Ferguson v. Industrial Acc. Commission

• Decision Date: 06 June 1958
• Citation: 50 Cal.2d 469,326 P.2d 145
• Court: California Supreme Court
• Parties: Lester FERGUSON, Petitioner, v. INDUSTRIAL ACCIDENT COMMISSION of the State of California; Subsequent Injuries Fund; Birdo Burks, dba Thrifty Super Market; Casualty Insurance Company of California, Respondents. L. A. 24914.

Page 145

326 P.2d 145

50 Cal.2d 469

Lester FERGUSON, Petitioner, v. INDUSTRIAL ACCIDENT COMMISSION of the State of California; Subsequent Injuries Fund; Birdo Burks, dba Thrifty Super Market; Casualty Insurance Company of California, Respondents.

L. A. 24914.

Supreme Court of California, In Bank.

June 6, 1958.

As Modified on Denial of Rehearing July 2, 1958.

William M. Sarnoff and Donald Franz, Los Angeles, for petitioner.

Everett A. Corten, San Francisco, Edward A. Sarkisian, Los Angeles, Edmund G. Brown, Atty. Gen., Miles J. Rubin and Gerald F. Carreras, Deputy Attys. Gen., for respondents.

SCHAUER, Justice.

Petitioner seeks annulment of a decision and award of respondent Industrial Accident Commission denying his application for compensation payments from respondent Subsequent Injuries Fund (hereinafter sometimes termed the fund). We have concluded that 'labor disablement' rather than 'employer knowledge' is the essential factor by which to gauge the previously sustained disablement in determining whether that disability qualifies petitioner for resort to the fund, and that the matter should be remanded to the commission for redetermination in the light of the views hereinafter set forth.

On February 2, 1956, petitioner, then 43 years of age, sustained a fractured right hip arising out of and occurring in the course of his employment as a meat cutter. His claim against his employer and the latter's insurance carrier, based on the industrial injury, has been settled by an approved compromise and release, and the present case concerns only petitioner's asserted right to payments from respondent fund under the provisions of section 4751 of the Labor Code ¹ as amended effective September 7, 1955.

During convalescence from the hip fracture (i. e., from the industrial injury), it was discovered that petitioner was suffering from progressive muscular dystrophy. His application for compensation payments from the fund followed. For the purpose of determining the application the trial referee found that petitioner's industrial injury resulted in a permanent disability rated at 14 1/2 per cent; that petitioner 'had a previous permanent partial disability consisting of primary progressive muscular dystrophy affecting * * * lower extremities'; and that the combination of the disabilities resulted in a permanent disability of 100 per cent, entitling petitioner to certain subsequent injuries payments from respondent fund.

On petition of the fund respondent commission granted reconsideration and, on the sole and specific ground that petitioner had failed to prove that his employer knew of the pre-existing disability, concluded that petitioner was not entitled to payments from the fund. ² In so doing the commission relied on four opinions by the District Court of Appeal which state or hold that proof of knowledge by the employer of the previous disability is a prerequisite to payments under section 4751. (State of California, Subsequent Injuries Fund v. Industrial Acc. Comm. (Baldes) (1957), 150 Cal.App.2d 716, 311 P.2d 26; State of California v. Industrial Acc. Comm. (Bachrach) (1957), 147 Cal.App.2d 818, 306 P.2d 64; Urquiza v. Industrial Acc. Comm. (1956), 144 Cal.App.2d 322, 300 P.2d 871; State of California, Subsequent Injuries Fund v. Industrial Acc.Comm. (Strauss) (1955), 135 Cal.App.2d 544, 288 P.2d 31.)

In the earliest of these four cases (Strauss) the applicant had suffered a heart attack while lifting some objects in the course of his employment. His resultant 90 per cent disability was determined to be partially due to the lifting and partially due to pre-existing heart disease. Uncontradicted evidence indicated that prior to the lifting incident the heart condition was unknown, did not interfere with the applicant's work ability and could not have been diagnosed had the applicant submitted to a heart examination. The commission nevertheless found that at the time of his injury the applicant 'suffered from a previous physical disability' within the meaning of section 4751. The court annulled that part of the award which provided for subsequent injuries payments and, in the course of its opinion, referred to Zyla v. A. D. Juilliard & Co. (1951), 277 App.Div. 604, 102 N.Y.S.2d 255 (holding that 'employer knowledge' is essential to payments from the New York counterpart of our Subsequent Injuries Fund), and concluded 'that section 4751 * * * was not intended to apply to asymptomatic disease processes which were unknown to both employee and employer and which in nowise interfered with the employee's ability to work.' (At page 553 of 135 Cal.App.2d, 288 P.2d at page 36; italics added.)

