Seattle School Dist. No. 1 v. Department of Labor and Industries of State of Wash.
| Decision Date | 07 February 1991 |
| Docket Number | No. 57173-2,57173-2 |
| Citation | 804 P.2d 621,116 Wn.2d 352 |
| Parties | , 65 Ed. Law Rep. 578 SEATTLE SCHOOL DISTRICT NO. 1, Respondent, v. The DEPARTMENT OF LABOR AND INDUSTRIES OF the STATE OF WASHINGTON, Petitioner, and Rose M. Fears, Defendant. En Banc |
| Court | Washington Supreme Court |
Kenneth O. Eikenberry, Atty. Gen., Nancy Thygesen Day, Asst., Seattle, for petitioner.
Talmadge, Friedman & Cutler, Philip A. Talmadge, Seattle, for respondent.
Defendant, Department of Labor and Industries, seeks review of a Court of Appeals' decision holding second injury fund relief available to plaintiff, Seattle School District, a self-insured employer. Defendant contends plaintiff is not entitled to second injury fund relief since the injury in question occurred before second injury fund relief was extended to self-insured employers. Plaintiff challenges the statutory provisions awardingattorney fees only to an injured worker or beneficiary as unconstitutional.
The facts are not in dispute. On June 1, 1977, Rose Fears suffered an industrial back injury while in the employment of Seattle School District No. 1 (the District), a self-insured employer. Fears acted promptly to file an industrial insurance claim for the injury with the Department of Labor and Industries (the Department) in June 1977. On July 7, 1978, the Department issued an order closing the claim without any award for permanent partial disability. Fears was rehired by the District in a position other than the one she held at the time of the injury sometime after July 1, 1977.
On September 11, 1980, Fears filed an application to reopen her claim for aggravation of disability. On April 14, 1982, the Department again closed Fears' claim with a permanent partial disability award of 25 percent effective back to August 4, 1980.
Fears also suffers from a nonindustrial psychiatric condition which pre-dated the 1977 back injury. Fears experienced a worsening of this psychiatric condition after April 14, 1982. On May 2, 1983, she filed a second application to reopen her claim for aggravation of disability. The Department reopened her claim, and on April 8, 1985, issued an order classifying Fears as a totally and permanently disabled worker effective as of March 3, 1983 and placed her on the pension rolls the same date. Fears' total disability was caused by the combined effect of the 1977 back injury and the preexisting psychiatric condition. Neither alone would have been sufficient to disable her completely.
On April 8, 1985, the Department also issued an order denying the District's request for second injury fund relief. The Department explained the injury covered by this claim occurred on June 1, 1977, and the provisions of RCW 51.16.120, which extend second injury fund relief to self-insured employers, did not become effective until July 1, 1977. The Department stated industrial insurance claims are governed by the law in effect at the time of the injury. The Department's decision was upheld by both the Board of Industrial Insurance Appeals (the Board) and the King County Superior Court.
The Court of Appeals reversed. Seattle Sch. Dist. 1 v. Department of Labor & Indus., 57 Wash.App. 87, 786 P.2d 843 (1990). This appeal followed.
The critical issue before us is what event fixes an employer's eligibility for second injury fund relief. The Department argues the Court of Appeals improperly focused on when a claim for second injury fund relief matures and thereby tied eligibility for second injury fund relief to the time when the total and permanent disability becomes effective--in this case, March 3, 1983. The Department asserts eligibility for second injury fund relief is distinct from the elements establishing a mature claim for second injury relief and is properly fixed at the time of the industrial injury--in this case, June 1, 1977.
Prior to 1971, all employers in the state of Washington were State-insured under the workers' compensation statute. During that time, all employers were entitled to second injury fund relief under RCW 51.16.120 by virtue of each employer's compulsory payments into the general accident fund. A portion of each payment was automatically transferred into the second injury fund. The second injury fund statute provides that, when a previously disabled employee suffers an on-the-job injury and the combined effect of the previous disability and the injury results in total and permanent disability, the employer pays only the accident cost attributable exclusively to the industrial injury. The second injury fund covers the remainder. Chicago Bridge & Iron Co. v. Department of Labor & Indus., 46 Wash.App. 252 254-55, 731 P.2d 1 (1986), review denied, 107 Wash.2d 1032, cert. denied, 484 U.S. 823, 108 S.Ct. 87, 98 L.Ed.2d 48 (1987).
