Stark v. Munce Bros. Transfer & Storage

461 N.W.2d 587, 1990 S.D. LEXIS 155, 1990 WL 160954

• Court: South Dakota Supreme Court
• Decided: October 24, 1990
• Docket: 16845
• Status: Published

Opinions

SABERS, Justice.

Gerhardt Stark (Stark) appeals from a circuit court judgment dismissing his appeal. We affirm.

FACTS

The Secretary of Labor affirmed the Division of Labor and Management decision to deny Stark a lump sum settlement of his workers’ compensation claim against his employer, Munce Brothers Transfer & Storage (Munce). Stark was served with the order by mail on May 10, 1989.

On May 15, 1989, Stark filed a timely appeal with the circuit court and made timely service upon his employer and its insurer. However, Stark failed to serve a timely notice of appeal upon the Department of Labor as required by SDCL 1-26-31 which provides, in part:

An appeal [from an administrative agency to circuit court] shall be taken by serving a notice of appeal upon the adverse party and upon the agency which rendered the decision, and by filing the same, or a certified copy, with proof of such service in the office of the clerk of courts of the county in which the venue of the appeal is set, within thirty days after the agency served notice of the final decision.... (emphasis added).

Munce filed a motion to dismiss the circuit court appeal on June 27, 1989, on the basis that the circuit court lacked subject matter jurisdiction as a result of Stark’s failure to serve notice of the appeal on the Department of Labor. On June 15, 1989, five days after the 30-day period for service had ended, Stark served the notice of appeal upon the Department of Labor. SDCL 1-26-31. Despite Stark’s failure to timely serve the Department of Labor, the deputy director of the Division of Labor and Management indexed its record and transmitted it to the circuit court within thirty days after service of the notice of appeal to circuit court. SDCL 1-26-33. The circuit court dismissed the appeal for lack of subject matter jurisdiction and noted that the mandatory language of SDCL 1-26-31 required service on the Department of Labor.

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DECISION

Stark relies on Olson v. Midwest Printing Co., 347 N.W.2d 43 (Minn.1984) and argues that failure to give notice to the Department of Labor was not a jurisdictional error requiring dismissal because the agency is not a party to the appeal and only performs administrative functions. Stark also argues that since the Department of Labor performed its administrative functions within the 30 days allotted by statute, his failure to serve the Department of Labor was a minor error that resulted in no prejudice to Munce.

Olson involved an appeal to the Workers’ Compensation Court of Appeals from a compensation judge’s opinion. Under Minnesota’s Workers’ Compensation intra-agency appeal procedure, an appellant “shall” 1) serve the notice of appeal on each adverse party, 2) file the original with the chief administrative law judge, and 3) file a copy with the commissioner. Minn. Stat. § 176.421 (1982). Olson failed to do the third step. The Supreme Court of Minnesota noted this omission in a footnote to its opinion, explaining, in part:

The WCCA found it had jurisdiction, even though Olson did not strictly comply with the filing requirements. We concur in this determination. Midwest Printing and American Mutual cannot show prejudice or delay in the appeals process due to Olson’s failure to file a copy of the notice of appeal with the commissioner. The requirement that a copy of the notice of appeal be filed with the commissioner simply assists the commissioner in carrying out purely administrative functions. See Minn.Stat. § 175.101 (1982).

Id. at 44. Olson dealt with an appeal within an administrative agency and not an appeal from an administrative (executive) agency to a circuit (judicial) court.

The issue here is whether the subject matter jurisdiction of the circuit court was invoked. When the legislature prescribes a procedure for circuit court review of the action of an administrative body, the conditions of the procedure must be complied with before jurisdiction is invoked. Appeal of Heeren Trucking Co., 75 S.D. 329, 330-331, 64 N.W.2d 292, 293 (1954); Middle Creek Sch. Dist. No. 18 v. Butte County Bd. of Ed., 83 S.D. 107, 155 N.W.2d 450 (1968). Heeren and Middle Creek were decided prior to the adoption of the administrative procedures act in South Dakota. A careful review of the administrative procedures act and subsequent case law leads to the conclusion that the concept enunciated in Heeren and Middle Creek was not diminished or abrogated by the adoption of the administrative procedures act. See Hein v. Marts, 295 N.W.2d 167, 171 (S.D.1980) (“As a general rule, where a method of giving notice is prescribed by statute, there must be strict compliance with the prescribed method in form of notice.”) SDCL 1-26-31 specifically requires service of the notice upon the agency which rendered the decision, in this case the Department of Labor. The statute is clear and uses mandatory language. Matter of Groseth Intern., Inc., 442 N.W.2d 229 (S.D.1989).

Contrary to Stark’s argument, the notice of appeal to the Department of Labor does more than order the completion of administrative functions. As we recently indicated, the notice of appeal serves as a notice of transfer of jurisdiction from the executive branch to the judicial branch. See Groseth, 442 N.W.2d at 231. As a result, this case is inherently different than Olson which involved an intra-agency appeal. Lack of prejudice to Munce has little or no bearing on Stark’s failure to notify the Department of Labor of the transfer of jurisdiction to the judicial branch. Moreover, Stark’s error is in no way negated by the Division of Labor and Management’s completion of the administrative portions of its responsibilities. The circuit court’s subject matter jurisdiction had not been invoked and the circuit court was correct in dismissing the appeal.

Affirmed.

MILLER, C.J., and WUEST and MORGAN, JJ., concur. HENDERSON, J., dissents.

On July 27, 1989, the circuit court granted the motion to dismiss, noting in its letter decision:

The South Dakota administrative procedures in SDCL 1-26-31 require that an appeal be served "[upon] the adverse party and upon the agency that rendered the decision.”

The appellant [Stark] served a Notice of Appeal on the Employer [Munce] and Insurer, however, failed to serve a Notice of Appeal upon the Department of Labor. The language of the statute makes notice to the agency mandatory. Since the appellant failed to give notice to the Department within the time frames required by statute, this appeal has not been perfected and the Circuit Court lacks jurisdiction to review the Department’s decision.