Opinion
No. 108,603.
2013-09-13
Jason H. HARWOOD, Appellant/Cross–Appellee, v. Rudy FEYH, Defendant, and City of Topeka, Intervenor/Appellee/Cross–Appellant.
Appeal from Shawnee District Court; Larry D. Hendricks, Judge. LJ Leatherman and Dustin L. Van Dyk, of Palmer, Leatherman, White & Dalton, LLP, of Topeka, for appellant/cross-appellee. Douglas M. Greenwald, of McAnany, Van Cleave & Phillips, P.A., of Kansas City, for appellee/cross-appellant.
Appeal from Shawnee District Court; Larry D. Hendricks, Judge.
LJ Leatherman and Dustin L. Van Dyk, of Palmer, Leatherman, White & Dalton, LLP, of Topeka, for appellant/cross-appellee. Douglas M. Greenwald, of McAnany, Van Cleave & Phillips, P.A., of Kansas City, for appellee/cross-appellant.
Before LEBEN, P.J., ATCHESON and SCHROEDER, JJ.
MEMORANDUM OPINION
ATCHESON, J.
This case began as a personal injury action Plaintiff Jason Harwood brought against Defendant Rudy Feyh in Shawnee County District Court, but it comes to us solely on issues related to Intervenor City of Topeka's assertion of subrogation rights for workers compensation benefits. The City paid substantial benefits to Harwood, a police officer, because he was severely injured on the job when a car driven by Feyh hit him. Harwood has resisted the City's efforts to recoup those benefits from a recovery he obtained from Feyh for just over half his damages. The district court granted the City a lien against the recovery for the benefits it paid Harwood and a credit for any future benefits. We affirm, except as to the credit due the City. On that point, we reverse and remand with directions to recalculate the credit in conformity with the statutory requirements, an adjustment that should increase it.
Factual and Procedural History
We briefly recount the underlying facts to provide some context for the subrogation dispute. On May 12, 2010, Officer Harwood had been sent to I–70 to assist in locating and stopping suspects fleeing a crime scene in a motor vehicle. Harwood had gotten out of his patrol car and was on the shoulder of the highway. Feyh apparently fell asleep behind the wheel of his car, drove onto the shoulder, and struck the parked police car, which then struck Harwood.
Harwood was seriously injured. He was hospitalized for about 2 weeks and spent months recuperating. Although Harwood eventually returned to field duty with the police department, he never fully regained his strength or endurance. Because Harwood was injured on the job, the City paid him workers compensation benefits covering medical expenses and lost wages.
Harwood hired a lawyer to pursue a personal injury claim against Feyh. Feyh's potential liability far exceeded his automobile insurance policy's $300,000 coverage limit. In presuit negotiations, Harwood's lawyer and the representative of Feyh's insurance carrier tentatively arrived at a resolution of the personal injury claim for payment of the policy limit. As part of the negotiations, Harwood's lawyer asked the City to waive or substantially reduce its statutory workers compensation lien on any settlement. The City refused.
In June 2011, Harwood sued Feyh in the district court for negligently driving his car. In the tort action, Harwood sought damages for his injuries, including medical costs, lost income, pain and suffering, and loss of consortium on behalf of his spouse. The City appeared in the case as an intervenor to assert a statutory lien for the workers compensation benefits.
On September 19, 2011, the district court held a hearing on damages—effectively a bench trial in what amounted to an admitted liability case. Lawyers for Harwood, Feyh, and the City appeared. The parties understood that Feyh's liability for any damages would be limited to the $300,000 policy-limit amount his insurance carrier tendered at the hearing and that the district court would determine the City's subrogation and lien rights for the workers compensation benefits it had paid Harwood. After tendering a check for $300,000, the lawyer appearing on behalf of Feyh and his insurance carrier did participate in the hearing. Only Harwood testified. The district court received documentary evidence related to Harwood's injuries, medical bills, lost income, and what the City had paid in workers compensation benefits.
