Opinion ID: 2205475
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: ¶ 10 The central issue in this case is whether chapter 51.24 RCW authorizes the Department to include Tobin's pain and suffering damages in the distribution calculation. In order to answer this question, we must discuss the basic history and framework of Washington workers' compensation law, our decision in Flanigan, 123 Wash.2d 418, 869 P.2d 14, and the meaning of a post- Flanigan legislative amendment, RCW 51.24.030(5). ¶ 11 Washington State has abolished workplace injury torts and established Title 51 RCW, the workers' compensation statutes. RCW 51.04.010. Under the statutes, an injured worker generally may not bring a suit in tort, but is instead limited to recovering workers' compensation benefits from the Department. RCW 51.04.060 (describing benefits and burdens of statute as mandatory, exclusive remedy). ¶ 12 The third party recovery statutes, chapter 51.24 RCW, provide an exception. An injured worker is permitted to sue a third person, not in the worker's same employ [who] is or may become liable to pay damages on account of a worker's injury. RCW 51.24.030(1). ¶ 13 [A]ny recovery obtained from a third party suit shall be distributed according to the statute's distribution formula. RCW 51.24.060(1). The distribution formula requires payment in the following order: (a) attorney fees and costs, (b) 25 percent to the injured worker free of any claim by the Department, (c) to the Department the balance of the recovery made, but only to the extent necessary to reimburse [the Department] for benefits paid and (d) to the injured worker [a]ny remaining balance. Id. ¶ 14 In Flanigan, 123 Wash.2d 418, 869 P.2d 14, we held that recovery excludes damages for loss of consortium, and in dicta, suggested that other noneconomic damages, such as pain and suffering, may also be excluded. Id. at 423, 426, 869 P.2d 14. We observed that the workers' compensation statute makes no statement clearly defining the types of damages that benefits are supposed to compensate for leaving the court to interpret the legislature's intent. ¶ 15 In Flanigan we noted that the Department uses a lesser percentage of the employee's salary to calculate benefits. Id. at 423, 869 P.2d 14 (citing RCW 51.32.050,.060, .090). As such, we found the Department did not pay the claimant any benefits for the purpose of compensating for loss of consortium. Id. Referencing the language of RCW 51.24.060(1)(c), we concluded that where the Department has not paid out benefits for a type of damages, it cannot seek reimbursement from that type of damages. Id. at 426, 869 P.2d 14. We also relied on the dictionary definition of reimburse, a term not defined by the statute, to support this conclusion. Id. We held that recovery excludes damages for loss of consortium and in dicta suggested that other noneconomic damages, such as pain and suffering, may also be excluded. Id. at 423, 426, 869 P.2d 14. ¶ 16 After Flanigan, the legislature amended the statute to define recovery as all damages except loss of consortium. RCW 51.24.030(5). The amendment appears to codify the holding of Flanigan. However, the parties debate whether it does more. The Department argues that the legislature also intended to limit the reasoning of Flanigan to loss of consortium damages. Tobin disputes this interpretation and argues that the reasoning of Flanigan can be extended to third party recoveries of pain and suffering damages. Resp't's Answer to Pet. for Review at 7. ¶ 17 The Department references the plain language of the amendment and argues that interpreting pain and suffering as excluded from recovery is to rewrite the statute's definition of recovery as all damages except loss of consortium, and pain and suffering. Br. of Appellant [L & I] at 3. The Department argues that the court may not rewrite the amended statute in this manner. Left with the plain language of the amendment, the court has an either or choice. Pain and suffering is not loss of consortium; therefore it must be included in recovery. ¶ 18 Tobin counters that RCW 51.24.030, including the amendment, should not be read in isolation, but in context with RCW 51.24.060(1)(c), which gives the Department access to recovery only to the extent necessary to reimburse the department ... for benefits paid. RCW 51.24.060(1)(c); Resp't Tobin's Suppl. Br. at 8 (citing Cockle v. Dep't of Labor & Indus., 142 Wash.2d 801, 807, 16 P.3d 583 (2001)). This argument is particularly compelling because (i) Flanigan relied on this section of the statute to support its reasoning and (ii) the legislature did not alter this section. ¶ 19 We agree