Duskin v. Carlson

136 Wash. 2d 550

• Court: Washington Supreme Court
• Decided: October 1, 1998
• Docket: No. 65998-2
• Status: Published

Opinions

Dolliver, J.

The Washington State Department of Labor and Industries (the Department) and the Defendant, Kenneth Carlson (Carlson), seek review of a Court of Appeals’ decision reversing the trial court’s grant of summary judgment in their favor. Duskin v. Carlson, 83 Wn. App. 694, 922 P.2d 1373 (1996). This case addresses the adequacy of the form letters and brochures the Department sends to injured workers who have potential third party claims. The Court of Appeals held the correspondence too vague to constitute a demand that the worker elect whether to pursue a claim or assign it to the Department.

In September 1993, Plaintiff Gordon Duskin (Duskin) was injured in a work-related, two-car accident. Carlson was driving the other car. The Department allowed Mr. Duskin’s claim for industrial insurance benefits.

Chris White, a Department representative, wrote to Duskin on November 15, 1993, and informed him he might have a third party claim. The letter stated:

If your injury or occupational disease was caused by a third party, you have two alternatives: (A) You may seek recovery yourself; or (B) you may ask Labor and Industries to consider seeking recovery for you.

Please complete the form in the back of the brochure and return it to me no later than 30 days after you receive this letter. If the form is not returned within that time, we will consider seeking recovery.

Your rights and responsibilities on third-party actions are explained in the enclosed brochure.

Clerk’s Papers at 106. Duskin received this letter, but “there was no form included,” and he so noted on the letter. Clerk’s Papers at 128. Duskin did not call the Department to ask for the form, nor did he take any other action in response to the November letter.

On February 25, 1994, this time by certified mail, the Department sent a third party action letter, with referenced enclosures, to Duskin. The enclosures were a brochure and an election form. The brochure explained Mr. Duskin’s rights and responsibilities under chapter 51.24 RCW Again, the letter informed Mr. Duskin he had “two alternatives” regarding a possible cause of action against Mr. Carlson—to seek recovery himself or ask the Department to consider seeking recovery for him. Clerk’s Papers at 108. The letter indicated it was from Kim Malcom of the “Third Party Section” and included an address and telephone number where Mr. Malcom could be reached. Id. The letter also referred Mr. Duskin to an election form accompanying the letter and directed him to “complete the form . . . and return it ... no later than 60 days after [receipt of the Department] letter.” Id. The letter also reiterated: “Your rights and responsibilities on third-party actions are explained in the enclosed brochure.” Id.

The enclosed brochure contained a detachable “THIRD PARTY ELECTION FORM” on which Mr. Duskin was asked to elect between Option A (“MY ATTORNEY OR I WILL PURSUE THIRD PARTY ACTION”) and Option B (“I ASSIGN THE ACTION TO THE DEPARTMENT”). Clerk’s Papers at 30. The brochure contained a series of questions and answers regarding third party actions, including the following:

Q. Do I have to pursue a third party action?

A. No. However, the law does require you to make a choice. You must either pursue the action yourself, with or without an attorney (Option A), or assign the action to the Department of Labor and Industries. (Option B).

Q. What if I do nothing?

A. You are required to complete this form. If you do not complete this form and return it to the department within 60 days, the third party action is automatically assigned to the department. Any further action is at the discretion of the department.

Id.

By the time the Department sent the letter and brochure, both Duskin and his wife were undergoing chemotherapy for recently diagnosed cancers. Duskin’s wife signed for the certified February 25, 1994, letter. However, she did not open the letter or give it to her husband; instead, she bundled it with the couple’s mail and “stuck it away in a cupboard.” Clerk’s Papers at 129.

In March 1994, Kim Malcom (who had sent the Department’s letter to Duskin) wrote to State Farm, Carlson’s insurance carrier, and informed State Farm of Duskin’s worker compensation claim. The Department noted it was awaiting a response from Duskin regarding whether he planned to pursue an action against Carlson or assign it to the Department. A copy of this letter was sent to Duskin.

On April 21, 1994, Duskin received a letter from State Farm offering him $10,000 to settle his claim. In response, Duskin called Wayne Kittredge, the State Farm adjuster, and informed him he was not ready to settle. The Department was unaware of this exchange and, indeed, believed Duskin had never responded to the State Farm offer.

On April 26, 1994, Kim Malcom wrote Duskin again, stating the Department had not heard from him and would therefore evaluate the third party claim and might “attempt to recover damages in the same amount that you could have sought.” Clerk’s Papers at 110.

In June 1994, State Farm sent to the Department the offer it had previously made to Duskin. In July 1994, the Department wrote to both Duskin and State Farm, indicating the Department had “sole responsibility to act for Mr. Duskin,” agreeing to settle the claim for $13,969.80, and explaining Duskin would receive $10,000 while the Department would receive $3,969.80 to reimburse it for the benefits it had already paid. Clerk’s Papers at 112. Duskin did not object to the settlement. Upon receipt of the payment from State Farm, the Department released Carlson from further liability. Duskin cashed the $10,000 check on September 15, 1994.

