Rymer v. Hagler

• Decision Date: 27 June 1989
• Docket Number: No. F009315,F009315
• Citation: 211 Cal.App.3d 1171,260 Cal.Rptr. 76
• Court: California Court of Appeals Court of Appeals
• Parties: Leonard RYMER, Jr., Plaintiff and Appellant, v. Sheridan HAGLER, Defendant and Respondent.

Page 76

260 Cal.Rptr. 76

211 Cal.App.3d 1171

Leonard RYMER, Jr., Plaintiff and Appellant, v. Sheridan HAGLER, Defendant and Respondent.

No. F009315.

Court of Appeal, Fifth District, California.

June 27, 1989.

Certified for Partial Publication ^*

Review Denied Sept. 6, 1989.

Henry W. Bockman, Sherman Oaks, for plaintiff and appellant

Clifford, Jenkins & Brown, Robert D. Harding, Steven D. Rick, Bakersfield, for defendant and respondent.

OPINION

BAXTER, Associate Justice.

STATEMENT OF FACTS AND PROCEEDINGS BELOW

Appellant Rymer filed an application for "Adjudication of Claim" against his employer Hagler with the Workers' Compensation Appeals Board (WCAB) on November 16, 1981. The claim sought compensation for injuries resulting from a work-related accident. Appellant later filed a civil complaint for damages against Hagler in the Kern County Superior Court, which was predicated on the injuries received in the same accident. Appellant relies on LABOR CODE SECTION 3706¹ to establish jurisdiction in the superior court. ² The complaint filed in superior court alleges that Hagler failed to provide workers' compensation benefits to appellant when injured. The two proceedings progressed concurrently.

On September 9, 1986, appellant brought a motion in the WCAB proceeding to exclude Fremont Indemnity Company (Fremont) as a party to the proceeding on the basis that Fremont was not the workers' compensation carrier for Hagler at the time of appellant's injuries. After hearing the arguments of counsel, the WCAB judge denied the motion and found Fremont "either has workers' compensation coverage for the alleged date of injury or is estopped to deny workers' compensation coverage for the alleged date of injury based on their admission of such coverage." The parties were notified the decision was subject to a "Petition for Reconsideration" as provided in section 5900, subdivision (a), which provides that any aggrieved person may seek rehearing of any final order, decision or award made and filed by the appeals board or a workers' compensation judge. Further testimony on the merits of the workers' compensation claim was heard that same day, but the hearing was not concluded. A second day of testimony was set for a later date, but was never held. On November 13, 1986, all parties were served with a written copy of the minutes of the previous hearing at which the WCAB judge issued his order concerning coverage. The order was included in the minutes. That same day appellant petitioned for a voluntary dismissal of the workers' compensation claim. The petition was granted and the claim dismissed on December 3, 1986. Appellant never did seek reconsideration of the judge's decision on the motion to exclude Fremont.

On February 19, 1987, Hagler filed a motion for judgment on the pleadings in the superior court action on the ground that the WCAB judge's ruling on the issue of workers' compensation coverage was binding on appellant in the superior court action. Hagler asked the court to take judicial notice of the prior ruling and argued that since the hearing officer had found coverage on the date of appellant's injury, appellant's civil action could not be maintained under section 3706.

The trial court granted Hagler's motion, and judgment on the pleadings was entered in his favor. Appellant filed a timely notice of appeal.

DISCUSSION

I.

DID THE TRIAL COURT ERR IN APPLYING THE DOCTRINE OF COLLATERAL-

ESTOPPEL ³ TO THE ISSUE OF WHETHER RESPONDENT HAD "SECURED PAYMENT OF COMPENSATION" AS REQUIRED BY SECTION 3700?

Appellant contends the trial court erred in granting respondent's motion for judgment on the pleadings. Appellant argues the trial court incorrectly applied the doctrine of res judicata to the determination of workers' compensation coverage made by the WCAB judge and, by implication, erroneously held the so-called "coverage by estoppel" sufficiently complied with the requirement of section 3700 so as to bar the instant civil action.

The California Workers' Compensation Act (Act) provides an elaborate and complete scheme for the adjudication of claims by employees against employers for injuries arising out of the course and scope of employment. ( § 3600 et seq.; Santiago v. Employee Benefits Services (1985) 168 Cal.App.3d 898, 214 Cal.Rptr. 679; Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465, 165 Cal.Rptr. 858, 612 P.2d 948.) The workers' compensation statute has long been held to provide the exclusive remedy against an employer for work-related death or injury with a few statutory and judicially-created exceptions. (Young v. Libbey-Owens Ford Co. (1985) 168 Cal.App.3d 1037, 214 Cal.Rptr. 400, citing Johns-Manville Products Corp. v. Superior Court, supra, 27 Cal.3d at pp. 467-468, 165 Cal.Rptr. 858, 612 P.2d 948.)

