Opinion
Edgar A. Grimm, Grimms&sGrimm, Auburn, for plaintiff-appellant.
Thos. M. Moorhead, Shoaff, Keegan, Bairds&sSimon, Fort Wayne, for appellees Newnam Foundry Co., Inc. and Jon McCreery.
Carl J. Suedhoff, Jr., Hunt, Suedhoff, Borror, Eilbachers&sLee, Fort Wayne, for appellee Newnam Foundry Company, Inc.
Daniel F. Diggins, Emericks&sDiggins, Kendallville, for appellee Jon McCreery; Frank L. Nikolay, Nikolay, Jensen and Scott, Colby, Wis., of counsel.
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Arthur A. May, Crumpacker, May, Searer, Oberfells&sHelling, South Bend, for appellee American Mut. Liability Ins. Co.
GARRARD, Judge.
This case arises from the operation of our Workmen's Compensation laws. It presents the question of the appropriate remedy when a compensation claimant desires to assert that he was precluded from filing a timely claim for Workmen's Compensation benefits because of fraud perpetrated by his employer, or his employer's agents.
The facts upon which the issue arises may be summarized as follows. On June 28, 1965, Mr. Gayheart was an employee of the Newnam Foundry Company, Inc. (Newnam) and was injured in an industrial accident. He received disability benefits for about two months and was then released to return to work. However, he experienced difficulty and again received disability benefits for two months until July 25, 1966. In January 1969, Newnam denied Gayheart's claim for permanent partial impairment upon the basis that the two year statute of limitations for filing claims had expired. Newnam filed with the Industrial Board a Form 14 request for review because of a change in conditions. (The use of this form was keyed to the payment of disability benefits. See IC 22-3-3-27; International Detrola Corp. v. Hoffman (1947), 224 Ind. 613, 70 N.E.2d 844.) To this claim Newnam filed a special answer asserting the statute of limitations. Gayheart then filed a verified reply asserting that fraud on the part of the employer precluded operation of the statute of limitations. The Industrial Board found that Gayheart's Form 14 was not filed within two years from the last date for which compensation was paid and that the Board was without jurisdiction. It therefore dismissed the claim.
Gayheart did not appeal the Board's action dismissing his claim to the Court of Appeals. Instead he commenced this suit as a civil action for fraud. Newnam moved for summary judgment asserting that since Gayheart had raised the claim of fraud before the Industrial Board and had then failed to appeal, he was barred by the principles of res adjudicata from maintaining his civil action. The trial court granted summary judgment on that basis and Gayheart appeals.
At the outset we affirm that if an employee is in fact prevented from claiming in time Workmen's Compensation benefits to which he is entitled under the law because of fraud perpetrated by his employer, he will not be without a remedy. The question more properly is whether the fraud, if established, can estop the employer from asserting the statute of limitations in a claim before the Industrial Board, or whether the employee must bring and prove a common law action for fraud based upon the deprivation. See Bailey v. London G.s&sA. Co. (1918), 72 Ind.App. 84, 121 N.E. 128.
That same question is determinative of the outcome in this case. If Gayheart's claim of fraud was cognizable by the Industrial Board to prevent the bar of the statute of limitations, then Gayheart should have pursued his appeal from the Board's dismissal of his claim. Having failed to do so, he would be precluded from maintaining this action through the principles of former adjudication and the law of the case.
However, if the Industrial Board had no power to consider the equitable effect of an alleged fraud then it was without jurisdiction to determine Gayheart's claim and res adjudicata would have no application. Kramer v. Matthews (1879), 68 Ind. 172; Evansville Am. Legion Home Ass'n. v. White (1967), 141 Ind.App. 574, 230 N.E.2d 623, cert. den. 393 U.S. 859, 89 S.Ct. 110, 21 L.Ed.2d 126.
Under our prior decisions considering the compensation laws as a special statutory action and the Board as merely an administrative agency without judicial function, it appears the Board correctly ruled it was powerless to consider Gayheart's claim. In Keser v. U.S.S. Lead Refinery, Inc. (1928), 88 Ind.App. 246, 163 N.E. 621 the appellate court had before it this same question. In that case the employee urged his employer's offer of a contract to employ the claimant for life if he would not file a compensation claim and the subsequent breach thereof, to justify his failure to file a claim for compensation within two years. The Board found it was without jurisdiction, and the employee appealed the dismissal of his claim. Holding that the Board was correct and that the Board had no power to consider the "judicial" effect of fraud, the appellate court affirmed, stating,
"We hold that any right of action which appellant might have would be in a court of law for damages." 88 Ind.App. 246, 250, 163 N.E. 621, 622.
