Clarifying Personal Liability under N.D.C.C. § 65-04-26.1: No Penalties for Payroll-Report Failures, Yes to Prospective Accrual

Introduction

In WSI v. Boechler, 2025 ND 132, the North Dakota Supreme Court revisited the scope of personal liability imposed on corporate officers under N.D.C.C. § 65-04-26.1 for workers-compensation premiums, interest, penalties, and costs. Workforce Safety and Insurance (“WSI”) had twice sued Boechler PC and its president, Jeanette Boechler, to recover unpaid premiums and related charges. The Cass County District Court limited Ms. Boechler’s individual liability to a fraction of the amount sought, prompting WSI’s appeal.

Two statutory interpretation questions dominated the appeal:

  • Does an individual’s personal liability under § 65-04-26.1 encompass penalties assessed for failing to file payroll reports?
  • Does WSI’s administrative determination of personal liability apply prospectively—i.e., to amounts that accrue after the date of the determination?

The Supreme Court answered “no” to the first and “yes” to the second, affirming in part, reversing in part, and remanding. Although highly fact-specific, the decision lays down a precedent of statewide importance on how “including” in § 65-04-26.1 cabins the type of penalties for which individuals may be liable, and on the forward-looking nature of WSI’s liability orders.

Summary of the Judgment

1. Penalties for Failure to File Payroll Reports Excluded. The Court held that the word “including” in § 65-04-26.1 confines personal liability to charges that are parts or elements of unpaid premiums (interest, penalties, costs) and does not reach penalties triggered by separate misconduct, such as failing to file required payroll reports.

2. Prospective Liability Confirmed. Once WSI issues a valid administrative determination that an individual is liable, that liability extends to future unpaid premiums (and their interest, penalties, costs) until the individual’s relationship with the employer ends or the debt is satisfied.

3. Pecuniary Outcome. The district court must recalculate Ms. Boechler’s debt to include: (a) the unpaid premiums, interest, and permissible penalties in WSI’s July 22 2021 order without deducting the amount previously reduced to judgment against the corporation; and (b) all qualifying amounts that accrued through commencement of the 2022 action (≈ $23,573.05).

Analysis

A. Precedents Cited

  • Grand Forks Professional Baseball, Inc. v. N.D. Workers Compensation Bureau, 2002 ND 204
    Clarified grammatical parsing of § 65-04-26.1, holding that the clause after “employee” is descriptive of which employees may be liable. The present Court relied on this parsing to separate “classes of individuals” from “scope of liability.”
  • Wheeler v. Gardner, 2006 ND 24; Ash v. Traynor, 2000 ND 75
    Reaffirmed that statutory interpretation is a question of law reviewed de novo and that courts first look to statutory text.
  • Meiers v. N.D. Dep’t of Transp., 2025 ND 21
    Offered the recent canon that “and” is conjunctive; used here illustratively to show how the legislature could have drafted § 65-04-26.1 differently.
  • WSI v. Boechler, PC, 2022 ND 98
    Earlier litigation between the same parties explaining WSI’s need to issue an administrative decision before suing for personal liability.

B. Legal Reasoning

  1. Plain-Language Approach. The Court divided the statute into three parts: (i) who may be liable; (ii) the what (premiums and reimbursements “including” interest, penalties, costs); (iii) the condition precedent (non-payment by the company). It treated “including” as restrictive, not expansive.
  2. Semantic Illustration. Using an everyday analogy (“I will pay for dinner, including drinks and dessert.”), the Court showed that “including” naturally points to things subsumed within the main noun. Penalties for payroll-report failures are not subsumed within “premiums.”
  3. Availability of Premium-Based Penalties. Section 65-04-22 expressly labels the sanction for defaulted premium payments a “penalty,” rebutting WSI’s argument that only interest applies to unpaid premiums. Thus, “penalties” tied to premium non-payment are covered by § 65-04-26.1; those tied to other misconduct are not.
  4. Prospective Reach. The Court read § 65-04-26.1(1) & (2) in tandem with WSI’s 2021 order. Liability endures “for the life of the account” unless the individual’s corporate status changes. Because Ms. Boechler remained president, her liability naturally grew as the corporation failed to pay subsequent premiums.
  5. Administrative Res Judicata & Prior Judgment. The prior corporate judgment did not immunize Ms. Boechler because she had been dismissed “without prejudice.” Nor could she relitigate WSI’s administrative order, which had become final when she missed the appeal window.

C. Potential Impact

For Employers & Their Officers:

  • Corporate officers are insulated from personal liability for payroll-report penalties, a common sanction when companies neglect paperwork but still pay premiums.
  • However, once WSI makes a valid personal-liability determination, officers remain on the hook for any premium-based obligations that accrue going forward until they formally sever ties with the entity.

For WSI (and Administrative Agencies):

  • The agency must segregate penalty types in billing and pleadings; failure to do so risks partial forfeiture in court.
  • Timely issuance of a clear personal-liability order effectively tolls the accrual clock against individuals, simplifying future collection efforts.

For the Courts:

  • The decision furnishes a textual roadmap for interpreting “including” vis-à-vis “and” in liability statutes.
  • Reaffirms that administrative res judicata applies, but corporate and personal judgments are distinct unless explicitly merged.

Complex Concepts Simplified

  • Premiums vs. Payroll-Report Penalties
    Premiums are like insurance premiums—amounts owed for coverage. Payroll-report penalties are fines for not sending required wage data. They arise from different statutory duties.
  • “Including” as a Limiting Term
    Think of “including” as opening a parenthesis: it lists items inside the bigger category. It does not add unrelated categories.
  • Administrative Res Judicata
    Once an agency issues a final order (and appeal time lapses), the same parties cannot re-litigate what was decided. It is the administrative cousin of claim preclusion in court.
  • Prospective Liability
    Liability that continues into the future until a triggering event changes—here, either payment in full or the officer’s departure.

Conclusion

WSI v. Boechler crystallizes two critical principles in North Dakota workers-compensation law:

  1. Personal liability under § 65-04-26.1 does not extend to penalties for failing to file payroll reports—only to charges that are part and parcel of unpaid premiums or reimbursements.
  2. Once WSI determines that an individual is personally liable, that liability sweeps in future premium-based obligations until the individual’s corporate involvement ends.

For practitioners, the ruling underscores the importance of carefully parsing statutory language and of distinguishing between different types of penalties in both administrative and judicial proceedings. For corporate officers, the case offers limited relief from liability while simultaneously warning that unpaid premiums—and the interest, penalties, and costs tied to them—can follow them long after the original determination.