Castro v. Fowler Equipment Co.

• Decision Date: 02 April 1965
• Court: California Court of Appeals Court of Appeals
• Parties: Jose CASTRO, Plaintiff and Respondent, v. FOWLER EQUIPMENT CO., Defendant and Appellant. Civ. 461.

Page 589

43 Cal.Rptr. 589

233 Cal.App.2d 416

Jose CASTRO, Plaintiff and Respondent, v. FOWLER EQUIPMENT CO., Defendant and Appellant.

Civ. 461.

District Court of Appeal, Fifth District, California.

April 2, 1965.

Rehearing Denied April 30, 1965.

Hearing Denied May 26, 1965.

Ives, Kirwan & Dibble and Martin J. Kirwan, Los Angeles, for appellant.

Byhower, Longley & Vaughan and Arthur N. Hews, Santa Ana, for respondent.

RALPH M. BROWN, Justice.

This is an appeal brought by appellant from a judgment entered pursuant to a jury verdict in favor of respondent. Appellant also seeks a review of an order denying its motion for a new trial.

No charge of insufficiency of the evidence being made, the facts pertinent to this appeal may be briefly summarized. Respondent sustained serious injuries while acting within the course and scope of his employment as an employee of Nordstrom & Faccou Cement Contractors. He filed this common law action for damages for both present injuries and future disablement against appellant and Welch's Ready-Mixed Concrete, Inc. At the time of trial a nonsuit was granted as to the latter corporation. Appellant cross-complained against the employer, Nordstrom & Faccou, and its compensation carrier, the State Compensation Insurance Fund, seeking a reduction against any judgment the respondent might recover in an amount equal to workmen's compensation benefits paid or to be paid in the future to the respondent, on the theory that the employer's negligence caused or contributed to the respondent's injuries. The State Compensation Insurance Fund, in turn, cross-complained against appellant under the doctrine of subrogation, seeking to recover reimbursement for the amount of compensation paid.

At the time of trial compensation benefits actually paid were shown to total $12,862.51. At that time the respondent's permanent injuries had not then been rated by the Industrial Accident Commission and there was no award for future benefits. The Fund, in open court, waived its right to reimbursement for any additional benefits which might be paid to respondent.

A jury returned a verdict in favor of respondent and against appellant awarding damages in the sum of $157,490.51, less a deduction of $12,862.51, for a net award of $144,628. A second verdict was returned in favor of the appellant and against the State Compensation Insurance Fund. Appellant's motion for a new trial having been denied, it brought this appeal.

Two grounds of appeal are presented: (1) the trial court erred in not permitting appellant to introduce evidence of future benefits the respondent was entitled to receive under the applicable provisions of the compensation policy of the State Compensation Insurance Fund; and (2) the trial court erred in failing to instruct the jury on issues raised by the appellant's cross-complaint. Appellant also states that the trial court abused its discretion in denying its motion for a new trial based on one of the questions answered on voir dire by one of the jurors.

The appellant contends that the trial court erred in excluding its proffered testimony of the monetary value of future compensation benefits (as distinguished from benefits actually paid) which respondent was entitled to receive under the provisions of the Workmen's Compensation Act. At the time of the trial respondent's permanent injuries had not been rated, nor had a permanent award been made by the Industrial Accident Commission.

During the course of the trial the respondent introduced considerable evidence tending to established damages for his future disablement which undoubtedly contributed substantially to the amount of the jury's award. At the trial the appellant introduced contrary evidence as to the permanent disability of the respondent and attempted to introduce evidence of the monetary value of the benefits that the respondent was eligible to receive as compensation benefits. The court at the argument relied on Witt v. Jackson, 57 Cal.2d 57, 17 Cal.Rptr. 369, 366 P.2d 641, and stated that this type of a situation has to be resolved by the Legislature, and ruled that such testimony by an expert as to what the Industrial Accident Commission would rule is too speculative and conjectural.