No subsequent decisions have questioned that ruling and it was binding upon the Board when it considered Gayheart's claim. We hold that under Keser the dismissal of Gayheart's Form 14 was based upon lack of jurisdiction and therefore did not preclude litigation of the fraud issue in a civil action. The summary judgment was granted in error.
Although we premise our holding on Keser as conforming to the reasonable expectations of the parties and the Board when it ruled, we are concerned over continued adherence to that rule and the potentially adverse impact it may have upon both employers and employees arising from the prospect of litigation in two forums. Additionally, it appears that in such cases our civil courts may of necessity be required to make disability and impairment ratings and determine compensation rights as a part of the measure of damages for a fraud. We think that the interests of both employers and employees would be better served if such cases were permitted to proceed under the compensation act. Moreover, recent decisions in our courts no longer find it necessary to deny to an administrative agency all quasi-judicial authority as a prerequisite to preserving the separation of powers decreed by the constitution.
In the field of compensation law legislative changes and court decisions now treat the limitation section as a statute of limitations. Johnson v. Thomass&sSkinner, Inc. (1972), 152 Ind.App. 136, 282 N.E.2d 346. While the Board has not been expressly authorized to toll the statute for fraud, we have recognized fraud as equitably available to prevent the bar of other statutes of limitations containing no express exceptions. Guy v. Schuldt (1956), 236 Ind. 101, 138 N.E.2d 891; Brown v. Gardner (1974), Ind.App., 308 N.E.2d 424.
See IC 22-3-3-30 establishing minority and mental incompetency as a basis for tolling the statute and implicitly authorizing the Board to make competency determinations.
Accordingly, we further hold that upon this opinion becoming final the Industrial Board shall have jurisdiction to determine whether an employer is estopped from setting up, as a bar to a claim, the appropriate statute of limitations under the Workmen's Compensation Act because the employer, its agents or the employer's physician fraudulently induced the claimant to forbear filing a timely claim.
The summary judgment is reversed and this case is remanded to the trial court for further proceedings consistent herewith.
HOFFMAN, J., concurs.
STATON, P. J., dissents and files separate opinion.
STATON, Presiding Judge, dissenting.
I dissent from the majority opinion, and I would affirm the trial court's judgment which granted summary judgment. IC 1971, 22-3-1-3 (Burns Code Ed.) provides that questions of law, such as fraud in the present case, should be certified to the Court of Appeals. This statute was passed by the Indiana General Assembly in 1937 and renders the 1928 case of Keser v. U.S.S. Lead Refinery, Inc. (1928), 88 Ind.App. 246, 163 N.E. 621 cited by the majority void. The phrase "to make conclusions of facts and rulings of law;" in the statute which precedes the phrase "to certify questions of law to the Court of Appeals;" refers to rulings of law within the context of the Workmen's Compensation Act, for example "good cause." The question of the employer's fraud could have been litigated by Gayheart before the Industrial Board by requesting that the Board certify the question of law fraud to the Court of Appeals or by appealing the no jurisdiction decision. Wilson v. Betz Corporation, et al. (1959), 130 Ind.App. 83, 159 N.E.2d 402. Res judicata arises to bar litigation of an issue in an action which could have been litigated between the same parties in a prior claim. Bob Layne Contractor, Inc. v. Buennagel (1973), 158 Ind.App. 43, 301 N.E.2d 671. Therefore, Judge Lee was correct in granting summary judgment.
Article 7, Section 1 of the Indiana Constitution provides that "The judicial power of the State shall be vested in one Supreme Court, one Court of Appeals, Circuit Courts, and such other courts as the General Assembly may establish." What the majority opinion attempts is clearly unconstitutional and in violation of the separation of powers doctrine. It is attempting to expand the jurisdiction granted to the Industrial Board by the Indiana General Assembly. This attempt is additionally unconstitutional because it attempts to enter the legislative domain which is exclusively reserved to the Indiana General Assembly by the Indiana Constitution. Furthermore, the majority opinion attempts to repeal the legislative mandate of IC 1971, 22-3-1-3 which expressly provides for questions of law to be certified to the Court of Appeals. Wilson v. Betz Corporation, et al., supra. Therefore, I dissent.