Department v. Granger

• Decision Date: 01 March 2007
• Docket Number: No. 78139-7.,78139-7.
• Citation: 159 Wn.2d 752,153 P.3d 839
• Parties: DEPARTMENT OF LABOR AND INDUSTRIES of the State of Washington, Petitioner, v. William A. GRANGER, Respondent.
• Court: Washington Supreme Court

153 P.3d 839

159 Wn.2d 752

DEPARTMENT OF LABOR AND INDUSTRIES of the State of Washington, Petitioner, v. William A. GRANGER, Respondent.

No. 78139-7.

Supreme Court of Washington, En Banc.

Argued November 9, 2006.

Decided March 1, 2007.

John R. Wasberg, Office of the Attorney General, Seattle, WA, for Petitioner.

Terry James Barnett, Rumbaugh Rideout Barnett & Adkins, Tacoma, WA, for Respondent.

BRIDGE, J.

¶ 1 The Department of Labor and Industries (Department) seeks review of a decision of Division One of the Court of Appeals which determined that the health care payments Granger's employer made to a trust on his behalf should be included in his monthly wage calculation for purposes of determining disability benefits. The Department argues that because Granger was not eligible to receive the benefits of that trust at the time of his injury, the payments made to the trust should not be included in the calculation. Granger argues that because his employer was paying $2.15 per hour to the trust in return for Granger's work, that amount represents his earning capacity at the time of his injury and thus should be included in the calculation. We agree with Granger and affirm the Court of Appeals.

I Facts and Procedural History

¶ 2 William Granger was a 31-year member of the Union Local 292 of Washington and Northern Idaho District Counsel of Laborers. Under the union's trust fund rules, eligibility for medical benefits was based upon an "hour-bank system." Clerk's Papers (CP) at 29. In addition to his hourly wage, for every hour that Granger worked his employer paid $2.15 for medical benefits into a trust account. Once he had obtained 200 hours he was initially eligible for the coverage. For every month that he worked his employer deducted 120 hours for the medical coverage, which began the first day of the following month. That is, if Granger had 120 hours in his hour bank at the end of March, his employer would deduct those hours from his hour bank and he would have medical coverage for the month of April. If his total accumulated hours dropped below 120, he was no longer eligible for the benefits, but he would be eligible again if he reached the requisite 120 hours within 10 months. An employee could accrue up to 1,080 hours in the hour bank.

¶ 3 On April 20, 1995, Granger sustained an industrial injury while employed by G.G. Richardson, Inc. Although Granger had previously reached the requisite 200 hours for initial health care eligibility, his health care coverage had lapsed on March 31, 1995 due to insufficient hours. At the time of his injury Granger's employer had been making payments to the health care trust, but as of April 20 he had accrued only 64 hours in his hour bank. Granger filed an application with the Department, seeking industrial insurance benefits. The Department issued an order allowing his claim, but in calculating his monthly wage (upon which his time-loss compensation would be based) it did not include the money that his employer was paying for health care coverage.

¶ 4 Granger's challenge to this order remained pending for years, but on July 9, 2002, the Department issued a final order affirming that the loss time compensation rate would not include the money that Granger's employer had been paying for his health care. Granger appealed this decision to the Board of Industrial Insurance Appeals (Board), and on August 4, 2003, the industrial appeals judge (IAJ) issued a proposed decision and order upholding the Department's order. Granger then petitioned for review by the full Board, which reversed the IAJ and the Department, and ordered the Department to include the $2.15 per hour in the monthly wage computation. The Department appealed the order to Skagit County Superior Court, and on September 29, 2004, that court affirmed the Board's order. The Department timely appealed, and on October 31, 2005, Division One affirmed the superior court's decision. Dep't of Labor & Indus. v. Granger, 130 Wash.App. 489, 123 P.3d 858 (2005). The Department sought review in this court, which we accepted on September 7, 2006. Dep't of Labor & Indus. v. Granger, 157 Wash.2d 1021, 142 P.3d 608 (2006).

II

Analysis

¶ 5 RCW 51.08.178: This case poses a question of statutory interpretation, a question of law that we review de novo. Cockle v. Dep't of Labor & Indus., 142 Wash.2d 801, 807, 16 P.3d 583 (2001). The legislature has mandated that Title 51 RCW be "liberally construed for the purpose of reducing to a minimum the suffering and economic loss arising from injuries and/or death occurring in the course of employment." RCW 51.12.010. Of course, we may not construe the statute in a way that would lead to a "strained or unrealistic interpretation." Senate Republican Campaign Comm. v. Pub. Disclosure Comm'n, 133 Wash.2d 229, 243, 943 P.2d 1358 (1997). However, "where reasonable minds can differ over what Title 51 RCW provisions mean, in keeping with the legislation's fundamental purpose, the benefit of the doubt belongs to the injured worker ...." Cockle, 142 Wash.2d at 811, 16 P.3d 583.

