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Date: 06-23-2011
Case Style: Crown, Cork & Seal v. Sylvia Smith
Case Number: 83854-2
Judge: Johnson
Court: Washington Supreme Court on appeal from the Superior Court of Thurston County
Plaintiff's Attorney: Kathryn Carman Comfort, Tacoma, Washington; Natalee Ruth Fillinger, Washington State Attorney Generals Office, Olympia, Washington; Anastasia R. Sandstrom, Attorney General's Office, Seattle, Washington
Defendant's Attorney: Lee Edward Schultz, Seattle Washington and Kenneth Wendell Masters, Masters Law Group, PLLC, Brainbridge Island, Washington
Description: This case asks the court to determine what constitutes a
"previous bodily disability" entitling an employer to second injury fund coverage
under RCW 51.16.120(1) of the Industrial Insurance Act. Division Two of the
Court of Appeals held that Crown, Cork & Seal (Crown) was not entitled to second
injury fund coverage because any injury to the employee did not substantially
impact the employee's daily functioning and efficiency. We affirm.
FACTS
In 1980, Sylvia Smith began employment with Crown, a manufacturer of beer
and soda cans. Smith worked as a bagger, a job requiring her to push a string of
Cause No. 83854-2
beer and soda can tops into a bag, physically remove the bag from a mandrel, then
fold the bag and stack it on a pallet. Smith performed this sequence three times a
minute during 12-hour shifts. Certified Appeal Board Record (CABR) Perpetuation
Dep. Upon Oral Examination of Douglas M. Gorker (Mar. 20, 2006) at 5-7.
The evidence Crown submitted indicates that, in January 1994, Smith
experienced pain in her left wrist and swelling in both arms. Smith sought
emergency room treatment. The attending physician diagnosed Smith with tendosynovitis1 and provided her with wrist splints to wear while working or when
sleeping. Later that month, Smith consulted an osteopath, who instructed her to
wear wrist splints while working, but placed no substantial restrictions on her work.
One month later, during a follow up appointment, another physician noted that
Smith's wrist had gotten "significantly better" and showed no swelling or
tenderness. Smith was not diagnosed with carpal tunnel syndrome during either of
these examinations. CABR Dep. Upon Oral Examination of Sean Atteridge, DO
(Apr. 11, 2006) at 30-31.
In January 1997, after 17 years of uninterrupted employment with Crown,
1 "[T]endosynovitis" is the inflammation of a tendon and its enveloping sheath. Stedman's Medical Dictionary 1795 (27th ed. 2000).
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Smith sustained an industrial injury at work when a forklift ran over and fractured
her right leg. Prior to her industrial injury, the record indicates that Smith's wrist
pain caused difficulty with some daily activities, including cutting vegetables,
mowing her lawn, and performing other household chores. However, Smith did not
seek any active medical treatment for her wrist pain between 1994 and the time of
her industrial injury in 1997. CABR Test. of Sylvia Smith (Apr. 14, 2006) at 32,
34, 44; CABR Dep. Upon Oral Examination of Barbara Berndt, M.ED, CRC, CCM
(May 5, 2006) at 16.
Following the forklift accident, Smith received numerous medical and
physical evaluations. In 1997, Smith received two physical evaluations -- one noted
that Smith had normal upper body extremity functions and the other noted no
medical difficulties other than her leg trauma. In 1998, a physical capacities report
indicated that Smith had carpal tunnel complaints, but this report was based on
Smith's description of her medical condition and was not a medical diagnosis. In
2000, another medical evaluation indicated the symptoms of carpal tunnel. CABR
Dep. of Berndt (May 5, 2006) at 21-22, 26; CABR Test. of Erin McPhee (Apr. 14,
2006) at 28.
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Also during this time, in 1998, a certified rehabilitation counselor conferred
with Smith to determine whether Smith was eligible for vocational retraining. The
rehabilitation counselor decided that Smith was unable to perform her prior duties at
Crown, and Smith was placed in a retraining program for office helpers. Due to her
continuing complaints of hand pain, Smith did not complete the vocational retraining
program. CABR Test. of McPhee (Apr. 14, 2006) at 5, 11.
In 2005, the Department of Labor & Industries (L&I) determined that Smith's
industrial leg injury left her permanently and totally disabled. L&I ordered Crown,
a self-insured employer, to place Smith on the pension rolls. L&I also issued an
order denying Crown second injury fund coverage.
