Sanchez, Strong and Modern Apportionment

Saturday, November 5, 2005 | 0

by "Jake" Jacobsmeyer

The Workers' Compensation Appeals Board has issued decisions in two cases which are virtual twins of each other. The cases however involve somewhat different factual situations and distinct legal issues and therefore are more in the form of "fraternal twins" than "identical twins". Both cases involve apportionment pursuant to Labor Code section 4664 and the impact of a pre existing permanent disability award.

In Sanchez v. County of Los Angeles the WCAB addressed the issue of apportionment to a pre existing Award involving the same body region. In Strong v. City and County of San Francisco the Appeals Board considered the issue of a prior Award in a different region of the body and the analysis needed to apply LC 4664 to determine apportionment.

As indicated above these two decisions are virtual mirror images of each other with the only difference being the Board's discussion of apportionment under Labor Code section 4664 where the injury involves the same region of the body versus a different region.

The Board outlined an evaluation process for determination of how apportionment is to be evaluated and then calculated. The following is the process to be involved. The language in Sanchez is the primary language and the language in Strong is underlined in order to differentiate:

1. Where an employee suffers an industrial injury causing permanent disability, and where there is a prior Award of permanent disability relating to the same region of the body, (to one region of the body, and where there is a prior Award of permanent disability involving and/or including any other regions of the body,) Section 4664 requires the apportionment of overlapping disabilities;

2. The defendant has the burden of proving the existence of any prior permanent disability Award relating to the same region of the body (involving and/or including any other regions of the body);

3. Where the defendant has established the existence of any prior permanent disability Awards relating to the same body region (involving or including any other regions of the body) the permanent disability underlying any such Award is conclusively presumed to still exist, i.e., the applicant is not permitted to share medical rehabilitation from the disabling effect of the earlier industrial injury or injuries;

4. When the defendant has established the existence of any prior permanent disability Award relating to the same region of the body (involving and/or including any other regions of the body,) the percentage of permanent disability from the prior Awards will be subtracted from the current overall percentage of permanent disability, unless the applicant disapproves overlap, i.e., the applicant demonstrates that the prior permanent disability and the current permanent disability affected different abilities to compete and earn either in whole or in part;

5. The issue of whether the prior permanent disability for the same region of the body overlaps (for a different region of the body) overlaps the current disability is determined using substantially the same principles that were applied prior to the enactment of Section 4664: and

6. The sum of the permanent disability Award for any one body region cannot exceed 100 percent, even when the permanent disability caused by the applicant's new injury does not overlap the permanent disability underlying the prior Awards, unless the employee's new industrial injury causes disability that is conclusively presumed to be total under Section 4662.

CASE SUMMARIES:

In Sanchez the applicant had an injury to her left foot now which by agreement was rated on the basis of subjective complaints at 7 percent. Prior to that applicant had a pre existing permanent disability of 22 percent awarded for a bilateral knee injury. The case was submitted on the issue of how to calculate apportionment, if any, to the pre existing disability where the applicant's permanent disability Award to the knees was based upon a work restriction identifying a 35 percent loss of pre injury capacity for kneeling, squatting, climbing, heavy lifting, etc. The disability for the left foot was identified as moderate pain with cold weather and rain. There were no restrictions for the left foot.

The trial judge awarded a 7 percent permanent disability concluding that the overall level of disability described in the pre existing Award did not overlap as there was a different part of the body (foot versus knee) and the factors of disability did not overlap.

In Strong, the applicant had multiple injuries, the most recent of which involved a description of disability for the low back which was identified a semi sedentary level of permanent disability. After adjustment for age and occupation the overall rating was 70 percent. Prior to that injury the injured worker had a number of Awards the most recent of which involved multiple body parts including left shoulder, left knee, left ankle and right wrist (but not the low back) with an identified restriction involving a limitation to light work and a prior PD rating, after apportionment of 42%. The apportionment had been made previously to an old award that overlapped in part. The light work however resulted in an overall rating of 60%. The trial judge issued a Findings and Award of 10 percent permanent disability which was the residual disability after reduction of the overall Award for the pre existing permanent disability of 60%.

The WCAB granted reconsideration and has issued en banc decisions. The Board provided an extensive discussion of the law of apportionment prior to SB899. The Board noted that Labor Code section 4750 now which had been the basis for apportionment to pre existing disabilities had been repealed as part of SB899. However it is determined by the Board while the section may have been repealed it was replaced by other sections which certainly suggested in their enactment a substantial intent on the part of the legislature that there should be apportionment to pre existing disabilities. While subtraction of the permanent disability was not mandated under the section the court noted that if there is going to be apportionment of pre existing disability it is difficult to apportion without subtracting the actual percentages. The Board therefore determined that the only rational approach for handling this issue (especially giving its prior en banc decision in Nabors v. Piedmont Mill and Lumber) now was to subtract the portions of disability.

