INDUSTRIAL INSURANCE ‑- WORKERS' COMPENSATION ‑- RECOVERY OF INTERIM TIME LOSS PAYMENTS UPON ULTIMATE REJECTION OF CLAIM
When the Department of Labor and Industries pays temporary total disability (time loss) benefits to an industrial insurance claimant pursuant to RCW 51.32.210 prior to entry of an order, and then subsequently rejects the claim, the department is not entitled to recover back those time loss benefits in the absence of some clerical error, misrepresentation or fraud.
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July 24, 1981
Honorable Sam Kinville
Department of Labor and Industries
General Administration Building
Olympia, Washington 98504 Cite as: AGLO 1981 No. 19
Dear Mr. Kinville:
By letter previously acknowledged, you requested our opinion on a question which we paraphrase as follows:
When the Department of Labor and Industries pays temporary total disability (time loss) benefits to an industrial insurance claimant pursuant to RCW 51.32.210 prior to entry of an order, and then subsequently rejects the claim, is the department entitled to recover back those time loss benefits in the absence of some clerical error, misrepresentation or fraud?
We answer this question in the negative for reasons set forth in our analysis.
[[Orig. Op. Page 2]]
The statute in question, RCW 51.32.210, reads:
"Claims of injured workers 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 department'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 worker or his or her beneficiaries prior to such order shall likewise not be considered a binding determination of their rights under this title."
This statute and its corresponding provision relating to self-insurers1/ provide for prompt action upon filing of claims by injured workers. Where time loss is payable, the statute clearly directs that such compensation be commenced within fourteen days after receipt of the claim. We will hereafter refer to these payments, made prior to adjudication of the claim, as interim time loss payments.
The statute itself is silent on the question of whether the Department of Labor and Industries (hereafter referred to as the department) may later recover back such interim time [[Orig. Op. Page 3]] loss payments if it ultimately rejects the claim. Likewise, there are no appellate court decisions in this state directly in point. However, an analysis of workers' compensation cases involving payments made by mistake, and of other provisions of Title 51 RCW, leads us to the conclusion that these interim payments cannot be so recovered.
Our Supreme Court has held that the department may not recoup an award made under our workers' compensation law which was paid through a mistake of fact occasioned by the department. The Court ruled that absent express statutory prescription, monies paid a recipient under the law by virtue of a mistake of fact, not induced by fraud or the result of a clerical error, may not be recouped from future payments to which the recipient is entitled. See,Deal v. Department of Labor and Industries, 78 Wn.2d 537, 477 P.2d 175 (1970), citingState ex rel. Dunbar v. Olson, 172 Wash. 424, 20 P.2d 850 (1933).
Subsequent toDeal, the legislature enacted what is now RCW 18.104.22.168/ That statute authorizes the department to make claim for repayment or recoupment of monies paid a claimant under the following three circumstances: (1) When "any payment of benefits under this title is made because of clerical error, mistake of identity, innocent misrepresentation by or on behalf of the recipient thereof mistakenly acted upon, or any other circumstance of a similar nature, all not induced by fraud"; (2) when benefits have been paid pursuant to an adjudication by the department or by order of a board or court which is afterwards reversed; and (3) when payments have been induced by fraud.
Given the restraints of the Deal case against recovery and the limited recovery permitted under RCW 51.32.240, it thus follows that interim time loss payments are not recoverable by the department where they do not involve clerical error, or mistake of identity, or innocent misrepresentation, or any like circumstance. The payments are made because RCW 51.32.210, supra, [[Orig. Op. Page 4]] in effect, directs the department either to reject the claim within fourteen days or to pay interim time loss.
While, as previously stated, there are no appellate court cases directly bearing on this question in the State of Washington, the Board of Industrial Insurance Appeals has considered two cases involving substantially the same issue. They are In Re Lynnette A. Murray, BIIA Docket No. 42,296 and In Re Sandra Lucille Walster, BIIA Docket No. 43,049. InMurray, the board considered the question of whether a self-insurer must pay interim time loss under RCW 51.32.190 even though the claim was subsequently rejected. It held that the overriding intent of both RCW 51.32.210 and RCW 51.32.190 was to promote prompt action as to allowance or rejection of claims. In so ruling the board stated that interim compensation must be paid (if in fact there is temporary total disability) until a determinative initial order is entered. It reasoned that if the law was otherwise, there would have been no need for the statutes to provide that the interim payments by the department or self-insurer‑-and acceptance by the claimant prior to entry of an order‑-are not to be a binding determination of their respective rights and obligations under the Workmens' Compensation Act, saying:
". . . 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 periodprior to said order that he is in fact temporarily totally disabled due to the condition for which the claim was filed. . . ."
