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Weaver v. City of Everett

Court of Appeals of Washington, Division 1

July 16, 2018

MICHAEL WEAVER, Appellant,
v.
CITY of EVERETT and STATE of WASHINGTON, DEPARTMENT of LABOR AND INDUSTRIES, Respondents.

          Dwyer, J.

         Collateral estoppel and res judicata are common law doctrines that were, for centuries, applied solely to common law claims. The twentieth century rise of the administrative state brought with it an explosion of executive branch quasi-judicial decision-making. Eventually, the urge to apply common law principles in these otherwise statutorily-created forums proved irresistible. But the apples to oranges application of common law doctrines to statutory claims litigated in executive branch forums was-by its very nature- never guaranteed universal success. Many times, such applications fit nicely and a sound and fair resolution was achieved. Other times, however, the apples to oranges application resulted in a distasteful fruit salad of injustice. This case falls into the latter category.

         Michael Weaver, a long-time Everett firefighter, applied for compensation resulting from that which he alleged-and the law presumes-to be a work-related occupational disease. Weaver's petition is serious to him and his family; he suffers from brain cancer that has made it impossible for him to work and that will ultimately claim his life. The Board of Industrial Insurance Appeals ruled that either collateral estoppel or res judicata barred his claim. The superior court unfortunately adopted the same either/or analysis and also unfortunately ruled that Weaver's application was barred. But a careful review of these two distinct common law doctrines-conducted pursuant to the analytical framework mandated by our Supreme Court-reveals that neither doctrine, properly applied, bars Weaver's entreaty. Accordingly, we reverse.

         I

         Michael Weaver was employed between 1996 and 2014 by the City of Everett (the City) as a firefighter. In June 2011, Weaver noticed a mole on the skin of his left shoulder. The mole was removed and the resulting biopsy revealed that it contained a malignant melanoma.

         Shortly thereafter, Weaver underwent surgery to remove the melanoma. After a period of recovery, Weaver returned to his employment as a firefighter. The treatment and surgery caused Weaver to miss nearly five weeks of work, losing the opportunity to earn just under $10, 000 in wages.[1]

         While in recovery, in July 2011, Weaver filed a pro se application for temporary total disability benefits from the City, a self-insured entity for workers' compensation purposes. His application alleged that the malignant melanoma on his shoulder arose from his 15 years of working as a firefighter. He requested compensation for the nearly 5 weeks of wages that he had been unable to earn due to the medical treatment.

         After initially granting Weaver's application, the Department of Labor and Industries (the Department) reconsidered its decision and denied his application. Thereafter, Weaver, through counsel, appealed the Department's denial order to the Board of Industrial Insurance Appeals (the Board). A hearing before an administrative law judge (ALJ) resulted. The City presented the published deposition testimony of two medical specialists, Dr. Robert Levenson, an oncologist, and Dr. John Hackett, a dermatologist.

         Weaver's counsel, presumably due to monetary considerations, chose not to present the testimony of Dr. David Aboulafia, Weaver's treating oncologist. Nor did Weaver's attorney present testimony from a medical expert in oncology or dermatology.[2] Instead, Weaver's counsel presented the published deposition testimony of Dr. Kenneth Coleman, a doctor with a practice in family and emergency medicine, but with no expertise in melanoma generally or in melanoma arising from occupational exposures specifically.

         The ALJ recommended that the Board affirm the Department's order denying Weaver's application.[3] In February 2013, the Board adopted the ALJ's recommendation and issued a final order denying Weaver's application.

         After the Board's ruling, Weaver's counsel withdrew. Weaver filed a pro se review petition in the superior court. Ten months later, with Weaver still unrepresented and no progress being made in the appeal, the parties entered into a stipulation and agreed order of dismissal. Weaver's petition for review was dismissed in late 2013.

         In January 2014, Weaver began to have difficulty with mental processing and word finding. A magnetic resonance imaging test revealed a three-centimeter mass, a tumor, in the left frontal lobe of his brain.

         Weaver immediately underwent surgery and the tumor was removed. The resulting biopsy diagnosed the tumor as a metastatic malignant melanoma, a form of cancer developing out of a primary cancer site. The logical conclusion was that the brain tumor had metastasized out of the malignant melanoma that Weaver noticed on his shoulder in 2011.

         Weaver did not return to work as a firefighter after the surgery. He was estimated to have a 20 to 30 percent chance of survival over the next two years.

         In July 2014, Weaver, now represented by counsel, submitted an application for workers' compensation from the City, seeking permanent total disability benefits. The application alleged that he suffered from a malignant melanoma located on his "upper back/scapula area, w/ cancer spreading to brain." He alleged that the condition arose from "sun exposure during outdoor firefighting and training from 1996 forward."

         The Department denied Weaver's application on the basis that it had already rejected his application for compensation based on the malignant melanoma discovered on his shoulder and that the metastasized melanoma had arisen from the earlier melanoma.

