Recent Decisions

Deborah McKinnon v. Otis Elevator Company 72 CCC. 427 (2007)
Eleen Y. Vallejo

The California 3rd District Court of Appeal upheld a workers' compensation claimant’s right to sue a third party for an elevator accident because the carrier settled separately, without notifying the injured worker. The case involved a workers' compensation claim and the insurance carrier’s subrogation action against Otis Elevator Company. An alleged tortfeasor cannot use mere settlement and dismissal of an employer’s subrogation action to bar an employee from maintaining an action for damages against an alleged tortfeasor when certain conditions are met:

1. When an employer fails to adequately notify its employee of its subrogation lawsuit and proposed settlement involving an alleged third party tortfeasor and fails to obtain the employee’s consent to the settlement of that suit; and;

2. When settling with the alleged third party tortfeasor, prior to settlement, was or reasonably should have been aware of the possibility of the employee’s claim for damages against the tortfeasor.

The employee’s action for damages against the third party must account for any workers' compensation benefits paid to the employee, or to be paid, the court determined. This is to preclude double recovery for the employee and double liability for the tortfeasor.


John Andersen v. Workers’ Compensation Appeals Board (City of Santa Barbara) 72 CCC. 389 (2007)
Eleen Y. Vallejo

The Court of Appeal held that defendant discriminated against applicant, in violation of Labor Code § 132a, by requiring applicant, who had returned to work following industrial injuries, to use earned vacation time, rather than sick leave, to attend medical appointments needed to care for those industrial injuries, while permitting workers with non industrial injuries to use their sick leave for medical appointments. The court found that Santa Barbara may not discriminate against active, industrially injured workers in the use of sick leave for medical appointments, as compared to non industrially injured workers. It was found that local government entities and unions may not create policies that discriminate against their industrially injured employees to their detriment.


Stan Brodie v. Workers' Compensation Appeals Board, Contra Costa County Fire Protection District; Kenneth Dee Welcher v. Workers' Compensation Appeals Board, Hat Creek Construction; Jack Strong v. Workers' Compensation Appeals Board, City and County of San Francisco; Agoura Lopez v. Workers' Compensation Appeals Board, State of California/Department of Social Services; Henry L. Williams v. Workers' Compensation Appeals Board, United Airlines
Eleen Y. Vallejo

The court agreed with the WCAB’s en banc decisions in Baglione II and Pendergrass II regarding the comprehensive medical-legal report and Section 4601 notice exceptions of Section 4660(d) to the application of the 2005 PD Schedule. The consolidated cases presented the following question: When a worker suffers an industrial injury that results in permanent disability, how should the compensations owed based on the current level of permanent disability be discounted for either previous industrial injury or non industrial disabilities? The issue was originally settled in Fuentes v. Workers’ Compensation Appeals Board 16 Cal. 3d 1 (1976), but the 2004 Omnibus Reform of California’s Workers' Compensation scheme created doubt as to whether the apportionment formula adopted in Fuentes had been superseded, and a different formula should now be employed. The court concluded Fuentes has not been superseded and its formula remained the correct one to apply in apportioning compensation between causes of disability. Therefore, the subtraction method should apply.


Costco Wholesale Corporation v. Workers’ Compensation Appeals Board (Chavez) 72 C.C.C. 582 (2007)
Eleen Y. Vallejo

In substance, the court holds:

(1) A comprehensive medical-legal report, like a treating physician’s report and/or a defendant’s QME report, must contain an indication of PD to trigger use of the pre 2005 schedule; and;

(2) The 4601 notice exception applies only if the last payment of TD was paid, or owed prior to January 1, 2005.

Therefore, in this case, as applicant’s last temporary disability payment was on June 28, 2005, and, because no pre-2005 medical/legal report indicated the existence of permanent disability, applicant’s permanent disability must be rated under the 2005 schedule. The Court found that a medical/legal report advising applicant was not permanent and stationary and the report gave no opinion whatsoever about whether applicant would suffer from permanent disability, could not substantiate a rating under the old system.


Sarabi v. The Workers’ Compensation Appeals Board (Hofbrau) 72 CCC. 778 (2007)

Additional temporary total disability benefits may be awarded more than five years after the injury if the claimant’s disability worsened and required further medical treatment. Applicant appealed the WCAB holding that it could not Award him TTD benefits five years after the injury occurred, despite the need for additional surgery. However, to deny TTD benefits on the facts of this case would permit an employer, knowing that an applicant has filed a timely petition to reopen, and has suffered a new and further disability within the pertinent five year period, to make the voluntary payments until after the five year period has elapsed so that any award for additional benefits would be jurisdictionally barred as commencing more than five years after the date of injury. This would be an unjust result and would conflict with the rule that the law must be liberally construed in favor of the employee, unless otherwise compelled by the language of the statute.


