Court Opinion

ID: 4201760
Source: CourtListenerOpinion
Date Created: 2017-09-07 15:22:00.527933+00
Date Added: 2024-06-11T14:38:26.550800
License: Public Domain

IN CLBRKt OFFICE
                                                  This opinion wasfiled for record
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       CmEFJUSTKE                                       ^
                                                      SUSAN L. CARLSON
                                                   SUPREME COURT CLERK
   IN THE SUPREME COURT OF THE STATE OF WASHINGTON

 BASILIO CORNELIO CARRERA,an
 unmarried individual, by the DEPARTMENT
 OF LABOR & INDISTRIES, as statutory
 assignee,

                                Respondent,

 THOMAS OLMSTEAD and BARBRA E.                          NO. 93799-1
 OLMSTEAD,husband and wife, and the marital
community comprised thereof; LAW OFFICE
OF THOMAS S. OLMSTEAD,a Washington
 sole proprietorship; JOHN DOES and JANE
DOES 1 through 10 inclusive.

                                Defendants,             EN BANC

                and

SUNHEAVEN FARMS,a Washington General
Partnership; SUNHEAVEN FARMS,LLC,a
Washington limited liability company; BRENT
SCHULTHIES FARMS,LLC,a Washington                       Filed          0 7 2017
limited liability company; BRENT
SCHULTHIES and ELAINE SCHULTHIES,
husband and wife, and the marital community
comprised thereof, individually and as general
partner of Sunheaven Farms; and JOHN DOES
and JANE DOES 1 through 10 inclusive.

                                Petitioners.
Carrerav. Olmstead, etal., 93799-1

       STEPHDENS, J.—Basilio Carrera lost his right hand in a workplace accident.

We are asked to determine whether the Department of Labor and Industries(L&I)

may pursue a third party claim for Carrera's injuries against Sunheaven Farms LLC,

the contractor responsible for workplace safety at Carrera's job.

       We affirm the Court of Appeals' holding that L&I may pursue such a claim.

The Court of Appeals correctly concluded that statutes oflimitations do not run against

the sovereign when,as here, the State brings an action in the public interest. Benefit to

a private party in addition to that state interest does not strip a state action of its

sovereign character. Here, L&I's claim stands to benefit the State by reimbursing the

medical aid fund(Fund)and furthering public policy goals; it is therefore exempt from

the statute oflimitations under RCW 4.16.160.
                                          I

      The Court of Appeals also correctly interpreted chapter 51.24 RCW as

authorizing L&I to recover damages beyond what it may retain. RCW 51.24.030(5)

authorizes L&I to recover all damages except loss ofconsortium. Sunheaven's attempt

to restrict recovery to economic damages alone is unsupported by the statutory text.

L&I may seek both economic and noneconomic damages, but any recovery must be

distributed according to the formula provided in RCW 51.24.050(4), which authorizes

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Carrerav. Olmstead, etal., 93799-1

L&I to retain only legal costs and expenditures from the Fund and to distribute the rest

to the injured worker.

                      FACTS AND PROCEDURAL HISTORY

       In the summer of 2009, Brent Hartley Farms hired 19-year-old Carrera as a

seasonal laborer. Carrera'sjob was to assist with sorting and packing harvested onions.

At the start of the season, Carrera and the other new hires received a basic safety

lecture.^ Workplace safety training and compliance was the responsibility ofthird party

contractor Sunheaven, which provided Brent Hartley Farms and other local farms with

centralized administrative and operational support.

       On August 14,2009, Carrera'sjob changed. His supervisor took him to the farm

warehouse, gave him a hand broom, and told him to sweep the floor. He instructed

Carrera to dump the contents ofhis dust pan onto a nearby conveyor belt, which carried

garbage and plant debris out ofthe warehouse and into waiting trucks. In an alleged

violation of state law,the conveyor's side guards had been removed. Carrera received

no additional safety training for his new role, nor was he advised how to work safely in

the proximity ofthe modified conveyor belt. While Carrera was sweeping, crouched

next to the conveyor,the machine caught his hand or sleeve. The conveyor severed his

right hand and wrist from his forearm. Unable to reattach the limb, doctors at the

       ^ The safety meeting was conducted in English, with no employer-provided
translator. Carrera, a native of Mexico,spoke "very little English." Clerk's Papers at 286.