In Sanchez the WCAB determined that the injured worker's 7 percent Award was justified by the record as the factors of disability involving the foot did not overlap the work restriction involving the bilateral knees. The new disability was not based on the previously restricted activities involving kneeling, squatting, crawling, lifting, etc. The subjective complaints for the most recent injury involved only working with the cold. Therefore there was no overlap and applicant met their burden under No. 4 of the WCAB's outline to show that there was no overlap between the two injuries. However the Board noted that in light of No. 6 in the Sanchez decision that the overall level of disability at this time was the 22 percent plus 7 percent for the bilateral extremities (one of the identified body parts) for a lifetime total of 29%. This effectively limits the injured workers level of permanent disability for any further injuries to no more than 71 percent as this is the residual remaining to 100 percent.

In Strong the WCAB noted that the overall level of applicant's prior permanent disability was a 50 percent standard adjusted for age and occupation to 60 percent. The new disability resulted in a 70 percent overall and therefore even though the parts of the body were different the concept of overlap of pre existing permanent disability was still viable. The Board found it difficult to avoid the concept that if an injured worker has a specific work restriction which is followed by a similar or perhaps slightly greater work restriction to argue that the initial disability does not pre exist.

In both cases the Board specifically excluded any consideration of "medical rehabilitation" based upon the WCAB finding that medical rehabilitation was not a provable issue from the standpoint of litigation of apportionment and was effectively prohibited by Labor Code section 4664.

SIGNIFICANT POINT:

The Board made a number of interesting observations and holding in this matter. Certainly the idea that defendant has the burden of proving the existence of a prior Award is not surprising. Existing case law supports this and as defendants have the burden generally of proving apportionment, the language in Labor Code section 4664 requiring the parties asserting the apportionment to have the burden of proof is a natural consequence.

What was more surprising was the Board's interpretation of the language involving the ability to rebut the evidence. The court specifically held that once a defendant is able to show that there is a prior permanent disability Award, apportionment under Labor Code section 4664 is allowed as a matter law unless applicant is able to show that the permanent disability does not overlap the prior Award. In Sanchez the applicant was able to show that the foot disability was different from the knee disability thereby overcoming the apportionment. However under the court's discussion and holding if the applicant had not been able to locate the actual Award and/or rating instructions for the prior permanent disability and then demonstrate that the permanent disability in the foot was separate from the disability in the knees, apportionment would have been allowed as applicant would not have been able to meet their burden and applicant would have received nothing. Under the Strong case applicant was not able to show that there was not an overlap on the work restrictions. The court specifically held that the issue of apportionment would be considered in the same terms as had existed prior to SB899 and Labor Code section 4664. Therefore even though the parts of the body were separate the work restriction itself overlapped and apportionment was allowed.

Of interest are the issues that the WCAB refused to comment upon:

1. The question of the impact of a Compromise and Release even if it identifies a level of permanent disability was not addressed. The Board's holding appears to apply only to permanent disability Awards and not to Awards which are a Compromise and Release where there is no finding of permanent disability. While the issue of apportionment to permanent disability under Labor Code section 4664 is clearly difficult where there is no actual Award it is certainly possible to argue that there might be some basis where apportionment would apply. Clearly Labor Code section 4663 apportionment however is still applicable in many of these situations.

2. The Board determined that where an Award of permanent disability is demonstrated defendant has met its burden in proving apportionment under Labor Code section 4664. The Board does acknowledge that there may be problems in finding some of the permanent disability Awards and presenting evidence as to the actual Award. The Board supports the concept that there may be other ways of proving prior permanent disability Award than actually entering into evidence of the actual Award. Presumably other evidence could include either medical reports which are documented as being a basis for the Award, payments by insurance carriers showing the amount that they paid on an Award or other evidence which might tend to show the level of a partial permanent disability Award without having an actual copy of the Award. The Board however does not specifically indicate what might be considered acceptable.

3. Similarly applicant attorneys who are attempting to show that the prior permanent disability Award involves either a different part of the body or a non overlapping disability may have significant problems in making that proof presentation if they are unable to obtain copies of existing records or subpoena them from prior carriers, etc. What the Board makes clear is that once a permanent disability Award is issued and defendant has demonstrated that there is a pre existing Award the burden then shifts back to applicant to show the basis of the prior Award and whether the Award involved overlapping impairments. If applicant is not able to meet that burden then apportionment as a matter of law is to be allowed without consideration of overlap.

