Tobin v. Department of Labor & Industries
| Decision Date | 01 July 2008 |
| Docket Number | No. 36031-4-II.,36031-4-II. |
| Citation | 145 Wn. App. 607,187 P.3d 780 |
| Parties | Jim A. TOBIN, Respondent, v. DEPARTMENT OF LABOR & INDUSTRIES, Appellant. |
| Court | Washington Court of Appeals |
Michael King Hall, Office of the Atty. General, Olympia, WA, for Appellant.
David W. Lauman, Attorney at Law, Tacoma, WA, for Respondent.
¶ 1 The Department of Labor and Industries (L & I) appeals the superior court's finding that L & I cannot seek reimbursement from the portion of Jim A. Tobin's third party recovery compensating him for his pain and suffering following a work-related injury that he sustained when a crane boom crushed him. L & I argues that the statutory reimbursement use of the term "recovery" includes "all damages except loss of consortium" and that it is entitled to seek reimbursement from the pain and suffering portion of Tobin's damages. We hold that, because L & I did not, and will not, pay pain and suffering damages, it is not entitled to sue for reimbursement from that portion of Tobin's third party recovery compensating him for his pain and suffering; we affirm.
¶ 2 In June 2003, while Tobin was working for Saybr Contractors, Inc., he was injured when a crane boom, operated by a third party, swung unexpectedly and crushed him against a post. L & I accepted Tobin's subsequent worker's compensation application and paid him time loss compensation and medical benefits.
¶ 3 In March 2005, L & I determined that Tobin was totally and permanently disabled as a result of this work-related injury and began paying him pension benefits. Tobin is entitled to receive these pension benefits for the rest of his natural life, rather than for the rest of his working life or until he reaches retirement age.
¶ 4 Because a third party's negligence had caused his injury, in addition to successfully applying for workers' compensation benefits, he sued the responsible third party for damages.2 In September 2005, Tobin settled his third party claim for $1.4 million, allocated as follows:
Medical Expenses: $ 29,326.84
Future Medical Expenses: $ 14,647.00
Total wage loss (past & future): $562,943.00
Pain and Suffering: $793,083.16
Administrative Record (AR) at 70.
¶ 5 On September 29, 2005, L & I applied RCW 51.24.060(1)3 and issued an order calculating the distribution4 of Tobin's $1.4 million third party recovery as follows:
Attorney's share: $472,262.44
Claimant's share: $874,391.25
[L & I's] share: $ 53,346.31
AR at 71. At the time L & I issued the distribution order, it had paid Tobin workers' compensation benefits totaling $80,501.40. These benefits included $25,208.93 in medical treatment, $42,893.89 in time loss compensation, and $12,398.58 in pension benefits.
¶ 6 In September 2005, using the distribution formula from the third party recovery statute, RCW 51.24.060, L & I calculated that $425,735.63 of Tobin's $874,391.25 share was "excess recovery" which would offset future workers' compensation benefits that L & I would otherwise pay. AR at 71; see RCW 51.24.060(1)(a)-(e). L & I's order left Tobin's pension benefits intact.
¶ 7 Tobin appealed L & I's order to the Board of Industrial Insurance Appeals (Board). There, Tobin argued that L & I should have excluded his $793,083.16 "pain and suffering" damages from the "recovery" figure used to calculate distribution of the proceeds of his third party settlement. Specifically, Tobin argued that L & I did not pay him any compensation for his pain and suffering and it could not be reimbursed for payments it never made. Tobin also argued that including his pain and suffering damages in the distribution formula amounted to an unconstitutional taking.
¶ 8 On June 6, 2006, the Board's industrial insurance appeals judge (IIAJ) issued a proposed decision and order upholding L & I's distribution order. The IIAJ reasoned that RCW 51.24.030 authorizes L & I to assert a right of recovery for third party awards for pain and suffering because RCW 51.24.030(5) defined "recovery" as "all damages except loss of consortium," thereby including the part of Tobin's recovery compensating him for his pain and suffering. Tobin filed a petition for review to the full Board; the Board denied his petition.
¶ 9 Tobin appealed the Board's decision to the Pierce County Superior Court. The superior court reversed the Board, finding that L & I cannot be reimbursed from the pain and suffering portion of Tobin's third party distribution. In making this ruling, the trial court relied on Flanigan v. Department of Labor & Industries, 123 Wash.2d 418, 423-24, 869 P.2d 14 (1994), in which our Supreme Court held that L & I's statutory right to reimbursement does not extend to a spouse's recovery for loss of consortium because RCW 51.24.060 provides that L & I can be "reimburse[ed]" only for "benefits paid," and L & I does not compensate the injured worker for loss of consortium. Specifically, here, the superior court found that, because L & I did not pay Tobin for his pain and suffering, the pain and suffering portion of Tobin's third party recovery, like the loss of consortium recovery in Flanigan, cannot be subject to distribution.
