General Cas. v. Workers' Comp. Appeals Bd.
| Decision Date | 20 October 2004 |
| Docket Number | No. B167541.,No. B167017.,No. B167542.,No. B167540.,B167017.,B167540.,B167541.,B167542. |
| Citation | 123 Cal.App.4th 202,20 Cal.Rptr.3d 58 |
| Court | California Court of Appeals Court of Appeals |
| Parties | GENERAL CASUALTY INSURANCE et al., Petitioners, v. WORKERS' COMPENSATION APPEALS BOARD and The California Insurance Guarantee Association, Respondents. American Home Assurance Company, Petitioner, v. Workers' Compensation Appeals Board and The California Insurance Guarantee Association, Respondents. RemedyTemp, Inc., Petitioner, v. Workers' Compensation Appeals Board and The California Insurance Guarantee Association, Respondents. Jacuzzi Incorporated, Petitioner, v. Workers' Compensation Appeals Board and The California Insurance Guarantee Association, Respondents. |
Latham & Watkins, G. Andrew Lundberg, Los Angeles, Stephen J. Newman and Kay L. Tidwell, Los Angeles; Barger & Wolen, John C. Holmes and Bryan C. Crawley, Los Angeles; Sharon M. Renzi, for Petitioner RemedyTemp, Inc.
Seyfarth Shaw, Robert E. Buch, Los Angeles, Peter E. Romo, San Francisco, and Dennis C. DePalma, Los Angeles, for Petitioner Jacuzzi Incorporated.
Guilford Steiner Sarvas & Carbonara and Richard E. Guilford, Santa Ana, for Respondent California Insurance Guarantee Association.
No appearance for Respondent Workers' Compensation Appeals Board.
American Staffing Association and Edward A. Lenz; Thelen Reid & Priest and Robert Spagat, San Francisco, for Amicus Curiae American Staffing Association.
McCormick, Barstow, Sheppard, Wayte & Carruth, James P. Wagoner and Todd W. Baxter, Fresno, for Amicus Curiae Pridestaff.
Finnegan, Marks, Hampton & Theofel and Ellen Sims Langille, San Francisco, for Amicus Curiae California Workers' Compensation Institute.
RemedyTemp, Inc. (RemedyTemp), a general employer which provides workers or special employees to special employers, agreed to provide Mark Miceli to Jacuzzi, Inc. (Jacuzzi), pursuant to a Service Agreement. RemedyTemp further agreed to keep Miceli on payroll and provide workers' compensation insurance through Reliance National Indemnity Co. (Reliance), which named Jacuzzi as an additional insured under an Alternate Employer Endorsement. Jacuzzi also obtained a California standard workers' compensation insurance policy for its own workers through American Home Assurance (Assurance).
Miceli admittedly sustained an industrial injury while working for Jacuzzi as a shipper and receiver on March 1, 2000. Miceli filed for workers' compensation benefits. However, on October 3, 2001, Reliance was ordered liquidated and the California Insurance Guarantee Association (CIGA) was joined to cover the claim.1 CIGA then requested to be dismissed under Ins.Code section 1063.1, subdivision (c)(9),2 contending that the Assurance policy provided other available insurance which covered Miceli's claim. RemedyTemp, Jacuzzi and Assurance alleged that their agreements qualified under Ins.Code section 116633 and Labor Code section 3602, subdivision (d),4 which limited liability to Reliance and therefore CIGA.5
The Workers' Compensation Appeals Board (WCAB) in banc concluded that RemedyTemp and Jacuzzi were jointly and severally liable to Miceli for workers' compensation benefits, which was not extinguished by the contractual agreements. In addition, the WCAB determined that Ins.Code section 11663 was limited to insurers, which does not include CIGA whose liability is strictly statutory. The WCAB reasoned further that section 3602, subdivision (d) precludes tort liability and not alternative workers' compensation insurance. Although the contracting parties may not have expected Assurance to provide coverage because it did not collect premium for special employees like Miceli, the WCAB explained, the Assurance policy is a standard workers' compensation insurance policy that provides unlimited coverage absent an expressed exclusion. The WCAB concluded that the Assurance policy is other available insurance under Ins. Code section 1063.1, subdivision (c)(9), and granted CIGA dismissal.
