-31.4. Within 10 days of service of the appellant’s statement of issues, an

appellee may “file an additional statement of issues on appeal[.]” Id. And within

20 days of service of a notice of appeal, “[a]n appellee may obtain review of a final

decision, ruling, or action of any agency which may adversely affect him by filing a

notice of review with the clerk of the circuit court[.]” SDCL 1-26-36.1.

[¶38.]       Lagler contends her statement of additional issues should be

considered a notice of review under Maack. In that case, a school district denied a


                                          -18-
#28255, #28266

former employee’s request for reinstatement. Maack, 463 N.W.2d at 843. The

employee attempted to appeal by filing a document titled “request for conciliation.”

Id. at 843-44. The Department treated the document as a notice of appeal, and the

case proceeded without objection from the school district. Id. After the Department

held in favor of the employee, the school district appealed to the circuit court. Id.

On appeal, the school district argued that the form titled “request for conciliation”

was not a notice of appeal, and the court agreed. Id. Stating that “[n]otices of

appeal should be liberally construed in favor of their sufficiency[,]” this Court

reversed: “[U]nder the unique facts of this case, the text of the request filed by

Maack was intended to be a notice of appeal, was treated as a notice of appeal by all

parties involved, and constituted a notice of appeal . . . .” Id.

[¶39.]       Lagler’s reliance on Maack is misplaced. In contrast to the request for

conciliation at issue in Maack, there is no ambiguity as to what Lagler intended

when she filed her statement of additional issues. Lagler filed a document titled

“Claimant’s additional statement of issues on appeal.” (Emphasis added.) Unlike a

“request for conciliation,” a “statement of issues on appeal” is the exact name of a

document specifically identified in SDCL 1-26-31.4. Indeed, the first line of text in

Lagler’s document states that she filed it “[p]ursuant to SDCL 1-26-31.4” (the

statement-of-issues provision)—not SDCL 1-26-36.1 (the notice-of-review provision).

Lagler provides no other reason to conclude that when she filed a statement of

issues pursuant to SDCL 1-26-31.4, she really intended to file a notice of review

pursuant to SDCL 1-26-36.1.




                                           -19-
#28255, #28266

[¶40.]       As Menard and Zurich correctly point out, this Court has previously

taken a strict view of a party’s failure to file a notice of review. In Brown, a school-

district employee appealed the Department’s denial of PTD compensation.

2002 S.D. 92, ¶ 8, 650 N.W.2d at 267. Seeking review of “the Department’s denial of

a willful misconduct defense and award of benefits for an impairment rating[,]” the

school district filed a statement of additional issues. Id. ¶ 31, 650 N.W.2d at 272.

However, the school district did not attempt to file a notice of review until more

than 20 days after the appellant filed her notice of appeal. Id. Rejecting the notice

of review as untimely, the court concluded it “was without jurisdiction to hear the

issues the [s]chool sought to have reviewed.” Id. On appeal, this Court agreed that

even though the school board timely filed its statement of additional issues, the

failure to file a notice of review within 20 days of the notice of appeal was fatal to

reviewing the issues raised in that statement. Id. ¶ 32, 650 N.W.2d at 272-73.

[¶41.]       However, cases like Brown conflate concepts of jurisdiction and issue

waiver by suggesting that a court obtains jurisdiction to review issues. Id. ¶ 31,

650 N.W.2d at 272; see also, e.g., Whitesell v. Rapid Soft Water & Spas, Inc.,

2014 S.D. 41, ¶ 10, 850 N.W.2d 840, 842 (“Such failure to file a notice of review

precludes appellate review of that issue.” (emphasis added)); Schuck v. John Morrell

& Co., 529 N.W.2d 894, 897 (S.D. 1995) (“An issue is not properly preserved for

appeal when a party fails to file a notice of review . . . .” (emphasis added)). As

SDCL chapter 1-26 makes clear, parties do not appeal issues—they appeal final

decisions, rulings, or actions of an agency. SDCL 1-26-30.2, -36.1. And once a

notice of appeal specifying such a decision, ruling, or action has been filed and


                                          -20-
#28255, #28266

noticed, jurisdiction is immediately conferred on the court to review that decision,

ruling, or action. Fair v. Nash Finch Co., 2007 S.D. 16, ¶ 8, 728 N.W.2d 623, 628

(“[J]urisdiction is conferred by the filing of the notice of appeal . . . .”); see also Stark

v. Munce Bros. Transfer & Storage, 461 N.W.2d 587, 589 (S.D. 1990) (“[T]he notice

of appeal serves as a notice of transfer of jurisdiction from the executive branch to

the judicial branch.”). Thus, if an appellant files a notice of appeal identifying a

particular decision, ruling, or action, filing a notice of review identifying the same

would serve no purpose—the court’s jurisdiction would have already been

established by the filing of the notice of appeal.