         Weaver sought an administrative appeal and, in the resulting proceeding, the ALJ recommended that the Board affirm the Department's rejection of Weaver's application for permanent total disability benefits. The executive branch official concluded that the common law doctrines of res judicata and collateral estoppel barred Weaver's application. The board, an executive branch agency, adopted the ALJ's proposed decision and order as its final order.[4]

         Weaver filed a notice of appeal to the superior court. The superior court affirmed the Board's order and denied Weaver's petition, ruling that either collateral estoppel or res judicata barred his claim.

         Weaver now appeals.

         II

         A

         It is necessary for us to determine whether the superior court erred by affirming the Board's application of the doctrines of collateral estoppel and res judicata to bar Weaver from pursuing his claim for compensation under the Industrial Insurance Act, Title 51 RCW.

         At the outset, we note that collateral estoppel and res judicata are equitable, court-created doctrines established at common law. See J.M. Weatherwax Lumber Co. v. Ray, 38 Wash. 545, 80 P. 775 (1905); see also Phillip A. Trautman, Claim and Issue Preclusion in Civil Litigation in Washington, 60 Wash.L.Rev. 805, 806, 842 (1985). We further note that the Industrial Insurance Act, as set forth below, was enacted by our legislature in 1911 with the intent to abolish the common law cause of action then-available to workers and establish in its place a distinct statutory scheme aimed at providing workers "sure and certain relief." Laws of 1911, ch. 74, § 1, at 345.

         Accordingly, in resolving the matter before us, we proceed with due caution so as to not unduly shoehorn common law concepts into a statutory scheme wherein our legislature did not specifically call for them to apply or may not otherwise have intended for their application.

         B

         Collateral estoppel and res judicata are affirmative defenses. Lemond v. Dep't of Licensing, 143 Wn.App. 797, 805, 180 P.3d 829 (2008) (collateral estoppel) (quoting State Farm Mut. Auto. Ins. Co. v. Avery, 114 Wn.App. 299, 304, 57 P.3d 300 (2002)); Davignon v. Clemmey, 322 F.3d 1, 17 (1st Cir. 2003) (res judicata). The proponent of either doctrine has the burden of proof. Lemond, 143 Wn.App. at 805 (quoting State Farm Mut. Auto. Ins. Co., 114 Wn.App. at 304); Davignon, 322 F.3d at 17.

         Whether collateral estoppel or res judicata apply to preclude litigation is a question of law that we review de novo. Lemond, 143 Wn.App. at 803 (collateral estoppel) (citing State v. Vasquez, 109 Wn.App. 310, 314, 34 P.3d 1255 (2001), aff'd, 148 Wn.2d 303, 59 P.3d 648 (2002)); Lynn v. Dep't of Labor & Indus., 130 Wn.App. 829, 837, 125 P.3d 202 (2005) (res judicata) (citing Kuhlman v. Thomas, 78 Wn.App. 115, 119-20, 897 P.2d 365 (1995)). In reviewing a superior court ruling in a workers' compensation matter, we apply a standard of review akin to our review of any other superior court trial judgment. Rogers v. Dep't of Labor & Indus., 151 Wn.App. 174, 180-81, 210 P.3d 355 (2009).

         On appeal, both the Department and the City urge us to affirm the decision of the superior court on the basis that they established that collateral estoppel and res judicata apply to preclude litigation on Weaver's application.[5]We address each doctrine in turn.

         III

         As an initial matter, the Department and the City contend that they established that collateral estoppel bars Weaver's application for permanent total disability benefits. We disagree.

         A

         The principles underlying the common law doctrine of collateral estoppel are well set forth in our opinion in Lemond.

Collateral estoppel "'prevents relitigation of an issue after the party estopped has had a full and fair opportunity to present its case.'" Barr v. Day. 124 Wn.2d 318, 324-25, 879 P.2d 912 (1994) (quoting Hanson v. City of Snohomish, 121 Wn.2d 552, 561, 852 P.2d 295 (1993)). Collateral estoppel, or issue preclusion, is the applicable preclusive principle when "the subsequent suit involves a different claim but the same issue." Phillip A. Trautman, Claim and Issue Preclusion in Civil Litigation in Washington, 60 Wash.L.Rev. 805 (1985). Thus,
[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.
Restatement (Second) of Judgments § 27 (1982). Collateral estoppel prevents relitigation of issues in a subsequent claim or cause of action, whereas res judicata prevents a second assertion of the same claim or cause of action. Seattle-First Nat'l Bank v. Kawachi, 91 Wn.2d 223, 225-26, 588 P.2d 725 (1978). Thus, res judicata is generally referred to as claim preclusion, and collateral estoppel as issue preclusion. Trautman, supra, at 829.
The purpose of the doctrine of collateral estoppel is to promote judicial economy by avoiding relitigation of the same issue, to afford the parties the assurance of finality of judicial determinations, and to prevent harassment of and inconvenience to litigants. Hanson, 121 Wn.2d at 561. These purposes are balanced against the important competing interest of not depriving a litigant of the opportunity to adequately argue the case in court. Restatement, supra, § 27 cmt. c. at 252.
The proponent of the application of the doctrine has the burden of proving four elements to demonstrate the necessity of its applicability:
"(1) the issue decided in the prior adjudication is identical with the one presented in the second action; (2) the prior adjudication must have ended in a final judgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with the party to the prior adjudication; and (4) application of the doctrine does not work an injustice."
Thompson v. Dep't of Licensing, 138 Wn.2d 783, 790, 982 P.2d 601 (1999) (quoting Nielson v. Spanaway Gen. Med. Clinic, Inc., 135 Wn.2d 255, 262-63, 956 P.2d 312 (1998)). Because all four elements must be proved, the proponent's failure to establish any one element is fatal to the proponent's claim.

