Hollingsworth v. Superior Court

• Decision Date: 24 July 2019
• Docket Number: B297658
• Citation: 37 Cal.App.5th 927,249 Cal.Rptr.3d 851
• Court: California Court of Appeals Court of Appeals
• Parties: Leanne HOLLINGSWORTH et al., Petitioners, v. The SUPERIOR COURT OF LOS ANGELES COUNTY et al., Respondents; Heavy Transport, Inc., et al., Real Parties in Interest.

37 Cal.App.5th 927

249 Cal.Rptr.3d 851

Leanne HOLLINGSWORTH et al., Petitioners,

v. The SUPERIOR COURT OF LOS ANGELES COUNTY et al., Respondents;Heavy Transport, Inc., et al., Real Parties in Interest.

B297658

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

Filed July 24, 2019

Murray & Associates and Murray D. Lawrence, San Francisco; Frances L. Diaz, Beverly Hills, for Petitioners.

Anne Schmitz, Allison J. Fairchild and Peter Ray, Glendale, for Respondent Workers' Compensation Appeals Board.

No appearance for Respondent Superior Court of Los Angeles.

Gray Duffy and John Joseph Duffy for Real Parties in Interest.

COLLINS, J.

INTRODUCTION

"Pursuant to constitutional mandate, the Legislature has vested the Workers' Compensation Appeals Board (WCAB) with exclusive jurisdiction over claims for workers' compensation benefits. ( Cal. Const., art. XIV, § 4, Lab. Code, § 5300.)" ( 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.) Thus, in an action involving a worker injured during his or her employment, "the superior court and the WCAB ... ‘do not have concurrent jurisdiction over the whole of the controversy, and one of them will be without jurisdiction to grant any relief whatsoever, depending upon whether or not the injuries were ... covered by the workmen's compensation laws.’ " ( Ibid. ) "The only point of concurrent jurisdiction of the two tribunals is jurisdiction to determine jurisdiction; jurisdiction once determined is exclusive, not concurrent." ( Ibid. )

This case presents the question of which tribunal—the superior court or the WCAB—had jurisdiction to determine which tribunal had exclusive jurisdiction. The Supreme Court has made clear that when a civil action and a workers' compensation proceeding are concurrently pending, "the tribunal first assuming jurisdiction" should determine exclusive jurisdiction. ( Scott v. Industrial Acc. Commission (1956) 46 Cal.2d 76, 81, 293 P.2d 18 ( Scott ).) Here, the superior court exercised jurisdiction first, so the court had jurisdiction to decide which tribunal has exclusive jurisdiction. The court erred by staying the civil case to allow the WCAB to decide that issue, and the WCAB erred by proceeding without deference to the superior court. We therefore grant plaintiffs' petition.

FACTUAL AND PROCEDURAL BACKGROUND

A. Workers' compensation exclusivity

"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.) "The underlying premise behind this statutorily created system of workers' compensation" is a bargain in which " ‘the employer assumes liability for industrial personal injury or death without regard to fault in exchange for limitations on the amount of that liability. The employee is afforded relatively swift and certain payment of benefits to cure or relieve the effects of industrial injury without having to prove fault but, in exchange, gives up the wider range of damages potentially available in tort.’ " ( Charles J. Vacanti, M.D., Inc. v. State Comp. Ins. Fund (2001) 24 Cal.4th 800, 811, 102 Cal.Rptr.2d 562, 14 P.3d 234, citing Shoemaker v. Myers (1990) 52 Cal.3d 1, 16, 276 Cal.Rptr. 303, 801 P.2d 1054.) For purposes of this matter, it is not disputed that the fatal injury at issue occurred in the course of the decedent's employment.

However, "[t]he price that must be paid by each employer for immunity from tort liability is the purchase of a workers' compensation policy." ( Hernandez v. Chavez Roofing, Inc. (1991) 235 Cal.App.3d 1092, 1095, 286 Cal.Rptr. 919.) All employers are required to "secure the payment of compensation by obtaining insurance from an authorized carrier or by securing a certificate of consent from the Director of Industrial Relations to become a self-insurer." ( Minish v. Hanuman Fellowship (2013) 214 Cal.App.4th 437, 461, 154 Cal.Rptr.3d 87 ; Lab. Code, § 3700.) "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, as if this division did not apply." ( Lab. Code, § 3706.) There is a dispute in this case about whether the decedent's employer had workers' compensation insurance, and therefore whether the claims are restricted to the workers' compensation system.