[¶42.]        Once the circuit court’s jurisdiction to review a particular decision,

ruling, or action has been established—either through the filing of a notice of appeal

or a notice of review—the question then becomes one of issue waiver. As indicated

above, the appellant must file a statement of the issues to be presented on appeal,

and the appellee may file such a statement as well. SDCL 1-26-31.4. In other

words, once jurisdiction is established, the parties must preserve their arguments

for review by stating their reasons why the agency decision, ruling, or action

identified as the object of the appeal should be reversed or modified. While the

failure to specify a decision, ruling, or action in a notice of appeal or notice of review

results in a lack of jurisdiction to review the same, the failure to file a statement of

issues results in a waiver of argument. And while either lack of jurisdiction or

waiver of argument results in a denial of relief on appeal, they do so in

fundamentally different ways (a lack of jurisdiction—which may be raised at any




                                            -21-
#28255, #28266

time—is a mandatory restraint on the court’s power to act, but waiver is a restraint

on a party’s arguments that gives a court discretion to disregard them).

[¶43.]       In light of the foregoing, Lagler’s failure to file a notice of review did

not deprive the circuit court of jurisdiction to review the Department’s denial of

Lagler’s request for attorney’s fees. The Department denied her request in its

April 29, 2015 decision, its June 4 factual findings and legal conclusions, and its

June 29 order, each of which Menard and Zurich specifically identified in their

notice of appeal as agency actions they sought to have reviewed. Therefore, under

SDCL 1-26-30.2, the circuit court obtained jurisdiction to review the Department’s

decision to deny attorney’s fees upon Menard and Zurich’s filing the notice of

appeal, see Fair, 2007 S.D. 16, ¶ 8, 728 N.W.2d at 628, and Lagler’s statement of

issues preserved her argument regarding that agency action for review.

Consequently, the court did not err by reviewing the Department’s denial of Lagler’s

request for attorney’s fees.

[¶44.]       b.     Merits of decision to deny attorney’s fees

[¶45.]       Turning to the merits of the attorney’s-fees issue, Menard and Zurich

next contend the circuit court erroneously set aside the Department’s finding that

Zurich’s denial of workers’ compensation was not vexatious. Lagler asked the

Department to award her attorney’s fees under SDCL 58-12-3. Under that statute,

the Department is required to award attorney’s fees

             [i]n all actions or proceedings . . . commenced against any . . .
             insurance company, . . . on any policy or certificate of any type or
             kind of insurance, if it appears from the evidence that such
             company or exchange has refused to pay the full amount of such
             loss, and that such refusal is vexatious or without reasonable
             cause[.]

                                          -22-
#28255, #28266

SDCL 58-12-3. An insurer has a “duty to conduct a good-faith investigation of [a]

claim[.]” Eldridge v. Nw. G.F. Mut. Ins. Co., 88 S.D. 426, 434, 221 N.W.2d 16, 21

(1974). Thus, if an insurer refuses coverage after making “an inadequate

investigation” of a claim, such refusal is “without reasonable cause.” Id. An

agency’s determination of whether a refusal is “vexatious or without reasonable

cause is a finding of fact and thus will not be reversed unless . . . clearly erroneous.”

Kern v. Progressive N. Ins. Co., 2016 S.D. 52, ¶ 32, 883 N.W.2d 511, 518.

[¶46.]       In this case, the Department found that Zurich had reasonable cause

to deny coverage of Lagler’s claim. The Department based its finding on the

September 15, 2008 conversation noted in Lemieux’s claim notes. That note states:

             angie roberts, dr. watts nurse called me. we discussed the
             etiology of this. can be due to heels, ie [sic] pump bump but
             really ti’s [sic] more of an idiopathic condition. not related to
             ankle injury. is she then disabled due to hte [sic] haglund’s?
             yes, not due to the original injury.

