Baker v. WCAB

Filed 7/28/17
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
CHRISTINE BAKER, as Administrator, H043291
etc., (W.C.A.B. No. ADJ1377005)
Petitioner, WRIT OF REVIEW
v.
WORKERS' COMPENSATION
APPEALS BOARD and JIM
GUERRERO,
Respondents.
We granted the petition for writ of review in this matter to answer a previously
unresolved question: At what point does the Subsequent Injuries Benefits Trust Fund, the
state fund that pays workers’ compensation benefits to certain permanently disabled
workers, begin to owe those benefits to a qualifying applicant? We conclude that under
the controlling statutes, Subsequent Injuries Benefits Trust Fund benefits commence at
the time the employer’s obligation to pay permanent disability benefits begins. We will
therefore affirm the decision of the Workers’ Compensation Appeals Board.1
1
In connection with the petition for writ of review, at petitioner’s request we have
taken judicial notice of the legislative history of SB 863 (2011–2012 Reg. Sess.) and
SB 899 (2003–2004 Reg. Sess.), as well as the decision of the Workers’ Compensation
Appeals Board in Elizabeth Cochran v. Subsequent Injuries Fund, Winship Properties,
State Compensation Insurance Fund (2016) Cal.Wrk.Comp. P.D. Lexis 198).
I. BACKGROUND
A. THE SUBSEQUENT INJURIES BENEFITS TRUST FUND
California has long had in place laws requiring employers to compensate workers
who are injured on the job. The purpose of this legislation is to provide an efficient
mechanism for paying medical expenses and replacing lost wages of injured workers,
without the need to determine who is at fault for causing the injury and without
protracted litigation. (See Labor Code § 3200 et seq. Unspecified statutory references
are to this code.) The workers’ compensation bargain is that in exchange for giving up
the ability to seek tort damages against an employer for on-the-job-injuries, employees
gain a statutory right to the employer’s payment of injury-related expenses. (Everfield
v. State Comp. Ins. Fund (1981) 115 Cal.App.3d 15, 18.) All employers are required to
maintain insurance or furnish sufficient security for the purpose of paying workers’
compensation claims. (§ 3700.)
Through an administrative process, an employee who applies for workers’
compensation is evaluated to determine the nature of the injury and the degree of any
resulting disability. The employee may be awarded compensation in any of several
categories, depending on the extent of the injury and the employee’s ability to return to
work: temporary disability (either total or partial), permanent disability (total or partial),
or a life pension. (§§ 4653–4655, 4659.)
The duty for employers to compensate employees for the full extent of a disability
resulting from a work-related injury could adversely affect the hiring of disabled workers,
due to the perception that a worker already limited by a disability is more likely to
become totally disabled in the event of further injury and need greater compensation.
The Subsequent Injuries Benefits Trust Fund (SIBTF) was created by the Legislature to
counteract that disincentive. (§§ 62.5 and 4751 et seq.)
Under the relevant statutes, the SIBTF pays a portion of the permanent disability
compensation owed to a qualifying worker. (§ 4751). A qualifying worker is one who is
already suffering from a permanent partial disability and then incurs a further work-
related injury that, combined with the existing disability, leaves the worker with a
permanent disability rating of at least 70 percent. (Ibid.) In addition, either the previous
disability affected a hand, arm, foot, leg or eye, with the new injury affecting the opposite
corresponding member; or, regardless of the nature of either injury, the subsequent injury
alone equates to a permanent disability rating of at least 35 percent. (Ibid.) A worker
who meets these criteria is eligible to receive benefits from the SIBTF. In such a case,
the employer pays only that portion of the permanent disability compensation determined
to be directly attributable to the last on-the-job injury and the SIBTF pays the remainder.
(Ibid.) The compensation paid by the SIBTF is separate from and in addition to the
compensation paid by the employer. (Ibid.)
