August Case Law Update

By Michael Sullivan

Michael Sullivan & Associates, P.C.

The following is a summary of important updates to California workers' compensation law.

JURISDICTION AND SUBROGATION

In Ball v. Beverly Hills Small Animal Hospital, 2011 Cal. Wrk. Comp. P.D. LEXIS 5, a California Workers' Compensation Appeals board panel concluded that Labor Code Section 3600(b), which provides that civil damages received pursuant to the exceptions to the exclusive remedy rule under LC 3602 and LC 4558 shall be credited against the employer's obligation to pay further compensation, did not apply to an applicant's civil claim for "general damages, including emotional distress damages." Moreover, the panel concluded that the employer did not meet its burden of showing that there was double recovery because the civil settlement expressly excluded release of the applicant's workers' compensation claims. 

THE BUSINESS OF INSURANCE

In Jenkins v. Next Enterprise, Inc., 2011 Cal. Wrk. Comp. P.D. LEXIS 33, and Ramirez v. Top Year International, 2011 Cal. Wrk. Comp. P.D. LEXIS 47, the appeals board concluded that IC 1063.1(c)(9) did not preclude CIGA's liability for liens on the basis that lien claimants "assigned" their liens to a collection service, when CIGA failed to prove that legal title of the liens was transferred to the collection service; instead, it found that the collection service acted only as the lien claimant's representative and not as the legal owner of the lien claims. 

EMPLOYMENT

In Irvine Eurocars, L.L.C., dba Irvine BMW v. WCAB (Van Haastere) (2011) 76 CCC 571 (writ denied), the appeals board issued a split decision finding that a nanny/house manager was an employee of a car dealership rather than of the dealership's owners even though she performed her work duties at the owner's residence, not for the dealership, but was placed on the dealership's payroll.

INJURY

In Securitas Security Services v. WCAB (Aguilar) (2011) 76 CCC 596 (writ denied), a security guard was not barred from receiving benefits under LC 3600(a)(7) when he sustained an injury in an altercation with a person who he reasonably believed was a shoplifter on the employer's premises, even though he initiated the physical altercation. The appeals board found that LC 3600(a)(7) did not support forfeiture of compensation rights whenever an employee initiated physical means of preventing misconduct by others and an altercation developed causing him injury. It added that the applicant's actions were physical conduct that a reasonable person would perceive to be a real, present and apparent threat of bodily harm.

In Murphy v. County of San Bernardino, 2010 Cal. Wrk. Comp. P.D. LEXIS 635, an appeals board panel concluded that an applicant did not sustain a compensable psychiatric injury under LC 3208.3(b) when she alleged that she was subject to a constant campaign of harassment, but the appeals board found no objective evidence of harassment. 

In Perez v. Construction Zone, Inc., 2011 Cal. Wrk. Comp. P.D. LEXIS 45, an appeals board panel concluded that an applicant's injury was sudden and extraordinary when, while working on scaffolding that was approximately 15 feet off the ground, he stepped backward into protective tubing that gave way, and he fell. The panel concluded that the tubingís inability to hold and the applicant's subsequent fall were an "extraordinary" employment event because the applicant testified that he had never before experienced protective tubing giving way.

In Salas v. City of Bakersfield, 2011 Cal. Wrk. Comp. P.D. LEXIS 48, an appeals board panel held that an applicant's individual and subjective expectations are not a proper measure as to whether an employment condition was "sudden and extraordinary." It found that a maintenance worker who fell from a truck did not sustain a sudden and extraordinary injury, as it is common and usual for a worker who climbs up and down a dump truck to risk a fall.

STATUTE OF LIMITATION

In Yang v. WCAB (2011) 76 CCC 607 (writ denied), the appeals board concluded that under LC 5804, when the foundational issue is employment and employment is not found, the WCAB loses jurisdiction after the statutory time for seeking reconsideration has expired.

