CENA v. STATE (2004)

PUBLISHED IN PART

The exclusive remedy provisions of the Industrial Insurance Act (IIA) bar a direct action against an employer for an injury incurred by an employee in the course of employment.¹  The bar extends to the claims administration process unless the employer's conduct exceeds all bounds of reasonable administrative procedure or is too tenuous in its relationship to the  underlying workplace injury.   Thomas Cena asserts negligent administration of a workers' compensation claim by the Department of Labor and Industries (L & I), but fails to show that his claim falls outside the exclusive remedy provisions of the IIA. We affirm the dismissal of Cena's claim on summary judgment.

FACTS

In January 1982, Thomas A. Cena, Sr., sustained a lower back injury in the course of his employment with the Washington State Department of Employment Security.   He filed an accident report with L & I on March 10, 1982.   Over a period of years various claims were made, and for a number of reasons it took approximately 14 years to determine the claims associated with the injury.   In February 1996, L & I paid Cena $120,761.26 in time-loss compensation for the period from June 1, 1982, to December 6, 1992.   Later it was determined that Cena was not paid Loss of Earning Power (LEP) benefits for an additional “missing” 524 days, and in June 1996, L & I paid Cena an additional $58,269.98 in LEP benefits for the period from December 7, 1992, to June 21, 1996.   L & I then placed Cena on pension rolls effective June 22, 1996.

Alleging numerous causes of action regarding the administration of the industrial insurance claim, including wrongful delay or denial of benefits, Thomas and Bea Cena (Cena) filed a complaint seeking damages from L & I. Cena asserted theories of negligent administration of a worker's compensation claim, negligence per se for statutory violations, negligent supervision, breach of statute, negligent infliction of emotional distress, outrage, fraud, spoliation, and violations of various criminal statutes as well.

Before trial, Cena was allowed to amend his complaint to include a claim for defamation for a comment made by an L & I claims manager to Ann Pearl Owen, counsel for Cena. Throughout much of the claims process and beyond Owen communicated directly with L & I claims managers.   One conversation occurred by telephone in February 2000.    Owen called L & I claims manager Christopher Gray to discuss the correctness of a Board of Industrial Insurance Appeals order issued by Gray. Gray claims the conversation became heated and both he and Owen became accusatory and argumentative.   Gray asserted that Owen called the L & I process and employees a fraud and that he responded by calling Owen a fraud as well.   Owen's version was different;  she claimed that Gray said Cena, or his claim, was the biggest fraud he'd ever seen.   Owen and her secretary, who claimed she could hear the conversation, were the only ones who heard the statement.   Cena testified he learned of Gray's remark in September 1991, just before trial began, over a year after the remark was made.

On a motion for summary judgment, the trial court dismissed all negligence claims, finding the exclusive remedy provisions of the IIA barred the actions.

A bench trial proceeded on the claims of intentional infliction of emotional distress, outrage and defamation.   The trial court determined that Cena failed to prove the elements of outrage/intentional infliction of emotional distress in the administration of the claim.   The trial court also held that the alleged defamatory comment, if made, was not defamatory because it was a statement of opinion that, given the context of the statement and the audience to whom it was made, could not reasonably be taken to be defamatory.   The trial court entered Findings of Fact and Conclusions of Law. Judgment for statutory fees and costs was entered.²  Cena appeals.

DISCUSSION

Summary Judgment-Negligent Claims Administration 3

Cena insists that the phrase “sure and certain relief” mentioned in the purpose statement or exclusive remedy  provision of the worker's compensation statute ⁴ creates a statutory tort duty to be imposed on L & I, but not self-insurers, which allows recovery on a theory of negligent claims administration.   We disagree.

 The exclusive remedy provision is sweeping, comprehensive, and of the broadest, most encompassing nature.⁵  A person receiving benefits under the IIA has no separate remedies for his or her injuries except where the IIA specifically authorizes a cause of action.