The district court found Harwood had damages of $124,196 in medical expenses; $27,395.60 in lost wages; $100,000 for loss of consortium; and $250,000 for noneconomic harm, essentially pain and suffering, reflecting the maximum allowed under the statutory cap in K.S.A. 60–19a02. The damages came to $501,591.60, far in excess of the tendered recovery and Feyh's ability to satisfy that amount. The district court found the City had paid workers compensation benefits on Harwood's behalf totaling $84,936.13 for medical expenses and $7,960.68 for lost wages. The district court held the City had an enforceable lien against Harwood's actual recovery for those workers compensation benefits. The district court ordered the lien amount paid to the City and awarded Harwood's lawyer one-third of that amount as a reasonable attorney fee for his work in securing that payment for the City. As required by K.S.A. 44–504(b), the district court also calculated a credit to the City for any future workers compensation benefits paid to Harwood.
Legal Analysis
Harwood has timely appealed to challenge the extent of the subrogation lien, and the City has cross-appealed to contest the amount of the credit. Before turning to those issues, we set out both the principal workers compensation statute applicable to employers' subrogation and lien rights and some precepts governing statutory interpretation. We then take up Harwood's appeal followed by the City's cross-appeal, adding additional facts as necessary.
Key Statutory Provision; Principles of Interpretation; and Standard of Review
In K.S.A. 44–504(a), the legislature provided that persons injured on the job could receive workers compensation benefits from their employers without compromising their right to pursue independent legal actions against third parties potentially liable for the injuries. The statute eliminates any possible question about Harwood's legal right to have sued Feyh. The legislature, however, also granted employers subrogation rights for workers compensation benefits paid injured employees as against recoveries those employees might realize in third-party suits. K.S.A. 44–504(b). The legislature permitted the employers to intervene in employees' third-party actions to protect their subrogation interests, K.S.A. 44–504(b). Employers have statutory liens against employees' recoveries from liable third parties and may receive credits for future workers compensation benefits related to employees' injuries. K.S.A. 44–504(b). Given its importance here, we set out subsection (b) in relevant part:
“In the event of recovery from such other person by the injured worker ... by judgment, settlement or otherwise, the employer shall be subrogated to the extent of the compensation and medical aid provided by the employer to the date of such recovery and shall have a lien therefore against the entire amount of such recovery, excluding any recovery, or portion thereof, determined by a court to be loss of consortium or loss of services to a spouse. The employer shall receive notice of the action, have a right to intervene and may participate in the action. The district court shall determine the extent of participation of the intervenor, including the apportionment of costs and fees. Whenever any judgment in any such action, settlement or recovery otherwise is recovered by the injured worker ... prior to the completion of compensation or medical aid payments, the amount of such judgment, settlement or recovery otherwise actually paid and recovered which is in excess of the amount of compensation and medical aid paid to the date of recovery of such judgment, settlement or recovery otherwise shall be credited against future payments of the compensation or medical aid.” K.S.A. 44–504(b).
In construing statutory provisions, appellate courts are to glean the legislative purpose and intent from the language used, and they are to give effect to that purpose and intent. State v. Gracey, 288 Kan. 252, 257, 200 P.3d 1275 (2009); Hall v. Dillon Companies, Inc., 286 Kan. 777, 785, 189 P.3d 508 (2008). It is not the courts' business or function to add to or take away from the language of a statute. And the courts should not impose some meaning on a statute beyond what the words themselves convey through their common and usual definitions. Gracey, 288 Kan. at 257. Of late, the Kansas Supreme Court has been particularly vigilant in applying the plain-meaning rule to workers compensation statutes. See Redd v. Kansas Truck Center, 291 Kan. 176, 197–98, 239 P.3d 66 (2010); Bergstrom v. Spears Manufacturing Co., 289 Kan. 605, 607–10, 214 P.3d 676 (2009). We take our cues accordingly. See Smith v. Hy–Vee Food Stores, No. 105,911, 2011 WL 6385658, at *2 (Kan.App.2011) (unpublished opinion).
