Ogdon v. Workmen's Comp. Appeals Bd.

• Decision Date: 15 April 1974
• Citation: 11 Cal.3d 192,520 P.2d 1022,113 Cal.Rptr. 206
• Court: California Supreme Court
• Parties: , 520 P.2d 1022 Donald R. OGDON, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD, SAN BERNARDINO COUNTY WELFARE DEPARTMENT, et al., Respondents. L.A. 30131.

Page 206

113 Cal.Rptr. 206

11 Cal.3d 192, 520 P.2d 1022

Donald R. OGDON, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD, SAN BERNARDINO COUNTY WELFARE DEPARTMENT, et al., Respondents.

L.A. 30131.

Supreme Court of California In Bank.

April 15, 1974.

Thompson, Talbott, Lemaster & Taylor, and George D. Thompson, Pomona, for petitioner.

Rushing & Clark, Modesto, Rushing, and Clark, Albert G. Clarke, Jr., Modesto, Daniel S. Brunner, San Pedro, W. Dayton Coles, Jr., Los Angeles, and JayAllen Eisen, San Francisco, as amici curiae on behalf of petitioner.

Stanford D. Herlick, County Counsel, San Bernardino, for respondents.

McCOMB, Justice.

Donald R. Ogdon, an applicant for workmen's compensation, seeks review of an award of lien made by the appeals board to the San Bernardino County Welfare Department in the sum of $2,031.50 against the sum of $9,177.91, the balance remaining under the Compromise and Release Agreement entered into between Ogdon, his employer, and the latter's insurance carriers after deduction of other liens not here contested. The referee ordered that the sum of $2,031.50 be withheld from payment pending determination of the validity of the lien asserted by the County Welfare Department (County). The lien was ordered paid in full by the appeals board.

The County had paid moneys to Ogdon under the Aid to Families with Dependent Children Program (AFDC) (Welf. & Inst. Code, § 1200 et seq.) during a period subsequent to industrial injuries when he was no longer receiving compensation disability payments, his claims for permanent disability and additional temporary disability were pending and disputed, he was physically unable to work, he had a wife and four children to support, and he qualified for benefits under the AFDC program for the support of himself and his family. The County discontinued payment to Ogdon when the Compromise and Release Agreement settling his workmen's compensation claim was executed. It then asserted a lien against the award for the AFDC payments theretofore made, relying on a statutory provision allowing liens to be filed against compensation awards for 'The reasonable value of the living expenses of an injured employee or of his dependents, subsequent to the injury' (Lab.Code, § 4903, subd. (c)).

It would serve no useful purpose to recount the complex procedural history of this case. It is sufficient to note that there is now no issue as to the validity of the Compromise and Release Agreement, the propriety of its approval by the appeals board, the eligibility of Ogdon to receive AFDC benefits during the period in which he received them, the absence of fraud or failure to disclose income or resources, and the use of the funds so received for the support of himself and his family. The fact that the award was based on a settlement agreement rather than litigation creates no problem. It is settled law that an approved compromise and release agreement has the same force and effect as an award made after a full hearing. (Lab.Code, § 5002; Aetna Life Ins. Co. v. Ind. Acc. Com. (1952) 38 Cal.2d 599, 241 P.2d 530; Raischell & Cottrell, Inc. v. Workmen's Compensation Appelas Bd. (1967) 249 Cal.App.2d 991, 997, 58 Cal.Rptr. 159.)

The general issue is whether the appeals board acted without or in excess of its jurisdiction in allowing this lien. It is a constitutional tribunal (Cal.Const., art. XX, §§ 17 1/2, 21) but if it allows a lien in satisfaction of an obligation not specified in section 4903 of the Labor Code it acts in excess of its authority and without jurisdiction. (Western Union Tel. Co. v. Fibush (1935) 4 Cal.2d 185, 188, 48 P.2d 37.)

The determination of this issue requires review of the pertinent provisions of the state Workmen's Compensation and Insurance Act (Lab.Code, Div. 4, § 3201 et seq.), the state Public Social Services Act (Welf. & Inst.Code, Div. 9, § 10000 et seq.), the federal Social Security Act (42 U.S.C.A., § 601 et seq.) and administrative regulations promulgated by the Department of Health, Education and Welfare (HEW) 45 CFR 200 et al.) in connection with the federal act.

We begin with the lien provisions of the Labor Code. Section 4903 must be read in conjunction with section 4901. ¹ Section 4901 provides: 'No claim for compensation nor compensation awarded, adjudged, or paid, is subject to be taken for the Debts of the party entitled to such compensation Except as hereinafter provided.' (Italics added.) Section 4903 itemizes the 'debts' which may be allowed as liens against a compensation award by the appeals board. ² These two sections indicate a clear legislative intent to remove such awards from the operation of the usual remedies available to creditors, to limit and regulate the kinds of debts which may be allowed, and to insure that the award is made available to the injured employee for his recovery and rehabilitation in accordance with the purposes of the act. (Dept. of Mental Hygiene v. Ind. Acc. Com. (1960) 183 Cal.App.2d 832, 834--835, 7 Cal.Rptr. 257; see Pacific E. Ry. Co. v. Bonding etc. Ins. Co. (1921) 55 Cal.App. 704, 204 P. 262; Hanna, Law of Employees' Injuries and Workmen's Compensation (1973) Vol. II, § 17.07(4)(a).)