B. FACTUAL AND PROCEDURAL HISTORY
Jim Guerrero applied for workers’ compensation benefits after he was injured in
the course of his employment as a construction laborer. He received temporary disability
benefits for the periods of November 18, 2005–December 4, 2005; and January 17, 2006–
June 15, 2006. His entitlement to permanent disability benefits was contested, but
ultimately settled in December 2014. The resulting compromise and release agreement
provided that Guerrero would receive a lump sum in satisfaction of his employer’s
obligation to pay permanent disability benefits, less the amount of permanent disability
payments his employer had advanced during the pendency of the proceedings.
Guerrero also applied for benefits from the SIBTF, asserting that a prior medical
condition when combined with the work injury left him sufficiently disabled to meet the
eligibility requirements for SIBTF payments. The SIBTF contested his entitlement to
benefits. In October 2015 a Workers’ Compensation Administrative Law Judge ordered
the SIBTF to pay, finding that Guerrero’s preexisting condition combined with the
subsequent injury left him totally and permanently disabled.
The administrative law judge fixed the beginning date for SIBTF payments as
June 16, 2006, the day after temporary disability payments ceased. The SIBTF
contended its obligation should not begin until January 26, 2011 (the date when
Guerrero’s injuries were deemed permanent and stationary), but the administrative law
judge rejected this argument and ordered that SIBTF benefits commence at the same time
the law required the employer to begin making permanent disability payments.
The SIBTF petitioned the Workers’ Compensation Appeals Board for
reconsideration of the award, and the Appeals Board denied the petition. The SIBTF then
petitioned this court for a writ of review on the issue of when its payments to a qualifying
worker must commence.
II. DISCUSSION
A. STANDARD OF REVIEW
The parties do not dispute the relevant facts and we therefore review de novo the
purely legal question of when the law requires the SIBTF to begin paying benefits.
(Tanimura & Antle v. Workers’ Compensation Appeals Bd. (2007) 157 Cal.App.4th 1489,
1494.) But in doing so we must give great weight to the Workers’ Compensation Appeals
Board’s interpretation of the applicable statutes, unless that interpretation is clearly
erroneous. (Ibid.)
B. PRINCIPLES OF STATUTORY CONSTRUCTION
Resolving the question presented here requires us to interpret statutes governing
the payment of workers’ compensation and SIBTF benefits. We are guided by well-
established rules of statutory construction. Our primary goal in construing a statute is to
ascertain and effectuate the Legislature’s intent. (People v. Allegheny Casualty Co.
(2007) 41 Cal.4th 704, 708.) “ ‘ “Because statutory language ‘generally provide[s] the
most reliable indicator’ of that intent [citations], we turn to the words themselves, giving
them their ‘usual and ordinary meanings’ and construing them in context [citation].
[Citation.] If the language contains no ambiguity, we presume the Legislature meant
what it said, and the plain meaning of the statute governs.” ’ ” (Id. at pp. 708–709.) If a
statute is amenable to different interpretations, the interpretation that leads to the more
reasonable result should be followed. (People v. Arias (2008) 45 Cal.4th 169, 177.) We
must construe the words of a statute in context, and harmonize the various parts of an
enactment by considering the provision at issue in the context of the statutory framework
as a whole. (People v. Cottle (2006) 39 Cal.4th 246, 254.)
In addition, when construing a provision from the Workers’ Compensation Act, if
the statute can reasonably be construed in a manner that would provide coverage or
payments we must adopt that construction. (Wright v. State of California (2015)
233 Cal.App.4th 1218, 1229; Subsequent Etc. Fund v. Industrial Acc. Com. (1952)
39 Cal.2d 83, 91 [“The policy of the law, enjoined by both statute and precedent, directs
that workmen’s compensation laws shall be liberally construed in favor of extending their
benefits.”].)
C. WHEN SIBTF PAYMENTS MUST COMMENCE
Petitioner, the Director of Industrial Relations (in her capacity as administrator of
the SIBTF), argues that the Workers’ Compensation Appeals Board erroneously relied on
Labor Code section 4650, subdivision (b) to determine that SIBTF payments in this case
should begin once the employer’s obligation to pay temporary disability benefits ends.
