Ferguson v. Workers' Comp. Appeals Bd., A063246

• Decision Date: 13 April 1995
• Docket Number: No. A063246,A063246
• Citation: 39 Cal.Rptr.2d 806,33 Cal.App.4th 1613
• Court: California Court of Appeals Court of Appeals
• Parties: Judy A. FERGUSON, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and Raley's Supermarkets, Respondents.

Page 806

39 Cal.Rptr.2d 806

33 Cal.App.4th 1613

Judy A. FERGUSON, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and Raley's Supermarkets, Respondents.

No. A063246.

Court of Appeal, First District, Division 2, California.

April 13, 1995.

Review Denied July 13, 1995.

Mark E. Gearheart, Pleasant Hill, for petitioner

William B. Donohoe, Asst. Secretary, WCAB Legal Unit, San Francisco, for respondent WCAB.

Law Offices of Joseph J. D'Andre, Mark R. Lippman, Mark R. Peterson, San Francisco, for respondent Raley's Supermarkets.

KLINE, Presiding Justice.

This case presents the heretofore unresolved question whether the 50 percent increase in workers' compensation recovery provided in Labor Code section 4553 ¹ for cases of serious and willful misconduct by an employer is to be calculated on the basis of the entire workers' compensation award, including nonindemnity payments, or must be calculated only on the basis of the compensation indemnity. We hold that the 50 percent increase is to be calculated on the entire award, not just compensation indemnity, provided the total benefits do not exceed the amount necessary to fully compensate the worker.

BACKGROUND

On September 14, 1988, petitioner Judy Ferguson (applicant) slipped and fell on a wet floor while employed as a general merchandise clerk for respondent Raley's Supermarkets (Raley's). This admitted industrial injury resulted in the need for medical treatment and vocational rehabilitation. Applicant was paid temporary disability indemnity and awarded a permanent disability indemnity of 61 percent, the equivalent of $66,780, payable at $210 per week.

Applicant also sought a 50 percent increase in her award under section 4553, alleging serious and willful misconduct by Raley's. The matter proceeded to hearing on April 24, 1991, before Workers' Compensation Judge (WCJ) Christopher E. Hamilton. It was undisputed that there were no safety mats on the linoleum floor in the kitchen area, which was frequently wet and slippery from water and grease as a result of spray from a sink and a backed up drain. It was also undisputed that Raley's knew of the dangerous condition, as other employees had fallen and complained to management. Applicant's work supervisor was aware of the dangerous condition, but chose not to put down safety mats because they were a "nuisance." Instead, employees were advised to "walk like a duck" in the wet kitchen area. Other than advising employees to walk carefully, Raley's took no action to correct the hazardous condition.

On August 29, 1991, the WCJ issued his decision, finding inter alia that applicant's injury occurred as a result of Raley's serious and willful misconduct. The WCJ ordered a one-half increase in applicant's total compensation benefits, including all nonindemnity payments, and reserved jurisdiction for determination of future increased compensation under section 4553 as a result of the serious and willful finding.

Raley's petitioned for reconsideration on September 23, 1991, contesting both the finding of serious and willful misconduct and the calculation of increased compensation on the basis of all the compensation benefits applicant received.

On October 8, 1991, the WCJ filed his report on reconsideration, recommending that the Board deny Raley's petition. As relevant to the issues before this court, the WCJ stated as follows: "[S]o long as an injured worker's total compensation award is less than the actual damages he could have recovered but for elimination of his right to sue, the added portion of the award over and above his normal compensation benefits would not amount to an unconstitutional penalty or be tantamount to punitive or exemplary damages, which the Appeals Board would have no authority to award. [p] I think there can be no doubt in the present case that applicant's award of increased compensation The Board granted reconsideration on November 22, 1991, and on August 24, 1993, affirmed the WCJ's finding that applicant's injury occurred as a result of Raley's serious and willful misconduct. The Board held, however, that the 50 percent increase in compensation pursuant to the section 4553 award applied only to compensation (temporary and permanent) indemnity and not to nonindemnity benefits.

still does not exceed damages she could have obtained if this were a negligence claim rather than a workers' compensation case. It seems doubtful there was any negligence on her part."

Applicant seeks review, contending that the "amount of compensation otherwise recoverable" under section 4553 includes nonindemnity benefits such as medical treatment payments, medical-legal fees, and vocational rehabilitation costs payable to third parties. We agree.

DISCUSSION

-I-

Section 4553 provides in relevant part: "The amount of compensation otherwise recoverable shall be increased one-half, together with costs and expenses not to exceed two hundred fifty dollars ($250), where the employee is injured by reason of the serious and willful misconduct of [the employer]...."

