Fidelity & Cas. Co. of New York v. Workers' Comp. Appeals Bd.

• Citation: 163 Cal.Rptr. 339,103 Cal.App.3d 1001
• Parties: FIDELITY & CASUALTY COMPANY OF NEW YORK, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Respondent, Edward HARRIS, Real Party in Interest. Civ. 18798.
• Decision Date: 31 March 1980
• Court: California Court of Appeals

Page 339

163 Cal.Rptr. 339

103 Cal.App.3d 1001

FIDELITY & CASUALTY COMPANY OF NEW YORK, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, Respondent Edward HARRIS, Real Party in Interest.

Civ. 18798.

Court of Appeal, Third District, California.

March 31, 1980.

Rehearing and Decertification Denied April 23, 1980.

Hearing Denied May 28, 1980.

Files, McMurchie, Foley & Brandenburger, Douglas B. Weill, Sacramento, for petitioner.

Richard W. Younkin, William B. Donohoe, Dexter W. Young, San Francisco, for respondent.

Eugene C. Treaster, Sacramento, for real party in interest.

BLEASE, Associate Justice.

Fidelity & Casualty Company of New York (Fidelity), a workers' compensation insurer, petitions this court for a writ of mandate ordering the Workers' Compensation Appeals Board (WCAB) to limit its consideration of real party in interest Edward Harris' (Harris) case to the issue whether good cause exists within the meaning of Labor Code section 5803 to rescind a compromise and release agreement entered into on August 15, 1975, between Fidelity and Harris.

Fidelity contends that the WCAB exceeded its statutory and constitutional authority by: (1) taking and considering evidence unrelated to the issues raised by Harris' petition for reconsideration; (2) failing to provide Fidelity and Harris with adequate notice and an opportunity to be heard; and (3) failing both to adequately state the evidence relied upon and to specify in detail the reasons for granting reconsideration.

The WCAB has responded by answer to the petition and by return to this court's order to show cause. In its answer it claims that the court lacks jurisdiction to review the matter by mandate and that, upon reconsideration, the WCAB may consider any issue which could have been raised in the original proceeding. By return it claims further that Harris sought relief not only to reopen to set aside the compromise and release but by separate petition sought to reopen for consideration of new and further disability pursuant to Labor Code section 5410.

Harris responded by return to the order to show cause asking this court to order the WCAB to set aside the compromise and release agreement.

We shall issue a writ directing the WCAB not to proceed to reopen Harris' settlement except for good cause as required by Labor Code section 5803; to inform the parties of the ground of good cause upon which it seeks to take or consider additional evidence; and to afford the parties the opportunity to cross-examine witnesses and present rebuttal evidence upon the noticed ground.

FACTS

Harris received injuries on May 8, 1973, in the course of his employment as a truck driver by California Liquid Gas Corporation. Fidelity is the insurance carrier for California Liquid Gas Corporation.

Harris employed Norman J. Mulholland as his attorney. He requested and received a rating from the Permanent Disability Rating Bureau of the WCAB; his permanent disability range was determined to be 81/2 percent to 83/4 percent.

Through his attorney Harris agreed to sign and on May 6, 1975, signed a compromise and release agreement with Fidelity on WCAB Form 15 (Rev. 1-72), by which Fidelity agreed to pay Harris $3,250 in release of all claims.

A WCAB judge reviewed the settlement and accompanying medical reports and questioned the adequacy of the settlement. Fidelity agreed to raise the amount to $4,500, which was approved by the judge. On August 15, 1975, the compromise and release agreement of May 6, 1975, as raised, was approved by the WCAB.

On August 31, 1977, Harris, through new counsel, filed a motion with the WCAB entitled "Motion to Set Aside Compromise and Release," thus seeking to invoke the continuing jurisdiction of the WCAB to rescind its orders for good cause. The motion, as considered by a WCAB judge on January 16, 1978, claimed that Harris' prior counsel purported to be an attorney admitted to practice in California at the time he represented him but was not so qualified, that Harris did not receive the money due him under the compromise and release agreement, that his prior attorney was not mentally competent to advise him concerning the agreement, and that the agreement lacked proper execution.

Following the hearing, on May 1, 1978, but before decision on the motion, Harris filed with the WCAB a petition denominated "Petition to Maintain Jurisdiction of the WCAB," claiming inter alia that he had suffered a new and further disability.

On June 28, 1978, the WCAB judge denied the motion to set aside the agreement on the ground that Harris had not shown good cause for rescinding it in that he had failed to show fraud, duress, undue influence, mutual mistake of fact or law, improper execution of the document, mental incompetency, or his minority at the time of signing.

