Cole v. Dept. of Labor Industries

The question of the right of an employer to prosecute an appeal to the superior and supreme courts from an award in favor of his injured workman is one of great importance and difficulty. In the case at bar, as stated in the majority opinion, the claim of respondent Emma Louise Cole, the widow of the deceased workman, was denied by the supervisor and by the joint board. On appeal to the superior court by the claimant, the departmental order was reversed, and the claim remanded to the department for further proceedings. The employer has prosecuted to this court an appeal from the judgment of the superior court. No appeal from that judgment by the department is before us.

Laws of 1911, chapter 74, p. 345 (Rem. Rev. Stat., § 7673 [P.C. § 3468]), the workmen's compensation act, in § 1, p. 345, by way of a preamble, states the purpose of the act, and provides that the state of Washington, in the exercise of its police and sovereign power,

". . . declares that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workmen, injured in extrahazardous work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this act; and to that end all civil actions and civil causes of action for such personal injuries and all jurisdiction of the courts of the state over such causes are hereby abolished, except as in this act provided."

The act as originally passed, and as amended, provides for appeals on the part of employers to the courts from departmental decisions; § 7697 [P.C. § 3488] being general, other sections being specific. The section referred to provides in part, referring to orders, decisions or awards by the department, that "any claimant, employer or other person aggrieved by any such order, decision or award must, before he appeals to the courts," etc. I have come to the conclusion that an employer is notaggrieved by a ruling of the department or a judgment of the superior court making an award to his injured employee, save in so far as that award may unjustly affect his cost experience and consequently increase the amounts which he is required to pay into the fund by way of premiums. Save as to that phase of the matter, the particular employer of the workman injured is no more aggrieved by an award in favor of the workman than is every other employer of labor in the same group with the employer in question, all of whom contribute to the particular fund, by way of premiums or assessments, sums sufficient to pay the employees of that group who are injured in the course of their employment.

In the case of Mud Bay Logging Co. v. Department of Labor Industries, 189 Wash. 285, 64 P.2d 1054, and on rehearing,193 Wash. 275, 75 P.2d 579, there was before this court an appeal by an employer, presenting a state of facts as follows: A workman in the employ of Mud Bay Logging Company was injured. The department allowed the workman compensation, and the department paid him the sum of $1,225, then charging four thousand dollars against the employer's cost experience. The employer sought relief before the joint board on account of the charge against its cost experience. The board accorded a hearing, but refused to grant any relief. The employer then appealed to the superior court, which granted the employer relief, finding that the order making the charge against the employer's cost experience was erroneously entered and directing that the charge be canceled. From that judgment, the department appealed to this court. The judgment of the superior court was affirmed, this court holding that the employer had, under the law, the right to appeal to the superior court from the order of the joint board, above referred to.

It has many times been held that an opinion of an appellate court is controlling authority only upon the question actually decided, and manifestly, in the case referred to, there was no question of an appeal by an employer from an award to an injured workman, as the workman had received his money. The only question presented and decided was the right of the employer to contest, on appeal, the charge against his cost experience, which charge would tend to increase the payments which he would be required to make into the accident fund. The case was correctly decided; as, in so far as an improper award to a workman increased the amounts which the employer of that workman would be required to pay, over the amount he would have been required to pay had the award not been made, that particular employer was aggrieved by the order of the department. While the language of the opinion of this court on the rehearing of the case cited is very broad, and indicates that an employer generally has the right of appeal, the opinion is controlling authority only for the proposition that an employer may be "aggrieved" by an award by the department in favor of his injured workman, within the intent of § 7697, only in so far as the award may affect his cost experience and increase the contributions which he must make to the fund.

The opinion refers to the previous cases of Brewer v.Department of Labor Industries, 143 Wash. 49, 254 P. 831, and Seattle Can Co. v. Department of Labor Industries,147 Wash. 303, 265 P. 739, as cases in which appeals by employers from department orders were not questioned. In the earlier of these cases, the workman appealed to this court from a judgment of the superior court sustaining the denial by the department of compensation for injuries, and this court affirmed the judgment appealed from, holding that the claimant was not an employee. The employer had intervened before the superior court, and had also appealed to this court from the judgment therein rendered. Concerning this phase of the case, we said:

"We have not considered the question whether the Hobi Logging Company, not having appealed within the time fixed by statute from a decision of the department of labor and industries, had a right thereafter to intervene in the superior court and become a party to the action, for the reason that the case is here upon its merits by Brewer's appeal. Upon the ruling of the trial court in permitting the intervention we express no opinion."