Crown appealed L&I's order to the Board of Industrial Insurance Appeals
(BIIA). The BIIA found that "[n]one of Ms. Smith's pre-existing physical and/or
mental conditions constituted a 'previous bodily disability'" and affirmed L&I's
order. In re Smith, No. 05 14864, at 11 (Wash. Bd. of Indus. Ins. Appeals July 17,
2006). On Crown's appeal, the superior court reversed the BIIA. Examining the
factual record developed by the BIIA, the superior court concluded that Smith's
carpal tunnel conditions preexisted her industrial injury and did constitute a
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"previous bodily disability."
On L&I's appeal, Division Two of the Court of Appeals reversed the superior
court. The Court of Appeals held that a "previous bodily disability" is a disability
that evidences a loss of daily functioning and efficiency and may be shown despite
the employee's ability to perform her workplace functions. According to the Court
of Appeals, Smith's difficulty with household chores and the presence of pain were
insufficient to constitute a "previous bodily disability."
ISSUE
Whether Smith suffered a "previous bodily injury" under RCW 51.16.120(1),
thereby entitling Crown to second injury fund coverage.
ANALYSIS
The question before us is, under the statute, what constitutes a "previous
bodily disability" for second injury fund coverage. We review questions of law de
novo. Cockle v. Dep't of Labor & Indus., 142 Wn.2d 801, 807, 16 P.3d 583 (2001)
(citing Stuckey v. Dep't of Labor & Indus., 129 Wn.2d 289, 295, 916 P.2d 399
(1996)).
The second injury fund is a component of the state workers' compensation
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Cause No. 83854-2
system and is used to partially relieve an employer's costs related to an injured worker's pension. Employer access to the fund is governed by RCW 51.16.120(1).2
The statute applies when an employee with a "previous bodily disability" suffers a
subsequent work-related industrial injury and the combined effect of both the
previous disability and the subsequent industrial injury results in total and permanent
disability. The statute provides that the employer pays only the accident cost
attributable to the latter industrial injury; the second injury fund covers the
remainder.
The second injury fund serves several underlying purposes. First, the fund
encourages employers to hire and retain previously disabled workers, providing that
the employer hiring the disabled worker will not be liable for a greater disability
than what actually results from a later accident. Second, by recognizing that an
employer is only required to bear the costs associated with the industrial injuries
2 RCW 51.16.120(1), in relevant part, states: Whenever a worker has a previous bodily disability from any previous injury or disease, whether known or unknown to the employer, and shall suffer a further disability from injury or occupational disease in employment covered by this title and become totally and permanently disabled from the combined effects thereof or die when death was substantially accelerated by the combined effects thereof, then the experience record of an employer insured with the state fund at the time of the further injury or disease shall be charged and a self-insured employer shall pay directly into the reserve fund only the accident cost which would have resulted solely from the further injury or disease, had there been no preexisting disability, and which accident cost shall be based upon an evaluation of the disability by medical experts. The difference between the charge thus assessed to such employer at the time of the further injury or disease and the total cost of the pension reserve shall be assessed against the second injury fund.
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sustained by its employees, the fund encourages workplace safety and prevents
placing unfair financial burdens on employers. Jussila v. Dep't of Labor
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Cause No. 83854-2
& Indus., 59 Wn.2d 772, 778-79, 370 P.2d 582 (1962). Since no evidence or
argument is made in this case that Smith had any injury before beginning her
employment with Crown, our focus is on the latter statutory purpose.
RCW 51.16.120(1) provides three prerequisites that an employer must meet
to merit second injury fund coverage. The employer must show that its employee
had a "previous bodily disability from any previous injury or disease, whether
known or unknown to the employer." RCW 51.16.120(1). The employee must then
sustain an industrial injury. Last, the employee must "'become totally and
permanently disabled'" as a proximate result of the "'combined effects"' of the two.
Seattle Sch. Dist. No. 1 v. Dep't of Labor & Indus., 116 Wn.2d 352, 357, 804 P.2d
621 (1991) (quoting RCW 51.16.120(1)).
In this case, neither party disputes that Crown's employee, Smith, is now
totally and permanently disabled, nor that Smith's total disability resulted from the
combined effects of Smith's carpal tunnel symptoms and her industrial forklift
injury. Therefore, the sole issue before us is whether Smith's prior wrist conditions
constituted sufficient evidence of a "previous bodily disability" at the time she
suffered her industrial injury in 1997.