 The rejection of a negligent administration claim was first fully explained in Deeter v. Safeway Stores, Inc.,⁶ wherein the plaintiff filed a civil claim based on the theory of wrongful delay or denial of benefits.   The issue decided in Deeter is the same as the one here, whether the bar to direct actions for industrial injuries covered by the IIA extends to the claims administration process.   The Deeter court held that the bar was extended to the claims administration process in cases where the claim arose from a bona fide dispute over compensation and therefore is inextricably interwoven with the compensation scheme.⁷

Deeter 's reasoning was affirmed in Wolf v. Scott Wetzel Services, Inc.⁸ Central to the Wolf decision was the language in the exclusive remedy provision of the IIA. The  exclusive remedy provisions in RCW 51.04.010 withdraw from private controversy “all phases of the premises” and consider the administration of a claim as involving one of those phases.⁹  Only if the claimed injury is too tenuous in its relationship to the underlying workplace injury can a separate action lie.   The exclusive remedy is found in the IIA;  there is no other remedy for negligence-based claims of wrongful delay of benefits.¹⁰

Cena argues that Wolf and Deeter do not apply because L & I is not a self-insurer and that the injuries here are separate from the industrial injury.   But Deeter and Wolf do not distinguish between a claims administration decision made by a self-insured employer or by L & I. Nor is there reason to treat claims management decisions made by L & I employees differently than those made by claims managers for self-insureds.¹¹  In order to qualify as an exception to the ban on tort actions based on workplace injuries, Cena must satisfy a separate injury test wherein the injury resulted from an occurrence separate from the one giving rise to the claim compensable under the IIA. He cannot satisfy that test.

Here, the exclusive remedy provision applies because the remedy for the injury is based in the IIA. Claims based on wrongful delay in the payment of benefits falling short of outrage do not pass the separate injury test because a claim which arises from a bona fide dispute over compensation is inextricably interwoven with the compensation claim.¹²  Dismissal of Cena's negligence based claims by the trial  court on summary judgment was appropriate and is affirmed.¹³

The remainder of this opinion has no precedential value.   Therefore, it will be filed for public record in accordance with the rules governing unpublished opinions.

Outrage/Defamation claims

Cena's claims of outrage and defamation were rejected following a bench trial.   Findings of Fact and Conclusions of Law were filed.   Where a trial court has weighed the evidence, appellate review is limited to determining whether substantial evidence supports the findings of fact and whether the findings support the trial court's conclusions of law.14

Cena argues the trial court erred in dismissing his claim of outrage regarding the administration of his worker's compensation claim.   Cena challenges only two findings of fact pertinent to the issue.   Findings of fact 7 and 8 determine when Cena made his formal requests for certain benefits during the claims process.   Cena takes issue with the trial court's determination of the timing of his requests.   But rather than actually challenging the findings, Cena argues the findings were not sufficiently detailed.   To the extent Cena fails to challenge findings of fact, those findings are verities on appeal. 15

In order to pursue a civil tort action, the conduct in question must be so egregious as to constitute the tort of outrage.16  To recover for emotional distress inflicted by outrageous conduct, Cena necessarily had to prove the basic elements of outrage:

(1) extreme and outrageous conduct;  (2) intentional (or reckless) infliction of emotional distress;  and (3) actual result to the plaintiff of severe emotional distress.[17]

The conduct in question must be so outrageous in character and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized community.18  The question of whether the conduct complained of is sufficiently outrageous is ordinarily for a trier of fact, but initially the trial court must determine if reasonable minds could differ on whether the conduct was sufficiently extreme to result in liability.19  In making the initial determination a court considers a number of factors, including:

(a) the position occupied by the defendant;  (b) whether the plaintiff was peculiarly susceptible to emotional distress, and if the defendant knew this fact;  (c) whether defendant's conduct was privileged under the circumstances;  (d) the degree of distress caused must be severe as opposed to constituting mere annoyance, inconvenience or embarrassment which normally occur in a confrontation of the parties;  and (e) the actor must be aware that there is a high probability that his conduct will cause severe emotional distress and that he proceeds in conscious disregard of it.[20]