It seems to me clear that an employer may appeal from a ruling of the department, to the effect that an injured workman was or was not an employee, was or was not engaged in extrahazardous labor, or was or was not injured in the course of his employment. There was no question in the case concerning the right of the employer to appeal from an award in favor of an injured workman, as no award was ever made.

An employer may appeal to the courts from any ruling of the department on the matter of whether the workmen's compensation act applies in any particular situation. There are, of course, other specific provisions in the act giving an employer the right to appeal in the instances therein referred to, but in regard to an award in favor of a workman, it seems to me that, under the act, the employer may appeal to the courts only as to questions which affect him particularly, and not as to the propriety of the award in the particular case, when that award affects him no differently, save in degree, than it affects other employers in the same class group.

In the second of the cases last cited, it appeared that three employees of the Seattle Can Company had contracted benzol poisoning. Claims based upon this poisoning were rejected by the department. The employer appealed to the superior court from the departmental ruling, and the personal representative of one of the employees, who had died as the result of the poisoning, also appealed. The superior court reversed the action of the department and remanded the cases for classification and award. The department appealed to this court from the judgment of the superior court, and the judgment was here affirmed. There was, then, no question of an appeal by the employer from an award made by the department. In my opinion, these cases throw no light on the question of the right of an employer to appeal from an award made by the department to an injured workman.

In the case of Hama Hama Logging Co. v. Department of Labor Industries, 157 Wash. 96, 288 P. 655, an employer appealed from an order of the department rejecting the claim of a workman, the employer contending that the workman was within the protection of the industrial insurance law, and that his remedy was limited to the relief afforded by that statute. The department had ruled that the workman was without the protection of the law, and evidently the injured man was anxious to accept that ruling and sue the employer for damages. It was properly held that the courts had jurisdiction to entertain an appeal by the employer from the departmental ruling, as the employer was aggrieved thereby and had the right to present to the courts the question of whether or not the workman was within the scope of the act.

In the case of State ex rel. Crabb v. Olinger, 191 Wash. 534,71 P.2d 545, this court held that an employer, adversely affected by an order of the supervisor, could, under Rem. Rev. Stat., §§ 7697 and 10837 [P.C. §§ 3488, 4-79], apply for a rehearing before the joint board. The matter was presented to this court on an original application by the workman for a writ of mandate requiring the state auditor to issue warrants in favor of the workman in a sum which he alleged had been awarded to him by an order of the supervisor. The application for the writ was by this court denied, upon the ground that the matter was still pending before the department.

In the later case of State ex rel. Crabb v. Olinger,196 Wash. 308, 82 P.2d 865, another application by the same injured workman for a writ of mandate requiring the supervisor to transmit vouchers to the state auditor in payment of an award, it appeared that the supervisor had made an award in favor of the workman, which award had been sustained by the joint board. The employer then appealed to the superior court, whereupon the supervisor refused, on demand of the workman, to pay the amount awarded by the department, contending that the employer's appeal to the superior court ousted the department of jurisdiction. On the foregoing state of facts, this court held that, under Rem. Rev. Stat., § 7697, the appeal by the employer did not operate as a stay. It was held that the application should be granted, and the writ was accordingly issued. In the course of the opinion, this court said:

"In the absence of a bond superseding the order of which the employer complains in the case at bar — in view of Rem. Rev. Stat., § 7697, granting the right of appeal by denying the right to supersede the order — relator may enforce payment by writ of mandamus. . . .

"The appeal granted to the employer does not, under the plain language of the statute, operate as a stay; therefore, the compensation awarded by the joint board should be paid without regard to the question whether the appeal of the employer may be successful. . . .

"To hold that compensation such as that awarded to the relator can be stayed pending judicial review on appeal by the employer from the order making the award, would nullify the very purpose of the compensation act to furnish certain, expeditious, and adequate relief to the injured workman."

Under the statute, the case was properly decided. On his appeal, the employer could still present to the court any question concerning the charge which the department could make against his cost experience. That was the only matter in connection with the award in which the employer could be aggrieved. Certainly, if the payment of an award to an injured workman, as held in the case last cited, cannot be stayed pending an appeal by the employer, such an appeal in many cases is a vain and useless gesture. In case of a continuing payment, such as a widow's pension, an appeal by the employer, if successful on the merits, would result in stopping the payments, but it seems unreasonable that the law should be so construed as to permit an appeal to defeat some awards and not others.

