Tallerday v. Delong

• Decision Date: 11 January 1993
• Docket Number: No. 28123-2-I,28123-2-I
• Citation: 68 Wn.App. 351,842 P.2d 1023
• Court: Washington Court of Appeals
• Parties: Joseph F. TALLERDAY and Claudia Tallerday, husband and wife, Respondents, v. Wallace A. DELONG and Jane Doe Delong, husband and wife, Defendants, and The State of Washington, Appellant. Robert L. UNDSDERFER, Respondent, v. STATE of Washington, DEPARTMENT of LABOR & INDUSTRIES, Appellant.

Page 351

68 Wn.App. 351

842 P.2d 1023

Joseph F. TALLERDAY and Claudia Tallerday, husband and wife, Respondents, v. Wallace A. DELONG and Jane Doe Delong, husband and wife, Defendants, and The State of Washington, Appellant.

Robert L. UNDSDERFER, Respondent, v. STATE of Washington, DEPARTMENT of LABOR & INDUSTRIES, Appellant.

No. 28123-2-I.

Court of Appeals of Washington Division 1.

Jan. 11, 1993.

Kenneth O. Eikenberry, Atty. Gen., and Beverly N. Goetz, Asst. Atty. Gen., Seattle, for appellant

Ralph Maimon, Oseran, Hahn, Van Valin & Watts, P.S., Bellevue, for respondents.

SCHOLFIELD, Judge.

The Department of Labor & Industries (Department) appeals the trial court's decision on summary judgment that it had no right of reimbursement against the legal malpractice recoveries of respondents Tallerday and Undsderfer. We reverse.

The issue in this case is whether an injured worker's malpractice recovery against an attorney for negligence in pursuing a third party claim under RCW 51.24.030 is subject to the Department's reimbursement lien. The trial court ruled that respondent Joseph Tallerday's recovery against his attorney for malpractice did not result from a "third party action" within the purview of RCW 51.24, and thus the Department could not assert a lien against the recovery. The court's ruling concluded the Undsderfer case which raised the same issue. The parties have stipulated to the following facts:

1. Facts Regarding Undsderfer

On October 10, 1977, Undsderfer sustained an industrial injury when a vehicle he was riding in in the course of his employment was involved in an accident with James Odle, an employee of another company. The Department expended $18,955.55 on Undsderfer's behalf for time loss and other benefits.

Undsderfer retained a law firm to pursue a third party claim as permitted by RCW 51.24.030 and .060. The complaint as prepared by Undsderfer's counsel named only James Odle--not his employer Olympic Masonry--as defendant. An action against Olympic Masonry was not timely pursued, and the statute of limitations for the claim expired.

In June 1984, Undsderfer was awarded $84,000 in damages and $330.80 in costs in his action against Odle. Because Odle's assets were limited to an insurance policy with a limit of $30,000, Undsderfer accepted $30,330.80 in full satisfaction of Odle's liability. Undsderfer then brought a legal malpractice action against the law firm handling the case for him, claiming as damages the difference between the $84,330.80 awarded in the personal injury action and the $30,330.80 received from Odle.

Undsderfer's malpractice claim settled in July 1984 for the sum of $52,000. The Department then asserted a claim of lien on the settlement proceeds in the amount of $14,441.48. An industrial appeals judge ruled that Undsderfer's recovery was subject to the Department's reimbursement lien. Undsderfer's subsequent petition for review to the Board of Industrial Insurance Appeals (Board) was denied, and he appealed to superior court.

2. Facts Regarding Tallerday

On August 4, 1978, Tallerday sustained an industrial injury when a safety railing he was leaning against broke, causing him to fall. In October 1978, Tallerday retained an attorney to investigate and pursue any possible third party claims arising from the accident. However, the attorney concluded that Tallerday did not have a valid third party claim, and so informed Tallerday in February 1979. Tallerday then assigned his rights to any third party claim to the Department.

In 1983, Tallerday retained another attorney who, after investigating the factual and legal issues surrounding Tallerday's industrial accident, concluded that a valid third party claim could indeed have been pursued by Tallerday. In In July 1988, Tallerday settled his claim against his former attorney for $160,000. At that time, Tallerday had received approximately $137,132 in workers' compensation benefits. In August 1988, the Department issued an order distributing the third party recovery and asserting a right to reimbursement pursuant to RCW 51.24.060(1) for workers' compensation benefits in the amount of $16,556.20.

                October 1985, Tallerday filed an action against his former attorney for malpractice.   The complaint was subsequently amended to name the State of Washington as an additional defendant, and a request was made for the court to determine whether the State, through the Department, held a statutory right to claim a lien on any settlement or judgment proceeds
                

At superior court the parties agreed to consolidate Undsderfer's appeal from the Board with Tallerday's declaratory judgment action. Undsderfer and the Department agreed to be bound by the final decision in the Tallerday case. The trial court's entry of summary judgment in favor of Tallerday therefore concluded the Undsderfer case, and this consolidated appeal followed.

