ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
W. F. CONOUR JULIA BLACKWELL GELINAS
Conour Doehrman DAVID T. KASPER
Indianapolis, Indiana NELSON D. ALEXANDER
Locke Reynolds LLP
ATTORNEYS FOR AMICUS CURIAE ATTORNEY FOR AMICUS CURIAE
INDIANA STATE AFL-CIO IN THE INSURANCE INSTITUTE OF
OPPOSITION TO TRANSFER: INDIANA, THE INDIANA CHAMBER
OF COMMERCE, THE AMERICAN
WILLIAM R. GROTH INSURANCE ASSOCIATION, THE
GEOFFREY S. LOHMAN NATIONAL ASSOCIATION OF
Fillenwarth Dennerline Groth & Towe INDEPENDENT INSURERS, AND
Indianapolis, Indiana THE ALLIANCE OF AMERICAN
INSURERS IN SUPPORT OF
NATHAN B. MAUDLIN
SUPREME COURT OF INDIANA
JOHN SIMS, )
Appellant (Plaintiff ), ) Supreme Court Cause Number
UNITED STATES FIDELITY & ) Court of Appeals Cause Number
GUARANTY COMPANY, ) 49A02-9904-CV-295
Appellee (Defendant ). )
APPEAL FROM THE MARION SUPERIOR COURT NO. 12
The Honorable Susan Macey Thompson, Judge
Cause No. 49D12-9904-CT-489
January 28, 2003
Indiana Code section 22-3-4-12.1 grants exclusive jurisdiction to the Workers Compensation Board to
determine whether a workers compensation insurance carrier committed an independent tort in adjusting
or settling the injured workers claim. Specifically subsection (a) of the statute
The workers compensation board, upon hearing a claim for benefits, has the exclusive
jurisdiction to determine whether the employer, the employers workers compensation administrator, or the
workers compensation insurance carrier has acted with a lack of diligence, in bad
faith, or has committed an independent tort in adjusting or settling the claim
We decide today that the statute is not constitutionally infirm.
Facts and Procedural History
John Sims was employed as a laborer for Hagerman Construction Corporation. On
September 9, 1998, he was injured while working at Conseco Fieldhouse in Indianapolis.
More particularly, while walking down a flight of metal stairs, Sims tripped
over a welding lead that had been draped across the stairway. Falling
down the stairs, Sims sprained his left ankle and sustained a fracture to
his left tibia.
Hagerman Construction filed a First Report of Injury notice with its workers compensation
carrier, United States Fidelity and Guaranty Company (USF&G). On October 20, 1998,
USF&G sent Sims a letter requesting that he complete a Statement of Claim
form. Sims did so and returned the form. On October 22,
1998, Sims contacted USF&G by letter seeking to schedule medical care and requesting
payment of temporary total disability benefits under the Workers Compensation Act (Act).
USF&G did not respond. He followed up the request on November 11,
1998. Again the insurance carrier failed to respond. On November 23,
1998, Sims filed a complaint in the Marion Superior Court alleging USF&G was
grossly negligent, intentionally inflicted emotional distress, and intentionally deprived him of certain statutory
rights by refusing to provide workers compensation benefits and by denying him access
to timely medical care and physical therapy.
In response, USF&G filed a motion to dismiss under Indiana Trial Rule 12(B)(1)
alleging lack of subject matter jurisdiction. Citing Indiana Code section 22-3-4-12.1, USF&G
argued that the Workers Compensation Board had the exclusive jurisdiction over the claims
alleged in Sims complaint. The trial court agreed and granted the motion
to dismiss. Sims appealed making several Indiana constitutional challenges to the statute.
Finding two of the challenges dispositive, a divided panel of the Court
of Appeals reversed the trial court holding Indiana Code section 22-3-4-12.1 violated the
open courts provision of Article I, Section 12 of the Indiana Constitution and
the right to a trial by jury as expressed in Article I, Section
20 of the Indiana Constitution. See Sims v. U.S. Fid. & Guar.
