Gallo v. Department of Labor & Industries

• Decision Date: 04 November 2003
• Docket Number: No. 21574-1-III.,21574-1-III.
• Citation: 81 P.3d 869,119 Wash.App. 49
• Court: Washington Court of Appeals
• Parties: Paula K. GALLO, Appellant, v. DEPARTMENT OF LABOR & INDUSTRIES, Respondent.

81 P.3d 869

119 Wash.App. 49

Paula K. GALLO, Appellant, v. DEPARTMENT OF LABOR & INDUSTRIES, Respondent.

No. 21574-1-III.

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

November 4, 2003.

Robert C. Milhem, Attorney at Law, Spokane, WA, for Appellant.

John R. Wasberg, Assistant Attorney General, Seattle, WA, for Respondent.

BROWN, C.J.

Paula K. Gallo is a union construction worker. Pursuant to a collective bargaining agreement, her employer contributed a designated sum of money to trust accounts in Ms. Gallo's name for every hour she worked. The trusts funded Ms. Gallo's health insurance, retirement, and apprenticeship training benefits. Ms. Gallo was injured on the job and received worker compensation benefits from the Department of Labor and Industries (Department). For purposes of income loss benefit calculations under RCW 51.08.178, the Department did not include Ms. Gallo's trust account contributions as part of her wages. Ms. Gallo filed an administrative appeal as to a number of issues including her benefits. The Board of Industrial Insurance Appeals (Board) reversed the Department as to the health insurance benefits but affirmed as to the pension and apprentice training benefits. Ms. Gallo appealed the loss of the latter two benefits to the superior court, which affirmed the Board. Ms. Gallo appeals here contending the employer contributions for retirement and apprenticeship training benefits are "wages" under RCW 51.08.178. We disagree, and affirm.

FACTS

Unless otherwise designated, the following facts flow from the superior court's unchallenged findings of fact.

Ms. Gallo worked full time as a construction operating engineer for Murphy Brothers, Inc. She belongs to the International Union of Operating Engineers Local 370. "Her rate of pay was $18.10 per hour in direct salary, $2.50 per hour for pension benefits, 30 cents per hour for required contribution to the apprenticeship program, and $2.55 per hour for health insurance benefits." Clerk's Papers (CP) at 60, Finding of Fact (FF 2).

On August 29, 1997, Ms. Gallo was injured while operating heavy equipment. In September, she successfully filed a claim for benefits with the Department.

In 1998, the Department assessed an overpayment on the basis that Ms. Gallo was a seasonal worker. Ms. Gallo appealed to the Board.

On August 17, 2001, the Industrial Insurance Appeals Judge (IIAJ) entered a proposed decision and order finding Ms. Gallo to be a full-time worker. The IIAJ also found Ms. Gallo's medical insurance benefit "a core benefit of like nature to food, shelter, and fuel." Board Record (BR) (August 17, 2001) at 29, FF 9. Conversely, the IIAJ found Ms. Gallo's pension benefit to be "a fringe benefit of a nature unlike food, shelter, fuel, and health insurance." BR at 30, FF 10. Similarly, the IIAJ found Ms. Gallo's "apprenticeship-program-contribution benefit" to be "a fringe benefit of a nature unlike food, shelter, fuel, and health insurance ." BR at 30, FF 11.

The IIAJ concluded that Ms. Gallo's "employer-furnished health insurance benefits constitutes includable `wages' for purpose of computing her rates of time-loss compensation and loss of earning power pursuant to RCW 51.08.178." BR at 30 Conclusion of Law (CL) 4. But the IIAJ also concluded that Ms. Gallo's "employer-furnished pension benefits does not constitute includable `wages' for purpose of computing her rates of time-loss compensation and loss of earning power pursuant to RCW 51.08.178." BR at 30, CL 5. Likewise, the IIAJ concluded Ms. Gallo's "employer furnished contribution to the apprenticeship program of the International Union of Operating Engineers Local 370 does not constitute includable `wages' for purpose of computing her rates of time-loss compensation and loss of earning power pursuant to RCW 51.08.178." BR at 30-31, CL 6. The IIAJ reversed the Department's order and remanded so that Ms. Gallo's health insurance benefits could be factored into her worker's compensation award.

Ms. Gallo then petitioned the Board to review the proposed decision and order. The Board denied the petition, and adopted the proposed decision and order as the Board's final order.

Ms. Gallo then filed a notice of appeal to the Spokane County Superior Court. The superior court affirmed the Board in a memorandum opinion and in findings of fact and conclusions of law consistent with the IIAJ's proposed decision and order.

Ms. Gallo then appealed to this court.

ANALYSIS

The issue is whether the trial court erred when it affirmed the Department's final order that declined to include Ms. Gallo's pension benefits and apprenticeship training benefits in her wage calculation.

