This? ?class? ?action?? involved?? monetary claims by individual health care providers who live ?with ?the ?DSHS? clients ?for ?whom ?they provide care.? ?The Plaintiffs? theory was that DSHS?s subsequently invalidated ?shared living rule?? reduced ?their ?compensation ?below ?the actual time they spent working because the rule presumed providers who lived with their clients always worked 15% less than providers who did not. ?A jury found in favor of the providers and awarded $57 million.? ?The judge awarded an additional $39 million in prejudgment interest.
Writing for? a majority of five Justices, Justice ?Owens ?upheld ?the ?jury? verdict ?on ?the basis that Washington law does not require a violation of an express contract term in order to find a duty of good faith and fair dealing. ?It also held that the duty of good faith and fair dealing arises when one party has discretionary authority to determine a future contract term.?? Here that was the amount of the payments to be made to the providers.?? Finally, the majority held that it makes no difference that the breach of duty of good faith and fair dealing arises from a statutory violation.
The? ?Court? ?unanimously?? affirmed? ?the grant of summary judgment on the providers? RCW 49.52 claims. ?The Court held that DSHS was not an agent of the clients, who are legally the employers of the providers. ?Nor was DSHS an employer of the providers in this context. ?It was not sufficient that DSHS controlled the money the client-employers used to pay the employee-providers. Eight members of the Court held that prejudgment ?interest ?wasn?t ?available? because the ?providers? ?damages ?couldn?t ?be ?calculated with ?exactness ?at ?the ?time? the? payments ?were legally due. ?The damages formula in this case was the? difference? between ?what ?the? providers ?were paid under the shared living rule and what the providers should have been paid under the correct formula. ?The actual hours worked data necessary for the calculation under the correct formula were not entered or collected contemporaneously.? ?It wasn?t enough that mathematical estimation methods were available.
Justice Charles Johnson dissented on the prejudgment interest issue. ?He asserted that prior wage and hour cases had found damages to be liquidated in similar circumstances.? ?Here the providers?? damages ?could ?have? been ?calculated with exactness using an hours worked time hourly rate calculation.? ?He argued that no discretion defeating liquidated damages existed once the jury found the number of unpaid hours the providers worked. The Court unanimously held attorneys? fees were also not available because the providers did not recover wages under RCW 49.52 and merely prevailed on a contract claim. Justice Stephens, who had dissented in the 2007 case invalidating the shared-living rule, also dissented here from the affirmance of the jury verdict.?? ?Justices Jim Johnson, Madsen, and Fairhurst joined the dissent.?? The dissent asserted that DSHS had no contractual obligation to the providers to determine the hours of authorized care for which they would receive compensation. ?The dissent also found no other basis for recovery for either the providers or the clients.
Rekhter v. State, — Wn.2d —, 323 P.3d 1036 (4/3/14).