Significant Decisions

See RES JUDICATA Orders void ab initio
See TIME LOSS COMPENSATION Orders void ab initio
Time loss compensation orders based on a legally incorrect computation method are void ab initio and a party may challenge the correctness of the amount of time loss compensation even though the statutory time limitation for filing an appeal or request for reconsideration has passed. ....Rod Carew, 87 3313 (1989) Dennis Roberts, 88 0073 (1989) [Editor's Note: Consider impact of Marley v. Department of Labor & Indus., 125 Wn.2d 521 (1994)]
See TIME LOSS COMPENSATION Wages - Compensation
RCW 51.08.178 requires the Department to base the calculation of time loss compensation on the worker's monthly wage at the time of injury. The pre-1988 statute does not permit the averaging of wages over a several month period in order to determine the "monthly wage." ....Ubaldo Antunez, 88 1852 (1989) ; Rod Carew, 87 3313 (1989); Dennis Roberts, 88 0073 (1989); Jeanetta Stepp, 87 2734 (1989)



IN RE: ROD E. CAREW ) DOCKET NO. 873313
  )  
CLAIM NO. H-994708 ) DECISION AND ORDER
  )  
APPEARANCES
Claimant, Rod E. Carew, by
Beaudry, Clark and Krueger, per
William A. Taylor
Employer, Washington King Clam, Inc.,
None
Department of Labor and Industries, by
The Attorney General, per
Stephen A. Eggerman, Assistant and
Laurel Anderson, Paralegal

This is an appeal filed by the claimant, Rod E. Carew, on October 7, 1987 from an order of the Department of Labor and Industries dated September 25, 1987. The order adhered to the provisions of an order dated May 14, 1987 closing the claim with time-loss compensation as paid, and a permanent partial disability award of 5% as compared to total bodily impairment. Reversed and remanded.

DECISION

Pursuant to RCW 51.52.104 and RCW 51.52.106, this matter is before the Board for review and decision on a timely Petition for Review filed by the claimant, and a response thereto filed by the Department, to a Proposed Decision and Order issued on June 10, 1988. The Proposed Decision and Order dismissed claimant's appeal for the reason that the only relief sought involved issues which had become res judicata.

The issues presented in this appeal are (1) whether the principle of res judicata precludes the claimant from attempting to readjust the [2] rate at which his time-loss compensation had been paid after determinative orders paying time-loss compensation had become final; and (2) if the principle does not bar this action, whether the Department may calculate a worker's "monthly wage" (as used in determining the base rate of time-loss compensation) by averaging either the monthly income earned in a four-month period immediately prior to the industrial injury or by averaging the monthly income earned during the calendar year of injury.

The evidence upon which this case must be decided consists of 40 exhibits which were submitted by stipulation of the parties. While the Proposed Decision and Order adequately summarizes most of the evidence, for clarity, a brief recitation of the material facts is in order.

In December 1981, the claimant began work for Washington King Clam, Inc. as a clam harvester. His remuneration was based upon the number of clams he harvested. Exhibit No. 3 reflects monthly remuneration Mr. Carew received from December 1981 through March 1982. It shows that in December 1981 the company paid him $778.38; in January 1982, $831.50; in February 1982, $1,203.08; and in March 1982, $1,627.10. Exhibit No. 6 reveals that for the year of 1982 Washington King Clam, Inc. paid Mr. Carew $18,705.01. Exhibit No. 1 indicates that on March 13, 1982, Mr. Carew sustained the industrial injury for which this claim was filed.

Exhibits 7 through 16 are copies of the Department orders providing time-loss compensation at a rate of $666.01 per month for various periods beginning March 14, 1982 and ending December 21, 1983. [3]

Though not stated in the orders, the Department arrived at this payment amount using a base calculation which averaged Mr. Carew's gross monthly earnings during the four month period he had worked for the company from December 1981 to the March 13, 1982 injury.

A Department memo dated December 26, 1984 indicates that Mr. Carew advised the Department of his gross earnings during 1982 and requested a review of his time-loss rate. The Department considered this request as an application for change in compensation pursuant to RCW 51.28.040 (Exhibit No. 5). The Department adjusted the rate based upon a calculation which averaged the remuneration received during the twelve months of 1982. The Department applied the sixty day time limit contained in RCW 51.28.040 and recalculated the time-loss compensation effective October 26, 1984 (sixty days prior to claimant's request). The adjusted rate equaled $1,073.32 per month, and was paid, with cost of living increases, until the final time-loss order was entered on November 14, 1986, paying time-loss compensation through February 3, 1987. (Exhibits 24 and 34).

On September 25, 1987, the order under appeal was issued whereby the Department adhered to a prior order closing the claim with "time-loss compensation as paid."

