Azevedo v. Abel
| Decision Date | 26 July 1968 |
| Citation | 70 Cal.Rptr. 710,264 Cal.App.2d 451 |
| Parties | Alice L. AZEVEDO, Plaintiff and Appellant, v. Ruth ABEL, as Executrix of the Estate of Emanuel M. Abel etc., Deceased, Defendant and Respondent. PACIFIC INDEMNITY COMPANY, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD of the State of California, Alice Azevedo and Emanuel Abel, dba the Surrey, Respondents. Civ. 11623, 11800. |
| Court | California Court of Appeals Court of Appeals |
Hanna & Brophy, Sacramento, for petitioner.
Eugene C. Treaster, Sacramento, for plaintiff-appellant.
Everett Corten and Rupert Pedrin, San Francisco, for Workmen's Compensation Appeals Bd.
Eugene C. Treaster, Sacramento, for Azevedo.
White, Harber, Fort & Schei, Sacramento, for estate of Abel.
Van Gelder, Sypnicki & McClarrinon, Sacramento, for Emanuel Abel.
White, Harber, Fort & Schei, Sacramento, for defendant-respondent.
Alice Azevedo, employee in a retail dress shop, was injured when Abel, her angry employer, kneed her in the sacrococcyx area. Occurrence of the injury in the course of her employment is undisputed. She first filed a claim for workmen's compensation benefits, then commenced a lawsuit in the superior court seeking compensatory and punitive damages. Later the employer died. His compensation carrier, Pacific Indemnity Company, defends the workmen's compensation proceeding. His executrix has been substituted as defendant in the damage suit.
In December 1965 the Industrial Accident Commission (predecessor of the Workmen's Compensation Appeals Board) dismissed the compensation proceeding, believing that it lacked jurisdiction to make an award where the injury was intentionally inflicted by the employer. 1 This court granted review. In Azevedo v. Industrial Accident Comm. (1966) 243 Cal.App.2d 370, 52 Cal.Rptr. 283, we set aside the dismissal and ordered resumption of the compensation proceedings. Disapproving our earlier decision in Conway v. Globin (fn. 1, supra), we held that an industrially connected, albeit intentionally inflicted, injury is compensable.
The scene then shifted to the superior court, which granted a defense motion for dismissal of the damage action. 2 Mrs. Azevedo appealed from the judgment. In the renewed workmen's compensation proceeding, however, she was awarded temporary and permanent disability benefits, medical expenses and further medical treatment. We granted Pacific Indemnity's petition for a review of the award. For the purpose of decision, we have consolidated Mrs. Azevedo's appeal from the adverse superior court judgment and Pacific Indemnity's petition for review of the compensation award.
Pacific Indemnity cites provisions of California law, particularly Insurance Code, section 533 and Civil Code, section 1668, prohibiting insurance and indemnification against willful injury. 3 Thus, it contends that the employer's compensation insurance does not provide coverage against his intentional assault upon the employee; that the Appeals Board erred in holding the insurance carrier; that, as to this willful injury, the employer has failed to provide compensation security, thus permitting the employee to invoke Labor Code, section 3706 (fn. 2, supra) and to pursue common law and workmen's compensation remedies concurrently.
Labor Code, section 3600 declares in effect that Liability for workmen's compensation shall be in lieu of any other liability; section 3601 that the Right to recover workmen's compensation shall be the exclusive Remedy for the employee's injury or death. Used to denote exclusiveness or concurrency, words such as these tend to becloud the important distinction between substantive entitlement and procedural means. While these terms are often used interchangeably, a 'right' is generally a claim which the law will enforce, 4 while a 'remedy' refers to the judicial means by which it is made effective. 5 Essentially, sections 3600 and 3601 are substantive declarations, fixing the employee's claim to those benefits declared by the compensation law and foreclosing entitlement to the damages traditionally available through the courts of law. Strictly speaking, then, these provisions do not point to a tribunal with exclusive jurisdiction to supply a remedy. That function is served by Labor Code, section 5300, which designates the Workmen's Compensation Appeals Board as the exclusive tribunal to award workmen's compensation benefits. 6 Section 5300 really declares the procedural or jurisdictional result of substantive decisions reached under sections 3600 and 3601.