Petitioner asserts that the plain language of section 4650 indicates it applies only to
workers’ compensation benefits payable by employers, and the SIBTF is not an
employer. According to Petitioner, it is section 4751 that controls when SIBTF benefits
must commence, and the proper start date is when the applicant’s injury is declared
permanent and stationary.
Section 4650, subdivision (b) governs the payment of workers’ compensation
benefits for permanent disability. It provides that an employer must begin making
permanent disability payments to an employee within 14 days of the date that the
employee’s last payment for temporary disability was owed. Even if the employee’s
injury has not yet been determined to be permanent and stationary, the employer must
start making permanent disability payments once temporary benefits cease. (§ 4650,
subd. (b)(1) [“… regardless of whether the extent of permanent disability can be
determined at that date, the employer nevertheless shall commence the timely payment
required by this subdivision and shall continue to make these payments until the
employer’s reasonable estimate of permanent disability indemnity due has been
paid …”].)
Petitioner is correct that section 4650, subdivision (b), which states “the
employer” must make timely payment of permanent disability benefits, applies only to
benefits payable by employers, and that the SIBTF is not considered an employer for
purposes of payment of workers’ compensation benefits. (See Subsequent Etc. Fund v.
Industrial Acc. Com., supra, 39 Cal.2d at p. 92 [“We do not believe that the Subsequent
Injuries Fund, even regarded as an entity, must necessarily be also regarded as in the
position of an employer.”].) Petitioner is also correct that the timing of SIBTF benefit
payments is governed by section 4751. But petitioner is incorrect that those premises
result in a different conclusion than the one reached by the Workers’ Compensation
Appeals Board.
Section 4751 provides, “[i]f an employee who is permanently partially disabled
receives a subsequent compensable injury resulting in additional permanent partial
disability so that the degree of disability caused by the combination of both disabilities is
greater than that which would have resulted from the subsequent injury alone, and the
combined effect of the last injury and the previous disability or impairment is a
permanent disability equal to 70 percent or more of total, he shall be paid in addition to
the compensation due under this code for the permanent partial disability caused by the
last injury compensation for the remainder of the combined permanent disability existing
after the last injury as provided in this article … .”
Giving the plain language of section 4751 a commonsense meaning, we read the
Legislature’s mandate that SIBTF benefits (when an employee qualifies for them) “shall
be paid in addition to” permanent disability benefits to mean that the SIBTF is required to
commence payments at the same time as an employer’s obligation to make permanent
disability payments begins. To hold otherwise would contravene the requirement of
section 4751 that whenever an employee qualifies for SIBTF payments, they shall be paid
“in addition to” the permanent disability payments made by the employer. The trigger
for the start of SIBTF benefits must be the qualifying employee’s entitlement to
permanent disability payments from the employer. Once permanent disability payments
are required for an employee who also qualifies for SIBTF benefits, the SIBTF is
obligated to pay benefits “in addition to” those permanent disability benefits.
We acknowledge the language prescribing that SIBTF benefits “shall be paid in
addition to” permanent disability benefits is amenable to a construction different from
ours, since the statute does not expressly state when the additional SIBTF benefits
commence. We therefore must adopt the construction that leads to the most reasonable
result, construing the statutory provision in context and harmonizing it with the rest of the
statutory framework. (People v. Cottle, supra, 39 Cal.4th at p. 254.)
Petitioner contends that under section 4751 an applicant is only entitled to SIBTF
benefits upon the injury reaching permanent and stationary status (in this case,
January 2011, over four years after the employer became obligated to pay permanent
disability benefits). But petitioner cites no authority for that proposition. Instead,
petitioner argues that payment of SIBTF benefits has “always commenced on the date
when the injured worker reached maximum medical improvement and was declared
permanent and stationary” by a medical examiner.
