Dep't of Labor & Indus. v. Rowley

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Ronald R. CarpentBr ·
Supreme Court Clark

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

DEPARTMENT OF LABOR AND NO. 91357-9
INDUSTRIES,

Petitioner,
ENBANC
v.

BART ROWLEY, SR.,
MAR ~ 7 2U16
Respondent.

GORDON McCLOUD, J.-Bart Rowley Sr. was injured while driving a truck

for his employer, and he subsequently filed a claim for workers' compensation

benefits. The Department of Labor and Industries (Department) denied Rowley's

claim because it determined that Rowley was injured while committing a felony:

possession of a controlled substance. The Industrial Insurance Act (IIA), Title 51

RCW, bars payment of workers' compensation under that circumstance. RCW

51.32.020. Rowley filed a notice of appeal to the Board of Industrial Insurance

Appeals (Board). After considering testimony from several witnesses, an industrial
Dep 't ofLabor & Indus. v. Rowley (Bart), No. 91357-9

appeals judge (IAJ) found that there was insufficient evidence to sustain the

Department's decision and ordered the Department to approve Rowley's claim.

The Department has challenged that order four times: in an appeal before a

three-member board panel, at the superior court, at the Court of Appeals, and finally

in this court. Every lower court affirmed the IAJ's decision that Rowley was entitled

to benefits. Although we reverse the Court of Appeals' holding on the applicable

evidentiary standard, we too agree that Rowley is entitled to benefits.

FACTS

Bart Rowley worked as a truck driver for 33 years. Rowley was severely

injured 1 when his truck-trailer veered off a highway overpass and landed on the

roadway below. The accident occurred midday on a clear and dry day. Suspecting

that drug use might have been a contributing factor, law enforcement sent Officer

Donevan Dexheimer, a trained drug recognition officer, to Harborview hospital,

where Rowley was treated after the accident. At Harborview, an emergency room

(ER) nurse provided Officer Dexheimer with a "baggie" that she said had come from

Rowley's pocket. The baggie contained residue that Officer Dexheimer believed to

1Rowley's spinal cord was severed in the accident, causing paraplegia, among other
conditions.
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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

be methamphetamine. Officer Dexheimer also had Rowley's blood drawn and

submitted to the Washington State Toxicology Laboratory (Lab) for testing.

Rowley filed a claim for workers' compensation benefits. The Department

rejected Rowley's claim, finding that it was barred by RCW 51.32.020. The relevant

part of that statute provides:

If injury or death results to a worker from the deliberate intention of the
worker himself or herself to produce such injury or death, or while the
worker is engaged in the attempt to commit, or the commission of, a
felony, neither the worker nor the widow, widower, child, or dependent
of the worker shall receive any payment under this title.

(Emphasis added.)

As will be discussed in more detail below, this statute contains two bars to

payment of a workers' compensation claim: the deliberate self-injury bar (not at

issue in this case) and the felony payment bar (at issue in this case). In its order

denying benefits, the Department appeared to conflate the two payment bars and

thus paraphrased the statute inaccurately:

CLAIM IS REJECTED BASED [ON] RCW 51.32.020 WHICH
STATES IF INJURY OR DEATH RESULTS TO A WORKER FROM
THE DELIBERATE INTENTION OF THE WORKER HIMSELF ...
WHILE THE WORKER IS ENGAGED IN THE ATTEMPT TO
COMMIT, OR THE COMMISSION OF, A FELONY .... SHALL
NOT RECEIVE ANY PAYMENT UNDER THIS TITLE.

Clerk's Papers (CP) at 275 (alterations in original).

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Dep't of Labor & Indus. v. Rowley (Bart), No. 91357-9

Rowley filed a request for reconsideration, which the Department denied. He

then filed a notice of appeal with the Board. The Board granted Rowley a hearing

before IAJ Kathleen Stockman.

