Hollingsworth v. Heavy Transp., Inc.

• Decision Date: 27 July 2021
• Docket Number: B306127
• Citation: 66 Cal.App.5th 1157,281 Cal.Rptr.3d 738
• Court: California Court of Appeals Court of Appeals
• Parties: Leanne HOLLINGSWORTH et al., Plaintiffs and Appellants, v. HEAVY TRANSPORT, INC. et al., Defendants and Respondents.

66 Cal.App.5th 1157

281 Cal.Rptr.3d 738

Leanne HOLLINGSWORTH et al., Plaintiffs and Appellants,

v.HEAVY TRANSPORT, INC. et al., Defendants and Respondents.

B306127

Court of Appeal, Second District, Division 4, California.

Filed July 27, 2021

Murray & Associates, Lawrence D. Murray, San Francisco, for Plaintiffs and Appellants.

Gray•Duffy, John Duffy, Michelle MacDonald, Encino; Black, Compean & Hall, Frederick G. Hall, Los Angeles, for Defendants and Respondents.

COLLINS, J.

INTRODUCTION

In June 2016, Kirk Hollingsworth (Hollingsworth) was involved in a fatal accident while working for defendant Heavy Transport, Inc. (HT). Hollingsworth's wife and son, plaintiffs Leanne and Mark Hollingsworth, filed a wrongful death complaint in superior court against HT and Bragg Investment Company, Inc. (Bragg) (collectively, Bragg/HT; the parties dispute whether the defendants are separate companies). Plaintiffs alleged that HT lacked the required workers’ compensation insurance at the time of the incident, and therefore plaintiffs were entitled to sue Bragg/HT under Labor Code section 3706, which states, "If any employer fails to secure the payment of compensation, any injured employee or his dependents may bring an action at law against such employer for damages ...." Bragg/HT then filed an application for adjudication of claim with the Workers’ Compensation Appeals Board (WCAB). Only one of these tribunals could have exclusive jurisdiction over plaintiffs’ claims, and in our previous opinion, Hollingsworth v. Superior Court (2019) 37 Cal.App.5th 927, 249 Cal.Rptr.3d 851 ( Hollingsworth I ), we held that the superior court, which had exercised jurisdiction first, should resolve the questions that would determine which tribunal had exclusive jurisdiction over plaintiffs’ claims.

Following remand, plaintiffs asserted they were entitled to a jury trial on the factual issues that would determine jurisdiction. The superior court denied plaintiffs’ request and held a hearing in which it received evidence and heard testimony regarding HT's insurance status. The superior court determined that HT was insured by a workers’ compensation policy at the time of Hollingsworth's death, and therefore the WCAB had exclusive jurisdiction over the matter. The court entered a judgment terminating proceedings in the superior court, and plaintiffs appealed.

Plaintiffs assert that they were entitled to a jury trial on the fact issues that would determine jurisdiction. We disagree. Although a jury may determine questions relevant to workers’ compensation exclusivity when the issue is raised as an affirmative defense to common law claims, jurisdiction under Labor Code section 3706 is an issue of law for the court to decide. Plaintiffs also contend that the superior court erred in considering parol evidence in interpreting the workers’ compensation insurance policy at issue. We find that the court's consideration of parol evidence was not erroneous, and that substantial evidence supports the court's findings. We therefore affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Background facts and previous appellate opinion

On June 20, 2016, a Bragg/HT tractor-trailer was hauling a large Bragg crane that had been used to hoist blades onto electric-generating windmills in the Stockton area. Two tires on the trailer failed, and Hollingsworth, who worked in maintenance for HT, was called to the location to change the tires. After the tires were changed and the tractor-trailer began traveling again, a third tire failed. The rubber treads of the tire came loose and wrapped around the axle of the trailer. Hollingsworth was again called to the scene for repair. As Hollingsworth and the truck driver attempted to free the rubber treads from the axle, Hollingsworth was crushed, causing his death.

"As a general rule, an employee who sustains an industrial injury ‘arising out of and in the course of the employment’ is limited to recovery under the workers’ compensation system." ( Torres v. Parkhouse Tire Service, Inc. (2001) 26 Cal.4th 995, 1001, 111 Cal.Rptr.2d 564, 30 P.3d 57 ; see also Lab. Code, § 3600.) Private employers must either carry workers’ compensation insurance or be self-insured. ( Lab. Code, § 3700, subds. (a), (b).) The WCAB has exclusive jurisdiction over claims for workers’ compensation benefits. ( La Jolla Beach & Tennis Club, Inc. v. Industrial Indemnity Co . (1994) 9 Cal.4th 27, 35, 36 Cal.Rptr.2d 100, 884 P.2d 1048.) If an employer fails to carry the appropriate insurance, however, "any injured employee or his dependents may bring an action at law against such employer for damages" in superior court. ( Lab. Code, § 3706.) "If at the time of the accident there was no work[ers’] compensation coverage, then the [WCAB] is without jurisdiction to grant relief, and if there was such coverage then the superior court is without jurisdiction and must leave the parties to pursue their remedies before the [WCAB]." ( Scott v. Industrial Acc. Commission (1956) 46 Cal.2d 76, 83, 293 P.2d 18 ( Scott ).)