Although an established practice may inform our interpretation, it does not in itself
provide a compelling reason to continue the practice, particularly when there has been an
intervening change in law as there was here.2 Sections 4650 and 4656, governing the
timing of workers’ compensation disability payments by an employer, were amended in
2004 as part of legislation that made a number of changes to the workers compensation
system. Significant here, the statutory amendments altered the timing for employer
payment of temporary and permanent disability benefits.
Section 4656 was amended to provide for a 104-week cap on temporary disability
benefits. Temporary disability payments were previously paid by the employer until the
injured worker either returned to work or the injury was deemed permanent and the
worker was therefore unable to return to work. (Department of Rehabilitation v.
Workers’ Comp. Appeals Bd. (2003) 30 Cal.4th 1281, 1292). Under the amended statute,
temporary disability payments are now payable for a maximum of 104 weeks.
To avoid a gap in payments to an injured worker whose medical condition is not
deemed permanent until after the 104-week maximum temporary disability period, the
Legislature concurrently amended section 4650 to provide that permanent disability
payments must commence when temporary disability payments stop, even if the injury
has not yet been deemed permanent and stationary. (See Baker v. Workers’ Comp.
Appeals Bd. (2011) 52 Cal.4th 434, 439, fn. 2 [finding that permanent disability payments
2
The effect of the change in law on SIBTF payments is illustrated by Elizabeth
Cochran v. Subsequent Injuries Fund, Winship Properties,State Compensation Insurance
Fund, supra, (2016) Cal.Wrk.Comp. P.D. Lexis 198, of which we took judicial notice at
petitioner’s urging. In that case, the Workers’ Compensation Appeals Board decided the
applicant’s SIBTF benefits did not start until the date her injury was deemed permanent
and stationary, and petitioner argues the outcome should be consistent here. But the
injury in Cochran occurred in 2001. The applicable law was therefore the pre-2004
version of section 4650 providing that permanent disability benefits were payable by the
employer beginning upon the permanent and stationary date––not the amended version
that applies to Guerrero’s injury and which changed the timing of the employer’s
obligation.
for injuries predating the 2004 amendment are payable upon the injury being declared
permanent and stationary, but recognizing that for injuries occurring after the effective
date of the amendment “it may be that an injured worker would become entitled to total
permanent disability payments … before the worker’s medical condition is permanent
and stationary.”].)
The overall effect of these amendments was to change the timing for permanent
disability payments to begin, from when the injury has been declared permanent and
stationary (under the former version of the statutes) to when temporary disability
payments cease (under the current version).3 As a result, the timing for the start of
SIBTF benefits, which under section 4751 must be paid “in addition to” permanent
disability benefits, necessarily also changed.
Petitioner argues the Legislature’s decision to not amend section 4751 when it
amended the statutes governing the payment of temporary and permanent disability
benefits evidences its intent to not disturb the status quo with regard to SIBTF payments,
i.e., that such payments are not required until a finding of permanent and stationary
status. This argument misses the mark. The status quo for payment of SIBTF benefits
has not changed: Such benefits were previously payable at the time permanent disability
payments commenced, and they remain payable at the time permanent disability
payments commence. The fact that the Legislature chose not to amend section 4751
when it changed the time for payment of permanent disability benefits actually weakens
petitioner’s argument. Had the Legislature intended for SIBTF benefits to be payable
only upon a declaration of permanent and stationary status (as petitioner urges) rather
3
Section 4650 was again amended, in 2012, to provide that an employer need not
make permanent disability payments if the employee returned to work at a comparable
position or the employer offered a position to the employee. For Guerrero, there was no
return to work or offer of employment and therefore this provision is not at issue.
than being paid in addition to permanent disability payments from the employer (as the
statute reads), it could have changed section 4751 to so provide––but it did not.
The construction urged by petitioner would also render the statutory scheme
providing for SIBTF benefits ineffectual, an unreasonable outcome we cannot
countenance. (See Azusa Land Partners v. Department of Industrial Relations (2010)
191 Cal.App.4th 1, 21–22 [courts must read each statute with reference to the entire
scheme of law of which it is part so that the whole may be harmonized and retain its
effectiveness].) If the language “shall be paid in addition to” which appears in
section 4751 does not mean that SIBTF payments commence at the start of permanent
disability payments, then the entire statutory scheme would contain no start date at all for
SIBTF benefits. The start date proposed by petitioner––the date the injury is declared
permanent and stationary––is not found anywhere in the statutes.