In Avila-Gonzalez v. Barrett Business Services, Inc., 2011 Cal. Wrk. Comp. P.D. LEXIS 4, an appeals board panel found that a change of law interpreting LC 4660(d) from a binding rule under Vera v. WCAB (2007) 72 CCC 1115 to a situation in which a WCJ or appeals board panel could choose which rule to follow (Vera or Genlyte Group, L.L.C. v. WCAB (Zavala) (2008) 73 CCC 6) constituted good cause to reopen a claim for permanent disability under LC 5803.

MEDICAL TREATMENT

In Bishop v.  Zurich Ins. Co., (2011) 39 CWCR 149 [Bishop v. Schindler Elevator Co. 2011 Cal. Wrk. Comp. P.D. LEXIS 150], the panel majority was not convinced that housekeeping, gardening and pool services fell under the definition of "medical treatment" subject to utilization review. The majority also found no substantial evidence that these services were reasonable and necessary to cure or relieve the applicant's injury.

In Haulenbeck v. City of Anaheim, 2010 Cal. Wrk. Comp. P.D. LEXIS 632, an appeals board panel concluded that if an employer's utilization review physician does not approve the treatment authorization of an employee's treating physician, the injured worker must timely object to the employer's UR denial and initiate the dispute resolution process required pursuant to LC 4062. Otherwise, there is no basis on which to award the treatment the applicant seeks.

In Valdez v. Warehouse Demo Services, 2011 Cal. Wrk. Comp. LEXIS 92, the appeals board issued an en banc decision granting reconsideration of its earlier en banc decision holding that when unauthorized treatment is obtained outside a validly established and properly noticed MPN, reports from the non-MPN doctors are inadmissible and may not be relied on, and the employer is not liable for the costs of non-MPN reports.

In Schleifstein v. Leslie's Pool Supply. 2011 Cal. Wrk. Comp. P.D. LEXIS 191, an appeals board panel concluded that the fee schedule was not rendered inapplicable because a defendant denied an applicant's claim. It also found that the lien claimant did not prove that there were extraordinary circumstances related to the unusual nature of services rendered by the lien claimant to justify a reasonable fee in excess of what the fee schedule allows.

In Bayley v. YMCA of the East Bay, 2011 Cal. Wrk. Comp. P.D. LEXIS 149, an appeals board panel granted reconsideration and remanded the case to address the potential applicability of CCR 9792(a). It explained that the lien claimant should be afforded an opportunity to present evidence regarding any extraordinary circumstances related to the unusual nature of the services rendered that it claims supports a reasonable fee in excess of the amount allowed by the fee schedule. It added that the defendant should also be allowed a further opportunity to show that the amount it paid is reasonable for the services applicant received and/or that there are no extraordinary circumstances related to the unusual nature of the services rendered that support payment of a fee in excess of the reasonable maximum under the fee schedule.

TEMPORARY DISABILITY

In Toloza v. Dolan Foster Enterprises, Dba Taco Bell, 2011 Cal. Wrk. Comp. P.D. LEXIS 51, an appeals board panel held that an employee who was terminated while performing temporary modified work was not entitled to temporary disability indemnity during the period of temporary partial disability because the applicant's own misconduct created the lack of ability to return to modified work, and defendant established good cause for terminating applicant's modified work.

In McKay v. Genentech, Inc., 2011 Cal. Wrk. Comp. P.D. LEXIS 42, an appeals board panel concluded that a private employer's salary continuation benefits did not trigger the 104-week limitation on temporary disability indemnity in LC 4656(c)(1) because the benefits were not tantamount to commencement of payment of temporary disability benefits. 

In Cheney v. Westech Industries, Inc., 2010 Cal. Wrk. Comp. P.D. LEXIS 618, an appeals board panel held that an applicant had severe burns for the purposes of LC 4656(c)(3)(C) when the AME found that the applicant suffered: severe burns; gangrene secondary to the burns; time-consuming and delicate surgery to restore blood flow to areas that would receive grafts later; and internal burns that required complex treatment.

