The opinion
IN THE
Court of Appeals of Indiana
Indiana Compensation Rating Bureau,
Appellant-Defendant FILED
Oct 24 2024, 9:21 am
And CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
Indiana Department of Insurance
Defendant
v.
Technology Insurance Company,
Appellee-Plaintiff
October 24, 2024
Court of Appeals Case No.
24A-PL-857
Appeal from the Marion County Superior Court, Civil Division
The Honorable James Joven, Judge
Trial Court Cause No.
49D13-2207-PL-22174
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Opinion by Judge Bailey
Judges Bradford and Foley concur.
Bailey, Judge.
Case Summary
[1] Technology Insurance Company (“TIC”) sought reimbursement from the
Indiana Compensation Rating Bureau, as Administrator of the Indiana
Assigned Risk Reinsurance Plan, (“ICRB”) for TIC’s payment of a worker’s
compensation claim and attorney’s fees incurred in litigation of that claim.
ICRB denied the request for reimbursement, and TIC appealed to the Indiana
Department of Insurance (“IDOI”). IDOI issued a ruling that ICRB had
breached its contract. One day after the time for objections expired, TIC filed a
motion for prejudgment interest and attorney’s fees incurred in appealing the
denial of reimbursement. ICRB filed a request for judicial review in the Marion
Superior Court and IDOI advised the parties that jurisdiction was in that court.
After the dismissal of ICRB’s petition and months of correspondence from TIC,
IDOI did not set a hearing. TIC filed a petition for judicial review and obtained
an order from the Marion Superior Court, Civil Division, purportedly
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remanding 1 to IDOI and ordering that it award TIC a specific amount of
attorney’s fees and prejudgment interest. ICRB appeals, contending that TIC
cannot recover the additional attorney’s fees and interest it seeks because, at the
very least, it did not first request those funds from ICRB. 2 Because we agree
that TIC has failed to exhaust its administrative remedies by not doing so, we
reverse.
Issue
[2] ICRB articulates several issues for review. We address the dispositive issue:
whether the trial court erred in ordering that IDOI conduct further proceedings
and award prejudgment interest and appellate attorney’s fees to TIC absent TIC
first obtaining a decision on the prejudgment interest and appellate attorney’s
fees from ICRB.
Facts and Procedural History
[3] ICRB is a statutorily created workers’ compensation insurance rating agency, 3
privately funded by the insurance industry, and operating under a license issued
by IDOI. Among other things, ICRB serves as the plan administrator of the
1
Although the trial court ordered the IDOI to conduct proceedings on remand, the trial court stated that it
“shall retain jurisdiction over any petition for judicial review related to any further orders issued by the IDOI
with respect to the dispute between TIC and the ICRB.” Appealed Order at 10.
2
IDOI is not an active party in this appeal.
3
See Ind. Code § 27-7-2-3.
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Indiana Assigned Risk Reinsurance Pool (“the Pool”), which provides worker’s
compensation insurance for employers who are unable to secure insurance in
the voluntary market. ICRB acts as a reinsurer for worker’s compensation
losses properly paid, and it allocates expenses among its members. 4
[4] In November of 2013, member TIC executed an Indiana Assigned Risk
Reinsurance Pool Servicing Carrier Agreement (“the Agreement”) with ICRB
for a three-year term. 5 Pursuant to the Agreement, a member must accept all
risks assigned by the Plan Administrator and issue worker’s compensation
insurance policies to the risks. In turn, a member is to be reimbursed for
liabilities for losses under its policies and certain related expenses, absent a
showing of conduct in the handling of a claim that is willfully or intentionally
wrong, fraudulent, or criminal. The Agreement provides that “in the event
legal action is initiated by either Party for breach of this Agreement, the
prevailing Party shall be entitled to recover in addition to all other damages,
attorney’s fees, expenses and costs.” (App. Vol. II, pg. 41.)
