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McFaul: End of Final Claim Denials in Workers' Compensation?: [2018-08-24]
In what is clearly an unfortunate circumstance regarding a worker’s later diagnosis of brain cancer, the Washington Court of Appeals ruled that the common-law application of res judicata and collateral estoppel do not bar a worker from filing a new claim despite prior denial of the same claim.
This ruling potentially undermines the finality of denials and closure orders, as well as settlement agreements.
The worker originally filed an application for benefits in 2011, contending that his work as a firefighter resulted in melanoma cancer on his shoulder. He underwent surgery and missed five weeks of work.
The Department of Labor and Industries denied the claim for benefits. The worker sought appeal, which affirmed the department’s denial.
The man then filed a pro se appeal to superior court. He ultimately entered an agreement and dismissed his appeal in late 2013. This resulted in denial of the claim for melanoma.
In 2014, a brain tumor metastasized (spread) from the melanoma that had been on the worker’s shoulder. He underwent surgery, was unable to return to work and had low survival chances. He filed a second application for benefits, contending that the cancer was related to firefighting.
The department and the employer contended that the second application for benefits was barred by the legal theories of collateral estoppel and res judicata. They argued that the repeat application for benefits should be denied, as the issue had already been litigated and the cancer had been determined to not be related to his employment.
In Michael Weaver v. City of Everett and Department of Labor and Industries, the Court of Appeals reversed L&I, stating that the common-law principles of res judicata and collateral estoppel do not apply in this case. The doctrine of res judicata prevents repeat litigation of a claim where a subsequent claim involves the same parties and subject matter or issue that was litigated, or could have been litigated, in the prior action.
Similarly to the res judicata doctrine, the theory of collateral estoppel is used to promote judicial economy, to avoid repeat litigation of the same issues, to afford finality to judicial determinations, and to prevent harassment and inconvenience to parties.
The court ruled that the application of the doctrines did not apply and would cause an injustice against the worker, as the court was convinced that Weaver did not have a chance to fully litigate all of the issues in the prior action.
The court stated that the prior litigation encompassed only minor treatment and missing a few weeks of work that were not sufficient economic losses for the worker to fully pursue his claim. The court noted that the worker did not know he would later have brain cancer that would leave him with extensive medical expenses, permanently unable to work and with a low chance of survival.
As a result, he allegedly did not fully litigate the issues previously, and an injustice would result if he were not allowed to litigate the issues in his second application.
The court gave Weaver a second bite at the apple despite his entering a legally binding prior agreement and order that his cancer was not job-related. The court was concerned that an injustice would result if collateral estoppel applied and the worker was not given another chance to litigate when the stakes were higher.
The court failed to see that the worker had already had a full opportunity to contest denial of the claim and pursue allowance not only at L&I, but also at the appeal hearing, then again with a petition for review and at Superior Court.
The decision is published, meaning it will have precedential value for cases that come after it.
If the Weaver case remains law, it will allow claims that had previously been denied to be refiled if the worker contends that he is seeking a different or more substantial benefit than with the prior application. It will be unclear whether department orders regarding causation and entitlement to benefits are ever final and binding. It is likely that this decision will be appealed to the Washington Supreme Court, given its highly controversial outcome.
Anna McFaul is an attorney with Reinisch Wilson Weier PC, headquartered in Portland, Oregon. This column is republished with permission from the firm’s website.