Kaiser Foundation Hospitals v. Workers' Com. Appeals Bd.

• Decision Date: 21 June 1978
• Court: California Court of Appeals Court of Appeals
• Parties: KAISER FOUNDATION HOSPITALS and Southern California Permanente Medical Group, Petitioners, v. WORKERS' COMPENSATION APPEALS BOARD of the State of California and Vornado, Inc., et al., Respondents. Civ. 51870.

Page 30

147 Cal.Rptr. 30

82 Cal.App.3d 39

KAISER FOUNDATION HOSPITALS and Southern California Permanente Medical Group, Petitioners, v. WORKERS' COMPENSATION APPEALS BOARD of the State of California and Vornado, Inc., et al., Respondents.

Civ. 51870.

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

June 21, 1978.

Thelen, Marrin, Johnson & Bridges, James W. Baldwin and Robert Loeffler, Los Angeles, for petitioners.

Kendig, Stockwell & Gleason, Inc., Eugene L. Stockwell, Jr., and Ian Joseph McNeil, Los Angeles, for respondent Vornado, Inc.

Thomas J. McBirnie, San Francisco, for respondent Workers' Compensation Appeals Bd.

FILES, Presiding Justice.

Petitioners Kaiser Foundation Hospitals and Southern California Permanente Medical Group (hereinafter "Kaiser") seek review of an award made July 28, 1977. They contend the Workers' Compensation Appeals Board (hereinafter "Board") erred in holding that part of Kaiser's lien for the value of medical services was barred by the statute of limitations. Kaiser asserts this contention based upon the arguments that the defense of statute of limitations was waived and/or that the statute of limitations may not be applied to its lien. Since we find that there was a waiver of the defense of statute of limitations as to Kaiser's lien, we need not reach Kaiser's contentions regarding the application of the statute of limitations.

Relevant Facts

On or about October 29, 1974, Sylvia J. Kramer (hereinafter "applicant") filed a claim for workers' compensation death benefits (Lab. Code, § 4700 et seq.) which alleged that her spouse, Ronald A. Kramer (hereinafter "decedent") who was employed by respondent Vornado, Inc., dba Two Guys Department Stores (hereinafter "Vornado") during the period commencing January 1, 1969, to and including September 22, 1974, sustained injury arising out of and occurring in the course of said employment to his heart which resulted in his death on September 22, 1974.

Kaiser provided medical treatment to decedent for his heart condition and hypertensive cardiovascular disease during the period prior to and up to decedent's death. On or about April 1, 1975, Kaiser filed a lien in the workers' compensation proceedings in the amount of $7,010.55 for reimbursement for the costs of such medical treatment. (See Lab. Code, § 4903(b).)

Vornado denied decedent's heart disease, hypertension and resulting death were the result of employment at Vornado and refused to pay any death benefits. The matter came on for hearing before the workers' compensation trial judge. Among the issues at that hearing were: "Injury arising out of and occurring in the course of employment to the heart, resulting in (decedent's) death on September 22, 1974"; "Liability for self procured medical treatment"; "Lien claims"; and "Statute of Limitations."

Thereafter the judge issued a finding and award, dated July 13, 1976, which held that decedent's death was industrially related and that applicant was entitled to workers' compensation death benefits. Of importance here are findings of fact numbers 6 and 8 which stated:

"6. Defendants (Vornado) failed to furnish medical treatment when necessary and (decedent and/or applicant) incurred expense therefor. The amount of such treatment is to be adjusted by the parties, including but not limited to the lien claim of Kaiser Permanente Medical Center in the sum of $7,010.55."

"8. Defendants (Vornado) failed to sustain the burden of proof re Statute of Limitations."

Vornado then sought reconsideration (for purposes of clarity this petition for reconsideration will be called the "initial petition for reconsideration"), contending that substantial evidence did not support the judge's finding of industrial injury. In the initial petition for reconsideration, Vornado did not challenge the judge's finding concerning the statute of limitations. The Board denied reconsideration and Vornado did not seek appellate review at that time.

Subsequently, Kaiser admitted that $751.75 of the charges identified in Kaiser's lien was for medical treatment provided prior to decedent's employment with Vornado. Kaiser offered to accept $6,258.80 in full satisfaction of its lien but this was rejected by Vornado. Being unable to "adjust" Kaiser's lien, the parties requested a hearing be set on the matter. ¹

After a hearing on June 3, 1977, the judge issued a Supplemental Findings and Award dated June 9, 1977, which awarded $6,243.80 to Kaiser in full satisfaction of its lien. Vornado then sought reconsideration (hereinafter, for purposes of clarity, this petition for reconsideration will be called the "second petition"), contending Kaiser's lien was barred all or in part by the statute of limitations in that more than one year prior to the time the claim was filed Kaiser "knew or should have known" that decedent's heart condition was compensable.

In reply to the second petition, in his Report of Trial Judge on Petition for Reconsideration, the judge recommended Vornado's petition for reconsideration be denied, stating in part:

"At the hearing of March 11, 1976, defendant raised the issue of Statute of Limitations. By Findings and Award issued July 13, 1976, defendant was found not to have sustained the burden of proof on that issue. (Finding No. 8.) By Finding No. 6, reimbursement of the lien of Kaiser Permanente was awarded but subject to adjustment. Defendant then petitioned on other grounds. This Petition on the Statute of Limitations is untimely."

By an opinion and order filed July 28, 1977, the Board granted reconsideration. The Board concluded that Kaiser "knew or should have known" decedent's cardiovascular condition was industrially related more than one year before the claim was filed by applicant. The Board held that the statute of limitations barred that portion of Kaiser's lien pertaining to the cost of treatment rendered earlier than one year before applicant filed her claim.

Discussion

The statute of limitations is an affirmative defense. (Lab. Code, § 5409.) In the findings and award of July 13, 1976, the trial judge made a general finding that Vornado had "failed to sustain the burden of proof re Statute of Limitations." As this finding is unlimited by its terms, the inescapable conclusion is that such finding holds that no aspect of the claim before the judge, including Kaiser's lien, was barred by the statute of limitations. ²

Vornado's failure to request Board review in the initial petition for reconsideration on the issue of statute of limitations is an effective waiver of the defense. (Lab. Code, § 5904; Cedillo v. Workmen's Comp. Appeals Bd. (1971) 5 Cal.3d 450, 455-456, 96 Cal.Rptr. 471, 487 P.2d 1039; U. S. Auto Stores v. Workmen's Comp. App. Bd. (Brenner ) (1971) 4 Cal.3d 469, 476-477, 93 Cal.Rptr. 575, 482 P.2d 199.) Such waiver cannot be remedied by Vornado's attempt to relitigate the issue at the hearing of June 3, 1977. (Cf. Young v. Ind. Acc. Com. (1944) 63 Cal.App.2d...