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Carrerav. Olmstead, etal., 93799-1

Harborview Medical Center performed a medical amputation at the forearm level. In

addition to the loss of his dominant hand, Carrera suffers ongoing pain and discomfort

and was diagnosed with posttraumatic stress disorder. On July 11,2014,L&I classified

Carrera as "totally and permanently disabled" and placed him on pension support.

Clerk's Papers at 214.

         After the accident, Carrera retained attorney Thomas Olmstead. Olmstead sued

Brent Hartley Farms, notwithstanding the employer's statutory immunity from

nonintentional tort liability. The superior court dismissed the suit. Olmstead failed to

name Sunheaven as a defendant and also failed to inform L&I ofthe case at the time of

filing. L&I did not learn of Carrera's claim until its dismissal, at which point L&I

identified Sunheaven as a potentially liable third party. L&I then sent notice to Carrera

that it would pursue a third party action if he did not. See Carrera v. Olmstead, 196

Wn. App. 240,244, 383 P.3d 563 (2016); RCW 51.24.050(1). When Carrera did not

respond within 60 days, his claim was statutorily assigned to L&I. See id.', RCW

51.24.070(2). L&I initially brought a malpractice claim against Olmstead in Kitsap

County Superior Court and later amended its complaint to add a third party negligence

claim against Sunheaven. The case before this court relates only to this third party

claim.

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Carrera v. Olmstead, et al, 93799-1

      Sunheaven moved for partial summary judgment. It conceded that L&I could

recover damages when assigned an injured worker's claim under RCW 51.24.050, but

asked the trial court to limit any recovery to the expected cost ofCarrera's L&I benefits

package.^ The trial court granted Sunheaven's motion Mid held that because more than

three years had passed, any tort claim by Carrera was time barred—and thus L&I's

attempt to recover Carrera's noneconomic damages was barred as well. However,the

trial court allowed L&I to seek reimbursement of its benefits liability via recovery of

economic damages capped at the lien amount. L&I appealed.

      The Court of Appeals reversed. Carrera, 196 Wn. App. at 243. That court held

that while L&I may not retain Carrera's noneconomic damages, RCW 51.24.050

authorizes it to "seek[] and recover[] damages greater than the amount it may retain."

Id. at 253. The Court of Appeals rejected the trial court's approach as "effectively

split[ting] the cause of action by limiting the available damages." Id. Reasoning that

allowing L&I to litigate third party actions benefits the public, the Court of Appeals

held that the statute of limitations does not apply to L&I's claims under RCW

51.24.050. Id. at 258. Sunheaven appealed, and this court granted review. Carrera v.

Olmstead, 187 Wn.2d 1017, 390 P.3d 349(2017).

      ^ L&I calculated the lien amount for Carrera's past and future benefit payments to
be $788,418.

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Carrerav. Olmstead, et ah, 93799-1

                                        ANALYSIS

       We granted review to address two questions: (1) whether RCW 4.16.160

exempts third party claims assigned to L&I under RCW 51.24.050 from the relevant

statute of limitations and (2) whether chapter 51.24 RCW authorizes L&I to seek

damages beyond the amount necessary to reimburse the Fund.^ We answer both

questions in the affirmative.