[5] In July of 2017, TIC submitted a reimbursement request to ICRB in the amount
of $2,855,329. This consisted of $2,050,000 TIC had paid in connection with
4
Indiana Code Section 27-7-2-3 provides: “After July 1, 1935, every insurance company authorized to effect
worker’s compensation insurance in this state shall be a member of the worker’s compensation rating bureau
of Indiana. The bureau shall be composed of all insurance companies lawfully engaged on July 1, 1935,
wholly or in part in making worker’s compensation insurance in Indiana or who shall after July 1, 1935, be
issued a certificate of authority to make worker’s compensation insurance in this state.”
5
ICRB binds insurance coverage for employers and contracts with one of its members to administer a policy
issued through the Indiana Assigned Risk Reinsurance Pool. The member is then considered to be a
Servicing Carrier.
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several lawsuits, collectively referred to by the parties as the Omega
McWorthey litigation, 6 and related attorney’s fees and costs of $805,329. On
June 14, 2018, ICRB notified TIC that the ICRB Board of Directors had denied
the reimbursement request.
[6] TIC decided to pursue its right of appeal, set forth in the Agreement as follows:
A Servicing Carrier shall have the right to appeal a decision by
the Plan Administrator to the Governing Board of the Plan
Administrator (the "Governing Board"), provided however, such
appeal must be filed with the Governing Board not later than
thirty (30) days after the date of the decision by the Plan
Administrator. The Governing Board shall either (i) render a
decision on the appeal, or (ii) submit the appeal to a committee
appointed by the Governing Board, which will render a decision
on the appeal. In the event a Servicing Carrier fails to timely
appeal the decision within thirty (30) days after the date of the
decision, the Servicing Carrier shall be deemed to have waived
such appellate right and the decision of the Plan Administrator
shall become final and non-appealable without any further
action.
A Servicing Carrier shall have the right to appeal a decision by
the Governing Board to the Department, provided however, such
appeal must be filed with the Department not later than thirty
(30) days after the date of the decision by the Governing Board.
The Department shall render a decision on the appeal. In the
event a Servicing Carrier fails to timely appeal the decision of the
6
In 2013, the ICRB received an application for insurance from Omega Demolition Corporation. ICRB
agreed to provide coverage and assigned its obligation to TIC to issue an Indiana Assigned Risk Workers
Compensation and Employers Liability Insurance Policy to Omega effective July 24, 2013. (ALJ Order,
para. 28.) A claim on the policy was filed by Omega relating to an injury to its employee James McWorthey
that gave rise to multiple lawsuits.
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Governing Board within thirty (30) days after the date of the
decision, the Servicing Carrier shall be deemed to have waived
such appellate right and the decision of the Governing Board
shall become final and non-appealable without any further
action.
A Servicing Carrier shall have the right to appeal a decision by
the Department to the Marion County Superior Court or Circuit
Court as provided by Ind. Code §27-7-2-27 within thirty (30) days
after the date of the decision. In the event a Servicing Carrier
fails to timely appeal the decision of the Department within thirty
(30) days after the date of the decision, the Servicing Carrier shall
be deemed to have waived such appellate right and the decision
of the Department shall become final and non-appealable
without any further action.
(Id. at 40.)
[7] On July 3, 2018, TIC filed an appeal to IDOI, designated as Technology
Insurance Company v. Indiana Compensation Rating Bureau, IDOI Case Number
RB-1004-001. In a motion for summary judgment, TIC requested
reimbursement in connection with the McWorthey claim and litigation as well
as legal fees and expenses in connection with litigating the appeal. On July 21,
2021, an Administrative Law Judge (“ALJ”) issued an order granting TIC’s
motion for summary judgment and denying ICRB’s cross-motion for summary
judgment. The lengthy decision addressed the Agreement, policies and conduct
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pertaining to the underlying litigation, and unfounded allegations of fraud;7 no
language addressed the request for appellate fees and costs. 8 The order states
that “judgment is hereby entered on all issues in this case” and additionally that
“TIC is entitled to reimbursement of the amounts it paid in connection with the
Omega/McWorthey Claim.” (Appellee’s App. Vol. II, pg. 31.)
