Appellate Court Modifies Burden of Proof Under Labor Code Sec. 4664

Saturday, September 23, 2006 | 0

By Jake Jacobsmeyer

The 3rd Appellate District issued a new opinion in a case providing additional judicial interpretation to another aspect of Labor Code Section 4664. In Kopping v. WCAB, the court has given us further clarification of how the presumption for prior awards of permanent disability is to be applied that agrees in part and disagrees in part with prior authority issued by the WCAB. In this case the court addressed the presumption that was created for prior awards of the WCAB and whether it is conclusive or rebuttable and how the presumption affects the burden of proof.

The applicant in this proceeding had an existing award of PD of 29% for the low back. His new injury, the subject of the current claim, was described by an agreed medical evaluator (AME) using factors of disability resulting in a 27% PD. The AME concluded that there was no apportionment as the applicant had completely rehabilitated from the prior award of PD.

The trial judge issued a decision finding the applicant had no disability as a result of the complete overlap of the new award by the old and rejecting the applicant's argument for medical rehabilitation based on Labor Code Section 4664.

The WCAB granted reconsideration and remanded to the WCJ to consider whether the applicant could meet the burden under the then recent en banc decisions in Sanchez v. County of Los Angeles (2005) 70 Cal.Comp.Cases 1440 (Sanchez) and Strong v. City & County of San Francisco (2005) 70 Cal.Comp.Cases 1460 (Strong), to show that the prior award did not completely overlap the current level of PD. The WCAB held the presumption that the prior award continued to exist was a conclusive presumption and that under the cited authority, the applicant had the burden to prove there was not a complete overlap of current PD by the prior award.

The applicant appealed arguing both the presumption under Labor Code Section 4664 was a rebuttable one, which he had successfully rebutted based on the AME opinion of medical rehabilitation from the prior award and further that the WCJ erred in subtracting the old award from the new to the extent the factors of disability did not completely overlap. The Court of Appeal ultimately rejected the applicant's argument that the presumption was rebuttable by evidence of medical rehabilitation but did determine the WCAB incorrectly determined the effect of the language regarding the burden of proof on the overlap issue; holding the defendant, not applicant, held the burden to show there was overlap of the two disabilities.

Quoting extensively from Sanchez, the court concluded that the only way to give effect to the language in Labor Code Section 4664 creating a conclusive presumption was to preclude consideration of any evidence that a previously issued award did not exist at a future time and rejected the argument that the existence of a prior award was rebuttable; to be overcome by applicant's presentation of evidence of medical rehabilitation.

"We disagree. If permanent disability is understood as 'the irreversible residual of an injury' (1 Cal. Workers' Compensation Practice (Cont.Ed.Bar 4th ed. 2005) Section 5.1, p. 276) (as contrasted with temporary disability), then it is anomalous that an injured worker who was determined to have a permanent disability could prove, at a later date, that he actually recovered from that disability. If section 4664(b) is understood as representing the Legislature's common sense recognition that there can be no recovery from a permanent disability, then there is no inconsistency between that statute and section 4664(a). This is so because a new industrial injury cannot be the cause (direct or otherwise) of a pre-existing permanent disability. Thus, the presumption that a permanent disability continues to exist throughout the claimant's lifetime is perfectly consistent with the provision in section 4664(a) that limits an employer's liability to the percentage of permanent disability directly caused by the new injury."

In Sanchez and Strong, the WCAB ruled that once the existence of the prior award was demonstrated, the burden of proof to show the lack of overlap shifted to applicant to avoid the reduction of the current level of PD by the prior award. This was interpreted as a second presumption, which was rebuttable in nature, that fell on the applicant to prove. The court, while acknowledging the difficulty in harmonizing the language in Labor Code Section 4664 with the evidentiary concepts of presumptions, rejected this second, rebuttable presumption described by the WCAB. Instead the court determined that the traditional rules affecting the burden of proof on apportionment would still apply:

"... Although the conclusive presumption thus affects the employer's burden of proving apportionment by conclusively establishing the continued existence of a prior disability, it does not completely carry that burden, because the employer still has to prove the overlap, if any, between the previous disability and the current disability in order to establish that apportionment is appropriate."

Thus, under this interpretation the employer has the burden of both proving the existence of the prior award and the overlap between the two permanent disabilities:

"Under our construction of the statute, what section 4664(b) does is simply prevent a claimant from defeating an employer's showing of apportionment by proving medical rehabilitation from a prior permanent disability for which he or she received permanent disability benefits. In such a case, the employer otherwise continues to bear the burden of proof on the issue of apportionment. First, the employer must prove the existence of the prior permanent disability award. Then, having established by this proof that the permanent disability on which that award was based still exists, the employer must prove the extent of the overlap, if any, between the prior disability and the current disability. Under these circumstances, the employer is entitled to avoid liability for the claimant's current permanent disability only to the extent the employer carries its burden of proving that some or all of that disability overlaps with the prior disability and is therefore attributable to the prior industrial injury, for which the employer is not liable."

The court does not provide any additional guidance on how the employer meets the burden of proving the existence of overlap, but does not dispute the WCAB's holding in the Sanchez and Strong cases that the traditional rules of overlap still apply. Given this application, in most cases the issue of overlap should be addressed fairly easily where the injuries affect the same part of the body. It may be more difficult where overlap is asserted based on the factors of PD being based on the same kind of disability where the body parts are different (same or similar work restrictions for different parts of the body). The court does make it absolutely clear that applicant's primary argument, the ability to rebut the presumption by evidence of medical rehabilitation, is not going to fly in any way, shape or form.

Interestingly, this same issue had been raised in a somewhat less forceful fashion by applicant in the Strong case, which was decided by a panel with two of the same justices and written by the same justice (Robie) of this same appellate division a little more than a week ago. In that case the court had determined the applicant had not demonstrated that there was any evidence to present on the issue of medical rehabilitation. The court held that the issue was not properly framed in that case, concluding:

"... Strong does not contend that he wanted to, but was prohibited from, trying to prove before the WCJ that his prior permanent disability no longer existed at the time of his back injury. Accordingly, we will leave for another day how this apparently contradictory statute is to be interpreted."

It appears that the court was deferring the issue until this decision in Kopping.

Cases can be viewed by slick on the case name on the right.

Attorney Richard "Jake" Jacobsmeyer is a partner in the firm Shaw, Jacobsmeyer, Crain & Claffey and can be reached at jakejacobsmeyer@shawlaw.org.

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