COLE v. SILVERADO FOODS, INC.

COLE v. SILVERADO FOODS, INC.
2003 OK 81
78 P.3d 542
Case Number: 98150
Decided: 10/07/2003

THE SUPREME COURT OF THE STATE OF OKLAHOMA

REGINA COLE, Petitioner,
v.
SILVERADO FOODS, INC., TRAVELERS INSURANCE CO., and THE WORKERS' COMPENSATION COURT, Respondents.

ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIV. IV

¶0 Employee filed a claim for workers' compensation benefits and sought a hearing for final determination of permanent partial disability in accordance with the terms of

THE THREE-JUDGE PANEL'S ORDER AND THE COURT OF CIVIL
APPEALS' OPINION ARE VACATED; THE AWARD OF THE TRIAL
JUDGE IS SUSTAINED.

Susan H. Jones, Wilson Jones, P.C., Tulsa, Oklahoma, for Petitioner.
H. Grady Parker, Jr., Looney, Nichols & Johnson, Oklahoma City, Oklahoma, for Respondents.

OPALA, V.C.J.

¶1 The issue on certiorari is whether the provisions of 85 O.S. Supp. 1997 § 43(B), which were enacted during the claim's pendency and whose terms shorten from five to three years the period within which unadjudicated elements of a compensation claim must be pressed for resolution before they stand barred by lapse of time, govern this case. We answer in the negative.

I.
ANATOMY OF THE LITIGATION

¶2 On 22 July 1997 Regina Cole (Cole or employee or claimant) filed two workers' compensation claims, alleging two separate job-related injuries, sustained while she was employed by Silverado Foods. Silverado and its insurance carrier, Travelers Insurance Co. (collectively Silverado or employer), timely filed their answer and tendered a pretrial stipulation on 8 September 1997. Silverado admitted that Cole had suffered an accidental injury for which medical treatment was provided but denied temporary total disability benefits because she had not lost any time at work. Cole took no other steps in the case until four years later when she filed, on 5 October 2001, a request for a hearing to determine permanent partial disability and medical maintenance.2 Cole's claim was scheduled for a hearing on 14 March 2002.

¶3 Silverado invoked the provisions of 85 O.S. Supp. 1997 § 43(B)3 - the after-enacted legislation that shortens the time span for a request to adjudicate the unrecovered elements of a pending workers' compensation claim - and moved for dismissal. The motion met with denial, and Cole was awarded permanent partial disability but no medical maintenance. On Silverado's appeal, a three-judge panel ruled the claim was time-barred by the amended provisions invoked by the employer and denied Cole's claim. Cole sought review. The Court of Civil Appeals (COCA), Division IV, vacated the panel's order. It declared the after-enacted §43(B) provisions do not apply to a proceeding filed prior to the effective date of the amendment and remanded the claim to the three-judge panel with directions to reinstate the trial judge's award. Silverado's certiorari paperwork brings to our attention a published opinion by another COCA division, Cunningham v. Oklahoma Dept. of Corrections,4 which holds the § 43(B) amendment governs a claim's disposition when enacted during its viable period of pendency. We granted certiorari to settle this interdivisional conflict and to provide guidance by a precedential pronouncement.

II.
THE PARTIES' RESPECTIVE POSITIONS ON CERTIORARI

¶4 When Cole's compensation claim5 was filed on 22 July 1997, the statutory law then in effect, 85 O.S. Supp. 1994 § 43(B),6 allowed a claimant five (5)years after filing a claim to request a hearing for its complete adjudication. Section 43(B) was amended, effective 1 November 1997,7 by a text that shortened the request-time span to three (3) years. Cole's claim was pending when the amended provision took effect. The 1997 amendment is silent with respect to its effect upon filed claims whose adjudicatory periods have not yet lapsed. Simply stated, the question before us is which request-time limit governs Cole's claim? If the pre-1997 §43(B) statute is applicable to today's controversy, Cole's claim must be allowed to survive. Under the amended version of 1997, the unadjudicated elements of Cole's claim stand extinguished for her failure to press for adjudication of unrecovered benefits within the statutory three-year period.