In this appeal, Mr. Carew does not dispute the portions of the order closing his claim and awarding a permanent partial disability. His appeal is solely concerned with the sufficiency of the time-loss paid under his claim. He asserts the time-loss was paid under rates established in direct contravention of RCW 51.08.178. He contends that [4] because the time-loss orders were based upon calculations invalid under the statute, they were void ab initio and without res judicata effect.

The Department responds that each of the underlying time-loss orders was determinative and became final with respect to the rate calculation. Since Mr. Carew admittedly did not appeal these orders within sixty days of their issuance, the Department maintains that RCW 51.52.050 and .060 preclude any reconsideration, including scrutiny of the method by which the time-loss base rate was calculated. Substantively, the Department asserts that the initial rate calculation and any subsequent adjustments were either computed in accordance with the law or were based on a factual rather than legal mistake and that the statutory time period for correction has elapsed. It concludes that these orders should therefore be considered res judicata and beyond the Board's jurisdiction to review.

Generally, a Department order is a res judicata determination with respect to all issues specifically addressed by the order, unless an appeal or request for reconsideration is filed within sixty days of the order's communication. RCW 51.52.050 and .060; Perry v. Department of Labor and Industries, 48 Wn. 2d 205 (1956); Kuhnle v. Department of Labor Industries, 15 Wn. 2d 427 (1942); King v. Department of Labor and Industries, 12 Wn. App. 1 (1974). However, when an order is void, no appeal or request for reconsideration is necessary, and the statute of limitation will not apply. Likewise, a void order will not become res judicata in effect. Booth v. Department of Labor and Industries, 189 Wash. 201 (1937). [5]

Our inquiry therefore turns to whether the Department time-loss orders conformed to the statutory method of computation found in RCW 51.08.178. While this statute was amended by Laws of 1988, ch. 161, ] 12, p. 698-699, the rights of parties, with limited exceptions, are governed by the law in effect at the time the industrial injury occurred. Department of Labor and Industries v. Moser, 35 Wn. App. 204 (1983). Similarly, a newly enacted statute will operate prospectively unless the legislative intent to the contrary is clear and unequivocal. Bodine v. Department of Labor and Industries, 29 Wn.2d 879 (1948). Our inquiry reveals no language which expressly states or necessarily implies a retroactive effect to the 1988 amendment. Another exception applies when a statute relates to practice, procedure or remedies, and does not affect substantive or vested rights. Bodine; Moser. However, the interests affected by the 1988 amendments are substantive, i.e., the worker's right to compensation benefits and the Department's financial obligations. Consequently, no exception to the rule of prospective effect operates to cause a retroactive application of the 1988 amendments to RCW 51.08.178.

RCW 51.08.178, as it existed at the time of claimant's injury here, stated in part:

(1) For the purposes of this title, the monthly wages the worker was receiving from all employment at the time of injury shall be the basis upon which compensation is computed, unless otherwise provided specifically in the statute concerned. [6]

The primary consideration of this statute when calculating time-loss compensation is the monthly wage at the time of injury. Under the facts of this case, the "monthly wage" calculation required by the statute is straightforward. Exhibit No. 3 establishes that Mr. Carew's wages were fixed and recorded by the month. Indeed, the Department calculations acknowledged as much since they too began with a monthly wage. Mr. Carew was injured in March 1982. During that month he earned $1,627.10. Obviously, Mr. Carew's monthly wage at the time of injury was $1,627.10. Under these plain and simple facts, it is not necessary to resort to the statute's substitute methods for calculating monthly wages according to daily wages and number of days per week normally worked, or usual wages paid other similarly engaged employees. The explicit terms of the statute make these methods available only where the worker's wages are not fixed by the month. Confronted with the verified evidence of Mr. Carew's monthly wage at the time of injury, the Department nevertheless chose, in contravention of the statutory mandate, to average his wages, including months both prior and subsequent to the injury.

Initially, the Department calculated the time-loss compensation by averaging the wages received during the four months prior to injury. Upon receipt of new information showing subsequent earnings, it adjusted the calculation by using a 12 month average of wages which claimant had received during the full calendar year of the injury. In support of its methods, the Department references its Workers' Compensation Claims Manual, which sets forth a six-month average [7] method. However, neither RCW 51.08.178 nor the Department's authority to promulgate rules and regulations permit any deviation from the statutory method of calculating a worker's monthly wage. In re Teresa Johnson, BIIA Dec., 85 3229 (1987). At the time of the orders in question, the averaging of monthly wages by the Department was without support in law, and remained so until the effective date of the 1988 statutory amendment to RCW 51.08.178.

