Tollycraft Yachts Corp. v. McCoy, 59940-8

CourtUnited States State Supreme Court of Washington
Writing for the CourtUTTER; ANDERSEN
Citation858 P.2d 503,122 Wn.2d 426
PartiesTOLLYCRAFT YACHTS CORPORATION, Appellant, v. Clyde E. McCOY and The Department of Labor and Industries of the State of Washington, Respondents. En Banc
Docket NumberNo. 59940-8,59940-8
Decision Date16 September 1993

Roberts, Reinisch, MacKenzie, Healey & Wilson, P.C., Craig A. Staples, Portland, OR, for appellant.

Springer, Norman & Workman, Wayne Torneby, Jr., Longview, for respondent McCoy.

Christine O. Gregoire, Atty. Gen., John R. Wasberg, Asst., Seattle, for respondent State.

UTTER, Justice.

This is a case of first impression regarding a 1988 amendment to the Industrial Insurance Act (Act). The amendment, Laws of 1988, ch. 161, § 11 (codified at RCW 51.32.160), imposed an aggregate 150-day limit upon the time which the Department of Labor and Industries (Department) has to consider an application to re-open a workers' compensation claim due to the aggravation of an industrial injury. Construing and applying the amendment, the Board of Industrial Insurance Appeals (Board) determined that Clyde McCoy's re-opening application was "deemed granted" since the Department had not acted within the 150-day limit. It therefore ordered the Tollycraft Yachts Corporation (Tollycraft), McCoy's employer and a self-insurer under the Act, to re-open McCoy's claim. On Tollycraft's appeal, the Superior Court for Cowlitz County granted summary judgment in favor of McCoy. We reverse.


In 1988, McCoy suffered an injury to his back while employed at Tollycraft, and Tollycraft requested a determinative order from the Department on the compensability of the injury under the Act. The Department determined that the injury was work-related and ordered compensation for time lost. McCoy's claim was then closed in early 1989, without an award of permanent partial disability.

Later, after moving to Ohio, McCoy filed an application to re-open his claim. According to his physician, McCoy was suffering from a strain of his lower back and left hip which had manifested itself approximately four months after the closing of the workers' compensation claim. The application to re-open was sent to Tollycraft and filed with the Department on December 7, 1989.

On March 6, 1990, one day before the expiration of the statutory deadline for processing McCoy's application, the Department issued an order extending the deadline for 60 days. The Department's explanation for the delay was that "[t]he self-insured employer has been requested to schedule an independent medical examination" of McCoy. Clerk's Papers, at 28. The record does not indicate the requested examination ever took place. However, Tollycraft alleges that it requested medical information from McCoy's physician twice during this period, on March 9 and April 13, but did not receive a response. See Clerk's Papers, at 57-58.

On May 3, four days before the expiration of the extension period, the Department concluded McCoy had not shown an aggravation of his back injury and issued an order denying his application to re-open. The very next day, however, the Department issued an order placing the May 3 order "in abeyance pending further investigation." Clerk's Papers, at 30.

In July, while the Department's denial of McCoy's application was still in abeyance, an independent panel of physicians conducted a "records review" of McCoy's case. 1 See In re McCoy, BIIA No. 91-0701 (March 4, 1991) [McCoy I ], at 1. Tollycraft asserts the report concluded McCoy's back problems were not a result of his industrial injury. According to the Board's description of the report, however, the panel was "unable to offer an opinion as to whether there was objective evidence of worsening." McCoy I, supra at 1.

On August 20, 1990, the Department issued another order, reinstating its original denial of McCoy's application (the denial which had been placed in abeyance on May 4). McCoy requested reconsideration. While McCoy's request for reconsideration was pending, he was examined by the same medical panel which had conducted the "records review" in July. According to the Board, the panel's report 2 from this examination concluded that McCoy's condition was fixed and stable and that no worsening had taken place. McCoy I, supra at 2. On December 13, the Department issued an order affirming its August 20 denial.

McCoy appealed to the Board, arguing the Department was in error in concluding his condition had not worsened and seeking an order re-opening his claim. On March 4, 1991, the Board granted the requested relief, but did so on grounds different from those urged by McCoy. The Board noted that as of May 8, 1990, no final order denying McCoy's application had been in force, since the Department had placed the May 3 order in abeyance. Under the Board's interpretation of the 1988 amendment to the Act, the absence of such a final order on May 8 compelled the conclusion that McCoy's application had been "deemed granted" by force of law. See McCoy I, supra at 2-3. The Board consequently reversed the Department's orders, granted McCoy relief on the record, and remanded to the Department for the re-opening of McCoy's compensation claim. Tollycraft appealed this decision to the Superior Court for Cowlitz County.