In regard to Lemieux’s note, the Department said:

             We do not know with whom Lemieux spoke during that
             conversation. It was not Dr. Watt’s [sic] Physician Assistant,
             Angela Majeres, who probably knew more about Lagler’s case
             than anyone else in the office other than Dr. Watts. It is more
             likely than not that it was with a nurse in the office because the
             claim entry indicates that it was a nurse. Despite the fact that
             the name of the individual indicated by Lemieux’s entry is
             incorrect, does not lead to the inevitable fact that notation of the
             rest of the conversation was false or fabricated.
             Indeed, the Department believes that the substance of the
             conversation was much as described in Lemieux’s claims entry.
             She knew nothing about the condition prior to the phone
             conversation. In addition, some of the details in the claims
             entry are correct in a general sense, despite the facts that some
             of the particulars did not apply in Lagler’s case. For example,
             the bursitis is sometimes caused by heels or pumps and the
             cause is sometimes idiopathic. ·


                                          -23-
#28255, #28266

             While the nurse may have been speaking in general terms
             rather than the specifics of Lagler’s case, the Department finds
             that this conversation was a legitimate basis for Lemieux’s
             denial. Therefore, the Insurer’s denial of Lagler’s second
             surgery was neither vexatious nor with[out] reasonable cause.

On appeal, the circuit court concluded that the Department’s reasonable-cause

finding regarding Zurich’s denial of coverage was clearly erroneous.

[¶47.]       A complete review of the record supports the circuit court’s conclusion.

First, the veracity of Lemieux’s note is dubious at best. Lemieux did not testify in

person before the Department; rather, her testimony was presented as a deposition.

Even though a favorable medical opinion could have absolved Zurich of

responsibility for Lagler’s second surgery, Lemieux failed to accurately identify the

source of her information. There is no “Angie Roberts” in Dr. Watts’s office, and the

only person named “Angie” that would have any knowledge of Lagler’s case is

Angela Majeres, who is a P.A., not a nurse. Not only did P.A. Majeres testify that

she never spoke to Lemieux, Lagler’s medical records do not indicate that anyone

from Dr. Watts’s office discussed her condition with Lemieux. Moreover, Lemieux’s

claim that somebody from Dr. Watts’s office told her that Lagler’s symptoms were

unrelated to the April 2007 injury requires believing that this unidentified nurse

would directly contradict Dr. Watts’s explicit medical opinion. In a note dated

July 30, 2008, Dr. Watts opined that Lagler’s symptoms were “sustained from a

work comp related injury.” And then on August 6, Dr. Watts indicated in another

note that Lagler described her “pain in her heel area to be present since her initial

injury at work back in . . . April 2007.”

[¶48.]       Even if it is assumed that an unidentified nurse called Lemieux on

September 15, 2008; that the nurse gave a medical opinion contradicting Dr.
                                       -24-
#28255, #28266

Watts’s; and that against office policy, the nurse failed to note the conversation in

Lagler’s file; such would be insufficient to establish that Lemieux fulfilled her duty

to conduct a good-faith investigation. Relying on the opinion of even a physician is

not per se reasonable. See Mordhorst v. Dakota Truck Underwriters & Risk Admin.

Servs., 2016 S.D. 70, ¶¶ 12-14, 886 N.W.2d 322, 325-26 (discussing reasonableness

in context of tort action alleging bad-faith denial of benefits). And regardless of

what the unidentified nurse said, Lemieux necessarily knew that Dr. Watts

submitted a request to Zurich to pay for the second surgery, which should have

strongly suggested to Lemieux that Dr. Watts considered Lagler’s symptoms to be

related to the workers’-compensation claim. At the very least, then, Lemieux

should have investigated further. Yet, Lemieux did not obtain an independent

medical examination of Lagler. Nor did Lemieux obtain an independent review of

Lagler’s medical records prior to denying coverage. So despite the medical opinion

of Lagler’s treating physician, Dr. Watts, and without a contrary opinion from any

other physician, Lemieux—who does not have medical training—decided to deny

coverage for Lagler’s second surgery and to terminate all workers’ compensation.

[¶49.]       The foregoing is sufficient to create “a definite and firm conviction”

that the Department made a mistake. Moulton v. Moulton, 2017 S.D. 73, ¶ 6,

904 N.W.2d 68, 71 (quoting Aguilar v. Aguilar, 2016 S.D. 20, ¶ 9, 877 N.W.2d 333,

336). Even if Lemieux acted with “some diligence,” her conduct fell far short of a

good-faith investigation of Lagler’s claim. See Lewis v. State Dep’t of Transp.,

2003 S.D. 82, ¶¶ 7, 9, 30-36, 667 N.W.2d 283, 286-87, 291-92 (concluding denial of

coverage unreasonable where adjuster failed to obtain medical opinions, review


                                          -25-
#28255, #28266

documentary evidence, or otherwise investigate prior to decision). Therefore, the

circuit court correctly concluded that the Department’s reasonable-cause finding is

clearly erroneous, and Lagler was entitled to attorney’s fees.

