Nelson v. Dep't of Labor & Indus.

• Decision Date: 07 March 2017
• Docket Number: No. 47672-0-II,47672-0-II
• Citation: 392 P.3d 1138,198 Wash.App. 101
• Court: Washington Court of Appeals
• Parties: Timothy M. NELSON, Appellant, v. DEPARTMENT OF LABOR & INDUSTRIES, Respondent.

198 Wash.App. 101

392 P.3d 1138

Timothy M. NELSON, Appellant,

v.DEPARTMENT OF LABOR & INDUSTRIES, Respondent.

No. 47672-0-II

Court of Appeals of Washington, Division 2.

March 7, 2017

Carl A. Taylor Lopez, Lopez & Fantel, Inc. P.S., 2292 W. Commodore Way, Ste. 200, Seattle, WA, 98199-1286, for Appellant.

William Henry, Attorney at Law, 800 Fifth Ave., Ste. 2000, Seattle, WA, 98104-3188, for Respondent.

Bjorgen, C.J.¶1 Timothy Nelson appeals the superior court's decision affirming the Board of Industrial Insurance Appeals (Board), which determined that the allocation of Nelson's recovery from a third party under the distribution formula of RCW 51.24.060 was proper. Under the Industrial Insurance Act (IIA), title 51 RCW, a worker injured in the course of his employment has a right to sue any third party involved in the tortious act. RCW 51.24.030(1).¹ If the injured worker collects any "recovery" from the third party, it is subject to a distribution formula that requires, among other matters, the attorney fees and costs to be proportionately shared by the injured worker and the Department. RCW 51.24.060(1).

¶2 In the published portion of this opinion, we address Nelson's contention that the Department's distribution of his recovery was premature because the pertinent IIA provisions require that attorney fees and costs from all claims pursued, even if unsuccessful, be included in the distribution of recovery. We hold that the Department's distribution of Nelson's recovery was not erroneous because the plain language of RCW 51.24.060 indicates that only attorney fees and costs associated with the resolved claims causing the recovery must be included in a distribution—not attorney fees and costs related to other unsuccessful claims. We address Nelson's remaining arguments in the unpublished portion of this opinion and hold that they fail. Accordingly, we affirm.

FACTS

¶3 In the course of his employment, Nelson was in a motor vehicle accident with Amanda Wade and suffered personal injuries. The Department paid $116,958.64 in worker's compensation benefits to Nelson. Pursuant to RCW 51.24.030(1), Nelson elected to pursue civil damages against Wade and Pierce County.² The trial court granted summary judgment in favor of Pierce County on all Nelson's claims against it. Nelson then settled with Wade, releasing all claims and causes of action against her. The settlement amount totaled $525,000, $408,000 of which was allocated to pain and suffering.³ The remaining $117,000 constituted economic damages considered a "recovery" and triggered distribution under the formula set forth in RCW 51.24.060.

¶4 The Department contacted Nelson about the settlement with Wade and requested a copy of the settlement agreement, his attorney fee agreement, and "a ledger of costs relating to this recovery." Clerk's Papers (CP) at 77. The attorney fee agreement indicated that Nelson's lawyers represented him on all claims relevant to his motor vehicle accident with Wade and that he would pay his lawyers one-third of the total recovery in the case. The ledger of attorney costs showed various expenses totaling $6,523.23.

¶5 After receiving this information, the Department asserted a lien of $114,957.32⁴ against Nelson's settlement. Pursuant to the RCW 51.24.060 formula, the Department then calculated the distribution of Nelson's $117,000 settlement. First, the Department calculated the total attorney fees and costs associated with the settlement as $40,453.75. RCW 51.24.060(1)(a). Second, the Department distributed 25 percent of the award's balance, $19,136.56, directly to Nelson. RCW 51.24.060(1)(b). Finally, the Department allocated the remaining portion, $57,409.69, to itself for reimbursement of benefits paid out to Nelson. RCW 51.24.060(1)(c). Subsequently, the Department issued an order that requested Nelson to reimburse the Department in the amount of $57,409.69.

¶6 Nelson objected to the Department's distribution order. He argued that the Department's order was "premature and potentially overstate[d] the amount the [Department] is entitled to recover" because the calculation "understates costs and attorney fees incurred in causes of action[s] ... being pursued and/or investigated for underinsured motorist, highway design and products liability, based on the same injuring event." CP at 100. Nelson hypothesized that because those cause of actions may ultimately prove unsuccessful, he would never recover the costs and attorney fees associated with those claims. Furthermore, Nelson alleged that at least $25,000 in additional expenses had been incurred after the settlement for the other pending causes of action. He did not contend that the Department's calculation was incorrect, nor did he make an argument that its calculation was contrary to the statutory language of RCW 51.24.060. The Department denied reconsideration of its distribution order.