Section 4903 is a procedural statute (Lohman v. Barker Bros. Corp. (1957) 22 Cal.Comp.Cases 247). In order to assert a lien against a compensation award there must be a valid debt and the debt must be within one of the classes enumerated in the statute for which a lien may be lawfully declared in that proceeding (Los Angeles v. Ind. Acc. Com. (1926) 76 Cal.App. 639, 245 P. 796). The creditor must possess a right of repayment. Liens may not be asserted for moneys paid pursuant to a contract (Glass Containers, Inc. v. Ind. Acc. Com. (1953) 121 Cal.App.2d 656, 660, 264 P.2d 148); voluntarily (Dean v. Signal Oil and Gas Co. (1944) 10 Cal.Comp.Cases 78); or as a gift (Ila v. Cal.Comp.Ins. Co. (1953) 18 Cal.Comp.Cases 241).

Government entities are entitled to the same standing as private citizens in asserting 4903 liens (Pac. Employers Ins. Co. v. Ind. Acc. Com. (1959) 24 Cal.Comp.Cases 38; cert. den. 359 U.S. 911, 79 S.Ct. 588, 3 L.Ed.2d 575), but their liens must be statutorily conferred (Fifield Manor v. Finston (1960) 54 Cal.2d 632, 642, 7 Cal.Rptr. 377, 354 P.2d 1073). In Pacific Employers a lien claim of the Veterans Administration was allowed for medical treatment provided to an injured veteran when his employer's compensation insurer refused to provide it. Veterans Administration regulations, which are promulgated under congressional authority, provide that medical care can be furnished without cost to a veteran for non-service connected disability only to the extent that third parties are not liable therefore. In furnishing such medical care the Veterans Administration came within subdivision (b) of section 4903.

No provision is made in section 4903 for the allowance of a lien to the Department of Social Welfare or to a county for the payment of AFDC funds to a compensation claimant during the period while his claim is being disputed. It appears to be significant that the Legislature has made specific provision for the allowance of a lien to the Department of Employment for reimbursement of unemployment compensation disability benefits paid during the period where there is uncertainty whether benefits are payable under the Unemployment Insurance Code or under the workmen's Compensation and Insurance Act (subd. (f)) and has made specific provision for reimbursement of unemployment compensation benefits and extended duration benefits paid for the same days for which he receives or is entitled to receive total disability indemnity payments (subd. (g)). Under the well-known rule of statutory interpretation, Expressio unius est exclusio alterius, the failure of the Legislature to make provision in this section for recoupment or reimbursement of AFDC funds paid during a period of uncertainty whether a workmen's compensation claim would be allowed seems intentional. Subdivisions (f) and (g) illustrate a deliberate balancing by the Legislature of competing public policies,--to avoid overlapping or duplicating payments for the same period to the same injured employee, to encourage prompt payment of benefits where there is a question as to the source to which he should look for aid, and to avoid jeopardizing or diminishing his statutory right to benefits during the period of need and uncertainty.

We next examine the pertinent provisions made by Congress and the Legislature with regard to the AFDC program. This program is state-supervised and county-administered, but is encouraged and financed in substantial part by grants-in-aid from the federal government (Title IV--A, Social Security Act, 42 U.S.C.A., §§ 601--609). Federal funds are advanced to participating states according to the minimum standards of eligibility and administration set by Title IV--A in order to carry out the program 'as far as practicable under the conditions in such State' (Id., § 601). It is basically a voluntary program, with the determination of standard of need and level of benefits left to the individual participating states. (Rosado v. Wyman (1970) 397 U.S. 397, 90 S.Ct. 1207, 25 L.Ed.2d 442; Cal. Welfare Rights Organization v. Carleson (1971) 4 Cal.3d 445, 450, 93 Cal.Rptr. 758, 482 P.2d 670.) States electing to participate must comply with the mandatory requirements established by the act, as interpreted and implemented by regulations promulgated by HEW (County of Alameda v. Carleson (1971) 5 Cal.3d 730, 739, 97 Cal.Rptr. 385, 488 P.2d 953).

The stated purpose of the federal act is to encourage 'the care of dependent children in their own homes or in the homes of relatives . . . to help maintain and strengthen family life and to help such parents or relatives to attain or to retain capability for the maximum self support' (42 U.S.C.A., § 601). Such aid must be furnished to all eligible individuals with reasonable...