Sea-Land Service, Inc. v. Workers' Comp. Appeals Bd., SEA-LAND

• Citation: 14 Cal.4th 76,925 P.2d 1309,58 Cal.Rptr.2d 190
• Decision Date: 02 December 1996
• Docket Number: No. S042327,SEA-LAND,S042327
• Court: United States State Supreme Court (California)
• Parties: , 925 P.2d 1309, 61 Cal. Comp. Cases 1360, 96 Cal. Daily Op. Serv. 8649, 96 Daily Journal D.A.R. 14,399 SERVICE, INC., et al., Petitioners, v. WORKERS' COMPENSATION APPEALS BOARD and Chris A. Lopez, Respondents.

Page 190

58 Cal.Rptr.2d 190

14 Cal.4th 76, 925 P.2d 1309, 61 Cal. Comp. Cases 1360,

96 Cal. Daily Op. Serv. 8649,

96 Daily Journal D.A.R. 14,399

SEA-LAND SERVICE, INC., et al., Petitioners, v. WORKERS' COMPENSATION APPEALS BOARD and Chris A. Lopez, Respondents.

No. S042327.

Supreme Court of California.

Dec. 2, 1996.

Frank B. Hugg, San Francisco, Jeanne M. Bates, Baltimore, MD, and Wendy B. Moseley, San Francisco, for Petitioners.

Littler, Mendelson, Fastiff, Tichy & Mathiason, Roy D. Axelrod, Margaret C. Bell, San Diego, and Samantha M. Paynter as Amici Curiae on behalf of Petitioners.

Boxer, Elkind & Gerson and Michael G. Gerson, Oakland, for Respondents.

William A. Herreras, Grover Beach, and Patrick O'Shaughnessy, Salinas, as Amici Curiae on behalf of Respondents.

BAXTER, Justice.

When a maritime employee suffers an industrial injury that falls within the concurrent jurisdiction of the Longshore and Harbor Workers' Compensation Act (LHWCA) (33 U.S.C. § 901 et seq.) and the California Workers' Compensation Act (Lab.Code, § 3200 et seq.), ¹ must the total amount of disability benefits paid to the employee under the LHWCA be credited against the total amount of disability benefits awarded under the California act, or may credit for LHWCA benefits be determined by comparing the amount paid or awarded in each specific category of benefits under each act?

We conclude that credit for LHWCA disability benefits must be calculated based upon a comparison of the total disability benefit payments and awards under each act, regardless of category. Accordingly, the contrary judgment of the Court of Appeal is reversed and the matter is remanded for further proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

The facts are not disputed. Sea-Land Service, Inc. (Sea-Land) employed Chris A. Lopez (Lopez) as a maritime warehouse worker. On July 15, 1985, Lopez suffered an industrial injury to his shoulder while working for Sea-Land.

The parties stipulated that Lopez's injury fell within the concurrent jurisdiction of the California Workers' Compensation Act and the federal LHWCA. Sea-Land, permissibly self-insured, provided all medical care and paid temporary disability indemnity to Lopez under the LHWCA. These temporary disability payments totaled $25,457, which was $9,617 more than the $15,840 in temporary disability indemnity to which Lopez was entitled under the California act. ² After a formal hearing and order, a federal administrative law judge awarded unscheduled wage loss permanent disability benefits of $7,041 to Lopez under the LHWCA. Although Sea-Land paid the $7,041 in federal permanent disability benefits to Lopez, this award was later reversed on appeal.

Subsequently, the California Workers' Compensation Appeals Board (WCAB) awarded Lopez scheduled permanent partial disability indemnity of $9,020. Even though the maximum amount of temporary disability benefits available to Lopez under the LHWCA ($25,457) exceeded the total combined amount of temporary and permanent disability benefits available to him under the California act ($24,860), Lopez claimed that, in addition to the federal temporary disability benefits, he was entitled to state permanent disability benefits because no such benefits were allowed under the LHWCA.

In order to reconcile the state award and the prior federal disability payments, Lopez conceded before the WCAB that Sea-Land was entitled to a credit for all payments made under the LHWCA for benefits of the same category (category-by-category credit). In this regard, Lopez agreed that, because federal temporary disability benefits were higher than California would have allowed, he was not entitled to any additional temporary disability payments under state law. Also, Lopez agreed that Sea-Land was entitled to a credit against his state permanent disability indemnity award for the $7,041 in federal permanent disability payments Sea-Land made before the federal award was reversed. Lopez objected, however, to Sea-Land's petition for credit of its excess federal temporary disability payments of $9,617 against its remaining liability for $1,979 for state permanent disability benefits. ³

A workers' compensation judge accepted Lopez's concessions that federal temporary disability should be credited against state temporary disability and that federal permanent disability should be credited against state permanent disability. The judge, however, denied Sea-Land's petition for credit of the excess federal temporary disability against state permanent disability and awarded $1,979 to Lopez. The WCAB denied reconsideration of the judge's determination, and the Court of Appeal summarily denied Sea-Land's petition for writ of review. After this court granted Sea-Land's petition for review and transferred the matter to the Court of Appeal with instructions to vacate the summary denial and grant the writ of review, the Court of Appeal concluded in a split decision that the WCAB properly granted category-by-category credit of Sea-Land's federal temporary and permanent disability payments. We granted Sea-Land's petition for review.

