Pacific Emp. Ins. Co. v. Industrial Commission

• Decision Date: 29 August 1963
• Citation: 33 Cal.Rptr. 442,219 Cal.App.2d 634
• Parties: PACIFIC EMPLOYERS INSURANCE COMPANY and Empire Star Mines Company, Ltd., Petitioners, v. The INDUSTRIAL ACCIDENT COMMISSION of the State of California, Clyde A. Snell and Lava Cap Gold Mining Corporation, Respondents. Civ. 10634.
• Court: California Court of Appeals Court of Appeals

Page 442

33 Cal.Rptr. 442

219 Cal.App.2d 634

PACIFIC EMPLOYERS INSURANCE COMPANY and Empire Star Mines Company, Ltd., Petitioners, v. The INDUSTRIAL ACCIDENT COMMISSION of the State of California, Clyde A. Snell and Lava Cap Gold Mining Corporation, Respondents.

Civ. 10634.

District Court of Appeal, Third District, California.

Aug. 29, 1963.

Hearing Denied Oct. 23, 1963.

Mullen & Filippi, John A. Thompson, San Francisco, for petitioners.

Rupert A. Pedrin, and R. P. Wisecarver, San Francisco, for respondent, Industrial Accident Commission.

Gladstein, Anderson, Leonard & Sibbett, San Francisco, for respondent, Snell.

PIERCE, Presiding Justice.

Petitioners seek annulment of an award of respondent commission. Petitioners allege that by this award petitioner Empire Star Mines Company, Ltd. (hereinafter 'Empire Star') through its insurer, petitioner Pacific Employers Insurance Company, is required to bear the burden of the entire compensation payable to respondent Clyde Snell for silicosis-produced disability, although employment by Empire Star was only the last (and briefest) of a series of employments where exposures causing the disability existed.

The award was made under Labor Code, section 5500.5 and the result, asserted to be inequitable and unconstitutional, springs from an amendment of that section in 1959 (Stats.1959, ch. 1208, p. 3296).

Pertinent here is that portion of section 5500.5 providing that '[i]n any case involving a claim of occupational disease contracted as a result of more than one employment, the employee making the claim * * * may elect to proceed against any one or more of the employers named in the application. * * * [A]ny award which the commission shall issue awarding compensation benefits shall be a joint and several award as against any two or more employers who may be held liable for compensation benefits.' Also pertinent is the further provision in the section that at any time within a year after an award the employers held liable may institute proceedings before the commission to determine proportionate liability and to obtain contributions from other chargeable employers.

The section as originally enacted in 1951 (Stats.1951, ch. 1741, p. 4154) included a provision recognizing that the subsequent proceeding would be ineffectual to the extent that other employers from whom contributions were sought (or their insurers) were beyond the commission's jurisdiction or were insolvent. The Legislature stated: 'It is inequitable that total ultimate liability should fall on one or more such employers who happen to be solvent or have solvent insurance carriers within the commission's jurisdiction or in reach of its process.' Therefore, in silicosis cases the commission was authorized, in the apportionment proceedings, to make an award to the paying employer or employers out of the Subsequent Injuries Fund ¹ 'in an amount equal to the unreimbursed portions of the original payment or payments to which such employer or employers are found entitled. * * *'

The 1959 amendment deleted this right of access and, as stated above, it is this deletion which petitioners contend renders the section (as applied to them under the facts found) obnoxious to the Fourteenth Amendment of the Constitution of the United States.

The facts found by the commission (and it is not contended that substantial evidence does not support them) are that applicant Snell sustained injury consisting of the industrial disease of silicosis arising out of and in the course of his employment by Lava Cap Gold Mining Corporation (hereinafter 'Lava Cap'), self-insured, and by petitioner Empire Star, insured by petitioner Pacific Employers Insurance Company. The disease culminated in a disability on May 21, 1956. The commission found, 'Said disease of silicosis resulted from exposure to harmful dust over a period of many years.' The evidence showed that commencing in 1934 Snell had worked underground in gold mines in Colorado a total of 5 1/2 years; that in 1940 he moved to California and was subsequently employed by Lava Cap for 21 months. Thereafter between October 7, 1947 and January 5, 1948 and for two days in 1950, Snell was employed by Empire Star (a total of 68 shifts). During all of said employments he was exposed to silica dust. An award was made by the commission in favor of Snell and against Lava Cap and Empire Star 'jointly and severally.' Lava Cap has not contested the award and it appears it is insolvent, although as a self-insured employer it has deposited $25,000 in United States bonds to secure payment of claims.

