Wyphoski v. Sparks Nugget, Inc.

915 P.2d 261, 112 Nev. 413, 1996 Nev. LEXIS 56

• Court: Nevada Supreme Court
• Decided: April 30, 1996
• Docket: No. 23323
• Status: Published

Opinions

OPINION

By the Court,

Springer, J.:

The issue on this appeal is whether a self-insured employer may prosecute a civil action to recoup workers’ compensation benefits that it paid to an employee and which are subsequently determined to be unwarranted. We have already held in Ransier v. SIIS, 104 Nev. 742, 766 P.2d 274 (1988), that the State Industrial Insurance System (“SIIS”) cannot recoup funds properly paid to a claimant pending appeal, when the payments are later found to be unwarranted after appeal. Although respondent, Sparks Nugget, is a private, self-insurer, it also is subject to the rule in Ransier; therefore, we reverse the district court’s order and deny recoupment.

In Ransier, the claimant was paid $19,655.56; on appeal, this sum was ruled unjustified. 104 Nev. at 745, 766 P.2d at 276. There is an inherent injustice in allowing a claimant to keep funds to which he is not legally entitled, and we recognized in Ransier that there are “valid policy reasons to allow recoupment.” Nevertheless, in Ransier, we concluded that a cause of action to enforce such a recoupment claim by SIIS was “unsupported by any fair reading of the statutory scheme.” Id. at 746, 745 P.2d at 277.

The Nugget argues that as a private insurer, denial of its right to recoup payment of an unjustified claim violates its constitutional right to due process of law. According to the Nugget, once the court ruled that Wyphoski’s physical problem was not industrially related, the Nugget had an absolute property right to recoup the funds paid under the false assumption that Wyphoski was entitled to industrial compensation.¹

The trial court and the Nugget agree that under Ransier, SIIS cannot recoup funds properly paid to a claimant pending an appeal when the funds are later found to be unwarranted. We conclude that a self-insurer is similarly precluded from recouping such funds. Here, the Nugget voluntarily chose to be a self-insurer; it has no greater rights than SIIS to recoup payments already made. The Nugget does, however, raise other issues which must be addressed.

In Ransier, we noted in dictum that “Ransier has done no wrong,” id. at 746, 766 P.2d at 277, and implied that this fact entered into our decision to deny SIIS the right to recoup funds that had been “unjustified.” The Nugget argues that the Ransier rule should not be applied in this case because Wyphoski “had been advised by several treating physicians” that the pain in her wrist “did not relate to her employment.” The Nugget urges us to adopt a rule allowing recoupment in cases in which a doctor tells the claimant that her injury is not work-connected. We decline to modify Ransier and leave it to the legislature to balance the interests of the claimants and insurers in these kinds of difficult cases.²

Based upon our holding in Ransier, we reverse the order of the trial court and deny the Nugget’s claim for recoupment. Wyphoski’s request that the Nugget be sanctioned for its allegedly intentional disregard of the hearing officer’s order is denied.

Young, Shearing, and Rose, JJ., concur.

1 We are told by counsel for the Nugget that it is unfair to deny recoupment in this case because the recoupment would, in reality, be funded by Wyphoski’s insurance carrier. The source of a recoupment payment, however, does not affect our holding in Ransier that funds already paid to a claimant cannot be recouped.

2 Ransier is based principally on the legislature’s failure to create a new cause of action to cover these kinds of situations. Although it can be argued that NRS 616.5435(2) might reveal some intention on the part of the legislature to allow recoupment in cases like the one at bar, the Nugget’s counsel concedes in her answering brief that “[although NRS 616.5435(2) creates an offset against certain future benefits, it does not purport to address the situation where, as here, there are no future benefits from which such amounts may be deducted.” She also concedes: “Likewise, although NRS 616.563 and NRS 616.675 address situations involving entitlement to reimbursements or deduction from benefits in cases of willful misrepresentation or concealment of a material fact, they do not purport to address the situation where, as here, there is no such willful misrepresentation or concealment.” Absent legislative intervention, we continue to honor the rule established in Ransier.