       A.     Overview of Third Party Liability under Washington's Industrial
              Insurance Act

       The Industrial Insurance Act (Act), chapter 51.24 RCW, removes most

workplace injury claims from Washington's common law tort regime. See RCW

51.04.010. The Act is structured around a "grand compromise" between workers and

employers: injured workers are guaranteed certain benefits regardless of fault, while

employers are immunized from workplace negligence actions. BirUid v. Boeing Co.,

ni Wn.2d 853, 859, 904 P.2d 278 (1995); RCW 51.04.010. Contributions from

nonexempt employers are directed into a common Fund,which L&I uses to pay benefits

to injured workers. The result is predictable payments and limited liability for

       ^ For the first time on appeal, Sunheaven advances a resjudicata argument. Because
this argument is belatedly raised, we decline to address it. See, e.g.. Singleton v. Wuljf,428
U.S. 106, 120-21, 96 S. Ct. 2868, 49 L. Ed. 2d 826 (1976) (refusing to address new
argument on appeal); Wilcox v. Basehore, 187 Wn.2d 772, 788-89, 389 P.3d 531 (2017)
(declining to reach issue raised for the first time on appeal).

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Carrerav. Olmstead, etal., 93799-1

employers, while injured workers receive "speedy and sure" (albeit reduced) relief.

Flanigan v. Dep't ofLabor & Indus., 123 Wn.2d 418,422,869 P.2d 14(1994),

      As articulated by the legislature, the purpose of the Act is twofold: to protect

industry and to safeguard the interests of Washington workers. The Act states:

      The common law system goveming the remedy of workers against employers
      for injuries received in employment... proves to be economically unwise and
      unfair.... The remedy ofthe worker has been uncertain, slow and inadequate.
      ... The welfare ofthe state depends upon its industries, and even more upon the
      welfare ofits wage worker. The state ofWashington,therefore,...declares that
      all phases ofthe 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 ofevery other remedy.

RCW 51.04.010 (emphasis added). The Act is intended to ensure the survival of

industry while protecting injured workers. Id. The Act thus benefits both workers and

employers—and by extension,"[t]he welfare ofthe state." Id.

             The ActPreserves Third Party Liabilityfor Workers'Injuries

      While it generally immunizes employers from liability for negligence, the Act

extends no such protection to third parties. Instead, RCW 51.24.030 carves out an

exception to the general abolition of civil suits by authorizing an injured employee or

her beneficiary to sue potentially liable third parties. See RCW 51.24.030(1)("Ifa third

person, not in a worker's same employ, is or may become liable [for]... a worker's

injury...,the injured worker or beneficiary may elect to seek damages from the third

person.").

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Carrerav. Olmstead, et ah, 93799-1

       Third party suits serve dual functions: first, nonemployers who are legally and

factually responsible for a worker's injury can be held accountable and required to share

the burden ofcompensation. Second, a successful third party action is the only way an

injured employee may recover noneconomic damages.                Normally, the benefits

guaranteed by the Act "do not provide full compensation for the damages incurred."

Flanigan, 123 Wn.2d at 423(noting worker's compensation benefits "cannot take into

account noneconomic damages, such as an employee's own pain and suffering"). In

creating a third party cause of action, the legislature signaled that the award injured

workers typically receive—i.e., worker's compensation—is a mandatory floor, not a

ceiling. A worker may "increase his or her compensation beyond the Act's limited

benefits" by suing liable third parties. Id. at 424.

             RCW51.24.050 Allows Assignment ofan Injured Worker's
                          Third Party Claim to L&I

       An injured worker may sue a third party in one oftwo ways: the worker or his

beneficiary may elect to bring the claim himself, or he can assign it to L&I. See

RCW 51.24.030, .050. If the worker chooses to sue, he must inform L&I of the

action. ROW 51.24.030(2).'^ If the worker elects not to proceed, or does nothing,

the claim is assigned to L&I by operation of law. RCW 51.24.050, .070(2). To

        Note that when the worker brings suit, L&l may intervene as a party "to protect its
statutory interest in recovery." RCW 51.24.030(2). The State may also petition a court to
assign the claim to L&I if it is not being diligently prosecuted. See RCW 51.24.070(3).

