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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Kim v. Alyeska Seafoods, Inc. (12/05/2008) sp-6325
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| NGHI KIM, | ) |
| ) Supreme Court No. S- 12754 | |
| Appellant, | ) |
| ) Alaska Workers Compensation | |
| v. | ) Appeals Commission No. 06- 026 |
| ) | |
| ALYESKA SEAFOODS, INC. and | ) O P I N I O N |
| ALASKA NATIONAL INSURANCE | ) |
| CO., | ) No. 6325 - December 5, 2008 |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Alaska Workers Compensation
Appeals Commission, Kristin Knudsen, Chair.
Appearances: James R. Walsh, Law Office of
James R. Walsh, Lynnwood, Washington, and
Michael J. Schneider, Law Offices of Michael
J. Schneider, Anchorage, for Appellant. Kara
Heikkila, Holmes Weddle & Barcott, Seattle,
Washington, for Appellees.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Carpeneti and Winfree, Justices.
WINFREE, Justice.
I. INTRODUCTION
After leaving his job, an employee alleged that he had
injured his back during his employment. The employer
controverted benefits and the employee filed a workers
compensation claim with the Alaska Workers Compensation Board.
The employer controverted the compensation claim. A workers
compensation statute states that if an employee does not request
a hearing within two years of a notice of controversion, the
employees claim is denied. Two days before the second
anniversary of the controversion of his claim, the employee filed
a motion for a continuance, requesting more time to prepare for
hearing. The employer then petitioned for denial of the
compensation claim as time-barred. The Board did not expressly
rule on the employees motion, but granted the employers petition
and denied the employees compensation claim, finding that the
employee had failed to timely file a hearing request. The Alaska
Workers Compensation Appeals Commission affirmed the Board.
Because the relevant statutory language for requesting a hearing
is directory rather than mandatory, substantial compliance is
sufficient to toll the time-bar, and the Board has discretion to
extend the deadline for good cause. We therefore reverse and
remand for further proceedings.
II. FACTS AND PROCEEDINGS
Nghi Kim worked for Alyeska Seafoods, Inc. in a surimi
plant in Unalaska from January to March 2002. He returned to his
home in Washington in mid-March 2002 and gave notice in mid-
August that he had suffered a back injury on February 25, 2002.
After Alyeska controverted workers compensation benefits, Kim
filed a workers compensation claim for temporary total disability
benefits, medical and transportation costs, and attorneys fees
and costs. Alyeska controverted Kims compensation claim on
December 17, 2003, with a Board-prescribed notice.
On December 15, 2005, two days before the second
anniversary of Alyeskas controversion of his compensation claim,
Kim filed a motion for a continuance supported by a declaration
from his attorney that Kim was not ready for a hearing and needed
more time to prepare his case. The attorney asserted that Kim
face[d] a significant language barrier interfering with his
ability to prepare his case for hearing and requested a
continuance pursuant to AS 23.30.110 for further discovery and
preparation of the case.1
Alyeska did not respond directly to Kims motion.2
Instead, on January 3, 2006, Alyeska filed a petition and
supporting memorandum for denial of Kims claim as time-barred
under AS 23.30.110(c), arguing that Kim had not filed a request
and an affidavit of readiness for a hearing on his compensation
claim. In response, Kims attorney explained why he could not
sign a truthful affidavit of readiness for hearing on Kims claim
and asked the Board to treat the motion for continuance as a
constructive request for a hearing.
Alyeska filed an affidavit of readiness for hearing on
its petition to deny Kims compensation claim. At a pre-hearing
conference, the parties agreed to submit the dispute for a
hearing on written briefing. Although the Boards representative
noted both Kims motion for a continuance and Alyeskas petition
for denial of Kims claim, Alyeskas petition was identified as the
issue for the hearing. Kim filed a hearing brief and declaration
by his attorney regarding the basis for the continuance motion.
After reviewing the parties briefs, the Board decided that oral
arguments would be useful.
The Board ultimately found Kims claim time-barred. On
appeal the Commission affirmed the Board, concluding that
substantial evidence in the record supported the finding that Kim
had failed to file a request for hearing within two years of the
controversion of his claim. It construed AS 23.30.110(c) to
require denial of the claim, and further determined that
substantial evidence supported an implicit finding by the Board
that Kim had failed to present evidence justifying equitable
relief from a dismissal.
