Court Opinion

ID: 2714971
Source: CourtListenerOpinion
Date Created: 2014-08-06 17:09:37.944723+00
Date Added: 2024-06-11T09:50:25.613342
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

THE BOEING COMPANY,                           NO. 69759-5-1

                    Respondent,               DIVISION ONE

                                              PUBLISHED OPINION
PATRICIA DOSS,
                                                                                  c i r. >

                    Respondent,               FILED: March 31, 2014               rn ~*

STATE OF WASHINGTON,                                                         CO

DEPARTMENT OF LABOR &
INDUSTRIES,
                                                                             Up   <:i^
                   Appellant.                                                en   ••- -c -
                                                                             CD      - --

      Leach, C.J. — The Department of Labor and Industries (Department)

appeals a superior court judgment ordering the Department to pay from the

second injury fund the costs of Patricia Doss's ongoing postpension medical

treatment. The Department claims that the Boeing Company, as a self-insured

employer, must pay these costs because Doss is permanently and totally

disabled due to the combined effects of her preexisting disabling condition and

chemical exposure at Boeing.      Because the unambiguous language of RCW

51.16.120(1), consistent with the second injury fund's purpose, requires the

Department to pay these costs, we affirm.
NO. 69759-5-1 / 2

                                     FACTS

      In March 2000, Doss filed an application for workers' compensation

benefits with the Department, alleging that chemical exposure while employed at

Boeing permanently aggravated her preexisting symptomatic asthma. On June

17, 2008, the Department determined that Doss was permanently and totally

disabled as of May 14, 2008, as a result of the combined effects of her industrial

exposure and her preexisting condition. The Department awarded her a pension

and also authorized ongoing postpension medical treatment for her asthma.1
      The Department granted second injury fund relief to Boeing but also

authorized ongoing medical treatment for Doss's asthma. On July 27, 2010, the

Department, by letter, directed Boeing to pay the entire cost of this treatment.

Boeing appealed this letter to the Board of Industrial Insurance Appeals (Board),

which affirmed the Department. Boeing next appealed to the superior court.

      The superior court reversed the Board's decision, concluding, "Ms. Doss'

post pension treatment benefits are properly payable from the Second Injury

Fund, and are not the responsibility of Boeing." The Department appeals.

       1 The Department ordered ongoing medical treatment with prescription
medications under former RCW 51.36.010 (2007).
                                        -2-
NO. 69759-5-1 / 3

                           STANDARD OF REVIEW

      When the Board reviews a case on stipulated facts, any remaining issues

present questions of law, which we review de novo.2
                                   ANALYSIS

      This case presents a single issue: should the cost of Doss's postpension

medical care be paid by Boeing or by the Department from the second injury

fund. The Department claims, "[T]he superior court erred because it ordered the

Department to pay for the costs of a self-insured employee's post-pension

medical treatment with funds that are not collected for or devoted to such a

purpose."   Boeing responds, "Both the language of the Second Injury Fund

statute and the Department's own self-promulgated regulations show that

Employers, when Second Injury Fund relief has been granted, are only

responsible for the accident costs that resulted solely from the Claimants'

industrial injury or disease." We agree with Boeing.

       In Washington, every employer must secure the payment of workers'

compensation by either "'[ijnsuring and keeping insured the payment of such

benefits with the state fund'" or by qualifying as a self-insurer under chapter

51.14 RCW.3 If an employer maintains industrial insurance through the state, the

       2 Tobin v. Dep't of Labor & Indus., 145 Wash. App. 607, 613, 187 P.3d 780
(2008) (citing Tunstall v. Berqeson, 141 Wash. 2d 201, 209-10, 5 P.3d 691 (2000)).
       3 Johnson v. Tradewell Stores. Inc.. 95 Wash. 2d 739, 742, 630 P.2d 441
(1981) (quoting RCW 51.14.010).
                                        -3-
NO. 69759-5-1 / 4

