Appellate Court Clarifies Voc-Rehab Appeal Rights

Tuesday, June 1, 2010 | 0

By Richard M. "Jake" Jacobsmeyer

The California 2nd District Court of Appeal published a decision on May 26 that advances our understanding of the impact of the repeal of Labor Code § 139.5 (vocational rehabilitation) effective 1/1/09 on cases pending on appeal. The court, while upholding the principles in prior cases on this issue (citing the holding in Beverly Hilton Hotel v. Workers’ Comp. Appeals Bd. (2009) 176 Cal.App.4th 1597), also provided some interpretations of some potential wrinkles in the status of cases on appeal when the VR repeal became effective.

In Los Angeles County Fire Dept v WCAB (Norton), the applicant sustained injuries in 1997 and with a cumulative trauma injury ending on 9/19/2000. The parties resolved the underlying cases with a stipulated award being made in 2004. Norton made a request for vocational rehabilitation benefits by written demand on Sept 8, 2005. No benefits were provided nor offered and almost one year later, he filed a request for benefits with the Rehabilitation Unit. In March 2007, the Rehabilitation Unit determined Norton’s VR benefits were barred as untimely. Norton appealed and the workers' compensation judge reversed the Rehab Unit determination and remanded to the unit for further action including an award of benefits. While the county filed a petition for reconsideration from this ruling, which was denied on 9/10/2007, it did not seek further appellate review.

While a settlement of prospective VR was approved by the Rehab Unit pursuant to Labor Code § 4646, however there was no resolution over retroactive benefits and the Rehab Unit awarded past VR benefits at the “delay rate” (maximum TTD rates) from 9/8/05 to 8/28/07. The county appealed the award of benefits contending Norton was not entitled to benefits from 9/8/05 till 9/26/06 when the formal request as filed with the Rehab Unit and further arguing the repeal of former Labor Code § 139.5 and the supporting VR statutes (Labor Code § 4635 to 4646) effective 1/1/04 repealed the authority for an award of benefits at the delay rate as Labor Code § 4642 had been repealed with the other statutes.

On 12/5/08 the WCJ affirmed the award of the Rehab Unit and Defendant’s Petition for Reconsideration on the award was filed on 12/30/08.  In its appeal the county sought to overturn the award of benefits at the delay rate and also the award of benefits prior to the filing of a request for dispute resolution with the Disability Evaluation Unit. The WCAB denied the petition for reconsideration, affirming the WCJ’s award in full.

In its appeal, the county for the first time raised the issue of the effect of the repeal of Labor Code § 139.5 and other VR statutes effective 12/31/08 as well as its other arguments on the merits. Applicant objected to the raising of the repeal issue for the first time on appeal.  Applicant also contended the original decision on reconsideration in September 2009 was a final award and therefore benefits were owned even under the Beverly Hills case rational.

The Appellate Court followed the reasoning of the Beverly Hills case to a T. The court noted the September 2007 award addressed only the issue statute of limitations and was not an award of benefits. The subsequent award was an award, but was not final as of 1/1/09 and therefore the right to any benefits that were not final expired on that date. However as noted by the court, the right to all of the awarded benefits was not on appeal:

“Norton contends that because it was not appealed by the county, he is entitled to the maintenance allowance awarded at the 'non-delay' rate of $246 per week from Sept. 27, 2006, to Aug. 28, 2007, which became final before repeal of former section 139.5. We agree.

"It is a long-standing rule that a party may appeal from a specific part of a judgment, leaving all other parts in full force and not subject to jurisdiction of the reviewing court. (citations removed) An exception is made when the part of the judgment appealed is so interwoven and connected with, or so dependent upon, the remainder that reversal of the part appealed should extend to the entire judgment."

The award of maintenance allowance at the “non-delay” rate of $246 per week from Sept. 27, 2006, to Aug. 28, 2007, was not included in the county’s petition for reconsideration and presents a separable issue from the remainder of the award. We note the county previously settled prospective vocational rehabilitation services on an independent basis. Moreover, the WCJ expressly stated that the county was not disputing past maintenance allowance was owed and, in its petition for reconsideration, the county admitted that Norton was a “qualified injured worker,” a status he would not have if he was not entitled to any rehabilitation benefits, thereby implicitly admitting he was entitled to some rehabilitation benefit.