143 Wn.App. at 803-05 (emphasis added).

         Here, the Department has established the first three elements of collateral estoppel. Both of Weaver's applications for compensation regarded the identical issue of whether the malignant melanoma diagnosed on his left shoulder was caused by his employment as a firefighter. In addition, Weaver's application for temporary total disability benefits ended in a final judgment on the merits (the dismissal of his appeal). Additionally, the Department and the City were both parties to Weaver's application for temporary total disability benefits.

         B

         The remaining question is whether the Department and the City proved the fourth element of collateral estoppel-that application of the doctrine would not work an injustice against Weaver.

         They did not.

         "Collateral estoppel is, in the end, an equitable doctrine that will not be applied mechanically to work an injustice." Hadley v. Maxwell, 144 Wn.2d 306, 315, 27 P.3d 600 (2001). Application of the doctrine works an injustice upon a party when, during an earlier proceeding, that party did not have a '"full and fair opportunity'" to litigate the contested issue. Lemond, 143 Wn.App. at 803-04 (internal quotation marks omitted) (quoting Barr, 124 Wn.2d at 324-25). Indeed, for collateral estoppel to apply, the party must have had "sufficient motivation for a full and vigorous litigation of the issue." Hadley, 144 Wn.2d at 315.

         Our Supreme Court's decision in Hadley is both controlling and instructive. In Hadley, two automobiles collided with one another. One of the drivers, Helen Maxwell, was issued a $95 citation for an improper lane-travel traffic infraction. Thereafter, Maxwell, pro se, unsuccessfully contested the citation before the district court. She did not call any witnesses on her behalf nor did she elect to appeal the district court's adverse decision to the superior court. Hadley, 144 Wn.2d at 308-09. In a subsequent personal injury lawsuit arising from the collision, the trial court ruled that Maxwell was collaterally estopped from denying her violation of the lane change statute. This was so, the trial court ruled, because Maxwell failed to appeal the district court's decision that she had committed the infraction. Hadley, 144 Wn.2d at 309-10. In the resulting trial, Maxwell was found liable for $136, 000 in damages. Hadley, 144 Wn.2d at 310.

         Appealing to our Supreme Court, Maxwell challenged the collateral estoppel ruling on the basis that its application constituted an injustice. As the court explained:

To determine whether an injustice will be done, respected authorities urge us to consider whether "the party against whom the estoppel is asserted [had] interests at stake that would call for a full litigational effort." 14 Lewis H. Orland & Karl B. Tegland, Washington Practice: Trial Practice, Civil § 373, at 763 (5th ed.1996); see also Parklane hosiery Co. v. Shore], 439 U.S. [322, ] 33O[, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979)] (holding incentive to vigorously contest cases with small or nominal damages at stake could be a reason not to apply collateral estoppel); Beale v. Speck, 127 Idaho 521, 903 P.2d 110, 119 (1995) (holding collateral estoppel for misdemeanor traffic offenses generally inappropriate); Rice v. Massalone, 554 N.Y.S.2d 294, 160 A.D.2d 861 (1990) (holding collateral estoppel inappropriate after an administrative determination of liability for a traffic accident).

Hadley, 144 Wn.2d at 312. The Supreme Court adopted this consideration and instructed that collateral estoppel "is not generally appropriate when there is nothing more at stake than a nominal fine." Hadley, 144 Wn.2d at 315. Turning to Maxwell's circumstance, the court determined that "the incentive to litigate was low-Maxwell was at risk $95." Hadley, 144 Wn.2d at 312. The court accordingly ruled that, in the district court proceeding, Maxwell lacked sufficient motivation to fully and vigorously litigate whether she, in fact, committed the traffic infraction. Thus, the Supreme Court held, the superior court erred by precluding her from contesting that issue at the subsequent civil trial.

         Weaver's circumstances are strikingly similar to those in Hadley. As with Maxwell's nominal incentive to litigate a $95 citation before the district court, Weaver's incentive to fully and vigorously litigate during the proceeding on his application for temporary compensation was low. Indeed, Weaver's initial application for compensation sought only temporary total disability benefits, those wages equivalent to five weeks of missed work. Weaver anticipated that he would-and he did-return to his duties as a firefighter after completing his recovery. He was not then, as he is now, confronted by a brain cancer that is alleged to have left him permanently disabled, unable to work, with significant out-of-pocket medical expenses, and with a real possibility of death arising from the cancer.

         Moreover, that Weaver had less than $10, 000 in benefits at stake during his application for temporary compensation further informs our inquiry. Indeed, had Weaver retained a specialist in oncology or dermatology (or both), the cost of doing so might rival-or perhaps even eclipse-the modest benefit amount that he sought and, if his efforts ...


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