The meaning of this statute must, in the first instance, be sought in the language of the enactment itself. (Leroy T. v. Workmen's Comp. Appeals Bd. (1974) 12 Cal.3d 434, 438, 115 Cal.Rptr. 761, 525 P.2d 665.) Our role is to ascertain the intent of the Legislature so as to effect the purpose of the law. (Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230, 110 Cal.Rptr. 144, 514 P.2d 1224.) In so doing, we are to harmonize the various parts of the statute with the general tenor and scope of the statutory framework as a whole (Youngblood v. Workers' Comp. Appeals Bd. (1989) 216 Cal.App.3d 764, 772, 265 Cal.Rptr. 211); where the Legislature has prescribed the meaning to be given precise terms used in a statute, that meaning is binding on the courts. (People v. Western Air Lines, Inc. (1954) 42 Cal.2d 621, 638, 268 P.2d 723; People v. Aadland (1961) 193 Cal.App.2d 584, 590, 14 Cal.Rptr. 462.)

Section 4553 cannot be read without reference to section 3207, which defines "compensation." From the time our workers' compensation scheme was initially established, this critical term has consistently been given an expansive meaning, described as including "every benefit or payment" conferred upon employees. (Stats.1917, ch. 586, § 3, subd. 3, p. 833.) Section 3207 currently provides that " '[c]ompensation' means compensation under Division 4 [Workers' Compensation and Insurance] and includes every benefit or payment conferred by Division 4 upon an injured employee, including vocational rehabilitation, or in the event of his [or her] death, upon his [or her] dependents, without regard to negligence." (Italics added.) This broad language leaves no doubt that compensation includes vocational rehabilitation costs and, by virtue of their location in Division 4, medical treatment payments and medical-legal fees. (§§ 4600, 5811; Adams v. Workers' Comp. Appeals Bd. (1976) 18 Cal.3d 226, 231, 133 Cal.Rptr. 517, 555 P.2d 303.)

If medical-legal fees are "compensation" for calculating increased compensation under section 5814, ² as determined by the Supreme Court in Adams, then surely the cost of medical treatment, a more immediate and significant benefit to an injured employee, must also be treated as "compensation" within the meaning of section 4553. ³ It would be Finally, the legislative history of section 4553 and related provisions of section 132a ⁴ are also consistent with an expansive interpretation of the former statute. Before enactment of the predecessor to section 4553, the workers' compensation system provided an employee a choice of remedies if his or her injury was caused by the employer's gross negligence or willful misconduct. The employee could either claim workers' compensation benefits or maintain an action at law for damages. (Stats.1913, ch. 176, § 12, subd. b, pp. 283-284.) This provision was deleted in 1917 and a section enacted specifying a one-half increase in compensation in the event of serious and willful misconduct by the employer as the employee's sole remedy. (Stats.1917, ch. 586, § 6, subd. b, p. 834.) "The clear implication is that the addition in 1917 of the 'exclusive remedy' limitation and the provision for a penalty for the willful misconduct of the employer was a substitute for the previous right of an employee to bring an action at law." (Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, 472, 165 Cal.Rptr. 858, 612 P.2d 948 (hereafter Johns-Manville ), italics added.)

unconscionable for an employer, whose quasi-criminal or intentional conduct under section 4553 causes injury to an employee, to benefit from a more constrictive statutory interpretation of "compensation" than applies to an employer who, in violation of section 5814, merely delays unreasonably in the payment of benefits.

Prior to amendments made in 1982, sections 4553 and 132a both contained a $10,000 limit on the amount recoverable for the one-half increase in compensation from an employer guilty of either serious and willful misconduct or unlawful discrimination. Section 132a incorporated by reference the "provisions of [s]ection 4553" with regard to "increased compensation." ⁵ Effective January 1, 1983, sections 4553 and 132a were both amended. The reference to the "provisions in [s]ection 4553" was deleted from section 132a, but the statute specifically retained the $10,000 limit on the amount recoverable against an employer. (Stats.1982, ch. 922, § 1, p. 3364.) The $10,000 limit on the amount of increased compensation was, however, removed from section 4553, thereby eliminating any restriction on the actual amount that may be awarded under section 4553 when an injury is caused by an employer's serious and willful misconduct. (Stats.1982, ch. 922, § 10, p. 3369.) From this it may be inferred that in 1982, the last time it modified section 4553, the Legislature intended no restriction on the basis upon which the increased...