Labor Code 4658 With 15% Included is Issue With PD

Saturday, May 2, 2009 | 0

By Richard M. "Jake" Jacobsmeyer


The Court of Appeal (4th District) has reversed a WCAB decision which had determined that the provisions of Labor Code 4658 implementing the 15% increase or decrease in a Partial Permanent Disability award had been waived by failing to specifically raise the issue at the MSC and Trial. 

The appellate court ruled the application of this provision was, in effect, raised by indicating that Permanent Disability was an issue for determination by the WCAB and did not need to be separately raised or indicated as an issue.  The courts decision effectively eliminates the obligation to separately raise this issue at an MSC and puts the section at issue in any situation where PD is being litigated in a post-1/1/05 case.

In Bontempo v WCAB  http://www.courtinfo.ca.gov/opinions/documents/B207660.DOC, the Appellate court took note of several factual issues that assisted it in reversing the WCJ and WCAB .  Additionally the court asked the parties and the WCAB if the application of Labor Code 4658 was mandatory and self-executing;

"We sent a letter asking the parties and the Board to address whether "the provisions of Labor Code section 4658, subdivision (d)(2) and (d)(3) [are] mandatory by operation of law, thus requiring the 15 percent increase or decrease in permanent disability indemnity to be addressed and/or awarded in the Opinion on Decision and Findings and Award."  The Board responded with a letter stating that "if all the criteria in [] either section 4658 (d)(2) or (d)(3) have been met, the corresponding 15 percent increase or decrease must be applied, i.e., it is mandatory.  However, . . . it will not necessarily be apparent from the record whether sections 4658(d)(2) or 4658(d)(3) should apply."  The Board contended the record did not contain sufficient evidence to permit determination whether to apply the provisions."

The court noted the MSC statement did not have a separate "box" to check listing this issue.  The court also noted that as this was an issue affecting only PD, a reasonable person could conclude that checking the issue of PD would adequately indicate this issue was jointed.  In this particular case, the employer was actually making payments increased under Labor Code 4658 at the time of hearing.  The court considered this also as an admission by defendant that the increase was due and also that there was no significant dispute as to the need for a finding on the PD benefit as it was already being paid.

"...Here, the undisputed evidence established that Bontempo had not worked after mid-2005 because the City had no modified or alternate work available. This evidence, combined with the stipulations of the parties that the City was paying the additional 15 percent prescribed by section 4658, subdivision (d)(2), was sufficient to put any question regarding the provision's applicability before the WCJ for adjudication and resolution in Bontempo's favor.

Finally, in resolving a dispute over an applicant's alleged failure to specify issues, the Board and the courts are to be mindful of the principle that the statutes governing workers' compensation, including the procedural provisions, are to be liberally construed in favor of protecting workers.  (City of Fresno v. Workers' Comp. Appeals Bd. (1985) 163 Cal.App.3d 467, 471;   3202 [workers' compensation statutes "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"]; see   5708 [in the conduct of hearings, the WCJ "shall not be bound by the common law or statutory rules of evidence and procedure, but may make inquiry in the manner, through oral testimony and records, which is best calculated to ascertain the substantial rights of the parties and carry out justly the spirit and provisions of this division"]"

The court's holding that this section is effectively self-executing and included in the issue of PD, may also have an application in one further issue that can arise on occasion under Labor Code 4658.  In cases where an employer does make an offer of employment and obtain the benefit of the reduced PD but at a later date finds that the employee cannot be maintained at the offered employment, Labor Code 4658(d)(3)(B) provides any payments made after the date of layoff, will be made with the 15% increase going into effect.  One of the issues that have arisen in discussions about such a change in the PD benefit is whether the applicant needs to file a petition to re-open the award to obtain the change from a 15% reduction to the 15% increase for those remaining payments.  It has been my position that this section is self-executing, much like the obligation to increase benefits under Labor Code 4661.5.  This decision would seem to suggest that such an approach is legally correct.  This will admittedly be a rare circumstance but now feel confident, based on this holding, that such an alteration of the statutory benefit, even post award, is self-executing and should be implemented even without a Petition to alter the existing award and indeed, even if jurisdiction has expired to alter the award (Post 5 years from the
date of injury)

I suspect however that most of us will never see that circumstance arise.


Benson Update:

On Wednesday, the Supreme Court denied the applicant's petition for hearing in the Benson v WCAB . case.  This was the case holding that Wilkinson v WCAB . requiring combining of multiple injuries into a single PD rating was no longer the law after the passage of SB 899.  This case is now final.

There continue to be two "Benson Clone" cases which were consolidated and argued earlier this month in the 2nd Appellate District.  The results of those cases should be known in the next few weeks and indeed, the Court at oral argument indicated to the parties that it would likely wait for the results of the Supreme Court in Benson before ruling.  Should  that court disagree with the First District decision in Benson, the Supreme Court might have to grant the defendants' certain appeal or at least order decertification of the subsequent decisions thereby rendering them unable to cite as authority and leaving the Benson decision as our reigning authority.  One way or another, this issue may become final within the next few weeks.


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Richard "Jake" Jacobsmeyer is a partner with the Oakland, Calif., firm of Shaw, Jacobsmeyer, Crain & Claffey & Nix LLP
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