Nagel v. State

542 P.3d 622

2024 WY 15

Bjay NAGEL, Appellant (Petitioner),

v.STATE of Wyoming, EX REL. DEPARTMENT OF WORKFORCE SERVICES, WORKERS’ COMPENSATION DIVISION, Appellee (Respondent).

S-23-0147

Supreme Court of Wyoming.

February 1, 2024

Appeal from the District Court of Crook County, The Honorable James Michael Causey, Judge

Representing Appellant: Brooke M. Barney, Barney & Graham, LLC, Sheridan, Wyoming.

Representing Appellee: Bridget Hill, Wyoming Attorney General; Mark Klaassen, Deputy Attorney General; Peter Howard, Senior Assistant Attorney General; Holli J. Welch, Senior Assistant Attorney General.

Before FOX, C.J., and KAUTZ, BOOMGAARDEN, GRAY, and FENN, JJ.

KAUTZ, Justice.

[¶1] Bjay Nagel broke his left ankle while working for Sand Creek Country Club (Club) near Beulah, Wyoming. The Wyoming Department of Workforce Services, Workers’ Compensation Division (Division) initially awarded benefits but later denied further benefits upon discovering Mr. Nagel was intoxicated at the time of his injury. After a contested case hearing, the Wyoming Office of Administrative Hearings (OAH) upheld the Division’s denial of benefits because Mr. Nagel’s intoxication was a substantial factor causing his injury. Mr. Nagel filed a petition for review with the district court, which affirmed the OAH’s decision. We too affirm.

ISSUE

[¶2] Mr. Nagel raises one issue for our review, which we restate as follows:

Was the OAH’s decision that Mr. Nagel’s intoxication was a substantial factor causing his injury contrary to substantial evidence, arbitrary, capricious, or otherwise not in accordance with the law?

FACTS

[¶3] Mr. Nagel was employed as a caretaker by the Club. He and his family lived in the caretaker’s cabin on the Club’s property and were permitted to fish and tube the creek on the property. Mr. Nagel’s duties as caretaker included "mak[ing] rounds of the Club grounds at least twice a day" and "[r]emov[ing] any trees which f[e]ll into the creek." Mr. Nagel was expected to "be on site daily" unless he notified the Club’s President or a member of its Board of Directors that he would be away from the property.

[¶4] On June 13, 2021, after performing his rounds of the Club’s property, Mr. Nagel and his wife went to the local trading post for brunch. While there, he consumed alcohol and met two individuals who were painting a Club member’s cabin. Mr. Nagel agreed to take the painters tubing on the creek. He and one of the painters left the trading post and went to Mr. Nagel’s cabin, where they loaded tubes onto Mr. Nagel’s side-by-side all-terrain vehicle (ATV). After delivering the tubes up the creek, he and the painter drove the ATV back to the cabin to pick up Mr. Nagel’s wife and the other painter. En route, Mr. Nagel’s dog, who had followed him to the creek, suddenly darted in front of the ATV. Mr. Nagel swerved to avoid hitting the dog and rolled the ATV onto its side. Mr. Nagel’s left foot got caught underneath the ATV’s tire, fracturing his left ankle. His passenger was not injured.

[¶5] At 4:49 p.m., the Crook County Medical Services District dispatched an ambulance to the scene of the accident. The paramedic observed Mr. Nagel had an "open fracture with bone sticking out." He noted there was no alcohol on Mr. Nagel’s breath and Mr. Nagel’s neurological examination and speech were normal. Mr. Nagel told the paramedic:

[H]e was going about 25 mph when his dog ended up following them from home, dog ran out in front of ATV causing him to roll over, vehicle landed on his chest, his father in law lifted it off, he doesn’t know what part of his chest where it landed, denies [shortness of breath] or [chest pain], the only pain he has is 10/10 in the [left] foot, he admits to 3 beers and 2 shots about 2 hours prior, adamantly and repeatedly denies other pain elsewhere. [D]enies hitting his head or having [loss of consciousness].

[¶6] The ambulance transported Mr. Nagel to the Emergency Department (ED) at Monument Health Hospital in Spearfish, South Dakota. Mr. Nagel told the examining doctor that a "dog ran in front [of the ATV,] he skidded and fell out[.]" He also "admitted] to drinking some alcohol." The doctor diagnosed Mr. Nagel with "a very severe comminuted open fracture dislocation of the ankle" which needed emergency treatment at a trauma center. He cleaned and applied a splint to Mr. Nagel’s ankle and ordered a blood draw for laboratory testing, which was taken at 7:00 p.m. that evening. Mr. Nagel was then transported by ambulance to the Monument Health Hospital in Rapid City, South Dakota, for surgery. The testing of Mr. Nagel’s blood revealed a Blood Alcohol Content (BAC) of .183%.

