| IN RE: FLORENCE IRENE REID | ) | DOCKET NO. 43,052 |
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| Claim No. S-118008 | ) | ORDER DENYING APPEAL |
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Appeal filed by the Scott Paper Company, a self-insured employer, on August 27, 1973, from an order of the Department of Labor and Industries dated July 31, 1973, adhering to a prior order of July 5, 1973, which directed the employer to pay temporary disability compensation to which claimant is entitled until such time as a determinative order is issued, in accordance with RCW 51.32.190. Appeal denied.
DECISION
This appeal raises solely a question of law. The pertinent facts as disclosed by the Department file, are as follows:
The claimant, Florence Irene Reid, alleges that she sustained an occupational back condition due to her employment for the self-insured employer, Scott Paper Company, which rendered her temporarily totally disabled for the period from May 25 through June 17, 1973. She filed a claim with the employer on May 30, 1973, and the employer on June 8, 1973, notified the claimant and the Department in writing, pursuant to RCW 51.32.190(1), of its denial of the claim for the stated reason that there was no proof of a specific injury at work.
Thereupon the Department, by letter of June 25, 1973, advised both the employer and the claimant that there was in- sufficient evidence to either allow or reject the claim. The employer was requested to submit copies of its investigation report, medical substantiation, or other information upon which its denial of the claim was based, and the parties were both advised that, upon receipt of the additional information, the Department would review all material in the file and issue a determinative order on allowance or rejection of the claim. Apparently, the submission of additional information by the employer, and the issuance of the Department's determinative order, have not yet been done.
In the meantime, information was submitted on behalf of the claimant on June 26, 1973, that the employer did not pay her time-loss compensation from May 25 through June 17, 1973, the period during which she was off work allegedly because of her back condition, as required by RCW 51.32.190. The Department thereupon entered its order of July 5, 1973, directing the employer to pay claimant time-loss compensation to which she is entitled, pursuant to that statute. Following a request for reconsideration filed by the employer, said order was reaffirmed by the Department's order of July 31, 1973, from which the employer filed the instant appeal. [2]
It is the employer's contention that, since it has not been finally determined that claimant's alleged industrial injury caused her temporary disability, the employer is not required to pay this time-loss compensation. However, we believe this contention overlooks the basic legislative intent of the new statutory sections which are here involved.
Two statutory sections must be considered together in order to understand their intent. These are RCW 51.32.190, relating to prompt claim action and payment of temporary disability compensation in self-insured cases, and RCW 51.32.210, relating to prompt claim action and payment of temporary disability compensation in Department-insured cases. These are the codifications of Sections 25 and 26, Chap. 43, Laws of 1972 ex. sess.
RCW 51.32.190, as pertinent to this case, provides:
"(1) If the self-insurer denies a claim for compensation, written notice of such denial, clearly informing the claimant of the reasons therefor and that the director will rule on the matter shall be mailed or given to the claimant and the director within seven days after the self-insurer has notice of the claim.
(2) Until such time as the department has entered an order in a disputed case acceptance of compensation by the claimant shall not be considered a binding determination of his rights under this title. Likewise the payment of compensation shall not be considered a binding determination of the obligations of the self- insurer as to future compensation payments.
(3) Upon making the first payment of income benefits, and upon stopping or changing of such benefits except where a determination of the permanent disability has been made as elsewhere provided in this title, the self-insurer shall immediately notify the director in accordance with a form to be prescribed by the director that the payment of income benefits has begun or has been stopped or changed. Where temporary dis- ability compensation is payable, the first pay- ment thereof shall be made within fourteen days after notice of claim and shall continue at regular semimonthly or biweekly intervals.
(4) If, after the payment of compensation without an award, the self-insurer elects to controvert the right to compensation, the payment of compensation shall not be considered a binding determination of the obligations of the self- insurer as to future compensation payments. The acceptance of compensation by the workman or his beneficiaries shall not be considered a binding determination of their rights under this title.