On September 20, 1994, Duskin protested the Department’s actions, which the Department then affirmed. Duskin appealed to the Board of Industrial Insurance Appeals. In October 1994, however, Duskin sued Carlson in Snohomish County Superior Court. The Department intervened in the Superior Court action, and the parties agreed to stay the administrative appeal until the courts had decided the validity of the settlement.

Both parties moved for summary judgment. The trial court ruled in favor of Carlson and the Department. The Court of Appeals reversed, holding the Department’s February 25, 1994, correspondence was not a demand under RCW 51.24.070(1). Duskin v. Carlson, 83 Wn. App. 694. We granted review and now reverse the Court of Appeals.

In the Court of Appeals, Duskin argued the Department’s certified mail delivery of the February 25, 1994, letter violated his right to procedural due process. Although the Court of Appeals did not reach this issue, Duskin asks us to consider it, stating, “Either personal service or at the very least, certified mail with restricted delivery must be utilized in order to assure that the worker is not deprived of his right to procedural due process.” Br. of Appellants at 19.

RCW 51.24.030(1) provides:

If a third person, not in a worker’s same employ, is or may become liable to pay damages on account of a worker’s injury for which benefits and compensation are provided under this title, the injured worker or beneficiary may elect to seek damages from the third person.

RCW 51.24.070 provides, in relevant part:

(1) The department . . . may require the injured worker or beneficiary to exercise the right of election under this chapter by serving a written demand by registered mail, certified mail, or personal service on the worker or beneficiary.

(2) Unless an election is made within sixty days of the receipt of the demand . . ., the injured worker or beneficiary is deemed to have assigned the action to the department....

Duskin maintains he is not challenging the constitutionality of the statute, which clearly allows service by certified mail, but only the procedure used in this case. However, the Department complied with RCW 51.24.070: it sent the February 25, 1994, letter by certified mail. The statute does not require “restricted delivery.” Had the Legislature intended to require restricted delivery, or another method guaranteeing evidence of actual delivery to the recipient, it could have said so expressly. In re Marriage of McLean, 132 Wn.2d 301, 307, 937 P.2d 602 (1997).

Although the plain language of RCW 51.24.070 does not require personal service or restricted delivery, Duskin argues the statute should be construed to require either of those options in order to safeguard procedural due process rights. Where possible, statutes will be construed so as to avoid any unconstitutionality. City of Seattle v. Montana, 129 Wn.2d 583, 590, 919 P.2d 1218 (1996). The Fourteenth Amendment requires that deprivation of life, liberty, or property by adjudication must be preceded by notice and an opportunity to be heard. Due process requires “notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 94 L. Ed. 865 (1950).

Due process does not require actual notice in all circumstances. Martin v. Meier, 111 Wn.2d 471, 477, 760 P.2d 925 (1988). In fact, courts of this state have found mailed notice sufficient for due process purposes even where it is not actually received. Baker v. Altmayer, 70 Wn. App. 188, 851 P.2d 1257 (1993) (holding mechanic’s lien statute does not require actual receipt of notice sent by registered or certified mail to owner of materialmen’s intent to claim lien); see also State v. Rogers, 127 Wn.2d 270, 898 P.2d 294 (1995); State v. Whitney, 78 Wn. App. 506, 897 P.2d 374, review denied, 128 Wn.2d 1003 (1995).

In determining what constitutes proper notice, we weigh the individual interest at stake against the important state interest involved. Duskin’s property interest is control over a potential lawsuit. The Department’s interest is efficient administration of the State’s social insurance system and minimizing associated costs to the industrial insurance fund. Mills v. Department of Labor & Indus., 72 Wn. App. 575, 578, 865 P.2d 41 (1994). Certified mail is efficient and inexpensive. Service of actual notice would entail a far greater burden. Marriage of McLean, 132 Wn.2d at 311-12.

In this case, Duskin’s wife received and signed for the Department’s letter to her husband. Duskin simply did not see it because his wife placed it in a cupboard. Certified mail, which is proper service under the statute, was reasonably calculated, under all the circumstances, to reach Duskin.

Duskin also argues even if he had opened and read the February 25, 1994, letter, it did not constitute the “demand” required by statute. The Department argues because Duskin did not read the “notice of election,” he is precluded from challenging its wording.

In Nisqually Delta Ass’n v. City of DuPont, 103 Wn.2d 720, 696 P.2d 1222 (1985), we stated notice statutes in civil cases should fairly and sufficiently apprise those who may be affected of the nature and character of an action. Unless someone is actually misled or confused, notice is deemed adequate. Id. at 727. And in State v. Storhoff, 133 Wn.2d 523, 946 P.2d 783 (1997), we held that in the absence of actual prejudice, incorrect notice from the Department of Licensing did not invalidate revocation of three defendants’ licenses.

