| IN RE: RICHARD L. BONEY, DEC'D | ) | DOCKET NOS. 99 15811, 99 22615, 00 12121 & 00 12211 |
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| CLAIM NO. T-683150 | ) | DECISION AND ORDER |
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- APPEARANCES
- Joan Boney, Surviving Spouse of Richard L. Boney, Dec'd, by
- Schroeter, Goldmark & Bender, per
- Sidney S. Royer
- Self-Insured Employer, City of Tacoma, by
- Craig, Jessup & Stratton, per
- Richard A. Jessup
- Department of Labor and Industries, by
- The Office of the Attorney General, per
- Diane Hunter-Cornell, Assistant
Joan Boney, the surviving spouse of Richard L. Boney, Dec'd, filed appeals with the Board of Industrial Insurance Appeals to four orders of the Department of Labor and Industries.
Docket No. 99 15811: Mrs. Boney filed a Notice of Appeal on May 26, 1999, with the Board from an order of the Department of Labor and Industries dated April 21, 1999. The Department order of April 21, 1999, allowed the claim for spousal pension and ordered that the pension benefits would be deducted from the remaining third party recovery balance of $190,467.36, until the total sum had been expended in benefits. AFFIRMED.
Docket No. 99 22615: Mrs. Boney filed an appeal on December 17, 1999, with the Board from a Department order dated August 23, 1999. The Department order dated August 23, 1999, determined that no benefits or compensation would be paid until such time as the excess recovery totaling $10,786.75 had been expended for costs incurred as a result of the conditions covered under the claim. AFFIRMED.
Docket No. 00 12121: Mrs. Boney filed an appeal on February 28, 2000, with the Board from a Department order dated June 4, 1999. The Department order of June 4, 1999, determined that no benefits or compensation would be paid until such time as the excess third party recovery totaling $13,084.76 had been expended for costs incurred as a result of conditions covered under the claim. AFFIRMED. [2]
Docket No. 00 12211: Mrs. Boney filed an appeal on February 28, 2000, with the Board from a Department order dated August 9, 1999. The Department order of August 9, 1999, determined that no benefits or compensation would be paid until such time as the excess third party recovery totaling $15,764.58, had been expended for costs incurred as a result of conditions covered under the claim. AFFIRMED.
PROCEDURAL AND EVIDENTIARY MATTERS
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 self-insured employer to a Proposed Decision and Order issued on March 19, 2001, in which the orders of the Department dated June 4, 1999, August 9, 1999 and August 23, 1999 were affirmed, and the Department order dated April 21, 1999, was reversed.
The Board has reviewed the evidentiary rulings in the record of proceedings and finds that no prejudicial error was committed and the rulings are affirmed.
DECISION
The controversy in these appeals focuses on the whether the Department of Labor and Industries, pursuant to the third party recovery section of the Industrial Insurance Act, can offset the recovery against the pension benefits claimed by Mrs. Boney. In her Proposed Decision and Order, our industrial appeals judge relied on our decision in In re Lawrence Guyette, Dec'd, BIIA Dec., 89 0832 (1990), and determined that the third party recovery received during Mr. Boney's lifetime could not be used to offset the pension benefits due Mrs. Boney under her claim. Our industrial appeals judge also determined that the monies received after Mr. Boney's death could be used to offset the pension benefits due Mrs. Boney. We have granted review because we agree with the self-insured employer's position that all recoveries made by Mr. and Mrs. Boney prior to or after Mr. Boney's death may be used to offset Mrs. Boney's pension benefits due under this claim. To the extent that our decision in Guyette is inconsistent with this decision, it is overruled.
Richard Boney suffered from epitheloid mesothelioma. This condition was accepted by the Department of Labor and Industries as an occupational disease. Mr. Boney and his wife, Joan Boney, brought a third party action against a number of asbestos manufacturers. The Boneys reached settlement with a number of the third party defendants. At the time of the settlement the Department of Labor and Industries, the third party, and Mr. and Mrs. Boney agreed that 20 percent of each gross recovery was attributable to a loss of consortium claim of Mrs. Boney and would be excluded from the third party distribution calculations. [3]
As the monies were received from the various settlements, the Department issued third party distribution orders. These orders followed the statutory scheme calculating the amounts assigned to attorneys' fees and costs, the dollars due the Department and self-insured employer, and determined the excess recovery subject to offset.