                                           -8-
Carrerav. Olmstead, etal, 93799-1

prevent unnecessary delays, RCW 51.24.070 allows L&I to set a timeline for the

decision: receipt of a demand letter gives the worker 60 days to exercise his right of

election. RCW 51.24.070(l)-(2). Ifthe worker does not respond, as in this case,the

claim is assigned to L&I. Id. at .070(2).

      Assignment puts L&I in the shoes of the injured worker. See RCW

51.24.050(1)(assigning "the cause of action to the department or self-insurer, which

may prosecute or compromise the action in its discretion in the name of the injured

worker"). As the assignee of the worker's claim, L&I may recover "damages"

against any third party that "is or may become liable" for the worker's injury. RCW

51.24.030(1). L&I's potential recovery is explicitly defined as "includ[ing] all

damages except loss of consortium." Id. at (5).

      If L&I's claim is successful, any recovery is divided between L&I's legal

costs, the injured worker, and reimbursing the Fund. RCW 51.24.050 states:

            (4) Any recovery made by the department or self-insurer shall be
      distributed as follows:
            (a)The department or self-insurer shall be paid the expenses incurred
      in making the recovery including reasonable costs of legal services;
            (b) The injured worker or beneficiary shall be paid twenty-five
      percent ofthe balance ofthe recovery made ...;
            (c)The department and/or self-insurer shall be paid the compensation
      and benefits paid to or on behalf of the injured worker or beneficiary by the
      department and/or self-insurer; and
            (d) The injured worker or beneficiary shall be paid any remaining
      balance.
             (5) Thereafter no payment shall be made to or on behalf of a worker
      or beneficiary by the department and/or self-insurer for such injury until the

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Carrerav. Olmstead, etai, 93799-1

      amount of any further compensation and benefits shall equal any such
      remaining balance.

In sum, the distribution formula first repays L&I for its litigation costs, then

distributes 25 percent of whatever remains to the worker, then reimburses the Fund

for benefit payments L&I has already paid, and finally gives the injured worker any

remaining balance. RCW 51.24.050(4). The statute ensures that the worker will not

recover twice. Regular benefit payments cease for as long as the worker receives

equivalent payouts under RCW 51.24.050(4)(d). See id. at (5). Thus, if the

remaining balance of L&I's recovery is greater than the remaining lien amount,the

worker will receive no further benefits from L&I. Id.

      B.     L&I's Claim Is Not Subject to the Statute ofLimitations Because
             Actions under RCW 51.24.050 Benefit the State

      States, when acting in their sovereign capacity, are generally exempt from

statutes oflimitations. See, e.g.. State v. LGElecs., Inc., 186 Wn.2d 1, 12, 375 P.3d

636 (2016). Sunheaven nevertheless argues that L&Fs third party claim against it

is subject to the statute of limitations. See Pefrs' Suppl. Br. at 11-12. Sunheaven

asserts that when "the state's action is brought for the benefit of a private party, no

sovereign action is implicated." Id. at 17 (citing Herrmann v. Cissna, 82 Wn.2d 1,

5,507 P.2d 144(1973). Sunheaven oversimplifies this court's case law. L&I's third

party action stands to benefit both Carrera and the State; shared benefit is sufficient

to retain the sovereign character of the action. See, e.g., Herrmann, 82 Wn.2d at 6.

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Carrerav. Olmstead, etal, 93799-1

Because L&I's claim benefits the State, it is exempt from the statute of limitations

under RCW 4.16.160.

              Statutes ofLimitations Do Not Run against a Sovereign
                           Actingfor the Public Benefit

      Historically, statutes of limitations have not applied to states absent their

explicit consent. See, e.g., LG Elecs., 186 Wn.2d at 8 n.3 (explaining the common

law doctrine''"'nullum tempus occurrit regi,'"'" or'"no time runs against the King.'"

(quoting Sigmund D. Schutz, Time to Reconsider Nullum Tempus Occurrit

Regi—The Applicability ofStatutes ofLimitations against the State ofMaine in Civil

Actions, 55 Me.L.Rev. 373,374(2003)). In part, this reflects the age-old principle

that the sovereign's rules do not automatically bind the sovereign itself. Ld. at 12.