Co., 730 N.E.2d 232, 234 (Ind. Ct. App. 2000). Having previously granted
transfer, we conclude the statute violates neither section of the Indiana Constitution and
thus affirm the trial court.
Standard of Review
When a statute is challenged as an alleged violation of the Indiana Constitution,
our standard of review is well settled. A statute is presumed constitutional
until the party challenging its constitutionality clearly overcomes the presumption by a contrary
showing. Boehm v. Town of St. John, 675 N.E.2d 318, 321 (Ind.
1996). If a statute has two reasonable interpretations, one constitutional and the
other not, we will choose the interpretation that will uphold the constitutionality of
the statute. Id. We do not presume that the General Assembly
violated the constitution unless the unambiguous language of the statute so mandates.
Id. This Court should nullify a statute on constitutional grounds only where
such result is clearly rational and necessary. Bd. of Commrs of the
County of Howard v. Kokomo City Plan Commn, 263 Ind. 282, 330 N.E.2d
92, 95 (1975).
Article I, Section 12 of the Indiana Constitution provides: All courts shall
be open; and every person, for injury done to him in his person,
property, or reputation, shall have remedy by due course of law. Justice
shall be administered freely, and without purchase; completely, and without denial; speedily, and
without delay. Ind. Const. art I, § 12 (emphasis added). Sims
contends, and the Court of Appeals agreed, that granting the Workers Compensation Board
the exclusive jurisdiction to adjudicate independent tort claims effectively closes the courthouse doors
to workers seeking to pursue redress against errant employers or workers compensation insurance
carriers in attempting to settle their workers compensation claims. Sims, 730 N.E.2d
The Workers Compensation Act contains an exclusivity provision that provides:
The rights and remedies granted to an employee . . . on account
of personal injury or death by accident shall exclude all other rights and
remedies of such employee, the employees personal representatives, dependents, or next of kin,
at common law or otherwise, on account of such injury or death, except
for remedies available under IC 5-2-6.1.
Ind. Code § 22-3-2-6 (West Supp. 2002). This statute limits an employee
whose injury meets the jurisdictional requirements of the Act to the rights and
remedies provided therein. Perry v. Stitzer Buick GMC, Inc., 637 N.E.2d 1282,
1285 (Ind. 1994); Campbell v. Eckman/Freeman & Assocs., 670 N.E.2d 925, 930 (Ind.
Ct. App. 1996), trans. denied. Accordingly, if an employees injury occurred by accident
arising out of and in the course of employment, then the employee is
entitled to workers compensation benefits. The exclusivity provision bars a court from
hearing any common law action brought by the employee for the same injuries.
Campbell, 670 N.E.2d at 930; see Wine-Settergren v. Lamey, 716 N.E.2d 381,
384 (Ind. 1999). However, the Act permits an action against third party
tortfeasors, so long as the third party is neither the plaintiffs employer nor
his fellow employee. I.C. § 22-3-2-13 (West Supp. 2002); see Wine-Settergren, 716
N.E.2d at 384; Campbell, 670 N.E.2d at 930. Under the Act, the
term employer includes the workers compensation carrier. See I.C. § 22-3-6-1(a) (West
In Stump v. Commercial Union, 601 N.E.2d 327 (Ind. 1992) this Court was
called upon to respond to a certified question from the United States District
Court, Northern District of Indiana, Fort Wayne Division. We were asked whether
Indiana law permitted a cause of action by an injured employee against a
workers compensation insurance carrier for injuries proximately caused by the insurance carriers tortious
conduct such as gross negligence, intentional infliction of emotional distress, and constructive fraud.
Id. at 329. This Court held that the exclusive remedy provision
of the Act does not preclude an employee from filing a complaint in
court against a workers compensation insurance for such claims. Id. at 333.