[¶50.]       3.     Whether the circuit court erred by reversing the
                    Department’s decision to award compensation to
                    Lagler in a lump sum.

[¶51.]       Next, Lagler argues she is entitled to receive workers’ compensation in

a lump sum. Generally, awarding workers’ compensation in a lump sum is

disfavored. Stuckey v. Sturgis Pizza Ranch, 2011 S.D. 1, ¶ 7, 793 N.W.2d 378, 382.

But as an exception, SDCL 62-7-6 authorizes the lump-sum payment of unpaid

workers’ compensation if such is “in the best interests of the employee[.]” To qualify

for a lump-sum payment of PTD compensation, an employee must also demonstrate

that she “has exceptional financial need that arose as a result of reduced income

due to the injury” or that a lump-sum payment is “necessary to pay the attorney’s

fees, costs and expenses approved by the department under § 62-7-36.” SDCL 62-7-

6. In any event, “any awards of lump sum payments must be made in accordance

with the goal of preserving future wage replacement benefits.” Thomas v. Custer

State Hosp., 511 N.W.2d 576, 581 (S.D. 1994).

[¶52.]       The first question, then, is whether a lump-sum payment is in Lagler’s

best interest. This Court has previously identified several factors that weigh on the

question of best interests:

             1. Age, education, mental and physical condition, and actual life
                expectancy.
             2. Family circumstances, living arrangements, and
                responsibilities to dependents.
             3. Financial condition, including all sources of income, debts
                and living expenses.
                                         -26-
#28255, #28266

               4. Reasonableness of plan for investing the lump sum proceeds
                  and ability to manage invested funds or arrangement for
                  management by others.

Steinmetz v. State, DOC Star Academy, 2008 S.D. 87, ¶ 11, 756 N.W.2d 392, 396-97

(quoting Enger v. FMC, 2000 S.D. 48, ¶ 13, 609 N.W.2d 132, 135). Lagler is

58 years old, is in relatively good health, has a life expectancy of 83, and still has

several years before she could begin receiving Social Security retirement benefits at

age 62. She has a high-school diploma, and she attended cosmetology school. She

does not have any dependents to support, and because she is living in a home owned

by her daughter, Lagler is no longer in danger of losing her home. Due in part to

the circumstances of this case, Lagler has several debts, including creditor

judgments totaling several thousand dollars, loans from family members totaling at

least $10,000, and unpaid medical bills totaling $40,160. Lagler’s most current

financial data at the time of the third hearing before the Department indicated that

her annual income was approximately $21,000.9 She contends that she has an

investment plan that will “sustain her for several years.”

[¶53.]         While the Department granted Lagler’s request for a lump-sum award,

the circuit court reversed for three reasons. Although the court recognized the

debts that Lagler has accumulated, the court pointed out that Lagler is entitled to

nearly $200,000 in past-due temporary-total-disability (TTD) compensation. As the

court noted, “immediate payment of past due temporary total disability of nearly

$200,000 will cover the judgments and debts [Lagler] owes, and may even pay for a




9.       Lagler’s brief indicates that in 2013, she received $7,897 in wages and
         $13,261 in Social Security disability payments.
                                            -27-
#28255, #28266

home in Winner.” The court was also skeptical of Lagler’s investment plan. The

court found that Lagler’s “plan does not contemplate cost of living adjustments” or

“secure funds from unplanned withdrawals so as to prevent sudden dissipation of

funds.” And finally, the court was concerned about the effect a lump-sum award

might have on Lagler’s eligibility for Social Security disability benefits. In her brief

to this Court, Lagler does not address any of the court’s three concerns.