The contention of petitioners can be stated more specifically as follows: That a rule subjecting one or two out of a greater number of successive employers to several liability for an entire award of compensation for disability caused by an occupational disease is unconstitutional (violating due process) when the paying employers cannot with certainty obtain reimbursement for excess payments; that unconstitutionality is obviated if the law creating such liability provides such reimbursement out of public funds; but that withdrawal of the fund for reimbursement will leave the exaction of liability again offensive to due process as an unauthorized taking of private property.

It at once becomes apparent that petitioners' theory hinges upon the soundness of its premise; because if liability could originally validly exist without provision for public fund reimbursement the fact that the Legislature first granted, then withdrew, the benefit would not violate any constitutional guaranty--at least under the facts here. It would simply be a case where 'the Legislature hath given; the Legislature hath taken away, blessed be' etc.

Respondents argue that such liability without right of reimbursement from public funds did originally exist here--not by statute but by case law; that the Legislature in enacting section 5500.5 merely codified the existing rule. They cite and rely upon Colonial Insurance Co. v. Industrial Accident Commission, 29 Cal.2d 79, 172 P.2d 884, decided in September, 1946, in which our State Supreme Court (per Justice Carter) asserted the rule (on page 82 of 29 Cal.2d, on page 886, of 172 P.2d):

'* * * [I]n progressive occupational diseases * * * the employee may, at his option, obtain an award for the entire disability against any one or more of successive employers or successive insurance carriers if the disease and disability were contributed to by the employment furnished by the employer chosen or during the period covered by the insurance even though the particular employment is not the sole cause of the disability.'

At the time that decision was made, there was no fund out of which refunds could be sought or made.

Colonial Insurance Co., supra, was followed by this court in two cases, Industrial Indemnity Exchange v. Industrial Accident Commission, 87 Cal.App.2d 465, 197 P.2d 75, and Globe Indemnity Co. v. Industrial Accident Commission, 125 Cal.App.2d 763, 271 P.2d 149, in the latter of which the court (per Justice Peek) said on page 768 of 125 Cal.App.2d, on page 153 of 271 P.2d:

'It would seem that since the case of Colonial Ins. Co. v. Industrial Acc[ident] Comm., 29 Cal.2d 79, 172 P.2d 884, there could be no question of the right of a disabled employee to proceed against 'any one or more of successive employers or successive insurance carriers', 29 Cal.2d at page 82, 172 P.2d at page 886, and if the 'disease and disability were contributed to by the employment * * * [he could] have an award against any or all of them for the whole disability * * *''.

The question of due process seems not to have been raised in Colonial Insurance Co., supra. Neither was it raised in the two cited cases following and reasserting its rule. Therefore the rule must now be tested against such attack.

Our original Workmen's Compensation Law adopted in 1913 (Stats.1913, p. 279) under state constitutional authorization in 1911 (Art. XX, sec. 21, p. 2179) was upheld generally against a claim of unconstitutionality (violation of due process and equal protection of law) in 1915 in Western Indemnity Co. v. Pillsbury, 170 Cal. 686, 151 P. 398. The holding of the court that the act was a valid exercise of the police power included a statement (on page 694 of 170 Cal., on page 401 of 151 P.) that '[t]he broad and all-pervading scope of this power makes a satisfactory definition of it impossible' but, says the court, '[f]or the purposes of this discussion, the police power is, we think, adequately and well described by the Supreme Court of Washington in these words: 'By means of it, the Legislature exercises a supervision over matters affecting the common weal and enforces the observance by each individual member of society of duties which he owes to others and the community at large. The possession and enjoyment of all rights are subject to this power. Under it, the state may 'prescribe regulations promoting the health, peace, morals, education and good order of the people, and to legislate so as to increase the industries of the state, develop its resources, and add to its welfare and prosperity.' In fine, when reduced to its ultimate and final analysis, the police power is the power to govern.' State ex rel. DavisSmith Co. v. Clausen, 65 Wash. 156, 177, 117 P. 1101, (37 L.R.A. [N.S.] 466).'

'The arbitrary taking of life, liberty, or property cannot, of course, be justified by referring the act to the police power. But, if a given piece of legislation may fairly be regarded as necessary or proper for the protection or furthering of a legitimate public interest, the mere fact that it hampers private action in a matter which had theretofore been free from interference is not a sufficient ground for nullifying the act.'

This description of the police power by the court had been prefaced by a discourse on the nature and purpose of Workmen's Compensation legislation, the court saying on pages...