Throughout the period in which Mr. Carew was temporarily totally disabled as a result of his industrial injury, the Department entered orders providing time-loss compensation based upon calculations which not only failed to heed the statutory rule of calculation, but were directly contrary to it. There is no room within the plain language of the statute for averaging previous or subsequent monthly wages when establishing the monthly compensation rate. It is not the Department's function to stray from the legislature's mandate and award an amount which, for one reason or another, it may deem just or "fair" under the particular circumstances. The Department's function was to apply the statutorily prescribed method to the underlying facts; because the time-loss compensation orders entered in this claim did not comport with the statute, they are therefore void ab initio insofar as they apply a calculation method which violates the statutory mandate of RCW 51.08.178. Thus claimant was not required to protest or appeal those time-loss compensation orders in the face of the Department's clear legal error, which rendered the orders void ab initio as to the computation method. The issue of the sufficiency of time-loss [8] compensation paid under this claim is therefore properly before us. Booth. The amount the Department failed to pay in time-loss compensation due to its legally erroneous computation method is still owing to the claimant and must be paid.

After consideration of the Proposed Decision and Order, claimant's Petition for Review, and the Department's response thereto, as well as the briefs of the parties and the entire record in this matter, and mindful of our construction of RCW 51.08.178, as already discussed, we conclude that the Department has underpaid Mr. Carew's time-loss compensation by using a legally erroneous calculation method. Accordingly, the Department order of September 25, 1987 must be reversed in order to correct that error. We enter the following Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

1. On March 19, 1982, the claimant, Rod E. Carew, filed an accident report with the Department of Labor and Industries, alleging an industrial injury occurring on March 13, 1982 while in the course of employment with Washington King Clam, Inc. On April 12, 1982 an interlocutory Department order was issued whereby time-loss compensation was paid.

On July 21, 1982, the Department entered an order allowing the claim for industrial injury.

On January 20, 1983 the first of a series of determinative orders was entered whereby time-loss compensation was paid. On December 26, 1984 the Department received information indicating the claimant received $18,705.01 in wages for the year of 1982. The Department issued an order on January 14, 1985, adjusting the time-loss compensation rate effective October 26, 1984. On February 5, 1985 a determinative Department order was issued which corrected and superseded a time-loss compensation [9] order dated November 19, 1984 and paid time-loss compensation for the period of January 6, 1985 through February 5, 1985. On November 14, 1986 the Department entered the last order of a series of determinative orders paying time-loss compensation, paying such compensation through February 3, 1987.

On May 14, 1987 the Department entered an order which closed the claim with time-loss as paid, and with compensation for permanent partial disability equal to 5% as compared to total bodily impairment.

On July 8, 1987 the claimant filed with the Department his protest and request for reconsideration of its May 14, 1987 order. The Department issued an order dated August 18, 1987, holding its order dated May 14, 1987 in abeyance. By order dated September 25, 1987, the Department affirmed its order dated May 14, 1987. On October 7, 1987 the Board of Industrial Insurance Appeals received a notice of appeal filed by the claimant from the Department order dated September 25, 1987. The Board issued an order granting claimant's appeal on October 19, 1987, which assigned the appeal Docket No. 87 3313 and directed that proceedings be held on the issues raised in the notice of appeal.

2. On March 13, 1982, the claimant while in the course of his employment with Washington King Clam, Inc. was injured. As a proximate result of this injury the claimant was temporarily totally disabled from gainful employment for certain periods of time between March 13, 1982 and February 3, 1987.

3. The claimant's monthly wages for the month of March 1982 were $1,627.10.

CONCLUSIONS OF LAW

  1. The Board of Industrial Insurance Appeals has jurisdiction over the parties and the subject matter of this appeal.
  2. The amendments to RCW 51.08.178 found at Laws of 1988, ch. 161, §12, p. 698-699, have prospective effect only and may not be retroactively applied to this claim involving a March 13, 1982 industrial injury. [10]
  3. Pursuant to RCW 51.08.178, the time-loss compensation rate to which the claimant is entitled is fixed by the month and is based upon his monthly wage at the time of injury, which equaled $1,627.10. The Department orders providing time- loss compensation in this claim were based upon averaging monthly wages, were entered by the Department without statutory authority, and were void ab initio as to the calculation method used.
  4. The Department order dated September 25, 1987 adhering to the provisions of a prior order closing this claim with time-loss compensation as paid and a permanent partial disability award equal to 5% as compared to total bodily impairment, is incorrect. The Department order is reversed and the claim is remanded to the Department with direction to pay time-loss compensation to the claimant based on the monthly wage at the time of injury, $1,627.10, for the period of March 1982 through February 3, 1987, less prior time-loss compensation paid, and thereupon close the claim with the previously paid permanent partial disability award equal to 5% as compared to total bodily impairment.

It is so ORDERED.

Dated this 3rd day of January, 1989.

BOARD OF INDUSTRIAL INSURANCE APPEALS

/s/

SARA T. HARMON Chairperson

/s/

FRANK E. FENNERTY, JR. Member

/s/

PHILLIP T. BORK Member


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