We reasoned that the exclusive remedy provision precludes an employees action outside
the Act only when the injury occurs by accident and in the course
of employment. Id. at 331. However an additional harm caused by
a carriers mishandling of a claim was not the type of harm the
Act was intended to compensate. Id. Although not expressly analyzing the
point, we also noted that this interpretation was consistent with the open courts
provision of Article I, Section 12. Id.
Relying on the reasoning in Stump, the Court of Appeals majority in this
case held that the portion of Indiana Code section 22-3-4-12.1 which declares that
the Workers Compensation Board has the exclusive jurisdiction to determine whether the .
. . employers workers compensation insurance carrier has . . . committed an
independent tort in adjusting or settling the claim for compensation violates Article
I, Section 12 of the Indiana Constitution. Sims, 730 N.E.2d at 235
(quoting I.C. § 22-3-4-12.1(a)). However, Indiana Code section 22-3-4-12.1 was enacted after
Stump and likely represented a legislative response to it. The Court of
Appeals majority acknowledged as much but nonetheless found that the statute violated the
open courts clause of the Indiana Constitution by unreasonably denying Sims access to
the courts and denying him a complete remedy for the insurance carriers alleged
independent tort. Id. However, because of the legislative enactment, Stump is
no longer controlling.
In Martin v. Richey, 711 N.E.2d 1273 (Ind. 1999), this Court examined Article
I, Section 12 in the context of considering the constitutionality of the medical
malpractice statute of limitations. In so doing, we noted that this Court
has never held that there is a fundamental right to access to the
courts. Id. at 1283. Rather, the legislature has the authority to
modify or abrogate common law rights provided that such change does not interfere
with constitutional rights. Id. We reiterated there is a right of
access to the courts, and . . . the legislature cannot unreasonably deny
citizens the right to exercise this right. Id.
Here, the Court of Appeals seized on the quoted language to support the
conclusion that the statute violated Article I, Section 12 of the Indiana Constitution.
However, our ruling in Martin did not sweep quite so broadly. Instead,
we determined that the occurrence-based statute of limitations was unconstitutional as applied to
the plaintiff primarily because otherwise the statute would impose an impossible condition on
plaintiffs access to courts and ability to pursue an otherwise valid tort claim.
Id. at 1284 (emphasis added). In other words, the statute as
applied completely denied plaintiff Martin all access to the courts.
Unlike Martin, Sims is not completely denied access to the courts. Rather, he
is merely required to present his claim first to the full Workers Compensation
Board. Thereafter, if he receives an adverse ruling, then he may invoke
the jurisdiction of the appellate courts. See I.C. § 22-3-4-8(b); Sheets v.
Disabilities Servs., Inc., 602 N.E.2d 506, 506 (Ind. 1992). As the Court
of Appeals has previously observed, [t]he legislature, in enacting [I.C. § 22-3-4-12.1(a)], has
merely acted to restrict the remedy available for a breach of duty imposed
upon the workers compensation insurance carrier. Borgman v. State Farm Ins. Co.,
713 N.E.2d 851, 856 (Ind. Ct. App. 1999), trans. denied, (rejecting a claim
that the statute violated the open courts provision of Article I, Section 12).
We agree with the Borgman court. Accordingly, we conclude that Sims
has failed to overcome the presumptive constitutional validity of the challenged statute.
Sims also contends that Indiana Code section 22-3-4-12.1 unconstitutionally deprives him of a
jury trial by requiring that his claim be submitted to the Workers Compensation
Board. He relies on Article I, Section 20 of the Indiana Constitution,
which dictates, In all civil cases, the right of trial by jury shall
remain inviolate. Ind. Const. art. I, § 20. The phrase civil
cases has been construed to preserve a jury right in those civil cases
triable by jury at common law. Wright v. Fulz, 138 Ind. 594,
38 N.E. 175, 175 (1894); Allen v. Anderson, 57 Ind. 388, 389 (1877);
Lake Erie, Wabash & St. Louis R.R. Co. v. Heath, 9 Ind. 558,
559-60 (1857). It is true that actions for injuries caused by another
were known under the common law and triable by jury. Warren v.
