Leonard G. Ellerbroek v. CHS Inc. ( 2020 )

FILED
MAY 14, 2020
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
LEONARD G. ELLERBROEK, )
) No. 36563-8-III
Respondent, )
)
v. )
)
CHS INC, ) OPINION PUBLISHED IN PART
)
Appellant. )
KORSMO, J. — An employer challenges the statutory penalty imposed after it was
required to make payments while its motion to stay the payment obligation was pending.
We affirm.
PROCEDURAL HISTORY
Respondent Leonard Ellerbroek injured his left hand while working as a propane
delivery driver for appellant CHS, Inc., on March 27, 2013. The Department of Labor
and Industries (DLI) allowed his claim for workers’ compensation benefits.
Ellerbroek underwent surgery on his left thumb February 3, 2014. He returned to
work and performed office tasks, but had difficulty doing the job and took time off. CHS
later offered him a laborer position, which he declined. CHS terminated Ellerbroek’s
worker’s compensation benefit on October 8, 2014, and terminated his employment
November 3, 2014.
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DLI, by orders entered February 2 and 24, 2015, directed CHS to pay Ellerbroek
benefits from October 9, 2014. CHS appealed the February 24 order to the DLI Board on
March 5, 2015. CHS also asked the Board to stay its obligation to pay benefits. On
March 12, counsel for CHS left a message with counsel for Ellerbroek advising him that
CHS would make the payments if the stay was denied and asking if there were any
objections to that approach. Ellerbroek’s attorney did not respond.
Instead, Ellerbroek requested on March 23 that DLI assess a penalty against CHS
for failing to pay benefits as ordered. On April 8, DLI held its February 24 order in
abeyance. On April 21, DLI held that CHS unreasonably withheld benefits and ordered a
penalty payment to Ellerbroek of $2,955.56. DLI affirmed its February 24 order on May
6; CHS paid Ellerbroek the time loss award on May 15. Three days later, DLI affirmed
its April 21 order. CHS appealed that ruling to the Board.
The industrial appeals judge entered a proposed decision and order finding that
CHS did not unreasonably delay paying Ellerbroek time loss benefits from October 2014
to February 2015, and reversed the May 6 and May 18 orders. The Board adopted the
proposed decision and order.
DLI and Ellerbroek appealed to the superior court. The court reversed the Board
and reinstated the penalty against CHS. The court also awarded Ellerbroek $22,596 in
attorney fees.
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CHS timely appealed to this court. A panel considered the appeal without
conducting argument.
ANALYSIS
This appeal challenges the imposition of the penalty and the amount of attorney
fees awarded to Ellerbroek; the time loss benefits are not at issue. We address the two
claims in that order.
Penalty
CHS and DLI offer competing readings of the statute each agrees governs this
case, RCW 51.52.050(2). CHS contends that it was entitled to withhold payment due to a
reasonable and genuine doubt regarding the payment obligation, while DLI argues the
genuine doubt standard no longer applies. CHS also argues that Ellerbroek should have
been equitably estopped from seeking the penalty since he did not object to the plan
proposed by CHS’s counsel.
Appellate courts review workers’ compensation appeals in accordance with
ordinary standards governing civil cases. RCW 51.52.140; Rogers v. Dep’t of Labor &
Indus., 151 Wn. App. 174, 180-81, 210 P.3d 355 (2009). Unlike other administrative
appeals, this court reviews the decision of the superior court rather than that of the Board.
Rogers, 151 Wn. App. at 180. This court reviews findings of fact for substantial
evidence and conclusions of law de novo. Id.
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The construction of a statute is a question of law reviewed de novo. Dep’t of
Labor & Indus. v. Granger, 159 Wn.2d 752, 757, 153 P.3d 839 (2007); Stuckey v. Dep’t
of Labor & Indus., 129 Wn.2d 289, 295, 916 P.2d 399 (1996). The court’s fundamental
objective in interpreting a statute is to ascertain and carry out the legislature’s intent.
Arborwood Idaho, LLC v. City of Kennewick, 151 Wn.2d 359, 367, 89 P.3d 217 (2004).
If the statute’s meaning is plain on its face, the court must give effect to that plain
meaning as an expression of legislative intent. Dep’t of Ecology v. Campbell & Gwinn,
LLC, 146 Wn.2d 1, 9-10, 43 P.3d 4 (2002). Only if a statute remains ambiguous after a
plain meaning analysis may the court resort to external sources or interpretive aids, such
as canons of construction, case law, or legislative history. Jongeward v. BNSF Ry. Co.,
174 Wn.2d 586, 600, 278 P.3d 157 (2012); State ex rel. Citizens Against Tolls v. Murphy,
151 Wn.2d 226, 242-43, 88 P.3d 375 (2004).
The Industrial Insurance Act, Title 51 RCW, must 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 51.12.010. Accordingly,
“where reasonable minds can differ over what Title 51 RCW provisions mean, in keeping
with the legislation’s fundamental purpose, the benefit of the doubt belongs to the injured
worker.” Cockle v. Dep’t of Labor & Indus., 142 Wn.2d 801, 811, 16 P.3d 583 (2001).
