Apportionment: Subtract $, Not %

Saturday, December 31, 2005 | 0

by "Jake" Jacobsmeyer

The 4th District Court of Appeals has upheld the denial of Reconsideration of the WCAB decision in E & J Gallo Winery v WCAB (Dykes). In the original decision by the WCAB, the trial judge's decision to apportion to a prior award of permanent disability by subtracting the dollar value of the prior award of permanent disability rather than the percentage of disability was upheld on reconsideration by the WCAB with a decision that adopted and incorporated the WCJ's determination. As will be discussed below, this decision has far reaching implications about how we are to treat Permanent disability in the future.

In this case, the applicant had a permanent disability award of 20:2% awarded from a prior injury that occurred in 1996. On 10/28/2002, Dykes sustained a new injury with a resulting rating of 73%. The parties agree to the level of disability to assign to both injuries but contested the method for calculating the dollar value. Applicant argued for subtracting the prior dollar value of the 20:2% and defendant argued for subtraction of the actual permanent disability award from the 73% for a total award of 53% permanent disability.

The trial judge subtracted the dollar value and the decision was adopted and incorporated by the WCAB. Gallo appealed the WCAB determination arguing that the clear unequivocal language of Labor Code section 4663 required reduction of the current award based on the percentage of permanent disability and not dollars (or weeks of permanent disability, the other offered alternative).

The court started out by stating its conclusion as to how apportionment should be considered in these circumstances:

"We conclude that where an employee sustains multiple disabling injuries while working for the same self-insured employer, the employee is entitled to compensation for the total disability above any percentage of permanent disability previously awarded. In this narrow context, we see no reason to treat an employee who has been injured twice differently from a similarly situated employee who is injured once with the same level of disability. Our conclusion benefits employers by ensuring there can be no double recovery for the same disability; it benefits the employee by providing equitable compensation under the exponentially progressive nature of the workers' compensation system. This approach best meets the legislative goal of bringing stability to what had become an unworkable statutory scheme."

The court then provided its analysis, reviewing the case law and in particular the repeal of Labor Code section 4750 and its impact on the holding of the California Supreme Court in Fuentes v WCAB, 16 Cal 3rd 1. The court also noted, with some degree of understandable puzzlement, the WCAB decision in Nabors v WCAB (en banc), 70 CCC 856, wherein a 5 member majority, (including two of the commissioners who decided Dykes), issued a contrary ruling to this case.

"...We are unconvinced by the Nabors majority that the reasons for adopting formula A are as compelling today as in 1976 when the Supreme Court addressed the issue in Fuentes. Fuentes repeatedly states its holding was required by the express and unequivocal language of section 4750. In fact, the Supreme Court went so far as to suggest that the repeal of section 4750 would create the opportunity to apply another apportionment formula."

The Court was completely unimpressed with the arguments that subtraction of the level of permanent disability rather that the dollar value of prior awards was necessary to implement the legislative policy to encourage hiring the disabled. The Court agreed with Commissioner Rabine's observation that there was no data to suggest that the application of Labor Code section 4750 had any impact on that issue in the past. The Court also noted the other remedies available to the disabled to compel equal treatment and seemed to feel that those remedies more than adequately addressed the public policy concerns.

This court also relied heavily on the liberal presumption of Labor Code section 3202 and, not finding any specific statutory language, felt compelled to maximize the benefits available to an industrially injured worker.

"In adopting Sen. Bill 899, the Legislature did not outline any particular method for apportioning either a permanent disability award or a life pension. We are, however, guided by the specific legislative mandate that "[t]he employer shall only be liable for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment." (section 4664, subd. (a).) We are also guided by the overriding principle that workers' compensation laws "shall be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment." (section 3202.) We keep firmly in mind the exponentially progressive nature of the workers' compensation disability tables, the increasing maximum weekly benefit rates, and the lifetime pension for disabilities over 70 percent-all of which serve to compensate employees with higher levels of permanent disability in greater proportion to those with lower levels of permanent disability. In doing so, we conclude that only formula C ensures both that an employee is adequately compensated and that an employer is directly liable for the percentage of disability directly caused by the injury arising out of employment"

This court certainly expressed a clear intent to overturn the WCAB en banc decision in Nabors v Piedmont Lumber & Mill. Nabors is currently on appeal in the 1st District Court of Appeal and the briefing is almost completed. Assuming the Court of Appeal decision is upheld on further appeal, and is not ordered depublished, the holding reverses the WCAB en banc holding in Nabors. This makes the argument and ultimate decision in the Nabors case critical to a final determination of this issue. The First Appellate District could disagree with the court in Dykes, and if so the California Supreme Court would have to step in to resolve the conflict between appellate districts. The Supreme Court could decide to grant a petition for hearing and decide the case itself or order one of the decisions unpublished thereby rendering the published decision as citable authority thereby resolving the conflict.

It will certainly be interesting to see how the Supreme Court takes to a lower court's decision that a prior Supreme Court decision has been rendered moot by statute.

As written, this decision has no application to apportionment to non-industrial disability and there is no expressed intent to require subtraction of dollar value for apportioned Permanent disability under Labor Code section 4663. However this issue will certainly be raised in the future by applicants and this case leaves the door open.

One of the effects of this decision is to overturn not only Nabors and Fuentes, but also some of the limiting provisions in Wilkinson v WCAB, (1977) 19 Cal.3d 491 and certainly the holding in Parker v. Workers' Comp. Appeals Bd. (1992) 9 Cal. App.4th 1636, 57 Cal. Comp. Cases 608. Under this holding, the issue of whether an injured worker gets a rating based on a combined rating is no longer dependant on whether the body parts or the P & S dates are the same nor on whether the WCAB has jurisdiction to combine prior awards. The combined rating will apply if the prior level of Permanent disability overlaps the current Permanent disability so that there is legal apportionment as defined in Sanchez v County of LA or Strong v City and County of San Francisco. In effect this case also overturns the entire line of cases after Wilkinson and revives the WCAB decision in the previously disapproved Danielle case (State of California/Department of Corporations v. W.C.A.B. (Danielle) (1996) 61 Cal. Comp. Cases 1469).

This decision gives the applicant's bar its first significant favorable decision in interpreting SB 899 and potentially one of its biggest ones. Should this decision be upheld, it will go a significant distance to addressing some of the complaints of inequity in the system coming from organized labor and the applicant's bar.

The case can be read in its entirety by clicking on the case title in the sidebar at right.

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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