Travelers Indem. Co. v. Gridiron Mgmt. Group

Travelers I ndemnITy C ompany, appellee , v.
G rIdIron manaGemenT G roup, appellanT.
794 N.W.2d 143
Filed February 11, 2011. 	No. S-10-068.
1. Administrative Law: Judgments: Appeal and Error. A judgment or final order
rendered by a district court in a judicial review pursuant to the Administrative
Procedure Act may be reversed, vacated, or modified by an appellate court for
errors appearing on the record. When reviewing an order of a district court under
the Administrative Procedure Act for errors appearing on the record, the inquiry
is whether the decision conforms to the law, is supported by competent evidence,
and is neither arbitrary, capricious, nor unreasonable.
2. Judgments: Appeal and Error. Whether a decision conforms to law is by defi-
nition a question of law, in connection with which an appellate court reaches a
conclusion independent of that reached by the lower court.
3. Administrative Law: Statutes: Appeal and Error. To the extent that the mean-
ing and interpretation of statutes and regulations are involved, questions of law
are presented, in connection with which an appellate court has an obligation
to reach an independent conclusion irrespective of the decision made by the
court below.
4. Constitutional Law: Due Process. The determination of whether the procedures
afforded an individual comport with constitutional requirements for procedural
due process presents a question of law.
5. Judgments: Appeal and Error. On a question of law, an appellate court is obli-
gated to reach a conclusion independent of the court below.
6. Statutes: Intent. When construing a statute, a court must look at the statutory
objective to be accomplished, the problem to be remedied, or the purpose to
be served, and then place on the statute a reasonable construction which best
achieves the purpose of the statute, rather than a construction defeating the statu-
tory purpose.
7. Constitutional Law: Statutes. It is the duty of a court to give a statute an inter-
pretation that meets constitutional requirements if it can reasonably be done.
8. Statutes: Legislature: Intent. Components of a series or collection of statutes
pertaining to a certain subject matter are in pari materia and should be conjunc-
tively considered and construed to determine the intent of the Legislature, so that
different provisions are consistent, harmonious, and sensible.
9. Administrative Law: Due Process: Notice. Generally, under due process prin-
ciples, the notice of an administrative agency hearing should inform a party of the
issues involved in order to prevent surprise at the hearing and allow that party an
opportunity to prepare.
Appeal from the District Court for Lancaster County: K aren
B. F lowers, Judge. Affirmed.
Michael J. Mullen, of Burns Law Firm, for appellant.
TrAveLerS INDeM. CO. v. GrIDIrON MGMT. GrOuP 	113
Cite as 281 Neb. 113
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:45 AM CST

CeCelia C. Ibson, of Ibson Law Firm, for appellee.
H eavICan, 	C.J., 	wrIGHT, 	C onnolly, 	G errard, 	sTepHan,
mCC ormaCK, and mIller-lerman, JJ.
mIller-lerman, J.
NATure OF THe CASe
This case involves the proper notice procedure to be used
by the Nebraska Department of Insurance (Department) when
setting a disputed experience rating to be applied to workers’
compensation insurance. Following several lower level admin-
istrative proceedings, the Department set a hearing to deter-
mine what experience rating the football operation Gridiron
Management Group (Gridiron), appellant, should be assigned
in connection with the workers’ compensation insurance it
was to receive from Travelers Indemnity Company (Travelers),
appellee. The hearing was sought by Gridiron. Although its
interest had been represented below, Travelers was not formally
notified of the Department hearing, the outcome of which was
contained in a January 21, 2009, decision and was favorable to
Gridiron and unfavorable to Travelers.
Travelers 	appealed 	the 	Department’s 	decision 	to 	the
district court for Lancaster County under Neb. rev. Stat.
§ 84-917 (Cum. Supp. 2010) of the Administrative Procedure
Act. Travelers claimed, inter alia, that because of lack of
notice, the Department’s decision should be set aside and
the matter remanded to the Department with instructions to
give proper statutory notice under Neb. rev. Stat. § 44-7532
(reissue 2004) to all interested parties, including Travelers,
and to thereafter conduct a new hearing. The district court
agreed with Travelers’ assertion that it should have been noti-
fied. The district court set aside the Department’s decision and
remanded the matter to the Department with directions to hold
a new hearing giving Travelers notice and an opportunity to
be heard.
Gridiron appeals and claims that because Travelers had
learned through informal communication of Gridiron’s appeal,
statutory notice was not required. We reject Gridiron’s argu-
ment and agree with the district court’s decision that proper
notice was lacking. Accordingly, we affirm.
114 	281 NeBrASkA rePOrTS

