Donald FOREST, Appellant, v. SAFEWAY STORES, INC., and Scott Wentzel Services, Appellees.
No. S-4079.
Supreme Court of Alaska.
April 17, 1992.
Rehearing Denied May 14, 1992.
829 P.2d 778
AFFIRMED.
Richard W. Wright and Edward R. Niewohner, Fairbanks, for appellant.
Robert J. McLaughlin, Faulkner, Banfield, Doogan & Holmes, Seattle, Wash., for appellees.
Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.
OPINION
BURKE, Justice.
An employee injured in an industrial accident, for which he was being paid workers’ compensation benefits, brought suit against a physician, alleging that his industrial injury was later aggravated by malpractice on the part of the physician. The employee subsequently entered into a stipulation to dismiss his malpractice claim with prejudice. His employer, who had been paying compensation, filed a petition with the Workers’ Compensation Board (Board) to dismiss the employee‘s compensation claim. The Board granted the petition, concluding that the employee had compromised his third-party claim against the physician without the employer‘s written consent, thus forfeiting all rights to further compensation. On appeal to the superior court, the Board‘s decision was affirmed. We reverse and remand to the Board for further proceedings consistent with this opinion.
I
The essential facts are not in dispute. Donald Forest injured his back in 1983, while working for Safeway Stores, Inc. Safeway accepted Forest‘s workers’ compensation claim and began to pay compensation benefits, although the full extent of Safeway‘s statutory liability remained in dispute.1 In 1984, Forest underwent back surgery. The surgery was performed by Dr. John Joosse. According to Forest, the surgery not only failed to resolve his back problem, it made the problem worse. Accordingly, Forest filed a medical malpractice action against Dr. Joosse.
Safeway continued to pay Forest workers’ compensation benefits while the malpractice suit was pending. Safeway also continued to negotiate with Forest over the full extent of compensation due. These negotiations culminated in an offer of settlement; Safeway prepared a Compromise and Release, which it presented to Forest in late 1987. In the proposed compromise, Safeway offered a lump sum payment of $77,000, and two waivers: (1) a waiver of a small costs judgment against Forest for $489; and (2) a waiver of “any lien under
As indicated by the language of the proposed compromise, Safeway was aware of Forest‘s malpractice claims against Dr. Joosse. Indeed, at some point after Forest filed suit against Dr. Joosse, Safeway “notified [Forest] of its intent to share in the proceeds of the malpractice action pursuant to
In the malpractice action, Dr. Joosse moved for summary judgment on both of the negligence counts alleged in the complaint. After hearing oral argument, the superior court, Judge Mary E. Greene, granted partial summary judgment. On one count, she ruled in favor of Dr. Joosse. On the second count, she ruled in Forest‘s
I feel obliged to make a further statement. Just because one is able to defeat summary judgment by raising an issue of fact that ends up being a credibility case doesn‘t mean that you‘ve got a great case. It‘s very apparent to me that this is not a very strong plaintiff‘s case.
In April 1988, Forest filed a notice of appeal of the superior court‘s summary judgment decision. Eight months later, however, Forest dropped his appeal and joined in a stipulation to dismiss with prejudice his malpractice action. The stipulation provided that each party would bear its own costs and attorney‘s fees. In accordance with the stipulation, Judge Greene ordered the malpractice action dismissed, with prejudice, and judgment was entered.
When Safeway learned that the malpractice action had been dismissed, it petitioned the Board to dismiss Forest‘s compensation claim. Safeway claimed that, by dismissing his malpractice action without its consent, Forest forfeited his right to receive further compensation under
The Board granted Safeway‘s petition, finding as follows:
[Forest] settled his third party claim, apparently to avoid possible cost and attorney fee liability and Rule 11 sanctions. The parties did not stipulate to dismiss, however, until more than nine months after Judge Green[e]‘s [summary judgment] ruling. This was plenty of time for [Forest] to notify [Safeway] of the settlement considerations and to allow [Safeway] to pursue the third party claim if it wished. The employer was never given the choice.
The Board then denied Forest‘s claim for additional workers’ compensation benefits. Safeway ceased to pay Forest any benefits at all from the date of the dismissal order.
Forest appealed the dismissal of his claim to the superior court. The court ruled that
II
First, Forest was under no obligation to pursue a claim for damages against Dr. Joosse.
