Johnson v. Workmen's Comp. App. Bd.

• Decision Date: 30 July 1970
• Docket Number: S.F. 22712
• Citation: 471 P.2d 1002,88 Cal.Rptr. 202,2 Cal.3d 964
• Court: California Supreme Court
• Parties: , 471 P.2d 1002 Jean JOHNSON, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD Lentz Construction Company et al., Respondents.

Page 202

88 Cal.Rptr. 202

2 Cal.3d 964, 471 P.2d 1002

Jean JOHNSON, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD Lentz Construction Company et al., Respondents.

S.F. 22712.

Supreme Court of California,

In Bank.

July 30, 1970.

Smith & Burstein and Jack B. Burstein, Vallejo, for petitioner.

Rupert A. Pedrin, Everett A. Corten, San Francisco, Edmund D. Leonard, Orinda and Dawson B. Leonard, Orinda, for respondents.

TOBRINER, Justice.

Petitioner Jean Johnson seeks review of an order of the Workmen's Compensation Appeals Board dismissing, on its own motion and before the filing of any responsive pleading, her application for death benefits, on the ground that her husband entered into a compromise and release of all claims, including those of his dependents.

We shall explain why we have held, contrary to petitioner's contentions, (1) that Labor Code, section 5000, subdivision (b), authorizes an employee to release claims of his dependents; (2) that Labor Code, section 5000, subdivision (b), does not deny petitioner due process of law or the equal protection of the laws; and (3) that petitioner is not entitled to a hearing to determine whether her husband, in executing the release, intended to release claims of his dependents. We point out, however, that the board erred in dismissing the petition on its own motion, before the employer's insurance carrier had raised the release as a defense. A release is an affirmative defense which must be raised and proved by the insurer; petitioner, moreover, should be afforded the opportunity to assert the invalidity of the release on any legally sufficient grounds. We remand the cause for further proceedings consistent with this opinion.

On October 31, 1967, Edwin Johnson, petitioner's husband, in attempting to shut off a tank used to chlorinate a water line being repaired by his employer, Lentz Construction Company, accidentally inhaled chlorine gas and sustained injury to his lungs. On January 10, 1968, he filed an application for compensation benefits. The parties filed extensive medical reports, and the matter came to hearing on June 6, 1968. After several hours of testimony the hearing recessed; during the recess the parties negotiated a compromise. When the hearing reconvened they presented the compromise to the referee; the referee approved the settlement.

The compromise provided for payment of $350 to Dr. Ross for medical treatment, $390 to the Department of Employment, $800 to applicant's attorneys, and the balance of $6,700 to applicant. The compromise agreement was executed on Workmen's Compensation Appeals Board form 15, a mandatory printed form for compromise and release which contains blanks for filling in the names of the parties, the nature of the disability, the amount of compensation, etc. Paragraph 11 of the printed form provides: 'Upon approval of the Compromise Agreement by the Workmen's Compensation Appeals Board or a referee, and payment in accordance with the provisions hereof, said Employee releases and forever discharges said employer and insurance carrier from All claims and causes of action, whether now known or ascertained, or Which may hereafter arise or develop As a result of said injury, including any and all Liability of said employer and said insurance carrier and each of them To the dependents, heirs, executors, representatives, administrators or assigns Of said employee.' (Italics added.)

Mr. Johnson died on January 2, 1969; his widow filed her claim for death benefits on January 27. On February 4 the referee, without hearing or responsive pleading from the employer or insurance carrier, dismissed petitioner's application on the basis of the release executed by Mr. Johnson. The board denied reconsideration.

1. Labor Code, section 5000, subdivision (b), authorizes an employee to release claims of his dependents.

Division 4 of the Labor Code, at sections 4701 and 4702, provides for burial expenses of $1,000 and a death benefit of $20,000, which increases to $23,000 for a widow with dependent minor children. Section 5000 sets out in part that: 'nothing in this division shall * * * Confer upon the dependents of any injured employee any interest which the employee may not release by compromise or for which he, or his estate is in the event of such compromise by him accountable to dependents.'