Section 3706 is one of the principal exceptions to the Act's exclusive remedy rule. Section 3706 provides:

"If any employer fails to secure the payment of compensation, any injured employee or his dependents may bring an action at law against such employer for damages, as if this division did not apply."

Section 3706 provides an alternative remedy to an injured worker where the employer has failed to secure the payment of compensation required by section 3700. ⁴ (Young v. Libbey-Owens Ford Co., supra, 168 Cal.App.3d 1037, 214 Cal.Rptr. 400; Felix v. Workmen's Comp. Appeals Bd. (1974) 41 Cal.App.3d 759, 116 Cal.Rptr. 345.) Jurisdiction of the superior court to try claims of an employee against his employer for damages under section 3706 arises only when payment of compensation is not secured. (Scott v. Industrial Acc. Com. (1956) 46 Cal.2d 76, 293 P.2d 18; Strickland v. Foster (1985) 165 Cal.App.3d 114, 211 Cal.Rptr. 305; Coffin v. Bloodworth (1938) 28 Cal.App.2d 522, 82 P.2d 953.) Under the exclusivity provisions of the Act this is true even though, in some instances, a particular worker may have a better claim in a state civil action. (Argonaut Ins. Co. v. Superior Court (1985) 164 Cal.App.3d 320, 210 Cal.Rptr. 417.)

Because the complaint in the instant action seeks recovery against an employer for work-related injuries, the exclusivity rule will bar appellant's superior court action unless he can establish that Hagler failed "to secure the payment of compensation" as required under the Act. It is appellant's burden to show there was no coverage. (Doney v. Tambouratgis (1979) 23 Cal.3d 91, 99, fn. 11, 151 Cal.Rptr. 347, 587 P.2d 1160.)

Appellant's motion to exclude Fremont from the WCAB proceeding clearly raised the issue of whether Hagler secured the payment of compensation at the time of the injuries through Fremont. If Fremont provided coverage, it was an appropriate party to the proceeding. If Fremont did not provide coverage, it had no standing to participate in the proceeding. The WCAB judge ruled Fremont did provide workers' compensation coverage or was estopped from denying coverage on the date of the injury. The trial court found the decision of the WCAB judge conclusively determined the issue of coverage under the doctrine of collateral estoppel. Because there had been a determination of coverage, the trial court dismissed the action against Hagler, finding the action was barred under the exclusivity rule.

"The doctrine of res judicata gives conclusive effect to a former judgment in subsequent litigation between the same parties involving the same cause of action. A prior judgment for the plaintiff results in a merger and supersedes the new action by a right of action on the judgment. A prior judgment for the defendant on the same cause of action is a complete bar to the new action. (4 Witkin, Cal.Procedure (2d ed. 1971) Judgment, §§ 147-148, pp. 3292-3293.) Collateral estoppel is a distinct aspect of res judicata. It involves a second action between the same parties on a different cause of action. The first action is not a complete merger or bar, but operates as an estoppel or conclusive adjudication as to such issues in the second action which were actually litigated and determined in the first action. (Id., § 197, at p. 3335.)" (Preciado v. County of Ventura (1982) 143 Cal.App.3d 783, 786-787, fn. 2, 192 Cal.Rptr. 253.)

The doctrine of collateral estoppel is applicable to final decisions of administrative agencies acting in a judicial or quasi-judicial capacity. (United States v. Utah Constr. Co. (1966) 384 U.S. 394, 421-422, 86 S.Ct. 1545, 1559-1560, 16 L.Ed.2d 642; People v. Sims (1982) 32 Cal.3d 468, 480-481, 186 Cal.Rptr. 77, 651 P.2d 321; French v. Rishell (1953) 40 Cal.2d 477, 254 P.2d 26.) An administrative agency acts in a judicial capacity when it resolves disputed issues of fact properly before it and provides the parties with an opportunity to present evidence and to litigate fully the issues. (United States v. Utah Constr. Co., supra, 384 U.S. at p. 422, 86 S.Ct. at p. 1560.)

In the instant case, the parties were given an opportunity to present evidence and to litigate the coverage issue. The decision in the WCAB proceeding resolved a disputed issue by applying a rule of law ( § 3700) to a specific set of facts. (See People v. Sims, supra, 32 Cal.3d at p. 480, 186 Cal.Rptr. 77, 651 P.2d 321.) Appellant was afforded a full hearing to present evidence under oath or affirmation. Each party was represented by counsel. Each party was provided an opportunity to present oral argument. While no evidence was introduced on the issue of coverage and the WCAB judge heard only argument of counsel, there is no showing that appellant was denied the opportunity to introduce evidence on the issue. He simply chose not to do so. It is the opportunity to litigate that is important in these cases, not whether the litigant availed him or herself of the opportunity. (Teitelbaum Furs, Inc. v. Dominion (1962) 58 Cal.2d 601, 607, 25 Cal.Rptr. 559, 375 P.2d 439, cert. den. (1963) 372 U.S. 966, 83 S.Ct. 1091, 10 L.Ed.2d 130.)

The doctrine of collateral estoppel applies...