III. STANDARD OF REVIEW
Because the Commissions decisions represent the final
administrative action in a workers compensation case and have
precedential value for the Board and the Commission, and because
the questions presented are questions of law not involving agency
expertise, we review the Commissions decision.3 Proper
application of a statute of limitations presents a question of
law to which we apply our independent judgment.4 Applying our
independent judgment, we adopt the rule of law that is most
persuasive in light of precedent, reason, and policy.5
IV. DISCUSSION
The first and last sentences of AS 23.30.110(c) govern
the manner by which hearings are requested before the Board and
the consequences of failure to prosecute a claim:
Before a hearing is scheduled, the party
seeking a hearing shall file a request for a
hearing together with an affidavit stating
that the party has completed necessary
discovery, obtained necessary evidence, and
is prepared for the hearing. . . . If the
employer controverts a claim on a board-
prescribed controversion notice and the
employee does not request a hearing within
two years following the filing of the
controversion notice, the claim is denied.[6]
The first sentence of the subsection sets out
prerequisites for scheduling a hearing: a party must submit a
request for hearing with an affidavit swearing that the party is
prepared for a hearing.7 The last sentence of the subsection
specifies when a claim is denied for failure to prosecute: if
the employee does not request a hearing within two years of
controversion, the claim is denied.8 The Commission recognized
that [t]he lack of reference to the affidavit in the last
sentence of section 110(c), coupled with the use of the verb
request, hints that filing a hearing request without an affidavit
will toll the time-bar. The Commission nonetheless held that a
Board regulation requiring an affidavit to request a hearing was
a reasonable interpretation of subsection .110(c) and that the
Board could reasonably require an affidavit to toll the time-bar
of subsection .110(c).9 But because a statutory dismissal
results from failing to request a hearing, rather than from
failing to schedule one, it was error to conclude that an
affidavit of readiness was required to request a hearing and toll
the time-bar. We conclude that strict compliance with the
affidavit requirement is unnecessary because subsection .110(c)
is directory, not mandatory.
Subsection .110(c) is a procedural statute that sets up
the legal machinery through which a right is processed and
directs the claimant to take certain action following
controversion.10 A party must strictly comply with a procedural
statute only if its provisions are mandatory; if they are
directory, then substantial compliance is acceptable absent
significant prejudice to the other party.11 In South Anchorage
Concerned Coalition, Inc. v. Municipality of Anchorage, we
examined a municipal ordinance with language similar to the
language in subsection .110(c).12 In that case, we determined
that the ordinance was directory, not mandatory, so that strict
compliance with the ordinance was not required.13 We stated
there:
A statute is considered directory if (1) its
wording is affirmative rather than
prohibitive; (2) the legislative intent was
to create guidelines for the orderly conduct
of public business; and (3) serious,
practical consequences would result if it
were considered mandatory.[14]
We conclude that the language of subsection .110(c)
satisfies these criteria and hold its provisions are directory.
First, the language of subsection .110(c) is affirmative, not
prohibitive.15 The first sentence of the statute directs a party
to file a request for a hearing with an affidavit of readiness to
schedule a hearing, but it does not say what a party or the Board
should not do. The last sentence of the subsection also gives an
affirmative directive, rather than a prohibition, simply stating
that a claim is denied if the employee does not request a hearing
within two years following a notice of controversion.
Second, the legislature added the affidavit requirement
to create procedural guidelines for the orderly conduct of public
business. Although the last sentence of subsection .110(c)
imposes a penalty on a claimant for failing to meet the deadline
to request a hearing, legislative history supports the conclusion
that the primary purpose of requiring an affidavit was to create
guidelines for the orderly conduct of public business.16 The
House Judiciary Committees sectional analysis of the legislation
reenacting subsection .110(c) to include an affidavit requirement
stated that this subsection was meant to address delays in
getting disputed cases before the Board and the [B]oards problems
in timely docketing cases for hearing.17
Finally, this case aptly demonstrates the serious
consequences of a conclusion that the affidavit requirement is a
mandatory component of a request for a future hearing a party
who wants to request a future hearing, but is for legitimate
reasons unable to truthfully state readiness for an immediate
hearing, faces denial of workers compensation benefits.
Alyeska argues that construing the statute to toll the
time-bar when a hearing request is filed without an affidavit of
readiness will make subsection .110(c) ineffective by not
requiring claimants to prosecute their claims in a timely manner.
