Fairley v. Department of Labor & Industries

• Decision Date: 09 April 1981
• Docket Number: No. 3771-III-1,3771-III-1
• Citation: 627 P.2d 961,29 Wn.App. 477
• Court: Washington Court of Appeals
• Parties: Carolyn FAIRLEY, widow of James D. Fairley, deceased, Respondent, v. DEPARTMENT OF LABOR & INDUSTRIES, Appellant.

Page 477

29 Wn.App. 477

627 P.2d 961

Carolyn FAIRLEY, widow of James D. Fairley, deceased, Respondent, v. DEPARTMENT OF LABOR & INDUSTRIES, Appellant.

No. 3771-III-1.

Court of Appeals of Washington, Division 3, Panel Two.

April 9, 1981.

Rehearing Denied May 20, 1981.

Kenneth O. Eikenberry, Atty. Gen., Charles R. Bush, Asst. Atty. Gen., Seattle, for appellant.

Philip M. Raekes, Raekes, Rettig & Osborne, Kennewick, for respondent.

GREEN, Judge.

The Department of Labor and Industries (Department) appeals a summary judgment requiring a claim made by Carolyn Fairley for compensation under the Crime Victims Compensation Act (Act) to be reevaluated. RCW 7.68. We affirm.

Three questions are presented: (1) Did the trial court have jurisdiction to determine the validity of Mrs. Fairley's claim when she failed to appeal the Department's decision within 60 days as required by RCW 51.52.060? (2) Does a Supreme Court decision, rendered after the Department determination but before appeal to the superior court, control? and (3) Does a subsequent legislative amendment, nullifying the Supreme Court decision, apply retroactively to require affirmance of the Department's determination?

The facts are not disputed. On August 4, 1973, James Fairley died as a result of a criminal assault. His widow filed a claim with the Department for death benefits. Her claim was approved, but the Department stated no benefits would be payable at that time because she was receiving life insurance proceeds and social security benefits exceeding the amount payable under the Act. When she asked for the basis for this calculation, the Department recalculated her benefits and on September 25, 1975, issued an order reaffirming its decision. The Department reasoned that social security benefits constituted "public insurance" under RCW 7.68.130 ¹ and were deductible from the benefits payable. The order stated, "The Department will recalculate benefits upon notice from Mrs. Fairley that circumstances have changed." Mrs. Fairley did not appeal this order.

On July 24, 1978, Mrs. Fairley requested the Department to reconsider its 1975 order. This was denied. She petitioned for review to the Board of Industrial Insurance Appeals. Review was denied because the 1975 departmental order had not been appealed within 60 days. Mrs. Fairley appealed the Board decision to superior court, contending the Department misinterpreted the term "public insurance." Subsequently, she moved for summary judgment on this issue. The court granted summary judgment, holding that social security benefits should not reduce the amount payable to Mrs. Fairley.

First, the Department contends Mrs. Fairley's failure to appeal to the Board within 60 days after its 1975 order deprived the Board, as well as the courts, of jurisdiction. We disagree.

This case is analogous to Booth v. Department of Labor and Industries, 189 Wash. 201, 64 P.2d 505 (1937). There, a miner's widow received monthly benefits under the Workmen's Compensation Act after her husband's death. Thereafter the Department agreed to a lump sum settlement of a dispute which had previously caused her benefits to be terminated. This sum was to compensate her for all past and future benefits. More than 1 year after she accepted the lump sum payment, the widow filed a petition for adjustment of compensation, claiming she was entitled to an additional amount under the statute. The Department denied her petition on the basis that the amount of the settlement was discretionary and her claim was barred by the statute of limitations. The Supreme Court voided the settlement on the ground the Department had incorrectly construed the statute. In holding the time limitation for appeal did not apply, the court reasoned, at page 210:

Being a void order, no appeal to the joint board therefrom was necessary, and hence the statute of limitations would not apply. Whatever amount the department failed to pay according to the mandate of the statute would still be owing to the beneficiary, and no appeal would be necessary until the department should refuse to pay, or to entertain a claim for, the balance of the amount legally owing. That was the procedure followed in this case. ²

Here, prior to Mrs. Fairley's appeal to the superior court, Standing v. Department of Labor and Industries, 92 Wash.2d 463, 598 [627 P.2d 964] P.2d 725 (1979), was decided. In that case, the court held social security benefits are not "public insurance" and do not reduce the benefits payable under the Act. The court, at pages 473-74, 598 P.2d 725, reasoned:

To reduce benefits available to innocent victims of crime in this state by the amount of OASI payments would virtually destroy the compensatory foundation of the Act for a major segment of the population. Where doubt or uncertainty arise from words used by the legislature, the section under construction should be read in context with the entire act and a meaning ascribed to it that avoids strained or absurd consequences.... Applying this common sense rule of statutory construction, we are unwilling to construe RCW 7.68.130 in such a manner as to destroy its application to a major segment of the state's population.