STATeMeNT OF FACTS
Gridiron acquired the football operation assets of Omaha
Beef, LLC, on January 1, 2008. In early 2008, Gridiron applied
for workers’ compensation insurance from Travelers. Gridiron
had not previously obtained workers’ compensation insurance
and, therefore, had not previously been assigned an experience
rating. A company’s experience rating is used by Travelers to
set premiums. In determining an insured’s experience rating,
Travelers uses the National Council of Compensation Insurance
(Council). The Council is a rating organization licensed in, and
authorized by, the State of Nebraska to make and file rules,
rating values, classifications, and rating plans for workers’
compensation insurance.
After applying for coverage, Gridiron was assigned an expe-
rience rating by the Council. In assigning Gridiron an experi-
ence rating, the Council noted that effective January 1, 2008,
Gridiron had acquired the assets and business of Omaha Beef.
The Council determined that the two entities were combinable
for experience rating purposes and assigned Gridiron the expe-
rience rating previously held by Omaha Beef, 2.27, rather than
the experience rating given to a new company, 1.0. The higher
experience rating translates into higher premiums being paid
by Gridiron.
Gridiron appealed the assignment first to the Council’s
appeal panel. Gridiron disputed the experience rating assign-
ment for a variety of reasons, all to the effect that Gridiron ran
the football operation in a manner that differed from Omaha
Beef. After an August 22, 2008, telephone conference, the
Council’s appeal panel affirmed the decision.
Next, Gridiron appealed the decision of the Council’s appeal
panel to the Department. On October 30, 2008, at a prehearing
conference, the Department ordered that Gridiron’s appeal be
heard commencing on November 12. Travelers was not a par-
ticipant at the prehearing conference. The certificate of service
of the prehearing conference order setting the hearing shows
service on only counsel for Gridiron.
At the hearing on November 12, 2008, Gridiron was the
only party to participate. The Council’s participation in the
hearing was limited to providing background information. At
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Cite as 281 Neb. 113

the hearing, the Department determined that the only issue
for determination by the Department was whether Gridiron
was combinable with Omaha Beef for workers’ compensation
experience rating purposes. The Department concluded that
Gridiron was not a successor entity to Omaha Beef and that
Gridiron should have been assigned an experience modifica-
tion rating of 1.0, as a new and independent company, rather
than the 2.27 experience rating assigned by the Council. The
Department’s January 21, 2009, findings, conclusions, and
8-page written order were served on only Gridiron.
Travelers learned of the Department’s ruling and appealed
the Department’s decision to the district court for Lancaster
County pursuant to § 84-917 of the Administrative Procedure
Act. Travelers claimed that under the procedural provisions
of § 44-7532, it was entitled to notice of the hearing before
the Department, and that it had not received proper notice.
Travelers sought, inter alia, to set aside the Department’s
decision.
The district court held a hearing. At the hearing, Travelers
acknowledged that it had learned informally that an appeal
to the Department would take place in the future but indi-
cated that it did not receive statutory notice of the appeal. It
is undisputed that statutory notice under § 44-7532 was not
given by the Department to Travelers. Gridiron took the posi-
tion that because Travelers had been aware of the existence
of Gridiron’s appeal, Travelers had chosen not to attend, and
that Travelers suffered no prejudice attributable to the lack of
formal notice.
On December 17, 2009, the district court filed an order in
which it noted that § 44-7532 provides that “notice of the hear-
ing [shall] be given to all interested parties and state the time,
place, and purpose of the hearing.” (emphasis in original.)
The district court concluded that “[t]here can be no doubt that
Travelers is an interested party.” The district court further deter-
mined that the record showed that Travelers had not received
notice of the hearing “as required by statute [§ 44-7532] and
that the hearing was conducted without giving [Travelers] an
opportunity to participate.” Accordingly, the district court set
aside the January 21 Department decision and remanded the
116 	281 NeBrASkA rePOrTS