[¶54.]        The circuit court did not err by reversing the Department’s decision to

award Lagler a lump-sum payment. None of the factors listed above, see supra

¶ 52, supports a lump-sum award. Considering Lagler’s health and life expectancy,

her PTD compensation will need to serve as a substitute for wages for decades to

come, but because of the problems highlighted by the court, her proposed

investment plan does not guarantee the same longevity. Lagler does not have any

dependents, and she now has stable housing. Moreover, the amount Lagler will

receive in past-due TTD payments will cover her existing debts and other

immediate needs. And because Lagler is entitled to recover her attorney’s fees, she

will not have those to worry about either. Thus, as the circuit court concluded,

“[c]onsidering the payment of TTD to cover [Lagler’s] debts and purchase a home,

the shortcomings of the investment plan, and the unknown effect on her social

security disability, a lump-sum payment of PTD benefits is not in [Lagler’s] best

interests.”




                                          -28-
#28255, #28266

[¶55.]         4.    Whether the circuit court erred by declining to
                     award additional costs to Lagler.

[¶56.]         Finally, Lagler claims the circuit court erred in denying her request to

tax additional disbursements under SDCL 15-17-37 in the amount of $7,443 to

Menard and Zurich.10 Lagler devotes three sentences to this issue. She does not

offer any details on these disbursements or explain whether they fall within the

narrow scope of SDCL 15-17-37. She does not explain the circuit court’s decision,

let alone offer argument and analysis as to how that decision is erroneous. And

aside from generally citing SDCL 15-17-37, Lagler does not offer any supporting

authorities. Appellate briefs must “contain the contentions of the party with

respect to the issues presented, the reasons therefore, and the citations to the

authorities relied on.” SDCL 15-26A-60(6). Therefore, an issue that is not

supported by argument and authority is waived. See id.; State v. Stanley, 2017 S.D.

32, ¶ 12, 896 N.W.2d 669, 675.

[¶57.]         Even if Lagler had presented argument and authority on this issue,

the record supports the circuit court’s denial of Lagler’s request. Of the $7,443 that

Lagler requested after the second appeal, $6,620 was incurred prior to the trial

before the Department. In those initial proceedings, Lagler already requested the

Department tax those costs as disbursements against Menard and Zurich. The

Department denied Lagler’s request. It is undisputed that Lagler did not appeal




10.      SDCL 15-17-37 permits “[t]he prevailing party in a civil action or special
         proceeding [to] recover expenditures necessarily incurred in gathering and
         procuring evidence or bringing the matter to trial.”
                                           -29-
#28255, #28266

that decision. Therefore, in regard to $6,620 of the $7,443, Lagler failed to preserve

this issue for appeal.

[¶58.]       The remaining $823 of Lagler’s request relates to costs incurred during

appellate and remand proceedings. The taxation of disbursements under SDCL 15-

17-37 is a matter of discretion. DeHaven v. Hall, 2008 S.D. 57, ¶ 48, 753 N.W.2d

429, 444. “The authority to tax [disbursements] should not be implied, but must

rest upon a clear legislative grant of power to do so.” Id. ¶ 41, 753 N.W.2d at 442

(quoting In re Estate of O’Keefe, 1998 S.D. 92, ¶ 18, 583 N.W.2d 138, 142). Thus,

this Court has “urged courts to use cautious restraint and allow only those

disbursements ‘specifically authorized by SDCL 15-17-37.’” DeHaven, 2008 S.D. 57,

¶ 48, 753 N.W.2d at 444 (quoting Lewis v. Aslesen, 2001 S.D. 131, ¶ 10, 635 N.W.2d

744, 747). Heeding this Court’s warning, the circuit court noted that while

SDCL 15-17-37 authorizes “expenditures necessarily incurred in gathering and

procuring evidence or bringing [a] matter to trial[,]” it does not authorize

expenditures incurred during appeal or remand proceedings. (Emphasis added.)

Given this Court’s narrow view of taxable disbursements, the court’s decision to

deny Lagler’s request for taxation of expenditures made on appeal and remand was

not an abuse of discretion.

                                     Conclusion

[¶59.]       The circuit court did not err by affirming the Department’s decision to

award Lagler permanent-total-disability compensation. Nor did the court err by

reversing the Department’s decision to deny Lagler’s request for attorney’s fees.

The court correctly determined that Lagler was not entitled to a lump-sum award.


                                          -30-
#28255, #28266

Finally, the court did not err by denying Lagler’s request for taxation of

expenditures.

[¶60.]       We affirm.

[¶61.]       ZINTER and JENSEN, Justices, concur.

[¶62.]       SEVERSON, Retired Justice, and KERN, Justice, concur in part and

concur in result in part.



SEVERSON, Retired Justice (concurring in part and concurring in result in part).

