San Joaquin Case Resolves Recurrent PDA Problems

Sunday, April 25, 2004 | 0

The Court of Appeal in a published decision has reversed a WCAB decision that denied credit for Permanent Disability (PD) advances in a Compromise and Release (C&R) that were claimed as a credit by defendant where the credit was larger that the amount listed on the C & R but the agreement contained language that the amount of advances was "subject to proof".

In a situation that is all too familiar to many worker's compensation practitioners, the WCAB in County of San Joaquin vs. WCAB (C043812, 4/21/04) had denied a credit for the full amount of PD advances made by defendant where the settlement was negotiated and partially completed at one conference and the actual approval occurred at a later date.

In this case the amount of advances noted in Paragraph 6 of the C & R was a figure based on the printout at a conference in 10/01. While the applicant rejected the settlement at the October conference, at a later date in April, 2002 an agreement was reached. The same settlement agreement was used with the PD advance figure. The injured worker had continued to receive advances until the 2nd conference and the C &R had language indicating, "Less credit for further PDA subject to proof."

When defendant paid the C & R, they deducted the actual amount of the advances totaling $6362.87. Applicant objected claiming that she was to receive the settlement with only the listed amount of advances (approximately $2400) deducted.

The Trial judge and the WCAB both held that since the defendant drafted the settlement agreement it should be held to the amount listed in the deductions for PD advances. Both discounted the language concerning additional credit "subject to proof" as poor drafting that should be interpreted against the defendant.

The Court of Appeal reversed the WCAB's ruling and was critical of the analysis of WCJ & WCAB on the meaning of the language regarding allowance of "further advances." The Court pointed out that the interpretation of this provision was certainly not complex, that the injured worker was certainly aware that there had been additional advances and that failure to allow the credit would deprive defendant's of their bargained for agreement. In reviewing the language for ambiguity the court stated:

"...Every substantial claim of ambiguity must tender a candidate reading of the language which is of aid to the claimant. One must ask what meanings are proffered and examine their plausibility in light of the language. A party attacking a meaning succeeds only if the attacker can propose an alternative, plausible, candidate of meaning." (Estate of Dye (2001) 92 Cal.App.4th 966, 976; see Solis, supra, 94 Cal.App.4th at p. 360.) Here, there is no alternative candidate of meaning tendered by the Board, thus there is no ambiguity...

"The Board offers no alternate semantically permissible construction of the phrase Less credit for further PDA subject to proof.' We conclude it carries the meaning ascribed to it by the employer, and that the Board erred as a matter of law by denying the employer credits it had bargained for in the compromise with Sepulveda."

This situation occurs all too frequently at the WCAB when the parties have incomplete or dated information as to the amount of either PD advances or other credits. Obviously the best solution is to be up to date and clear on the specific terms of any settlements.

However, it is certainly comforting to know that the Court of Appeals recognizes that the parties are entitled to the benefits of their negotiated bargain and that overly technical interpretations should not be a basis to deny the parties their rights where there is no meaningful dispute of the actual terms of the agreements.

Article by Richard Jacobsmeyer of the law firm Adelson, Testan, Brundo & Popalardo. "Jake" is the Managing Partner of the firm's East Bay Office (Concord, Ca.) and can be reached by e-mail at richardjacobsmeyer@atblaw.net or by phone at (925) 609-1990.

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