Opinion
No. 59854-6-I.
June 2, 2008.
Appeal from a judgment of the Superior Court for Whatcom County, No. 05-2-01493-4, Charles R. Snyder, J., entered March 23, 2007.
Affirmed by unpublished opinion per Agid, J., concurred in by Schindler, C.J., and Becker, J.
After Susan Peterson won a judgment for benefits before the Board of Industrial Insurance Appeals (Board), she moved for sanctions against the Department of Labor and Industries (Department). Because the Department's defense against Peterson's benefits claim was legally and procedurally sound, we affirm the Board's ruling denying her motion for sanctions.
FACTS
The facts related to Peterson's industrial injury and workers' compensation claim are uncontested. On July 1, 2002, Peterson sustained a shoulder injury at work, diagnosed as a rotator cuff tear with retraction. The Department accepted her workers' compensation claim and provided treatment.
On May 22, 2003, Peterson's attorney wrote a letter to the Department requesting coverage for mental health treatment and enclosing documents from a psychologist, Dr. Jeremiah Schwartz, and one of her physicians, Dr. Michael Hughes. On June 17, 2003, Peterson's attorney left a phone message for Peterson's Department claim manager asking whether the Department would accept Peterson's mental health condition. The claim manager replied that the Department had not yet accepted or denied Peterson's psychological condition and would be requesting Peterson's medical records. The claim manager then sent Peterson the standard release of information and provider forms.
On June 27, 2003, the Department received the completed forms, and on July 11, 2003, the Department sent records requests to Drs. Hughes and Schwartz. The Department received Dr. Hughes's records on July 24, 2003, and Dr. Schwartz's records on July 25, 2003. On or about August 21, 2003, the Department asked an occupational nurse consultant for her opinion on whether to accept Peterson's mental health condition under her shoulder injury claim.
On August 29, 2003, the Department sent Dr. Hughes a letter (the Hughes letter) specifying the medical conditions for which the Department accepted Peterson's benefits claims. The letter was silent about Peterson's mental health claim. On September 5, 2003, Peterson's attorney sent another letter requesting "a written decision on Ms. Peterson's mental health care treatment." The letter stated, "we have yet to receive a decision on this matter."
On September 25, 2003, Peterson filed a notice of appeal, contending that theHughes letter constituted an unwarranted denial of her claim for mental health treatment. On September 30, 2003, the occupational nurse consultant recommended that the Department obtain an independent psychiatric medical examination to determine whether Peterson's mental health condition was related to her job or to her shoulder injury.
On October 23, 2003, the Board granted Peterson's appeal. The Department moved to dismiss on the grounds that the Hughes letter did not deny Peterson's mental health condition and the Board did not have jurisdiction to hear an appeal. On April 21, 2004, the Board Industrial Appeals Judge (IAJ) denied the Department's motion to dismiss. The Department then filed a petition for interlocutory review of the IAJ's order, which was denied on May 4, 2003.
On May 3, 2004, Peterson took Dr. Schwartz's perpetuation deposition. Dr. Schwartz opined that Peterson's depression was caused by her industrial injury, but he also said that other stressors in Peterson's life may have caused her depression. At the May 5, 2004 hearing, Peterson presented Dr. Schwartz's testimony; she and her husband also testified. At the conclusion of Peterson's case, the Department rested, stating that it would renew its jurisdictional argument. After the hearing, the IAJ issued a proposed decision and order, reaffirming her denial of the Department's motion to dismiss and directing the Department to accept Peterson's mental health claim. The Department petitioned the Board to review the IAJ's proposed decision on the jurisdictional issue. On January 24, 2005, the Board denied review by adopting the IAJ's proposed decision as its final order.
On March 10, 2005, Peterson filed a motion for sanctions, requesting attorney fees and costs under CR 11 and RCW 4.84.185. Peterson claimed that the Department's efforts to dismiss her case and its defense at the hearing were frivolous. The Board denied Peterson's motion for sanctions, finding that, "[t]he Department's belief that the Board lacked authority to consider the mental health condition was not unreasonable . . . the Department was justified in relying on its scope of review objection as a defense to this appeal." Peterson appealed the ruling denying her motion for sanctions to the superior court, and the court affirmed.
This appeal followed.
DISCUSSION
On appeal, the Board's decision is viewed as being prima facie correct, and the burden of proof is on the party challenging that decision. Both the superior court and this court review decisions of the Board de novo, but "cannot consider matters outside the record or presented for the first time on appeal." The Board's decision is entitled to deference, but may be reversed for errors of law.
RCW 51.52.115; Ruse v. Dep't of Labor Indus., 138 Wn.2d 1, 5, 977 P.2d 570 (1999).
Sepich v. Dep't of Labor Indus., 75 Wn.2d 312, 316, 450 P.2d 940 (1969).
See City of Redmond v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 136 Wn.2d 38, 46, 959 P.2d 1091 (1998) (deference accorded to Board's interpretations of law, but not binding).
