Los Angeles County v. Workers' Compensation Appeals Bd.
Decision Date | 28 November 1979 |
Citation | 160 Cal.Rptr. 369,99 Cal.App.3d 101 |
Court | California Court of Appeals |
Parties | COUNTY OF LOS ANGELES (Mechanical Department) Legally Uninsured, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD of the State of California; Charles Crowe, Respondents. Civ. 54411. |
John H. Larson, County Counsel, Milton J. Litvin, Div. Chief, Workers' Compensation Div., and Patrick A. Wu, Deputy County Counsel, Los Angeles, for petitioner.
James E. Hummell, Pamona, for respondent Charles L. Crowe.
Petitioner County of Los Angeles (County) contends respondent Workers' Compensation Appeals Board) (Board) erred in the method it calculated a ten percent penalty against County pursuant to Labor Code section 5814 1 for County's unreasonable delay in providing permanent disability payments to respondent injured worker, Charles Crowe. In light of Gallamore v. Workers' Comp. Appeals Bd. (1979) 23 Cal.3d 815, 153 Cal.Rptr. 590, 591 P.2d 1242, we find merit to County's contention.
The issue here is not whether a penalty should be assessed but rather how the ten (10) percent penalty should be calculated.
While employed by County on November 7, 1971 Crowe sustained injury arising out of and occurring in the course of employment to both his hips and lower extremities.
County concedes that it unreasonably delayed in voluntarily making permanent disability payments to Crowe from January 25, 1977 to July 11, 1977. (See Lab.Code, § 4650; Kerley v. Workmen's Comp. App. Bd. (1971) 4 Cal.3d 223, 93 Cal.Rptr. 192, 481 P.2d 200; Berry v. Workmen's Comp. App. Bd. (1969) 276 Cal.App.2d 381, 81 Cal.Rptr. 65.) However, in March 1977 the parties settled by an appeals board approved compromise and release the claim for penalty for any delay by County on or before March 28, 1977. On July 11, 1977, all delayed permanent disability payments were brought up to date and thereafter all permanent disability payments were paid by County to Crowe in a timely manner. No other type of workers' compensation benefits owed to Crowe was delayed by County.
The matter proceeded to hearing on May 24, 1978. The issues at the hearing were permanent disability, whether Crowe was in need of further medical treatment, and the penalty claim. Per findings and award issued on June 9, 1978, the workers' compensation judge found Crowe to be permanently totally disabled and in need of further medical care as the result of the industrial injury herein. The judge accordingly awarded Crowe permanent disability benefits of $21,000, payable at $52.50 per week for 400 weeks, and thereafter a life pension of $48.46 per week. The judge also found that as County had unreasonably delayed in making permanent disability payments to Crowe a ten percent penalty should be assessed against County on the awarded permanent disability (including the life pension) and on the awarded future medical treatment. The judge, however, applied no penalty to permanent disability accrued up to and including March 28, 1977 in light of the settlement agreement.
The Board denied County's petition for reconsideration on the penalty issue, relying upon the judge's analysis. The judge rejected County's contention that the penalty only applied to benefits actually delayed. The judge observed that Adams v. Workers' Comp. Appeals Bd. (1976) 18 Cal.3d 226, 133 Cal.Rptr. 517, 555 P.2d 303, as interpreted in Sierra Pac. Industries v. Workers' Comp. Appeals Bd. (1977) 67 Cal.App.3d 413, 136 Cal.Rptr. 649, required that the penalty apply to both the awarded permanent disability and future medical care. Sierra Pac. Industries held that even if only one type of benefit was delayed the penalty applied to all awarded benefits. Subsequent to the judge's decision and the denial of reconsideration by the Board, the Supreme Court in Gallamore v. Workers' Comp. Appeals Bd. supra, 23 Cal.3d 815, 153 Cal.Rptr. 590, 591 P.2d 1242 disapproved this holding of Sierra Pac. Industries. (Gallamore, supra, 23 Cal.3d at pp. 826-827, 153 Cal.Rptr. 590, 591 P.2d 1242.)
Gallamore expressly held that "the penalty is to be computed by assessing 10 percent of the entire amount ultimately awarded for the particular class of benefit which has been unreasonably delayed or withheld." (23 Cal.3d at p. 827, 153 Cal.Rptr. at p. 596, 591 P.2d at p. 1248.) Accordingly, the assessment of the penalty against the awarded future medical treatment must be annulled. Permanent disability and medical care are clearly different classes of benefits. 2 Crowe now concedes this point.
