Shafer v. Department

• Decision Date: 13 August 2009
• Docket Number: No. 81049-4.,81049-4.
• Citation: 213 P.3d 591,166 Wn.2d 710
• Parties: Kelly L. SHAFER, Respondent, v. DEPARTMENT OF LABOR AND INDUSTRIES of the State of Washington, Petitioner.
• Court: Washington Supreme Court

213 P.3d 591

166 Wn.2d 710

Kelly L. SHAFER, Respondent, v. DEPARTMENT OF LABOR AND INDUSTRIES of the State of Washington, Petitioner.

No. 81049-4.

Supreme Court of Washington, En Banc.

Argued March 10, 2009.

Decided August 13, 2009.

John R. Wasberg, Attorney General's Office, Seattle, WA, Jay Douglas Geck, Attorney General's Office, Olympia, WA, for Petitioners.

Philip Albert Talmadge, Sidney Charlotte Tribe, Talmadge/Fitzpatrick, Tukwila, WA, Jennifer Margareta Cross-Euteneier, Vail Cross-Euteneier & Associates, Tacoma, WA, for Respondents.

Stewart Andrew Estes, Keating Bucklin & McCormack, Mary Elizabeth Levenson, Attorney at Law, Seattle, WA, Amicus Curiae on behalf of Washington Defense Trial Lawyers.

Bryan Patrick Harnetiaux, Michael J. Pontarolo, Attorney at Law, Spokane, WA, Amicus Curiae on behalf of Washington State Association for Justice Foundation.

ALEXANDER C.J.

¶ 1 The Department of Labor and Industries (Department) seeks reversal of a decision of the Court of Appeals in which that court held that a worker's compensation claim is not final unless and until the worker's attending physician receives a copy of the Department's order closing the claim. We hold that because the Department's failure to provide the worker's attending physician a copy of the closure order prevented the physician from appealing the order, the worker's claim is not final until 60 days after the attending physician receives a copy of the order. We, therefore, affirm the Court of Appeals.

I

¶ 2 Kelly Shafer injured her back in 1998 while working at AMF Sports World, a bowling alley in Federal Way. The injury occurred while she was helping another worker lift a keg of beer into a cabinet. Despite the injury, Shafer continued working at the bowling alley until March 1999. She stopped working at that time because the pain in her back became so severe that it interfered with her ability to perform her job.

¶ 3 Although Shafer visited several medical practitioners for treatment, she was eventually treated by Dr. Elizabeth Cook, a spinal specialist. Computerized axial tomography (CAT) scans ordered by Dr. Cook revealed that Shafer had sustained broken bones in her vertebrae and a pinched nerve in her lower back. Dr. Cook concluded that Shafer suffered from spondylolysis, a condition where the vertebrae bones are weak and can break.

¶ 4 On Shafer's behalf, Dr. Cook applied to the Department for reimbursement of the cost of the treatment she provided. Although the Department approved payment for the cost of some of the treatment provided by Dr. Cook, payment for additional x-rays sought by Dr. Cook was denied. The Department also denied payment for an electromyogram, which Dr. Cook wished to obtain in order to check for nerve damage. Thereafter, Shafer visited Dr. Cook a few more times but, according to Dr. Cook, her options for treatment were limited due to the Department's refusal to pay for additional diagnostic testing.

¶ 5 In July 2000, the Department arranged for an independent medical examination of Shafer. The Department's examiner, Dr. Briggs, concluded that Shafer's condition was fixed and stable and could not be improved with further treatment. He opined that Shafer could return to work without restriction. Based on this report, the Department sent Shafer and Dr. Cook an order closing Shafer's claim.¹

¶ 6 The closing order did not make any award to Shafer for disability, indicating that although her preexisting back condition, spondylolysis, was aggravated by the 1998 injury, her back had returned to preinjury status. This order was appealed by Shafer. In response, the Department revised the order and awarded her a permanent partial disability award of $6,773. The Department sent a copy of this order to Shafer but did not send a copy of it to Dr. Cook. Dr. Cook did not learn of the existence of the revised closing order for nearly three years after it was sent to Shafer.

¶ 7 Shafer eventually returned to see Dr. Cook in 2003 because, according to Shafer, the pain in her back had become debilitating. After analyzing the results of a magnetic resonance imaging (MRI) procedure, Dr. Cook determined that Shafer's spinal condition had worsened. Dr. Cook then asked the Department to reopen Shafer's claim to provide her with funds for further treatment. The Department declined to do so.

