Christopher Belling v. Employment Security Department, State of Washington
34066-0
| Wash. Ct. App. | Sep 12, 2017Background
- Christopher Belling received $22,924 in unemployment benefits (June 2011–April 2012) after DLI terminated his time-loss benefits; he successfully appealed DLI and later received a retroactive workers’ compensation award of $48,251.19.
- DLI recouped a $9,271.80 earlier permanent-partial-disability payment from that lump sum; Belling paid his attorney a 30% contingent fee ($14,475.36) plus $5,255.21 in costs.
- ESD demanded full repayment of the $22,924 overpayment under RCW 50.20.085/.190 (no concurrent receipt of UI and L&I time-loss). Belling tendered 70% ($16,046.80), arguing ESD should bear a pro rata share of his attorney fee.
- An ALJ and the ESD review commissioner denied waiver under RCW 50.20.190, applying the Peltier approach (compare claimant’s net L&I recovery after fees/costs to the UI overpayment). They found Belling would not suffer a net loss and demonstrated no qualifying financial hardship.
- Superior court reduced ESD’s recovery by $3,645.18 (accepting a different net-recovery calculation); the Court of Appeals reversed the superior court and affirmed the commissioner’s decision denying broader waiver.
Issues
| Issue | Belling's Argument | ESD's Argument | Held |
|---|---|---|---|
| Whether ESD must waive repayment to cover a pro rata share of claimant’s contingent attorney fee (common-fund / equitable sharing) | ESD benefited from Belling’s litigation and should contribute to attorney fees (waive part of overpayment equal to its share of the fee). | No statutory basis to require ESD to pay or share attorney fees; waiver under RCW 50.20.190 is discretionary and was properly denied. | Court rejected requirement that ESD pay pro rata fees; commissioner did not abuse discretion in denying such waiver. |
| Proper starting figure for Peltier-style net-recovery comparison (gross L&I award vs. award after DLI recoupment) | Start from the net DLI payment after DLI’s $9,271.80 recoupment (yielding a net that would make claimant worse off). | Start from the full gross DLI award ($48,251.19) because claimant received the earlier $9,271.80 and counsel’s fee was calculated on the full award. | Court upheld commissioner’s use of the gross award approach; $48,251.19 was the correct starting figure. |
| Whether claimant demonstrated financial hardship supporting waiver under WAC 192-220-030(2) | Claimed hardship; argued repayment would leave him worse off after fees. | Record shows claimant’s ongoing income (DLI time-loss, SSDI) and expenses; no showing of inability to meet basic needs. | Commissioner’s findings on finances were adequate; claimant did not show entitlement to waiver for hardship. |
| Standard of review: whether commissioner abused discretion or misapplied law | Argued commissioner misapplied RCW 50.20.190 and equity principles (Delagrave). | Argued commissioner acted within discretion and consistent with precedent (Delagrave/Peltier guidance). | Appellate review: legal questions de novo; waiver denial reviewed for abuse of discretion — no abuse found. |
Key Cases Cited
- Delagrave v. Employment Security Dep't, 127 Wn. App. 596 (2005) (ESD may consider equitable waiver where claimant incurred attorney fees in obtaining overlapping L&I recovery; remanded for commissioner to consider waiver)
- Verizon Nw., Inc. v. Employment Sec. Dep't, 164 Wn.2d 909 (2008) (APRA review principles — appellate review constrained to commissioner’s decision and administrative record)
- Berland v. Employment Sec. Dep't, 52 Wn. App. 401 (1988) (standard: appellate review of ESD commissioner’s waiver decision is for abuse of discretion)
- Brand v. Dep't of Labor & Indus., 139 Wn.2d 659 (1999) (Industrial Insurance Act principles and limits on recovering attorney fees from DLI)