More pragmatically, exempting states from statutes of limitations reflects the view

that when government executes its duties to protect the public, the concerns

associated with stale claims are outweighed by public policy considerations. See,

e.g., Bellevue Sch. Dist. No. 405 v. Brazier Constr. Co., 103 Wn.2d 111, 114, 691

P.2d 178(1984)("'It was deemed important that, while the sovereign was engrossed

by the cares and duties of his office, the public should not suffer by the negligence

ofhis servants.'"(quoting United States v. Thompson,98 U.S.(8 Otto)486,489-90,

25 L. Ed. 194 (1878))).

                                        -11-
Carrerav. Olmstead, etal, 93799-1

      Washington has conditionally consented to certain statutes of limitations. At

issue in this case is RCW 4.16.160, which states in relevant part:

      The limitations prescribed in this chapter shall apply to actions brought in
      the name or for the benefit of any county or other municipality or
      quasimunicipality of the state, in the same manner as to actions brought by
      private parties: PROVIDED,That... there shall be no limitation to actions
      brought in the name orfor the benefit of the state, and no claim of right
      predicated upon the lapse oftime shall ever be asserted against the state.

(Emphasis added.) Absent an express provision to the contrary, RCW 4.16.160

exempts any action brought for the benefit ofthe State from the statute oflimitations.

Id.; see also Bellevue Sch. Dist. No. 405, 103 Wn.2d at 120.

      An action is for the benefit ofthe State when the State acts in its sovereign—

rather than proprietary—capacity. See, e.g., State v. Vinther, 176 Wash. 391, 393,

29 P.2d 693(1934); Herrmann,82 Wn.2d at 4-5. Ifthe State brings the claim as an

exercise of its governmental authority and "in furtherance of its public policy," the

statute of limitations does not apply. Vinther, 176 Wash, at 393. By contrast,

defendants may assert a statute of limitations defense "when the state is a mere

formal plaintiff in a suit, not for the purpose of asserting any public right or

protecting any public interest, but merely to form a conduit [between private

litigants]." Id. (citing United States v. Beebe, 127 U.S. 338,8 S. Ct. 1083,32 L. Ed.

121 (1888)).

                                         -12-
Carrera v. Olmstead, et al, 93799-1

             State Actions under RCW 51.24.050 Are Exemptfrom the
              Statute ofLimitations Because They Benefit the Public

      It has been settled law for nearly a century that the State acts as a sovereign

when it sues third parties liable for workplace injuries. See id. at 394-95(such claims

are sovereign actions because the underlying "[A]ct, as a whole, is the exercise of a

governmental function in the fullest sense of the word, having its support in the

police power of the state"). Sunheaven argues this case falls into an exception to

that general rule, namely that a state instead acts in a proprietary capacity when it is

merely a "formal plaintiff in a suit litigating purely private interests. See Pet'rs'

Suppl. Br. at 17-18; Vinther, 176 Wash, at 393. Sunheaven relies on Herrmann to

argue that L&I's suit cannot be a sovereign action because Carrera stands to benefit.

See Pet'rs' Suppl. Br. at 17-18. But Herrmann does not support so broad an

assertion.

      In Herrmann, the court held that the statute of limitations does not apply to

claims by the insurance commissioner in his capacity as statutory rehabilitator of a

bankrupt insurance company. 82 Wn.2d at 1; former RCW 48.31.120(2) (1947),

recodified as RCW 48.99.020(2). While rehabilitation would certainly benefit the

private company, the court found that the suit would also benefit the public. See

Herrmann, 82 Wn.2d at 5 ("It cannot be denied that the proceeds . . . , if any, will

inure to the benefit of the company . ... But obviously the commissioner is not

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Carrerav. Olmstead, et ah, 93799-1

authorized to take over the rehabilitation of insurance companies solely for the

benefit of such companies."). Under Herrmann, shared benefit between a private

entity and the State is sufficient to retain the sovereign character ofthe State's action.