4. The Board also declined to rule on how apportionment would be handled under Labor Code section 4664 where there is an Award of permanent disability utilizing the new permanent disability rating schedule. Many such ratings may be significantly lower for some (but not all) injuries than the permanent disability Awards from old schedule injuries given the significant impact on permanent disability that work restrictions had under the old rating schedule and the lack of such impact on inflating the ratings under the new permanent disability rating schedule using the AMA Guidelines.

CONCLUSION:

The fact that the Board specifically determined that the mere showing of a prior Award demonstrates a basis for apportionment and relieving the defendant of the burden of showing how much of the Award is to be attributed to overlapping disability is somewhat surprising but given the Board's discussion of the statutory language perhaps the analysis appears to be appropriate. Certainly it places the burden upon the injured worker to present specific evidence as to the nature of the permanent disability. This is certainly information that should be equally available to the injured worker as it is to defendants and therefore the burden is placed upon the party who seeks to benefit from the information splitting up the permanent disability Award into its various components or negating overlap in some other ways.

This is certainly much better than the state of affairs prior to 4/19/04 when defendant was in effect required to prove a negative by showing that the injured worker had not rehabilitated from a prior injury. The burden of proof under these two cases is shifted between defendants and applicants on the relative likelihood that either party is going to have the required information to meet its burden. It surely would make no sense for defendants to have to show the actual parts of the disability and the components as the applicant is the one who has the burden of benefiting from that showing. Under the old rules that we used for apportionment defendants were frequently penalized if they were not able to provide very specific and detailed information to justify their apportionment. Clearly those days are now behind us and in this case each party will have their own necessary showing on issues involving apportionment.

It must also be noted that these two cases rely on the rationale in the Nabors decision. Applicant's petition for writ of review has been granted in Nabors (as has defendants in a case involving the same issue in the 5th appellate district in Dykes). If the methodology set out by the WCAB for calculating apportionment in Nabors does not hold up, these decisions will require further refinement on making the actual calculations on apportionment and the dollar values to be assigned to post apportionment PD awards.

By attorney Richard "Jake" Jacobsmeyer, managing partner of the Concorde office of Adelson, Testan, Brundo & Popolardo. Jake can be reached at richardjacobsmeyer@atblaw.net.

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The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management. by "Jake" Jacobsmeyer

The Workers' Compensation Appeals Board has issued decisions in two cases which are virtual twins of each other. The cases however involve somewhat different factual situations and distinct legal issues and therefore are more in the form of "fraternal twins" than "identical twins". Both cases involve apportionment pursuant to Labor Code section 4664 and the impact of a pre existing permanent disability award.

In Sanchez v. County of Los Angeles the WCAB addressed the issue of apportionment to a pre existing Award involving the same body region. In Strong v. City and County of San Francisco the Appeals Board considered the issue of a prior Award in a different region of the body and the analysis needed to apply LC 4664 to determine apportionment.

As indicated above these two decisions are virtual mirror images of each other with the only difference being the Board's discussion of apportionment under Labor Code section 4664 where the injury involves the same region of the body versus a different region.

The Board outlined an evaluation process for determination of how apportionment is to be evaluated and then calculated. The following is the process to be involved. The language in Sanchez is the primary language and the language in Strong is underlined in order to differentiate:

1. Where an employee suffers an industrial injury causing permanent disability, and where there is a prior Award of permanent disability relating to the same region of the body, (to one region of the body, and where there is a prior Award of permanent disability involving and/or including any other regions of the body,) Section 4664 requires the apportionment of overlapping disabilities;

2. The defendant has the burden of proving the existence of any prior permanent disability Award relating to the same region of the body (involving and/or including any other regions of the body);

3. Where the defendant has established the existence of any prior permanent disability Awards relating to the same body region (involving or including any other regions of the body) the permanent disability underlying any such Award is conclusively presumed to still exist, i.e., the applicant is not permitted to share medical rehabilitation from the disabling effect of the earlier industrial injury or injuries;

4. When the defendant has established the existence of any prior permanent disability Award relating to the same region of the body (involving and/or including any other regions of the body,) the percentage of permanent disability from the prior Awards will be subtracted from the current overall percentage of permanent disability, unless the applicant disapproves overlap, i.e., the applicant demonstrates that the prior permanent disability and the current permanent disability affected different abilities to compete and earn either in whole or in part;

5. The issue of whether the prior permanent disability for the same region of the body overlaps (for a different region of the body) overlaps the current disability is determined using substantially the same principles that were applied prior to the enactment of Section 4664: and

6. The sum of the permanent disability Award for any one body region cannot exceed 100 percent, even when the permanent disability caused by the applicant's new injury does not overlap the permanent disability underlying the prior Awards, unless the employee's new industrial injury causes disability that is conclusively presumed to be total under Section 4662.