As a preliminary matter, we first address the Department's claim that Peterson's motion should have been dismissed for lack of subject matter jurisdiction because she failed to file it within 30 days after the Board entered its order, as required under RCW 4.84.185. The time limit in RCW 4.84.185 does not apply to motions for sanctionsbefore the Board. Rather, its language refers to frivolous lawsuits in superior court. Because we are reviewing an order of the Board, we reject the Department's argument and review the order on the merits.
We now turn to Peterson's claim for CR 11 sanctions. CR 11 is designed "`to deter baseless filings and to curb abuses of the judicial system.'" CR 11 is not a fee shifting mechanism. To obtain sanctions under CR 11, Peterson had to establish that: (1) the Department's action was not well grounded in fact; (2) it was not warranted by existing law; and (3) the Department failed to conduct a reasonable inquiry into the legal or factual basis of the action. In the context of this case, the burden was on Peterson to prove that the Department's defense to her appeal at the Board "cannot be supported by any rational argument on the law or facts."
Neither party raises the question whether CR 11 applies to litigation with the Department before the Board, so we do not address it.
Biggs v. Vail, 124 Wn.2d 193, 197, 876 P.2d 448 (1994) (Biggs Il) (emphasis omitted) (quoting Bryant v. Joseph Tree, Inc., 119 Wn.2d 210, 219, 829 P.2d 1099 (1992)).
Id.
CR 11; Lockhart v. Greive, 66 Wn. App. 735, 743-44, 834 P.2d 64 (1992).
Smith v. Okanogan County, 100 Wn. App. 7, 24, 994 P.2d 857 (2000).
Peterson first argues that the Department's motion to dismiss her appeal at the Board was not warranted by existing law. She claims that it was beyond dispute that the Hughes letter constituted a final decision on her mental health claim and the Board was authorized to review the Department's determination. Washington courts have held that the Board's appellate authority is strictly limited to reviewing specific Department decisions. The Board may not rule on an issue on which the Departmenthas not made a decision.
See Kingery v. Dep't of Labor Indus., 132 Wn.2d 162, 171-72, 937 P.2d 565 (1997); Hanquet v. Dep't of Labor Indus., 75 Wn. App. 657, 665, 879 P.2d 326 (1994), review denied, 125 Wn.2d 1019 (1995); Lenk v. Dep't of Labor Indus., 3 Wn. App. 977, 982, 478 P.2d 761 (1970).
Lenk, 3 Wn. App. at 982.
The Department contends the Hughes letter was not an appealable decision denying benefits and the Board therefore lacked jurisdiction to hear the appeal. The Department argued, based on well-settled authority, including Lenk and Hanquet, that the Board lacked jurisdiction over Peterson's mental health claim because the Department never issued a decision on it. The Board disagreed, but it noted that the Department's position was supported by law.
Lenk v. Dep't of Labor Indus., 3 Wn. App. 977, 478 P.2d 761 (1970).
Hanquet v. Dep't of Labor Indus., 75 Wn. App. 657, 879 P.2d 326 (1994), review denied, 125 Wn.2d 1019 (1995).
We agree that the Department's position was legally sound. In fact, it is difficult to reconcile Peterson's position with the record. On September 5, 2003, approximately one week after the Department sent the Hughes letter, Peterson's attorney sent another letter requesting "a written decision on Ms. Peterson's mental health care treatment[,]" adding, "we have yet to receive a decision on this matter." Clearly, she did not view the Hughes letter as a "final determination" denying her claim at that time.
We also reject Peterson's claim that the Department's evidentiary defense was so inadequate that it constituted a sanctionable abuse of process. Although the Department's effort to refute Peterson's mental health claim was nominal, it was sufficient to put facts on the record showing that there was a genuine question about the causal relationship between her industrial injury and her mental health condition. The Department had obtained treatment records from Dr. Schwartz and Dr. Hughes, as well as Peterson's claim file and pharmacy records. From this evidence and from thetestimony of Peterson's witnesses, the Department put forth evidence that Peterson's depression may have been caused by events in her life other than her rotator cuff injury.
Finally, we reject Peterson's assertion, without citation to any supporting authority that, as a worker involved in litigation under the Industrial Insurance Act, she has a "special status" under CR 11. There is nothing in the Industrial Insurance Act, Title 51 RCW, that states or suggests that CR 11 applies differently to workers' compensation cases or to the Department than it does in other civil cases. Although the Industrial Insurance Act is a remedial statute to be "liberally construed in order to achieve its purpose of providing compensation . . . with doubts resolved in favor of the worker," workers still have to meet their burden of proof under RCW 51.52.050. Moreover, there is no authority for the proposition that CR 11 must be liberally construed in favor of a worker.
Dennis v. Dep't of Labor Indus., 109 Wn.2d 467, 470, 745 P.2d 1295 (1987).
Accordingly, we affirm the Board's order denying Peterson's motion for sanctions and deny Peterson's request for attorney fees.