¶5 Silverado relies upon Cunningham, the COCA, Division I, decision, which holds the amended terms of § 43(B) are applicable to a claim pending and unextinguished at the time of the amendatory enactment's effective date.8 Cunningham teaches a workers' compensation "claimant has no vested right" in a five-year period during which a hearing may be requested so long as at the effective date at which the period is shortened the claim is not extinguished by the lapse of the shortened period.9 Silverado also urges the 1997 version of § 43(B) impacts solely matters of procedure and does not affect any substantive rights. Because it affects solely the employee's remedy and not her rights, it may be given retrospective application.10

¶6 Cole urges first that § 43(B) is not a statute of limitations but rather one of repose. It is not subject to retroactive application of amendatory enactments. She also asserts the statute affects more than mere matters of procedure. Once a claim is filed, she contends, the claimant's rights are established. Any change in the law affecting those rights must be regarded as substantive in nature and protected from legislative interference by the provisions of Art. 5 § 54, Okl. Const.11 Because § 43(B) impacts a claimant's right, and not just her remedy, it is solely prospective in its application.12 According to Cole, the amended version of § 43(B) may have no impact on this controversy.

III.
SECTION 43(B) OPERATES ON FIXED RIGHTS AND OBLIGATIONS.
THE PROVISIONS OF ART. 5 § 54, OKL. CONST., AND EXTANT
JURISPRUDENCE SHIELD AN EMPLOYEE'S SUBSTANTIVE RIGHT
FROM EXTINGUISHMENT BY AFTER-ENACTED LEGISLATION.

¶7 The right of an employee to compensation arises from the contractual relation between the employee and employer on the date of injury.13 The statute then in effect forms a portion of the contract of employment and determines the substantive rights and obligations of the parties.14 No subsequent amendment that has the effect of increasing or diminishing the amount of compensation recoverable can operate retrospectively to affect any accrued rights and fixed obligations.15

¶8 Oklahoma's fundamental law and extant jurisprudence provide a comprehensive scheme that governs the application of repealed and amended legislation to existing legal claims. To clarify legal terms of art which, over time, have become clouded, we turn first to an examination of jurisprudential teachings that deal with the impact of after-enacted changes. Absent a plain legislative intent to the contrary, statutes are generally presumed to operate prospectively only.16 Legislation that is general in its terms and impacts only matters of procedure is presumed to be applicable to all actions, even those that are pending.17 Statutes that relate solely to remedies and hence affect only modes of procedure - i.e., enactments which do not create, enlarge, diminish, or destroy accrued or contractual rights - are generally held to operate retroactively and apply to pending proceedings (unless their operation would affect substantive rights).18

¶9 Statutes of limitations

¶10 Not every statutorily-enacted time limit constitutes a statute of limitations. Although at first blush § 43(B) appears to bear some characteristics of limitations, it does not qualify for inclusion in that rubric.

¶11 The dispositive question to be answered here is whether the 1997 amendment represents more than a mere procedural reform - one that intrudes upon claimant's substantive rights. If so, it must be given purely prospective application and may have no effect upon this claim. Our analysis of this query compels us to conclude that § 43(B) indeed operates to impact the rights in Cole's claim. We hence hold that the amended provisions of § 43(B) may not be invoked as a defense against this controversy.

¶12 Section 43(B) is much more than a remedial enactment. By the lapse of the § 43(B) time interval claimant is not merely deprived of a remedy but rather suffers the loss of right to press for unrecovered benefits. This is so because the after-enacted provisions of § 43(B) diminish an employee's right to unadjudicated elements of a claim which constitute a portion of statutorily "recoverable compensation."

¶13 Section 43(B) stands as an employer's liability-defeating defense against an employee's untimely quest for permanent disability's adjudication. A statutory defense constitutes an accrued right.

¶14 We now turn to examine the State's fundamental law's impact upon today's controversy. The terms of Art. 5 § 54, Okl. Const., protect from legislative extinguishment by retroactive enactments "accrued" rights acquired or "proceedings begun" under a repealed or amended statute.

¶15 After-enacted legislation that increases or diminishes the amount of recoverable compensation or alters the elements of the claim or defense by imposition of new conditions affects the parties' substantive rights and liabilities.

IV.
SUMMARY

¶16 Today's controversy is over whether the provisions of

¶17 On certiorari previously granted, the Court of Civil Appeals' opinion and the three-judge panel's order are vacated. The trial judge's award is sustained.

¶18 OPALA, V.C.J., HODGES, LAVENDER, HARGRAVE, SUMMERS and BOUDREAU, JJ., CONCUR.

¶19 WATT, C.J. and KAUGER, J., CONCUR IN RESULT.

¶ 20 WINCHESTER, J., DISSENTS.