If compromise with a third person is made by the person entitled to compensa-
tion ... of an amount less than the compensation to which the person ... would be entitled, the employer is liable for compensation stated in (f) of this section only if the compromise is made with the employer‘s written approval.
The central question here is whether, under
“The goal of statutory construction is to give effect to the legislature‘s intent, with due regard for the meaning the statutory language conveys to others.” Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 905 (Alaska 1987). Whenever possible, each part or section of a statute should be construed with every other part or section, so as to produce a harmonious whole. Anchorage v. Scavenius, 539 P.2d 1169, 1174 (Alaska 1975). It is also important to note that we have consistently held that the Workers’ Compensation Act should be liberally construed in favor of the employee in accordance with its humanitarian purposes.7 Bignell v. Wise Mechanical Contractors, 651 P.2d 1163, 1165 n. 5 (Alaska 1982).
If on account of disability ... for which compensation is payable under this chapter the person entitled to the compensation believes that a third person other than the employer or a fellow employee is liable for damages, the person need not elect whether to receive compensation or to recover damages from the third person.
The clear purpose of this section is to allow employees to seek damages from third-party tortfeasors without jeopardizing their compensation while, at the same time, allowing employers to share in damage awards up to the limit of their exposure under the workers’ compensation law. As
However, under
It does not follow from the language of the section, taken in its entirety, that an employee who sues a third party for aggravation of a existing work-related injury forfeits his or her right to all compensation, both for the initial injury and for the aggravation, simply because the employer was excluded from settlement negotiations. Such an interpretation would result in a windfall for the employer. It would also constitute a particularly harsh penalty for an injured worker who would end up paying for what is undoubtedly an attorney‘s blunder.10
Accordingly we hold that the Board erred in dismissing Forest‘s entire compensation claim. Under our interpretation of the section, the Board should have determined Forest‘s entitlement to compensation attributable to the initial injury apart from any aggravation caused by Dr. Joosse‘s malpractice and then dismissed that part of Forest‘s compensation claim attributable to the physician‘s negligence. Our interpretation does not take the teeth from
Upon remand to the Board, Forest will carry the burden of proving that the malpractice claim lacked merit. In other words, Forest bears the burden of segregating his initial injury from any possible aggravation caused by Dr. Joosse‘s negligence. This follows from the fact that Forest failed to comply with the nonburdensome notice and approval requirements of
The decision of the superior court affirming the Board‘s decision to dismiss Forest‘s claim for compensation benefits is REVERSED and REMANDED to the Board for further proceedings consistent with this opinion.
MATTHEWS, Justice, joined by RABINOWITZ, C.J., dissenting in part.
I agree that the forfeiture provision of
Under the majority opinion there are two issues on remand: (1) what is the value of that portion of Forest‘s total claim against Safeway which was aggravated by Dr. Joosse‘s treatment; and (2) was Dr. Joosse‘s treatment negligent? Forest can win the case on remand in two ways under the majority opinion. He may establish that Dr. Joosse‘s treatment did not aggravate his injuries, or he may establish that Dr. Joosse‘s treatment was not negligent, although it may have aggravated his injuries. In the typical third-party claim where a claimant‘s injuries are concurrently caused by a third-party defendant and the claim is compromised without the written approval of the employer, it is never a defense to forfeiture that the third-party defendant was not negligent. Thus, I think the majority has gone too far by allowing Forest to escape liability on the ground that Dr. Joosse‘s treatment was not negligent. I would limit the inquiry on remand solely to the first issue noted above, the extent to which Dr. Joosse‘s treatment aggravated Forest‘s condition.
Notes
Additionally, we note that this case involves a close interpretation of
(b) The legislature declares that the workers’ compensation laws must not be construed by the courts in favor of any party.
Ch. 79, § 1, SLA 1988. However, since the amendment “applies only to injuries sustained on or after July 1, 1988,” ch. 79 § 48 SLA 1988, this change in our rules of construction will not be applied in this case.
A practical difficulty that attends the application of ordinary third-party rules to malpractice cases arises from a fundamental difference between these aggravation cases and third-party cases in which the wrongdoer caused the original injury. The difference lies in the fact that the malpractice action involves liability for only a part of the injury while every other third-party action involves liability of the third party for the entire injury.
2A A. Larson, The Law of Workmen‘s Compensation § 72.65(a), at 14-228.64 (1990).
