Appeal from Superior Court of Snohomish County. Docket No: 94-2-07509-6. Date filed: 07/12/95. Judge signing: Hon. Richard J. Thorpe.
Order Denying Motions for Reconsideration and Amending Opinion July 15, 1997,
PER CURIAM -- An injured worker may sue a third party for damages under the industrial insurance third party action statute. Or the worker may assign the action to the Department of Labor and Industries. The action is automatically assigned if the worker does not answer the Department's "written demand" to decide whether to sue. In this case, the Department wrote to Gordon Duskin, briefly describing third party actions, and advised him "(A) You may seek recovery yourself; or (B) you may ask Labor and Industries to consider seeking recovery for you." This permissively worded letter did not tell Duskin that failing to answer would forfeit control over his personal injury action. Because it was not reasonably calculated to generate a response, it was not a demand.
Consequently Duskin's action was not automatically assigned to the Department. It follows that the Department could not release the tortfeasor, and the trial court erred in granting him summary judgment.
Kenneth Carlson allegedly failed to stop at a stop sign, injuring Gordon Duskin, who was driving his employer's automobile. Duskin applied for workers compensation benefits in fall 1993. The Department of Labor and Industries, pursuant to the third party action chapter of the industrial insurance act, sent a letter to Duskin in November 1993. He opened it, read it, noticed that it lacked the promised "election form," and wrote himself a note to "call them." In a later declaration, he swore that "From reading the letter, I had no idea that there was an automatice assignment of all of my claims against the driver and his insurance company if the form was not received back. The Department sent the same letter to Duskin in February 1994, but this time sent it certified. The letter, this appeal's focal point, advised Duskin of two options:
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 60 days after you receive this letter. If the form is not returned within that time, we will consider seeking recovery.
The letter also contained an election form, and a brochure with eleven questions and answers regarding third party actions. Duskin's wife signed for the letter, but neither Duskin, nor his wife, who were both undergoing medical treatments, opened it.
Later, Kenneth Carlson's liability insurer, State Farm, contacted Duskin and offered to settle his action for $10,000 plus Duskin's medical expenses. Duskin rejected the offer, and State Farm told Duskin that they would "continue to deal direct with them [Labor and Industries] concerning their subrogated interest for past and future medical care that may be related to this motor vehicle accident."
The Department again wrote to Duskin in late April 1994:
You were sent a "Third Party Election form." . . . As we have not heard from you, this section will evaluate your claim and may attempt to recover damages in the same amount that you could have sought. . . . When your third party rights are assigned to us, you are freed from personal responsibility to pay the legal costs involved; however, you also give up your right to control the action. If you have any questions regarding your third party action, please call the number below.
The Department of Labor and Industries believed that it had been assigned Duskin's action because he failed to return the election form. *fn1 The Department settled Duskin's action for $10,000 in general damages, plus $3,969.80 that the Department had paid to Duskin. It executed a general release in Carlson's favor. When they settled, both the Department and State Farm knew that Duskin had already rejected $10,000.
The Department informed Duskin that it had settled, and gave him $10,000 in July 1994. He accepted the settlement proceeds, but administratively appealed the Department's action. The Department affirmed, and Duskin appealed to the Board of Industrial Insurance Appeals.
Around the same time, Duskin sued Carlson in superior court for personal injury. Carlson contended that the Department's general release precluded his liability in tort. The Department joined the lawsuit, and the parties agreed to stay the administrative action until the court decided ...