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Ksionek v. Wisconsin Department of Health and Family6/6/2000
APPEAL from an order of the circuit court for Outagamie County: DEE R. DYER, Judge.
Affirmed.
. The Department of Employe Trust Funds and Group Insurance Board (collectively the department) appeal from an order declaring that the department has no right to settlement proceeds from Jeanette Ksionek's action filed pursuant to the Americans with Disabilities Act (the Act). The department, as fiduciary for the Employe Trust Fund, argues that it is entitled to reimbursement for payments made to Ksionek pursuant to an income continuation insurance plan. The department argues that the circuit court should have given great weight deference to its interpretation of Wis. Stat. ch. 40 and the income continuation insurance contract. It additionally argues that the circuit court erred by failing to conclude that the department is entitled to reimbursement under either (1) the terms of the income continuation insurance contract; (2) the provisions of Wis. Stat. § 40.08(4); or (3) the doctrine of equitable subrogation. We reject the department's arguments and affirm the order.
Background
. Ksionek was employed by the Department of Health and Family Services, a state agency, and participated in an income continuation insurance plan offered by the Group Insurance Board. In July 1995, Ksionek became ill, started working half-time and began receiving income continuation insurance benefits. In February 1996, she was terminated from her employment for medical reasons. Ksionek continued to receive income continuation insurance benefits until June of 1998.
. Ksionek filed suit in federal court claiming she was wrongfully terminated in violation of the Act. In October 1998, the parties agreed to settle Ksionek's claim. Pursuant to the settlement agreement, Ksionek was reinstated at the Department of Health and Family Services and received approximately $58,000 in back pay. In addition, the settlement agreement provided, in relevant part:
5. The State of Wisconsin will pay to the Department of Employe Trust Funds such amount as the plaintiff lawfully may be required to pay as reimbursement for income continuation payments received by the plaintiff.
6. The State of Wisconsin will pay to the plaintiff for damages the sum of $25,000, less any payment made to the Department of Employe Trust Funds under Paragraph 5 of this agreement. (Emphasis added.)
. Ksionek commenced this action in circuit court, seeking declaratory judgment for the proper distribution of the settlement proceeds. The circuit court concluded that the department does not possess any legal right to a claim for the $25,000 settlement proceeds. This appeal followed.
Analysis
. The department initially argues that the circuit court erred by failing to apply great weight deference to its interpretation and conclusions. In the alternative, the department contends that it is entitled to reimbursement for the income continuation insurance benefits Ksionek received by virtue of (1) the repayment obligation imposed on Ksionek by the insurance contract's terms; (2) the department's right of recovery pursuant to Wis. Stat. § 40.08(4); and (3) the doctrine of equitable subrogation.
A. Great Weight Deference
. The department argues for the first time on appeal that the circuit court erred by failing to give great weight deference to the department's interpretation of both the income continuation insurance contract and Wis. Stat. ch. 40. The "great weight" standard, which provides the highest level of deference, is afforded to an agency's conclusion of law or statutory interpretation when the following four elements are
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