Ind. Tel. Co., 217 Ind. 93, 26 N.E.2d 399, 403 (1940). However,
Sims right to pursue the insurance carrier arose only because of the existence
of the Act. Namely, because of his on-the-job injury, and regardless of fault,
Sims is entitled to compensation. In the words of Judge Baker, but
for the Act there would be no insurance carrier against whom to bring
an action. Sims, 730 N.E.2d at 237-38 (Baker, J., dissenting). We
agree. As explained in more detail below, Indiana Code section 22-3-4-12.1 is
part of a special statutory proceeding, and not a civil case as contemplated
by Article I, Section 20.
Prior to the enactment of workers compensation acts, workers were faced with the
harshness of the common law. An action in tort against the employer
was the only remedy available to an employee injured in the workplace by
the alleged negligence of an employer. These claims were rarely successful due
to the common law defenses of contributory negligence, assumption of risk, and injury
by a fellow servant. See Frampton v. Cent. Ind. Gas Co., 260
Ind. 249, 297 N.E.2d 425, 427 (1973). The basic policy underlying the
Act was to shift the economic burden for employment connected injuries from the
employee to the employer:
When an injury to a servant is found to be covered by a
workers compensation act, it is uniformly held that the statutory compensation is the
sole remedy, and that any recovery against the employer at common law is
barred. It is recognized that this remedy is in the nature of
a compromise, by which the worker is to accept a limited compensation, usually
less than the estimate which a jury might place upon his damages, in
return for an extended liability of the employer, and an assurance that he
will be paid.
W. Page Keeton et al., Prosser and Keeton on the Law of Torts
§ 80, at 574 (5th ed. 1984) (footnotes omitted). This quid pro
quo regime represents a deliberate policy choice by the General Assembly in an
apparent response to the Industrial Revolution when more and more men poured their
lives, their limbs, and their health into the might of industry. Ben
F. Small, Workmens Compensation Law of Indiana, § 1.2, at 4-5 (1950).
As Justice Dickson has pointed out, the continuing vitality of a workmens compensation
system not only serves the interests of the injured worker, it also benefits
the business community in providing protection from large verdicts and by permitting the
business community to more easily predict, quantify and plan for anticipated costs from
employee injuries. Evans v. Yankeetown Dock Corp., 491 N.E.2d 969, 971 (Ind.
By enacting the Workers Compensation Act, the General Assembly has changed the common
law by establishing a statutory scheme that approaches strict liability: if the
accidental injury arises out of and in the course of employment, then the
employer must pay. And this is so regardless of whether the employee
contributed to the injury, assumed the risk of working in a particular environment,
or was injured not by the act of the employer, but by a
Sims is correct that we have long held that the General Assembly has
the authority to modify or abrogate the common law so long as such
change does not interfere with constitutional rights. Martin, 711 N.E.2d at 1283;
State v. Rendleman, 603 N.E.2d 1333, 1336 (Ind. 1992). However, Indianas Constitution
does not forbid abolition of old rights recognized by the common law in
order to attain permissible legislative [objectives]. Rendleman, 603 N.E.2d at 1336.
It is axiomatic that because the employees common law right to proceed in
court against an allegedly negligent employer for work related injuries has been abolished
by the Legislature, all attendant rights have been abolished as well. In
its place, the Legislature has provided a special statutory scheme as the exclusive
remedy for such claims. We of course acknowledge that the right to
a jury trial is a fundamental right in our democratic judicial system that
must be scrupulously guarded against encroachment. Levinson v. Citizens Nat. Bank of
Evansville, 644 N.E.2d 1264, 1267 (Ind. Ct. App. 1994). Nonetheless, this court
has held that there is no fundamental right . . . to
bring a particular cause of action to remedy an asserted wrong. Martin,
711 N.E.2d at 1283.
Considering the underlying policy and purpose of the Act, the prohibition against trial
by jury is reasonable in our view. The Act is designed for
the humanitarian purpose of providing injured workers with an expeditious and adequate remedy.
