Ray v. Industrial Acc. Commission

• Decision Date: 28 November 1956
• Citation: 146 Cal.App.2d 393,303 P.2d 793
• Court: California Court of Appeals
• Parties: Charles RAY, d/b/a Built-Rite Fence Company, Petitioner, v. INDUSTRIAL ACCIDENT COMMISSION of the State of California and William Charles Woigamott, Respondents.

Page 793

303 P.2d 793

146 Cal.App.2d 393

Charles RAY, d/b/a Built-Rite Fence Company, Petitioner, v. INDUSTRIAL ACCIDENT COMMISSION of the State of California and William Charles Woigamott, Respondents.

District Court of Appeal, Third District, California.

Nov. 28, 1956.

Manwell & Manwell, James G. Changaris, Marysville, for petitioner.

Donald E. Huckins, Marysville, for respondent Wolgamott.

Everett A. Corten, Daniel C. Murphy, San Francisco, for Industrial Accident Commission.

PEEK, Justice.

Petitioner seeks review of an award of the Industrial Accident Commission granting respondent-employee Wolgamott additional compensation by reason of the alleged serious and willful misconduct of the petitioner-employer under the provisions of Labor Code, section 4553.

The facts show that on February 16, 1954, Wolgamott, while operating an unguarded table saw, sustained an injury admittedly arising out of and in the course of his employment. On January 31, 1955, after negotiation with the respondent insurance carrier, Wolgamott entered into a 'Compromise and Release' of claim for the sum of $4,320 which was the exact amount of the advisory disability rating of 36 percent previously given by the Permanent Disability Rating Bureau. The agreement which was on a form supplied by the Commission provided in part as follows:

'Upon approval of this Compromise agreement by the Industrial Accident Commission and payment in accordance with the provisions hereof, said applicant releases and forever discharges said employer and insurance carrier from all claims and causes of action, whether now known or ascertained, or which may hereafter arise or develop as a result of said injury * * *.'

The agreement was not signed by the petitioner but only by Wolgamott and Fireman's Fund, petitioner's insurance carrier, and was not attested to by two disinterested witnesses or a notary public as required by Labor Code, section 5003, however no question in that regard was raised before the Commission.

On February 10, 1955, prior to the approval of the compromise agreement by the Commission, Wolgamott filed an application for increased compensation under the provisions of section 4553 of the Labor Code. On February 17, 1955, pursuant to a referee's recommendation, the compromise agreement was approved by the Commission and filed. On March 1, 1955, Wolgamott filed an amended application for hearing wherein he specifically charged the violation of safety orders of the Department of Industrial Relations requiring the maintenance of a hood over a circular saw. The answer of the employer (1) denied the allegations of misconduct, (2) affirmatively alleged the application was barred by the provisions of section 5407 of the Labor Code and (3) pleaded the compromise and release in bar. The Commission found against the employer over his first affirmative defense based on section 5407, but made no finding on his second affirmative defense and concluded that the injury was caused by the serious and willful misconduct of the employer and awarded additional compensation. A petition for reconsideration was granted, but after further consideration the decision was affirmed.

It is now contended by the petitioner (1) that the claim was barred by the written 'Compromise and Release', (2) that the claim is barred by the statute of limitations, and (3) that the charge of misconduct was neither properly pleaded nor supported by the evidence.

Petitioner's argument in support of his first contention is predicated primarily upon the release provisions contained in Civil Code, sections 1541 and 1542, and upon the alleged failure of the Commission to find specifically on the issue so raised. Neither petitioner nor the I.A.C. has referred this court to any California decision. However, we find that one California case, Peterson v. Industrial Acc. Comm., 81 Cal.App.2d 352, 183 P.2d 927, 930, has noted to a degree the difference between the procedures relative to the two types of benefits, and that courts in other jurisdictions, namely Massachusetts and Nebraska, have had the question squarely presented. In the Peterson case the court noted that while one may claim both ordinary compensation and compensation arising out of willful misconduct in the same proceeding, nevertheless the language of section 5407 indicates an intention that '* * * some definite step, other and different from the filing of a general application, must be taken to raise an issue of willful misconduct * * *.' This distinction is further amplified by the fact that under the terms of section 3700, compensation for ordinary benefits is compulsory while under the provisions of section 11661 of the Insurance Code, insurance covering willful misconduct liability cannot be legally written.

Although the cases from other jurisdictions arose under statutes different from those in this state, the rationale of the decisions appears to be substantially the same and equally applicable here; that the insurance carrier can only be interested in that portion of the coverage in which it is directly liable, and this could not include compensation for serious or willful misconduct for which it could not insure. See Mercer-Fraser Co. v. Industrial Acc. Comm., 40 Cal.2d 102, 108, 251 P.2d 955. Hence the insurance carrier could not bargain for the release of the employer from such additional...