¶ 8 Shafer appealed the Department's refusal to reopen her claim to the Board of Industrial Insurance Appeals (Board), contending that her physical and mental health had worsened due to the injury. Shafer argued to the Board that her initial claim was never closed because Dr. Cook had not received a copy of the Department's revised closing order. During Shafer's appeal to the Board, Dr. Cook filed an affidavit in which she states that the revised closing order in which Shafer's claim was closed was not communicated to her. Dr. Cook stated that if she had received the order, she would have appealed it because it was her opinion that Shafer needed additional curative treatment.

¶ 9 An industrial appeals judge (IAJ) determined that Shafer's condition had not become aggravated and affirmed the Department's decision to not reopen her claim. The IAJ also determined that even though the Department's revised closure order was not communicated to Dr. Cook, it had been communicated to Shafer and thus, the claim was terminated as to her. The Board's chief IAJ and the Board affirmed the IAJ's determination.

¶ 10 Following receipt of the adverse decision, Shafer appealed to the King County Superior Court. Based on a jury's finding that Shafer's condition had not become aggravated between 2000 and 2003, the trial court denied reopening of her claim. The trial court did not address the question of whether Shafer's claim was still open due to the Department's failure to communicate the closing order to Dr. Cook.

¶ 11 Shafer next sought review in the Court of Appeals, where she contended that the revised closure order was not final because the revised closing order had not been communicated to Dr. Cook, that substantial evidence did not support the trial court's finding on her petition to reopen the claim, and that the trial court abused its discretion when it ordered Shafer to submit to a CR 35 mental examination. After determining that the claim finality issue was dispositive, the Court of Appeals concluded that the revised closing order had not become final because it was not "received" by Dr. Cook. Shafer v. Dep't of Labor & Indus., 140 Wash.App. 1, 11, 159 P.3d 473 (2007). It did not address the other issues. We granted the Department's petition to review the decision of the Court of Appeals. Shafer v. Dep't of Labor & Indus., 163 Wash.2d 1052, 187 P.3d 752 (2008)

II

¶ 2 The issue before us is whether a department closing order that was served on the worker, but not communicated to her attending physician, is not final as to the worker and, therefore, subject to a direct protest or direct appeal. This question is one of first impression for this court, and it requires us to interpret provisions of the Industrial Insurance Act (IIA), Title 51 RCW. The Department's interpretation of the IIA is subject to de novo review. RCW 34.05.570(3)(d); see RCW 51.52.115. Relief from a department order is available following an adjudicative proceeding if the Department "erroneously interpreted or applied the law." RCW 34.05.570(3)(d). Alternatively, relief is available from a department order following an adjudicative proceeding if the order is inconsistent with a rule of the agency, "unless the agency explains the inconsistency by stating facts and reasons to demonstrate a rational basis for inconsistency." RCW 34.05.570(3)(h).

III

¶ 13 In 1911, the IIA displaced the common law system that had previously governed the remedies available to workers for injuries received in employment and it became the exclusive administrative remedy between employer and employee. RCW 51.04.010. The IIA aims to provide a speedy remedy and enable injured workers to become gainfully employed. Id.; RCW 51.32.095(4)(a). Additionally, the IIA is to "be liberally construed for the purpose of reducing to a minimum the suffering and economic loss arising from injuries and/or death occurring in the course of employment." RCW 51.12.010.

¶ 14 The Department administers the IIA and is responsible for supervising medical treatment for workers injured in the course of employment. RCW 51.04.020(4), .030(1). The IIA provides for a Board of Industrial Insurance Appeals, which serves as the administrative review body for department orders, decisions, and awards. RCW 51.52.050. A worker aggrieved by a final decision or order of the Board may appeal to the superior court. RCW 51.52.110.

¶ 5 An injured worker is entitled to proper and necessary treatment from a physician chosen by the worker. RCW 51.36.010. The Department is required to pay for the treatment provided by the chosen physician. Id.; RCW 51.36.080. When a worker suffers a permanent partial disability, payment for treatment ceases upon the award of compensation for the injury. RCW 51.36.010.

¶ 16 A worker suffering a permanent partial disability is compensated according to the award schedule set forth in RCW 51.32.080. A "`[p]ermanent partial disability'" is defined as "any anatomic or functional abnormality or loss after maximum medical improvement (MMI) has been achieved." WAC 296-20-19000. Upon achieving the MMI, the worker's condition is considered to be "stable or nonprogressive" at the time the evaluation is made. Id. Monetary awards for injuries are "designed to compensate the worker for the loss of function" of the injured body part. Id. When the Department determines that a worker's condition is stable, a closing order is issued "based on factors which include medical recommendation, advice, or examination." RCW 51.32.160(1)(b).

¶ 17 The dispute here centers on two provisions in the IIA that govern Department...