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South Kitsap Sch. Dist. v. Zimmerman

Court of Appeals of Washington, Division 2

May 20, 2014

South Kitsap School District, Respondent,
Daniel B. Zimmerman et al., Respondents, The Board of Industrial Insurance Appeals, Appellant

Oral Argument December 3, 2013.

Appeal from Kitsap Superior Court. Docket No: 12-2-00928-9. Date filed: 06/19/2012. Judge signing: Honorable Jeanette M Dalton.

Robert W. Ferguson, Attorney General, and Kathryn C. Wyatt, Assistant, for appellant.

Bernadette M. Pratt (of Pratt Day & Stratton PLLC ); and David C. Snell and Kathryn C. Comfort (of Small Snell Weiss & Comfort PS ), for respondents.

Kristopher I. Tefft on behalf of Association of Washington Business, amicus curiae.

AUTHOR: Thomas R. Bjorgen, J. We concur: Jill M Johanson, A.C.J., Bradley A. Maxa, J.


Bjorgen, J.

[181 Wn.App. 359] ¶ 1 Under legislation adopted in 2011, injured workers may waive certain lifetime workers' compensation benefits in exchange for a series of installment payments. This is accomplished by negotiating a claim resolution structured settlement agreement (CRSSA) with the Department of Labor and Industries or self-insured employers and obtaining approval by the Board of Industrial Insurance Appeals (Board).

Page 814

¶ 2 In this appeal the Board challenges a superior court order that reversed the Board's decision to reject a CRSSA between the workers' compensation trust for South Kitsap School District, a self-insured employer, and Daniel Zimmerman, [181 Wn.App. 360] a worker injured in the course of his employment with the District. The Board rejected the CRSSA because it could not determine from the information provided whether it was in Zimmerman's best interest. The District appealed the Board's decision to superior court, arguing that, because an attorney represented Zimmerman in the negotiations, the Board should not have considered whether the CRSSA was in Zimmerman's best interest. We hold that the statute, as written, does not permit the Board or its hearing examiner to reject a proposed CRSSA for a worker represented by an attorney because they deem it not to be in the worker's best interest. Therefore, we affirm the superior court.


¶ 3 In February 2012 Zimmerman and the District entered into a CRSSA in which Zimmerman forfeited the right to receive future disability benefits in exchange for a series of seven monthly payments totaling $60,000. The CRSSA concerned a claim Zimmerman had filed in 1991 after suffering a low back injury. By April 2011 Zimmerman had received approximately 19 years of time loss compensation benefits for that injury.

¶ 4 The three-member Board rejected the CRSSA by a vote of two to one[1] because it could not determine whether the CRSSA met the requirements under RCW 51.04.063(3)(b). Specifically, the majority stated that

[a]s part of that determination, we believe we must evaluate whether the [CRSSA] is in the best interest of the worker. We are unable to make that determination based on the information that has been provided to us.

Clerk's Papers (CP) at 20.

¶ 5 [181 Wn.App. 361] The decision made clear that the parties could resubmit the same CRSSA if they provided certain additional information. The majority described the apparent inadequacy of the CRSSA and explained what additional information it needed in the following terms:

According to the [CRSSA], the self-insured employer paid Mr. Zimmerman almost 19 years of time loss compensation benefits through April 2011. The parties have provided no explanation for why those benefits were terminated at that point. From the information provided, we cannot ascertain whether there is a genuine dispute, based on specific opposing medical or vocational opinions, regarding Mr. Zimmerman's entitlement to continuing total disability benefits. If there is such a dispute, that might explain why he is willing to relinquish a claim for such benefits in exchange for $60,000. We should be provided the estimate of the value of the claim or the pension reserve. Mr. Zimmerman must be aware of the potential benefits he forfeits by entering into this [CRSSA]. Alternatively, if he now has some other source of income to support him or anticipates a reduction in his compensation rate as a result of receiving other benefits, perhaps that would explain why this settlement is in his best interest. But without further information, we cannot say it would be in his best interest to forego total disability benefits in light of his life expectancy, particularly with such a rapid pay out and no explanation of how Mr. Zimmerman will support himself thereafter.

CP at 22. Zimmerman was born July 31, 1956, had an estimated life expectancy of 24.01 years at the time of the CRSSA, and was single with one child. Thus, the majority was concerned that $60,000 would not cover Zimmerman's living expenses for the remainder ...

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