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Peek v. Alaska Pacific Assurance (6/25/93), 855 P 2d 415
Notice: This is subject to formal correction before
publication in the Pacific Reporter. Readers are
requested to bring typographical or other formal errors
to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, in order that
corrections may be made prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
JOE A. PEEK (Deceased) )
and MARY PEEK, ) Supreme Court No. S-4935
) Trial Court No.
v. ) 3AN-90-7546 Civil
SKW/CLINTON and ALASKA ) O P I N I O N
PACIFIC ASSURANCE COMPANY, )
Appellees. ) [No. 3969 - June 25, 1993]
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Dana Fabe, Judge.
Appearances: Chancy Croft, Chancy Croft
Law Office, Anchorage, for Appellants. James
E. Hutchins, Faulkner, Banfield, Doogan &
Holmes, Anchorage, for Appellees.
Before: Moore, Chief Justice,
Rabinowitz, Burke, Matthews and Compton,
In this case, Mary Peek, the widow of Joe Peek, appeals
the superior court's affirmation of the Alaska Workers' Compen
sation Board's ("Board") denial of death benefits to her from
SKW/Clinton, one of Joe Peek's employers. We AFFIRM the Board's
order denying and dismissing Peek's claim against SKW/Clinton.
I. FACTUAL AND PROCEDURAL BACKGROUND
Joe Peek worked as a pipefitter and plumber for almost
45 years in California, New Mexico, Arizona, Nevada, Idaho, and
Alaska. Throughout his career he was exposed to asbestos in the
work place. His last three employers were all located in Alaska:
Fluor Alaska, from 1975 to 1977; SKW/Clinton, from August 1977 to
January 1978; and Litwin Corporation, from July 1980 through
December 1980. In April 1986, Peek was hospitalized with
shortness of breath and chest pain. He was diagnosed as having a
tumor consistent with mesothelioma.1 Peek had surgery in June
1986, was again hospitalized in April 1987, and died on May 4,
1987. The cause of death was listed as respiratory failure due
to abdominal ascites resulting from mesothelioma metastasis.
Joe Peek's widow, Mary Peek, claimed Joe's mesothelioma
was caused by his exposure to asbestos in the work place and
filed a claim for death benefits under the Alaska Workers'
Compensation Act against eighteen Alaskan employers for whom Peek
had worked. On January 13, 1989, the Board approved a compromise
and release agreement between Mary Peek and ten of the former
employers and their insurers involving payment of approximately
$200,000. One of the settling parties was Litwin Corporation,
Peek's last employer in 1980. The Board dismissed four other
defendants, but denied SKW/Clinton and Fluor's motions for
After a hearing adjudicating Mary Peek's claims against
Fluor and SKW/Clinton, the Board issued a decision denying and
dismissing Peek's claims against both employers. The Board found
that Peek's employment at Litwin in 1980 was the last employment
that constituted a substantial factor in bringing about his
death. Therefore, in accordance with the "last injurious
exposure"rule, the Board relieved SKW/Clinton and Fluor of any
liability for payment of death benefits to Mary Peek. On appeal,
the superior court affirmed the Board's decision. Peek appeals.2
Peek makes two arguments on appeal: (1) that the Board
incorrectly applied the "last injurious exposure"rule when it
relieved SKW/Clinton, the second-to-last employer, of any
liability for death benefit payments; and (2) that the Board
erred in finding that Peek's employment at Litwin Corporation,
his last employer, constituted a substantial factor in causing
Peek's death. We address these contentions in turn.
A. Did the Board Properly Apply the "Last Injurious
This court adopted the "last injurious exposure" rule
in Ketchikan Gateway Borough v. Saling, 604 P.2d 590, 596-97
(Alaska 1979). Under this rule, full liability is placed on the
most recent employer whose employment of the claimant bears a
causal relation to the claimant's disability. 4 Arthur Larson,
The Law of Workmen's Compensation 95.20 (1990). In United
Asphalt Paving v. Smith, 660 P.2d 445 (Alaska 1983), we set out
two determinations that must be made under this rule: "(1)
whether employment with the subsequent employer `aggravated,
accelerated, or combined with' a pre-existing condition; and, if
so, (2) whether the aggravation, acceleration or combination was
a `legal cause' of the disability, i.e., `a substantial factor in
bringing about the harm.'"Id. at 447 (quoting Saling, 604 P.2d
at 597, 598).