CASE SUMMARIES:

In Sanchez the applicant had an injury to her left foot now which by agreement was rated on the basis of subjective complaints at 7 percent. Prior to that applicant had a pre existing permanent disability of 22 percent awarded for a bilateral knee injury. The case was submitted on the issue of how to calculate apportionment, if any, to the pre existing disability where the applicant's permanent disability Award to the knees was based upon a work restriction identifying a 35 percent loss of pre injury capacity for kneeling, squatting, climbing, heavy lifting, etc. The disability for the left foot was identified as moderate pain with cold weather and rain. There were no restrictions for the left foot.

The trial judge awarded a 7 percent permanent disability concluding that the overall level of disability described in the pre existing Award did not overlap as there was a different part of the body (foot versus knee) and the factors of disability did not overlap.

In Strong, the applicant had multiple injuries, the most recent of which involved a description of disability for the low back which was identified a semi sedentary level of permanent disability. After adjustment for age and occupation the overall rating was 70 percent. Prior to that injury the injured worker had a number of Awards the most recent of which involved multiple body parts including left shoulder, left knee, left ankle and right wrist (but not the low back) with an identified restriction involving a limitation to light work and a prior PD rating, after apportionment of 42%. The apportionment had been made previously to an old award that overlapped in part. The light work however resulted in an overall rating of 60%. The trial judge issued a Findings and Award of 10 percent permanent disability which was the residual disability after reduction of the overall Award for the pre existing permanent disability of 60%.

The WCAB granted reconsideration and has issued en banc decisions. The Board provided an extensive discussion of the law of apportionment prior to SB899. The Board noted that Labor Code section 4750 now which had been the basis for apportionment to pre existing disabilities had been repealed as part of SB899. However it is determined by the Board while the section may have been repealed it was replaced by other sections which certainly suggested in their enactment a substantial intent on the part of the legislature that there should be apportionment to pre existing disabilities. While subtraction of the permanent disability was not mandated under the section the court noted that if there is going to be apportionment of pre existing disability it is difficult to apportion without subtracting the actual percentages. The Board therefore determined that the only rational approach for handling this issue (especially giving its prior en banc decision in Nabors v. Piedmont Mill and Lumber) now was to subtract the portions of disability.

In Sanchez the WCAB determined that the injured worker's 7 percent Award was justified by the record as the factors of disability involving the foot did not overlap the work restriction involving the bilateral knees. The new disability was not based on the previously restricted activities involving kneeling, squatting, crawling, lifting, etc. The subjective complaints for the most recent injury involved only working with the cold. Therefore there was no overlap and applicant met their burden under No. 4 of the WCAB's outline to show that there was no overlap between the two injuries. However the Board noted that in light of No. 6 in the Sanchez decision that the overall level of disability at this time was the 22 percent plus 7 percent for the bilateral extremities (one of the identified body parts) for a lifetime total of 29%. This effectively limits the injured workers level of permanent disability for any further injuries to no more than 71 percent as this is the residual remaining to 100 percent.

In Strong the WCAB noted that the overall level of applicant's prior permanent disability was a 50 percent standard adjusted for age and occupation to 60 percent. The new disability resulted in a 70 percent overall and therefore even though the parts of the body were different the concept of overlap of pre existing permanent disability was still viable. The Board found it difficult to avoid the concept that if an injured worker has a specific work restriction which is followed by a similar or perhaps slightly greater work restriction to argue that the initial disability does not pre exist.

In both cases the Board specifically excluded any consideration of "medical rehabilitation" based upon the WCAB finding that medical rehabilitation was not a provable issue from the standpoint of litigation of apportionment and was effectively prohibited by Labor Code section 4664.

SIGNIFICANT POINT:

The Board made a number of interesting observations and holding in this matter. Certainly the idea that defendant has the burden of proving the existence of a prior Award is not surprising. Existing case law supports this and as defendants have the burden generally of proving apportionment, the language in Labor Code section 4664 requiring the parties asserting the apportionment to have the burden of proof is a natural consequence.