[¶63.]       Although I agree that, in this case, Lagler’s “community” is Winner

rather than Sioux Falls, I do not believe this Court should broadly state that “the

availability of regular, suitable work in Sioux Falls is not relevant to the question

whether Lagler is permanently, totally disabled.” Majority Opinion ¶ 27. Indeed,

the word community is defined as “the area within sixty road miles of the

employee’s residence,” and Lagler lives in Winner, which is not within 60 miles of

Sioux Falls. See SDCL 62-4-52(1). But it is important to highlight that Lagler did

not seek to recover permanent total disability benefits during the time she resided

in Sioux Falls. Had she claimed entitlement to permanent total disability benefits

from the date of her injury, Lagler would have been required to make a prima facie

showing “in the community in which she resided when injured to recover for that

period.” See Reede v. S.D. Transp., 2000 S.D. 157, ¶ 18, 620 N.W.2d 372, 376. As

we recognized in Reede, “[a]n entitlement to benefits in a single community, based

on an inability to secure anything more than sporadic employment, does not allow a

claimant to recover benefits for periods outside that community.” Id. ¶ 20.


                                         -31-
#28255, #28266

[¶64.]       Further, although I agree that there are limits to an employee’s right

to relocate and receive workers’ compensation, see Majority Opinion ¶ 28, this case

does not concern whether Lagler purposefully left the labor market as used in SDCL

62-4-53. Under the burden-shifting framework in SDCL 62-4-53, Lagler had to

make a prima facie showing that her “physical condition, in combination with [her]

age, training, and experience and the type of work available in [her] community,

cause [her] to be unable to secure anything more than sporadic employment

resulting in an insubstantial income.” (Emphasis added.) The question whether an

employee purposefully leaves a labor market comes into play after the employee

makes a prima facie showing and after the employer “shows that some form of

suitable work is regularly and continuously available to the employee in the

community[.]” See id.

[¶65.]       Therefore, the proper inquiry is whether Lagler’s “change of

community was done in good faith, and not for improper motives[.]” Reede, 2000

S.D. 157, ¶ 20, 620 N.W.2d at 376. Indeed, the record reveals that the Department

examined Lagler’s motive and whether the move was done in good faith. It

concluded that Lagler’s move to Winner “was done in good faith and not to

withdraw from the Sioux Falls job market or to collect workers’ compensation

benefits.” The Department found: (1) Lagler’s “move provided her with a place to

live and the emotional support she needed at the time from her family”; (2) Lagler

was not required to enter bankruptcy before choosing to move; (3) Lagler was not

required to sacrifice her safety and comfort; and (4) Lagler was not required to

explore all options that would allow her to stay in Sioux Falls before she chose to


                                         -32-
#28255, #28266

move to Winner. Because the Department examined whether Lagler’s move to

Winner was done in good faith and not for improper motives, and Menard has not

established that the Department’s findings are clearly erroneous, I would affirm the

Department’s conclusion that Lagler’s “community” is Winner.

[¶66.]       Nevertheless, Menard also claims that the Department erred when it

concluded that Lagler is obviously unemployable in her community. On this claim,

the Majority Opinion declares that “SDCL 62-4-53 requires an employee to make a

prima facie showing of unemployability and to ‘introduce evidence of a reasonable,

good faith work search effort unless the medical or vocational findings show such

efforts would be futile.’” Majority Opinion ¶ 30. But Lagler was not required to

prove that she made a reasonable, good faith effort to find employment because the

Department found that Lagler is obviously unemployable. See Kassube v. Dakota

Logging, 2005 S.D. 102, ¶ 34, 705 N.W.2d 461, 468 (“[I]f the claimant is ‘obviously

unemployable,’ he will not bear the burden of proving ‘that he made reasonable

efforts to find employment in the competitive market.’” (quoting Petersen v. Hinky

Dinky, 515 N.W.2d 226, 232 (S.D. 1994)).

[¶67.]       Thus, to address Menard’s claims, the inquiry on appeal is whether the

Department erred when it held that Lagler is obviously unemployable. This Court

has said that a “claimant has two avenues to make the required prima facie

showing for inclusion in the odd-lot category[.]” Fair v. Nash Finch Co., 2007 S.D.

