The Boeing Company v. Dli ( 2014 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
THE BOEING COMPANY, NO. 69759-5-1
Respondent, DIVISION ONE
PUBLISHED OPINION
PATRICIA DOSS,
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Respondent, FILED: March 31, 2014 rn ~*
STATE OF WASHINGTON, CO
DEPARTMENT OF LABOR &
INDUSTRIES,
Up <:i^
Appellant. en ••- -c -
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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).
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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).
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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.
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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).
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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).
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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)).
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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).
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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
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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
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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:
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24 Flaniqan v. Dep't of Labor & Indus., 123 Wash. 2d 418, 426, 869 P.2d 14
(1994).
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