Walker v. State, 694 N.E.2d 258, 266 (Ind. 1998); see also Leisure
v. Leisure, 605 N.E.2d 755, 758 (Ind. 1993) (explaining [t]he Act was enacted
to remove obstacles and insure a more certain remedy for the injured worker.).
One may argue that the remedy here was neither certain nor expeditious
in that USF&Gs delay and non-responsiveness prompted Sims to file a complaint in
the first place. However, the Act itself is not the culprit.
And it still provides an avenue for redress unencumbered by the inherent delay
caused by congested trial court dockets. In sum, we conclude that Indiana
Code section 22-3-4-12.1 does not violate Article I, Section 20 of the Indiana
Last, Sims argued before the Court of Appeals that Indiana Code section 22-3-4-12.1
also violates Article I, Section 23 of the Indiana Constitution which provides, The
General Assembly shall not grant to any citizen, or class of citizens, privileges
or immunities, which, upon the same terms, shall not equally belong to all
citizens. Ind. Const. art. I, § 23. Because the court ruled
in favor of Sims on other grounds, it did not reach this issue.
We now address this claim as well.
According to Sims, the statute creates an impermissible distinction between workers compensation carriers
on the one hand and all other insurance carriers on the other hand.
Sims also complains that injured workers are treated differently than other injured
parties. Specifically, he says, under the statute, a tort claimant who suffers
additional injury at the hands of a workers compensation insurance carrier faces a
greater burden, diminished remedies, and less compensation than other tort claimants seeking similar
recovery from other types of insurance companies or insurance coverage. Br. of
Appellant at 19.
Claims asserted under Article I, Section 23 are subject to a two-part test.
First, the disparate treatment accorded by the legislation must be reasonably related
to inherent characteristics, which distinguish the unequally treated classes.
Collins v. Day,
644 N.E.2d 72, 78-79 (Ind. 1994). Second, the preferential treatment must be
uniformly applicable and equally available to all persons similarly situated. Id. at
80. In determining whether a statute complies with or violates Article I,
Section 23, courts must exercise substantial deference to legislative discretion.
Legislative classification becomes a judicial question only where the lines drawn appear arbitrary
or manifestly unreasonable. So long as the classification is based upon substantial
distinctions with reference to the subject matter, we will not substitute our judgment
for that of the legislature; nor will we inquire into the legislative motives
prompting such classification.
Id. The burden is on the challenger to negative every conceivable basis
which might have supported the classification. Id. In this case, Sims
challenges the statute only upon the first part of the Collins two-part test.
The underlying purposes and policy of the Act, as more fully discussed in
Part II above, justify the difference in treatment that Indiana Code section 22-3-4-12.1
affords workers compensation insurance carriers versus other insurance carriers as well as injured
workers versus other injured claimants. To provide an expeditious and adequate remedy
for workers injured in work-related accidents, regardless of fault, Walker, 694 N.E.2d at
266, and to insure a more certain remedy for the injured worker, Smith
v. Smith, 676 N.E.2d 388, 390 (Ind. Ct. App. 1997), the Act obligates
employers covered thereby to provide compensation to injured employees who at common law
were precluded from recovery because of the common law defenses of contributory negligence,
assumption of risk, or injury by a fellow servant. Unlike other tort
claimants, a worker covered under the Act is absolutely assured of compensation provided
the injury was by accident and arose out of and in the course
of employment. Too, the Act imposes obligations on workers compensation carriers that
are unique within the insurance industry. For example, an employers notice or
knowledge of an employees injury is imputed to the workers compensation carrier, I.C.