On July 24, 1978, Harris filed a petition for reconsideration before the WCAB under the provisions of Labor Code section 5900 et seq., contending that the WCAB judge acted in excess of jurisdiction, that the evidence did not justify the findings of fact, and that the judge's finding was illegal. Fidelity answered and the WCAB judge, on August 21, 1978, submitted a report and recommendation on the petition for reconsideration. (Cal.Admin.Code, tit. 8, § 10860.) He concluded inter alia that the WCAB review of the release raising the amount to $4,500 was a sufficient review and protection to Harris to constitute waiver of any formal defect in the original execution of the release and that a misunderstanding between an applicant and an applicant's attorney is not a ground to set aside a compromise and release. He recommended denial of the petition for reconsideration.

On September 28, 1978, the WCAB issued an Opinion and Order Granting Reconsideration. It set forth the judge's findings and recommendation and said: "Upon reviewing the entire record, the Board is of the opinion that further medical evidence is necessary for the Board to reach a just and reasoned decision on the issue raised herein. The Board may not leave undeveloped matters which it identifies as requiring further evidence. Raymond Plastering v. WCAB (1967), 252 Cal.App.2d 748, 60 Cal.Rptr. 860, 32 CCC 287. This is, therefore, an appropriate case for the Board to exercise its discretion to direct an examination by an independent physician. Lundberg v. WCAB (1968), 69 Cal.2d 436, 71 Cal.Rptr. 684, 445 P.2d 300, 33 CCC 656. Reconsideration will be granted for an examination by an independent physician and for such further proceedings as the Board may thereafter determine to be appropriate."

On September 29, 1978, Fidelity wrote to the WCAB seeking clarification of the issues then pending before the board by virtue of its order granting reconsideration. The letter stated Fidelity's belief that no medical issues had been raised in the adjudication of Harris' motion to set aside the release, and asked for a supplemental opinion and order stating the issue to be resolved by the medical examination and its desire to be informed so that it could prepare a rebuttal. The board responded on November 2, 1978, that "(t)he matter was referred to an independent physician . . . so that a determination of the adequacy of the Compromise and Release Agreement may be made."

The independent medical examiner, Dr. William C. Hickey, reviewed the complete medical and legal files to determine the physical disability prior to the award of August 15, 1975, as compared to after December 5, 1978, the date of his examination. Dr. Hickey indicated certain subjective and objective factors of disability, and concluded that Harris' complaints precluded him from heavy lifting, repeated bending and stooping.

The WCAB then requested from the Permanent Disability Rating Board a rating of the objective disability factors contained in Dr. Hickey's report. On February 16, 1979, the rating board recommended a disability rating of 271/2 percent, amounting to a total payment of $7,560. The WCAB then admitted into evidence Dr. Hickey's report, the disability rating of February 16, 1979, and the previously served medical report of Dr. Peal, relied upon by Dr. Hickey.

Fidelity moved to strike Dr. Hickey's and Dr. Peal's reports from evidence and to quash the permanent disability rating of February 16, 1979. At a hearing on the medical examination counsel for Fidelity argued that the only issue before the board was whether there was good cause to set aside the compromise and release, and that if the WCAB intended to issue a rating based on Harris' current orthopedic disability, that Fidelity be allowed to present rebuttal evidence. Harris objected to the introduction into evidence of a medical report authored by a doctor who was subpoenaed to testify at the June 28 hearing, but who did not appear. The judge said that the WCAB must have denied the motions to strike and quash by implication, since it sent the case to the Sacramento office for a hearing. Dr. Hickey then testified at the hearing, and counsel for Fidelity and Harris cross-examined him.

Fidelity filed its petition for a writ of mandate in this court on July 24, 1979. The WCAB filed an answer to the petition on August 2, 1979. Fidelity filed a response to the answer on August 8, 1979. This court issued an order to show cause on August 23, 1979. The WCAB and Harris filed returns to the order to show cause on August 29, 1979. Fidelity filed its response to the returns on September 11, 1979.

I

The WCAB challenges the propriety of mandamus to review the issues tendered in the petition. It claims that the petitioner has a plain, speedy and adequate statutory remedy under the provisions of Labor Code sections 5950 to 5956.

"Labor Code, section 5955 expressly provides that in a proper case a 'writ of mandate shall lie from the Supreme Court or a court of appeal' to compel the board to perform its duties." (Betancourt v. Workmen's Comp. App. Bd. (1971) 16 Cal.App.3d 408, 412, 94 Cal.Rptr. 911.) Although ...