Estate of Kinsman, In re
| Decision Date | 23 June 1986 |
| Docket Number | No. 14192-9-I,14192-9-I |
| Citation | 721 P.2d 981,44 Wn.App. 174 |
| Parties | In re the ESTATE OF William Robert KINSMAN, Deceased. DEPARTMENT OF LABOR AND INDUSTRIES, Appellant, v. Helene Park KINSMAN, Jean Archer and Robert Kinsman, Respondents. |
| Court | Washington Court of Appeals |
Geoffrey P. Chism, James T. Johnson, Seattle, for appellant Dept. of Labor and Industries.
The Department of Labor & Industries (hereinafter the Department) appeals the trial court's allocation of proceeds from a wrongful death action, awarding the worker's widow less
than her industrial insurance benefits entitlement, despite the Department's lack of consent.
William Robert Kinsman died on December 9, 1981 as a result of asbestos-related injuries. Before his death, Kinsman initiated a personal injury action in United States District Court against several manufacturers of asbestos products, pursuant to RCW 51.24.030, 1 under the Industrial Insurance Act. The action was subsequently converted to a wrongful death and survival action on behalf of his second wife, Helene, and his grown children, Jean and Robert, as permitted in RCW 4.20.060. 2
Because Kinsman and his widow were receiving industrial insurance medical and pension benefits, the Department was continually advised about the progress of settlement negotiations. Based on the Department's liability to the estate and to Helene for these benefits, the Department, pursuant to RCW 51.24.090, 3 continually reminded the attorney for the three plaintiffs that "[t]he Ultimately, the wrongful death action was settled for the gross sum of $202,500. The Department had given tacit approval to the gross amount, while reserving its approval as to the allocation. The net proceeds of the settlement after attorney's fees and costs came to $115,150.72. Helene's entitlement 4 under the Industrial Insurance Act was $99,335.96. Apparently, Helene and the children were not on friendly terms and were disputing various assets of Kinsman's estate, including certain bank accounts. Because the parties could not agree to an allocation of the proceeds of the lawsuit, they petitioned the probate department of King County Superior Court to make an allocation. The Department understood that Helene would be seeking a 90 percent share of the net proceeds, which would more than cover her entitlement.
Department would have to approve the basis for the breakdown between what Mrs. Kinsman receives and what is given to the estate" if the amount received by the widow was less than her entitlement under the Industrial Insurance Act.
However, just prior to trial, Helene and the children reached an agreement under which the estate would receive $5,657.77 for medical expenses (which the Department had paid, and therefore had a lien against); Helene would receive 20 percent of the remainder, or $21,898.59; and Jean and Robert would split the balance equally between them. The reason for this proposed settlement was a "side agreement" in which the children would relinquish their claims on the disputed bank accounts, giving Helene an additional $24,240.69.
According to the Department's counsel and Helene's attorney, they spoke on Friday, December 16, 1983, and agreed that Helene's position at trial would be to ask for 90 percent of the settlement. The agreement with Jean and Robert's attorney was reached on Friday evening. The At that time, the attorney for Jean and Robert presented the stipulated allocation to the court. The Department objected because the amount awarded to Helene would cover only 14 percent of her industrial insurance entitlement. The Department recommended instead a distribution of 40 percent to Helene and 30 percent each to Jean and Robert. The Department based this recommendation in part on a codicil to Kinsman's will in which he indicated that any recovery to the estate should be divided 50 percent to Helene and 25 percent each to the children.
Department was not contacted prior to the trial date on Monday, December 19, 1983.
No party presented any testimony (the beneficiaries were not present), and the trial court entered an order granting the stipulated allocation. On December 27, 1983, the Department moved for reconsideration, which was denied by the court on December 29, 1983. The court further ordered the Department's lien on the settlement released after payment to the Department of $12,572.01, the amount of the lien calculated on Helene's share of the proceeds.
This appeal by the Department timely followed.
The Industrial Insurance Act has preempted civil causes of action arising from injuries occurring in the workplace. RCW 51.04.010 states in pertinent part:
The state of Washington ... declares that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workers, injured in their work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this title; and to that end all civil actions and civil causes of action for such personal injuries and all jurisdiction of the courts of this state over such causes are hereby abolished, except as in this title provided.
(Italics ours.) One exception to the abolition of civil causes of action arises when a third party is liable for the harm caused the employee. RCW 51.24.030 (see n.1).
RCW 51.24.040 goes on to state that:
The injured worker or beneficiary shall be entitled to the full compensation and benefits provided by this title regardless of any election or recovery made under this chapter.
See also Lowry v. Department of Labor & Indus., 21 Wash.2d 538, 151 P.2d 822 (1944).
However, because the Department will be liable to the claimant for the difference, if any, between the amount awarded in the third party action and the claimant's entitlement, the Legislature has given the Department power to approve settlements for amounts which are less than the claimant's entitlement. RCW 51.24.090 (see n.3). The respondents here argue that the statute is inapplicable because (a) the settlement with the third party is not at issue and (b) the gross amount of the settlement is more than Helene's entitlement.
We reject these arguments. The language of RCW 51.24.090 speaks to the "result" of the settlement. The result of a settlement is the amount actually paid to the beneficiary. Therefore, the statute is applicable to the situation before the court.
This issue was before the Court of Appeals in In re Estate of Boettcher, 35 Wash.App. 178, 665 P.2d 1378 (1983). There, a deceased worker's widow, who was entitled to worker's compensation benefits, sought to overturn the superior court's approval of a settlement entered into with the third party tortfeasor. The court-ordered allocation divided the proceeds of $225,000 equally among the widow and her two children. This resulted in an award to the widow which was less than her entitlement under the workers' compensation act. The widow and the Department moved to vacate the allocation, and the court granted the motion. The Court of Appeals held that the absence of written approval from the Department invalidated the settlement under RCW 51.24.090. Boettcher, at 179, 665 P.2d 1378.
The court analyzed RCW 51.24.090 as follows:
It is apparent from the statutory scheme that the Legislature intended DLI to aggressively collect any benefits paid to the beneficiary.... Otherwise, the settlement is void.... This provision is unambiguous and mandates strict compliance....
... [I]t is argued written approval is not required because the gross amount of the settlement ......
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