matter to the Department with directions to hold a new hearing
giving Travelers notice and an opportunity to present evidence
and be heard. Gridiron appeals.
For completeness, we note that elsewhere in the district
court’s order, it dismissed the Department, which had been
named as a party to the district court action. No issue is before
us on appeal with respect to this ruling.
ASSIGNMeNT OF errOr
Gridiron claims, summarized and restated, that the district
court erred when it determined that Travelers was not given
adequate notice of the hearing before the Department and thus
erred when it set aside the decision of the Department and
remanded the matter to the Department for a new hearing giv-
ing Travelers statutory notice and an opportunity to be heard.
STANDArDS OF revIeW
[1] A judgment or final order rendered by a district court in
a judicial review pursuant to the Administrative Procedure Act
may be reversed, vacated, or modified by an appellate court for
errors appearing on the record. When reviewing an order of a
district court under the Administrative Procedure Act for errors
appearing on the record, the inquiry is whether the decision
conforms to the law, is supported by competent evidence, and
is neither arbitrary, capricious, nor unreasonable. Children’s
Hospital v. State, 278 Neb. 187, 768 N.W.2d 442 (2009).
[2] Whether a decision conforms to law is by definition a
question of law, in connection with which an appellate court
reaches a conclusion independent of that reached by the lower
court. Id.
[3] To the extent that the meaning and interpretation of
statutes and regulations are involved, questions of law are
presented, in connection with which an appellate court has an
obligation to reach an independent conclusion irrespective of
the decision made by the court below. Id.
[4,5] The determination of whether the procedures afforded
an individual comport with constitutional requirements for
procedural due process presents a question of law. Scott v.
County of Richardson, 280 Neb. 694, 789 N.W.2d 44 (2010).
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Cite as 281 Neb. 113

On a question of law, an appellate court is obligated to reach a
conclusion independent of the court below. Id.
ANALYSIS
On appeal to this court, Gridiron challenges the district
court’s order setting aside the decision of the Department
and remanding this matter to the Department with directions
to hold a new hearing giving Travelers notice and an oppor-
tunity to present evidence and be heard. Gridiron argues that
Travelers had adequate notice of the hearing. Gridiron specifi-
cally relies on the fact that Travelers knew of the existence of
Gridiron’s appeal as shown by Travelers’ comments before the
district court to the effect that it was aware that Gridiron had
appealed the Department’s order.
In response, Travelers argues that the Department failed
to comply with the notice provisions of § 44-7532 and that
as a result, Travelers did not participate in the hearing and
was denied procedural due process. Accordingly, Travelers
claims that the district court did not err when it set aside
the Department’s order and remanded the matter. We agree
with Travelers.
In its order, the district court noted that the dispute con-
cerned the premium to be paid for workers’ compensation
insurance and that there had been a series of administrative
appeals. The case before the district court was an extension of
those appeals, and the district court stated that “it is fair to say
that Travelers and Gridiron are the only interested parties.” The
district court concluded that under § 44-7532, Travelers was an
interested party to the proceedings before the Department and
that the Department erred when it failed to give Travelers statu-
tory notice of the hearing and an opportunity to be heard.
In addressing whether Travelers received sufficient notice,
we must consider both the statutory notice of hearing require-
ments and the constitutional requirements for procedural due
process. The statutes quoted below are relevant to our analy-
sis. Neb. rev. Stat. § 44-7508(5) (reissue 2004) states: “An
insurer may authorize the director to accept rating system
filings and prospective loss cost filings made on its behalf
by an advisory organization. The insurer shall file additional
118 	281 NeBrASkA rePOrTS