The appellant points out that in its opinion there is no method available to a third party defendant in an action brought by an injured employee to prevent double recovery on the part of the employee after the judgment in his common law action has become final. In the cases of Witt v. Jackson, supra; City of Sacramento v. Superior Court of Sacramento County, 205 Cal.App.2d 398, 23 Cal.Rptr. 46; Tate v. Superior Court of Los Angeles County, 213 Cal.App.2d 238, 28 Cal.Rptr. 548; and Dauer v. Aerojet General Corp., 224 Cal.App.2d 175, 36 Cal.Rptr. 356, the injured employee was prohibited from recovering double compensation by permitting the third party tortfeasor a reduction against the amount of the judgment in favor of the employee. In the Witt case, the court pointed out that under the Workmen's Compensation Act an employer may recover the amount expended by way of compensation benefits in three ways: by an independent action, by joining in the employee's action, or by claiming a lien on the employee's judgment. On the rationale that it is contrary to the policy of the law to permit an employer who is contributively negligent, or his subrogated carrier, to profit by the wrong of the employer, the court laid down these rules:

'Thus, whether an action is brought by the employer or the employee, the third party tortfeasor should be able to invoke the concurrent negligence of the employer to defeat its right to reimbursement, since, in either event, the action is brought for the benefit of the employer to the extent that compensation benefits have been paid to the employee.' (57 Cal.2d p. 72, 17 Cal.Rptr. p. 377, 366 P.2d p. 649.)

'Since, however, the injured employee may not be allowed double recovery, his damages must be reduced by the amount of workmen's compensation he received.' (57 Cal.2d p. 73, 17 Cal.Rptr. p. 378, 366 P.2d p. 650.)

City of Sacramento v. Superior Court of Sacramento County, supra, 205 Cal.App.2d 398, 23 Cal.Rptr. 43, was a mandamus proceeding to compel the Superior Court to permit the defendants in a suit brought by the injured employee to bring in as new parties the employer (who was allegedly negligent), and the State Compensation Insurance Fund, its insurer, by way of a cross-complaint. On the theory that the right of the third party tortfeasor is a substantive right which could not be lost by a circumstance wholly beyond his control, namely, whether the employer elected to sue or join in the suit, on the one hand, or wait to enforce his lien, on the other, the court held that the cross-complaint should be allowed and a peremptory writ was granted.

Tate v. Superior Court of the Los Angeles County, supra, 213 Cal.App.2d 238, 28 Cal.Rptr. 548, was also a proceeding in mandamus to compel the superior court to take various actions to the end that the third party defendants in the suit brought by the employee would be permitted to amend their answer to raise the defense of the employer's contributory negligence. It was held that the defense could be raised by joining the employer and its carrier, but that since the latter were not indispensable parties, it could be raised by an answer in the employee's suit without such joinder.

Respondent was entitled as a matter of law to bring his third party action against the third party negligent tortfeasor for damage unaffected by any compensation. (Lab.Code § 3852.) The employer had a right to, and did, join in the said proceeding. (Lab.Code § 3856.) Under Tate v. Superior Court, supra, a third party tortfeasor has a right to claim the contributing negligence of the employer and to claim a set-off.

In Witt v. Jackson, supra, at page 70 of 57 Cal.2d, 17 Cal.Rptr. 369, 366 P.2d 641, the court held that in the absence of the Workmen's Compensation Act, a negligent third party would be allowed contribution against a concurrently negligent employer if the conditions of Code of Civil Procedure sections 875 to 880 are met. (Joint tortfeasor act.) (See also Chick v. Superior Court In and For City and County of San Francisco, 209 Cal.App.2d 201, 204, 25 Cal.Rptr. 725.)

No rating having been made by the Industrial Accident Commission, it is impossible for any court to determine what that rating might be. The Commission has exclusive jurisdiction to determine compensation even where a third party action is brought before jurisdiction of the Commission has been invoked. (Sanstad v. Industrial Acc. Com., 171 Cal.App.2d 32, 39, 339 P.2d 943.)

Labor Code section 3858 reads as follows:

'After payment of litigation expenses and attorneys' fees fixed by the court pursuant to Section 3856 and payment of the employer's lien, the employer shall be relieved from the obligation to pay further compensation to or on behalf of the employee under this division up to the entire amount of the balance of the judgment, if satisfied, without any deduction. No satisfaction of such judgment in whole or in part, shall be valid without giving the employer notice and a reasonable opportunity to perfect and satisfy his lien.'

Even though a rating had been made by the Industrial Accident Commission, it does not necessarily follow that the respondent would receive all that such award would allow as it may be terminated by death or other events, and to require that the respondent should have his judgment against the tortfeasor reduced by that amount would mean that he would not be able to collect on his common law right but would have to wait for payments on a weekly basis unless he made a lump-sum settlement.

It would have been improper for the jury to have heard testimony and made a finding of fact as to what the Industrial Accident Commission might award the respondent in the event of a hearing. How...