However, “a statutory directive to give a statute a liberal construction does not require us
to do so if doing so would result in a strained or unrealistic interpretation of the statutory
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language.” Senate Republican Campaign Comm’n v. Pub. Disclosure Comm’n, 133
Wn.2d 229, 243, 943 P.2d 1358 (1997).
The statute in question, with underscored emphasis of provisions particularly
relevant to this appeal, provides in part:
An order by the department awarding benefits shall become effective and
benefits due on the date issued. Subject to (b)(i) and (ii) of this subsection,
if the department order is appealed the order shall not be stayed pending a
final decision on the merits unless ordered by the board. Upon issuance of
the order granting the appeal, the board will provide the worker with notice
concerning the potential of an overpayment of benefits paid pending the
outcome of the appeal and the requirements for interest on unpaid benefits
pursuant to RCW 51.52.135. A worker may request that benefits cease
pending appeal at any time following the employer’s motion for stay or the
board’s order granting appeal. The request must be submitted in writing to
the employer, the board, and the department. Any employer may move for
a stay of the order on appeal, in whole or in part. The motion must be filed
within fifteen days of the order granting appeal. The board shall conduct an
expedited review of the claim file provided by the department as it existed
on the date of the department order. The board shall issue a final decision
within twenty-five days of the filing of the motion for stay or the order
granting appeal, whichever is later. The board’s final decision may be
appealed to superior court in accordance with RCW 51.52.110. The board
shall grant a motion to stay if the moving party demonstrates that it is more
likely than not to prevail on the facts as they existed at the time of the order
on appeal. The board shall not consider the likelihood of recoupment of
benefits as a basis to grant or deny a motion to stay.
RCW 51.52.050(2)(b) (emphasis added). Subsection (2)(b) was added to the statute by
Laws of 2008, ch. 280, § 1. It has not been amended since its adoption.
The opening sentence of the paragraph is exceptionally clear—the benefits
become due on the date the award is issued. The statute then provides for rapid review of
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the award on the merits, as well as prompt consideration of a request to stay the award.
However, the statute carefully circumscribes any stay of the award: (1) no stay shall issue
unless ordered by the Board, (2) the merits decision will be expedited, (3) the Board may
only grant a stay upon a showing of likelihood of prevailing, and (4) likelihood of
recoupment is irrelevant to the stay decision. This entire approach is consistent with the
expectation that the award will be paid and that a stay of payment will be provided only
in limited circumstances. There is no ambiguity in the statute. CHS needed to pay
Ellerbroek immediately without regard to its intention to seek a stay. Masco Corp. v.
Suarez, 7 Wn. App. 2d 342, 350, 433 P.3d 824, review denied, 193 Wn.2d 1015 (2019).
The failure to make the payment authorized the imposition of a penalty. RCW
51.48.017 provides that when “a self-insurer unreasonably delays or refuses to pay
benefits as they become due there shall be paid” a penalty equal to $500 or 25 percent of
the amount owed the employee. The director must determine whether there was an
unreasonable delay or refusal to pay. RCW 51.48.017.
Division Two of this court interpreted the “unreasonably delays” language to
mean that the employer had to have a “genuine doubt from a legal or medical standpoint
as to who was liable for benefits.” Taylor v. Nalley’s Fine Foods, 119 Wn. App. 919,
926, 83 P.3d 1018 (2014). In turn, Masco recognized that Taylor was issued before the
legislature adopted RCW 51.52.050(2)(b) to require immediate payment of benefits.
7 Wn. App. 2d at 351-52. While determining that the delay at issue was unreasonable,
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the Masco court nonetheless declined to overrule the Taylor test despite the legislative
change rendering liability a nonissue in these circumstances, believing that the test might
still be informative in some instances. Id. at 352, n.6.
DLI agrees with Masco that the “genuine doubt” test might still be useful where
there has been no Board order, but asks us to “clarify” that the Taylor1 standard is no
longer applicable once an order determining benefits has issued. We agree with DLI that
the Taylor “genuine doubt” standard is inapplicable after the Board has issued an award
of benefits. At that point there is no doubt about the obligation to make the payment.
The Board is still entitled under RCW 51.52.050(2)(b) to stay an award if it believes the
employer is likely to prevail. However, the genuine doubt test is not part of that statute
and has no application once an order determining benefits has issued.
