Robinson v. N. Dakota Workforce Safety & Ins.

Filed 7/30/19 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2019 ND 201Jack Robinson, Appellant
v.
North Dakota Workforce Safety
and Insurance, Appellee
No. 20180383
Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable Thomas J. Schneider, Judge.
REVERSED AND REMANDED.
Opinion of the Court by McEvers, Justice.
Erich M. Grant, Minot, ND, for appellant.
Jacqueline S. Anderson, Special Assistant Attorney General, Fargo, ND, for
appellee.
Robinson v. Workforce Safety & Insurance
No. 20180383
McEvers, Justice.
[¶1] Jack Robinson appeals from a district court judgment affirming a Workforce
Safety and Insurance (“WSI”) order finding Robinson personally liable for any unpaid
workers’ compensation premiums, penalties, interest, and costs owed by Dalton
Logistics, Inc. (“Dalton”). Robinson argues WSI failed to properly serve him with
the administrative order resulting in a lack of personal jurisdiction and that his due
process rights were violated. We reverse the judgment and remand to the agency with
directions.
I
[¶2] In June 2015, WSI issued a notice of decision finding Robinson, as vice
president of Dalton Logistics, Inc., personally liable for all unpaid workers’
compensation premiums, penalties, interest, and costs owed by Dalton.
[¶3] In August 2015, after no response from Robinson, WSI commenced a civil
action in district court seeking a judgment against Robinson for unpaid workers’
compensation premiums, penalties, and interest. In November 2015, WSI moved for
summary judgment. Robinson opposed WSI’s motion for summary judgment on the
basis that Robinson was not properly served the notice of decision. In December
2016, the district court action was dismissed without prejudice based on the parties’
stipulation.
[¶4] In March 2017, WSI issued an administrative order, again finding Robinson
personally liable for amounts owed by Dalton. The administrative order was served
by certified mail on the attorney Robinson retained in the district court proceedings.
In April 2017, Robinson’s attorney requested the matter be dismissed, arguing
Robinson had not been properly served “notice of the decision,” by regular mail,
citing N.D.C.C. § 65-04-32. The request stated that although Robinson’s attorney
1
represented Robinson in past actions, “he has not been authorized to accept service
on his behalf to commence the present action,” and that valid service of process was
necessary for WSI to assert personal jurisdiction over Robinson. Robinson requested
in the alternative that a hearing be scheduled for presenting evidence to correctly
determine the past due premium amounts and whether Robinson was personally
liable. The request for a hearing was granted.
[¶5] At the administrative hearing, Robinson’s attorney moved to dismiss for lack
of personal jurisdiction on Robinson’s behalf, reiterating his objection to the lack of
service as required under N.D.C.C. § 65-04-32(1), arguing failure to properly serve
Robinson personally with the notice of decision resulted in a failure to effect personal
jurisdiction over him and due process violations. Robinson’s attorney further argued
WSI was not authorized to serve the administrative order on Robinson’s attorney,
because he had not represented that he had authority to accept service on behalf of
Robinson. WSI argued the administrative proceedings were not commenced
following the issuance of a notice of decision governed by N.D.C.C. § 65-04-32(1);
rather, the current proceedings were initiated by serving an administrative order,
governed by N.D.C.C. § 65-04-32(3), which does not require first serving a notice of
decision. WSI argued it served Robinson’s attorney with the administrative order
because Robinson’s attorney was still on the account as the attorney of record. After
the hearing, the ALJ issued findings, conclusions of law, and an order affirming
WSI’s March 2017 administrative order. The hearing officer concluded that the
hearing proceeded under N.D.C.C. § 65-04-32(3), not N.D.C.C. § 65-04-32(1),
denying Robinson’s motion to dismiss as a matter of law. Robinson appealed the
ALJ’s order to the district court, and the district court affirmed.
II
[¶6] “In an appeal from a district court’s review of an administrative agency’s
decision, we review the agency’s decision.” Haynes v. Dir., Dep’t of Transp., 2014
ND 161, ¶ 6, 851 N.W.2d 172. This Court must affirm the agency’s decision unless:
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1. The order is not in accordance with the law.
2. The order is in violation of the constitutional
rights of the appellant.
3. The provisions of this chapter have not been
complied with in the proceedings before the
agency.
4. The rules or procedure of the agency have not
afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not
supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency
are not supported by its findings of fact.
7. The findings of fact made by the agency do not
sufficiently address the evidence presented to the
agency by the appellant.
8. The conclusions of law and order of the agency
do not sufficiently explain the agency’s rationale
for not adopting any contrary recommendations
by a hearing officer or an administrative law
judge.
If the order of the agency is not affirmed by the court, it must be
modified or reversed, and the case shall be remanded to the agency for
disposition in accordance with the order of the court.
N.D.C.C. § 28-32-46. We have also stated:
We do not make independent findings of fact or substitute our
judgment for that of the agency; rather, we determine only whether a
reasoning mind reasonably could have concluded the agency’s findings
were supported by the weight of the evidence from the entire record.