Alyeska suggests a claimant could request a hearing to toll the
time-bar and then simply never schedule one, thus rendering the
statute meaningless. The Commission similarly expressed concern
that construing the statute in this manner would undermine the
statutory purpose of requiring claimants to prosecute their
claims promptly.
Yet the Commission has noted that the [B]oard is not
without power to excuse failure to file a request for hearing on
time when the evidence supports application of a recognized form
of equitable relief.18 In Tonoian v. Pinkerton Security, the
Commission suggested several legal reasons why delay by a pro se
litigant might be excused.19 And in Omar v. Unisea, Inc., the
Commission remanded the case to the Board to consider whether,
among other things, the circumstances as a whole constitute
compliance with the requirements of [AS] 23.30.110(c) sufficient
to excuse any failures . . . to comply with the statute.20 From
these decisions, it appears that the Commission and the Board
already exercise some discretion and do not always strictly apply
the statutory requirements. This approach is consistent with the
notion that a statute of limitations defense is disfavored.21
In holding that subsection .110(c) is directory, we do
not suggest that a claimant can simply ignore the statutory
deadline and fail to file anything.22 A determination that a
statute is directory instead permits substantial compliance with
statutory requirements, rather than strict compliance.23 We
construe subsection .110(c) to require filing a request for
hearing within two years of the date of the employers
controversion of a claim. If within that two-year period the
claimant is unable to file a truthful affidavit stating that he
or she actually is ready for an immediate hearing, as was the
case here, the claimant must inform the Board of the reasons for
the inability to do so and request additional time to prepare for
the hearing. Filing the hearing request and the request for
additional time to prepare for the hearing constitutes
substantial compliance and tolls the time-bar until the Board
decides whether to give the claimant more time to pursue the
claim.24 If the Board agrees to give the claimant more time, it
must specify the amount of time granted to the claimant. If the
Board denies the request for more time, the two-year time limit
begins to run again, and the claimant has only the remainder of
that time period to file the paperwork necessary to request an
immediate hearing.25
We are troubled by Alyeskas assertion at oral argument
that it is not uncommon for a party to sign an affidavit of
readiness despite not actually being ready and that the solution
for a claimant in Kims predicament is to file an affidavit of
readiness for hearing and then request a continuance of the
scheduled hearing. The lack of a Board regulation to deal with
exceptional circumstances, and the myriad reasons why a party
might not be able to swear truthfully that the claimant is
prepared for an immediate hearing despite conducting discovery
and obtaining evidence, make strict adherence to an affidavit
requirement problematic. A party or attorney should not be in a
position of having to choose between perjury and relinquishing a
valid claim.
It is not clear to us that a method the Board has
apparently used to resolve this tension permitting the filing of
an affidavit of readiness on any issue no matter how small or
inconsequential26 solves the problem a party or attorney may
face. Nor is it clear when the Board permits less orthodox
pleadings to toll the subsection .110(c) time-bar. For example,
the Board decided in one case that an affidavit of readiness for
hearing on a request for extension of time for a hearing was
sufficient to toll the time-bar of subsection .110(c)
permanently.27 Although Kims request was titled differently, he
too requested an extension of time for a hearing. The Board
never ruled on the merits of Kims request, presumably because he
did not file an affidavit of readiness with the motion for
continuance.28 If so, this seems to place form over substance
(especially when the motion was discussed at the pre-hearing
conference).29
On remand, the Board should fully consider the merits
of Kims request for additional time and any resulting prejudice
to Alyeska. If in its broad discretion the Board determines that
Kims reasons for requesting additional time have insufficient
merit, or that Alyeska would be unduly prejudiced, the Board can
set a hearing of its own accord or require Kim to file an
affidavit of readiness within two days the amount of time
remaining before the original two-year period expired.30
IV. CONCLUSION
We REVERSE and REMAND for further proceedings
consistent with this opinion.