Plaintiffs filed a wrongful death complaint in superior court on January 22, 2018, alleging that Hollingsworth was in the course of his employment with HT at the time of his death, and that HT did not have workers’ compensation insurance. Plaintiffs alleged that although Bragg purported to merge HT "out of existence and into" Bragg in 1986, the two companies maintained separate operations, and HT continued to operate as a separate corporation. Plaintiffs alleged that Bragg paid them workers’ compensation benefits, "evidencing the lack of Worker's Compensation Insurance for Kirk Hollingsworth as the employee" of HT. Plaintiffs further alleged that the Bragg and HT equipment involved in the incident was in a dangerous condition, and that Bragg and HT failed to adequately train their workers, leading to Hollingsworth's death. Plaintiffs included a demand for jury trial with their complaint.

Bragg/HT demurred to plaintiffs’ complaint. It admitted that Hollingsworth was working for HT at the time of his death. But it asserted that HT was "a fictitious business name of defendant Bragg Investment Company, Inc.," so the companies were in fact "the same company." Bragg/HT contended that "Bragg Investment Company, Inc. d/b/a Heavy Transport, Inc." had an active workers’ compensation policy that covered the incident, so "plaintiffs’ lawsuit is barred in its entirety by the Exclusive Remedy Rule of the Workers’ Compensation System pursuant to Labor Code Sections 3601 and 3602."

As stated in our previous decision, the trial court overruled the demurrer, finding that plaintiffs had adequately alleged an exception to workers’ compensation exclusivity by asserting that HT did not have workers’ compensation insurance. ( Hollingsworth I, supra , 37 Cal.App.5th at p. 931, 249 Cal.Rptr.3d 851.) The WCAB then determined that the accident had occurred in the course of employment, and set a hearing to determine if any workers’ compensation insurance covered the incident. ( Ibid . ) The parties acknowledged that resolution of the insurance issue would determine which tribunal had exclusive jurisdiction, and in a series of motions and requests, Bragg/HT sought to stay proceedings in the superior court until the WCAB made that finding, while plaintiffs sought to stay the WCAB proceedings until the superior court made that finding. ( Id . at pp. 931-932, 249 Cal.Rptr.3d 851.) The superior court stayed all proceedings to allow the WCAB to decide, and plaintiffs filed a petition for writ of mandate in this court. ( Id . at p. 933, 249 Cal.Rptr.3d 851.) Following Scott, supra, 46 Cal.2d 76, 293 P.2d 18, we held that the superior court, which had exercised jurisdiction first, "should make the necessary findings to determine which tribunal has exclusive jurisdiction over the remainder of the matter." ( Hollingsworth I, supra , 37 Cal.App.5th at p. 933, 249 Cal.Rptr.3d 851.) We remanded the case with instructions to the superior court to "conduct further proceedings limited to determining which tribunal has exclusive jurisdiction over plaintiffs’ claims." ( Id. at p. 937, 249 Cal.Rptr.3d 851.)

B. Plaintiffs’ request for a jury trial

Following remand, the superior court requested that the parties submit briefs asserting their positions on jurisdiction. Bragg/HT argued that jurisdiction was an issue of law for the court to determine. It stated that a workers’ compensation policy had been issued to Bragg by insurer XL Insurance America, Inc. (XL Insurance), and HT was insured under the policy. Bragg/HT submitted declarations and the insurance policy in support of its contentions. It argued that because it carried workers’ compensation insurance at the time of Hollingsworth's death, the exception to workers’ compensation exclusivity did not apply, and jurisdiction in the WCAB was appropriate.

Plaintiffs agreed that "[e]xclusive jurisdiction rests on the presence or absence of the injured worker's employer carrying Worker's Compensation Insurance for the injured employee at the time and location of the injury." They argued that this question must be answered by a jury. Plaintiffs also contended that the insurance policy covering Bragg did not include "(a) Heavy Transport Inc[.], a California Corporation, [or] (b) any company named Heavy Transport Inc[.], at a California location." Plaintiffs further asserted that there had been no "merger" of Bragg and HT under California law, and whether the companies were separate "should be part of the jury's verdict."

At a hearing on November 22, 2019 before Judge Mark C. Kim, the superior court noted that the Hollingsworth I opinion remanded the case "to have a hearing and then make a determination as to whether or not this court has the jurisdiction or W.C.A.B. has the jurisdiction." The court said the "one thing [at] issue" was "whether or not defendants had workers’ compensation coverage for the plaintiff," and "[i]f they did have coverage, then ... it goes to workers’...