Petitioner points out that because an applicant’s eligibility for SIBTF benefits
cannot be determined until the injury is permanent and stationary (as only then can the
level of permanent disability be ascertained), interpreting section 4751 in the manner we
do here will require SIBTF benefits to be paid retroactively whenever permanent and
stationary status occurs after 104 weeks (the maximum period of temporary disability
payments). While it is true that in such cases SIBTF payments will be made retroactive
to the date when permanent disability payments began––just as the administrative law
judge ordered in this case––we fail to see how that fact changes the analysis of the plain
language of section 4751 calling for SIBTF benefits be paid “in addition to” permanent
disability benefits. In subsequent injury cases, whether a worker qualifies for SIBTF
benefits is one issue that must be determined; the date when those benefits start accruing
is another. Once it is determined that a worker’s permanent and stationary injury
qualifies the worker for SIBTF benefits, the proper accrual date for those benefits is the
date the employer’s obligation to pay permanent disability began.
We find further support for our reading of the statute in the Supreme Court’s
reasoning in Baker v. Workers’ Comp. Appeals Bd., supra, 52 Cal.4th 434. That case
involved whether a workers’ compensation statute providing for a yearly cost of living
adjustment (COLA) when an applicant becomes entitled to receive permanent disability
payments should be calculated beginning when the injury occurred, or when the applicant
started receiving the permanent disability payments. The Court held the most reasonable
construction of the statute is that it requires a COLA increase each year following the
date the applicant begins receiving permanent disability payments because that is when
the applicant becomes entitled to the payments. Just as the COLAs are connected to
permanent disability payments as an increase in those payments, so too are SIBTF
benefits connected to permanent disability payments as an amount paid in addition.
Consistent with Baker, we hold that the entitlement to SIBTF benefits begins at the time
the applicant becomes entitled to permanent disability payments.
Finally, even if petitioner’s interpretation of the statute were equally reasonable, it
would have the effect of denying injured workers SIBTF benefits (which are payable
separate from and in addition to employer-paid benefits) during the gap between the end
of the 104 weeks of temporary disability benefits and the date the injury is deemed
permanent and stationary. Whenever there are two reasonable interpretations of a
workers’ compensation statute, we must adopt the construction of the statute that
provides coverage or payments. (Wright v. State of California, supra, 233 Cal.App.4th at
p. 1229.)
Based on the above reasoning and given that we must defer to the Workers’
Compensation Appeals Board’s interpretation of the relevant statutes unless it is clearly
erroneous, we conclude that the start date for SIBTF benefits in this case was correctly
determined.
III. DISPOSITION
The decision of the Workers’ Compensation Appeals Board is affirmed. The
parties shall bear their own costs in this writ proceeding.
____________________________________
Grover, J.
WE CONCUR:
____________________________
Premo, Acting P. J.
____________________________
Elia, J.
Baker v. Workers’ Compensation Appeals Board et al.
H043291
Venue: Workers’ Compensation Appeals Board
Case No. ADJ 1377005
Workers’ Compensation Hon. David L. Lauerman
Administrative Law Judge:
Counsel for Petitioner Christine Christopher G. Jagard, Chief Counsel
Baker, Director of Industrial Christopher Frick, Assistant Chief Counsel
Relations As Administrator of the Michelle G. Bethge, Staff Counsel
Subsequent Injuries Benefits Trust Department of Industrial Relations
Fund:
Counsel for Respondent The James Thomas Losee
Workers’ Compensation Appeals Department of Industrial Relations/WCAB
Board of the State of California:
Counsel for Real Party In Interest Arthur L. Johnson
Jim Guerrero: Butts & Johnson
Baker v Workers’ Compensation Appeal Board et al.
H043291