Wolf v. Scott Wetzel Services, Inc.
| Decision Date | 31 October 1989 |
| Docket Number | No. 55319-0,55319-0 |
| Citation | 113 Wn.2d 665,782 P.2d 203 |
| Court | Washington Supreme Court |
| Parties | Scott WOLF, Appellant, v. SCOTT WETZEL SERVICES, INC., a Washington corporation, Respondent. |
Cohen & Keith-Miller, P.S., Norman W. Cohen, Seattle, for appellant.
Lane, Powell, Moss & Miller, Ralph C. Pond, Seattle, for respondent.
Bryan P. Harnetiaux, Gary N. Bloom, Michael J. Pontarolo, Spokane, Wayne Lieb, Olympia, amici curiae, for appellant on behalf of Washington State Trial Lawyers Ass'n.
Tim Donaldson, Constance Gould, Seattle, Craig A. Staples, Portland, Or., amici curiae, for respondent on behalf of Washington Self-Insurers Ass'n.
FACTS OF CASE
In this case we are presented with the question of whether the Industrial Insurance Act bars an employee from bringing a civil action, outside the workers' compensation system, against the claims administrator of a self-insured employer for wrongful delay or termination of workers' compensation benefits.
The parties have stipulated to the following facts.
On April 27, 1979, Scott Wolf injured his lower back while working as a truck driver for St. Regis Lumber Company in Marysville. While driving his truck near Mt. Vernon, he noticed that his load of lumber had shifted. He injured his lower back while attempting to lift a 4 X 16 X 22 timber back into place.
Mr. Wolf's claim was administered by Scott Wetzel Services, Inc. Scott Wetzel Services contracted with St. Regis to manage its worker's compensation claims, for which St. Regis is self-insured pursuant to RCW Chapter 51.14. From the date of his injury until November 7, 1979, Mr. Wolf received time loss compensation and payment of medical bills from St. Regis. On November 7, 1979, Gary Ladd of Scott Wetzel Services terminated time loss compensation to Mr. Wolf based on a report from Wolf's attending physician, Dr. Charles Anderson, that Mr. Wolf was capable of gainful employment.
In January 1980, Mr. Wolf and his new treating physician, Dr. Richard McCollum, asked Scott Wetzel Services to pay for psychiatric treatment, suggesting that his back injury may have contributed to psychological problems. At that time, Mr. Ladd denied this request. On February 14, 1980, Mr. Ladd recommended to the Department of Labor & Industries that the claim be closed. The Department closed the claim by order dated that same day, February 14, 1980, with time loss compensation as paid and a permanent partial disability award for five percent of the maximum for unspecified disabilities. This was for low back injuries only and did not contemplate any award for psychological impairments.
On appeal, the Board of Industrial Insurance Appeals reversed the Department by order dated June 25, 1980, re-opening the claim for all purposes, including psychiatric care. Since that time, Scott Wetzel Services has paid for Mr. Wolf's visits with his psychiatrist, Dr. Jules Sicotte, pursuant to the Board's order. At this time, Mr. Wolf's worker's compensation claim is still open.
Mr. Wolf filed the present lawsuit [in Superior Court] in November 1982, alleging that the initial refusal by Scott Wetzel Services to pay for psychiatric care constitutes bad faith administration of his worker's compensation claim. The specific allegation in the complaint is that "within three years last past, defendant has, by many words, acts and deeds (of omission as well as commission), tortiously withheld and/or delayed plaintiff's workmen's compensation benefits proximately resulting in great injury to plaintiff...."
Mr. Wolf's claims in this lawsuit are based only on the initial refusal to pay for psychiatric care and what Mr. Wolf believes Scott Wetzel Services, Inc., which administered the self-insurer's workers' compensation claims (and which was the defendant below and is the respondent in this court), moved for summary judgment in the trial court. The motion was based on its claim that exclusive subject matter jurisdiction over disputes of this kind is vested in the Department of Labor and Industries. The Superior Court granted the motion and dismissed Mr. Wolf's claims for lack of subject matter jurisdiction. Mr. Wolf then sought direct review in this court. We agreed and retained the case for decision. 1
was premature claim closure, and not on any other alleged conduct.
One principal issue is presented.
