Hopkins v. Department of Labor and Industries, 26338.

• Decision Date: 04 May 1937
• Docket Number: 26338.
• Citation: 190 Wash. 251,67 P.2d 872
• Parties: HOPKINS v. DEPARTMENT OF LABOR AND INDUSTRIES.
• Court: Washington Supreme Court

67 P.2d 872

190 Wash. 251

HOPKINS v. DEPARTMENT OF LABOR AND INDUSTRIES.

No. 26338.

Supreme Court of Washington

May 4, 1937

Department 2.

Appeal from Superior Court, King County; A. W. Frater, Judge.

Action by Frank F. Hopkins, sole trader doing business as the Seattle Boiler Works, against the Department of Labor and Industries. From an adverse judgment, defendant appeals.

Affirmed.

G. W Hamilton, Atty. Gen., and J. A. Kavaney Asst. Atty. Gen., for appellant.

Kenneth Durham, of Seattle, for respondent.

HOLCOMB Justice.

This case is here on an appeal from a judgment by the lower court requiring appellant to award a merit rating to respondent for 1935 in computing his industrial insurance premium for that period for such of his extrahazardous activities as are classified under Rem.Rev.Stat. (Supp.) § 7676, class 5-8:

'Chimneys, metal (erection) * * *

'Iron framed structures (other than bridges) * * *

'Steel frame structures (erection)

'Steeples (erection) * * *

'Tanks, metal (erection)

'Tanks, wooden (erection)

'Towers, wood

'Water towers, metal or wood (erection).'

Respondent is engaged in manufacturing boilers as his principal business, under which his work is classified under Rem.Rev.Stat. (Supp.) § 7676, class 6-3, as used in the 1933 amendment:

'That the premiums of employers operating coal mines which shall include shaft sinking and all tunneling in connection with coal mines and the building industry, which shall include, all field activities in connection with the erection, alteration, repairing or demolishing of any building or buildings or part thereof or appurtenance thereto, adapted to residential, business, governmental, educational or manufacturing uses, shall be computed on a base rate only and no merit rating credits or penalties shall be given or imposed on such employers.' Laws of 1933, c. 193, p. 927, § 1.

Respondent applied to appellant for a merit rating on his extrahazardous activities under class 5-8, above quoted, upon the ground that he had an experience rating which would justify a reduction in the premium paid. Appellant refused to award an industrial merit rating to respondent for such activities under that class on the ground that those activities were embraced in the term 'building industry,' as used in the 1933 amendment to section 7676, Rem.Rev.Stat., holding that under the amendment just quoted his industrial insurance premium in class 5-8 must be assessed on the base rate method only. From the refusal of the supervisor to accord to him a merit rating for his extrahazardous activities for 1935 under class 5-8, supra, respondent appealed to the joint board of the department. At that hearing respondent gave evidence through his general manager, but no testimony was introduced by the department. The action of the supervisor was sustained by the joint board and respondent's premium was assessed on the base rate for that period. Appeal was then taken by respondent to the superior court for King county.

At the trial it was stipulated between the parties that respondent had a favorable accident cost experience for a five-year period in class 5-8.

The only question involved was the question of law as to whether or not the operations of respondent, under class 5-8, should be computed on an individual merit rating or on a base rating. The cause was submitted to the trial court on the departmental record after which trial the court entered findings of fact, conclusions of law, and judgment awarding respondent an individual experience rate in class 5-8 for the year 1935.

Among other things, the trial court found that respondent is not engaged in the building business, does not take contracts for building buildings, and the articles it manufactures and assembles are not buildings. The court also found:

'That the said joint board was in error in holding that the activities and employment of the plaintiff are and were such as to bring the plaintiff within the above quoted exception to the merit rating provisions of Sec. 7676 Rem.Rev.Stat. That the said work of the plaintiff in Class 5-8 was not within such exception, was not a part of the 'building industry' and the said operations of the plaintiff were within the general provisions of said Sec. 7676 and the defendant should have determined the individual premium rate to be paid by the plaintiff, based upon his accident cost experience over the period provided by law, in said Class 5-8 and charged plaintiff only therefor.'

The court entered this conclusion of law: 'That the plaintiff is entitled to judgment against the defendant, reversing the order of the joint board of December 9, 1935, which order sustained the supervisor's refusal to grant the plaintiff an individual experience rating in industrial insurance Class 5-8, and remanding the said matter to the defendant department with instructions to determine an individual experience rate in industrial insurance Class 5-8 for the plaintiff for the year 1935, to charge the plaintiff only such rate in said class and credit the plaintiff with any excess paid.'

Respondent manufactures boilers, large steel refuse burners, such as are used in connection with sawmills, large oil tanks, and large steel smoke stacks. Because of their size, they must be assembled on the premises of the purchasers. Of the pay roll involved in this issue, 3.4 per cent. arises from assembling refuse burners, 1.1 per cent. from assembling oil tanks, and 5.1 per cent. from assembling smoke stacks, which comprise only 9.6 per cent. of the entire pay roll.

Appellant asserts that respondent builds two types of burners for burning waste lumber products accumulating in the operation of shingle and sawmills: a bricklined type of burner erected on a concretebase or foundation prepared by the mill company, and an all stell air-cooled type of burner which is fastened to a concrete base by anchor bolts.

The undisputed evidence in the record is that the brick-lined type of burner is and has been obsolete for about ten years, during which time respondent has not manufactured any.

The refuse burners manufactured by respondent are always placed a considerable distance from any building, generally 200 or 250 feet, all mill refuse being transported to the burner by a conveyor. The oil tanks are always remote from any buildings. Fifty per cent. of the smoke stacks are placed completely outside of any building and connected with the boilers by breeching. Other stacks are erected on the tops of boilers, extending through large holes in the roof, supported by guy wires, but even in that case great care is taken to insure that they never touch any portion of the building. The purpose in all cases is to reduce the fire hazard.

It is a matter of common knowledge that most building work is done by small contractors with simple tools generally owned by the men themselves. Many of them do not even have permanent offices.

The first merit rating law was enacted in 1931 (Laws 1931, c. 104, p. 297). Its purpose was to encourage accident prevention and thereby reduce costs. It exempted coal mining probably on the plea of the operators that a catastrophe hazard is always present in that industry and that a single mine explosion might force even the largest operator to cease business, by raising his industrial insurance rate to a prohibitive extent. In 1933 the law was again amended, reducing the differential between the highest and lowest rates for the same work, four to one. Doubtless for the reasons stated by us, the building industry was also excepted. Those reasons would not apply to employers like respondent operating permanent factories having large, continuous pay rolls who might have some incidental work under some subdivision of class 5, such as assembling tanks, stacks, and refuse burners. Hence, instead of excepting all work in class 5, the Legislature limited the exception to the 'building industry.'

Rem.Rev.Stat. § 7674 declares as extrahazardous 'buildings being constructed, repaired, moved or demolished.'

Rem.Rev.Stat. § 7675 states:

'In the sense of this act words employed mean as here stated, to-wit: * * *

'Engineering work means any work of construction, improvement or alteration or repair of buildings,...