16, ¶ 19, 728 N.W.2d 623, 632. First, a claimant may show “obvious

unemployability” by: “(1) showing that his ‘physical condition, coupled with his

education, training and age make it obvious that he is in the odd-lot total disability


                                         -33-
#28255, #28266

category,’ or (2) persuading the trier of fact that he is in fact in the kind of

continuous, severe and debilitating pain which he claims.” Id. (quoting Kassube,

2005 S.D. 102, ¶ 34, 705 N.W.2d at 468). Here, Lagler showed obvious

unemployability under the first avenue.

[¶68.]        “[I]f the claimant is obviously unemployable, then the burden of

production shifts to the employer to show that some suitable employment is actually

available in claimant’s community for persons with claimant’s limitations.” Id.

(emphasis added). The Department found that Menard did not meet its “burden of

showing that work is regularly and continuously available to [Lagler] in the Winner

area.” (Emphasis added.) Although Menard claims Lagler is not obviously

unemployable, it bases its argument on the fact that regular and continuous

employment is available to Lagler in Sioux Falls. Menard’s argument ignores that

Lagler’s “community” under SDCL 62-4-53 is Winner.

[¶69.]        Because Menard has not established that the Department erred when

it held that Lagler showed that her physical condition, coupled with her education,

training, and age, made it obvious that she is unemployable in Winner, we need not

examine whether Lagler engaged in a reasonable, good faith search for work in

Winner. (See, e.g., Majority Opinion ¶ 30). We similarly need not examine

Menard’s claim that Lagler was required to produce expert testimony that she is

unable to benefit from vocational rehabilitation or that the same is not feasible.

(See, e.g., Majority Opinion ¶ 31). For these reasons, I concur in result only on issue

one.




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[¶70.]         On issue two, I also concur in result only. I agree that the circuit court

had subject matter jurisdiction over the Department’s decisions, rulings, and actions

because of Menard’s notice of appeal from the same. However, based on a reading

of the statutes governing administrative appeals and this Court’s past cases, an

appellee’s filing of a statement of additional issues under SDCL 1-26-31.4 does not

preserve the appellee’s right to obtain review. Majority Opinion ¶ 43. This is true

even if this Court has in the past called it a jurisdictional defect instead of issue

waiver.

[¶71.]         SDCL 1-26-30 gives “[a] person who has exhausted all administrative

remedies available within any agency or a party who is aggrieved by a final decision

in a contested case” the right “to judicial review under this chapter.” The plain

language of this statute is not limited to one or another party. More specifically,

“[a]n appeal shall be allowed in the circuit court to any party in a contested case

from a final decision, ruling, or action of an agency.” SDCL 1-26-30.2. Again, the

statute does not limit the right to appeal to a particular party—it is a right given to

“any party.”

[¶72.]         In regard to how an appeal may be taken by an appellant, SDCL 1-26-

31 outlines the timing and filing requirements. An appellant must file a notice of

appeal within 30 days of service of the agency decision, ruling, or action. Id. Then,

if an appellee wishes to obtain review of an agency decision, ruling, or action, the

appellee must file a notice of review within 20 days of service of the appellant’s

notice of appeal. SDCL 1-26-36.1. Running within these time requirements, the

appellant has ten days after filing its notice of appeal to file a statement of issues


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and the appellee has 10 days after service of the appellant’s statement of issues to

file a statement of additional issues. SDCL 1-26-31.4. Considering these time

requirements together, the appellee would be filing its notice of review and

statement of additional issues on the same day.

[¶73.]       We have said that an appellant’s failure to file a statement of issues is

not a jurisdictional defect so long as the appellant has timely filed a notice of

appeal. But we have never said that an appellee’s filing of a statement of additional

issues preserves the right to obtain review despite the appellee’s failure to file a

notice of review. Indeed, in a similar context, an appellee’s failure to file a notice of

review to the Supreme Court waives the appellee’s issue for review. SDCL 15-26A-

22.

[¶74.]       To conclude, as the Majority Opinion has, that an appellee need not

comply with SDCL 1-26-36.1 so long as the appellant’s notice of appeal identifies the

same “order or decision from which the appeal is taken” unnecessarily creates new

law. Majority Opinion ¶ 43. Here, the circuit court had subject-matter jurisdiction

to consider the attorney fee issue, and the court addressed the merits of the issue

without objection from Menard. Menard knew Lagler intended to challenge the

attorney fees issue and knew that Lagler did not file a notice of review.

Nevertheless, Menard fully briefed and argued the issue in response to Lagler’s

briefing and argument. More importantly, Menard did not object until after the

circuit court decided the merits of the issue, issued a decision remanding the case,

and the Department issued a new order.