[8] Pursuant to the order, any objections were to be filed within fifteen days. No
objection was made, and, on the sixteenth day, TIC filed a “Motion for
Prejudgment Interest, Attorney Fees and Expenses” to establish the amount
due from ICRB as full reimbursement. (Id. at 71.) TIC sought prejudgment
interest of $625.82 per day and $1,049,388.28 in attorney fees, expert fees, and
costs.
[9] On September 17, 2021, IDOI issued its Final Order fully adopting the findings
of the ALJ order and mandating that ICRB “fully reimburse [TIC] for its
payments made in connection to the Omega McWorthey litigation.” (Id. at 87.)
Again, the Final Order did not specify an amount; nor did it refer to the
motion. On October 8, ICRB filed in the Marion Superior Court a petition for
judicial review and motion to stay the administrative ruling. On November 12,
IDOI and TIC each filed a motion to dismiss the petition for judicial review.
7
The ALJ decision stated, in part, that “ICRB apparently had no factual basis for its original denial of the
claim, and could establish no basis after ample opportunity for discovery of TIC’s intent in the proceeding.”
(Appellee’s App. Vol. II, pg. 18.)
8
The ALJ succinctly described the focus of the appeal: “the gist of this appeal involves pure issues of
insurance contract interpretation.” (Appellee’s App. Vol. II, pg. 17.)
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[10] TIC attempted in vain to obtain a ruling from IDOI upon TIC’s motion for
prejudgment interest, attorney fees, and expenses, beginning with a letter
composed three days after the Final Order. On October 12, TIC filed a motion
with IDOI denominated as a “Motion Requesting Final Monetary Judgment
and Renewed Motion for Prejudgment Interest, Attorney Fees and Expenses.”
(Id. at 89.) On November 17, TIC filed an additional motion for a monetary
calculation. On December 21, the IDOI issued a Notice to the Parties to
inform the parties that it would not issue a ruling on the motion or issue any
other future ruling during the pendency of judicial review in Marion Superior
Court.
[11] On January 19, 2022, the Marion Superior Court dismissed ICRB’s petition for
judicial review on grounds that ICRB had failed to exhaust administrative
remedies and also had failed to timely file a certified agency record. On
February 4, TIC filed with IDOI a supplemental submission of affidavits in
support of the request for attorney’s fees and “Appellant’s Motion Requesting a
Ruling on Appellant’s Motions for Prejudgment Interest, Attorney Fees, and
Expenses.” (Id. at 135.) The claimed expenses and attorney fees, inclusive of
the Marion County litigation, were $1,244,026.60 (in addition to prejudgment
interest). In March, TIC filed an additional motion. In May, TIC requested via
email that IDOI conduct a status hearing. Later in May, TIC requested a
“ruling on remaining issues,” specifically, the “sum certain” to “fully
reimburse” TIC and additionally requested “guidance” from IDOI. (Id. at 147.)
On May 31, ICRB issued to TIC a check for $2,855,329, denominated by ICRB
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as payment in full. TIC notified IDOI that it considered the check to be less
than full satisfaction of TIC’s claim.
[12] On July 1, 2022, TIC filed a Verified Petition for Judicial Review and Order of
Mandamus (“the Petition”) in Marion Superior Court, requesting an order that
IDOI rule upon TIC’s pending motion. The trial court heard oral argument on
May 18, 2023, at which attorneys for TIC, IDOI, and ICRB appeared. ICRB’s
counsel argued that TIC had failed to preserve its rights by filing a cross-appeal
in the prior Marion Superior Court case. IDOI’s attorney took the position that
TIC was required to file an additional claim with ICRB, and IDOI could not
“make [a] decision or statement without evaluating the contract.” (Tr. Vol. II,
pg. 12.) Counsel explained: “you have additional rights that are accruing, but
those are also based on the underlying contract [a]nd so, they’re essentially
trying to skip the claim process and jump straight to an appeal.” (Id.) TIC
argued that it had diligently attempted to preserve its right to challenge the
omission of an order for prejudgment interest and attorney fees on appeal from
the claim denial. On the following day, the trial court issued an order denying
the motions to dismiss filed by IDOI and ICRB. The parties submitted written
briefs on their respective positions.
