Dep't of Corr. & Rehab. v. Workers' Comp. Appeals Bd.

• Decision Date: 25 September 2018
• Docket Number: C085850
• Citation: 27 Cal.App.5th 607,238 Cal.Rptr.3d 224
• Court: California Court of Appeals Court of Appeals
• Parties: DEPARTMENT OF CORRECTIONS AND REHABILITATION, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and Dean Fitzpatrick, Respondents.

27 Cal.App.5th 607

238 Cal.Rptr.3d 224

DEPARTMENT OF CORRECTIONS AND REHABILITATION, Petitioner,

v.WORKERS' COMPENSATION APPEALS BOARD and Dean Fitzpatrick, Respondents.

C085850

Court of Appeal, Third District, California.

Filed September 25, 2018

Carla R. Anene, Mary R. Huckabaa, Riverside, and Lisa A. Stolzy, for Petitioner.

Finnegan, Marks, Theofel & Desmond, Randall G. Poppy, for the California Chamber of Commerce, as Amicus Curiae on behalf of Petitioner.

John F. Shields, Santa Rosa, for Respondent Workers Compensation Appeals Board.

Metzinger & Associates and Ronald M. Metzinger, Sacramento, for Respondent Dean Fitzpatrick.

Law Office of Joseph Waxman and James Achermann, San Francisco, for the California Applicants' Attorneys Association, as Amicus Curiae on behalf of Respondent Dean Fitzpatrick.

Robie, J.

We granted the Department of Corrections and Rehabilitation’s (Department) petition for a writ of review (Petition) of a Workers' Compensation Appeals Board (Board) opinion, which raises the following statutory construction question: Must a finding of permanent total disability¹ be made in accordance with Labor Code 2

section 4660,³ or does section 4662, subdivision (b), provide a separate path to such a finding? We conclude section 4660 governs how the finding and award of permanent total disability shall be made "in accordance with the fact," as provided in section 4662, subdivision (b).

GENERAL BACKGROUND

"The right to workers' compensation benefits is wholly statutory and is not derived from common law." ( DuBois v. Workers' Comp. Appeals Bd. (1993) 5 Cal.4th 382, 388, 20 Cal.Rptr.2d 523, 853 P.2d 978.) To assist in a better understanding of the finding and award subject to this appeal and the discussion that follows, we begin with the general background of the applicable statutory and regulatory framework underlying workers' compensation permanent disability awards.

IThe Permanent Disability System Generally

"Employers are responsible to workers who sustain permanent disabling injuries that arise out of and in the course of their employment." ( Ogilvie v. Workers' Comp. Appeals Bd. (2011) 197 Cal.App.4th 1262, 1269, 129 Cal.Rptr.3d 704.) "A permanent disability is the irreversible residual of a work-related injury that causes impairment in earning capacity, impairment in the normal use of a member or a handicap in the open labor market." ( Id . at p. 1270, 129 Cal.Rptr.3d 704.) "A disability is considered permanent when the employee has reached maximal medical improvement, meaning his or her condition is well stabilized, and unlikely to change substantially in the next year with or without medical treatment." ( Cal. Code Regs., tit. 8, § 10152.)

There are two types of permanent disability: partial and total. Permanent total disability is "a permanent disability with a rating of 100 percent permanent disability only." (§ 4452.5, subd. (a).) Permanent partial disability is "a permanent disability with a rating of less than 100 percent permanent disability." (§ 4452.5, subd. (b).)

" ‘Permanent disability payments are calculated by first expressing the degree of permanent disability as a percentage and then converting that percentage into an award based on a table.’ [Citation.] Since 1937, permanent disability awards have been assessed using a schedule that ‘was always expressly intended to manifest "prima facie evidence of the percentage of permanent disability to be attributed to each injury covered by the schedule." ’ " ( Ogilvie v. Workers' Comp. Appeals Bd. , supra , 197 Cal.App.4th at p. 1270, 129 Cal.Rptr.3d 704.) "In 2004, the Legislature enacted omnibus changes to California’s workers' compensation system as ‘an urgency measure designed to alleviate a perceived crisis in skyrocketing workers' compensation costs.’ " ( Ibid . ) The revised provisions, including section 4660, "substantially affected the assessment of an injured worker’s permanent disability." ( Milpitas Unified School Dist. v. Workers' Comp. Appeals Bd. (2010) 187 Cal.App.4th 808, 818, 115 Cal.Rptr.3d 112 ; Stats. 2004, ch. 34, § 32.)

IIThe Pertinent Statutes And Administrative Rule

A Section 4660

" Section 4660 prescribes the method for determining the percentages of permanent disability for workers' compensation purposes" for "injuries occurring before January 1, 2013." ( Chang v. Workers' Comp. Appeals Bd. (2007) 153 Cal.App.4th 750, 753, 63 Cal.Rptr.3d 219 ; § 4660.) "In determining the percentages of permanent disability, account shall be taken of the nature of the physical injury or disfigurement, the occupation of the injured employee, and his or her age at the time of the injury, consideration being given to an employee’s diminished future earning capacity." ( § 4660, subd. (a).) The " ‘nature of the physical injury or disfigurement’ " requirement "shall incorporate the descriptions and measurements of physical impairments and the corresponding percentages of impairments published in the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition)" (hereinafter Guides) and "an employee’s diminished future earning capacity shall be a numeric formula based on empirical data and findings from [a 2003 report] prepared by the RAND Institute for Civil Justice, and upon data from additional empirical studies" ( § 4660, subd. (b)(1) & (2) ).