B. Procedural background

Kirk Hollingsworth was involved in a fatal accident while working for defendant Heavy Transport, Inc. in June 2016. His wife, Leanne Hollingsworth, and son, Mark Hollingsworth (plaintiffs),¹ filed a wrongful death complaint in superior court on January 22, 2018. Plaintiffs alleged that Heavy Transport did not have workers' compensation insurance. They also alleged that defendant Bragg Investment Company purported to have merged with Heavy Transport in 1986, but that the two companies had always maintained separate operations. Plaintiffs asserted that Bragg "sought to extend Worker's Compensation Benefits" to them. Plaintiffs also alleged that defective Bragg equipment contributed to the incident.

On March 5, 2018, Bragg and Heavy Transport (defendants) demurred to plaintiffs' complaint. They asserted that Heavy Transport was a fictitious business name for Bragg, and therefore they were the same entity. Bragg had a workers' compensation policy that covered the accident, so plaintiffs' action was barred by workers' compensation exclusivity. Defendants sought judicial notice of several documents they contended supported the demurrer, including documents regarding ownership of Heavy Transport and insurance information.

On March 14, 2018, defendants filed an application for adjudication of claim with the WCAB. The application listed Bragg as the employer, included insurance information, and noted that a lawsuit had been filed.

The trial court denied defendants' request for judicial notice and overruled the demurrer. The court held that plaintiffs had adequately alleged an exception to workers' compensation exclusivity, because they had alleged that Heavy Transport was the decedent's employer and it did not have workers' compensation insurance.

On January 14, 2019, defendants filed an ex parte application for an order staying the civil action, Defendants asserted that in December 2018 the WCAB determined that the accident had occurred in the course of decedent's employment. The WCAB then set a hearing for February 19, 2019 to determine if any applicable workers' compensation insurance covered the incident. Defendants noted that plaintiffs had served deposition notices and document requests. Defendants asked that the civil case be stayed until the WCAB determined the insurance issue, which would then determine which tribunal had exclusive jurisdiction.

Plaintiffs opposed defendants' request for a stay, asserting that evidence showed that decedent was employed by Heavy Transport, not Bragg, and there was no indication that Heavy Transport had workers' compensation insurance. Plaintiffs asserted that defendants' attempt to cast Bragg as the employer was an effort to "escape responsibility" for the incident.

Judge Stephen Goorvitch heard defendants' ex parte application and partially granted it. The court noted that there was a factual dispute about the identity of decedent's employer and whether the employer was insured, and "Plaintiffs are entitled to conduct discovery to attempt to resolve these issues." The court granted defendants' request for a stay of discovery "except with respect to discovery concerning the identity² , employment, and insurance issues in this case." The court also found the case to be complex, and transferred it to a new department.

On March 11, 2019, plaintiffs filed a request for a preliminary injunction "to preserve [the trial] court's jurisdiction." Plaintiffs stated that they also had filed a motion with the WCAB to stay those proceedings, but "[r]ather than grant the motion, the WCAB set the case for trial before a WCAB arbitrator on June 6, 2019, on the issue of insurance coverage, which is the exact issue retained by this Court for decision." Plaintiffs cited Scott, supra , 46 Cal.2d 76, 293 P.2d 18, which we discuss in greater detail below. In short, Scott held that where there is a jurisdictional dispute about whether the superior court or a workers' compensation tribunal has exclusive jurisdiction over a claim, both the superior court and the workers' compensation tribunal have concurrent jurisdiction to determine exclusive jurisdiction, and the tribunal that first exercised jurisdiction should determine exclusive jurisdiction. ( Scott , supra , 46 Cal.2d at pp. 81, 89, 293 P.2d 18.) Plaintiffs requested a preliminary injunction to "preserve the status quo" until the trial court determined jurisdiction.

Defendants opposed the motion, noting that Labor Code section 5955 explicitly states that a superior court does not have the authority to "suspend or delay the operation or execution thereof, or to restrain, enjoin, or interfere with the appeals board in the performance of its duties." Defendants also asserted that plaintiffs had not established a reasonable probability of prevailing on the merits.

Judge Mark C. Kim heard the matter and took it under submission. The court later denied plaintiffs' motion in a written ruling, stating that plaintiffs "do not offer any evidence supporting a probability of prevailing on the merits." The court also stated that plaintiffs had not "presented any authority for the Court to stay a pending WCAB case." In addition, the court stated, "Plaintiff [sic ] also has not indicated why a WCAB trial on the issue of insurance is an issue."

The court further stated that on its own motion, upcoming discovery motion hearings were vacated, and all further discovery was stayed. The court set a status...