The Oregon Supreme Court has also discussed this question in connection with an analogous Oregon Statute3/ and has similarly concluded that even though the underlying claim for benefits is ultimately denied, the claimant is not obligated to repay interim time loss‑-in the absence of a statute requiring a worker [[Orig. Op. Page 5]] to repay interim compensation if a claim is finally denied. See,Jones v. Emanuel Hospital, 280 Or. 147, 570 P.2d 70 (1977); and see also,Williams v. State Accident Insurance Fund, 31 Ore. App. 1301, 572 P.2d 658 (1977).
We agree with that analysis. The rationale of those Oregon cases is in harmony to the stated purpose of our Workers' Compensation Act to provide sure and certain relief for injured workers as a replacement for the common law remedy which was "uncertain, slow and inadequate." See, RCW 51.04.010. Furthermore, the legislature has mandated that the act be liberally construed in favor of its beneficiaries. RCW 51.12.010.
Our own Court inDeal v. Department of Labor and Industries,supra, recognized the problem arising when funds are paid out without ultimate legal justification when it said:
". . . Superficially, none would disagree that state funds which are disbursed without ultimately proper legal 'justification' should be recovered. However, very real practicalities are presented in cases of this nature. If the industrial insurance recipient must live in fear that he may be required to repay, at some indeterminate date, that money which he has already in good faith accepted, a fundamental purpose of the act‑-to provide 'sure and certain relief for workmen, . . . their families and dependents'‑-would be emasculated.
". . . It is reasonable to assume in this case, and in most such cases, that monies previously paid to recipients have already been spent upon their minimal necessities. . . . The effect of [a recoupment] . . . upon the family unit would at least be painful, and at worst would be totally disruptive of the family's capacity to maintain itself on a reasonable subsistence basis." Page 541.
[[Orig. Op. Page 6]]
TheDeal Court also invited legislative action to meet the problem of payments which turn out to have been made in error. The legislature responded with RCW 51.32.240, supra, which, as we have seen, does not provide for recoupment or recovery in the case of interim time loss payments except for the specific grounds stated therein.
We also understand that ever since the enactment of the interim time loss statutes in 1971 and the recoupment statute in 1975, the department has interpreted those statutes asnot requiring a recipient of interim time loss payments to repay them if ultimately his claim is rejected. Such interpretations of an ambiguous statute by the administrative agency charged with its administration is entitled to "great weight," Washington Water Power v. Washington State Human Rights Comm'n, 91 Wn.2d 62, 586 P.2d 1149 (1978), Eickhoff v. Thurston County, 17 Wn.App. 774, 565 P.2d 1196 (1977); or at least "considerable weight," Weyerhaeuser Co. v. Department of Ecology, 86 Wn.2d 310, 545 P.2d 5 (1976),Port Townsend School Dist. v. Brouillet, 21 Wn.App. 646, 587 P.2d 555 (1978).
Finally, we note the possibility of a contention that retention of interim time loss payments by a claimant whose claim is ultimately denied might constitute a violation of Wash. Const., Art. VIII, § 5, prohibiting giving or loaning of the state's credit. The answer, however, is that when the payments were made, they were not gifts or loans. They were, instead, payments to which claimants were entitled pursuant to statutory authorization as part of the total scheme of compensation to workers engaged in employment covered by the Workers' Compensation Act and for which claimants have given up their common law right to sue their employers. RCW 51.04.010.
In summary, interim time loss payments are not gifts but are payments to which claimants are entitled under the law. There is no provision in our statutes which would permit the department to demand a repayment from a claimant who receives benefits under the interim time loss statute (RCW 51.32.210) in the absence of some clerical error, misrepresentation or [[Orig. Op. Page 7]] fraud as contemplated by RCW 51.32.240. When a determination of the allowance or rejection of a claim is not made within fourteen days from its filing, the decision as to who should bear the economic burden of the delayed initial determination would appear to be as stated by the Board of Industrial Insurance Appeals in the In Re Lynnette A. Murray decisionsupra:
". . . As to such cases, the legislature has simply said that the economic burden of any delayed initial determination be placed on the workmen's compensation system, rather than on the temporarily disabled claimant or other social welfare or insurance program."
We trust that the foregoing will be of assistance to you.
Very truly yours,
KENNETH O. EIKENBERRY
ROBERT G. SWENSON
Assistant Attorney General
*** FOOTNOTES ***
2/Sec. 13, chapter 224, Laws of 1975, 1st Ex. Sess.
3/Ore. Rev. Stat. § 656.262.