Turning initially to the application of 'dependents' as used in the section, we do not believe, as petitioner contends, that the term refers only to persons claiming accrued and unpaid disability benefits under Labor Code, section 4700, ¹ and not to a person such as a 'surviving widow,' claiming death benefits. ² Section 4701, the statutory authority for payment of the death benefit provides that 'where an injury causes death * * * the employer shall be liable * * * for * * * a death benefit, to be allowed to the Dependents when the employee leaves any person dependent upon him for support.' (Italics added.) Thus, both accrued disability benefits and the death benefit are paid to 'dependents,' and we must reasonably construe section 5000, in authorizing release of 'any interest' of 'dependents,' to refer both to accrued benefits and the death benefit. We conclude that Labor Code, section 5000 empowers an employee to compromise and release claims of his dependents. (See Miller v. Trinity Universal Ins. Co. (1964) 30 Cal.Comp.Cases 430; McGee v. American Motorists Ins. Co. (1943) 9 Cal.Comp.Cases 97; Douglas v. Industrial Acc. Com. (1941) 6 Cal.Comp.Cases 163.)

2. Labor Code section 5000, subdivision (b), does not deny to petitioner due process of law or the equal protection of the laws.

Contending that her widow's right to a death benefit is independent and separate from the right of her husband to compensation during his lifetime, petitioner submits that Labor Code, section 5000, if construed to authorize the employee to release that right, deprives her of property without due process of law and denies her the equal protection of the laws. ³

To establish the separateness and independence of her right to a death benefit, petitioner cites the case of Glavich v Industrial Acc. Com. (1941) 44 Cal.App.2d 517, 112 P.2d 774. In that matter, the injured husband during his lifetime had failed to file for disability benefits within the statutory period; despite such failure, the widow and children filed their claims for death benefits. Holding that the provisions for funeral expenses and a death benefit did not compose an 'inseparable part' of the employee's claim for compensation, the court said: 'Death benefit and burial expenses are different and distinct obligations provided for by statute for the benefit of each and all of the individuals dependent upon the workman.' (P. 521, 112 P.2d p. 777.) The court further reasoned that 'The claim of the widow and minor children had not accrued at the time Mr. Glavich sought to recover compensation for his disability. Since their claim did not then exist, it certainly could not be barred by his failure to apply for compensation.' (P. 523, 112 P.2d p. 778.)

From the Glavich decision, petitioner concludes that her right, allegedly an independent and absolute one, could not constitutionally be compromised by her husband. Although, as the court noted in Glavich, the Legislature has imposed a separate obligation upon employers to afford death benefits to the workman's dependents, the Legislature has also placed conditions upon the payment of such benefits. Section 5000, which is part of the whole legislative scheme of workmen's compensation, confers upon the employee the power to compromise any claims of dependents to death benefits. Since the contingent rights to such benefits derive exclusively from statute (Ruiz v. Industrial Acc. Com. (1955) 45 Cal.2d 409, 414, 289 P.2d 229; see Treat v. Los Angeles Gas etc. Corp. (1927) 82 Cal.App. 610, 615, 256 P. 447), we cannot ignore the statutory condition attached to their accrual. In Glavich the court did not face specific legislation limiting the spouse's separate right to benefits and thus the court was free to effectuate the general policy favoring compensation to workmen and their dependents. In the instant case we confront a clear and specific statute; we cannot so exalt the rights granted under sections 4701 and 4702 of the Labor Code as to render unconstitutional the concurrent limitation on those rights placed by the Legislature in section 5000.

Petitioner also rests her constitutional argument on Lewis v. Connolly Contracting Co. (1936) 264 N.W. 581, 196 Minn. 108, 264 N.W. 581, 583--584, a case in which the court stated: 'To hold that the Industrial Commission, on the application of the insurer, the employer, and the injured workman, (had jurisdiction) to approve a settlement between them to which the dependent widow was not a party, of which she had no notice, and at a time when she had in no manner appeared before the commission, (and thus) could deprive her of all right to compensation for the subsequent death of her husband, would be a startling disregard of the law that a stranger to a suit or proceeding cannot be deprived of his property or rights without notice and opportunity to be heard.' ⁴

Whatever the persuasiveness of the Lewis argument regarding the factual situation there, it does not apply to the statutory situation here. The California Legislature, after presumably weighing the considerations for and against such a measure, has expressly provided that the injured employee may release by compromise any interest his dependents may have in any death benefit. (Lab.Code, § 5000.) No similar enactment confronted the Lewis court.

The legislative provision for, and protection of, a complete settlement of all compensation claims could well rest upon sound policy considerations. The Legislature could have recognized the salutary purpose of enabling the parties to enter into an all-embracing, single settlement of all claims...