with Tobin that if the legislature intended to limit the reasoning of Flanigan, it could have clearly expressed its intent by defining recovery to include all noneconomic damages except for loss of consortium. Alternatively, it could have clearly expressed which types of damages the statute is meant to provide compensation for by defining the term reimburse. It did not. Accordingly, we conclude the legislature intended to codify the holding of Flanigan and left the reasoning of Flanigan undisturbed. ¶ 20 In Flanigan this court emphasized that the statute's calculation of benefits involves only a percentage of salary and makes no explicit reference to any other category of damages. RCW 51.32.050, .060, .090. Following this reasoning, the benefits calculation does not involve pain and suffering any more than it does loss of consortium. ¶ 21 The Department argues, though, that extending Flanigan to exclude reimbursement for pain and suffering creates conceptual difficulties. The Department argues that Tobin will receive pension benefits for the rest of his natural life, rather than for the rest of his working life or until he reaches retirement age. Thus, the Department argues, benefits may be viewed as representing more than medical expenses and lost wages. The Department cites to Arthur Larson's treatise, explaining that [a] compensation system, [is] unlike a tort recovery, [and] does not pretend to restore to the claimant what he or she has lost but instead grants the claimant a sum certain on which to live. 1 Arthur Larson, Larson's Workers' Compensation Law § 1.03[5] (2009). ¶ 22 A form of Larson's argument, that reimbursement under the statute should be viewed broadly rather than separated into damage types, was urged by the dissent in Flanigan, but the majority found that other considerations outweighed this argument. Flanigan, 123 Wash.2d at 430, 869 P.2d 14 (Madsen, J., dissenting) (the Act does not distinguish based on the nature of the damages which flow from the worker's injury). We adhere to our position in Flanigan. ¶ 23 The Department raises another concern that arises when Flanigan is applied in the context of pain and suffering. Specifically, the Department points out that Tobin's third party claim settled for $1.4 million. The amount was allocated as follows: $29,326.84 for medical expenses, $14,647.00 for future medical expenses, $562,943.00 for total wage loss (past and future), and $793,083.16 for pain and suffering. The Department notes the category of pain and suffering constitutes the largest amount (over $230,000.00 more than total wages lost) and represents approximately 57 percent of the total award. The Department argues that when a large dollar amount is allocated to pain and suffering, the specter of fraud or collusion may arise. Moreover, the Department says, if Tobin prevails and similar cases follow in his wake, large allocations to pain and suffering will have a significant impact on the Department's fund and potentially its solvency. ¶ 24 Tobin recognizes that the solvency of the fund is a legitimate consideration but argues that it is not unreasonable to limit the Department's recovery to reimbursement for benefits actually paid. Tobin cites Wilson v. State, 142 Wash.2d 40, 56, 10 P.3d 1061 (2000), in which the dissent argued that considering the impact of a decision on the replenishment of the Medicaid fund is a legitimate concern, but fund replenishment should still be limited to those damage types that the fund actually paid out as reimbursement. The same view expressed in this dissent was later adopted by the United States Supreme Court in Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006). We do not find concerns over solvency sufficient to upset our interpretation of the statute. ¶ 25 In regard to concerns about collusion, fraud was a concern in Flanigan as well, but the court ultimately decided that other considerations outweighed worries over fraud in the context of loss of consortium. Flanigan, 123 Wash.2d at 429, 869 P.2d 14 (Andersen, C.J., dissenting) (majority's decision also opens the door to abuse and manipulation... [i]n the settlement context, [where] parties may allocate the recovery ... in order to defeat the funds' reimbursement right). Moreover, the Department has presented no evidence that Tobin engaged in any fraud or collusion in this case. We are not convinced that general concerns over fraud are sufficient to upset our interpretation of the statute. ¶ 26 For the reasons discussed above, we hold that chapter 51.24 RCW does not authorize the Department to subject pain and suffering damages to its reimbursement calculation.