In light of Standing, supra, the Department here misconstrued the term "public insurance" in calculating Mrs. Fairley's benefits. In our view, Booth applies. The court analyzed the facts in that case, stating, 189 Wash. at page 211, 64 P.2d 505:

(T)he result intended to be accomplished (was) due to a misconception of the proper construction of the statute. Later, after the lump sum payment had been made, respondent conceived that the statute was not capable of the construction which the parties had placed upon it. She then took the position that the agreement was void, and that, therefore, she was entitled to an additional fourteen hundred dollars. The appellant, on the contrary, insisted that the interpretation originally given to the statute by the parties was correct.

(Emphasis ours.) Here, as in Booth, the Department miscalculated Mrs. Fairley's benefits because of a misconstruction of the statute. Its award, being outside the statutory mandate, was therefore void. (See n. 2) Being a void order no appeal from the initial decision was necessary. As in Booth, although Mrs. Fairley did not challenge the Department's initial decision, she timely appealed its refusal to reconsider because of changed circumstances and the Board's denial of her request for recalculation of benefits. Based on Booth, we find the court had jurisdiction of Mrs. Fairley's appeal.

Second, the Department argues Standing cannot be retroactively applied to its order. A similar issue was addressed in Johnson v. Morris, 87 Wash.2d 922, 557 P.2d 1299 (1976). In that case, after the defendant's conviction, the Supreme Court held that the age of majority for extending jurisdiction over a juvenile defendant was 18. In re Carson, 84 Wash.2d 969, 530 P.2d 331 (1975). Later, the juvenile court extended jurisdiction over the defendant until he was 19, based upon a subsequent legislative enactment providing for jurisdiction over juveniles until age 21. The Johnson court reasoned that Carson controlled, 87 Wash.2d at pages 927-28, 557 P.2d 1299:

It is a fundamental rule of statutory construction that once a statute has been construed by the highest court of the state, that construction operates as if it were originally written into it. ... In other words, there is no "retroactive" effect of the court's construction of a statute; rather, once the court has determined the meaning, that is what the statute has meant since its enactment.... Therefore, although not yet enunciated, the law at the time respondent committed his criminal acts was that juvenile court jurisdiction ceased at age 18, not 21.

The court's holding in Standing that social security benefits were not "public insurance" under the Act related back to the time of its enactment. Consequently, the Department erroneously reduced the benefits due Mrs. Fairley by the amount of the social security benefits.

Finally, the Department contends Standing does not control because of the legislature's subsequent enactment of sections 1 and 2(7), ch. 156, laws of 1980. Therein, "public insurance" was defined as

any source of recompense provided by statute, state or federal, available as a result of the claimed injury or death at the time of such injury or death, or which becomes available at any time thereafter.

The Department points out that in Standing, supra, 92 Wash.2d at 474, 598 P.2d 725, the court stated, "Further clarification or limitation of its application must be left to the legislature." It is contended the legislature thereby clarified its intent that social security benefits are "public insurance" and the enactment should be given retroactive effect. It is argued this intent was declared in section 1:

Sections 2 through 4 of this 1980 act are required to clarify the legislative intent concerning the phrase "public or private insurance" as used in section 13, chapter 122, Laws of 1973 1st ex. sess. and RCW 7.68.130 which was the subject of Wagner v. Labor & Indus., 92 Wash.2d 463 (598 P.2d 725) (1979). It has continuously been the legislative intent to include as "public insurance" both state and federal statutory social welfare and insurance schemes which make available to victims or their beneficiaries recompense as a result of the claimed injury or death, such as but not limited to old age and survivors insurance, ...

Further, it is urged this court is "not at liberty to speculate upon legislative intent when that body, having subsequent opportunity, has put its own construction upon its prior enactments." State ex rel. Oregon Railroad & Navigation Co. v. Clausen, 63 Wash. 535, 541, 116 P. 7 (1911); Cowiche Growers, Inc. v. Bates, 10 Wash.2d 585, 604, 117 P.2d 624 (1941); Carpenter v. Butler, 32 Wash.2d 371, 377, 201 P.2d 704 (1949); Anderson v. Seattle, ...