The subrogation issues turn on the construction of pertinent portions of the Workers Compensation Act, primarily K.S.A. 44–504. The relevant facts are undisputed. The points on appeal, therefore, present questions of law that we consider without particular deference to the rulings of the district court. Deeds v. Waddell & Reed Invst. Mgmt. Co., 47 Kan.App.2d 499, 502, 280 P.3d 786 (2012). Harwood's Appeal: Challenging the City's Lien Plain language of K.S.A. 44–504 controls and supports affirming the district court
Harwood had over $500,000 in adjudicated damages against Feyh but recovered only $300,000 from him, and so he presses arguments that the district court erroneously granted the City too large a subrogation interest in and lien against his recovery. Analogizing to personal injury protection (PIP) benefits under K.S.A. 40–3113a and caselaw construing that part of the Kansas Automobile Injury Reparations Act, Harwood contends the City's interest should be confined to amounts that are duplicative of his actual recovery—the lien would attach if he had been fully compensated by Feyh or if the disposition of the case in the district court precluded the City from proceeding directly against Feyh. See State Farm Mut. Auto. Ins. Co. v. Kroeker, 234 Kan. 636, Syl. ¶¶ 4–5, 676 P.2d 66 (1984). The City counters that a plain reading of K.S.A. 44–504(b) allows an employer dollar-for-dollar subrogation against an injured party's recovery from a legally liable third party.
The City's position conforms to the statutory language and is consistent with Kansas Supreme Court authority. The language of K.S .A. 44–504(b) expressly gives an employer a subrogation interest in and lien “against the entire amount of [the employee's] recovery” from the third party, except for damages for loss of consortium. The lien amount corresponds to “the extent of the compensation and medical aid provided by the employer” to the date of recovery. K.S .A. 44–504(b). The sensible construction of that language grants an employer a lien against the employee's recovery from a third party for the full amount of workers compensation benefits paid on behalf of the employer. The statute contains no exception or limitation if the employee's actual recovery turns out to be less than his or her damages. We would be reading something into the statute that isn't there to find what Harwood wants. That option isn't open to us. See Bergstrom, 289 Kan. 605, Syl. ¶ 1.
Our interpretation of K.S.A. 44–504(b) is bolstered by the one exception the legislature has included for loss of consortium claims. That demonstrates the legislature considered possible exceptions or limits on dollar-for-dollar subrogation and didn't simply overlook the whole subject. In turn, it also reemphasizes that the legislature did not intend to adopt a subrogation rule of the sort Harwood outlines. A common canon recognizes that the inclusion of one thing in a statute may be taken as indicating legislative intent to exclude like things not mentioned. In re Marriage of Killman, 264 Kan. 33, 42, 955 P.2d 1228 (1998). This is a good illustration of it. While the canon is not conclusive, the interpretation it suggests here comports with the statutory language and reinforces an otherwise reasonable reading of that language. See 264 Kan. at 42. The narrow exclusion for loss of consortium claims makes sense because the damage is for the deprivation of services, including care and companionship, suffered by the spouse of the physically injured party. K.S.A.2011 Supp. 23–2605. Under K.S.A.2011 Supp. 23–2605, the injured party asserts the claim for the benefit of his or her spouse. The claim, therefore, differs from other personal injury damages.
In construing an earlier version of K.S.A. 44–504(b), the Kansas Supreme Court held that an employer's subrogation rights for workers compensation benefits would reach pain and suffering damages an injured worker recovered in actions against a third party. McGranahan v. McGough, 249 Kan. 328, 336, 820 P.2d 403 (1991). The court also held that those rights did not extend to a claim for loss of consortium because the compensable harm befalls the injured employee's spouse. 249 Kan. at 338. At that time, the statute did not specifically address claims for loss of consortium and permitted subrogation “to the extent of the compensation and medical aid provided by the employer” with a lien “therefor against such recovery.” K.S.A.1990 Supp. 44–504(b).
The holding in McGranahan is consistent with the way the district court applied the current version of K.S.A. 44–504(b) and the way we believe the statute should be read. But the earlier version isn't so clear and could be construed to grant an employer a subrogation interest in a third-party recovery only to the extent the recovery included amounts for damages comparable to what the employer had paid in workers compensation, e.g., medical expenses and benefits for lost wages. The court, however, forged a rationale extending subrogation to recoveries for pain and suffering even though workers compensation benefits do not cover noneconomic damages. 249 Kan. at 335–36 Justice Allegrucci dissented in part and gave K.S.A.1990 Supp. 44–504(b) another reasonable reading that would not have allowed subrogation against an employee's third-party recovery for pain and suffering. 249 Kan. at 339–40 (Allegrucci, J., concurring in part and dissenting in part).