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Cause No. 83854-2
Crown argues that a "previous bodily disability" exists when an employee's vocational options are limited by a preexisting condition.3 More specifically, Crown
contends that a "previous bodily disability" may be shown when the preexisting
disability impacts an employee's daily activities enough to limit vocational
opportunities. Crown asserts that second injury fund coverage should be denied
only when the preexisting condition is latent or rarely interferes with an employee's
ordinary pursuits of life.
The Court of Appeals' holding articulates a similar interpretation of "previous
bodily disability." Reviewing the case law, the court determined that a "previous
bodily disability" may be shown by looking to the employee's functioning both
inside and outside the workplace:
In some cases, individuals will suffer a loss of "daily functioning and efficiency" and have a loss in potential "earning power" but still be
3 In its petition for review, Crown argues that the Court of Appeals erred by improperly substituting its own factual findings for those of the superior court. Crown relies principally on Ruse v. Department of Labor & Industries, 138 Wn.2d 1, 5, 977 P.2d 570 (1999) (quoting Young v. Department of Labor & Industries, 81 Wn. App. 123, 128, 913 P.2d 402 (1996)) ("review is limited to examination of the record to see whether substantial evidence supports the findings made after the superior court's de novo review, and whether the court's conclusions of law flow from the findings"). However, Crown's argument misconstrues the Court of Appeals' decision. Before reviewing whether substantial evidence supported the superior court's findings, the Court of Appeals first turned to the question of whether the trial court properly construed RCW 51.16.120(1). Since the Court of Appeals determined that the superior court applied an incorrect legal standard for "previous bodily disability," the Court of Appeals held that, as a matter of law, the findings did not support showing that Smith had a previous bodily disability. Crown Cork & Seal Co., v. Smith, noted at 151 Wn. App. 1030, 2009 WL 2233108, at *3. Since the Court of Appeals did not make its own factual findings, but rather applied the existing findings to a different legal standard, we reject this argument.
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Cause No. 83854-2
able to do their job at their current place of employment.
Crown Cork & Seal Co. v. Smith, noted at 151 Wn. App. 1030, 2009 WL 2233108,
at *4. Applying this standard, the Court of Appeals denied Crown second injury
fund coverage by concluding that Smith's daily functioning and efficiency, at the
time of her industrial injury, were insufficiently impacted to be a "'previous bodily
disability.'" Crown, 2009 WL 2233108, at *4.
L&I agrees with the Court of Appeals' conclusion that Smith's wrist
problems did not constitute a "previous bodily disability" but argues that the court's
decision applies a legal standard that is too permissive. L&I contends that RCW
51.16.120(1) contemplates a narrowly focused test requiring that the employee's
previous disability substantially affect that employee's ability to do her current job.
Put another way, L&I argues that a "previous bodily disability" must be evident by
solely looking to whether the disability substantially impacted the employee's work
performance.
While L&I's position roughly accords with some BIIA cases, we find that the
legal standard of "previous bodily disability" that emerges from our existing case
law is more nuanced than L&I suggests.
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Cause No. 83854-2
The Industrial Insurance Act, Title 51 RCW, does not provide a definition for
the term "disability." However, in the context of occupational disease, this court
has defined "disability" to mean
the impairment of the workman's mental or physical efficiency. It embraces any loss of physical or mental functions which detracts from the former efficiency of the individual in the ordinary pursuits of life. It connotes a loss of earning power.
Henson v. Dep't of Labor & Indus., 15 Wn.2d 384, 391, 130 P.2d 885 (1942)
(citing 2 William Richard Schneider, The Law of Workmen's Compensation Rules
of Procedures and Commutation Tables §400, at 1332 (2d ed. 1932)). This standard
has been used to define "previous bodily disability" for second injury fund cases,
both in the appellate courts and in BIIA decisions. Later appellate court decisions
further developed this standard by indicating that the preexisting disability cannot be
"latent, or quiescent, and not disabling" and merely be "'lighted up'" by the second
injury. Donald W. Lyle, Inc. v. Dep't of Labor & Indus., 66 Wn.2d 745, 746, 405
P.2d 251 (1965); Rothschild Int'l Stevedoring Co. v. Dep't of Labor & Indus., 3
Wn. App. 967, 478 P.2d 759 (1970).