In the case of Albrecht v. Department of Labor Industries,192 Wash. 520, 74 P.2d 22, the department granted a claim for a widow's pension. The employer then petitioned the joint board for a rehearing, which the board granted. After the hearing had been held, the joint board entered an order sustaining its previous ruling, to the effect that the pension be paid. From this last order, the employer appealed to the superior court. It was held that there was no statutory provision authorizing

". . . an appeal to the joint board after it has made its final order upon an appeal from the supervisor; when the joint board hears an appeal on the question presented and makes a final order on the merits of the case, that case is closed;"

and the order of the superior court dismissing the employer's appeal was affirmed. It was apparently assumed that the employer had the right of appeal from the departmental order awarding the widow's pension — as, in my opinion, he did — in order to contest, if he desired, any charge against his cost experience based upon the award of the pension. The only question, however, determined by the decision was that the employer had not proceeded correctly in endeavoring to prosecute an appeal to the superior court from the order of the joint board.

In the recent case of Hoff v. Department of Labor Industries, 198 Wash. 257, 88 P.2d 419, it appeared that the department denied an application on the part of an injured workman for the reopening of his claim on the ground that his condition had become aggravated since the claim had been closed. The workman appealed to the superior court, with the result that judgment was entered reversing the order of the department. The department and the employer took separate appeals to this court from the judgment of the superior court. On motion of the workman, the appeal of the department was dismissed, and the cause proceeded on the appeal of the employer. The respondent moved to dismiss this appeal, on the ground that the employer had not formally intervened in the cause below, and for that reason was not a party to the record. In discussing this motion, this court stated that, by certain of its recent decisions, it had been held that an employer had a right of appeal to the courts in industrial insurance cases, citing several authorities. Assuming that the employer had a right of appeal, the motion to dismiss was properly denied.

In addition to the cases above referred to, the court, in support of the proposition that we have held that an employer may appeal, cited the cases of State ex rel. Winningham v. Olinger,190 Wash. 697, 70 P.2d 317, and State ex rel. Hills v.Olinger, 193 Wash. 365, 75 P.2d 926. In the first of these two cases, this court reversed a judgment of the superior court directing that a writ of mandamus issue requiring the supervisor to approve a contract with a hospital association, holding that, before an appeal could be prosecuted to the superior court from any departmental action, resort must first be had to the joint board. The contract which was the subject matter of the action was one for medical aid. In my opinion, the case has nothing to do with the question of the right of an employer to appeal from the department to the courts in an attempt to review, on the merits, an award to an injured workman.

In the other of the two cases last referred to, which was an original application to this court for a writ of mandate, it appeared that the relator, in the course of his employment, suffered an injury for which he presented a claim, which was allowed and later closed. Thereafter, the claim was opened, and the claimant allowed an additional amount. Subsequently, the workman asked that his claim be reopened, on the ground that his injury had become aggravated. This application was denied, and an appeal was taken to the joint board, which ordered a hearing upon the matter of aggravation. The joint board reversed the action of the supervisor, and directed that an additional amount be allowed, whereupon the employer requested that a further hearing be had, which request the department granted. The workman then instituted the proceeding by way of an application for a writ of mandate to require the supervisor to transmit to the state auditor a voucher in favor of the workman. This court assumed, without deciding, that the employer had no right to petition the department for a rehearing, but held that the department nevertheless had the right to grant a rehearing on its own motion. This court held that the matter was still pending before the department; that the claim had not been finally disposed of by the joint board; and that the relator was not entitled to the relief which he sought before this court. This case has no bearing upon the question of the right of an employer to appeal to the courts from an award in favor of a workman.

In the case of Hoff v. Department of Labor Industries,supra, this court entertained and decided in favor of the employer an appeal from a judgment of the superior court entered in favor of the injured workman. It seems to me that this is the only one of our cases which is directly in point upon the matter of the right of an employer to prosecute such an appeal and obtain relief by way of the reversal of the award in favor of the workman. As I understand the other cases cited in the Hoff case, no one of them, in so far as the question therein actually decided was concerned, is direct authority for the proposition that an employer may prosecute such an appeal, and contest the award on the merits.

Undoubtedly, our decisions contain language which is thoroughly consistent with the theory that an employer may appeal to the courts and contest, on the merits, an award by the department in favor of his injured employee. After careful consideration, however, I am convinced that an employer is not, within the purview of § 7697, a person aggrieved by an order of the department awarding compensation to his injured employee, in so far as the actual award is concerned, and that, on appeal to the courts from such an award by the department, the employer can contest only the charge against his cost experience, which follows as the result of the award made. In so far as the award itself is concerned, the employer is no more aggrieved, and in fact, if his payroll be small, he may be much less aggrieved, than other employers in the same group. Any question as to whether or not the injured workman is within the scope and protection of the act, and his remedy limited thereby, presents an entirely different situation.