¶7 Nelson appealed to the Board, where both Nelson and the Department moved for summary judgment. Nelson reiterated the same argument to the Board that the Department's distribution was premature because it failed to account for attorney fees and costs that might result from other potential causes of action arising from the same incident. Further, Nelson argued for the first time that the plain language of RCW 51.24.060 does not limit the distribution of attorney fees and costs to successful claims against parties. Rather, he argued the purpose of the IIA requires the Department to wait until all claims are resolved to ensure an injured worker receives the full benefit of sharing attorney fees and costs with the Department. Thus, Nelson contended the Department should not have distributed the money received from the settlement with Wade until all claims related to the auto accident were resolved.

¶8 After a hearing, the Board granted summary judgment in favor of the Department, reasoning that the plain language of RCW 51.24.060 applies only to actual or realized recoveries, not to potential or possible recoveries. Relying on RCW 51.24.030(2)⁵ and prior cases it adjudicated,⁶ the Board concluded that the IIA contemplates "multiple ... causes of action arising from a claim." CP at 42-43. Furthermore, the Board explained that the settlement completely resolved Nelson's lawsuit against Wade and that the settlement was a recovery triggering application of RCW 51.24.060 for calculation of a distribution. Along with these reasons, the Board entered findings of fact and conclusions of law, reflecting that the Department properly calculated the distribution.⁷

¶9 Nelson appealed to the superior court. The superior court affirmed the Board and adopted the Board's findings of fact and conclusions of law to support its decision. Nelson appeals.

ANALYSIS

I. STATUTORY INTERPRETATION

¶10 Nelson argues that the Board arrived at an erroneous interpretation of RCW 51.24.060 by finding it "not reasonable to include in the distribution formula any cost not directly related to the settling defendant even though the cost was incurred in the same litigation." Br. of Appellant at 9, 17. The Department contends that the plain meaning of RCW 51.24.060 indicates that a distribution of a recovery only requires inclusion of the attorney fees and costs associated with the resolved claims that caused the recovery and triggered the distribution. For the reasons set forth below, we agree with the Department and resolve the statutory interpretation question on a plain meaning analysis.

1. Standard of Review/Legal Principles

¶11 A superior court reviews the Board's actions de novo, but relies on the certified Board record and decides only those matters that the administrative tribunals previously determined. Matthews v. Dep't of Labor & Indus. , 171 Wash.App. 477, 491, 288 P.3d 630 (2012) ; Rogers v. Dep't of Labor & Indus. , 151 Wash.App. 174, 179, 210 P.3d 355 (2009). The superior court must consider the Board's decision as prima facie correct. RCW 51.52.115. If the superior court determines that the Board has acted within its power and has correctly construed the law, its decision will be upheld. Id.

¶12 From the superior court's judgment, our review " ‘is limited to examination of the record to see whether substantial evidence supports the findings made after the superior court's de novo review, and whether the court's conclusions of law flow from the findings.’ " Rogers , 151 Wash.App. at 180, 210 P.3d 355 (quoting Ruse v. Dep't of Labor & Indus. , 138 Wash.2d 1, 5, 977 P.2d 570 (1999) ). However, the superior court's findings of fact and conclusions of law were entered in its review of the summary judgment entered by the Board, which in turn adopted the proposed decision and order by an industrial insurance judge that found no genuine issues of material fact and granted summary judgment to the Department. The superior court adopted the findings and conclusions of the Board's decision, granting summary judgment. "Findings of fact and conclusions of law are not necessary on summary judgment and, if made, are superfluous ..." Concerned Coupeville Citizens v. Town of Coupeville , 62 Wash.App. 408, 413, 814 P.2d 243 (1991). On review of summary judgment, as here, we review de novo whether there are any genuine issues of material fact and whether the moving party is entitled to judgment as a matter of law. CR 56(c).

¶13 Nelson concedes that no genuine issues of material fact exist and that the dispositive issue was purely of statutory interpretation.

Because statutory interpretation is purely a question of law, we review the superior court's ruling de novo. Hill v. Dep't of Labor & Indus ., 161 Wash.App. 286, 292, 253 P.3d 430 (2011). Further, "[a]lthough we may substitute our judgment for that of the agency on issues of law, we give great weight to the agency's interpretation of the law it administers." Jones v. City of Olympia , 171 Wash.App. 614, 621, 287 P.3d 687 (2012).

¶14 The goal of statutory interpretation is to ascertain and give effect...