Consistent with Washington Administrative Code (WAC) 263-12-115(2)(a),

which provides that "[i]n any appeal under ... the [IIA] ... , the appealing party

shall initially introduce all evidence in his or her case in-chief," 2 Rowley presented

his evidence first. He called only two witnesses: himself and the office manager for

his employer. Consistent with WAC 263-12-115(2)( c), the Department then

presented its case in chief. It called six witnesses: Officer Dexheimer; Brian Capron,

a forensic specialist from the Lab; Washington State Trooper David Roberts, the first

responder to Rowley's accident; Washington State Trooper Nicholas King; Mary

Comstock, a nurse who treated Rowley in the ER; and Jennifer Compton, another

ER nurse who treated Rowley.

The office manager for Rowley's employer testified that Rowley was working

when the accident occurred. She thus provided evidence of injury during the course

of employment. Rowley testified that he was in a coma for 40 days after the accident

and could not remember anything about the events leading up to it. But he also

2The only exception to this rule applies to cases in which the Department alleges
that a worker has received benefits through "fraud or willful misrepresentation." WAC
263-12-115(2)(a).
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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

testified that he had taken random drug tests many times over the course of his

employment and was not aware of ever testing positive. He thus presented some

evidence from which an inference could be drawn that he did not possess drugs at

the time of his accident.

The Department then called Officer Dexheimer; he testified that he was

trained to identify both signs of impairment and types of drugs. He also testified

about his interactions with nurses treating Rowley. He stated that a nurse (either

Nurse Comstock or Nurse Compton) told him that Rowley "had a quote/unquote

'surprise' in his pocket when he arrived." CP at 73 7. Officer Dexheimer explained

that he could not perform a field sobriety test on Rowley because Rowley was

unconscious, but that he measured Rowley's pulse, listened to the conversations

occurring between the treating nurses, and got Nurse Comstock to help him find

Rowley's clothes and a baggie with some suspected methamphetamine residue in it.

Rowley's pulse was normal, but Officer Dexheimer testified that he believed this

was unusual because hospital staff had given Rowley morphine and Valium. Under

those circumstances, Officer Dexheimer considered Rowley's pulse high, possibly

indicating use of a central nervous system stimulant prior to the accident. On one

hand, Officer Dexheimer testified that he could not form an opinion about whether

Rowley was impaired by drug use because he could not perform a proper field

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Dep'tofLabor & Indus. v. Rowley (Bart), No. 91357-9

sobriety test. On the other hand, he testified that "coming down" from stimulants

could cause a person to fall asleep at the wheel and that this might explain Rowley's

accident. CP at 751. He also stated that he arrested Rowley for driving under the

influence of an intoxicant (DUI) (while Rowley was unconscious in the hospital)

and he opined that the accident "more likely than not" occurred because Rowley was

affected by methamphetamine. CP at 754.

Officer Dexheimer also testified that he asked Nurse Comstock where the

baggie was and that she told him Rowley's clothes and the baggie were both in the

trash. He related the following exchange with Nurse Comstock:

So she pointed out -- We looked through the garbage bag that was
actually still in the room, and it was nearly empty. She says, "No, this
isn't the right bag." We went outside, we opened up the garbage bag,
and she started opening the bags that were inside, and she says, "oh,
here it is," hands it to me, or points it out to me. I can't remember
whether she actually physically handed it to me or just said, "That's the
. " ....
one. Th at ' s 1t.

CP at 746. When Officer Dexheimer saw the baggie, he determined that the residue

in it looked like methamphetamine. He explained that this was because of its color,

texture, and packaging.

Finally, Officer Dexheimer testified that he provided Nurse Comstock with

two vials so she could draw Rowley's blood. Officer Dexheimer labeled these vials

with Rowley's name, but could not remember whether he also labeled them with the

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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

date or the case number. After Nurse Comstock took Rowley's blood, Officer

Dexheimer gave the vials to Trooper King.

On cross-examination, Officer Dexheimer explained that, according to his

police report, hospital staff had washed the contents of the baggie down the sink

before he arrived at Harborview. He stated that although Nurse Comstock found the

baggie in the trash for him, he believed that a different staff member originally

discovered the baggie. He also testified that he might have written the wrong date

in his accident report and the wrong name on the blood vials ("Rawley" instead of

Rowley), CP at 765, that he did not test the baggie or take a sample from the hospital

sink, and that coffee can raise a person's heart rate. CP at 766-67.