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[¶75.]       More specifically, the record reveals that in June 2015, the

Department issued findings of fact and conclusions of law denying Lagler’s request

for an award of attorney fees. Menard appealed the Department’s decision to the

circuit court. Lagler did not file a notice of review in response to Menard’s appeal

but submitted a statement of additional issues and asserted that the Department

erred when it denied Lagler’s request for an award of attorney fees. Lagler then

briefed the issue to the circuit court. Menard responded to Lagler’s argument in its

reply brief. Menard did not allege that Lagler failed to file a notice of review and

thus waived the right to obtain review. Instead, Menard fully briefed and argued

against Lagler’s claims.

[¶76.]       In February 2016, the circuit court issued a memorandum decision

addressing the issues raised by Menard and Lagler. On Lagler’s attorney fee issue,

the court held that Lagler “is entitled to have her attorneys’ fees paid by

Employer/Insurer.” After addressing all issues, the circuit court affirmed the

Department’s decision in part, reversed in part, and remanded in part. Following

remand, the Department issued a decision. In addition to addressing other matters

on remand, the Department entered an order awarding Lagler attorney fees at “30%

of the disputed amount ($66,327.32) plus costs and sales tax.” Lagler appealed the

Department’s June 2016 Order Following Remand as well as the Department’s

previous orders entered prior to the first appeal. In her statement of issues to the

circuit court, Lagler asserted, among other issues, that “Department erred in its

application of law and/or calculation of the amount of attorney fees and expenses

awarded to Claimant pursuant to SDCL 58-12-3 in the Order Following Remand.”


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[¶77.]       In July 2016, Menard, for the first time, challenged the circuit court’s

jurisdiction to consider Lagler’s attorney fee issue. Menard filed a motion to dismiss

Lagler’s appeal, claiming that because Lagler failed to file a notice of review in the

previous appeal to the circuit court after the Department’s June 2015 decision,

Lagler failed to preserve the issue for the circuit court’s review. See SDCL 1-26-

36.1. Lagler conceded that she did not file a notice of review in the previous appeal.

But she claimed that the circuit court had subject matter jurisdiction in that

previous appeal upon Menard’s filing of a notice of appeal, and therefore, the court

properly considered the issue.

[¶78.]       In January 2017, the circuit court issued a memorandum decision. It

noted that although Lagler did not file a notice of review in response to Menard’s

notice of appeal, Menard did not object in the previous appeal. The court further

highlighted that Menard “briefed and argued the original Statement of Issues [filed

by Lagler] on the merits, including SDCL 15-12-3.” Because Menard was aware

that Lagler intended to challenge the attorney fee issue and made arguments and

submitted briefs on the issue, the court declined to rule that Lagler waived the right

to obtain review. The court found compelling that Menard admitted that it was

“late to the game” in objecting. The court wrote: “Having played the attorney fees

game and lost, only now does [Menard] raise its objection and claim that the game

should never have been played.”

[¶79.]       On appeal to this Court, Menard avers that Lagler’s failure to file a

notice of review is a jurisdictional defect, which issue Menard claims can be raised

anytime. On the contrary, as stated above, the requirement to file a notice of review


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is not jurisdictional; it is procedural. As a procedural rule, waiver is not necessarily

automatic. See, e.g., State v. Gard, 2007 S.D. 117, ¶¶ 15-16, 742 N.W.2d 257, 261

(waived issues may nonetheless be addressed); In re J.D.M.C., 2007 S.D. 97, ¶ 27,

739 N.W.2d 796, 805 (the “rule is procedural and we have discretion to ignore the

rule when faced with a compelling case”); Nature’s 10 Jewelers v. Gunderson, 2002

S.D. 80, ¶ 19, 648 N.W.2d 804, 808-09 (Konenkamp, J., dissenting); Sharp v. Sharp,

422 N.W.2d 443, 445-46 (S.D. 1988) (“We must, however, emphasize this is merely a

rule of procedure and not a matter of jurisdiction.”). Therefore, although Lagler did

not file a notice of review and that failure would ordinarily result in a waiver of the

right to obtain review, no such waiver exists under the circumstances of this case.

[¶80.]       Therefore, I agree in result that “the court did not err by reviewing the

Department’s denial of Lagler’s request for attorney’s fees.” Majority Opinion ¶ 43.

[¶81.]       KERN, Justice, joins this special writing.




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