In Cedars-Sinai Medical Center v. WCAB (Modlin) (2011) 76 CCC 557 (writ denied), a doctor evaluated an applicant Feb. 14, 2002, and reported that the applicant's condition was not permanent and stationary. On Nov. 3, 2005, the doctor reported that the applicant's condition was P&S. At deposition, the doctor opined that the applicant should have been declared P&S Feb. 14, 2002, because she did not participate in treatment afterward. The appeals board found that the applicant was entitled to temporary disability until Nov. 3, 2005, because the doctor's retroactive declaration that the applicant was P&S in 2002 carried less evidentiary weight than his contemporaneous medical reporting.

PERMANENT DISABILITY

In Ogilvie v. WCAB, 2011 Cal. App. LEXIS 988, the 1st District Court of Appeal reversed and remanded the WCAB's en banc decision and held that the 2005 Permanent Disability Rating Schedule is not rebutted by evidence that an employee's loss of future earnings is greater than the earning capacity adjustment that would apply to his or her scheduled rating from nonindustrial factors. Instead, the court held that to contest the application of the rating schedule on the basis that the employee's diminished future earning capacity is different from the earning capacity used to arrive at the scheduled rating, the employee must demonstrate an error in the earning capacity formula, the data or the result derived from the data in formulating the adjustment. Alternatively, an employee may rebut a scheduled rating by showing that the rating was incorrectly applied or the disability reflected in the rating schedule is inadequate in light of the effect of the employee's industrial injury.  

 

The Court of Appealís decision occurred July 29; it was not included in the Aug. 1 update of Sullivan on Comp on WorkCompCentral.com. However, the website will be updated with that discussion later in the week.

In Hansen-Dillard v. Save Mart Supermarkets, 2010 Cal. Wrk. Comp. P.D. LEXIS 630, an appeals board panel concluded that it is not the physician's role to incorporate diminished future earning capacity or the applicant's ultimate work disability into his or her determination of the applicant's physical impairment.

In Sanchez v. City of Santa Clara, 2010 Cal. Wrk. Comp. P.D. LEXIS 640, the panel majority held that LC 4662's conclusive presumption of total disability in and of itself precludes any type of apportionment. The concurring opinion agreed that the applicant in that case was entitled to an unapportioned award of permanent total disability because the medical evidence did not support apportionment. But it disagreed that a finding of permanent total disability pursuant to LC 4662 is unapportionable.

In Robbins v. WCAB (2011) 76 CCC 593 (writ denied), the appeals board concluded that to be eligible for benefits under LC 4751, the employee must have prior disability that is of a nature on which an award for partial permanent partial could be made had it been industrially caused. An injured worker could have constant minimal pain, but not a ratable level of disability.

RETURN TO WORK

In Flood v. Penske Logistics, 2010 Cal. Wrk. Comp. P.D. LEXIS 625, an appeals board panel ordered a defendant to pay attorneys' fees that were withheld from VRMA benefits paid before the repeal of VR, even though there was no award of such fees before the repeal. The panel explained that the money withheld for potential attorneys' fees was not the defendant's money, and added that because the fees accrued and were requested by the applicant's attorney before the sunset of vocational rehabilitation, the applicant's attorney had a vested right to them.

In Hilpert v. City of Santa Rosa, 2011 Cal. Wrk. Comp. P.D. LEXIS 27, an appeals board panel concluded that an offer of work after an applicant had been returned to regular work but before she was permanent and stationary entitled the employer to the incentive offered by LC 4658(d)(3)(A). 

DISCOVERY AND SETTLEMENT

In  Williams v. FedEx Office and Print Services, 2011 Cal. Wrk. Comp. P.D. LEXIS 55, an appeals board panel concluded that LC 4060 does not have a time limit for when an objection to the determination of the treating physician must be made before the parties may request a panel of QMEs.

In Montebello Unified School District v. WCAB (Gallardo) (2011) 76 CCC 582 (writ denied), the appeals board held that a WCJ may not compel the parties to attend an agreed medical evaluation when both parties have pulled out of the agreement.