Duskin does not argue he was confused or misled into inaction by the February 25, 1994, correspondence from the Department. Having now read the letter, however, he argues it was insufficient to put him on notice that he “would be losing an important right as to [his] claim against Carlson.” Clerk’s Eapers at 129. He also states, “I have since read the pamphlet and it, too, does not make the election very clear.” Id.

Duskin blames his inaction on the substance of the letter, which he contends was poorly worded and would not, in any event, have compelled him to act. In fact, his failure to act was not brought on by any inadequacy in the letter, but by Duskin’s failure to read it. Any prejudice he claims is purely hypothetical, because it is undisputed he did not read the letter until after the election deadline had passed.

Moreover, we are satisfied the Department’s correspondence to Duskin constituted a demand. Again, RCW 51.24.070 provides, in relevant part:

(1) The department . . . may require the injured worker or beneficiary to exercise the right of election under this chapter by serving a written demand by registered mail, certified mail, or personal service on the worker or beneficiary.

(2) Unless an election is made within sixty days of the receipt of the demand . . ., the injured worker or beneficiary is deemed to have assigned the action to the department....

(Emphasis added.) Because the term “demand” is not defined in the statute, we apply its plain and ordinary meaning. Chamberlain v. Department of Transp., 79 Wn. App. 212, 217, 901 P.2d 344 (1995). A demand has been defined as “[t]he assertion of a legal right; a legal obligation asserted in the courts” and “[a]n imperative request preferred by one person to another, under a claim of right, requiring the latter to do or yield something or to abstain from some act.” Black’s Law Dictionary 429 (6th ed. 1990). A demand is also “an act of . . . asking esp. with authority” and “an expressed desire for ownership or use.” Webster’s Seventh New Collegiate Dictionary 219 (1969). The Court of Appeals held a demand must contain mandatory language, conspicuous discussion of what will happen if the recipient does not answer, citation to the statute conferring authority to demand an election, and information telling the recipient how to answer consistent with the statute. Duskin, 83 Wn. App. at 699.

No strict definition of “demand” has developed in case law; rather, the term has been defined broadly and flexibly. In Gershman v. Barted Realty Corp., 22 Misc. 2d 461, 198 N.Y.S.2d 664 (1960), the New York Supreme Court defined it as a request to do a particular thing specified under a claim of right on the part of the person requesting, holding:

The demand “may be couched in the customarily-used polite language of the day. All that is required is the assertion of the right . . . and a request for compliance therewith.”

Gershman, 198 N.Y.S.2d at 665 (quoting National Life & Accident Ins. Co. v. Dove, 141 Tex. 464, 174 S.W.2d 245, 247 (1943)).

In Freitag v. Huiskamp, 166 N.W.2d 915 (Iowa 1969), the Iowa Supreme Court held a taxing agency’s letter constituted a demand when it informed the taxpayer of the tax and penalty date and the name of a contact person. That the letter was “polite, courteous and informative” rather than “blunt or threatening” did not disqualify it as a demand. Id. at 917.

In Gil Enters., Inc. v. Delvy, 79 F.3d 241 (2d Cir. 1996), the court held:

[A] demand is intended to trigger certain rights and obligations. ... In order to prompt such rights and obligations, it is necessary that the party upon whom the demand is being made be put on notice that those legal obligations have been triggered. . . . [T]he gravamen of a legal demand is its notice providing function.

Id. at 246.

In this case, the Department’s correspondence to Duskin meets the various definitions of “demand.” When considered together, the letter and brochure apprised Duskin of his rights and responsibilities and directed him to act.

The letter states that if the form is not completed and returned within 60 days, the Department may seek recovery; it also states that, in the absence of a reply, the Department will consider pursuing the third party claim itself. The letter also directs Duskin to the brochure, which explains inaction will result in automatic assignment of a potential lawsuit to the Department. Moreover, the election form is quite clear, requesting the selection of Option A (“MY ATTORNEY OR I WILL PURSUE THIRD PARTY ACTION”) or Option B (“I ASSIGN THE ACTION TO THE DEPARTMENT”). Clerk’s Papers at 30.

The Court of Appeals deemed the brochure “well written,” but felt the letter was so vague the worker might not read the brochure. Duskin, 83 Wn. App. at 699. While the letter may be “blandly phrased,” or “permissively worded,” Id. at 698-99, it is not vague. It triggered Duskin’s responsibilities, gave him a deadline, and told him what would occur if he did not act. We hold the Department issued a proper demand. We reverse the Court of Appeals and affirm the decision of the trial court.

Durham, C.J., and Smith, Guy, Madsen, Alexander, and Talmadge, JJ., concur.