Second Appellate Decision Published in Accord with <i>Costco v. WCAB</i>

Saturday, July 28, 2007 | 0

By Jake Jacobsmeyer

The 1st Appellate District has ordered publication of a prior decision in one of the many pending cases on the old vs. new PDRS issues.

In Zenith Insurance Co v. WCAB (Azizi), the court had issued its decision in the latter part of June reversing a WCAB award that was issued prior to the en banc decision in Pendergrass II. The WCAB, relying on Pendergrass I had applied the old PDRS based on the commencement of TTD in 2004.

The Court of Appeal had granted Zenith's Petition for Writ of Review prior to Pendergrass II or the appellate decision in Costco v. WCAB, which also reversed a WCAB award applying the old schedule based on the commencement of TTD prior to Jan. 1, 2005.

This court saw no reason to not follow the rational of their fellow appellate panel in Costco.

"We agree with the reasoning of Costco and reject Azizi's claim. We also observe that the Board has, since its decision in the present case, reached the same conclusion as the court in Costco. In Pendergrass v. Duggan Plumbing and State Compensation Ins. Fund (2007) 72 Cal.Comp.Cases 456, the Board held in an en banc decision that the duty to give notice under section 4061 arises with the last payment of temporary disability, which must be made before January 1, 2005 for the 1997 schedule to apply"

The Court also considered, briefly, and rejected soundly the same arguments raised by the applicant in the Aldi case:

"This argument proceeds from a faulty premise, because there is no inconsistency between the provisions of section 4660, subdivision (d). The statute states the general rule that the applicable schedule is the one in effect on the date of the injury, and then provides an exception to that rule, namely, that the new schedule will apply to pre-2005 injuries unless one of three specified circumstances existed prior to 2005. There is nothing illogical or absurd about this interpretation of the statute, which adheres to its plain and commonsense meaning. Azizi's interpretation is strained by comparison. If, as he suggests, the Legislature had meant to target only those injuries arising during the period between the enactment of Senate Bill No. 899 on April 19, 2004, and the implementation of the new permanent disability rating schedule, it presumably would have done so explicitly rather than by making a blanket reference to claims arising before January 1, 2005."

These are the first two published cases on these issues. There is an additional unpublished decision, also 1st district, which is in accord with both of these decisions, Minatta Transportation Co. v. WCAB (Lanning).

So far all of the cases on these issues have issued from the 1st Appellate District and that district has been unanimous in its assessment of the statutory language. Each case has cited, but not relied upon, Pendergrass II in support of its decision.

There continue to be a plethora of cases still pending in other districts on these old vs. new PDRS issues. While the published decisions of the 1st District and the WCAB en banc holdings are certainly persuasive arguments to the other district appellate courts; none are binding and it is certainly possible in the coming months we will have a split in the authority in this area ala' Welcher v. WCAB and that line of cases on the calculation of apportionment.

If so, the Supreme Court would have to take some action to clarify the law, whether by decertifying the contrary decisions or granting the appeal in one or more of the cases and issuing its own opinion.

New CIGA Contribution Case:

The California Insurance Guarantee Association has prevailed in yet another case involving contribution with a co-defendant.

In CIGA v. WCAB (SCIF), the WCAB has awarded CIGA 25% of the amounts it had paid for TD, Medical care and VR benefits for the combined effects of its specific injury and a subsequent CT for which SCIF had been the sole carrier. The AME in the case had allocated liability between the two injuries as 75% to CIGA's claim and 25% to SCIF's.

Relying on that opinion the WCAB awarded CIGA only 25% of the total paid after the date of the SCIF injury. CIGA appealed and was denied hearing at the appellate level.

However the Supreme Court granted CIGA's request for hearing and transferred the case back to the Court of Appeals to hear.

The Court reviewed the entire line of cases beginning with Industrial Indemnity v. WCAB (Garcia) and concluding with the Hooten and Weitzman cases in order to conclude:

"Weitzman and Hooten compel the conclusion that SCIF, as solvent 'other insurance,' must reimburse CIGA in full for all the temporary workers' compensation benefits it paid regarding these injuries, which is the sum of $43,505.53. SCIF is jointly and severally liable for all of these temporary benefits CIGA paid regarding the injuries, which acted in concert to cause the disability that was sustained by Hernandez ..."

The issue in this case is effectively the flip side of the Weiztman and Hooten cases. In those claims the co-defendants were trying to obtain reimbursement from CIGA and ultimately failed. In this case, CIGA was the one seeking contribution; however, the result was the same. Whenever there is a solvent defendant, with concurrent liability for the same benefits, CIGA will be relieved of all liability for the jointly owed benefits.

In this case, the issue of contribution on PD was not at issue and CIGA was only seeking full reimbursement for the commonly owed benefits.

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

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