Valeri Hawkins v. Amberwood Productions, State Compensation Insurance Fund 72 CCC. 807 (2007)
Eleen Y. Vallejo

California’s two year cap on temporary disability benefits commences when benefits are first paid, and not when they are first owed. The panel ruled that the two year TD clock imposed by Senate Bill 899 started, “ticking” on May 3, 2005, the date that State Fund made its first payment to Hawkins. Thus, the statutorily allowable period of payments, which is 104 weeks compensable weeks within two years from the date of commencement of temporary disability payment, begins on the date when temporary disability is first paid, not on the date when temporary disability indemnity is first owed. State Compensation Insurance Fund reimbursed EDD and then SCIF began issuing its own payments. The panel essentially concluded that EDD payments were not within the scope of the 104 week ruling. The panel focused on when SCIF actually commenced its payments, which was in May 2005. Therefore, the 104 week clock began at that juncture.


California Insurance Guarantee Association v. Workers' Compensation Appeals Board (SCIF) (2007)
Eleen Y. Vallejo

A solvent insurer must fully reimburse CIGA for workers' compensation benefits paid as a result of the first and second injury when the new insurer is jointly and severely liable for one of the two injuries. In this case, the parties attended an AME, who opined that 75% of applicant's disability was caused by the first injury, and 25% was caused by the second injury. CIGA had paid approximately $43,505.53 for all medical expenses and benefits for both injuries. In the Compromise and Release, CIGA reserved its right to seek contribution from SCIF for the total amount it paid to applicant. The parties attended arbitration. The arbitrator concluded that CIGA was entitled to full reimbursement because SCIF was jointly and severely liable as a solvent, "other insurer." The Court of Appeal, Second Appellate District, Division 6 agreed with CIGA, in that CIGA was entitled to full reimbursement.


Kimberly Stokes v. Patton State Hospital/Department of Mental Health/State of California, Legally Uninsured, Administered by State Compensation Insurance Fund (2007) Opinion and Decision after Reconsideration
Eleen Y. Vallejo

The matter was remanded to the trial level because it could not be determined from the record whether Pomona Surgery Center, Inc. was doing business as Ambulatory Surgical Center of Pomona under an accredited, "outpatient setting," where surgeries are performed and allowed by Health and Safety Code § 1248(c) and Business and Professions Code § 2285, such that a fictitious name permit from the medical board is not required, or alternatively, whether Pomona Surgery Center, Inc., was claiming that it provided medical treatment as a, "clinic" within the definition of Health and Safety Code §§ 1200 and 1204(b)(1), such that it was required to possess a both licensed and a fictitious name permit from the medical board. Moreover, even if it is claimed by Pomona Surgery Center, Inc., doing business as Ambulatory Center of Pomona that it is, "an outpatient setting," that does not need a license from the medical board, the record is unclear if accreditation identified at trial properly applied to the surgical center. In this regard, it was the burden of the surgical center to prove that it was properly licensed or accredited.


Virginia Sanchez v. County of Los Angeles, En Banc WCAB Decision (10/26/05) 70 CCC 1440

Jack C. Strong v. City & Count of San Francisco, En Banc WCAB Decision (10/26/05) 70 CCC1460
Kim A. Enriquez & Judith Anne Prikle

The Sanchez case discusses the issue of apportionment under LC section 4664 where there has been a prior industrial injury resulting in an award of PD relating to the same region of the body. The Strong case discussed the same issue as it relates to apportionment involving different regions of the body. The analysis is the same in both cases.

    (1) Where an employee suffers an industrial injury causing PD, and where there is a prior award of PD relating to the same region of the body (Sanchez), or to other regions of the body (Strong), section 4664 requires apportionment of overlapping permanent disabilities;

    (2) The defendant has the burden of proving the existence of any prior PD awards; (usually by providing a copy of the prior Award)

    (3) When the defendant has established the existence of any prior PD award(s), the PD underlying any such award(s) is conclusively presumed to still exist and the applicant is not permitted to show medical rehabilitation;

    (4) When the defendant has established the existence of any prior PD award(s), the percentage of PD from the prior award(s) will be subtracted from the current overall percentage of PD, unless the Applicant disproves overlap, i.e. the Applicant demonstrates that the prior PD and the current PD affect different abilities to compete and earn, either in whole or in part.

Comment: Defendant is not required to provide the medical reports to support the Prior Award if a Prior Award is produced as evidence of prior PD. The burden then shifts to the Applicant to produce the underlying medical reports to disprove overlap.


Stanley Marsh vs. WCAB, Stanley Bostitch (6/28/05) 70 CCC 787
Kim A. Enriquez & Judith Anne Pirkle

Discussion by the Fifth Appellate District of cases preceding the Marsh case both at the WCAB and Court of Appeal level. The Court concludes that the standard under which a WCAB determination is final for purposes of considering apportionment under SB 899, occurs once the WCAB has issued a final judgment and the appellate process has been exhausted. In this case Mr. Marsh’s claim had not become final and therefore the matter must be remanded to consider whether the applicant’s disability award should be apportioned under Labor Code § 4663 and § 4664.

Comment: This opinion cites both Kleeman and Escobedo in reaching its decision that applicant will be subject to the strict apportionment rules found under SB 899.

****New cases regarding Overlapping disabilities from prior Awards


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