Peek argues that no decision in this state has ever
allowed the rule to be used, as it was by SKW/Clinton, as a
defense to a claim for compensation. Peek contends that the rule
is meant only to be a "sword for an injured worker, not a shield
for an employer."
SKW/Clinton cites State, Department of Highways v.
Burgess Construction Co., 575 P.2d 792 (Alaska 1978), for the
proposition that the "last injurious exposure"rule can be used
as a defense. In that case, the employee, Benson, filed workers'
compensation claims against Burgess Construction, where he had
worked several years, and the State, his last employer. Id. at
793-94. Burgess argued that it was not liable as it was not the
last place of employment where Benson was exposed to the poison
causing his disease. The Board nevertheless held Burgess liable
for Benson's disability and Burgess appealed to the superior
court. Id. at 794. The State moved to dismiss the appeal as it
pertained to the State on the grounds that the appeal was taken
too late. Id. The State's motion was granted, and no appeal was
taken from the order dismissing the State. Id. Subsequently the
superior court found that the Board erred in not imposing
liability on the State as the last employer and remanded the case
to the Board to determine the liability of the State as the last
employer. The State appealed. Id.
This court agreed with the State that the superior
court had erred in remanding the case to the Board to determine
whether the State was liable after the State had been dismissed
from the case; further, we agreed that the dismissal was
technically proper. Nonetheless, we reversed the superior
court's order dismissing the State. We took this step in order
to avoid "a serious injustice"to the employee due to the
procedural error of the first employer. Id. at 796. We noted
that if we affirmed the dismissal of the State, the result on
remand to the Board might be that "the State rather than Burgess
may be liable to Benson under the last injurious exposure rule.
The Board will not have jurisdiction over the State . . .
[because the State had been dismissed from the case] and thus
Benson may find that while he has a compensable disability, he
will be legally entitled to benefits from no one." Id.
SKW/Clinton interprets Burgess as recognizing that the
last injurious exposure rule can be used as a defense. Peek
argues that Burgess was decided before we adopted the "last
injurious exposure" rule in Saling and therefore cannot be
considered an interpretation of Saling.
While Burgess obviously cannot be considered an
interpretation of Saling, it is an interpretation of the "last
injurious exposure"rule. By recognizing that on remand the
State might be found to be the "last employer on whose job Benson
was injuriously exposed,"we implicitly acknowledged that Burgess
could raise the rule as a defense, thereby avoiding liability.
Our concern was that the last employer to expose the employee was
no longer before the Board, and that use of the rule as a defense
by another employer would defeat the employee's claim completely.4
For this reason, we relaxed our procedural rules and reversed the
superior court's dismissal of the last employer.
Burgess thus suggests that an employee may use the last
injurious exposure rule as a defense. Two other cases cast
further light on the appropriate defensive use of the last
injurious exposure rule.
First, the Ninth Circuit allowed use of the last
injurious exposure rule as a defense under the Longshore and
Harbor Workers' Compensation Act, 33 U.S.C. 901-50, in Kelaita
v. Office of Workers' Compensation Programs, 799 F.2d 1308 (9th
Cir. 1986). In Kelaita, the employee filed claims against his
last two employers: Triple A Machine Shop and General
Engineering. An administrative law judge denied both claims, but
Kelaita appealed only his claim against Triple A. Id. at 1309.
On remand from an order vacating the judge's ruling, the judge
found that General was liable under the last responsible employer
rule and denied Kelaita's benefits as General was no longer a
party. Id. at 1310. Kelaita appealed, arguing that "where there
is no jurisdiction over a potentially liable subsequent employer,
the [last injurious exposure] rule should not defeat a worker's
claim." Id. at 1311. The Ninth Circuit rejected this argument
and allowed defensive use of the last injurious rule because:
[t]he lack of jurisdiction over General
is the fault of neither General nor Triple A.
General attempted to participate in the
appeal, but Kelaita made it clear he was
appealing only as to the decision regarding
Triple A. Kelaita cannot now attempt to hold
Triple A liable and deprive it of the last
responsible employer defense when Kelaita
himself decided to pursue his claim only
against Triple A.
Id. at 1311.
Second, in Carrier v. Shelby Mutual Insurance Company,
351 N.E.2d 505 (Mass. 1976), aff'g Carrier's Case, 334 N.E.2d 633
(Mass. App. 1975), the Supreme Judicial Court of Massachusetts
addressed a fact pattern quite similar to the present case. The
employee suffered successive injuries while working for two
employers. Both injuries contributed to his present disability
-- the more recent only to the extent of ten percent of the total
disability. The employee settled with the more recent employer.