Before the Superior Court reached a decision, the Department issued an order to Tollycraft, as self-insurer, to re-open McCoy's claim for determination of benefits. See In re McCoy, BIIA No. 91-3205 (July 11, 1991) [McCoy II ]. Tollycraft appealed. The Board denied the appeal reasoning that the Department's order to re-open the claim was merely a "ministerial" act in compliance with the Board's decision in McCoy I and was therefore not appealable.

The Superior Court subsequently granted summary judgment to McCoy. The court agreed with the Board's interpretation of the 1988 amendment and remanded to the Department with instructions that McCoy's claim be re-opened. Tollycraft appealed to Division II of the Court of Appeals and then moved to transfer the case to this court. McCoy did not object, and we accepted the transfer. We now reverse.


This case is before the court on an appeal of an order of summary judgment. In reviewing such an order, this court engages in the same inquiry as the trial court. RAP 9.12; Harris v. Ski Park Farms, Inc., 120 Wash.2d 727, 737, 844 P.2d 1006 (1993). Since the facts relevant to this appeal are undisputed and the lower court's decision involved only questions of law, our review is de novo. See Department of Labor & Indus. v. Fankhauser, 121 Wash.2d 304, 308, 849 P.2d 1209 (1993); DuVon v. Rockwell Int'l, 116 Wash.2d 749, 753, 807 P.2d 876 (1991).


The question in this case is an issue of first impression involving the harmonization of the 1988 amendment, Laws of 1988, ch. 161, § 11, at 698-99 (codified at RCW 51.32.160), with the existing provisions of the Industrial Insurance Act, RCW Title 51. In particular, the case concerns the resolution of an apparent conflict between two sets of statutory deadlines and the relationship of those deadlines to the administrative authority of the Department. It therefore requires examination of the multi-layered and complex statutory scheme established by the Legislature to govern industrial insurance claims.

The 1988 amendment to the Act set out time limits governing the Department's obligation to process applications to re-open workers' compensation claims. After a final determination is made on a claim for compensation, i.e., theclaim is "closed", an injured worker has up to seven years to assert that his or her injury has been "aggravated" and that additional medical treatment or compensation is warranted. RCW 51.32.160 provides, in part:

If aggravation, diminution, or termination of disability takes place, the director may, upon the application of the beneficiary, made within seven years from the date the first closing order becomes final, or at any time upon his or her own motion, readjust the rate of compensation in accordance with the rules in this section provided for the same, or in a proper case terminate the payment[.]

Thus, under RCW 51.32.160, three requirements must be met before the Department adjusts compensation based upon a worker's aggravation application: first, the worker's initial claim must have been "closed"; second, there must be aggravation of the disability since the closing of the initial claim; and third, the adjustment must be sought within seven years of the initial closing date.

Under the second requirement of the statute, the burden is on the injured worker to produce some objective medical evidence, verified by a physician, that his or her injury has worsened since the initial closure of the claim. Gammon v. Clark Equip. Co., 104 Wash.2d 613, 617, 707 P.2d 685 (1985); Dinnis v. Department of Labor & Indus., 67 Wash.2d 654, 656, 409 P.2d 477 (1965). 3 The aggravation, however, need not be the result of the industrial accident itself but may be the worsening of the industrial injury through the incidents of day-to-day life. See McDougle v. Department of Labor & Indus., 64 Wash.2d 640, 393 P.2d 631 (1964) (adjustment allowed for aggravation of back injury caused by lifting feed sacks).

The administrative processing of an application to re-open under RCW 51.32.160 takes place in three stages. In the first, the injured worker files an application with the Department . 4 In the second, the Department determines whether the application to re-open meets the requirements of the statute. See WAC 296-14-420(1). If it does, the worker's claim is re-opened, and the process moves to the third stage where an evaluation of the worker's condition is made to determine the extent of the aggravation of the injury and the appropriate adjustment of benefits.

In the second stage, the decision of the Department to re-open a claim, is not merely a "paper" act. It is, instead, a substantive decision by the Department that the injured employee has met the criteria of the...

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