_______________________________
1 The relevant part of AS 23.30.110, Procedure on claims,
is as follows:
(c) Before a hearing is scheduled, the party
seeking a hearing shall file a request for a
hearing together with an affidavit stating that
the party has completed necessary discovery,
obtained necessary evidence, and is prepared for
the hearing. An opposing party shall have 10 days
after the hearing request is filed to file a
response. If a party opposes the hearing request,
the board or a board designee shall within 30 days
of the filing of the opposition conduct a pre-
hearing conference and set a hearing date. If
opposition is not filed, a hearing shall be
scheduled no later than 60 days after the receipt
of the hearing request. . . . After a hearing has
been scheduled, the parties may not stipulate to
change the hearing date or to cancel, postpone, or
continue the hearing, except for good cause as
determined by the board. . . . If the employer
controverts a claim on a board-prescribed
controversion notice and the employee does not
request a hearing within two years following the
filing of the controversion notice, the claim is
denied.
2 The Boards regulations contemplate two kinds of filings
with the Board: claims, which are written requests for statutory
workers compensation benefits; and petitions, which are all other
requests for action by the Board. 8 Alaska Administrative Code
(AAC) 45.050(a)-(b) (2004). The Board evidently considered Kims
motion to be a properly filed petition, because it was not
returned. See 8 AAC 45.050(b)(8) (Board will return petition not
in accordance with regulations). A hearing on a petition
generally will not be scheduled in the absence of a timely filed
affidavit of readiness. 8 AAC 45.070(b). Affidavits of
readiness for hearing on petitions may not be filed until the
earlier of an answer to the petition or twenty days after the
petition is filed. 8 AAC 45.070(b)(2). However, the Board may
schedule a hearing on a petition even in the absence of an
affidavit of readiness. 8 AAC 45.070(b)(3). Kim did not file an
affidavit of readiness for hearing on his motion.
3 Barrington v. Alaska Commcn Sys. Group, Inc., ____ P.3d
____, Op. No. 6321 at 5 (Alaska October 24, 2008). As in
Barrington, we decline to adopt here a general rule for appeals
from the Commission about the standards we will use to review
other types of rulings that may be presented in workers
compensation appeals, such as factual determinations, decisions
committed to adjudicator discretion, or rulings on questions of
law that involve agency expertise. Id. at 6. We also express no
opinion about whether we will review the Commissions decision or
the Boards decision in other circumstances. Id.
4 Bailey v. Tex. Instruments, Inc., 111 P.3d 321, 323-24
(Alaska 2005) (interpreting AS 23.30.110(c)); Tipton v. ARCO
Alaska, Inc., 922 P.2d 910, 912 n.1 (Alaska 1996) (same).
5 Seybert v. Cominco Alaska Exploration, 182 P.3d 1079,
1089 (Alaska 2008).
6 AS 23.30.110(c). We have previously likened the time-
bar in subsection .110(c) to a statute of limitations because it
denies the benefits requested in a compensation claim. Tipton,
922 P.2d at 912 n.4 (citing Jonathan v. Doyon Drilling, Inc.,
890 P.2d 1121, 1122 (Alaska 1995); Suh v. Pingo Corp., 736 P.2d
342, 346 (Alaska 1987)). A statute of limitations defense is
disfavored, and we have previously held that provisions absent
from subsection .110(c) should not be read into it. Tipton, 922
P.2d at 912-13 (rejecting employers argument that in order to
avoid the time-bar an employee must again request a hearing every
time a previously-requested hearing is cancelled).
7 AS 23.30.110(c).
8 Id.
9 The Commission cited 8 AAC 45.070(b)(1), which provides
that an affidavit of readiness is required to request a hearing.
We note that 8 AAC 45.070(b)(3) allows the Board to schedule a
hearing even though a party fails to file an affidavit of
readiness.
10 Pan Alaska Trucking, Inc. v. Crouch, 773 P.2d 947, 949
(Alaska 1989).
11 S. Anchorage Concerned Coal., Inc. v. Mun. of Anchorage
Bd. of Adjustment, 172 P.3d 768, 772 (Alaska 2007) (citing In re
Weiderholt, 24 P.3d 1219, 1233 (Alaska 2001)).
12 172 P.3d at 772. We quoted Anchorage Municipal Code
21.30.050(B) in that case as follows:
The appellant shall arrange for the preparation of
the transcript of the board hearing by a court
reporter or the current board and commission
recording secretary and shall pay the cost of such
preparation. The appellant shall file the
transcript with the municipal clerk. If the
appellant fails to file the transcript within 30
days of the filing of the notice of appeal, the
appeal shall be automatically denied.
Id.
