Herzog v. Department of Labor & Industries
This text of 696 P.2d 1247 (Herzog v. Department of Labor & Industries) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Some recipients of workers' compensation disability payments are also entitled to social security payments. When this is so, federal law prohibits the combined benefits from exceeding 80 percent of the recipient's average current earnings at the time the disability was suffered. Combined benefits exceeding this level must be reduced. 1 Federal law permits a state to take full advan *22 tage of this by permitting the reduction to be taken entirely from the state benefits. 2 Washington has accepted this largess by the enactment of RCW 51.32.220. 3
The dispute in this case is about how this reduction should be made where the recipient first receives a lump *23 sum partial disability award, and later receives monthly payments for total disability retroactive to the date of the partial disability award. We hold that the method used in this case by the Department of Labor and Industries was correct, and that the method used by the Board of Industrial Insurance Appeals was incorrect. Accordingly, we affirm a superior court judgment reversing the Board and reinstating the Department's determination.
In July 1977, the Department found Melvin Herzog to be permanently partially disabled. It awarded and paid him $5,700. He appealed. While the appeal was pending, the Department reassumed jurisdiction, found Herzog totally disabled, and made its decision retroactive to the July 1977 date of the lump sum partial disability award. As required by RCW 51.32.080(2) 4 the $5,700 was deducted from Her-zog's pension reserve.
Herzog also became eligible for social security payments. Because his combined benefits would exceed the 80 percent level, the Department calculated the necessary reduction of his state benefits as follows:
I. Determination of the reduction:
Total monthly permanent disability
entitlement $602.00
Add monthly Social Security entitlement 332.90
Total 934.90
Subtract 80 % Average Current Earnings 622.40
Amount of reduction 312.50
II. Application of reduction:
*24 Total monthly permanent disability
entitlement 602.00
Subtract reduction 312.50
Worker's Compensation payment
after reduction and before adjustment for $5,700 previously paid 289.50
III. Adjustment for $5,700 previously paid:
Worker's Compensation payment after
reduction 289.50
Less deduction of monthly amortized
value of $5,700 received 45.03
Net monthly payment due from State $244.47
Herzog appealed to the Board. Although he conceded that the $5,700 was properly deducted from his pension reserve under RCW 51.32.080(2), he argued that only the amount of his monthly permanent disability entitlement should be considered in calculating and applying the reduction. Thus, he contended,; the calculations should be as follows:
Step One Determination of monthly worker's compensation benefits before reduction:
RCW 51.32.060 total permanent
disability entitlement $602.00
Less amortized permanent partial
disability award 45.03
Monthly total permanent disability payment before reduction 556.97
Step Two Determination of reduction:
Worker's compensation reduced pension 556.97
Add social security entitlement 332.90
Total 889.87
Subtract 80% of average current earnings 622.40
Reduction 267.47
Step Three Application of reduction:
Worker's compensation pension 556.97
Subtract reduction 267.47
Monthly payment due from State $289.50
*25 While recognizing that the "result is exactly as though the Department has never paid the $5,700," the Board nevertheless adopted Herzog's calculations. It believed that the Department's determination penalized Herzog for appealing the original award. Therefore, it held that the $5,700 award was final and refused to consider it a part of his total disability benefits. The Superior Court recognized, as do we, that the Board's conclusion is flawed for two reasons. First, Herzog's partial disability award was not final, and the lump sum payment became a part of his total disability award. Second, Herzog's calculations make it appear that his monthly entitlement from the State has been reduced when in fact it has not been. Thus, his calculations result in a windfall to him, contrary to the obvious intent of the controlling statutes.
Under RCW 51.52.050, an award which is appealed is not final. After he appealed, Herzog got what he asked for from the Department: a determination that he was totally, not partially, disabled. The money he had already received became part of his total disability award. RCW 51.32.130. The monthly amortized portion of the lump sum payment was part of his monthly payment just as surely as if he received it every month in cash.
The controlling statutes must be interpreted in light of the legislative purpose. In re Piercy, 101 Wn.2d 490, 681 P.2d 223 (1984); DeWeese v. Port Townsend, 39 Wn. App. 369, 693 P.2d 726 (1984). Herzog's method of calculation frustrates that purpose. Although it only purports to take the lump sum payment into account, it does not really do so. The notion of a penalty should not have infected the Board's reasoning. When an award is final, the amount of entitlement is fixed by law. A claimant should receive no more and no less. Herzog is entitled to $289.50 per month from the State. He is getting exactly that by getting $244.47 each month and by enjoying the $5,700 payment, the monthly amortized value of which is $45.03. 5
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696 P.2d 1247, 40 Wash. App. 20, Counsel Stack Legal Research, https://law.counselstack.com/opinion/herzog-v-department-of-labor-industries-washctapp-1985.