The above stated conclusion is fully consistent with the fundamental requirement of the statute as to status for eligibility to resort to the fund; i. e., that the employe be one who already 'is permanently partially disabled.' (Lab.Code, § 4751.) But the language of the Strauss case goes farther. It articulates the inception in California of the 'employer knowledge' requirement, and it is against that concept that Ferguson directs his attack. He argues that the court erred in relying upon New York decisions to support the proposition that 'employer knowledge' is requisite to payments under section 4751, and points to the fact that the New York statute is significantly different from ours. There the employer is made liable not only for the disability resulting from the industrial injury but also for the disability flowing from the employe's pre-existing condition. Such is not the case in California. (See Lab.Code, § 4750. ³) It is the New York employer, rather than the employe, who must seek the benefits of the New York counterpart of our Subsequent Injuries Fund, and the New York courts have held that the employer must prove that he had knowledge of the employe's pre-existing impairment before he qualifies for reimbursement. New York reasons that the purpose of the statute is to encourage employment of handicapped persons and that the legislative intent is not furthered by reimbursing an employer who did not know of the employe's pre-existing handicap. (See Zyla v. A. D. Juilliard & Co. (1951), supra, 277 App.Div. 604, 102 N.Y.S.2d 255.)

Be that as it may, and despite the difference between the New York and California statutes, section 4751 is a constituent part of the subsequent injuries legislation of this state (Lab.Code, §§ 4750-4755) which this court, so treating it, has sustained against constitutional attack, on the ground, inter alia, that such legislation is designed, and is appropriate, to encourage employment of handicapped persons and that such purpose is encompassed in the constitutional authorization. (Subsequent Injuries Fund v. Industrial Acc. Comm. (1952), 39 Cal.2d 83, 86, 244 P.2d 889.)

Nevertheless, neither section 4751 nor any other provision of the subsequent injuries legislation nor any decision of this court requires that the employer have knowledge of the employe's pre-existing condition as a basis for a Subsequent Injuries Fund claim by an employe who already 'is permanently partially disabled (and who) receives a subsequent compensable injury.' The purpose of the legislation to encourage employment of persons who are 'permanently partially disabled' is subserved if the further protection provided by the fund encourages either employers to offer, or the described handicapped persons to seek or accept, such employment. A person who already 'is permanently partially disabled' to the substantial extent contemplated by the statute as by the loss of 'a hand, an arm, a foot, a leg, or an eye' to meet the requirement of subdivision (a), or that will combine with the subsequent injury of 40 per cent or more to make a minimum combined effect of 70 per cent of total permanent disability as required by subdivision (b) may well need the encouragement afforded by the fund as an inducement to seek further gainful employment. By such employment he may risk the aggravated effect of loss of 'the opposite and corresponding member' as defined in subdivision (a) or the grave percentage of totality described in subdivision (b). Whether full employer knowledge of pre-existing employe disabilities is or is not desirable, or should or should not be encouraged by the statute, is beside the point here. Certainly employers are entitled to know all relevant and material facts concerning the physical condition of prospective employes just as such employes are entitled to be informed as to hours of labor, working conditions, etc. But all such matters should be the subject of discussion before the contract of employment is made. If prospective employers wish to be informed of pre-existing disabilities before entering into an employment contract, they are in a position to acquire the pertinent data by means, for example, of requiring the filling out of an application blank including a statement of physical condition, or by requiring a physical examination by a doctor as does the State of California before accepting applicants into permanent employment in civil service positions. (See Gov.Code, §§ 18931, 18935.)

The fund, in support of its argument favoring an employer-knowledge rule, refers to the fact that as pointed out in the Strauss case (135 Cal.App.2d 544, 553, 288 P.2d 31), in the 'Subsequent Injuries Fund Report of the Sub-committee of Assembly Interim Committee on Finance and Insurance' (vol. 15, No. 7, 1953-1955, Assembly Interim Committee Reports), attention is called to the wide variety of pathologies (most of them asymptomatic, i. e., unmanifested) which have been urged as a basis for commission awards against the Subsequent Injuries Fund: 'heart disease; arthritic processes; nervous tremors; Parkinson's disease; tuberculosis; syphilis; varicosities; diabetes; hysteria, and other forms of mental derangement; harelip; speech impediments; weak abdominal walls; decreased mental capacity; epilepsy;...