Marley v. Department of Labor and Industries of State

• Decision Date: 22 December 1994
• Docket Number: No. 61449-1,61449-1
• Citation: 125 Wn.2d 533,886 P.2d 189
• Court: Washington Supreme Court
• Parties: Beverly MARLEY, the widow of Richard Marley, Sr., deceased, Petitioner, v. DEPARTMENT OF LABOR AND INDUSTRIES of the State of Washington, Respondent.

Page 533

125 Wn.2d 533

886 P.2d 189

Beverly MARLEY, the widow of Richard Marley, Sr., deceased, Petitioner, v. DEPARTMENT OF LABOR AND INDUSTRIES of the State of Washington, Respondent.

No. 61449-1.

Supreme Court of Washington En Banc.

Dec. 22, 1994.

Thompson & Delay, P.S., Daniel P. Thompson, Walthew, Warner, Costello, Thompson & Eagan, Robert H. Thompson, Seattle, for petitioner

Christine O. Gregoire, Atty. Gen., Nancy Thygesen Day, Sr. Counsel, Loretta A. Vosk, Asst., Seattle, for respondent.

GUY, Justice.

Six years after the Department of Labor and Industries (Department) denied her claim for worker's compensation, Petitioner Beverly Marley sought to declare the Department's order void. Both the Department and the Board of Industrial Insurance Appeals declined to reopen the claim. The Superior Court for King County ruled that the Department's original order denying benefits to Mrs. Marley was void and therefore subject to appeal at any time. The Court of Appeals reversed the Superior Court. Marley v. Department of Labor & Indus., 72 Wash.App. 326, 864 P.2d 960 (1993). We agree that the Department's original order was not void and affirm the Court of Appeals' decision.

FACTS

On April 3, 1984, Richard Marley lost control of the 1980 Mercury Capri he was driving eastbound on the I-90 floating bridge in Seattle. The car spun and rear-ended a concrete barrier, throwing Mr. Marley out the back window. Mr. Marley died of head injuries at the scene.

Mr. Marley's employer, a Bellevue automobile dealer, owned the Mercury Capri. Mr. Marley was driving in the direction of the dealership when he lost control of the car. On July 12, 1984, Mrs. Marley applied for worker's compensation payments for her children and herself as beneficiaries. An attorney represented Mrs. Marley throughout these 1984 proceedings.

When an investigator from the Department interviewed Mrs. Marley in her attorney's presence, Mrs. Marley stated that she had separated from Mr. Marley in 1972 and the two had lived separately since then. She also said that Mr. Marley had paid child support through the Department of Social and Health Services (DSHS). On August 15, 1984, the investigator attempted to confirm that Mrs. Marley had lived apart from her husband for more than 2 years, and that her husband had paid no support other than child support through DSHS. Mrs. Marley requested that the investigator call her attorney. The investigator called the attorney and left a message, but no record exists that the attorney returned the call.

On September 17, 1984, the investigator called Mrs. Marley again to tell her that her two children qualified for dependent's benefits; however, because the Department's information showed that Mrs. Marley was living in a state of abandonment under RCW 51.08.020, ¹ the investigator told her that she did not qualify for payments as a beneficiary. Mrs. Marley requested that the investigator call her attorney.

The investigator called the attorney. No record exists that the attorney returned the call.

On October 4, 1984, the Department mailed formal notice of its decision to Mrs. Marley and her attorney. The Department's order granted benefits to Mrs. Marley's two sons but denied benefits to Mrs. Marley, concluding that "Beverley [sic] J. Marley had been living separate and apart from the deceased and does not qualify as a beneficiary as defined under RCW 51.08.020." At the top of its order, the Department notified Mrs. Marley and her attorney that "ANY PROTEST OR REQUEST FOR RECONSIDERATION OF THIS ORDER MUST BE MADE IN WRITING TO THE DEPARTMENT OF LABOR AND INDUSTRIES IN OLYMPIA WITHIN 60 DAYS."

No appeal followed the order.

On September 6, 1990, a new attorney for Mrs. Marley wrote the Department for a copy of the files in her 1984 claim. The new attorney, on November 5, 1990, requested reconsideration of the Department's order which denied benefits to Mrs. Marley. The Department denied the request for reconsideration on November 15, 1990, stating that the Department's order of October 4, 1984, became final after 60 days had expired without an appeal.

Mrs. Marley appealed the denial of reconsideration to the Board of Industrial Insurance Appeals (Board). On June 17, 1991, an Industrial Appeals Judge upheld the Department's ruling of November 15, 1990, and concluded that the order of October 4, 1984, denying benefits was final and binding. When the Board declined review of Mrs. Marley's appeal, the decision of the Industrial Appeals Judge became the decision of the Board.