We defer to an agency’s opportunity to judge witnesses’ credibility.
Once the facts are established, their significance presents a question of
law, which we review de novo.
Beylund v. Levi, 2017 ND 30, ¶ 9, 889 N.W.2d 907 (internal citations omitted). “On
appeal from the district court’s decision, we review the administrative agency’s
decision in the same manner as the district court, giving due respect to the district
court’s analysis and review.” Bergum v. N.D. Workforce Safety & Ins., 2009 ND 52,
¶ 8, 764 N.W.2d 178.
3
III
[¶7] On appeal, Robinson admits his attorney was served the administrative order
by certified mail, but argues WSI was required to serve Robinson himself by certified
mail. The question on appeal is whether service of the administrative order on
Robinson’s attorney was adequate to acquire personal jurisdiction over Robinson in
the administrative proceeding.
[¶8] We have stated, “[t]he jurisdiction of an administrative agency is dependent
upon the terms of the statute and must meet at least the basic mandatory provisions
of the statute before jurisdiction is established.” Schwind v. Dir., N.D. Dep’t of
Transp., 462 N.W.2d 147, 150 (N.D. 1990) (relying on 2 Am. Jur. 2d Administrative
Law § 328 (1962)). As a general rule, proceedings before an administrative agency
are not restricted by the technical and formal rules practiced before a court, but the
fundamental principals of judicial inquiry should be observed. State ex rel. Pub. Serv.
Comm’n v. No. Pac. Ry. Co., 75 N.W.2d 129, 134 (N.D. 1956). Like courts,
administrative agencies must have both personal and subject matter jurisdiction before
they can hear a case. 2 Am. Jur. 2d Administrative Law § 272 (2014). Valid service
of process is necessary to assert personal jurisdiction over a party. Gessner v. City of
Minot, 1998 ND 157, ¶ 5, 583 N.W.2d 90. However, methods of serving agency
process may be specified by statute or rule. 2 Am. Jur. 2d Administrative Law § 281
(2014). Section 65-04-32(3), N.D.C.C., provides:
Within sixty days after receiving a petition for reconsideration, unless
settlement negotiations are ongoing, the organization shall serve on the
parties by certified mail an administrative order including its findings
of fact, conclusions of law, and order, in response to the petition for
reconsideration. The organization may serve an administrative order
on any decision made by informal internal review without first issuing
a notice of decision and receiving a request for reconsideration.1
[¶9] Robinson argues that under N.D.C.C. § 65-04-32(3), he must be served as a
party, rather than service by certified mail on his attorney, because the administrative
1
Section 65-04-32(3), N.D.C.C., has since been amended and effective August
1, 2019, serving a party by certified mail is no longer required.
4
order is service of process which requires the application of either the statute or
N.D.R.Civ.P. 4. Process, under N.D.R.Civ.P. 4(c), includes the requirement for
service of a summons and complaint. “Under our law, ‘process’ means ‘a writ or
summons issued in the course of judicial proceedings.’” Olsrud v. Bismarck-Mandan
Orchestral Ass’n, 2007 ND 91, ¶ 13, 733 N.W.2d 256 (citing general definition of
process under N.D.C.C. § 1-01-49(6) (now located in subsection 12)). The term
“process” as defined under N.D.C.C. § 1-01-49(12) is a term of art that by definition
applies only to judicial proceedings. The rules of civil procedure govern the
procedure in civil actions and proceedings in district court, subject to some
exceptions. N.D.R.Civ.P. 1. In other words, service of process as described in
N.D.R.Civ.P. 4 only applies to service of the summons and complaint in judicial
proceedings.
[¶10] The administrative order is not a writ or summons in a judicial proceeding, and
does not require service of “process” under N.D.R.Civ.P. 4. Rather, the equivalent
of “service of process” required for WSI to initiate an agency proceeding by
administrative order is to serve the parties of an administrative order by certified mail
under N.D.C.C. § 65-04-32(3). WSI argues service of documents other than service
of a summons and complaint are to be made under N.D.R.Civ.P. 5(a)(1). However,
Rule 5, N.D.R.Civ.P., only provides for service of documents that are not process.
Principal Residential Mortg., Inc. v. Nash, 2000 ND 21, ¶ 9, 606 N.W.2d 120. See
also N.D.R.Civ.P. 5 (explanatory note).
[¶11] Serving parties with notice in accordance with the rules of civil procedure may
also be designated by statute. See N.D.C.C. § 65-01-16(5) (providing procedures that
must be followed in claims for benefits and allowing service of an administrative
order following a request for reconsideration must be received in accordance with the
rules of civil procedure); see also N.D.C.C. § 28-32-21 (providing procedures for
adjudicative proceedings and setting forth circumstances when the rules of civil
procedure apply). The administrative order served by WSI here was not an order
under either of these provisions, and WSI has not pointed to a similar provision under
5
N.D.C.C. § 65-04-32, discussing the procedures that apply to employers who wish to
dispute decisions on the amount of premiums due. Because the administrative order
must be served to initiate the administrative proceedings here, and N.D.C.C. § 65-04-
32(3) does not provide that the rules of civil procedure apply, rather it provides an
administrative order be served on a party by certified mail.