Capron, the forensic specialist from the Lab, testified that the Lab received

two vials of blood marked "R-a-w-1-e-y," along with a "request for analysis" marked

"R-o-w- 1-e-y. " CP at 784. He explained that the Lab's analysts noted that

discrepancy and then tested the blood. Capron testified that the blood tested positive

for high levels of methamphetamine. He also testified that he believed it was more

probable than not that Rowley was impaired by methamphetamine when his truck

went off the road.

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Compton, one of the ER nurses, testified that she did not specifically

remember Rowley but that her records showed that Officer Dexheimer gave her vials

so she could draw Rowley's blood.

Comstock, the other ER nurse, testified that she remembered Rowley, but not

well. She explained that when a trauma patient like Rowley comes into the ER, his

or her clothing is cut off either before or upon arrival. She also stated that when ER

staff cut clothing from a patient, they search it for valuables, lock up any valuables

that are found, and dispose of any other items. Comstock said she was sure that

Rowley's clothes were disposed of.
.
Comstock also testified that Officer Dexheimer had disrupted protocol in the

ER and that she had provided him with a baggie that she was certain, on that day,

came from Rowley's clothes. She recounted the events as follows:

I remember there being [a] disruptive scenario in that room, not
because the patient was sick but because now we had the officer in-
house. It was a ... significant delay .

. . . [W]e had done a lot of care and quantified the patient was
very sick, but then this officer shows up and wants all of these things
that we've already disposed of and wants to be engaged in the care
immediately []regardless of the acuity. I do remember that part.

So I remember him wanting the clothes, being very frustrated
about them not being readily available and being frustrated that we had
found something that we suspected to be an illicit drug and that we

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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

didn't have to produce to him, and his expectation was that they would
have saved all of this stuff, anticipating somebody to be there, but that's
not our general practice.

So I do remember him and I -- he and I dialoguing, and I told him
I could find the clothes if they -- I knew where they would go, because
they had already been removed from the room, because the
housekeepers are very diligent about cleaning those spaces.

So we went down the hall to where they would be and I do
remember -- I don't remember what trash they were in. I don't
remember what the color of the bags were. I don't remember what the
clothes looked like. I just remember us pulling the clothes out, me
finding the ones that were his and the Baggie that he was in question
about, because it was distinctive ....

. . . I know that that day I was certain that they were [Rowley's
clothes]. I couldn't recall to you at this point what they looked like or
who they were [from], but they came from that room that was the only
room that had just-- they had just cleaned that day because I remember
the housekeepers coming down to be helpful to, you know, help me go
through the trash. That's not something they like for us to do at all, so
it took significant negotiating to be able to get into the trash to be able
to pull it out, because it's just not safe.

CP at 905-07. Comstock also testified that she could not remember whether she or

someone else originally discovered the baggie with the smiley faces on it. She

explained that she had to go "down to the hallway ... to negotiate with the staff of

the housekeepers to get into the room to be able to go through the trash, something

they're instructed to not allow us to do." CP at 925-26.

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Dep't of Labor & Indus. v. Rowley (Bart), No. 91357-9

Trooper King testified that he came to Harborview shortly after Rowley's

accident and that Officer Dexheimer provided him with two pieces of evidence there:

the blood vials taken from Rowley' and "a small baggie of crystal substance." CP at

948. He stated that he labeled the blood vials with the name '"Rowley Bart A.,"'

Rowley's date of birth, and "item numbers." CP at 948-49. He later clarified that

he had marked the vials with the name "R-A-W-L-E-Y," per Officer Dexheimer's

original spelling, and testified that he used an incorrect "[p]roperty number" on the

"transfer-disposition report" associated with the vials and put the wrong time "time

obtained" in his evidence report-2:30a.m. instead of2:30 p.m. CP at 953-56, 965.

Trooper King also testified that he tested the residue in the baggie using a "field test

kit" or "NIK [(narcotics identification kit)] test[]" kit and determined it to be

"ecstasy, methamphetamine." CP at 972-75, 948.