Whether there may be other instances in which the “genuine doubt” test remains
vital is a question we leave to another day. We simply conclude that a self-insured
employer who delays payment while pursuing a stay of its obligation “unreasonably
delays” payment for purposes of the penalty provision, RCW 51.48.017.
1
Taylor adopted the genuine doubt test from a standard used by DLI in an
authoritative opinion, In re Madrid, No. 860224-A, 1987 WL 61383 (Wash. Bd. of Indus.
Ins. Appeals Sept. 4, 1987). We reference the appellate cases instead of the DLI
authority.
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CHS also argues that Ellerbroek should be equitably estopped from pursuing the
penalty because he did not object to the plan to await the stay ruling before issuing
payment. He was under no obligation to waive his statutory right to payment.
The elements of equitable estoppel are: (1) a party’s admission, statement
or act inconsistent with its later claim; (2) action by another party in
reliance on the first party’s act, statement or admission; and (3) injury that
would result to the relying party from allowing the first party to contradict
or repudiate the prior act, statement or admission.
Kramarevcky v. Dep’t of Soc. & Health Servs., 122 Wn.2d 738, 743, 863 P.2d 535 (1993).
“In addition to satisfying each of these elements, the party asserting the doctrine must be
free from fault in the transaction at issue.” Id. at 743 n.1. Silence can constitute
acquiescence when a party would be expected to speak to protect its interests. Peckham v.
Milroy, 104 Wn. App. 887, 892, 17 P.3d 1256 (2001). A party may not assert estoppel to
enforce an agreement that is contrary to a statute and its policy. State v. Nw. Magnesite
Co., 28 Wn.2d 1, 26, 182 P.2d 643 (1947).
There is no basis for applying estoppel in this case. CHS left a message advising
Ellerbroek of its plans and asked if there was any objection. There is no indication that
CHS relied on the failure to respond, nor would we credit the lack of response if CHS had
claimed to do so. Ellerbroek’s right to receive payment was protected by statute, so he
should not have been expected to voice an objection in order to safeguard his interests.
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Additionally, estoppel cannot be used to enforce the alleged agreement because it is
directly contrary to CHS’ statutory obligations.
Accordingly, the estoppel argument is without merit. We affirm the penalty
award.
A majority of the panel having determined that only the foregoing portion of this
opinion will be printed in the Washington Appellate Reports and that the remainder,
having no precedential value, shall be filed for public record pursuant to RCW 2.06.040,
it is so ordered.
Attorney Fees
CHS next argues that the amount of attorney fees awarded by the trial court was
unreasonable, while Ellerbroek requests fees on appeal. We affirm the award and grant
Ellerbroek his fees in this court.
Reasonable attorney fees are available to an injured worker in accordance with
RCW 51.52.130. Brand v. Dep’t of Labor & Indus., 139 Wn.2d 659, 665-66, 989 P.2d
1111 (1999). The trial court is allowed to apply the lodestar principle to an award under
this statute. Id. at 666. We review the fee award for abuse of discretion. Id. at 665.
Discretion is abused when it is exercised on untenable grounds or for untenable reasons.
State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
The essence of the lodestar methodology is the initial formula: a reasonable hourly
rate for a reasonable number of hours worked. Brand, 139 Wn.2d at 666. Trial courts
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must assess both the reasonableness of the hourly fee as well as the number of hours
expended on the project. Id. The attorney fee award to the employee is not limited
merely to those arguments on which the employee prevailed. Id. at 669.
Although not challenging Ellerbroek’s counsel’s hourly rate, CHS challenges the
court’s award of fees unrelated to the penalty issue, the 20 hours spent on briefing in the
trial court, time billed for reading a letter, Ellerbroek’s alleged creation of the penalty
issue by not responding to the message left by CHS’s counsel, and the court’s use of a 1.2
multiplier. Since this portion of the opinion is nonprecedential and the trial court’s
rulings all were tenable, we answer these arguments summarily.
The court was permitted to award fees for all issues presented. Id. The court
considered and trimmed the time requested by counsel in favor of an amount it
considered reasonable. It was not unreasonable to award 15 minutes for reading and
considering a letter received from the opposing side. As discussed previously, Ellerbroek
was under no obligation to remind CHS of its statutory obligation to pay him. Finally,
the 1.2 multiplier was a modest one considering the novelty of the argument has led two
appellate courts to publish their conclusions on the topic. The trial court’s attorney fee
award is affirmed.
Finally, we grant Ellerbroek’s request for reasonable attorney fees provided he
timely complies with RAP 18.1(d). Our commissioner will consider any challenges to
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the request and ascertain there is no unnecessary duplication of fees given the briefing in
the trial court.
Affirmed.
_________________________________
Korsmo, J.
WE CONCUR:
_________________________________
Fearing, J.
_________________________________
Pennell, C.J.
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