Department collects premiums from the employer to support medical aid and

accident funds.4 Injured workers receive medical benefits through the medical

aid fund.5 The accident fund provides benefits to workers who suffer injuries on

the job or to the worker's family or dependents if the worker dies.6 Self-insured

employers pay benefits to injured workers directly.7

      "Compensation for permanent total disability is paid as a monthly pension

(or a lump sum) based on a percentage of the worker's wages."8                 RCW

51.44.070(1) requires,

      For every case resulting in death or permanent total disability the
      department shall transfer on its books from the accident fund of the
      proper class and/or appropriate account to the "reserve fund" a sum
      of money for that case equal to the estimated present cash value of
      the monthly payments provided for it, to be calculated upon the
      basis of an annuity covering the payments in this title provided to
      be made for the case. Such annuity values shall be based upon
      rates of mortality, disability, remarriage, and interest as determined
      by the department, taking into account the experience of the
       reserve fund in such respects.

             Similarly, a self-insurer in these circumstances shall pay into
      the reserve fund a sum of money computed in the same manner,
       and the disbursements therefrom shall be made as in other
       cases.[9]

       4 WR Enters.. Inc. v. Dep't of Labor & Indus.. 147 Wash. 2d 213, 216-17, 53
P.3d 504 (2002).
       5WR Enters.. 147 Wash. 2d at 217 (citing former RCW 51.04.030 (1998)).
       6WR Enters.. 147 Wash. 2d at 216-17 (citing ch. 51.32 RCW).
      7 Johnson. 95 Wash. 2d at 742.
      8 Mclndoe v. Dep't of Labor & Indus.. 144 Wash. 2d 252, 257, 26 P.3d 903
(2001) (citing former RCW 51.32.060 (1993)).
       9 Alternatively, a self-insured employer may file a bond or an assignment
of an account or may purchase an annuity to cover the costs of the required
pension benefits. RCW 51.44.070(2); see also RCW 51.44.140.
                                        -4-
NO. 69759-5-1 / 5

       RCW 51.36.010(4) allows the supervisor of industrial insurance to

authorize medical benefits for a pensioned worker "when such medical and

surgical treatment is deemed necessary by the supervisor of industrial insurance

to protect such worker's life or provide for the administration of medical and

therapeutic measures including payment of prescription medications." Here, the

Department awarded Doss postpension medical treatment for her asthma.

       Washington's workers' compensation system includes a special fund

called the "second injury fund." This "fund encourages employers to hire and

retain previously disabled workers, providing that the employer hiring the

disabled worker will not be liable for a greater disability than what actually results

from a later accident."10     Additionally, "by recognizing that an employer is

required only to bear the costs associated with the industrial injuries sustained by

its employees, the fund encourages workplace safety and prevents placing unfair

financial burdens on employers."11 A rule that makes it easier for an employer to

recover from the second injury fund will support the fund's purpose, while a rule

that makes recovery too difficult will discourage an employer from hiring a

previously disabled worker.12

       10 Crown. Cork & Seal v. Smith. 171 Wash. 2d 866, 873, 259 P.3d 151
(2011).
       11 Crown. Cork & Seal. 171 Wash. 2d at 873 (citing Jussila v. Dep't of Labor
& Indus 59 Wash. 2d 772, 778-79, 370 P.2d 582 (1962)).
       R Puqet Sound Energy. Inc. v. Lee. 149 Wash. App. 866, 880, 205 P.3d 979
(2009) (citing Jussila. 59 Wash. 2d at 779).
                                         -5-
NO. 69759-5-1 / 6

      RCW 51.44.040(1) provides that the second injury fund "shall be used

only for the purpose of defraying charges against it as provided in RCW

51.16.120 [distribution of further accident cost] and 51.32.250 [job modification],

as now or hereafter amended."13 RCW 51.16.120(1) states,

      Whenever a worker has a previous bodily disability from any
      previous injury or disease, whether known or unknown to the
      employer, and shall suffer a further disability from injury or
      occupational disease in employment covered by this title and
      become totally and permanently disabled from the combined effects
      thereof... a self-insured employer shall pay directly into the
      reserve fund only the accident cost which would have resulted
      solely from the further injury or disease, had there been no
      preexisting disability, and which accident cost shall be based upon
      an evaluation of the disability by medical experts. The difference
      between the charge thus assessed to such employer at the time of
      the further injury or disease and the total cost of the pension
      reserve shall be assessed against the second injury fund.