In Abadia v. Quicksilver, Inc., 2011 Cal. Wrk. Comp. P.D. LEXIS 1, an appeals board panel concluded that an applicant waived his right to object to the timeliness of the defendant's UR review because his conduct evidenced an intention to proceed with the spinal surgery second opinion process. Despite delays in obtaining a second opinion report from the AME, the applicant clearly acquiesced to the process; by participating in the second opinion process and not raising the issue of timeliness until after the AME's reports had been submitted, the applicant accepted the fact that the UR denial was untimely and waived any objection to recourse to the second opinion process.

In Montebello Unified School District v. WCAB (Gallardo) (2011) 76 CCC 582 (writ denied), the appeals board held that the reports of a treating physician should be provided to an AME or QME regardless of whether they are admissible unless they contain materially false, inaccurate or inflammatory material. 

LITIGATION

In Vasquez v. Vertex Coatings, Inc., 2011 Cal. Wrk. Comp. P.D. LEXIS 53, an appeals board panel concluded that a defendant complied with LC 5501.6 when it filed a petition for change of venue listing the names of the witnesses with the employer's business address.

In Cervantes v. Lodarcy Masse Construction, 2010 Cal. Wrk. Comp. P.D. LEXIS 617, an appeals board panel concluded that the service of a Rehabilitation Unit's determination on an applicant, the insurance carrier and the applicant's attorney, but not on the defense attorney, was defective, and tolled the time for the defendant to appeal until the defense attorney receive the determination.

In McNabb v. City of Los Angeles, 2009 Cal. Wrk. Comp. P.D. LEXIS 532, an appeals board panel granted a request to seal records when an applicant sought to expunge a statement by a WCJ in an opinion on decision and summary of evidence. The applicant alleged that the statement was false and erroneous and could impede his efforts to obtain employment and supported his petition with a stipulation signed by both parties that the statement was erroneous, a letter from New Scotland Yard and a letter from the West Mercia Constabulary. The appeals board issued an order sealing the offending pages from the opinion on decision and summary of evidence because the applicant met his burden under CCR 10272.

In Stathoulis v. Red Lobster, 2011 Cal. Wrk. Comp. P.D. LEXIS 50, an appeals board panel denied an applicant's request to seal her entire workers' compensation file, or alternatively to be granted "Jane Doe" status and have a line-by-line redaction of her name and private data because the public has a constitutional and common law right to access WCAB records, and the applicant failed to meet her burden under CCR 10272 for sealing the records.

In Wilson v. SCIF (2011) 39 CWCR 145 [Wilson v. Piedmont Lumber & Mill Co. 2011 Cal. Wrk. Comp. P.D. LEXIS 196], an appeals board panel stated that the following principles must be considered in determining a reasonable attorney's fee in a 100 percent permanent disability case: (1) the WCAB must consider the responsibility assumed, the care exercised, the time expended and the results obtained by the attorney; (2) the WCAB must consider its attorney's fee guidelinesthat is, whether the case is of "below-average," "average" or "above-average" complexity, and whether, in addition to obtaining a 100 percent permanent disability award, the attorney's efforts also helped the applicant obtain temporary disability indemnity and/or out-of-pocket medical costs; (3) the WCAB is not required to allow a fee based strictly on a fixed percentage of 621.25 weeks of permanent partial disability indemnity, and ordinarily should consider the actuarial present value of the injured employee's lifetime PTD award at TTD indemnity rates, including an average annual cost of living allowance (COLA) under LC 4659(c), if warranted; and (4) notwithstanding No. 3, a reasonable attorney's fee in a 100 percent case ordinarily should not be based strictly on the PTD award's present value, with an appropriate average annual COLA, if any.

In Cortez v. WCAB (2011) 76 CCC 561 (writ denied), the appeals board questioned whether attorneys' fees under LC 4066, which allows for fees when an employer files an application contesting the formal medical evaluation prepared by an AME, should be paid on an hourly basis. But the appeals board did not directly address the issue because it also questioned whether LC 4066 applied in that case.

Complete discussion of these topics can be found in Sullivan On Comp available to subscribers at