Id. Sunheaven would be correct to argue that a state action brought only for private

benefit would not be a sovereign act. See, e.g., Vinther, 176 Wash,at 393. However,

Sunheaven's actual assertion—^that L&Fs claim cannot be a sovereign action

because Carrera also stands to benefit—^is unsupported by Washington law. See

Vinther, 176 Wash,at 394-95;Herrmann,82 Wn.2d at 5; Wash. State Major League

Baseball Stadium Pub. Facilities Dist. v. Huber, Hunt& Nichols-Kiewit Constr. Co.,

165 Wn.2d 679, 687, 202 P.3d 924 (2009)("In determining whether an action is

sovereign or proprietary,...[t]he distribution of benefits is irrelevant.").^

       The State does not act as a "conduit" for private litigants merely because it

brings a claim on behalf of a private party. Vinther, 176 Wash, at 393. Instead, we

       ^ Sunheaven argues that LM's action is "entirely derivative" of Carrera's claim.
Pet'rs' Suppl. Br. at 7. In the property law context, this Court has applied the statute of
limitations to purely derivative state actions. See Pacific Nw. Bell Tel. Co. v. Dep't of
Revenue, 78 Wn.2d 961, 964,481 P.2d 556 (1971). However,the claim in this case arises
from L&I's statutory authority to pursue third party actions on behalf ofinjured workers—
it is not purely derivative. See RCW 51.24.050; Herrmann, 82 Wn.2d at 7-8 ("The fact
that the state may be exercising a right derived by assignment... is not determinative....
[It] arises out of statute ...[and] is not a purely derivative action."). Assigned third party
claims are governed by Vinther, which remains good law. See Herrmann, 82 Wn.2d at 9-
10(finding no conflict between Vinther and Pacific Northwest Bell Telephone Co. because
the latter case pertains only to escheat actions).

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Carrerav. Olmstead, etal, 93799-1

must look to the ''"'character or nature'^ of the action. Wash. State Major League

Baseball Stadium Pub. Facilities Dist., 165 Wn.2d at 686. If the action's purpose,

at least in part, is to benefit the State or protect the public, we must conclude that the

State acts in its sovereign capacity. See, e.g., Herrmann, 82 Wn.2d at 5; RCW

4.16.160. In this case, L&I's action in litigating third party negligence claims under

the Act benefits the State directly by replenishing the Fund, and benefits the public

more generally by helping injured workers maximize their recovery.

      The RCW 51.24.050(4)distribution formula provides clear evidence that third

party actions by L&I benefit the State. In addition to providing for L&Fs legal costs,

see RCW 51.24.050(4)(a), third party recovery allows L&I to reimburse the Fund

for its benefit payments to the worker and reduce or eliminate its future benefits

liability. See id. at (4)(d),(5). Given that the Act immunizes employers from most

civil suits, see RCW 51.24.010, it is L&I that typically bears the cost of providing

support to injured workers statewide. In short, each dollar recovered from liable

third parties keeps a dollar in the Fund, and increasing the solvency of the Fund

represents a clear benefit to the State. Indeed, without the distribution formula

authorizing L&I to recover from negligent third parties, L&I would be unable to

reimburse the Fund for benefits paid even if a successful claim cut off its

responsibility for future payments. See RCW 51.24.050(4),.060(1).

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Carrerav. Olmstead, etal., 93799-1

      Third party claims by L&I also benefit the working public. Holding third

parties responsible for workplace negligence furthers a core public policy goal

underlying the Act, namely improving on the "economically unwise and unfair"

common law system previously available to injured workers. RCW 51.04.010;

Vinther, 176 Wash, at 393 (an action "in furtherance of[the State's] public policy"

is sovereign in character). The deterrent effect of workplace safety enforcement also

stands to benefit Washington workers by encouraging better compliance with safety

regulations. See, e.g., Herrmann, 82 Wn.2d at 7 ("[T]he deterrent effect of such

proceedings ... is a factor tending to benefit the public in general."). Ultimately,

measures that protect Washington workers also serve the interests ofthe State. See

RCW 51.04.010("The welfare ofthe state depends upon ...the welfare of its wage

worker[s].").