¶ 6 RCW 51.08.178(1) provides that

the monthly wages the worker was receiving from all employment at the time of injury shall be the basis upon which compensation is computed ....

....

The term "wages" shall include the reasonable value of board, housing, fuel, or other consideration of like nature received from the employer as part of the contract of hire....

¶ 7 Cockle was the first case in which we considered "whether the value of employer-provided health care coverage is included in the basis used to calculate workers' compensation payments under RCW 51.08.178." Cockle, 142 Wash.2d at 805, 16 P.3d 583. In that case, Cockle's employer paid her $5.61 per hour and also paid her health insurance premiums at a rate of $205.52 per month. Id. When Cockle was injured in the course of her employment, the Department calculated her compensation based upon only her paycheck earnings, and not her health care coverage. Id. at 805-06, 16 P.3d 583.

¶ 8 We found that although the use of the phrase "consideration of like nature" limited the kinds of consideration to be considered "wages" under the statute, health care coverage was one of the "[c]ore, nonfringe benefits" that must be included. See id. at 810, 822-23, 16 P.3d 583 (emphasis omitted). We determined that "consideration of like nature" includes those benefits that are "readily identifiable and reasonably calculable in-kind components of a worker's lost earning capacity at the time of injury that are critical to protecting workers' basic health and survival." Id. at 822, 16 P.3d 583. This became known as the "Cockle test." See Gallo v. Dep't of Labor & Indus., 155 Wash.2d 470, 482-83, 120 P.3d 564 (2005).

¶ 9 Four years later we again addressed the issue of the types of consideration to be included in the compensation calculation. In Gallo we were asked whether employer contributions to retirement trust funds, apprenticeship training funds, the Laborers-Employers Cooperation and Education Trust Fund, and life and disability insurance trust funds should be included in the monthly wage calculation to determine compensation. In that case the workers argued that all wages paid under their collective bargaining agreements should be considered as cash wages because the employer paid an hourly sum that was then diverted to various trusts. We rejected that argument, reiterating that in Cockle we found that "the legislature did not intend that all consideration given in exchange for work is to be included in `wages.'" Id. at 484, 120 P.3d 564 (emphasis added) (quoting Cockle, 142 Wash.2d at 808, 16 P.3d 583). Rather, we applied the Cockle test to the benefits at issue and found that none of them constituted "consideration of like nature." See id. at 491-93, 120 P.3d 564.

¶ 10 We must here decide whether the payments that an employer was making to an employee's health care trust fund at the time of the employee's injury should be included in the wage calculation if the employee was not entitled to the trust benefits at that time. Although the parties ask us to construe the meaning of "receiving at the time of the injury," the disagreement also requires us to determine what constitutes "consideration": the payments to the trust, or the coverage itself.

¶ 11 The Department argues that the coverage itself is the consideration and, therefore, where the employee was not entitled to receive this consideration at the time of the injury, he may not have the value of the benefit included in the wage calculation. Pet. for Review at 7. Granger, on the other hand, argues that the $2.15 per hour that the employer paid for the health care coverage is the consideration and that because he was earning this money at the time of the injury, it must be included in his wage calculation in order to most accurately reflect his lost earning capacity. See Answer to Pet. for Review at 4. Therefore, in construing RCW 51.08.178, we must determine whether focus should be upon the payments to the trust or the coverage itself.

¶ 12 The Department contends that the plain language of RCW 51.08.178 requires a worker to be receiving benefits at the time of an industrial injury in order for those benefits to be included as part of monthly wages, and that Division One erred when it failed to recognize that the "receiving at the time of the injury" requirement of RCW 51.08.178 is unambiguous. Pet. for Review at 9. The Department argues that the meaning of "receive" is plain on its face, see Suppl. Br. of Pet'r at 8, and cites Harris v. Dep't of Labor & Indus., 120 Wash.2d 461, 472, 843 P.2d 1056 (1993), where we determined that "[t]o receive is to `take possession or delivery of' something" (quoting Webster's Third New International Dictionary 1894 (1976)). Additionally, the Department argues that because the wage calculation under Title 51 RCW is based upon lost earning capacity, "monthly wages cannot...