O'Rourke v. Department of Labor and Industries of State of Wash.
| Decision Date | 26 March 1990 |
| Docket Number | No. 23745-4-I,23745-4-I |
| Citation | 788 P.2d 17,57 Wn.App. 374 |
| Parties | Timothy O'ROURKE, Respondent, v. DEPARTMENT OF LABOR AND INDUSTRIES OF the STATE OF WASHINGTON, Appellant. |
| Court | Washington Court of Appeals |
Thornton Wilson, for appellant.
Patrick H. LePley, Bellevue, for respondent.
The State of Washington Department of Labor and Industries (the Department) appeals the trial court's reversal of the Board of Industrial Insurance Appeals' decision requiring Timothy O'Rourke to reimburse the Department for benefits paid to him because he received a recovery from his employer's UIM policy. We reverse.
On July 17, 1984, O'Rourke was injured while driving his employer's vehicle in the course of his employment with Hi Line Furniture Company. The negligent third party who caused O'Rourke's injuries was uninsured. O'Rourke was eligible for worker's compensation benefits, and these were paid to him under Claim No. J-449364.
The vehicle driven by O'Rourke was insured by American Alliance Insurance Company. The premiums were paid by O'Rourke's employer. The policy contained an endorsement for underinsured motorist (UIM) coverage, and O'Rourke was eligible for benefits under the endorsement. O'Rourke settled with the insurance company on or about September 16, 1987.
The Department paid O'Rourke $24,266.83 in benefits. His settlement from the insurance company was $155,000. Issuing its order dated September 29, 1987 requesting reimbursement, the Department asserted a lien in the amount of $15,227.19. This amount apparently represented the amount of worker's compensation benefits paid, less the Department's portion of O'Rourke's attorney's fees and expenses. Additionally, the Department ordered that no further worker's compensation benefits would be paid to O'Rourke until his excess recovery of $48,689.89 had been expended. The parties stipulated that if O'Rourke was required to reimburse the Department, these calculations However, O'Rourke sought further review by appealing to the Board of Industrial Insurance Appeals. The Board denied his petition for review. O'Rourke then filed a notice of appeal with the Superior Court for King County. He then moved for summary judgment. The trial court granted O'Rourke's motion for summary judgment and reversed the Board's decision as being erroneous as a matter of law.
were correct. An appeal to the Hearings Review Judge resulted in an order affirming the initial order
The Department timely filed its notice of appeal with this court.
Chapter 51.24 RCW deals with the relationship between industrial insurance benefits and actions at law for injuries incurred. The current version of RCW 51.24.030, including certain 1986 amendments, states as follows:
Action against third person--Election by injured person or beneficiary authorized--Statutory interest in recovery--"Injury" defined--Applicability of chapter to underinsured motorist insurance coverage. (1) If a third person, not in a worker's same employ, is or may become liable to pay damages on account of a worker's injury for which benefits and compensation are provided under this title, the injured worker or beneficiary may elect to seek damages from the third person.
(2) In every action brought under this section, the plaintiff shall give notice to the department or self-insurer when the action is filed. The department or self-insurer may file a notice of statutory interest in recovery. When such notice has been filed by the department or self-insurer, the parties shall thereafter serve copies of all notices, motions, pleadings, and other process on the department or self-insurer. The department or self-insurer may then intervene as a party in the action to protect its statutory interest in recovery.
(3) For the purposes of this chapter, "injury" shall include any physical or mental condition, disease, ailment or loss, including death, for which compensation and benefits are paid or payable under this title.
(4) Damages recoverable by a worker or beneficiary pursuant to the underinsured motorist coverage of an insurance policy shall be subject to this chapter only if the owner of the policy is the employer of the injured worker.
Former RCW 51.24.030 read significantly differently prior to the 1986 amendments:
(1) If an injury to a worker for which benefits and compensation are provided under this title is due to the negligence or wrong of a third person not in the same employ, the injured worker or beneficiary may elect to seek damages from the third person.
(2) For the purposes of this chapter, "injury" shall include any physical or mental condition, disease, ailment or loss, including death, for which compensation and benefits are paid or payable under this title.
RCW 51.24.060 sets forth the Department's right to a lien against a recovery from an action against a third person. The statute states in pertinent part:
Action against third person--Distribution of award or settlement recovered by injured worker or beneficiary--Lien--Adjustment of experience rating[788 P.2d 19] --Enforcement. (1) If the injured worker or beneficiary elects to seek damages from the third person, any recovery made shall be distributed as follows:
(a) The costs and reasonable attorneys' fees shall be paid proportionately by the injured worker or beneficiary and the department and/or self-insurer;
(b) The injured worker or beneficiary shall be paid twenty-five percent of the balance of the award: Provided, That in the event of a compromise and settlement by the parties, the injured worker or beneficiary may agree to a sum less than twenty-five percent;
(c) The department and/or self-insurer shall be paid the balance of the recovery made, but only to the extent necessary to reimburse the department and/or self-insurer for compensation and benefits paid;
. . . . .
(d) Any remaining balance shall be paid to the injured worker or beneficiary;
. . . . .
(2) The recovery made shall be subject to a lien by the department and/or self-insurer for its share under this section.
. . . . .
(4) In the case of an employer not qualifying as a self-insurer, the department shall make a retroactive adjustment to such employer's experience rating in which the third party claim has been included to reflect that portion of the award or settlement which is reimbursed for compensation and benefits paid and, if the claim is open at the time of recovery, applied . . . . .
against further compensation and benefits to which the injured worker or beneficiary may be entitled.
(6) It shall be the duty of the person to whom any recovery is paid before distribution under this section to advise the department or self-insurer of the fact and amount of such recovery, the costs and reasonable attorneys' fees associated with the recovery, and to distribute the recovery in compliance with this section.
The trial court's order, in its summary judgment posture, gave no findings and conclusions. Neither did the order set forth any reasoning for its decision. However, O'Rourke asserts that the basis for the trial court's decision below was that the court determined that O'Rourke's recovery was governed by the pre-1986 law, and that the law did not grant the Department its statutory lien on recoveries such as his.
Legislative enactments are presumed to have prospective application only, and will not be applied retroactively, unless the legislative intent to apply them retrospectively is clearly expressed. Puyallup v. Pacific Northwest Bell Tel. Co., 98 Wash.2d 443, 656 P.2d 1035 (1982). With respect to amendatory legislation, it is generally held that provisions added by amendment, affecting substantive rights, will also only be applied prospectively, unless the Legislature expresses a contrary intent.
O'Rourke contends, without supporting authority, that prospective application of the amendments to RCW 51.24.030 means applying them to individuals who are injured after the effective date of the statute. We disagree. We hold that the relevant date for application of the statutory scheme before us is the date of recovery of the UIM settlement. There was no fund in existence to which RCW 51.24.030(4) could be applied until after the 1986 amendments became...
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