On February 20, 1999, Mr. Boney died from mesothelioma. Subsequently, Mrs. Boney filed a claim for spousal benefits. On April 21, 1999, the Department issued an order allowing Mrs. Boney's claim for pension benefits. The order also determined that Mrs. Boney's pension would be subject to the remaining third party recovery balance of $190,467.36, until the total amount was expended.
After Mr. Boney's death additional third party settlements were paid. These additional recoveries were distributed by Department orders dated June 4, 1999, August 9, 1999, and August 23, 1999. These orders determined there was an additional excess recovery subject to offset in the amount of $39,636.09.
Third party actions allow an injured worker to recover damages from responsible third parties, and, at the same time, seek industrial insurance benefits. The third party section of the Industrial Insurance Act is Chapter 51.24 of the Revised Code of Washington. RCW 51.24.030 provides that:
a. If a third person, not in a worker's same employ, is or may become liable to pay damages on account of a worker's injury for which benefits and compensation are provided under this title, the injured worker or beneficiary may elect to seek damages from the third person.. . .
(3) For the purposes of this chapter, "injury" shall include any physical or mental condition, disease, ailment or loss, including death, for which compensation and benefits are paid or payable under this title.. . .
(5) For the purposes of this chapter, "recovery" includes all damages except loss of consortium.
RCW 51.24.060 provides for the method of the distribution of the amounts recovered under the third party statute. RCW 51.24.060(1)(e) provides that:
Thereafter no payment shall be made to or on behalf of a worker or beneficiary by the department and/or self-insurer for such injury until the [4] amount of any further compensation and benefits shall equal any such remaining balance . . .. Thereafter, such benefits shall be paid by the department and/or self-insurer to or on behalf of the worker or beneficiary as though no recovery had been made from a third person.
Our reading of the provisions of the third party chapter, RCW 51.24, reveals a legislative scheme that all excess third party recoveries must be exhausted before benefits, including surviving spouse benefits, are paid under the Industrial Insurance Act. The mandatory distribution scheme requires that excess third party recoveries related to the injury or disease that is the subject of the third party action, be used to offset industrial insurance benefits. In this case, Mrs. Boney's pension benefits are undisputedly related to Mr. Boney's occupational disease and subsequent death. The mandatory distribution scheme is not altered simply because a portion of the third party funds were paid before Mr. Boney's death.
We fail to recognize a principled reason for treating settlement funds recovered prior to Mr. Boney's death differently from funds recovered after his death. This is especially true in light of the fact that all funds were recovered as a result of the worker's injury. (See RCW 51.24.030) Both the worker's and the beneficiary's right to bring a third party action and the beneficiary's right to receive industrial insurance benefits flow from the worker's injury (or disease). To the extent that the Guyette decision suggests that a spouse's pension is a separate claim for third party distribution purposes, it is overruled.
The plain language of the third party chapter establishes that the Department was correct when it offset Mrs. Boney's spousal pension against all of the remaining balance of excess third party recoveries, including those received by Mr. Boney before his death.
The Department orders are correct and should be affirmed.
FINDINGS OF FACT
1. On March 13, 1996, the Department of Labor and Industries received an application for benefits filed on behalf of the claimant alleging an occupational disease of asbestos-related mesothelioma. The claim was subsequently allowed and benefits were paid to the claimant.
On July 20, 1998, the Department issued a third party distribution order distributing third party recoveries received by Mr. Boney in the amount of $581,500, of which the self-insured employer received $84,550.69 and the Department received $2,641.94 for their statutory liens, and determined an offset of excess recovery in the amount of $128,199.87. [5]
On December 9, 1998, the Department issued an order distributing an additional third party recovery by Mr. Boney of $180,000 and determining an excess recovery in the amount of $54,847,994. On December 14, 1998, the Department issued an order distributing an additional third party recovery in the amount of $60,000 and determining an additional offset against excess recovery in the amount of $23,998.13. An additional order was issued on December 14, 1998, distributing an additional third party recovery of $72,000 and determining an offset of against excess recovery in the amount of $23,998.13. On December 24, 1998, the Department issued an order distributing an additional third party recovery of $10,000 and establishing a further offset against excess recovery in the amount of $4,161.31.