information as is necessary to complete its rating systems on
file with the director.”
Neb. rev. Stat. § 44-7517 (reissue 2004) states:
Within a reasonable time after receiving a written
request and after receiving payment of such reasonable
charge as it may require, every insurer and advisory
organization shall furnish all pertinent information to any
insured affected by a rate, premium, or prospective loss
cost made by the insurer or advisory organization. upon
written request, every insurer and advisory organization
shall provide within this state reasonable means by which
the insured aggrieved by the application of the advisory
organization’s or insurer’s rating system may be heard,
in person or by an authorized representative, to review
the manner in which such rating system has been applied
in connection with the insurance afforded the insured. If
the insurer or advisory organization fails to act upon such
request within thirty days after it is made, the applicant
may proceed in the same manner as if the application
had been rejected. An insured affected by the action
of the insurer or advisory organization on such request
may appeal to the director within thirty days after writ-
ten notice of such action. The director, after a hearing
held in accordance with section 44-7532, may affirm the
action of the insurer or advisory organization or order
remedial action to be undertaken by the insurer or advi-
sory organization.
Neb. rev. Stat. § 44-7531 (reissue 2004) states:
Any insurer, joint underwriting pool, joint reinsurance
pool, statistical agent, or advisory organization aggrieved
by any order or decision of the director made without a
hearing may, within thirty days after notice of the order,
make written request to the director for a hearing thereon
in accordance with section 44-7532. Pending such hearing
and decision, the director may suspend the effective date
of his or her action.
Section 44-7532 states in part:
If a hearing is held at the request of a party other
than the director, unless mutually agreed upon by the
TrAveLerS INDeM. CO. v. GrIDIrON MGMT. GrOuP 	119
Cite as 281 Neb. 113

director and all interested parties, notice of hearing shall
be provided within thirty days after the director’s receipt
of a written request for a hearing. Notice of hearing
shall be given to all interested parties and shall state the
time, place, and purpose of the hearing. unless mutually
agreed upon by the director and all interested parties, the
hearing shall be held not less than ten days after notice
is served.
[6-8] When construing a statute, a court must look at the
statutory objective to be accomplished, the problem to be rem-
edied, or the purpose to be served, and then place on the statute
a reasonable construction which best achieves the purpose of
the statute, rather than a construction defeating the statutory
purpose. State v. Arterburn, 276 Neb. 47, 751 N.W.2d 157
(2008). It is the duty of a court to give a statute an interpreta-
tion that meets constitutional requirements if it can reasonably
be done. Id. Components of a series or collection of statutes
pertaining to a certain subject matter are in pari materia and
should be conjunctively considered and construed to deter-
mine the intent of the Legislature, so that different provisions
are consistent, harmonious, and sensible. Davio v. Nebraska
Dept. of Health & Human Servs., 280 Neb. 263, 786 N.W.2d
655 (2010).
In reviewing the structure and process established by these
statutes taken together, it is clear that the Legislature contem-
plated that the insurer, its authorized agent, and the insured
would all be involved in the process of establishing and, if
necessary, challenging an insured’s workers’ compensation
experience rating. The Legislature provided a process for
each entity to address or challenge a decision by which it
was aggrieved.
The process begins with § 44-7508, which allows the insurer
to authorize the Council to determine the appropriate rate for
an insured. Section 44-7517 provides that once the rate is set,
the Council and the insurer must provide the insured a reason-
able way to object to the rate and further provides that if the
insured is not satisfied with this result, the insured can appeal
to the Department. If the Department fails to hold a hearing
120 	281 NeBrASkA rePOrTS