§ 22-3-5-5(c)(3) (West Supp. 2002); the workers compensation carrier is obligated to pay
benefits to an injured employee regardless of any default by the employer after
the injury occurred, I.C. § 22-3-5-5(c)(4), -5.5 (d) (West Supp. 2002); and the
employer is required to give ten days notice to the Workers Compensation Board
before a workers compensation carrier can terminate an employees coverage, I.C. § 22-3-5-5(c)(5)
(West Supp. 2002). By vesting in the Workers Compensation Board the authority
to determine whether a workers compensation carrier has committed an independent tort in
adjusting or settling a claim, the General Assembly has drawn classifications between injured
claimants and insurers that are neither arbitrary nor manifestly unreasonable. Because the
disparate treatment in this case is reasonably related to inherent characteristics, which distinguish
the unequally treated classes, we conclude that Indiana Code section 22-3-4-12.1 does not
violate Article I, Section 23 of the Indiana Constitution.
A party challenging the constitutionality of a statute carries a heavy burden.
In this case, Sims has not carried his burden of demonstrating that Indiana
Code section 22-3-4-12.1 violates Article I, Section 12; Article I, Section 20; or
Article I, Section 23 of the Indiana Constitution. Therefore, we affirm the
judgment of the trial court.
SHEPARD, C.J., and SULLIVAN and BOEHM, JJ., concur.
DICKSON, J., dissents with separate opinion.
DICKSON, J., dissenting.
In Stump v. Commercial Union, 601 N.E.2d 327, 333 (Ind. 1992), we held
that the Indiana Worker's Compensation Act does not authorize injured employees to seek
separate recourse in the courts for claims against their employers' worker's compensation insurance
carriers based on either (a) breach of duty to act in good faith
and to engage in fair dealings with the employee, or (b) breach of
fiduciary obligation owed the employee. However, we recognized that an injured employee could
maintain a common law claim against the carrier for "tortious conduct such as
to constitute gross negligence, intentional infliction of emotional distress, or constructive fraud."
In 1997, the Indiana General Assembly enacted a statute declaring that the Worker's
Compensation Board has "exclusive jurisdiction to determine whether the employer, the employer's worker's
compensation administrator, or the worker's compensation insurance carrier has acted with a lack
of diligence, in bad faith, or has committed an independent tort in adjusting
or settling the claim for compensation" and providing for maximum recovery of $20,000.
Ind. Code § 22-3-4-12.1(a), (b).
This statute does not abolish the civil cause of action recognized under Stump,
but rather compels exclusive recourse to an administrative tribunal, depriving an injured claimant
from seeking redress through courts of law, and denying the right to a
jury trial. I remain convinced that the statute thereby violates Article I,
Section 12 ("All courts shall be open; and every person, for injury done
to him in his person, property, or reputation, shall have remedy by due
course of law. Justice shall be administered . . . completely, and
without denial; . . .") and Section 20 ("In all civil cases, the
right of trial by jury shall remain inviolate.") of the Indiana Constitution.
Our Constitution prohibits the legislature from eviscerating a recognized common law cause of
action by proclaiming it ineligible for jury trial.
For these reasons, I would reverse the trial court's order granting the motion
Sims also contended the statute violates several other Indiana constitutional provisions:
(i) the separation of powers as expressed in Article III, Section 1;
(ii) the prohibition of special legislation found in Article IV, Sections 22 and
23; and (iii) the grant of judicial authority as expressed in Article VII,
Section 1. Because Sims cites no authority in support of his contentions,
they are waived. In addition, Sims argued before the Court of Appeals
that Indiana Code section 22-3-4-12.1 was unconstitutional because it limited recovery to a
maximum of $20,000. The Court of Appeals majority declined to address this
issue on the ground that it was not properly raised in the trial
court. Sims has not raised this issue on transfer, and therefore we
decline to address it.