(5) The director (a) may, upon his own initiative at any time in a case in which payments are being [3] made without an award, and (b) shall, upon receipt of information from any person claiming to be entitled to compensation, from the self-insurer, or otherwise that the right to compensation is controverted, or that payment of compensation has been opposed, stopped or changed, whether or not claim has been filed, promptly make such inquiry as circumstances require, cause such medical examinations to be made, hold such hearings, require the submission of further information, make such orders, decisions or awards, and take such further action as he considers will properly determine the matter and protect the rights of all parties." (Emphasis supplied)
RCW 51.32.210 provides:
"Claims of injured workmen of employers who have secured the payment of compensation by insuring with the department shall be promptly acted upon by the department. Where temporary disability compensation is payable, the first payment thereof shall be mailed within fourteen days after receipt of the claim at the depart- ment's offices in Olympia and shall continue at regular semimonthly intervals.
The payment of this or any other benefits under this title, prior to the entry of an order by the department in accordance with RCW 51.52.050 as now or hereafter amended, shall be not considered a binding determination of the obligations of the department under this title. The acceptance of compensation by the workman or his beneficiaries prior to such order shall likewise not be considered a binding determination of their rights under this title." (Emphasis supplied)
Clearly, the overriding object of these statutes is to promote prompt investigation and determinative initial action on all claims filed by workmen under the law -- prompt action by both the self-insurer and the Department in self-insured cases, and prompt Departmental action in Department-insured cases. Especial- ly is prompt action important in the cases where temporary total disability is involved. Thus, to make the objective effective, the "14-day law" was adopted, to require commencement of payment of time-loss compensation within that period of time after notice of the claim.
Furthermore, when this 14-day requirement is considered in conjunction with the other language in these statutes, it is clear that, if in fact there is temporary total disability, compensation for it must be paid, even though a determinative order has not yet been entered by the Department, determining that the temporary disability was industrially caused. This, in our opinion, is the obvious intent of these statutes when viewed in their entirety. If the intent were otherwise, there would be no need for the portions of the statutes providing that payment by the self-insurer or the Department, as the case may be, and [4] acceptance by the claimant, of such compensation prior to the entry of a determinative order, is not a "binding determination" of their respective rights and obligations under the Act. Clearly such payments are contemplated, or the statute would not have to provide for their non-binding nature. The "binding determination" on allowance or rejection of the claim must be a final determinative order entered by the Department which complies with the requirements for a "final" order as set forth in RCW 51.52.050. Thus, until said determinative order on allowance or rejection is entered, the Department or self-insurer, as the case may be, must comply with the "14-day_ provision and pay time-loss compensation to the claimant for whatever period prior to said order that he is in fact temporarily totally disabled.
The reason for this new kind of statutory requirement appears to be a very practical one, namely, that when a workman is rendered temporarily unable to work because of a physical condition caused, or alleged to be caused, by his employment, there is usually an urgent economic need for prompt payment of temporary disability compensation as wage replacement. The law- makers have apparently decided that this social need outweighs the wisdom of the previous practice that under no circumstances would any compensation be paid until a determinative administrative decision was made that liability existed. That practice could produce economic hardship for a claimant while awaiting the decision on acceptance of his claim, which decision in some cases was long in coming.
A consequence of this new statutory approach to forcing prompt administrative determinations on allowance or rejection of claims is, of course, that in some cases the claimant will have received time-loss compensation where it is later finally deter- mined, by administrative or judicial decision, that the claim should be rejected and no benefits payable. However, this con- sequence points up the effectiveness of the statute in achieving its purpose, i.e., it should cause all people involved in administering the system to see to it that the Department's determinative order on allowance or rejection is entered promptly -- within 14 days whenever possible. If necessary investigative tasks result in a longer period, the legislature has simply said that the economic burden of such investigative period should fall on the workmen's compensation system, not on the temporarily disabled claimant or on welfare or some other insurance program.
As support for our legal conclusion, we need look no further than to our neighboring state of Oregon. The Oregon workmen's compensation law, in ORS Sec. 656.262, has provisions very similar to our applicable statutory sections; including requirements for prompt payments of compensation (subsection 2 of ORS 656.262) until denial of the claim is formally made (per subsection (6); the requirement for paying compensation within 14 days after notice of claim and at least biweekly thereafter (subsection 4); and the provision that "merely paying or providing compensation shall not be considered acceptance of a claim or an admission of liability." (Subsection 7).
We are not aware of any decision by the Oregon appealate courts in which the question here before us was squarely presented. However, the case of Logan v. Boise Cascade Corp., 5 Or. App. 636, 485 P. 2d 441, (1971) is significant. Although the [5] exact holding in that case was concerned with whether or not a statute of limitations operated as a bar to the claim, the Court did observe that initial payment of compensation did not, in view of the provisions of ORS 656.262(7), prevent the employer from later contesting the claim on its merits.