on a disputed matter brought by an insurer (or other entity),
§ 44-7531 provides for the manner in which an insurer may
make a request for a Department hearing to be held in accord-
ance with the notice provisions of § 44-7532 to challenge the
decision. Where the Department holds a hearing at the request
of a party other than the Department, as was the case in the
present action, § 44-7532 requires that “[n]otice of hearing
shall be given to all interested parties and shall state the time,
place, and purpose of the hearing.”
We note that under § 44-7517, an “aggrieved” insured may
seek a Department hearing under the procedures set forth in
§§ 44-7531 and 44-7532; an “aggrieved” insurer may similarly
seek a hearing under § 44-7532. It is clear that the language
in § 44-7532 referring to notice to “all interested parties” con-
templates notice by the Department to both the insured and the
insurer regarding the adversarial proceeding to come. It would
not be a sensible reading of the statutes to require notice to
only one of the parties, where both parties are active in the
proceeding but seek different outcomes.
Based on the process established by the statutes, we con-
clude that the relevant statutory provisions, when read together,
contemplate that the insured and insurer are interested in this
process and, as such, are “interested parties” under § 44-7532,
entitled to formal notice by the Department of the hear-
ing, including “the time, place and purpose of the hearing.”
We read § 44-7532 in context and conclude that notice of
the Department hearing should be of record and, contrary to
Gridiron’s suggestion, that casual or informal notice is not
anticipated by § 44-7532 and is not sufficient.
[9] With respect to constitutional notice requirements, we
have explained that generally, under due process principles,
the notice of an administrative agency hearing should inform a
party of the issues involved in order to prevent surprise at the
hearing and allow that party an opportunity to prepare. See,
generally, Lariat Club v. Nebraska Liquor Control Comm.,
267 Neb. 179, 673 N.W.2d 29 (2004). See, also, Goldberg v.
Kelly, 397 u.S. 254, 90 S. Ct. 1011, 25 L. ed. 2d (1970). We
read § 44-7532 as contemplating these constitutional notice
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Cite as 281 Neb. 113

requirements as well as an opportunity to the parties to be
heard and present evidence. So read, the notice requirements of
§ 44-7532 are constitutionally satisfactory.
under § 44-7532, it is the responsibility of the Department
to provide all interested parties with formal notice of the time,
place, and subject matter to be considered at the hearing, as
well as a hearing which provides an opportunity to be heard.
Contrary to Gridiron’s suggestion, it was not incumbent on
Travelers to seek out the details of an upcoming appeal which
it may have learned about informally. The prehearing confer-
ence order setting the hearing date was not served on Travelers.
The district court did not err when it determined that “Travelers
did not receive notice as required by statute.”
CONCLuSION
The Department failed to give Travelers, an interested party,
formal notice of Gridiron’s appeal as required by § 44-7532.
Accordingly, we affirm the district court’s order which vacated
the decision of the Department and remanded the matter for a
new hearing providing Travelers with notice and an opportunity
to present evidence and be heard.
aFFIrmed.
I n re esTaTe oF darleen F. C raven, deCeased.
C ounTy oF lanCasTer , neBrasKa , appellanT, v.
unIon BanK & TrusT C ompany, TrusTee and
personal represenTaTIve oF THe esTaTe
oF darleen F. C raven, appellee .
794 N.W.2d 406
Filed February 11, 2011. 	No. S-10-393.
1. Decedents’ Estates: Taxation: Appeal and Error. The scope of review in an
appeal of an inheritance tax determination is review for error appearing on
the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors appear-
ing on the record, the inquiry is whether the decision conforms to the law,
is supported by competent evidence, and is neither arbitrary, capricious, nor
unreasonable.
122 	281 NeBrASkA rePOrTS