Court Opinion

ID: 4711587
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:37:04.373061+00
Date Added: 2024-06-11T08:07:09.502921
License: Public Domain

Johnson, J.
(dissenting) — The majority concludes the Department of Labor and Industries’ (Department) letter and brochure provides sufficient notice to constitute a “demand” as required under RCW 51.24.070. I disagree and would affirm the decision and reasoning of the Court of Appeals. By defining a legal demand “broadly and flexibly,” the majority ignores the purpose of the statute, misapplies the cases cited in support of its holding, and provides no objective criteria by which it thinks the sufficiency of a demand should be tested. At the minimum, a demand letter should provide unequivocal notice that legal rights are at stake and legal consequences will follow from inaction. The Department’s letter to Mr. Duskin fails to do either.
I agree with the Court of Appeals’ reasoning that a proper demand letter should include mandatory language, a conspicuous discussion of what will happen if the injured worker does not respond, a citation to the statute conferring authority to demand an election, and instructions specifically telling the recipient how to respond. Duskin v. Carlson, 83 Wn. App. 694, 699, 922 P.2d 1373 (1996) (citing RCW 51.24.080). Meeting these requirements is not difficult. I also agree with the Court of Appeals’ conclusion *562that the Department’s letter does not “demand” Mr. Duskin to elect.
Under RCW 51.24.050(1), an injured worker’s election not to proceed with a third-party action operates as an assignment of the cause of action to the Department. However, the Department has no authority to require the injured worker to exercise the right of election until the Department serves “written demand” upon the worker. RCW 51.24.070(1). Furthermore, in all cases, the Department’s interest in the outcome of litigation is limited to reimbursement of benefits paid. RCW 51.24.050(4)(c), (d); .060(l)(c); .090.
The clear purpose of the statute is to preserve the industrial insurance fund to the limited extent of reimbursement, while recognizing and safeguarding the worker’s significant interest in an independent, legal remedy. Within this context, the word “demand” is not loosely intended and must be given meaningful effect.1 The majority’s holding essentially reads the demand requirement out of the statute and, thus, ignores the worker’s interest.
Here, the permissively worded letter, although giving a time deadline, does not warn of the consequences following a failure to answer. It does not cite statutory authority, and it does not tell the recipient that the statute requires any response be served personally or by certified mail.
Importantly, we are examining the forfeiture of a significant right—control over a personal injury lawsuit. Mr. Duskin does not challenge the Department’s statutory authority to assignment of the claim but merely argues the Department must provide legal notice in clear and specific terms. The language of the Department’s letter—“If the form is not returned within [the time limit], we will *563consider seeking recovery”2—hardly notifies an injured worker he or she may forfeit the right to seek recovery for an injury.
The majority cites several cases3 dealing with the requirements of a demand letter, but fails to correctly apply the case law. Contrary to the majority’s reading, these cases recognize the fundamental notice-providing function of a demand where legal rights are at stake.
In Gil Enterprises, for example, the court specifically distinguished between a demand and a mere request which carries no legal consequences:
By its nature, a demand is intended to trigger certain rights and obligations. ... In order to prompt such rights and obligations, it is necessary that the party upon whom the demand is being made be put on notice that those legal obligations have been triggered. Without notice, the demand would serve no purpose because it would fail to provide . . . the opportunity to [comply]. Accordingly, the gravamen of a legal demand is its notice providing function.
Gil Enters., Inc. v. Delvy, 79 F.3d 241, 246 (2d Cir. 1996) (emphasis added). The Gil Enterprises court found the subject letter insufficient to constitute a demand because it contained “precatory language” and “ambiguous statements” which “did not rise to the level of a demand, because they objectively failed to put [defendant] on notice of the drastic legal repercussions that could result from noncompliance.” Gil Enters., 79 F.3d at 246 (emphasis added). This is exactly the situation we have here. The majority recognizes Gil Enters, but fails to apply its holding.
In Gershman, the court found that a loosely worded letter requesting action on the part of the defendant fell “far short of measuring up to the requirements of what constitutes a legal demand” because it did not “in any way *564indicate that the request [was] made under a claim of right” nor request compliance in accordance with the claimed right. Gershman v. Barted Realty Co., 22 Misc.2d 461, 462, 198 N.Y.S.2d 664 (1960) (emphasis added).
Similarly, in Freitag, a tax evasion case, the court found the subject tax assessment notice constituted a demand only after reasoning “it seems inconceivable that a wealthy taxpayer accustomed to paying taxes could misunderstand or misconstrue the letter or think that she could ignore it.” Freitag v. Huiskamp, 166 N.W.2d 915, 917 (Iowa 1969). The court clearly believed the taxpayer had engaged in intentional misconduct and found any other result would have been “flagrantly unjust.” Nevertheless, the court reiterated “ ‘the word “demand” is defined as meaning the assertion of a legal right, ... a peremptory claim to a thing of right; ... a request addressed to a person that he will do some act which he is legally bound to do, after the request has been made ....’” Freitag, 166 N.W.2d at 919 (emphasis added) (quoting 26A C.J.S. Performance or Breach of Conditions (Demand) § 213 at 169 (1956) (footnotes omitted)).
Dictionary definitions also “make clear that a demand requires an imperative solicitation for that which is legally owed . . . .” Gil Enters., 79 F.3d at 246 (emphasis added). See, e.g., Black’s Law Dictionary 429 (6th ed. 1990) (A demand is “[a]n imperative request preferred by one person to another, under a claim of right, requiring the latter to do or yield something or to abstain from some act.” (emphasis added)).
The majority cites to all of the cases above, yet its analysis is more concerned with the tone of the Department’s letter than with its content. While I take no issue with the Department’s letter being “polite and courteous” rather than “blunt or threatening,” see majority at 560 (citing Freitag, 166 N.W.2d at 917), a polite tone does not relieve the Department of providing adequate legal notice to workers that inaction will result in the loss of significant, personal rights.
The majority’s analysis combines the language of the let*565ter and the language of the brochure and forms sent with the letter. However, our analysis should be limited to the language of the letter alone. The Department does not give clear and unequivocal notice, much less make a “demand,” by a patchwork quilt of language parsed from a collection of brochures and forms. Accordingly, the language contained in the form is not relevant. Further, while the form might be helpful, the record contains two election forms: one that did not cite any statutory authority and the other that cited authority only at the form’s bottom right hand corner. Duskin, 83 Wn. App. at 700. Significantly, neither election form warns the worker that failing to respond results in forfeiture of the legal right to pursue an independent action.
I agree with the Court of Appeals’ analysis of the facts. The letter received by Mr. Duskin merely stated: “you may ask Labor and Industries to consider seeking recovery for you.” Clerk’s Papers at 106. Nowhere on the election form is there language advising of the serious legal consequences of failure to respond. The only warning given of the potential legal consequences is contained halfway through a general question and answer brochure which, by its own terms, does not apply to “specific cases.” See Clerk’s Papers at 30, 82-83.
The Court of Appeals found the letter, brochure, and election forms insufficient to constitute a legal demand because they did not contain (1) mandatory language; (2) a conspicuous discussion of what will happen if the recipient does not answer; (3) any citation to the statute conferring authority to demand an election; and (4) a description telling the recipient how to answer consistent with the statute. Duskin, 83 Wn. App. at 699. The majority ignores these factors without establishing any objective means by which the sufficiency of a demand may be tested, merely deciding this particular letter and brochure suffice.
I would hold a proper legal demand requires at least an unequivocal statement requesting the action to be taken, made under a claim of right (in this case, citation to the *566statute conferring authority to demand election), and a clear and conspicuous warning of the legal ramifications of either action or inaction. These, at the minimum, ensure a legal demand’s fundamental notice providing function is met. The Department could easily include these basic elements in its legal communications, particularly when such communications start a limitations period running against the recipient.
The majority shows impatience with Mr. Duskin’s argument on this issue, reasoning that he did not actually read the letter which he now claims was insufficient. That Mr. Duskin did not actually read the letter is irrelevant to whether the Department has met the statutory “demand” requirement. An inadequate letter does not suddenly become adequate because it is unread.4 Thus, contrary to the majority’s conclusion, Mr. Duskin’s claimed prejudice is not “purely hypothetical.” See majority at 558. Under RCW 51.24.070, Mr. Duskin’s right to sue is automatically assigned to the Department only after proper “demand” has been made upon him. If the Department’s letter fails the statute’s demand requirement, then the clock never begins to run. Thus, the Department’s appropriation of Mr. Dusk-in’s legal right is without statutory authority. Accordingly, Mr. Duskin’s claimed prejudice is very real; if the Department never obtained the authority to act, its action was unlawful whether or not Mr. Duskin had prior knowledge.5
I would find the Department’s letter and brochure insuf*567ficient to constitute a legal demand. I would require objective factors to test whether a communication meets the basic notice giving function of a demand, including: (1) an unequivocal statement requesting the specific action to be taken; (2) reference to the authority under which the request is made; and (3) a clear and conspicuous warning of the legal consequences. For these reasons, I dissent.
Sanders, J., concurs with Johnson, J.