Here, after review of the record, we determine there is substantial evidence to support the trial court's findings, which specifically address and reject Cena's claim that there was a long established pattern of delay and denial of benefits.   The record establishes the existence of a bona fide dispute regarding Cena's entitlement to compensation, and as a result the outrage claim fails. The trial court found that in terms of providing medical benefits, L & I acted in a timely and appropriate manner.   The court also found that Cena made no request, nor provided medical verification, for monthly income continuation benefits until 1991.   Cena's claim that the December 12, 1984 letter was a request for total disability or other benefits is not supported.   Nor was there any follow up to this letter until 1991.   When Cena did make a request for total disability benefits in 1991, an investigation and adjudication regarding the request was proper due to contradictory medical evidence in Cena's file.   The actions taken by L & I were not outrageous.

Cena also claims the trial court erred by failing to determine whether Gray's calling Cena a fraud was outrageous, much less defamatory.   The determination of this issue is mainly subsumed in the discussion of Cena's defamation claim, but the claim fails because, even assuming that Gray called Cena or his claim fraudulent, the context of the statement does not rise to outrage.   The tort of outrage does not extend to insults, indignities, threats, annoyances, petty oppressions, or other trivialities.21

Defamation claim

To make a prima facie case of defamation Cena necessarily must prove “falsity, an unprivileged communication, fault and damages.” 22  But even before the truth or falsity of a claimed defamatory statement can be assessed, Cena must prove that the words constituted a statement of fact, not an opinion.   Expressions of opinion are protected under the First Amendment and are not actionable.23  Whether the allegedly defamatory words were intended as a statement of fact or an expression of opinion is a threshold question of law for the court.   Here the trial court concluded that, even if Gray called Cena the biggest fraud he'd ever seen, the statement was not defamatory because it was a statement of opinion.   Review of the record shows this conclusion is amply supported by the findings, which in turn are supported by substantial evidence.

Even if Gray's statement was more than mere opinion, Cena does not prevail.   The standard for determining whether name-calling amounts to defamation, and is therefore actionable, directs a trial court to

consider at least (1) the medium and context in which the statement was published, (2) the audience to whom it was published, and (3) whether the statement implies undisclosed facts.[24]

Here, the evidence supports the finding that the method and context of the statement indicate it should not be taken as a factual assertion that Cena was guilty of a crime.   Further, the statement was made to opposing counsel during a heated discussion and counsel, as the “audience,” should understand the statement did not mean that Cena was an actual fraud.   Here, Owen knew the facts and should have been able to judge the truthfulness of the statement.   There is ample evidence to support the trial court's finding that the statement could not reasonably be taken to have a defamatory meaning given the context and the audience.   Even Cena testified he did not know about the statement until a year after it was made.

Additionally, Cena's claim that the use of the term “fraud” was libel per se is not supported.   The inquiry is whether or not the words used are defamatory in the sense in which they would be understood, correctly or mistakenly, but reasonably, by those to whom they are published.25  In this case there is no evidence to suggest that Cena was exposed to hatred or contempt.   The publication was only to Cena's own counsel and possibly her secretary, who testified that her view of Cena remained unchanged after the use of the word.

Collateral estoppel

Unable to successfully attack findings of fact 7 and 8 as to the trial court's determination of when Cena actually requested certain benefits, Cena argues for the first time on appeal that the trial court was collaterally estopped from deciding these factual disputes due to the ruling of another trial court.   In an oral opinion, a separate trial court ordered interest to be paid on the amounts paid to Cena. It reasoned that, because Cena did what he could to procure his benefits and because he was unable to have use of the money at the time the benefits should have been paid, he was entitled to interest.   But in addition to improperly raising the argument for the first time on appeal, Cena's argument fails because the oral ruling from the other trial court did not pertain to the same issues, was not a final judgment, and application of the doctrine would work an injustice.26  Further, Cena argued at summary judgment and at a motions hearing that the other action did not present the same issues and that collateral estoppel did not apply.   Cena cannot argue the reverse now.