[¶12] Under N.D.C.C. § 65-04-32(4):
[a] party has thirty days from the date of service of an administrative
order to file a written request for rehearing. The request must state
specifically each alleged error of fact and law to be reheard and the
relief sought. Absent a timely and sufficient request for rehearing, the
administrative order is final and may not be reheard or appealed.
In his request for a hearing before the ALJ, Robinson included in his specification of
errors:
The governing statute, NDCC § 65-04-32, requires that the
organization “serve notice of the decision on the parties by regular
mail.” Although [Robinson’s attorney], the undersigned, has
represented Mr. Jack Robinson in past actions, he has not been
authorized to accept service on his behalf to commence the present
action. Valid service of process is necessary in order for WSI to assert
personal jurisdiction over a party. Mr. Robinson has not been served
consistent with the governing statute, therefore the current matter must
be dismissed.
(Emphasis added.) In its decision, the ALJ addressed Robinson’s argument that he
was not properly served by regular mail with the notice of decision under N.D.C.C.
§ 65-04-32(1), stating that provision did not apply because the hearing was a result
of an administrative order under N.D.C.C. § 65-04-32(3). However, the ALJ did not
resolve the factual issue of whether or not Robinson’s attorney was representing him
at the time the administrative order was issued or authorized to accept service of the
administrative order on behalf of Robinson. Rather, the ALJ concluded “Robinson
requested this administrative hearing to contest the disputed issues. Robinson’s
Motion to Dismiss is denied as a matter of law.”
6
[¶13] While cryptic for lack of analysis, it appears the ALJ concluded as a matter of
law that Robinson’s attorney was authorized to accept service on his behalf.
However, the ALJ made no corresponding finding of fact to support its conclusion.
[¶14] This Court has stated valid service of process is necessary to assert personal
jurisdiction, and the specific requirements for service of process must be strictly
complied with. Gessner, 1998 ND 157, ¶ 5, 583 N.W.2d 90. While Gessner involves
a civil action, the theory is the same. Analysis regarding personal jurisdiction is a
question of law, and we use the de novo standard of review for legal conclusions and
a clearly erroneous standard of review for factual findings. Spirit Prop. Mgmt. v.
Vondell, 2017 ND 158, ¶ 16, 897 N.W.2d 334. WSI has the burden to establish that
it served Robinson or that Robinson’s attorney had authority to receive service of
process on Robinson’s behalf. See Olsrud, 2007 ND 91, ¶¶ 18-19, 733 N.W.2d 256(discussing burden on plaintiff to show authority of defendant’s attorney to receive
service of process).
[¶15] The parties disputed the facts related to personal jurisdiction. At the hearing,
WSI argued Robinson’s attorney was served because his name was on the account as
the attorney of record. Robinson’s attorney argued that he had not represented to WSI
that he was authorized to accept service on Robinson’s behalf. Emails in the record
between Robinson’s attorney and WSI’s attorney discussing the attorney’s
representation of Robinson only refer to the case number of the proceeding in district
court.
[¶16] For us to affirm, the ALJ’s findings of fact must support the conclusions of
law. N.D.C.C. § 28-32-46(6). An agency is required to explicitly state its findings
of fact and its conclusions of law. N.D.C.C. § 28-32-39(1). “The ALJ must consider
the entire record, clarify inconsistencies, and adequately explain its reasoning.”
Workforce Safety & Ins. v. Auck, 2010 ND 126, ¶ 14, 785 N.W.2d 186. A finding of
fact is necessary to dispose of a factual issue, and the need for a finding is particularly
pressing where the disputed issue is dispositive of the case. Evans v. Backes, 437
N.W.2d 848, 850 (N.D. 1989).
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[¶17] We hold the ALJ failed to make any findings of fact to support its conclusion
that Robinson’s motion to dismiss be denied as a matter of law. We therefore reverse
the judgment of the district court and remand to the agency for further proceedings
consistent with this opinion.
IV
[¶18] We do not reach the due process issue because we reversed the hearing
officer’s decision on the jurisdictional issue and remanded for further proceedings.
If the hearing officer determines Robinson was not properly served, the previous
proceedings would be void, making any opinion we give on the due process issue
advisory, and we do not issue advisory opinions. Gray v. Berg, 2015 ND 203, ¶ 10,
868 N.W.2d 378.
V
[¶19] We reverse the judgment and remand to the agency for further proceedings
consistent with this opinion.
[¶20] Lisa Fair McEvers
Jon J. Jensen
Daniel J. Crothers
Jerod E. Tufte
Gerald W. VandeWalle, C.J.
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