In 1971, RCW 51.14 was enacted to allow qualified employers to elect to become self-insurers. Laws of 1971, 1st Ex.Sess., ch. 289, § 27, p. 1562. The District elected to become such a self-insured employer. The statute made no provision to allow self-insured employers to participate in and contribute to the second injury relief fund. That self-insured employers were not covered under the 1971 version of the second injury fund statute is not challenged here. See T.I.M.E.-D.C. v. Schuirman, 42 Wash.App. 607, 610, 711 P.2d 1116, review denied, 105 Wash.2d 1014 (1986).
In 1977, the Legislature acted to amend RCW 51.16.120 to extend second injury fund relief to self-insured employers. Laws of 1977, 1st Ex.Sess., ch. 323, § 13, p. 1239. Self-insured employers now make periodic payments into the second injury relief fund, and in the event of an injury to a previously disabled worker, pay the cost attributable to the on-the-job injury directly into the second injury fund. RCW 51.16.120, RCW 51.44.040(3).
RCW 51.16.120(1) now provides second injury fund relief is available to an employer
[w]henever a worker has a previous bodily disability from any previous injury or disease, whether known or unknown to the employer, and shall suffer a further disability from injury or occupational disease in employment covered by this title and become totally and permanently disabled from the combined effects thereof ...
The Court of Appeals interpreted the "plain language" of RCW 51.16.120 to establish three prerequisites to a claim for second injury fund relief: a preexisting injury or disease, an industrial injury, and permanent total disability as a result of those two injuries. Seattle Sch. Dist. 1, 57 Wash.App. at 93, 786 P.2d 843. The court then went on to hold that, since second injury fund coverage was not triggered until the last of these events occurred, an employer's eligibility for coverage would not be fixed until that time. Seattle Sch. Dist. 1, 57 Wash.App. at 94, 786 P.2d 843.
The court's decision is directly at odds with Chicago Bridge which denied second injury fund relief to a self-insured employer. The court below attempted to distinguish Chicago Bridge by stating:
There the claim arose out of pre-1977 injuries that caused total permanent disability before the amendment of the act.
(Italics ours.) Seattle Sch. Dist. 1, 57 Wash.App. at 93, 786 P.2d 843. However, the court's characterization of Chicago Bridge is not reflected in the text of Chicago Bridge. The court in that case merely states the injured worker's claim was closed in 1975 with an award of 20 percent permanent partial disability. The claim was then reopened a number of times until the worker was finally declared permanently and totally disabled in 1982 from the combined effects of the pre-1977 injuries. Chicago Bridge, 46 Wash.App. at 253, 786 P.2d 843. Nowhere in Chicago Bridge does it say the worker was totally and permanently disabled prior to the effective date of the 1977 amendment. In fact, the briefs of both parties in that case reveal agreement that the worker's total and permanent disability did not occur until January 8, 1979.
The crucial difference between the case before us and Chicago Bridge is that the court in Chicago Bridge recognized the well established rule under the Industrial Insurance Act which fixes rights and liabilities on the date of the industrial injury. Chicago Bridge, 46 Wash.App. at 255, 731 P.2d 1 (citing T.I.M.E.-D.C., 42 Wash.App. at 610, 711 P.2d 1116). In its opinion in this case, the Court of Appeals, without explanation, completely overlooks this doctrine. It has long been the rule that the rights of parties under the workers' compensation statute are governed by the law in force at the time the injury occurred. Ellis v. Department of Labor & Indus., 88 Wash.2d 844, 851 n. 2, 567 P.2d 224 (1977); Ashenbrenner v. Department of Labor & Indus., 62 Wash.2d 22, 25, 380 P.2d 730 (1963); Bodine v. Department of Labor & Indus., 29 Wash.2d 879, 889, 190 P.2d 89 (1948). The injured worker's rights are fixed at the time of the original industrial injury regardless of whether there is a subsequent aggravation or worsening of the condition. Ashenbrenner, 62 Wash.2d at 25, 380 P.2d 730; Corak v. Department of Labor & Indus., 2 Wash.App. 792, 800-01, 469 P.2d 957 (1970) ().
Although the majority of the precedents fixing rights at the date of the industrial injury deal with employee rights, the principle is equally applicable to employer liabilities. A recent Court of Appeals decision applied the "last injurious exposure rule" to a self-insured employer in holding the employer rather than the Department liable for an employee's injuries. The court stated:
When an employee sustains a subsequent industrial injury which is found to be a "new" injury, the insurer at risk at the time of the second injury is liable for all of claimant's benefits.
(Italics ours.) Champion Int'l, Inc. v. Department of Labor & Indus., 50 Wash.App....
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