      The Department asks us to follow a Board decision, In re Boudon.14 where

the Board directed Boeing to pay for the claimant's postpension medical

treatment when the Department granted second injury fund relief. The Board

reasoned,

      The provision of medical benefits after a pension award is
      discretionary to the director. It is not an anticipated cost that is built
      into the pension reserve. To pay the cost of the ongoing benefits
      from the pension reserve would deplete the funds placed in the
      reserve to cover the cost of the pension over the life of the worker.
      If the employer were a state fund employer, the Department would
      pay the cost of the ongoing medical benefits from the medical aid
      fund, not the supplemental pension reserve fund. The self-insured

       13 This case does not involve RCW 51.32.250.
       14 Nos. 98 17459 & 99 22359, 2000 WL 245825, at *5 (Wash. Bd. of
Indus. Ins. Appeals Jan. 26, 2000).
                                         -6-
NO. 69759-5-1 / 7

       employer stands in the shoes of the Department with respect to
       payment of medical benefits and must likewise pay the cost of Ms.
       Boudon's ongoing psychiatric care.[151
Boeing notes that it appealed this decision to the superior court, which reversed

the Board and ordered the benefits paid from the second injury fund.16

       We interpret a statute to give effect to the legislature's intent. Accordingly,

we begin our review with the statute's plain language.17 When a statute is

unambiguous, we determine legislative intent from the statutory language

alone.18   Where an agency charged with administering and enforcing an

ambiguous statute has interpreted it, we accord great weight to the agency's

interpretation to determine legislative intent.19 Absent ambiguity, however, we do

not need the agency's expertise to construe the statute.20 Additionally, we will

not defer to an agency determination that conflicts with the statute.21 "The courts

retain the ultimate authority to interpret a statute."22

       15 Boudon. 2000 WL 245825, at *5.
       16 Dep't of Labor & Indus, v. Boeing Co., No. 00-2-05612-5-KNT (King
County Super. Ct., Wash. Dec. 15, 2012).
       17 Tiger Oil Corp. v. Dep't of Labor & Indus.. 88 Wash. App. 925, 930, 946
P.2d 1235 (1997) (citing Lacev Nursing Ctr., Inc. v. Dep't of Revenue. 128 Wash. 2d
40, 53, 905 P.2d 338 (1995)).
       18 Tiger Oil. 88 Wash. App. at 930 (citing Waste Mgmt. of Seattle. Inc. v.
Utils. & Transp. Comm'n, 123 Wash. 2d 621, 629, 869 P.2d 1034 (1994); In re
Eaton, 110 Wash. 2d 892, 898, 757 P.2d 961 (1988)).
       19 Tiger Oil. 88 Wash. App. at 931 (citing City of Pasco v. Pub. Emp't
Relations Comm'n. 119 Wash. 2d 504, 507, 833 P.2d 381 (1992)).
       20 Tiger Oil. 88 Wash. App. at 931 (citing Pasco, 119 Wash. 2d at 507).
       21 Tiger Oil. 88 Wash. App. at 931 (citing Cowiche Canyon Conservancy v.
Boslev. 118 Wash. 2d 801, 815, 828 P.2d 549 (1992)).
       22 Tiger Oil. 88 Wash. App. at 930 (citing Franklin County Sheriff's Office v.
Sellers. 97 Wash. 2d 317, 325-26, 646 P.2d 113 (1982)).
                                           -7-
NO. 69759-5-1 / 8

        The plain language of RCW 51.16.120(1) requires a self-insured employer

to pay "only the accident cost which would have resulted solely from the further

injury or disease, had there been no preexisting disability." The second injury

fund pays "[t]he difference between the charge thus assessed to such employer

at the time of the further injury or disease and the total cost of the pension

reserve."23 Thus, the statute requires Boeing to pay only the costs necessitated

solely by Doss's industrial exposure and no more. The Department makes no

claim that Doss's need for postpension medical care resulted solely from

chemical exposure at Boeing. Thus, Boeing cannot be required to pay for this

care.

