Heese v. a & T TRUCKING

635 P.2d 962, 102 Idaho 598, 1981 Ida. LEXIS 385
CourtIdaho Supreme Court
DecidedOctober 19, 1981
Docket13288
StatusPublished
Cited by24 cases

This text of 635 P.2d 962 (Heese v. a & T TRUCKING) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heese v. a & T TRUCKING, 635 P.2d 962, 102 Idaho 598, 1981 Ida. LEXIS 385 (Idaho 1981).

Opinion

BAKES, Chief Justice.

This worker’s compensation appeal centers on the constitutionality and application of I.C. § 72-210, which provides:

“72-210. EMPLOYER’S FAILURE TO INSURE LIABILITY. — If an employer fails to secure payment of compensation as required by this act, an injured employee, or one contracting an occupational disease, or his dependents or legal representative in case death results from the injury or disease, may claim compensation under this law and shall be awarded, in addition to compensation, an amount equal to ten per cent (10%) of the total amount of his compensation together with costs, if any, and reasonable attorney’s fees if he has retained counsel.”

Prior to respondent Heese’s accident, employer appellant A & T Trucking (A & T) was attempting to procure worker’s compensation insurance after its former insurer decided to get out of the western market. On April 5, 1977, A & T applied to Argonaut Northwest Insurance Company for coverage. A & T’s president and bookkeeper testified that at that time they paid the requested deposit premium to Argonaut’s agent, who informed them that they were thereafter covered.

Respondent Heese was injured on the job on May 16, 1977. However, Argonaut denied that any insurance coverage had been procured and refused to pay Heese’s compensation claim. After hearings before the Industrial Commission, Heese was awarded income and disability benefits. The commission found that while A & T believed that it had obtained worker’s compensation *600 insurance from Argonaut effective April 5, 1977, no such insurance policy had ever issued. The commission concluded that A & T was not in fact insured on the date of the injury, May 16,1977. 1 The commission also found that no notice of security had been filed with the commission as required by I.C. § 72-311(1). Based on the above findings and the language of I.C. § 72-210, the commission awarded Heese an extra 10% of the compensation award, as well as costs and attorney fees. The employer appeals, contending that the commission erroneously construed I.C. § 72-210 and that the statute as construed violates constitutional principles of equal protection and due process. We disagree and affirm the commission’s award.

The employer contends that I.C. § 72-210 should not be construed to apply to those employers, like A & T, who have made good faith attempts to procure insurance and reasonably believe that they have done so. However, that statute specifically imposes penalties upon an employer who “fails to secure payment of compensation as required by this act.” In order to “secure payment of compensation as required by this act,” I.C. § 72-311(1) requires that “[t]he employer shall forthwith file with the commission in form prescribed by it, a notice of his security.” I.C. § 72-312 requires the employer to

“post and maintain in a conspicuous place or places in and about his place or places of business typewritten or printed notices in form prescribed by the commission, stating the fact that he has complied with the law as to securing the payment of compensation to his employees and their dependents in accordance with the provisions of this law. Such notice shall contain the name and address of the surety, if any, with which the employer has secured payment of compensation.”

I.C. § 72-312 further provides that “[a]n employer who fails to post and keep such notice conspicuously displayed shall be guilty of a misdemeanor.” Viewing these several provisions in pari materia, as we must, it is apparent that the legislature intended strict compliance with those provisions requiring the employer to obtain security for payment of the compensation to injured employees, and that it intended substantial penalties for non-compliance.

I.C. § 72-210, the specific section invoked by the commission to impose the penalty in this case, is unambiguous. It requires no showing of bad faith or scienter as a prerequisite to the imposition of the 10% surcharge, costs or attorney fees. The commission did not err in concluding that an employer failing to secure payment of compensation as required by the act is strictly liable for the statutory penalty.

The employer next contends that the statute runs afoul of state and federal equal protection clauses. The employer contends that I.C. § 72-210 creates a special class composed of employers who have not provided security for compensation, and that such classification fails to provide equal protection under the law. Since I.C. § 72-210 creates no suspect, “near” suspect, or invidiously discriminatory classification, and entangles no fundamental or “quasi” fundamental right, the statute must be tested under the restrained standard of equal protection review, the familiar “rational basis” test. LePelley v. Grefenson, 101 Idaho 422, 614 P.2d 962 (1980); Idaho Quarterhorse Breeders Ass’n, Inc. v. Ada County Fair Board, 101 Idaho 339, 612 P.2d 1186 (1980); School Dist. No. 25 v. State Tax Comm’n, 101 Idaho 283, 612 P.2d 126 (1980); Jones v. State Board of Medicine, 97 Idaho 859, 555 P.2d 399 (1976), cert. denied 431 U.S. 914, 97 S.Ct. 2173, 53 L.Ed.2d 223 (1977). The statute easily withstands such scrutiny. One of the purposes of the worker’s compensation law is to provide “sure and certain relief” for an injured worker *601 and the worker’s family. I.C. § 72-201. To that end, the legislature saw fit to impose a statutory penalty without regard to fault in every case where the employee’s recovery is at risk by virtue of the employer’s failure to “secure payment of compensation as required by this act.” The penalty imposed is one rational way to encourage employers to comply with the act.

The employer next contends that the statute is constitutionally contrary to state and federal due process provisions. The standard applicable in due process cases is whether the challenged law bears a rational relationship to a legitimate legislative purpose. E. g., Jones v. State Board of Medicine, supra. For reasons already stated above, we hold that I.C. § 72-210 survives a due process attack as well.

Finally, the employer contends that the Industrial Commission lacked subject matter jurisdiction to decide whether there existed a contract of insurance between A & T and Argonaut Insurance Company. The employer alleges that in two previous cases, Martin v. Argonaut Insurance Co., 90 Idaho 107, 408 P.2d 475 (1965), and Thompson v. Liberty National Insurance Co., 78 Idaho 381, 304 P.2d 910

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Bluebook (online)
635 P.2d 962, 102 Idaho 598, 1981 Ida. LEXIS 385, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heese-v-a-t-trucking-idaho-1981.