¶ 10 L & I timely appeals.
¶ 11 L & I argues that the trial court's reasoning is flawed because, under RCW 51.24.030(5), "recovery" includes "all damages except loss of consortium" and necessarily includes all other forms of damages, including pain and suffering. We disagree. Under the Flanigan rationale, because L & I did not compensate Tobin for his pain and suffering, it cannot be "reimbursed" from that portion of Tobin's award.
¶ 12 When the Board reviews a case on stipulated facts, any remaining issues are questions of law which we review de novo. Tunstall v. Bergeson, 141 Wash.2d 201, 209-10, 5 P.3d 691 (2000), cert. denied, 532 U.S. 920, 121 S.Ct. 1356, 149 L.Ed.2d 286 (2001).
¶ 13 Washington workers injured in the course of their employment are entitled to benefits under Title 51 RCW, the Industrial Insurance Act (IIA). These workers' compensation benefits are, with limited exceptions, the exclusive remedy available to injured workers. See RCW 51.04.010. The third party recovery statute, RCW 51.24.030, sets out the few exceptions to Title 51 RCW's exclusive remedy provisions. See Bankhead v. Aztec Constr. Co., 48 Wash.App. 102, 106, 737 P.2d 1291 (1987). RCW 51.24.030(1) permits an injured worker to pursue a tort claim "[i]f 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."
¶ 14 Under the third party recovery statute, any recovery is divided and distributed in the following order: (1) attorney fees and costs are paid, (2) 25 percent of the balance goes to the injured employee or beneficiary, and (3) L & I "shall be paid the balance of the recovery made, but only to the extent necessary to reimburse [L & I] for benefits paid." RCW 51.24.060(1)(a)-(c). Any remaining balance is paid to the employee or beneficiary. RCW 51.24.060(1)(d). Thereafter, the employee or beneficiary is not entitled to receive additional workers' compensation benefits until the additional benefits equal the remaining balance of the recovery paid to the employee or beneficiary. RCW 51.24.060(1)(e).
¶ 15 Allowing these third party actions serves two purposes: first, it spreads responsibility for compensating injured employees and their beneficiaries to third parties who are legally and factually responsible for the injury and, second, it permits the employee to increase his or her compensation beyond the IIA's limited benefits. Flanigan, 123 Wash.2d at 424, 869 P.2d 14 (citing Maxey v. Dep't of Labor & Indus., 114 Wash.2d 542, 549, 789 P.2d 75 (1990)). Allowing L & I to obtain reimbursement from the proceeds of a third party recovery likewise serves two roles: it ensures that the accident and medical funds are not charged for damages caused by a third party, and it also ensures that the injured employee does not make a double recovery. Flanigan, 123 Wash.2d at 425, 869 P.2d 14 (citing Maxey, 114 Wash.2d at 549, 789 P.2d 75). In other words, the injured worker "cannot be paid compensation and benefits from [L & I] and yet retain the portion of damages which would include those same elements." Flanigan, 123 Wash.2d at 425, 869 P.2d 14 (quoting Maxey, 114 Wash.2d at 549, 789 P.2d 75) (emphasis omitted).
¶ 16 L & I argues that RCW 51.24.030(5) requires it to exclude loss of consortium damages from its distribution of third party recoveries but mandates that it include all other damages, such as damages for pain and suffering, regardless of whether it first compensated the injured worker for that portion of his recovery. We disagree.
¶ 17 Here, relying on Flanigan, the trial court held that Tobin's pain and suffering damages were not subject to distribution under the third party distribution statute. We agree. Because L & I did not, and will not, pay pain and suffering damages, it cannot recover from that portion of Tobin's third party recovery compensating him for his pain and suffering.5 See Flanigan, 123 Wash.2d at 423, 869 P.2d 14. As such, the pain and suffering portion of Tobin's third party damages is not a "recovery" as it is defined under RCW 51.24.030(5).
¶ 18 Shortly after the Flanigan decision, the legislature passed RCW 51.24.030(5), which provides: "For the purposes of this chapter, `recovery' includes all damages except loss of consortium."
¶ 19 L & I argues that the amendment of RCW 51.24.030 codified...
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