The court further noted the un-appealed portion of the award became final 2 days before the Statute repeal went into effect. The court therefore rule the benefits that had not been appealed (VRMA at $246 per week through 9/26/06) and was therefore final: 

“The award of maintenance allowance at $246 per week from Sept. 27, 2006, to Aug. 28, 2007, is affirmed. The remainder of the maintenance allowance award is reversed…”

Comments:                                                                                                           

This case clearly has very limited application. However for those of us who have appeals currently pending on VR issues, this case gives clear instructions that only those issues where the appellate issues have been clearly reserved are going to benefit from the statutory repeal effective 1/1/09. A careful review of existing awards for the specific issues and whether there are final awards is imperative to recognize the issues which have been disposed of by the statutory repeal.

ODDs & ENDS:

By now many of you have seen the rather surprising action by the Supreme Court in dismissing the applicant’s appeal in the Hertz v WCAB case last week.  This was the case where the Court of Appeal in the 6th appellate district has ruled the W.C.A.B. was required to consider apportionment to non-occupational factors such as language and educational deficiencies etc in determining the employee’s level of permanent disability. The court dismissed the appeal and did not order publication of the prior appellate court decision. The original holding therefore has no precedential value for anyone except the parties to the case.

The question therefore arises as to what conclusions, if any, be drawn from the court’s action. In reality we probably can draw no conclusions from the dismissal, we could only arrive at such conclusions if the court gave us its though process in dismissing a case it had originally agreed to hear. The Supreme Court only rarely agrees to hear workers' compensation case (one or two a year at most – many years none).  This is the first case in my experience where the court has taken the unusual step to dismiss a previously granted appeal.

While conclusions cannot be drawn with any degree of certainty, perhaps some inferences  can be drawn, as long as we are not too dogmatic in our analysis.  The Court may also have given us some clues in the steps it did not take. 

The court did not transfer the matter back to the Court of Appeals for further hearing or with instructions to reconsider its decision.  It also did not order republication of the prior Appellate Decision.  The combination of these two factors suggest the Supreme Court did not have a problem with the lower courts result and also suggests the higher court did have a problem with the lower court’s reasoning.

In my initial eblast on this case, I noted the appellate court’s result looked to be legally supportable but that its analysis seemed to be difficult to follow and demonstrated a lack of understanding of how apportionment really should work. The 6th district seemed to suggest that an employee’s overall disability could be reduced by the non-occupational factors that existed at the time of injury.  The court’s decision, rather than holding such issues should be excluded from consideration for establishment of disability, should be subtracted from the overall level of PD once it had been established.  In effect the Court held the non-occupational factors should be apportioned out after the PD was established rather than excluded from consideration of what disability was attributable to the injury.  It was, and still is, my opinion that such issues should be excluded on the front end of the disability description and consideration given only to the medical consequences of the injury as if the employee had no limitations on ability to work. Factors such as education, language skills, intellectual capacity etc, should be excluded from consideration of the employee’s disability.

The Court of Appeals in Aguilar seemed to suggest that such factors should be considered as disability or impairments that were to be subtracted from the overall level of PD after calculation of the level of disability.  Such considerations could potentially take away significant portions of an award of PD if the employee was severely handicapped from an intellectual, educational or vocational standpoint and it was possible a significant part of an overall PD could be subtracted from an otherwise deserving applicant. This was one of the consequences pointed out in the Concurring and Dissenting opinion in the original decision.

I therefore think it is a reasonable, but by no means certain, inference that the Supreme Court agreed with the result of the 6th District's decision (or else the matter could have been reversed and remanded with or without instructions) but disagreed with the court’s rational for the ultimate holding (or else the Supreme Court could have ordered publication of the original decision).

However it is also very plausible that the Supreme Court simply reconsidered whether this was the correct case to decide whatever issue in the case piqued its curiosity. Until we see some further appellate activity, we can only speculate. We can say is the issue will not go away and indeed may intensify should the WCAB decision in Ogilvie v City & County of San Francisco hold up. In that even the question of the role of such non-occupational factors on the loss of earning capacity will be a hot topic.

The Supremes will likely have to decide this issue at some point.

Subscribers may read the Los Angeles County Fire Department v. WCAB (Norton) case by clicking on the case title in the sidebar.

Richard M. Jacobsmeyer is a partner with Shaw, Jacobsmeyer, Crain, Claffey & Nix in Oakland, a defense law firm with offices in San Francisco, Oakland and Beverly Hills.