Does the New 5814 Enforce an Old 5814 Award?

Sunday, November 20, 2005 | 0

The following article by York McGavin first appeared in the WorkCompCentral Professional Forums as a question and answer post. Because of the novelty of the topic discussed, It is reproduced here with minor editing:

BACKGROUND:

Injured Worker (IW) sustains injury long ago and is awarded a single LC 5814 penalty under the 'old' law for the medical species of benefit that is now final.

The Employer (ER) fails to comply with old 5814 Award and owes IW 5814 penalties today.

IW files a new 5814 Petition prior to 6/1/04 to avoid the 2 year SOL in the 'new' 5814.

QUESTION(S):

In enforcing the 'old' 5814 Award, should the Workers' Compensation Judge (WCJ) award IW up to 25% of amount unreasonably denied or delayed according to 'new' 5814, or should WCJ increase 'old' 5814 as set forth in the WCAB en banc Truesdale case, 42 CCC 610?

Remember, this is not a petition to seek a 'new' 5814 Award, but a petition to enforce an existing 'old' 5814 Award.

In the instant matter, the IW has an 'old' existing 5814 Award which became final years before SB 899 was implemented. Being as the 'old' 5814 Award is final, is the 'old' 5814 Award increased as set forth in Truesdale, or can the 'new' 5814 be applied to an 'old' award?

The Truesdale case is of interest in that the court found as follows:

"all benefits awarded under Division 4 are subject to the ten percent penalty, including an award of penalty. We therefore find that the award of November 5, 1975 should be increased by ten percent. This finding results in increasing the penalty on temporary disability, reimbursement of self-procured medical treatment, and the costs of future medical care to 11 percent."

"Defendants have unreasonably failed to comply with that portion of the Findings and Award of November 5, 1975, awarding a ten percent penalty on the costs of medical care provided by defendants."

"IT IS FURTHER ORDERED that payments of penalty to the applicant pursuant to paragraph (c) of the award filed November 5, 1975 be made to the applicant as 11 percent of the value of and concurrent with each payment of medical costs by the defendant herein.

IT IS FURTHER ORDERED that the penalty on temporary disability indemnity, reimbursement of self-procured medical treatment, and the cost of medical care provided by the defendants, as provided for in the Findings and Award of November 5, 1975 be increased to 11 percent." (Emphasis added by author.)

Due to my academic interest (as a lien claimant, I have no standing to even raise LC 5814), I researched this issue. I stumbled across a couple of cases of interest: Jones v. WCAB (1997)(writ denied) 62 CCC 196, and Anderson v. WCAB (1981)(writ granted) 46 CCC 342.

In Jones, the court held, "penalties for successive delays in paying benefits should be computed as 10 percent of the underlying benefit, rather than 10 percent of the increased sum." and further explained, "only when there has been an unreasonable delay in the payment of an award that has already been increased by 10 percent, the entire amount of the award, including the original 10 percent increase, will be increased by 10 percent. Accordingly, the WCAB amended the WCJ's decision to impose 12 separate uncompounded penalties..." (Emphasis added by author.)

In Anderson, the appellate court reversed the WCAB and determined, "we believe it is important to note the difference between penalties for delayed payment of a prior penalty and successive delays in paying the basic benefit. In the latter case, each penalty is computed as 10 percent of the underlying benefit, rather than 10 percent of the increased sum. (See Davison v. Industrial Acc. Comm. (1966) 241 Cal. App. 2d 15, 18-19 [31 Cal. Comp. Cases 77, 50 Cal. Rptr. 76].) Since the petition here involves the former situation, there is no impropriety in adding any prior penalties to the original benefit award for purposes of determining the base for any subsequent penalty assessments.

"The Board erred in applying the 10 percent assessment to the prior penalty, increases, rather than to the principal amount of the original award (i.e., underlying benefit plus any prior penalty increases)."

When reading the above cited cases together, I am uncertain as to whether an IW with an 'old' 5814 award (who seeks enforcement of the 'old' award), is entitled to another increase. If so, is an increase of the previous 'old' 10% award to be increased to 11% --- or to 21%?

In the alternative, in this "choice-of-law" issue, are all the above cases irrelevant?

Is the 'new' 5814 controlling when seeking to enforce an 'old' 5814 award?

I realize that these are rather esoteric questions, and being as the entire 5814 penalty scheme has changed dramatically, there is a paucity of case law addressing the issue of how to properly enforce an 'old' 5814 award, and properly compute any amount due.

Sooner or later, this issue will come to the front burner of the WCAB as well as the appellate courts. How they will rule on this issue is certainly of interest --- at least to me on an academic basis --- and should be of interest to the entire regulated community.

by York McGavin. York can be contacted at ymcgavin@socal.rr.com.

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