Langer v. Workmen's Compensation Appeals Bd.

• Decision Date: 30 January 1968
• Citation: 258 Cal.App.2d 400,65 Cal.Rptr. 598
• Court: California Court of Appeals Court of Appeals
• Parties: Irving LANGER, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD of the State of California; Gilbert& Dolan Enterprises, Inc., a corporation, and Reliance Insurance Company, a corporation, Respondents. Civ. 31910.

Page 598

65 Cal.Rptr. 598

258 Cal.App.2d 400

Irving LANGER, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD of the State of California; Gilbert& Dolan Enterprises, Inc., a corporation, and Reliance Insurance Company, a corporation, Respondents.

Civ. 31910.

Court of Appeal, Second District, Division 5, California.

Jan. 30, 1968.

Raymond Gloozman, Los Angeles, for petitioner.

Everett A. Corten, San Francisco, and Edward A. Sarkisian, Los Angeles, for respondent Appeals Board.

Clopton & Penny and Robert A. Kegel, Los Angeles, for Reliance Ins. Co.

McCOY, Associate Justice. ^*

Petitioner seeks review and annulment of an award of the Workmen's Compensation Appeals Board assessing a penalty, pursuant to Labor Code, section 5814, against the insurance carrier for unreasonable delay in the payment of compensation. Petitioner, the applicant, contends that the board has not computed the penalty as required by the statute.

The statute provides: 'When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the order, decision or award shall be increased by 10 percent. The question of delay and the reasonableness of the cause therefor shall be determined by the appeals board in accordance with the facts. Such delay or refusal shall constitute good cause under Section 5803 to rescind, alter or amend the order, decision or award for the purpose of making the increase provided for herein.'

The board found that the carrier unreasonably delayed payment of compensation benefits awarded in an 'Order Denying Petition to Terminate and Supplemental Findings and Award,' dated September 29, 1966; that applicant was entitled to the sum of $7 per week beginning November 9, 1966, ¹ and continuing thereafter during the continuance of his disability until the further order of the board as a penalty on temporary disability indemnity; and that he was entitled to the sum of $57.92 as a penalty on reimbursement for self-procured medical treatment. The award is in accordance therewith.

It is the applicant's contention that the statute clearly calls for the imposition of a penalty of 10 percent of the full amount of the award of $70 per week commencing October 13, 1964, and not from November 9, 1966. We agree.

Applicant, a carpenter, born 1911, sustained industrial injury to his back on October 12, 1964. Upon his application the referee issued his findings and an award on March 3, 1965. He found that the injury causing continuing temporary total disability beginning October 13, 1964, to and including January 12, 1965 (the date of the hearing) and thereafter, payable at $70 per week and that defendants failed to furnish medical treatment after notice of need and medical costs of the reasonable value of $698.50 were necessarily incurred by the petitioner. The award was for these benefits together with certain medical-legal costs.

Defendants on July 21, 1965, filed a notice of cessation of payments and petition for termination of liability. They alleged that weekly compensation had been paid through July 13, 1965.

Following the filing of the petition for termination of liability there were several hearings but no further award was made for well over a year. On September 29, 1966, the referee found that petitioner's temporary total disability was still continuing and the award of $70 per week beginning October 13, 1964, was continued in force until further order. Among other things defendants were ordered to pay $50 to a Doctor Glass, $150 to a Doctor Thompson and the sum of $41.70 to petitioner as reimbursement for self-procured medical treatment.

It appears that between July 13, 1965, when defendants had stopped paying petitioner the sum of $70 per week and the referee's order of September 29, 1966, defendants had made certain payments to petitioner in the sum of $52.50 per week. The record is fairly obscure on the point but as near as we can gather these payments were not made for a considerable number of weeks.

Reconsideration of the order of September 29, 1966, was denied on November 9, 1966.

On December 5, 1966, petitioner requested penalties under section 5814. The matter came on for hearing on February 15, 1967. At that hearing it appeared without contradiction that in January 1967 after the penalty proceedings were started defendants paid petitioner the sum of $1,820, but even then defendants' total payments were $2,000 short of what they should have paid under the original award and the award of September 29, 1966. They had not paid petitioner the $41.70 for self-procured medical treatment, nor had they paid Drs. Glass and Thompson. Defendants made no attempt to excuse the delinquencies.