The current version of K.S.A, 44–504(b) not only codifies the holding in McGranahan but eliminates the potential ambiguity lurking in its predecessor's language. As we have noted, the statute now explicitly carves out loss of consortium claims from employers' subrogation rights. In addition, K.S.A. 44–504(b) now has language stating an employer “shall have a lien therefor against the entire amount of such recovery” apart from any award for loss of consortium. (Emphasis added.) Especially against the backdrop of McGranahan, reference to the “entire amount” of the third-party recovery necessarily brings noneconomic damages, including pain and suffering, within an employer's subrogation lien. See Wishon v. Cossman, 268 Kan. 99, 104, 991 P.2d 415 (1999) (noting that the legislature included the additional language in K.S .A. 44–504(b) as part of a substantial revision of the workers compensation statutes less than 2 years after McGranahan was decided). The additional language effectively supersedes the majority's arguably strained rationale for extending an employer's workers compensation lien to an employee's recovery of pain and suffering damages from a third party. The “entire amount” phrasing clearly pronounces a legislative intent to broadly apply an employer's subrogation rights to the whole of an employee's recovery, save for loss of consortium, as a matter of policy in administering this state's workers compensation scheme.
The legislative design in K.S.A. 44–504(b) also advances a policy allowing employers to secure maximum subrogation against third-party recoveries in negligence cases that have been diminished by injured employees' comparative fault—something that didn't come into play here. An employer provides workers compensation benefits to employees typically without regard to the employees' negligence or fault for their own injuries. Olds–Carter v. Lakeshore Farms, Inc., 45 Kan.App.2d 390, 408, 250 P.3d 825 (2011) (“[T]he policy and purpose behind the [Workers Compensation] Act is to furnish a remedy which is both expeditious and free from proof of fault.”). In other words, the employer is strictly liable to an employee for medical expenses and lost wage benefits covered under workers compensation. In a third-party negligence action that goes to trial, an employee's recovery for damages, include medical expenses and lost wages, must be reduced by the percentage of fault the jury attributes to the employee. K.S.A. 60–258a(a). The employee could have his or her recovery reduced by as much as 49 percent. Under Harwood's interpretation, the employer would be unable to recoup anything near the full measure of workers compensation benefits paid to the employee if it were limited to the third-party recovery for medical expenses and wages rather than being able to obtain a lien against the “entire recovery.” So his approach would impose adverse economic consequences on the employer flowing from the employee's negligence rather than leaving them with the employee. That result seems incompatible with a broad subrogation right for benefits an employer must provide through the fault-neutral workers compensation system.
The subrogation regimen in K.S.A. 44–504(b), allowing dollar-for-dollar subrogation, always imposes on the injured employee the negative impact of a third-party recovery that is less than the employee's actual damages. That is true whether the recovery is reduced by operation of law for the employee's own comparative fault or negligence vis-à-vis the third party or by happenstance because the third party lacks the financial resources to satisfy the full measure of damages. An argument could be made for a workers compensation subrogation policy that allocates the impact of the reduced recovery differently in those two situations by shifting the economic burden of a judgment-proof third party from the injured employee to the employer. The legislature has chosen not to do so, and that is a classic legislative policy determination that the courts must respect and enforce.
In sum, we find the language of K.S.A. 44–504(b) to be dispositive of Harwood's arguments on appeal. Given that clear language and the manifest purpose of K.S.A. 44–504(b), Harwood necessarily fails in his contention that the City's subrogation lien for the medical expenses and lost-wage benefits it provided under the Workers Compensation Act cannot be asserted against the whole of his recovery from Feyh, except for the $100,000 awarded for loss of consortium.
Analogy to PIP subrogation and an alternative ground for affirming
Harwood argues that an employer's statutory subrogation rights under the Workers Compensation Act should be treated in the same manner as an insurance carrier's subrogation rights for PIP benefits under K.S.A. 40–3113a. But that argument is unpersuasive. First, the argument attempts to inject authority related to PIP benefits in motor vehicle liability insurance policies into the highly specialized, integrated workers compensation scheme. That alone presents a formidable barrier to the argument. As the Kansas Supreme Court has pointed out: “The workers compensation act is complete in itself, and courts do not look outside the act for guidance.” McGranahan, 249 Kan. 328, Syl. ¶ 3.