[13] On February 24, 2024, the trial court conducted an additional hearing at which
counsel for ICRB did not appear. Counsel for TIC requested remand to IDOI.
Counsel for IDOI argued that IDOI “would be acting outside of its authority if
it were to go back and add a specific monetary award different from what the
ALJ ordered” absent “proper procedures” and additionally argued that TIC had
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“notice of agency inaction” when the petition for judicial review in Marion
Superior Court was dismissed. (Tr. Vol. II, pgs. 70-71.)
[14] On March 22, the trial court issued an order granting the petition for judicial
review, denying ICRB’s motion for summary judgment, and providing that
IDOI was to assign an ALJ “to conduct proceedings related to TIC’s motion for
attorney’s fees and prejudgment interest and any other associated relief.”
Appealed Order at 10. In relevant part, the trial court determined that TIC’s
motion for interest and fees was timely, TIC’s petition for judicial review was
timely, TIC is entitled to attorney’s fees, and TIC is entitled to prejudgment
interest. ICRB appeals.
Discussion and Decision
[15] TIC was aggrieved by a decision of ICRB and, after preliminary review as
provided for in the Agreement, invoked review by IDOI pursuant to Indiana
Code Section 27-7-2-9, which provides:
The charges and expenses incident to the establishment and
operation of the bureau shall be borne equitably and without
discrimination among the members of the bureau. If any
member is aggrieved by an apportionment of the cost or costs
made by the bureau or by failure of the bureau to make such
equitable apportionment, it may in writing petition the
commissioner for a review of such apportionment or failure to
act. The commissioner shall upon not less than five (5) days’
notice to each member hold a hearing upon such petition at
which time all members shall be entitled to be heard. And said
commissioner shall determine the matter or matters and mail a
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copy of his decision to each member of the bureau. The decision
of the commissioner shall be final.
Accordingly, IDOI is the sole arbiter of an alleged failure of ICRB to make an
equitable apportionment. TIC properly appealed the denial of its
Omega/McWorthey claim to IDOI. Construing the contractual provisions of
the Agreement, IDOI determined that ICRB had breached the contract and
must fully reimburse TIC in connection with Omega/McWorthey litigation.
[16] In pursuit of a specific calculation of damages from IDOI, TIC requested an
order of mandate but also sought judicial review as afforded by the Indiana
Administrative Orders and Procedures Act (“AOPA”), Indiana Code Section 4-
21.5 et seq. IDOI is an agency subject to AOPA. See Indiana Code Section 4-
21.5-1-3, (defining an “agency” as “any officer, board, commission, department
division, bureau, or committee of state government that is responsible for any
stage of a proceeding under this article.”)
[17] Under the AOPA in effect at the time of the proceedings, 9 relief could be
provided by a court if the person seeking judicial relief had been prejudiced by
an agency action that was:
9
AOPA was amended, effective July 1, 2024. Indiana Code Section 4-21.5-5-14(d)(5) now requires the
person seeking judicial relief to demonstrate that the agency action is “unsupported by a preponderance of
the evidence” rather than “unsupported by substantial evidence.” The amended statute also provides:
(a) Judicial review of disputed issues of fact must be confined to the agency record for the agency
action supplemented by additional evidence taken under section 12 of this chapter. A court is not
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(1) arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law;
(2) contrary to constitutional right, power, privilege, or
immunity;
(3) in excess of statutory jurisdiction, authority, or limitations, or
short of statutory right;
(4) without observance of procedure required by law; or
(5) unsupported by substantial evidence.
I.C. § 4-21.5-5-14(d). TIC bore the burden of showing the invalidity of agency
action. I.C. § 4-21.5-5-14(a).
[18] ICRB now appeals an order granting a petition for judicial review, which
petition pointed to an alleged omission by IDOI in an appeal from the denial of
a claim for reimbursement. “To the extent they involve only legal issues, we
review the trial court’s orders de novo.” Ind. Dep’t of Environ. Mgmt. v. Raybestos,
bound by a finding of fact made by the ultimate authority if the finding of fact is not supported by
the record.