We conclude as a matter of law that the Department's order of July 31, 1973, was a correct and proper order under the terms of RCW 51.32.190, and that this self-insured employer is required to pay time-loss compensation to the claimant for whatever period between May 25, 1973 and June 17, 1973, that she was in fact temporarily totally disabled.
ORDER
Now, therefore, it is hereby ORDERED that the order of the Department of Labor and Industries dated July 31, 1973, adhering to its prior order of July 5, 1973, and directing the self- insured employer, Scott Paper Company, to pay temporary disability compensation to which the claimant is entitled in accordance with RCW 51.32.190, be, and the same is hereby, confirmed; and the employer's above-numbered appeal from said order, filed with this Board on August 27, 1973, be, and the same is hereby, denied.
Dated this 26th day of October, 1973.
BOARD OF INDUSTRIAL INSURANCE APPEALS
/s/
PHILLIP T. BORK Chairperson
/s/
R. H. POWELL Member
DISSENTING OPINION
The claimant in this case is an employee of Scott Paper Company; Scott Paper Company being a self-insurer under the appropriate provisions of the Act. The record before us indicates that the employee-claimant filed a claim of industrial injury with the employer on May 30, 1973; the date of injury being May 25, 1973. On June 8, 1973, the employer denied the claim. It is observed that the first paragraph of RCW 51.32.190 requires the self-insurer to rule upon such a matter within seven days after the self-insurer has notice of the claim and this requirement of the statute was not complied with.
On July 5, 1973, the Department issued an order directing the employer to pay time-loss to which she was entitled until such time as "a determinative order is issued." Thereafter, that order was reaffirmed on July 31, 1973. Apparently the Department has not as yet made a determination as to the actual validity of the claim.
The employer has appealed the Department's order dated July 5, 1973, directing the employer to pay time loss; the time interval [6] being May 25, 1973 and June 17, 1973. The majority of the Board has elected to deny the employer's appeal on the ground that the provisions of RCW 51.32.190(3) require the employer to pay time- loss in a situation of this nature. The final sentence of RCW 51.32.190(3) reads as follows:
"...Where temporary disability compensation is payable, the first payment thereof shall be made within fourteen days after notice of claim and shall continue at regular semimonthly or biweekly intervals." (Emphasis added)
In the opinion of the majority, the intent of the provisions of RCW 51.32.190 make it mandatory to pay time-loss regardless of any determination as to the occurrence of an insured injury under the Act and regardless of any determination as to whether or not the claimant was temporarily and totally disabled because of the incident complained of.
It is observed that the final paragraph of the statute quoted above reads "Where temporary disability compensation is payable" and to my mind these words connote a situation where a true injury under the Act has occurred and further there has been evidence of temporary total disability due to that eligible injury. In the case before us, we have a factual pattern where the Department of Labor and Industries has not made a determination as to the validity of the claim but nevertheless has directed the employer to pay time-loss on an alleged claim.
To me, it is patently incongruous that the Department would on the one hand hold up an alleged claim and on the other hand direct a self-insured employer to pay time loss compensation for an incident as to which a determination has not been made by the Department. In an ordinary reject case where a self-insured employer is not involved, it is well settled that first there must be an injury insurable under the Act and secondly, there must be temporary total disability attributable to that injury in order to enable the employee to recover time-loss compensation. In the case before us, there is no showing that there was an injury covered by the Act and there is no showing that the employee was properly classified as temporarily and totally disabled due to the incident complained of. I refer to Franks v. Department of Labor and Industries, 35 Wn. 2d 763, Stampas v. Department of Labor and Industries, 38 Wn. 2d 48.
In my opinion, the action of the Department in this case requiring the employer to pay time-loss regardless of whether or not there was an injury under the Act amounts to a violation of that portion of the 14th Amendment to the Constitution of the United States which provides in part that "nor shall any state deprive any person of life, liberty or property without due process of law."
It is my belief that the appeal made by the employer to this Board should be allowed and that the employer should be afforded an opportunity to offer proof supporting a rejection of the [7] initial claim and also proof as available on the question of temporary total disability, attributable to the incident complained of.
For the reasons noted, I accordingly dissent.
Dated this 26th day of October, 1973.
/s/
R. M. GILMORE Member