Finally, Trooper Roberts testified that he was the first responder to the scene

of Rowley's accident. He explained that the accident occurred in daylight, in dry

weather, and on a portion of road with no signs or lights. Trooper Roberts stated

that after his investigation, he recommended that the State charge Rowley with

possessing methamphetamine in violation of the Controlled Substances Act, chapter

69.50 RCW. But Trooper Roberts also testified that (1) he charged Rowley with

DUI, and (2) he referred the case to the prosecutor's office as a felony "Violation of

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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

the Controlled Substance Act," and (3) he was not sure whether any criminal charges

were ever filed against Rowley. CP at 1005-07. It is undisputed that the State never

charged Rowley with a felony.

On the basis of that testimony, Judge Stockman reversed the Department's

order. In a "Proposed Decision and Order," she concluded that the Department had

not met its burden-which she determined to be a preponderance of the evidence

standard-to show that RCW 51.32.020-as inaccurately paraphrased in the

Department's original order-barred compensation: "[i]nnuendos and boot

strapping are not sufficient to establish even by a preponderance of the evidence that

the claimant's injury resulted from the deliberate intention of Mr. Rowley himself

while he was engaged in the attempt to commit, or in the commission of, a felony."

CP at 69. Judge Stockman therefore found that "[o]n or about August 14, 2008, the

injuries sustained by Bart A. Rowley, Sr., did not result from the deliberate intention

of Mr. Rowley himself while he was engaged in the attempt to commit, or in the

commission of, a felony." CP at 70.

Procedural History

A three-member Board panel granted the Department's petition for review.

The Department argued that the IAJ erred by requiring it to prove that Rowley

intended to commit a felony and by concluding that the preponderance of the

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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

evidence did not establish that Rowley possessed methamphetamine. The Board

panel affirmed in a split vote, with three separate opinions applying three different

evidentiary burdens. CP at 11-19.

The controlling opinion (signed by two judges) reached four conclusions

relevant to our analysis. CP at 11-17.

First, the opinion addressed the confusion in the original and proposed orders

regarding the legal standard at issue. It explained that compensation will be barred

simply because a worker was injured while committing or attempting a felony, and

that the Department does not need to prove any separate '"deliberate intention'" in

order to deny benefits. CP at 15 (emphasis omitted).

Second, the opinion held that the Department must prove the commission or

attempt of a felony by clear, cogent, and convincing evidence. It acknowledged that

the normal standard in IIA appeals is the preponderance of the evidence standard but

it concluded that felony payment bar appeals were different for two reasons: (1) the

felony payment bar "deprive[s] the worker of benefits to which he or she would

otherwise be entitled but for the allegation of wicked conduct" and (2) an adverse

determination exposes the worker to significant financial and reputational

consequences and possibly even criminal prosecution. CP at 14. In reaching this

conclusion, the controlling opinion also relied on a prior board decision interpreting

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Dep 't ofLabor & Indus. v. Rowley (Bart), No. 91357-9

another statute, RCW 51.32.240, which governs cases in which the Department

alleges that a claimant obtained benefits through "willful misrepresentation." Id. at

14-15.

Third, the Board's controlling opinion concluded that the Department had not

met its evidentiary burden. It explained that while the evidence showed that Rowley

likely used methamphetamine, this was not dispositive because driving under the

influence is only a gross misdemeanor. It further explained that while possession is

a felony, the evidence that Rowley actually possessed methamphetamine in the truck

was not clear, cogent, and convincing. It cited Officer Dexheimer's failure to

explain why he believed the residue in the baggie was methamphetamine, the chain

of custody problems involving the baggie, and Officer King's failure to explain why

his field test was reliable or how that test could reveal both ecstasy and

methamphetamine.

Finally, the controlling opinion held that "the Department cannot reject a

claim under the felony provision of RCW 51.32.020 [because] ... [t]he proper

inquiry [under that statute] is whether Rowley is barred from receiving industrial

insurance payments." CP at 13. In other words, the panel issued a procedural

holding: whenever the Department concludes that a claimant was injured in the

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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

course of employment while committing or attempting a felony, it must grant the

claim and then deny payment.

One member of the panel concurred in the decision, stating that he would have

required the Department to prove the attempt or commission of a felony by proof

beyond a reasonable doubt. CP at 17-18. The third member dissented, concluding

that the preponderance of the evidence standard governs in all workers'

compensation claims and that the Department's evidence met that standard. CP at

18-19.

The Department appealed to the superior court. CP at 2-4. The superior court

affirmed the Board's decision in all respects. CP at 1182-85. The Department again

appealed. CP at 1186-87.

Division One of the Court of Appeals affirmed two of the lower court's

holdings: (1) the holding that the Department bears the burden to prove that the

felony payment bar applies and (2) the holding that this proof must be by "clear,

cogent, and convincing" evidence. Dep 't of Labor & Indus. v. Rowley, 185 Wn.

App. 154, 157,340 P.3d 929 (2014), review granted, 183 Wn.2d 1007,352 P.3d 187

(2015). But it reversed the holding that the Department cannot reject claims under

the felony payment bar. !d. at 168-70.

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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

With respect to the burden of proof, the Court of Appeals reasoned that the

felony payment bar is an affirmative defense: a statutory exception that the

Department asserts to escape the general rule that a covered worker is entitled to

benefits whenever he or she is injured on the job. ld. at 162.

With respect to the standard of proof, the Court of Appeals acknowledged that

the preponderance standard usually applies in industrial insurance appeals. Id. at

163 (citing Olympia Brewing Co. v. Dep 't of Labor & Indus., 34 Wn.2d 498, 504,

208 P.2d 1181 (1949), overruled in part on other grounds by Windust v. Dep 't of

Labor & Indus., 52 Wn.2d 33, 40, 323 P.2d 241 (1958)). But it concluded that the

Board panel had made a sound "policy decision" to apply the clear, cogent, and

convincing evidentiary standard in felony payment bar cases. I d. at 164-65. It

decided that the superior court "appropriately deferred to the expertise of the Board

on this issue," in light of the purposes underlying the IIA. I d. at 165.

STANDARD OF REVIEW

Generally, when we review an agency's decision we sit in the same position

as the superior court and apply the Administrative Procedure Act directly to the

record before the agency. Brown v. Dep't of Commerce, 184 Wn.2d 509, 359 P.3d

771 (2015); ch. 34.05 RCW. But a modified standard applies to workers'

compensation appeals. Gorre v. City ofTacoma, 184 Wn.2d 30, 33, 357 P.3d 625

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Dep't ofLabor & Indus. v. Rowley (Bart), No. 91357-9

(2015). Under that standard, which is discussed in detail in the analysis below, the

superior court presumes the correctness of the Board's decision and can reverse it

only upon finding, by a preponderance of the evidence, that the Board's "findings

and decision are erroneous." Id. at 36 (citing Ravsten v. Dep 't of Labor & Indus.,

108 Wn.2d 143, 146, 736 P.2d 265 (1987)).

In an IIA appeal from the superior court, the court reviews the record '"to see

whether substantial evidence supports the findings made after the superior court's

de novo review, and whether the court's conclusions oflaw flow from the findings."'

Id. (quoting Ruse v. Dep't of Labor & Indus., 138 Wn.2d 1, 5-6, 977 P.2d 570

(1999)). As always, we review questions of statutory interpretation de novo. Cockle

v. Dep 't of Labor & Indus., 142 Wn.2d 801, 807, 16 P .3d 583 (200 1).

ANALYSIS

Three questions of law are presented in this case.

The first is which party bears the burden of proof on the felony payment bar,

RCW 51.32.020. On this question of first impression, the IIA is silent. For the

reasons given in the analysis below, we hold that the Department bears this burden.

The second question presented implicates the burden of production under

RCW 51.52.050(2)(a), which provides:

Whenever the department has taken any action or made any
decision relating to any phase of the administration of this title the

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Dep 't of Labor & Indus. v. Rowley (Bart), No. 91357-9

worker, beneficiary, employer, or other person aggrieved thereby may
request reconsideration of the department, or may appeal to the board.
In an appeal before the board, the appellant shall have the burden of
proceeding with the evidence to establish a prima facie case for the
relief sought in such appeal.

The Department interprets this statute to mean that an aggrieved party must

ma1