STANDARD OF REVIEW

In evaluating a summary judgment, this court makes the same inquiry as the trial court. Touchet Valley Grain Growers, Inc. v. Opp & Seibold Gen. Constr., Inc., 119 Wash.2d 334, 341, 831 P.2d 724 (1992). A motion for summary judgment should be granted only if the pleadings, affidavits, depositions, and admissions on file demonstrate that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Harris v. Harris, 60 Wash.App. 389, 392, 804 P.2d 1277, review denied, 116 Wash.2d 1025, 812 P.2d 103 (1991). Given the uncontested facts of this case, the applicability of the Department's statutory right of reimbursement against respondents' malpractice recoveries is one of law, and is reviewed de novo. ¹ See DuVon v. Rockwell Int'l Corp., 116 Wash.2d 749, 753, 807 P.2d 876 (1991).

RIGHT OF REIMBURSEMENT

The Department contends that Undsderfer and Tallerday had no right to maintain an action for malpractice except as permitted by the Industrial Insurance Act, RCW Title 51, which is the exclusive remedy for injured workers. The Department claims that the purpose of the third party chapter is to replenish the industrial insurance fund, and that every third party recovery is subject to its right of reimbursement under RCW 51.24.060. It contends that a 1986 amendment to RCW 51.24.030 clarified this right. Finally, the Department claims that workers are not entitled to double recovery, and that it has an equitable right to reimbursement.

The act provides the exclusive remedy for workers, along with their families and dependents, unintentionally injured during the course of their employment. Clark v. Pacificorp, 118 Wash.2d 167, 174, 822 P.2d 162 (1991); Bankhead v. Aztec Constr. Co., 48 Wash.App. 102, 104, 737 P.2d 1291 (1987). A worker who receives workers' compensation benefits under the act has no separate remedy for his or her injuries except where the act specifically authorizes a cause of action. Bankhead at 104, 737 P.2d 1291. The preemption of civil actions by the act is sweeping and comprehensive, Downey v. Department of Labor & Indus., 65 Wash.App. 200, 204, 827 P.2d 1101 (1992), and the act has been characterized as being of the broadest and most encompassing nature. West v. Zeibell, 87 Wash.2d 198, 201, 550 P.2d 522 (1976). The goal of the act is to provide sure and certain relief to injured workers and their families, not to award full tort damages. Clark v. Pacificorp, supra, 118 Wash.2d at 186 n. 9, 822 P.2d 162.

RCW 51.24, the third party chapter, provides an exception to the act's prohibition of any other remedy. Bankhead, 48 Wash.App. at 105, 737 P.2d 1291. Where a worker's injury is due to the negligence of a third party (defined as one not in the worker's same employ), the worker, or a beneficiary, may elect to sue that third party for damages. RCW 51.24.030; Clark v. Pacificorp, supra, 118 Wash.2d at 174, 822 P.2d 162. By electing to pursue the third party, the worker ² is not precluded from receiving benefits. RCW 51.24.040; Clark v. Pacificorp, supra at 175, 822 P.2d 162. However, the Department is entitled to reimbursement of benefits paid if the third party recovery exceeds these benefits. The act provides a lien to enforce the reimbursement right. RCW 51.24.060; Clark v. Pacificorp, supra at 175, 822 P.2d 162.

The issue in this case is one of law that has yet to be decided in this state. Simply stated, the court must decide whether a worker's recovery for legal malpractice against his attorney for negligent prosecution of a third party claim is subject to the Department's right of reimbursement.

At the time of respondents' injuries (and Undsderfer's 1984 malpractice settlement), RCW 51.24.030(1) provided as follows:

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.

Former RCW 51.24.030(1). This provision was amended in 1986 and currently reads as follows:

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.

RCW 51.24.030(1). Under the statute's present language, we believe a worker's recovery against his or her attorney for negligence in prosecuting a third party claim constitutes a third party recovery. The attorney under such circumstances is a party who "is or may become liable to pay damages on account of a worker's injury". RCW 51.24.030(1). See also O'Rourke v. Department of Labor & Indus., 57 Wash.App. 374, 380, 788 P.2d 17 (current RCW 51.24.030 does not limit definition of "third party" to tortfeasors), review denied, 115 Wash.2d 1002, 795 P.2d 1155 (1990).

Because Tallerday's 1988 malpractice settlement occurred after the 1986 amendment to RCW 51.24.030(1), his recovery is governed by the...