Second, the statutory language governing subrogation for PIP benefits differs from the language in K.S.A. 44–504(b). A motor vehicle insurance carrier does not get to subrogate PIP payments unless they are “duplicative” of a recovery the insured obtains against a third-party tortfeasor. K.S.A. 40–3113a. In Kroeker, 234 Kan. 636, Syl. ¶ 5, the Kansas Supreme Court construed the requirement that PIP benefits be duplicative as precluding subrogation when the insured's recovery from the legally liable third-party is less than his or her actual damages. There is no comparable “duplicative” prerequisite or language to be found in K .S.A. 44–504(b) for workers compensation subrogation. Although some decisions refer to duplication of benefits in describing workers compensation subrogation, the Kansas Supreme Court has not construed the language of K.S.A. 44–504(b) as creating a rule such as Harwood advances here or that Kroeker recognized for PIP payments.
Harwood's argument seems particularly tenuous in light of the change the legislature made to K.S.A. 44–504(b) clarifying that workers compensation subrogation extends to “the entire amount of” the employee's recovery from a third party. See L.1993, ch. 286, sec. 26. That amendment made clear a legislative intent to allow an employer an exceptionally broad reach in recouping workers compensation benefits paid to an employee who independently recovers damages from a wrongdoer. Had the legislature meant to go the other way and rein in workers compensation subrogation, it might have borrowed the “duplicative” language from the PIP benefits statute, K.S.A. 40–3113a, or included some comparable phrasing in marked contrast to what it actually did.
We recognize another panel of this court has construed K.S.A. 44–504(b) as comparable to K.S.A. 40–3113a and, in that case, remanded a workers compensation subrogation dispute to the district court for further factual findings necessary to apply the rule in caselaw pertaining to PIP subrogation. See Jerby v. Truck Insurance Exchange, 36 Kan.App.2d 199, 208–09, 138 P.3d 359 (2006). For the reasons we have outlined, however, we do not share the Jerby panel's willingness to find so compelling a similarity between PIP payments and workers compensation benefits as to warrant treating the authority construing the respective statutory provisions on subrogation as interchangeable. We, likewise, view the statutory language of those provisions to be materially different, cutting against the analogy.
Even if we are mistaken in our assessment of K.S.A. 44–405(b) and the general inapplicability of PIP law as analogous authority, Harwood still fails. In Jerby, the panel recognized that PIP benefits would be duplicative and, thus, subject to subrogation if: (1) the injured insured has fully released the third-party tortfeasor, thereby precluding the insurance carrier from proceeding against the third party to enforce its lien; or (2) the insured has not released the third party but recovers an amount equal to or greater than actual damages plus the PIP benefits. And the panel then essentially applied that same rule to an employer's subrogation lien for workers compensation benefits. 36 Kan.App.2d at 208–09; see Kroeker, 234 Kan. at 647. So if Jerby controls and Harwood's workers compensation benefits are duplicative of his recovery under either of those tests, the City would be entitled to a lien.
Plainly, the City couldn't assert subrogation rights based on the second test, since Harwood recovered far less than his actual damages from Feyh. But the first test seems applicable in light of the appellate record. In Kroeker, the court held that if the injured party has effectively precluded his or her insurance carrier from proceeding against the third-party wrongdoer, the insurance carrier would have a subrogation right for any PIP payments. Kroeker, 234 Kan. 636, Syl. ¶ 4. We consider that analysis.
Toward the end of the damages hearing or trial, Harwood's lawyer told the district court that Feyh “has been fully and finally released,” although he indicated the City joined in or consented to the release. From the caselaw, however, we don't understand that Harwood required the City's consent to settle. And we don't see that the City's apparent consent undermines the result in Kroeker, as applied to workers compensation in Jerby. So Harwood's release of Feyh, as acknowledged to the district court, would satisfy the first test for duplicative benefits subject to subrogation.
Apart from the apparent release itself, the specific terms of which are not in the record, the disposition of this action in the district court was the functional equivalent of a release of Feyh and, thus, satisfies the test for duplicative benefits. Harwood, of course, filed a civil action against Feyh. The district court's last memorandum decision, filed August 3, 2012, states that it is a “final entry of judgment” and requires no additional journal entry. Both Harwood and the City appealed from that decision. If the claims against Feyh had not been fully adjudicated or otherwise resolved, that memorandum decision could not have been a final judgment, and no appeal would lie. See K.S.A. 60–254(b). Feyh was not otherwise dismissed as a party, nor were the claims against him dismissed without prejudice. See K.S.A. 60–241(a). Accordingly, the entry of judgment must have resolved the claims Harwood asserted or could have asserted against Feyh and any correlative right of the City to subrogation.