Additionally, numerous BIIA decisions have addressed the issue of second
injury fund coverage when an employer asserts its employee had a "previous bodily
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Cause No. 83854-2
disability." While these BIIA decisions are highly fact-specific, they are generally
in accord with our appellate decisions and start from the premise that a "'previous
bodily disability'" must be "[s]omething more than the existence of prior conditions
requiring periodic medical attention." See, e.g., In re Pate, No. 90 4055, 1992 WL
160673, at *2 (Wash. Bd. of Indus. Ins. Appeals May 7, 1992).4
These rules are widely cited and shape the inquiry into what constitutes a
"previous bodily disability;" however these rules are so general that they do little to
establish a finer measure of what is included in the term. Looking closer at the
underlying purpose and amendments to RCW 51.16.120, and to our appellate court
and BIIA decisions, we hold that a "previous bodily disability" is an objectively
injured state -- rather than a transitory condition -- that either effectively impacts an
employee's performance in the workplace or materially diminishes the employee's
functional ability to perform the essential activities associated with daily living.
The purpose of the second injury fund establishes the parameters of what
constitutes a "previous bodily disability." The second injury fund promotes fairness
in distributing the costs of industrial accidents and improves safety by ensuring that
4 BIIA decisions are not binding on this court, but can provide instructive guidance. Jenson v. Dep't of Ecology, 102 Wn.2d 109, 113, 685 P.2d 1068 (1984) (appellate courts give substantial weight to an administrative agency's interpretation of the law).
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each employer's cost burden is equal to just those injuries caused in
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the employer's workplace. Jussila, 59 Wn.2d at 778-79. Our case law was
developed with this purpose in mind and bears out the principle that temporary
conditions are insufficient to constitute a previous bodily disability; rather the
employer must demonstrate that its employee had an actual, chronic disability. Lyle,
66 Wn.2d at 748 (holding that the purpose of the second injury fund statute
contemplates a "preexisting disabling injury"); e.g., In re Pate, No. 90 4055, at *2.
In light of these cases and the underlying purpose of the second injury fund, it
is also evident that the second injury fund was not established to permit employers
to avoid paying an employee's full pension when the employer bears responsibility
for the employee's injured state. In other words, an employer cannot demand its
employee perform a strenuous job then seek relief when that job strains the
employee's stamina. Instead, a "previous bodily disability" must be an objectively
disabling injury rather than the result of a transitory condition, such as the normal
age-related degeneration of the body's function or fatigue due to strenuous physical
exertion in the workplace. Rothschild, 3 Wn. App. at 968 (coverage denied when
industrial injury "'triggered'" a "'traumatic neurosis'" aggravated by employee's
advancing age, general frailty, and overall physical condition); Lyle, 66 Wn.2d at
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Cause No. 83854-2
746 (coverage denied for degenerative arthritis that was "latent, or quiescent" at
time of further injury).
This reasoning is supported by legislative amendments to RCW 51.16.120(1).
The statute formerly allowed second injury fund coverage for a "previous bodily
infirmity or disability," but the legislature amended the statute to remove "infirmity
or," thereby narrowing the applicable scope of the statute. Former RCW
51.16.120(1) (Laws of 1977, 1st Ex. Sess., ch. 323, § 13). By removing "infirmity"
from the statute, the legislature eliminated temporary conditions and naturally
occurring frailties or fatigue from second injury fund protection but retained actual,
chronic "disabilities" that affect an employee's work performance. This reasoning
is supported by the outcomes in numerous BIIA decisions. In re Funk, No. 89
4156, at 2 (Wash. Bd. of Indus. Ins. Appeals Feb. 4, 1991) (coverage denied when
logger performed "apparently without limitation"); In re Anderson, No. 88 4251,
1990 WL 310624, at *4 (Wash. Bd. of Indus. Ins. Appeals June 15, 1990)
(coverage denied when employee "was able to regularly perform his duties" for
nearly 36 years without major interruption).
But RCW 51.16.120(1) does not limit second injury fund coverage to those
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Cause No. 83854-2
employers able to show a "previous bodily disability" by evidence of an employee's
workplace impairment. The statute also affords second injury fund coverage when
an employee's previous disability materially diminishes his or her functional ability
to perform the routine activities of daily living. Put another way, an employer may
still show an employee's "previous bodily disability," despite the absence of
workplace impairment, if the employee's disability has a significant impact on the
essential activities of day-to-day life. This situation is most likely to occur where
the employee suffers a disabling injury independent of employment, which has no
apparent affect on job performance but, when combined with an industrial injury,
results in permanent and total disability. This is also evident from legislative
amendments to RCW 51.16.120(1).