The allowance to an employer of a general appeal on the merits, which would bring before the courts the basic question of the propriety of the award, appears wholly inconsistent with the rule laid down in the recent case of State ex rel. Crabb v.Olinger, 196 Wash. 308, 82 P.2d 865, where we held that an appeal by an employer from an award by the department in favor of his injured employee did not operate as a stay to delay the payment of compensation awarded by the department to the injured workman, and that such compensation must be paid pending the appeal, and without regard to the outcome thereof. Under the statute (Rem. Rev. Stat. (Sup.), § 7676, Laws of 1937, chapter 89, p. 345, § 1), the employer clearly has a right to appeal to the courts from any departmental determination as to his cost experience, and this right is nowise enlarged by holding that the employer may review that question on appeal under the right granted by § 7697; and careful study of this section convinces me that an employer is not aggrieved by such award within the scope thereof, but is aggrieved within the intent thereof if, because of the award, an unjust and unwarranted addition to his cost experience is made by the department.

In my opinion, the different provisions of the statute concerning rehearings of decisions of the supervisor before the joint board, and providing for appeals to the superior court, are indefinite and ambiguous, and in construing these provisions, the entire statute, its clearly expressed purpose, and its orderly administration must be considered. Certainly, if an employer can appeal to the superior court from a departmental order awarding compensation to his injured workman, and contest before the courts the award on its merits, the matter of compensation to injured workmen is nowise removed from private controversy.

In my opinion, this court, in the case of Hoff v. Departmentof Labor Industries, supra, should have considered only the question of whether or not the award to the workman should or should not be made the basis of a charge against the employer's cost experience. Section 7697 provides that "appeal shall lie from judgment of the superior court as in other civil cases," and appeals in other civil cases may be taken only by parties aggrieved by the judgment of the superior court. The jurisdiction of the superior court on appeals from the department is statutory, and, in my opinion, the only logical rule is that the employer is not aggrieved by any judgment in favor of the workman which the superior court may grant, save in so far as this judgment may affect his cost experience. The interest of the employer does not become, as to matters affecting an award to a workman under the act, essentially different in nature from his interest in the matter while the claim is pending before the department. Doubtless, the employer may and should cooperate with the department, both in departmental and judicial proceedings, but as the employer remains at all times a private party, and as, under the act, the matter of payment to an injured workman by way of an award on account of injuries received by the workman has been removed from private controversy, the employer at no stage of the proceedings becomes a person aggrieved, within the meaning of the act, by the making of an award.

Any controversy between a workman on the one hand and the department on the other is not, in essence, a private controversy, as the department is an agency of the state, provided for by statute to accomplish certain statutory purposes. The same is true as to any controversy between the employer on the one hand and the department on the other, concerning questions of law, but when the department, pursuant to its statutory authority, has made an award in favor of a workman, to allow the workman's employer to appeal from that award to the superior court and contest the same on the merits, presents a matter which, it seems to me, is purely one of private controversy. A workman may appeal from the department's denial of any award, or from the granting of what he considers inadequate relief, and the employer may appeal from a ruling of the department in favor of a workman, and present any question which may affect his cost experience; but to allow the employer to appeal from the award in favor of the workman, carries on what is no more than a private controversy between the workman and his employer.

If, after the making of an award by the department, the employer elects to appeal to the courts from the departmental ruling and challenge the award for the reason that the injured workman was not an employee, or that he was not engaged in extrahazardous employment, or that he was not injured in the course of his employment, or that, for any other reason, the workman was not within the protection of the act, or possibly for some other reason exclusive of the merits of the award itself (as admittedly the employer has the right to do), the employer, nevertheless, on appeal may obtain relief from the courts, as on appeal from the award itself, as above stated, only as to the matter of any charge against his cost experience, and may not obtain a review of the award itself on the merits.

As to whether or not an employer could appeal from an award and present on such appeal the contention that the award made was purely arbitrary and capricious and without foundation either in fact or in law, I express no opinion. No such question is presented in the case at bar.

As above stated, I am of the opinion that the same rule should apply to appeals from the superior court as applies to appeals from the department.

In the case at bar, in my opinion, the only question which the employer may urge upon his appeal to this court is whether or not the award which the judgment of the superior court provides shall be made should be charged against the employer's cost experience.

I agree with the majority opinion in holding that the preponderance of the evidence supports the findings and decision of the department, but, in my opinion, the relief granted by this court should be limited to a direction that the cost experience of appellant be not increased by the amount which respondent will receive.