What was more surprising was the Board's interpretation of the language involving the ability to rebut the evidence. The court specifically held that once a defendant is able to show that there is a prior permanent disability Award, apportionment under Labor Code section 4664 is allowed as a matter law unless applicant is able to show that the permanent disability does not overlap the prior Award. In Sanchez the applicant was able to show that the foot disability was different from the knee disability thereby overcoming the apportionment. However under the court's discussion and holding if the applicant had not been able to locate the actual Award and/or rating instructions for the prior permanent disability and then demonstrate that the permanent disability in the foot was separate from the disability in the knees, apportionment would have been allowed as applicant would not have been able to meet their burden and applicant would have received nothing. Under the Strong case applicant was not able to show that there was not an overlap on the work restrictions. The court specifically held that the issue of apportionment would be considered in the same terms as had existed prior to SB899 and Labor Code section 4664. Therefore even though the parts of the body were separate the work restriction itself overlapped and apportionment was allowed.

Of interest are the issues that the WCAB refused to comment upon:

1. The question of the impact of a Compromise and Release even if it identifies a level of permanent disability was not addressed. The Board's holding appears to apply only to permanent disability Awards and not to Awards which are a Compromise and Release where there is no finding of permanent disability. While the issue of apportionment to permanent disability under Labor Code section 4664 is clearly difficult where there is no actual Award it is certainly possible to argue that there might be some basis where apportionment would apply. Clearly Labor Code section 4663 apportionment however is still applicable in many of these situations.

2. The Board determined that where an Award of permanent disability is demonstrated defendant has met its burden in proving apportionment under Labor Code section 4664. The Board does acknowledge that there may be problems in finding some of the permanent disability Awards and presenting evidence as to the actual Award. The Board supports the concept that there may be other ways of proving prior permanent disability Award than actually entering into evidence of the actual Award. Presumably other evidence could include either medical reports which are documented as being a basis for the Award, payments by insurance carriers showing the amount that they paid on an Award or other evidence which might tend to show the level of a partial permanent disability Award without having an actual copy of the Award. The Board however does not specifically indicate what might be considered acceptable.

3. Similarly applicant attorneys who are attempting to show that the prior permanent disability Award involves either a different part of the body or a non overlapping disability may have significant problems in making that proof presentation if they are unable to obtain copies of existing records or subpoena them from prior carriers, etc. What the Board makes clear is that once a permanent disability Award is issued and defendant has demonstrated that there is a pre existing Award the burden then shifts back to applicant to show the basis of the prior Award and whether the Award involved overlapping impairments. If applicant is not able to meet that burden then apportionment as a matter of law is to be allowed without consideration of overlap.

4. The Board also declined to rule on how apportionment would be handled under Labor Code section 4664 where there is an Award of permanent disability utilizing the new permanent disability rating schedule. Many such ratings may be significantly lower for some (but not all) injuries than the permanent disability Awards from old schedule injuries given the significant impact on permanent disability that work restrictions had under the old rating schedule and the lack of such impact on inflating the ratings under the new permanent disability rating schedule using the AMA Guidelines.

CONCLUSION:

The fact that the Board specifically determined that the mere showing of a prior Award demonstrates a basis for apportionment and relieving the defendant of the burden of showing how much of the Award is to be attributed to overlapping disability is somewhat surprising but given the Board's discussion of the statutory language perhaps the analysis appears to be appropriate. Certainly it places the burden upon the injured worker to present specific evidence as to the nature of the permanent disability. This is certainly information that should be equally available to the injured worker as it is to defendants and therefore the burden is placed upon the party who seeks to benefit from the information splitting up the permanent disability Award into its various components or negating overlap in some other ways.

This is certainly much better than the state of affairs prior to 4/19/04 when defendant was in effect required to prove a negative by showing that the injured worker had not rehabilitated from a prior injury. The burden of proof under these two cases is shifted between defendants and applicants on the relative likelihood that either party is going to have the required information to meet its burden. It surely would make no sense for defendants to have to show the actual parts of the disability and the components as the applicant is the one who has the burden of benefiting from that showing. Under the old rules that we used for apportionment defendants were frequently penalized if they were not able to provide very specific and detailed information to justify their apportionment. Clearly those days are now behind us and in this case each party will have their own necessary showing on issues involving apportionment.

It must also be noted that these two cases rely on the rationale in the Nabors decision. Applicant's petition for writ of review has been granted in Nabors (as has defendants in a case involving the same issue in the 5th appellate district in Dykes). If the methodology set out by the WCAB for calculating apportionment in Nabors does not hold up, these decisions will require further refinement on making the actual calculations on apportionment and the dollar values to be assigned to post apportionment PD awards.

By attorney Richard "Jake" Jacobsmeyer, managing partner of the Concorde office of Adelson, Testan, Brundo & Popolardo. Jake can be reached at richardjacobsmeyer@atblaw.net.

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The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.