Mrs. Marley appealed to the Superior Court for King County, which reversed the decision of the Board. The court remanded the case to the Department, directing the Department to decide whether Mrs. Marley was living in a state of abandonment at the time of her husband's fatal injury.

Division One of the Court of Appeals reversed the trial court. Marley v. Department of Labor & Indus., 72 Wash.App.

                326, 864 P.2d 960 (1993).  The Court of Appeals concluded that the Department's order denying benefits was not contrary to statutory mandate and therefore was a final judgment.  Marley, 72 Wash.App. at 334-35, 864 P.2d 960.   To reach this conclusion, the Court of Appeals explicitly disagreed with the ruling by Division Three in Fairley v. Department of Labor & Indus., 29 Wash.App. 477, 627 P.2d 961, review denied, 95 Wash.2d 1032 (1981)
                

This court granted Mrs. Marley's petition for review to resolve the conflict between the opinions of the Court of Appeals.

ISSUES PRESENTED

This case presents two issues: (1) what must a party show to establish that an order from the Department of Labor and Industries is void, and (2) was the October 4, 1984 order denying benefits to Mrs. Marley void? We conclude that to prove a departmental order was void, a party must show that the Department lacked either personal or subject matter jurisdiction. Because the Department had jurisdiction, we find its order valid and binding.

ANALYSIS

I

The doctrine of claim preclusion applies to a final judgment by the Department ² as it would to an unappealed order of a trial court.

[A]n order or judgment of the department resting upon a finding, or findings, of fact becomes a complete and final adjudication, binding upon both the department and the claimant unless such action ... is set aside upon appeal or is vacated for fraud or something of like nature.

LeBire v. Department of Labor & Indus., 14 Wash.2d 407, 415, 128 P.2d 308 (1942); see also Perry v. Department of Labor & Indus., 48 Wash.2d 205, 209, 292 P.2d 366 (1956) ("no appeal If a party to a claim believes the Department erred in its decision, that party must appeal the adverse ruling. The failure to appeal an order, even one containing a clear error of law, turns the order into a final adjudication, precluding any reargument of the same claim.

having been taken therefrom, all matters determined by [departmental order] became final"); Philip A. Trautman, Claim and Issue Preclusion in Civil Litigation in Washington, 60 Wash.L.Rev. 805, 825-26 (1985) (common example of binding agency decisions are Department's determinations of worker's compensation claims). An unappealed final order from the Department precludes the parties from rearguing the same claim.

Mrs. Marley agrees she did not appeal the original decision of the Department within the required 60 days. She argues that because the Department's decision was void when entered, she may attack the decision at any time. "If an order is void, then no appeal is necessary and the statute of limitations will not apply." Marley, 72 Wash.App. at 330, 864 P.2d 960.

Here, then, is the central issue of this case. What must a claimant show to establish that an order from the Department was void when entered? To answer, we draw from three sources. First, the Restatement (Second) of Judgments §§ 1, 11 (1982) establishes that a tribunal's lack of personal or subject matter jurisdiction voids that tribunal's orders. Second, this court in Dike v. Dike, 75 Wash.2d 1, 448 P.2d 490 (1968) has articulated a 3-part standard for voiding a court's order. Third, in a series of cases beginning in the 1930s, this court announced, and then substantially narrowed, a test for determining when lump sum settlements of worker's compensation claims were void.

Section 1 of the Restatement (Second) of Judgments sets forth the requisites of a valid judgment:

A court has authority to render judgment in an action when the court has jurisdiction of the subject matter of the action, as stated in § 11, and

(1) The party against whom judgment is to be rendered has submitted to the jurisdiction of the court, or

(2) Adequate notice has been afforded the party, as stated in § 2, and the court has territorial jurisdiction of the action, as stated in §§ 4 to 9.

By implication, a void judgment exists whenever the issuing court lacks personal jurisdiction over the party or subject matter jurisdiction over the claim.

In Mrs. Marley's case, only subject matter jurisdiction is at issue. She does not contest the Department had personal jurisdiction over her.

Section 11 of the Restatement defines subject matter jurisdiction: "A judgment may properly be rendered against a party only if the court has authority to adjudicate the type of controversy involved in the action." (Italics ours.) We underscore the phrase "type of controversy" to emphasize its importance. A court or agency does not lack subject matter jurisdiction solely because it may lack authority to enter a given order.

The term "subject matter jurisdiction" is often confused with a court's "authority" to rule in a particular manner. This has led to improvident and inconsistent use of the term.

....

... Courts do not lose subject matter jurisdiction merely by interpreting the law erroneously. If the phrase is to maintain its rightfully sweeping definition, it must not be reduced to signifying that a court has acted without error.

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