Although "[a] schedule for assessing permanent disability had been required since 1937 ... no guidance was provided for the formulation of the schedule until the 2004 amendment." ( Milpitas Unified School Dist. v. Workers' Comp. Appeals Bd. , supra , 187 Cal.App.4th at p. 818, 115 Cal.Rptr.3d 112.) In section 4660, subdivision (c), the Legislature directed the administrative director "to develop and regularly amend the rating schedule based on specified data from empirical studies." ( Milpitas , at p. 818, 115 Cal.Rptr.3d 112.) "The schedule is to ‘promote consistency, uniformity, and objectivity’ [citation], and the scheduled rating continues to be ‘prima facie evidence of the percentage of permanent disability to be attributed to each injury covered by the schedule.’ " ( Ogilvie v. Workers' Comp. Appeals Bd. , supra , 197 Cal.App.4th at p. 1271, 129 Cal.Rptr.3d 704 ; § 4660, subds. (c) & (d).)

BAdministrative Rule

In accordance with the Legislature’s directive in section 4660, subdivision (c), the administrative director adopted and published a revised schedule for rating permanent disabilities effective January 1, 2005 (2005 Schedule), "which incorporated the fifth edition of the Guides in its entirety." ( Milpitas Unified School Dist. v. Workers' Comp. Appeals Bd. , supra , 187 Cal.App.4th at p. 818, 115 Cal.Rptr.3d 112 ; Cal. Code Regs., tit. 8, § 9805 ; 2005 Schedule, p. 1-2.)

The 2005 Schedule states: "A permanent disability rating can range from 0% to 100%. Zero percent signifies no reduction of earning capacity, while 100% represents permanent total disability. A rating between 0% and 100% represents permanent partial disability. Permanent total disability represents a level of disability at which an employee has sustained a total loss of earning capacity. Some impairments are conclusively presumed to be totally disabling. ( Lab. Code, § 4662.)" (2005 Schedule, pp. 1-2-1-3.) The process for calculating the permanent disability rating consists of multiple steps.

Generally, the evaluating physician first prepares an impairment rating for each body part arising out of the injury in accordance with the Guides. (2005 Schedule, p. 1-2.) "Initial impairment ratings are consolidated by body part ... and converted to a whole person impairment rating." (Ibid. ) A psychiatric impairment is evaluated by a physician using the global assessment of function (GAF) scale and the resultant score is then converted to a whole person impairment rating using the conversion table in the 2005 Schedule. (2005 Schedule, p. 1-12.) The whole person impairment rating is expressed as a percentage ( Almaraz v. Environmental Recovery Services/Guzman v. Milpitas Unified School Dist. (2009) 74 Cal.Comp.Cases 1084, 1092 ) and "then adjusted to account for diminished future earning capacity, occupation and age at the time of injury to obtain a final permanent disability rating" (2005 Schedule, p. 1-2).

As applicable here, "[a] single injury can result in multiple impairments of several parts of the body. ... Multiple impairments must be combined in a prescribed manner to produce a final overall rating."⁴ (2005 Schedule, p. 1-5.) "When combining two or more ratings to create a composite rating, the ratings must be expressed in the same scale" and the numbers "are generally combined using the following formula where ‘a’ and ‘b’ are the decimal equivalents of the impairment or disability percentages: [¶] a+b(1-a)" (Formula). (2005 Schedule, pp. 1-3, 1-10.) Except for specified impairments (not applicable here), "all impairments are converted to the whole person scale, adjusted, and then combined to determine the final overall disability rating." (2005 Schedule, p. 1-11.)

Section 8 of the 2005 Schedule contains the combined values chart (Chart), and states: "Use this chart to combine two or more impairments, or two or more disabilities." (2005 Schedule, p. 8-1.) The combined values in the Chart range from 2% to 100%. (2005 Schedule, pp. 8-2-8-4.) The Guides describe the Chart as "[a] method used to combine multiple impairments, derived from the formula A+B(1-A) = combined values of A and B, which ensures that the summary value will not exceed 100% of the whole person." (Guides, p. 600.)

"In many cases, ... the revision to the schedule for rating permanent disabilities [in the 2005 Schedule] reduces the amount a worker will be compensated for a permanent disability," as compared to the prior schedule. ( Genlyte Group, LLC v. Workers' Comp. Appeals Bd. (2008) 158 Cal.App.4th 705, 715-716, 69 Cal.Rptr.3d 903, fn. omitted; see, e.g., Vera v. Workers' Comp. Appeals Bd. (2007) 154 Cal.App.4th 996, 1000, 65...