In its last substantive amendment,5 the legislature inserted the phrase
"whether known or unknown" into the statute to eliminate any requirement that an
employer have knowledge of its employee's "previous bodily disability." RCW
51.16.120(1), amended by Laws of 1984, ch. 63, § 1. Following this amendment,
any interpretation of RCW 51.16.120(1) that requires an employer to show that its
5 RCW 51.16.120 was further amended in both 2004 and 2010. The 2004 amendment added a subsection to the statute that is irrelevant to determining the scope of "previous bodily disability." The 2010 amendment made nonsubstantive changes to two subsections of the statute. See RCW 51.16.120, amended by Laws of 2004, ch. 258, § 1; and Laws of 2010, ch. 213, §1.
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Cause No. 83854-2
employee suffered a "previous bodily disability" resulting in workplace impairment
makes little sense when the statute removes the requirement of an employer's
knowledge of its employee's disability. Several appellate court and BIIA decisions
support finding a "previous bodily disability" without requiring the employer to
show workplace impairment. See, e.g., Puget Sound Energy, Inc. v. Lee, 149 Wn.
App. 866, 888-89, 205 P.3d 979 (2009) ("While a 'previous bodily disability' must
have a substantial negative impact on the worker's physical or mental functioning, it
does not follow that is must have a substantial negative impact on the worker's
ability to perform his or her current job."); In re Powell, No. 97 6424, 1999 WL
756228, at *5 (Wash. Bd. of Indus. Ins. Appeals July 21, 1999) (insulin-dependent
diabetes constituted a previous bodily disability despite a record "devoid" of
information regarding whether the diabetes impacted employee's work).
In sum, the employer seeking second injury fund coverage under RCW
51.16.120(1) bears the burden of establishing that its employee had a "previous
bodily disability." To show a "previous bodily disability" the employer must
produce evidence that the employer either hired or retained the employee in an
objectively injured state; transitory conditions arising from natural age-related
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Cause No. 83854-2
degeneration or fatigue due to exertion in the workplace are insufficient. However,
the evidence to meet this burden is not limited to evidence showing that the
disability effectively impaired the employee's ability to perform his or her work
duties. While it stands to reason that the clearest cases will be based on evidence
showing that the employee suffered an objective injury impairing his or her ability to
perform occupational duties, a previous bodily disability may be disabling without
the employee exhibiting outward signs of workplace impairment if the preexisting
disability materially diminished the employee's ability to perform the activities of
daily living and combined with an industrial injury caused permanent and total
disability.
The only question remaining is whether Crown has satisfied its burden and is
entitled to second injury fund coverage for Smith's injuries. We find that the
evidence in this case is insufficient to merit second injury fund relief. As mentioned,
Crown has the burden to show that, at the time of her 1997 industrial injury, Smith's
preexisting wrist issues either effectively impacted workplace performance or
materially diminished her ability to perform the activities of daily living. Crown
fails to carry its burden.
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Cause No. 83854-2
In this case, the evidence shows that Smith fully performed her workplace
functions as a bagger, except for a brief period in 1994 when she experienced wrist
pain and sought medical treatment. But this brief period alone is insufficient to
show a "previous bodily disability" because Crown does not establish that Smith's
wrist complaints were caused by something more than the normal wear and tear of
performing a physically demanding job. To the contrary, Smith's carpal tunnel
condition was evidently work-related and caused by the strenuous, repetitious work
that Smith performed for Crown.
Crown is also unable to show that Smith's condition materially detracted
from her daily life. Smith testified that, after working her weekly shift, she
experienced some difficulty in the ordinary pursuits of life, namely performing
household chores. However, this testimony does not show that Smith was unable to
substantially perform these tasks or that Smith was unable to procure other
employment at the time of her industrial injury because of her wrist pain. A
previously injured employee who retains the ability to perform all ordinary life
activities -- including but not limited to work activities -- does not have a "previous
bodily disability." Crown has not established that Smith suffered from a "previous
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Cause No. 83854-2
bodily disability" at the time of the industrial injury to her leg.
* * *
See: http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=838542MAJ
Outcome: As used in RCW 51.16.120(1), a "previous bodily disability" is an
objectively injured state that either effectively impacts an employee's performance
in the workplace or materially diminishes the employee's functional ability to
perform the routine activities associated with daily living. We affirm the Court of
Appeals.
Plaintiff's Experts:
Defendant's Experts:
Comments: