Christopher Belling v. Employment Security Department, State of Washington ( 2017 )


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  •            IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
    DIVISION THREE
    CHRISTOPHER BELLING,                        )
    )         No. 34066-0-111
    Appellant,              )
    )
    V.                                    )
    )
    EMPLOYMENT SECURITY                         )         UNPUBLISHED OPINION
    DEPARTMENT of the State of                  )
    Washington,                                 )
    )
    Respondent.             )
    SrooowAY, J. -   After Christopher Belling :successfully appealed the Department
    of Labor and Industries' (DLI) termination of his workers' compensation benefits and
    was awarded retroactive benefits exceeding $48,000.00, the Employment Security
    Department (ESD) demanded the repayment of duplicative unemployment insurance
    benefits he received for the same period he was out of work. While he does not dispute
    that he was overpaid, Mr. Belling contended unsuccessfully in the administrative process,
    and argues in this appeal, that ESD should have waived repayment of 30 percent of the
    overpaid unemployment insurance benefits-the percentage of the award from DLI that
    he owed his lawyers as a contingent fee. He demonstrates no abuse of discretion by the
    ESD review commissioner, who found that (1) repayment of the unemployment
    No. 34066-0-111
    Belling v. Employment Security Department
    insurance benefits would not leave him with less than his net recovery of workers
    compensation under the ESD's decision in In re Peltier 1 and (2) he demonstrated no
    financial hardship basis supporting waiver of the repayment obligation. We affirm.
    PROCEDURAL BACKGROUND
    In 2005, Christopher Belling suffered a disabling workplace injury. As a result,
    DLI paid him time loss benefits of $1,486.00 twice each month. In March 2011, DLI
    notified him that it was terminating time loss payments based on its determination that he
    could work. It paid him $9,271.80 for a permanent partial disability, which compensated
    him for his future reduced capacity for work. Mr. Belling appealed the DLI decision to
    terminate his time loss benefits, with representatiort by a lawyer who agreed to handle the
    appeal on a 30 percent contingent fee basis.
    Pending the appeal, Mr. Belling applied for unemployment insurance benefits.
    ESD paid Mr. Belling $22,924.00 in benefits from June 2011 to April 2012.
    In June 2012, the DLI appeal was concluded by an order under which Mr.
    Belling's time loss benefits were reinstated through a lump sum payment of $48,251.19.
    In making payment, DLI deducted the permanent partial disability payment of $9,271.80
    he had received in 2011. Mr. Belling paid his lawyers $14,475.36, which was their 30
    1
    No. 04-2006-22057 (Wash. Emp't Sec. Dep't Comm'r Dec. No. 910, 2d Series
    Feb. 16, 2007), 
    2007 WL 5172355
    .
    2
    No. 34066-0-III
    Belling v. Employment Security Department
    percent of the $48,251.19 recovery. He also reimbursed $5,255.21 in costs that his
    lawyers had advanced on his behalf.
    Once notified that DLI had compensated Mr. Belling for the same period in which
    he had received unemployment insurance benefits, ;BSD demanded repayment of the
    $22,924.00 of benefits it had paid. Under RCW 50.20.085 a claimant may not
    concurrently receive unemployment compensation and DLI time loss payments.
    Mr. Belling did not dispute that he had been overpaid, but a letter and notice of
    appeal from his lawyers took the position that ESD "is legally obligated to pay its share
    of attorney fees for the efforts that our office has taken to recover the retroactive time-
    loss benefits from [DLI]." Clerk's Papers (CP) at 102. Treating ESD as owing the 30
    percent fee on the $22,924.00 it would recover as a,result of the successful DLI appeal,
    Mr. Belling's lawyer tendered repayment of $16,046.80. At the hearing on Mr. Belling's
    appeal ofESD's determination that he must repay, he renewed his request that ESD
    waive his repayment obligation in an amount equal to its asserted pro rata responsibility
    for his contingent attorney fee.
    The administrative law judge (ALJ) assigned to Mr. Belling's appeal
    acknowledged in her decision that when an unemployment compensation claimant is not
    "at fault" in causing the overpayment (and she found that Mr. Belling was not), "[ESD]
    may consider partial or full waiver of claimant's overpayment pursuant to the rationale in
    Delagrave v. Emp 't Sec. Dep 't, 
    127 Wn. App. 596
    , 
    111 P.3d 879
     (2005), which allows
    3
    No. 34066-0-III
    Belling v. Employment Security Department
    partial waiver on the basis of fairness." CP at 205. Although Mr. Belling argued that
    repayment to ESD of the full amount of unemployment insurance benefits would leave
    him with a net loss on his successful DLI appeal, the ALJ concluded otherwise. She also
    made the following finding as to financial hardship:
    The claimant continues to receive $1,486 twice each month in time loss
    benefits from [DLI]. The claimant could at Some point in the future receive
    another [p ]ermanent partial [d]isability payout. The claimant also receives
    $1,700 per month in Social Security Disability Benefits. The claimant pays
    $600 per month in rent. He is responsible for no minor children. He "eats
    out a lot", and has no set grocery budget. The claimant has no debt in
    collections, and owns three vehicles. He pays $280 per week for his cell
    phone service.
    CP at 204. She concluded that "repayment would not be unfair and repayment would not
    be against equity and good conscience." CP at 206.
    Mr. Belling petitioned for review. The ESD review commissioner affirmed and
    adopted the ALJ' s findings of fact and conclusions. of law. Mr. Belling then appealed to
    the superior court, which modified the commissionier's decision, waiving $3,645.18 of
    the overpayment. In arriving at this amount, the court accepted Mr. Belling's assertion
    that the workers compensation he had received net of his attorney fees was only
    $19,278.82, and thereby $3,645.18 less than the amount he was being asked to repay to
    ESD.
    Mr. Belling appeals the trial court's decision reducing the overpayment
    determination by only $3,645.18. ESD cross appeals the trial court's waiver of $3,645.18
    4
    No. 34066-0-III
    Belling v. Employment Security Department
    of the overpayment.
    ANALYSIS
    The Washington Administrative Procedure Act, chapter 34.05 RCW, governs our
    review of a decision by an ESD commissioner. Verizon Nw., Inc. v. Emp 't Sec. Dep 't,
    
    164 Wn.2d 909
    ,915, 
    194 P.3d 255
     (2008). We review only the commissioner's decision,
    not the administrative law judge's decision or the Slflperior court's ruling. 
    Id.
     We base
    our decision on the administrative record before th1 commissioner. 
    Id.
    Under the Employment Security Act, Title 5p RCW, an individual is disqualified
    from receiving unemployment insurance benefits 1ith respect to any day or days for
    i
    which he or she receives workers' compensation. ~CW 50.20.085. RCW 50.20.190
    !
    authorizes the ESD to issue an overpayment assessrent if this ineligibility applies, and
    I
    imposes an obligation on the individual to repay udless the commissioner waives
    I
    recovery. The commissioner "may waive an overpayment if the commissioner finds that
    the overpayment was not the result of fraud, misrepresentation, willful nondisclosure, or
    fault attributable to the individual and that the recoyery thereof would be against equity
    I
    and good conscience." RCW 50.20.190(2).
    In Delagrave v. Employment Security Department, 
    127 Wn. App. 596
     (2005), the
    lawyer representing Mr. Belling in this appeal askep this court to apply the "common
    !
    fund" doctrine to ESD's right to recover overpaymtnts in cases such as this, where a
    I
    worker incurred attorney fees in recovering duplicaltive workers' compensation. He
    !
    I
    5
    No. 34066-0-111
    Belling v. Employment Security Department
    argued there, as he does now, that in fairness, ESD should pay a pro rata share of the cost
    of the successful workers' compensation appeal. This court held that "[i]f the legislature
    had intended attorney fees to be available in overlapping benefits scenarios like the one
    here, the logical place to include such a provision would be within [RCW 50.32.160,
    50.20.085, or 50.20.190]." Id. at 605. Because the legislature had not provided for
    payment of the worker's attorney fees, this court refused to read such a requirement into
    the Employment Security Act.
    Sua sponte, however, this court raised the ESD commissioner's discretion to
    waive recovery of an overpayment under RCW 50.20.190 if the worker was not at fault
    and recovering the overpayment would be against equity and good conscience. Since the
    commissioner had not considered whether Mr. Delagrave's liability for attorney fees was
    a reason for waiving recovery of the overpayment, this court remanded, directing the
    commissioner to entertain an argument for waiver.
    Thereafter, in In re Peltier, which the ESD commissioner has designated as
    precedential, 2 the commissioner waived a portion of an overpayment of unemployment
    insurance benefits where the worker had incurred attorney fees in recovering the
    2
    Under RCW 50.32.095, the commissioner may designate certain commissioner's
    decisions as precedents. Decisions thus designated are to be treated as persuasive
    authority by a reviewing court. Martini v. Emp 't Sec. Dep 't, 
    98 Wn. App. 791
    , 795, 
    990 P.2d 981
     (2000).
    6
    No. 34066-0-III
    Belling v. Employment Security Department
    duplicative workers' compensation payments. In that case, the worker had received
    $9,581.00 in unemployment insurance benefits before she successfully appealed a DLI
    decision and received a duplicative award of retroactive workers' compensation in the
    amount of $10,351.56. After paying her lawyers, however, Ms. Peltier's net workers'
    compensation recovery was $7,230.00. The commissioner explained why a partial
    waiver was appropriate:
    Here, the claimant argues that she should only have to repay $7,230 of her
    $9,581, since $7,230 is all that she received in workers' compensation after
    her attorney was paid. We believe that claimant's argument has merit in
    the instant case and is certainly reasonable when considering fundamental
    fairness of the claimant's situation. Accordingly, we hold that the claimant
    is liable for repayment of her overpayment in the amount of $7,230 and that
    $2351 of her overpayment is waived pursuant to RCW 50.20.190. See
    Delagrave.
    Id. at * 1.
    A court may grant relief from an agency order in an adjudicative proceeding only
    if it finds one of the grounds identified by RCW 34.05.570(3). Mr. Belling contended in
    his petition for judicial review that the commissioner erroneously interpreted or applied
    the law. RCW 34.05.570(3)(d); CP at 213 (claiming entitlement to waiver "based upon
    the statutory construction of RCW 50.20.190").
    A Peltier analysis was included in the ALJ's conclusions oflaw in Mr. Belling's
    case, and was adopted by the commissioner. The commissioner concluded that reducing
    the $48,251.19 workers' compensation award by both the $14,475.36 contingent fee and
    7
    No. 34066-0-III
    Belling v. Employment Security Department
    $5,255.21 in costs still left Mr. Belling with a net award of $28,850.62 in workers'
    compensation. See CP at 205-06 (Conclusions of Law 4-7). Accordingly, even if
    required to repay ESD and even after paying all of the associated fees and costs, Mr.
    Belling was $5,626.62 ahead for having appealed DLI's decision.
    Mr. Belling has assigned error to the relevant conclusions of law, arguing that the
    starting figure for the analysis should not be the $48,251.19 award of workers'
    compensation, but the $38,979.39 that Mr. Belling was paid in 2012 after DLI recouped
    from his award the $9,271.80 permanent partial disability payment it had paid in 2011, to
    which he was not entitled. Using $38,979.39 as the starting figure, the recovery net of
    attorney fees and costs is $19,248.82-less than the $22,924.00 overpayment, and an
    amount that would parallel the circumstances in which a portion of the overpayment was
    waived in Peltier. We disagree that $38,979.39 is the correct starting figure. Mr. Belling
    had and received the $9,271.80 workers' compensation paid in 2011. Ifhe had returned
    that check, to which he ultimately proved unentitled, he would have been paid the full
    $48,251.19 awarded in retroactive time loss benefits. And ifwe add the $9,271.80 that
    he had and received in 2011 to the $38,979.39 he had and received in 2012, the total
    workers' compensation received was $48,251.19. Notably, Mr. Belling's lawyers
    8
    No. 34066-0-III
    Belling v. Employment Security Department
    calculated their 30 percent contingent fee based on the $48,251.19 award. 3 The
    commissioner correctly applied Pe/tier's analysis. 4
    The commissioner's findings also address financial hardship, which Mr. Belling
    claimed during the hearing. Financial hardship is explicitly recognized as a basis for
    waiver under WAC 192-220-030(2). While Mr. Belling assigns error to the finding on
    Mr. Belling's financial circumstances, it is only to speculation in the finding about a
    future permanent partial disability payout. He does not challenge the finding's discussion
    of the extent by which his income exceeds his expenses.
    3
    By analogy, if I deliver you a piece of cake on Monday, realize on Tuesday that I
    was supposed to deliver you a whole cake, and bring you the whole cake in exchange for
    return of the piece, you have received a whole cake. The same would be true if you had
    eaten the first piece, and I recovered it by cutting it out of the whole cake.
    4
    In a deviation from Peltier, the dissent proposes a "second method" of
    calculation. Slip op. (dissent) at 11. Under Peltier, ESD looks at the DLI recovery on
    appeal less the cost of the appeal and-if that would result in a loss-waives the
    employee's obligation to repay the unemployment compensation to the extent of that
    loss. In essence, under Peltier, ESD bears the burden of the unemployment
    compensation that was not a windfall to the employee.
    Under the dissent' s "second method" of calculation, ESD bears not only that
    burden, but an additional cost, so that the employee can retain the permanent partial
    disability payment to which he was not entitled.
    Presumably, Mr. Belling took the risk of that further "loss" because he believed he
    was better off in the long run by having his time loss benefits reinstated and avoiding the
    obligation to work or remain available to work. If an employee is truly going to be better
    off by keeping a permanent partial disability payment and continuing to rely on
    unemployment compensation, we should not incentivize him to pursue an otherwise-
    unwarranted appeal by a waiver process that lets him keep both his DLI award and an
    earlier permanent partial disability payment to which he was not entitled.
    9
    No. 34066-0-III
    Belling v. Employment Security Department
    Instead, Mr. Belling's principal argument on appeal is that the commissioner's
    exercise of discretion to waive overpayment where "recovery ... would be against equity
    and good conscience" as provided by RCW 50.20.190(2) requires more than protecting a
    successful DLI appellant against a net loss, as was done in Peltier-instead, he argues,
    "ESD should be required to pay its pro rata share of attorney fees and costs, or make
    some other adjustment of what it receives, when it, not Mr. Belling, acquired the greatest
    financial benefit from Mr. Belling's successful litigation"-a financial benefit he argues
    that ESD receives "without risk or the expenditure of any monies." Br. of Appellant at 1.
    He complains that neither the ALJ, nor the commissioner on review, provided adequate
    findings as to why "equity and good conscience'' does not require ESD to pay fees for
    services from which it benefitted. In short, he believes he correctly determined what
    "equity and good conscience" requires when he discounted the overpayment liability by
    ESD's $6,875.20 "share" of the contingent fee and tendered $16,046.80 instead. Br. of
    Appellant at I 9.
    Questions of statutory construction are reviewed de novo. State v. Roggenkamp,
    
    153 Wn.2d 614
    ,621, 
    106 P.3d 196
     (2005). We review a decision by an ESD
    commissioner declining to waive recovery of an overpayment for abuse of discretion.
    Berlandv. Emp't Sec. Dep't, 
    52 Wn. App. 401
    ,410, 
    760 P.2d 959
     (1988). An abuse of
    discretion occurs when a decision is manifestly unreasonable or exercised on untenable
    10
    No. 34066-0-111
    Belling v. Employment Security Department
    grounds or for untenable reasons. Graves v. Emp 't Sec. Dep 't, 
    144 Wn. App. 302
    , 309,
    
    182 P.3d 1004
     (2008).
    Mr. Belling fails to show that the commissioner misconstrued RCW 50.20.190(2)
    or abused her discretion. He does not demonstrate financial hardship or that repayment
    of the duplicative unemployment insurance benefits would cause him to sustain a net loss
    from his successful DLI appeal. He demonstrates only that the commissioner did not
    share his view the ESD should, in "equity and good conscience," contribute toward the
    contingent fee he owes his lawyer so he can retain a larger percentage of his recovery
    from the successful appeal. The commissioner's view is not manifestly unreasonable. It
    is consistent with the American rule that attorney fees are not recoverable unless
    provided for by contract, statute, or recognized equitable principles. See Delagrave, 127
    Wn. App. at 606. It is consistent with this court's refusal to read an equitable expansion
    of entitlement of attorney fees into the Employment Security Act in Delagrave. Id. It is
    consistent with the fact that under the Industrial Insurance Act, Title 51 RCW, Mr.
    Belling was not entitled to recover his attorney fees even from DLI-and unlike ESD,
    DLI is the agency that proved to have been wrong. RCW 51.52.130; Brand v. Dep 't of
    Labor & Indus., 
    139 Wn.2d 659
    , 675 n.6, 
    989 P.2d 1111
     (1999) (Talmadge, J.
    concurring).
    11
    No. 34066-0-III
    Belling v. Employment Security Department
    We reverse the superior court's decision and affinn the decision of commissioner
    dated June 14, 2013. Because we affinn the commissioner's decision, we deny Mr.
    Belling's request for an award of fees under RCW 50.32.160.
    A majority of the panel has determined this opinion will not be printed in the
    Washington Appellate Reports, but it will be filed for public record pursuant to RCW
    2.06.040.
    I CONCUR:
    12
    No. 34066-0-111
    FEARING, CJ. (dissenting) -    I dissent for three reasons. First, the Washington
    Employment Security Department's (ESD's) findings of fact and conclusions oflaw fail
    to adequately address, in light of Delagrave v. Employment Security Department, 
    127 Wn. App. 596
    , 
    111 P.3d 879
     (2005), whether demanding full reimbursement of
    unemployment compensation benefits serves equity and good conscience. Second, under
    the ESD's own precedent, In re Peltier, No. 04-2006-22057 (Wash. Emp't Sec. Dep't
    Comm'r Dec. No. 910, 2d Series Feb. 16, 2007), 
    2007 WL 5172355
    , Christopher Belling
    should at the least only be required to reimburse the department $19,278.82, not the
    $22,924 sought by ESD. Third, this court wrongly decided Delagrave v. Employment
    Security Department. Equity and good conscience requires that ESD at least consider the
    common fund doctrine when seeking recovery, from a worker, of the overlapping
    amounts the worker procured by his or her attorney's efforts from the Department of
    Labor & Industries (DLI). Fairness dictates that an injured and unemployed worker
    should not bear, except in justifiable circumstances, the entire expense of correcting one
    state agency's error when the correction benefits another state agency's accounting
    balance.
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    At the least, this court should remand to ESD for a full determination of whether
    waiving partial reimbursement fulfills equity and good conscience and whether the
    common fund doctrine should apply. Finally, at the least, this court should affirm the
    superior court's waiver of $3,645.18.
    SOME FACTS
    This appeal juxtaposes the operation of two state insurance plans afforded
    Washington workers: unemployment insurance available from the Employment Security
    Department and work injury insurance available from the Department of Labor &
    Industries. After DLI terminated Christopher Belling's worker compensation time loss
    benefits, ESD paid Belling $22,924 in unemployment benefits from June 2011 to April
    2012. With the assistance of hired counsel, Belling appealed DLI's termination of
    benefits.
    In June 2012, DLI awarded Christopher Belling worker compensation time loss
    benefits for March 8, 2011 to July 24, 2012. DLI thereby awarded Belling a gross lump
    sum of$48,25I.19. Nevertheless, the department deducted from the lump sum
    (1) $9,271.80 to reimburse DLI for an earlier remittance to Belling for a permanent
    partial disability, (2) $14,475.36 as payment to Belling's attorney as fees on a thirty
    percent contingent fee basis, and (3) $5,255.21 in costs to be paid the attorney. CP at
    204-05. Belling paid his counsel thirty percent of the entire $48,251.19 award, not the
    net award of $38,979.39 after deducting the earlier permanent partial disability payment.
    2
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    After subtracting the three deductions, Belling netted $19,278.82.
    With Christopher Belling's receipt of the lump sum payment from DLI, ESD sent
    a written demand to Belling that he refund all $22,924.00 of unemployment
    compensation he received from ESD from June 2011 through April 2012. In response,
    Belling tendered a check to ESD in the sum of$16,046.80, seventy percent of
    $22,924.00, since Belling recompensed his counsel on a thirty percent contingent fee rate.
    Belling concluded that ESD should share in the expense of the attorney since the
    attorney's work benefitted ESD. Belling did not seek reimbursement of any costs he
    incurred in appealing DLI's denial of benefits. I assume that ESD did not cash the
    $16,046.80 check.
    SOME PROCEDURE
    Thereafter, ESD continued to seek recovery of the $22,924.00 that it claimed
    Christopher Belling owed. An ESD administrative law judge (ALJ) concluded that
    Belling was responsible for reimbursing ESD the entire $22,924.00 earlier paid him by
    the department. In so ruling, the ALJ found that:
    9. The claimant continues to receive $1,486 twice each month in
    time loss benefits from [DLI]. The claimant could at some point in the
    future receive another [p ]ermanent partial [d]isability payout. The claimant
    also receives $1,700 per month in Social Security Disability Benefits. The
    claimant pays $600 per month in rent. He is responsible for no minor
    children. He "eats out a lot," and has no set grocery budget. The claimant
    has no debt in collections, and owns three vehicles. He pays $280 per week
    for his cell phone service.
    3
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    Clerk's Papers (CP) at 204. I do not know why the ALJ focused on debt in collection
    rather than debt as a whole.
    The ALJ entered a conclusion of law that read:
    7. Here, the claimant received a back pay award for time loss
    benefits in the amount of $48,251.19 including PPD. After taking into
    consideration fees and costs, the amount claimant received ($28,850.62)
    was greater than the overpayment amount of $5,626.62. Thus, applying the
    calculation in Peltier, the claimant should be required to repay the full
    overpayment, in the amount of $22,924. The undersigned further
    concludes that repayment would not be unfair and repayment would not be
    against equity and good conscience.
    CP at 206. The ALJ did not deduct the $9,271.80 reduction imposed by DLI for the
    earlier partial permanent disability payment when determining Belling's net recovery
    from DLI. The ESD commissioner adopted all findings of fact and conclusions of law
    entered by the ALJ.
    LAW
    Sufficiency of Findings and Conclusions
    On appeal to this court, Christopher Belling repeats his contention raised below.
    He contends that equity demands that ESD share in the expense, including the cost of an
    attorney, of his obtaining DLI payments. Belling emphasizes that he or his attorney
    performed all the work, took the financial risk, and paid all the fees and costs to obtain a
    settlement from DLI. Furthermore, on appeal, he newly contends that ESD entered
    insufficient findings of fact as to whether it was equitable for him to pay all of the
    4
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    attorney's fees and costs incurred in procuring the money that benefits ESD. I agree that
    ESD failed to enter sufficient findings of fact or conclusions oflaw. I will later address
    Belling's overall argument that equity demands that ESD share in the expenses of
    procuring the recovery from DLI.
    Two unemployment compensation statutes and one regulation control the question
    on appeal. First, RCW 50.20.085 declares:
    An individual is disqualified from [unemployment compensation]
    benefits with respect to any day or days for which he or she is receiving, or
    has received, or will receive compensation under RCW 51.32.060 or
    51.32.090 [worker compensation time loss benefits for permanent total and
    temporary total disability].
    Christopher Belling concedes this statute compels at least partial reimbursement to ESD
    of the settlement he received from DLI. Second, RCW 50.20.190 reads:
    (1) An individual who is paid any amount as benefits under this title
    to which he or she is not entitled shall, unless otherwise relieved pursuant
    to this section, be liable for repayment of the amount overpaid. The
    department shall issue an overpayment assessment setting forth the reasons
    for and the amount of the overpayment. ...
    (2) The commissioner may waive an overpayment if the
    commissioner finds that the overpayment was not the result of fraud,
    misrepresentation, willful nondisclosure, or fault attributable to the
    individual and that the recovery thereof would be against equity and good
    conscience . ...
    (Emphasis added.) The two statutes evidence an intent by the Washington State
    Legislature for DLI's ledger, not the Employment Security Department's balance sheet,
    5
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    to be charged when a work injury renders a worker unemployed. Third, WAC 192-220-
    030, which implements RCW 50.20.190, states:
    (1) "Equity and good conscience" means fairness as applied to a
    given set of circumstances.
    (2) It will be against equity and good conscience to deny waiver
    when repayment of the overpayment would deprive you of income required
    to provide for basic necessities including food, shelter, medicine, utilities,
    and related expenses. Unless there are unusual circumstances which would
    argue against waiver, the department will presume repayment would leave
    you unable to provide basic necessities if your total household resources in
    relation to household size do not exceed seventy percent of the Lower
    Living Standard Income Level (LL SIL) and circumstances are not expected
    to change within the next ninety days.
    (3) The department may also consider, but is not limited to, the
    following factors in determining whether waiver should be granted for
    reasons of equity and good conscience:
    (a) Your general health, including disability, competency, and
    mental or physical impairment;
    (b) Your education level, including literacy;
    (c) Whether you are currently employed and your history of
    unemployment;
    (d) Your future earnings potential based on your occupation, skills,
    and the local labor market;
    (e) Your marital status and number of dependents, including whether
    other household members are employed;
    ( f) Whether an error by department staff contributed to the
    overpayment;
    (g) Whether you refused or were ineligible for other government
    benefits because you received unemployment benefits; and
    (h) Other factors indicating that repayment of the full amount would
    cause you undue economic, physical, or mental hardship.
    (5) The decision to grant or deny waiver will be based on the totality
    of circumstances rather than the presence of a single factor listed in
    subsections (2), (3), and (4).
    6
    No. 34066-0-111
    Belling v. Employment Security Department (dissent)
    (Emphasis added.) Note that the statute and regulation use three terms: equity, good
    conscience, and fairness in the particular circumstances. I do not fathom any difference
    in meaning between the tenns.
    Christopher Belling relies on Delagrave v. Employment Security Department, 
    127 Wn. App. 596
     (2005). Don Delagrave also received a lump sum retroactive time loss
    settlement from DLI for a window of time that overlapped the same period during which
    he received unemployment compensation. ESD sought reimbursement of unemployment
    compensation paid. Delagrave requested a reduction in the repayment based on his
    incurring attorney fees and costs in obtaining the settlement from DLI. Delagrave asked
    for a waiver for equitable purposes. The ESD commissioner denied the request under a
    conclusion of law that read: "neither an administrative law judge nor the undersigned has
    the authority to waive part or all of an overpayment for any other reason than the 'equity
    and good conscience' provisions." Delagrave v. Employment Security Department, 127
    Wn. App. at 603. The Delagrave court resolved that the conclusion of law meant that
    ESD took the position that, under no circumstances, would equity and good conscience
    permit a reduction in the overpayment because of the claimant's payment of attorney fees
    and costs to recover DLI payments.
    WAC 192-220-030 does not limit the Employment Security Department to
    waiving reimbursement, on the basis of ··equity and good conscience," to the financial
    condition of the unemployment compensation of the claimant. Delagrave v. Employment
    7
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    Security Department addressed a former regulation, not WAC 192-220-030, but the
    regulation contained similar terms that did not limit waiver to the financial circumstances
    of the claimant. The Delagrave court noted that limiting waiver to the fiscal condition of
    the claimant would contradict the broad language ofRCW 50.20.190 that permits waiver
    when reimbursement would "be against equity and good conscience" without any
    limitation. Delagrave v. Employment Security Department, 127 Wn. App. at 603. This
    court rejected the application of the common fund doctrine for purposes of waiver of the
    refund, a rejection I will later analyze. Nevertheless, we remanded the appeal to the
    commissioner of ESD to determine under the facts of the case whether the department
    should waive reimbursement. Delagrave v. Employment Security Department teaches
    that ESD may not summarily deny waiver of reimbursement on the basis that the law
    does not permit waiver when the unemployment compensation claimant incurs attorney
    fees and costs in reversing a denial of worker compensation benefits.
    In Christopher Belling's case on appeal, the ESD administrative law judge entered ·
    no finding of fact that mentions whether waiver would serve equity and good conscience.
    The ALJ entered a conclusion of law that may be meatier than the conclusion of law in
    Delagrave v. Employment Security Department, but the conclusion still suffers from the
    same shortcoming as the conclusion of law in Delagrave. The ALJ's conclusions of law
    in this appeal includes the language: "The undersigned further concludes that repayment
    would not be unfair and repayment would not be against equity and good conscience."
    8
    No. 34066-0-111
    Belling v. Employment Security Department ( dissent)
    CP at 206. The ESD commissioner adopted this conclusion of law. The conclusion of
    law, as its label implies, is only a conclusion. The conclusion does not inform us as to
    the reason for denying waiver. Since the findings of fact analyze the financial
    circumstances of Christopher Belling, the reader could judiciously conclude that, in
    violation of Delagrave v. Employment Security Department, ESD limited the question of
    waiver to the fiscal welfare of the claimant. The conclusion of law suggests that ESD
    repeated the mistake of denying waiver as a matter of law for the reason that the claimant
    seeks partial waiver on the ground of payment of attorney fees and costs in appealing a
    DLI decision. Therefore, at the least, this court should remand this appeal to ESD for a
    reassessment of waiver.
    Brevity in opinion writing is commendable, but sometimes a terse opinion raises
    more questions than it answers. Our concise opinion in Delagrave v. Employment
    Security Department failed to provide any guidelines to ESD as to if and when it may or
    should grant waiver on the basis of the claimant's incurring attorney fees and costs when
    recovering DLI benefits. Delagrave does not answer the question of whether ESD may
    always exercise its discretion by denying reimbursement, when the claimant paid fees
    and costs, after reviewing the individual facts of the claimant's challenge to repayment of
    benefits. Nor does Delagrave explicitly answer the question as to whether equity and
    good conscience always requires that ESD share in the expense of the worker's recovery
    of worker compensation benefits.
    9
    r
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    The ESD ALJ and this court's majority opinion rely on In re Peltier, No. 04-2006-
    22057 (Wash. Emp't Sec. Dep't Comm'r Dec. 910, 2d Series Feb. 16, 2007), 
    2007 WL 5172355
    . This court may consider ESD commissioner rulings, such as Peltier, as
    persuasive authority. Martini v. Employment Security Department, 
    98 Wn. App. 791
    ,
    795, 
    990 P.2d 981
     (2000). Peltier, however, provides no guidance for the factual
    circumstances and arguments forwarded by Christopher Belling in this appeal.
    In Peltier, DLI also denied Suzanne Peltier time loss benefits, after which Peltier
    applied for and received unemployment compensation of $9,581.00. Later Peltier
    received retroactive worker compensation benefits of $10,351.56. After paying her
    attorney, Peltier received a net recovery from DLI in the sum of $7,230.00. ESD,
    nonetheless, sought reimbursement of$9,581.00. On appeal, the ESD commissioner
    ruled, under principles of equity and good conscience, that Peltier need only reimburse
    the department her net payment of $7,230.00. Peltier did not seek any other waiver of
    reimbursement. The commissioner never commented whether other circumstances might
    merit waiver to an extent more than the worker's net recovery. Assuming the ALJ and
    the ESD commissioners based conclusion of law seven on Peltier, they misplaced their
    reliance.
    Peltier Rule
    Remember that the ESD commissioner ruled, in In re Peltier, that Suzanne Peltier
    need not reimburse ESD more than her net payment from DLI. Peltier only argued that
    10
    No. 34066-0-111
    Belling v. Employment Security Department (dissent)
    she should be able to deduct her attorney fees from her gross DLI payment to reach the
    sum of overpayment by ESD.
    One could reach two different conclusions as to the amount of the net payment
    received by Christopher Belling from DLI. Under the first calculation, one only deducts
    attorney fees and costs incurred by Belling in order to obtain the additional DLI recovery.
    Under this calculation, one deducts fees of $14,475.36 and costs of $5,255.21 from the
    gross lump sum of $48,251.19 to arrive at the net recovery of $28,850.62. This net
    recovery exceeds the unemployment compensation payment of $22,924.00, such that
    Belling lost nothing by reason of appealing the DLI denial of benefits. The ESD ALJ and
    this court's majority impliedly employ this first calculation.
    Under a second method of calculation, one deducts all amounts taken by DLI from
    the lump sum payment of$48,251.19, including the $9,271.80 that reimbursed DLI for a
    2011 remittance to Christopher Belling for a permanent partial disability. After
    subtracting the attorney fees, costs, and earlier payment, Belling netted $19,278.82. This
    net recovery deceeds Belling's unemployment compensation benefits of $22,924.00.
    Under this calculation, Belling loses $3,645.18 by reason of challenging DLI's denial of
    continued benefits. He would have kept the $9,271.80 permanent partial disability
    payment and the $22,924.00 in unemployment compensation but for hiring the lawyer to
    challenge the DLI denial of worker compensation benefits. The superior court apparently
    performed this calculation and ruled that Belling need only reimburse ESD $19,278.82.
    11
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    On appeal, ESD contends that the $9,271.80 covers the period that Christopher
    Belling received unemployment benefits. Nevertheless, ESD does not cite the record to
    support this factual proposition. Neither the ALJ nor the commissioner expressly so
    found. One might surmise that the 2011 lump sum payment covered a period during
    which Christopher Belling garnered unemployment compensation, but such surmising is
    speculative. Since the $9,271.80 compensated Belling for a reduced ability to garner
    income because of a permanent partial disability, the payment also likely compensated
    Belling primarily for a time period well into the future and beyond April 2012.
    Common Fund Doctrine and Delagrave Revisited
    If I did not otherwise dissent from the majority's ruling, I might withhold, in favor
    of stare decisis, any challenge to the validity of Delagrave v. Employment Security
    Department's rejection of the common fund doctrine. Since I dissent on other grounds, I
    forward this challenge.
    Delagrave v. Employment Security Department held, in part, that the common
    fund doctrine does not apply to a worker's reimbursement of unemployment
    compensation benefits paid from the worker's recovery of worker compensation
    payments. The condensed reasoning of Delagrave miscarries. The purpose behind the
    common fund doctrine fulfills the prerequisite of equity, good conscience, and fairness in
    order to waive repayment. The common fund doctrine operates commensurately with
    12
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    equity, good conscience, and fairness. The Delagrave court should not have outright
    rejected the use of the common fund doctrine.
    The common fund doctrine provides that an attorney who renders services in
    recovering or preserving a fund, in which a number of persons are interested, may in
    equity be allowed his or her compensation out of the whole fund, when his or her services
    are rendered on behalf of, and are a benefit to, the common fund. Winters v. State Farm
    Mutual Automobile Insurance Co., 
    144 Wn.2d 869
    , 877, 
    31 P.3d 1164
    , 
    63 P.3d 764
    (2001); 20 AM. JUR. 2o Costs§ 63 (2015). Stated differently, the doctrine allows an
    attorney "in equity" to recover fees in the absence of a contract or statute when his
    services confer a substantial benefit for a group of people. John P. Lynch, PS v.
    Deaconess Medical Center, 
    113 Wn.2d 162
    , 167-68, 
    776 P.2d 681
     (1989). When one
    person creates or preserves a fund from which another then takes, the two should share,
    pro rata, the fees and costs reasonably incurred to generate the fund. Winters v. State
    Farm Mutual Automobile Insurance Co., 
    144 Wn.2d at 877
    . A person who benefits from
    a lawsuit without contributing to its expense is unjustly enriched at the successful
    litigant's expense. 20 AM. JUR. 2o Costs§ 63 (2015). Common fund fee awards present
    an exception to the American rule that each litigant pays his or her own attorney for
    services performed. Mahler v. Szucs, 
    135 Wn.2d 398
    , 426-27, 
    957 P.2d 632
    , 
    966 P.2d 305
     (1998).
    13
    No. 34066-0-111
    Belling v. Employment Security Department (dissent)
    Appellate decisions repeatedly proclaim that the law grounds the common fund
    doctrine in equity, good conscience, and fairness, the requirements for waiver of ESD
    reimbursement under RCW 50.20.190 and WAC 192-220-030. According to
    Washington courts, the common fund doctrine generates an "equitable sharing rule."
    Hamm v. State Farm Mutual Automobile Insurance Co., 
    151 Wn.2d 303
    ,310, 
    88 P.3d 395
     (2004); Mahler v. Szucs, 
    135 Wn.2d at 426-27
    . The doctrine is grounded in equity.
    Bowles v. Department of Retirement Systems, 
    121 Wn.2d 52
    , 70, 
    847 P.2d 440
     (1993).
    The doctrine arises from "equitable principles." Hamm v. State Farm Mutual Automobile
    Insurance Co., 
    151 Wn.2d at 311
    . According to commentators and foreign decisions, the
    doctrine is calculated to achieve equity. Johnny Parker, The Common Fund Doctrine:
    Coming ofAge in the Law of Insurance Subrogation, 31 IND. L. REV. 313, 323 (1998).
    The common fund doctrine invokes a court's general equity power "to do equity in a
    particular situation." Sprague v. Ticonic National Bank, 
    307 U.S. 161
    , 166, 
    59 S. Ct. 777
    , 
    83 L. Ed. 1184
     ( 1939). The doctrine touches the power of equity in doing justice
    between a party and the beneficiaries of his litigation. Morris B. Chapman & Associates,
    Ltd. v. Kitzman, 
    193 Ill. 2d 560
    , 575, 
    739 N.E.2d 1263
     (2000). The common fund
    doctrine requires a beneficiary of the common fund to pay attorney fees "as a matter of
    fairness." Butson v. Department ofEmployment & Training, 
    2006 VT 10
    , 
    179 Vt. 599
    ,
    
    892 A.2d 255
    , 257.
    Three factors should be present before a court adopts the common fund approach:
    14
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    ( 1) those benefiting from the litigation should be small in number and easily identifiable,
    (2) the benefits should be traceable with some accuracy, and (3) the benefits should be
    capable of being shifted with some exactitude to those benefiting. 20 AM. JUR. 2o Costs
    § 63 (2015). The circumstances of this appeal fit all three factors. Only two parties,
    Christopher Belling and ESD, benefited from Belling's litigation to gain worker
    compensation payment. One can readily identify ESD's benefit from the litigation before
    or after removing thirty percent for attorney fees. Belling can easily shift the benefits of
    the worker compensation payment by forwarding some of the payment to ESD.
    The appeal raises the unusual question of whether the common fund doctrine
    applies when the liable party or the party whose payment creates the common fund is a
    state agency and a beneficiary of the fund is another state agency. Government's
    involvement should not preclude use of the doctrine. In Bowles v. Department of
    Retirement Systems, 
    121 Wn.2d at 70
     (1993), the state high court applied the common
    fund doctrine when a State obligation created the fund.
    Even if the Washington State Employment Security Department and the
    Washington State Department of Labor & Industries are considered one entity as
    branches of one state government, the common fund doctrine should apply despite the
    same entity creating and benefiting from the common fund. The Washington Supreme
    Court has applied the doctrine in the context of an insurance company which created the
    common fund and benefited from the common fund. Hamm v. State Farm Mutual
    15
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    Automobile Insurance Co., 
    151 Wn.2d 303
     (2004). Unemployment compensation and
    worker compensation are forms of insurance provided by the same legal entity.
    The common fund doctrine has been applied in many types of cases covering a
    large range of civil litigation. Morris B. Chapman & Associates, Ltd. v. Kitzman, 
    193 Ill. 2d at 573
     (2000). Whether the doctrine applies in a particular case is not determined
    by a label, but rather by a proper understanding of the doctrine and its limitations. Morris
    B. Chapman & Associates, Ltd. v. Kitzman, 
    193 Ill. 2d at 573
    .
    The common fund doctrine differs from other theories authorizing the granting of
    attorney fees. Bowles v. Department of Retirement Systems, 
    121 Wn.2d at 70
     (1993).
    The common fund doctrine does not authorize a party to shift fees to an adversary, but
    rather authorizes the spread of the fees among those who benefit from the litigation.
    Morris B. Chapman & Associates, Ltd. v. Kitzman, 
    193 Ill. 2d at 572
    . The award of fees
    is still borne by the prevailing parties, not the losing party. Bowles v. Department of
    Retirement Systems, 
    121 Wn.2d at 70
    . As mentioned later, the Delagrave court failed to
    recognized that the common fund doctrine permits fee sharing, not fee shifting.
    In light of this background of the common fund doctrine, I review Delagrave's
    succinct scrutiny of the common fund doctrine. This court wrote then:
    There is no express provision in the statute that allows ESD to
    forgive an amount attributable to attorney fees on an overpayment. When
    the legislature does not act to create such a provision, we may not read one
    into the statute even if we believe the omission is unintentional. State ex
    rel. Ewingv. Reeves, 
    15 Wn.2d 75
    , 85,
    129 P.2d 805
     (1942);Dep'tof
    16
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    Labor & Indus. v. Cook, 
    44 Wn.2d 671
    ,677,
    269 P.2d 962
     (1954). RCW
    50.32.160 provides for payment of attorney fees and costs out of the
    unemployment compensation administration fund only if a commissioner's
    decision is reversed. A provision for attorney fees for recovery of
    overpayment is notably absent from this provision as well as from the
    overpayment provisions of the statutes. See RCW 50.20.085, .190. If the
    legislature had intended attorney fees to be available in overlapping
    benefits scenarios like the one here, the logical place to include such a
    provision would be within these three statutes. Mr. Delagrave correctly
    notes that there is a provision for fees upon recovery from third parties in
    the L&I statute (RCW 51.24.060(1)). But that only underscores this point.
    Moreover, Washington follows the American rule-attorney fees are
    not recoverable unless provided for otherwise in contract, statute, or
    recognized equitable principles. Rettkowski v. Dep 't ofEcology, 
    128 Wn.2d 508
    ,514,
    910 P.2d 462
     (1996). Although Mr. Delagrave correctly
    notes that the common fund rule is a common law rule of equity, it is
    susceptible to modification by statute. "If the merits of the litigation fall
    within a statutory scheme which prohibits the award of attorney fees, or
    allows such an award under narrow circumstances, a party cannot enlarge
    those circumstances by reference to the common fund doctrine or other
    equitable powers of the trial court." Leischner v. Alldridge, 
    114 Wn.2d 753
    , 757, 
    790 P.2d 1234
     (1990) (citing Fleischmann Distilling Corp. v.
    Maier Brewing Co., 
    386 U.S. 714
    , 719, 
    87 S. Ct. 1404
    , 
    18 L. Ed. 2d 475
    (1967)). RCW 50.32.160 provides for attorney fees under narrow
    circumstances. The statute may not be enlarged under the doctrine.
    Delagrave v. Employment Security Department, 127 Wn. App. at 605-06 (2005).
    The Delagrave court reasoned that, if a statute lacks an express provision that
    allows an entity to forgive an amount attributable to attorney fees on an overpayment, the
    court may not read the provision into the statute even if the court believes the omission is
    unintentional. The court cites State ex rel. Ewing v. Reeves, 15 Wn.2d at 85 (1942) and
    Department of Labor & Industries v. Cook, 
    44 Wn.2d at 677
     (1954) to support this
    ratiocination. Ewing does state that a court may not read into a statute an omission. The
    17
    No. 34066-0-111
    Belling v. Employment Security Department (dissent)
    Ewing decision, however, did not consider an award of attorney fees or the common fund
    doctrine. Cook also cites the proposition that a court cannot insert into a statute a
    provision that the court imagines the legislature inadvertently skipped. Cook,
    nonetheless, also does not review an award of fees or the common fund doctrine.
    The rule, that a court cannot read into a statute a provision that the court believes
    the legislature mistakenly overlooked, lacks any import in our setting. The legislature in
    RCW 50.20.190 distinctly declared that a waiver may be awarded on grounds of equity
    and good conscience. The common fund doctrine quintessentially enforces equity and
    good conscience.
    The Delagrave court next relied on RCW 50.32.160, which provides for payment
    of attorney fees and costs out of the unemployment compensation administration fund
    only if a commissioner's decision is reversed. The court also noted that the
    reimbursement and waiver statutes, RCW 50.20.085 and .190, do not mention imposition
    of any fees on the ESD. Based on these statutes, Delagrave deduced that attorney fees
    may not be removed from a DLI payment. In so ruling, the Delagrave court
    misunderstood the nature of the common fund doctrine. Application of the doctrine
    would not require payment of fees from the unemployment compensation fund. The
    common fund doctrine is not a fee shifting rule that requires ESD to pay fees from its
    own pocket. Rather the doctrine, in consideration of fairness and equity, demands that a
    portion of the reimbursement to ESD be removed before deposited into the
    18
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    unemployment compensation fund in order to pay for the cost of procuring the
    reimbursement.
    The Delagrave court next mentioned that, if the merits of the litigation fall within
    a statutory scheme which prohibits the award of attorney fees, or allows such an award
    under narrow circumstances, a party cannot enlarge those circumstances by reference to
    the common fund doctrine or other equitable powers of the trial court. The court cited
    Leischner v. Alldridge, 
    114 Wn.2d at 757
     (1990) and Fleischmann Distilling Corp. v.
    Maier Brewing Co., 
    386 U.S. at 719
     (1967) for this imperative. The Delagrave court
    then remarked that RCW 50.32.160 provides for attorney fees under narrow
    circumstances. Once again, however, the court failed to understand the nature of the
    common fund doctrine and the import ofRCW 50.32.160. The statute addresses
    instances when ESD must pay fees to the worker. The common fund doctrine is not a fee
    shifting rule. ESD does not pay any fees to the worker.
    The Delagrave court's reliance on Leischner v. Alldridge and Fleischmann
    Distilling Corp. v. Maier Brewing Co. is also misdirected. The Leischner court
    mentioned the rule stated, but only in dicta. No statutory scheme addressing attorney fees
    was at issue in Leischner. The court rejected application of the common fund doctrine
    because the plaintiff never created any common fund. The Leischner suit involved
    quieting title to real property. Although Fleischman Distilling Corp. mentioned the
    19
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    common fund doctrine, the doctrine was not at issue. The court was asked to award
    attorney fees against the losing party under the federal Lanham Trade-Mark Act.
    Despite my disagreement with Delagrave v. Employment Security Department, the
    decision compels me to ask: if the Washington State Legislature wanted the common
    fund doctrine to apply when ESD recovers DLI payments from the worker, why would
    the legislature not expressly reference the doctrine in the language of RCW 50.20.190?
    Answers readily surface. The legislature may have wished to write in general terms
    rather than defining and thereby impliedly limiting waiver to discrete circumstances.
    Since the common fund doctrine intimately intertwines with equity, good conscience, and
    fairness, one could conclude that the legislature particularly sought to allow waiver based
    on the common fund doctrine. By referring to equity, good conscience and fairness, the
    legislature expressly meant, in part, the common fund doctrine. To the contrary and
    because of the inviting interrelationship between the common fund doctrine and equity,
    the legislature would have expressly excluded waiver based on the doctrine if the
    legislature did not want ESD to consider the doctrine.
    Only one foreign decision, Butson v. Department ofEmployment & Training, 
    892 A.2d 255
     (VT 2006), addresses the same issue: whether a worker may deduct the cost of
    collecting worker compensation payments when the worker must reimburse, to the
    unemployment compensation insurance administration, benefits collected when the
    worker later recovers payment from a worker compensation insurance administration and
    20
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    the benefits overlap in time. The Butson court ruled against the worker, but the reasoning
    of the Vermont decision, assuming the reasoning supports either side, bolsters
    Christopher Belling' s position.
    In Butson v. Department ofEmployment & Training, Kenneth Butson received
    unemployment compensation benefits from April 20, 2002 through January 4, 2003,
    totaling $8,440. He later filed a worker compensation claim and received benefits
    covering the period from April 20, 2002 to January 4, 2003, and greater in the amount
    than the unemployment compensation benefits earlier garnered. The Vermont
    Employment. Security Board issued an order demanding that Butson repay the
    unemployment compensation fund all monies earlier received. Butson argued that he
    should be allowed to deduct from the repayment a share of the attorney fees he incurred
    when seeking worker compensation funds. The Board disagreed and Butson appealed.
    On appeal to the Vermont Supreme Court, Kenneth Butson argued that a reduced
    repayment was authorized by equitable considerations and the common fund doctrine.
    The Vermont court disagreed based on its reading of its state statute. The unemployment
    compensation statute read:
    Any person who receives remuneration ... which is allocable in
    whole or in part to prior weeks during which he or she received any
    amounts as benefits under this chapter shall be liable for all such amounts
    of benefits or those portions of such amounts equal to the portions of such
    remuneration properly allocable to the weeks in question.
    21
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    21 V.S.A. § 1347(b) (emphasis and alterations in original). The express terms of the
    statute required a claimant to repay all of the benefits received for the time period
    duplicated by his worker compensation benefits, without any indication that he may .
    reduce the amount for any purpose. Because of this clear legislative mandate, the court
    could not permit a deduction pursuant to the common fund doctrine, even for equitable
    considerations. Of course, the Washington statute, unlike the Vermont statute, allows
    reduction of the reimbursement to ESD based on equity and good conscience. RCW
    50.20.190.
    A Washington case consistent with Butson v. Department of Employment &
    Training is Department of Labor & Industries v. Dillon, 
    28 Wn. App. 853
    ,
    626 P.2d 1004
    (1981). Donald Dillon recovered $11,493.95 in benefits from DLI, under the victims of
    crime compensation act, as a result of an assault. He later recovered $15,000.00 against
    his assailant. DLI then demanded full reimbursement of the benefits paid. Dillon's
    attorney wished payment from some of the settlement proceeds and filed a lien against
    the recovery from the tortfeasor. DLI sued to recover all amounts paid. Former RCW
    7.68.050 (1973) then read:
    No right of action at law for damages incurred as a consequence of a
    criminal act shall be lost as a consequence of being entitled to benefits
    under the provisions of this chapter. In the event any person entitled to
    benefits under this chapter additionally seeks a remedy for damages
    incurred as a consequence of a criminal act, then and in that event the
    department shall be subrogated to the rights of such person and have a lien
    upon any recovery so made to the extent of the benefits paid or payable by
    22
    No. 34066-0-111
    Belling v. Employment Security Department (dissent)
    the department to or on behalf of such person under this chapter.
    (Emphasis added.) This court refused to apply the common fund doctrine because of the
    language of the statute. The court noted the imposition of a lien in favor of DLI on any
    recovery. Of course, the statute contained no exception for a waiver on equitable
    grounds. RCW 50.20.190, the unemployment compensation reimbursement statute,
    contains no lien provision and affords an important exception for circumstances in equity
    and good conscience, circumstances consistent with the common fund doctrine.
    Fairness demands that ESD at least consider the common fund doctrine when the
    state government generated and profited from the fund created by the worker's effort.
    DLI wrongfully withheld benefits owed Christopher Belling. ESD did nothing to assist
    Belling to litigate the wrong. Yet, when Belling prevailed against DLI, ESD immediately
    demanded payment of much of the recovery. Fairness, equity and good conscience does
    not sanction an injured worker expending time, energy and money to obtain rightful
    benefits from the government only to remit most of the benefits back to the government
    while paying the entire cost of obtaining the benefits. ESD would not have boosted its
    ledger sheet without the expense incurred by Belling.
    Christopher Belling's counsel took his thirty percent share of Belling's worker
    compensation recovery from the full $48,251.19. Therefore, ESD' s payment of a portion
    of the fees would allow reimbursement to Belling of some of his payment to counsel. I
    23
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    assume and expect that counsel would repay to Belling the portion of the fees deducted
    from ESD' s reimbursement.
    ESD contends that the common fund doctrine should not apply, in part, because,
    even without waiver of some of the overpayment, Christopher Belling remains in the
    same financial position as without receiving unemployment benefits. According to ESD,
    Belling would have remained responsible for any attorney fees and costs associated with
    litigating his worker compensation claim even without earlier receiving unemployment
    compensation. Compelling reflections, however, deflect this contention. The State of
    Washington agencies caught Belling in the middle. DLI wrongfully withheld benefits
    and placed Belling in a position that required him to rely on ESD. Belling may have
    never pursued DLI payments if he had known ESD would garner almost all of the worker
    compensation recovery. When considering that DLI deducted $9,271.80 from the award,
    Belling actually lost by reason of seeking recovery from DLI. ESD's contention ignores
    the unjustness of it reaping a windfall without paying a fair share of the expenses of that
    windfall.
    My analysis must continue. The ESD reimbursement waiver statute, RCW
    50.20. I 90(2), reads that the ESD "may waive an overpayment if the commissioner finds
    ... that the recovery thereof would be against equity and good conscience." (Emphasis
    added.) The word "may" connotes discretion. A court construes "may" as permissive.
    In re Parentage of K.R.P., 
    160 Wn. App. 215
    ,223,
    247 P.3d 491
     (2011). Generally, the
    24
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    court has no discretion in determining whether to apply the common fund doctrine.
    Either it applies or does not apply. Granting ESD discretion to apply the common fund
    doctrine presents the same conundrum raised in the first section of this dissent: what, if
    any, guidelines or considerations should ESD follow when exercising its discretion in
    determining waiver based on fees incurred by the worker.
    One abuses its discretion if it relies on unsupported facts, applies the wrong legal
    standard, or adopts a position no reasonable person would take. State v. Lord, 
    161 Wn.2d 276
    , 284, 
    165 P.3d 1251
     (2007). Thus, discretion has limits and must be reasonably
    applied. It is wrong to apply discretion contrary to the law.
    Under a correct reading ofRCW 50.20.190, ESD must exercise some discretion in
    applying the common fund doctrine. ESD cannot just dismiss the doctrine. As the
    Delagrave court directed ESD to consider fees incurred by the worker when ESD
    exercises equity and good conscience when resolving waiver, ESD must consider
    whether the common fund doctrine should lead to waiver of the reimbursement
    requirement. When the worker asserts the common fund doctrine, the department should
    address the contention and declare whether it applies the doctrine. In doing so, ESD
    should apply fairness under the circumstances and explain the reason for applying or not
    applying the theory. Because of the compelling connection between the common fund
    doctrine, on the one hand, and equity, good conscience and fairness, on the one hand, I
    would hope that ESD would almost always allow waiver. Nevertheless, because of
    25
    No. 34066-0-III
    Belling v. Employment Security Department (dissent)
    discretion afforded ESD, I would expect some circumstances may not call for application
    of the common fund doctrine.
    Since this appeal is from an administrative hearing, the court should remand for
    ESD to exercise its discretion. During the remand, the parties could present input on how
    the discretion should be exercised. If need be, this court could address this exercise at a
    later date.
    I DISSENT:
    ~           ~         J,
    Fearing,~ )
    26