Cena seeks attorney fees for the appeal.   Cena's request for attorney fees and costs under RAP 18.1(a) is denied.

The decision of the trial court is affirmed.

FOOTNOTES

1.   The bar is removed for suits in which the employer is alleged to have a deliberate intent to injure the worker.  RCW 51.24.020;  Hope v. Larry's Markets, 108 Wash.App. 185, 196, 29 P.3d 1268 (2001).

2.   A separate trial has been held regarding the correct amount of industrial insurance benefits paid to Cena, including the question of interest due on the delayed claims paid.

3.   The usual standard for review of summary judgment applies.   CR 56(c);  Wilson v. Steinbach, 98 Wash.2d 434, 437, 656 P.2d 1030 (1982).

4.   “The state of Washington, ․ exercising herein its police and sovereign power, declares that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workers, injured in their work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this title;  and to that end all civil actions and civil causes of action for such personal injuries and all jurisdiction of the courts of the state over such causes are hereby abolished, except as in this title provided.”   RCW 51.04.010.

5.   Tallerday v. Delong, 68 Wash.App. 351, 356, 842 P.2d 1023 (1993).

6.   Deeter v. Safeway Stores, Inc., 50 Wash.App. 67, 747 P.2d 1103 (1987).

7.   Deeter, 50 Wash.App. at 82-83, 747 P.2d 1103 (Grosse, J. concurring), citing 2A A. Larson, Workmen's Compensation § 68.34(b), (c) (1987);  see also Michael A. Rosenhouse, Annotation, Tort Liability of Worker's Compensation Insurer for Wrongful Delay or Refusal to Make Payments Due, 8 A.L.R.4th 902 (1981).

8.   Wolf v. Scott Wetzel Servs., Inc., 113 Wash.2d 665, 672, 782 P.2d 203 (1989).

9.   Wolf, 113 Wash.2d at 675, 782 P.2d 203.

10.   See Birklid v. Boeing Co., 127 Wash.2d 853, 872-73, 904 P.2d 278 (1995) (to the extent a plaintiff alleges or proves only negligent or reckless based claims, the exclusive remedy provision of the IIA bars such claims).

11.   The state cannot be liable for its acts under circumstances where a similarly situated private entity would not be liable.  Edgar v. State, 92 Wash.2d 217, 222-228, 595 P.2d 534 (1979).

12.   See Deeter, 50 Wash.App. at 84, 747 P.2d 1103 (Grosse, J., concurring).

13.   The remedy provided by the IIA for resolving disputes regarding the administration of claims is found in RCW 51.52.050:  “Whenever the department has taken any action or made any decision relating to any phase of the administration of this title the worker, beneficiary, employer, or other person aggrieved thereby may request reconsideration of the department, or may appeal to the board.”   Therefore, an aggrieved worker may request reconsideration by L & I or may appeal any decision regarding the administration of a claim to the Board.   See Dils v. Dep't of Labor & Indus., 51 Wash.App. 216, 219, 752 P.2d 1357 (1988).If Cena was as frustrated with the process as counsel claims, and could not procure a decision from L & I, Cena could have filed a writ of mandamus pursuant to RCW 7.16.160 in superior court to compel agency action.   Dils, 51 Wash.App. at 220, 752 P.2d 1357.   Further, RCW 51.48.017 grants a remedy for wrongful delay or termination of workers' compensation benefits.   The statute provides that if a self-insurer unreasonably delays or refuses to pay benefits, then the self-insurer pays a penalty.   Here, contrary to Cena's claim, the State acts in a similar capacity as a self-insurer.

FN14. Ridgeview Properties v. Starbuck, 96 Wash.2d 716, 719, 638 P.2d 1231 (1982);  State ex rel. Coughlin v. Jenkins, 102 Wash.App. 60, 63, 7 P.3d 818 (2000)..  FN14. Ridgeview Properties v. Starbuck, 96 Wash.2d 716, 719, 638 P.2d 1231 (1982);  State ex rel. Coughlin v. Jenkins, 102 Wash.App. 60, 63, 7 P.3d 818 (2000).