Does the Industrial Insurance Act bar an employee from bringing a civil action against a company, which was hired by a self-insured employer to administer workers' compensation claims, for wrongful delay or termination of benefits?
CONCLUSION. The Industrial Insurance Act expressly provides a remedy within the workers' compensation system for wrongful delay or termination of workers' compensation benefits; that is the exclusive remedy for any such wrongful delay or termination.
It has long been recognized that the Industrial Insurance Act (IIA) (RCW Title 51) reflects a quid pro quo compromise between employees and employers. 2 Under the IIA, the employer pays some claims for which it would not be liable under the common law in exchange for limited liability. 3 The employee, on the other hand, gives up common law actions and remedies in exchange for sure and certain relief. 4 As enacted by the Legislature, the IIA accomplishes this quid pro quo compromise through the following exclusive remedy provisions:
The state of Washington, ... exercising herein its police and sovereign power, declares that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workers, injured in their work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this title; and to that end all civil actions and civil causes of action for such personal injuries and all jurisdiction of the courts of the state over such causes are hereby abolished, except as in this title provided.
(Italics ours.) RCW 51.04.010 (part).
Each worker injured in the course of his or her employment, or his or her family or dependents in case of death of the worker, shall receive compensation in accordance with this chapter, and, except as in this title otherwise provided, such payment shall be in lieu of any and all rights of action whatsoever against any person whomsoever: ...
(Italics ours.) RCW 51.32.010 (part).
Mr. Wolf contends in effect, however, that a civil action for wrongful delay or termination of workers' compensation benefits is not one of the actions abolished by these exclusive remedy provisions. Thus, according to his view, he should be able to maintain the present civil action in the Superior Court, quite apart from the statutory workers' compensation system. We disagree.
Several courts in other jurisdictions have addressed the issue of whether a civil cause of action lies for wrongful delay or termination of workers' compensation benefits. 5 According to Professor Arthur Larson, a leading authority on workers' compensation law, and one whose teachings we have often quoted with approval, "[i]n the great majority of these cases, for one reason or another, a cause of action was held not to lie." (Italics ours.) 2A A. Larson, Workmen's Compensation § 68.34(c), at 13-127 to 13-128 (1988).
Courts have held against the existence of such a cause of action for essentially two reasons. First, they have been persuaded by the policies underlying the exclusive remedy provisions of their state workers' compensation statutes. 6 As Professor Larson explains in this connection:
The temptation to shatter the exclusiveness principle by reaching for the tort weapon whenever there is a delay in payments or a termination of treatment is all too obvious, and awareness of this possibility has undoubtedly been one reason for the reluctance of courts to recognize this tort except in cases of egregious cruelty or venality.
(Footnote omitted.) 2A A. Larson, § 68.34(c), at 13-145. Second, courts have been greatly influenced by the fact that workers' compensation statutes typically contain provisions that impose a penalty for wrongful delay or termination of benefits. 7 Courts generally take the view that the presence of such a penalty provision in the workers' compensation statute evinces a legislative intent that the remedy for wrongful delay or termination of benefits remain within the workers' compensation system. 8 Significantly, as will be further discussed in some detail, our IIA contains just such a provision. 9
Consistent with the foregoing, the Illinois Supreme Court, after exhaustively reviewing the cases on the subject, aptly summarized the reasons for the majority view The rationale of these cases has typically been that the legislature, anticipating that bad faith in delaying payment of benefits would occur on occasion, provided a quick, simple and readily accessible method of resolving disputes over such payments without the proof and defenses incident [to a common law action], the intolerable delay in resolution of a lawsuit, economic waste to all and expense to the worker or the spectre of multiple jurisdictions being engaged in the resolution of the same basic questions with the possibility of conflicting results.
(Citations and internal quotation marks omitted.) Robertson v. Travelers Ins. Co., 95 Ill.2d 441, 448, 69 Ill.Dec. 954, 448 N.E.2d 866 (1983).
A minority of courts, on the other hand, have permitted a civil cause of action to lie for the wrongful delay or termination of benefits. 10 It has been the reasoning of these courts that the injury at issue does not arise out of the employment relationship, but rather out of the workers' status as a claimant seeking benefits. 11 They thus conclude that the injury complained of does not fall within the purview of the exclusive remedy provisions of the workers' compensation statute. 12
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