(b) The court shall decide all questions of law, including any interpretation of a federal or state
constitutional provision, state statute, or agency rule, without deference to any previous
interpretation made by the agency.
I.C. § 4-21.5-5-11 (effective July 1, 2024). However, the amendments apply only to: “(1) an administrative
proceeding or a proceeding for judicial review commenced after June 30, 2024; or (2) an administrative
proceeding conducted after June 30, 2024, on remand from a court.” Id
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897 N.E.2d 469, 473 (Ind. 2008) (internal citations omitted). We will uphold
the findings of fact unless they are clearly erroneous. Id.
[19] IDOI argued to the trial court that it had taken all action within its statutory
authority, i.e., that conferred by Indiana Code Section 27-7-2-9. Our standard
applicable to statutory review is well-settled:
We [ ] review questions of law, such as the interpretation of a
statute, de novo. Pierce v. State, 29 N.E.3d 1258, 1265 (Ind.
2015). When construing a statute, our primary goal is to
determine and effectuate the legislature’s intent. Cooper Indus.,
LLC v. City of South Bend, 899 N.E.2d 1274, 1283 (Ind. 2009). To
discern that intent, we first look to the statutory language and
give effect to its plain and ordinary meaning. Jackson v. State, 50
N.E.3d 767, 772 (Ind. 2016). Where the language is clear and
unambiguous, “there is ‘no room for judicial construction.’” Id.
(quoting St. Vincent Hosp. & Health Care Ctr., Inc. v. Steele, 766
N.E.2d 699, 704 (Ind. 2002)). We presume the legislature
intended the statutory language to be applied “logically and
consistently with the statute’s underlying policy and goals, and
we avoid construing a statute so as to create an absurd result.”
Walczak v. Lab. Works-Ft. Wayne LLC, 983 N.E.2d 1146, 1154
(Ind. 2013).
Culver Cmty. Tchrs. Ass’n v. Ind. Educ. Emp. Rels. Bd., 174 N.E.3d 601, 604-05
(Ind. 2021).
[20] Pursuant to Indiana Code Section 27-7-2-9, the IDOI may review an
“apportionment or failure to act.” The plain statutory language limits the role
of IDOI, as IDOI has contended; its focus is necessarily upon the rejected or
approved claim for reimbursement. This statute does not provide authorization
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for IDOI to sit as a trial court, hear evidence of additional damages, or calculate
awards based upon collateral events. The ALJ decision, adopted by the IDOI
final authority, plainly provides that ICRB breached the Agreement and is
liable to TIC for full reimbursement in connection with the
Omega/McWorthey litigation.
[21] As a factual matter, the ALJ found that ICRB had alleged fraud without having
an adequate basis for its allegations. Without dispute, this caused unnecessary
delay and unnecessary attorney’s fees. TIC may be entitled to an additional
apportionment from the ICRB as a result of ICRB’s obdurate conduct.
Contractual claims under the Agreement are not limited to denials of
reinsurance for worker’s compensation claims paid. Section XI provides in
part:
In the event the Servicing Carrier has any claim against the Plan
Administrator, the Pool, any Member of the Plan Administrator,
any participant in the Pool, the Trust or any trustee of the Trust,
arising from or related to this Agreement or the performance of
the Servicing Carrier’s obligations and duties as Servicing
Carrier, the Servicing Carrier may seek a review of the matter by
the Plan Administrator by setting forth in writing with specificity
the nature of the dispute, the parties to the dispute, the relief
sought and the basis thereof.
(Appellee’s App. Vol. II, pg. 39) (emphasis added.) However, an
apportionment must first be made or denied to trigger IDOI statutory review.
Conclusion
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[22] Because the claim had not first been presented to ICRB, the trial court erred in
ordering that IDOI award TIC a specific amount of attorney’s fees and
prejudgment interest.
[23] Reversed.
Bradford, J., and Foley, J., concur.
ATTORNEY FOR APPELLANT
E. Scott Treadway
EST Law, LLC
Indianapolis, Indiana
ATTORNEYS FOR APPELLEE
Linda L. Pence
Suzannah W. Overholt
Amundsen Davis, LLC
Indianapolis, Indiana
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