      In sum, L&Fs RCW 51.24.050 claim against Sunheaven is for the shared

benefit of Carrera and the State. The State benefits from reimbursing the Fund,

enforcing workplace safety laws, and deterring future negligence. Because the

public stands to gain some benefit from L&I's third party action, the action is "for

the benefit... of the state" under RCW 4.16.160, regardless of personal benefit to

Carrera. We hold that Sunheaven may not assert the statute of limitations as an

affirmative defense to L&I's third party action.

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Carrerav. Olmstead, etal, 93799-1

      C.     RCW 51.24.050 Authorizes L&I To Seek Both Economic and
             Noneconomic Damages in a Third Party Action

      Having established that L&Ts action is exempt from the statute of limitations,

we must determine what damages the Act allows L&I to recover from third parties.

Sunheaven argues that RCW 51.24.050 authorizes L&I to seek only economic

damages, which should be capped at an amount equivalent to L&Fs total lien. See

Pet'rs' Suppl. Br. at 20-23. The Court of Appeals rejected this argument and held that

the Act authorizes L&I to recover both economic and noneconomic damages. See

Carrera, 196 Wn. App. at 253("[0]n the plain meaning ofRCW 51.24.050 ...L&I is

not barred from seeking and recovering damages greater than the amount it may

retain."). We agree. Under RCW 51.24.050, L&I may seek recovery of all damages,

both economic and noneconomic.

      Sunheaven's argumentthat recovery is limited to economic damages alone relies

on inapposite cases and incorrectly interprets RCW 51.24.050. Sunheaven cites

Flanigan, 123 Wn,2d 418,and Tobin v. Department ofLabor & Industries, 169 Wn.2d

396,239 P.3d 544(2010),for the proposition that RCW 51.24.050 does not authorize

L&Ito recover noneconomic damages. These cases are unhelpful. Both involve claims

brought directly by injured workers under RCW 51.24.060. See Flanigan, 123 Wn.2d

418; Tobin, 169 Wn.2d 396. By contrast, this case is solely concerned with assigned

claims under RCW 51.24.050. In other words, Flanigan and Tobin address what

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Carrerav. Olmstead, et al, 93799-1

portion of a worker's initial recovery L&I can claim for itself; neither case addresses

what damages the State may seek when L&I itselfis the litigating entity.^

       Furthermore,neither case ojffers guidance as to what damages L&I can seek from

a third party, hi Flanigan, the court held that L&I could not reimburse itself from a

surviving spouse's loss of consortium award. 123 Wn.2d at 426. Loss of consortium

is not at issue here because consortium damages are explicitly not recoverable in actions

under chapter 51.24 RCW.           See RCW 51.24.030(5) (defining "recovery" as

"includ[ing] all damages except loss ofconsortium"). In Tobin,the court held that L&I

could not reimburse itselffrom the noneconomic damages awarded to an injured worker

for his pain and suffering. 169 Wn.2d at 398. Again, this addresses what portion of a

worker's recovery under RCW 51.24.060 L&I can keep—^not what type of damages

L&I is itself authorized to      under RCW 51.24.050.

       Sunheaven's failure to distinguish between what L&I can recover versus what it

can retain is particularly problematic in light ofthe clear distinction drawn in the statute.

The worker, his or her beneficiary, or L&I may bring a claim to recover "damages"

      ^ There is language in the Court of Appeals' opinion suggesting that the "general
reasoning" of Flanigan and Tobin applies to this case so that L&I "may not retain
noneconomic damages in assigned third party actions." Carrera, 196 Wn. App. at 250-51.
We do not endorse this view because the sole question before this court concerns what
damages L&I may seek. Our holding that L&I may bring a claim for both economic and
noneconomic damages is based on the plain language of RCW 51.24.050, which governs
the distribution of any L&I recovery in an assigned third party action.