In turn, were Harwood or the City to file a new action against Feyh for claims arising out of the incident in which he injured Harwood, Feyh could assert a res judicata defense to bar the suit. See Estate of Belden v. Brown County, 46 Kan.App.2d 247, 259, 261 P.3d 943 (2011) (outlining res judicata principles). Entry of judgment in an action and the resulting res judicata defense is the legal and practical equivalent of a release in that each, respectively, bars relitigation of claims. Res judicata covers claims that were or could have been litigated in the suit. 46 Kan.App.2d at 259. A release covers those claims the party or parties to it have identified. See Cobb v. Corbett, 32 Kan.App.2d 1184, 1185, 95 P.3d 1028 (plaintiff's release of claims against defendant agent bars suit against agent and agent's employer on respondeat superior theory), rev. denied 278 Kan. 843 (2004). The final judgment, to which Harwood is a party, prevents the City from pursuing any further legal action against Feyh.
Harwood, therefore, has satisfied the first test outlined in Jerby, allowing the City to assert its subrogation lien as a matter of law under the rationale of that decision. That provides an independent and fully sufficient ground to affirm the district court.
The City's Cross–Appeal: Credit Where Credit is Due
As provided in K.S.A. 44–504(b), when an injured employee obtains a third-party recovery exceeding the workers compensation benefits paid, the difference between the amount of that recovery (less damages for loss of consortium) and the amount of the workers compensation benefits becomes a credit in the employer's favor against any future benefits for the same incident, In this case, the district court computed the statutory credit by first deducting the $100,000 awarded for loss of consortium from the $300,000 Harwood recovered from Feyh. The district court then combined the $124,196 it awarded Harwood for his reasonable medical expenses with the $7,960.68 reflecting the workers compensation benefits corresponding to lost wages, yielding a total of $132,156.68. The district court then subtracted that total from the $200,000 to arrive at a credit to the City against future workers compensation benefits of $67,843.32. The City has cross-appealed, challenging that computation in two respects.
First, the City contends the loss of consortium claim should be prorated in making the deduction from Harwood's recovery. In other words, according to the City, the district court should have determined the ratio the damages for the loss of consortium claim ($100,000) bore to the total damages awarded Harwood ($501,591.60) and then deducted an amount bearing the same proportion or ratio to Harwood's actual recovery ($300,000). The accounting works out to a deduction for the loss of consortium of just under $60,000. We aren't overly concerned with the exact amount because we reject the City's contention.
The City cites no case authority in support of its argument and simply relies on the assertion that a pro rata reduction is reasonable. We won't say that it is an unreasonable idea. But we can say it requires an unusual interpretation of the statutory language. The wording of K.S.A. 44–504(b) carves out loss of consortium claims from the employer's subrogation right and resulting lien. The statutory treatment of those claims looks to be an unqualified exception to subrogation. The legislature could have included a method or formula for prorating loss of consortium claims for subrogation purposes should a third-party recovery turn out to be less than the employee's adjudicated damages. But the legislature did not.
The district court, therefore, acted in conformity with K.S.A. 44–504(b) in deducting the full amount awarded for loss of consortium from Harwood's recovery before calculating the City's credit for future worker compensation benefits.
Next, the City contends the district court erred by using the amount of the reasonable medical costs it awarded to Harwood rather than the amount of medical expenses the City paid in workers compensation benefits to calculate the credit. We agree with the City.
Under K.S.A. 44–504(b), the employer's credit equals the amount by which the recovery exceeds “the amount of compensation and medical aid paid.” The phrase “medical aid” turns up earlier in that subsection and plainly refers to what the employer has paid—in contrast to the face amount of medical bills the service providers have submitted. K.S.A. 44–504(b) (subrogation includes “the extent of the ... medical aid provided by the employer”). In that way, the statute affords the employer a financial reward for negotiating or otherwise securing cost reductions from the medical providers. The statute requires the district court to use the amount the City has paid in medical expenses, not the amount the providers have billed, in calculating the credit. The district court erred.
We affirm the district court in all respects except the calculation of the City's credit for future workers compensation benefits, and on that we reverse and remand with directions to recalculate the credit in conformity with K.S.A. 44–504(b) and this decision.