13 Id.
14 Id. (citing Weiderholt, 24 P.3d at 1233).
15 This is in contrast to statutes of limitations, which
are prohibitory. For example, AS 09.10.010, General Limitations
on Civil Actions, states, A person may not commence a civil
action except within the periods prescribed in this chapter after
the cause of action has accrued . . . . See also AS
09.10.030.090.
16 The claim denial penalty of subsection .110(c) predates
the affidavit requirement. See ch. 93, 12, SLA 1982; ch. 79,
20, SLA 1988.
17 House Judiciary Comm., Sectional Analysis, House Comm.
Substitute for Comm. Substitute for Senate Bill (SB) 322 (L&C),
15th Leg., 2d Sess. at 8 (April 6, 1988). In Bailey, we rejected
an assertion that the claim dismissal directive of AS
23.30.110(c) violated substantive due process and equal
protection rights, noting that the statutory provision was
rationally connected to the core purpose of the workers
compensation act: to establish a quick, efficient, and fair
system for resolving disputes. 111 P.3d at 325 n.10.
18 Morgan v. Alaska Regl Hosp., AWCAC Decision No. 035 at
17-18 (February 28, 2007) (citing Tonoian v. Pinkerton Sec.,
AWCAC Decision No. 029 at 11 (January 30, 2007)).
19 Tonoian v. Pinkerton Sec., AWCAC Decision No. 029 at 11
(January 30, 2007).
20 Omar v. Unisea, Inc., AWCAC Decision No. 053 at 7-8
(August 27, 2007).
21 Tipton, 922 P.2d at 912-13.
22 For example, in Bailey two of the three claims for
benefits filed by the employee were denied under the two-year
time-bar because the employee failed to file anything regarding a
hearing. 111 P.3d at 324.
23 Our holding today is compatible with our holding in
Summers v. Korobkin Constr., 814 P.2d 1369, 1372 (Alaska 1991),
where we decided that AS 23.30.110(c) required the Board to hold
a hearing when one had been requested, i.e., that a hearing was
mandatory and not discretionary. Failing to hold a hearing would
not amount to compliance with the statute it would result in
complete noncompliance with it. On the other hand, the Board
might still comply with the statute by holding a hearing sixty-
two days after an affidavit of readiness is filed, rather than
sixty days as stated in the statute.
24 Cf. AS 23.30.110(h). Under the facts and circumstances
of this case, Kims motion for a continuance constitutes
substantial compliance.
25 This is similar to the statutory framework governing
continuances of scheduled hearings and running of the time-bar.
See AS 23.30.110(h).
26 See Lewis v. Windfall Gold Mining, AWCB Decision No. 92-
0028 at 3 (February 6, 1992) (holding that claimant only need be
ready to prosecute some aspect of claim).
27 Pool v. City of Wrangell, AWCB Decision No. 99-0097 at
2, 4 (April 29, 1999). When the employee in Pool filed her
request for extension of time for hearing, no hearing had been
scheduled and the parties were involved in a protracted discovery
battle. Id. at 2.
28 At the hearing on Alyeskas petition to deny Kims claim
as time-barred, the Board chair asked Kim if he had filed an
affidavit of readiness with his motion for continuance. The
Board chair then stated that because Kim had not filed an
affidavit of readiness on the petition to continue . . . we will
treat the petition to continue as an opposition to the petition
to dismiss.
29 The Board had the authority to schedule a hearing on
Kims request even though he had not filed an affidavit of
readiness. See 8 AAC 45.070(b)(3). It also had the power to
relax any regulatory deadlines or procedural requirements. See
8 AAC 45.063(b), .195.
30 The Commission stated that the Board implicitly found
Kim had not made diligent and timely efforts to prepare for a
hearing on his compensation claim, and further found substantial
evidence in the record to support what the [B]oard meant. The
Commission concluded that Kim therefore had shown no
justification for equitable tolling even if it were applicable.
But the Commission earlier stated that [t]he [B]oard noted that
. . . it did not have discretion to excuse the employee from
failure to file a request for hearing. Because we hold that the
Board has discretion to accept substantial compliance with AS
23.30.110(c) to toll its time-bar and to extend the time for
filing a scheduling request for a hearing, we remand for the
Boards exercise of its discretion in this case. If the Board
requires Kim to file an affidavit of readiness within two days,
the Board should clarify whether it must be for some or all
issues relevant to his claim.
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