Court Opinion

ID: 9545439
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:12:34.08883+00
Date Added: 2024-06-11T15:14:47.856830
License: Public Domain

*741Dolliver, J. —
The question before the court is whether employees who work for self-insured employers and who successfully appeal from the Board of Industrial Insurance Appeals to superior court are entitled to attorney and witness fees. The opinions of Division One and Division Two of the Court of Appeals are in conflict on this issue. Johnson v. Tradewell Stores, Inc., 24 Wn. App. 53, 600 P.2d 583 (1979); Maxwell v. Department of Labor & Indus., 25 Wn. App. 202, 607 P.2d 310 (1980). The cases have been consolidated for review by this court.
Plaintiff Emmett Johnson was injured while in the employ of defendant Tradewell Stores, Inc., a self-insured employer under RCW 51.14.010(2), .020 and .030. The Department of Labor and Industries denied his claim for permanent partial disability. The Board reversed the Department. Nevertheless, Johnson appealed. The Superior Court increased the award and authorized attorney and medical witness fees as well.
Tradewell appealed. The Court of Appeals, Division One, reduced the amount of the award, but sustained the allowance of attorney and medical witness fees to be paid from the Department's administrative fund on the basis of RCW 51.52.130.
Plaintiff Elizabeth Maxwell sustained an industrial injury while employed by respondent St. Regis Paper Company, a self-insured employer. The Department awarded her permanent partial disability and the award was affirmed by the Board. On appeal to the Superior Court, Maxwell received an increased award but was denied attorney and medical witness fees against St. Regis.
Maxwell appealed. The Court of Appeals, Division Two, affirmed the trial court on all issues on the basis of RCW 51.52.130.
The relevant portions of RCW 51.52.130 read as follows:
If, on appeal to the court from the decision and order of the board, said decision and order is reversed or modified and additional relief is granted to a worker ... a reasonable fee for the services of the worker's . . . attor*742ney shall be fixed by the court. ... If the decision and order of the board is reversed or modified and if the accident fund is affected by the litigation then the attorney's fee fixed by the court for services before the court only, and the fees of medical and other witnesses and the costs shall be payable out of the administrative fund of the department.
In Washington, an employer may secure the payment of workers' compensation by "(1) Insuring and keeping insured the payment of such benefits with the state fund; or (2) Qualifying as a self-insurer under this title." RCW 51.14.010. Premiums to the state fund are paid to "accident and medical aid funds". RCW 51.16.035; 51.44.010, .020. Since these funds are the only source of benefits for employees whose employers are covered under the state system, any litigation which increased employee benefits would affect the accident fund. If an employer is self-insured, however, as authorized by RCW 51.14.010(2), .020 and .030, the benefits are paid directly to the employees by the self-insured employers. The accident fund is not affected under these circumstances and is not affected in the cases before us.
Contrary to the assertion of the employers, this case does concern benefits. Although the term "benefit" is nowhere defined in the industrial insurance statutes (RCW Title 51), it is clear the term refers to payment or compensation paid to the injured worker or his beneficiaries. RCW 51.32. It refers to amounts of money received. The contention of the employers that attorney and witness fees are not benefits or compensation under the act misses the point. It is not the attorney and witness fees which are benefits; rather, it is the increased benefits received when those fees do not have to be paid by the worker. For any worker who qualifies to receive attorney and witness fees under RCW 51.52.130, the actual benefits obtained in the appeal will be increased pro tanto by the amount of attorney and witness fees the worker does not have to pay. Using this analysis, it is incontestable that the award of attorney and witness fees *743under the provisions of RCW 51.52.130 does benefit the worker covered by industrial insurance.
Once the real nature of RCW 51.52.130 is correctly stated, it is readily apparent this case revolves around "benefits" or "compensation" of the type contemplated by RCW Title 51. This being so, a liberal construction is not only appropriate but mandatory. RCW 51.12.010. A recent unanimous decision of this court cited by the concurring opinion in Division One in Johnson v. Tradewell Stores, Inc., 24 Wn. App. 53, 58, 600 P.2d 583 (1979), points the way. In Whitehead v. Department of Social & Health Servs., 92 Wn.2d 265, 269, 595 P.2d 926 (1979), in another situation where there appeared to be a hiatus in the legislation, we said:
Statutes should receive a sensible construction, such as will effect the legislative intention, and, if possible, so as to avoid unjust or absurd consequences. State ex rel. Thorp v. Devin, 26 Wn.2d 333, 173 P.2d 994 (1946). A thing which is within the object, purpose and spirit of an enactment is as much within the act as if it were within the letter. In re Estates of Donnelly, 81 Wn.2d 430, 502 P.2d 1163, 60 A.L.R.3d 620 (1972).