On April 21, 1999, the Department issued an order placing Joan Boney, the surviving spouse of a totally and permanently disabled worker, on the pension rolls, effective February 20, 1999. On April 21, 1999, the Department issued an additional order allowing the spouse's claim for a pension and then deducting her benefits from the remaining third party recovery balance of $190,467.36. On May 26, 1999, Mrs. Boney filed a Notice of Appeal with the Board of Industrial Insurance Appeals from the April 21, 1999 Department order. On July 11, 1999, the Board issued an order granting the appeal, assigned Docket No. 99 15811, and ordered that further proceedings be held.
On June 4, 1999, the Department issued an order distributing an additional third party recovery in the amount of $40,000 and determining an excess recovery in the amount of $13,084.76. On or after January 5, 2000, the claimant received the Department order dated June 4, 1999. On February 28, 2000, Mrs. Boney filed a Notice of Appeal with the Board of Industrial Insurance Appeals from the Department order dated June 4, 1999. On March 14, 2000. The Board issued an order granting the appeal, assigned Docket No. 00 12121, and ordered that further proceedings be held.
On August 9, 1999, the Department issued an order distributing an additional third party recovery in the amount of $45,200 and determining an offset against the excess recovery in the amount of $15,764.58. On or after January 5, 2000, the claimant received the August 9, 1999 Department order. On February 28, 2000, Mrs. Boney filed a Notice of Appeal with the Board of Industrial Insurance Appeals from the Department order dated August 9, 1999. On March 14, 2000, the Board issued an order granting the appeal, assigned Docket No. 00 12211, and ordered that further proceedings be held. [6]
On August 23, 1999, the Department issued an order distributing a further third party recovery in the amount of $25,570.40 and determined a further offset against excess recovery in the amount of $10,786.75. On or after November 24, 1999, the claimant received the Department order dated August 23, 1999. On December 17, 1999, Mrs. Boney filed a Notice of Appeal with the Board of Industrial Insurance Appeals from the Department order dated August 23, 1999. On January 14, 2000, the Board issued an order granting the appeal, assigned Docket No. 99 22615, and ordered that further proceedings be held.
2. Richard L. Boney contracted asbestos-related mesothelioma. This condition constitutes an occupational disease under the Washington State Industrial Insurance Act.
3. On September 6, 1996, Richard L. Boney signed a third party election form pursuant to RCW 51.24.030. Subsequently Richard and Joan Boney made a third party recovery against several asbestos manufacturers.
4. Twenty percent of the total third party recovery consisted of Mrs. Joan Boney's claim for loss of consortium.
5. Richard L. Boney died on February 20, 1999, as a result of the effects of his occupational disease.
6. The third party recovery was received in part prior to Mr. Boney's death and part after his death. The excess third party recovery received prior to his death and subject to offset at the time of his death was the amount of $190,467.36. The amount of excess third party recovery received after his death and subject to offset was the amount of $39,636.09.
7. Mrs. Joan Boney, as the surviving spouse of a deceased worker whose death resulted from the occupational disease, is entitled to benefits pursuant to RCW 51.32.050.
CONCLUSIONS OF LAW
- The Board of Industrial Insurance Appeals has jurisdiction over the parties and the subject matter to these appeals.
- Pursuant to RCW 51.24.060, the Department and the self-insured employer are entitled to offset all excess third party recovery against the benefits paid or payable to Joan Boney under the provisions of RCW 51.32.050. [7]
- The orders of the Department of Labor and Industries dated April 21, 1999, June 4, 1999, August 9, 1999, and August 23, 1999, are correct, and are affirmed.
It is so ORDERED.
Dated this 24th day of October, 2001.
BOARD OF INDUSTRIAL INSURANCE APPEALS
/s/
THOMAS E. EGAN Chairperson
/s/
JUDITH E. SCHURKE Member