Opinion
No. 60574-7-I.
July 7, 2008.
Appeal from a judgment of the Superior Court for Skagit County, No. 06-2-00065-2, Susan K. Cook, J., entered August 16, 2007.
Affirmed by unpublished opinion per Grosse, J., concurred in by Ellington and Leach, JJ.
A surviving spouse of an industrial worker whose death is work-related is entitled to compensation under the Industrial Insurance Act. Calculation of compensation awards is based on the deceased worker's total average monthly wages at the time of death. While a worker's total earned wages may be from multiple sources of employment, only wages actually earned and not payments that are speculative or contingent are included in calculating the wage benefit. Here, a widow's monthly compensation award properly excluded her husband's "deferred wages" which were contingent upon a mining venture becoming both operational and profitable, an event that has not yet occurred even many years after her husband's death. The trial court is affirmed.
Chapter 51.32 RCW.
FACTS
Fred Thomas died of a heart attack on May 7, 1999 while engaged in work-related activities for Frank Harkness Trucking and Logging (Harkness). Fred was not, however, a regular employee of Harkness. Rather, Fred was working there for one day only in his stepson's stead for an hourly wage of $12.50, or $100 per 8-hour workday.
Maria Thomas filed a widow's claim with the Washington Department of Labor and Industries (Department) shortly thereafter. The Department calculated Fred's wage rate based on a 12-month wage of $100 total pursuant to RCW 51.08.178(2) as he was not "normally employed" by Harkness and was best categorized as intermittent. Thus, the Department's January 27, 2004 order set the average monthly wage benefit due to Maria at $8.33, but she was awarded the monthly statutory minimum of $215.
See RCW 51.32.060(1)(a).
Maria does not assign error to the Department's calculation of Fred's wage rate as it relates to his one day of employment with Harkness. Rather, she contends that the monthly wage calculation should have included wages Fred earned from his employment with the Noble Lady Mine, LLC (Mine). The Thomases were the majority owners of the Mine and both served on its Management Committee. Under his employment contract with the Mine, Fred worked 160 hours a month for deferred wages, totaling approximately $4,000 a month (based on a rate of $25 an hour) that would be "paid upon production of the mine" according to his employment contract. "[I]n production" meant that the mine was doing business and selling minerals. Once the Mine was producing sufficient profits, Fred would be paid his wages, including back-pay of the deferred wages. The Mine, however, never went "in production," and has never sold any ore or other minerals. Moreover, the Mine has been closed and inoperative since 2003.
There was no signed contract in effect when Fred died in 1999, but it had been agreed that he was continuing to work for the Mine under the same terms that year by oral contract.
Fred Thomas had no other documented income during the years immediately preceding his death and did not file tax returns for the years 1997, 1998, or 1999. The Department excluded Fred's purported wages from the Mine as they constituted future payments that were both highly speculative and contingent. Both the Industrial Appeals Board judge (IAJ) and the trial court agreed with the Department's decision and its reasoning. Maria Thomas appeals.
ANALYSIS
Washington's Industrial Insurance Act (Act) is a time-loss compensation scheme for workers who suffer an industrial work- related injury. Under RCW 51.32.050(2), a surviving spouse of a deceased worker eligible for benefits under the Act is entitled to receive monthly benefits for life or until remarriage per a fixed schedule. After extensive amendments to the Act in 1971, compensation benefits are now calculated based on the worker's wages at the time of the injury or death.
Chapter 51.32 RCW.
Laws of 1971, ch. 289, § 14.
Appellate review of claims filed under the Act is fairly limited. This court examines the record to determine whether substantial evidence supports the trial court's findings, based on its de novo review from the Board record, and whether the court's conclusions of law follow from those findings. Here, this standard is easily met.
Young v. Dep't of Labor Indus., 81 Wn. App. 123, 127-28, 913 P.2d 402 (1996); see also Dils v. Dep't of Labor Indus., 51 Wn. App. 216, 218, 752 P.2d 1357 (1988).
The Act's provisions should be liberally construed in favor of the worker so as to achieve its purpose of providing expedient relief to those that fall within its protection. However, the person claiming benefits under the Act must still demonstrate the right to receive such compensation. As compensation is based on an injured worker's wage rate, a worker's entitlement (or family members' entitlement in the case of the worker's death) to any compensation or benefits under the Act requires earned wages.
Du Pont v. Dep't of Labor Indus., 46 Wn. App. 471, 475, 730 P.2d 1345 (1986).
See Jenkins v. Dep't of Labor Indus., 85 Wn. App. 7, 931 P.2d 907 (1996).
RCW 51.08.178 provides:
The term "wages" shall include the reasonable value of board, housing, fuel, or other consideration of like nature received from the employer as part of the contract of hire. . . . The daily wage shall be the hourly wage multiplied by the number of hours the worker is normally employed. The number of hours the worker is normally employed shall be determined by the department in a fair and reasonable manner, which may include averaging the number of hours worked per day.
Thus, "wages" are more comprehensive than just cash payments as "consideration of like nature" may include items like healthcare benefits. But, consistent with the Act's purpose, the Supreme Court has held that compensation for the value of pension benefits (before a worker is eligible for them) is improper under the Act as they are not part of a worker's wages and are not necessary to the worker's basic health and survival at the time of the injury. Such future expectancies do not serve the Act's purpose of "reducing to a minimum the suffering and economic loss arising from injuries and/or death occurring in the course of employment."
E.g. Cockle v. Dep't of Labor Indus., 96 Wn. App. 69, 977 P.2d 668 (1999).
See Gallo v. Dep't of Labor Indus., 155 Wn.2d 470, 120 P.3d 564 (2005).
Maria argues that even though Fred did not receive easily calculable wages from the Mine, his work can be evaluated by comparing similar job positions. RCW 51.08.178(4) provides:
In cases where a wage has not been fixed or cannot be reasonably and fairly determined, the monthly wage shall be computed on the basis of the usual wage paid other employees engaged in like or similar occupations where the wages are fixed.
But, workers compensation is not based upon what an employee could earn, but rather what an employee actually did earn. Potential compensation is entirely outside the worker's compensation statutory scheme. Compensation contingent on some future occurrence is not a wage that is simply difficult to fairly determine or has not yet been fixed. The inclusion of those contingent and speculative payments are improper whether calculated under subsection (4) or under subsections (1) or (2) to RCW 51.08.178.
Fred Thomas had not actually been paid any of his earned deferred wages at the time of his death, nor was he entitled to such payment. The Act does not contemplate compensation for payments that are merely speculative and contingent at the time of the worker's death. Further, the trial court's findings and resulting conclusion that Fred's deferred wages from the Mine were highly speculative and contingent are supported by substantial evidence. Thus, the wages were properly excluded in calculating Fred's wage rate under RCW 51.08.178.
Finally, Maria's request for attorney fees under RAP 18.1 and RCW 51.52.130 is denied. Not being the prevailing party, she is not entitled to attorneys fees on appeal.
The trial court is affirmed.