After the hearing the referee made an award imposing a penalty of 10 percent on all payments for temporary total disability starting October 13, 1964, and on all reimbursement for self-procured medical treatment.

On reconsideration, the board on May 15, 1967, accepted the referee's findings concerning the unreasonable delay of the payment of compensation benefits, but modified the award by providing that the 10 percent penalty on the temporary disability indemnity was not to start until November 9, 1966.

Labor Code section 5814 was enacted in 1945. Prior to that time section 5811 provided that the commission could, in its discretion, allow interest at a rate not to exceed 1 1/2 percent per month on unreasonably delayed payments of compensation 'during such period of delay.' There was no provision for interest on an award when there was unreasonable delay or refusal of payment. (Pacific Indemnity Co. v. Indus. Acc. Com., 202 Cal. 521, 261 P. 987.) In 1945 section 5800 was added to provide that interest shall run at the same rate as judgments in civil actions on all sums payable forthwith and on other sums as they become due and payable under an award. The interest provision in section 5811 was deleted at that time and the penalty for unreasonable delay was treated in section 5814.

Only a few cases have had occasion to consider the statute. In Hockett v. Industrial Acc. Com., 170 Cal.App.2d 155, 338 P.2d 604, the applicant was disabled for 22 weeks and incurred $1,141.43 medical and hospital expenses and $95 for medical-legal expenses in proving his claim. The defendants paid no benefits whatever. Upon a finding that the payment of compensation had been unreasonably delayed and refused, the commission, as a penalty, increased the award of weekly temporary disability compensation by 10 percent, that is, from $50 to $55 per week. It denied an increase of 10 percent in the amount awarded for reimbursement for medical and hospital expenses and the amount for medical-legal costs. It also refused to increase the amount ordered paid to satisfy the lien of an unemployment compensation insurance carrier. On review the court concluded that the commission was in error in denying a 10 percent increase on the amount incurred for medical care and hospital treatment but was correct in denying the increase on medical-legal costs which are in the nature of costs rather than compensation and on the amount of the lien since that amount had been included in the 10 percent increase on weekly indemnity benefits. It said (pp. 157--158, 338 P.2d p. 606): 'Section 5814 of the Labor Code is not ambiguous and expressly provides that 'When payment of compensation has been unreasonably delayed or refused, * * * The full amount of the * * * award shall be increased by 10 percent.' (Emphasis added.) The award referred to is the award of compensation. 'Compensation' includes every benefit or payment conferred upon an injured employee by division IV of the Labor Code (Labor Code, § 3207). Medical, surgical and hospital treatment reasonably required to cure or relieve from the effects of injury were benefits so conferred (Labor Code, § 4600) and reimbursement for the amount reasonably incurred for such care is compensation under the statute. (Citations).'

In Davison v. Industrial Acc. Com., 241 Cal.App.2d 15, 50 Cal.Rptr. 76, an award had issued to the applicant upon her application for adjustment of claim after receipt of some temporary disability compensation and medical treatment. The award was for continuing weekly disability benefits and medical treatment. It allowed credit to the insurer for sums previously paid. Subsequently the insurer petitioned to terminate benefits and, as in the present case, the petition to terminate was denied and a supplemental award issued for continuing benefits and medical treatment as well as reimbursement for certain self-procured medical treatment. Upon the subsequent delay of the insurer in furnishing medical treatment (although it made weekly disability payments) the applicant requested the imposition of the penalty provided by section 5814. After a hearing supplemental decision issued imposing the penalty by way of a 10 percent increase on everything but medical-legal costs. Thereafter the applicant requested that a second penalty be imposed for an alleged subsequent unreasonable delay in medical treatment. The commission refused to take any evidence on the issue on the ground that under the statute only one 10 percent penalty could be imposed. The court remanded to the appeals board with directions to hear and determine...