Garcia v. Industrial Acc. Commission

• Court: California Court of Appeals
• Writing for the Court: KAUFMAN
• Citation: Garcia v. Industrial Acc. Commission, 328 P.2d 561, 162 Cal.App.2d 761 (Cal. App. 1958)
• Decision Date: 14 August 1958
• Parties: Louis GARCIA and Pak Hoy Wong, Petitioners, v. INDUSTRIAL ACCIDENT COMMISSION of the State of California, Juan Santiago and State Compensation Insurance Fund, Respondents. Civ. 18238.

Page 561

328 P.2d 561

162 Cal.App.2d 761

Louis GARCIA and Pak Hoy Wong, Petitioners, v. INDUSTRIAL ACCIDENT COMMISSION of the State of California, Juan Santiago and State Compensation Insurance Fund, Respondents.

Civ. 18238.

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

Aug. 14, 1958.

Hearing Denied Oct. 10, 1958.

Garcia & Wong, San Francisco, for petitioner.

Everett A. Corten, Daniel C. Murphy, Melvin S. Witt, San Francisco, for respondent Industrial Accident Comm.

KAUFMAN, Presiding Justice.

Petitioners, attorneys for the successful employee, seek review and annulment of an order made by the respondent commission denying their petition for attorneys' fees.

Initially, the respondent commission had issued an order on October 6, 1952, awarding to the employee, benefits ($2,340) based on a permanent disability rating of 19 1/2% for his industrial injury of June 26, 1951. The respondent commission also found that employee suffered a permanent disability of 100% as the result of the combination of the permanent disability caused by the industrial injury of June 26, 1951, and the permanent disability pre-existing the industrial injury. Benefits ($30 a week comencing one week after the termination of the 78 weekly payments due from the carrier, and continuing until 322 weekly payments had been made to the employee totaling $9,660, and thereafter a life pension at the rate of $18.46 a week) were accordingly awarded to the employee from the Subsequent Injuries Fund (hereinafter referred to as the Fund) based on a pre-existing permanent disability rating of 80 1/2%.

On June 15, 1956, eleven days before the lapse of five years from the date of the employee's industrial injury, the Fund simultaneously filed two petitions to reopen. One was for the purpose of reducing the 80 1/2% pre-existing permanent disability rating, and the other for the purpose of dismissing the Fund from any and all liability. As a result of these filings, payments to the employee, as provided for in the award issued on October 6, 1952, were stopped, and no payments provided for under that award have been made to the employee.

On July 10, 1956, more than five years after the date of injury, petitioners were substituted as attorneys for the employee for the purpose of resisting the Fund's petitions to reopen. Petitioners represented the employee in the following proceedings, all of which took place more than five years after the injury:

1) They filed an answer to the Fund's petition to reopen.

2) Thereafter, they represented the employee at two hearings before the respondent commission. At the conclusion of these hearings, the referee granted the petition of the Fund dismissing and discharging it from any further liability.

3) Thereafter, they filed a petition for reconsideration on the employee's behalf which the Fund answered.

4) Thereafter, they filed a reply to the Fund's answer to petition for reconsideration. On April 12, 1957, the respondent commission affirmed its award of October 6, 1952, for lack of jurisdiction to modify an award after the lapse of five years from the date of injury. The fund filed a petition for reconsideration.

5) Thereafter, they filed an answer to the Fund's petition for reconsideration. The fund's petition for reconsideration was denied by the respondent commission. The Fund then petitioned this court (Div. One) for a writ of review.

6) Thereafter, they filed an answer to the Fund's petition for writ of review. They also participated in the oral argument on the writ of review before the District Court of Appeal. The Commission's decision was affirmed in State v. Industrial Accident Commission, 1957, 155 Cal.App.2d 551, 318 P.2d 194. The Fund then filed a petition for hearing before the Supreme Court.

7) Thereafter, they filed an answer to the Fund's petition for hearing before the California Supreme Court. The Supreme Court denied the Fund's petition for hearing on January 23, 1958.

Petitioners, on February 13, 1958, formally requested via petition for attorneys' fees, that the respondent commission determine and allow them $500 for services rendered in their capacity as attorneys for the successful employee. Previously, on December 9, 1957, petitioners requested by letter that the respondent commission make a supplemental award in connection with this matter to provide for attorneys' fees. Petitioners allege that as of February 13, 1958, the accrued payments, due and payable, under the order of October 6, 1952, to the meployee were $2,550.

On February 24, 1958, the respondent commission denied petitioners' petition for attorneys' fees, for the reason that it was without jurisdiction to allow a lien for attorneys' fees. Petitioners filed a petition for reconsideration which was subsequently denied by the respondent commission, and they now seek relief here via a petition for writ of review.

The sole question presented here is whether or not the respondent commission was correct in its determination that it had no jurisdiction five years after the date of injury, to allow a lien for attorneys' fees to the petitioners. This question is one of first impression.

In connection with the continuing jurisdiction granted to the commission by Labor Code, section 5803, respondent commission submits that such continuing jurisdiction cannot be utilized in the instant case because of the five year limitation contained in Labor Code, section 5804. Section 5804 prohibits alteration or amendment of a prior award of compensation after five years. An allowance of a lien for attorneys' fees would constitute an alteration or amendment of the prior award of compensation made to the employee on October 6, 1952. Therefore, section 5804 prohibits the commission from allowing a lien for attorneys' fees in the instant case. In other words, allowance of the lien would constitute an alteration or amendment of the 1952 award, inasmuch as the prior award would have to be amended or altered to provide a specific amount for the attorneys' fees, and to provide for reduction of such amount from the compensation payable to the applicant.

Section 4901 of the Labor Code provides that '[n]o claim for compensation nor compensation awarded, adjudged, or paid, is subject to be taken for the debts of the party entitled to such compensation except as hereinafter provided.' One of the exceptions to this general provision is subdivision (a) of section 4903 of the Labor Code, which provides as follows: 'The commission may determine, and allow as a lien against any amount to be paid as compensation: * * * A reasonable attorney's fee for legal services pertaining to any claim for compensation either before the commission or before any of the appellate courts, and the reasonable disbursements in connection therewith.' This provision, on its face, extends the continuing jurisdiction of the commission beyond the provisions of sections 5803 and 5804, of the Labor Code. A lien may be allowed for a reasonable attorney fee for legal service pertaining to any compensation claim before any of the appellate courts. The lien may be allowed against the Fund as well as against the employer or his carrier. Cf. Gonzales v. Industrial Accident Commission, 50 Cal.2d 360, 325 P.2d 993.

The commission has limited discretion with respect to the allowance on disallowance of lien claims. The fact that section 4903 of the Labor Code provides that the commission 'may' allow a lien, despite the definition of 'may' as 'permissive' by section 15 of the Labor Code, does not invest the commission with power arbitrarily to disallow a proven lien. It may do so on proper grounds, but it does not have discretion to disallow a lien where it is established as in the instant case that the attorneys did furnish services of value within one of the categories specified in section 4903 of the Labor Code. Bryant v. Industrial Accident Commission, 37 Cal.2d 215, at page 220, 231 P.2d 32.

'The Commission frowns upon fee agreements as indication of a possible intent to exact a larger...