Regard for the distinction between substantive and procedural declarations facilitates analysis of the pertinent decisions. In Scott v. Industrial Accident Comm. (1956) 46 Cal.2d 76, 293 P.2d 18, the court was confronted with the practical problem arising when either one of two tribunals has an exclusive jurisdiction which cannot be discerned until such time as a final decision on substantive entitlement is reached. Scott holds that--as between the workmen's compensation agency and the trial courts--the tribunal first assuming jurisdiction retains it to the exclusion of the tribunal invoked later (46 Cal.2d at p. 81, 293 P.2d 18); that the only point of concurrent jurisdiction is jurisdiction to determine jurisdiction (46 Cal.2d at p. 83, 293 P.2d 18); if the claim is not covered by workmen's compensation the industrial accident agency (now the Appeals Board) has no jurisdiction to give relief, and if there is coverage the superior court is without jurisdiction (46 Cal.2d at p. 83, 293 P.2d 18); that a final determination as to coverage by either tribunal will be Res judicata in subsequent proceedings between the parties or their privies (46 Cal.2d at p. 83, 293 P.2d 18); that the tribunal first invoked should proceed to determine jurisdiction, while the second will be restrained if it attempts to do so (46 Cal.2d at p. 81, 293 P.2d 18.)
Taylor v. Superior Court (1956) 47 Cal.2d 148, 301 P.2d 866, represents an application of the concept developed in Scott, holding that the superior court should not proceed to trial in the damage action where an earlier-commenced compensation proceeding is pending. Essentially, Scott and Taylor deal with the problem of remedy or jurisdiction, not substantive entitlement.
Substantive entitlement, however, was the central problem in our former decision in this case, Azevedo v. Industrial Accident Commission, supra. The substantive question was whether the employee had a right to workmen's compensation benefits for an injury intentionally inflicted by the employer. We held in the affirmative. Procedurally, we went no farther than to declare, in conformity with the Scott case, that the workmen's compensation agency had jurisdiction to decide the question of coverage where its jurisdiction had been first invoked (243 Cal.App.2d at pp. 376--377, 52 Cal.Rptr. 283).
In Carter v. Superior Court (1956) 142 Cal.App.2d 350, 298 P.2d 598, the employee had secured an award from the workmen's compensation agency for injuries inflicted by an assaultive employer, then brought a civil damage action. Holding that the compensation agency's final decision in favor of coverage was Res judicata, the court restrained further prosecution of the civil damage action. Carter too was a procedural decision, since the employee's entitlement to workmen's compensation benefits was not in question. The substantive problem of entitlement to civil damages vanished with the denial of access to the civil courts. 7
Here the parties do not question Mrs. Azevedo's sustantive entitlement to workmen's compensation benefits. The compensation carrier, however, disclaims insurance coverage, on the theory that statutory declarations of public policy outside the workmen's compensation law preclude insurance covering willful injury by the policyholder. Specifically, the insurer relies on Insurance Code section 533 and Civil Code, section 1668 (). These provisions establish a public policy to prevent insurance coverage which has the effect of encouraging willful torts. 8 Case law qualifies the policy in some respects. For example, recovery against the insurer under a subsequent estoppel does not encourage unlawful conduct and is not precluded by the policy statutes. (Ibid.)
No California decision has considered the system of workmen's compensation insurance in relation to the statutory ban on insurance against willful injury liability. The workmen's compensation law, Labor Code, section 3700, provides that private employers 'shall secure the payment of compensation' either by liability insurance or by a certificate of consent to self-insure. Section 15 of the same code states that 'shall' is mandatory. Section 3710.2 declares that failure to secure the payment of compensation is a misdemeanor. As to employers not covered by approved self-insurance, these provisions impose a statutory obligation to insure, an obligation which must be met before the actual necessity for payment arises, not when compensation is already payable. 9 Liability policies, when approved by the State Insurance Commissioner, may restrict coverage by risks, persons or occupations. (Ins.Code, §§ 11657--11660, Fyne v. Industrial Accident Comm. (1956) 138 Cal.App.2d 467, 473, 292 P.2d 78.) The authority for restrictions or exclusions in individual policies does not permit gaps in the coverage of the employer's Ordinary liability for disability payments and medical expenses. The workmen's compensation law demands security for this ordinary liability in advance of injury. It does not pretermit this demand in the case of perils caused by the employer's willful tort. There is, then, a surface conflict between the compensation law's demand for secured compensation and the statutory police against insurance for willful torts.
The conflict disappears in the light of additional statutes. Labor Code, section 4553...
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