FN15. Robel v. Roundup Corp., 148 Wash.2d 35, 42-43, 59 P.3d 611 (2002)..  FN15. Robel v. Roundup Corp., 148 Wash.2d 35, 42-43, 59 P.3d 611 (2002).

FN16. Birklid, 127 Wash.2d at 870, 904 P.2d 278..  FN16. Birklid, 127 Wash.2d at 870, 904 P.2d 278.

FN17. Birklid, 127 Wash.2d at 867, 904 P.2d 278, citing Rice v. Janovich, 109 Wash.2d 48, 61, 742 P.2d 1230 (1987);  Restatement (Second) of Torts § 46 (1965).   However, in this case Cena would necessarily have to prove that the conduct of the L & I case managers was intentional, not merely reckless, because the conduct must be intentional to escape the exclusive remedy provision of the IIA..  FN17. Birklid, 127 Wash.2d at 867, 904 P.2d 278, citing Rice v. Janovich, 109 Wash.2d 48, 61, 742 P.2d 1230 (1987);  Restatement (Second) of Torts § 46 (1965).   However, in this case Cena would necessarily have to prove that the conduct of the L & I case managers was intentional, not merely reckless, because the conduct must be intentional to escape the exclusive remedy provision of the IIA.

FN18. Grimsby v. Samson, 85 Wash.2d 52, 59, 530 P.2d 291 (1975)..  FN18. Grimsby v. Samson, 85 Wash.2d 52, 59, 530 P.2d 291 (1975).

FN19. Phillips v. Hardwick, 29 Wash.App. 382, 387, 628 P.2d 506 (1981)..  FN19. Phillips v. Hardwick, 29 Wash.App. 382, 387, 628 P.2d 506 (1981).

FN20. Phillips, 29 Wash.App. at 388, 628 P.2d 506..  FN20. Phillips, 29 Wash.App. at 388, 628 P.2d 506.

FN21. Grimsby, 85 Wash.2d at 59, 530 P.2d 291, citing Restatement (Second) of Torts § 46 cmt. d (1965)..  FN21. Grimsby, 85 Wash.2d at 59, 530 P.2d 291, citing Restatement (Second) of Torts § 46 cmt. d (1965).

FN22. Robel, 148 Wash.2d at 55, 59 P.3d 611, citing Mark v. Seattle Times, 96 Wash.2d 473, 486, 635 P.2d 1081 (1981)..  FN22. Robel, 148 Wash.2d at 55, 59 P.3d 611, citing Mark v. Seattle Times, 96 Wash.2d 473, 486, 635 P.2d 1081 (1981).

FN23. Robel, 148 Wash.2d at 55, 59 P.3d 611, citing Camer v. Seattle Post-Intelligencer, 45 Wash.App. 29, 39, 723 P.2d 1195 (1986)..  FN23. Robel, 148 Wash.2d at 55, 59 P.3d 611, citing Camer v. Seattle Post-Intelligencer, 45 Wash.App. 29, 39, 723 P.2d 1195 (1986).

FN24. Robel, 148 Wash.2d at 56, 59 P.3d 611, citing Dunlap v. Wayne, 105 Wash.2d 529, 539, 716 P.2d 842 (1986)..  FN24. Robel, 148 Wash.2d at 56, 59 P.3d 611, citing Dunlap v. Wayne, 105 Wash.2d 529, 539, 716 P.2d 842 (1986).

FN25. Ward v. Painters' Local Union, 41 Wash.2d 859, 864, 252 P.2d 253 (1953)..  FN25. Ward v. Painters' Local Union, 41 Wash.2d 859, 864, 252 P.2d 253 (1953).

FN26. Hadley v. Maxwell, 144 Wash.2d 306, 311-12, 27 P.3d 600 (2001)..  FN26. Hadley v. Maxwell, 144 Wash.2d 306, 311-12, 27 P.3d 600 (2001).

GROSSE, J.