In industrial insurance cases, the superior court conducts a de novo review of the Board's decision but relies exclusively on the evidence contained in the certified board record. RCW 51.52.115. "In all court proceedings under or pursuant to this title the findings and decision of the board shall be prima facie correct and the burden of proof shall be upon the party attacking the same." Id. "Appeal shall lie from the judgment of the superior court as in other civil cases." RCW 51.52.140.

Here, Ms. Gallo does not assign error to the trial court's findings of fact, which are nearly identical to the IIAJ's findings of fact. Accordingly, those unchallenged findings of fact are verities on appeal. Dep't of Labor & Indus. v. Kantor, 94 Wash.App. 764, 772, 973 P.2d 30 (1999); see also Heidgerken v. Dep't of Natural Res., 99 Wash.App. 380, 384, 993 P.2d 934 (2000) (noting that unchallenged agency findings are verities on appeal pursuant to the Administrative Procedure Act, chapter 34.05 RCW).

This issue turns on the meaning of RCW 51.08.178, the provision of the Industrial Insurance Act defining wages. That statute partly states:

For the purposes of this title, the monthly wages the worker was receiving from all employment at the time of injury shall be the basis upon which compensation is computed unless otherwise provided specifically in the statute concerned.

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 for hire[.]

RCW 51.08.178(1).

Resolving whether the term "wages" includes the funds Ms. Gallo's employer paid into trust accounts on her behalf requires statutory interpretation, a question of law we review de novo. Cockle v. Dep't of Labor & Indus., 142 Wash.2d 801, 807, 16 P.3d 583 (2001); Stuckey v. Dep't of Labor & Indus., 129 Wash.2d 289, 295, 916 P.2d 399 (1996). In interpreting a statute, this court strives "to best advance" the underlying legislative purpose. State v. C.J., 148 Wash.2d 672, 685, 63 P.3d 765 (2003) (citing Morris v. Blaker, 118 Wash.2d 133, 143, 821 P.2d 482 (1992)). We start with interpreting the plain meaning of the language on the face of the statute and closely related statutes in light of the underlying legislative purpose. See Wash. Pub. Ports Ass'n v. Dep't of Revenue, 148 Wash.2d 637, 645, 62 P.3d 462 (2003); Wagg v. Estate of Dunham, 146 Wash.2d 63, 73, 42 P.3d 968 (2002); Dep't of Ecology v. Campbell & Gwinn, L.L.C., 146 Wash.2d 1, 11, 43 P.3d 4 (2002). Moreover, we interpret the statute in its entirety, reviewing all of its provisions in relation to each other. In re Det. of Williams, 147 Wash.2d 476, 490, 55 P.3d 597 (2002).

The Supreme Court recently held the definition of "wages" in RCW 51.08.178 includes employee health care benefit premiums paid by the employer. Cockle, 142 Wash.2d at 823, 16 P.3d 583. Understanding the Cockle court's extensive analysis is critical in determining whether Ms. Gallo's pension benefits and apprentice training benefits constitute wages under RCW 51.08.178.

The Cockle court held RCW 51.08.178 "expressly expands" the meaning of the term "wages" "to include the `reasonable value' of in-kind work benefits such as `board, housing [and] fuel.'" Cockle, 142 Wash.2d at 808, 16 P.3d 583. "That definitional expansion clearly removes the term from its arguably more common usage and makes it manifest that the Legislature intended to include in `wages' the value of at least some in-kind work `benefits.'" Id.

The Supreme Court also found the phrase "`other consideration of like nature'" to be ambiguous. Id. (quoting RCW 51.08.178(1)). The Court therefore had to resort to "principles of statutory construction, legislative history, and relevant case law to assist us in discerning the legislative intent." Id. (citing Harmon v. Dep't of Soc. & Health Servs., 134 Wash.2d 523, 530, 951 P.2d 770 (1998); State v. Bash, 130 Wash.2d 594, 601-02, 925 P.2d 978 (1996)).

Applying "ejusdem generis," a canon of statutory construction that requires certain specific language to control more general terms, and noting that an appellate court must construe the statute so as not to render any portion of it superfluous, the Supreme Court reasoned the specific phrase "of like nature" controlled the broader phrase "any other consideration." Cockle, 142 Wash.2d at 808-10, 16 P.3d 583. "The Legislature's specific choice of words thus rules out both exceedingly narrow and exceedingly broad readings of the phrase `other consideration of like nature received from the employer as part of the contract of hire.'" Id. at 810, 16 P.3d 583.

The Supreme Court then noted the legislative history of RCW 51.08 .178 supported its interpretation of that statute. Id. at 810-11, 16 P.3d 583. And the Cockle court further noted it construes Title 51 RCW liberally "`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.'" Id. at 811, 16 P.3d 583 (quoting RCW 51.12.010). "In other words, where reasonable minds can differ over what Title 51 provisions mean, in keeping with the legislation's fundamental purpose, the benefit of the doubt belongs to the injured worker." Id. In...