FOOTNOTES

1 Identified herein are only those counsel for the parties whose names appear on the certiorari briefs.

2 The record shows that Cole filed, on 20 December 2001, a second Form 9, her request for a hearing upon permanent partial disability and medical maintenance. The trial transcript shows Cole received medical treatment but no temporary disability benefits.

3 The terms of 85 O.S. Supp. 1997 § 43(B) provide:
"B. When a claim for compensation has been filed with the Administrator as herein provided, unless the claimant shall in good faith request a hearing and final determination thereon within three (3) years from the date of filing thereof or within three (3) years from the date of last payment of compensation or wages in lieu thereof, same shall be barred as the basis of any claim for compensation under the Workers' Compensation Act and shall be dismissed by the Court for want of prosecution, which action shall operate as a final adjudication of the right to claim compensation thereunder. ***"

4 Cunningham v. Oklahoma Dept. of Corrections, 2002 OK CIV APP 119, 60 P.3d 527.

5 Cole's two claims had been consolidated for hearing by the trial tribunal's 21 November 1997 order.

6 The text of 85 O.S. Supp. 1994 § 43(B) provides:
"B. When a claim for compensation has been filed with the Administrator as herein provided, unless the claimant shall in good faith request a hearing and final determination thereon within five (5) years from the date of filing thereof or within five (5) years from the date of last payment of compensation or wages in lieu thereof, same shall be barred as the basis of any claim for compensation under the Workers' Compensation Act and shall be dismissed by the Court for want of prosecution, which action shall operate as a final adjudication of the right to claim compensation thereunder. ***"

7 For the terms of 85 O.S. Supp. 1997 § 43(B) see supra note 3.
Because Cole was injured shortly before the amended § 43(B) provisions became effective, she had almost the full three-year period to request adjudication of permanent partial disability. She sought final determination a little over a year after the three-year period expired and approximately nine months before the five-year period would have lapsed.

8 Cunningham, supra note 4, at ¶ 11, at 528.

9 In Cunningham, COCA, Division I, perceived it was dealing with neither an amendment that increases or diminishes compensation nor any right to compensation based on the employment relationship. Rather it regarded the issue as purely procedural. It applied the reasoning employed in Marley Cooling Tower Co. v. Cooper, 1991 OK 62, 814 P.2d 472, which dealt with a statutory amendment that extended the time to file a claim prior to expiration of the limitations period in existence at the time of the injury. Marley teaches that a "defendant does not have a vested right in a limitations period" until the statute actually bars the claim. (Citing Trinity, infra note 10, at ¶ 8, at 1366.) Thus when the time to file a claim has not expired at the time of the enactment of a new limitations period, a claimant has, at minimum, the new limitations period from the effective date of the amended law. COCA applied Marley's reasoning and ruled that "a claimant has no vested right to a five-year period to request a hearing" so long as when the period is shortened the claim is not extinguished by the shortened period.

10 Silverado cites Trinity Broadcasting Corp. v. Leeco Oil Co., 1984 OK 80, ¶6, 692 P.2d 1364, 1366, for the proposition that statutes affecting solely procedure (as distinguished from those that impact substantive rights) may be applied retroactively.

11 The text of Art. 5 § 54, Okl. Const., provides:
"The repeal of a statute shall not revive a statute previously repealed by such statute, nor shall such repeal affect any accrued right, or penalty incurred, or proceedings begun by virtue of such repealed statute."

12 Trinity, supra note 10, at ¶ 6, at 1366.

13 Magnolia Petroleum Co. v. Watkins, 1936 OK 372, ¶ 14, 57 P.2d 622, 625-26, 177 Okl. 30. Magnolia teaches the State Industrial Commission (now Workers' Compensation Court) is not barred from re-opening a claim (based upon an employee's assertion of change in condition) by after-enacted legislation that limits the time for invoking this remedy.

14 Magnolia, supra note 13, at ¶ 5, at 623.

15 Magnolia, supra note 13, at ¶ 5, at 623; Knott v. Halliburton Services, 1988 OK 29, ¶ 4, 752 P.2d 812, 813-14. In Knott we refused to apply retroactively an amendment that would have taken away the element of tolling time on claims for injuries that occurred prior to the amendatory change.

16 Trinity, supra note 10, at ¶ 6, at 1366; Thomas v. Cumberland Operating Co., 1977 OK 164, ¶4, 569 P.2d 974, 976.

17 Thomas, supra note 16, at ¶ 4, at 976.

18 Thomas, supra note 16, at ¶ 4, at 976; Knott, supra note 15, at ¶ 4, at 813-14 (citing Magnolia, supra note 13, at ¶ 5, at 623).