We now turn to the application of the penalty to the permanent disability and life pension. In Gallamore one of the claimed penalties involved the failure to voluntarily pay permanent disability advances prior to the issuance of an award. The carrier for the employer failed to make any permanent disability advances until after the injured had filed a petition for assessment of a penalty. At the hearing the parties stipulated to permanent disability of 421/2 percent, equivalent to a total of $13,702.50 in weekly payments. The Board assessed the penalty as $1,370. The court first rejected the distinction in computing the penalty between pre-award and post-award delinquencies in the payment of benefits as there was "no reason why the Amount of the penalty should vary depending on whether the delinquency occurred prior or subsequent to the award." (Gallamore, supra, 23 Cal.3d at p. 822, 153 Cal.Rptr. at p. 593, 591 P.2d at p. 1245.) Commenting upon the computation of the penalty the court stated:
(Gallamore, supra, 23 Cal.3d at p. 827, 153 Cal.Rptr. at p. 596, 591 P.2d at p. 1248.)
Thus, it is clear from Gallamore that the penalty applies to the entire permanent disability award except for that portion of the penalty covered by the March 1977 settlement. There remains a question, however, whether the penalty applies to permanent disability payments voluntarily and timely made prior to the issuance of the award.
It has been said that Gallamore appears to make a distinction between voluntary payments and payments under compulsion of award. Thus, "While the penalty is to be assessed according to the class of benefit delayed, no penalty is to be assessed against benefits already provided voluntarily." (1 Herlick, California Workers' Compensation Law Handbook (2d ed. Supp.1979) § 11.12, pp. 40-41; in apparent accord is 2 Hanna, California Law of Employee Injuries and Workmen's Compensation (2d ed. 1979) § 17.06(1), p. 17-47.)
The weight of prior appellate authority is that for the class of benefits delayed which is subject to a penalty that portion of such benefit class Voluntarily and Timely paid prior to the issuance of an award is not subject to a penalty. (Garcia v. Workmen's Comp. Appeals Bd. (1972) 6 Cal.3d 687, 690, fn. 2, 100 Cal.Rptr. 149, 493 P.2d 877; State Comp. Ins. Fund v. Workmen's Comp. Appeals Bd. (Sturm) (1973) 35 Cal.App.3d 374, 110 Cal.Rptr. 757; Ramsey v. Workmen's Comp. App. Bd., supra, 2 Cal.App.3d 693, 698, 83 Cal.Rptr. 51; disapproved on another point in Adams v. Workers' Comp. Appeals Bd., supra, 18 Cal.3d at p. 231, 133 Cal.Rptr. 517, 555 P.2d 303; Vogh v. Workmen's Comp. App. Bd. (1968) 264 Cal.App.2d 724, 728-729, 70 Cal.Rptr. 722; disapproved on another point in Adams, supra, 18 Cal.3d at p. 231, 133 Cal.Rptr. 517, 555 P.2d 303; see also, Langer v. Workmen's Comp. App. Bd. (1968) 258 Cal.App.2d 400, 406, fn. 3, 65 Cal.Rptr. 598.)
Exempting payments timely and voluntarily paid prior to the issuance of the award encourages the employer (or his carrier) to correct his error in payment by bringing payments up to date and continue to pay promptly. If voluntary and timely payments were not so exempt the employer has no incentive to correct his error. While there may be multiple penalties for separate and distinct acts of delay or non-payment, a single act of misconduct may only result in one penalty. (Gallamore, supra, 23 Cal.3d at pp. 823-824, 153 Cal.Rptr. 590, 591 P.2d 1242.)
Here, while County admittedly initially delayed in making permanent disability advances, County voluntarily brought the payments up to date on July 11, 1977, and continued to make timely payments thereafter. The penalty does not apply to the permanent disability advances voluntarily and timely paid commencing on July 11, 1977 until the issuance of the findings and award. The penalty does apply to the permanent disability payments actually delayed and those which are payable pursuant to the issued findings and award of June 9, 1978.
The final question is whether the penalty should apply to the life pension.
In Manning v. Workmen's Comp. App. Bd. (1970) 10 Cal.App.3d 655, 89 Cal.Rptr. 76, the carrier failed to timely make permanent disability payments under an award and the penalty was also applied by the Board to the life pension. The sole issue before the court in Manning, however, was "whether the penalty should have been computed by applying the penalty to temporary disability benefits previously paid under an earlier award as well as on the award of...
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