His claim against the earlier employer was held to be barred
under the Massachusetts last injurious exposure rule. Id. at
Kelaita and Carrier both indicate that when the last
employer was at one time properly before the adjudicating
authority, but is later removed from the case by a voluntary act
of the worker, the worker cannot avoid application of the last
injurious exposure rule. We agree that this approach is reason
able. In this case, Peek made the decision to settle with
Litwin, Joe Peek's last employer. With the Board's approval, the
settlement became "enforceable the same as an order or award of
the board"and "discharge[d] the liability"of Litwin as to Peek.
AS 23.30.012. Thus Peek's voluntary act removed from the case
the employer potentially liable under the "last injurious
exposure"rule. The possibility that the Board would find Litwin
to be the employer liable under the rule was a risk Peek took in
settling with Litwin.
We hold that an employer can use the "last injurious
exposure" rule as a defense to liability where the employee has
settled with the last employer who is potentially liable and was
properly before the Board.5
B. Is There Substantial Evidence to Support the
Board's Finding That Joe Peek's Employment at Litwin
Corporation Constituted a Substantial Factor in Causing
"[T]he question of whether employment aggravated or
accelerated a pre-existing disease or injury is one of fact to be
determined by the Board and it is not the function of the court
to reweigh the evidence or choose between competing inferences."
Burgess Constr. Co. v. Smallwood, 623 P.2d 312, 317 (Alaska
1981). The Board's finding that Joe Peek's employment at Litwin
in 1980 was a substantial factor in bringing about Peek's
mesothelioma and subsequent death is such a finding of fact. We
will affirm the Board's factual findings where substantial
evidence exists "`in light of the whole record that a reasonable
mind might accept as adequate to support the board's
conclusion.'" Summerville v. Denali Center, 811 P.2d 1047, 1051
(Alaska 1991) (quoting Delaney v. Alaska Airlines, 693 P.2d 859,
863 (Alaska 1985)).
Peek argues that even if the "last injurious exposure"
rule can be used as a defense, there was insufficient evidence
for the Board to find that Peek's employment at Litwin met the
factual and legal causation requirements this court set out in
United Asphalt Paving, 660 P.2d at 447 (see supra p. 4).
Therefore, Peek argues that as his employment at SKW/Clinton does
meet these requirements, SKW/Clinton is liable under the "last
injurious exposure"rule. The question is not, however, whether
the exposure at SKW/Clinton was a substantial factor. The
question is whether the exposure at Litwin, a subsequent
employer, was also a substantial factor in causing Peek's death.
As we pointed out in Saling, under the "last injurious exposure"
rule, an employee need not show that employment with the last
employer was the legal cause of disability, only a legal cause of
the disability. Saling, 604 P.2d at 598.
There is no dispute that Joe Peek was exposed
extensively to asbestos on several jobs. At the hearing,
testimony was presented by several of Peek's co-workers that
asbestos was "like snow"in the air on several jobs including
SKW/Clinton. Although Peek argues that there was no testimony
indicating that Peek was exposed to asbestos at Litwin, the Board
was presented with the deposition of Floyd Luster, who stated
that exposure at Litwin also was like "snow in the air,"and that
Peek would have been exposed to the asbestos in the course of his
job. Because Peek presented no significant evidence to the
contrary, we cannot say that the Board erred in finding that Peek
was in fact exposed to high levels of asbestos at both
SKW/Clinton and Litwin.
The more difficult question is whether exposure at
Litwin was a legal cause, a "substantial factor in bringing about
the harm." Id. Three medical experts testified in this case:
Dr. Alan Gazzaniga, the surgeon who originally diagnosed Peek and
operated on him; Dr. Irwin Stoloff, an oncologist; and Dr. Ken
Miller, a specialist in occupational medicine. All three agreed
that if the exposure at SKW/Clinton was as described by Peek's co-
workers, then that employment was a substantial factor in the
development of Peek's mesothelioma.