[¶7] Mr. Nagel applied for workers’ compensation benefits. The Club objected to Mr. Nagel’s claim because, according to it, he was not acting in his role as a caretaker at the time of his injury but instead was engaged in a leisure activity with his wife and friends. The Division disagreed because Mr. Nagel was required to be on the job "24/7" unless he notified the Club’s President or a Board member that he would be gone. It concluded Mr. Nagel’s injury was compensable and paid him $1,483.50 for his medical expenses and $5,200.26 in temporary total disability benefits.

[¶8] A few months later, the Division received Mr. Nagel’s medical records and discovered he had a .183% BAC at the ED on the date of his injury. It denied Mr. Nagel any future benefits because the definition of "injury" in the Wyoming Workers’ Compensation Act "does not include injury caused by the fact the employee is intoxicated or injury due solely to the culpable negligence of the injured employee." Wyo. Stat. Ann. § 27-14-102(a)(xi)(B)(I), (C) (2023). Mr. Nagel timely objected and requested a hearing. The Division referred Mr. Nagel’s claim to the OAH, which held a contested case hearing.

[¶9] The OAH found Mr. Nagel’s injury arose out of and in the course and scope of his employment and the Division had failed to meet its burden of showing that Mr. Nagel’s injury was not compensable because it was caused solely by his culpable negligence. However, it affirmed the denial of benefits under § 27-14-102(a)(xi)(B)(I), which excludes workers’ compensation coverage for injuries caused by the employee’s intoxication. It decided the Division had shown by a preponderance of the evidence that Mr. Nagel’s intoxication was a substantial factor causing his injury. Mr. Nagel petitioned the district court for judicial review. After the district court affirmed the OAH’s denial of benefits, Mr. Nagel timely appealed to this Court.

STANDARD OF REVIEW

[1] [¶10] "When an appeal is taken from a district court’s review of an administrative agency’s decision, we examine the case as if it came directly from the agency, giving no special deference to the district court’s decision." McCallister v. State ex rel. Dep’t of Workforce Servs., Workers’ Comp. Div., 2022 WY 66, ¶ 7, 510 P.3d 1051, 1054 (Wyo. 2022) (citing In re Vinson, 2020 WY 126, ¶ 25, 473 P.3d 299, 308 (Wyo. 2020), and Guerrero v. State ex rel. Dep’t of Workforce Servs., Workers’ Comp. Div., 2015 WY 88, ¶ 11, 352 P.3d 262, 265 (Wyo. 2015)) (other citation omitted). Our review is governed by Wyo. Stat. Ann. § 16-3-114(c) (2023), which provides in relevant part:

(c) To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited by a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall:

…

(ii) Hold unlawful and set aside agency action, findings and conclusions found to be:

(A) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law; [or]

…

(E) Unsupported by substantial evidence in a case reviewed on the record of an agency hearing provided by statute.

Vinson, ¶ 25, 473 P.3d at 308 (citation and internal quotation marks omitted).

[2–4] [¶11] Whether an employee’s injury was caused by his intoxication is a question of fact. Johnson v. State ex rel. Wyo. Workers’ Comp, Div., 911 P.2d 1054, 1058 (Wyo. 1996) (citations omitted). "In accordance with § 16-3-114(c)(ii)(E), we review [an] agency’s findings of fact by applying the substantial evidence standard." McCallister, ¶ 8, 510 P.3d at 1054 (citing Vinson, ¶ 26, 473 P.3d at 308). "Findings of fact are supported by substantial evidence if there is relevant evidence in the record which ‘a reasonable mind might accept in support of the agency’s conclusion.’" Id. (quoting Dale v. S&S Builders, LLC, 2008 WY 84, ¶ 11, 188 P.3d 554, 558 (Wyo. 2008)) (other citations omitted).

[5–8] [¶12] "‘Even if an agency record contains sufficient evidence to support the administrative decision under the substantial evidence test, this Court applies the arbitrary-and-capricious standard as a "safety net" to catch other agency action that may have violated the Wyoming Administrative Procedures Act[.]’" Vinson, ¶ 27, 473 P.3d at 309 (quoting Rodgers v. State ex rel. Wyo. Workers’ Safety & Comp. Div., 2006 WY 65, ¶ 19, 135 P.3d 568, 575 (Wyo. 2006), and citing Dale, ¶ 23, 188 P.3d at 561).

"The arbitrary and capricious test requires the reviewing court to review the entire record to determine whether the agency reasonably could have made its finding and order based upon all the evidence before it. The arbitrary and capricious standard is more lenient and deferential to the agency than the substantial evidence standard because it requires only that there be a rational basis for the agency’s decision."

Id. (quoting Toyback v. Teton Cnty. Bd. of Cnty. Comm’rs, 2017 WY 114, ¶ 13, 402 P.3d 984, 988 (Wyo. 2017)). "‘Under the umbrella of arbitrary and capricious actions would fall potential mistakes such as inconsistent or incomplete findings of fact or any...