        Because the statutory language is unambiguous, we will not defer to the

agency's interpretation in Boudon, which conflicts with the statute.   Requiring

Boeing to pay the cost of Doss's postpension medical treatment would also

conflict with the second injury fund's purpose—to contain the future workers'

compensation costs for employers who hire workers with preexisting disabling

conditions to make those costs comparable to those for workers without

preexisting disabling conditions. A contrary result would provide an economic

disincentive to hiring previously disabled workers.

        23 RCW 51.16.120(1).
                                        -8-
NO. 69759-5-1 / 9

      Boeing also asserts that requiring it to pay Doss's postpension medical

treatment costs would constitute a double assessment on Boeing and a windfall

to the Department.     RCW 51.44.040(3) imposed on self-insured employers

assessments for the second injury fund "pursuant to rules and regulations

promulgated by the director to ensure that self-insurers shall pay to such fund in

the proportion that the payments made from such fund on account of claims

made against self-insurers bears to the total sum of payments from such fund."

WAC 296-15-221 (4)(a) requires each self-insured employer to submit to the

Department

      [c]omplete and accurate quarterly reports summarizing worker
      hours and claim costs paid the previous quarter. . .. This report is
      the basis for determining the administrative, second injury fund,
      supplemental    pension,   asbestosis    and    insolvency     trust
      assessments....

             (ii) Claim costs include, but are not limited to:
             (A) Time loss compensation. Include the amount of time
      loss the worker would have been entitled to if kept on full salary.
             (B) Permanent partial disability (PPD) awards.
             (C) Medical bills.
             (D) Prescriptions.
             (E) Medical appliances.
             (F) Independent medical examinations and/or consultations.
             (G) Loss of earning power.
             (H) Travel expenses for treatment or rehabilitation.
             (I) Vocational rehabilitation expenses.
             (J) Penalties paid to injured workers.
             (K) Interest on board orders.

      The Department bases a self-insured employer's assessments for the

second injury fund upon the employer's total claim costs. Thus, we agree with

                                       -9-
NO. 69759-5-1/10

Boeing that it pays assessments for the second injury fund based, in part, on

treatment costs.     Including treatment costs as part of the total claim costs

considered for the self-insured employer's assessments indicates that the

legislature intended for the Department to pay from the second injury fund the

costs of postpension medical treatment after it grants second injury fund relief.

         All self-insured employers pay for second injury fund claims that involve

individual self-insured employers. This spreads the risk among all of these self-

insured employers. This does not affect assessments imposed on employers

who insure the payment of workers' compensation benefits with the state fund.

         Further, as the    Department notes, when the         Department orders

postpension treatment in a second injury state fund claim, the cost of this

treatment "is spread to all state fund employers and employees." The state fund

employer pays for actual and anticipated costs for permitted claims, including

pensions. The state fund employer's experience rating is based upon these

costs.

         When a state fund employer's injured worker becomes totally disabled

because of the combined effects of a preexisting disabling condition and an

industrially related condition, the state fund employer is entitled to have the

pension paid from the second injury fund without any charges to the employer's

account and without any effect on the employer's experience rating.             The

                                        -10-
NO. 69759-5-1/11

Department's proposed result would impose a greater financial burden on self-

insured employers.      "We do not interpret statutes to reach absurd and

fundamentally unjust results."24     Therefore, because the Department has

presented no authority to support disparate financial treatment of self-insured

employers, we reject its proposed statutory interpretation.

                                  CONCLUSION

       Because the unambiguous language of RCW 51.16.120(1), consistent

with the purpose of the second injury fund, requires the Department, rather than

the self-insured employer, to pay the costs of a disabled employee's ongoing

postpension medical treatment and a self-insured employer should not bear a

financial burden different from a state fund employer, we affirm.

                                                    ,OU&c^/ f /
WE CONCUR:

                                                              >g-v\,.   1

       24 Flaniqan v. Dep't of Labor & Indus., 123 Wash. 2d 418, 426, 869 P.2d 14
(1994).
                                        -11-