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Carrerav. Olmstead, et al, 93799-1

jfrom liable third parties. RCW 51.24.030(1),.050. This claim correlates to the single

cause of action created by RCW 51.24.030, which defines "recovery" broadly:

"'recovery' includes all damages except loss of consortium." RCW 51.24.030(5).

There is no alternative definition of"recovery" in RCW 51.24.050,.nor is there any

indication in the text that the act of assignment constrains the single cause of action.'^

The statutory language is unambiguous: L&I may recover all damages except loss of

consortium. See RCW 51.24.030(5);Jametsky v. Olsen, 179 Wn.2d 756,762,317 P.3d

1003 (2014)(courts must give effect to a statute's plain meaning when the text is

unambiguous).

      The statute makes it equally clear that L&I is not authorized to retain all that it

may recover. After subtracting L&I's legal costs, any recovery is further reduced by

first distributing 25 percent of the remaining funds to the worker. See RCW

51.24.050(4)(a)-(b). Only after this distribution can L&I reimburse the Fund. See id.

at (4)(c). As the Court of Appeals points out, the statutory structure confirms that

capping L&I's recovery atthe amount ofits benefits liability would be illogical. Merely

to break even, L&I's recovery must exceed its withdrawals from the Fund by the cost

oflitigation plus an additional 25 percent. See Carrera, 196 Wn. App. at 252.

      ^ The relevant statutory phrasing in this section refers to L&I's awarded damages in
the singular ("the recovery"), thus reinforcing the interpretation that RCW 51.24.050
contemplates distribution of a single recovery. RCW51.24.050(4)(a)-(b) (emphasis
added).

                                          -19-
Carrerav. Olmstead, etal., 93799-1

       Simply put, RCW 51.24.050(4) divides L&I's recovery into two categories of

recovery it can keep(legal fees and benefits paid)and two categories it cannot keep(25

percent ofthe initial award and any "remaining balance"). IfL&I were not authorized

to recover fimds it cannot keep,there would be no reason for the legislature to instruct

L&I how to dispose ofthat recovery. Furthermore,the legislature explicitly authorized

L&I to reimburse the Fund when either the worker or the State recovers damages from

a third party. See, e.g., RCW 51.24.060(1),.050(4). By capping L&Fs recovery at the

lien amount (i.e., the exact amount required to fully replenish the Fund) before costs

and the worker's 25 percent are deducted, Sunheaven's interpretation would guarantee

that the Fund would never be fully reimbursed.^ This interpretation is unsupported by

the statute and contrary to legislative intent—^we decline to adopt it.

       We hold that RCW 51.24.030 and .050 authorize L&I to rec6ver both economic

and noneconomic damages. L&I may seek all damages contemplated by RCW

51.24.050, but may retain only its legal costs and economic damages equal to benefits

paid to Camera.

       ^ As L&I notes, Sunheaven's interpretation would also guarantee that there is never
a "remaining balance" to distribute under RCW 51.24.050(4)(d), rendering that step in the
distribution formula superfluous. Suppl. Br. ofDep't of Labor & Indus, at 15.

                                           -20-
Carrerav. Olmstead, etal., 93799-1

                                    CONCLUSION

      L&I's third party claim against Simheaven stands to replenish the Fund and

further the State's public policy goals. The action is therefore "for the benefit...ofthe

state" under ROW 4.16.160 and is exempt from the statute oflimitations. In bringing

such an action, L&I may seek to recover both economic and noneconomic damages,to

be distributed as required by ROW 51.24.050(4). We affirm the Court ofAppeals.

                                          -21-
Carrerav. Olmstead, etal., 93799-1

WE CONCUR:

         hMA%i V C(

                      7

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