The original legislation, Senate Bill 2154, permitted the Department to require election upon “written notice.” The final bill, as passed, was changed to require “written demand.” See Washington State Legislative Digest and History of Bills of the Senate and House of Representatives 60, 45th Leg. 1st Ex. Sess. (final ed. 1977). Presumably, the Legislature had a specific intention in making this revision.

Clerk’s Papers at 106.

See Gershman v. Barted Realty Corp., 22 Misc.2d 461, 461-62, 198 N.Y.S.2d 664 (1960); Freitag v. Huiskamp, 166 N.W.2d 915 (Iowa 1969); Gil Enters, v. Delvy, 79 F.3d 241 (2d Cir. 1996).

Under the majority’s reasoning, would a blank letterhead constitute a “demand” simply because Duskin failed to read it?

The majority’s reliance on State v. Storhoff, 133 Wn.2d 523, 946 P.2d 783 (1997), is misplaced. Unlike Storhoff, this case is not about postdeprivation notice, but whether the Department acted lawfully in the first instance. Storhoff involved a challenge to a postdeprivation notice and opportunity for hearing. The defendants had already lost their licenses by operation of law. Thus, the State’s initial action—revocation of the licenses—was taken with legal authority. The question was whether the State’s subsequent notice of revocation complied with due process. Conversely, in this case, proper demand is a prerequisite to the Department’s authority to act. Without proper demand, the Department may not simply appropriate the legal rights of others. If the Department never achieved the authority to act, its action was unlawful whether or not Mr. Duskin had prior knowledge.