We do not believe it reasonably can be claimed that the "object, purpose and spirit" (Whitehead, at 269) of the industrial insurance act is to exclude workers whose only deficiency is the chance that their employers choose to be self-insured.
As we observed 50 years ago when construing the industrial insurance act:
This court is committed to the doctrine that our workmen's compensation act should be liberally construed in favor of its beneficiaries. It is a humane law and founded on sound public policy, and is the result of thoughtful, painstaking and humane considerations, and its beneficent provisions should not be limited or curtailed by a narrow construction.
Hilding v. Department of Labor & Indus., 162 Wash. 168, 175, 298 P. 321 (1931).
The next question to be considered is whether there is *744denial of equal protection under U.S. Const, amend. 14 and Const, art. 1, § 12.
The legislature has wide discretion in designating classifications. But these classifications may not be "manifestly arbitrary, unreasonable, inequitable, and unjust" (State ex rel. O'Brien v. Towne, 64 Wn.2d 581, 583, 392 P.2d 818 (1964)), and reasonable grounds must exist for making a distinction between those within and those without the class. Moran v. State, 88 Wn.2d 867, 568 P.2d 758 (1977). Plaintiffs contend there is no reasonable basis for a classification between those workers whose employers are under the state system and those whose employers are self-insured, and that this classification is unconstitutional. We agree.
Is it reasonable to say that two workers, both of whom are entitled to industrial insurance, may be classified as to the receipt of benefits merely because one works for an employer covered by the state system and the other works for a self-insured employer? We think not.
RCW 51.12.010 declares:
There is a hazard in all employment and it is the purpose of this title to embrace all employments which are within the legislative jurisdiction of the state.
This title shall be liberally construed for the purpose of reducing to a minimum the suffering and economic loss arising from injuries and/or death occurring in the course of employment.
RCW 51.12.020 lists employments which shall not be included within the mandatory coverage of the title. These exclusions make no distinction as to the kind of industrial insurance coverage used by the employer but rather are directed to the nature of the employment of the worker. Thus, it is clear that, while the legislature has chosen to classify workers, it has done so on the rational basis of the nature of the employment and not the arbitrary distinction of whether the employer is a self-insurer or under the state system.
*745The provision for self-insurance which the legislature has granted (RCW 51.14) is to give the employer an option which can be exercised on the basis of economic or other considerations. It is not an option given to the employee. Safeguards are provided for the employee should an employer elect to become self-insured. Provisions are also made to protect the employee in the event of the default of a self-insurer. RCW 51.14.070. The whole thrust of RCW 51.14 is to make certain employees under this system have the same benefits as those covered by the state system. At no place in the statute is there any suggestion that employees who are employed by self-insurers are somehow to receive fewer benefits than those employees whose employers are under the state system. Nowhere in RCW Title 51 is there even a hint that the legislature intended some covered employees to be treated differently than others. The classification before the court and made by the legislature is of employers. It is a manifest injustice of the most egregious nature, and we hold it to be a violation of the equal protection clause of the Fourteenth Amendment and Const, art. 1, § 12 to classify one group of employees so that they receive fewer benefits than similarly situated employees simply because the employer chooses to be self-insured.
In both of the cases before us, the awards to plaintiffs were increased. If their employers had been covered under the state system, the attorney and witness fees would have been paid by the administrative fund. Under our foregoing analysis, the employees of self-insured employers are entitled to the same benefits. Since self-insured employers do in fact pay into the administrative fund (RCW 51.44.150; WAC 296-15-060), the applicable attorney and witness fees for these plaintiffs shall be paid from an administrative fund.
The Court of Appeals, Division One, is affirmed on Johnson.
*746The Court of Appeals, Division Two, is reversed on Maxwell.
Rosellini, Utter, Williams, and Dimmick, JJ., concur.