19 A statute of limitations establishes a time limit for bringing a civil action, based on the date when the pressed claim accrued. See infra note 23 for an explanation of statutes of limitations.

20 Trinity, supra note 10, at ¶ 8, at 1366-67.

21 Trinity, supra note 10, at ¶ 8, at 1366-67 (citing Mires v. Hogan, 1920 OK 308, ¶ 9, 192 P. 811, 818, 79 Okl. 233); Marley, supra note 9, at ¶ 8, at 475.

22 Trinity, supra note 10, at ¶ 8, at 1366 (citing Magnolia, supra note 13, at ¶ 5, at 623); Marley, supra note 9, at ¶ 9, at 475.

23 While I joined the court's opinions in White v. Weyerhaeuser Co., 1990 OK 98, 798 P.2d 623, and Matter of Hendricks, 1991 OK 52, 812 P.2d 1361, and concurred in part in Ellington v. Horwitz Enterprises, 2003 OK 37, 68 P.3d 983, I am not unmindful that the court at times inadvertently referred to the statutory language we deal with here, that in § 43(B), as a "statute of limitations" or "limitations period."

The common-law system recognizes two time bars that are conceptually distinct: (1) the "pure" or "true" statute of limitations that measures the time within which an action must be brought, and (2) a time limit that conditions the exercise of a right, which extinguishes the right as well as the remedy. When a pure statute of limitations expires, merely the remedy is extinguished. Lapse of time prescribed by the other category - that which so specifically attaches to the substantive claim that it must be construed as its element or condition upon the right - operates to extinguish the right as well as the remedy. It may also transfer an interest lost by time lapse. The latter time bars do not just destroy the claim but may also confer a new right on one who invokes the benefit of the lapse. The second category of temporal limits comes to us from the Roman-law doctrine of prescription, while the first category developed from the common-law's right/remedy dichotomy. It is this dichotomy that accounts for the difference between these two time-lapse categories. Estate of Speake, 1987 OK 61, ¶¶ 12-14, 743 P.2d 648, 652-53.

Employee's assertion that § 43(B) is a statute of repose is erroneous. A statute of repose bars a suit a fixed number of years after the defendant acts in some manner (generally in the design or manufacture of a product), even if the repose period ends before a plaintiff suffers injury. Although statutes of repose and statutes of limitations bear some similarities to one another, each also possesses distinct characteristics. While both are designed to provide repose for a defendant, a statute of limitations places a limit on a plaintiff's time to bring an action. After the prescribed time period has lapsed, a statute of limitations extinguishes the remedy for the redress of an accrued cause of action. This is not so with a statute of repose. The latter bars potential liability by limiting the time during which a cause of action may arise. It serves to bar a claim even before it accrues. A statute of limitations will punish those who sleep on their rights, while a statute of repose will bar recovery, despite a plaintiff's diligent efforts to assert the claim. Smith v. Westinghouse Elec. Corp., 1987 OK 3, ¶ 6, n.11, 732 P.2d 466, 468-69, n.11; See also Black's Law Dictionary, 1423 (7th ed. 1999).

24 An accrued right is a right that is ripe for enforcement; a matured right. In re Bomgardner, 1985 OK 59, ¶ 11 n.22, 711 P.2d 92, 96 n.22; Mid-Continent Casualty Co. v. P & H Supply, Inc., 1971 OK 135, ¶ 16, 490 P.2d 1358, 1361; Barry v. Board of County Commissioners, 1935 OK 701, ¶ 7, 49 P.2d 548, 549, 173 Okl. 645, syl. 3.

25 Magnolia, supra note 13, at ¶ 5, at 623.

26 Supra note 24.

27 Merits are the elements or grounds of a claim or defense. Black's Law Dictionary, 1003 (7th ed. 1999).

28 For the complete text of Art. 5 § 54, Okl. Const., see supra note 11.

29 First Nat. Bank of Pauls Valley v. Crudup, 1982 OK 132, ¶ 5, 656 P.2d 914, 916.

30 Today's decision - that the filing of a workers' compensation claim falls within the Art. 5 § 54 definition of "proceedings begun" - is consistent with our holding in Crudup, supra note 29. There we declared that a filed lien statement constitutes an accrued right within the meaning of the term "proceedings begun."

31 Knott, supra note 15, at ¶ 5, at 813-14; Magnolia, supra note 13, at ¶ 5, at 623.