RemedyTemp, Jacuzzi, Assurance and Casualty petition for writ of review. Petitioners argue that the contractual agreements comply with Ins.Code section 11663 and section 3602, subdivision (d), which extinguishes Jacuzzi's joint and several liability and excludes insurance coverage for special employees such as Miceli under the Assurance policy. Moreover, the WCAB agreed this was the intent of the contracting parties, which should be enforced. Thus, an expressed exclusion is unnecessary, and the Assurance policy is not other available insurance under Ins.Code section 1063.1, subdivision (c)(9). The WCAB's decision is not only contrary to the intent of the contracting parties, but the Legislature's purpose for enacting section 3602, subdivision (d) to avoid duplicate insurance coverage and premium.
CIGA answers that it is not an insurer bound by Ins.Code section 11663, but only pays covered claims according to Ins.Code section 1063.1, subdivision (c). In addition, the Assurance policy is other available insurance under Ins.Code section 1063.1, subdivision (c)(9), because coverage under a standard workers' compensation insurance policy is unlimited unless an endorsement excluding coverage is obtained. CIGA further contends that section 3602, subdivision (d) only precludes tort liability, not joint and several liability, alternative insurance protection or additional premium. Moreover, the Service Agreement and insurance policies involve separate parties, and there is no evidence of any privity or mutual intent under section 3602, subdivision (d).
Based on statutory language, legislative history and judicial decisions, we conclude that employer joint and several liability to employees for workers' compensation benefits is not extinguished by Ins.Code section 11663 or section 3602, subdivision (d). In addition, Ins.Code section 11663 is expressly limited to insurers, which does not include CIGA. In regards to section 3602, subdivision (d), the statute allows general and special employers to avoid duplicate insurance coverage and premium by agreeing to insure for workers' compensation with a single insurer. In this case, however, Jacuzzi obtained workers' compensation coverage from two separate insurers, and Jacuzzi and Assurance failed to follow the statutory scheme by excluding coverage for special employees like Miceli under a proper endorsement. Thus, the Assurance policy provides coverage under the circumstances, and the policy is other available workers' compensation insurance within the meaning of Ins.Code section 1063.1, subdivision (c)(9). The WCAB's dismissal of CIGA is affirmed.
The parties stipulated to the basic facts which are as follows. Pursuant to a Service Agreement, RemedyTemp, a general employer, provided Mark Miceli, a special employee, to work as a shipper and receiver for Jacuzzi, the special employer.6 The Service Agreement further provided that RemedyTemp would retain special employees such as Miceli on payroll, provide workers' compensation insurance and hold Jacuzzi harmless from claims. On or about July 22, 1997, RemedyTemp secured a workers' compensation insurance policy through Reliance, which contained an Alternate Employer Endorsement naming Jacuzzi as an additional insured. Jacuzzi also insured its own workers through Assurance, which issued a California standard form workers' compensation insurance policy, April 1992 edition, for the period of May 31, 1999, through May 31, 2000.
On March 1, 2000, Miceli admittedly sustained a cut injury to his left minor ring finger while working for Jacuzzi, and Reliance provided workers' compensation benefits including surgery. However, Reliance was ordered into liquidation on October 3, 2001, and CIGA began administering Miceli's claim. CIGA also petitioned for dismissal arguing that Assurance provided other available insurance under Ins. Code section 1063.1, subdivision (c)(9). Since there were approximately 540 similar cases involving RemedyTemp, Reliance, and special employers and employees, the WCAB consolidated the cases and issued a stay order pending a test case regarding CIGA's liability. Miceli's case was chosen.
The parties proceeded with discovery, which included the deposition of Vincent Catapano, the regional underwriting manager of Assurance. Catapano testified repeatedly that Miceli was not covered by the Assurance policy because premium had not been collected which is based on Jacuzzi's payroll.7 Miceli was not covered even though the Assurance policy allows retroactive premium since this is also based on Jacuzzi's payroll. However, Catapano conceded he was not familiar with California law, Ins.Code section 11663 or section 3602, subdivision (d). Catapano also stated that he did not handle claims, but had previously testified regarding insurer intent.
The parties proceeded to trial and stipulated to the basic facts. The issues included whether CIGA or Assurance was liable considering Ins.Code sections 1063.1 and 11663, section 3602, subdivision (d) and the contractual agreements involved. The joint exhibits included the legislative histories of Ins.Code section 116638 and section 3602, subdivision (d),9 the Service Agreement and the insurance policies.
The workers' compensation administrative law judge (WCJ) determined that RemedyTemp and Jacuzzi, as general and special employers of Miceli, are jointly and severally liable for workers' compensation benefits, which is not extinguished by the agreements under Ins.Code section...
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