The doctors were not as emphatic in their conclusion
that Peek's employment at Litwin was also a substantial factor in
causing his death. Nevertheless, two of them did give testimony
which can be so construed.6 Dr. Stoloff testified that, given
Peek's exposure to asbestos over thirty-forty years, the exposure
at both SKW/Clinton and Litwin was a substantial additive factor
to the fiber burden that increased the risk of mesothelioma,
particularly if the exposure was as heavy as Peek's co-workers
testified.7 Dr. Miller was more equivocal in his testimony, but
did not rule out the possibility that the Litwin exposure was a
substantial factor. Dr. Miller testified that mesothelioma is
dependent on two factors, the latency period, defined as the time
elapsed between the initial exposure to asbestos and the
development of the tumor, and the total dose of exposure. The
further away in time from the initial exposure, the less likely
the exposure is a substantial factor in the development of the
disease. However, Dr. Miller testified that
any dose, additional cumulative dose, as
I said earlier, increases the chances that
the response you are looking for -- in this
case, mesothelioma -- would be more likely to
occur, and if that is your -- if that is your
background understanding, then any exposure
within a reasonable latency period could be a
substantial contributing factor.8
Although the doctors' testimony was not absolute, the
Board found the testimony sufficient to conclude that Peek's
exposure at Litwin was a substantial factor in aggravating or
accelerating Peek's death. Under the deferential standard of
review employed by this court, the evidence is sufficient "`in
light of the whole record that a reasonable mind might accept as
adequate to support the board's conclusion.'" Summerville, 811
P.2d at 1051 (quoting Delaney, 693 P.2d at 863).
The Board did not err in allowing SKW/Clinton to use
the "last injurious exposure"rule as a defense. Peek has not
been left without compensation. By settling with Litwin, Mary
Peek accepted the risk that the Board might find Litwin to be the
last employer to substantially contribute to Joe Peek's death.
Furthermore, under the standard of review for factual findings,
substantial evidence exists in the record to support the Board's
finding that Peek's employment with Litwin was a substantial
factor in aggravating or accelerating Peek's death. Therefore we
AFFIRM the decision of the superior court affirming the Board's
order denying and dismissing Mary Peek's claim against
1 Mesothelioma is a tumor arising from the mesothelial cells
lining the pleural cavity. It is generally associated with
exposure to asbestos.
2 Peek does not appeal the dismissal against Fluor, because
between SKW/Clinton and Fluor, SKW/Clinton is the last employer.
3 Whether the Board properly applied the "last injurious
exposure" rule is a question of law, and as such is subject to
independent review by this court. Childs v. Kalgin Island Lodge,
779 P.2d 310, 313 (Alaska 1989) (citing Simon v. Alaska Wood
Prods., 633 P.2d 252, 254 (Alaska 1981); M-K Rivers v.
Schleifman, 599 P.2d 132, 134 (Alaska 1979)).
4 The Ninth Circuit Court of Appeals faced a similar
situation in Todd Shipyards Corp. v. Black, 717 F.2d 1280 (9th
Cir. 1983), a case brought under the Longshore and Harbor
Workers' Compensation Act. In Todd, the Ninth Circuit
acknowledged that the "last injurious exposure" rule could be
used as a defense. Id. at 1284. However, the court did not
allow Todd, the second-to-last employer, to utilize it as such
because the last employer was outside the coverage of the Act.
Id. at 1286. The Ninth Circuit recognized the possibility of an
employer using the rule as a defense, but limited the rule to
"the last employer covered by the applicable statute." Id. at
5 We recently held that when the last employer is not within
the jurisdiction of the Board, as in the case of an out-of-state
employer, the last employer in Alaska may not use the last
injurious exposure rule as a defense. Wolfer v. Veco, Inc., ___
P.2d ___, Op. No. 3960 (Alaska, May 28, 1993). If the employee
has settled with the out-of-state employer, double recovery may
be avoided by giving credit for the benefits received from the
out-of-state claim. Id.
6 Dr. Gazzaniga testified that it was out of his area of
expertise to determine if the exposure at Litwin was a
7 Stoloff testified that "any employment that released
significant respirable fibers of asbestos would have contributed
to his mesothelioma."
8 Peek argues that the exposure at Litwin could not be a
substantial factor in Peek's death as the average latency period
for mesothelioma is thirty-forty years, and the shortest latency
period testified to was seven years. The latency period,
however, is not the issue in this case. SKW/Clinton is not
arguing that the exposure at Litwin was the initial first
exposure or cause of Peek's disease. Rather, SKW/Clinton is
arguing that as each exposure to asbestos is cumulative and
increases the risk of developing mesothelioma, the exposure at
Litwin "aggravated, accelerated, or combined with" pre-existing
exposure to cause Peek's death.