II. DISCUSSION

"A basic premise of compensation law is that there shall be but a single recovery of benefits on account of a single injury or disability; to permit a double recovery would be to place a double burden on industry and encourage malingering; the right to recovery of compensation from more than one source is subject to the rule that a credit shall be allowed against an award for any payment to the extent that it permits a double recovery." (Raischell & Cottrell, Inc. v Workmen's Comp.App. Bd. (1967) 249 Cal.App.2d 991, 997, 58 Cal.Rptr. 159.)

In this case, the parties agree on the general proposition that, when an injury falls within the concurrent jurisdiction of the LHWCA and the California Workers' Compensation Act, the injured worker may not obtain a "double recovery" of disability benefits. They also agree it is appropriate to credit benefit payments made by an employer pursuant to the LHWCA against an award for the same injury under the California act to prevent such double recovery.

Notwithstanding their evident accord on the above points, the parties are in sharp disagreement over what method of crediting must be applied to LHWCA disability payments where benefits are later sought under the California act. As indicated above, Sea-Land argues it should be given dollar-for-dollar or full economic credit of its excess federal temporary disability payments against its remaining liability for state permanent disability indemnity. (See fn. 3, ante.) As the former amount exceeds the latter in this case, Sea-Land reasons it should not have to pay additional amounts for state permanent disability indemnity. Conversely, Lopez argues that credit for payments under the LHWCA should be determined on a category-by-category basis rather than by comparing the total payments or awards made under each act. Lopez claims that since permanent disability benefits are not available under the LHWCA in his case, no credit is applicable under the California act and, therefore, he is entitled to receive state permanent disability benefits in addition to the temporary disability benefits he received under the LHWCA.

The difference in the two crediting systems essentially boils down to this. Under the category-by-category credit system advanced by Lopez, an employee's final recovery of state and federal disability benefits for an injury could exceed that available under either the LHWCA or the California act alone. Under the dollar-for-dollar credit system supported by Sea-Land, an injured employee's final recovery would be limited to the higher available recovery under one act or the other. Mindful of this difference, we begin our analysis.

The LHWCA "establishes a comprehensive federal workers' compensation program that provides longshoremen and their families with medical, disability, and survivor benefits for work-related injuries and death." (Howlett v. Birkdale Shipping Co., S.A. (1994) 512 U.S. 92, 95, 114 S.Ct. 2057, 2062, 129 L.Ed.2d 78.) Jurisdiction under the LHWCA is not exclusive, however. Amendments made to the LHWCA in 1972 have been interpreted as allowing states to apply their own workers' compensation schemes to land-based injuries that fall within the coverage of the federal act. (Sun Ship, Inc. v. Pennsylvania (1980) 447 U.S. 715, 100 S.Ct. 2432, 65 L.Ed.2d 458 (hereafter Sun Ship ).)

The United States Supreme Court has twice addressed the issues of double recovery and crediting in the context of LHWCA awards. In Calbeck v. Travelers Insurance Co. (1962) 370 U.S. 114, 82 S.Ct. 1196, 8 L.Ed.2d 368 (hereafter Calbeck ), the high court affirmed two awards ordering benefits under the LHWCA, holding that an injured employee's previous acceptance of state disability benefits did not constitute an election of remedies so as to preclude a subsequent claim for benefits under the LHWCA. In so holding, the court observed: "in the order [to pay compensation under the LHWCA] the full amount of all payments made by the employer [under the state act] was credited against the [LHWCA] award, and no impermissible double recovery is possible." (Calbeck, supra, 370 U.S. at p. 131, 82 S.Ct. at p. 1206, italics added.) Subsequently, in Sun Ship, supra, 447 U.S. 715, 100 S.Ct. 2432, 65 L.Ed.2d 458, the high court relied upon Calbeck, supra, in concluding that a system of concurrent federal-state workers' compensation jurisdiction does not threaten double recovery since awards under one compensation system are credited against any recovery under the second system. (Sun Ship, supra, 447 U.S. at p. 725, fn. 8, 100 S.Ct. at p. 2439, fn. 8.)

In the proceedings below, a majority of the Court of Appeal determined that Calbeck and Sun Ship were unhelpful in answering the crediting question posed here for two reasons (1) both decisions...